<PAGE>
Filed Pursuant to Rule 424(b)(5)
Registration File No.: 333-87441
INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES
UNTIL THE FINAL PROSPECTUS SUPPLEMENT AND PROSPECTUS ARE DELIVERED. THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS ARE NOT AN OFFER TO SELL
THESE SECURITIES AND ARE NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION DATED JANUARY 1, 2000
PRELIMINARY PROSPECTUS SUPPLEMENT
(To Prospectus dated January 1, 2000)
J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP.
Depositor
$732,945,000 (Approximate)
Mortgage Pass-Through Certificates, Series 2000-C9
THE OFFERED CERTIFICATES:
o The trust fund will issue sixteen classes of certificates. Only the
following eight classes of "offered certificates" are offered hereby:
<TABLE>
<CAPTION>
APPROXIMATE INITIAL CLASS BALANCE INITIAL PASS-THROUGH RATE
CLASS OR NOTIONAL BALANCE (SUBJECT TO ADJUSTMENT)
- ---------- ----------------------------------- --------------------------
<S> <C> <C>
Class A1 $ 200,000,000
Class A2 $ 404,682,000
Class X $ 814,388,116(1)
Class B $ 36,647,000
Class C $ 38,683,000
Class D $ 10,179,000
Class E $ 28,503,000
Class F $ 14,251,000
</TABLE>
- ----------
(1) Notional amount.
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE S-9 OF THIS
PROSPECTUS SUPPLEMENT AND PAGE 9 IN THE ACCOMPANYING PROSPECTUS.
Neither the offered certificates nor the underlying mortgage loans are
insured or guaranteed by any governmental agency or instrumentality.
The offered certificates will represent interests in the trust fund only.
They will not represent interests in or obligations of the Depositor, any of
its affiliates or any other entity.
This prospectus supplement may be used to offer and sell the offered
certificates only if accompanied by the prospectus dated January 1, 2000.
o The offered certificates will represent beneficial ownership interests in
the trust fund only.
o Interest will be payable monthly, commencing in February 2000.
o Principal payments will also be payable monthly. The outstanding class with
the highest priority of distribution will receive all principal payments until
it is paid in full. This sequential payment will continue until all classes
have their respective class balances reduced to zero.
THE TRUST FUND:
o The trust fund will consist of fixed rate mortgage loans secured by
mortgages or deeds of trust on multifamily or commercial properties.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE OFFERED CERTIFICATES OR
DETERMINED THAT THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IS ACCURATE OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
We expect that the delivery of the offered certificates will be made in
book-entry form on or about January , 2000.
J.P. Morgan Securities Inc. and ABN AMRO Incorporated are acting as co-managers
and J.P. Morgan Securities Inc. is the sole bookrunner of all of the offered
certificates. The underwriters will offer the offered certificates to the
public in negotiated transactions at varying prices to be determined at the
time of sale. The proceeds to the depositor from the initial sale of the
offered certificates will be approximately % of the initial principal balance
thereof plus accrued interest from the cut-off date.
J.P. MORGAN & CO. ABN AMRO INCORPORATED
Prospectus Supplement dated January , 2000
<PAGE>
J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP.
Mortgage Pass-Through Certificates, Series 2000 - C9
[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.]
MISSOURI 1 property $ 1,140,618 0.1% of total
MINNESOTA 1 property $ 1,264,689 0.2% of total
ILLINOIS 8 properties $ 68,757,586 8.4% of total
WISCONSIN 2 properties $ 4,494,190 0.6% of total
MICHIGAN 4 properties $ 21,828,529 2.7% of total
INDIANA 3 properties $ 18,137,876 2.2% of total
OHIO 5 properties $ 19,599,094 2.4% of total
PENNSYLVANIA 7 properties $ 22,732,097 2.8% of total
NEW YORK 12 properties $ 97,359,852 12.0% of total
NEW HAMPSHIRE 1 property $ 3,889,927 0.5% of total
CANADA 10 properties $ 22,559,278 2.8% of total
MASSACHUSETTS 6 properties $ 30,373,752 3.7% of total
RHODE ISLAND 1 property $ 4,240,067 0.5% of total
CONNECTICUT 2 properties $ 3,194,902 0.4% of total
NEW JERSEY 6 properties $ 40,835,753 5.0% of total
MARYLAND 8 properties $ 66,441,508 8.2% of total
VIRGINIA 5 properties $ 11,651,061 1.4% of total
NORTH CAROLINA 7 properties $ 28,972,220 3.6% of total
GEORGIA 2 properties $ 5,309,006 0.7% of total
FLORIDA 11 properties $ 65,512,867 8.0% of total
KENTUCKY 1 property $ 1,784,329 0.2% of total
ALABAMA 1 property $ 4,688,695 0.6% of total
TENNESSEE 2 properties $ 3,755,357 0.5% of total
TEXAS 17 properties $ 44,658,735 5.5% of total
OKLAHOMA 2 properties $ 3,414,357 0.4% of total
ARIZONA 2 properties $ 13,749,730 1.7% of total
COLORADO 5 properties $ 27,839,747 3.4% of total
CALIFORNIA 26 properties $145,372,868 17.9% of total
NEVADA 4 properties $ 27,932,532 3.4% of total
OREGON 2 properties $ 2,896,894 0.4% of total
[ ] (less than) 1.0%
of Initial Pool Balance
[ ] 1.1 - 5.0%
of Initial Pool Balance
[ ] 5.1 - 10.0%
of Initial Pool Balance
[ ] (greater than) 10.0%
of Initial Pool Balance
PROPERTY TYPES
RETAIL 21.8%
OFFICE 21.2%
INDUSTRIAL 17.6%
HOTEL 7.2%
MIXED USE 2.9%
NURSING HOME 1.7%
CONGREGATE CARE 1.6%
SELF-STORAGE 1.0%
MULTIFAMILY 24.9%
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
WE PROVIDE INFORMATION TO YOU ABOUT THE OFFERED CERTIFICATES 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. YOU SHOULD READ BOTH THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS BEFORE INVESTING IN ANY OF THE OFFERED
CERTIFICATES.
You should rely only on the information contained in this prospectus
supplement and accompanying prospectus. If the description of your certificates
in the prospectus and in this prospectus supplement varies, you should rely on
the information in this prospectus supplement.
We include cross-references in this prospectus supplement and the
prospectus to captions in these materials where you can find further related
discussions. The table of contents on page ii provides the page numbers on
which these captions are located.
You can find a listing of the pages where capitalized terms used in this
prospectus supplement and the prospectus are defined under the caption "Index
of Principal Terms" on page S-90 in this prospectus supplement.
LIMITATIONS ON OFFERS OR SOLICITATIONS
We do not intend this document to be an offer or solicitation:
(A) if used in a jurisdiction in which such offer or solicitation is not
authorized;
(B) if the person making such offer or solicitation is not qualified to do
so; or
(C) if such offer or solicitation is made to anyone to whom it is unlawful
to make such offer or solicitation.
You should rely only on the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities. The information in this document may only be accurate
as of the date of this document.
UNTIL 90 DAYS AFTER THE DATE OF THIS PROSPECTUS SUPPLEMENT, ALL DEALERS
THAT EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT PARTICIPATING IN
THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO
THE DEALER'S OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS AN UNDERWRITER
AND WITH RESPECT TO UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
i
<PAGE>
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<S> <C>
Executive Summary .......................................................... S-1
Summary of the Prospectus Supplement ....................................... S-2
Risk Factors ............................................................... S-9
Description of the Mortgage Pool ........................................... S-27
Description of the Certificates ............................................ S-60
Certain Prepayment, Maturity and Yield Considerations ...................... S-71
Master Servicer and Special Servicer ....................................... S-75
Description of the Pooling and Servicing Agreement ......................... S-80
Use of Proceeds ............................................................ S-83
Certain Federal Income Tax Consequences .................................... S-83
State Tax Considerations ................................................... S-84
ERISA Considerations ....................................................... S-84
Legal Investment ........................................................... S-86
Plan of Distribution ....................................................... S-87
Legal Matters .............................................................. S-88
Rating ..................................................................... S-88
Index of Principal Terms ................................................... S-90
Annex A: Certain Characteristics of the Mortgage Loans ..................... A-1
Annex B: Certain Characteristics of Multifamily and Other Residential Loans B-1
Annex C: Certain Characteristics of Office, Industrial and Retail Loans .... C-1
Annex D: F/X Schedules ..................................................... D-1
Annex E: Sales Memorandum .................................................. E-1
Annex F: Certificateholder Reports ......................................... F-1
Annex G: Global Clearance, Settlement and Tax Documentation Procedures ..... G-1
</TABLE>
PROSPECTUS
<TABLE>
<S> <C>
Prospectus ......................................................................... 1
Important Notice About Information Presented in this Prospectus and the Accompanying
Prospectus Supplement ............................................................. 2
Additional Information ............................................................. 3
Incorporation of Certain Information by Reference .................................. 3
Summary of Prospectus .............................................................. 4
Risk Factors ....................................................................... 9
Description of the Trust Funds ..................................................... 9
Use of Proceeds .................................................................... 24
Yield Considerations ............................................................... 24
The Depositor ...................................................................... 27
Description of the Certificates .................................................... 28
Description of the Agreements ...................................................... 35
Description of Credit Support ...................................................... 50
Certain Legal Aspects of Mortgage Loans and the Leases ............................. 52
Federal Income Tax Consequences .................................................... 68
ERISA Considerations ............................................................... 96
Legal Investment ................................................................... 98
Plan of Distribution ............................................................... 100
Legal Matters ...................................................................... 100
Financial Information .............................................................. 100
Rating ............................................................................. 101
Glossary of Terms .................................................................. 102
</TABLE>
ii
<PAGE>
EXECUTIVE SUMMARY
You should read carefully the detailed information appearing elsewhere in
this prospectus supplement and the accompanying prospectus in making your
investment decision. The following executive summary does not include important
information relating to the offered certificates, particularly with respect to
the risks and special considerations involved with an investment in the offered
certificates.
<TABLE>
<CAPTION>
INITIAL
AGGREGATE
CERTIFICATE
PRINCIPAL DESCRIPTION INITIAL WEIGHTED
AMOUNT OF THE PASS- AVERAGE PRINCIPAL
RATING BY OR NOTIONAL % OF % CREDIT PASS-THROUGH THROUGH LIFE(2) WINDOW(2)
CLASS FITCH/MOODY'S AMOUNT TOTAL SUPPORT RATE RATE(1) (YEARS) (MONTHS)
- ------- --------------- --------------------- ----------- ---------- -------------- --------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Offered Certificates
A1 AAA/Aaa $ 200,000,000 24.56% 25.75% (4) 5.47 1-108
A2 AAA/Aaa $ 404,682,000 49.69% 25.75% (4) 9.53 108-117
X AAA/Aaa $ 814,388,116(3) N/A N/A (5) 5.47(6) N/A
B AA/Aa2 $ 36,647,000 4.50% 21.25% (4) 9.72 117-117
C A/A2 $ 38,683,000 4.75% 16.50% (4) 9.72 117-117
D A-/A3 $ 10,179,000 1.25% 15.25% (4) 9.72 117-118
E BBB/Baa2 $ 28,503,000 3.50% 11.75% (4) 9.80 118-118
F BBB-/Baa3 $ 14,251,000 1.75% 10.00% (4) 9.81 118-118
Private Certificates
G BB+/Ba1 $ 14,251,000 1.75% 8.25% (4)
H BB/Ba2 $ 20,359,000 2.50% 5.75% (4)
J NR/B2 $ 26,467,000 3.25% 2.50% (4)
K NR/B3 $ 6,107,000 0.75% 1.75% (4)
NR UNR $ 14,259,116 1.75% 0.00% (4)
</TABLE>
- ----------
(1) In addition to distributions of interest and principal, holders of the
offered certificates will be entitled to receive a portion of any
prepayment premiums as described herein.
(2) Assumes no prepayments, defaults or early termination. See "Certain
Prepayment, Maturity and Yield Considerations -- Weighted Average Life of
Offered Certificates" herein.
(3) Notional amount.
(4) The pass-through rate for this Class of Certificates will be equal to
either a fixed rate or a rate based on the weighted average of the
remittance rates on the mortgage loans.
(5) The pass-through rate for the Class X Certificates will be equal to the
weighted average of the remittance rates on the mortgage loans minus the
weighted average of the pass-through rates on all other classes of
certificates. The remittance rates on the mortgage loans will represent
accrued interest on the mortgage loans net of certain servicing and
trustee fees. The initial pass-through rate on the Class X Certificates
will be approximately % per annum.
(6) Implied weighted average life.
S-1
<PAGE>
SUMMARY OF THE PROSPECTUS SUPPLEMENT
The following summary is a brief description of the main terms of the
offered certificates. For this reason, the summary does not contain all the
information that may be important to you. You will find a detailed description
of the terms of the offered certificates following this summary and in the
prospectus. Certain capitalized terms used in this summary are defined
elsewhere in this prospectus supplement.
TITLE OF CERTIFICATES Mortgage Pass-Through Certificates, Series
2000-C9.
THE PARTIES
DEPOSITOR J.P. Morgan Commercial Mortgage Finance Corp.,
a Delaware corporation, an indirect
wholly-owned limited purpose finance
subsidiary of J.P. Morgan & Co. Incorporated
and an affiliate of J.P. Morgan Securities
Inc., one of the underwriters. See "The
Depositor" in the prospectus.
SELLERS (a) Morgan Guaranty Trust Company of New York,
an affiliate of the depositor and one of the
underwriters, and (b) LaSalle Bank National
Association, the bond administrator and an
affiliate of the other underwriter, originated
or purchased all of the mortgage loans.
MASTER SERVICER ORIX Real Estate Capital Markets, LLC, a
Delaware limited liability company. See
"Master Servicer and Special Servicer" herein.
SPECIAL SERVICER ORIX Real Estate Capital Markets, LLC, a
Delaware limited liability company. The
special servicer may be removed without cause
under certain circumstances described herein
under "Master Servicer and Special Servicer --
Responsibilities of Special Servicer" herein.
TRUSTEE Norwest Bank Minnesota, National Association.
See "Description of the Pooling and Servicing
Agreement" herein.
BOND ADMINISTRATOR LaSalle Bank National Association, an
affiliate of ABN AMRO Incorporated, one of the
underwriters. See "Description of the Pooling
and Servicing Agreement" herein.
DEAL INFORMATION/ANALYTICS It is anticipated that certain mortgage pool
and certificate information will be available
from the following services: Bloomberg, Intex,
Conquest and The Trepp Group.
SIGNIFICANT DATES
CUT-OFF DATE January 1, 2000.
DELIVERY DATE On or about January , 2000.
S-2
<PAGE>
DISTRIBUTION DATE The 15th day of each month or, if such 15th
day is not a business day, on the next
succeeding business day, beginning in February
2000.
DETERMINATION DATE For any distribution date, the fourth business
day prior to the related distribution date.
RATED FINAL DISTRIBUTION DATE The distribution date in October 2032.
REMITTANCE PERIOD For any distribution date, the period
beginning on the day after a determination
date in the immediately preceding month (or
the cut-off date, in the case of the first
remittance period) through and including the
related determination date.
THE CERTIFICATES
REGISTRATION OF THE OFFERED The offered certificates initially
CERTIFICATES will be issued in book-entry form.
Certificateholders acquiring beneficial
ownership interests in the offered
certificates may elect to hold their
book-entry certificate interests either
through The Depository Trust Company, in the
United States, or through Cedelbank or the
Euroclear System, in Europe. See "Description
of the Certificates -- Book-Entry Registration
of the Offered Certificates -- Definitive
Certificates" in this prospectus supplement
and in the prospectus under "Description of
the Certificates -- Book-Entry Registration
and Definitive Certificates."
DENOMINATIONS The certificates will be issuable in
book-entry form in denominations of (except in
the case of the Class X Certificates) $25,000
and integral multiples of $1 in excess
thereof. The Class X Certificates will be
issuable in denominations of $100,000 notional
amount and integral multiples of $1 notional
amount in excess thereof.
THE MORTGAGE LOANS
THE MORTGAGE POOL The trust fund will consist of a mortgage pool
of 140 fixed rate mortgage loans secured by
first liens on fee simple and/or leasehold
interests in multifamily, retail, office,
industrial, hotel, mixed use, nursing home,
congregate care and self storage properties,
collectively the "mortgaged properties,"
located in 29 states and Canada. See
"Description of the Mortgage Pool -- General."
S-3
<PAGE>
General Mortgage Loan Characteristics
(as of the Cut-off Date, unless otherwise indicated)
<TABLE>
<CAPTION>
MORTGAGE POOL
--------------------
<S> <C>
Initial Pool Balance .................... $814,388,116
Number of Mortgage Loans ................ 140
Number of Mortgaged Properties .......... 164
Average Mortgage Loan Balance ........... $5,817,058
Maximum Mortgage Loan Balance ........... $49,225,000
Minimum Mortgage Loan Balance ........... $798,725
Weighted Average Mortgage Rate .......... 8.07%
Range of Mortgage Rates ................. 6.53% -- 9.19%
Weighted Average Remaining Term to
the Earlier of Maturity or Anticipated
Repayment Date .......................... 112 months
Range of Remaining Term to the
Earlier of Maturity or Anticipated
Repayment Date ..........................55 -- 236 months
Weighted Average UW DSCR ................ 1.38x
Weighted Average LTV Ratio .............. 68.3%
Percentage of Initial Pool Balance made
up of:
ARD Loans ............................. 56.2%
Fully Amortizing Loans (other than
ARD Loans) ........................ 0.8%
Interest Only Loans ................... 4.6%
Balloon Loans ......................... 38.4%
Multi-Property Loans .................. 13.8%
Crossed Loans ......................... 12.0%
</TABLE>
For a further description of the mortgage
loans, see "Description of the Mortgage Pool"
herein.
THE CERTIFICATES
THE OFFERED CERTIFICATES Only the Class A1, Class A2, Class B, Class C,
Class D, Class E, Class F and Class X
Certificates are offered hereby. The offered
certificates will have the initial class
balances set forth on the cover hereof. The
Class X Certificates will not have a class
balance.
PASS-THROUGH RATES ON THE The pass-through rate on the offered
OFFERED CERTIFICATES certificates (except the Class X Certificates)
will be equal to either a fixed rate or a rate
based on the weighted average of the remittance
rates on the mortgage loans. The pass-through
rate on the Class X Certificates is not fixed
and will be equal to the weighted average of
the remittance rates on the mortgage loans
minus the weighted average (by class balance)
of the pass-through rates on all other classes
of certificates. The remittance rates on the
mortgage loans will represent accrued interest
on the mortgage loans net of certain servicing
and trustee fees. The pass-through rate on the
S-4
<PAGE>
Offered Certificates for the initial
distribution date is set forth above under
"Executive Summary."
DISTRIBUTIONS
INTEREST DISTRIBUTIONS ON THE In general, holders of each class of
CERTIFICATES certificates will be entitled to receive on
each distribution date in the order of their
priority, to the extent available,
distributions allocable to interest equal to
the interest accrued during the interest
accrual period on the related class balance
(or notional amount) immediately prior to such
distribution date at the then-applicable
pass-through rate. The notional amount of the
Class X Certificates will equal the aggregate
class balance of all the certificates. The
notional amount does not entitle the Class X
Certificates to any distributions of
principal.
Distributions will be made on each
distribution date. The chart below sets forth
the priority of each class for the payment of
interest to each class in descending order.
Class A1,
Class A2 and Class X
Class B
Class C
Class D
Class E
Class F
Private Certificates
See "Description of the Certificates --
Distributions -- Interest Distributions on the
Certificates" herein.
S-5
<PAGE>
PRINCIPAL DISTRIBUTIONS ON THE In general, holders of a class of certificates
CERTIFICATES will be entitled to receive on each
distribution date principal in the order set
forth in the chart below, until the related
class balance is reduced to zero, to the extent
available after the payment of interest for
such class of certificates.
Class A1
Class A2
Class B
Class C
Class D
Class E
Class F
Private Certificates
See "Description of the Certificates --
Distributions -- Principal Distributions on
the Offered Certificates" herein. The Class X
Certificates do not have a class balance and
are therefore not entitled to any principal
distributions.
P&I ADVANCES Generally, the servicers are required to make
advances for delinquent monthly payments on
the mortgage loans and for certain other
expenses to the extent described herein. To
the extent that a servicer fails to make any
such advance required of it, the trustee shall
make such required advance as provided in the
pooling and servicing agreement. As more fully
described herein, if either servicer or the
trustee makes an advance it will be entitled
to reimbursement and interest on such advance.
Such advances will facilitate in making
regular monthly distributions of principal and
interest on the certificates. See "Description
of the Certificates -- Advances" herein.
OTHER CONSIDERATIONS
ALLOCATION OF LOSSES Realized losses on the mortgage loans will be
allocated, first, to the private certificates,
second, to the Class F Certificates, third, to
the Class E Certificates, fourth, to the Class
D Certificates, fifth, to the Class C
Certificates, sixth,
S-6
<PAGE>
to the Class B and thereafter, to the Class A1
and Class A2 Certificates, on a pro rata
basis, based on class balance, in each case
until the related class balance is reduced to
zero. The allocation of losses will reduce the
value of the affected certificates.
SPECIAL PRINCIPAL PAYMENT Certain of the mortgage loans have a prepayment
CONSIDERATIONS premium period. If certain voluntary
prepayments are made during such period, a
prepayment premium will be required to be paid
during such period. See "Description of the
Mortgage Pool" herein. Distributions of
principal on classes having an earlier priority
of payment will be directly affected by the
rates of prepayments of the mortgage loans. The
timing of commencement of principal
distributions and the weighted average lives of
classes of certificates will be affected by the
rates of prepayments experienced.
SPECIAL YIELD CONSIDERATIONS A higher than anticipated rate of prepayments
(including voluntary prepayments and
prepayments resulting from defaults,
liquidations and purchases of mortgage loans
due to a breach of a representation or
warranty) would reduce the aggregate principal
balance of the mortgage loans more quickly
than expected, thereby reducing the aggregate
interest payments with respect to such
mortgage loans. Therefore, a higher rate of
principal prepayments could result in a lower
than expected yield to maturity on classes of
certificates purchased at a premium.
Conversely, a lower than anticipated rate of
principal prepayments could result in a lower
than expected yield to maturity on classes of
certificates purchased at a discount since
payments of principal with respect to the
mortgage loans would occur later than
anticipated.
The yield to investors on the Class X
Certificates will be especially sensitive to
the rate and timing of prepayments, defaults
and liquidations on the mortgage loans and
could result in the failure of investors in
the Class X Certificates to recover their
initial investments. The yield on the Class X
Certificates and any class of offered
certificates with a pass-through rate subject
to the weighted average remittance rate will
be materially and adversely affected to a
greater extent than the yields on other
offered certificates, if the mortgage loans
with higher mortgage interest rates prepay
faster than the mortgage loans with lower
mortgage interest rates. See "Certain
Prepayment, Maturity and Yield
Considerations," especially "-- Class X
Certificate Yield Considerations" herein.
CERTAIN FEDERAL INCOME TAX Three separate real estate mortgage investment
CONSEQUENCES conduit elections will be made with respect to
the trust fund or federal income tax purposes.
Upon the issuance of the offered certificates,
Brown & Wood LLP, counsel to the
S-7
<PAGE>
depositor, will deliver its opinion generally
to the effect that for federal income tax
purposes, REMIC I, REMIC II and REMIC III will
each qualify as a real estate mortgage
investment conduit under Sections 860A through
860G of the Internal Revenue Code of 1986, as
amended.
The Class X Certificates will, and the other
offered certificates may, be treated as having
been issued with original issue discount for
federal income tax purposes. For further
information regarding the federal income tax
consequences of investing in the offered
certificates, see "Certain Federal Income Tax
Consequences" herein and in the prospectus.
ERISA CONSIDERATIONS Subject to important considerations described
under "ERISA Considerations" in this
prospectus supplement and in the accompanying
prospectus, the Class A1, Class A2 and Class X
Certificates will generally be eligible for
purchase by persons investing assets of
employee benefit plans or individual
retirement accounts.
RATING The offered certificates are required to
receive the ratings from Fitch IBCA, Inc. and
Moody's Investors Service, Inc., indicated
above under "Executive Summary." The ratings
on the offered certificates address the
likelihood of timely receipt of interest and
ultimate receipt of principal by the rated
final distribution date by the holders of
offered certificates. They do not address the
likely actual rate of prepayments. Such rate
of prepayments, if different than originally
anticipated, could adversely affect the yield
realized by holders of the offered
certificates or cause the Class X
Certificateholders to fail to recover their
initial investments. See "Rating" in this
prospectus supplement and in the prospectus
for a discussion of the basis upon which
ratings are given, the limitations and
restrictions on the ratings, and conclusions
that should not be drawn from a rating.
LEGAL INVESTMENT The certificates will not be "mortgage related
securities" within the meaning of the
Secondary Mortgage Market Enhancement Act of
1984, as amended.
S-8
<PAGE>
RISK FACTORS
Prospective purchasers of the offered certificates should consider, among
other things, the following risk factors (as well as the risk factors set forth
under "Risk Factors" in the prospectus) in connection with an investment in the
offered certificates.
THE MORTGAGE LOANS
RISKS ASSOCIATED WITH COMMERCIAL Commercial and multifamily lending is generally
LENDING MAY BE DIFFERENT THAN thought to be riskier than single-family
RESIDENTIAL LENDING residential lending for a variety of reasons,
including the likelihood that larger loans are
made to single borrowers or groups of related
mortgagors.
The mortgage loans are secured by the
following income-producing property types:
o multifamily properties;
o retail properties;
o office properties;
o industrial properties;
o hotel properties;
o mixed use properties;
o nursing home properties;
o congregate care properties; and
o self storage facilities.
Repayment of loans secured by commercial and
multifamily properties typically depends on
the cash flow produced by such properties. The
ratio of net cash flow to debt service of a
loan secured by income-producing property is
an important measure of the risk of default on
such a loan. Most of the mortgage loans were
originated within twelve months of the cut-off
date. Consequently, the mortgage loans
generally do not have a long-standing payment
history.
NET CASH FLOW PRODUCED BY A Payment on each mortgage loan is dependent
MORTGAGED PROPERTY MAY BE primarily on:
INADEQUATE TO REPAY THE
MORTGAGE LOAN o the net operating income of the related
mortgaged property; and
o at maturity (whether at scheduled maturity
or, in the event of a default under the
mortgage loan, upon the acceleration of
such maturity), the market value of the
related mortgaged property (taking into
account any adverse effect of a foreclosure
proceeding on such market value) or the
ability of the related mortgagor to
refinance the mortgage loan.
If a mortgage loan has a relatively high loan
to value ratio or relatively low debt service
coverage ratio, a foreclosure sale is less
likely to provide enough money to satisfy the
outstanding debt. Therefore, the special
servicer may have
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to modify the mortgage loans that it is
servicing in order to try to maximize
recoveries. However, such flexibility may not
result in a greater recovery on a net present
value basis than liquidation.
LOANS NOT INSURED OR GUARANTEED The mortgage loans will not be an obligation
of, or be insured or guaranteed by, any
governmental entity, by any mortgage insurer,
or by the depositor, the sellers, the
underwriters, the master servicer, the special
servicer, the trustee or any of their
respective affiliates.
NONRECOURSE LOANS LIMIT THE Each mortgage loan generally is a
REMEDIES AVAILABLE FOLLOWING A nonrecourse loan. If there is a default there
MORTGAGOR DEFAULT will generally only be recourse against
the specific properties and other assets that
have been pledged to secure such mortgage
loan. Even if a mortgage loan provides for
recourse to a mortgagor or its affiliates, it
is unlikely the trust fund ultimately could
recover any amounts not covered by the
mortgaged property.
FUTURE CASH FLOWS AND PROPERTY Commercial and multifamily property
VALUES ARE NOT PREDICTABLE values and cash flows are volatile and may be
insufficient to cover debt service on the
related mortgage loan at any given time. If the
cash flow from a mortgaged property is reduced
(for example, if leases are not obtained or
renewed), the mortgagor may not be able to
repay the loan. Cash flow will determine the
mortgagor's ability to cover debt service and
property values affect the ability to refinance
the property and the amount of the recovery of
proceeds upon foreclosure. Cash flow and
property value depend upon a number of factors,
including:
o national, regional and local economic
conditions;
o local real estate conditions, such as an
oversupply of space similar to the related
mortgaged property;
o changes or weakness in a specific industry
segment;
o the nature of expenses:
o as a percentage of revenue;
o whether expenses are fixed or vary with
revenue; and
o the level of required capital
expenditures for proper maintenance and
demanded by tenants;
o demographic factors;
o changes required by retroactive building
or similar codes;
o capable management and adequate
maintenance;
o location;
o with respect to properties with uses
subject to significant regulation, changes
in applicable laws;
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o perceptions by prospective tenants and, if
applicable, their customers, of the safety,
convenience, services and attractiveness of
the property;
o the age, construction quality and design
of a particular property; and
o whether the mortgaged properties are
readily convertible to alternative uses.
POOR PROPERTY MANAGEMENT WILL The successful operation of a real estate
LOWER THE PERFORMANCE OF THE project also depends on the performance and
RELATED MORTGAGED PROPERTY viability of the property manager. Properties
deriving revenues primarily from short-term
sources (such as hotels, nursing homes and
self-storage facilities) generally are more
management intensive than properties leased to
creditworthy tenants under long-term leases.
The property manager is generally responsible
for:
o operating the properties;
o providing building services;
o establishing and implementing the rental
structure;
o managing operating expenses;
o responding to changes in the local market;
and
o advising the mortgagor with respect to
maintenance and capital improvements.
Property managers may not be in a financial
condition to fulfill their management
responsibilities.
Certain of the mortgaged properties are
managed by affiliates of the applicable
mortgagor. If a mortgage loan is in default or
undergoing special servicing, such
relationship could disrupt the management of
the underlying property. This may adversely
affect cash flow. However, the mortgage loans
generally permit the lender to remove the
property manager upon the occurrence of an
event of default, a decline in cash flow below
a specified level or the failure to satisfy
some other specified performance trigger.
THE FAILURE OF A TENANT WILL Twenty-two of the mortgaged properties
HAVE A NEGATIVE IMPACT ON representing approximately 12.2% of the initial
SINGLE TENANT PROPERTIES pool balance (calculated based on allocated
value in the case of multi-property loans) are
secured by single tenant properties. Income
from and the market value of retail, office and
industrial mortgaged properties occupied by a
single tenant would be adversely affected under
the following circumstances:
o if vacated space in such mortgaged
properties could not be leased or relet on
terms comparable to the prior lease;
o if tenants were unable to meet their lease
obligations;
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o if a significant tenant were to become a
debtor in a bankruptcy case; and
o if for any other reason rental payments
could not be collected.
Even if vacated space is successfully relet,
the costs associated with reletting, including
tenant improvements, leasing commissions and
free rent, could exceed the amount of any
reserves maintained for such purpose and could
reduce cash flow from the mortgaged
properties. Although certain of the mortgage
loans require the mortgagor to maintain
escrows for such expenses, there can be no
assurance that such factors will not adversely
affect the ability of a mortgagor to repay a
mortgage loan.
The success of its anchor tenant is important
to a shopping center property. An anchor
tenant attracts and maintains other stores and
it generates consumer traffic. The failure of
one or more specified tenants, such as an
anchor tenant, to operate from its premises
may give certain tenants the right to
terminate or reduce rents under their leases.
SPECIAL RISKS ASSOCIATED WITH Twenty of the mortgage loans, representing
HOSPITALITY PROPERTIES approximately 7.2% of the initial pool balance,
are secured by full service hotels or limited
service hotels. See "Description of the
Mortgage Pool -- Certain Characteristics of the
Mortgage Loans." In addition to some of the
factors discussed under "-- Future Cash Flows
and Property Values are not Predictable" above,
the value and cash flow of such hospitality
properties will depend on the following
factors:
o adverse economic conditions; because hotel
rooms generally are rented for short
periods of time, hotels tend to be more
sensitive to adverse economic conditions
and competition than are other commercial
properties;
o the physical condition of such hospitality
property;
o the financial strength and capabilities of
the owner and operator of a hotel;
o financial strength and public perception
of the franchise service mark and the
continued existence of the franchise
license agreement; and
o the continued existence of a liquor
license.
Most of the hospitality properties have liquor
licenses. Some states do not permit liquor
licenses to be held other than by a natural
person. Consequently, liquor licenses for
hospitality properties located in such
jurisdictions are held by an individual
affiliated with the related mortgagor or
manager. Generally, a liquor license may not
be transferred without the approval of the
relevant licensing authority. In the event of
a foreclosure of a hospitality property, it is
unlikely that the trustee (or master servicer
or special servicer) or purchaser in any such
sale would be entitled to
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the rights under the liquor license for such
hospitality property. Such party would be
required to apply in its own name for such
license.
SPECIAL RISKS ASSOCIATED WITH Three of the mortgage loans representing
NURSING HOMES AND CONGREGATE approximately 3.3% of the initial pool balance
CARE PROPERTIES are secured by nursing homes and congregate
care properties. Mortgage loans secured by
liens on such residential health care
facilities have risks not associated with
loans secured by liens on other types of
income-producing real estate. These risks may
lead to adverse consequences which may have a
negative impact on the payments of the offered
certificates.
o Providers of long-term nursing care and
other medical services are subject to
federal and state laws that relate to:
o the adequacy of medical care;
o distribution of pharmaceuticals;
o rate setting;
o equipment;
o personnel;
o operating policies and additions to
facilities and services; and
o the reimbursement policies of
government programs and insurers.
The failure of any of the mortgagors to
maintain or renew any required license or
regulatory approval could prevent it from
continuing operations (in which case no
revenues would be received from the related
mortgaged property or the portion thereof
requiring licensing) or bar it from
participation in certain reimbursement
programs. In the event of foreclosure, the
trustee or any other purchaser at a
foreclosure sale may not be entitled to the
rights under such licenses and such party may
have to apply in its own right for such a
license. There can be no assurance that a new
license could be obtained.
To the extent any nursing home receives a
significant portion of its revenues from
government reimbursement programs, primarily
Medicaid and Medicare, such revenue may be
subject to:
o statutory and regulatory changes;
o retroactive rate adjustments;
o administrative rulings;
o policy interpretations;
o delays by fiscal intermediaries; and
o government funding restrictions.
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<PAGE>
Governmental payors have employed
cost-containment measures that limit payments
to health care providers, and there are
various proposals that could materially change
or curtail those payments. There can be no
assurances that payments under government
programs will, in the future, be sufficient to
fully reimburse the cost of caring for program
beneficiaries. Net operating income of the
mortgaged properties that receive substantial
revenues from those sources, and consequently,
the ability of the related mortgagors to meet
their mortgage loan obligations, could be
adversely affected.
Under applicable federal and state laws and
regulations, including those that govern
Medicare and Medicaid programs, only the
provider who actually furnished the related
medical goods and services may sue for or
enforce its rights to reimbursement. In the
event of foreclosure, none of the trustee, the
master servicer, the special servicer or a
subsequent lessee or operator of the property
would generally be entitled to obtain from
federal or state governments any outstanding
reimbursement payments relating to services
furnished at the respective properties prior
to such foreclosure.
ADVERSE CONSEQUENCES ASSOCIATED The average principal balance of the mortgage
WITH CONCENTRATION OF loans as of the cut-off date is approximately
MORTGAGE LOANS AND RELATED $5,817,058, which is equal to approximately
BORROWERS 0.7% of the initial pool balance. Several of
the mortgage loans have principal balances as
of the cut-off date that are substantially
higher than the average principal balance as of
the cut-off date. In addition, there are
several groups of mortgage loans with related
mortgagors. In general, such concentrations can
result in losses that are more severe than
would be the case if the aggregate balance of
such pool were more evenly distributed among
the mortgage loans in such pool. No mortgage
loan represents more than 6.0% of the initial
pool balance and no mortgage loans with related
mortgagors represent in the aggregate more than
2.7% of the initial pool balance.
Mortgage loans with the same borrower or
related mortgagors pose certain risks. For
example, if an entity that owns or controls
several mortgaged properties experiences
financial difficulty at one mortgaged
property, it could defer maintenance at
another mortgaged property in order to satisfy
current expenses with respect to the troubled
mortgaged property. Alternatively, it could
attempt to avert foreclosure by filing a
bankruptcy petition that might have the effect
of interrupting monthly payments for an
indefinite period on all of the related
mortgage loans.
LIMITATIONS ON THE BENEFITS OF Twenty-two of the mortgage loans, representing
CROSS-COLLATERALIZED AND approximately 12.0% of the initial pool
CROSS-DEFAULTED PROPERTIES balance, are cross-collateralized and/or
cross-defaulted with other
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<PAGE>
mortgage loans in the mortgage pool. No group
of cross-collateralized and cross-defaulted
mortgage loans represents in the aggregate
more than 4.6% of the initial pool balance.
These arrangements attempt to reduce the risk
that one mortgaged property may not generate
enough net operating income to pay debt
service. Securing a mortgage loan with
multiple properties generally reduces the risk
that the net operating income generated by
such properties will not be sufficient to pay
debt service and result in defaults and
ultimate losses. However, such crossed
mortgaged properties generally will be managed
by the same managers or affiliated managers or
will be subject to the management of the same
borrowers or affiliated borrowers.
Cross-collateralization arrangements involving
more than one mortgagor could be challenged as
a fraudulent conveyance if:
o one of the mortgagors were to become a
debtor in a bankruptcy case;
o such borrower did not receive fair
consideration or reasonably equivalent
value in exchange for allowing its
mortgaged property to be encumbered; and
o at the time the lien was granted, the
mortgagor was: (A) insolvent, (B)
inadequately capitalized or
(C) unable to pay its debts.
TIMING OF PRINCIPAL PREPAYMENTS If principal payments, property releases,
MAY LEAD TO DIFFERENT ASSET or prepayments are made on a mortgage loan, the
CONCENTRATIONS THAN IN THE remaining mortgage pool may be subject to more
INITIAL MORTGAGE POOL concentrated risk with respect to the diversity
of properties, types of properties and property
characteristics and with respect to the number
of mortgagors. See the table entitled "Year of
Scheduled Maturity" under "Description of the
Mortgage Pool -- Certain Characteristics of the
Mortgage Loans" herein for a description of the
respective maturity dates of the mortgage
loans.
Because principal on the offered certificates
is payable in sequential order, and no class
receives principal until the class balance of
the preceding class or classes has been
reduced to zero, classes that have a lower
sequential priority are more likely to be
exposed to the risk of concentration discussed
under "-- Concentration of Mortgage Loans"
above than classes with a higher sequential
priority.
THE GEOGRAPHIC CONCENTRATION OF Except as indicated in the following table,
MORTGAGED PROPERTIES SUBJECTS less than 5.0% of the mortgage loans, by
THE TRUST FUND TO A GREATER initial pool balance are secured by
EXTENT TO STATE OR REGIONAL mortgaged properties in any one state.
CONDITIONS
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<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
NUMBER OF OF INITIAL
STATE LOANS POOL BALANCE
- ---------------------- ----------- -------------
<S> <C> <C>
California ......... 26 17.9%
New York ........... 12 12.0%
Illinois ........... 8 8.4%
Maryland ........... 8 8.2%
Florida ............ 11 8.0%
Texas .............. 17 5.5%
New Jersey ......... 6 5.0%
</TABLE>
The concentration of mortgaged properties in a
specific state or region will make the
performance of the mortgage pool as a whole,
more sensitive to the following in the state
or region where the mortgagors and the
mortgaged properties are located:
o economic conditions;
o conditions in the real estate market;
o changes in governmental rules and fiscal
policies;
o acts of God (which may result in uninsured
losses); and
o other factors which are beyond the control
of the mortgagors.
EXERCISE OF LEGAL REMEDIES MAY The mortgage loans may contain a due-on-sale
BE LIMITED FOLLOWING A DEFAULT clause. A Such clause permits the holder of the
ON MORTGAGE LOAN mortgage loan to accelerate the maturity of
the mortgage loan if the related mortgagor
sells or otherwise transfers or conveys the
related mortgaged property or its interest in
the mortgaged property in violation of the
terms of the mortgage loan. The mortgage loans
may also include a debt-acceleration clause,
which permits the lender to accelerate the
debt upon specified monetary or non-monetary
defaults of the mortgagor. 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 or
other sale of a mortgaged property or refuse
to permit the acceleration of the indebtedness
as a result of a default deemed to be
immaterial or if the exercise of such remedies
would be inequitable or unjust or the
circumstances would render the acceleration
unconscionable.
Certain of the mortgage loans will be secured
by an assignment of leases and rents from the
mortgagor, however, the mortgagor generally
may collect rents for so long as there is no
default. As a result, the trust fund's rights
to such rents will be limited because:
o it may not have a perfected security
interest in the rent payments until the
master servicer collects them;
o the master servicer may not be entitled to
collect the rent payments without court
action; and
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<PAGE>
o the bankruptcy of the related mortgagor
could limit the master servicer's ability
to collect the rents.
See "Certain Legal Aspects of Mortgage Loans
and the Leases -- Leases and Rents" in the
prospectus.
ENVIRONMENTAL LAWS MAY ADVERSELY Under various federal, state and local
AFFECT THE VALUE OF AND CASH environmental laws, ordinances and regulations,
FLOW FROM A MORTGAGED PROPERTY a current or previous owner or operator of real
property may be liable for the costs of cleanup
of environmental contamination on, under,
adjacent to or in such property. Such laws
often impose liability whether or not the owner
or operator knew of, or was responsible for,
the presence of such contamination. The cost of
any required cleanup and the owner's liability
for these costs are generally not limited under
these laws and could exceed the value of the
property and/or the aggregate assets of the
owner. In addition, the presence of hazardous
or toxic substances, or the failure to properly
clean up contamination on such property, may
adversely affect the owner's or operator's
ability to borrow using such property as
collateral.
Certain environmental laws impose liability
for releases of asbestos into the air. Third
parties may seek recovery from owners or
operators of real property for personal injury
associated with exposure to asbestos.
Under some environmental laws, such as the
federal Comprehensive Environmental Response,
Compensation and Liability Act as well as
certain state laws, a secured lender (such as
the trust fund) may be liable as an "owner" or
"operator," for the costs of responding to a
release or threatened release of hazardous
substances on or from a mortgagor's property.
Such liability may be imposed on the lender if
its agents or employees are deemed to have
participated in the management of the
mortgagor's property, regardless of whether a
previous owner caused the environmental
damage. The trust fund's potential exposure to
liability for cleanup costs may increase if
the trust fund actually takes possession of a
mortgagor's property, or control of its
day-to-day operations, as, for example,
through the appointment of a receiver.
An environmental site assessment of each of
the mortgaged properties was performed (in
some cases, prior assessments were updated) in
connection with the initial underwriting and
origination of the mortgage loans. Such
assessments do not generally include
environmental testing. In certain cases,
additional environmental testing was
performed.
The information in such assessments has not
been independently verified by the sellers,
the depositor, the servicers, the trustee, the
underwriters, or by any of their respective
affiliates. With respect to a number of the
mortgaged properties, the assessments revealed
the
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presence or possible presence of
asbestos-containing materials, radon gas or
other environmental concerns. None of these
issues constituted a material violation of any
environmental law in the judgment of the
assessor. In these cases, the mortgagors agreed
to establish and implement operations and
maintenance programs or had other remediation
agreements or escrows in place.
It is possible that the environmental site
assessments did not reveal all environmental
liabilities, that there are material
environmental liabilities of which neither the
sellers nor the depositor are aware or that the
environmental condition of the mortgaged
properties could be affected in the future by
tenants, occupants, or third parties unrelated
to the mortgagors.
Each mortgagor has represented that, except as
described in the environmental reports referred
to above, each mortgaged property was, or to
the best of the mortgagor's knowledge was, in
compliance with applicable environmental laws
and regulations on the date of the origination
of the related mortgage loan. Each mortgagor
has also represented that, except as described
in the environmental reports, no actions, suits
or proceedings have been commenced or are
pending or, to the best of the mortgagor's
knowledge are threatened, with respect to any
applicable environmental laws. Each mortgagor
has represented that such mortgagor has not
received any notice of violation of any legal
requirement related to the use and occupancy of
any mortgaged property and has agreed not to
use, cause or permit the presence on the
related mortgaged property of any hazardous
materials in a manner which violates any
applicable law.
The principal security for the obligations
under each mortgage loan consists of the
mortgaged property. Therefore, if any of the
representations described in the preceding
paragraph are breached, there can be no
assurance that any other assets of the
mortgagor would be available in connection with
any exercise of remedies in response to such a
breach. In addition, most mortgagors are
structured as single asset entities and
therefore have no assets other than the
mortgaged property.
SPECIAL RISKS ASSOCIATED WITH Sixty-six mortgage loans (including two
BALLOON LOANS interest-only mortgage loans), representing
approximately 43.0% of the initial pool
balance, are balloon loans. The balloon loans
do not fully amortize over their terms to
maturity and, thus, require substantial
principal payments (i.e., balloon payments) at
their stated maturity. Mortgage loans with
balloon payments are riskier because the
ability of a mortgagor to make a balloon
payment will depend upon its ability either to
refinance the loan or to sell the related
mortgaged property in a timely fashion. The
ability of a mortgagor to accomplish either of
these goals will be
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affected by a number of factors, including:
o the level of available mortgage interest
rates at the time of sale or refinancing;
o the mortgagor's equity in the related
mortgaged property;
o the financial condition and operating
history of the mortgagor and the related
mortgaged property;
o tax laws;
o rent control laws (with respect to certain
multifamily properties);
o renewability of operating licenses;
o prevailing general economic conditions;
and
o the availability of credit for commercial
or multifamily real properties.
ONE ACTION JURISDICTION MAY Several states have laws that prohibit
LIMIT THE ABILITY OF THE more than one "judicial action" to enforce a
SPECIAL SERVICER TO mortgage obligation, and some courts have
FORECLOSE ON A MORTGAGED construed the term "judicial action" broadly.
PROPERTY The special servicer may need to obtain advice
of counsel prior to enforcing any of the trust
fund's rights under any of the mortgage loans
that include mortgaged properties where the
rule could be applicable.
In the case of a 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 only permitted method of foreclosure.
See "Certain Legal Aspects of Mortgage Loans
and the Leases -- Foreclosure" in the
prospectus.
APPRAISALS AND MARKET STUDIES OF An appraisal of the value for each of the
MORTGAGED PROPERTIES mortgaged properties was made between
May 28, 1997 and November 14, 1999. It is
possible that the market value of a mortgaged
property securing a mortgage loan has declined
since the most recent appraisal for such
mortgaged property. Appraisals represent the
analysis and opinion of the respective
appraisers at or before the time made and are
not guarantees, and may not be indicative, of
present or future value. Another appraiser may
have arrived at a different valuation, even if
such appraiser used the same general approach
to, and the same method of, appraising the
property.
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.
Information regarding the
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values of the mortgaged properties as of the
cut-off date is presented under "Description
of the Mortgage Pool" herein for illustrative
purposes only.
CERTAIN PARTIES MAY HAVE A substantial number of the mortgaged
CONFLICTS OF INTEREST properties are managed by property managers
WITH RESPECT TO THE affiliated with the respective mortgagors.
MORTGAGED PROPERTIES These property managers may also
manage additional properties, including
properties that may compete with the mortgaged
properties. Affiliates of the managers and/or
the mortgagors, or the managers and/or the
mortgagors themselves, may also own other
properties, including competing properties.
Therefore, the managers of the mortgaged
properties and the mortgagors may experience
conflicts of interest in the management and/or
ownership of such properties. In addition, the
sellers or affiliates thereof may have other
financing arrangements with affiliates of the
mortgagors and may enter into additional
financing relationships in the future.
SPECIAL SERVICER MAY TAKE In connection with the servicing of specially
ACTIONS WHICH ARE ADVERSE serviced mortgage loans, the special servicer
TO YOU may take actions with respect to such mortgage
loans that could adversely affect you. As
described herein under "Master Servicer and
Special Servicer -- Responsibilities of Special
Servicer," the actions of the special servicer
will be subject to review by a representative
of the holders of the monitoring certificates,
who may have interests that conflict with those
of the holders of the other classes of
certificates. As a result, it is possible that
such representative may influence the special
servicer to take actions which conflict with
the interests of certain classes of
certificates; provided, however, that the
special servicer shall in all cases be required
to act in accordance with the servicing
standard. In addition, the special servicer may
be removed without cause by the directing
certificateholders as described under "Master
Servicer and Special Servicer --
Responsibilities of Special Servicer," herein.
THE STATUS OF A GROUND LEASE Six mortgaged properties, representing
MAY BE UNCERTAIN IN A approximately 2.6% of the initial pool balance
BANKRUPTCY PROCEEDING (calculated based on allocated value in the
case of multi-property loans), are secured in
part by a leasehold interest in their
respective mortgaged properties. In addition,
one mortgage loan, representing 6.0% of the
initial pool balance, is secured by a leasehold
interest in the related mortgaged property and
an undivided 50% interest in the fee interest
in the related mortgaged property. For the
purposes of this prospectus supplement, any
mortgaged property, a material portion of which
consists of a leasehold estate, is considered a
leasehold interest unless the trust fund also
holds a mortgage on the fee, in which case it
is considered a fee interest. Pursuant to
Section 365(h) of the Bankruptcy Code, ground
lessees are currently afforded rights not to
treat a ground lease as terminated and to
remain in
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possession of their leased premises upon the
bankruptcy of their ground lessor and the
rejection of the ground lease by the
representative of such ground lessor's
bankruptcy estate.
The leasehold mortgages provide that the
mortgagor may not elect to treat the ground
lease as terminated on account of any such
bankruptcy of, and rejection by, the ground
lessor without the consent of the related
mortgagee. In the event of a bankruptcy of a
ground lessee/mortgagor, the ground
lessee/mortgagor under the protection of the
Bankruptcy Code has the right to assume (i.e.,
continue) or reject (i.e., terminate) any or
all of its ground leases.
In the event of concurrent bankruptcy
proceedings involving the ground lessor and
the ground lessee/mortgagor, either servicer
may be unable to enforce the bankrupt ground
lessee/mortgagor's obligation to refuse to
treat a ground lease rejected by a bankrupt
ground lessor as terminated. In such
circumstances, a ground lease could be
terminated notwithstanding lender protection
provisions contained therein or in the
mortgage.
SPECIAL RISKS ASSOCIATED WITH Seventy-one mortgage loans, representing
ANTICIPATED REPAYMENT DATE approximately 56.2% of the initial pool
LOANS balance, are mortgage loans with anticipated
repayment dates. After the anticipated
repayment date, any excess cash flow will be
required to be applied to payments of principal
and interest on such loan. All of the
anticipated repayment date loans will have
substantial principal balances on their
anticipated repayment date. The failure to pay
such loan by the related anticipated repayment
date will not result in an event of default or
acceleration.
The ability of a mortgagor to repay a mortgage
loan on the anticipated repayment date will
depend on its ability either to refinance the
mortgage loan or to sell the related mortgaged
property. The ability of a mortgagor to
accomplish either of these goals will be
affected by a number of factors, including:
o the level of available mortgage interest
rates at the time of sale or refinancing;
o the mortgagor's equity in the related
mortgaged property;
o the financial condition and operating
history of the mortgagor and the related
mortgaged property;
o tax laws;
o rent control laws (with respect to certain
multifamily properties);
o renewability of operating licenses;
S-21
<PAGE>
o prevailing general economic conditions;
and
o the availability of credit for commercial
or multifamily real properties.
SPECIAL RISKS ASSOCIATED WITH Some of the tenant leases contain provisions
ATTORNMENT that require the tenant to attorn to (that is,
recognize as landlord under the lease) a
successor owner of the property following
foreclosure. Some of the leases may be either
subordinate to the liens created by the
mortgage loans or else contain a provision that
requires the tenant to subordinate the lease if
the mortgagee agrees to enter into a
non-disturbance agreement.
In some states, if tenant leases are
subordinate to the liens created by the
mortgage loans and such leases do not contain
attornment provisions, such leases may
terminate upon the transfer of the property to
a foreclosing lender or purchaser at
foreclosure. Accordingly, in the case of the
foreclosure of a mortgaged property located in
such a state and leased to one or more
desirable tenants under leases that do not
contain attornment provisions, such mortgaged
property could experience a further decline in
value if such tenants' leases were terminated
(e.g., if such tenants were paying
above-market rents).
If a mortgage is subordinate to a lease, the
lender will not (unless it has otherwise
agreed with the tenant) possess the right to
dispossess the tenant upon foreclosure of the
property, and if the lease contains provisions
inconsistent with the mortgage (e.g.,
provisions relating to application of
insurance proceeds or condemnation awards),
the provisions of the lease will take
precedence over the provisions of the
mortgage.
THE MORTGAGED PROPERTIES MAY Due to changes in applicable building and
NOT BE IN COMPLIANCE WITH zoning ordinances and codes which have come
CURRENT ZONING LAWS into effect after the construction of
improvements on certain of the mortgaged
properties, some improvements may not comply
fully with current zoning laws (including
density, use, parking and set-back
requirements) but qualify as permitted
non-conforming uses. Such changes may limit the
ability of the related mortgagor to rebuild the
premises "as is" in the event of a substantial
casualty loss. Such limitations may adversely
affect the ability of the mortgagor to meet its
mortgage loan obligations from cash flow.
Insurance proceeds may not 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 then current law,
its value could be less than the remaining
balance on the mortgage loan and it may produce
less revenue than before such repair or
restoration.
INSPECTIONS MADE OF THE The mortgaged properties were inspected by
MORTGAGED PROPERTY MAY licensed engineers at the time the mortgage
HAVE MISSED NECESSARY loans were originated to assess the structure,
REPAIRS exterior walls, roofing, interior
S-22
<PAGE>
construction, mechanical and electrical
systems and general condition of the site,
buildings and other improvements located on
the mortgaged properties. There can be no
assurance that all conditions requiring repair
or replacement have been identified in such
inspections.
COMPLIANCE WITH AMERICANS WITH Under the Americans with Disabilities Act of
DISABILITIES ACT MAY RESULT IN 1990, all public accommodations are required to
ADDITIONAL LOSSES meet certain federal requirements related to
access and use by disabled persons. To the
extent the mortgaged properties do not comply
with such laws, the mortgagors may be required
to incur costs to comply with such laws. In
addition, noncompliance could result in the
imposition of fines by the federal government
or an award of damages to litigants.
LITIGATION CONCERNS There may be legal proceedings pending and,
from time to time, threatened against the
mortgagors or their affiliates relating to the
business of or arising out of the ordinary
course of business of the mortgagors and their
affiliates. There can be no assurance that
such litigation will not have a material
adverse effect on the distributions to
certificateholders.
THE OFFERED CERTIFICATES
ONLY TRUST FUND ASSETS ARE If the assets of the trust fund are
AVAILABLE TO PAY YOU insufficient to make payments on the offered
certificates, no other assets will be available
for payment of the deficiency. See "Risk
Factors -- Limited Assets" in the prospectus.
PREPAYMENTS WILL AFFECT YOUR Prepayments. The yield to maturity on the
YIELD offered certificates will depend on the rate
and timing of principal payments (including
both voluntary prepayments, in the case of
mortgage loans that permit voluntary
prepayment, and involuntary prepayments, such
as prepayments resulting from casualty or
condemnation, defaults, liquidations or
repurchases for breaches of representations or
warranties) on the mortgage loans and how such
payments are allocated among the offered
certificates entitled to distributions of
principal. The yield to maturity of the Class
X Certificates will be particularly sensitive
to the rate and timing of receipt of principal
since its sole distribution is interest based
upon the aggregate principal balance of all
the certificates.
In addition, upon the occurrence of certain
limited events, a party may be required to
repurchase a mortgage loan from the trust fund
and the money paid would be passed through to
the holders of the certificates with the same
effect as if such mortgage loan had been
prepaid in full (except that no prepayment
premium would be payable with respect to any
such repurchase). No representation is made as
to the anticipated rate of prepayments
(voluntary or involuntary) on the mortgage
loans or as to the
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<PAGE>
anticipated yield to maturity of any
certificate. See "Certain Prepayment, Maturity
and Yield Considerations" herein and "Yield
Considerations" in the prospectus.
Yield. In general, if you purchase an offered
certificate at a premium and principal
distributions occur at a rate faster than you
anticipated at the time of purchase, and no
prepayment premiums are collected, your actual
yield to maturity may be lower than that you
assumed at the time of purchase. In the case
of the Class X Certificates, this could result
in the failure of investors in the Class X
Certificates to recover their initial
investment. Conversely, if you purchase an
offered certificate at a discount and
principal distributions thereon occur at a
rate slower than that you assumed at the time
of purchase, your actual yield to maturity may
be lower than that you assumed at the time of
purchase.
The investment performance of the offered
certificates may be materially different from
what you expected if the rate of prepayments
on the mortgage loans is higher or lower than
what you assumed at the time of investment.
The yield on the Class X Certificates will be
adversely affected if mortgage loans with
higher mortgage interest rates pay faster than
mortgage loans with lower mortgage interest
rates.
Interest Rate Environment. In general,
mortgagors are less likely to prepay if
prevailing interest rates are at or above the
rates borne by such mortgage loans. On the
other hand, mortgagors are more likely to
prepay if prevailing rates fall significantly
below the mortgage rates of the mortgage
loans. Mortgagors are less likely to prepay
mortgage loans with a lockout period or
prepayment premium provision, to the extent
enforceable, than otherwise identical mortgage
loans without such provisions, with shorter
lockout periods or with lower prepayment
premiums.
Premiums. Provisions requiring prepayment
premiums may not be enforceable in some states
and under federal bankruptcy law, and may
constitute interest for usury purposes.
Accordingly, no assurance can be given that
the obligation to pay a prepayment premium
will be enforceable or, if enforceable, that
the foreclosure proceeds will be sufficient to
pay such prepayment premium. Additionally,
although the collateral substitution
provisions related to defeasance are not
intended to be, and do not have the same
effect on the certificateholders as a
prepayment, there can be no assurance that a
court would not interpret such provisions as
requiring a prepayment premium and thus
unenforceable or usurious under applicable
law. Prepayment premiums are generally not
charged for prepayments resulting from
casualty or
S-24
<PAGE>
condemnation and would not be paid in
connection with repurchases of mortgage loans
for breaches of representations or warranties.
BORROWER DEFAULTS MAY ADVERSELY The aggregate amount of distributions on the
AFFECT YOUR YIELD offered certificates, the yield to maturity of
the offered certificates, the rate of principal
payments on the offered certificates and the
weighted average life of the offered
certificates will be affected by the rate and
timing of delinquencies and defaults on the
mortgage loans. Delinquencies on the mortgage
loans, if the delinquent amounts are not
advanced, may result in shortfalls in
distributions of interest and/or principal to
the offered certificates for the current month.
Any late payments received on or in respect of
the mortgage loans will be distributed to the
certificates in the priorities described more
fully herein, but no interest will accrue on
such shortfall during the period of time such
payment is delinquent.
If you calculate your anticipated yield based
on an assumed rate of default and an assumed
amount of losses on the mortgage loans that
are lower than the default rate and the amount
of losses actually experienced, and if such
losses are allocated to your class of
certificates, your actual yield to maturity
will be lower than the yield so calculated and
could, under certain scenarios, be negative.
Losses on the mortgage loans will reduce the
notional amount of the Class X Certificates.
This could result in the failure of investors
in the Class X Certificates to recover their
initial investment. The timing of any loss on
a liquidated mortgage loan also will affect
the actual yield to maturity of the offered
certificates to which all or a portion of such
loss is allocable, even if the rate of
defaults and severity of losses are consistent
with your expectations. In general, the
earlier you bear a loss, the greater the
effect on your yield to maturity. See "Certain
Prepayment, Maturity and Yield
Considerations."
Even if losses on the mortgage loans are
allocated to a particular class of offered
certificates, such losses may affect the
weighted average life and yield to maturity of
other certificates. Losses on the mortgage
loans, to the extent not allocated to such
class of offered certificates, may result in a
higher percentage ownership interest evidenced
by such certificates than would otherwise have
resulted absent such loss. The consequent
effect on the weighted average life and yield
to maturity of the offered certificates will
depend upon the characteristics of the
remaining mortgage loans.
DELINQUENCIES WILL ENTITLE As and to the extent described herein,
SERVICER TO RECEIVE CERTAIN the master servicer, the special servicer or
ADDITIONAL COMPENSATION the trustee, as applicable, will be entitled to
WHICH TAKES PRECEDENCE OVER receive interest on unreimbursed advances and
YOUR RIGHT TO RECEIVE unreimbursed servicing expenses. The right of
DISTRIBUTIONS servicer, the special servicer or the trustee,
as applicable, to
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<PAGE>
receive such payments of interest is senior to
the rights of certificateholders to receive
distributions on the offered certificates and,
consequently, may result in losses being
allocated to the offered certificates that
would not have resulted absent the accrual of
such interest. In addition, the special
servicer will receive a fee with respect to
each specially serviced mortgage loan and any
collections thereon, including specially
serviced mortgage loans which have been
returned to performing status. This will
result in shortfalls which may be allocated to
the offered certificates.
See "Master Servicer and Special Servicer --
Servicing and Other Compensation and Payment
of Expenses."
VOTES OF OTHER Under certain circumstances, the consent or
CERTIFICATEHOLDERS MAY approval of the holders of a specified
ADVERSELY AFFECT YOUR percentage of the aggregate certificate
INTERESTS balance of all outstanding certificates will
be required to direct, and will be sufficient
to bind all certificateholders to, certain
actions, including directing the special
servicer or the master servicer with respect
to actions to be taken with respect to certain
mortgage loans and real estate owned
properties and amending the pooling and
servicing agreement in certain circumstances.
See "Description of the Pooling and Servicing
Agreement -- Voting Rights" herein.
COMPUTERIZED SYSTEMS MAY BE The transition from the year 1999 to the year
DISRUPTED BY THE TRANSITION TO 2000 may disrupt the ability of computerized
THE YEAR 2000 systems of the master servicer, the special
servicer, the trustee, the mortgagors and other
parties to process information including:
o the collection of payments on the mortgage
loans;
o the servicing of the mortgage loans; and
o the distributions on your certificates.
The master servicer, the special servicer, the
trustee and the bond administrator have taken
or are taking steps to address these issues
such that their systems and applications will
be year 2000 compliant. If the master
servicer, the special servicer, trustee, the
bond administrator, the mortgagors or other
third parties are not year 2000 compliant, the
ability of the master servicer, the special
servicer, the trustee or bond administrator to
service the mortgage loans and make
distributions to the certificateholders,
respectively, may be materially and adversely
affected. The depositor has been advised by
each of the trustee, the bond administrator,
the master servicer and the special servicer
that each of them expect to be year 2000
compliant to the extent necessary to perform
its obligations under the Pooling and
Servicing Agreement.
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<PAGE>
DESCRIPTION OF THE MORTGAGE POOL
GENERAL
The Trust Fund will consist primarily of a pool (the "Mortgage Pool") of
fixed rate mortgage loans (the "Mortgage Loans") with an aggregate principal
balance as of the Cut-off Date, after deducting payments of principal due on
such date, of approximately $814,388,116 (the "Initial Pool Balance"). Each
Mortgage Loan is evidenced by a promissory note (a "Mortgage Note") and secured
by a mortgage, deed of trust or other similar security instrument (a
"Mortgage") creating a first lien on a fee simple and/or leasehold interests in
multifamily properties, retail properties, office properties, industrial
properties, hotel properties, mixed use properties, nursing home properties,
congregate care properties and self storage facilities (each, a "Mortgaged
Property"). Except as otherwise indicated, all percentages of the Mortgage
Loans described herein are approximate percentages by aggregate principal
balance as of the Cut-off Date. The Mortgage Loans provide for scheduled
payments of principal and/or interest (the "Monthly Payments") to be due on the
first day of each month (the "Due Date").
One hundred nineteen of the Mortgage Loans, representing 82.1% by Initial
Principal Balance, were originated by Morgan Guaranty Trust Company of New York
("MGT"). Four Mortgage Loans were purchased by MGT from one entity and
represent 2.8% by Initial Principal Balance. MGT is an affiliate of the
Depositor and of J.P. Morgan Securities Inc., one of the Underwriters. Fourteen
of the Mortgage Loans, representing 11.8% by Initial Principal Balance, were
originated by LaSalle Bank National Association ("LaSalle"). Two Mortgage
Loans, representing 2.5% of the Initial Pool Balance, were originated pursuant
to LaSalle's underwriting guidelines by another entity and were purchased by
LaSalle immediately upon the funding of each Mortgage Loan. One Mortgage Loan,
representing 0.9% of the Initial Pool Balance, was purchased by LaSalle.
LaSalle is the Bond Administrator and an affiliate of ABN AMRO Incorporated,
one of the Underwriters.
The Mortgage Loans were underwritten generally in conformity with the
guidelines described below. See "-- Underwriting Guidelines and Processes"
below. Each Seller will sell the Mortgage Loans to the Depositor on or prior to
the Delivery Date pursuant to a loan sale agreement between the Seller and the
Depositor (each, a "Loan Sale Agreement"). The Depositor will cause the
Mortgage Loans in the Mortgage Pool to be assigned to the Trustee pursuant to
the Pooling and Servicing Agreement.
See Annex A, Annex B, Annex C and the Diskette for additional information
with respect to the Mortgage Loans.
THE SELLERS
Morgan Guaranty Trust Company of New York is a wholly-owned subsidiary and
the principal asset of J.P. Morgan & Co. Incorporated, a Delaware corporation
whose principal office is located in New York, New York. MGT is a commercial
bank offering a wide range of banking services to its customers both
domestically and internationally. Its business is subject to examination and
regulation by Federal and New York State banking authorities.
LaSalle Bank National Association ("LaSalle") is a national banking
association whose principal offices are in Chicago, Illinois. LaSalle is a
subsidiary of LaSalle National Corporation, which is a subsidiary of ABN AMRO
Bank N.V., a bank organized under the laws of The Netherlands. LaSalle is a
commercial bank offering a wide range of banking series to customers in the
United States. Its business is subject to examination and regulation by Federal
banking authorities.
REPRESENTATIONS AND WARRANTIES
Under the Loan Sale Agreements, the Sellers will make certain
representations and warranties to the Depositor. Pursuant to the terms of the
related Loan Sale Agreement, each Seller will be obligated to cure any breach
of such representations and warranties or to repurchase any of the Mortgage
Loans it sold to the Depositor as to which there exists a breach of any such
representation or warranty that materially and adversely affects the interests
of the Certificateholders in such Mortgage Loan. The Sellers will covenant
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<PAGE>
with the Depositor to repurchase any Mortgage Loan from the Depositor or cure
any such breach within 90 days of receiving notice thereof. Under the Pooling
and Servicing Agreement, the Depositor will assign its rights under the Loan
Sale Agreements to the Trustee for the benefit of the Certificateholders. The
sole remedy available to the Trustee or the Certificateholders is the
obligation of the Sellers to cure or repurchase any Mortgage Loan in connection
with which there has been a breach of any such representation or warranty which
materially and adversely affects the interest of the Certificateholders in such
Mortgage Loan.
Each Seller will generally represent and warrant as of the Delivery Date
with respect to each of the Mortgage Loans it sold to, among other things,
subject to certain exceptions set forth in the related Loan Sale Agreements,
that: (i) the Mortgage Loan is not one month or more delinquent in payment of
principal and interest and has not been so delinquent more than once in a
twelve-month period prior to the Delivery Date and there is no payment default
and no other default under the Mortgage Loan which has a material adverse
effect on the Mortgage Loan; (ii) the Mortgage Loan is secured by a Mortgage
that is a valid and subsisting first priority lien on the Mortgaged Property
(or a leasehold interest therein) free and clear of any liens, claims or
encumbrances, subject only to certain permitted encumbrances; (iii) the
Mortgage, together with any separate security agreements, establishes a first
priority security interest in favor of the Seller in all the related
Mortgagor's personal property used in, and reasonably necessary to operate the
Mortgaged Property, and to the extent a security interest may be created
therein, the proceeds arising from the Mortgaged Property and any other
collateral securing the Mortgage subject only to certain permitted
encumbrances; (iv) there is an assignment of leases and rents provision or
agreement creating a first priority security interest in leases and rents
arising in respect of the related Mortgaged Property, subject only to certain
permitted encumbrances; (v) there are no mechanics' or other similar liens
affecting the Mortgaged Property which are or may be prior or equal to the lien
of the Mortgage, except those insured against pursuant to the applicable title
insurance policy; (vi) the related Mortgagor has good and indefeasible title in
fee simple or leasehold interest to, and no person has any outstanding
exercisable rights of record with respect to the purchase or sale of all or a
portion of, the related Mortgaged Property, except for rights of first refusal;
(vii) the Mortgaged Property is covered by a title insurance policy insuring
that the Mortgage is a valid first lien, subject only to certain permitted
encumbrances; (viii) no claims have been made under the related title insurance
policy and such policy is in full force and effect and will provide that the
insured includes the owner of the Mortgage Loan; (ix) at the time of the
assignment of the Mortgage Loan to the Depositor, the Seller had good title to
and was the sole owner of the Mortgage Loan free and clear of any pledge, lien
or encumbrance and such assignment validly transfers ownership of the Mortgage
Loan to the Depositor free and clear of any pledge, lien or encumbrance; (x)
the related assignment of mortgage and related assignment of the assignment of
rents and leases is legal, valid and binding and has been recorded or submitted
for recording in the applicable jurisdiction; (xi) the Seller's endorsement of
the related Mortgage Note constitutes the legal and binding assignment of the
Mortgage Note and together with an assignment of mortgage and the assignment of
the assignment of leases and rents, legally and validly conveys all right,
title and interest in the Mortgage Loan and related Mortgage Loan documents;
(xii) each Mortgage Loan document is a legal, valid and binding obligation of
the parties thereto, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by applicable state law and by
bankruptcy, insolvency, reorganization or other laws relating to creditors'
rights and general equitable principles and except that certain provisions of
the Mortgage Loan documents are or may be unenforceable in whole or in part,
but the inclusion of such provisions does not render the Mortgage Loan
documents invalid as a whole, and the Mortgage Loan documents taken as a whole
are enforceable to the extent necessary and customary for the practical
realization of the rights and benefits afforded thereby; (xiii) the Seller has
not modified the terms of such related Mortgage Loan and related Mortgage Loan
documents have not been modified or waived in any material respect except as
set forth in the Loan Sale Agreements and the Mortgage Loan documents; (xiv)
the Mortgage Loan has not been satisfied, canceled, subordinated, released or
rescinded and the related Mortgagor has not been released from its obligations
under any Mortgage Loan document; (xv) none of the Mortgage Loan documents is
subject to any right of rescission, set-off, valid counterclaim or defense;
(xvi) each Mortgage Loan document complied in all respects with all material
applicable state or federal laws including usury to the extent non-compliance
would have a material
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<PAGE>
adverse effect on the Mortgage Loan; (xvii) the related Mortgaged Property is,
in all material respects, in compliance with, and is used and occupied in
accordance with applicable law; (xviii) to the Seller's knowledge, (a) in
reliance on an engineering report, the related Mortgaged Property is in good
repair and (b) no condemnation proceedings are pending; (xix) the ESA prepared
in connection with the origination thereof reveals no known circumstances or
conditions with respect to the Mortgaged Property that would constitute or
result in a material violation of any environmental laws, require any
expenditure material in relation to the principal balance of the Mortgage Loan
to achieve or maintain compliance in all material respects with any
environmental laws or require substantial cleanup or remedial action or any
other extraordinary action in excess of the amount escrowed for such purposes;
(xx) the Mortgaged Property is covered by insurance policies providing coverage
against certain losses or damage; (xxi) all amounts required to be deposited by
the Mortgagor at origination have been deposited; (xxii) to the Seller's
knowledge, all significant leases are in full force and effect, and there has
been no material default by the related Mortgagor or lessee; and (xxiii) to the
Seller's knowledge, there are no pending, or to the Seller's actual knowledge
threatened, actions, suits or proceedings by or before any court or other
governmental authority against or affecting the related Mortgagor under the
Mortgage Loan or the Mortgaged Property which, if determined against the
Mortgagor or property would materially and adversely affect the value of such
property or ability of the Mortgagor to pay principal, interest and other
amounts due under the Mortgage Loan.
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
All of the Mortgage Loans are secured by first liens on a fee simple
and/or leasehold interest in the related Mortgaged Properties. As of the
Cut-off Date, the Mortgage Loans had characteristics set forth below. The
totals in the following tables may not add up to 100% due to rounding. For a
Mortgage Loan secured by more than one Mortgaged Property the original
principal balance of the Mortgage Loan is allocated to each related Mortgaged
Property based on (1) the related appraisal values, (2) the square footage
provided in the appraisal or (3) as otherwise provided in the Mortgage Loan
documentation. The principal balance as of the Cut-off Date of a Mortgage Loan
is allocated to each related Mortgaged Property based on the allocation of the
original principal balance.
MORTGAGE INTEREST RATES
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE WEIGHTED
NUMBER PRINCIPAL PRINCIPAL AVERAGE
OF BALANCE BALANCE WEIGHTED CUT-OFF
MORTGAGE AS OF THE AS OF THE AVERAGE DATE
MORTGAGE INTEREST RATES LOANS CUT-OFF DATE CUT-OFF DATE DSCR LTV
- --------------------------- ---------- -------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
7.2500% or less ........... 2 $ 11,848,313 1.5% 1.95x 58.7%
7.2501% - 7.5000% ......... 7 91,500,449 11.2 1.53 65.6
7.5001% - 7.7500% ......... 7 30,036,516 3.7 1.34 70.7
7.7501% - 8.0000% ......... 31 183,604,316 22.5 1.28 73.9
8.0001% - 8.2500% ......... 49 247,868,667 30.4 1.35 68.5
8.2501% - 8.5000% ......... 23 153,852,251 18.9 1.37 65.8
8.5001% - 9.0000% ......... 18 87,323,273 10.7 1.45 63.8
9.0001% or more ........... 3 8,354,331 1.0 1.48 62.3
-- ------------ ---- ---- ----
Total: ................... 140 $814,388,116 100.0% 1.38x 68.3%
=== ============ ===== ==== ====
</TABLE>
Weighted Average Mortgage Interest Rate: 8.07%
Minimum Mortgage Interest Rate: 6.53%
Maximum Mortgage Interest Rate: 9.19%
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<PAGE>
PRINCIPAL BALANCE
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE
NUMBER PRINCIPAL PRINCIPAL WEIGHTED
OF BALANCE BALANCE WEIGHTED AVERAGE
MORTGAGE AS OF THE AS OF THE AVERAGE CUT-OFF
PRINCIPAL BALANCE LOANS CUT-OFF DATE CUT-OFF DATE DSCR DATE LTV
- ----------------------------------- ---------- -------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
$1,000,000 or less ................ 4 $ 3,508,728 0.4% 1.55x 69.4%
$1,000,001 - $1,500,000 ........... 16 20,394,295 2.5 1.38 69.0
$1,500,001 - $2,000,000 ........... 21 37,572,553 4.6 1.40 69.0
$2,000,001 - $2,500,000 ........... 6 13,780,791 1.7 1.45 64.6
$2,500,001 - $3,000,000 ........... 6 16,396,923 2.0 1.32 69.0
$3,000,001 - $3,500,000 ........... 12 39,982,838 4.9 1.39 70.5
$3,500,001 - $4,000,000 ........... 11 40,240,214 4.9 1.35 71.3
$4,000,001 - $4,500,000 ........... 8 34,694,726 4.3 1.46 69.0
$4,500,001 - $5,000,000 ........... 10 47,475,531 5.8 1.34 68.7
$5,000,001 - $6,000,000 ........... 9 47,701,336 5.9 1.37 68.6
$6,000,001 - $7,500,000 ........... 4 26,564,769 3.3 1.58 66.9
$7,500,001 - $10,000,000 .......... 9 79,827,988 9.8 1.32 70.5
$10,000,001 - $12,500,000 ......... 8 89,415,152 11.0 1.33 65.1
$12,500,001 - $15,000,000 ......... 6 82,998,446 10.2 1.39 67.5
$15,000,001 - $17,500,000 ......... 3 50,025,765 6.1 1.44 71.9
$17,500,001 - $20,000,000 ......... 1 18,689,849 2.3 1.27 76.9
$20,000,001 - $25,000,000 ......... 4 88,380,595 10.9 1.39 68.4
$25,000,001 - $30,000,000 ......... 1 27,512,617 3.4 1.30 71.3
$45,000,001 - $50,000,000 ......... 1 49,225,000 6.0 1.42 57.6
-- ------------ ---- ---- ----
Total: ........................... 140 $814,388,116 100.0% 1.38x 68.3%
=== ============ ===== ==== ====
</TABLE>
Average Principal Balance per Mortgage Loan: $5,817,058
Average Principal Balance per Mortgaged Property: $4,965,781
Smallest Principal Balance: $798,725
Largest Principal Balance: $49,225,000
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<PAGE>
ORIGINAL TERM TO MATURITY/ANTICIPATED REPAYMENT DATE IN MONTHS
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE
NUMBER PRINCIPAL PRINCIPAL WEIGHTED
OF BALANCE BALANCE WEIGHTED AVERAGE
MORTGAGE AS OF THE AS OF THE AVERAGE CUT-OFF
ORIGINAL TERM IN MONTHS LOANS CUT-OFF DATE CUT-OFF DATE DSCR DATE LTV
- -------------------------------- ---------- -------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Anticipated Repayment Date Loans
49 - 60 ....................... 1 $ 2,789,582 0.3% 1.25x 75.4%
61 - 72 ....................... 2 51,667,396 6.3 1.41 57.9
73 - 84 ....................... 3 22,934,032 2.8 1.23 76.0
85 - 120 ...................... 65 380,476,262 46.7 1.34 69.2
-- ------------ ---- ---- ----
Subtotal .................... 71 $457,867,272 56.2% 1.35x 68.3%
Balloon Loans
49 - 60 ....................... 3 $ 10,901,936 1.3% 1.41x 68.9%
73 - 84 ....................... 10 20,140,273 2.5 1.95 60.1
85 - 120 ...................... 49 256,901,887 31.5 1.34 69.8
121 - 180 ..................... 2 24,484,778 3.0 1.41 70.4
-- ------------ ---- ---- ----
Subtotal .................... 64 $312,428,873 38.4% 1.38x 69.2%
Interest Only Loans
85 - 120 ...................... 2 $ 37,503,350 4.6% 1.78x 59.0%
Fully-Amortizing Loans
181 - 240 ..................... 3 $ 6,588,621 0.8% 1.23x 73.0%
-- ------------ ---- ---- ----
Total/Weighted Average ......... 140 $814,388,116 100.0% 1.38x 68.3%
=== ============ ===== ==== ====
</TABLE>
Weighted Average Original Term to Maturity/Anticipated Repayment Date in
Months: 117
REMAINING TERM TO MATURITY/ANTICIPATED REPAYMENT DATE IN MONTHS
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE
NUMBER PRINCIPAL PRINCIPAL WEIGHTED
OF BALANCE BALANCE WEIGHTED AVERAGE
MORTGAGE AS OF THE AS OF THE AVERAGE CUT-OFF
REMAINING TERM IN MONTHS LOANS CUT-OFF DATE CUT-OFF DATE DSCR DATE LTV
- -------------------------------- ---------- -------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Anticipated Repayment Date Loans
49 - 60 ....................... 1 $ 2,789,582 0.3% 1.25x 75.4%
61 - 72 ....................... 2 51,667,396 6.3 1.41 57.9
73 - 84 ....................... 3 22,934,032 2.8 1.23 76.0
85 - 120 ...................... 65 380,476,262 46.7 1.34 69.2
-- ------------ ---- ---- ----
Subtotal .................... 71 $457,867,272 56.2% 1.35x 68.3%
Balloon Loans
49 - 60 ....................... 4 $ 14,331,226 1.8% 1.54x 66.1%
61 - 72 ....................... 8 15,578,384 1.9 2.00 59.9
73 - 84 ....................... 1 1,132,598 0.1 1.26 70.8
85 - 120 ...................... 49 256,901,887 31.5 1.34 69.8
121 - 180 ..................... 2 24,484,778 3.0 1.41 70.4
-- ------------ ---- ---- ----
Subtotal .................... 64 $312,428,873 38.4% 1.38x 69.2%
Interest Only Loans
85 - 120 ...................... 2 $ 37,503,350 4.6% 1.78x 59.0%
Fully-Amortizing Loans
181 - 240 ..................... 3 $ 6,588,621 0.8% 1.23x 73.0%
-- ------------ ---- ---- ----
Total/Weighted Average ......... 140 $814,388,116 100.0% 1.38x 68.3%
=== ============ ===== ==== ====
</TABLE>
Weighted Average Remaining Term to Maturity/Anticipated Repayment Date in
Months: 112
S-31
<PAGE>
REMAINING AMORTIZATION TERM IN MONTHS (1)(2)
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE
NUMBER PRINCIPAL PRINCIPAL WEIGHTED
OF BALANCE BALANCE WEIGHTED AVERAGE
MORTGAGE AS OF THE AS OF THE AVERAGE CUT-OFF
REMAINING TERM IN MONTHS LOANS CUT-OFF DATE CUT-OFF DATE DSCR DATE LTV
- -------------------------------- ---------- -------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Anticipated Repayment Date Loans
181-240 ....................... 8 $ 44,142,290 5.7% 1.52x 63.2%
241-300 ....................... 25 107,497,205 13.8 1.38 63.2
301-360 ....................... 38 306,227,777 39.4 1.31 70.8
-- ------------ ---- ---- ----
Subtotal .................... 71 $457,867,272 58.9% 1.35x 68.3%
Balloon Loans
181-240 ....................... 13 $ 38,957,346 5.0% 1.69x 61.7%
241-300 ....................... 16 66,060,194 8.5 1.40 68.0
301-360 ....................... 35 207,411,333 26.7 1.32 71.0
-- ------------ ---- ---- ----
Subtotal .................... 64 $312,428,873 40.2% 1.38x 69.2%
Fully-Amortizing Loans
181-240 ....................... 3 $ 6,588,621 0.8% 1.23x 73.0%
-- ------------ ---- ---- ----
Total/Weighted Average ......... 138 $776,884,766 100.0% 1.36x 68.7%
=== ============ ===== ==== ====
</TABLE>
Weighted Average Remaining Amortization Term in Months: 327
- ----------
(1) Excludes the Interest Only loans (Loan Numbers 6 and 8).
(2) One Mortgage Loan (Loan Number 1) is currently subject to payments of
interest only. The remaining amortization term used for this Mortgage
Loan applies to a principal and interest payment which begins on November
1, 2000.
MONTH AND YEAR OF ORIGINATION
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE
NUMBER PRINCIPAL PRINCIPAL WEIGHTED
OF BALANCE BALANCE WEIGHTED AVERAGE
MORTGAGE AS OF THE AS OF THE AVERAGE CUT-OFF
MONTH AND YEAR OF ORIGINATION LOANS CUT-OFF DATE CUT-OFF DATE DSCR DATE LTV
- ------------------------------- ---------- -------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
June 1997 ..................... 1 $ 3,310,110 0.4% 1.27x 73.6%
December 1997 ................. 1 3,429,290 0.4 1.96 57.2
June 1998 ..................... 1 4,259,809 0.5 2.22 57.1
August 1998 ................... 7 11,318,575 1.4 1.92 61.0
September 1998 ................ 1 13,619,235 1.7 1.50 65.7
December 1998 ................. 2 28,653,235 3.5 1.31 71.6
March 1999 .................... 3 17,025,071 2.1 1.36 73.9
May 1999 ...................... 3 11,779,769 1.4 1.27 73.7
June 1999 ..................... 11 92,618,380 11.4 1.28 71.9
July 1999 ..................... 21 104,471,691 12.8 1.36 67.0
August 1999 ................... 31 184,372,516 22.6 1.42 66.9
September 1999 ................ 33 200,359,191 24.6 1.36 67.1
October 1999 .................. 13 81,029,259 9.9 1.39 71.5
November 1999 ................. 11 53,581,350 6.6 1.33 67.5
December 1999 ................. 1 4,560,634 0.6 1.35 66.8
-- ------------ ---- ---- ----
Total: ....................... 140 $814,388,116 100.0% 1.38x 68.3%
=== ============ ===== ==== ====
</TABLE>
Weighted Average Months Since Origination: 5
S-32
<PAGE>
YEAR OF SCHEDULED MATURITY/ANTICIPATED REPAYMENT DATE
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE
NUMBER PRINCIPAL PRINCIPAL WEIGHTED
OF BALANCE BALANCE WEIGHTED AVERAGE
YEAR OF SCHEDULED MATURITY/ MORTGAGE AS OF THE AS OF THE AVERAGE CUT-OFF
ANTICIPATED REPAYMENT DATE LOANS CUT-OFF DATE CUT-OFF DATE DSCR DATE LTV
- ----------------------------- ---------- -------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
2004 ........................ 4 $ 13,691,518 1.7% 1.38x 70.2%
2005 ........................ 11 70,675,070 8.7 1.57 58.3
2006 ........................ 4 24,066,630 3.0 1.23 75.7
2008 ........................ 1 7,361,125 0.9 2.31 47.5
2009 ........................ 115 667,520,374 82.0 1.35 69.1
2013 ........................ 1 13,619,235 1.7 1.50 65.7
2014 ........................ 1 10,865,543 1.3 1.30 76.2
2017 ........................ 1 3,310,110 0.4 1.27 73.6
2018 ........................ 1 1,588,291 0.2 1.07 79.0
2019 ........................ 1 1,690,220 0.2 1.30 66.3
--- ------------ ---- ---- ----
Total: ..................... 140 $814,388,116 100.0% 1.38x 68.3%
=== ============ ===== ==== ====
</TABLE>
The following two tables set forth the range of Cut-off Date LTV Ratios
and Maturity Date/Anticipated Repayment Date LTV Ratios of the Mortgage Loans.
A "Cut-off Date LTV Ratio" is a fraction, expressed as a percentage, the
numerator of which is the Cut-off Date principal balance of a Mortgage Loan, and
the denominator of which is the appraised value of the related Mortgaged
Property as determined by an appraisal thereof obtained in connection with the
origination of such Mortgage Loan. A "Maturity Date/Anticipated Repayment Date
LTV Ratio" is a fraction, expressed as a percentage, the numerator of which is
the principal balance of a Mortgage Loan on the related Maturity Date or, in the
case of an ARD Loan, the related Anticipated Repayment Date assuming all
scheduled payments due prior thereto are made and there are no principal
prepayments, and the denominator of which is the appraised value of the related
Mortgaged Property as determined by an appraisal thereof obtained in connection
with the origination of such Mortgage Loan. Because the value of Mortgaged
Properties at the Maturity Date or, in the case of an ARD Loan, the Anticipated
Repayment Date may be different than such appraised value, there can be no
assurance that the loan-to-value ratio for any Mortgage Loan determined at any
time following origination thereof will be lower than the Cut-off Date LTV
Ratio, notwithstanding any positive amortization of such Mortgage Loan. It is
possible that the market value of a Mortgaged Property securing a Mortgage Loan
may decline between the origination thereof and the related Maturity Date or, in
the case of an ARD Loan the Anticipated Repayment Date.
An appraisal of the value for each of the Mortgaged Properties was made
between May 28, 1997 and November 14, 1999. It is possible that the market
value of a Mortgaged Property securing a Mortgage Loan has declined since the
most recent appraisal for such Mortgaged Property. All appraisals were obtained
in accordance with the requirements of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, as amended ("FIRREA").
S-33
<PAGE>
CUT-OFF DATE LTV RATIOS
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE
NUMBER PRINCIPAL PRINCIPAL WEIGHTED
OF BALANCE BALANCE WEIGHTED AVERAGE
MORTGAGE AS OF THE AS OF THE AVERAGE CUT-OFF
CUT-OFF DATE LTV RATIOS LOANS CUT-OFF DATE CUT-OFF DATE DSCR DATE LTV
- ------------------------- ---------- -------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
50.00% or less .......... 4 $ 22,056,890 2.7% 1.69x 48.4%
50.01% - 55.00% ......... 2 4,772,468 0.6 1.70 53.5
55.01% - 60.00% ......... 16 148,011,324 18.2 1.57 58.0
60.01% - 65.00% ......... 16 61,505,428 7.6 1.50 62.8
65.01% - 70.00% ......... 28 165,346,922 20.3 1.35 67.6
70.01% - 75.00% ......... 46 264,570,713 32.5 1.29 72.1
75.01% - 80.00% ......... 28 148,124,371 18.2 1.26 78.0
-- ------------ ---- ---- ----
Total: ................. 140 $814,388,116 100.0% 1.38x 68.3%
=== ============ ===== ==== ====
</TABLE>
Weighted Average Cut-off Date LTV Ratio: 68.25%
MATURITY DATE/ANTICIPATED REPAYMENT DATE
LTV RATIOS
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE
NUMBER PRINCIPAL PRINCIPAL WEIGHTED
OF BALANCE BALANCE WEIGHTED AVERAGE
MATURITY DATE MORTGAGE AS OF THE AS OF THE AVERAGE CUT-OFF
ANTICIPATED REPAYMENT DATE LTV RATIOS LOANS(1) CUT-OFF DATE CUT-OFF DATE DSCR DATE LTV
- --------------------------------------- ---------- -------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
50.00% or less ........................ 25 $130,616,778 16.2% 1.58x 59.3%
50.01% - 55.00% ....................... 16 67,070,640 8.3 1.43 62.2
55.01% - 60.00% ....................... 21 155,554,671 19.3 1.48 62.8
60.01% - 65.00% ....................... 35 254,004,348 31.4 1.29 70.9
65.01% - 70.00% ....................... 25 124,354,828 15.4 1.28 75.5
70.01% - 75.00% ....................... 13 70,558,082 8.7 1.26 78.9
75.01% - 80.00% ....................... 2 5,640,148 0.7 1.23 79.2
-- ------------ ---- ---- ----
Total: ............................... 137 $807,799,495 100.0% 1.38x 68.2%
=== ============ ===== ==== ====
</TABLE>
Weighted Average Maturity Date LTV Ratio: 59.71%
- ----------
(1) Excludes fully amortizing Mortgage Loans.
The following table sets forth the range of Underwritten Cash Flow Debt
Service Coverage Ratios for the Mortgage Loans. The "Underwritten Cash Flow
Debt Service Coverage Ratio" or "UW DSCR" for any Mortgage Loan for any period
as presented in the table below or Annex A, is the ratio of Underwritten Cash
Flow calculated for the related Mortgaged Property to the amounts of principal
and interest due under such Mortgage Loan during the 12-month period that
includes February 1, 2000 and January 1, 2001. "Underwritten Cash Flow" or "UW
Cash Flow" means the Underwritten NOI (as defined below) for the Mortgaged
Property decreased by an amount that the applicable Seller has determined to be
an appropriate allowance for average annual tenant improvements, leasing
commissions, and replacement reserves for capital items based upon its
underwriting guidelines. "Debt Service Coverage Ratio" for a period, on the
other hand, is the ratio of the NOI for the period to the amounts of principal
and interest due under the related Mortgage Loan for the same period.
"Underwritten NOI" or "UW NOI" means the NOI for the Mortgaged Property as
determined by the applicable Seller in accordance with its underwriting
guidelines for similar properties. Revenue from a Mortgaged Property
("Effective Gross Income") is generally calculated as follows: rental revenue
is calculated using actual rental rates, in some cases, adjusted downward to
market rates with vacancy rates equal to the higher of the Mortgaged Property's
historical rate, the market rate or an assumed vacancy rate; other revenue,
such as parking fees, laundry and other income items are included only if
supported by a trend and/or is likely to be recurring. Operating expenses
generally reflect the Mortgaged Property's historical expenses, adjusted to
account for inflation, significant occupancy increases and a market rate
S-34
<PAGE>
management fee. Generally, "Net Operating Income" ("NOI") for a Mortgaged
Property equals the operating revenues (consisting principally of rental and
related revenue) for such Mortgaged Property minus the operating expenses (such
as utilities, repairs and maintenance, general and administrative, management
fees, marketing and advertising, insurance and real estate tax expenses) for
the Mortgaged Property. NOI generally does not reflect replacement reserves,
capital expenditures, debt service, tenant improvements, leasing commissions,
depreciation, amortization and similar non-operating items.
The amounts representing "Net Operating Income," "Underwritten NOI" and
"Underwritten Cash Flow" are not a substitute for or an improvement upon net
income as determined in accordance with generally accepted accounting
principles as a measure of the results of the Mortgaged Property's operations
or a substitute for cash flows from operating activities determined in
accordance with generally accepted accounting principles as a measure of
liquidity. No representation is made as to the future net cash flow of the
properties, nor is "Net Operating Income," "Underwritten NOI" and "Underwritten
Cash Flow" set forth herein intended to represent such future net cash flow.
The UW Cash Flows and UW NOIs used as a basis for calculating the UW DSCRs
presented in the following table and in Annex A attached hereto, were derived
principally from operating statements obtained from the respective Mortgagors
(the "Operating Statements"). The Operating Statements were not audited and in
most cases were not prepared in accordance with generally accepted accounting
principles. To increase the level of consistency between the Operating
Statements, in some instances, adjustments were made to such Operating
Statements. These adjustments were principally for real estate tax and
insurance expenses (e.g., adjusting for the payment of two years of expense in
one year), and to eliminate obvious items not related to the operation of the
Mortgaged Property. However, such adjustments were subjective in nature and may
not have been made in a uniform manner.
UNDERWRITTEN CASH FLOW DEBT SERVICE COVERAGE RATIOS
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE
NUMBER PRINCIPAL PRINCIPAL WEIGHTED
OF BALANCE BALANCE WEIGHTED AVERAGE
MORTGAGE AS OF THE AS OF THE AVERAGE CUT-OFF
UNDERWRITTEN CASH FLOW DEBT SERVICE COVERAGE RATIOS LOANS CUT-OFF DATE CUT-OFF DATE DSCR DATELTV
- ----------------------------------------------------- ---------- -------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
1.200x or less(1) ................................... 2 $ 4,030,687 0.5% 1.13x 70.1%
1.201x - 1.250x ..................................... 22 137,869,289 16.9 1.23 73.3
1.251x - 1.300x ..................................... 34 197,111,662 24.2 1.27 73.4
1.301x - 1.400x ..................................... 42 223,568,170 27.5 1.33 69.1
1.401x - 1.500x ..................................... 19 143,449,256 17.6 1.44 61.7
1.501x - 1.600x ..................................... 4 17,394,528 2.1 1.52 62.8
1.601x - 1.700x ..................................... 3 12,375,016 1.5 1.64 57.9
1.701x - 1.800x ..................................... 5 36,863,715 4.5 1.74 60.5
1.801x - 1.900x ..................................... 3 21,184,183 2.6 1.82 59.3
1.901x - 2.000x ..................................... 2 5,319,012 0.7 1.94 56.7
2.001x - 2.100x ..................................... 1 1,998,364 0.2 2.05 68.5
2.201x - 2.300x ..................................... 1 4,259,809 0.5 2.22 57.1
2.301x - 2.400x ..................................... 2 8,964,425 1.1 2.31 49.6
-- ------------ ---- ---- ----
Total: ............................................. 140 $814,388,116 100.0% 1.38x 68.3%
=== ============ ===== ==== ====
</TABLE>
Weighted Average UW DSCR: 1.38x
- ----------
(1) Herndon Village Shoppes (Loan Number 95) has a UW DSCR of 1.16x with a
16-year amortization period. RiteAid -- Dayton (Loan Number 119) is a
credit tenant lease loan with a UW DSCR of 1.07x.
S-35
<PAGE>
GEOGRAPHIC DISTRIBUTION
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE
NUMBER PRINCIPAL PRINCIPAL WEIGHTED
OF BALANCE BALANCE WEIGHTED AVERAGE
MORTGAGED AS OF THE AS OF THE AVERAGE CUT-OFF
GEOGRAPHIC DISTRIBUTION PROPERTIES CUT-OFF DATE CUT-OFF DATE DSCR DATE LTV
- ------------------------- ------------ -------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
California .............. 26 $145,372,868 17.9% 1.46x 64.5%
New York ................ 12 97,359,852 12.0 1.37 65.7
Illinois ................ 8 68,757,586 8.4 1.27 73.1
Maryland ................ 8 66,441,508 8.2 1.43 68.9
Florida ................. 11 65,512,867 8.0 1.31 70.6
Texas ................... 17 44,658,735 5.5 1.28 72.4
New Jersey .............. 6 40,835,753 5.0 1.30 65.3
Massachusetts ........... 6 30,373,752 3.7 1.38 66.6
North Carolina .......... 7 28,972,220 3.6 1.43 66.5
Nevada .................. 4 27,932,532 3.4 1.26 73.0
Colorado ................ 5 27,839,747 3.4 1.56 64.2
Pennsylvania ............ 7 22,732,097 2.8 1.33 66.7
Canada .................. 10 22,559,278 2.8 1.88 61.7
Michigan ................ 4 21,828,529 2.7 1.31 76.1
Ohio .................... 5 19,599,094 2.4 1.24 71.6
Indiana ................. 3 18,137,876 2.2 1.41 64.7
Arizona ................. 2 13,749,730 1.7 1.26 73.7
Virginia ................ 5 11,651,061 1.4 1.30 70.2
Georgia ................. 2 5,309,006 0.7 1.26 71.8
Alabama ................. 1 4,688,695 0.6 1.25 79.5
Wisconsin ............... 2 4,494,190 0.6 1.23 74.7
Rhode Island ............ 1 4,240,067 0.5 1.41 69.6
New Hampshire ........... 1 3,889,927 0.5 1.46 70.7
Tennessee ............... 2 3,755,357 0.5 1.58 61.1
Oklahoma ................ 2 3,414,357 0.4 1.39 79.4
Connecticut ............. 2 3,194,902 0.4 1.55 74.4
Oregon .................. 2 2,896,894 0.4 1.25 75.1
Kentucky ................ 1 1,784,329 0.2 1.30 71.4
Minnesota ............... 1 1,264,689 0.2 1.30 71.3
Missouri ................ 1 1,140,618 0.1 1.37 79.2
-- ------------ ---- ---- ----
Total: ................. 164 $814,388,116 100.0% 1.38x 68.3%
=== ============ ===== ==== ====
</TABLE>
S-36
<PAGE>
PROPERTY TYPES
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE WEIGHTED
NUMBER OF PRINCIPAL PRINCIPAL WEIGHTED AVERAGE
MORTGAGED BALANCE AS OF BALANCE AS OF AVERAGE CUT-OFF
PROPERTY TYPE PROPERTIES THE CUT-OFF DATE THE CUT-OFF DATE DSCR DATE LTV
- -------------------------------- ------------ ------------------ ------------------ ---------- ---------
<S> <C> <C> <C> <C> <C>
Multifamily
Multifamily ................... 45 $183,242,204 22.5% 1.33x 72.7%
Manufactured Housing .......... 1 13,985,254 1.7 1.20 71.7
Mobile Home Park .............. 3 5,812,417 0.7 1.32 62.7
-- ------------ ---- ---- ----
Subtotal .................... 49 $203,039,876 24.9% 1.32x 72.3%
Retail
Anchored ...................... 15 $102,892,766 12.6% 1.36x 71.1%
Unanchored .................... 21 46,933,858 5.8 1.36 66.6
Factory Outlet ................ 3 22,753,296 2.8 1.45 55.8
Specialty ..................... 1 5,050,168 0.6 1.45 68.2
-- ------------ ---- ---- ----
Subtotal .................... 40 $177,630,087 21.8% 1.37x 67.9%
Office
CBD ........................... 6 $111,907,572 13.7% 1.36x 64.4%
Suburban ...................... 18 60,981,010 7.5 1.38 69.0
-- ------------ ---- ---- ----
Subtotal .................... 24 $172,888,583 21.2% 1.37x 66.0%
Industrial
Flex Space .................... 15 $ 79,543,735 9.8% 1.32x 70.3%
Warehouse ..................... 6 63,900,621 7.8 1.30 69.4
-- ------------ ---- ---- ----
Subtotal .................... 21 $143,444,356 17.6% 1.31x 69.9%
Hotel
Limited Service ............... 16 $ 44,530,876 5.5% 1.61x 63.1%
Full Service .................. 4 14,249,292 1.7 1.87 58.4
-- ------------ ---- ---- ----
Subtotal .................... 20 $ 58,780,168 7.2% 1.67x 62.0%
Mixed Use
Multifamily/Hotel ............. 1 $ 13,776,427 1.7% 1.33x 67.2%
Office/Retail ................. 4 9,746,531 1.2 1.54 63.0
-- ------------ ---- ---- ----
Subtotal .................... 5 $ 23,522,959 2.9% 1.42x 65.5%
Nursing Home ................... 1 $ 13,918,633 1.7% 1.75x 61.6%
Congregate Care ................ 2 $ 12,637,276 1.6% 1.49x 67.0%
Self-Storage ................... 2 $ 8,526,178 1.0% 1.41x 60.8%
-- ------------ ---- ---- ----
Total/Weighted Average ......... 164 $814,388,116 100.0% 1.38x 68.3%
=== ============ ===== ==== ====
</TABLE>
YEARS SINCE THE MORTGAGED PROPERTIES WERE BUILT(1)
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE
NUMBER PRINCIPAL PRINCIPAL WEIGHTED
OF BALANCE BALANCE WEIGHTED AVERAGE
MORTGAGED AS OF THE AS OF THE AVERAGE CUT-OFF
YEARS SINCE THE MORTGAGED PROPERTIES WERE BUILT PROPERTIES CUT-OFF DATE CUT-OFF DATE DSCR DATE LTV
- ------------------------------------------------- ------------ -------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
5 or less ...................................... 24 $130,839,461 16.1% 1.33x 70.0%
6 - 10 ......................................... 12 69,843,772 8.6 1.39 67.6
11 - 15 ......................................... 33 132,655,044 16.3 1.42 69.6
16 - 20 ......................................... 25 117,495,025 14.4 1.35 69.1
21 - 25 ......................................... 12 35,349,563 4.3 1.37 66.8
26 - 30 ......................................... 18 73,894,432 9.1 1.47 64.7
31 or more ...................................... 40 254,310,819 31.2 1.37 67.7
-- ------------ ---- ---- ----
Total: ......................................... 164 $814,388,116 100.0% 1.38x 68.3%
=== ============ ===== ==== ====
</TABLE>
Weighted Average Property Age: 20(2)
- ----------
(1) For Properties constructed in stages, the earliest date was used.
(2) Eleven properties originally constructed prior to 1930 were excluded from
the weighted average calculation due to significant renovations that have
occured since then and/or due to the historical nature of the property.
S-37
<PAGE>
PHYSICAL OCCUPANCY PERCENTAGES(1)
MULTIFAMILY
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE
NUMBER PRINCIPAL PRINCIPAL WEIGHTED
OF BALANCE AS OF BALANCE AS OF WEIGHTED AVERAGE
PHYSICAL OCCUPANCY PERCENTAGES(1) MORTGAGED THE CUT-OFF THE CUT-OFF AVERAGE CUT-OFF
MULTIFAMILY PROPERTIES DATE DATE DSCR DATE LTV
- ----------------------------------- ------------ --------------- --------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
85.01% - 90.00% ................... 6 $ 14,410,558 7.10% 1.26x 70.2%
90.01% - 95.00% ................... 8 60245843 29.7 1.26 73.2
95.01% - 100.00% .................. 35 128383476 63.2 1.35 72.2
-- ------------ ---- ---- ----
Total: ........................... 49 $203,039,876 100.0% 1.32x 72.3%
== ============ ===== ==== ====
</TABLE>
Weighted Average Occupancy Percentage: 95.93%
- ----------
(1) See Annex A for dates as of which occupancy percentages were calculated
for each Mortgaged Property.
PHYSICAL OCCUPANCY PERCENTAGES(1)
RETAIL
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE
NUMBER PRINCIPAL PRINCIPAL WEIGHTED
OF BALANCE BALANCE WEIGHTED AVERAGE
PHYSICAL OCCUPANCY PERCENTAGES(1) MORTGAGED AS OF THE AS OF THE AVERAGE CUT-OFF
RETAIL PROPERTIES CUT-OFF DATE CUT-OFF DATE DSCR DATELTV
- ----------------------------------- ------------ -------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
60.01% - 65.00%(2) ................ 2 $ 4,258,335 2.4% 1.57x 52.7%
75.01% - 80.00%(2) ................ 2 15,171,376 8.5 1.55 57.6
80.01% - 85.00% ................... 2 5,950,618 3.4 1.63 59.2
85.01% - 90.00% ................... 2 8,088,900 4.6 1.74 59.0
90.01% - 95.00% ................... 7 36,983,326 20.8 1.34 72.5
95.01% - 100.00% .................. 25 107,177,533 60.3 1.31 69.5
-- ------------ ---- ---- ----
Total: ........................... 40 $177,630,087 100.0% 1.37x 67.9%
== ============ ===== ==== ====
</TABLE>
Weighted Average Occupancy Percentage: 93.90%
- ----------
(1) See Annex A for dates as of which occupancy percentages were calculated
for each Mortgaged Property.
(2) See "-- Largest Mortgage Loans" for a description of the Abbey Company
Loans and the Horizon Outlet Loans.
PHYSICAL OCCUPANCY PERCENTAGES(1)
OFFICE
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE
NUMBER PRINCIPAL PRINCIPAL WEIGHTED
OF BALANCE BALANCE WEIGHTED AVERAGE
PHYSICAL OCCUPANCY PERCENTAGES(1) MORTGAGED AS OF THE AS OF THE AVERAGE CUT-OFF
OFFICE PROPERTIES CUT-OFF DATE CUT-OFF DATE DSCR DATE LTV
- ----------------------------------- ------------ -------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
80.01% - 85.00% ................... 4 $ 14,428,703 8.3% 1.34x 72.4%
90.01% - 95.00% ................... 5 49,252,005 28.5 1.29 70.3
95.01% - 100.00% .................. 15 109,207,875 63.2 1.41 63.2
-- ------------ ---- ---- ----
Total: ........................... 24 $172,888,583 100.0% 1.37x 66.0%
== ============ ===== ==== ====
</TABLE>
Weighted Average Occupancy Percentage: 95.61%
- ----------
(1) See Annex A for dates as of which occupancy percentages were calculated
for each Mortgaged Property.
S-38
<PAGE>
PHYSICAL OCCUPANCY PERCENTAGES(1)
INDUSTRIAL
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE
NUMBER PRINCIPAL PRINCIPAL WEIGHTED
OF BALANCE AS OF BALANCE AS OF WEIGHTED AVERAGE
PHYSICAL OCCUPANCY PERCENTAGE(1) MORTGAGED THE CUT-OFF THE CUT-OFF AVERAGE CUT-OFF
INDUSTRIAL PROPERTIES DATE DATE DSCR DATE LTV
- ---------------------------------- ------------ --------------- --------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
85.01% - 90.00% .................. 1 $ 2,286,250 1.6% 1.82x 59.0%
90.01% - 95.00% .................. 1 27,512,617 19.2 1.30 71.3
95.01% - 100.00% ................. 19 113,645,489 79.2 1.31 69.8
-- ------------ ---- ---- ----
Total: .......................... 21 $143,444,356 100.0% 1.31x 69.9%
== ============ ===== ==== ====
</TABLE>
Weighted Average Occupancy Percentage: 98.66%
- ----------
(1) See Annex A for dates as of which occupancy percentages were calculated
for each Mortgaged Property.
PHYSICAL OCCUPANCY PERCENTAGES(1)
HOTEL
<TABLE>
<CAPTION>
PERCENT BY
AGGREGATE AGGREGATE
NUMBER PRINCIPAL PRINCIPAL WEIGHTED
OF BALANCE AS OF BALANCE AS OF WEIGHTED AVERAGE
PHYSICAL OCCUPANCY PERCENTAGES(1) MORTGAGED THE CUT-OFF THE CUT-OFF AVERAGE CUT-OFF
HOTEL PROPERTIES DATE DATE DSCR DATE LTV
- ----------------------------------- ------------ --------------- --------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
55.01% - 60.00% ................... 1 $ 4,598,974 7.8% 1.40x 63.2%
60.01% - 65.00% ................... 3 9,380,043 16.0 1.57 64.6
65.01% - 70.00% ................... 4 14,198,745 24.2 1.50 63.0
70.01% - 75.00% ................... 5 15,007,671 25.5 1.81 60.1
75.01% - 80.00% ................... 3 7,030,954 12.0 2.06 60.8
80.01% - 85.00% ................... 2 6,193,400 10.5 1.62 62.7
85.01% - 90.00% ................... 2 2,370,382 4.0 1.79 55.6
- ----------- ---- ---- ----
Total: ........................... 20 $58,780,168 100.0% 1.67x 62.0%
== =========== ===== ==== ====
</TABLE>
Weighted Average Occupancy Percentage: 71.01%
- ----------
(1) See Annex A for dates as of which occupancy percentages were calculated
for each Mortgaged Property.
With certain limited exceptions relating to casualty and condemnation
proceeds, or other prepayments beyond the Mortgagor's control, all of the
Mortgage Loans prohibit the prepayment thereof until a date specified in the
related Mortgage Note (such period, the "Lock-out Period" and the date of
expiration thereof, the "Lock-out Date"). Thereafter, each Mortgage Loan
provides that until a date specified in the related Mortgage Note the related
Mortgagor will be required to pay a yield maintenance penalty (a "Prepayment
Premium") upon any voluntary principal prepayment of a Mortgage Loan or provide
for Defeasance, in whole and/or in part. The following table sets forth the
percentage of the declining aggregate principal balance of all the Mortgage
Loans that on January 1 of each of the years indicated will be within their
related Lock-out Period, are subject to Defeasance and/or in which a principal
prepayment must be accompanied by a Prepayment Premium.
S-39
<PAGE>
PREPAYMENT PROTECTION
PERCENTAGE OF MORTGAGE LOANS BY OUTSTANDING
PRINCIPAL BALANCE AS OF THE CUT-OFF DATE THAT HAVE
PREPAYMENT LOCK-OUTS OR PENALTIES (ASSUMING NO PREPAYMENTS)*
<TABLE>
<CAPTION>
JANUARY JANUARY JANUARY JANUARY
CURRENT 2001 2002 2003 2004
----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Lock-Out/Defeasance(1) ......... 100.0% 99.1% 99.1% 99.1% 96.9%
YM(2) .......................... 0.0 0.9 0.9 0.9 3.1
----- ---- ---- ---- ----
Total Lock-Out/ Defeasance
and YM ........................ 100.00 100.0 100.0 100.0 100.0
1.00%(3) ....................... 0.0 0.0 0.0 0.0 0.0
No Prepayment Premium .......... 0.0 0.0 0.0 0.0 0.0
------ ----- ----- ----- -----
Total .......................... 100.0% 100.0% 100.0% 100.0% 100.0%
====== ===== ===== ===== =====
Aggregate Mortgage Loan
Balance(4) .................... $ 814.4 $ 807.0 $ 798.5 $ 789.3 $ 779.3
Percentage of Balance
Outstanding ................... 100.0% 99.1% 98.1% 96.9% 95.7%
<CAPTION>
JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY
2005 2006 2007 2008 2009 2110
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Lock-Out/Defeasance(1) ......... 97.3% 97.2% 97.1% 96.8% 96.5% 43.5%
YM(2) .......................... 1.8 1.8 1.8 2.2 2.3 56.5
---- ---- ---- ---- ---- ----
Total Lock-Out/ Defeasance
and YM ........................ 99.1 99.0 99.0 99.0 98.8 100.0
1.00%(3) ....................... 0.9 1.0 1.0 0.0 0.0 0.0
No Prepayment Premium .......... 0.0 0.0 0.0 1.0 1.2 0.0
---- ---- ---- ---- ---- -----
Total .......................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== ===== =====
Aggregate Mortgage Loan
Balance(4) .................... $ 752.9 $ 679.8 $ 646.5 $ 634.8 $ 590.6 $ 24.7
Percentage of Balance
Outstanding ................... 92.4% 83.5% 79.4% 78.0% 72.5% 3.0%
</TABLE>
- ----------
(1) Certain Mortgage Loans permit the applicable Mortgagor after a specified
period (not less than two years from the Delivery Date) to obtain the
release of the related Mortgaged Property from the lien of the related
Mortgage upon substitution of direct non-callable obligations of the
United States providing payments in amounts equal to the scheduled
payments due on such Mortgage Loan to the related Maturity Date or, in
the case of certain of the ARD Loans, the Anticipated Repayment Date. The
Master Servicer shall, on behalf of the related Mortgagor, purchase such
obligations of the United States for deposit into the Trust Fund. Any
such substitution shall be subject to, among other things, certain
conditions set forth in the Pooling and Servicing Agreement. Such
substitution of collateral is referred to herein as "Defeasance." For
purposes of this table, to the extent a Mortgagor may elect to defease
the related Mortgage Loan, such Mortgage Loan will be reflected in the
"Lock-Out/Defeasance" category.
(2) The Mortgage Loan generally requires the payment of a Prepayment Premium
in connection with any principal prepayment, in whole or in part. Any
Prepayment Premium will equal the present value, as of the date of
prepayment, of the remaining Monthly Payments from such date of
prepayment through the related stated maturity (including the Balloon
Payment), determined by discounting such payments at a U.S. Treasury rate
(or with respect to the Canadian Loans, a Canadian Treasury rate)
specified therein, minus the then outstanding principal balance, subject
to a minimum Prepayment Premium equal to 1% of the principal balance of
such Mortgage Loan being prepaid ("Yield Maintenance" or "YM").
(3) The Mortgage Loan requires a Prepayment Premium equal to the indicated
percentage of the amount that is prepaid.
(4) Millions of dollars.
* See Annex A and the Diskette for additional, detailed information on the
Mortgage Loans' Prepayment Penalties.
S-40
<PAGE>
LARGEST MORTGAGE LOANS
Set forth below are the Mortgage Loans or groups of cross-collateralized
and cross-defaulted Mortgage Loans which represent in excess of 2.0% of the
Initial Pool Balance.
THE 711 THIRD AVENUE LOAN
The Loan. The largest Mortgage Loan (the "711 Third Avenue Loan"), which
represents approximately 6.0% of the Initial Pool Balance, was originated by
MGT on September 10, 1999 and has a principal balance as of the Cut-off Date of
$49,225,000 (Loan Number 1). The 711 Third Avenue Loan is secured by a first
mortgage encumbering a 100% leasehold interest and an undivided 50% interest in
the fee estate of a 20-story office building located at 711 Third Avenue, in
New York, New York (the "711 Third Avenue Property"). The 711 Third Avenue Loan
was made to SLG 711 Third LLC and SLG 711 Fee LLC, special purpose limited
liability companies (collectively, the "711 Third Avenue Borrower") which are
controlled by SL Green Realty Corp. (NYSE Symbol: SLG) ("SL Green"), a real
estate investment trust that owns, manages, leases, acquires, and repositions
office properties in Manhattan. At September 30, 1999, SL Green reported its
portfolio consisted of 24 properties, 21 of which are wholly owned, comprising
approximately 8.5 million square feet and had a portfolio occupancy rate of
95%. At September 30, 1999, SL Green reported total assets of $1.0 billion,
total debt of $422.4 million, and a debt-to-total market capitalization of 39%.
The 711 Third Avenue Loan has an initial twelve-month interest only period
ending October 1, 2000, followed by a 360-month amortization term and matures
on October 1, 2030. The 711 Third Avenue Loan is an ARD Loan with an
Anticipated Repayment Date of October 1, 2005. The 711 Third Avenue Loan may
not be prepaid prior to April 1, 2005 and may be prepaid, in whole or in part,
without payment of a Prepayment Premium, at any time thereafter. The 711 Third
Avenue Loan is subject to Defeasance, in whole or in part, at any time after
the second anniversary of the Delivery Date.
The Property. The 711 Third Avenue Property is a 20-story Class A office
building comprising 528,357 square feet of net rentable area. The 711 Third
Avenue Property was built in 1955 with several subsequent improvements and
includes a 165-space parking garage that is leased to a third party operator.
The 711 Third Avenue Property is located on approximately 1.09 acres at the
eastern side of Third Avenue between East 44th and East 45th Streets, in the
Grand Central District of Manhattan. The 711 Third Avenue Property is leased to
25 tenants. Approximately 37% of the net rentable space is leased to Parade
Publications, Crain's Communications and Chicago Title (rated "Baa1" and "BBB"
by Moody's and Standard & Poor's Ratings Services, a division of the
McGraw--Hill Companies, Inc. ("S&P"), respectively) and street-level retail
tenants Eddie Bauer and The Avenue. The 711 Third Avenue Property occupancy was
96.0% as of September 8, 1999.
Property Management. The 711 Third Avenue Property is managed by SL Green
Management LLC, an affiliate of the 711 Third Avenue Borrower, which manages
approximately 30 properties comprising ten million square feet for its own
portfolio and third parties.
Operating History.
<TABLE>
<CAPTION>
TRAILING 12 TRAILING 12 ORIGINATOR'S
1997 ACTUAL MOS. -- 6/99 MOS. -- 10/99 UNDERWRITTEN
---------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Effective Gross Income ................ $ 11,297,000 $ 14,016,280 $ 15,329,745 $ 14,778,011
Expenses .............................. 8,108,000 7,627,578 7,634,817 7,852,154
------------ ------------ ------------ ------------
NOI ................................... $ 3,189,000 $ 6,388,702 $ 7,694,928 $ 6,925,857
============ ============ ============ ============
UW Cash Flow .......................... N/A N/A N/A $ 5,902,107
Occupancy ............................. 76.0% 95.8% 95.8% 92.5%
Operating Expense Ratio(1) ............ 71.8% 54.4% 49.8% 53.1%
Debt Service Coverage Ratio based on
NOI .................................. 0.77x 1.54x 1.86x 1.67x
UW DSCR based on UW Cash Flow ......... N/A N/A N/A 1.42x
</TABLE>
- ----------
(1) Expenses as a percentage of Effective Gross Income.
S-41
<PAGE>
Lockbox and Reserves. All rents payable by the tenants in the 711 Third
Avenue Property are paid directly into a lockbox account which will be
controlled by the Master Servicer. Funds in the lockbox are allocated monthly
to a debt service account, a recurring replacement reserve account and a tenant
improvement account. The 711 Third Avenue Loan documents require monthly
deposit into the tenant improvement account of $76,236 until the aggregate
amount on deposit is equal to $1.0 million. An additional $850,000 was
deposited at closing for tenant improvements and leasing commissions.
Additional terms and escrows for the 711 Third Avenue Loan are set forth
on Annexes A and C.
THE ABBEY COMPANY LOANS
The Loan. Two of the Mortgage Loans (the "Abbey Company Loans"),
representing in the aggregate approximately 4.6% of the Initial Pool Balance,
were originated by MGT on August 31, 1999, and have an aggregate principal
balance as of the Cut-off Date of $37,503,350 (Loan Numbers 6 and 8). The Abbey
Company Loans, if deemed one Mortgage Loan, would represent the second largest
Mortgage Loan. The Abbey Company Loans are cross-defaulted and
cross-collateralized loans secured by mortgages encumbering eleven properties
located in Southern California (collectively, the "Abbey Company Properties").
Each of the Abbey Company Loans was made to a special purpose limited liability
company (the "Abbey Company Borrowers") which are wholly-owned by Abbey
Properties, LLC, the managing member. Abbey Properties, LLC is owned by Donald
G. Abbey and a wholly owned subsidiary of Rodamco North America NV ("RNA"). RNA
is a real estate investment company that is listed on the Amsterdam stock
exchange. The market value of RNA's real estate assets was $3.3 billion at
February 28, 1999. RNA primarily owns super-regional and regional shopping
malls located in the United States. In addition, RNA has investments in several
private real estate companies, including The Abbey Company, an affiliate of the
Abbey Company Borrowers, and equity holdings in public real estate companies.
The Abbey Company currently owns or manages a portfolio of properties totaling
approximately 2.8 million square feet in Southern California.
The Abbey Company Loans are Balloon Mortgage Loans which require
interest-only payments through August 1, 2009 and mature on September 1, 2009.
The Abbey Company Loans may not be prepaid prior to June 1, 2009 and may be
prepaid, in whole but not in part, without payment of a Prepayment Premium, at
any time thereafter. The Abbey Company Loans are subject to Defeasance, in
whole but not in part, at any time after the second anniversary of the Delivery
Date.
S-42
<PAGE>
The Properties. The Abbey Company Properties consist of 11 office,
industrial and retail properties:
ABBEY POOL I
<TABLE>
<CAPTION>
LOAN PROPERTY SQUARE TYPE OF APPRAISED
NUMBER NAME LOCATION FOOTAGE PROPERTY OCCUPANCY(1) VALUE
- -------- ------------------- ---------------------------- --------- ------------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Colton Commerce Colton, CA 122,081 Anchored Retail 88.0% $12,310,000
Center
Palmdale Place Palmdale, CA 84,051 Anchored Retail 82.0 7,550,000
Commerce Center
Tenth Street Lancaster, CA 96,767 Anchored Retail 80.0 7,360,000
Commerce Center
Fountain Plaza Palmdale, CA 33,022 Unanchored Retail 63.0 2,745,000
(Palmdale II)
Diamond Bar Diamond Bar, CA 20,618 Unanchored Retail 94.0 2,600,000
Commerce Center
Palm Plaza Palmdale, CA 17,488 Unanchored Retail 87.0 1,400,000
(Palmdale III) ------- ------ -----------
Sub Total/Average 374,027 82.7%(2) $33,965,000
ABBEY POOL II
Cityview Plaza Garden Grove, CA 135,920 Office 96.0 $10,800,000
Glendora Glendora, CA 70,180 Office/Retail 96.0 7,400,000
Commerce Center
Anaheim Stadium Anaheim, CA 89,480 Industrial 100.0 4,300,000
Industrial Park
Arlington Airpark Riverside, CA 86,154 Industrial 90.0 3,875,000
Plaza
Edinger Santa Ana, CA 29,800 Office 100.0 3,225,000
------- -------- -----------
Sub Total/Weighted Average 411,534 95.9%(2) $29,600,000
------- -------- -----------
Total/Weighted Average 785,561 89.6%(2) $63,565,000
</TABLE>
- ----------
(1) Occupancy percentages as of September 1, 1999.
(2) Based upon weighted average square footage.
Property Management. The Abbey Company Properties are managed by The Abbey
Company. The Abbey Company currently manages a portfolio of properties totaling
approximately 2.8 million square feet. The Abbey Company has established a
strong local presence in the Southern California market with offices in Los
Angeles, Orange, Riverside, and San Bernardino counties.
Operating History:
<TABLE>
<CAPTION>
6 MOS. 1999 ORIGINATOR'S
1997 ACTUAL(1) 1998 ACTUAL ANNUALIZED UNDERWRITTEN
---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Effective Gross Income ................ $ 5,999,081 $ 8,280,218 $ 8,734,244 $ 8,824,761
Expenses .............................. 2,338,933 2,892,522 2,713,414 3,008,233
----------- ----------- ----------- -----------
NOI ................................... $ 3,660,148 $ 5,387,696 $ 6,020,830 $ 5,816,528
=========== =========== =========== ===========
UW Cash Flow .......................... N/A N/A N/A $ 5,044,646
Occupancy ............................. 88.7% 90.4% 89.2% 89.5%
Operating Expense Ratio(2) ............ 39.0% 34.9% 31.1% 34.1%
Debt Service Coverage Ratio based on
NOI(3) ............................... N/A 1.92x 2.12x 2.05x
UW DSCR based on UW Cash Flow ......... N/A N/A N/A 1.78x
</TABLE>
- ----------
(1) 1997 Actual Operating History does not reflect the operations of Diamond
Bar Commerce Center, Edinger and Glendora Commerce Center, which were
acquired in 1998.
(2) Expenses as percentage of Effective Gross Income.
(3) The Abbey Company Loans require interest-only payments until their
maturity date.
S-43
<PAGE>
Lockbox and Reserves. The Abbey Company Loan documents provide for
reserves for taxes, insurance and on-going replacements. The Abbey Company Loan
documents do not require the establishment of a lockbox or cash collateral
account.
Additional terms and escrows for the Abbey Company Loans are set forth on
Annexes A and C.
THE INTERNATIONAL AIRPORT CENTER LOS ANGELES LOAN
The Loan. The second largest Mortgage Loan (the "IACLA Loan,"), which
represents approximately 3.4% of the Initial Pool Balance, was originated by
LaSalle on December 28, 1998 and has a principal balance as of the Cut-off Date
of $27,512,617 (Loan Number 2). The IACLA Loan is encumbered by a first
Mortgage secured by a multi-tenant industrial/distribution property (the "IACLA
Property"). The IACLA Loan was made to IAC Los Angeles LLC, a special purpose
entity (the "IACLA Borrower"). The IACLA Property is managed by International
Airport Centers LLC, ("IAC"), a privately held company formed in 1995 which
specializes in the acquisition, development, ownership and management of
similar industrial and office properties located in close proximity to large
international U.S. airports. IAC recently completed projects similar to the
IACLA Property in Charlotte, North Carolina and Seattle, Washington.
The IACLA Loan has a remaining amortization term of 348 months and matures
on January 1, 2009. The IACLA Loan may not be prepaid prior to October 1, 2008.
The IACLA Loan may be prepaid in whole, but not in part, without payment of a
Prepayment Premium at any time thereafter. The IACLA Loan is subject to
Defeasance, in whole, but not in part, at any time after the second anniversary
of the Delivery Date.
The Property. The IACLA Property is an industrial warehouse/distribution
property totaling 317,184 square feet and consisting of two Class A buildings.
It is located approximately 1000 feet from the LAX International Airport Air
Cargo area in Los Angeles, California. The IACLA Property has direct access to
Interstates 105 and 405, which are approximately 1/4 mile from the site. These
routes are major east/west or north/south corridors spanning southern
California. The IACLA Property was constructed in 1997 and is one of the newest
warehouses in the area. The IACLA Property includes 153 docks/bays and a 180
foot turnaround space. The IACLA Property had an occupancy percentage of 95.0%
as of August 1, 1999. Of the 11 current tenants, major tenants at the IACLA
Property include BAX Global (94,363 square feet), Expeditors International
(45,491 square feet) and Hankyu International (37,011 square feet).
Property Management. The IACLA Property is managed by IAC. IAC currently
has ownership interests in and manages five warehouse/distribution properties
totaling more than one million square feet of rentable space.
Operating History.
<TABLE>
<CAPTION>
TRAILING 12 ORIGINATOR'S
1998 ACTUAL MOS. - 8/99 UNDERWRITTEN
-------------- -------------- ---------------
<S> <C> <C> <C>
Effective Gross Income ........................... $ 2,875,990 $ 3,670,606 $ 3,880,067
Expenses ......................................... 623,518 723,807 718,004
----------- ----------- -----------
NOI .............................................. $ 2,252,472 $ 2,946,799 $ 3,162,063
=========== =========== ===========
UW Cash Flow ..................................... N/A N/A $ 2,978,957
Occupancy ........................................ 88.3% 91.78% 95.00%
Operating Expense Ratio(1) ....................... 21.7% 19.7% 18.5%
Debt Service Coverage Ratio based on NOI ......... 0.99x 1.29x 1.39x
UW DSCR based on UW Cash Flow .................... N/A N/A 1.30x
</TABLE>
- ----------
(1) Expenses as a percentage of Effective Gross Income.
Lockbox and Reserves. The IACLA Loan documents provide for monthly
reserves for real estate taxes, replacement reserves and tenant
improvements/leasing commissions reserves. The IACLA Loan documents do not
require the establishment of a lockbox or cash collateral account.
Additional terms and escrows for the IACLA Loan are set forth on Annexes A
and C.
S-44
<PAGE>
THE ATLANTIC DEVELOPMENT LOAN
The Loan. The third largest Mortgage Loan (the "Atlantic Development
Loan"), which represents approximately 2.8% of the Initial Pool Balance, was
originated by MGT on September 15, 1999 and has a principal balance as of the
Cut-off Date of $23,113,978 (Loan Number 3). The Atlantic Development Loan is
secured by a first mortgage encumbering three industrial/office buildings
located at 40 Technology Drive, 100 Randolph Road, and 50 Randolph Road in
Warren and Franklin, New Jersey (each an "Atlantic Development Property" and,
collectively, the "Atlantic Development Properties"). The Atlantic Development
Loan was made to MBCC 40, LLC, WCA 50, LLC and WCA 100, LLC, each a special
purpose limited liability company (collectively, the "Atlantic Development
Borrower"), owned by Atlantic Development and Management Corporation ("ADMC").
The Atlantic Development Loan has a remaining amortization term of 357
months and matures on October 1, 2029. The Atlantic Development Loan is an ARD
Loan with an Anticipated Repayment Date of October 1, 2009. The Atlantic
Development Loan may not be prepaid prior to July 1, 2009. The Atlantic
Development Loan may be prepaid, in whole or in part, without payment of a
Prepayment Premium at any time thereafter. The Atlantic Development Loan is
subject to Defeasance, in whole or in part, at any time after the second
anniversary of the Delivery Date.
The Properties. The Atlantic Development Properties consist of three
office/industrial buildings:
<TABLE>
<CAPTION>
LOAN PROPERTY SQUARE TYPE OF APPRAISED
NUMBER NAME LOCATION FOOTAGE PROPERTY MAJOR TENANTS OCCUPANCY(1) VALUE
- -------- ------------- ------------ --------- ------------------- ----------------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
3.1 40 Warren, NJ 93,336 Industrial/Office Cordis Corp. 100% $15,280,000
Technology (subsidiary of Johnson
Dr. & Johnson)
3.2 100 Franklin 152,472 Industrial/Office Fountain Technologies 100 9,900,000
Randolph Township, Union Carbide Corp.
Road NJ
3.3 50 Randolph Franklin 89,024 Industrial/Office Fountain Technologies 100 7,000,000
Road Township, NJ ------- --- -----------
Total/Avg. 334,832 100%(2) $32,180,000
</TABLE>
- ----------
(1) Occupancy percentages as of August 1, 1999.
(2) Weighted Average based on square footage.
Property Management. The Atlantic Development Properties are managed by
ADMC. ADMC owns and manages a portfolio of seven office, research and
development and warehouse properties totaling approximately 825,000 square feet
located in central New Jersey.
Operating History.
<TABLE>
<CAPTION>
6 MOS. 1999 ORIGINATOR'S
1997 ACTUAL 1998 ACTUAL ANNUALIZED UNDERWRITTEN
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Effective Gross Income ................ $ 3,551,144 $ 4,003,170 $ 3,908,122 $ 3,967,963
Expenses .............................. 990,242 989,403 929,810 964,883
----------- ----------- ----------- -----------
NOI ................................... $ 2,560,902 $ 3,013,767 $ 2,978,312 $ 3,003,080
=========== =========== =========== ===========
UW Cash Flow .......................... N/A N/A N/A $ 2,610,321
Occupancy ............................. 93% 100% 100% 95%
Operating Expense Ratio(1) ............ 27.9% 24.7% 23.8% 24.3%
Debt Service Coverage Ratio based on
NOI .................................. 1.25x 1.47x 1.45x 1.47x
UW DSCR based on UW Cash Flow ......... N/A N/A N/A 1.27x
</TABLE>
- ----------
(1) Expenses as a percentage of Effective Gross Income.
S-45
<PAGE>
Release. Any Atlantic Development Property may be released from the lien
of the mortgage provided (a) an amount equal to 125% of the adjusted release
amount of such Atlantic Development Property is defeased and (b) after giving
effect to such release (i) the Debt Service Coverage Ratio for the Atlantic
Development Properties is not less than 1.25x and (ii) the loan to value ratio
is less than or equal to 75%.
Lockbox and Reserves. All rents payable by the tenants in the Atlantic
Development Properties are paid directly into a lockbox account controlled by
the Master Servicer. Funds in the lockbox are allocated monthly to a tax and
insurance account, a debt service account and a recurring replacement reserve
account.
Additional terms and escrows for the Atlantic Development Loan are set
forth on Annexes A and C.
THE CIRCLE PARK APARTMENTS LOAN
The Loan. The fourth largest Mortgage Loan (the "Circle Park Apartments
Loan"), which represents approximately 2.8% of the Initial Pool Balance, was
originated by LaSalle on August 30, 1999 and has a principal balance as of the
Cut-off Date of $22,924,768 (Loan Number 4). The Circle Park Apartments Loan is
secured by a first mortgage encumbering a multifamily community (the "Circle
Park Apartments Property"). The Circle Park Apartments Property, including the
land, improvements and real estate fixtures, is owned by an Illinois land trust
with Amalgamated Trust and Savings Bank as the land trustee and University
Center Associates, an Illinois special purpose limited partnership, as the
beneficiary. The Circle Park Apartments Loan is secured by the land trustee's
legal and equitable title to the Circle Park Apartments Property and the
beneficiary's beneficial interest in the land trust. The land trustee has
covenanted not to take any action with respect to the Circle Park Apartments
Property without the lender's consent. The principals of the beneficiary are
Jeffrey Zarem and HGK Management Co.
The Circle Park Apartments Loan has a remaining amortization term of 356
months and matures on September 1, 2009. The Circle Park Apartments Loan may
not be prepaid prior to June 1, 2009. The Circle Park Apartments Loan may be
prepaid in whole, but not in part, without payment of a Prepayment Premium at
any time thereafter. The Circle Park Apartments Loan is subject to Defeasance,
in whole, but not in part, at any time after September 1, 2002.
The Property. The Circle Park Apartments Property is located approximately
two miles from the Chicago Loop central business district, in the Illinois
Medical District/University of Illinois -- Chicago neighborhood. The site is
improved by a 418 unit multi-family garden apartment community including one,
two and three bedroom townhouses, midrise and age restricted units. The Circle
Park Apartments Property was built in 1983. Amenities at the Circle Park
Apartments Property include a swimming pool, tennis court, volleyball court,
mature landscaped grounds and 24-hour security. When the Circle Park Apartments
Property was developed it included a portion of Section 8 housing. The original
contract covering 239 units expires in January 2003. The age restricted midrise
building will remain subsidized (120 units, 29% of total units) however,
current plans are to discontinue the contract for the other 119 subsidized
units and convert these to market rate rentals (179 units have never been
subject to subsidies and are currently rented at market rates). Underwritten
Cash Flow is based on the current level of operations at the Circle Park
Apartments Property assuming no conversion.
Property Management. The Circle Park Apartments Property is managed by New
Frontier Management. Since 1977, New Frontier Management has managed a diverse
portfolio of 17,500 units located throughout the United States.
S-46
<PAGE>
Operating History.
<TABLE>
<CAPTION>
TRAILING 12 ORIGINATOR'S
1997 ACTUAL 1998 ACTUAL MOS. -- 7/99 UNDERWRITTEN
--------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Effective Gross Income ................ $ 4,533,544 $ 4,567,809 $ 4,453,511 $ 4,482,215
Expenses .............................. 2,407,155 2,147,354 2,173,709 1,904,901
----------- ----------- ----------- -----------
NOI ................................... $ 2,126,389 $ 2,420,455 $ 2,279,802 $ 2,577,314
=========== =========== =========== ===========
UW Cash Flow .......................... N/A N/A N/A $ 2,472,814
Occupancy ............................. 92.7% 95.9% 92.4% 89.9%
Operating Expense Ratio(1) ............ 53.1% 47.0% 48.8% 42.0%
Debt Service Coverage Ratio based on
NOI .................................. 1.04x 1.18x 1.11x 1.26x
UW DSCR based on UW Cash Flow ......... N/A N/A N/A 1.21x
</TABLE>
- ----------
(1) Expenses as a percentage of Effective Gross Income.
Lockbox and Reserves. The Circle Park Apartments Loan documents provide
for reserves for taxes, insurance and on-going replacements. In addition, a
reserve in the amount of $81,510 is being collected over three years to cover
potential shortfalls associated with the conversion of the 119 subsidized units
to market rental rates. This reserve may only be released if the Debt Service
Coverage Ratio for the Circle Park Apartments Property is maintained at 1.20x
for the nine consecutive months following the conversion of the last subsidized
unit. The Circle Park Apartments Loan documents do not require the
establishment of a lockbox or cash collateral account.
Additional terms and escrows for the Circle Park Apartments Loan are set
forth on Annexes A and C.
THE HORIZON OUTLET LOANS
The Loans. Three of the Mortgage Loans (the "Horizon Outlet Loans"),
representing in the aggregate approximately 2.8% of the Initial Pool Balance,
were originated by MGT on July 9, 1999, and have an aggregate principal balance
as of the Cut-off Date of $22,753,296 (Loan Numbers 22, 27, and 92). The
Horizon Outlet Loans, if deemed one Mortgage Loan, would represent the fifth
largest Mortgage Loan. The Horizon Outlet Loans are cross-defaulted and
cross-collateralized loans secured by first mortgages encumbering retail outlet
shopping centers located in Daleville, Indiana; Tulare, California; and
Sommerset, Pennsylvania; (collectively, the "Horizon Outlet Properties"). Each
of the Horizon Outlet Loans was made to a special purpose limited partnership
(the "Horizon Borrowers"), which are affiliated with Horizon Group Properties,
Inc. ("Horizon Group"), a Nasdaq listed real estate investment trust (Nasdaq
symbol: HGPI). Horizon Group owns and operates 12 factory outlet centers and
one power center in ten states totaling more than 2.6 million square feet. At
September 30, 1999, Horizon Group reported total assets of approximately $153.7
million.
Each of the Horizon Outlet Loans has a remaining amortization term of 295
months and matures on August 1, 2024. Each of the Horizon Outlet Loans is an
ARD Loan with an Anticipated Repayment Date of August 1, 2009. The Horizon
Outlet Loans may not be prepaid prior to May 1, 2009. The Horizon Outlet Loans
may be prepaid, in whole but not in part, without payment of a Prepayment
Premium, at any time thereafter. The Horizon Outlets Loans are subject to
Defeasance, in whole or in part, at any time after the second anniversary of
the Delivery Date.
S-47
<PAGE>
The Properties. The Horizon Outlet Properties consist of three factory
outlet retail centers:
<TABLE>
<CAPTION>
LOAN PROPERTY SQUARE TYPE OF APPRAISED
NUMBER NAME LOCATION FOOTAGE PROPERTY MAJOR TENANTS OCCUPANCY(1) VALUE
- -------- ------------ ---------------------- --------- ---------- --------------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
22 Indiana Daleville, IN 234,149 Factory Polo Factory Outlet 77.8% $19,000,000
Outlet Outlet Bass Co. Store
Center
27 Horizon Tulare, CA 138,647 Factory Gap Factory Outlet 100.0 16,500,000
Outlet Outlet Linen Barn
Center-
Tulare
92 Shoppes at Sommerset, PA 199,962 Factory Levis Outlet 62.4 5,400,000
Georgian Outlet Polo Factory Outlet
Terrace ------- ----- -----------
Total/ Weighted Avg. 572,758 77.8%(2) $40,900,000
</TABLE>
- ----------
(1) Occupancy percentages as of November 1, 1999.
(2) Weighted Average based on square footage.
Property Management. Each of the Horizon Outlet Properties is managed by
the Horizon Group Properties, L.P., an affiliate of the Horizon Borrower.
Operating History.
<TABLE>
<CAPTION>
TRAILING 12 ORIGINATOR'S
1997 ACTUAL 1998 ACTUAL MOS. -- 10/99 UNDERWRITTEN
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Effective Gross Income ................ $ 7,588,426 $ 7,223,067 $ 6,689,654 $ 6,243,122
Expenses .............................. 2,688,079 2,545,463 2,636,096 2,666,052
----------- ----------- ----------- -----------
NOI ................................... $ 4,900,347 $ 4,677,604 $ 4,053,558 $ 3,577,070
=========== =========== =========== ===========
UW Cash Flow .......................... N/A N/A N/A $ 3,198,725
Occupancy ............................. 81.7% 77.5% 75.8% 71.3%
Operating Expense Ratio(1) ............ 35.4% 35.2% 39.4% 42.7%
Debt Service Coverage Ratio based on
NOI .................................. 2.23x 2.13x 1.84x 1.63x
UW DSCR based on UW Cash Flow ......... N/A N/A N/A 1.45x
</TABLE>
- ----------
(1) Expenses as percentage of Effective Gross Income.
Release and Substitution. Any Horizon Outlet Property may be released from
the lien of the mortgage provided (a) an amount equal to one hundred percent
(100%) of the allocated loan amount of such Horizon Outlet Property plus
twenty-five percent (25%) of the initial allocated loan amount of such Horizon
Outlet Property is defeased and (b) after giving effect to such release, the
Debt Service Coverage Ratio for the Horizon Outlet Properties may be not less
than the greater of (i) 1.48x for the Daleville, Indiana property, 1.46x for
the Sommerset, Pennsylvania property and 1.43x for the Tulare, California
property, as applicable, and (ii) the aggregate debt service coverage for the
four fiscal quarter period immediately prior to effectuating such release.
A Horizon Outlet Property may be substituted with a new property if, among
other things, a written confirmation is obtained from each Rating Agency that
such release will not cause such Rating Agency to downgrade, qualify or
withdraw any of its then current ratings of any Certificates.
Lockbox and Reserves. All rents payable by tenants in the Horizon Outlet
Properties will be paid directly into a lockbox account controlled by the
Master Servicer. Funds in the lockbox account will be allocated monthly to a
tax and insurance account, a debt service payment account and a recurring
replacement reserve account. Additionally, at closing $200,000 was deposited
into a reserve account for tenant improvements and lease commissions.
S-48
<PAGE>
Additional terms and escrows for the Horizon Outlet Loans are set forth on
Annexes A and C.
THE PENN MAR SHOPPING CENTER LOAN
The Loan. The fifth largest Mortgage Loan (the "Penn Mar Shopping Center
Loan"), which represents approximately 2.7% of the Initial Pool Balance, was
originated by MGT on October 13, 1999 and has a principal balance as of the
Cut-off Date of $22,302,499 (Loan Number 5). The Penn Mar Shopping Center Loan
is secured by a mortgage encumbering an anchored shopping center located in
Forestville, Maryland (the "Penn Mar Shopping Center Property"). The Penn Mar
Shopping Center Loan was made to Penn Mar Associates, L.L.C., a special purpose
limited liability company (the "Penn Mar Shopping Center Borrower"), the
principal of which is Gary Rappaport. Mr. Rappaport is also the managing member
of a limited liability company which filed a voluntary bankruptcy petition in
July 1999 in connection with a $2.4 million note to a family trust providing
seller financing for the acquisition of an undeveloped parcel. The total
acquisition price was $3.4 million. The limited liability company filed its
petition when it was unable to obtain a rezoning approval for the parcel by the
note's maturity date and the family trust was unwilling to extend the term of
the note. The limited liability company continues to seek approval to rezone
the acquired property. Mr. Rappaport is the sole owner of Rappaport Management
Company and a member of the Board of Trustees for the International Counsel of
Shopping Centers. The Rappaport Management Company manages 20 shopping centers
in Maryland and Virginia totaling over 2.5 million square feet.
The Penn Mar Shopping Center Loan has a remaining amortization term of 358
months and matures on November 1, 2029. The Penn Mar Shopping Center Loan is an
ARD Loan with an Anticipated Repayment Date of November 1, 2009. The Penn Mar
Shopping Center Loan may not be prepaid prior to August 1, 2009. The Penn Mar
Shopping Center Loan may be prepaid, in whole but not in part, without payment
of a Prepayment Premium, at any time thereafter. The Penn Mar Shopping Center
Loan is subject to Defeasance, in whole but not in part, at any time after the
second anniversary of the Delivery Date.
The Property. The Penn Mar Shopping Center Property is a 373,592 square
foot anchored shopping center located in Forestville, Maryland. Forestville is
primarily a residential area located just outside Washington D.C. The Penn Mar
Shopping Center Property, originally built in 1958, was purchased by the Penn
Mar Shopping Center Borrower in 1995 and has been continually renovated and
expanded since that time. The Penn Mar Shopping Center Property has 46 inline
tenants and eight pad site tenants. The Penn Mar Shopping Center Property is
anchored by Superfresh (rated "Ba1" and "BBB--" by Moody's and S&P,
respectively), Marshalls (rated "A3" and "A--" by Moody's and S&P,
respectively), CVS (rated "A3" and "A" by Moody's and S&P, respectively) and
Burlington Coat Factory which occupy approximately 42% of the net rentable
space. The Penn Mar Shopping Center Property's occupancy was 97.0% as of July
20, 1999.
Property Management. The Penn Mar Shopping Center Property is managed by
Rappaport Management Company.
Operating History.
<TABLE>
<CAPTION>
TRAILING 12 ORIGINATOR'S
1997 ACTUAL 1998 ACTUAL MOS. -- 8/99 UNDERWRITTEN
--------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Effective Gross Income ................ $ 2,740,473 $ 3,172,910 $ 3,308,893 $ 3,800,371
Expenses .............................. 674,966 677,984 700,629 777,764
----------- ----------- ----------- -----------
NOI ................................... $ 2,065,507 $ 2,494,927 $ 2,608,264 $ 3,022,607
=========== =========== =========== ===========
UW Cash Flow .......................... N/A N/A N/A $ 2,819,296
Occupancy ............................. 89.6% 84.0% 91.0% 93.0%
Operating Expense Ratio(1) ............ 24.6% 21.4% 21.2% 20.5%
Debt Service Coverage Ratio based on
NOI .................................. 1.01x 1.22x 1.28x 1.48x
UW DSCR based on UW Cash Flow ......... N/A N/A N/A 1.38x
</TABLE>
- ----------
(1) Expenses as a percentage of Effective Gross Income.
S-49
<PAGE>
Mezzanine Debt. A mezzanine loan with a principal balance of $2,976,347 as
of January 1, 2000, an original principal balance of $3,000,000, a maturity
date of November 1, 2009 and an amortization term of 120 months, was made by
MGT to PM Investors, LLC, secured by general partnership interest in the Penn
Mar Shopping Center Borrower.
Lockbox and Reserves. All rents payable by the tenants in the Penn Mar
Shopping Center Property are paid directly into a lockbox account in the name
of the Penn Mar Shopping Center Borrower. Prior to the Anticipated Repayment
Date and provided there is no event of default under the loan documents, all
deposits in the lockbox account are remitted to the Penn Mar Shopping Center
Borrower. The Penn Mar Shopping Center Loan documents provide for reserves for
taxes, insurance, on-going replacements and tenant improvements/leasing
commissions.
Additional terms and escrows for the Penn Mar Shopping Center Loan are set
forth on Annexes A and C.
THE 332 SOUTH MICHIGAN LOAN
The Loan. The seventh largest Mortgage Loan (the "332 South Michigan
Loan"), which represents 2.3% of the Initial Pool Balance, was originated by
MGT on June 1, 1999, and has a principal balance as of the Cut-off Date of
$18,689,849 (Loan Number 7). The 332 South Michigan Loan is secured by a first
mortgage encumbering the first fourteen floors of an office building located in
Chicago, Illinois (the "332 South Michigan Property"). The 332 South Michigan
Loan was made to 332 South Michigan Avenue Office, LLC, a special purpose
limited liability corporation (the "332 South Michigan Borrower"), the
principal of which is Louis D. Angelo.
The 332 South Michigan Loan has a remaining amortization term of 354
months and matures on July 1, 2029. The 332 South Michigan Loan is an ARD Loan
with an Anticipated Repayment Date of July 1, 2009. The 332 South Michigan Loan
may not be prepaid prior to April 1, 2009. The 332 South Michigan Loan may be
prepaid, in whole but not in part, without payment of a Prepayment Premium, at
any time thereafter. The 332 South Michigan Loan is subject to Defeasance, in
whole but not in part, at any time after the second anniversary of the Delivery
Date.
The Property. The 332 South Michigan Property is a 20 story, 318,266
square foot building, situated on a 0.725 acre tract at the northwest corner of
South Michigan Avenue and East Van Buren Street in Chicago, Illinois. The
collateral for the 332 South Michigan Loan is contained within the first
fourteen stories of the building, housing retail and office tenants. The
remaining six stories are privately owned residential condominiums. The 332
South Michigan Property is located directly across from Grant Park in the
Chicago central business district. The 332 South Michigan Property was
constructed in 1912 and renovated between 1980 and 1985, and had an occupancy
of 95.0% as of November 30, 1999.
Property Management. The 332 South Michigan Property is managed by
Metropolitan Properties of Chicago, an affiliate of the 332 South Michigan
Borrower. Metropolitan Properties of Chicago has several years of experience
managing this and other properties in the immediate area of the 332 South
Michigan Property.
S-50
<PAGE>
Operating History.
<TABLE>
<CAPTION>
9 MOS. 1999 ORIGINATOR'S
1997 ACTUAL(1) 1998 ACTUAL ANNUALIZED UNDERWRITTEN
---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Effective Gross Income ................ $ 6,172,303 $ 5,641,270 $ 5,556,147 $ 5,504,646
Expenses .............................. 4,368,673 3,386,422 3,143,125 2,987,477
----------- ----------- ----------- -----------
NOI ................................... $ 1,803,630 $ 2,254,848 $ 2,413,022 $ 2,517,169
=========== =========== =========== ===========
UW Cash Flow .......................... N/A N/A N/A $ 2,100,691
Occupancy ............................. N/A N/A 95.0% 94.3%
Operating Expense Ratio(2) ............ 70.8% 60.0% 56.6% 54.3%
Debt Service Coverage Ratio based on
NOI .................................. 1.09x 1.37x 1.46x 1.53x
UW DSCR based on UW Cash Flow ......... N/A N/A N/A 1.27x
</TABLE>
- ----------
(1) 1997 Actual Operating History figures include all 20 stories of the
building.
(2) Expenses as a percentage of Effective Gross Income.
Lockbox and Reserves. All rents payable by the tenants in the 332 South
Michigan Property are paid directly into a lockbox account in the name of the
332 South Michigan Borrower. Prior to the Anticipated Repayment Date and
provided there is no event of default under the loan documents, all deposits
into the lockbox account are remitted to the 332 South Michigan Borrower. The
332 South Michigan Loan documents provide for reserves for taxes, insurance and
on-going replacements.
Additional terms and escrows for the 332 South Michigan Loan are set forth
on Annexes A and C.
THE ALPINE COMMONS SHOPPING CENTER LOAN
The Loan. The ninth largest Mortgage Loan (the "Alpine Commons Shopping
Center Loan"), which represents approximately 2.1% of the Initial Pool Balance,
was originated by MGT on September 24, 1999 and has a principal balance as of
the Cut-off Date of $16,772,760 (Loan Number 9). The Alpine Commons Shopping
Center Loan is secured by a first mortgage encumbering an anchored shopping
center located at 1357 Route 9 in Wappingers Falls, New York (the "Alpine
Commons Shopping Center Property"). The Alpine Commons Shopping Center Loan was
made to Alpine Improvements, LLC, a special purpose limited liability company
(the "Alpine Commons Shopping Center Borrower"), the principal of which is Adam
W. Ifshin. Mr. Ifshin is President of DLC Management Corp., which owns and/or
operates 22 shopping centers and three office properties in eleven states
totaling approximately 4.2 million square feet.
The Alpine Commons Shopping Center Loan has a remaining amortization term
of 357 months and matures on October 1, 2029. The Alpine Commons Shopping
Center Loan is an ARD Loan with an Anticipated Repayment Date of September 1,
2009. The Alpine Commons Shopping Center Loan may not be prepaid prior to July
1, 2009. The Alpine Commons Shopping Center Loan may be prepaid, in whole or in
part, without payment of a Prepayment Premium, at any time thereafter. The
Alpine Commons Shopping Center Loan is subject to Defeasance, in whole or in
part, at any time after the second anniversary of the Delivery Date.
The Property. Alpine Commons Shopping Center Property is a 209,950 square
foot anchored shopping center built in 1994 and as of June 1, 1999 is 93%
occupied. The shopping center's two major tenants are BJ's Wholesale Club, Inc.
and Stop & Shop. BJ's Wholesale Club, Inc. leases 106,664 square feet and
reported sales of $345 per square foot for 1998. The lease expires on May 31,
2013. BJ's Wholesale Club, Inc. (NYSE symbol: BJ) is a leading wholesale club
chain operating in the eastern United States with approximately 103 stores.
Stop & Shop leases 64,898 square feet and reported sales of $442 per square
foot for 1998. The lease expires on August 26, 2013. Stop & Shop is owned by
the Dutch company Royal Ahold (NYSE Symbol: AHO) an international food retailer
with leading supermarket companies in the United States, Europe, Latin America
and Asia. Royal Ahold operates more than 3,600
S-51
<PAGE>
stores worldwide and is rated "A3" and "A" by Moody's and S&P, respectively. In
the United States, the company is the leading supermarket operator on the east
coast with more than 1,000 stores, operating under the following names: Stop &
Shop, Giant Food Stores, Tops Markets and BI-LO.
Property Management. The Alpine Commons Shopping Center Property is
managed by DLC Management Corp., an affiliate of the Alpine Commons Shopping
Center Borrower.
Operating History.
<TABLE>
<CAPTION>
ORIGINATOR'S
1996 ACTUAL 1997 ACTUAL 1998 ACTUAL UNDERWRITTEN
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Effective Gross Income ................ $ 2,368,590 $ 2,294,829 $ 2,261,389 $ 2,700,130
Expenses .............................. 668,287 702,269 651,769 765,615
----------- ----------- ----------- -----------
NOI ................................... $ 1,700,303 $ 1,592,560 $ 1,969,620 $ 1,934,515
=========== =========== =========== ===========
UW Cash Flow .......................... N/A N/A N/A $ 1,839,378
Occupancy ............................. N/A 92.0% 93.0% 93.0%
Operating Expense Ratio(1) ............ 28.2% 30.6% 28.8% 28.3%
Debt Service Coverage Ratio based on
NOI .................................. 1.16x 1.09x 1.34x 1.32x
UW DSCR based on UW Cash Flow ......... N/A N/A N/A 1.25x
</TABLE>
- ----------
(1) Expenses as percentage of Effective Gross Income.
Lockbox and Reserves. All rents payable by the tenants in the Alpine
Commons Shopping Center are paid into a lockbox. Prior to the Anticipated
Repayment Date and provided there is no event of default under the loan
documents, all deposits into the lockbox account are remitted to the Alpine
Commons Shopping Center Borrower. The Alpine Commons Shopping Center Loan
documents provide for monthly reserves for taxes, insurance and ongoing
replacements.
Additional terms and escrows for the Alpine Commons Shopping Center Loan
are set forth on Annexes A and C.
THE CANADIAN LOANS
Ten of the Mortgage Loans, which represent 2.8% of the Initial Pool
Balance, are secured by properties in Canada.
The Westmont Canadian Loans. Eight of the Mortgage Loans (the "Westmont
Loans") are secured by eight hotels located in Canada (collectively, the
"Westmont Properties"). The Westmont Loans are payable in Canadian dollars
("C$"). The information set forth below is in U.S. dollars, unless otherwise
indicated, calculated based on an exchange rate of US$1.00 for C$1.4750. The
Westmont Loans, which represent approximately 1.9% of the Initial Pool Balance,
were originated by MGT on June 30, 1998 and August 11, 1998 and had an
aggregate principal balance as of the Cut-off Date of $15,578,384 (Loan Numbers
62, 97, 101, 106, 117, 126, 134 and 137). The Westmont Loans are secured by
cross-collateralized and cross-defaulted first mortgages encumbering the
Westmont Properties.
Additionally, a Mortgage Loan (Loan Number 79, the "Additional Westmont
Loan") which represents approximately 0.4% of the Initial Pool Balance (and,
together with the Westmont Loans, represents approximately 2.3% of the Initial
Pool Balance, and together with the Westmont Loans is referred to as the
"Westmont Canadian Loans") was originated by MGT on December 4, 1997 and has a
principal balance as of the Cut-off Date of $3,429,290. The Additional Westmont
Loan is secured by a first mortgage encumbering one hotel (the "Additional
Westmont Property" and together with the Westmont Properties is referred to
herein collectively as the "Westmont Canadian Properties"). The Additional
Westmont Loan is not cross-collateralized or cross-defaulted with any of the
Westmont Loans.
The Westmont Canadian Loans were made to nine individual special purpose
entities (collectively, the "Westmont Canadian Borrowers") controlled by the
W-Westmont Corporation ("W-Westmont"). The
S-52
<PAGE>
Westmont Canadian Loans, if deemed one Mortgage Loan, would represent the
eighth largest Mortgage Loan. On May 21, 1999, W-Westmont acquired the UniHost
Corporation, the previous controlling entity. W-Westmont was formed by the
Westmont Partnership, which owns or manages 45 hotel properties totaling over
8,500 rooms. The Westmont Partnership is a partnership between Westmont
Hospitality Group, which holds ownership interests in and/or manages over 300
hotels in Canada, the United States and Europe, and the Whitehall Street Real
Estate Funds, which are managed by The Goldman Sachs Group Inc.
Each Westmont Loan has a remaining amortization term of 222 or 224 months
and matures on either September 1, 2005 or July 1, 2005. The Additional
Westmont Loan has a remaining amortization term of 276 months and matures on
January 1, 2005. Each Westmont Loan may not be prepaid prior to either December
1, 2003 or October 1, 2003, and the Additional Westmont Loan may not be prepaid
prior to April 1, 2003. On or after the aforementioned dates upon which
prepayment is permitted, the Westmont Canadian Loans may be prepaid, in whole
but not in part, upon payment of a Prepayment Premium equal to the greater of
(i) 1% of the outstanding principal balance of the applicable Mortgage Loan and
(ii) an amount calculated based upon a Yield Maintenance formula based on a
Canadian Treasury rate. Each of the Westmont Loans may be prepaid, in whole but
not in part, without payment of a Prepayment Premium any time on or after
either June 1, 2005 or April 1, 2005, and the Additional Westmont Loan may be
prepaid, in whole or in part, without payment of a Prepayment Premium at any
time after July 1, 2004.
The Properties. The Westmont Properties consist of eight hotels and the
Additional Westmont Property is one hotel:
WESTMONT PROPERTIES
<TABLE>
<CAPTION>
LOAN PROPERTY # OF TYPE OF NATIONAL CHAIN APPRAISED
NUMBER NAME LOCATION ROOMS PROPERTY AFFILIATION OCCUPANCY(1) VALUE
- -------- ------------------- ------------------- ------- ----------------------- ---------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
62 Quality Suites -- Windsor, Ontario 128 Full Service Hotel Quality Suites 74.8 $7,457,627
Windsor
97 Comfort Inn -- Boucherville, 100 Limited Service Hotel Comfort Inn 70.8 3,627,119
Boucherville Quebec
101 Comfort Inn -- Sault Ste. Marie, 82 Limited Service Hotel Comfort Inn 76.6 2,915,254
Sault Ste. Marie Ontario
106 Comfort Inn -- Thunder Bay, 80 Limited Service Hotel Comfort Inn 82.3 3,389,831
Thunder Bay Ontario
117 Comfort Inn -- Saskatoon, 80 Limited Service Hotel Comfort Inn 76.7 2,711,864
Saskatoon Saskatchewan
126 Comfort Inn -- London, Ontario 80 Limited Service Hotel Comfort Inn 85.7 2,576,271
London
134 Comfort Inn -- Drummondville, 59 Limited Service Hotel Comfort Inn 75.0 1,762,712
Drummondville Quebec
137 Comfort Inn -- New Glasgow, Nova 62 Limited Service Hotel Comfort Inn 86.5 1,694,915
New Glasgow Scotia --- ----
Sub Total/Average 671 77.9%(2)
ADDITIONAL WESTMONT PROPERTY
79 Oshawa Holiday Oshawa, Ontario 193 Full Service Hotel Holiday Inn 78.7% $6,000,000
Inn --- ----
Total/Average 864 78.1%(2)
</TABLE>
- ----------
(1) Occupancy percentages on September 30, 1999.
(2) Based upon weighted average number of rooms.
S-53
<PAGE>
Property Management. The Westmont Canadian Properties are managed by
Journey's End Management, Inc., an affiliate of the Westmont Canadian
Borrowers.
Operating History.
<TABLE>
<CAPTION>
9 MOS. 1999 ORIGINATOR'S
1997 ACTUAL 1998 ACTUAL ANNUALIZED UNDERWRITTEN
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Effective Gross Income ................ $ 12,845,098 $ 14,567,689 $ 13,869,320 $ 13,195,295
Expenses .............................. 8,581,802 9,241,256 8,445,365 8,682,854
------------ ------------ ------------ ------------
NOI ................................... $ 4,263,296 $ 5,326,432 $ 5,423,956 $ 4,512,441
============ ============ ============ ============
UW Cash Flow .......................... N/A N/A N/A $ 3,838,044
Occupancy ............................. 74.6% 79.2% 78.4% 77.5%
Operating Expense Ratio(1) ............ 66.8% 63.4% 60.9% 65.8%
Debt Service Coverage Ratio based on
NOI .................................. 2.22x 2.78x 2.83x 2.35x
UW DSCR based on UW Cash Flow ......... N/A N/A N/A 1.99x
</TABLE>
- ----------
(1) Expenses as a percentage of Effective Gross Income.
Release. Notwithstanding that any Westmont Loan may be prepaid in full
without prepayment of the other Westmont Loans, no Westmont Property may be
released from the lien thereon securing the remaining Westmont Loans until all
the Westmont Loans are paid in full.
Lockbox and Reserves. The Westmont Canadian Loans documents provide for
reserves for taxes and ongoing replacements. Insurance escrows are not
required, as the Westmont Canadian Properties are covered under W-Westmont's
blanket insurance policy. The Westmont Canadian Borrowers were required at
closing to escrow three months insurance premiums on the related Westmont
Canadian Property.
Additional terms and escrows for the Westmont Canadian Loans are as set
forth on Annex A.
Foreign Currency Exchange Contracts. On the Delivery Date, the Depositor
will enter into and assign to the Trustee an ISDA master agreement (including a
schedule thereto) and a confirmation relating to each Westmont Canadian Loan
(each such transaction, a "Foreign Currency Exchange Contract"). In accordance
with each Foreign Currency Exchange Contract, the Master Servicer on behalf of
the Trustee will be required to pay MGT, as exchange contract counterparty, on
the second business day prior to each Distribution Date (each an "F/X Payment
Date") all amounts collected on the related Westmont Canadian Loan during the
Remittance Period ending on the related Determination Date in Canadian dollars.
On each F/X Payment Date, MGT, as exchange contract counterparty, will be
required to pay the Trustee in exchange for payments received in Canadian
dollars an amount in U.S. dollars at the related Interest F/X Rate, with
respect to amounts allocated to interest on the related Westmont Canadian Loan,
and at the Principal F/X Rate, with respect to amounts allocated to principal
and any other amounts collected on the related Westmont Canadian Loan.
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<PAGE>
The "Interest F/X Rate" for each Westmont Canadian Loan (expressed as
Canadian dollars per US$1.00) will be:
<TABLE>
<CAPTION>
INTEREST
LOAN NUMBER PROPERTY NAME F/X RATE
- ------------- --------------------------------- ---------
<S> <C> <C>
62 Quality Suites -- Windsor 1.4107
97 Comfort Inn -- Boucherville 1.4259
101 Comfort Inn -- Sault Ste. Marie 1.4259
106 Comfort Inn -- Thunder Bay 1.4259
117 Comfort Inn -- Saskatoon 1.4259
126 Comfort Inn -- London 1.4259
134 Comfort Inn -- Drummondville 1.4259
137 Comfort Inn -- New Glasgow 1.4259
79 Oshawa Holiday Inn 1.4176
</TABLE>
The "Principal F/X Rate" for each Westmont Canadian Loan (expressed as Canadian
dollars per US$1.00) will be 1.4750.
The Schedule attached as Annex D hereto (the "F/X Schedule") sets forth
the U.S. dollar payments that would be made by MGT, as exchange contract
counterparty, in exchange for payments in Canadian dollars equal to those made
under each indicated Mortgage Loan based on the terms of such Mortgage Loans as
of the Cut-off Date. Any payments in excess of or less than the scheduled
amounts or pursuant to payment terms modified after the Cut-off Date would
result in payments, if any, under the related Foreign Currency Exchange
Contract different from those set forth in the F/X Schedule. THE MASTER
SERVICER ON BEHALF OF THE TRUSTEE WILL ONLY BE REQUIRED TO MAKE CANADIAN DOLLAR
PAYMENTS UNDER EACH FOREIGN CURRENCY EXCHANGE CONTRACT TO THE EXTENT COLLECTED
ON THE RELATED WESTMONT CANADIAN LOAN. MGT WILL ONLY BE REQUIRED TO MAKE U.S.
DOLLAR PAYMENTS ON ANY F/X PAYMENT DATE TO THE EXTENT THE MASTER SERVICER ON
BEHALF OF THE TRUSTEE HAS MADE THE CORRESPONDING PAYMENTS UNDER EACH FOREIGN
CURRENCY EXCHANGE CONTRACT IN CANADIAN DOLLARS. Each Foreign Currency Exchange
Contract will remain in effect while the related Mortgage Loan is outstanding.
In the event that MGT fails to make a corresponding U.S. dollar payment
under any Foreign Currency Exchange Contract, such failure would not be a
default under any Westmont Canadian Loan; however, the Trustee will have the
right to terminate all of the Foreign Currency Exchange Contracts. If the
Foreign Currency Exchange Contracts are terminated, future distributions
related to the Westmont Canadian Loans would be subject to the Canadian
dollar/U.S. dollar exchange rate prevailing from time to time after such
termination. However, if any such termination occurred at the time when such
exchange rate had changed adversely to the trust, MGT would owe a termination
payment to the trust, payable in U.S. dollars, which if collected by the trust
would mitigate the adverse effect of the change. Also, if any such termination
occurred at a time when such exchange rate had changed beneficially to the
trust, the trust would owe a similar termination payment to MGT.
Neither the Certificates nor any of the Westmont Canadian Loans represent
an obligation of MGT or J.P. Morgan & Co. Incorporated. Certificateholders will
not have any right to proceed directly against MGT in respect of its
obligations under the Foreign Currency Exchange Contracts. The Master Servicer
will administer and perform all of the Trustee's obligations under the Foreign
Currency Exchange Contracts on behalf of the Trustee for the benefit of the
Certificateholders.
One other Mortgage Loan (Loan Number 72, together with the Westmont
Canadian Loans, the "Canadian Loans"), which represents 0.4% of the Initial
Pool Balance, is also secured by property in Canada. Collections thereon are
subject to the terms of a foreign currency exchange contract similar to the
Foreign Currency Exchange Contracts described above and subject to the master
agreement referred to above. The related Interest F/X Rate (expressed as
Canadian dollars per US$1.00) is 1.4095 and the related Principal F/X Rate
(expressed as Canadian dollars per US$1.00) is 1.4750. As described above, the
F/X Schedule sets forth the interest and principal payments that would be made
under such Mortgage Loan and the payments which would be made by MGT in
exchange therefor based on the terms of such Mortgage Loan as of the Cut-off
Date.
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CERTAIN TERMS AND CONDITIONS OF THE MORTGAGE LOANS
ARD Loans. Seventy-one of the Mortgage Loans representing approximately
56.2% of the Initial Pool Balance are "ARD Loans." The ARD Loans substantially
fully amortize over their stated terms, which are at least 60 months after
their related Anticipated Repayment Dates (as defined below). If the related
borrower thereunder (the "Mortgagor") elects to prepay an ARD Loan in full on
the related Anticipated Repayment Date, a substantial amount of principal will
be due. If a Mortgagor elects not to prepay an ARD Loan on or before its
Anticipated Repayment Date, all or a substantial portion of Excess Cash Flow
(as defined below) collected after such date shall be applied towards the
prepayment of such ARD Loan. ARD Loans generally accrue interest at a higher
rate following the applicable Anticipated Repayment Date. As used herein, the
term "Mortgage Interest Rate" does not include the portion of the interest rate
attributable to the rate increase. The excess of interest at such higher rate
over interest at the Mortgage Interest Rate (together with interest thereon) is
referred to herein as Excess Interest. The date on which all or substantially
all of any Excess Cash Flow is required to be applied toward prepayment of such
loan and on which any such Mortgage Loan begins accruing Excess Interest is
referred to herein as the "Anticipated Repayment Date."
Once the principal balance of an ARD Loan has been reduced to zero, all
Excess Cash Flow will be applied to the payment of accrued Excess Interest.
With respect to any ARD Loan, payment of Excess Interest will be deferred until
the principal of such ARD Loan has been paid in full.
Commencing on the respective Anticipated Repayment Date each ARD Loan
generally will bear interest at a fixed rate (the "Revised Rate") per annum
equal to the Mortgage Interest Rate plus a specified percentage (no more than
2%, so long as the Mortgage Loan is included in the Trust Fund). Until the
principal balance of each such Mortgage Loan has been reduced to zero, such
Mortgage Loan will only be required to pay interest at the Mortgage Interest
Rate and the interest accrued at the excess of the related Revised Rate over
the related Mortgage Interest Rate will be deferred (such accrued and deferred
interest and interest thereon, if any, is "Excess Interest"). Excess Interest
so accrued will, except where limited by applicable law, not be added to the
principal balance of the related Mortgage Loan but will accrue interest at the
Revised Rate. Each Mortgagor under the ARD Loans has agreed to have all revenue
from the related Mortgaged Property deposited after the Anticipated Repayment
Date into a Lockbox Account controlled by the Master Servicer.
From and after the Anticipated Repayment Date, in addition to paying
interest (at the Mortgage Interest Rate) and principal (based on the
amortization schedule), the related Mortgagor generally will be required to
apply all monthly cash flow from the related Mortgaged Property to pay the
following amounts in the following order of priority: (i) required payments for
the tax and insurance fund and ground lease escrows fund, (ii) payment of
monthly debt service, (iii) payments to any other required escrow funds, (iv)
payment of operating expenses pursuant to the terms of an annual budget
approved by the Master Servicer or in an amount which is capped at 1/12 of 105%
of the prior year's operating expenses, (v) principal on the Mortgage Loan
until such principal is paid in full and (vi) Excess Interest. The cash flow
from the Mortgaged Property securing an ARD Loan after payments of items (i)
through (iv) above is referred to herein as "Excess Cash Flow." Each ARD Loan
provides that the related Mortgagor is prohibited from prepaying the Mortgage
Loan until one to six months prior to the Anticipated Repayment Date but, upon
the commencement of such period, may prepay the loan, in whole or in part,
without payment of a Prepayment Premium. The failure to pay an ARD Loan,
including any Excess Interest due, by the related Anticipated Repayment Date
will not result in an event of default or acceleration of the related Mortgage
Loan. The Anticipated Repayment Date for each ARD Loan is listed in Annex A.
Balloon Mortgage Loans. Sixty-six of the Mortgage Loans (including two
interest-only mortgage loans) representing approximately 43.0% of the Initial
Pool Balance provide for monthly payments of principal based on an amortization
schedule longer, and in some cases significantly longer, than the remaining
term of such Mortgage Loan (each, a "Balloon Mortgage Loan"), thereby leaving a
substantial outstanding principal amount due and payable (the "Balloon
Payment") on its Maturity Date, unless prepaid prior thereto. See Annex A for
additional information regarding the Balloon Mortgage Loans.
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<PAGE>
Crossed Loans. Twenty-two Mortgage Loans representing approximately 12.0%
of the Initial Pool Balance are cross-defaulted and cross-collateralized with
another Mortgage Loan (the "Crossed Loans"). No group of Crossed Loans
represents in the aggregate more than 4.6% of the Initial Pool Balance. A
default under one of the Crossed Loans will result in a default under all of
the other Mortgage Loans which are cross-collateralized and cross-defaulted
with such Crossed Loan. See Annex A for additional information regarding the
Crossed Loans.
Additional Debt. Except with respect to one Mortgage Loan representing
approximately 0.4% of the Initial Pool Balance, the Mortgage Loans were made to
Mortgagors which are generally restricted under the related loan documents or
by its governing documents from incurring any indebtedness other than the
related Mortgage Loan, normal trade accounts payable and certain purchase
financing debt.
The existence of such other debt could:
o adversely affect the financial viability of the Mortgagor;
o adversely affect the security interest of the lender in the equipment
or other assets acquired through such financings;
o complicate bankruptcy proceedings; and
o delay foreclosure on the Mortgaged Property.
In cases where one or more junior liens are imposed on a mortgaged
property or the mortgagor incurs other unsecured indebtedness, the trust fund
is subjected to additional risks, including, the risks that the mortgagor may
have greater incentives to repay the junior or unsecured indebtedness first and
that it may be more difficult for the mortgagor to refinance the mortgage loan
or to sell the mortgaged property for purposes of making a balloon payment upon
the maturity of the mortgage loan.
Escrows. One hundred and thirty-seven Mortgage Loans which represent
approximately 97.7% of the Initial Pool Balance, provide for monthly escrows to
cover property taxes on the Mortgaged Properties and 131 of the Mortgage Loans,
which represent approximately 88.2% of the Initial Pool Balance, provide for
monthly escrows to cover insurance premiums on the Mortgaged Properties. With
respect to the Mortgage Loans which do not require monthly escrows to cover
insurance premiums, if the Mortgagor does not maintain the required insurance,
then (i) the Master Servicer may obtain such coverage at the cost of the
Mortgagor or (ii) with respect to most of the Mortgage Loans, the Master
Servicer may require monthly escrows in addition to providing force-placed
coverage.
One hundred and twenty-nine of the Mortgage Loans, which represent
approximately 90.5% of the Initial Pool Balance, also require monthly escrows
to cover ongoing replacements of furniture, fixtures and equipment and/or
capital expenditures.
Fifty-one of the Mortgage Loans, which represent approximately 75.9% of
the Initial Pool Balance for office, retail, industrial and mixed use
(excluding Loan Number 14) properties, also required upfront or monthly escrows
for the full term or a portion of the term of the related Mortgage Loan to
cover anticipated re-leasing costs, including tenant improvements and leasing
commissions. Twenty-nine of the Mortgage Loans, which represent approximately
31.3% of the Initial Pool Balance, have front-end escrows to cover various
other contingencies.
See Annex A for additional information pertaining to Mortgage Loan
escrows.
Related Borrowers. Thirty-eight of the Mortgage Loans, representing 12.4%
of the Initial Pool Balance, have Mortgagors which are related to one or more
other Mortgagors but are not cross-collateralized or cross-defaulted with other
mortgage loans. There are twelve such groups of related Mortgagors. No group of
Mortgage Loans with related Mortgagors represents in the aggregate more than
2.7% of the Initial Pool Balance. See Annex A for a description of the related
loan groups.
Earthquake Analysis. Thirty of the Mortgaged Properties in California,
Nevada and Oregon are located in seismic zones three and four. An architectural
and engineering consultant performed an analysis on all of such Mortgaged
Properties (except for Frontier Village Mobile Home Park (Loan
S-57
<PAGE>
Number 33.2) located in Nevada) in order to evaluate the structural and seismic
condition of such properties and to assess, based on a 475-year return period,
a 50-year window and a 10% probability of exceedance, the probable maximum loss
("PML") for such properties in a hypothetical earthquake scenario. The
resulting analysis indicated that in a hypothetical earthquake scenario, only
four of such Mortgaged Properties, which represent 1.2% of the allocated
Initial Pool Balance, are likely to suffer a PML in excess of 20% of the amount
of the estimated replacement cost of the improvements. Six of the Mortgaged
Properties described above, which represent 3.6% of the allocated Initial Pool
Balance are covered by earthquake insurance in an amount at least equal to the
outstanding principal balance of the related Mortgage Loan, including two of
the four Mortgaged Properties likely to suffer a PML in excess of 20%. The
remaining two Mortgaged Properties likely to suffer a PML in excess of 20%
represent 0.4% of the allocated Initial Pool Balance.
MEZZANINE DEBT
The owners of the Mortgagors under four Mortgage Loans representing 7.6%
of the Initial Pool Balance have pledged their ownership interest in such
Mortgagor as collateral for "mezzanine debt." Such "mezzanine debt" is
separately secured by a lien on the corresponding ownership interest in the
borrower. No such "mezzanine debt" currently exceeds $2,976,347 or 13.3% of the
related Mortgage Loan. Upon a default under a "mezzanine debt", the related
lender would be entitled to foreclose upon the equity pledged to secure such
loan. Such transfer of equity would not trigger a "due on sale" clause. If the
mezzanine lender attempts to foreclose upon such pledged equity, the obligor
may file for bankruptcy. No holder of "mezzanine debt" has a lien on, or has
the power to foreclose on, any of the Mortgaged Properties.
UNDERWRITING GUIDELINES AND PROCESS
Each Seller has developed guidelines establishing certain procedures with
respect to underwriting the mortgage loans originated or purchased by it, as
described more fully below. All of the Mortgage Loans were generally originated
in accordance with such guidelines. In some instances, one or more provisions
of the guidelines were waived or modified where it was determined not to
adversely affect the Mortgage Loans in any material respect. With respect to
the seven of the Mortgage Loans not originated by the Sellers, the Mortgage
Loans generally conformed to the underwriting standards established by the
related Seller.
Property Analysis. The Seller performs a site inspection to evaluate the
location and quality of the related mortgaged properties. Such inspection
includes an evaluation of functionality, design, attractiveness, visibility and
accessibility, as well as convenience to major thoroughfares, transportation
centers, employment sources, retail areas and educational or recreational
facilities. The Seller assesses the submarket in which the property is located
to evaluate competitive or comparable properties as well as market trends. In
addition, the Seller evaluates the property's age, physical condition,
operating history, leases and tenant mix, and management.
Cash Flow Analysis. The Seller reviews operating statements provided by
the mortgagor and makes adjustments in order to determine a debt service
coverage ratio. See "Description of the Mortgage Pool -- Certain
Characteristics of the Mortgage Loans" herein.
Appraisal and Loan-to-Value Ratio. For each mortgaged property, the Seller
obtains a current full narrative appraisal conforming at least to the
requirements of FIRREA. The appraisal must be based on the highest and best use
of the mortgaged property and must include an estimate of the current market
value of the property in its current condition. The Seller determines the
loan-to-value ratio of the mortgage loan at the date of origination based on
the value set forth in the appraisal.
Evaluation of Mortgagor. The Seller evaluates the mortgagor and its
principals with respect to credit history and prior experience as an owner and
operator of commercial real estate properties. The evaluation will generally
include obtaining and reviewing a credit report or other reliable indication of
the mortgagor's financial capacity; obtaining and verifying credit references
and/or business and trade references; and obtaining and reviewing
certifications provided by the mortgagor as to prior real estate
S-58
<PAGE>
experience and current contingent liabilities. Finally, although the mortgage
loans generally are non-recourse in nature, in the case of certain mortgage
loans, the mortgagor and certain principals thereof may be required to assume
legal responsibility for liabilities relating to fraud, misrepresentation,
misappropriation of funds, breach of environmental or hazardous waste
requirements and unauthorized transfer of title to the property. The Seller
evaluates the financial capacity of the mortgagor and such principals to meet
any obligations that may arise with respect to such liabilities.
Environmental Site Assessment. At origination, the Seller obtains or
updates an environmental site assessment ("ESA") for each mortgaged property
prepared by a qualified environmental firm. The Seller reviews the ESA to
verify the absence of reported violations of applicable laws and regulations
relating to environmental protection and hazardous waste. In cases in which the
ESA identifies such violations, the Seller requires the mortgagor to carry out
satisfactory remediation activities prior to the origination of the mortgage
loan, or to establish an operations and maintenance plan and to place
sufficient funds in escrow at the time of origination of the mortgage loan to
complete such remediation within twelve months.
Physical Assessment Report. At origination, the Seller obtains a physical
assessment report ("PAR") for each mortgaged property prepared by a qualified
structural engineering firm. The Seller reviews the PAR to verify that the
property is reported to be in satisfactory physical condition, and to determine
the anticipated costs of necessary repair, replacement and major maintenance or
capital expenditure needs over the term of the mortgage loan. In cases in which
the PAR identifies material repairs or replacements needed immediately, the
Seller generally requires the mortgagor to carry out such repairs or
replacements prior to the origination of the mortgage loan, or to place
sufficient funds in escrow at the time of origination of the mortgage loan to
complete such repairs or replacements within not more than twelve months.
Title Insurance Policy. The mortgagor is required to provide, and the
Seller reviews, a title insurance policy for each mortgaged property. The title
insurance policy must meet the following requirements: (a) the policy must be
written by a title insurer licensed to do business in the jurisdiction where
the mortgaged property is located, (b) the policy must be in an amount equal to
the original principal balance of the mortgage loan, (c) the protection and
benefits must run to the mortgagee and its successors and assigns, (d) the
policy should be written on a standard policy form of the American Land Title
Association or equivalent policy promulgated in the jurisdiction where the
mortgaged property is located and (e) the legal description of the mortgaged
property in the title policy must conform to that shown on the survey of the
mortgaged property, where a survey has been required.
Property Insurance. The mortgagor is required to provide, and the Seller
reviews, certificates of required insurance with respect to the mortgaged
property. Such insurance generally may include: (1) commercial general
liability insurance for bodily injury or death and property damage; (2) an "All
Risk of Physical Loss" policy; (3) if applicable, boiler and machinery
coverage; (4) if the mortgaged property is located in a flood hazard area,
flood insurance; and (5) such other coverage as the Seller may require based on
the specific characteristics of the mortgaged property.
ADDITIONAL INFORMATION
A Current Report on Form 8-K (the "Form 8-K") will be available to
purchasers of the Offered Certificates and will be filed, together with the
Pooling and Servicing Agreement, with the Securities and Exchange Commission
within 15 days after the initial issuance of the Offered Certificates.
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<PAGE>
DESCRIPTION OF THE CERTIFICATES
GENERAL
The Mortgage Pass-Through Certificates, Series 2000-C9 (the
"Certificates") will be issued pursuant to the Pooling and Servicing Agreement
and will include the following eight classes of Certificates designated as the
Class A1, Class A2 (together, the "Class A Certificates"), Class B, Class C,
Class D, Class E, Class F and Class X Certificates (the "Offered
Certificates"). In addition to the Offered Certificates, the Certificates will
also include the Class G, Class H, Class J, Class K, Class NR, Class R-I, Class
R-II and Class R-III Certificates. Only the Offered Certificates are offered
hereby. The Certificates represent in the aggregate the entire beneficial
ownership interest in a Trust Fund consisting of: (i) a pool of fixed rate
Mortgage Loans and all payments under and proceeds of the Mortgage Loans
received after the Cut-off Date (exclusive of payments of principal and
interest due on or before the Cut-off Date); (ii) any Mortgaged Property
acquired on behalf of the Trust Fund through foreclosure or deed in lieu of
foreclosure (upon acquisition, an "REO Property"); (iii) such funds or assets
as from time to time are deposited in the Collection or Certificate Accounts or
any account established in connection with REO Properties (the "REO Account");
and (iv) the rights of the mortgagee under all insurance policies with respect
to the Mortgage Loans.
The Class A Certificates will evidence approximately an initial 74.25%
undivided interest in the Trust Fund. The Class B Certificates will evidence
approximately an initial 4.50% undivided interest in the Trust Fund. The Class
C Certificates will evidence approximately an initial 4.75% undivided interest
in the Trust Fund. The Class D Certificates will evidence approximately an
initial 1.25% undivided interest in the Trust Fund. The Class E Certificates
will evidence approximately an initial 3.50% undivided interest in the Trust
Fund. The Class F Certificates will evidence approximately an initial 1.75%
undivided interest in the Trust Fund.
The Offered Certificates (the "DTC Registered Certificates") will be
issued, maintained and transferred on the book-entry records of The Depository
Trust Company ("DTC") and its Participants. The DTC Registered Certificates
(other than the Class X Certificates) will be issued in minimum denominations
of $25,000 and integral multiples of $1 in excess thereof. The Class X
Certificates will be issued in denominations of $100,000 Notional Amount and
integral multiples of $1 Notional Amount in excess thereof.
The DTC Registered Certificates will be represented by one or more
certificates registered in the name of the nominee of DTC. The Company has been
informed by DTC that DTC's nominee will be Cede & Co. ("Cede"). No person
acquiring an interest in the DTC Registered Certificates (a "Beneficial Owner")
will be entitled to receive a Definitive Certificate (as defined below)
representing such person's interest, except as set forth below under "--
Book-Entry Registration of the Offered Certificates -- Definitive
Certificates." Unless and until Definitive Certificates are issued for the DTC
Registered Certificates under the limited circumstances described herein, all
references to actions by Certificateholders with respect to the DTC Registered
Certificates shall refer to actions taken by DTC upon instructions from its
Participants, and all references herein to distributions, notices, reports and
statements to Persons acquiring beneficial ownership interests in the
Certificates (the "Certificateholders") with respect to the DTC Registered
Certificates shall refer to distributions, notices, reports and statements to
DTC or Cede, as the registered holder of the DTC Registered Certificates, for
distribution to Beneficial Owners by DTC in accordance with DTC procedures. The
Beneficial Owners may elect to hold their Certificates through DTC, in the
United States, or Cedelbank or the Euroclear system ("Euroclear"), in Europe,
through participants of such systems, or indirectly through organizations which
are participants in such systems.
BOOK-ENTRY REGISTRATION OF THE OFFERED CERTIFICATES
Book-Entry Registration. The Offered Certificates will be initially issued
to investors through the book-entry facilities of DTC, or Cedelbank or
Euroclear if they are participants of such systems, or indirectly through
organizations which are participants in such systems. As to any such class of
Offered
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<PAGE>
Certificates, the record holder of such Certificates will be DTC's nominee.
Cedelbank and Euroclear will hold omnibus positions on behalf of their
participants through customers' securities accounts in Cedelbank's and
Euroclear's names on the books of their respective depositories (the
"Depositories"), which in turn will hold such positions in customers'
securities accounts in Depositories' names on the books of DTC.
DTC is a limited-purpose trust company organized under the laws of the
State of New York, which holds securities for its participating organizations
("DTC Participants," and together with the Cedelbank and Euroclear
participating organizations, the "Participants") and facilitates the clearance
and settlement of securities transactions between Participants through
electronic book-entry changes in the accounts of Participants. Participants
include securities brokers and dealers, banks, trust companies and clearing
corporations and may include certain other organizations. Other institutions
that are not Participants but clear through or maintain a custodial
relationship with Participants (such institutions, "Indirect Participants")
have indirect access to DTC's clearance system.
Because of time zone differences, the securities account of a Cedelbank or
Euroclear Participant (each as defined below) as a result of a transaction with
a DTC Participant (other than a depository holding on behalf of Cedelbank or
Euroclear) will be credited during the securities settlement processing day
(which must be a business day for Cedelbank or Euroclear, as the case may be)
immediately following the DTC settlement date. Such credits or any transactions
in such securities settled during such processing will be reported to the
relevant Euroclear Participant or Cedelbank Participant on such business day.
Cash received in Cedelbank or Euroclear as a result of sales of securities by
or through a Cedelbank Participant or Euroclear Participant to a DTC
Participant (other than the depository for Cedelbank or Euroclear) will be
received with value on the DTC settlement date, but will be available in the
relevant Cedelbank or Euroclear cash account only as of the business day
following settlement in DTC.
Transfers between Participants will occur in accordance with DTC rules.
Transfers between Cedelbank Participants or Euroclear Participants will occur
in accordance with their respective rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedelbank
Participants or Euroclear Participants, on the other, will be effected in DTC
in accordance with DTC rules on behalf of the relevant European international
clearing system by the relevant Depositories; however, such cross-market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in such system in accordance
with its rules and procedures and within its established deadlines (European
time). The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to its
Depository to take action to effect final settlement on its behalf by
delivering or receiving securities in DTC, and making or receiving payment in
accordance with normal procedures for same day funds settlement applicable to
DTC. Cedelbank Participants or Euroclear Participants may not deliver
instructions directly to the Depositories.
Cedelbank, as a professional depository, holds securities for its
participating organizations ("Cedelbank Participants") and facilitates the
clearance and settlement of securities transactions between Cedelbank
Participants through electronic book-entry changes in accounts of Cedelbank
Participants, thereby eliminating the need for physical movement of
certificates. As a professional depository, Cedelbank is subject to regulation
by the Luxembourg Monetary Institute.
Euroclear was created to hold securities for participants of Euroclear
("Euroclear Participants") and to clear and settle transactions between
Euroclear Participants through simultaneous electronic book-entry delivery
against payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of securities and
cash. The "Euroclear Operator" is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. Euroclear is
under contract with Euroclear Clearance Systems S.C., a Belgian co-operative
corporation (the "Clearance Cooperative"). All operations are conducted by the
Euroclear Operator, and all Euroclear securities clearance accounts and
Euroclear cash accounts are accounts with the Euroclear Operator, not the
Clearance Cooperative. The Clearance Cooperative establishes policies for
Euroclear
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on behalf of Euroclear Participants. As such, it is regulated and examined by
the Board of Governors of the Federal Reserve System and the New York State
Banking Department, as well as the Belgian Banking Commission. Securities
clearance accounts and cash accounts with the Euroclear Operator are governed
by the Terms and Conditions Governing Use of Euroclear and the related
Operating Procedures of the Euroclear System and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities
and cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
Distributions in respect of the DTC Registered Certificates will be
forwarded by the Bond Administrator to DTC, and DTC will be responsible for
forwarding such payments to Participants, each of which will be responsible for
disbursing such payments to the Beneficial Owners it represents or, if
applicable, to Indirect Participants. Accordingly, Beneficial Owners may
experience delays in the receipt of payments in respect of their Certificates.
Under DTC's procedures, DTC will take actions permitted to be taken by holders
of any class of DTC Registered Certificates under the Pooling and Servicing
Agreement only at the direction of one or more Participants to whose account
the DTC Registered Certificates are credited and whose aggregate holdings
represent no less than any minimum amount of Percentage Interests or voting
rights required therefor. DTC may take conflicting actions with respect to any
action of Certificateholders of any class to the extent that Participants
authorize such actions. None of the Depositor, the Trustee, the Bond
Administrator or any of their respective affiliates will have any liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests in the DTC Registered Certificates or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
Beneficial Owners will not be recognized by the Trustee or the Bond
Administrator as Certificateholders, as such term is used in the Pooling and
Servicing Agreement; provided, however, that Beneficial Owners will be
permitted to request and receive information furnished to Certificateholders by
the Bond Administrator subject to receipt by the Bond Administrator of a
certification in form and substance acceptable to the Bond Administrator
stating that the person requesting such information is a Beneficial Owner.
Otherwise, the Beneficial Owners will be permitted to receive information
furnished to Certificateholders and to exercise the rights of
Certificateholders only indirectly through DTC, its Participants and Indirect
Participants.
Although DTC, Cedelbank and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of the Offered Certificates among
Participants of DTC, Cedelbank and Euroclear, they are under no obligation to
perform or continue to perform such procedures and such procedures may be
discontinued at any time.
See Annex G for additional information regarding global clearance,
settlement and tax documentation procedures.
Definitive Certificates. Certificates initially issued in book-entry form
will be issued in fully registered, certificated form to Beneficial Owners or
their nominees ("Definitive Certificates"), rather than to DTC or its nominee
only if (i) the Depositor advises the Bond Administrator in writing that DTC is
no longer willing or able to properly discharge its responsibilities as
depository with respect to the Certificates and the Depositor is unable to
locate a qualified successor or (ii) the Depositor, at its option, elects to
terminate the book-entry system through DTC.
Upon the occurrence of an event described in the preceding paragraph, the
Bond Administrator is required to notify, through DTC, Participants who have
ownership of DTC Registered Certificates as indicated on the records of DTC of
the availability of Definitive Certificates for their DTC Registered
Certificates. Upon surrender by DTC of the definitive certificates representing
the DTC Registered Certificates and upon receipt of instructions from DTC for
re-registration, the Bond Administrator will reissue the DTC Registered
Certificates as Definitive Certificates issued in the respective principal
amounts owned by individual Beneficial Owners, and thereafter the Trustee and
the Bond Administrator will recognize the holders of such Definitive
Certificates as Certificateholders under the Pooling and Servicing Agreement.
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DISTRIBUTIONS
Method, Timing and Amount. Distributions on the Certificates will be made
on the 15th day of each month or, if such 15th day is not a business day, then
on the next succeeding business day, commencing in February 2000 (each, a
"Distribution Date"). All distributions (other than the final distribution on
any Certificate) will be made by the Bond Administrator to the persons in whose
names the Certificates are registered at the close of business on the last
business day of the month preceding the month in which the related Distribution
Date occurs (the "Record Date"). Such distributions 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 Bond Administrator
with wiring instructions as provided in the Pooling and Servicing Agreement or,
if no such instructions have been provided, by check mailed to the address
listed for such Certificateholder on the Certificate Register. The final
distribution on any Certificate will be made in like manner, but only upon
presentment or surrender of such Certificate at the location specified in the
notice to the holder thereof of such final distribution. All distributions made
with respect to a class of Certificates on each Distribution Date will be
allocated pro rata among the outstanding Certificates of such class based on
their respective Percentage Interests. The "Percentage Interest" evidenced by
any Certificate is equal to the initial denomination thereof as of the Delivery
Date, divided by the initial Class Balance or Notional Amount, as applicable,
for such class. The aggregate distribution to be made on the Certificates on
any Distribution Date shall equal the Available Distribution Amount.
The "Available Distribution Amount" for any Distribution Date is an amount
equal to (a) the sum of (i) the amount on deposit in the Collection Account (as
defined herein) as of the close of business on the related Determination Date,
which amount will include scheduled payments on the Mortgage Loans due on or
prior to the Due Date occurring in the Remittance Period immediately preceding,
and collected as of, such Determination Date (to the extent not distributed on
previous Distribution Dates) and unscheduled payments and other collections on
the Mortgage Loans collected during the related Remittance Period, (ii) the
aggregate amount of any P&I Advances made by a Servicer or the Trustee in
respect of such Distribution Date and payments made by the Master Servicer to
cover related Prepayment Interest Shortfalls (not otherwise included in clause
(i) above) and (iii) for Distribution Dates occurring in March the Withheld
Amounts for the immediately preceding January, if applicable, and February net
of (b) the portion of the amount described in clause (a)(i) hereof that
represents (i) Monthly Payments due on a Due Date subsequent to the end of the
related Remittance Period, (ii) any amounts payable or reimbursable therefrom
to any Servicer, the Bond Administrator or the Trustee, (iii) any servicing,
bond administrator and trustee compensation or (iv) for Distribution Dates
occurring in February and, if in a year that is not a leap year, January, the
Withheld Amounts (as defined herein) with respect to the Interest Reserve Loans
(as defined herein) to be deposited into the Interest Reserve Account (as
defined herein) and held for future distribution.
Pass-Through Rate on the Offered Certificates. The rate per annum at which
any class of Certificates accrues interest from time to time is herein referred
to as its "Pass-Through Rate."
The Pass-Through Rate for each class of Certificates (except the Class X
Certificates) will be equal to either a fixed rate or a rate based on the
weighted average of the remittance rates on the Mortgage Loans. The
Pass-Through Rate on the Class X Certificates will be equal to the weighted
average of the Remittance Rates in effect from time to time on the Mortgage
Loans minus the weighted average (by Class Balance) of the Pass-Through Rates
on all other classes of Certificates. The Pass-Through Rate on the Class X
Certificates for the initial Distribution Date will be approximately % per
annum. The "Remittance Rate" for any Mortgage Loan is equal to the excess of
the Mortgage Interest Rate thereon (without giving effect to any modification
or other reduction thereof following the Cut-off Date) over the sum of the
applicable Master Servicing Fee Rate and the Trustee Fee Rate; provided,
however, that with respect to each Interest Reserve Loan, (i) the Remittance
Rate for the one-month period preceding the Due Dates in (a) January and
February in each year that is not a leap year or (b) February only in each year
that is a leap year will be determined net of the Withheld Amounts and (ii) the
Remittance Rate for the one-month period preceding the Due Date in March will
be determined after taking into account the addition of the Withheld Amounts
with respect to each such Mortgage Loan, provided, further, however,
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that with respect to the Canadian Loans, the Remittance Rate will be equal to
the interest rate derived from interest payments in U.S. dollars specified in
the related Foreign Currency Exchange Contract over the sum of the applicable
Master Servicing Fee Rate and the Trustee Fee Rate. See "-- Interest Reserve
Account" herein. For purposes of calculating the Remittance Rate, the Mortgage
Interest Rate for each of the Mortgage Loans which provide for the computation
of interest other than on the basis of a 360-day year consisting of twelve
30-day months (a "30/360 basis") (that is the basis on which interest on the
Certificates accrues) will be adjusted to reflect that difference.
Interest Distributions on the Certificates. Subject to the distribution of
the Principal Distribution Amount to the Holders of classes of Certificates of
a higher priority, if any, as described under "Priority of Distributions"
below, Holders of each class of Certificates will be entitled to receive on
each Distribution Date, to the extent of the Available Distribution Amount for
such Distribution Date (net of any Net Prepayment Premium) (the "Adjusted
Available Distribution Amount"), distributions allocable to interest in an
amount (the "Interest Distribution Amount") equal to (a) the sum of (i)
interest accrued during the period from and including the first day of the
month preceding the month of the Distribution Date (or from the Cut-off Date in
the case of the initial Distribution Date) to and including the last day of the
month preceding the month of the Distribution Date (calculated on the basis of
a 360-day year consisting of twelve 30-day months) on the Class Balance (or the
Notional Amount, in the case of the Class X Certificates) of such class of
Certificates outstanding immediately prior to such Distribution Date, at the
then-applicable Pass-Through Rate (the "Interest Accrual Amount"), and (ii) any
unpaid Interest Distribution Amount shortfall for a prior Distribution Date
together with interest thereon, less (b) such class' pro rata share, based on
the Interest Accrual Amount, of any interest shortfall not related to a
Mortgagor delinquency or default, such as Prepayment Interest Shortfalls (as
defined herein) and shortfalls associated with exemptions provided by the
Relief Act (as defined in the Prospectus). The "Notional Amount" of the Class X
Certificates will equal the aggregate of the Class Balances of all the Private
Certificates. The Notional Amount does not entitle the Class X to any
distributions of principal. If the Adjusted Available Distribution Amount for
any Distribution Date is less than the Interest Distribution Amount for such
Distribution Date, the shortfall will be part of the Interest Distribution
Amount distributable to holders of Certificates affected by such shortfall on
subsequent Distribution Dates. Any such shortfall will bear interest at the
Pass-Through Rate in effect for subsequent Distribution Dates.
In addition, to the extent not necessary to reimburse the Master Servicer
for reductions in its compensation to cover Prepayment Interest Shortfalls,
each class of Certificates (other than the Class X Certificates) will receive
on each Distribution Date the product of (a) any Net Prepayment Premium paid
with respect to the Mortgage Loans if such Net Prepayment Premium is calculated
by reference to a U.S. Treasury rate, (b) the related Class Prepayment Fraction
and (c) the related Allocation Fraction. On each Distribution Date, the Net
Prepayment Premium not payable to the Master Servicer or the holders of a class
of Certificates, other than the Class X Certificates, will be paid to the
holders of the Class X Certificates. On each Distribution Date, any Net
Prepayment Premium not payable to the Master Servicer or the holders of the
Offered Certificates will be paid the holders of one or more classes of the
Private Certificates. The "Class Prepayment Fraction" for any class of Offered
Certificates and any Distribution Date will equal a fraction the numerator of
which is the amount of principal paid to such class in reduction of the Class
Balance thereof on such Distribution Date and the denominator of which is the
amount of principal paid to all classes of Certificates in reduction of their
respective Class Balances on such Distribution Date. The "Allocation Fraction"
for any class of Offered Certificates and any Distribution Date will equal a
fraction (not greater than one and not less than zero) (x) the numerator of
which is the excess of (a) the Pass-Through Rate of such class of Offered
Certificates over (b) the discount rate used to calculate the related Net
Prepayment Premium and (y) the denominator of which is the excess of (a) the
Mortgage Interest Rate on the related Mortgage Loan over (b) the discount rate
referenced in clause (x) above. To the extent not necessary to reimburse the
Master Servicer, as described above, any Net Prepayment Premium paid with
respect to a Mortgage Loan which is not calculated by reference to a U.S.
Treasury rate will be distributed solely to the holders of the Class X
Certificates.
To the extent any Mortgage Loan is prepaid in full or in part between a
Determination Date and the related Due Date immediately following such
Determination Date, an interest shortfall may result on the
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second Distribution Date following such Determination Date because interest on
prepayments in full or in part will only accrue to the date of payment (such
shortfall, a "Prepayment Interest Shortfall"). To the extent any Mortgage Loan
is prepaid in full or in part between the related Due Date and the
Determination Date immediately following such Due Date, the interest paid in
connection with such prepayment will be included in the Available Distribution
Amount for the immediately following Distribution Date (the "Prepayment
Interest Excess"). If a Mortgage Loan is prepaid in full or in part during any
Remittance Period, any related Prepayment Interest Shortfall shall be offset to
the extent of any Prepayment Interest Excess and any Prepayment Premium
collected during such Remittance Period. If the Prepayment Interest Shortfall
for any Remittance Period exceeds any Prepayment Interest Excess and any
Prepayment Premiums collected during such period, such shortfall shall only be
offset by an amount up to the portion of the Master Servicing Fee payable to
the Master Servicer on the related Distribution Date calculated assuming a
Master Servicing Fee Rate of 0.02% per annum. To the extent that any such
shortfall shall have been offset by a portion of the Master Servicing Fee, the
Master Servicer shall be entitled to any excess of the Prepayment Interest
Excess and Prepayment Premiums over the Prepayment Interest Shortfall for any
subsequent period.
The "Net Prepayment Premium" with respect to any Distribution Date will
equal the excess of (a) all Prepayment Premiums received during the related
Remittance Period over (b) all Prepayment Interest Shortfalls to the extent not
offset by all Prepayment Interest Excesses for such Remittance Period.
The Pass-Through Rate on the Certificates will not be affected by the
deferral of interest or reduction of the Mortgage Interest Rate on any Mortgage
Loan by the Special Servicer or by the occurrence of either such event in
connection with any bankruptcy proceeding involving the related Mortgagor. The
amount of any resulting interest shortfall will be allocated to the
Certificates, in the order described under "Subordination" below.
Interest Reserve Account. The Bond Administrator will establish and
maintain an "Interest Reserve Account" in the name of the Trustee for the
benefit of the holders of the Certificates. With respect to each Distribution
Date occurring in February and each Distribution Date occurring in any January
which occurs in a year that is not a leap year, there shall be deposited, in
respect of each Mortgage Loan which does not provide for the computation of
interest on a 30/360 basis (the "Interest Reserve Loans"), an amount equal to
one day's interest at the related Mortgage Interest Rate (net of the Master
Servicing Fee payable therefrom) on the respective Stated Principal Balances as
of the immediately preceding Due Date, to the extent a Monthly Payment or P&I
Advance is made in respect thereof (all amounts so deposited in any consecutive
January (if applicable) and February, "Withheld Amounts"). With respect to each
Distribution Date occurring in March, an amount is required to be withdrawn
from the Interest Reserve Account in respect of each Interest Reserve Loan
equal to the related Withheld Amounts from the preceding January (if
applicable) and February, if any, and deposited into the Certificate Account.
Principal Distributions on the Offered Certificates. Holders of a class of
Certificates will be entitled to receive on each Distribution Date in reduction
of the related Class Balance in the order described herein until the related
Class Balance is reduced to zero, to the extent of the balance of the Adjusted
Available Distribution Amount remaining after the payment of the Interest
Distribution Amount for such Distribution Date for such class of Certificates
and each other class of Certificates with a higher priority for interest
payments (as described under "Priority of Distributions" below), distributions
in respect of principal in an amount (the "Principal Distribution Amount")
equal to, in each case to the extent not previously advanced the aggregate of
(i) all scheduled payments of principal (other than Balloon Payments) due on
the Mortgage Loans on the related Due Date whether or not received and all
scheduled Balloon Payments received on or before the related Determination
Date, (ii) if the scheduled Balloon Payment is not received, with respect to
any Balloon Mortgage Loans on and after the date on which the related Mortgage
Loan becomes due (the "Maturity Date") thereof, the principal payment that
would need to be received in the related month in order to fully amortize such
Balloon Mortgage Loan with level monthly payments by the end of the term used
to derive scheduled payments of principal due prior to the related Maturity
Date, (iii) any unscheduled principal recoveries received during the related
Remittance Period in respect of the Mortgage Loans, whether in the form of
liquidation proceeds, insurance proceeds, condemnation proceeds or amounts
received as a result of the purchase of any Mortgage Loan out of the
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Trust Fund and (iv) any other portion of the Adjusted Available Distribution
Amount remaining undistributed after payment of any interest payable on the
Certificates for the related or any prior Distribution Date, including any
principal prepayments received during the related Remittance Period and
Prepayment Interest Excess not offset by any Prepayment Interest Shortfall
occurring during the related Remittance Period or otherwise required to
reimburse the Master Servicer, as described herein, and interest distributions
on the Mortgage Loans, in excess of interest distributions on the Certificates,
resulting from the allocation of certain amounts described in this clause (iv)
to principal distributions on the Certificates. The "Class Balance" for any
class of Certificates on any Distribution Date will equal the initial principal
balance thereof reduced by distributions in reduction thereof and Realized
Losses allocated thereto, as described under "-- Subordination" below. The
Class X Certificates do not have a Class Balance and are therefore not entitled
to any principal distributions.
PRIORITY OF DISTRIBUTIONS
The Adjusted Available Distribution Amount for each Distribution Date will
be applied in the following order of priority:
(a) to distributions of the Interest Distribution Amounts for such
Distribution Date on the Class A1, Class A2 and Class X Certificates, pro
rata, based on their respective Interest Distribution Amounts;
(b) to distributions of the Principal Distribution Amount for such
Distribution Date to Class A1 Certificates until the Class Balance thereof
is reduced to zero;
(c) to distributions of the Principal Distribution Amount (or the portion
thereof remaining after the distribution thereof to the Class A1
Certificates in reduction of the Class Balance thereof to zero) for such
Distribution Date on the Class A2 Certificates, until the Class Balance
thereof is reduced to zero;
(d) to distributions of the Interest Distribution Amount for such
Distribution Date on the Class B Certificates;
(e) to distribution of the Principal Distribution Amount (or the portion
thereof remaining after the distribution thereof to the Class A2
Certificates in reduction of the Class Balance thereof to zero) for such
Distribution Date to the Class B Certificates, until the Class Balance
thereof is reduced to zero;
(f) to distributions of the Interest Distribution Amount for such
Distribution Date on the Class C Certificates;
(g) to distributions of the Principal Distribution Amount (or the portion
thereof remaining after the distribution thereof to the Class B
Certificates in reduction of the Class Balance thereof to zero) for such
Distribution Date to the Class C Certificates until the Class Balance
thereof is reduced to zero;
(h) to the distributions of the Interest Distribution Amount for such
Distribution Date on the Class D Certificates;
(i) to distributions of the Principal Distribution Amount (or the portion
thereof remaining after the distribution thereof to the Class C
Certificates in reduction of the Class Balance thereof to zero) for such
Distribution Date on the Class D Certificates, until the Class Balance
thereof is reduced to zero;
(j) to distributions of the Interest Distribution Amount for such
Distribution Date on the Class E Certificates;
(k) to distributions of the Principal Distribution Amount (or the portion
thereof remaining after the distribution thereof to the Class D
Certificates in reduction of the Class Balance thereof to zero) for such
Distribution Date on the Class E Certificates, until the Class Balance
thereof is reduced to zero;
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(l) to distributions of the Interest Distribution Amount for such
Distribution Date on the Class F Certificates;
(m) to distributions of the Principal Distribution Amount (or the portion
thereof remaining after the distribution thereof to the Class E
Certificates in reduction of the Class Balance thereof to zero) for such
Distribution Date on the Class F Certificates, until the Class Balance
thereof is reduced to zero;
(n) to distributions of the Interest Distribution Amount for such
Distribution Date on the Class G Certificates;
(o) to distributions of the Principal Distribution Amount (or the portion
thereof remaining after the distribution thereof to the Class F
Certificates in reduction of the Class Balance thereof to zero) for such
Distribution Date on the Class G Certificates, until the Class Balance
thereof is reduced to zero;
(p) to distributions of the Interest Distribution Amount for such
Distribution Date on the Class H Certificates;
(q) to distributions of the Principal Distribution Amount (or the portion
thereof remaining after the distribution thereof to the Class G
Certificates in reduction of the Class Balance thereof to zero) for such
Distribution Date on the Class H Certificates, until the Class Balance
thereof is reduced to zero;
(r) to distributions of the Interest Distribution Amount for such
Distribution Date on the Class J Certificates;
(s) to distributions of the Principal Distribution Amount (or the portion
thereof remaining after the distribution thereof to the Class H
Certificates in reduction of the Class Balance thereof to zero) for such
Distribution Date on the Class J Certificates, until the Class Balance
thereof is reduced to zero;
(t) to distributions of the Interest Distribution Amount for such
Distribution Date on the Class K Certificates;
(u) to distributions of the Principal Distribution Amount (or the portion
thereof remaining after the distribution thereof to the Class J
Certificates in reduction of the Class Balance thereof to zero) for such
Distribution Date on the Class K Certificates, until the Class Balance
thereof is reduced to zero;
(v) to distributions of the Interest Distribution Amount for such
Distribution Date on the Class NR Certificates; and
(w) to distributions of the Principal Distribution Amount (or the portion
thereof remaining after the distribution thereof to the Class K
Certificates in reduction of the Class Balance thereof to zero) for such
Distribution Date on the Class NR Certificates, until the Class Balance
thereof is reduced to zero.
To the extent only the Class A1 and Class A2 Certificates are outstanding
on any Distribution Date, the Adjusted Available Distribution Amount remaining
after application pursuant to clause (a) above shall be applied to distribution
of the Principal Distribution Amount for such Distribution Date to the Class A1
and Class A2 Certificates pro rata based on their respective Class Balances.
PRIVATE CERTIFICATES
The Class G, Class H, Class J, Class K, Class NR, Class R-I, Class R-II
and Class R-III Certificates (the "Private Certificates") are not offered
hereby. The Pass-Through Rates on the Class G, Class H, Class J, Class K and
Class NR Certificates for any Distribution Date will equal %, %, %,
% and %, respectively, per annum. The Class Balances for the Class G,
Class H, Class J, Class K and Class NR Certificates will equal $14,251,000,
$20,359,000, $26,467,000, $6,107,000 and $14,259,116, respectively.
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The Class R-I, Class R-II and Class R-III Certificates will not have a
Pass-Through Rate or a Class Balance and are not entitled to distribution of
principal or interest.
An affiliate of the Depositor intends to purchase and make an investment
in the Private Certificates. The Private Certificates may be sold in whole or
in part by such affiliate at any time and from time to time.
SUBORDINATION
Neither the Offered Certificates nor the Mortgage Loans are insured or
guaranteed against losses suffered on the Mortgage Loans by any government
agency or instrumentality or by the Depositor, the Sellers, the Trustee, the
Bond Administrator, the Master Servicer, the Special Servicer, the
Underwriters, or any affiliate thereof.
In addition to the payment priorities described under "-- Priority of
Distributions" above, certain Certificates will be subordinated to other
Certificates with respect to the allocation of Realized Losses. Realized Losses
on the Mortgage Loans will be allocated, first, to the Class NR, Class K, Class
J, Class H and Class G Certificates, in that order, second, to the Class F
Certificates, third, to the Class E Certificates, fourth, to the Class D
Certificates, fifth, to the Class C Certificates, sixth, to the Class B and
thereafter, to the Class A1 and Class A2 Certificates, on a pro rata basis,
based on Class Balance, in each case until the related Class Balance is reduced
to zero. Realized Losses will be allocated to a class of Certificate by
reducing its Class Balance on the Distribution Date in the month following the
occurrence of the Realized Loss by the excess of the aggregate Class Balance of
the Certificates over the aggregate Stated Principal Balance of the Mortgage
Loans after giving effect to all distributions on such Distribution Date.
In addition to Realized Losses, shortfalls will also occur as a result of
each Servicer's and the Trustee's right to receive payments of interest with
respect to unreimbursed advances, the related Special Servicer's right to
compensation with respect to Mortgage Loans which are or have been Specially
Serviced Mortgage Loans and as a result of other Trust Fund expenses. Such
shortfalls will be allocated as described above to the classes of Certificates
with the lowest payment priority for purposes of the application of Available
Distribution Amount in the order described herein.
A "Realized Loss," (a) in the case of any Mortgage Loan described in
clause (a) or clause (b) of the succeeding sentence, is equal to the sum of (i)
the Stated Principal Balance of any Loss Mortgage Loan, (ii) interest thereon
not previously distributed or advanced to Certificateholders through the last
day of the month in which such Mortgage Loan became a Loss Mortgage Loan, (iii)
any advances made by a Servicer or the Trustee which remain unreimbursed and
(iv) any interest accrued on such advances (see "-- Advances" below) as of such
time, reduced by any amounts recovered thereon as of such time and (b), in the
case of any Mortgage Loan described in clause (c) of the succeeding sentence,
is the amount determined to have been permanently forgiven as described in such
clause (c). A "Loss Mortgage Loan" is any Mortgage Loan (a) which is finally
liquidated, (b) with respect to which a determination has been made that an
advance which has been made or would otherwise be required to be made, is not,
or, if made, would not be, recoverable out of proceeds on such Mortgage Loan or
(c) with respect to which a portion of the principal balance thereof has been
permanently forgiven, whether pursuant to a modification or a valuation
resulting from a proceeding initiated under the Bankruptcy Code. The "Stated
Principal Balance" of any Mortgage Loan as of any date of determination is the
principal balance as of the Cut-off Date minus the sum of (i) the principal
portion of each Monthly Payment due on such Mortgage Loan after the Cut-off
Date, to the extent received from the Mortgagor or advanced and distributed to
Certificateholders, (ii) any unscheduled amounts of principal received with
respect to such Mortgage Loans, to the extent distributed to Certificateholders
and (iii) any Realized Loss previously allocated with respect to such Mortgage
Loan.
COLLATERAL VALUE ADJUSTMENT
Within 30 days after the earliest to occur of (i) 90 days after the date
on which an uncured delinquency occurs in respect of a Mortgage Loan, (ii) the
date on which a receiver is appointed in respect of a Mortgaged Property, (iii)
the date on which a Mortgaged Property becomes an REO Property, (iv) the date
on which a borrower declares bankruptcy or (v) the date on which a change in
the payment
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rate, Mortgage Interest Rate, principal balance, amortization terms or Maturity
Date of any Specially Serviced Mortgage Loan becomes effective (the earliest of
such dates, a "Required Appraisal Date"), the Special Servicer will use
reasonable efforts to obtain an appraisal from an independent MAI appraiser,
(except if an appraisal has been conducted within the twelve-month period
preceding such event) the cost of which shall be advanced by the Special
Servicer and reimbursed thereto from the Trust Fund. As a result of such
appraisal, a Collateral Value Adjustment may result, which Collateral Value
Adjustment will be allocated, for purposes of determining distributions of
interest to the Certificates, in the manner and priority described below.
Notwithstanding the foregoing, a Collateral Value Adjustment will be zero with
respect to such a Mortgage Loan if (i) the event giving rise to such Collateral
Value Adjustment is the extension of the maturity of such Mortgage Loan, (ii)
the payments on such Mortgage Loan were not delinquent during the twelve-month
period immediately preceding such extension and (iii) the payments on such
Mortgage Loan are then current, provided, that if at any later date there
occurs a delinquency in payment with respect to such Mortgage Loan, the
Collateral Value Adjustment will be recalculated and applied as described
above. In addition, in any case, upon the occurrence of any event giving rise
to a subsequent Collateral Value Adjustment (including the delinquency referred
to in the immediately preceding sentence) more than twelve months after an
appraisal was obtained with respect to a Collateral Value Adjustment, the
Special Servicer will order a new appraisal as described above, within 30 days
of the occurrence of any such event giving rise to a subsequent Collateral
Value Adjustment and will adjust the amount of the Collateral Value Adjustment
in accordance therewith.
The "Collateral Value Adjustment" with respect to any Mortgage Loan will
be an amount equal to the excess of (a) the principal balance of such Mortgage
Loan over (b) the excess of (i) 90% of the current appraised value of the
related Mortgaged Property as determined by an independent MAI appraisal of
such Mortgaged Property over (ii) the sum of (A) to the extent not previously
advanced by a Servicer, all unpaid interest on such Mortgage Loan at a per
annum rate equal to the Mortgage Interest Rate, (B) all unreimbursed Advances
and interest thereon, (C) all currently due and delinquent real estate taxes
and assessments, insurance premiums and, if applicable, ground rents in respect
of such Mortgaged Property (net of any amount escrowed or otherwise available
for payment of the amount due on such Mortgage Loan) and (D) the Master
Servicer's good faith estimate of the items in clauses (B) and (C) that will be
incurred during the next twelve months. The excess of the principal balance of
any Mortgage Loan over the related Collateral Value Adjustment is referred to
herein as the "Adjusted Collateral Value." A Collateral Value Adjustment may
result in a reduction of the Interest Distribution Amount of one or more
classes of Certificates, but shall not be a permanent reduction of the Class
Balance (or Notional Amount) of any class of Certificates prior to the
occurrence of a Realized Loss.
A Collateral Value Adjustment for a Mortgage Loan will reduce any P&I
Advance otherwise required for such Mortgage Loan. This will have the effect of
reducing the amount of interest available for distribution to the Certificates
(other than the Class A and Class X Certificates) in reverse alphabetical order
of the Classes. See "-- Advances" below. In addition, any Collateral Value
Adjustment will be allocated to the Certificates (other than the Class A and
Class X Certificates) in reverse alphabetical order of the Classes for purposes
of determining Voting Rights and the Monitoring Certificateholders. See
"Description of the Pooling and Servicing Agreement -- Voting Rights" below and
"Master Servicer and Special Servicer -- Responsibilities of the Special
Servicer" below. The Special Servicer is required, within 30 days of each
anniversary of the Required Appraisal Date, to order an update of the prior
appraisal (the cost of which will be advanced by the Special Servicer and
reimbursed thereto from the Trust Fund). The Special Servicer will determine
and report to the Master Servicer, the Bond Administrator and the Trustee the
updated appraisal. A lower appraisal value will increase the Collateral Value
Adjustment. Such increase will further reduce any P&I Advances for the related
Mortgage Loan. A higher appraised value will reverse the Collateral Value
Adjustment by the amount of the reported increase.
ADVANCES
On the business day immediately preceding each Distribution Date, the
Master Servicer (and under certain circumstances, the Special Servicer) will be
obligated to make advances out of its own funds or funds held in the Collection
Account (as defined herein) that are not required to be part of the Available
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Distribution Amount for such Distribution Date (each, a "P&I Advance"), in an
amount equal to the excess of all Monthly Payments (net of the Master Servicing
Fee) due over the amount actually received, subject to the limitations
described herein.
Notwithstanding the foregoing, if a Collateral Value Adjustment has been
made with respect to any Mortgage Loan, then, with respect to the Distribution
Date immediately following the date of such determination and with respect to
each subsequent Distribution Date, to the extent such Collateral Value
Adjustment has not been reversed, in the event of subsequent delinquencies
thereon, the interest portion of the P&I Advance in respect of such Mortgage
Loan will be reduced (no reduction to be made in the principal portion,
however) to equal 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 Collateral Value Adjustment, and the
denominator of which is equal to the Stated Principal Balance of such Mortgage
Loan. See "-- Subordination" above.
To the extent that the Master Servicer fails to make a P&I Advance
required of it prior to such Distribution Date, the Trustee shall make such
required P&I Advance on such Distribution Date, as provided in the Pooling and
Servicing Agreement. In addition, the Master Servicer will be required to
advance certain property related expenses. The Servicers generally may not
advance any amounts, other than P&I Advances, unless such advance (a "Property
Protection Advance") is contemplated in the related Asset Strategy Report (as
defined herein) for the related Mortgage Loan or such advance is for one of
several purposes specified in the Pooling and Servicing Agreement as "Property
Protection Expenses." All such advances will be reimbursable to a Servicer and
the Trustee from late payments, insurance proceeds, liquidation proceeds,
condemnation proceeds or amounts paid in connection with the purchase of such
Mortgage Loan to the extent such amounts are not required to be otherwise
applied pursuant to the terms of the related Mortgage Loan or, as to any such
advance that is deemed not otherwise recoverable, from any amounts required to
be deposited in the Collection Account. Notwithstanding the foregoing, a
Servicer and the Trustee will be obligated to make any such advance only to the
extent that it determines in its reasonable good faith judgment that such
advance, if made, would be recoverable out of late payments, insurance
proceeds, liquidations, condemnation proceeds or certain other collections on
the related Mortgage Loan. None of the Servicers and the Trustee will be
required to advance the full amount of any Balloon Payment not made by the
related Mortgagor. To the extent a Servicer and the Trustee are required to
make a P&I Advance on and after the Due Date for such Balloon Payment, such P&I
Advance shall not exceed an amount equal to a monthly payment calculated by the
Special Servicer necessary to fully amortize the related Mortgage Loan over the
period used for purposes of calculating the scheduled monthly payments thereon
prior to the related Maturity Date. Any failure by a Servicer to make a P&I
Advance or Property Protection Advance as required under the Pooling and
Servicing Agreement will constitute an event of default thereunder, in which
case the Trustee will be obligated to make any required advance, in accordance
with the terms of the Pooling and Servicing Agreement. The Trustee will be
entitled to a reimbursement for each P&I Advance or Property Protection Advance
(together with interest thereon) made by it in the same manner and to the same
extent, but prior to, the Servicers.
Each Servicer and the Trustee shall be entitled to interest on the
aggregate amount of all advances made by such Servicer or the Trustee at a per
annum rate equal to the Prime Rate reported in The Wall Street Journal. See
"Risk Factors -- Effect of Mortgagor Delinquencies and Defaults" herein.
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CERTAIN PREPAYMENT, MATURITY AND YIELD CONSIDERATIONS
GENERAL
The yield to maturity on the Offered Certificates will be affected by the
rate of principal payments on the Mortgage Loans including, for this purpose,
prepayments, which may include amounts received by virtue of the curtailments,
voluntary repayment in full, repurchases by the Sellers, condemnation or
casualty with respect to the Mortgaged Property or foreclosure pursuant to a
default on a Mortgage Loan ("Prepayment"). The rate of principal payments on
the Offered Certificates will correspond to the rate of principal payments
(including prepayments) on the related Mortgage Loans.
Each Mortgage Loan either prohibits voluntary prepayments during a certain
number of years following the origination thereof and/or allows the related
Mortgagor to prepay the principal balance thereof in whole or in part during a
certain number of years following the origination if accompanied by payment of
a Prepayment Premium. See Annex A hereto and the table entitled "Prepayment
Protection" under "Description of the Mortgage Pool -- Certain Characteristics
of the Mortgage Loan" herein. Any Net Prepayment Premium collected on a
Mortgage Loan will be distributed to the holders of the Certificates as
described herein. See "Risk Factors -- Special Prepayment Considerations"
herein, "Description of the Certificates -- Distributions -- Interest
Distributions on the Certificates" and "Certain Prepayment, Maturity and Yield
Considerations" herein, and "Yield Considerations" in the Prospectus.
The yield to maturity on each class of the Offered Certificates will
depend on, among other things, the rate and timing of principal payments
(including prepayments, defaults, liquidations and purchases of Mortgage Loans
due to a breach of a representation and warranty) on the Mortgage Loans and the
allocation thereof to reduce the Class Balance or Notional Amount of such class
and the collection and allocation of any Prepayment Premium thereon. The yield
to investors on any Class of Offered Certificates will be adversely affected by
any allocation thereto of Prepayment Interest Shortfalls on the Mortgage Loans,
which may result from the distribution of interest only to the date of a
prepayment occurring during any month following the related Determination Date
(rather than a full month's interest) to the extent any such interest shortfall
is not offset by Prepayment Premiums, any Prepayment Interest Excess or the
Master Servicing Fee for such Distribution Date.
The Pass-Through Rate for the Offered Certificates will be either a fixed
rate or a rate based on the weighted average of the Remittance Rates on the
Mortgage Loans. The Pass-Through Rate for the Class X Certificates for any
Distribution Date will be variable and will be based on the weighted average
Remittance Rates on the Mortgage Loans for such Distribution Date. Accordingly,
the yield on the Offered Certificates, to the extent the related Pass-Through
Rate is calculated based on the weighted average of the Remittance Rates, will
be sensitive to changes in the relative composition of the Mortgage Loans as a
result of scheduled amortization, voluntary prepayments, liquidations of
Mortgage Loans following default and repurchases of Mortgage Loans. Losses or
payments of principal on the Mortgage Loans with higher Remittance Rates could
result in a reduction in the weighted average of the Remittance Rates on the
Mortgage Loans reducing the Pass-Through Rates on such classes of Offered
Certificates.
See "Description of the Certificates -- Pass-Through Rates" and
"Description of the Mortgage Pool -- Certain Characteristics of the Mortgage
Loans" herein.
ARD Loans may be prepaid in full on or after the Anticipated Repayment
Date without the payment of any Prepayment Premium. Excess Cash Flow on an ARD
Loan will be applied to reduce the principal thereof after its Anticipated
Repayment Date and the related Mortgage Interest Rate will be reset at the
related Revised Rate. There can be no assurance that any of such Mortgage Loan
will be prepaid on that date or any date prior to maturity. The failure to pay
an ARD Loan by the related Anticipated Repayment Date is not an event of
default.
In general, if a class of Offered Certificates is purchased at a premium
and principal distributions thereon occur at a rate faster than anticipated at
the time of purchase, the investor's actual yield to maturity will be lower
than that assumed at the time of purchase. Conversely, if a class of Offered
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Certificates is purchased at a discount and principal distributions thereon
occur at a rate slower than that assumed at the time of purchase, the
investor's actual yield to maturity will be lower than that assumed at the time
of purchase.
If a Mortgage Loan becomes a Specially Serviced Mortgage Loan, the Special
Servicer may adopt a servicing strategy which affects the yield to maturity of
one or more classes of Offered Certificates.
The "Rated Final Distribution Date" for the Certificates will be the
Distribution Date in October 2032, which is the first Distribution Date
succeeding the second anniversary of the date at which all the Mortgage Loans
are scheduled to have zero balances, assuming no prepayments, defaults or
delinquencies, and that the Mortgage Loans which are Balloon Loans or ARD Loans
fully amortize according to their amortization schedule without a Balloon
Payment or final payment on the Anticipated Repayment Date, respectively.
WEIGHTED AVERAGE LIFE OF THE OFFERED CERTIFICATES
Weighted average life refers to the average amount of time from the date
of issuance of a security until each dollar of principal of such security will
be repaid to the investor. The weighted average life of the Offered
Certificates will be influenced by the rate at which principal payments
(including scheduled payments, principal prepayments, condemnation proceeds and
payments made pursuant to any applicable policies of insurance) on the Mortgage
Loans are made. Principal payments on the Mortgage Loans may be in the form of
scheduled amortization or prepayments (for this purpose, the term "prepayment"
includes prepayments, partial prepayments and liquidations due to a default or
other dispositions of the Mortgage Loans).
Prepayments on loans are commonly measured relative to a prepayment
standard or model, such as the constant prepayment rate prepayment model
("CPR"). CPR represents a constant assumed rate of prepayment each month
relative to the then outstanding principal balance of a pool of loans for the
life of such loans. Neither CPR 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 pool of loans,
including the Mortgage Loans.
The table of Percent of Initial Class Balance Outstanding for each class
of the Offered Certificates at each CPR set forth below indicates the weighted
average life of such Certificates and sets forth the percentage of the initial
principal amount of such Certificates that would be outstanding after each of
the dates shown at the indicated CPR. The table has been prepared on the basis
of the characteristics of the Mortgage Loans in Annex A and on the basis of the
following assumptions: (i) the Mortgage Loans prepay at the indicated CPR; (ii)
the Maturity Date of each of the Balloon Mortgage Loans is not extended; (iii)
distributions on the Offered Certificates are received in cash, on the 15th day
of each month, commencing in February 2000; (iv) no defaults or delinquencies
in, or modifications, waivers or amendments respecting, the payment by the
Mortgagors of principal and interest on the Mortgage Loans occur; (v)
prepayments represent payment in full of individual Mortgage Loans and are
received on the respective Due Dates and include a month's interest thereon;
(vi) there are no repurchases of Mortgage Loans due to breaches of any
representation and warranty, or pursuant to an optional termination as
described under "Description of the Pooling and Servicing Agreement --
Termination" or otherwise; (vii) the Offered Certificates are purchased on
January 25, 2000; and (viii) all of the ARD Loans are fully prepaid on their
related Anticipated Repayment Date and all of the other Mortgage Loans are paid
in full on their Maturity Date.
Variations in the actual prepayment experience and the balance of the
Mortgage Loans that prepay may increase or decrease the percentage of initial
Class Balance (and weighted average life) shown in the following table. Such
variations may occur even if the average prepayment experience of all such
Mortgage Loans is the same as any of the specified assumptions.
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<PAGE>
PERCENT OF INITIAL CLASS BALANCE OUTSTANDING
AT THE FOLLOWING PERCENTAGES OF CPR (1)
<TABLE>
<CAPTION>
CLASS A1 CLASS A2 CLASS B CLASS C
DISTRIBUTION ------------------------ ------------------------ ------------------------ ------------------------
DATE 0% 25% 50% 100% 0% 25% 50% 100% 0% 25% 50% 100% 0% 25% 50% 100%
- ------------------- ----- ----- ----- ------ ----- ----- ----- ------ ----- ----- ----- ------ ----- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial
percentage ....... 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100
January 2001 ...... 96 96 96 96 100 100 100 100 100 100 100 100 100 100 100 100
January 2002 ...... 92 92 92 92 100 100 100 100 100 100 100 100 100 100 100 100
January 2003 ...... 87 87 87 87 100 100 100 100 100 100 100 100 100 100 100 100
January 2004 ...... 82 82 82 82 100 100 100 100 100 100 100 100 100 100 100 100
January 2005 ...... 69 68 68 66 100 100 100 100 100 100 100 100 100 100 100 100
January 2006 ...... 33 31 30 29 100 100 100 100 100 100 100 100 100 100 100 100
January 2007 ...... 16 14 13 13 100 100 100 100 100 100 100 100 100 100 100 100
January 2008 ...... 10 8 7 7 100 100 100 100 100 100 100 100 100 100 100 100
January 2009 ...... 0 0 0 0 94 94 94 92 100 100 100 100 100 100 100 100
January 2010 ...... 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Weighted
Average life
in years (2) ..... 5.5 5.4 5.4 5.2 9.5 9.5 9.5 9.3 9.7 9.7 9.7 9.5 9.7 9.7 9.7 9.5
<CAPTION>
CLASS D CLASS E CLASS F
DISTRIBUTION ------------------------ ------------------------ -----------------------
DATE 0% 25% 50% 100% 0% 25% 50% 100% 0% 25% 50% 100%
- ------------------- ----- ----- ----- ------ ----- ----- ----- ------ ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial
percentage ....... 100 100 100 100 100 100 100 100 100 100 100 100
January 2001 ...... 100 100 100 100 100 100 100 100 100 100 100 100
January 2002 ...... 100 100 100 100 100 100 100 100 100 100 100 100
January 2003 ...... 100 100 100 100 100 100 100 100 100 100 100 100
January 2004 ...... 100 100 100 100 100 100 100 100 100 100 100 100
January 2005 ...... 100 100 100 100 100 100 100 100 100 100 100 100
January 2006 ...... 100 100 100 100 100 100 100 100 100 100 100 100
January 2007 ...... 100 100 100 100 100 100 100 100 100 100 100 100
January 2008 ...... 100 100 100 100 100 100 100 100 100 100 100 100
January 2009 ...... 100 100 100 100 100 100 100 100 100 100 100 100
January 2010 ...... 0 0 0 0 0 0 0 0 0 0 0 0
Weighted
Average life
in years (2) ..... 9.7 9.7 9.7 9.5 9.8 9.8 9.8 9.6 9.8 9.8 9.8 9.6
</TABLE>
- -------
(1) Prepayments are assumed to occur after the Lock-out/Defeasance Period
and/or Yield Maintenance penalty period.
(2) The weighted average life of a class of Offered Certificates is
determined by (i) multiplying the amount of each distribution of
principal by the number of years from the date of issuance to the related
Distribution Date, (ii) adding the results and (iii) dividing the sum by
the total principal distributions on such class of Certificates.
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CLASS X CERTIFICATES YIELD CONSIDERATIONS
The following table indicates the sensitivity of the pre-tax yield to
maturity on the Class X Certificates to various constant rates of prepayment on
the Mortgage Loans by projecting the monthly aggregate payments on the Class X
Certificates and computing the corresponding pre-tax yields to maturity on a
corporate bond equivalent basis, based on the assumptions described in clauses
(i) through (viii) in the second paragraph preceding the table entitled
"Percent of Initial Class Balance Outstanding at the Following Percentages of
CPR" under the heading "Certain Prepayment, Maturity and Yield Considerations
- -- Weighted Average Life of the Offered Certificates" herein, including the
assumptions regarding the performance of the Mortgage Loans which may differ
from the actual performance thereof and assuming the aggregate purchase price
and Pass-Through Rate set forth below and assuming further that the initial
Notional Amount of the Class X Certificates is as set forth herein. Any
differences between such assumptions and the actual characteristics and
performance of the Mortgage Loans and of the Certificates may result in yields
being different from those shown in such table. Discrepancies between assumed
and actual characteristics and performance underscore the hypothetical nature
of the table, which is provided only to give a general sense of the sensitivity
of yields in varying prepayment scenarios.
PRE-TAX YIELD TO MATURITY OF THE CLASS X CERTIFICATES
<TABLE>
<CAPTION>
ASSUMED
PURCHASE PRICE CPR PREPAYMENT ASSUMPTION
AS A PERCENTAGE RATE (2)
OF THE NOTIONAL ASSUMED ---------------------------
AMOUNT PASS-THROUGH RATE (1) 0% % % % %
- ----------------- ---------------------- ---- --- --- --- --
<S> <C> <C> <C> <C> <C> <C>
% % % % % % %
</TABLE>
- ----------
(1) Calculated based on the weighted average of the Remittance Rates on the
Mortgage Loans as of the Cut-off Date and the initial weighted average of
the Pass-Through Rates of the Certificates. The Pass-Through Rate on the
Class X Certificates will be subject to adjustment on each Distribution
Date.
(2) Prepayments are assumed to occur after the Lock-out/Defeasance period
and/or Yield Maintenance penalty period.
Each pre-tax yield to maturity set forth in the preceding table was
calculated by determining the monthly discount rate which, when applied to the
assumed stream 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 listed in the table, and by converting such monthly
rates to semi-annual corporate bond equivalent rates. Accrued interest is
included in the assumed purchase price of the Class X Certificates and is used
in computing the corporate bond equivalent yields shown. These yields do not
take into account the different interest rates at which investors may be able
to reinvest funds received by them as distributions on the Class X
Certificates, and thus do not reflect the return on any investment in the Class
X Certificates when, as applicable, any reinvestment rates other than the
discount rates set forth in the preceding table are considered.
Notwithstanding the assumed prepayment rates reflected in the preceding
table, it is highly unlikely that the Mortgage Loans will be prepaid according
to one particular pattern. For this reason and because the timing of cash flows
is critical to determining yields, the pre-tax yield to maturity on the Class X
Certificates is likely to differ from those shown in the table, even if all of
the Mortgage Loans prepay at the indicated constant percentages of CPR over any
given time period or over the entire life of the Certificates.
There can be no assurance that the Mortgage Loans will prepay at any
particular rate or that the yield on the Class X Certificates will conform to
the yields described herein. Moreover, the various remaining terms to maturity
of the Mortgage Loans could produce slower or faster principal distributions
than indicated in the preceding table at the various constant percentages of
CPR specified, even if the weighted average remaining term to maturity of the
Mortgage Loans is as assumed. Investors are urged to make
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their investment decisions based on their determinations as to anticipated
rates of prepayment under a variety of scenarios. Investors in the Class X
Certificates should fully consider the risk that an extremely rapid rate of
prepayments on the Mortgage Loans could result in the failure of such investors
to fully recover their investments. In addition, holders of the Class X
Certificates generally have rights to relatively larger portions of interest
payments on Mortgage Loans with higher Mortgage Interest Rates; thus, the yield
on the Class X Certificates will be materially and adversely affected to a
greater extent than the yield on the other Offered Certificates if the Mortgage
Loans with higher Mortgage Interest Rates prepay faster than the Mortgage Loans
with lower Mortgage Rates.
For additional considerations relating to the yield on the Certificates,
see "Yield Considerations" in the Prospectus.
The yield to maturity on the Class X Certificates will be extremely
sensitive to losses on the Mortgage Loans (and the timing thereof) because any
such losses will be allocated to reduce the Class Balance of the Certificates
and therefore will reduce the Notional Amount of the Class X Certificates.
Investors in the Class X Certificates should fully consider the risk that
Realized Losses on the Mortgage Loans could result in a failure of such
investors to fully recover their investments.
MASTER SERVICER AND SPECIAL SERVICER
THE MASTER SERVICER AND THE SPECIAL SERVICER
ORIX Real Estate Capital Markets, LLC ("ORECM") will be acting as the
Master Servicer and the Special Servicer (together, the "Servicers") under the
Pooling and Servicing Agreement. ORECM is a Delaware limited liability company.
ORECM manages a servicing portfolio of commercial and multifamily loans
encompassing in excess of 11,000 assets with an aggregate principal balance, as
of September 30, 1999, of approximately $32.3 billion, the collateral for which
is located in 50 states, Puerto Rico, the District of Columbia, Canada, the
Dominican Republic and the Virgin Islands. As of September 30, 1999, ORECM
served as the named special servicer on 71 securitized transactions
encompassing in excess of 18,000 loans, with an aggregate principal balance of
approximately $48.286 billion. ORECM's servicing operations are located at 1717
Main Street, Dallas, Texas 75201.
The information set forth above concerning the Master Servicer and the
Special Servicer has been provided by ORECM. The Depositor, the Underwriters,
the Trustee, the Bond Administrator and the Sellers make no representations or
warranties as to its accuracy.
RESPONSIBILITIES OF MASTER SERVICER
Under the Pooling and Servicing Agreement, the Master Servicer is required
to service and administer the Mortgage Loans solely on behalf of and in the
best interests of and for the benefit of the Certificateholders, in accordance
with the terms of the Pooling and Servicing Agreement and the Mortgage Loans
and to the extent consistent with such terms, with the higher of (a) the
standard of care, skill, prudence and diligence with which the Master Servicer
services and administers mortgage loans that are held for other portfolios that
are similar to the Mortgage Loans and (b) the standard of care, skill, prudence
and diligence with which the Master Servicer services and administers mortgage
loans for its own portfolio that are similar to the Mortgage Loans, in either
case, giving due consideration to customary and usual standards of practice of
prudent institutional multifamily and commercial mortgage lenders, loan
servicers and asset managers (with respect to the Master Servicer, the
"Servicing Standard") and without regard to (a) any relationship between itself
or its affiliates and any Mortgagor, (b) any ownership of the Certificates, (c)
its obligation to make advances, (d) any debt that it extended to any Mortgagor
and (e) any servicing compensation to which the Master Servicer may be
entitled.
The Master Servicer will also be required to perform other customary
functions of a servicer of comparable loans, including maintaining (or using
its best efforts to cause the Mortgagor under each Mortgage Loan to maintain)
hazard, business interruption and general liability insurance policies (and, if
applicable, rental interruption policies) as described herein to the extent
such insurance is available at
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commercially reasonable rates and filing and settling claims thereunder;
maintaining escrow or impoundment accounts of Mortgagors for payment of taxes,
insurance and other items required to be paid by any Mortgagor pursuant to the
Mortgage Loan; processing, in consultation with the Special Servicer,
assumptions or substitutions in accordance with the Servicing Standard;
demanding that the Mortgagor cure delinquencies; inspecting Mortgaged
Properties under certain circumstances; and maintaining records relating to the
Mortgage Loans.
RESPONSIBILITIES OF SPECIAL SERVICER
The servicing responsibility on a particular Mortgage Loan will be
generally transferred to the Special Servicer upon the occurrence of certain
servicing transfer events (each, a "Servicing Transfer Event"), including the
following: (i) the Mortgage Loan becomes a "Defaulted Mortgage Loan" because it
is more than 60 days delinquent in whole or in part in respect of any monthly
payment or is more than 30 days delinquent in whole or in part in respect of
the related Balloon Payment; (ii) the related Mortgagor has entered into or
consented to bankruptcy, appointment of a receiver or conservator or a similar
insolvency or similar proceeding, or the Mortgagor has become the subject of a
decree or order for such a proceeding; (iii) the Master Servicer shall have
received notice of the foreclosure or proposed foreclosure of any other lien on
the Mortgaged Property; (iv) the related Mortgagor admits in writing its
inability to pay its debts generally as they become due, files a petition to
take advantage of any applicable insolvency or reorganization statute, makes an
assignment for the benefit of its creditors, or voluntarily suspends payment of
its obligations; (v) any other default has occurred which has materially and
adversely affected the value of the related Mortgage Loan and has continued
unremedied for the applicable grace period specified in the related Mortgage
Note; (vi) the related Mortgaged Property becomes an REO Property; or (vii) if
for any reason an assumption agreement cannot be entered into upon the transfer
by the related Mortgagor of the Mortgaged Property. A Mortgage Loan serviced by
the Special Servicer is referred to herein as a "Specially Serviced Mortgage
Loan." The Special Servicer will collect certain payments on such Specially
Serviced Mortgage Loans and make certain remittances to, and prepare certain
reports for the Master Servicer with respect to such Mortgage Loans. The Master
Servicer shall have no responsibility for the performance by the Special
Servicer of its duties under the Pooling and Servicing Agreement provided that
the Master Servicer continues to perform certain servicing functions on such
Specially Serviced Mortgage Loans and, based on the information provided to it
by the Special Servicer, prepares certain reports for the Trustee with respect
to such Specially Serviced Mortgage Loans. To the extent that any Mortgage
Loan, in accordance with its original terms or as modified in accordance with
the Pooling and Servicing Agreement, becomes a performing Mortgage Loan for at
least three consecutive months, the Special Servicer will cease to service such
Mortgage Loan.
Under the Pooling and Servicing Agreement the Special Servicer is required
to service, administer and dispose of Specially Serviced Mortgage Loans solely
in the best interests of and for the benefit of the Certificateholders, in
accordance with the Pooling and Servicing Agreement and the Mortgage Loans and
to the extent consistent with such terms, with the higher of (a) the standard
of care, skill, prudence and diligence with which the Special Servicer
services, administers and disposes of, distressed mortgage loans and related
real property that are held for other portfolios that are similar to the
Mortgage Loans, Mortgaged Properties and REO Properties and (b) the standard of
care, skill, prudence and diligence with which the Special Servicer services,
administers and disposes of distressed mortgage loans and related real property
for its own portfolio that are similar to the Mortgage Loans, Mortgaged
Properties and REO Properties, giving due consideration to customary and usual
standards of practice of prudent institutional multifamily and commercial
mortgage lenders, loan servicers and asset managers, so as to maximize the net
present value of recoveries on the Mortgage Loans (with respect to the Special
Servicer, the "Servicing Standard") and without regard to (a) any relationship
between itself or its Affiliates and any Mortgagor, (b) any ownership of the
Certificates, (c) any debt that it extended to any Mortgagor and (d) any
servicing compensation to which the Special Servicer may be entitled.
The Special Servicer, on behalf of the Trust Fund, may at any time
institute foreclosure proceedings, exercise any power of sale contained in any
Mortgage Note, obtain a deed in lieu of foreclosure, or otherwise acquire, on
behalf of the Trust Fund, title to a Mortgaged Property securing a Specially
Serviced Mortgage Loan by operation of law or otherwise, if such action is
consistent with the Servicing Standard.
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The Special Servicer may not acquire title to any related Mortgaged Property or
take any other action that would cause the Trustee, for the benefit 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 previously determined,
based on a report prepared by a person who regularly conducts environmental
audits (the costs of which report will be paid as an expense of the Trust
Fund), that: (i) the Mortgaged Property is in compliance with applicable
environmental laws; or if not, that taking such actions as are necessary to
bring the Mortgaged Property in compliance therewith is reasonably likely to
produce a greater recovery on a present value basis, after taking into account
any risks associated therewith, than not taking such actions; and (ii) there
are no circumstances present at the Mortgaged Property relating to the use,
management or disposal of any hazardous substances, hazardous materials,
wastes, or petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required under any
federal, state or local law or regulation or that, if any such materials are
present, taking such action with respect to the affected Mortgaged Property is
reasonably likely to produce a greater recovery on a present value basis, after
taking into account any risks associated therewith, than not taking such
actions.
The Special Servicer, on behalf of the Trust Fund, will use its best
efforts to sell the Mortgaged Property not later than the end of the third
calendar year following the year of acquisition, unless (i) the Internal
Revenue Service grants an extension of time to sell such property or (ii) the
Special Servicer provides to the Trustee an opinion of independent counsel to
the effect that the holding of the property by the Trust Fund subsequent to the
end of the third year following the year in which such acquisition occurred
will not result in the imposition of a tax on the Trust Fund or cause the Trust
Fund to fail to qualify as a REMIC under the Code at any time that any
Certificate is outstanding. Subject to the foregoing, the Special Servicer will
be required to (i) solicit offers for any Mortgaged Property so acquired in
such a manner as will be reasonably likely to realize a fair price for such
property and (ii) accept an offer received from any person that constitutes a
fair price and which is in the best interest of the Certificateholders as
determined by the Special Servicer in accordance with Servicing Standard.
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 any of its obligations with
respect to the management and operation of such Mortgaged Property. Any such
property acquired by the Trust Fund will be managed in a manner consistent with
the Servicing Standard.
The Special Servicer will be obligated to follow or cause to be followed
such normal practices and procedures as it deems necessary or advisable to
realize upon Specially Serviced Mortgage Loans. If the proceeds of any
liquidation of the property securing the Specially Serviced Mortgage Loan are
less than the outstanding principal balance of the Specially Serviced Mortgage
Loan plus interest accrued thereon at the Mortgage Interest Rate plus the
aggregate amount of expenses incurred by the Special Servicer in connection
with such proceedings and which are reimbursable under the Pooling and
Servicing Agreement, the Trust Fund will realize a loss in the amount of such
difference. The Special Servicer will be entitled to be paid from the amounts
on deposit in the Collection Account, prior to the distribution to
Certificateholders, amounts representing its servicing compensation on the
Specially Serviced Mortgage Loans.
The Special Servicer shall have full power and authority to do any and all
things in connection with servicing and administering a Specially Serviced
Mortgage Loan that it may deem in its best judgment necessary or advisable,
including, without limitation, to execute and deliver on behalf of the Trust
Fund any and all instruments of satisfaction or cancellation or of partial
release or full release or discharge and all other comparable instruments, to
reduce the related Mortgage Interest Rate, and to defer or forgive payment of
interest and/or principal with respect to any Specially Serviced Mortgage Loan
or any Mortgaged Property. The Special Servicer may not permit a modification
or extension of any Mortgage Loan to a date later than three years prior to the
Rated Final Distribution Date or ten years prior to the expiration of any
Ground Lease. Notwithstanding the foregoing, the Special Servicer may not
permit any such modification with respect to a Balloon Mortgage Loan if it
results in the extension of such Maturity
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Date beyond the amortization term of such Balloon Mortgage Loan absent the
related Balloon Payment. The Special Servicer will prepare a report (an "Asset
Strategy 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. The holders of the fewest number of
classes of Certificates representing the most subordinate interests in the
Trust Fund that equals at least a 2.0% interest (by Class Balance (adjusted for
Collateral Value Adjustments)) in the Trust Fund (the "Monitoring
Certificateholders") will designate one Monitoring Certificateholder pursuant
to the Pooling and Servicing Agreement (the "Directing Certificateholder").
Each Asset Strategy Report will be delivered to the Directing
Certificateholder. The Directing Certificateholder may object to any Asset
Strategy Report within ten business days of receipt; provided, however, that
the Special Servicer shall implement the recommended action as outlined in such
Asset Strategy Report if it makes an affirmative determination that such
objection is not in the best interest of all the Certificateholders. In
connection with making such affirmative determination, the Special Servicer, by
notice to the Trustee, may request a vote by all the Certificateholders. If the
Directing Certificateholder does not disapprove an Asset Strategy Report within
ten business days, the Special Servicer shall implement the recommended action
as outlined in such Asset Strategy Report. If the Directing Certificateholder
disapproves such Asset Strategy Report and the Special Servicer has not made
the affirmative determination described above, the Special Servicer will revise
such Asset Strategy Report as soon as practicable. The Special Servicer will
revise such Asset Strategy Report until the Directing Certificateholder fails
to disapprove such revised Asset Strategy Report except as described above,
provided, however, the Special Servicer will implement the last submitted
report if 60 days have elapsed since the Mortgage Loan has become a Specially
Serviced Mortgage Loan, provided that the Special Servicer shall not be under
any obligation to perform any actions which are not consistent with applicable
laws and the related Mortgage Loan documents. Any Certificateholder, other than
the Mortgagor on the related Specially Serviced Mortgage Loan, an affiliate
thereof or a person acting on behalf of the Mortgagor, may request and obtain a
copy of any Asset Strategy Report, except to the extent prohibited by
applicable law or the related Mortgage Loan documents, upon execution of a
confidentiality agreement.
The Directing Certificateholder may at any time terminate the Special
Servicer and appoint a replacement (a "Replacement Special Servicer") to
perform such duties under substantially the same terms and conditions as
applicable to the 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. The designated replacement shall become
the Replacement 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 and
Servicing Agreement, none of the then-current rating or ratings of all
outstanding classes of the Certificates would be qualified (if applicable),
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 (obtained at the expense of the Directing
Certificateholder) to the effect that the designation of such replacement to
serve as Replacement Special Servicer is in compliance with the Pooling and
Servicing Agreement, that the designated replacement will be bound by the terms
of the Pooling and Servicing Agreement and that the Pooling and Servicing
Agreement will be enforceable against such designated replacement in accordance
with its terms. The Special Servicer shall be deemed to have resigned from its
duties simultaneously with such designated replacement's becoming the
Replacement Special Servicer under the Pooling and Servicing Agreement. Any
Replacement Special Servicer may be similarly so replaced by the Directing
Certificateholder.
Notwithstanding such replacement, the resigning Special Servicer shall be
entitled to receive the Workout Fee for any Mortgage Loan which became a
Specially Serviced Mortgage Loan and was subsequently returned to a performing
status prior to such resignation; provided that if such Mortgage Loan once
again becomes a Specially Serviced Mortgage Loan, the Replacement Special
Servicer shall thereafter be entitled to such fee. The Replacement Special
Servicer shall be entitled to the Special Servicing Fee, the Workout Fee and
the Liquidation Fee for all other Specially Serviced Mortgage Loans.
SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES
The principal compensation to be paid to the Master Servicer in respect of
its servicing activities will be the "Master Servicing Fee." The Master
Servicing Fee will be payable monthly and will accrue at the
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applicable Master Servicing Fee Rate (as defined below) and will be computed on
the basis of the same principal balance and for the same period respecting
which any related interest payment on each Mortgage Loan is computed. The
"Basic Master Servicing Fee Rate" will be 0.07% per annum. The Master Servicer
will also receive as part of its Master Servicing Fee an additional fee
calculated based on the following rates (each, an "Additional Servicing Fee
Rate"): (i) a primary servicing fee rate of 0.07% per annum with respect to
16.9% of the Mortgage Loans by aggregate principal balance as of the Cut-off
Date, (ii) a primary servicing fee rate of 0.05% per annum with respect to
13.6% of the Mortgage Loans by aggregate principal balance as of the Cut-off
Date, (iii) a primary servicing fee rate of 0.025% per annum with respect to
11.0% of the Mortgage Loans by aggregate principal balance as of the Cut-off
Date, (iv) a primary servicing fee of 0.06% per annum with respect to 4.2% of
the Mortgage Loans by aggregate principal balance as of the Cut-off Date and
(v) a primary servicing fee of 0.10% per annum with respect to 1.5% of the
Mortgage Loans by aggregate principal balance as of the Cut-off Date. With
respect to each Mortgage Loan, the sum of the Basic Master Servicing Fee Rate
and the related Additional Servicing Fee Rate, if any, is referred to herein as
the "Master Servicing Fee Rate."
In the event that the initial Master Servicer shall resign or be
terminated as the Master Servicer and a successor Master Servicer shall agree
to perform the services of the Master Servicer for an amount less than the
Master Servicing Fee, no part of any excess of such portion of the Master
Servicing Fee over the amount payable to such successor will be available for
payment to Certificateholders.
The principal compensation to be paid to the Special Servicer in respect
of its special servicing activities will be the Special Servicing Fee, the
Workout Fee and the Liquidation Fee. The "Special Servicing Fee" will equal
0.25% per annum. The Special Servicing Fee will be computed on the basis of the
same principal balance and for the same period respecting which any interest
payment on each Specially Serviced Mortgage Loan is computed. The "Workout Fee"
will equal 1.00% of all amounts collected with respect to any Mortgage Loan
that became a Specially Serviced Mortgage Loan and was subsequently returned
to, and remains in, a performing status. The "Liquidation Fee" will equal 1.00%
of the net payments or net proceeds obtained by the Special Servicer in
connection with payment in full or discounted payoff from the borrower or,
except under circumstances described in the Pooling and Servicing Agreement,
1.00% of the net proceeds in connection with any liquidation of the Mortgage
Loan.
The Master Servicer or, with respect to the Specially Serviced Mortgaged
Loans, the Special Servicer will be entitled to retain any other fees or
charges (other than late payment charges to the extent necessary to cover
interest on Advances) actually paid by a Borrower.
The Pooling and Servicing Agreement will provide that the Servicers will
be entitled to indemnification from the Trust Fund for any and all costs,
expenses, losses, damages, claims and liabilities incurred in connection with
any legal action or claim relating to any Mortgage Loan and the Pooling and
Servicing Agreement, other than any cost, expense, damage, claim or liability
incurred by reason of willful misfeasance, bad faith or negligence of such
Servicer in the performance of duties thereunder or by reason of reckless
disregard of such obligations and duties.
CONFLICTS OF INTEREST
The Master Servicer, Special Servicer or their respective affiliates own
and are in the business of acquiring assets similar to the Mortgage Loans held
by the Trust Fund. To the extent that any mortgage loans owned and/or serviced
by the Master Servicer, the Special Servicer or their respective affiliates are
similar to the Mortgage Loans held by the Trust Fund, the mortgaged properties
related to such mortgage loans may, depending upon certain circumstances such
as the location of the mortgaged property, compete with the Mortgaged
Properties related to the Mortgage Loans held by the Trust Fund for tenants,
purchasers, financing and similar resources.
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DESCRIPTION OF THE POOLING AND SERVICING AGREEMENT
GENERAL
The Certificates will be issued pursuant to a Pooling and Servicing
Agreement to be dated as of January 1, 2000 (the "Pooling and Servicing
Agreement"), by and among the Depositor, the Master Servicer, the Special
Servicer, the Bond Administrator and the Trustee. Following are summaries of
certain provisions of the Pooling and Servicing Agreement. The summaries do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, the provisions of the Pooling and Servicing Agreement. The
Bond Administrator will provide to a prospective or actual Certificateholder,
upon written request and at the expense of the requesting party, a copy
(without exhibits) of the Pooling and Servicing Agreement. Requests should be
addressed to LaSalle Bank National Association, 135 South LaSalle Street, Suite
1625, Chicago, Illinois 60603, Attention: J.P. Morgan Commercial Mortgage
Finance Corp., Series 2000-C9.
ASSIGNMENT OF THE MORTGAGE LOANS
On or prior to the Delivery Date, the Depositor will assign or cause to be
assigned the Mortgage Loans, without recourse, to the Trustee for the benefit
of the Certificateholders. On or prior to the Delivery Date, the Depositor
will, as to each Mortgage Loan, deliver to a custodian, acting on behalf of the
Trustee, among other things, the following documents (collectively, as to such
Mortgage Loan, the "Mortgage Loan File"): (i) the original Mortgage, and any
intervening assignments thereof, in each case with evidence of recording
thereon or in case such documents have not been returned by the applicable
recording office, certified copies thereof; (ii) the original or, if
accompanied by a "lost note" affidavit, a copy of the Mortgage Note, endorsed
by the Sellers, without recourse, in blank or to the order of Trustee; (iii) an
assignment of the Mortgage, executed by the applicable Seller, in blank or to
the order of the Trustee, in complete and recordable form; (iv) originals or
certified copies of any related assignment of leases, rents and profits and any
related security agreement (if, in either case, such item is a document
separate from the Mortgage) and any intervening assignments of each such
document or instrument; (v) assignments of any related assignment of leases,
rents and profits and any related security agreement (if, in either case, such
item is a document separate from the Mortgage), executed by the Sellers, in
blank or to the order of the Trustee, in complete and recordable form; (vi)
originals or certified copies of all assumption, modification and substitution
agreements in those instances where the terms or provisions of the Mortgage or
Mortgage Note have been modified or the Mortgage or Mortgage Note has been
assumed; (vii) the originals or certificates of a lender's title insurance
policy issued on the date of the origination of such Mortgage Loan or, with
respect to each Mortgage Loan not covered by a lender's title insurance policy,
an attorney's opinion of title given by an attorney licensed to practice law in
the jurisdiction where the Mortgaged Property is located; (viii) originals or
copies of any UCC financing statements (including originals of assignments
thereof to the Trustee in form that is complete and suitable for filing); (ix)
originals or copies of any guaranties related to such Mortgage Loan; (x)
originals or copies of insurance policies related to the Mortgaged Property;
(xi) originals or certified copies of any environmental liabilities agreement;
(xii) originals or copies of any escrow agreements; (xiii) originals or
certified copies of any prior assignments of mortgage if the Originator is not
the originator of record and (xiv) any collateral assignments of property
management agreements and other servicing agreements. The Pooling and Servicing
Agreement will require the Depositor to cause each assignment of the Mortgage
described in clause (iii), clause (v), and clause (viii) above to be submitted
for recording in the real property records of the jurisdiction in which the
related Mortgaged Property is located. Any such assignment delivered in blank
will be completed to the order of the Trustee prior to recording. The Pooling
and Servicing Agreement will also require the Depositor to cause the
endorsements on the Mortgage Notes delivered in blank to be completed to the
order of the Trustee.
TRUSTEE
Norwest Bank Minnesota, National Association shall serve as Trustee under
the Pooling and Servicing Agreement pursuant to which the Certificates are
being issued. Except in circumstances such as
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those involving defaults (when it might request assistance from other
departments in the bank), its responsibilities as trustee are carried out by
its Corporate Trust Department. The Trustee's fee will equal a portion of the
fee calculated at the Trustee Fee Rate as described in the Pooling and
Servicing Agreement. The "Trustee Fee Rate" will equal 0.003% per annum of the
outstanding principal balance of the Mortgage Loans. The offices of the
Trustee's corporate trust department with respect to this trust are located at
11000 Broken Land Parkway, Columbia, Maryland 21044-3562, Attention: Corporate
Trust Service (CMBS) -- J.P. Morgan Commercial Mortgage Finance Corp. Mortgage
Pass-Through Certificates, Series 2000-C9.
BOND ADMINISTRATOR
LaSalle Bank National Association ("LaSalle") will serve as Bond
Administrator. In addition, LaSalle will serve as paying agent and registrar
for the Certificates. The Bond Administrator's fee will equal a portion of the
fee calculated at the Trustee Fee Rate as described in the Pooling and
Servicing Agreement. The office of LaSalle responsible for performing its
duties under the Pooling and Servicing Agreement is located at 135 South
LaSalle Street, Suite 1625, Chicago, Illinois 60603, Attention: J.P. Morgan
Commercial Mortgage Finance Corp., Series 2000-C9.
ACCOUNTS
The Master Servicer is required to deposit all amounts received with
respect to the Mortgage Loans, net of certain amounts retained by the Master
Servicer as additional servicing compensation and certain amounts to be
deposited into escrow accounts, into a separate Collection Account (the
"Collection Account") maintained by the Master Servicer on behalf of the Trust
Fund. The Master Servicer is required to remit to the Bond Administrator for
deposit on the business day preceding each Distribution Date all amounts
received with respect to the Mortgage Loans into a separate account (the
"Certificate Account") maintained with the Bond Administrator. The Bond
Administrator will be entitled to make withdrawals from the Certificate Account
to pay the Trustee and the Bond Administrator their respective portions of the
fee calculated at the Trustee Fee Rate or to reimburse the Trustee and the Bond
Administrator for expenses not otherwise reimbursed from a Collection Account.
Interest or other income earned on funds in the Collection Account will be paid
to the Master Servicer maintaining such account as additional servicing
compensation. See "Description of the Trust Funds -- Mortgage Loans" and
"Description of the Agreements -- Distribution Account and Other Collection
Accounts" in the Prospectus.
REPORTS TO CERTIFICATEHOLDERS
On each Distribution Date, based upon information provided by the
Servicers, the Bond Administrator shall make available to each
Certificateholder, the Trustee, the Sellers, the Depositor and each Rating
Agency a statement setting forth certain information with respect to the
Mortgage Loans and the Certificates required pursuant to the Pooling and
Servicing Agreement. In addition, within a reasonable period of time after each
calendar year, the Bond Administrator shall furnish to each person who at any
time during such calendar year was the holder of a Certificate a statement
containing certain information with respect to the Certificates required
pursuant to the Pooling and Servicing Agreement, aggregated for such calendar
year or portion thereof during which such person was a Certificateholder.
Unless and until Definitive Certificates are issued, such statements or reports
will be furnished only to Cede, as nominee for DTC; provided, however, that the
Bond Administrator shall furnish a copy of any such statement or report to any
Beneficial Owner which requests such copy and provides to the Bond
Administrator a certification, in form acceptable to the Bond Administrator,
stating that it is the Beneficial Owner of a Certificate. The Bond
Administrator shall provide access to the information available on the monthly
statement to Certificateholders through the Bond Administrator's ASAP System,
or such other mechanism that the Bond Administrator may have in place from time
to time. The Bond Administrator's ASAP System may be accessed by calling (714)
282-5518 and requesting statement number 480. Certain information regarding the
Mortgage Loans will be available to Certificateholders in electronic format
through the Bond Administrator's dial-up bulletin board service by dialing
telephone number
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(714) 282-3990 and using an assigned log-on i.d. and password. The Bond
Administrator may (at its discretion and with the consent of the Depositor)
make the information that is available on its ASAP System also available via
the Internet site of the Bond Administrator at "http://www.lnbabs.com" or by
such other means as the Bond Administrator may have in place from time to time.
Any Asset Strategy Report that has been delivered to the Trustee and the Bond
Administrator shall be made available by the Bond Administrator, upon written
request and at the expense of the requesting party, to any Beneficial Owner of
an Offered Certificate subject to receipt by the Bond Administrator of evidence
satisfactory to it that the request is made by a Beneficial Owner and the
receipt by the Bond Administrator of a certificate acknowledging certain
limitations with respect to the use of such statement or report. See
"Description of the Certificates -- Reports to Certificateholders" in the
Prospectus. The Directing Certificateholder shall receive all reports prepared
or received by the Master Servicer or the Special Servicer. In addition, if the
Depositor so directs the Bond Administrator and on terms acceptable to the Bond
Administrator, the Bond Administrator will make certain information and certain
financial reports related to the mortgage loans available through its Corporate
Trust web site.
VOTING RIGHTS
Under certain circumstances, the consent or approval of the holders of a
specified percentage of the aggregate Certificate Balance of all outstanding
Certificates ("Voting Rights") will be required to direct, and will be
sufficient to bind all Certificateholders to, certain actions, including
directing the Trustee, the Special Servicer or the Master Servicer with respect
to actions to be taken with respect to certain Mortgage Loans and REO
Properties and amending the Pooling and Servicing Agreement in certain
circumstances. 98.0% of all Voting Rights shall be allocated among the classes
of Certificates, including the Private Certificates, (other than the Class X,
Class R-I, Class R-II and Class R-III Certificates) in proportion to the
respective Class Balances, 1.00% of all Voting Rights shall be allocated to the
Class X Certificates and 0.33 1/3% of all Voting Rights shall be allocated to
each of the Class R-I, Class R-II and Class R-III Certificates. Voting Rights
allocated to a class of Certificates shall be allocated among the holders of
such class in proportion to the Percentage Interests evidenced by their
respective Certificates. Allocations of Realized Losses and Collateral Value
Adjustments to a Class of Certificates and any other event which changes such
Class Balance will result in a corresponding change to such Class' Voting
Rights.
As described under "Description of the Certificates -- Book-Entry
Registration and Definitive Certificates" in the Prospectus, unless and until
Definitive Certificates are issued, except as otherwise expressly provided
herein, Certificate Owners may only exercise their rights as owners of
Certificates indirectly through DTC or their respective Participant or Indirect
Participant.
TERMINATION
The obligations created by the Pooling and Servicing Agreement will
terminate following the earlier of (i) the final payment or other liquidation
of the last Mortgage Loan or REO Property subject thereto, and (ii) the
purchase of all of the assets of the Trust Fund by and at the option of any
holder of a Class R-I Certificate, the holders of an aggregate Percentage
Interest in excess of 50% of the Most Subordinate Class of Certificates, the
Master Servicer and (to the extent all of the remaining Mortgage Loans are
being serviced by the Special Servicer) the Special Servicer (in that order).
The "Most Subordinate Class of Certificates" at the time of determination shall
be the class of Certificates to which Realized Losses would be allocated at
such time as described under "Description of the Certificates -- Subordination"
herein. Written notice of termination of the Pooling and Servicing Agreement
will be given to each Certificateholder, and the final distribution will be
made only upon surrender and cancellation of the Certificates at the office of
the Certificate Registrar specified in such notice of termination.
Any such purchase of all the Mortgage Loans and other assets in the Trust
Fund is required to be made at a price equal to the greater of (1) the
aggregate fair market value of all the Mortgage Loans and REO Properties then
included in the Trust Fund, determined pursuant to the Pooling and Servicing
Agreement, and (2) the aggregate Class Balance of all the Certificates plus
accrued and unpaid interest thereon together with any unreimbursed advances
(including any interest thereon). Such purchase will
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effect early retirement of the then outstanding Certificates, but the right to
effect such termination is subject to the requirements, among other things,
that (i) the aggregate Stated Principal Balance of the Mortgage Loans then in
the Trust Fund is less than 1% of the Initial Pool Balance and (ii) the
purchaser provides to the Trustee an opinion of independent counsel, addressed
to the Trustee, to the effect that the resulting termination will be a
"qualified liquidation" under Section 860F(a)(4) of the Code with respect to
REMICs I, II and III.
USE OF PROCEEDS
The net proceeds from the sale of the Offered Certificates will be used by
the Depositor to pay the purchase price of the Mortgage Loans.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary of the anticipated material federal income tax
consequences of the purchase, ownership and disposition of Offered Certificates
is based on the advice of Brown & Wood LLP, counsel to the Depositor. This
summary is based on laws, regulations, including the REMIC regulations
promulgated by the Treasury Department (the "REMIC Regulations"), rulings and
decisions now in effect or (with respect to regulations) proposed, all of which
are subject to change either prospectively or retroactively. This summary does
not address the federal income tax consequences of an investment in Offered
Certificates applicable to all categories of investors, some of which (for
example, banks and insurance companies) may be subject to special rules.
Prospective investors should consult their tax advisors regarding the federal,
state, local and any other tax consequences to them of the purchase, ownership
and disposition of Offered Certificates.
Three separate real estate mortgage investment conduit ("REMIC") elections
will be made with respect to the Trust Fund for federal income tax purposes.
Upon the issuance of the Certificates, Brown & Wood LLP, counsel to the
Depositor, will deliver its opinion generally to the effect that, assuming
compliance with all provisions of the Pooling and Servicing Agreement, for
federal income tax purposes, REMIC I, REMIC II and REMIC III (each as defined
in the Pooling and Servicing Agreement) will each qualify as a REMIC under the
Internal Revenue Code of 1986, as amended (the "Code").
For federal income tax purposes, the Class R-I Certificates will be the
sole class of "residual interests" in REMIC I, the Class R-II Certificates will
be the sole class of "residual interests" in REMIC II, and the Class R-III
Certificates will be the sole class of "residual interests" in REMIC III. The
Offered Certificates (other than the Class X Certificates), the Private
Certificates (other than the Class R-I, Class R-II and Class R-III
Certificates) and each component of the Class X Certificates will be "regular
interests" of REMIC III and will be treated as debt instruments of the REMIC
III. See "Certain Federal Income Tax Consequences -- REMICs" in the Prospectus.
The Class X Certificates will, and the other classes of Offered
Certificates may, be treated as having been issued with original issue discount
for federal income tax reporting purposes. For purposes of computing the rate
of accrual of original issue discount, market discount and premium, if any, for
federal income tax purposes it will be assumed that there are no prepayments on
the Mortgage Loans, except that ARD Loans prepay on their Anticipated Repayment
Dates. No representation is made that the Mortgage Loans will not prepay at
another rate. See "Certain Federal Income Tax Consequences -- REMICs --
Taxation of Owners of REMIC Regular Certificates" and "-- Original Issue
Discount" in the Prospectus.
Net Prepayment Premiums allocated to the Certificates will be taxable to
the holders of such Certificates on the date the amount of such premiums
becomes fixed.
The Offered Certificates may be treated for federal income tax purposes as
having been issued at a premium. Whether any holder of such a class of
Certificates will be treated as holding a certificate with amortizable bond
premium will depend on such Certificateholder's purchase price and the
distributions remaining to be made on such Certificate at the time of its
acquisition by such Certificateholder. Holders of such class of Certificates
should consult their own tax advisors regarding the possibility of making an
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election to amortize such premium. See "Certain Federal Income Tax Consequences
- -- REMICs -- Taxation of Owners of REMIC Regular Certificates" and "-- Premium"
in the Prospectus.
The Offered Certificates will be treated as "real estate assets" within
the meaning of Section 856(c)(5)(B) of the Code generally in the same
proportion that the assets of the REMIC underlying such Certificates would be
so treated. In addition, interest (including original issue discount) on the
Offered Certificates will be interest described in Section 856(c)(3)(B) of the
Code to the extent that such Offered Certificates are treated as "real estate
assets" under Section 856(c)(5)(B) of the Code. Moreover, the Offered
Certificates will be "obligation[s] . . . which . . . [are] principally secured
by an interest in real property" within the meaning of Section 860G(a)(3)(C) of
the Code. The Offered Certificates will not be considered to represent an
interest in "loans . . . secured by an interest in real property which is . . .
residential real property" within the meaning of Section 7701(a)(19)(C)(v) of
the Code except in the proportion that the assets of the Trust Fund are
represented by Mortgage Loans secured by multifamily apartment buildings. See
"Certain Federal Income Tax Consequences -- REMICs" in the Prospectus.
For further information regarding the federal income tax consequences of
investing in the Certificates, see "Certain Federal Income Tax Consequences" in
the Prospectus.
STATE TAX CONSIDERATIONS
In addition to the federal income tax consequences described in "Certain
Federal Income Tax Consequences," potential investors should consider the state
income tax consequences of the acquisition, ownership, and disposition of the
Offered Certificates. State income tax law may differ substantially from the
corresponding federal law, and this discussion does not purport to describe any
aspect of the income tax laws of any state. Therefore, potential investors
should consult their own tax advisors with respect to the various tax
consequences of investments in the Offered Certificates.
ERISA CONSIDERATIONS
A fiduciary of any employee benefit plan or other retirement plan or
arrangement (including individual retirement accounts and annuities and Keogh
plans) that is subject to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or to Section 4975 of the Code, or of any collective
investment fund or separate account or other entity in which such plans are
invested (each, a "Plan"), should carefully review with its legal advisors
whether the purchase or holding of any Offered Certificate could give rise to a
transaction that is prohibited or is not otherwise permitted either under ERISA
or Section 4975 of the Code.
The U.S. Department of Labor has issued an individual exemption
(Prohibited Transaction Exemption 90-23 (May 17, 1990) to J.P. Morgan
Securities Inc., which was amended by Prohibited Transaction Exemption 97-34
(July 21, 1997) (collectively, the "Exemption")), which generally exempts from
the application of the prohibited transaction provisions of Section 406 of
ERISA, and the excise taxes and other penalties imposed on such prohibited
transactions pursuant to Sections 4975(a) and (b) of the Code and Section
502(i) of ERISA, certain transactions, among others, relating to the servicing
and operation of mortgage pools and the purchase, sale and holding of mortgage
pass-through certificates underwritten by an Underwriter, provided that certain
conditions set forth in such exemptions are satisfied. For purposes of this
Section "ERISA Considerations," the term "Underwriter" shall include (a) J.P.
Morgan Securities Inc., (b) any person directly or indirectly, through one or
more intermediaries, controlling, controlled by or under common control with
J.P. Morgan Securities Inc. 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 Offered Certificates.
The obligations covered by the Exemption include mortgage loans such as
the Mortgage Loans. If mortgage loans are secured by leasehold interests, each
lease term must be at least 10 years longer than the term of the relevant
Mortgage Loan. Under the Exemption, trust assets must generally be limited to
certain secured obligations. However, trust assets may also include cash or
investments made therewith which are credited to an account to provide payments
to certificateholders pursuant to a yield supplement agreement or similar yield
maintenance arrangement to supplement the interest rates otherwise payable
S-84
<PAGE>
on obligations contained in the trust, provided that such arrangements do not
involve swap agreements or other notional principal contracts. The Depositor
believes that the Foreign Currency Exchange Contracts should not be viewed as
prohibited swap agreements or other prohibited notional principal contracts
within the meaning of the Exemption, and thus should not jeopardize the
applicability of the Exemption to the purchase of the Class A1, Class A2 and
Class X Certificates, provided that the transactions surrounding the Foreign
Currency Exchange Contracts satisfy the requirements of Prohibited Transaction
Class Exemption 94-20 (59 Fed. Reg. 8022, February 17, 1994)("PTCE 94-20,"
relating to certain employee benefit plan foreign exchange transactions). In
this regard, the Depositor has received a representation from MGT that it
satisfies each of the conditions of PTCE 94-20 that are within the control of
MGT. Moreover, each purchaser of an Offered Certificate will be deemed to
represent that neither MGT nor any of its affiliates has discretionary
authority or control with respect to the investment of the Plan's assets
invested in the Offered Certificate, or gives investment advice with respect to
the investment of such assets.
The Exemption sets forth six general conditions which must be satisfied,
among others, for a transaction involving the purchase, sale and holding of
Offered Certificates to be eligible for exemptive relief thereunder. First, the
acquisition of Offered Certificates by a Plan must be on terms (including the
price) that are at least as favorable to the Plan as they would be in an
arm's-length transaction with an unrelated party. Second, the rights and
interests evidenced by such Offered Certificates must not be subordinate to the
rights and interests evidenced by other certificates of the same trust. Third,
such Offered Certificates at the time of acquisition by the Plan must be rated
in one of the three highest generic rating categories by S&P, Moody's, Duff &
Phelps Credit Rating Co. or Fitch. Fourth, the Trustee cannot be an affiliate
of any member of the "Restricted Group" which consists of the Underwriters, the
Depositor, the Sellers, the Master Servicer, the Special Servicer, any insurer
and any Mortgagor with respect to Mortgage Loans constituting more than 5% of
the aggregate unamortized principal balance of the Mortgage Loans as of the
date of initial issuance of such Offered Certificates. Fifth, the sum of all
payments made to and retained by the Underwriters must represent not more than
reasonable compensation for underwriting such 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 Fund must represent not more than the fair
market value of such obligations; and the sum of all payments made to and
retained by the Master Servicer, any Sub-Servicer and the Special Servicer must
represent not more than reasonable compensation for such person's services
under the Pooling and Servicing 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
Securities and Exchange Commission under the Securities Act of 1933.
The Exemption also applies to transactions in connection with the
servicing, management and operation of the Trust Fund, provided that, in
addition to the general requirements described above, (a) such transactions are
carried out in accordance with the terms of a binding pooling and servicing
agreement and (b) the pooling and servicing agreement is provided to, or
described in all material respects in the prospectus or private placement
memorandum provided to, investing Plans before their purchase of Offered
Certificates issued by the Trust Fund. The Pooling and Servicing Agreement is a
pooling and servicing agreement as defined in the Exemption. The Pooling and
Servicing Agreement provides that all transactions relating to the servicing,
management, and operations of the Trust Fund must be carried out in accordance
with the Pooling and Servicing Agreement.
Because the Class A1, Class A2 and Class X Certificates are not
subordinate to any other class of Certificates, the second general condition
set forth above is likely to be satisfied with respect to such Offered
Certificates as of the initial closing date. It is a condition of the issuance
of the Class A1, Class A2 and Class X Certificates that they be rated "AAA" by
Fitch and "Aaa" by Moody's. The Depositor expects that the fourth general
condition set forth above will be satisfied with respect to each of such
classes of Offered Certificates. A fiduciary of a Plan contemplating purchasing
any of such class of Offered Certificate must make its own determination that
all of the general conditions set forth above will be satisfied with respect to
any such class of Offered Certificates. Each purchaser purchasing Class A1,
Class A2 or Class X Certificates with the assets of a Plan shall be deemed to
represent and warrant that it is an "accredited investor" as described in the
sixth general condition set forth above.
S-85
<PAGE>
The Class B, Class C, Class D, Class E and Class F Certificates do not
satisfy the second condition described above because they are subordinated to
the Class A1, Class A2 and Class X Certificates; furthermore the Class D, Class
E and Class F Certificates are not expected to satisfy the third condition
described above. Because the characteristics of the Class B, Class C, Class D,
Class E and Class F Certificates will not meet the requirements of the
Exemption and may not meet the requirements of any other exemption issued under
ERISA, the purchase and holding of the Class B, Class C, Class D, Class E and
Class F Certificates by a Plan may result in a prohibited transaction or the
imposition of excise taxes or civil penalties. Consequently, transfers of the
Class B, Class C, Class D, Class E and Class F Certificates will not be
registered by the Bond Administrator unless the Bond Administrator receives:
(i) a representation from the transferee of such Offered Certificate,
acceptable to and in form and substance satisfactory to the Bond Administrator,
to the effect that such transferee is not a Plan or a person investing on
behalf of or using the assets of a Plan to effect such transfer; (ii) if the
purchaser is an insurance company, a representation that the purchaser is an
insurance company which is purchasing such Offered Certificates with funds
contained in an "insurance company general account" (as such term is defined in
Section V(e) of the Prohibited Transaction Class Exemption 95-60 (60 Fed. Reg.
35925, July 12, 1995) ("PTCE 95-60")) and that the purchase and holding of such
Offered Certificates by such transferee is eligible for, and meets all of the
requirements of, relief under Sections I and III of PTCE 95-60; or (iii) an
opinion of counsel satisfactory to the Trustee and the Bond Administrator that
the purchase and holding of such Offered Certificate by a Plan, any person
acting on behalf of a Plan or using a Plan's assets will not result in the
assets of the Trust Fund being deemed to be "plan assets" and subject to the
prohibited transaction requirements of ERISA and the Code and will not subject
the Trustee or the Bond Administrator to any obligation in addition to those
undertaken in the Pooling and Servicing Agreement. Such representation as
described above in (i) or (ii) shall be deemed to have been made to the Bond
Administrator by the transferee's acceptance of a Class B, Class C, Class D,
Class E or Class F Certificate. In the event that such representation is
violated or any attempt to transfer to a Plan or person acting on behalf of a
Plan or using a Plan's assets is attempted without such opinion of counsel,
such attempted transfer or acquisition shall be void and of no effect.
In addition, to prevent prohibited transactions from arising in connection
with any Foreign Currency Exchange Contract, each purchaser of an Offered
Certificate will be deemed to represent that neither MGT nor any of its
affiliates has discretionary authority or control with respect to the
investment of the Plan's assets invested in the Offered Certificate, or gives
investment advice with respect to the investment of such assets.
Before purchasing any of such Offered Certificates, a fiduciary of a Plan
should itself confirm (a) that such Offered Certificates constitute
"certificates" for purposes of the Exemption and (b) that the specific and
general conditions of the Exemption 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
exemptions.
Purchasers using insurance company general account funds to effect such
purchase should consider the availability of PTCE 95-60 issued by the U.S.
Department of Labor.
Any Plan fiduciary considering whether to purchase any Offered
Certificates 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. Furthermore, any Plan
fiduciary considering a purchase of Offered Certificates should consider
whether, under the general fiduciary standards of investment prudence and
diversification, such an investment is appropriate for the Plan, taking into
account the overall investment policy of the Plan and the composition of the
Plan's investment portfolio. See "ERISA Considerations" in the Prospectus.
LEGAL INVESTMENT
The Certificates will not be "mortgage related securities" within the
meaning of the Secondary Mortgage Market Enhancement Act of 1984, as amended
("SMMEA").
S-86
<PAGE>
In addition, institutions whose investment activities are subject to
review by certain regulatory authorities may be or may become subject to
restrictions, which may be retroactively imposed by such regulatory
authorities, on the investment by such institutions in certain forms of
mortgaged backed securities. Furthermore, certain states have enacted
legislation overriding the legal investment provisions of SMMEA.
The Depositor and the Underwriters make no representations as to the
proper characterization of the Offered Certificates for legal investment or
other purposes, or as to the ability of particular investors to purchase the
Offered Certificates under applicable legal investment restrictions. These
uncertainties may adversely affect the legal liquidity of the Offered
Certificates. Accordingly, all institutions whose investment activities are
subject to legal investment laws and regulations, regulatory capital
requirements or review by regulatory authorities should consult with their own
legal advisors in determining whether and to what extent the Offered
Certificates constitute a legal investment or is subject to investment, capital
or other restrictions. See "Legal Investment" in the Prospectus.
PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in the underwriting
agreement among the Depositor, J.P. Morgan Securities Holdings Inc., J.P.
Morgan Securities Inc. and ABN AMRO Incorporated (the "Underwriting
Agreement"), the Depositor has agreed to sell to J.P. Morgan Securities Inc.
and ABN AMRO Incorporated (the "Underwriters"), and the Underwriters have
severally, but not jointly, agreed to purchase from the Depositor, the portion
of the Offered Certificates of each class listed opposite its name in the table
below.
ALLOCATION TABLE
<TABLE>
<CAPTION>
UNDERWRITER CLASS A1 CLASS A2 CLASS X CLASS B CLASS C CLASS D CLASS E CLASS F
- -------------------------- ---------- ---------- --------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J.P. Morgan
Securities Inc. .........
ABN AMRO
Incorporated ............
---- ---- ---- ---- ---- ---- ---- ----
Total .................... 100% 100% 100% 100% 100% 100% 100% 100%
==== ==== ==== ==== ==== ==== ==== ====
</TABLE>
In the Underwriting Agreement, the Underwriters have severally, but not
jointly, agreed, subject to the terms and conditions set forth therein, to
purchase all of the Offered Certificates if any are purchased. In the event of
default by any Underwriter, the Underwriting Agreement provides that, in
certain circumstances, the underwriting commitment of the nondefaulting
Underwriter may be increased or the underwriting may be terminated.
J.P. Morgan Securities Inc. and ABN AMRO Incorporated are acting as
co-managers. J.P. Morgan Securities Inc. is the sole bookrunner of all of the
Offered Certificates.
The obligations of the Underwriters under the Underwriting Agreement are
subject to certain conditions precedent.
Distribution of the Offered Certificates will be made by the Underwriters
from time to time in negotiated transactions or otherwise at varying prices to
be determined at the time of sale. Proceeds to the Depositor from the Offered
Certificates will be % of the initial aggregate principal balance thereof.
The Depositor also has been advised by the Underwriters that they
currently expect to make a market in the Offered Certificates; however, they
have 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, or if it does develop, that it will continue. The
Underwriters may effect the transactions by selling the Offered Certificates to
or through dealers, and the dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from the Underwriters.
S-87
<PAGE>
In connection with the purchase and sale of the Offered Certificates offered
hereby, the Underwriters may be deemed to have received compensation from the
Depositor in the form of underwriting discounts.
The Depositor and J.P. Morgan Securities Holdings Inc. have agreed to
indemnify the Underwriters against, or make contributions with respect to,
certain liabilities, including liabilities under the Securities Act of 1933.
The Underwriters have agreed severally, but not jointly, to indemnify the
Depositor against, or make contributions to the Depositor with respect to,
certain liabilities, including liabilities under the Securities Act of 1933,
under limited circumstances.
The Sellers have agreed to pay the expenses of the Depositor incurred in
connection with the purchase of the Mortgage Loans and the issuance of the
Certificates. J.P. Morgan Securities Inc. is an affiliate of the Depositor and
one of the Sellers and ABN AMRO Incorporated is an affiliate of the other
Seller and the Bond Administrator.
LEGAL MATTERS
Certain legal matters will be passed upon for the Depositor and J.P.
Morgan Securities Inc. by Brown & Wood LLP, New York, New York. Certain legal
matters will be passed upon for ABN AMRO Incorporated by Mayer, Brown & Platt,
New York, New York.
RATING
It is a condition of the issuance of the Class A1, Class A2 and Class X
Certificates that they be rated "AAA" by Fitch IBCA, Inc. ("Fitch") and "Aaa"
by Moody's Investors Service, Inc. ("Moody's," and together with Fitch, the
"Rating Agencies"). It is a condition of the issuance of the Class B
Certificates that they be rated not lower than "AA" by Fitch and "Aa2" by
Moody's. It is a condition of the issuance of the Class C Certificates that
they be rated not lower than "A" by Fitch and "A2" by Moody's. It is a
condition of the issuance of the Class D Certificates that they be rated not
lower than "A-" by Fitch and "A3" by Moody's. It is a condition of the issuance
of the Class E Certificates that they be rated not lower than "BBB" by Fitch
and "Baa2" by Moody's. It is a condition of the issuance of the Class F
Certificates that they be rated not lower than "BBB-" by Fitch and "Baa3" by
Moody's.
A rating on mortgage pass-through certificates addresses the likelihood of
the receipt of distributions of principal and interest to which
Certificateholders are entitled, including payment of all principal on the
Certificates by the Rated Final Distribution Date. The ratings take into
consideration the credit quality of the Mortgage Loans in the Trust Fund,
structural and legal aspects associated with the Certificates, and the extent
to which the payment stream from the pool of Mortgage Loans is adequate to make
required payments on the Certificates. The ratings on the Certificates do not
represent any assessment of (i) the likelihood or frequency of 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, Yield Maintenance charges, Excess Interest and
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 holders of the Class X Certificates might not fully
recover their investment in the event of rapid prepayments 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. 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 Holders nevertheless will have been paid,
and such result is consistent with the "AAA" and "Aaa" ratings received on the
Class X Certificates by Fitch and Moody's, respectively. The Class X
Certificate notional amount upon which interest is calculated is reduced by the
allocation of Realized Losses and prepayments, whether voluntary or
involuntary. The rating does not address the timing or magnitude of reductions
of such notional amount, but only the obligation to pay interest timely on the
notional amount as so reduced from time to time. Accordingly, the ratings of
the Class X Certificates should be evaluated independently from similar ratings
on other types of securities.
S-88
<PAGE>
There can be no assurance as to whether any rating agency not requested to
rate the Offered Certificates will nonetheless issue a rating and, if so, what
such rating would be. A rating assigned to the Offered Certificates by a rating
agency that has not been requested by the Depositor to do so may be lower than
the rating assigned by Fitch or Moody's pursuant to the Depositor's request.
The rating of the Offered Certificates should be evaluated independently
from similar ratings on other types of securities. A security rating is not a
recommendation to buy, sell or hold securities and may be subject to downgrade,
qualification (if applicable) or withdrawal at any time by the assigning rating
agency. Each security rating should be evaluated independently of any other
security rating. A security rating does not address the frequency or likelihood
of prepayments (whether voluntary or involuntary) of Mortgage Loans, or the
corresponding effect on the yield to investors.
S-89
<PAGE>
INDEX OF PRINCIPAL TERMS
<TABLE>
<S> <C>
30/360 basis .................................... S-64
332 South Michigan Borrower ..................... S-50
332 South Michigan Loan ......................... S-50
332 South Michigan Property ..................... S-50
711 Third Avenue Borrower ....................... S-41
711 Third Avenue Loan ........................... S-41
711 Third Avenue Property ....................... S-41
Abbey Company Borrowers ......................... S-42
Abbey Company Loans ............................. S-42
Abbey Company Properties ........................ S-42
Additional Servicing Fee Rate ................... S-79
Additional Westmont Loan ........................ S-52
Additional Westmont Property .................... S-52
Adjusted Available Distribution Amount .......... S-64
Adjusted Collateral Value. ...................... S-69
ADMC ............................................ S-45
Allocation Fraction ............................. S-64
Alpine Commons Shopping Center Borrower ......... S-51
Alpine Commons Shopping Center Loan ............. S-51
Alpine Commons Shopping Center Property ......... S-51
Anticipated Repayment Date ...................... S-56
ARD Loans ....................................... S-56
Asset Strategy Report ........................... S-78
Atlantic Development Borrower ................... S-45
Atlantic Development Loan ....................... S-45
Atlantic Development Properties ................. S-45
Atlantic Development Property ................... S-45
Available Distribution Amount ................... S-63
Balloon Mortgage Loan ........................... S-56
Balloon Payment ................................. S-56
Basic Master Servicing Fee Rate ................. S-79
Beneficial Owner ................................ S-60
Bond Administrator .............................. S-2
C$ .............................................. S-52
Canadian Loans .................................. S-55
Cede ............................................ S-60
Cedelbank Participants .......................... S-61
Certificate Account ............................. S-81
Certificateholders .............................. S-60
Certificates .................................... S-60
Circle Park Apartments Loan ..................... S-46
Circle Park Apartments Property ................. S-46
Class A Certificates ............................ S-60
Class Balance ................................... S-66
Class Prepayment Fraction ....................... S-64
Clearance Cooperative ........................... S-61
Code ............................................ S-83
Collateral Value Adjustment ..................... S-69
Collection Account .............................. S-81
</TABLE>
S-90
<PAGE>
<TABLE>
<S> <C>
CPR ........................................ S-72
Crossed Loans .............................. S-57
Cut-off Date LTV Ratio ..................... S-33
Debt Service Coverage Ratio ................ S-34
Defaulted Mortgage Loan .................... S-76
Defeasance ................................. S-40
Definitive Certificates .................... S-62
Delivery Date .............................. S-2
Depositories ............................... S-61
Determination Date ......................... S-54
Directing Certificateholder ................ S-78
Distribution Date .......................... S-63
DTC ........................................ S-60
DTC Participants ........................... S-61
DTC Registered Certificates ................ S-60
Due Date ................................... S-27
Effective Gross Income ..................... S-34
ERISA ...................................... S-84
ESA ........................................ S-59
Euroclear .................................. S-60
Euroclear Operator ......................... S-61
Euroclear Participants ..................... S-61
Excess Cash Flow ........................... S-56
Excess Interest ............................ S-56
Exemption .................................. S-84
F/X Payment Date ........................... S-54
F/X Schedule ............................... S-55
FIRREA ..................................... S-33
Fitch ...................................... S-88
Foreign Currency Exchange Contract ......... S-54
Form 8-K ................................... S-59
Global Securities .......................... G-1
Horizon Borrowers .......................... S-47
Horizon Group .............................. S-47
Horizon Outlet Loans ....................... S-47
Horizon Outlet Properties .................. S-47
IAC ........................................ S-44
IACLA Borrower ............................. S-44
IACLA Loan ................................. S-44
IACLA Property ............................. S-44
Indirect Participants ...................... S-61
Initial Pool Balance ....................... S-27
Interest Accrual Amount .................... S-64
Interest Distribution Amount ............... S-64
Interest F/X Rate .......................... S-55
Interest Reserve Loans ..................... S-65
LaSalle .................................... S-27
Liquidation Fee ............................ S-79
Loan Sale Agreement ........................ S-27
Lock-out Date .............................. S-39
Lock-out Period ............................ S-39
</TABLE>
S-91
<PAGE>
<TABLE>
<S> <C>
Loss Mortgage Loan ......................................... S-68
Master Servicing Fee ....................................... S-78
Master Servicing Fee Rate .................................. S-79
Maturity Date .............................................. S-65
Maturity Date/Anticipated Repayment Date LTV Ratio ......... S-33
MGT ........................................................ S-27
Monitoring Certificateholders .............................. S-78
Monthly Payments ........................................... S-27
Moody's, ................................................... S-88
Mortgage ................................................... S-27
Mortgage Interest Rate ..................................... S-56
Mortgage Loan File ......................................... S-80
Mortgage Loans ............................................. S-27
Mortgage Note .............................................. S-27
Mortgage Pool .............................................. S-27
Mortgaged Property ......................................... S-27
Mortgagor .................................................. S-56
Most Subordinate Class of Certificates ..................... S-82
Net Operating Income ....................................... S-35
Net Prepayment Premium ..................................... S-65
NOI ........................................................ S-35
Notional Amount ............................................ S-64
Offered Certificates ....................................... S-60
Operating Statements ....................................... S-35
ORECM ...................................................... S-75
P&I Advance ................................................ S-70
PAR ........................................................ S-59
Participants ............................................... S-61
Pass-Through Rate .......................................... S-63
Penn Mar Shopping Center Borrower .......................... S-49
Penn Mar Shopping Center Loan .............................. S-49
Penn Mar Shopping Center Property .......................... S-49
Percentage Interest ........................................ S-63
Plan ....................................................... S-84
PML ........................................................ S-58
Pooling and Servicing Agreement ............................ S-80
Prepayment ................................................. S-71
Prepayment Interest Excess ................................. S-65
Prepayment Interest Shortfall .............................. S-65
Prepayment Premium ......................................... S-39
Principal Distribution Amount .............................. S-65
Principal F/X Rate ......................................... S-55
Priority of Distributions .................................. S-65
Private Certificates ....................................... S-67
Property Protection Advance ................................ S-70
Property Protection Expenses ............................... S-70
PTCE 94-20 ................................................. S-85
PTCE 95-60 ................................................. S-86
Rated Final Distribution Date .............................. S-72
Rating Agencies ............................................ S-88
Realized Loss .............................................. S-68
</TABLE>
S-92
<PAGE>
<TABLE>
<S> <C>
Record Date ................................................ S-63
REMIC ...................................................... S-83
REMIC Regulations .......................................... S-83
Remittance Period .......................................... S-3
Remittance Rate ............................................ S-63
REO Account ................................................ S-60
REO Property ............................................... S-60
Replacement Special Servicer ............................... S-78
Required Appraisal Date .................................... S-69
Restricted Group ........................................... S-85
Revised Rate ............................................... S-56
Risk Factors ............................................... S-9
RNA ........................................................ S-42
S&P ........................................................ S-41
Servicers .................................................. S-75
Servicing Standard ......................................... S-75
Servicing Transfer Event ................................... S-76
SL Green ................................................... S-41
SMMEA ...................................................... S-86
Special Servicing Fee ...................................... S-79
Specially Serviced Mortgage Loan ........................... S-76
Stated Principal Balance ................................... S-68
Terms and Conditions ....................................... S-62
Trustee Fee Rate ........................................... S-81
U.S. Person ................................................ G-3
Underwriter ................................................ S-84
Underwriters ............................................... S-87
Underwriting Agreement ..................................... S-87
Underwritten Cash Flow ..................................... S-34
Underwritten Cash Flow Debt Service Coverage Ratio ......... S-34
Underwritten NOI ........................................... S-34
UW DSCR .................................................... S-34
UW NOI ..................................................... S-34
Voting Rights .............................................. S-82
W-Westmont ................................................. S-52
Westmont Canadian Borrowers ................................ S-52
Westmont Canadian Loans .................................... S-52
Westmont Canadian Properties ............................... S-52
Westmont Loans ............................................. S-52
Westmont Properties ........................................ S-52
Withheld Amounts ........................................... S-65
Workout Fee ................................................ S-79
Yield Maintenance .......................................... S-40
YM ......................................................... S-40
</TABLE>
S-93
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
<TABLE>
<CAPTION>
Loan Number Seller Property Name Address
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 MGT 711 Third Avenue 711 Third Avenue
2 LaSalle International Airport Center Los Angeles 5353/5343 Imperial Highway
3 MGT Atlantic Development I Various
3.1 MGT 40 Technology Drive 40 Technology Drive
3.2 MGT 100 Randolph Road 100 Randolph Road
3.3 MGT 50 Randolph Road 50 Randolph Road
4 LaSalle Circle Park Apartments 1111 South Ashland Avenue
5 MGT Penn Mar Shopping Center 3000-4000 Donnell Dr
6 MGT Abbey Portfolio I Various
6.1 MGT Colton Commerce Center 1200-1350 East Washington Street
6.2 MGT Palmdale Place Commerce Center 2211-2361 East Palmdale Boulevard
6.3 MGT Tenth Street Commerce Center 44204-44288 Tenth Street West
6.4 MGT Fountain Plaza (Palmdale II) 3005 East Palmdale Boulevard
6.5 MGT Diamond Bar Commerce Center (Palomino Plaza) 23525-23555 Palomino Drive
6.6 MGT Palm Plaza (Palmdale III) 2501-2505 East Palmdale Boulevard
7 MGT 332 South Michigan Avenue 332 South Michigan Avenue
8 MGT Abbey Portfolio II Various
8.1 MGT Cityview Plaza 12391-12465 Lewis Street
8.2 MGT Glendora Commerce Center 1309-1397 Grand Avenue
8.3 MGT Anaheim Stadium Industrial Park 2419 Winston Rd & 1321, 1342 S. Sunkist St.
8.4 MGT Arlington Airpark Plaza 7201-7209 Arlington Avenue
8.5 MGT Edinger 2009 East Edinger Avenue
9 MGT Alpine Commons Shopping Center 1357 Route 9
10 MGT Pirate's Cove Apartments 7200 Pirates Cove Road
11 MGT Toledo Apartments Portfolio Various
11.1 MGT Hunter's Ridge Apartments 3407 Gibralter Heights Drive
11.2 MGT Miracle Manor 5066 Jamleson Drive
11.3 MGT Toledo Arms Apartments 3355 W. Alexis
11.4 MGT Adrian Manor 1387 W. Maple Avenue
12 LaSalle Buttonwood Bay MHC 10001US Highway 27 South
13 MGT Salisbury Center 200 Civic Avenue
14 MGT Henderson's Wharf Complex 1000 Fell Street
15 MGT Hickory Hospitality Portfolio Various
15.1 MGT Comfort Suites - Hickory 1127 13th Avenue Drive SE
15.2 MGT Holiday Inn Express - Pineville 9820 Leitner Drive
15.3 MGT Sleep Inn - Hickory 1123 13th Avenue Drive SE
15.4 MGT Comfort Inn - Lincolnton 1550 East Main Street
16 MGT 8500 Wilshire 8500 Wilshire Boulevard
17 MGT Phoenix Northgate Business Center 2401 & 2501 West Grandview Road
18 MGT Montclair East Shopping Center 9191 Central Avenue
19 MGT Wilshire Hobart Building 3660 Wilshire Boulevard
20 MGT Twelve Oaks at Northbrook 3200 Sanders Road
21 LaSalle GATX Food Distribution 4412 Coloma Road
22 MGT Indiana Outlet Center 9301, 9401 S. Factory Shops Boulevard
23 MGT Cory Industries 666 South Front Street
24 MGT 24 Farnsworth Street 24 Farnsworth Street
25 MGT Sprint Spectrum Building 2745 Whitehall Park Dr.
26 MGT Park Terrace Apartments 12201-12405 North 50th Street
27 MGT Horizon Outlet Center - Tulare 1407 Horizon Dr
28 MGT Hydra Warehouse 16600 Table Mountain Parkway
29 MGT Moody Ramblin Portfolio Various
29.1 MGT Briarwood 19 Briar Hollow Lane
29.2 MGT Barker's Point 16000 Bakers Point Lane
29.3 MGT Bali Park II 9575 Katy Freeway
29.4 MGT Bali Park III 9601 Katy Freeway
30 MGT Bridgewater Place 500 Plum Street
31 MGT Heritage at North Andover 700 Chickering Road
32 MGT Green Tree Place Apartments 4211 Clay Hill Drive
33 MGT Frontier Portfolio Various
33.1 MGT Frontier Plaza 1901-1987 North Carson
33.2 MGT Frontier Village Mobile Home Park 1923 North Carson
34 LaSalle Habitat Apartments 6125-6255 Habitat Drive
35 LaSalle Timber Creek Apartments 3300 E. Deerfield Rd.
36 MGT Coffee Tree Plaza 130-170 Nut Tree Parkway
37 MGT Sun Pointe Lake Apartments 14200 Bruce B. Downs Blvd.
38 MGT Delaware County Medical Hospital (DCMH) 2100 Keystone Avenue
39 MGT Westminster Chase I & II 6910 & 6911 Interbay Boulevard
40 MGT Best Western Heritage Inn - Rancho Cordova 11269 Point East Drive
41 MGT Rustic Hills Park Apartments 1220 Potter Drive
42 MGT DSS Building 21445 Beaumeade Circle
43 MGT Countryside Shopping Center PA Route 819
44 MGT Fortress - Miami 1629 N.E. 1st Avenue
45 MGT 9020 Junction Drive 9020 Junction Drive
46 MGT Malibu Center 17871 Castleston St.
47 MGT English Park Village 334-348 Harris Hill Road
48 MGT S & S Graphics 14880 Sweitzer Lane
49 MGT Promenade at Bay Colony Shopping Center 6200 N. Federal Hwy.
50 MGT Shoppes at Temple Terrace 9219 56th Street North
51 MGT Wooster Place 3749-3853 Burbank Road
52 MGT Moutainside Apartments 1900 South 11th Place
53 MGT Ramada Inn - Homestead 990 Homestead Boulevard
54 MGT Howard Johnson - Cutler Ridge 10775 Caribbean Boulevard
55 MGT Denton Town Center 2215 - 2219 S. Loop 288
56 MGT Tropicana Plaza 3420-3430 East Tropicana Plaza
57 MGT Embassy Place - Phase II 2219 Teakwood Circle
58 MGT Mission Grove Office 1545 & 1565 Hotel Circle South
59 LaSalle Champlain Plaza 7 Pyramid Drive
60 LaSalle 2300 Maywood 2300 Maywood Dr.
61 MGT Sheldahl Facility 1285 S. Fordham Street
62 MGT Quality Suites - Windsor 250 Dougall Avenue
63 MGT 301 Metro Center Boulevard 301 Metro Center Boulevard
64 MGT Comfort Inn - Newburgh 5 Lakeside Road
65 MGT Pleasant View Retirement Home 227 Pleasant View Street
66 LaSalle Hart Gallery 2301 South Voss Rd
67 LaSalle West Oak Office 2151 NW Military Drive
68 MGT Base Ten Systems Building One Electronics Drive
69 MGT Best Western Heritage Inn - Chico 25 Heritage Lane
70 MGT KMart - Baltimore 222 North Point Boulevard
71 MGT Lakeville Corporate Park 10-20 Riverside Drive
72 MGT C-MAC-Metallek Building 12 Hotel de Ville Street
73 MGT 100 Passaic Avenue 100 Passaic Avenue
74 MGT 400 Lapp Road 400 Lapp Road
75 MGT Executive Apartments 91 Veterans Road
76 LaSalle Highland House Apartments 717-721 West ighland Ave.
77 MGT Spanish Apartments Various
78 LaSalle 9 West Jackson 9 West Jackson Avenue
79 MGT Oshawa Holiday Inn 1101 Bloor Street
80 MGT Brentwood/Greentree Apartments Various
80.1 MGT Brentwood Pointe Apartments 2900 Chatauqua Avenue
80.2 MGT Greentree Apartments 817 Biloxi Drive
81 MGT Tiffany Square Apartments 774 Tiffany Boulevard
82 MGT Fortress - Boston 99 Boston Street
83 LaSalle Pineridge Apartments 2740 Wilson Ave NW
84 MGT Parthenon Apartments 800 Gaines School Road
85 MGT Park Place Apartments 621 Arcadia Street
86 LaSalle Prospect Heights Apartments 1646 North Prospect Heights Ave
87 MGT Betancourt III 1818-1838 Amsterdam Ave.
88 MGT 5707 Corsa Avenue 5707 Corsa Ave.
89 MGT Oakmont Apartments 23 Oakmont Place
90 MGT Arbor Court Apartments 100 Arbor Court
91 MGT Shoppes at Georgian Terrace 707 Georgian Place
92 MGT Professional Office Building One 1 Medical Center Boulevard
93 MGT Hanover / Hoopes Apartments Various
93.1 MGT Hanover Apartments 12847 Jefferson Ave.
93.2 MGT Hoopes Place Apartments 22 Hoopes Road
94 MGT Hampton Inn - Goodlettsvile 202 Northgate Circle
95 MGT Herndon Village Shoppes 4900 East Colonial Drive
96 MGT Willard Square 34-50 Willard Street
97 MGT Comfort Inn - Boucherville 96 Boulevard de Mortangne
98 MGT Kingsland Village Shopping Center 21930 Kingsland Blvd
99 MGT Betancourt I 76 Wadsworth Avenue
100 MGT Pilgrim Mill/Holly Creek Apartments 2750 Antioch Road
101 MGT Comfort Inn - Sault Ste. Marie 333 Great Northern Road
102 MGT Hyde Park Apartments 1988, 1990, 1992 & 1994 Hyde Drive
103 MGT Woodstock Square Shopping Center SWQ State Rt.42 and interstate 81
104 MGT Hilltop Building 1310 College Avenue
105 MGT Technology Court 4200 Technology Court
106 MGT Comfort Inn - Thunder Bay 60 West Arthur Street
107 MGT Wyndham Pointe Apartments 6101 Boca Raton Boulevard
108 LaSalle Landmark Six Flex Center 6001 Randolph Road
109 MGT Medary Court & Stenton House Apartments 6301 Old York Road & 6201 N. 15th Street
110 MGT Gateway Computer Store - Florence 7149 Mall Road
111 MGT Greenmount Avenue Shopping Center 3228-3232 Greenmount Ave.
112 MGT Douglas Center 4501 E. Carson Street
113 MGT Henry Plastics Building 41703 Albrae Street
114 LaSalle T.T.C. Park Ridge 951 and 991 West Touhy
115 MGT Glenwood Village MHP 521 Glenwood Village MHP
116 MGT Turtle Creek Apartments 3114 Rex Cruse Drive
117 MGT Comfort Inn - Saskatoon 2155 Northridge Drive
118 MGT Santa Fe Mobile Home Park 10484 Valley Blvd
119 MGT RiteAid - Dayton NEC Main St. & Fairview Ave
120 MGT La Habra Apartments 150 S. Beach Blvd & 1900 W. La Habra Blvd
121 MGT Sterling Knoll Plaza 15120 Texas Highway 3
122 MGT Brookside Apartments 5 Laurel Street
123 MGT Westmount Place Condominiums 1441 Westmount Avenue
124 MGT Betancourt II Various
124.1 MGT 25 West 170th Street 25 West 170th Street
124.2 MGT 2416 Amsterdam Avenue 2416 Amsterdam Avenue
125 MGT Gateway 2000 Country Store - Madison 301 Junction Road
126 MGT Comfort Inn - London 1156 Wellington Road South
127 MGT Holiday Inn - Clarksville 700 Sango road
128 MGT Highland Terrace Apartments 1108 East Highland Avenue
129 MGT Gateway Computer Store - Woodbury 8411 Collier Way
130 MGT Meriweather Apartments 1548 SE Walnut St
131 LaSalle North Park Place 515 N.W. 72nd Street
132 MGT Chateau Crete Apartments 1818, 1835, & 1916 Stevens Forest Drive
133 MGT Gateway Computer Store - Dickson City 918 Viewmont Drive
134 MGT Comfort Inn - Drummondville 1055 Rue Haines
135 MGT Salisbury Medical Office Building (SMOB) 1104 Healthway Drive
136 MGT Gateway Computer Store - Henrietta 360 Jay Scutti Boulevard
137 MGT Comfort Inn - New Glasgow 740 Westville Rd
138 MGT 7 Meridian Street Apartments 7 Meridian Street
139 MGT Bear Creek Square Shopping Center 4904-4934 State Hwy 6 North
140 MGT Willard Towers 12 Willard Street
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Loan Number Seller City State Zip Code Property Type
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 MGT New York NY 10017 Office
2 LaSalle Los Angeles CA 90045 Industrial
3 MGT Franklin Township/Warren NJ Various Industrial
3.1 MGT Franklin Township/Warren NJ 07059 Industrial
3.2 MGT Franklin Township/Warren NJ 08873 Industrial
3.3 MGT Franklin Township/Warren NJ 08873 Industrial
4 LaSalle Chicago IL 60607 Multifamily
5 MGT Forestville MD 20747 Retail
6 MGT Various CA Various Retail
6.1 MGT Colton CA 92324 Retail
6.2 MGT Palmdale CA 93550 Retail
6.3 MGT Lancaster CA 93534 Retail
6.4 MGT Palmdale CA 93550 Retail
6.5 MGT Diamond Bar CA 91765 Retail
6.6 MGT Palmdale CA 93550 Retail
7 MGT Chicago IL 60604 Office
8 MGT Various CA Various Various
8.1 MGT Garden Grove CA 92640 Office
8.2 MGT Glendora CA 91740 Mixed Use
8.3 MGT Anaheim CA 92808 Industrial
8.4 MGT Riverside CA 92503 Industrial
8.5 MGT Santa Ana CA 92705 Office
9 MGT Wappingers Falls NY 12590 Retail
10 MGT Las Vegas NV 89128 Multifamily
11 MGT Various Various Various Multifamily
11.1 MGT Toledo OH 43609 Multifamily
11.2 MGT Toledo OH 43613 Multifamily
11.3 MGT Toledo ARMS OH 43623 Multifamily
11.4 MGT Adrian MI 49221 Multifamily
12 LaSalle Sebring FL 33870 Multifamily
13 MGT Salisbury MD 21801 Nursing Home
14 MGT Baltimore MD 21231 Mixed Use
15 MGT Various NC Various Hotel
15.1 MGT Hickory NC 28602 Hotel
15.2 MGT Pineville NC 28134 Hotel
15.3 MGT Hickory NC 28602 Hotel
15.4 MGT Lincolnton NC 28092 Hotel
16 MGT Los Angeles CA 90211 Office
17 MGT Phoenix AZ 85023 Industrial
18 MGT Montclair CA 91763 Retail
19 MGT Los Angeles CA 90010 Office
20 MGT Northbrook IL 60062 Multifamily
21 LaSalle Coloma MI 49038 Industrial
22 MGT Daleville IN 47334 Retail
23 MGT Elizabeth NJ 07202 Industrial
24 MGT Boston MA 02110 Office
25 MGT Charlotte NC 28273 Industrial
26 MGT Tampa FL 33617 Multifamily
27 MGT Tulare CA 93274 Retail
28 MGT Golden CO 80403 Industrial
29 MGT Houston TX Various Office
29.1 MGT Houston TX 77027 Office
29.2 MGT Houston TX 77027 Office
29.3 MGT Houston TX 77024 Office
29.4 MGT Houston TX 77024 Office
30 MGT Syracuse NY 13204 Office
31 MGT North Andover MA 01845 Congregate Care
32 MGT Houston TX 77084 Multifamily
33 MGT Carson City TX Various Various
33.1 MGT Carson City NV 89701 Retail
33.2 MGT Carson City NV 89701 Multifamily
34 LaSalle Boulder CO 80301 Multifamily
35 LaSalle Union Township MI 48858 Multifamily
36 MGT Vacaville CA 95687 Retail
37 MGT Tampa FL 33613 Multifamily
38 MGT Drexel Hill PA 19026 Office
39 MGT Tampa FL 33616 Multifamily
40 MGT Rancho Cordova CA 95670 Hotel
41 MGT Colorado Springs CO 80909 Multifamily
42 MGT Ashburn VA 20147 Industrial
43 MGT Mt. Pleasant PA 15666 Retail
44 MGT Miami FL 33132 Self-Storage
45 MGT Annapolis MD 20701 Industrial
46 MGT City of Industry CA 91748 Retail
47 MGT Lancaster NY 14221 Office
48 MGT Laurel MD 20707 Office
49 MGT Ft. Lauderdale FL 33308 Retail
50 MGT Tempe Terrace FL 33617 Retail
51 MGT Wooster Place OH 44691 Retail
52 MGT Birmingham AL 35205 Multifamily
53 MGT Homestead FL 33030 Hotel
54 MGT Miami FL 33189 Hotel
55 MGT Denton TX 76205 Retail
56 MGT Las Vegas NV 89121 Retail
57 MGT Highland IN 46322 Multifamily
58 MGT San Diego CA 92108 Office
59 LaSalle Plattsburg NY 12901 Retail
60 LaSalle Bellwood IL 60153 Industrial
61 MGT Longmont CO 80503 Industrial
62 MGT Windsor ON N9A 7C6 Hotel
63 MGT Warwick RI 02886 Office
64 MGT Newburgh NY 12550 Hotel
65 MGT Concord NH 03301 Congregate Care
66 LaSalle Houston TX 77057 Retail
67 LaSalle San Antonio TX 78224 Office
68 MGT Hamilton Township NJ 08619 Industrial
69 MGT Chico CA 95926 Hotel
70 MGT Baltimore MD 21224 Retail
71 MGT Lakeville MA 02347 Office
72 MGT Dollard-des-Osweaus PQ H9B 2P5 Industrial
73 MGT Florham Park NJ 07932 Industrial
74 MGT Malvern/E. Whiteland Twnshp PA 19355 Office
75 MGT Winthrop MA 02152 Multifamily
76 LaSalle Elgin IL 60123 Multifamily
77 MGT Miami FL Various Multifamily
78 LaSalle Naperville IL 60564 Retail
79 MGT Oshawa ON L1H 7K6 Hotel
80 MGT Norman OK Various Multifamily
80.1 MGT Norman OK 73072 Multifamily
80.2 MGT Norman OK 73071 Multifamily
81 MGT Rocky Mount NC 27804 Multifamily
82 MGT Boston MA 02125 Self-Storage
83 LaSalle Walker MI 49504 Multifamily
84 MGT Athens GA 30605 Multifamily
85 MGT Hurst TX 76053 Multifamily
86 LaSalle Milwaukee WI 53202 Multifamily
87 MGT New York NY 10031 Mixed Use
88 MGT Westlake Village CA 91362 Office
89 MGT Batesville IN 47006 Multifamily
90 MGT Wheeling IL 60090 Multifamily
91 MGT Somerset PA 15501 Retail
92 MGT Upland PA 19013 Office
93 MGT Newport News VA Various Multifamily
93.1 MGT Newport News VA 23608 Multifamily
93.2 MGT Newport News VA 23608 Multifamily
94 MGT Goodlettsville TN 37072 Hotel
95 MGT Orlando FL 32803 Retail
96 MGT Hartford CT 06105 Multifamily
97 MGT Boucherville PQ J4B 5M7 Hotel
98 MGT Katy TX 77450 Retail
99 MGT New York NY 10033 Office
100 MGT Cumming GA 30040 Multifamily
101 MGT Sault Ste. Marie ON P6B 4Z8 Hotel
102 MGT Greenville NC 27858 Multifamily
103 MGT Woodstock VA 22405 Retail
104 MGT Boulder CO 80104 Retail
105 MGT Chantilly VA 22021 Industrial
106 MGT Thunder Bay ON P7E 5R8 Hotel
107 MGT Fort Worth TX 75146 Multifamily
108 LaSalle San Antonio TX 78233 Industrial
109 MGT Philadelphia PA 19141 Multifamily
110 MGT Florence KY 41042 Retail
111 MGT Baltimore MD 21218 Retail
112 MGT Long Beach CA 90808 Mixed Use
113 MGT Fremont CA 94538 Industrial
114 LaSalle Park Ridge IL 60068 Retail
115 MGT Warrenton OR 97146 Multifamily
116 MGT Sherman TX 75092 Multifamily
117 MGT Saskatoon SK S7L 6X6 Hotel
118 MGT El Monte CA 91731 Multifamily
119 MGT Dayton OH 45405 Retail
120 MGT La Habra CA 90631 Multifamily
121 MGT Houston TX 77598 Retail
122 MGT Rye NY 10580 Multifamily
123 MGT Dallas TX 75208 Multifamily
124 MGT New York NY 10452 Various
124.1 MGT Bronx NY 10452 Retail
124.2 MGT Bronx NY 10452 Mixed Use
125 MGT Madison WI 53717 Retail
126 MGT London ON N6E 1M3 Hotel
127 MGT Clarksville TN 37043 Hotel
128 MGT Phoenix AZ 85014 Multifamily
129 MGT Woodbury MN 55125 Retail
130 MGT Hillsboro OR 97123 Multifamily
131 LaSalle Kansas City MO 64118 Multifamily
132 MGT Dallas TX 75208 Multifamily
133 MGT Dickson City PA 18519 Retail
134 MGT Drummondville PQ J2C 6G6 Hotel
135 MGT Salisbury MD 21804 Office
136 MGT Henrietta NY 14623 Retail
137 MGT New Glasgow NS B2H 2J8 Hotel
138 MGT Malden MA 02148 Multifamily
139 MGT Houston TX 77084 Retail
140 MGT Hartford CT 06105 Multifamily
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Loan Number Seller Sub Property Type Year Built Year Renovated
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 MGT CBD 1955
2 LaSalle Warehouse 1997
3 MGT Flex Space Various
3.1 MGT Flex Space 1986
3.2 MGT Flex Space 1986, 1989
3.3 MGT Flex Space 1989
4 LaSalle Multifamily 1983
5 MGT Anchored 1958 1998
6 MGT Unanchored/Anchored Various
6.1 MGT Anchored 1989
6.2 MGT Anchored 1986, 1988
6.3 MGT Anchored 1980 1992
6.4 MGT Unanchored 1987
6.5 MGT Unanchored 1980
6.6 MGT Unanchored 1989
7 MGT CBD 1912 1980-1985
8 MGT Various Various Various
8.1 MGT Suburban 1984
8.2 MGT Office/Retail 1986
8.3 MGT Flex Space 1980
8.4 MGT Flex Space 1988 1989
8.5 MGT Suburban 1970 1997
9 MGT Anchored 1994
10 MGT Multifamily 1988
11 MGT Multifamily Various
11.1 MGT Multifamily 1972 & 1977
11.2 MGT Multifamily 1965-1968
11.3 MGT Multifamily 1969
11.4 MGT Multifamily 1969
12 LaSalle Manufactured Housing Community 1984-89
13 MGT Nursing Home 1969, 1976 & 1985 1995
14 MGT Multifamily/Hotel 1894 1989/1990
15 MGT Limited Service Various
15.1 MGT Limited Service 1988
15.2 MGT Limited Service 1997
15.3 MGT Limited Service 1990
15.4 MGT Limited Service 1992
16 MGT CBD 1962
17 MGT Flex Space 1999
18 MGT Anchored 1991 1998 &1999
19 MGT CBD 1973 1992
20 MGT Multifamily 1974 1998
21 LaSalle Warehouse 1965 & 1987
22 MGT Factory Outlet 1994 & 1996
23 MGT Warehouse 1926
24 MGT CBD 1915 1989
25 MGT Flex Space 1999
26 MGT Multifamily 1986, 1998, 1999
27 MGT Factory Outlet 1995
28 MGT Warehouse 1997
29 MGT Suburban Various 1997
29.1 MGT Suburban 1978
29.2 MGT Suburban 1979
29.3 MGT Suburban 1979
29.4 MGT Suburban 1980
30 MGT CBD 1920 1989
31 MGT Congregate Care 1995
32 MGT Multifamily 1984
33 MGT Various Various
33.1 MGT Unanchored 1972 & 1980
33.2 MGT Mobile Home Park 1972
34 LaSalle Multifamily 1973
35 LaSalle Multifamily 1969 1998
36 MGT Anchored 1995 & 1999
37 MGT Multifamily 1980
38 MGT Suburban 1984 1997
39 MGT Multifamily 1985
40 MGT Full Service 1985
41 MGT Multifamily 1968 1972
42 MGT Flex Space 1998
43 MGT Anchored 1983 1990
44 MGT Self-Storage 1983 &1987
45 MGT Flex Space 1988
46 MGT Specialty 1997
47 MGT Suburban 1987-1992
48 MGT Suburban 1991 1991
49 MGT Unanchored 1978 1989/1993/1998
50 MGT Anchored 1957 & 1999
51 MGT Anchored 1998 1999
52 MGT Multifamily 1975
53 MGT Limited Service 1963 1998
54 MGT Limited Service 1971 1998
55 MGT Unanchored 1984
56 MGT Unanchored 1975
57 MGT Multifamily 1999
58 MGT Suburban 1984
59 LaSalle Anchored 1989 1997
60 LaSalle Warehouse 1953 1997
61 MGT Flex Space 1994 0
62 MGT Full Service 1991 1997
63 MGT Suburban 1999
64 MGT Limited Service 1990 1997
65 MGT Congregate Care 1926 1982-1984
66 LaSalle Unanchored 1972 &1999 1995
67 LaSalle Suburban 1983
68 MGT Flex Space 1980, 1982, 1985
69 MGT Limited Service 1985 1999
70 MGT Anchored 1974
71 MGT Suburban 1991 & 1993
72 MGT Flex Space 1988 1990
73 MGT Flex Space 1962, 1972 & 1978 1998
74 MGT Suburban 1999
75 MGT Multifamily 1969 1997
76 LaSalle Multifamily 1963 1998
77 MGT Multifamily 1923, 1925 & 1937
78 LaSalle Anchored 1965 1999
79 MGT Full Service 1971 1997
80 MGT Multifamily Various Various
80.1 MGT Multifamily 1968 1998
80.2 MGT Multifamily 1974 1997
81 MGT Multifamily 1979-1983
82 MGT Self-Storage 1988
83 LaSalle Multifamily 1988
84 MGT Multifamily 1972 & 1973 1988
85 MGT Multifamily 1978
86 LaSalle Multifamily 1954 1999
87 MGT Office/Retail 1887 1997
88 MGT Suburban 1981 1997
89 MGT Multifamily 1983-1990
90 MGT Multifamily 1963
91 MGT Factory Outlet 1990
92 MGT Suburban 1978
93 MGT Multifamily 1972
93.1 MGT Multifamily 1972
93.2 MGT Multifamily 1972
94 MGT Limited Service 1996
95 MGT Unanchored 1986
96 MGT Multifamily 1970 1981
97 MGT Limited Service 1986
98 MGT Unanchored 1978
99 MGT Suburban 1930 1992
100 MGT Multifamily 1985
101 MGT Limited Service 1983
102 MGT Multifamily 1997 & 1999
103 MGT Unanchored 1998
104 MGT Unanchored 1965
105 MGT Flex Space 1988
106 MGT Limited Service 1988 1996 & 1998
107 MGT Multifamily 1977
108 LaSalle Flex Space 1986
109 MGT Multifamily 1960
110 MGT Unanchored 1984 1998
111 MGT Unanchored 1920 1984
112 MGT Office/Retail 1991
113 MGT Warehouse 1983 1991
114 LaSalle Anchored 1998
115 MGT Mobile Home Park 1968, 1980-1982
116 MGT Multifamily 1982 1999
117 MGT Limited Service 1985 1996 & 1997
118 MGT Mobile Home Park 1970 1998
119 MGT Anchored 1998
120 MGT Multifamily 1965
121 MGT Unanchored 1984
122 MGT Multifamily 1941
123 MGT Multifamily 1984
124 MGT Various Various
124.1 MGT Unanchored 1920
124.2 MGT Office/Retail 1924, 1930
125 MGT Unanchored 1999
126 MGT Limited Service 1982 1998
127 MGT Full Service 1995
128 MGT Multifamily 1985
129 MGT Unanchored 1998
130 MGT Multifamily 1970
131 LaSalle Multifamily 1985
132 MGT Multifamily 1960 & 1961
133 MGT Unanchored 1999
134 MGT Limited Service 1985
135 MGT Suburban 1985
136 MGT Unanchored 1998
137 MGT Limited Service 1987
138 MGT Multifamily 1968
139 MGT Unanchored 1978
140 MGT Multifamily 1969 1979
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number of Sq. Occupancy Occupancy
Loan Number Seller Ft./Units Rate(1) Date
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 MGT 528,357 96.00 9/8/99
2 LaSalle 317,184 95.00 8/1/99
3 MGT 334,832 100.00 wtd avg
3.1 MGT 93,336 100.00 8/1/99
3.2 MGT 152,472 100.00 8/1/99
3.3 MGT 89,024 100.00 8/1/99
4 LaSalle 418 91.00 9/1/99
5 MGT 373,592 97.00 7/20/99
6 MGT 374,027 82.66 wtd avg
6.1 MGT 122,081 88.00 9/1/99
6.2 MGT 84,051 82.00 9/1/99
6.3 MGT 96,767 80.00 9/1/99
6.4 MGT 33,022 63.00 9/1/99
6.5 MGT 20,618 94.00 9/1/99
6.6 MGT 17,488 87.00 9/1/99
7 MGT 318,266 94.95 11/30/99
8 MGT 411,534 95.90 wtd avg
8.1 MGT 135,920 96.00 9/1/99
8.2 MGT 70,180 96.00 9/1/99
8.3 MGT 89,480 100.00 9/1/99
8.4 MGT 86,154 90.00 9/1/99
8.5 MGT 29,800 100.00 9/1/99
9 MGT 209,950 93.00 6/1/99
10 MGT 428 94.68 10/4/99
11 MGT 691 97.09 wtd avg
11.1 MGT 346 97.68 7/20/99
11.2 MGT 219 99.00 7/20/99
11.3 MGT 82 89.00 7/20/99
11.4 MGT 44 98.00 7/19/99
12 LaSalle 941 99.90 8/1/99
13 MGT 348 94.00 5/1/99
14 MGT 167 97.70 9/1/99
15 MGT 388 70.51 wtd avg
15.1 MGT 116 62.33 9/30/99
15.2 MGT 95 82.77 9/30/99
15.3 MGT 100 65.68 9/30/99
15.4 MGT 77 73.98 9/30/99
16 MGT 99,904 95.00 9/24/99
17 MGT 144,745 100.00 8/1/99
18 MGT 135,762 98.40 11/12/99
19 MGT 258,684 93.80 9/30/99
20 MGT 160 98.00 3/1/99
21 LaSalle 423,230 100.00 8/1/99
22 MGT 234,149 77.80 11/1/99
23 MGT 1,017,399 97.00 6/24/99
24 MGT 66,341 100.00 7/31/99
25 MGT 109,600 100.00 6/25/99
26 MGT 150 96.60 8/26/99
27 MGT 138,647 100.00 11/1/99
28 MGT 260,385 100.00 7/12/99
29 MGT 185,834 91.20 wtd avg
29.1 MGT 45,937 85.00 12/1/99
29.2 MGT 41,607 100.00 9/30/99
29.3 MGT 52,890 95.00 5/31/99
29.4 MGT 45,400 85.00 9/30/99
30 MGT 140,177 83.00 8/19/99
31 MGT 97 95.85 8/5/99
32 MGT 211 95.00 9/1/99
33 MGT 0 Various
33.1 MGT 104186 97.00 9/30/99
33.2 MGT 142 100.00 8/20/99
34 LaSalle 200 97.20 6/1/99
35 LaSalle 236 91.14 8/1/99
36 MGT 41,979 100.00 7/12/99
37 MGT 350 96.00 8/1/99
38 MGT 66,275 99.00 9/27/99
39 MGT 224 96.00 10/6/99
40 MGT 123 73.00 9/30/99
41 MGT 250 89.20 9/7/99
42 MGT 80,138 100.00 4/1/99
43 MGT 170,211 100.00 7/16/99
44 MGT 46,546 82.00 4/2/99
45 MGT 96,666 100.00 10/1/99
46 MGT 448,232 100.00 7/1/99
47 MGT 77,948 97.00 6/1/99
48 MGT 73,000 100.00 7/12/99
49 MGT 58,620 92.00 8/31/99
50 MGT 72,773 97.10 4/6/99
51 MGT 78970 100.00 10/16/99
52 MGT 196 100.00 7/3/99
53 MGT 148 70.00 7/31/99
54 MGT 154 56.41 7/31/99
55 MGT 77222 93.00 7/29/99
56 MGT 115308 91.00 7/27/99
57 MGT 64 98.00 8/1/99
58 MGT 66,028 100.00 7/2/99
59 LaSalle 51,918 100.00 7/1/99
60 LaSalle 234000 100.00 7/1/99
61 MGT 101,000 100.00 10/1/99
62 MGT 128 74.80 9/30/99
63 MGT 45,644 100.00 7/16/99
64 MGT 130 67.00 8/4/99
65 MGT 72 96.00 7/22/99
66 LaSalle 60,870 95.00 10/1/99
67 LaSalle 52639 92.00 8/1/99
68 MGT 81600 100.00 6/1/99
69 MGT 101 62.00 9/30/99
70 MGT 120,810 100.00 11/10/99
71 MGT 47,626 97.82 9/30/99
72 MGT 164,808 100.00 6/9/99
73 MGT 59,754 100.00 12/1/99
74 MGT 26,980 100.00 5/21/99
75 MGT 63 100.00 9/28/99
76 LaSalle 106 96.00 8/1/99
77 MGT 190 98.00 5/14/99
78 LaSalle 17300 100.00 9/1/99
79 MGT 193 78.70 9/30/99
80 MGT 162 96.62 wtd avg
80.1 MGT 112 96.00 9/28/99
80.2 MGT 50 98.00 9/28/99
81 MGT 184 91.85 8/31/99
82 MGT 32816 78.00 6/11/99
83 LaSalle 146 100.00 9/1/99
84 MGT 166 97.60 8/31/99
85 MGT 120 100.00 10/1/99
86 LaSalle 105 90.00 8/1/99
87 MGT 51015 100.00 8/12/99
88 MGT 21953 100.00 8/17/99
89 MGT 100 100.00 9/7/99
90 MGT 78 100.00 8/18/99
91 MGT 199,962 62.40 11/1/99
92 MGT 39,972 100.00 7/1/99
93 MGT 122 100.00 wtd avg
93.1 MGT 63 100.00 8/2/99
93.2 MGT 59 100.00 8/2/99
94 MGT 61 70.00 9/30/99
95 MGT 63,982 97.00 7/1/99
96 MGT 122 98.00 8/1/99
97 MGT 100 70.80 9/30/99
98 MGT 51,557 100.00 8/17/99
99 MGT 24,000 100.00 8/25/99
100 MGT 68 100.00 10/22/99
101 MGT 82 76.60 9/30/99
102 MGT 48 96.00 8/20/99
103 MGT 27660 100.00 12/2/99
104 MGT 21758 97.00 9/7/99
105 MGT 30573 100.00 7/15/99
106 MGT 80 82.30 9/30/99
107 MGT 200 85.50 8/31/99
108 LaSalle 69,300 100.00 10/1/99
109 MGT 94 97.00 5/14/99
110 MGT 13,440 100.00 6/4/99
111 MGT 17488 100.00 8/1/99
112 MGT 18588 93.00 7/21/99
113 MGT 34,000 100.00 8/12/99
114 LaSalle 11,100 100.00 9/1/99
115 MGT 76 96.00 6/30/99
116 MGT 88 100.00 8/1/99
117 MGT 80 76.70 9/30/99
118 MGT 99 100.00 8/12/99
119 MGT 11180 100.00 8/4/99
120 MGT 103 99.00 9/17/99
121 MGT 30,210 81.00 9/27/99
122 MGT 19 100.00 9/6/99
123 MGT 69 92.80 8/31/99
124 MGT 38,272 100.00 wtd avg
124.1 MGT 28272 100.00 8/12/99
124.2 MGT 10000 100.00 10/3/99
125 MGT 8,000 100.00 6/1/99
126 MGT 80 85.70 9/30/99
127 MGT 60 61.00 9/30/99
128 MGT 39 100.00 8/1/99
129 MGT 7500 100.00 6/4/99
130 MGT 39 95.00 9/1/99
131 LaSalle 56 89.00 9/1/99
132 MGT 93 86.00 8/11/99
133 MGT 8000 100.00 6/29/99
134 MGT 59 75.00 9/30/99
135 MGT 10961 83.00 9/7/99
136 MGT 7,995 100.00 6/4/99
137 MGT 62 86.50 9/30/99
138 MGT 16 100.00 9/1/99
139 MGT 17,090 94.00 9/21/99
140 MGT 60 93.00 8/1/99
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Appraisal Original Principal
Loan Number Seller Value($)(2) Appraisal Date Original LTV Balance ($)(2)(3)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 MGT 85,500,000 8/9/99 57.57 49,225,000
2 LaSalle 38,600,000 12/4/98 71.89 27,750,000
3 MGT 32,180,000 6/8/99 71.94 23,150,000
3.1 MGT 15,280,000 6/8/99 12,085,000
3.2 MGT 9,900,000 6/8/99 6,530,000
3.3 MGT 7,000,000 6/8/99 4,535,000
4 LaSalle 32,600,000 8/2/99 70.48 22,975,000
5 MGT 31,200,000 9/1/99 71.55 22,325,000
6 MGT 33,965,000 Various 59.00 20,039,350
6.1 MGT 12,310,000 7/16/99 7,262,900
6.2 MGT 7,550,000 6/24/99 4,454,500
6.3 MGT 7,360,000 6/28/99 4,342,400
6.4 MGT 2,745,000 6/28/99 1,619,550
6.5 MGT 2,600,000 7/15/99 1,534,000
6.6 MGT 1,400,000 6/28/99 826,000
7 MGT 24,300,000 3/26/99 77.16 18,750,000
8 MGT 29,600,000 Various 59.00 17,464,000
8.1 MGT 10,800,000 6/21/99 6,372,000
8.2 MGT 7,400,000 7/15/99 4,366,000
8.3 MGT 4,300,000 7/21/99 2,537,000
8.4 MGT 3,875,000 6/23/99 2,286,250
8.5 MGT 3,225,000 7/15/99 1,902,750
9 MGT 21,000,000 7/8/99 80.00 16,800,000
10 MGT 20,320,000 9/8/99 77.76 15,800,000
11 MGT 20,280,000 4/27/99 70.73 14,345,000
11.1 MGT 9,290,000 4/27/99 6,608,000
11.2 MGT 7,140,000 4/27/99 4,730,000
11.3 MGT 2,480,000 4/27/99 1,943,000
11.4 MGT 1,370,000 4/27/99 1,064,000
12 LaSalle 19,500,000 4/9/99 71.95 14,030,000
13 MGT 22,600,000 6/1/99 61.95 14,000,000
14 MGT 20,500,000 6/22/99 67.32 13,800,000
15 MGT 20,725,000 Various 66.83 13,850,000
15.1 MGT 7,285,000 6/10/98 4,432,000
15.2 MGT 6,216,000 6/3/98 4,376,600
15.3 MGT 4,285,000 6/10/98 2,977,750
15.4 MGT 2,939,000 6/2/98 2,063,650
16 MGT 19,700,000 9/15/99 68.02 13,400,000
17 MGT 16,850,000 7/19/99 74.16 12,496,000
18 MGT 17,000,000 5/10/99 68.82 11,700,000
19 MGT 19,400,000 10/1/99 59.41 11,525,000
20 MGT 16,900,000 4/14/99 67.46 11,400,000
21 LaSalle 14,250,000 4/28/99 76.49 10,900,000
22 MGT 19,000,000 5/20/99 57.24 10,875,000
23 MGT 21,000,000 7/1/99 50.00 10,500,000
24 MGT 15,300,000 11/14/99 67.32 10,300,000
25 MGT 14,350,000 8/1/99 69.69 10,000,000
26 MGT 12,200,000 2/17/99 78.69 9,600,000
27 MGT 16,500,000 6/1/99 56.52 9,325,000
28 MGT 12,000,000 3/24/99 75.00 9,000,000
29 MGT 12,600,000 Various 70.24 8,850,000
29.1 MGT 3,900,000 5/11/99 2,997,000
29.2 MGT 2,900,000 5/10/99 2,371,000
29.3 MGT 3,100,000 5/10/99 1,882,000
29.4 MGT 2,700,000 5/10/99 1,600,000
30 MGT 12,000,000 3/1/99 73.96 8,875,000
31 MGT 13,400,000 6/1/99 65.45 8,770,000
32 MGT 10,120,000 8/25/99 79.84 8,080,000
33 MGT 11,300,000 Various 67.35 7,610,000
33.1 MGT 7,400,000 6/14/99 5,030,000
33.2 MGT 3,900,000 6/15/99 2,580,000
34 LaSalle 15,500,000 11/11/97 47.58 7,374,891
35 LaSalle 8,750,000 9/25/98 75.43 6,600,000
36 MGT 8,800,000 8/1/99 73.86 6,500,000
37 MGT 8,300,000 6/7/99 74.40 6,175,000
38 MGT 8,500,000 6/1/99 69.00 5,865,000
39 MGT 7,250,000 9/7/99 78.62 5,700,000
40 MGT 9,100,000 4/15/99 58.24 5,300,000
41 MGT 7,900,000 7/20/99 66.46 5,250,000
42 MGT 7,650,000 8/11/99 67.97 5,200,000
43 MGT 7,564,000 7/3/99 68.75 5,200,000
44 MGT 8,000,000 3/1/99 65.00 5,200,000
45 MGT 6,700,000 8/24/99 76.12 5,100,000
46 MGT 7,400,000 6/3/99 68.58 5,075,000
47 MGT 6,750,000 7/6/99 73.56 4,965,000
48 MGT 6,925,000 3/31/99 71.16 4,927,500
49 MGT 8,200,000 7/28/99 59.76 4,900,000
50 MGT 6,985,000 3/12/99, 10/19/99 70.01 4,890,000
51 MGT 6,600,000 3/18/99 72.73 4,800,000
52 MGT 5,900,000 7/13/99 79.66 4,700,000
53 MGT 7,350,000 6/17/99 63.27 4,650,000
54 MGT 7,275,000 6/17/99 63.46 4,617,000
55 MGT 6,700,000 7/11/99 68.66 4,600,000
56 MGT 6,825,000 6/24/99 66.82 4,560,634
57 MGT 5,830,000 7/21/99 77.19 4,500,000
58 MGT 6,700,000 4/19/99 66.42 4,450,000
59 LaSalle 5,800,000 6/10/99 76.29 4,425,000
60 LaSalle 5,635,000 7/15/99 78.08 4,400,000
61 MGT 6,800,000 10/1/99 63.24 4,300,000
62 MGT 7,457,627 5/25/98 59.09 4,406,780
63 MGT 6,096,000 7/19/99 69.72 4,250,000
64 MGT 6,500,000 8/2/99 64.62 4,200,000
65 MGT 5,500,000 6/1/99 70.91 3,900,000
66 LaSalle 5,150,000 8/4/99 73.79 3,800,000
67 LaSalle 4,725,000 6/25/99 80.00 3,780,000
68 MGT 6,000,000 6/24/99 62.42 3,745,000
69 MGT 6,000,000 4/15/99 62.50 3,750,000
70 MGT 4,900,000 8/25/99 74.49 3,650,000
71 MGT 5,100,000 7/7/99 70.59 3,600,000
72 MGT 4,813,559 5/1/99 73.94 3,559,322
73 MGT 4,900,000 2/10/99 72.45 3,550,000
74 MGT 4,900,000 6/1/99 71.82 3,519,000
75 MGT 4,760,000 9/28/99 73.76 3,511,000
76 LaSalle 4,400,000 7/23/99 79.55 3,500,000
77 MGT 4,700,000 7/2/99 74.47 3,500,000
78 LaSalle 4,500,000 5/1/99 77.78 3,500,000
79 MGT 6,000,000 9/25/97 58.76 3,525,424
80 MGT 4,300,000 7/27/99 79.53 3,420,000
80.1 MGT 2,975,000 7/27/99 2,380,000
80.2 MGT 1,325,000 7/27/99 1,040,000
81 MGT 6,350,000 8/27/99 53.54 3,400,000
82 MGT 6,100,000 3/1/99 55.74 3,400,000
83 LaSalle 4,200,000 6/3/99 79.76 3,350,000
84 MGT 4,500,000 5/28/97 77.78 3,500,000
85 MGT 4,100,000 8/17/99 76.83 3,150,000
86 LaSalle 4,050,000 7/23/99 76.54 3,100,000
87 MGT 4,800,000 5/27/99 63.13 3,030,000
88 MGT 4,000,000 7/21/99 75.00 3,000,000
89 MGT 3,775,000 6/17/99 74.83 2,825,000
90 MGT 3,700,000 6/10/99 75.68 2,800,000
91 MGT 5,400,000 5/13/99 49.07 2,650,000
92 MGT 4,300,000 6/1/99 60.12 2,585,000
93 MGT 3,270,000 8/19/99 78.75 2,575,000
93.1 MGT 1,750,000 8/19/99 1,400,000
93.2 MGT 1,520,000 8/19/99 1,175,000
94 MGT 4,270,000 6/14/99 57.61 2,460,000
95 MGT 3,800,000 6/23/99 64.74 2,460,000
96 MGT 3,300,000 5/17/99 72.73 2,400,000
97 MGT 3,627,119 5/25/98 66.36 2,406,780
98 MGT 3,550,000 8/9/99 60.56 2,150,000
99 MGT 2,900,000 5/27/99 69.31 2,010,000
100 MGT 2,900,000 9/29/99 68.97 2,000,000
101 MGT 2,915,254 5/25/98 70.58 2,057,627
102 MGT 2,500,000 5/28/99 80.00 2,000,000
103 MGT 2,850,000 5/10/99 70.18 2,000,000
104 MGT 2,650,000 8/24/99 74.49 1,974,000
105 MGT 2,900,000 8/11/99 65.52 1,900,000
106 MGT 3,389,831 5/25/98 57.40 1,945,763
107 MGT 2,900,000 6/30/99 64.66 1,875,000
108 LaSalle 2,400,000 7/6/99 78.13 1,875,000
109 MGT 2,360,000 1/9/98 78.98 1,864,000
110 MGT 2,500,000 5/26/99 71.56 1,789,000
111 MGT 2,700,000 7/17/99 65.00 1,755,000
112 MGT 2,450,000 8/4/99 71.43 1,750,000
113 MGT 2,550,000 7/1/99 66.67 1,700,000
114 LaSalle 2,300,000 2/12/99 73.04 1,680,000
115 MGT 2,200,000 9/3/99 75.00 1,650,000
116 MGT 2,350,000 6/28/99 70.21 1,650,000
117 MGT 2,711,864 5/26/98 60.88 1,650,847
118 MGT 3,700,000 4/2/99 43.24 1,600,000
119 MGT 2,010,000 7/15/99 79.60 1,600,000
120 MGT 2,150,000 6/29/99 70.70 1,520,000
121 MGT 2,500,000 8/9/99 60.00 1,500,000
122 MGT 2,000,000 8/6/99 75.00 1,500,000
123 MGT 2,250,000 7/13/99 65.11 1,465,000
124 MGT 2,120,000 5/27/99 68.87 1,460,000
124.1 MGT 1,220,000 5/27/99 845,000
124.2 MGT 900,000 5/27/99 615,000
125 MGT 1,975,000 6/1/99 71.14 1,405,000
126 MGT 2,576,271 5/25/98 55.26 1,423,729
127 MGT 1,910,000 6/15/99 68.06 1,300,000
128 MGT 1,800,000 7/5/99 70.83 1,275,000
129 MGT 1,775,000 5/26/99 71.44 1,268,000
130 MGT 1,655,000 6/16/99 75.53 1,250,000
131 LaSalle 1,440,000 11/9/98 79.86 1,150,000
132 MGT 1,600,000 4/12/99 70.94 1,135,000
133 MGT 1,600,000 6/14/99 70.88 1,134,000
134 MGT 1,762,712 5/25/98 65.38 1,152,542
135 MGT 1,400,000 6/1/99 75.00 1,050,000
136 MGT 1,460,000 5/19/99 71.85 1,049,000
137 MGT 1,694,915 5/25/98 60.00 1,016,949
138 MGT 1,225,000 9/28/99 71.43 875,000
139 MGT 1,200,000 8/9/99 70.83 850,000
140 MGT 1,000,000 5/17/99 80.00 800,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Current Current Mortgage
Principal Balance Crossed Loan Related Loan Interest
Loan Number Seller ($)(2)(3) Group(4) Group(5) Rate (%)(6)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 MGT 49,225,000 8.1300
2 LaSalle 27,512,617 7.3000
3 MGT 23,113,978 8.0500
3.1 MGT
3.2 MGT
3.3 MGT
4 LaSalle 22,924,768 8.1300
5 MGT 22,302,499 8.4000
6 MGT 20,039,350 1 7.4700
6.1 MGT
6.2 MGT
6.3 MGT
6.4 MGT
6.5 MGT
6.6 MGT
7 MGT 18,689,849 7.9800
8 MGT 17,464,000 1 7.4700
8.1 MGT
8.2 MGT
8.3 MGT
8.4 MGT
8.5 MGT
9 MGT 16,772,760 7.9100
10 MGT 15,789,005 7.8200
11 MGT 14,304,119 7.8400
11.1 MGT
11.2 MGT
11.3 MGT
11.4 MGT
12 LaSalle 13,985,254 8.0000
13 MGT 13,918,633 8.6900
14 MGT 13,776,427 8.1200
15 MGT 13,619,235 7.4000
15.1 MGT
15.2 MGT
15.3 MGT
15.4 MGT
16 MGT 13,394,778 8.3700
17 MGT 12,477,918 8.2900
18 MGT 11,662,631 7.9950
19 MGT 11,521,187 8.7600
20 MGT 11,317,072 8.5900
21 LaSalle 10,865,543 8.0300
22 MGT 10,828,976 2 8.4600
23 MGT 10,463,562 8.4600
24 MGT 10,278,264 8.2600
25 MGT 9,968,013 7.9900
26 MGT 9,575,874 7.6000
27 MGT 9,285,536 2 8.4600
28 MGT 8,975,405 7.9900
29 MGT 8,823,006 8.1500
29.1 MGT
29.2 MGT
29.3 MGT
29.4 MGT
30 MGT 8,798,495 7.9800
31 MGT 8,747,349 A 8.2600
32 MGT 8,071,417 8.2100
33 MGT 7,582,893 8.3300
33.1 MGT
33.2 MGT
34 LaSalle 7,361,125 6.5300
35 LaSalle 6,560,916 7.4100
36 MGT 6,483,127 8.1700
37 MGT 6,159,600 7.6300
38 MGT 5,854,669 A 8.3500
39 MGT 5,693,895 8.1800
40 MGT 5,261,788 B 8.6500
41 MGT 5,235,131 7.8200
42 MGT 5,192,312 8.2200
43 MGT 5,163,713 7.3900
44 MGT 5,155,363 3 8.6500
45 MGT 5,094,296 8.0200
46 MGT 5,050,168 8.2900
47 MGT 4,955,391 8.5700
48 MGT 4,903,078 8.5000
49 MGT 4,891,822 7.8100
50 MGT 4,888,018 8.2700
51 MGT 4,767,651 7.9000
52 MGT 4,688,695 7.7700
53 MGT 4,631,002 C 8.9000
54 MGT 4,598,974 C 9.1900
55 MGT 4,590,266 8.2500
56 MGT 4,560,634 D 7.7300
57 MGT 4,487,188 7.1000
58 MGT 4,430,120 8.2000
59 LaSalle 4,404,739 8.0800
60 LaSalle 4,393,275 7.8500
61 MGT 4,296,873 8.5300
62 MGT 4,259,809 4 E 8.0930
63 MGT 4,240,067 7.8800
64 MGT 4,182,654 8.8300
65 MGT 3,889,927 A 8.2600
66 LaSalle 3,786,083 8.1900
67 LaSalle 3,769,931 F 8.0800
68 MGT 3,731,527 8.2800
69 MGT 3,723,483 B 8.7800
70 MGT 3,648,445 8.1400
71 MGT 3,593,424 8.1600
72 MGT 3,551,603 8.5390
73 MGT 3,526,686 8.0300
74 MGT 3,509,786 8.1400
75 MGT 3,509,319 G 7.8200
76 LaSalle 3,491,949 H 7.9400
77 MGT 3,490,668 8.1100
78 LaSalle 3,485,431 7.7500
79 MGT 3,429,290 E 8.3240
80 MGT 3,414,357 7.8500
80.1 MGT
80.2 MGT
81 MGT 3,389,745 7.5100
82 MGT 3,370,814 3 8.6500
83 LaSalle 3,341,102 8.0900
84 MGT 3,310,110 8.3100
85 MGT 3,146,353 7.8900
86 LaSalle 3,092,869 H 7.9400
87 MGT 3,020,150 5 8.7800
88 MGT 2,995,645 I 8.2800
89 MGT 2,821,712 7.8700
90 MGT 2,789,582 8.1100
91 MGT 2,638,785 2 8.4600
92 MGT 2,580,447 A 8.3500
93 MGT 2,570,751 7.8500
93.1 MGT
93.2 MGT
94 MGT 2,456,953 6 9.0400
95 MGT 2,442,396 8.2500
96 MGT 2,396,176 7 7.9700
97 MGT 2,337,460 4 E 8.2030
98 MGT 2,144,340 J 8.1700
99 MGT 2,003,466 5 8.7800
100 MGT 1,998,896 8.3600
101 MGT 1,998,364 4 E 8.2030
102 MGT 1,995,227 7.8000
103 MGT 1,990,936 8.1300
104 MGT 1,971,213 8.3700
105 MGT 1,897,061 8.0700
106 MGT 1,889,721 4 E 8.2030
107 MGT 1,871,879 K 7.8200
108 LaSalle 1,870,217 F 8.2300
109 MGT 1,853,727 8.0000
110 MGT 1,784,329 L 8.1500
111 MGT 1,750,900 8.7200
112 MGT 1,747,381 I 8.1800
113 MGT 1,690,220 8.7600
114 LaSalle 1,665,660 8.0300
115 MGT 1,648,189 8.0900
116 MGT 1,646,204 7.9400
117 MGT 1,603,300 4 E 8.2030
118 MGT 1,593,418 D 7.5900
119 MGT 1,588,291 8.1300
120 MGT 1,517,418 8.5300
121 MGT 1,496,118 J 8.2500
122 MGT 1,495,752 7.8200
123 MGT 1,462,562 K 7.8200
124 MGT 1,455,254 5 8.7800
124.1 MGT
124.2 MGT
125 MGT 1,401,321 L 8.1400
126 MGT 1,382,723 4 E 8.2030
127 MGT 1,298,404 6 9.0900
128 MGT 1,271,812 7.6200
129 MGT 1,264,689 L 8.1500
130 MGT 1,248,705 8.3000
131 LaSalle 1,140,618 7.5000
132 MGT 1,132,598 8.2500
133 MGT 1,130,971 L 8.0700
134 MGT 1,119,347 4 E 8.2030
135 MGT 1,047,230 A 8.1600
136 MGT 1,046,193 L 8.0640
137 MGT 987,659 4 E 8.2030
138 MGT 874,581 G 7.8200
139 MGT 847,762 J 8.1700
140 MGT 798,725 7 7.9700
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Net Mortgage Mortgage Interest Annual Debt Remaining
Interest Rate Accrual Service Interest Only
Loan Number Seller Rate(%)(7) Basis(8) ($)(2)(9) Period (months)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 MGT 8.007 ACT/360 4,142,961 9
2 LaSalle 7.202 ACT/360 2,282,951
3 MGT 7.977 ACT/360 2,048,089
3.1 MGT
3.2 MGT
3.3 MGT
4 LaSalle 8.032 ACT/360 2,048,030
5 MGT 8.327 ACT/360 2,040,963
6 MGT 7.397 ACT/360 1,517,730 115
6.1 MGT
6.2 MGT
6.3 MGT
6.4 MGT
6.5 MGT
6.6 MGT
7 MGT 7.907 ACT/360 1,647,834
8 MGT 7.397 ACT/360 1,322,680 115
8.1 MGT
8.2 MGT
8.3 MGT
8.4 MGT
8.5 MGT
9 MGT 7.837 ACT/360 1,466,640
10 MGT 7.677 30/360 1,367,500
11 MGT 7.767 ACT/360 1,243,955
11.1 MGT
11.2 MGT
11.3 MGT
11.4 MGT
12 LaSalle 7.867 ACT/360 1,235,366
13 MGT 8.617 ACT/360 1,478,208
14 MGT 8.047 ACT/360 1,239,103
15 MGT 7.327 ACT/360 1,217,413
15.1 MGT
15.2 MGT
15.3 MGT
15.4 MGT
16 MGT 8.227 ACT/360 1,221,629
17 MGT 8.147 ACT/360 1,130,759
18 MGT 7.922 ACT/360 1,029,716
19 MGT 8.617 ACT/360 1,088,995
20 MGT 8.517 ACT/360 1,194,986
21 LaSalle 7.932 ACT/360 962,501
22 MGT 8.387 ACT/360 1,047,306
23 MGT 8.387 ACT/360 1,011,192
24 MGT 8.187 ACT/360 929,435
25 MGT 7.847 ACT/360 879,681
26 MGT 7.527 ACT/360 813,398
27 MGT 8.387 ACT/360 898,035
28 MGT 7.847 ACT/360 791,713
29 MGT 8.077 ACT/360 790,392
29.1 MGT
29.2 MGT
29.3 MGT
29.4 MGT
30 MGT 7.837 ACT/360 820,574
31 MGT 8.137 ACT/360 830,468
32 MGT 8.137 ACT/360 725,703
33 MGT 8.257 ACT/360 724,901
33.1 MGT
33.2 MGT
34 LaSalle 6.432 ACT/360 571,949
35 LaSalle 7.277 ACT/360 548,905
36 MGT 8.047 ACT/360 581,607
37 MGT 7.457 ACT/360 524,730
38 MGT 8.227 ACT/360 559,622
39 MGT 8.037 ACT/360 510,504
40 MGT 8.577 ACT/360 557,988
41 MGT 7.677 ACT/360 478,756
42 MGT 8.147 ACT/360 467,475
43 MGT 7.247 ACT/360 498,501
44 MGT 8.577 ACT/360 547,460
45 MGT 7.897 ACT/360 449,917
46 MGT 8.147 ACT/360 487,895
47 MGT 8.497 ACT/360 461,078
48 MGT 8.427 ACT/360 476,131
49 MGT 7.737 ACT/360 423,691
50 MGT 8.127 ACT/360 441,669
51 MGT 7.827 ACT/360 440,757
52 MGT 7.697 ACT/360 404,836
53 MGT 8.827 ACT/360 498,464
54 MGT 9.117 ACT/360 505,274
55 MGT 8.107 ACT/360 414,699
56 MGT 7.657 ACT/360 414,028
57 MGT 7.027 ACT/360 362,897
58 MGT 8.127 ACT/360 419,250
59 LaSalle 7.947 ACT/360 412,653
60 LaSalle 7.752 ACT/360 391,484
61 MGT 8.457 ACT/360 416,541
62 MGT 7.97 30/360 433,803
63 MGT 7.807 ACT/360 369,962
64 MGT 8.757 ACT/360 447,966
65 MGT 8.137 ACT/360 369,307
66 LaSalle 8.057 ACT/360 357,707
67 LaSalle 7.947 ACT/360 335,369
68 MGT 8.157 ACT/360 355,231
69 MGT 8.707 ACT/360 398,532
70 MGT 8.067 ACT/360 325,674
71 MGT 8.087 ACT/360 338,016
72 MGT 8.466 ACT/360 318,182
73 MGT 7.957 ACT/360 329,641
74 MGT 7.997 ACT/360 313,985
75 MGT 7.747 ACT/360 303,879
76 LaSalle 7.842 ACT/360 306,426
77 MGT 7.967 ACT/360 327,229
78 LaSalle 7.652 ACT/360 300,893
79 MGT 8.201 30/360 326,517
80 MGT 7.777 ACT/360 296,857
80.1 MGT
80.2 MGT
81 MGT 7.367 ACT/360 301,774
82 MGT 8.577 ACT/360 357,955
83 LaSalle 7.992 ACT/360 297,499
84 MGT 8.187 30/360 359,451
85 MGT 7.747 ACT/360 274,470
86 LaSalle 7.842 ACT/360 271,406
87 MGT 8.707 ACT/360 299,673
88 MGT 8.207 ACT/360 271,216
89 MGT 7.727 ACT/360 245,681
90 MGT 7.937 ACT/360 261,783
91 MGT 8.387 ACT/360 255,206
92 MGT 8.227 ACT/360 246,654
93 MGT 7.777 ACT/360 223,510
93.1 MGT
93.2 MGT
94 MGT 8.967 ACT/360 266,359
95 MGT 8.177 ACT/360 277,385
96 MGT 7.897 ACT/360 210,722
97 MGT 8.08 30/360 240,319
98 MGT 7.997 ACT/360 202,043
99 MGT 8.707 ACT/360 198,793
100 MGT 8.287 ACT/360 186,018
101 MGT 8.08 30/360 205,455
102 MGT 7.727 ACT/360 172,769
103 MGT 8.057 ACT/360 187,308
104 MGT 8.227 ACT/360 179,962
105 MGT 7.997 ACT/360 168,412
106 MGT 8.08 30/360 194,286
107 MGT 7.747 ACT/360 162,282
108 LaSalle 8.097 ACT/360 168,719
109 MGT 7.857 ACT/360 172,640
110 MGT 8.077 ACT/360 159,775
111 MGT 8.577 ACT/360 172,714
112 MGT 8.107 ACT/360 156,734
113 MGT 8.687 ACT/360 180,407
114 LaSalle 7.932 ACT/360 155,999
115 MGT 8.017 ACT/360 146,530
116 MGT 7.797 ACT/360 144,458
117 MGT 8.08 30/360 164,838
118 MGT 7.517 ACT/360 143,012
119 MGT 8.057 30/360 164,852
120 MGT 8.407 ACT/360 147,242
121 MGT 8.177 ACT/360 141,921
122 MGT 7.747 ACT/360 136,787
123 MGT 7.747 ACT/360 126,797
124 MGT 8.707 ACT/360 144,397
124.1 MGT
124.2 MGT
125 MGT 8.067 ACT/360 125,362
126 MGT 8.08 30/360 142,160
127 MGT 9.017 ACT/360 141,261
128 MGT 7.477 ACT/360 108,240
129 MGT 8.077 ACT/360 113,245
130 MGT 8.227 ACT/360 113,218
131 LaSalle 7.402 ACT/360 96,492
132 MGT 8.107 ACT/360 102,323
133 MGT 7.997 ACT/360 100,515
134 MGT 8.08 30/360 115,082
135 MGT 8.037 ACT/360 98,588
136 MGT 7.991 ACT/360 92,928
137 MGT 8.08 30/360 101,543
138 MGT 7.747 ACT/360 75,732
139 MGT 7.997 ACT/360 79,877
140 MGT 7.897 ACT/360 70,241
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Remaining Maturity Date/
Remaining Term Amortization Anticipated
(months) Term (months) Repayment
Loan Number Seller (10)(11) (10)(11) Origination Date Date(12)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 MGT 60 360 9/10/99 10/1/05
2 LaSalle 108 348 12/28/98 1/1/09
3 MGT 117 357 9/15/99 10/1/09
3.1 MGT
3.2 MGT
3.3 MGT
4 LaSalle 116 356 8/30/99 9/1/09
5 MGT 118 358 10/13/99 11/1/09
6 MGT 1 1 8/31/99 9/1/09
6.1 MGT
6.2 MGT
6.3 MGT
6.4 MGT
6.5 MGT
6.6 MGT
7 MGT 114 354 6/1/99 7/1/09
8 MGT 1 1 8/31/99 9/1/09
8.1 MGT
8.2 MGT
8.3 MGT
8.4 MGT
8.5 MGT
9 MGT 116 357 9/24/99 9/1/09
10 MGT 83 359 10/29/99 12/1/06
11 MGT 115 355 7/30/99 8/1/09
11.1 MGT
11.2 MGT
11.3 MGT
11.4 MGT
12 LaSalle 114 354 6/16/99 7/1/09
13 MGT 116 236 8/24/99 9/1/09
14 MGT 117 345 9/9/99 10/1/09
15 MGT 165 285 9/21/98 10/1/13
15.1 MGT
15.2 MGT
15.3 MGT
15.4 MGT
16 MGT 118 358 11/9/99 11/1/09
17 MGT 117 357 9/24/99 10/1/09
18 MGT 114 354 6/25/99 7/1/09
19 MGT 119 359 11/17/99 12/1/09
20 MGT 115 235 7/14/99 8/1/09
21 LaSalle 174 354 6/28/99 7/1/14
22 MGT 115 295 7/9/99 8/1/09
23 MGT 116 296 8/16/99 9/1/09
24 MGT 116 356 8/31/99 9/1/09
25 MGT 114 354 6/25/99 7/1/09
26 MGT 116 356 8/6/99 9/1/09
27 MGT 115 295 7/9/99 8/1/09
28 MGT 115 355 7/27/99 8/1/09
29 MGT 114 354 6/11/99 7/1/09
29.1 MGT
29.2 MGT
29.3 MGT
29.4 MGT
30 MGT 111 291 3/29/99 4/1/09
31 MGT 117 297 9/9/99 10/1/09
32 MGT 118 358 10/13/99 11/1/09
33 MGT 116 296 8/31/99 9/1/09
33.1 MGT
33.2 MGT
34 LaSalle 98 338 10/18/99 3/1/08
35 LaSalle 111 351 3/31/99 4/1/09
36 MGT 115 355 7/15/99 8/1/09
37 MGT 116 356 8/27/99 9/1/09
38 MGT 118 298 10/5/99 11/1/09
39 MGT 118 358 11/1/99 11/1/09
40 MGT 55 235 7/13/99 8/1/04
41 MGT 117 297 9/28/99 10/1/09
42 MGT 117 357 9/22/99 10/1/09
43 MGT 116 236 8/2/99 9/1/09
44 MGT 114 234 6/30/99 7/1/09
45 MGT 118 358 10/22/99 11/1/09
46 MGT 115 283 7/20/99 8/1/09
47 MGT 116 356 8/23/99 9/1/09
48 MGT 114 294 6/18/99 7/1/09
49 MGT 117 357 9/7/99 10/1/09
50 MGT 119 359 11/19/99 12/1/09
51 MGT 113 293 5/20/99 6/1/09
52 MGT 116 356 8/18/99 9/1/09
53 MGT 117 237 9/17/99 10/1/09
54 MGT 117 237 9/17/99 10/1/09
55 MGT 116 356 8/9/99 9/1/09
56 MGT 116 297 12/10/99 9/1/09
57 MGT 116 356 8/6/99 9/1/09
58 MGT 115 295 7/7/99 8/1/09
59 LaSalle 115 295 7/29/99 8/1/09
60 LaSalle 117 326 9/9/99 10/1/09
61 MGT 119 299 11/16/99 12/1/09
62 MGT 66 222 6/30/98 7/1/05
63 MGT 116 356 8/17/99 9/1/09
64 MGT 117 237 9/15/99 10/1/09
65 MGT 117 297 9/9/99 10/1/09
66 LaSalle 116 296 8/26/99 9/1/09
67 LaSalle 55 355 7/15/99 8/1/04
68 MGT 116 296 8/11/99 9/1/09
69 MGT 115 235 7/13/99 8/1/09
70 MGT 119 359 11/15/99 12/1/09
71 MGT 82 298 10/22/99 11/1/06
72 MGT 80 356 8/3/99 9/1/06
73 MGT 113 293 5/27/99 6/1/09
74 MGT 115 355 7/2/99 8/1/09
75 MGT 119 359 11/19/99 12/1/09
76 LaSalle 116 356 8/24/99 9/1/09
77 MGT 117 297 9/1/99 10/1/09
78 LaSalle 113 353 5/18/99 6/1/09
79 MGT 60 276 12/4/97 1/1/05
80 MGT 117 357 9/30/99 10/1/09
80.1 MGT
80.2 MGT
81 MGT 117 297 9/30/99 10/1/09
82 MGT 114 234 6/30/99 7/1/09
83 LaSalle 115 355 6/28/99 8/1/09
84 MGT 210 210 6/30/97 7/1/17
85 MGT 118 358 10/14/99 11/1/09
86 LaSalle 116 356 8/24/99 9/1/09
87 MGT 116 296 8/26/99 9/1/09
88 MGT 117 357 9/23/99 10/1/09
89 MGT 118 358 10/4/99 11/1/09
90 MGT 56 296 8/20/99 9/1/04
91 MGT 115 295 7/9/99 8/1/09
92 MGT 118 298 10/5/99 11/1/09
93 MGT 117 357 9/20/99 10/1/09
93.1 MGT
93.2 MGT
94 MGT 119 239 11/24/99 12/1/09
95 MGT 69 189 9/16/99 10/1/05
96 MGT 117 357 9/3/99 10/1/09
97 MGT 68 224 8/11/98 9/1/05
98 MGT 117 297 9/23/99 10/1/09
99 MGT 116 296 8/26/99 9/1/09
100 MGT 119 329 11/3/99 12/1/09
101 MGT 68 224 8/11/98 9/1/05
102 MGT 116 356 8/20/99 9/1/09
103 MGT 115 295 7/2/99 8/1/09
104 MGT 117 357 9/15/99 10/1/09
105 MGT 117 357 9/17/99 10/1/09
106 MGT 68 224 8/11/98 9/1/05
107 MGT 117 357 9/24/99 10/1/09
108 LaSalle 55 355 7/30/99 8/1/04
109 MGT 114 294 6/3/99 7/1/09
110 MGT 115 355 7/16/99 8/1/09
111 MGT 117 297 9/15/99 10/1/09
112 MGT 117 357 9/23/99 10/1/09
113 MGT 236 236 8/12/99 9/1/19
114 LaSalle 111 291 3/29/99 4/1/09
115 MGT 118 358 10/13/99 11/1/09
116 MGT 116 356 8/27/99 9/1/09
117 MGT 68 224 8/11/98 9/1/05
118 MGT 116 296 8/19/99 9/1/09
119 MGT 227 227 8/26/99 12/1/18
120 MGT 118 298 10/21/99 11/1/09
121 MGT 117 297 9/1/99 10/1/09
122 MGT 117 297 9/29/99 10/1/09
123 MGT 117 357 9/24/99 10/1/09
124 MGT 116 296 8/26/99 9/1/09
124.1 MGT
124.2 MGT
125 MGT 115 355 7/19/99 8/1/09
126 MGT 68 224 8/11/98 9/1/05
127 MGT 119 239 11/24/99 12/1/09
128 MGT 116 356 8/13/99 9/1/09
129 MGT 115 355 7/16/99 8/1/09
130 MGT 118 358 10/1/99 11/1/09
131 LaSalle 108 348 12/4/98 1/1/09
132 MGT 80 356 8/16/99 9/1/06
133 MGT 115 355 7/20/99 8/1/09
134 MGT 68 224 8/11/98 9/1/05
135 MGT 117 297 9/9/99 10/1/09
136 MGT 115 355 7/21/99 8/1/09
137 MGT 68 224 8/11/98 9/1/05
138 MGT 119 359 11/19/99 12/1/09
139 MGT 117 297 9/23/99 10/1/09
140 MGT 117 357 9/3/99 10/1/09
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lock-out
ARD Final Balloon Balance Ending Period End
Loan Number Seller Maturity Date ($)(2)(13) LTV(13) Date(14)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 MGT 10/1/30 47,200,990 55.21 3/31/05
2 LaSalle 24,390,228 63.19 9/30/08
3 MGT 10/1/29 20,733,856 64.43 6/30/09
3.1 MGT
3.2 MGT
3.3 MGT
4 LaSalle 20,612,984 63.23 5/31/09
5 MGT 11/1/29 20,154,835 64.60 7/31/09
6 MGT 20,039,350 59.00 5/31/09
6.1 MGT
6.2 MGT
6.3 MGT
6.4 MGT
6.5 MGT
6.6 MGT
7 MGT 7/1/29 16,768,800 69.01 3/31/09
8 MGT 17,464,000 59.00 5/31/09
8.1 MGT
8.2 MGT
8.3 MGT
8.4 MGT
8.5 MGT
9 MGT 10/1/29 15,019,453 71.52 6/30/09
10 MGT 12/1/29 14,575,611 71.73 9/30/06
11 MGT 8/1/29 12,783,616 63.04 4/30/09
11.1 MGT
11.2 MGT
11.3 MGT
11.4 MGT
12 LaSalle 12,553,554 64.38 3/31/09
13 MGT 9/1/19 10,108,805 44.73 5/31/09
14 MGT 12,224,060 59.63 6/30/09
15 MGT 8,948,222 43.18 3/31/05
15.1 MGT
15.2 MGT
15.3 MGT
15.4 MGT
16 MGT 12,108,405 61.46 7/31/09
17 MGT 11,255,045 66.80 6/30/09
18 MGT 7/1/29 10,467,497 61.57 3/31/09
19 MGT 10,490,963 54.08 8/31/09
20 MGT 8/1/19 8,206,515 48.56 4/30/09
21 LaSalle 8,731,549 61.27 3/31/14
22 MGT 8/1/24 9,084,472 47.81 4/30/09
23 MGT 9/1/24 8,769,132 41.76 5/31/09
24 MGT 9/1/29 9,269,205 60.58 5/31/09
25 MGT 7/1/29 8,945,506 62.34 3/31/09
26 MGT 9/1/29 8,503,252 69.70 5/31/09
27 MGT 8/1/24 7,789,674 47.21 4/30/09
28 MGT 8/1/29 8,049,467 67.08 4/30/09
29 MGT 7/1/29 7,946,954 63.07 3/31/09
29.1 MGT
29.2 MGT
29.3 MGT
29.4 MGT
30 MGT 4/1/24 7,314,082 60.95 1/31/09
31 MGT 10/1/24 7,284,707 54.36 6/30/09
32 MGT 11/1/29 7,262,615 71.76 7/31/09
33 MGT 6,332,498 56.04 5/31/09
33.1 MGT
33.2 MGT
34 LaSalle 6,450,090 41.61 2/29/00
35 LaSalle 4/1/29 5,819,424 66.51 12/31/08
36 MGT 8/1/29 5,838,367 66.35 4/30/09
37 MGT 9/1/29 5,473,617 65.95 5/31/09
38 MGT 11/1/24 4,882,935 57.45 7/31/09
39 MGT 11/1/29 5,119,790 70.62 7/31/09
40 MGT 4,721,064 51.88 6/30/04
41 MGT 10/1/24 4,306,010 54.51 6/30/09
42 MGT 10/1/29 4,675,974 61.12 6/30/09
43 MGT 3,589,968 47.46 5/31/09
44 MGT 7/1/19 3,752,015 46.90 3/31/09
45 MGT 11/1/29 4,563,599 68.11 7/31/09
46 MGT 8/1/23 4,124,108 55.73 4/30/09
47 MGT 9/1/24 4,499,868 66.66 5/31/09
48 MGT 4,121,766 59.52 3/31/09
49 MGT 4,363,308 53.21 6/30/09
50 MGT 12/1/29 4,402,153 63.02 8/31/09
51 MGT 3,946,454 59.79 2/28/09
52 MGT 4,180,543 70.86 5/31/09
53 MGT 3,381,889 46.01 6/30/09
54 MGT 3,389,939 46.60 6/30/09
55 MGT 9/1/29 4,138,684 61.77 5/31/09
56 MGT 3,749,254 54.93 5/31/09
57 MGT 3,935,288 67.50 5/31/09
58 MGT 8/1/24 3,690,237 55.08 4/30/09
59 LaSalle 3,656,956 63.05 4/30/09
60 LaSalle 3,782,753 67.13 6/30/09
61 MGT 12/1/24 3,598,643 52.92 8/31/09
62 MGT 3,548,948 47.59 9/30/03
63 MGT 3,790,399 62.18 5/31/09
64 MGT 10/1/19 3,047,546 46.89 6/30/09
65 MGT 10/1/24 3,239,494 58.90 6/30/09
66 LaSalle 3,149,618 61.16 5/31/09
67 LaSalle 3,623,945 76.70 4/30/04
68 MGT 9/1/24 3,111,943 51.87 5/31/09
69 MGT 2,716,696 45.28 4/30/09
70 MGT 12/1/29 3,275,887 66.85 8/31/09
71 MGT 11/1/24 3,222,694 63.19 8/31/06
72 MGT 9/1/29 3,337,563 69.34 6/30/06
73 MGT 2,929,740 59.79 2/28/09
74 MGT 8/1/29 3,158,572 64.46 4/30/09
75 MGT 3,127,087 65.70 8/31/09
76 LaSalle 3,126,019 71.05 5/31/09
77 MGT 2,894,862 61.59 6/30/09
78 LaSalle 3,112,299 69.16 2/28/09
79 MGT 3,109,824 51.83 3/31/03
80 MGT 3,048,376 70.89 6/30/09
80.1 MGT
80.2 MGT
81 MGT 2,763,159 43.51 6/30/09
82 MGT 7/1/19 2,453,240 40.22 3/31/09
83 LaSalle 3,003,332 71.51 4/30/09
84 MGT 2 - 7/31/07
85 MGT 2,809,926 68.53 7/31/09
86 LaSalle 2,768,760 68.36 5/31/09
87 MGT 9/1/24 2,552,839 53.18 5/31/09
88 MGT 2,701,449 67.54 6/30/09
89 MGT 2,518,795 66.72 7/31/09
90 MGT 9/1/24 2,607,055 70.46 7/31/04
91 MGT 8/1/24 2,213,688 40.99 4/30/09
92 MGT 11/1/24 2,152,155 50.05 7/31/09
93 MGT 2,295,196 70.19 6/30/09
93.1 MGT
93.2 MGT
94 MGT 12/1/19 1,797,256 42.09 8/31/09
95 MGT 10/1/15 1,905,803 50.15 6/30/05
96 MGT 10/1/29 2,145,413 65.01 6/30/09
97 MGT 1,945,891 53.65 11/30/03
98 MGT 10/1/24 1,781,320 50.18 8/31/09
99 MGT 9/1/24 1,693,467 58.40 5/31/09
100 MGT 1,743,844 60.13 8/31/09
101 MGT 1,663,599 57.07 11/30/03
102 MGT 1,780,258 71.21 5/31/09
103 MGT 1,655,229 58.08 4/30/09
104 MGT 1,781,253 67.22 6/30/09
105 MGT 10/1/29 1,702,508 58.71 6/30/09
106 MGT 1,573,157 46.41 11/30/03
107 MGT 10/1/29 1,670,040 57.59 6/30/09
108 LaSalle 1,800,310 75.01 4/30/04
109 MGT 1,537,251 65.14 3/31/09
110 MGT 8/1/29 1,606,143 64.25 4/30/09
111 MGT 10/1/24 1,476,511 54.69 6/30/09
112 MGT 1,572,172 64.17 6/30/09
113 MGT 91,311 3.58 9/30/09
114 LaSalle 1,386,525 60.28 12/31/08
115 MGT 11/1/29 1,478,911 67.22 7/31/09
116 MGT 9/1/29 1,473,695 62.71 5/31/09
117 MGT 1,334,717 49.22 11/30/03
118 MGT 1,303,226 35.22 5/31/09
119 MGT - - 8/31/18
120 MGT 11/1/24 1,271,836 59.16 7/31/09
121 MGT 10/1/24 1,245,607 49.82 6/30/09
122 MGT 1,230,289 61.51 6/30/09
123 MGT 10/1/29 1,304,859 57.99 6/30/09
124 MGT 9/1/24 1,230,081 58.02 5/31/09
124.1 MGT
124.2 MGT
125 MGT 8/1/29 1,261,096 63.85 4/30/09
126 MGT 1,151,090 44.68 11/30/03
127 MGT 12/1/19 951,324 49.81 8/31/09
128 MGT 1,129,897 62.77 5/31/09
129 MGT 8/1/29 1,138,395 64.13 4/30/09
130 MGT 1,125,898 68.03 7/31/09
131 LaSalle 1,015,909 70.55 9/30/08
132 MGT 1,065,708 66.61 5/31/06
133 MGT 8/1/29 1,016,169 63.51 4/30/09
134 MGT 931,835 52.86 11/30/03
135 MGT 10/1/24 869,699 62.12 6/30/09
136 MGT 8/1/29 939,867 64.37 4/30/09
137 MGT 822,208 48.51 11/30/03
138 MGT 779,322 63.62 8/31/09
139 MGT 10/1/24 704,243 58.69 6/30/09
140 MGT 10/1/29 715,138 71.51 6/30/09
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Yield Maintenance
Loan Number Seller End Date 1% Penalty End Date NOI 97($)(2) Months 97
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 MGT 3,189,000 12
2 LaSalle 392,665 2
3 MGT 2,560,902 12
3.1 MGT 1,512,600 12
3.2 MGT 386,483 12
3.3 MGT 661,819 12
4 LaSalle 2,126,389 12
5 MGT 2,065,507 12
6 MGT 2,289,296 12
6.1 MGT 991,190 12
6.2 MGT 639,710 12
6.3 MGT 482,797 12
6.4 MGT 87,135 12
6.5 MGT
6.6 MGT 88,464 12
7 MGT 1,803,630 12
8 MGT 1,370,852 12
8.1 MGT 740,633 12
8.2 MGT
8.3 MGT 410,774 12
8.4 MGT 219,445 12
8.5 MGT
9 MGT 1,592,560 12
10 MGT
11 MGT 1,389,099 12
11.1 MGT 739,373 12
11.2 MGT 347,127 12
11.3 MGT 196,312 12
11.4 MGT 106,287 12
12 LaSalle 1,435,485 12
13 MGT 2,781,938 12
14 MGT 1,485,610 12
15 MGT 6/30/13 1,548,836 12
15.1 MGT 737,646 12
15.2 MGT
15.3 MGT 485,286 12
15.4 MGT 325,904 12
16 MGT 1,352,889 12
17 MGT
18 MGT 1,489,032 12
19 MGT 946,533 12
20 MGT 2,060,911 12
21 LaSalle
22 MGT 2,475,151 12
23 MGT 802,630 12
24 MGT 534,487 12
25 MGT
26 MGT 331,685 12
27 MGT 1,234,302 12
28 MGT
29 MGT 368,633 Various
29.1 MGT 224,423 12
29.2 MGT 92,291 12
29.3 MGT 116,334 6
29.4 MGT (64,415) 6
30 MGT 1,066,887 12
31 MGT 425,167 12
32 MGT 784,847 12
33 MGT 1,000,343 12
33.1 MGT 605,587 12
33.2 MGT 394,756 12
34 LaSalle 2/29/2004 8/31/2007 1,353,753 12
35 LaSalle 587,871 12
36 MGT 168,047 12
37 MGT 794,841 12
38 MGT
39 MGT 648,682 12
40 MGT 1,238,283 12
41 MGT 771,053 12
42 MGT
43 MGT 807,338 12
44 MGT 692,203 12
45 MGT 597,636 12
46 MGT (634,306) 6
47 MGT 549,197 12
48 MGT
49 MGT 615,461 12
50 MGT 323,712 12
51 MGT 320,762 12
52 MGT 537,870 12
53 MGT 667,167 12
54 MGT 470,517 12
55 MGT 512,100 12
56 MGT 827,668 12
57 MGT
58 MGT 637,694 12
59 LaSalle 533,264 12
60 LaSalle
61 MGT
62 MGT 3/31/05 918,369 12
63 MGT
64 MGT 817,676 12
65 MGT 467,602 12
66 LaSalle (154,915) 12
67 LaSalle 383,088 12
68 MGT 560,000 12
69 MGT 819,257 12
70 MGT 430,326 12
71 MGT 434,401 12
72 MGT 543,006 12
73 MGT
74 MGT
75 MGT
76 LaSalle
77 MGT
78 LaSalle
79 MGT 6/30/04 805,256 12
80 MGT 418,749 12
80.1 MGT 282,727 12
80.2 MGT 136,022 12
81 MGT 552,455 12
82 MGT 571,451 12
83 LaSalle 345,851 12
84 MGT 6/30/14 467,475 12
85 MGT 386,606 12
86 LaSalle 335,347 12
87 MGT 137,461 12
88 MGT
89 MGT 284,974 12
90 MGT 369,464 12
91 MGT 1,190,894 12
92 MGT
93 MGT 304,138 12
93.1 MGT 154,463 12
93.2 MGT 149,675 12
94 MGT 468,311 12
95 MGT
96 MGT
97 MGT 5/31/05 427,645 12
98 MGT 326,696 12
99 MGT 256,313 12
100 MGT 256,931 12
101 MGT 5/31/05 496,818 12
102 MGT
103 MGT
104 MGT 227,693 12
105 MGT 138,272 12
106 MGT 5/31/05 496,420 12
107 MGT 255,596 12
108 LaSalle 191,012 12
109 MGT 276,869 12
110 MGT
111 MGT 238,350 12
112 MGT 200,466 12
113 MGT 5/31/19
114 LaSalle
115 MGT 152,390 12
116 MGT 252,242 12
117 MGT 5/31/05 379,545 12
118 MGT 247,991 12
119 MGT
120 MGT 221,015 12
121 MGT 204,916 12
122 MGT 171,270 12
123 MGT 214,103 12
124 MGT 186,656 12
124.1 MGT 112,031 12
124.2 MGT 74,625 12
125 MGT
126 MGT 5/31/05 317,350 12
127 MGT 316,551 12
128 MGT 161,738 12
129 MGT
130 MGT 148,649 12
131 LaSalle 147,353 12
132 MGT 69,551 12
133 MGT
134 MGT 5/31/05 222,433 12
135 MGT
136 MGT
137 MGT 5/31/05 199,460 12
138 MGT
139 MGT 122,398 12
140 MGT
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Loan Number Seller NOI 98($)(2) Months 98 NOI 99($)(2) NOI 99 Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 MGT 6,388,702 12 7,694,928 10/31/99
2 LaSalle 2,252,472 12 2,946,799 8/31/99
3 MGT 3,013,767 12 2,978,312 6/30/99
3.1 MGT 1,513,021 12 1,627,125 6/30/99
3.2 MGT 862,539 12 737,940 6/30/99
3.3 MGT 638,207 12 613,247 6/30/99
4 LaSalle 2,420,455 12 2,279,802 7/31/99
5 MGT 2,494,927 12 2,608,264 8/31/99
6 MGT 2,785,258 Various 3,175,544 6/30/99
6.1 MGT 1,068,184 11 1,179,346 6/30/99
6.2 MGT 651,117 12 716,816 6/30/99
6.3 MGT 480,753 11 673,372 6/30/99
6.4 MGT 200,059 11 210,606 6/30/99
6.5 MGT 269,375 12 255,596 6/30/99
6.6 MGT 115,770 10 139,808 6/30/99
7 MGT 2,254,848 12 2,413,022 9/30/99
8 MGT 2,602,438 12 2,845,286 6/30/99
8.1 MGT 872,205 12 986,454 6/30/99
8.2 MGT 662,413 12 708,756 6/30/99
8.3 MGT 452,020 12 452,752 6/30/99
8.4 MGT 313,932 12 367,784 6/30/99
8.5 MGT 301,868 12 329,540 6/30/99
9 MGT 1,969,620 12
10 MGT 1,525,746 12 1,878,438 8/31/99
11 MGT 1,527,162 12 1,805,393 3/31/99
11.1 MGT 769,217 12 890,422 3/31/99
11.2 MGT 439,852 12 556,116 3/31/99
11.3 MGT 211,564 12 240,726 3/31/99
11.4 MGT 106,529 12 118,129 3/31/99
12 LaSalle 1,541,221 12 1,550,031 2/28/99
13 MGT 3,140,119 12 3,666,691 5/31/99
14 MGT 1,730,387 12 1,666,789 7/31/99
15 MGT 2,292,648 12 2,274,665 4/30/99
15.1 MGT 646,800 12 648,341 4/30/99
15.2 MGT 839,649 12 813,971 4/30/99
15.3 MGT 467,370 12 452,706 4/30/99
15.4 MGT 338,829 12 359,647 4/30/99
16 MGT 1,640,915 12 1,628,162 6/30/99
17 MGT
18 MGT 1,499,985 12 1,511,248 3/31/99
19 MGT 373,726 12 1,642,042 8/31/99
20 MGT 2,061,228 12 2,032,935 4/30/99
21 LaSalle
22 MGT 2,179,394 12 1,894,632 3/31/99
23 MGT 775,718 12 1,798,806 6/30/99
24 MGT 512,806 12 500,422 7/31/99
25 MGT
26 MGT 450,716 12 726,536 6/30/99
27 MGT 1,222,806 12 1,512,804 3/31/99
28 MGT 983,968 12 825,206 5/31/99
29 MGT 706,213 12 1,358,066 9/30/99
29.1 MGT 192,564 12 379,471 9/30/99
29.2 MGT 232,982 12 318,180 9/30/99
29.3 MGT 158,812 12 319,327 9/30/99
29.4 MGT 121,855 12 341,088 9/30/99
30 MGT 1,010,469 12 1,099,921 6/30/99
31 MGT 900,938 12 1,367,346 6/30/99
32 MGT 824,683 12 931,787 8/31/99
33 MGT 962,593 12 1,091,964 6/30/99
33.1 MGT 583,888 12 697,034 6/30/99
33.2 MGT 378,705 12 394,930 6/30/99
34 LaSalle 1,371,728 12 1,438,098 6/30/99
35 LaSalle 552,229 12 576,143 7/31/99
36 MGT 207,976 12 308,778 6/30/99
37 MGT 740,831 12 805,700 7/31/99
38 MGT 754,441 11 862,396 6/30/99
39 MGT 656,686 12 723,175 8/31/99
40 MGT 1,205,156 12 1,213,513 5/31/99
41 MGT 703,758 12 729,741 6/30/99
42 MGT 778,765 7/31/99
43 MGT 817,548 12 822,946 6/30/99
44 MGT 891,944 12 924,027 3/31/99
45 MGT 636,079 12 588,851 9/30/99
46 MGT 1,208,717 12 1,652,003 5/31/99
47 MGT 542,171 12 572,054 5/31/99
48 MGT
49 MGT 636,684 12 757,888 6/30/99
50 MGT 457,546 12 423,403 9/30/99
51 MGT 584,978 12 610,929 9/30/99
52 MGT 544,494 12 549,179 7/31/99
53 MGT 851,715 12 886,576 7/31/99
54 MGT 784,236 12 919,361 7/31/99
55 MGT 520,425 12 566,215 6/30/99
56 MGT 836,762 12 677,349 7/31/99
57 MGT
58 MGT 692,135 12 414,619 5/31/99
59 LaSalle 551,989 12 559,406 10/25/99
60 LaSalle
61 MGT
62 MGT 1,293,793 12 527,053 9/30/99
63 MGT
64 MGT 921,440 12 1,915,664 7/31/99
65 MGT 622,829 12 635,291 6/30/99
66 LaSalle (158,270) 12
67 LaSalle 383,022 12
68 MGT 560,000 12 560,000 5/31/99
69 MGT 893,817 12 882,406 5/31/99
70 MGT 537,280 12 546,865 8/31/99
71 MGT 537,188 12 575,955 8/31/99
72 MGT 560,347 12 492,814 3/31/99
73 MGT
74 MGT
75 MGT 396,591 12 480,210 9/30/99
76 LaSalle 30,404 12 74,287 7/31/99
77 MGT 924,646 12
78 LaSalle 96,652 7/31/99
79 MGT 1,157,555 12 1,364,182 9/30/99
80 MGT 454,818 12 485,960 8/31/99
80.1 MGT 301,656 12 308,074 8/31/99
80.2 MGT 153,162 12 177,886 8/31/99
81 MGT 537,398 12 575,262 7/31/99
82 MGT 678,602 12 675,718 3/31/99
83 LaSalle 390,687 12 408,347 8/31/99
84 MGT 466,954 12 491,722 6/30/99
85 MGT 397,275 12 444,452 9/30/99
86 LaSalle 306,054 12 347,163 7/31/99
87 MGT 184,432 12 352,288 6/30/99
88 MGT 54,860 12 383,143 8/31/99
89 MGT 311,575 12 322,214 6/30/99
90 MGT 418,451 12 415,306 7/31/99
91 MGT 1,275,404 12 1,013,860 3/31/99
92 MGT 428,847 11 422,397 6/30/99
93 MGT 321,526 12 309,035 5/31/99
93.1 MGT 171,143 12 163,590 5/31/99
93.2 MGT 150,383 12 145,445 5/31/99
94 MGT 607,991 12 623,453 9/30/99
95 MGT 319,314 9 421,790 7/31/99
96 MGT 390,120 12 580,882 6/30/99
97 MGT 508,982 12 603,555 9/30/99
98 MGT 316,620 12 390,011 7/31/99
99 MGT 398,387 12 401,132 6/30/99
100 MGT 279,121 12 303,219 8/31/99
101 MGT 513,092 12 614,723 9/30/99
102 MGT 108,262 12 103,330 4/30/99
103 MGT
104 MGT 244,295 12 213,992 7/31/99
105 MGT 183,513 12 244,933 6/30/99
106 MGT 481,656 12 613,702 9/30/99
107 MGT 203,054 12 327,717 8/31/99
108 LaSalle 191,269 12 256,465 10/31/99
109 MGT 286,607 12 270,599 4/30/99
110 MGT 243,667 5/31/99
111 MGT 151,423 12 212,633 6/30/99
112 MGT 220,812 12 224,932 6/30/99
113 MGT
114 LaSalle 176,073 8/31/99
115 MGT 183,816 12 192,999 7/31/99
116 MGT 267,496 9 309,744 6/30/99
117 MGT 482,803 12 491,108 9/30/99
118 MGT 245,297 12 303,487 3/31/99
119 MGT
120 MGT 228,039 12 229,146 6/30/99
121 MGT 222,089 12 230,705 7/31/99
122 MGT 188,373 12 186,159 6/30/99
123 MGT 201,293 12 226,312 5/31/99
124 MGT 259,890 12 265,086 6/30/99
124.1 MGT 150,782 12 158,838 6/30/99
124.2 MGT 109,108 12 106,248 6/30/99
125 MGT 190,808 5/31/99
126 MGT 385,416 12 518,758 9/30/99
127 MGT 304,503 12 278,012 5/30/99
128 MGT 167,828 12 184,901 7/31/99
129 MGT 170,948 5/31/99
130 MGT 153,889 12 174,589 8/31/99
131 LaSalle 113,522 10 222,515 7/31/99
132 MGT 131,423 12 170,676 5/31/99
133 MGT
134 MGT 252,809 12 309,179 9/30/99
135 MGT 204,118 12 196,867 6/30/99
136 MGT 148,867 5/31/99
137 MGT 250,327 12 381,696 9/30/99
138 MGT 117,070 7/31/99
139 MGT 116,099 12 135,128 7/31/99
140 MGT 207,480 12 247,366 6/30/99
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Basis for UW DSCR
Loan Number Seller NOI 99(15) UW NOI($)(2) UW Cash Flow($)(2) (x)(16)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 MGT Trailing 12 6,925,857 5,902,107 1.425
2 LaSalle Trailing 12 3,162,063 2,978,957 1.305
3 MGT 6 Months Ann 3,003,080 2,610,321 1.275
3.1 MGT 6 Months Ann 1,576,415 1,385,833
3.2 MGT 6 Months Ann 828,795 722,695
3.3 MGT 6 Months Ann 597,870 501,793
4 LaSalle Trailing 12 2,577,314 2,472,814 1.207
5 MGT Trailing 12 3,022,607 2,819,296 1.381
6 MGT 6 Months Ann 2,960,334 2,634,865 1.736
6.1 MGT 6 Months Ann 1,016,334 926,741
6.2 MGT 6 Months Ann 718,742 634,203
6.3 MGT 6 Months Ann 637,143 551,136
6.4 MGT 6 Months Ann 170,102 141,602
6.5 MGT 6 Months Ann 274,372 254,984
6.6 MGT 6 Months Ann 143,641 126,199
7 MGT 9 Months Ann 2,517,169 2,100,691 1.275
8 MGT 6 Months Ann 2,856,194 2,409,781 1.822
8.1 MGT 6 Months Ann 999,471 796,625
8.2 MGT 6 Months Ann 792,830 737,800
8.3 MGT 6 Months Ann 389,948 313,389
8.4 MGT 6 Months Ann 341,330 259,916
8.5 MGT 6 Months Ann 332,615 302,051
9 MGT 1,934,515 1,839,378 1.254
10 MGT 8 Months Ann 1,793,251 1,673,925 1.224
11 MGT 3 Months Ann 1,707,615 1,551,050 1.247
11.1 MGT 3 Months Ann 801,099 713,561
11.2 MGT 3 Months Ann 535,080 491,258
11.3 MGT 3 Months Ann 247,679 231,274
11.4 MGT 3 Months Ann 123,757 114,957
12 LaSalle Trailing 12 1,530,551 1,483,501 1.201
13 MGT Trailing 12 2,674,294 2,587,294 1.750
14 MGT Trailing 12 1,686,407 1,654,157 1.335
15 MGT Trailing 12 2,079,751 1,824,895 1.499
15.1 MGT Trailing 12 631,434 550,195
15.2 MGT Trailing 12 678,391 601,806
15.3 MGT Trailing 12 457,110 404,085
15.4 MGT Trailing 12 312,816 268,809
16 MGT 6 Months Ann 1,744,686 1,587,705 1.300
17 MGT 1,528,270 1,413,498 1.250
18 MGT Trailing 12 1,381,514 1,282,829 1.246
19 MGT Trailing 12 1,784,764 1,421,329 1.305
20 MGT Trailing 12 1,877,664 1,681,614 1.407
21 LaSalle 1,384,363 1,253,331 1.302
22 MGT 3 Months Ann 1,688,108 1,545,473 1.476
23 MGT 6 Months Ann 1,693,004 1,368,196 1.353
24 MGT Trailing 12 1,310,385 1,210,287 1.302
25 MGT 1,216,582 1,145,566 1.302
26 MGT 6 Months Ann 1,069,790 1,024,790 1.260
27 MGT 3 Months Ann 1,377,939 1,279,953 1.425
28 MGT 5 Months Ann 1,119,567 995,612 1.258
29 MGT 4 Months Ann 1,234,388 1,019,577 1.290
29.1 MGT 4 Months Ann 387,431 328,925
29.2 MGT 4 Months Ann 324,774 276,204
29.3 MGT 4 Months Ann 283,861 225,000
29.4 MGT 4 Months Ann 238,322 189,448
30 MGT 6 Months Ann 1,255,830 1,122,144 1.368
31 MGT 6 Months Ann 1,249,420 1,249,420 1.504
32 MGT 8 Months Ann 931,535 872,139 1.202
33 MGT Trailing 12 1,018,151 914,710 1.262
33.1 MGT Trailing 12 706,295 609,953
33.2 MGT Trailing 12 311,856 304,757
34 LaSalle Trailing 12 1,371,577 1,321,577 2.311
35 LaSalle 7 Months Ann 828,492 745,892 1.359
36 MGT 6 Months Ann 774,978 727,281 1.250
37 MGT Trailing 12 775,863 679,613 1.295
38 MGT Trailing 12 841,146 752,445 1.345
39 MGT Trailing 12 723,415 667,415 1.307
40 MGT 5 Months Ann 1,003,963 898,215 1.610
41 MGT 6 Months Ann 681,905 611,837 1.278
42 MGT 4 Months Ann 676,966 628,030 1.343
43 MGT Trailing 12 760,174 647,588 1.299
44 MGT Trailing 12 777,608 765,972 1.399
45 MGT 9 Months Ann 638,897 585,846 1.302
46 MGT Trailing 12 770,279 705,222 1.445
47 MGT Trailing 12 679,769 599,997 1.301
48 MGT 669,085 617,481 1.297
49 MGT 6 Months Ann 690,061 637,971 1.506
50 MGT 9 Months Ann 608,001 551,243 1.248
51 MGT 9 Months Ann 612,761 558,351 1.267
52 MGT Trailing 12 553,660 504,660 1.247
53 MGT Trailing 12 824,587 744,568 1.494
54 MGT Trailing 12 793,564 709,825 1.405
55 MGT Trailing 12 606,572 518,256 1.250
56 MGT 7 Months Ann 662,469 560,881 1.355
57 MGT 505,240 489,240 1.348
58 MGT 5 Months Ann 676,952 593,463 1.416
59 LaSalle 10 Months Ann 520,385 506,958 1.229
60 LaSalle 576,436 497,012 1.270
61 MGT 635,059 577,362 1.386
62 MGT 9 Months Ann 1,083,972 964,005 2.222
63 MGT 573,556 523,295 1.414
64 MGT Trailing 12 745,805 649,143 1.449
65 MGT 9 Months Ann 538,614 538,614 1.458
66 LaSalle 521,224 509,511 1.424
67 LaSalle 469,465 410,296 1.223
68 MGT 5 Months Ann 554,227 474,737 1.336
69 MGT Trailing 12 725,169 657,250 1.649
70 MGT Trailing 12 472,509 419,548 1.288
71 MGT 8 Months Ann 465,314 418,259 1.237
72 MGT 3 Months Ann 441,180 396,655 1.247
73 MGT 472,458 428,988 1.301
74 MGT 423,524 387,889 1.235
75 MGT 9 Months Ann 441,128 425,378 1.400
76 LaSalle Trailing 12 401,224 380,024 1.240
77 MGT 507,337 459,837 1.405
78 LaSalle 7 Months Ann 391,863 376,120 1.250
79 MGT 9 Months Ann 871,450 640,149 1.961
80 MGT Trailing 12 455,731 411,540 1.386
80.1 MGT Trailing 12 297,027 269,027
80.2 MGT Trailing 12 158,704 142,513
81 MGT Trailing 12 547,019 501,019 1.660
82 MGT Trailing 12 519,642 511,438 1.429
83 LaSalle Trailing 12 411,040 374,540 1.259
84 MGT 6 Months Ann 497,926 455,326 1.267
85 MGT Trailing 12 386,002 353,095 1.286
86 LaSalle Trailing 12 346,977 325,977 1.201
87 MGT 6 Months Ann 434,951 390,681 1.304
88 MGT Trailing 12 383,474 353,831 1.305
89 MGT Trailing 12 334,670 308,970 1.258
90 MGT Trailing 12 349,145 326,369 1.247
91 MGT 3 Months Ann 511,033 373,298 1.463
92 MGT Trailing 12 390,715 339,165 1.375
93 MGT 5 Months Ann 314,263 280,863 1.257
93.1 MGT 5 Months Ann 176,314 160,314
93.2 MGT 5 Months Ann 137,949 120,549
94 MGT Trailing 12 478,604 424,678 1.594
95 MGT Trailing 12 380,234 322,561 1.163
96 MGT 6 Months Ann 361,107 314,657 1.493
97 MGT 9 Months Ann 481,494 432,763 1.801
98 MGT 7 Months Ann 323,803 265,234 1.313
99 MGT 6 Months Ann 291,175 265,611 1.336
100 MGT Trailing 12 258,530 230,950 1.242
101 MGT 9 Months Ann 474,626 420,763 2.048
102 MGT Trailing 12 221,892 209,892 1.215
103 MGT 268,993 236,632 1.263
104 MGT Trailing 12 255,421 233,229 1.296
105 MGT 8.5 Months Ann 246,517 217,467 1.291
106 MGT 9 Months Ann 419,623 369,513 1.902
107 MGT Trailing 12 257,902 207,902 1.281
108 LaSalle Trailing 12 225,082 209,244 1.240
109 MGT 4 Months Ann 255,706 219,880 1.274
110 MGT 5 Months Ann 222,578 207,535 1.299
111 MGT 6 Months Ann 250,762 227,184 1.315
112 MGT Trailing 12 231,999 206,999 1.321
113 MGT 256,900 235,370 1.305
114 LaSalle 8 Months Ann 221,336 210,779 1.351
115 MGT Trailing 12 187,324 183,074 1.249
116 MGT 11 Months Ann 215,310 189,810 1.314
117 MGT 9 Months Ann 423,673 379,601 2.303
118 MGT 3 Months Ann 215,603 210,653 1.473
119 MGT 178,992 177,110 1.074
120 MGT Trailing 12 215,927 190,694 1.295
121 MGT 7 Months Ann 214,744 184,155 1.298
122 MGT Trailing 12 179,242 174,492 1.276
123 MGT 5 Months Ann 186,372 168,435 1.328
124 MGT 6 Months Ann 216,885 196,143 1.358
124.1 MGT 6 Months Ann 120,737 110,485
124.2 MGT 6 Months Ann 96,148 85,658
125 MGT 5 Months Ann 171,779 163,497 1.304
126 MGT 9 Months Ann 313,210 257,265 1.810
127 MGT Trailing 12 253,431 219,802 1.556
128 MGT Trailing 12 160,768 149,068 1.377
129 MGT Trailing 12 155,373 147,089 1.299
130 MGT Trailing 12 152,799 140,425 1.240
131 LaSalle 7 Months Ann 149,037 132,461 1.373
132 MGT Trailing 12 151,996 128,740 1.258
133 MGT 143,107 131,632 1.310
134 MGT 9 Months Ann 230,156 195,959 1.703
135 MGT Trailing 12 149,509 133,453 1.354
136 MGT Trailing 12 131,476 121,235 1.305
137 MGT 9 Months Ann 214,237 178,026 1.753
138 MGT Trailing 12 110,134 106,054 1.400
139 MGT 7 Months Ann 120,703 104,748 1.311
140 MGT 6 Months Ann 140,142 119,654 1.703
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Upfront Deposits($)(2)
---------------------------------------------------------------------------------------------
Loan Number Seller Repairs & Remediation TI/LC Environmental Other
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 MGT 850,000 750,000
2 LaSalle
3 MGT 450
3.1 MGT
3.2 MGT
3.3 MGT
4 LaSalle
5 MGT 339,375 239,000
6 MGT 58,144
6.1 MGT
6.2 MGT
6.3 MGT
6.4 MGT
6.5 MGT
6.6 MGT
7 MGT 127,375 15,000
8 MGT 61,918
8.1 MGT
8.2 MGT
8.3 MGT
8.4 MGT
8.5 MGT
9 MGT 102,000
10 MGT 353,300
11 MGT 9,863
11.1 MGT
11.2 MGT
11.3 MGT
11.4 MGT
12 LaSalle
13 MGT
14 MGT 6,000
15 MGT 152,647
15.1 MGT
15.2 MGT
15.3 MGT
15.4 MGT
16 MGT 1,400,000
17 MGT
18 MGT 10,840 300,000
19 MGT 21,750 126,000
20 MGT 10,125
21 LaSalle 15,625
22 MGT 3,125 66,667
23 MGT 155,238 37,500 375,000
24 MGT 215,400
25 MGT 1,000
26 MGT 1,250,000
27 MGT 66,667
28 MGT
29 MGT 620,900 150,000
29.1 MGT
29.2 MGT
29.3 MGT
29.4 MGT
30 MGT 22,750 4,583 400,000
31 MGT
32 MGT 6,250
33 MGT
33.1 MGT
33.2 MGT
34 LaSalle 3,875
35 LaSalle
36 MGT 106,735
37 MGT 38,750
38 MGT
39 MGT 114,396
40 MGT
41 MGT 522,684
42 MGT 233,738
43 MGT
44 MGT 5,820 30,000
45 MGT 1,875
46 MGT 40,658
47 MGT
48 MGT 22,260
49 MGT 47,231
50 MGT
51 MGT 4,875 250,000
52 MGT 52,750
53 MGT 6,250
54 MGT
55 MGT
56 MGT 128,625
57 MGT
58 MGT 6,281
59 LaSalle 7,500
60 LaSalle 4,500 200,000
61 MGT
62 MGT 36,542
63 MGT
64 MGT 127,500
65 MGT
66 LaSalle
67 LaSalle
68 MGT 8,125
69 MGT
70 MGT 48,438
71 MGT
72 MGT 1,831
73 MGT
74 MGT
75 MGT 11,813
76 LaSalle 41,375
77 MGT 5,625 163,615
78 LaSalle
79 MGT 605,976 1,356
80 MGT 21,000
80.1 MGT
80.2 MGT
81 MGT
82 MGT 2,904 30,000
83 LaSalle 8,438
84 MGT 27,900 5,000
85 MGT
86 LaSalle 27,913
87 MGT 6,563 14,000
88 MGT
89 MGT
90 MGT 50,000 1,000
91 MGT 64,875 66,667
92 MGT
93 MGT 1,615
93.1 MGT
93.2 MGT
94 MGT
95 MGT
96 MGT 4,375
97 MGT 34,513
98 MGT 1,625
99 MGT 25,000
100 MGT
101 MGT 45,339
102 MGT
103 MGT
104 MGT 100,000
105 MGT
106 MGT 32,373
107 MGT 82,375
108 LaSalle
109 MGT 2,500
110 MGT
111 MGT 1,000 14,560
112 MGT
113 MGT 6,250
114 LaSalle 35,000
115 MGT 60,000
116 MGT
117 MGT 23,601
118 MGT
119 MGT
120 MGT 12,500 25,000
121 MGT 1,800
122 MGT
123 MGT 1,650
124 MGT 12,500 10,000
124.1 MGT
124.2 MGT
125 MGT
126 MGT 155,932
127 MGT
128 MGT
129 MGT
130 MGT 67,875
131 LaSalle
132 MGT 240,000
133 MGT
134 MGT 22,966
135 MGT 5,000
136 MGT 1,750
137 MGT 39,820
138 MGT
139 MGT 2,062
140 MGT 3,125 615
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Upfront Deposits($)(2) Monthly Escrows(2)
---------------------- ----------------------------------------
Loan Number Seller Total Capital Expenses($) TI/LC($)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 MGT 1,600,000 6,962 76,236
2 LaSalle 1,584 11,085
3 MGT 450 5,591 27,196
3.1 MGT
3.2 MGT
3.3 MGT
4 LaSalle 9,729
5 MGT 578,375 2,491 6,227
6 MGT 58,144 4,689
6.1 MGT
6.2 MGT
6.3 MGT
6.4 MGT
6.5 MGT
6.6 MGT
7 MGT 142,375 5,296 13,500
8 MGT 61,918 5,144
8.1 MGT
8.2 MGT
8.3 MGT
8.4 MGT
8.5 MGT
9 MGT 102,000 1,083
10 MGT 353,300 9,944
11 MGT 9,863 13,071
11.1 MGT
11.2 MGT
11.3 MGT
11.4 MGT
12 LaSalle
13 MGT 7,250
14 MGT 6,000 3,207
15 MGT 152,647 18,368
15.1 MGT
15.2 MGT
15.3 MGT
15.4 MGT
16 MGT 1,400,000
17 MGT 924 4,167
18 MGT 310,840 1,698 6,526
19 MGT 147,750 26,000
20 MGT 10,125 3,546
21 LaSalle 15,625 5,290
22 MGT 69,792 2,927
23 MGT 567,737 5,935 8,333
24 MGT 215,400 1,339 8,333
25 MGT 1,000 349 4,667
26 MGT 1,250,000 3,750
27 MGT 66,667 2,080
28 MGT 153 3,900
29 MGT 770,900 2,323
29.1 MGT
29.2 MGT
29.3 MGT
29.4 MGT
30 MGT 427,333 1,074 4,583
31 MGT 1,550
32 MGT 6,250 4,950
33 MGT 2,241 3,333
33.1 MGT
33.2 MGT
34 LaSalle 3,875
35 LaSalle
36 MGT 106,735 185
37 MGT 38,750 7,974
38 MGT 1,975
39 MGT 114,396 3,806
40 MGT 8,812
41 MGT 522,684 5,839
42 MGT 233,738 485 3,733
43 MGT
44 MGT 35,820
45 MGT 1,875 1,208 2,685
46 MGT 40,658
47 MGT 2,052
48 MGT 22,260 1,095 3,407
49 MGT 47,231 733
50 MGT 995 3,678
51 MGT 254,875 1,000
52 MGT 52,750 4,083
53 MGT 6,250 6,622
54 MGT 6,978
55 MGT 1,000 5,600
56 MGT 128,625 2,231 4,000
57 MGT 533
58 MGT 6,281 1,207 5,500
59 LaSalle 7,500 649 1,084
60 LaSalle 204,500 1,950
61 MGT 1,683 3,125
62 MGT 36,542 8,153
63 MGT 216 3,417
64 MGT 127,500 8,055
65 MGT 946
66 LaSalle 761 1,015
67 LaSalle 965 2,193
68 MGT 8,125 2,244 2,917
69 MGT 5,660
70 MGT 48,438 1,372 2,903
71 MGT 794 3,127
72 MGT 1,831
73 MGT 747 1,083
74 MGT 139 1,079
75 MGT 11,813 1,313
76 LaSalle 41,375 1,325
77 MGT 169,240 3,960
78 LaSalle 228
79 MGT 607,332 19,275
80 MGT 21,000 3,406
80.1 MGT
80.2 MGT
81 MGT 2,847
82 MGT 32,904
83 LaSalle 8,438 2,433
84 MGT 32,900 3,850
85 MGT 2,742
86 LaSalle 27,913 2,188
87 MGT 20,563 447
88 MGT 569
89 MGT 2,142
90 MGT 51,000 1,898
91 MGT 131,542 3,666
92 MGT 625
93 MGT 1,615 2,106
93.1 MGT
93.2 MGT
94 MGT 4,000
95 MGT 800 4,006
96 MGT 4,375 3,871
97 MGT 34,513 4,061
98 MGT 1,625 1,167 1,250
99 MGT 25,000 411 1,500
100 MGT 1,915
101 MGT 45,339 3,763
102 MGT 600
103 MGT 346 917
104 MGT 100,000 363 1,450
105 MGT 514 1,907
106 MGT 32,373 4,176
107 MGT 82,375
108 LaSalle 866 1,320
109 MGT 2,500 2,986
110 MGT 73 2,688
111 MGT 15,560 548 1,428
112 MGT 583 1,555
113 MGT 6,250 381 708
114 LaSalle 35,000 156
115 MGT 60,000 121
116 MGT 2,125
117 MGT 23,601 3,673
118 MGT 250
119 MGT 196
120 MGT 37,500 2,103
121 MGT 1,800 504
122 MGT 146
123 MGT 1,650 1,880
124 MGT 22,500 728
124.1 MGT
124.2 MGT
125 MGT 58
126 MGT 155,932 4,662
127 MGT 2,800
128 MGT 782
129 MGT 20
130 MGT 67,875 1,031
131 LaSalle 1,381
132 MGT 240,000 1,938
133 MGT 59
134 MGT 22,966 2,849
135 MGT 5,000 240
136 MGT 1,750 38
137 MGT 39,820 3,018
138 MGT 340
139 MGT 2,062 391 795
140 MGT 3,740 1,707
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Monthly Escrows(2)
------------------------------------------------------------------------------------------
Loan Number Seller Environmental($) Other($) Tax(17) Insurance(17)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 MGT 1/12 1/12
2 LaSalle 1/12
3 MGT 1/12 1/12
3.1 MGT
3.2 MGT
3.3 MGT
4 LaSalle 2,264 1/12 1/12
5 MGT 1/12 1/12
6 MGT 1/12
6.1 MGT
6.2 MGT
6.3 MGT
6.4 MGT
6.5 MGT
6.6 MGT
7 MGT 1/12 1/12
8 MGT 1/12
8.1 MGT
8.2 MGT
8.3 MGT
8.4 MGT
8.5 MGT
9 MGT 1/12 1/12
10 MGT 1/12 1/12
11 MGT 1/12 1/12
11.1 MGT
11.2 MGT
11.3 MGT
11.4 MGT
12 LaSalle 1/12 1/12
13 MGT 1/12 1/12
14 MGT 1/12 1/12
15 MGT 1/12 1/12
15.1 MGT
15.2 MGT
15.3 MGT
15.4 MGT
16 MGT 1/12 1/12
17 MGT 1/12 1/12
18 MGT 1/12 1/12
19 MGT 1/12 1/12
20 MGT 1/12 1/12
21 LaSalle
22 MGT 1/12 1/12
23 MGT 1/12 1/12
24 MGT 1/12 1/12
25 MGT 1/12 1/12
26 MGT 1/12 1/12
27 MGT 1/12 1/12
28 MGT 1/12 1/12
29 MGT 1/12 1/12
29.1 MGT
29.2 MGT
29.3 MGT
29.4 MGT
30 MGT 1/12 1/12
31 MGT 1/12 1/12
32 MGT 1/12 1/12
33 MGT 1/12 1/12
33.1 MGT
33.2 MGT
34 LaSalle 1/12
35 LaSalle 1/12 1/12
36 MGT 1/12 1/12
37 MGT 1/12 1/12
38 MGT 1/12 1/12
39 MGT 1/12 1/12
40 MGT 1/12 1/12
41 MGT 1/12 1/12
42 MGT 1/12 1/12
43 MGT 1/12 1/12
44 MGT 1/12 1/12
45 MGT 1/12 1/12
46 MGT 1/12 1/12
47 MGT 1/12 1/12
48 MGT 1/12 1/12
49 MGT 1/12 1/12
50 MGT 1/12 1/12
51 MGT 1/12 1/12
52 MGT 1/12 1/12
53 MGT 1/12 1/12
54 MGT 1/12 1/12
55 MGT 1/12 1/12
56 MGT 1/12 1/12
57 MGT 1/12 1/12
58 MGT 1/12 1/12
59 LaSalle
60 LaSalle 1/12 1/12
61 MGT 1/12 1/12
62 MGT 1/12 1/12
63 MGT 1/12 1/12
64 MGT 1/12 1/12
65 MGT 1/12 1/12
66 LaSalle 1/12 1/12
67 LaSalle 1/12 1/12
68 MGT 1/12 1/12
69 MGT 1/12 1/12
70 MGT 1/12 1/12
71 MGT 1/12 1/12
72 MGT 1/12 1/12
73 MGT 1/12 1/12
74 MGT 1/12 1/12
75 MGT 1/12 1/12
76 LaSalle 1/12 1/12
77 MGT 1/12 1/12
78 LaSalle
79 MGT 1/12
80 MGT 1/12 1/12
80.1 MGT
80.2 MGT
81 MGT 1/12 1/12
82 MGT 1/12 1/12
83 LaSalle 1/12 1/12
84 MGT 1/12 1/12
85 MGT 1/12 1/12
86 LaSalle 1/12 1/12
87 MGT 1/12 1/12
88 MGT 1/12 1/12
89 MGT 1/12 1/12
90 MGT 350 1/12 1/12
91 MGT 1/12 1/12
92 MGT 1/12 1/12
93 MGT 1/12 1/12
93.1 MGT
93.2 MGT
94 MGT 1/12 1/12
95 MGT 1/12 1/12
96 MGT 1/12 1/12
97 MGT 1/12 1/12
98 MGT 1/12 1/12
99 MGT 1/12 1/12
100 MGT 1/12 1/12
101 MGT 1/12 1/12
102 MGT 1/12 1/12
103 MGT 1/12 1/12
104 MGT 1/12 1/12
105 MGT 1/12 1/12
106 MGT 1/12 1/12
107 MGT 1/12 1/12
108 LaSalle 1/12 1/12
109 MGT 1/12 1/12
110 MGT 1/12 1/12
111 MGT 1/12 1/12
112 MGT 1/12 1/12
113 MGT 1/12 1/12
114 LaSalle 1/12 1/12
115 MGT 1/12 1/12
116 MGT 1/12 1/12
117 MGT 1/12 1/12
118 MGT 1/12 1/12
119 MGT 1/12 1/12
120 MGT 1/12 1/12
121 MGT 1/12 1/12
122 MGT 1/12 1/12
123 MGT 1/12 1/12
124 MGT 1/12 1/12
124.1 MGT
124.2 MGT
125 MGT 1/12 1/12
126 MGT 1/12 1/12
127 MGT 1/12 1/12
128 MGT 1/12 1/12
129 MGT 1/12 1/12
130 MGT 1/12 1/12
131 LaSalle 1/12
132 MGT 1/12 1/12
133 MGT 1/12 1/12
134 MGT 1/12 1/12
135 MGT 1/12 1/12
136 MGT 1/12 1/12
137 MGT 1/12 1/12
138 MGT 1/12 1/12
139 MGT 1/12 1/12
140 MGT 1/12 1/12
</TABLE>
<PAGE>
(1) With respect to Mortgage Loans secured by multiple Mortgaged Properties,
the Occupancy Rate thereof is the weighted average Occupancy Rate for each
Mortgaged Property based on square feet, units or number of units thereof.
(2) For the Canadian Loans (Loan Numbers 62, 72, 79, 97, 101, 106, 117, 126,
134 and 137) all dollar amounts are US$ and based on a conversion rate of
US$1.00 to C$1.4750.
(3) For Mortgage Loans secured by multiple Mortgaged Properties, the Mortgage
Loan's principal balance is allocated to the respective Mortgaged
Properties. The Mortgage Loan's principal balance is allocated to the
respective Mortgaged Properties based on: 1) the terms of the Mortgage
Loan, 2) the Appraised Values of the Mortgaged Properties or 3) the square
footage, units or number of units of the Mortgaged Properties.
(4) Each number identifies one of seven groups of Crossed Loans.
(5) Each letter identifies one of twelve groups of related Mortgagors.
(6) For the Canadian Loans, the Current Mortgage Interest Rate is the rate
calculated based on the interest payments set forth in the related F/X
Schedule in Annex D.
(7) For each Mortgage Loan, the excess of the related Mortgage Interest Rate
over the related Master Servicing Fee Rate and the Trustee Fee Rate.
(8) "ACT/360" means interest accrues on the basis of the actual number of days
elapsed and a 360-day year.
(9) For Loan Numbers 1, 6 and 8, calculated as the aggregate of the 12 Monthly
Payments beginning on February 1, 2000 and ending on January 1, 2001; for
all other Mortgage Loans, calculated as 12 times the Monthly Payment in
effect as of the Cut-off Date.
(10) One ARD Loan (Loan Number 1) is an interest-only Mortgage Loan until
November 1, 2000. On such date and thereafter, payments of interest and
principal equal to $365,666.56 will be required. The Remaining Term and the
Remaining Amortization Term do not include the interest only period. For
all other Mortgage Loans, the Remaining Term and the Remaining Amortization
Term are equal to the original term and the original amortization term,
respectively, less the number of scheduled payments through the Cut-off
Date.
(11) "1" refers to an interest-only Mortgage Loan.
(12) For ARD Loans, the related Anticipated Repayment Date.
(13) For ARD Loans, calculated as of the related Anticipated Repayment Date.
(14) Certain of the Mortgage Loans allow for Defeasance no earlier than the
second anniversary of the Delivery Date.
(15) "Trailing 12" indicates NOI 99 is based on NOI for the twelve months
preceding the NOI 99 Date. "Months Ann" indicates NOI has been annualized
based on NOI for the number of months specified preceding the NOI 99 Date.
(16) Calculated as the ratio of UW Cash Flow to the Annual Debt Service.
(17) 1/12 refers to 1/12th of the annual amount.
<PAGE>
ANNEX B
<TABLE>
<CAPTION>
Loan Number Property Name City State Zip Code Detailed Property Type
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
4 Circle Park Apartments Chicago IL 60607 Multifamily
10 Pirate's Cove Apartments Las Vegas NV 89128 Multifamily
11.1 Hunter's Ridge Apartments Toledo OH 43609 Multifamily
11.2 Miracle Manor Toledo OH 43613 Multifamily
11.3 Toledo Arms Apartments Toledo ARMS OH 43623 Multifamily
11.4 Adrian Manor Adrian MI 49221 Multifamily
12 Buttonwood Bay MHC Sebring FL 33870 Manufactured Housing Community
13 Salisbury Center Salisbury MD 21801 Nursing Home
20 Twelve Oaks at Northbrook Northbrook IL 60062 Multifamily
26 Park Terrace Apartments(4) Tampa FL 33617 Multifamily
31 Heritage at North Andover North Andover MA 01845 Congregate Care
32 Green Tree Place Apartments Houston TX 77084 Multifamily
33.2 Frontier Village Mobile Home Park Carson City NV 89701 Mobile Home Park
34 Habitat Apartments Boulder CO 80301 Multifamily
35 Timber Creek Apartments Union Township MI 48858 Multifamily
37 Sun Pointe Lake Apartments Tampa FL 33613 Multifamily
39 Westminster Chase I & II Tampa FL 33616 Multifamily
41 Rustic Hills Park Apartments Colorado Springs CO 80909 Multifamily
52 Moutainside Apartments Birmingham AL 35205 Multifamily
57 Embassy Place - Phase II Highland IN 46322 Multifamily
65 Pleasant View Retirement Home Concord NH 03301 Congregate Care
75 Executive Apartments Winthrop MA 02152 Multifamily
76 Highland House Apartments Elgin IL 60123 Multifamily
77 Spanish Apartments Miami FL Various Multifamily
80.1 Brentwood Pointe Apartments Norman OK 73072 Multifamily
80.2 Greentree Apartments Norman OK 73071 Multifamily
81 Tiffany Square Apartments Rocky Mount NC 27804 Multifamily
83 Pineridge Apartments Walker MI 49504 Multifamily
84 Parthenon Apartments Athens GA 30605 Multifamily
85 Park Place Apartments Hurst TX 76053 Multifamily
86 Prospect Heights Apartments Milwaukee WI 53202 Multifamily
89 Oakmont Apartments Batesville IN 47006 Multifamily
90 Arbor Court Apartments Wheeling IL 60090 Multifamily
93.1 Hanover Apartments Newport News VA 23608 Multifamily
93.2 Hoopes Place Apartments Newport News VA 23608 Multifamily
96 Willard Square Hartford CT 06105 Multifamily
100 Pilgrim Mill/Holly Creek Apartments Cumming GA 30040 Multifamily
102 Hyde Park Apartments Greenville NC 27858 Multifamily
107 Wyndham Pointe Apartments Fort Worth TX 75146 Multifamily
109 Medary Court & Stenton House Apartments Philadelphia PA 19141 Multifamily
115 Glenwood Village MHP Warrenton OR 97146 Mobile Home Park
116 Turtle Creek Apartments Sherman TX 75092 Multifamily
118 Santa Fe Mobile Home Park El Monte CA 91731 Mobile Home Park
120 La Habra Apartments La Habra CA 90631 Multifamily
122 Brookside Apartments Rye NY 10580 Multifamily
123 Westmount Place Condominiums Dallas TX 75208 Multifamily
128 Highland Terrace Apartments Phoenix AZ 85014 Multifamily
130 Meriweather Apartments Hillsboro OR 97123 Multifamily
131 North Park Place Kansas City MO 64118 Multifamily
132 Chateau Crete Apartments Dallas TX 75208 Multifamily
138 7 Meridian Street Apartments Malden MA 02148 Multifamily
140 Willard Towers Hartford CT 06105 Multifamily
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Original Initial
Allocated Pool
Loan Balance Utilities Paid
Loan Number Property Name Balance(2) per Unit by Tenant
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
4 Circle Park Apartments 22,975,000 54,844 Electric
10 Pirate's Cove Apartments 15,800,000 36,890 Electricity
11.1 Hunter's Ridge Apartments 6,608,000 19,044 Electricity
11.2 Miracle Manor 4,730,000 21,537 Electricity
11.3 Toledo Arms Apartments 1,943,000 23,628 Electricity
11.4 Adrian Manor 1,064,000 24,113 Electricity
12 Buttonwood Bay MHC 14,030,000 14,862 Electric, Water
13 Salisbury Center 14,000,000 39,996 None
20 Twelve Oaks at Northbrook 11,400,000 70,732 None
26 Park Terrace Apartments(4) 9,600,000 63,839 Electricity, Phone
31 Heritage at North Andover 8,770,000 90,179 None
32 Green Tree Place Apartments 8,080,000 38,253 Electricity
33.2 Frontier Village Mobile Home Park 2,580,000 18,104 Electricity, Gas
34 Habitat Apartments 7,374,891 36,806 Electric, Gas
35 Timber Creek Apartments 6,600,000 27,800 None
37 Sun Pointe Lake Apartments 6,175,000 17,599 None
39 Westminster Chase I & II 5,700,000 25,419 Electricity, Gas
41 Rustic Hills Park Apartments 5,250,000 20,941 Electricity, Gas
52 Moutainside Apartments 4,700,000 23,922 Electricity
57 Embassy Place - Phase II 4,500,000 70,112 Electricity, Gas
65 Pleasant View Retirement Home 3,900,000 54,027 None
75 Executive Apartments 3,511,000 55,703 None
76 Highland House Apartments 3,500,000 32,943 Electric
77 Spanish Apartments 3,500,000 18,372 None
80.1 Brentwood Pointe Apartments 2,380,000 21,215 Electricity
80.2 Greentree Apartments 1,040,000 20,766 Electricity
81 Tiffany Square Apartments 3,400,000 18,423 Electricity
83 Pineridge Apartments 3,350,000 22,884 Electric
84 Parthenon Apartments 3,500,000 19,940 Electricity
85 Park Place Apartments 3,150,000 26,220 Electricity
86 Prospect Heights Apartments 3,100,000 29,456 Electric
89 Oakmont Apartments 2,825,000 28,217 Electricity
90 Arbor Court Apartments 2,800,000 35,764 Electricity and Gas
93.1 Hanover Apartments 1,400,000 22,186 Electricity, Gas
93.2 Hoopes Place Apartments 1,175,000 19,882 Electricity, Gas
96 Willard Square 2,400,000 19,641 Electricity
100 Pilgrim Mill/Holly Creek Apartments 2,000,000 29,396 Electricity
102 Hyde Park Apartments 2,000,000 41,567 Electricity
107 Wyndham Pointe Apartments 1,875,000 9,359 Electricity
109 Medary Court & Stenton House Apartments 1,864,000 19,720 Electricity
115 Glenwood Village MHP 1,650,000 21,687 Electricity, Gas
116 Turtle Creek Apartments 1,650,000 18,707 Electricity
118 Santa Fe Mobile Home Park 1,600,000 16,095 Electricity
120 La Habra Apartments 1,520,000 14,732 Electricity and Gas
122 Brookside Apartments 1,500,000 78,724 Electricity, Gas
123 Westmount Place Condominiums 1,465,000 21,197 Electricity
128 Highland Terrace Apartments 1,275,000 32,611 Electricity
130 Meriweather Apartments 1,250,000 32,018 Electricity
131 North Park Place 1,150,000 20,368 None
132 Chateau Crete Apartments 1,135,000 12,178 Electricity
138 7 Meridian Street Apartments 875,000 54,661 Electricity
140 Willard Towers 800000 13312 Electricity
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Studios/Beds/Pads (1)
------------------------------------------------------------------------
Avg. Rent
per mo. Min. Rent Max. Rent
Loan Number Property Name # of units ($)(3) per mo.($) per mo.($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
4 Circle Park Apartments
10 Pirate's Cove Apartments
11.1 Hunter's Ridge Apartments 15 250 250 250
11.2 Miracle Manor 10 302 290 320
11.3 Toledo Arms Apartments 5 295 295 295
11.4 Adrian Manor
12 Buttonwood Bay MHC 941 234 205 262
13 Salisbury Center 370 149
20 Twelve Oaks at Northbrook
26 Park Terrace Apartments(4)
31 Heritage at North Andover 97 103
32 Green Tree Place Apartments
33.2 Frontier Village Mobile Home Park 142 280 275 290
34 Habitat Apartments 12 759 600 775
35 Timber Creek Apartments
37 Sun Pointe Lake Apartments
39 Westminster Chase I & II
41 Rustic Hills Park Apartments
52 Moutainside Apartments 2 365
57 Embassy Place - Phase II
65 Pleasant View Retirement Home 72 80
75 Executive Apartments
76 Highland House Apartments 10 473 455 485
77 Spanish Apartments 68 512 497 518
80.1 Brentwood Pointe Apartments
80.2 Greentree Apartments
81 Tiffany Square Apartments
83 Pineridge Apartments 14 340 340 340
84 Parthenon Apartments
85 Park Place Apartments
86 Prospect Heights Apartments
89 Oakmont Apartments
90 Arbor Court Apartments
93.1 Hanover Apartments
93.2 Hoopes Place Apartments
96 Willard Square
100 Pilgrim Mill/Holly Creek Apartments
102 Hyde Park Apartments
107 Wyndham Pointe Apartments
109 Medary Court & Stenton House Apartments 14 381 299 425
115 Glenwood Village MHP 76 252 248 258
116 Turtle Creek Apartments
118 Santa Fe Mobile Home Park 99 457 381 670
120 La Habra Apartments 103 458 445 500
122 Brookside Apartments 2 1063 1025 1100
123 Westmount Place Condominiums
128 Highland Terrace Apartments
130 Meriweather Apartments
131 North Park Place
132 Chateau Crete Apartments 3 357 325 390
138 7 Meridian Street Apartments
140 Willard Towers 3 363 325 390
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1 Bedroom
------------------------------------------------------------------------
Avg. Rent
per mo. Min. Rent Max. Rent
Loan Number Property Name # of units ($)(3) per mo.($) per mo.($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
4 Circle Park Apartments 120 995 800 1010
10 Pirate's Cove Apartments 160 575 565 585
11.1 Hunter's Ridge Apartments 56 344 332 347
11.2 Miracle Manor 55 398 387 406
11.3 Toledo Arms Apartments 11 397 397 397
11.4 Adrian Manor 11 437 437 437
12 Buttonwood Bay MHC
13 Salisbury Center
20 Twelve Oaks at Northbrook 52 $75.00/Day
26 Park Terrace Apartments(4)
31 Heritage at North Andover
32 Green Tree Place Apartments 135 559 525 610
33.2 Frontier Village Mobile Home Park
34 Habitat Apartments 61 809 700 850
35 Timber Creek Apartments 23 573 525 615
37 Sun Pointe Lake Apartments 349 471 429 619
39 Westminster Chase I & II 156 438 379 550
41 Rustic Hills Park Apartments 14 398 375 415
52 Moutainside Apartments 123 383 345 435
57 Embassy Place - Phase II
65 Pleasant View Retirement Home
75 Executive Apartments 39 788 660 855
76 Highland House Apartments 42 603 575 650
77 Spanish Apartments 117 616 564 630
80.1 Brentwood Pointe Apartments 32 383 350 425
80.2 Greentree Apartments 4 325 325 325
81 Tiffany Square Apartments 56 422 410 450
83 Pineridge Apartments 118 417 409 429
84 Parthenon Apartments 75 444 420 480
85 Park Place Apartments 80 500 485 555
86 Prospect Heights Apartments 105 540 490 580
89 Oakmont Apartments 8 408 405 410
90 Arbor Court Apartments 9 700 680 760
93.1 Hanover Apartments 31 386 347 395
93.2 Hoopes Place Apartments 28 354 344 373
96 Willard Square 74 485 450 570
100 Pilgrim Mill/Holly Creek Apartments
102 Hyde Park Apartments 24 537 505 540
107 Wyndham Pointe Apartments 100 329 240 455
109 Medary Court & Stenton House Apartments 63 478 420 525
115 Glenwood Village MHP
116 Turtle Creek Apartments 32 405 405 415
118 Santa Fe Mobile Home Park
120 La Habra Apartments
122 Brookside Apartments 9 1180 850 1350
123 Westmount Place Condominiums 51 509 440 539
128 Highland Terrace Apartments 27 571 565 585
130 Meriweather Apartments
131 North Park Place 44 394 350 425
132 Chateau Crete Apartments 20 434 370 455
138 7 Meridian Street Apartments 2 813 675 950
140 Willard Towers 57 460 450 485
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
2 Bedrooms
------------------------------------------------------------------------
Avg. Rent
per mo. Min. Rent Max. Rent
Loan Number Property Name # of units ($)(3) per mo.($) per mo.($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
4 Circle Park Apartments 180 919 730 1200
10 Pirate's Cove Apartments 208 700 700 700
11.1 Hunter's Ridge Apartments 275 389 367 411
11.2 Miracle Manor 154 433 428 452
11.3 Toledo Arms Apartments 66 437 437 437
11.4 Adrian Manor 33 476 476 476
12 Buttonwood Bay MHC
13 Salisbury Center
20 Twelve Oaks at Northbrook 108 $85.00/Day
26 Park Terrace Apartments(4) 56 800 670 850
31 Heritage at North Andover
32 Green Tree Place Apartments 76 771 760 795
33.2 Frontier Village Mobile Home Park
34 Habitat Apartments 97 912 750 1100
35 Timber Creek Apartments 181 678 550 750
37 Sun Pointe Lake Apartments 1 629
39 Westminster Chase I & II 68 570 405 645
41 Rustic Hills Park Apartments 163 477 399 515
52 Moutainside Apartments 57 437 390 515
57 Embassy Place - Phase II 64 1030 995 1115
65 Pleasant View Retirement Home
75 Executive Apartments 24 983 950 1020
76 Highland House Apartments 54 693 645 725
77 Spanish Apartments 5 665 450 725
80.1 Brentwood Pointe Apartments 80 445 391 475
80.2 Greentree Apartments 46 475 450 500
81 Tiffany Square Apartments 104 509 430 795
83 Pineridge Apartments 14 541 529 549
84 Parthenon Apartments 69 520 505 530
85 Park Place Apartments 32 600 585 605
86 Prospect Heights Apartments
89 Oakmont Apartments 92 500 460 550
90 Arbor Court Apartments 60 802 755 890
93.1 Hanover Apartments 32 448 394 469
93.2 Hoopes Place Apartments 31 382 309 430
96 Willard Square 45 660 635 685
100 Pilgrim Mill/Holly Creek Apartments 68 553 525 610
102 Hyde Park Apartments 24 573 565 580
107 Wyndham Pointe Apartments 84 435 365 450
109 Medary Court & Stenton House Apartments 17 595 550 610
115 Glenwood Village MHP
116 Turtle Creek Apartments 56 485 485 510
118 Santa Fe Mobile Home Park
120 La Habra Apartments
122 Brookside Apartments 7 1544 1002 2200
123 Westmount Place Condominiums 12 639 590 659
128 Highland Terrace Apartments 12 682 670 710
130 Meriweather Apartments 38 580 550 600
131 North Park Place 12 492 425 525
132 Chateau Crete Apartments 70 499 378 545
138 7 Meridian Street Apartments 14 875 790 1100
140 Willard Towers 1 600
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
3 Bedrooms
-------------------------------------------------------------
Avg. Rent
per mo. Min. Rent Max. Rent Elevator
Loan Number Property Name # of units ($)(3) per mo.($) per mo.($) (Yes/No)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
4 Circle Park Apartments 118 1074 930 1207 Yes
10 Pirate's Cove Apartments 60 800 800 800 No
11.1 Hunter's Ridge Apartments No
11.2 Miracle Manor No
11.3 Toledo Arms Apartments No
11.4 Adrian Manor No
12 Buttonwood Bay MHC No
13 Salisbury Center No
20 Twelve Oaks at Northbrook No
26 Park Terrace Apartments(4) 94 976 770 1300 No
31 Heritage at North Andover No
32 Green Tree Place Apartments No
33.2 Frontier Village Mobile Home Park No
34 Habitat Apartments 30 1214 1000 1300 No
35 Timber Creek Apartments 32 861 750 1000 No
37 Sun Pointe Lake Apartments No
39 Westminster Chase I & II No
41 Rustic Hills Park Apartments 80 583 550 615 No
52 Moutainside Apartments 14 515 510 580 No
57 Embassy Place - Phase II No
65 Pleasant View Retirement Home No
75 Executive Apartments Yes
76 Highland House Apartments Yes
77 Spanish Apartments No
80.1 Brentwood Pointe Apartments No
80.2 Greentree Apartments No
81 Tiffany Square Apartments 24 549 535 595 No
83 Pineridge Apartments No
84 Parthenon Apartments 24 624 590 630 No
85 Park Place Apartments 8 670 No
86 Prospect Heights Apartments Yes
89 Oakmont Apartments No
90 Arbor Court Apartments 9 896 865 976 No
93.1 Hanover Apartments No
93.2 Hoopes Place Apartments No
96 Willard Square 3 833 825 850 Yes
100 Pilgrim Mill/Holly Creek Apartments No
102 Hyde Park Apartments No
107 Wyndham Pointe Apartments 16 579 563 585 No
109 Medary Court & Stenton House Apartments Yes
115 Glenwood Village MHP No
116 Turtle Creek Apartments No
118 Santa Fe Mobile Home Park No
120 La Habra Apartments No
122 Brookside Apartments No
123 Westmount Place Condominiums 6 715 705 729 No
128 Highland Terrace Apartments No
130 Meriweather Apartments 1 700 700 700 No
131 North Park Place No
132 Chateau Crete Apartments No
138 7 Meridian Street Apartments No
140 Willard Towers Yes
</TABLE>
<PAGE>
(1) Number of studios with respect to multifamily properties, number of beds
with respect to nursing homes and congregate care facilities and number of
pads with respect to mobile home parks.
(2) For mortgage loans secured by multiple Mortgaged Properties, the Mortgage
Loan's principal balance is allocated to the respective Mortgaged
Properties based on either: 1) the terms of the Mortgage Loan; 2) the
Appraised Value of the Mortgaged Properties.
(3) Average rents were determined based on an average of the current asking
rents set forth in the appraisal for the related Mortgaged Property.
(4) Total number of 3-bedroom apartments includes 8 4-bedroom units with a
monthly rent payment of $1400. The rents were not included under 3 Bedrooms
- Avg. Rent per mo., Min. Rent per mo. or Max. Rent per mo.
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
<TABLE>
<CAPTION>
Loan Number Property Name City State Zip Code
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 711 Third Avenue New York NY 10017
2 International Airport Center Los Angeles Los Angeles CA 90045
3.1 40 Technology Drive Franklin Township/Warren NJ 07059
3.2 100 Randolph Road Franklin Township/Warren NJ 08873
3.3 50 Randolph Road Franklin Township/Warren NJ 08873
5 Penn Mar Shopping Center Forestville MD 20747
6.1 Colton Commerce Center Colton CA 92324
6.2 Palmdale Place Commerce Center Palmdale CA 93550
6.3 Tenth Street Commerce Center Lancaster CA 93534
6.4 Fountain Plaza (Palmdale II) Palmdale CA 93550
6.5 Diamond Bar Commerce Center (Palomino Plaza) Diamond Bar CA 91765
6.6 Palm Plaza (Palmdale III) Palmdale CA 93550
7 332 South Michigan Avenue Chicago IL 60604
8.1 Cityview Plaza Garden Grove CA 92640
8.2 Glendora Commerce Center Glendora CA 91740
8.3 Anaheim Stadium Industrial Park Anaheim CA 92808
8.4 Arlington Airpark Plaza Riverside CA 92503
8.5 Edinger Santa Ana CA 92705
9 Alpine Commons Shopping Center Wappingers Falls NY 12590
16 8500 Wilshire Los Angeles CA 90211
17 Phoenix Northgate Business Center Phoenix AZ 85023
18 Montclair East Shopping Center Montclair CA 91763
19 Wilshire Hobart Building Los Angeles CA 90010
21 GATX Food Distribution Coloma MI 49038
22 Indiana Outlet Center Daleville IN 47334
23 Cory Industries Elizabeth NJ 07202
24 24 Farnsworth Street Boston MA 02110
25 Sprint Spectrum Building Charlotte NC 28273
27 Horizon Outlet Center - Tulare Tulare CA 93274
28 Hydra Warehouse Golden CO 80403
29.1 Briarwood Houston TX 77027
29.2 Barker's Point Houston TX 77027
29.3 Bali Park II Houston TX 77024
29.4 Bali Park III Houston TX 77024
30 Bridgewater Place Syracuse NY 13204
33.1 Frontier Plaza Carson City NV 89701
36 Coffee Tree Plaza Vacaville CA 95687
38 Delaware County Medical Hospital (DCMH) Drexel Hill PA 19026
42 DSS Building Ashburn VA 20147
43 Countryside Shopping Center Mt. Pleasant PA 15666
45 9020 Junction Drive Annapolis MD 20701
46 Malibu Center City of Industry CA 91748
47 English Park Village Lancaster NY 14221
48 S & S Graphics Laurel MD 20707
49 Promenade at Bay Colony Shopping Center Ft. Lauderdale FL 33308
50 Shoppes at Temple Terrace Tempe Terrace FL 33617
51 Wooster Place Wooster Place OH 44691
55 Denton Town Center Denton TX 76205
56 Tropicana Plaza Las Vegas NV 89121
58 Mission Grove Office San Diego CA 92108
59 Champlain Plaza Plattsburg NY 12901
60 2300 Maywood Bellwood IL 60153
61 Sheldahl Facility Longmont CO 80503
63 301 Metro Center Boulevard Warwick RI 02886
66 Hart Gallery Houston TX 77057
67 West Oak Office San Antonio TX 78224
68 Base Ten Systems Building Hamilton Township NJ 08619
70 KMart - Baltimore Baltimore MD 21224
71 Lakeville Corporate Park Lakeville MA 02347
72 C-MAC-Metallek Building Dollard-des-Osweaus PQ H9B 2P5
73 100 Passaic Avenue Florham Park NJ 07932
74 400 Lapp Road Malvern/E. Whiteland Twnshp PA 19355
78 9 West Jackson Naperville IL 60564
87 Betancourt III New York NY 10031
88 5707 Corsa Avenue Westlake Village CA 91362
91 Shoppes at Georgian Terrace Somerset PA 15501
92 Professional Office Building One Upland PA 19013
95 Herndon Village Shoppes Orlando FL 32803
98 Kingsland Village Shopping Center Katy TX 77450
99 Betancourt I New York NY 10033
103 Woodstock Square Shopping Center Woodstock VA 22405
104 Hilltop Building Boulder CO 80104
105 Technology Court Chantilly VA 22021
108 Landmark Six Flex Center San Antonio TX 78233
110 Gateway Computer Store - Florence Florence KY 41042
111 Greenmount Avenue Shopping Center Baltimore MD 21218
112 Douglas Center Long Beach CA 90808
113 Henry Plastics Building Fremont CA 94538
114 T.T.C. Park Ridge Park Ridge IL 60068
119 RiteAid - Dayton Dayton OH 45405
121 Sterling Knoll Plaza Houston TX 77598
124.1 25 West 170th Street Bronx NY 10452
124.2 2416 Amsterdam Avenue Bronx NY 10452
125 Gateway 2000 Country Store - Madison Madison WI 53717
129 Gateway Computer Store - Woodbury Woodbury MN 55125
133 Gateway Computer Store - Dickson City Dickson City PA 18519
135 Salisbury Medical Office Building (SMOB) Salisbury MD 21804
136 Gateway Computer Store - Henrietta Henrietta NY 14623
139 Bear Creek Square Shopping Center Houston TX 77084
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Original/
Allocated
Loan Initial Pool
Sub-property Balance Balance per
Loan Number Property Name Type ($)(2) Sq. Ft.($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 711 Third Avenue CBD Off 49,225,000 93.17
2 International Airport Center Los Angeles Warehouse 27,750,000 86.74
3.1 40 Technology Drive Flex Space 12,085,000 129.28
3.2 100 Randolph Road Flex Space 6,530,000 42.76
3.3 50 Randolph Road Flex Space 4,535,000 50.86
5 Penn Mar Shopping Center Anchored 22,325,000 59.70
6.1 Colton Commerce Center Anchored 7,262,900 59.49
6.2 Palmdale Place Commerce Center Anchored 4,454,500 53.00
6.3 Tenth Street Commerce Center Anchored 4,342,400 44.87
6.4 Fountain Plaza (Palmdale II) Unanchored 1,619,550 49.04
6.5 Diamond Bar Commerce Center (Palomino Plaza) Unanchored 1,534,000 74.40
6.6 Palm Plaza (Palmdale III) Unanchored 826,000 47.23
7 332 South Michigan Avenue CBD Off 18,750,000 58.72
8.1 Cityview Plaza Suburban Off 6,372,000 46.88
8.2 Glendora Commerce Center Office/Retail 4,366,000 62.21
8.3 Anaheim Stadium Industrial Park Flex Space 2,537,000 28.35
8.4 Arlington Airpark Plaza Flex Space 2,286,250 26.54
8.5 Edinger Suburban Off 1,902,750 63.85
9 Alpine Commons Shopping Center Anchored 16,800,000 79.89
16 8500 Wilshire CBD Off 13,400,000 134.08
17 Phoenix Northgate Business Center Flex Space 12,496,000 86.21
18 Montclair East Shopping Center Anchored 11,700,000 85.90
19 Wilshire Hobart Building CBD Off 11,525,000 44.54
21 GATX Food Distribution Warehouse 10,900,000 25.67
22 Indiana Outlet Center Factory Outlet 10,875,000 46.25
23 Cory Industries Warehouse 10,500,000 10.28
24 24 Farnsworth Street CBD Off 10,300,000 154.93
25 Sprint Spectrum Building Flex Space 10,000,000 90.95
27 Horizon Outlet Center - Tulare Factory Outlet 9,325,000 66.97
28 Hydra Warehouse Warehouse 9,000,000 34.47
29.1 Briarwood Suburban Off 2,997,000 65.04
29.2 Barker's Point Suburban Off 2,371,000 56.81
29.3 Bali Park II Suburban Off 1,882,000 35.47
29.4 Bali Park III Suburban Off 1,600,000 35.13
30 Bridgewater Place CBD Off 8,875,000 62.77
33.1 Frontier Plaza Unanchored 5,030,000 48.11
36 Coffee Tree Plaza Anchored 6,500,000 154.44
38 Delaware County Medical Hospital (DCMH) Suburban Off 5,865,000 88.34
42 DSS Building Flex Space 5,200,000 64.79
43 Countryside Shopping Center Anchored 5,200,000 30.34
45 9020 Junction Drive Flex Space 5,100,000 52.70
46 Malibu Center Specialty Ret 5,075,000 11.27
47 English Park Village Suburban Off 4,965,000 63.57
48 S & S Graphics Suburban Off 4,927,500 67.17
49 Promenade at Bay Colony Shopping Center Unanchored 4,900,000 83.45
50 Shoppes at Temple Terrace Anchored 4,890,000 67.17
51 Wooster Place Anchored 4,800,000 60.37
55 Denton Town Center Unanchored 4,600,000 59.44
56 Tropicana Plaza Unanchored 4,560,634 39.55
58 Mission Grove Office Suburban Off 4,450,000 67.09
59 Champlain Plaza Anchored 4,425,000 84.84
60 2300 Maywood Warehouse 4,400,000 18.77
61 Sheldahl Facility Flex Space 4,300,000 42.54
63 301 Metro Center Boulevard Suburban Off 4,250,000 92.89
66 Hart Gallery Unanchored 3,800,000 62.20
67 West Oak Office Suburban Off 3,780,000 71.62
68 Base Ten Systems Building Flex Space 3,745,000 45.73
70 KMart - Baltimore Anchored 3,650,000 30.20
71 Lakeville Corporate Park Suburban Off 3,600,000 75.45
72 C-MAC-Metallek Building Flex Space 3,559,322 21.55
73 100 Passaic Avenue Flex Space 3,550,000 59.02
74 400 Lapp Road Suburban Off 3,519,000 130.09
78 9 West Jackson Anchored 3,500,000 201.47
87 Betancourt III Office/Retail 3,030,000 59.20
88 5707 Corsa Avenue Suburban Off 3,000,000 136.46
91 Shoppes at Georgian Terrace Factory Outlet 2,650,000 13.20
92 Professional Office Building One Suburban Off 2,585,000 64.56
95 Herndon Village Shoppes Unanchored 2,460,000 38.17
98 Kingsland Village Shopping Center Unanchored 2,150,000 41.59
99 Betancourt I Suburban Off 2,010,000 83.48
103 Woodstock Square Shopping Center Unanchored 2,000,000 71.98
104 Hilltop Building Unanchored 1,974,000 90.60
105 Technology Court Flex Space 1,900,000 62.05
108 Landmark Six Flex Center Flex Space 1,875,000 26.99
110 Gateway Computer Store - Florence Unanchored 1,789,000 132.76
111 Greenmount Avenue Shopping Center Unanchored 1,755,000 100.12
112 Douglas Center Office/Retail 1,750,000 94.01
113 Henry Plastics Building Warehouse 1,700,000 49.71
114 T.T.C. Park Ridge Anchored 1,680,000 150.06
119 RiteAid - Dayton Anchored 1,600,000 142.07
121 Sterling Knoll Plaza Unanchored 1,500,000 49.52
124.1 25 West 170th Street Unanchored 845,000 29.79
124.2 2416 Amsterdam Avenue Office/Retail 615,000 61.30
125 Gateway 2000 Country Store - Madison Unanchored 1,405,000 175.17
129 Gateway Computer Store - Woodbury Unanchored 1,268,000 168.63
133 Gateway Computer Store - Dickson City Unanchored 1,134,000 141.37
135 Salisbury Medical Office Building (SMOB) Suburban Off 1,050,000 95.54
136 Gateway Computer Store - Henrietta Unanchored 1,049,000 130.86
139 Bear Creek Square Shopping Center Unanchored 850,000 49.61
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Largest Tenant(1)
----------------------------------------------------------------------
Lease Exp.
Loan Number Property Name Name Sq. Ft. Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 711 Third Avenue Parade Publications 82,444 8/1/2000
2 International Airport Center Los Angeles BAX 94,363 11/30/2004
3.1 40 Technology Drive Cordis Corp. (Aaa/AAA) 93,336 4/15/2001
3.2 100 Randolph Road Fountain Technology 104,705 12/31/2002
3.3 50 Randolph Road Fountain Technology 89,024 12/31/2002
5 Penn Mar Shopping Center Burlington Coat Factory 59,200 8/31/2010
6.1 Colton Commerce Center Rite-Aid (Ba3/BB) 23,672 7/13/2014
6.2 Palmdale Place Commerce Center Thrifty Drug (Ba3/BB) 19,120 5/31/2006
6.3 Tenth Street Commerce Center Lucky Stores, Inc. (A2/A) 28,217 9/30/2005
6.4 Fountain Plaza (Palmdale II) Chief Auto Parts 3,920 5/31/2004
6.5 Diamond Bar Commerce Center (Palomino Plaza) Sizzler Restaurant 5,200 9/4/2005
6.6 Palm Plaza (Palmdale III) Siam Market 3,664 6/30/2005
7 332 South Michigan Avenue American Art Academy 40,758 12/31/2003
8.1 Cityview Plaza Ask Southern California, INC. 5,872 7/31/2001
8.2 Glendora Commerce Center Mann Theaters 22,877 5/15/2006
8.3 Anaheim Stadium Industrial Park Lunada Bay 41,931 8/31/2002
8.4 Arlington Airpark Plaza Greensteel, INC. 31,021 12/31/2002
8.5 Edinger County of Orange 29,800 11/30/2005
9 Alpine Commons Shopping Center BJ's Wholesale Club 106,684 5/31/2013
16 8500 Wilshire CCT 25,794 12/31/1999
17 Phoenix Northgate Business Center EFTC 144,745 7/31/2007
18 Montclair East Shopping Center Sportmart 41,515 1/31/2011
19 Wilshire Hobart Building NOS Communications 33,042 5/31/2002
21 GATX Food Distribution GATX Logistics Inc (Baa1/BBB+) 423,230 6/30/2013
22 Indiana Outlet Center Dress Barn 9,010 1/31/2005
23 Cory Industries Crate & Barrel 605,000 1/31/2004
24 24 Farnsworth Street Commonwealth of Massachusetts (AA3/AA-) 64,254 11/12/2004
25 Sprint Spectrum Building Sprint Spectrum (Baa1/BBB+) 90,000 4/30/2009
27 Horizon Outlet Center - Tulare Linen Barn 10,163 11/30/2002
28 Hydra Warehouse Hydra Warehouse 260,000 6/30/2011
29.1 Briarwood Mobilecomm of the SW 16,011 12/31/2002
29.2 Barker's Point Kelman Seismic Processing 14,478 8/14/2003
29.3 Bali Park II Association Management 11,417 12/31/1999
29.4 Bali Park III Langham Creek Bank 9,611 8/31/2002
30 Bridgewater Place Eric Mower & Associates 29,500 12/31/2009
33.1 Frontier Plaza State of Nevada(AA2/AA) 23,744 5/31/2004
36 Coffee Tree Plaza CompUSA 26,683 4/11/2014
38 Delaware County Medical Hospital (DCMH) DCMH - Radiation 7,808 12/31/2001
42 DSS Building DSS, Inc. 80,000 3/31/2014
43 Countryside Shopping Center County Market 56,416 1/31/2002
45 9020 Junction Drive OSICOM 37,384 10/31/2004
46 Malibu Center Malibu Centers, Inc. 448,232 6/30/2023
47 English Park Village Parliament 13,172 3/31/2002
48 S & S Graphics S & S Graphics 73,000 1/31/2008
49 Promenade at Bay Colony Shopping Center TGIF 8,120 6/26/2003
50 Shoppes at Temple Terrace Moran Foods Inc. 14,425 8/31/2002
51 Wooster Place Staples (Baa2/BBB-) 24,000 2/29/2012
55 Denton Town Center Matress Giant 6,255 3/31/2004
56 Tropicana Plaza MacFrugals 28,050 11/30/2004
58 Mission Grove Office Corona & Balistre 20,123 3/31/2014
59 Champlain Plaza Hannaford Brothers 51,918 9/30/2010
60 2300 Maywood American Logistics Services 234,000 1/31/2005
61 Sheldahl Facility Sheldahl Manufacturing 101,000 1/0/2000
63 301 Metro Center Boulevard G-Tech 22,650 4/30/2009
66 Hart Gallery Hart Galleries 50,430 7/31/2012
67 West Oak Office SJ Wood 8,636 8/31/2003
68 Base Ten Systems Building Base Ten Systems 81,600 10/27/2009
70 KMart - Baltimore Kmart (Ba1/BB+) 95,810 11/30/2004
71 Lakeville Corporate Park Environ. Protect. Dept. 25,488 4/4/2003
72 C-MAC-Metallek Building C-Mac Metalket 164,808 12/31/2010
73 100 Passaic Avenue Immedica 16,100 1/30/2004
74 400 Lapp Road Lucent Technologies (A2/A) 26,980 5/31/2006
78 9 West Jackson Williams-Sonoma 17,300 4/30/2011
87 Betancourt III NYC Church of Christ 18,658 5/30/2004
88 5707 Corsa Avenue Masry & Vititoe Law Office 11,300 12/31/2013
91 Shoppes at Georgian Terrace Levis (Ba1/BBB-) 9,476 1/31/2000
92 Professional Office Building One Clinical Renal Assoc. 3,102 12/31/2002
95 Herndon Village Shoppes Blockbuster Music (Baa3/BBB-) 12,600 5/31/2002
98 Kingsland Village Shopping Center Excel Gyms, Inc. 17,670 2/28/2004
99 Betancourt I Northern Manhattan Improvement 22,000 12/31/2000
103 Woodstock Square Shopping Center Cato 4,160 3/31/2004
104 Hilltop Building Quinns 5,000 3/31/2005
105 Technology Court Computer Resources 5,838 10/31/2008
108 Landmark Six Flex Center Southwestern Bell (Aa3/AA-) 34,650 3/31/2004
110 Gateway Computer Store - Florence Gateway 2000 Country Stores, Inc. 13,440 11/30/2003
111 Greenmount Avenue Shopping Center Just for Feet 5,888 12/31/2008
112 Douglas Center Saigon Express 2,100 3/31/2004
113 Henry Plastics Building Henry Plastics Molding 34,000 6/30/2019
114 T.T.C. Park Ridge Hollywood Video 6,160 12/31/2008
119 RiteAid - Dayton Rite-Aid (Ba3/BB) 11,180 12/16/2018
121 Sterling Knoll Plaza Clear Lake Grocery 3,750 11/30/2003
124.1 25 West 170th Street 170th Street Auto Repair 14,272 2/28/2013
124.2 2416 Amsterdam Avenue A.R.T.C 5,000 9/30/2009
125 Gateway 2000 Country Store - Madison Gateway Computer Store 8,000 12/31/2003
129 Gateway Computer Store - Woodbury Gateway 2000 Country Stores, Inc. 7,500 12/31/2003
133 Gateway Computer Store - Dickson City Gateway 2000 Country Stores, Inc. 8,000 5/31/2004
135 Salisbury Medical Office Building (SMOB) Genesis 9,101 1/29/2003
136 Gateway Computer Store - Henrietta Gateway 2000 Country Stores, Inc. 7,995 11/30/2003
139 Bear Creek Square Shopping Center Bear Creek Animal Clinic 3,400 8/31/2002
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
2nd Largest Tenant(1)
----------------------------------------------------------------------
Lease Exp.
Loan Number Property Name Name Sq. Ft. Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 711 Third Avenue Crain's Communications 66,735 2/1/2009
2 International Airport Center Los Angeles Expeditors International 45,491 6/18/2003
3.1 40 Technology Drive NA NA NA
3.2 100 Randolph Road Union Carbide Corporation (Baa2) 24,160 11/30/2005
3.3 50 Randolph Road NA NA NA
5 Penn Mar Shopping Center Super Fresh (Ba1/BBB-) 57,457 11/30/2016
6.1 Colton Commerce Center Beverly Fabrics 17,500 10/25/2009
6.2 Palmdale Place Commerce Center Molina Medical Center 5,620 7/31/2002
6.3 Tenth Street Commerce Center Whole Wheatery 9,800 10/31/2000
6.4 Fountain Plaza (Palmdale II) Less than $1 3,580 2/28/2001
6.5 Diamond Bar Commerce Center (Palomino Plaza) Kindercare Learning Center 5,000 9/30/2000
6.6 Palm Plaza (Palmdale III) $.98 Store 2,800 1/12/2001
7 332 South Michigan Avenue Beacon Information 38,542 1/31/2004
8.1 Cityview Plaza O.C. Access Program 4,715 9/30/2004
8.2 Glendora Commerce Center Lazer Star 10,951 12/31/2002
8.3 Anaheim Stadium Industrial Park Elliott Auto Supply 17,280 8/31/2002
8.4 Arlington Airpark Plaza Netseller 5,864 12/31/2000
8.5 Edinger NA NA NA
9 Alpine Commons Shopping Center Stop & Shop (A3/A) 64,898 8/26/2013
16 8500 Wilshire Symbolic Motor Car 8,105 7/31/2003
17 Phoenix Northgate Business Center NA NA NA
18 Montclair East Shopping Center Ross Dress For Less 23,994 1/31/2004
19 Wilshire Hobart Building Hanmi Bank 23,870 11/30/2003
21 GATX Food Distribution NA NA NA
22 Indiana Outlet Center Bass Company Store 8,589 11/30/2001
23 Cory Industries Domain 227,599 3/31/2000
24 24 Farnsworth Street Daniel F. Kelleher Co. 2,087 5/30/2004
25 Sprint Spectrum Building Maintenance Team 19,600 6/30/2002
27 Horizon Outlet Center - Tulare Gap Outlet (A2/A) 10,000 6/30/2001
28 Hydra Warehouse NA NA NA
29.1 Briarwood Robert C. Wilson 11,833 12/31/2000
29.2 Barker's Point Enercon Engineering 13,768 4/14/2000
29.3 Bali Park II Sunland 4,971 6/14/2003
29.4 Bali Park III Martin, Farr, et al 3,376 12/27/2001
30 Bridgewater Place The Young Agency 25,652 5/31/2004
33.1 Frontier Plaza Cue-Phoria 8,800 6/30/2002
36 Coffee Tree Plaza Kinko's 4,954 3/16/2009
38 Delaware County Medical Hospital (DCMH) Suburban Cardiologists, Ltd 3,966 12/31/2001
42 DSS Building NA NA NA
43 Countryside Shopping Center AMES 54,000 3/31/2012
45 9020 Junction Drive Earthshell Corporation 34,956 9/30/2004
46 Malibu Center NA NA NA
47 English Park Village MJW Corporation, Inc. 6,600 9/30/2003
48 S & S Graphics NA NA NA
49 Promenade at Bay Colony Shopping Center Vision Works 6,688 12/1/2008
50 Shoppes at Temple Terrace Eckerds (A3/BBB+) 13,556 9/1/2019
51 Wooster Place MC Sporting Goods 18,000 6/26/2007
55 Denton Town Center Eyemasters 5,126 8/31/2003
56 Tropicana Plaza Peter Piper Pizza 12,000 12/31/2004
58 Mission Grove Office SGPA 7,317 3/31/2001
59 Champlain Plaza NA NA NA
60 2300 Maywood NA NA NA
61 Sheldahl Facility NA NA NA
63 301 Metro Center Boulevard CSC Outsourcing, Inc. 14,285 1/31/2004
66 Hart Gallery Best of Time and Gifts 2,030 7/31/2002
67 West Oak Office La Scala 6,315 10/31/2000
68 Base Ten Systems Building NA NA NA
70 KMart - Baltimore Fashsion Bug 10,000 3/31/2003
71 Lakeville Corporate Park More Solutions, Inc 4,650 10/31/2003
72 C-MAC-Metallek Building NA NA NA
73 100 Passaic Avenue BEM Systems (sub. of Berger Engineering) 14,979 5/31/2006
74 400 Lapp Road NA NA NA
78 9 West Jackson NA NA NA
87 Betancourt III Technique Step Up to Basics 7,448 4/15/2003
88 5707 Corsa Avenue Keenan & Assoc. 3,200 7/31/2003
91 Shoppes at Georgian Terrace Polo (Baa2/BBB) 7,728 11/30/2002
92 Professional Office Building One Opthalmic Surgery 2,740 12/31/2002
95 Herndon Village Shoppes Party City 9,760 4/30/2003
98 Kingsland Village Shopping Center Hi-Lo Auto Supply 12,537 2/29/2004
99 Betancourt I Licey Supermarket 2,000 5/31/2008
103 Woodstock Square Shopping Center Dollar Tree 4,000 3/31/2004
104 Hilltop Building Stanley Kaplan 3,073 5/31/2002
105 Technology Court Digital Systems 5,705 12/31/2001
108 Landmark Six Flex Center Lack's Stores, Inc. 10,325 5/31/2000
110 Gateway Computer Store - Florence NA NA NA
111 Greenmount Avenue Shopping Center Blockbuster Video (Baa3/BBB-) 4,133 9/30/2000
112 Douglas Center Hair Salon 2,000 6/30/2004
113 Henry Plastics Building NA NA NA
114 T.T.C. Park Ridge Coldwell Banker 4,940 12/31/2003
119 RiteAid - Dayton NA NA NA
121 Sterling Knoll Plaza JMT Computers 2,500 8/31/2001
124.1 25 West 170th Street Leon Martinez 5,000 10/31/2005
124.2 2416 Amsterdam Avenue Apartment House Supply 5,000 10/9/2007
125 Gateway 2000 Country Store - Madison NA NA NA
129 Gateway Computer Store - Woodbury NA NA NA
133 Gateway Computer Store - Dickson City NA NA NA
135 Salisbury Medical Office Building (SMOB) NA NA NA
136 Gateway Computer Store - Henrietta NA NA NA
139 Bear Creek Square Shopping Center Safelite Glass 2,600 4/30/2002
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
3rd Largest Tenant(1)
----------------------------------------------------------------------
Lease Exp.
Loan Number Property Name Name Sq. Ft. Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 711 Third Avenue Newport News 50,830 3/1/2011
2 International Airport Center Los Angeles Hankyu Int's 37,011 7/31/2004
3.1 40 Technology Drive NA NA NA
3.2 100 Randolph Road Silk Blossom Corporation 16,317 3/30/2002
3.3 50 Randolph Road NA NA NA
5 Penn Mar Shopping Center Marshalls (A3/A-) 30,450 5/31/2009
6.1 Colton Commerce Center Berean Christian Stores 13,000 12/31/2000
6.2 Palmdale Place Commerce Center Family Christian Bookstore, Inc. 4,639 4/30/2002
6.3 Tenth Street Commerce Center Edwards Fed Credit Union 8,520 12/31/2006
6.4 Fountain Plaza (Palmdale II) H. Hawatmeh & N. Dugom 2,500 12/31/2002
6.5 Diamond Bar Commerce Center (Palomino Plaza) Max Throckmorton 2,325 1/1/2003
6.6 Palm Plaza (Palmdale III) Palm Plaza Pet Hospital 2,588 8/31/2003
7 332 South Michigan Avenue Lexecon, Inc. 31,479 2/14/2007
8.1 Cityview Plaza Concord Credit 4,527 6/30/2001
8.2 Glendora Commerce Center Tutortime Corporation 10,001 10/17/2007
8.3 Anaheim Stadium Industrial Park Optical Science 12,000 9/30/2002
8.4 Arlington Airpark Plaza Cole Vocational Services 4,018 7/31/2002
8.5 Edinger NA NA NA
9 Alpine Commons Shopping Center A.C. Moore Arts & Crafts 23,000 2/22/2007
16 8500 Wilshire Peterson Medical Institute 3,610 5/31/2002
17 Phoenix Northgate Business Center NA NA NA
18 Montclair East Shopping Center Office Depot (Baa1/BBB) 22,498 12/31/2007
19 Wilshire Hobart Building Levy, Stern & Ford 8,320 8/30/2006
21 GATX Food Distribution NA NA NA
22 Indiana Outlet Center Mikasa Factory Store 8,486 11/30/2004
23 Cory Industries Babb 84,000 11/30/2002
24 24 Farnsworth Street NA NA NA
25 Sprint Spectrum Building NA NA NA
27 Horizon Outlet Center - Tulare Bass Co. Store 8,000 12/31/2005
28 Hydra Warehouse NA NA NA
29.1 Briarwood Viron Energy Services 2,145 10/31/2001
29.2 Barker's Point United Steel Structures 7,082 12/31/2000
29.3 Bali Park II American Medical Adjusters 3,617 3/31/2001
29.4 Bali Park III Houston Montessori 3,164 6/30/2001
30 Bridgewater Place Cox Radio 20,210 5/31/2001
33.1 Frontier Plaza Frontier Enterprises 7,072 11/30/2002
36 Coffee Tree Plaza Sleep Train 4,021 6/29/2004
38 Delaware County Medical Hospital (DCMH) HAN Barry Jacobson MD 3,801 12/31/2001
42 DSS Building NA NA NA
43 Countryside Shopping Center Fashion Bug 7,500 10/30/2002
45 9020 Junction Drive Roberts Office Furniture 14,630 9/30/2003
46 Malibu Center NA NA NA
47 English Park Village C&C Plumbing & HTG 5,300 1/31/2001
48 S & S Graphics NA NA NA
49 Promenade at Bay Colony Shopping Center Carmine's Gourmet Market 6,000 9/1/2006
50 Shoppes at Temple Terrace Auto Zone Inc. 7,992 1/31/2003
51 Wooster Place Factory Card Outlet 12,170 7/4/2007
55 Denton Town Center Castle Hill Communication 4,365 1/31/2004
56 Tropicana Plaza University of Cosmetology 10,083 12/1/2001
58 Mission Grove Office Taylor Research 7,091 12/31/2002
59 Champlain Plaza NA NA NA
60 2300 Maywood NA NA NA
61 Sheldahl Facility NA NA NA
63 301 Metro Center Boulevard Current Context 4,010 11/30/2004
66 Hart Gallery K&P Interiors 1,740 7/31/2004
67 West Oak Office La Rosita 3,352 6/30/2002
68 Base Ten Systems Building NA NA NA
70 KMart - Baltimore Advanced Auto Parts 7,000 8/31/2002
71 Lakeville Corporate Park So. Mass. Library 3,285 5/31/2003
72 C-MAC-Metallek Building NA NA NA
73 100 Passaic Avenue Tallum Realty (Owner/Borrower) 11,650 3/31/2009
74 400 Lapp Road NA NA NA
78 9 West Jackson NA NA NA
87 Betancourt III Words of Life Church 4,721 2/28/2002
88 5707 Corsa Avenue Wendland Group 1,770 7/31/2002
91 Shoppes at Georgian Terrace Bugle Boy 6,364 12/31/2000
92 Professional Office Building One Pediatric Associates 2,290 12/31/2002
95 Herndon Village Shoppes Pier 1 Imports (Baa3/BBB-) 8,692 3/31/2006
98 Kingsland Village Shopping Center Star Cleaners 2,650 1/31/2004
99 Betancourt I NA NA NA
103 Woodstock Square Shopping Center Shoe Show 2,800 3/31/2004
104 Hilltop Building College Corner 1,900 10/31/2007
105 Technology Court Dietz Construction 4,671 8/31/2001
108 Landmark Six Flex Center Boise Cascade 8,925 1/31/2004
110 Gateway Computer Store - Florence NA NA NA
111 Greenmount Avenue Shopping Center The Joint 2,255 4/30/2001
112 Douglas Center Japan Restaurant 1,450 6/30/2004
113 Henry Plastics Building NA NA NA
114 T.T.C. Park Ridge NA NA NA
119 RiteAid - Dayton NA NA NA
121 Sterling Knoll Plaza Express Lane 2,475 12/31/2004
124.1 25 West 170th Street Mickey's Auto Repair 4,900 6/30/2003
124.2 2416 Amsterdam Avenue NA NA NA
125 Gateway 2000 Country Store - Madison NA NA NA
129 Gateway Computer Store - Woodbury NA NA NA
133 Gateway Computer Store - Dickson City NA NA NA
135 Salisbury Medical Office Building (SMOB) NA NA NA
136 Gateway Computer Store - Henrietta NA NA NA
139 Bear Creek Square Shopping Center Long Lost Friends 1,920 5/31/2001
</TABLE>
<PAGE>
(1) The rating set forth next to the name of each tenant, as reported by the
related Mortgagors, is the rating reported by Moody's or S&P (in that
order) as listed by Bloomberg L.P. for the tenant, if not available, the
senior unsecured debt thereof, or, will be the rating most recently
reported by Moody's or S&P (in that order) for an affiliate of the tenant,
if not available, the senior unsecured debt of such affiliate, or, if not
available, the subordinated debt of such affiliate. To the extent su or any
other arrangement to support the tenant, satisfy its obligation under the
lease or otherwise assist the tenant in performing its obligations under
the lease.
(2) For Mortgage Loans secured by multiple Mortgaged Properties, the Mortgage
Loan's principal balance is allocated to the respective Mortgaged
Properties based on: 1) the terms of the Mortgage Loan; 2) the Appraised
Values of the Mortgaged Properties; or 3) the square footage of the
Mortgaged Properties.
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
ANNEX D
F/X SCHEDULES
<TABLE>
<CAPTION>
LOAN NUMBER 62: LOAN NUMBER 72:
QUALITY SUITES - WINDSOR C-MAC-METALLEK BUILDING
------------------------------------------------ ------------------------------------------------
TOTAL PRINCIPAL INTEREST TOTAL PRINCIPAL INTEREST
US$ US$ US$ US$ US$ US$
PAYMENT DATE PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT
- ------------------- ---------------- ---------------- -------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
February 1, 2000 37,403.30 8,674.44 28,728.86 27,674.24 1,559.20 26,115.04
March 1, 2000 37,400.76 8,730.39 28,670.36 27,598.98 3,179.51 24,419.47
April 1, 2000 37,398.18 8,786.70 28,611.48 27,672.69 1,592.50 26,080.19
May 1, 2000 37,395.60 8,843.38 28,552.22 27,634.84 2,407.28 25,227.56
June 1, 2000 37,393.00 8,900.41 28,492.58 27,671.38 1,620.60 26,050.78
July 1, 2000 37,390.38 8,957.82 28,432.56 27,633.57 2,434.67 25,198.90
August 1, 2000 37,387.74 9,015.60 28,372.14 27,670.06 1,649.10 26,020.96
September 1, 2000 37,385.09 9,073.75 28,311.34 27,669.52 1,660.68 26,008.84
October 1, 2000 37,382.42 9,132.28 28,250.15 27,631.76 2,473.74 25,158.02
November 1, 2000 37,379.74 9,191.18 28,188.56 27,668.17 1,689.74 25,978.44
December 1, 2000 37,377.03 9,250.46 28,126.57 27,630.45 2,502.05 25,128.40
January 1, 2001 37,374.31 9,310.13 28,064.18 27,666.81 1,719.19 25,947.61
February 1, 2001 37,371.57 9,370.18 28,001.39 27,666.25 1,731.27 25,934.97
March 1, 2001 37,368.82 9,430.62 27,938.20 27,554.34 4,140.70 23,413.64
April 1, 2001 37,366.04 9,491.44 27,874.60 27,664.33 1,772.54 25,891.80
May 1, 2001 37,363.25 9,552.66 27,810.59 27,626.70 2,582.73 25,043.96
June 1, 2001 37,360.44 9,614.28 27,746.16 27,662.91 1,803.14 25,859.77
July 1, 2001 37,357.61 9,676.29 27,681.32 27,625.31 2,612.56 25,012.75
August 1, 2001 37,354.77 9,738.71 27,616.06 27,661.47 1,834.16 25,827.30
September 1, 2001 37,351.90 9,801.52 27,550.38 27,660.87 1,847.05 25,813.82
October 1, 2001 37,349.02 9,864.74 27,484.28 27,623.32 2,655.36 24,967.97
November 1, 2001 37,346.12 9,928.37 27,417.75 27,659.40 1,878.69 25,780.71
December 1, 2001 37,343.19 9,992.40 27,350.79 27,621.90 2,686.19 24,935.71
January 1, 2002 37,340.26 10,056.85 27,283.40 27,657.91 1,910.77 25,747.14
February 1, 2002 37,337.30 10,121.72 27,215.58 27,657.28 1,924.19 25,733.09
March 1, 2002 37,334.32 10,187.00 27,147.31 27,546.18 4,316.17 23,230.02
April 1, 2002 37,331.32 10,252.71 27,078.61 27,655.25 1,968.04 25,687.21
May 1, 2002 37,328.31 10,318.84 27,009.47 27,617.85 2,773.27 24,844.58
June 1, 2002 37,325.27 10,385.40 26,939.87 27,653.70 2,001.36 25,652.35
July 1, 2002 37,322.22 10,452.39 26,869.83 27,616.34 2,805.73 24,810.61
August 1, 2002 37,319.14 10,519.80 26,799.34 27,652.13 2,035.13 25,617.00
September 1, 2002 37,316.05 10,587.65 26,728.39 27,651.46 2,049.43 25,602.03
October 1, 2002 37,312.93 10,655.95 26,656.99 27,614.16 2,852.58 24,761.58
November 1, 2002 37,309.80 10,724.68 26,585.12 27,649.87 2,083.88 25,565.99
December 1, 2002 37,306.64 10,793.85 26,512.79 27,612.61 2,886.16 24,726.45
January 1, 2003 37,303.47 10,863.47 26,440.00 27,648.24 2,118.80 25,529.44
February 1, 2003 37,300.27 10,933.54 26,366.73 27,647.55 2,133.69 25,513.87
March 1, 2003 37,297.06 11,004.06 26,293.00 27,537.34 4,506.73 23,030.61
April 1, 2003 37,293.82 11,075.04 26,218.78 27,645.39 2,180.35 25,465.04
May 1, 2003 37,290.56 11,146.47 26,144.09 27,608.24 2,980.17 24,628.07
June 1, 2003 37,287.28 11,218.37 26,068.92 27,643.70 2,216.61 25,427.09
July 1, 2003 37,283.98 11,290.73 25,993.26 27,606.60 3,015.51 24,591.09
August 1, 2003 37,280.66 11,363.55 25,917.11 27,642.00 2,253.38 25,388.62
September 1, 2003 37,277.32 11,436.85 25,840.47 27,641.26 2,269.21 25,372.05
October 1, 2003 37,273.95 11,510.61 25,763.34 27,604.22 3,066.77 24,537.45
November 1, 2003 37,270.57 11,584.85 25,685.71 27,639.52 2,306.71 25,332.82
December 1, 2003 37,267.16 11,659.58 25,607.58 27,602.52 3,103.31 24,499.21
January 1, 2004 37,263.73 11,734.78 25,528.95 27,637.75 2,344.72 25,293.04
February 1, 2004 37,260.28 11,810.47 25,449.81 27,636.99 2,361.19 25,275.80
March 1, 2004 37,256.81 11,886.65 25,370.15 27,563.89 3,935.03 23,628.86
April 1, 2004 37,253.30 11,963.32 25,289.99 27,634.94 2,405.44 25,229.50
May 1, 2004 37,249.79 12,040.48 25,209.31 27,598.05 3,199.53 24,398.53
June 1, 2004 37,246.25 12,118.14 25,128.10 27,633.11 2,444.82 25,188.29
July 1, 2004 37,242.68 12,196.31 25,046.38 27,596.27 3,237.91 24,358.36
August 1, 2004 37,239.09 12,274.97 24,964.12 27,631.25 2,484.75 25,146.50
September 1, 2004 37,235.48 12,354.14 24,881.34 27,630.44 2,502.21 25,128.23
October 1, 2004 37,231.85 12,433.83 24,798.02 27,593.67 3,293.84 24,299.84
November 1, 2004 37,228.19 12,514.03 24,714.16 27,628.55 2,542.94 25,085.61
December 1, 2004 37,224.51 12,594.74 24,629.77 27,591.83 3,333.53 24,258.30
January 1, 2005 37,220.81 12,675.98 24,544.83 27,626.63 2,584.23 25,042.40
February 1, 2005 37,217.07 12,757.74 24,459.34 27,625.79 2,602.39 25,023.40
March 1, 2005 37,213.32 12,840.03 24,373.30 27,517.53 4,933.04 22,584.50
April 1, 2005 37,209.54 12,922.84 24,286.70 27,623.33 2,655.34 24,967.99
May 1, 2005 37,205.75 13,006.20 24,199.55 27,586.74 3,443.06 24,143.68
June 1, 2005 37,201.92 13,090.09 24,111.83 27,621.33 2,698.18 24,923.15
July 1, 2005 3,586,146.48 3,562,122.93 24,023.55 27,584.80 3,484.82 24,099.98
August 1, 2005 0.00 0.00 0.00 27,619.32 2,741.63 24,877.69
September 1, 2005 0.00 0.00 0.00 27,618.42 2,760.89 24,857.53
October 1, 2005 0.00 0.00 0.00 27,581.96 3,545.94 24,036.02
November 1, 2005 0.00 0.00 0.00 27,616.37 2,805.21 24,811.15
December 1, 2005 0.00 0.00 0.00 27,579.96 3,589.13 23,990.83
January 1, 2006 0.00 0.00 0.00 27,614.28 2,850.14 24,764.13
February 1, 2006 0.00 0.00 0.00 27,613.35 2,870.17 24,743.18
March 1, 2006 0.00 0.00 0.00 27,506.22 5,176.61 22,329.61
April 1, 2006 0.00 0.00 0.00 27,610.72 2,926.71 24,684.01
May 1, 2006 0.00 0.00 0.00 27,574.46 3,707.53 23,866.92
June 1, 2006 0.00 0.00 0.00 27,608.56 2,973.33 24,635.23
July 1, 2006 0.00 0.00 0.00 27,572.35 3,752.96 23,819.39
August 1, 2006 0.00 0.00 0.00 27,606.36 3,020.59 24,585.77
September 1, 2006 0.00 0.00 0.00 3,365,168.16 3,340,604.60 24,563.56
<PAGE>
<CAPTION>
LOAN NUMBER 79: LOAN NUMBER 97:
OSHAWA HOLIDAY INN COMFORT INN - BOUCHERVILLE
------------------------------------------------ ------------------------------------------------
TOTAL PRINCIPAL INTEREST TOTAL PRINCIPAL INTEREST
US$ US$ US$ US$ US$ US$
PAYMENT DATE PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT
- ------------------- ---------------- ---------------- -------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
February 1, 2000 28,135.70 4,347.86 23,787.84 20,558.31 4,579.82 15,978.49
March 1, 2000 28,134.52 4,376.84 23,757.68 20,557.27 4,610.09 15,947.18
April 1, 2000 28,133.34 4,406.02 23,727.32 20,556.22 4,640.56 15,915.67
May 1, 2000 28,132.15 4,435.39 23,696.76 20,555.17 4,671.22 15,883.95
June 1, 2000 28,130.96 4,464.96 23,665.99 20,554.10 4,702.09 15,852.01
July 1, 2000 28,129.75 4,494.73 23,635.02 20,553.04 4,733.17 15,819.87
August 1, 2000 28,128.53 4,524.69 23,603.84 20,551.96 4,764.44 15,787.52
September 1, 2000 28,127.32 4,554.86 23,572.46 20,550.87 4,795.93 15,754.95
October 1, 2000 28,126.08 4,585.22 23,540.86 20,549.78 4,827.62 15,722.16
November 1, 2000 28,124.84 4,615.79 23,509.06 20,548.69 4,859.53 15,689.16
December 1, 2000 28,123.60 4,646.56 23,477.04 20,547.58 4,891.63 15,655.94
January 1, 2001 28,122.34 4,677.54 23,444.81 20,546.46 4,923.96 15,622.51
February 1, 2001 28,121.08 4,708.73 23,412.36 20,545.35 4,956.50 15,588.85
March 1, 2001 28,119.81 4,740.12 23,379.70 20,544.22 4,989.25 15,554.96
April 1, 2001 28,118.53 4,771.72 23,346.82 20,543.08 5,022.22 15,520.86
May 1, 2001 28,117.24 4,803.53 23,313.72 20,541.94 5,055.42 15,486.53
June 1, 2001 28,115.95 4,835.55 23,280.40 20,540.79 5,088.82 15,451.97
July 1, 2001 28,114.64 4,867.79 23,246.85 20,539.64 5,122.45 15,417.18
August 1, 2001 28,113.32 4,900.24 23,213.09 20,538.47 5,156.31 15,382.17
September 1, 2001 28,112.00 4,932.91 23,179.09 20,537.30 5,190.38 15,346.92
October 1, 2001 28,110.67 4,965.80 23,144.88 20,536.12 5,224.68 15,311.44
November 1, 2001 28,109.33 4,998.90 23,110.43 20,534.92 5,259.20 15,275.72
December 1, 2001 28,107.98 5,032.22 23,075.76 20,533.73 5,293.96 15,239.77
January 1, 2002 28,106.62 5,065.78 23,040.85 20,532.53 5,328.94 15,203.58
February 1, 2002 28,105.25 5,099.55 23,005.71 20,531.31 5,364.16 15,167.16
March 1, 2002 28,103.88 5,133.55 22,970.33 20,530.09 5,399.61 15,130.49
April 1, 2002 28,102.49 5,167.77 22,934.73 20,528.87 5,435.29 15,093.58
May 1, 2002 28,101.09 5,202.22 22,898.88 20,527.63 5,471.21 15,056.42
June 1, 2002 28,099.69 5,236.90 22,862.79 20,526.38 5,507.36 15,019.02
July 1, 2002 28,098.28 5,271.81 22,826.47 20,525.13 5,543.76 14,981.37
August 1, 2002 28,096.85 5,306.96 22,789.90 20,523.87 5,580.39 14,943.48
September 1, 2002 28,095.42 5,342.34 22,753.08 20,522.60 5,617.27 14,905.33
October 1, 2002 28,093.98 5,377.95 22,716.03 20,521.32 5,654.39 14,866.93
November 1, 2002 28,092.52 5,413.80 22,678.72 20,520.04 5,691.76 14,828.28
December 1, 2002 28,091.07 5,449.90 22,641.17 20,518.74 5,729.37 14,789.37
January 1, 2003 28,089.59 5,486.23 22,603.36 20,517.43 5,767.23 14,750.21
February 1, 2003 28,088.11 5,522.81 22,565.31 20,516.13 5,805.34 14,710.78
March 1, 2003 28,086.62 5,559.63 22,527.00 20,514.80 5,843.70 14,671.10
April 1, 2003 28,085.12 5,596.69 22,488.43 20,513.47 5,882.32 14,631.15
May 1, 2003 28,083.61 5,634.00 22,449.61 20,512.14 5,921.19 14,590.94
June 1, 2003 28,082.09 5,671.56 22,410.53 20,510.79 5,960.33 14,550.47
July 1, 2003 28,080.56 5,709.37 22,371.19 20,509.43 5,999.71 14,509.72
August 1, 2003 28,079.01 5,747.43 22,331.58 20,508.07 6,039.36 14,468.71
September 1, 2003 28,077.46 5,785.75 22,291.71 20,506.69 6,079.27 14,427.43
October 1, 2003 28,075.90 5,824.32 22,251.58 20,505.31 6,119.44 14,385.87
November 1, 2003 28,074.33 5,863.15 22,211.18 20,503.92 6,159.88 14,344.04
December 1, 2003 28,072.75 5,902.24 22,170.51 20,502.52 6,200.59 14,301.93
January 1, 2004 28,071.15 5,941.59 22,129.57 20,501.11 6,241.57 14,259.54
February 1, 2004 28,069.55 5,981.19 22,088.35 20,499.69 6,282.81 14,216.88
March 1, 2004 28,067.93 6,021.07 22,046.86 20,498.26 6,324.33 14,173.93
April 1, 2004 28,066.31 6,061.21 22,005.10 20,496.82 6,366.12 14,130.70
May 1, 2004 28,064.67 6,101.62 21,963.05 20,495.37 6,408.19 14,087.18
June 1, 2004 28,063.02 6,142.30 21,920.73 20,493.92 6,450.54 14,043.37
July 1, 2004 28,061.37 6,183.25 21,878.12 20,492.44 6,493.17 13,999.28
August 1, 2004 28,059.70 6,224.47 21,835.23 20,490.97 6,536.07 13,954.89
September 1, 2004 28,058.02 6,265.97 21,792.05 20,489.48 6,579.27 13,910.21
October 1, 2004 28,056.32 6,307.74 21,748.59 20,487.98 6,622.75 13,865.24
November 1, 2004 28,054.62 6,349.79 21,704.83 20,486.48 6,666.52 13,819.97
December 1, 2004 28,052.91 6,392.12 21,660.79 20,484.96 6,710.57 13,774.39
January 1, 2005 3,137,874.79 3,116,258.35 21,616.45 20,483.44 6,754.92 13,728.52
February 1, 2005 0.00 0.00 0.00 20,481.90 6,799.55 13,682.35
March 1, 2005 0.00 0.00 0.00 20,480.35 6,844.49 13,635.87
April 1, 2005 0.00 0.00 0.00 20,478.79 6,889.72 13,589.08
May 1, 2005 0.00 0.00 0.00 20,477.23 6,935.25 13,541.98
June 1, 2005 0.00 0.00 0.00 20,475.65 6,981.08 13,494.57
July 1, 2005 0.00 0.00 0.00 20,474.06 7,027.21 13,446.85
August 1, 2005 0.00 0.00 0.00 20,472.46 7,073.65 13,398.81
September 1, 2005 0.00 0.00 0.00 1,966,361.89 1,953,011.43 13,350.46
October 1, 2005 0.00 0.00 0.00 0.00 0.00 0.00
November 1, 2005 0.00 0.00 0.00 0.00 0.00 0.00
December 1, 2005 0.00 0.00 0.00 0.00 0.00 0.00
January 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
February 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
March 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
April 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
May 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
June 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
July 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
August 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
September 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
<PAGE>
<CAPTION>
LOAN NUMBER 101:
COMFORT INN - SAULT STE. MARIE
------------------------------------------------
TOTAL PRINCIPAL INTEREST
US$ US$ US$
PAYMENT DATE PAYMENT PAYMENT PAYMENT
- ------------------- ---------------- ---------------- --------------
<S> <C> <C> <C>
February 1, 2000 17,575.91 3,915.43 13,660.48
March 1, 2000 17,575.03 3,941.31 13,633.72
April 1, 2000 17,574.13 3,967.36 13,606.77
May 1, 2000 17,573.23 3,993.57 13,579.65
June 1, 2000 17,572.31 4,019.96 13,552.36
July 1, 2000 17,571.40 4,046.53 13,524.88
August 1, 2000 17,570.48 4,073.27 13,497.21
September 1, 2000 17,569.55 4,100.18 13,469.37
October 1, 2000 17,568.62 4,127.28 13,441.34
November 1, 2000 17,567.68 4,154.56 13,413.13
December 1, 2000 17,566.74 4,182.01 13,384.73
January 1, 2001 17,565.79 4,209.65 13,356.14
February 1, 2001 17,564.83 4,237.46 13,327.36
March 1, 2001 17,563.86 4,265.46 13,298.40
April 1, 2001 17,562.89 4,293.65 13,269.24
May 1, 2001 17,561.92 4,322.03 13,239.89
June 1, 2001 17,560.93 4,350.59 13,210.34
July 1, 2001 17,559.95 4,379.34 13,180.60
August 1, 2001 17,558.95 4,408.28 13,150.67
September 1, 2001 17,557.94 4,437.41 13,120.53
October 1, 2001 17,556.94 4,466.74 13,090.20
November 1, 2001 17,555.92 4,496.25 13,059.67
December 1, 2001 17,554.90 4,525.97 13,028.93
January 1, 2002 17,553.87 4,555.88 12,997.99
February 1, 2002 17,552.83 4,585.98 12,966.85
March 1, 2002 17,551.78 4,616.28 12,935.50
April 1, 2002 17,550.74 4,646.79 12,903.94
May 1, 2002 17,549.68 4,677.50 12,872.18
June 1, 2002 17,548.62 4,708.41 12,840.20
July 1, 2002 17,547.54 4,739.53 12,808.02
August 1, 2002 17,546.47 4,770.85 12,775.62
September 1, 2002 17,545.38 4,802.37 12,743.01
October 1, 2002 17,544.29 4,834.11 12,710.18
November 1, 2002 17,543.19 4,866.05 12,677.13
December 1, 2002 17,542.08 4,898.21 12,643.87
January 1, 2003 17,540.97 4,930.58 12,610.39
February 1, 2003 17,539.85 4,963.17 12,576.68
March 1, 2003 17,538.71 4,995.96 12,542.76
April 1, 2003 17,537.58 5,028.98 12,508.60
May 1, 2003 17,536.44 5,062.21 12,474.23
June 1, 2003 17,535.28 5,095.66 12,439.62
July 1, 2003 17,534.12 5,129.34 12,404.79
August 1, 2003 17,532.96 5,163.23 12,369.73
September 1, 2003 17,531.79 5,197.36 12,334.43
October 1, 2003 17,530.60 5,231.70 12,298.90
November 1, 2003 17,529.41 5,266.27 12,263.14
December 1, 2003 17,528.21 5,301.07 12,227.14
January 1, 2004 17,527.00 5,336.10 12,190.90
February 1, 2004 17,525.80 5,371.37 12,154.43
March 1, 2004 17,524.57 5,406.86 12,117.71
April 1, 2004 17,523.34 5,442.60 12,080.75
May 1, 2004 17,522.11 5,478.56 12,043.54
June 1, 2004 17,520.86 5,514.77 12,006.09
July 1, 2004 17,519.60 5,551.21 11,968.39
August 1, 2004 17,518.34 5,587.89 11,930.45
September 1, 2004 17,517.07 5,624.82 11,892.25
October 1, 2004 17,515.79 5,661.99 11,853.80
November 1, 2004 17,514.50 5,699.40 11,815.09
December 1, 2004 17,513.21 5,737.07 11,776.13
January 1, 2005 17,511.90 5,774.98 11,736.92
February 1, 2005 17,510.59 5,813.15 11,697.44
March 1, 2005 17,509.26 5,851.56 11,657.70
April 1, 2005 17,507.93 5,890.23 11,617.70
May 1, 2005 17,506.59 5,929.15 11,577.44
June 1, 2005 17,505.24 5,968.33 11,536.91
July 1, 2005 17,503.88 6,007.78 11,496.11
August 1, 2005 17,502.52 6,047.48 11,455.04
September 1, 2005 1,681,100.47 1,669,686.77 11,413.70
October 1, 2005 0.00 0.00 0.00
November 1, 2005 0.00 0.00 0.00
December 1, 2005 0.00 0.00 0.00
January 1, 2006 0.00 0.00 0.00
February 1, 2006 0.00 0.00 0.00
March 1, 2006 0.00 0.00 0.00
April 1, 2006 0.00 0.00 0.00
May 1, 2006 0.00 0.00 0.00
June 1, 2006 0.00 0.00 0.00
July 1, 2006 0.00 0.00 0.00
August 1, 2006 0.00 0.00 0.00
September 1, 2006 0.00 0.00 0.00
</TABLE>
D-1
<PAGE>
ANNEX D
F/X SCHEDULES
<TABLE>
<CAPTION>
LOAN NUMBER 106: LOAN NUMBER 117:
COMFORT INN - THUNDER BAY COMFORT INN - SASKATOON
------------------------------------------------ ------------------------------------------------
TOTAL PRINCIPAL INTEREST TOTAL PRINCIPAL INTEREST
US$ US$ US$ US$ US$ US$
PAYMENT DATE PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT
- ------------------- ---------------- ---------------- -------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
February 1, 2000 16,620.38 3,702.56 12,917.82 14,101.27 3,141.38 10,959.89
March 1, 2000 16,619.54 3,727.03 12,892.51 14,100.55 3,162.14 10,938.42
April 1, 2000 16,618.69 3,751.66 12,867.03 14,099.83 3,183.03 10,916.80
May 1, 2000 16,617.84 3,776.45 12,841.39 14,099.11 3,204.06 10,895.04
June 1, 2000 16,616.98 3,801.41 12,815.57 14,098.38 3,225.23 10,873.14
July 1, 2000 16,616.12 3,826.54 12,789.59 14,097.64 3,246.55 10,851.10
August 1, 2000 16,615.25 3,851.82 12,763.43 14,096.91 3,268.01 10,828.90
September 1, 2000 16,614.37 3,877.27 12,737.10 14,096.16 3,289.60 10,806.56
October 1, 2000 16,613.49 3,902.89 12,710.59 14,095.42 3,311.34 10,784.08
November 1, 2000 16,612.60 3,928.68 12,683.91 14,094.66 3,333.22 10,761.44
December 1, 2000 16,611.71 3,954.65 12,657.06 14,093.90 3,355.25 10,738.65
January 1, 2001 16,610.81 3,980.79 12,630.03 14,093.14 3,377.42 10,715.72
February 1, 2001 16,609.90 4,007.09 12,602.81 14,092.37 3,399.74 10,692.63
March 1, 2001 16,608.99 4,033.57 12,575.42 14,091.60 3,422.21 10,669.39
April 1, 2001 16,608.07 4,060.22 12,547.85 14,090.82 3,444.82 10,646.00
May 1, 2001 16,607.15 4,087.06 12,520.09 14,090.04 3,467.59 10,622.45
June 1, 2001 16,606.22 4,114.07 12,492.16 14,089.25 3,490.50 10,598.75
July 1, 2001 16,605.29 4,141.25 12,464.03 14,088.45 3,513.57 10,574.88
August 1, 2001 16,604.34 4,168.62 12,435.72 14,087.65 3,536.79 10,550.87
September 1, 2001 16,603.40 4,196.17 12,407.23 14,086.85 3,560.16 10,526.69
October 1, 2001 16,602.44 4,223.90 12,378.54 14,086.04 3,583.69 10,502.35
November 1, 2001 16,601.48 4,251.81 12,349.67 14,085.23 3,607.37 10,477.86
December 1, 2001 16,600.51 4,279.91 12,320.60 14,084.40 3,631.21 10,453.20
January 1, 2002 16,599.54 4,308.19 12,291.35 14,083.57 3,655.20 10,428.37
February 1, 2002 16,598.56 4,336.66 12,261.90 14,082.74 3,679.36 10,403.39
March 1, 2002 16,597.57 4,365.32 12,232.25 14,081.91 3,703.67 10,378.24
April 1, 2002 16,596.57 4,394.16 12,202.41 14,081.07 3,728.15 10,352.92
May 1, 2002 16,595.57 4,423.20 12,172.37 14,080.22 3,752.79 10,327.43
June 1, 2002 16,594.57 4,452.43 12,142.14 14,079.37 3,777.59 10,301.78
July 1, 2002 16,593.56 4,481.86 12,111.70 14,078.51 3,802.55 10,275.96
August 1, 2002 16,592.54 4,511.47 12,081.06 14,077.64 3,827.67 10,249.96
September 1, 2002 16,591.51 4,541.29 12,050.23 14,076.77 3,852.97 10,223.80
October 1, 2002 16,590.48 4,571.29 12,019.18 14,075.89 3,878.43 10,197.46
November 1, 2002 16,589.44 4,601.51 11,987.93 14,075.01 3,904.06 10,170.95
December 1, 2002 16,588.39 4,631.91 11,956.48 14,074.12 3,929.86 10,144.26
January 1, 2003 16,587.34 4,662.52 11,924.82 14,073.23 3,955.83 10,117.40
February 1, 2003 16,586.28 4,693.34 11,892.94 14,072.33 3,981.97 10,090.35
March 1, 2003 16,585.21 4,724.35 11,860.86 14,071.42 4,008.28 10,063.13
April 1, 2003 16,584.14 4,755.57 11,828.57 14,070.51 4,034.77 10,035.73
May 1, 2003 16,583.05 4,787.00 11,796.06 14,069.59 4,061.44 10,008.15
June 1, 2003 16,581.96 4,818.63 11,763.33 14,068.67 4,088.28 9,980.39
July 1, 2003 16,580.87 4,850.47 11,730.39 14,067.74 4,115.29 9,952.44
August 1, 2003 16,579.77 4,882.53 11,697.24 14,066.80 4,142.49 9,924.31
September 1, 2003 16,578.65 4,914.79 11,663.86 14,065.86 4,169.86 9,895.99
October 1, 2003 16,577.54 4,947.27 11,630.26 14,064.91 4,197.42 9,867.49
November 1, 2003 16,576.41 4,979.97 11,596.45 14,063.96 4,225.16 9,838.80
December 1, 2003 16,575.28 5,012.87 11,562.40 14,062.99 4,253.08 9,809.91
January 1, 2004 16,574.14 5,046.00 11,528.14 14,062.03 4,281.19 9,780.84
February 1, 2004 16,572.99 5,079.35 11,493.64 14,061.05 4,309.48 9,751.58
March 1, 2004 16,571.84 5,112.92 11,458.92 14,060.07 4,337.95 9,722.12
April 1, 2004 16,570.67 5,146.70 11,423.97 14,059.09 4,366.62 9,692.46
May 1, 2004 16,569.50 5,180.71 11,388.79 14,058.09 4,395.48 9,662.61
June 1, 2004 16,568.32 5,214.95 11,353.37 14,057.09 4,424.52 9,632.57
July 1, 2004 16,567.14 5,249.41 11,317.73 14,056.08 4,453.76 9,602.32
August 1, 2004 16,565.94 5,284.10 11,281.84 14,055.07 4,483.19 9,571.88
September 1, 2004 16,564.74 5,319.02 11,245.72 14,054.05 4,512.82 9,541.23
October 1, 2004 16,563.53 5,354.17 11,209.36 14,053.03 4,542.64 9,510.38
November 1, 2004 16,562.31 5,389.55 11,172.76 14,051.99 4,572.66 9,479.33
December 1, 2004 16,561.08 5,425.17 11,135.92 14,050.95 4,602.88 9,448.07
January 1, 2005 16,559.85 5,461.02 11,098.83 14,049.91 4,633.30 9,416.61
February 1, 2005 16,558.61 5,497.11 11,061.50 14,048.85 4,663.92 9,384.93
March 1, 2005 16,557.35 5,533.43 11,023.92 14,047.79 4,694.74 9,353.05
April 1, 2005 16,556.10 5,570.00 10,986.10 14,046.72 4,725.76 9,320.96
May 1, 2005 16,554.83 5,606.81 10,948.02 14,045.64 4,756.99 9,288.66
June 1, 2005 16,553.55 5,643.86 10,909.70 14,044.56 4,788.43 9,256.14
July 1, 2005 16,552.27 5,681.15 10,871.12 14,043.47 4,820.07 9,223.40
August 1, 2005 16,550.98 5,718.70 10,832.28 14,042.38 4,851.93 9,190.46
September 1, 2005 1,589,706.42 1,578,913.23 10,793.19 1,348,758.13 1,339,600.84 9,157.29
October 1, 2005 0.00 0.00 0.00 0.00 0.00 0.00
November 1, 2005 0.00 0.00 0.00 0.00 0.00 0.00
December 1, 2005 0.00 0.00 0.00 0.00 0.00 0.00
January 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
February 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
March 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
April 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
May 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
June 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
July 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
August 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
September 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00
<PAGE>
<CAPTION>
AN NUMBER
LO 137:
LOAN NUMBER 126: LOAN NUMBER 134: COMFORT INN -
COMFORT INN - LONDON COMFORT INN - DRUMMONDVILLE NEW GLASGOW
----------------------------------------------- ----------------------------------------- -------------
TOTAL PRINCIPAL INTEREST TOTAL PRINCIPAL INTEREST TOTAL
US$ US$ US$ US$ US$ US$ US$
PAYMENT DATE PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT
- ------------------- ---------------- ---------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
February 1, 2000 12,161.26 2,709.20 9,452.06 9,844.83 2,193.16 7,651.67 8,686.61
March 1, 2000 12,160.64 2,727.10 9,433.54 9,844.33 2,207.65 7,636.68 8,686.17
April 1, 2000 12,160.03 2,745.13 9,414.90 9,843.82 2,222.24 7,621.59 8,685.73
May 1, 2000 12,159.40 2,763.26 9,396.14 9,843.32 2,236.92 7,606.40 8,685.28
June 1, 2000 12,158.77 2,781.53 9,377.25 9,842.81 2,251.71 7,591.11 8,684.83
July 1, 2000 12,158.14 2,799.91 9,358.23 9,842.30 2,266.59 7,575.71 8,684.38
August 1, 2000 12,157.50 2,818.41 9,339.09 9,841.79 2,281.57 7,560.22 8,683.93
September 1, 2000 12,156.86 2,837.03 9,319.83 9,841.27 2,296.64 7,544.62 8,683.47
October 1, 2000 12,156.22 2,855.78 9,300.43 9,840.74 2,311.82 7,528.92 8,683.01
November 1, 2000 12,155.56 2,874.65 9,280.91 9,840.22 2,327.10 7,513.12 8,682.55
December 1, 2000 12,154.91 2,893.65 9,261.26 9,839.69 2,342.47 7,497.21 8,682.08
January 1, 2001 12,154.25 2,912.77 9,241.48 9,839.15 2,357.95 7,481.20 8,681.61
February 1, 2001 12,153.59 2,932.02 9,221.57 9,838.62 2,373.54 7,465.08 8,681.13
March 1, 2001 12,152.92 2,951.40 9,201.53 9,838.08 2,389.22 7,448.86 8,680.66
April 1, 2001 12,152.25 2,970.90 9,181.35 9,837.53 2,405.01 7,432.52 8,680.18
May 1, 2001 12,151.58 2,990.54 9,161.04 9,836.99 2,420.90 7,416.08 8,679.69
June 1, 2001 12,150.89 3,010.29 9,140.60 9,836.44 2,436.90 7,399.53 8,679.20
July 1, 2001 12,150.21 3,030.19 9,120.02 9,835.88 2,453.00 7,382.88 8,678.72
August 1, 2001 12,149.52 3,050.21 9,099.31 9,835.32 2,469.21 7,366.11 8,678.23
September 1, 2001 12,148.82 3,070.37 9,078.46 9,834.76 2,485.53 7,349.23 8,677.73
October 1, 2001 12,148.13 3,090.66 9,057.47 9,834.20 2,501.96 7,332.24 8,677.23
November 1, 2001 12,147.43 3,111.08 9,036.34 9,833.63 2,518.49 7,315.14 8,676.73
December 1, 2001 12,146.72 3,131.64 9,015.08 9,833.06 2,535.14 7,297.92 8,676.22
January 1, 2002 12,146.01 3,152.34 8,993.67 9,832.48 2,551.89 7,280.59 8,675.72
February 1, 2002 12,145.29 3,173.17 8,972.12 9,831.90 2,568.75 7,263.14 8,675.20
March 1, 2002 12,144.56 3,194.14 8,950.43 9,831.31 2,585.73 7,245.59 8,674.69
April 1, 2002 12,143.84 3,215.25 8,928.59 9,830.72 2,602.81 7,227.91 8,674.16
May 1, 2002 12,143.11 3,236.49 8,906.61 9,830.13 2,620.01 7,210.12 8,673.64
June 1, 2002 12,142.38 3,257.88 8,884.49 9,829.54 2,637.33 7,192.21 8,673.12
July 1, 2002 12,141.63 3,279.41 8,862.22 9,828.94 2,654.76 7,174.18 8,672.59
August 1, 2002 12,140.89 3,301.08 8,839.80 9,828.33 2,672.30 7,156.03 8,672.06
September 1, 2002 12,140.13 3,322.89 8,817.24 9,827.72 2,689.96 7,137.76 8,671.52
October 1, 2002 12,139.38 3,344.85 8,794.52 9,827.11 2,707.74 7,119.38 8,670.98
November 1, 2002 12,138.62 3,366.96 8,771.66 9,826.49 2,725.63 7,100.87 8,670.43
December 1, 2002 12,137.85 3,389.21 8,748.64 9,825.88 2,743.64 7,082.23 8,669.89
January 1, 2003 12,137.08 3,411.61 8,725.47 9,825.26 2,761.78 7,063.48 8,669.34
February 1, 2003 12,136.30 3,434.15 8,702.15 9,824.62 2,780.02 7,044.60 8,668.79
March 1, 2003 12,135.52 3,456.85 8,678.68 9,823.99 2,798.39 7,025.60 8,668.23
April 1, 2003 12,134.73 3,479.69 8,655.05 9,823.36 2,816.89 7,006.47 8,667.66
May 1, 2003 12,133.94 3,502.68 8,631.26 9,822.72 2,835.51 6,987.21 8,667.10
June 1, 2003 12,133.15 3,525.83 8,607.32 9,822.07 2,854.24 6,967.83 8,666.53
July 1, 2003 12,132.35 3,549.13 8,583.21 9,821.42 2,873.11 6,948.32 8,665.96
August 1, 2003 12,131.54 3,572.58 8,558.95 9,820.77 2,892.09 6,928.68 8,665.38
September 1, 2003 12,130.73 3,596.20 8,534.53 9,820.11 2,911.20 6,908.91 8,664.80
October 1, 2003 12,129.91 3,619.96 8,509.95 9,819.45 2,930.44 6,889.01 8,664.22
November 1, 2003 12,129.08 3,643.88 8,485.20 9,818.78 2,949.80 6,868.98 8,663.63
December 1, 2003 12,128.25 3,667.96 8,460.29 9,818.11 2,969.29 6,848.81 8,663.03
January 1, 2004 12,127.42 3,692.20 8,435.22 9,817.44 2,988.92 6,828.51 8,662.44
February 1, 2004 12,126.58 3,716.60 8,409.98 9,816.75 3,008.67 6,808.08 8,661.84
March 1, 2004 12,125.73 3,741.16 8,384.57 9,816.07 3,028.56 6,787.51 8,661.23
April 1, 2004 12,124.89 3,765.88 8,359.00 9,815.38 3,048.57 6,766.81 8,660.63
May 1, 2004 12,124.02 3,790.77 8,333.26 9,814.68 3,068.71 6,745.97 8,660.02
June 1, 2004 12,123.16 3,815.82 8,307.34 9,813.98 3,088.99 6,725.00 8,659.40
July 1, 2004 12,122.30 3,841.04 8,281.26 9,813.28 3,109.40 6,703.88 8,658.78
August 1, 2004 12,121.42 3,866.42 8,255.00 9,812.58 3,129.95 6,682.62 8,658.16
September 1, 2004 12,120.54 3,891.97 8,228.57 9,811.87 3,150.64 6,661.23 8,657.53
October 1, 2004 12,119.66 3,917.69 8,201.97 9,811.15 3,171.46 6,639.69 8,656.90
November 1, 2004 12,118.77 3,943.58 8,175.19 9,810.42 3,192.41 6,618.01 8,656.26
December 1, 2004 12,117.87 3,969.64 8,148.23 9,809.70 3,213.51 6,596.19 8,655.62
January 1, 2005 12,116.97 3,995.87 8,121.09 9,808.97 3,234.75 6,574.22 8,654.97
February 1, 2005 12,116.06 4,022.28 8,093.78 9,808.23 3,256.12 6,552.11 8,654.32
March 1, 2005 12,115.14 4,048.85 8,066.28 9,807.49 3,277.64 6,529.85 8,653.67
April 1, 2005 12,114.22 4,075.61 8,038.61 9,806.75 3,299.30 6,507.45 8,653.01
May 1, 2005 12,113.30 4,102.55 8,010.75 9,806.00 3,321.11 6,484.89 8,652.35
June 1, 2005 12,112.36 4,129.66 7,982.70 9,805.24 3,343.05 6,462.19 8,651.68
July 1, 2005 12,111.42 4,156.95 7,954.47 9,804.48 3,365.15 6,439.34 8,651.01
August 1, 2005 12,110.48 4,184.42 7,926.06 9,803.72 3,387.38 6,416.33 8,650.33
September 1, 2005 1,163,199.51 1,155,302.06 7,897.45 941,638.02 935,244.84 6,393.18 830,857.18
October 1, 2005 0.00 0.00 0.00 0.00 0.00 0.00 0.00
November 1, 2005 0.00 0.00 0.00 0.00 0.00 0.00 0.00
December 1, 2005 0.00 0.00 0.00 0.00 0.00 0.00 0.00
January 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00 0.00
February 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00 0.00
March 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00 0.00
April 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00 0.00
May 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00 0.00
June 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00 0.00
July 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00 0.00
August 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00 0.00
September 1, 2006 0.00 0.00 0.00 0.00 0.00 0.00 0.00
<PAGE>
<CAPTION>
LOAN NUMBER 137:
COMFORT INN - NEW GLASGOW
---------------------------
PRINCIPAL INTEREST
US$ US$
PAYMENT DATE PAYMENT PAYMENT
- ------------------- ------------- -------------
<S> <C> <C>
February 1, 2000 1,935.14 6,751.47
March 1, 2000 1,947.93 6,738.25
April 1, 2000 1,960.80 6,724.93
May 1, 2000 1,973.76 6,711.53
June 1, 2000 1,986.80 6,698.03
July 1, 2000 1,999.93 6,684.45
August 1, 2000 2,013.15 6,670.78
September 1, 2000 2,026.45 6,657.02
October 1, 2000 2,039.84 6,643.17
November 1, 2000 2,053.32 6,629.22
December 1, 2000 2,066.89 6,615.19
January 1, 2001 2,080.55 6,601.06
February 1, 2001 2,094.30 6,586.84
March 1, 2001 2,108.14 6,572.52
April 1, 2001 2,122.07 6,558.11
May 1, 2001 2,136.09 6,543.60
June 1, 2001 2,150.20 6,529.00
July 1, 2001 2,164.41 6,514.30
August 1, 2001 2,178.72 6,499.51
September 1, 2001 2,193.12 6,484.61
October 1, 2001 2,207.61 6,469.62
November 1, 2001 2,222.20 6,454.53
December 1, 2001 2,236.88 6,439.34
January 1, 2002 2,251.67 6,424.05
February 1, 2002 2,266.54 6,408.66
March 1, 2002 2,281.53 6,393.16
April 1, 2002 2,296.60 6,377.57
May 1, 2002 2,311.78 6,361.87
June 1, 2002 2,327.05 6,346.07
July 1, 2002 2,342.43 6,330.16
August 1, 2002 2,357.91 6,314.15
September 1, 2002 2,373.49 6,298.03
October 1, 2002 2,389.18 6,281.80
November 1, 2002 2,404.96 6,265.47
December 1, 2002 2,420.86 6,249.03
January 1, 2003 2,436.85 6,232.48
February 1, 2003 2,452.96 6,215.82
March 1, 2003 2,469.17 6,199.06
April 1, 2003 2,485.48 6,182.18
May 1, 2003 2,501.91 6,165.19
June 1, 2003 2,518.45 6,148.08
July 1, 2003 2,535.09 6,130.87
August 1, 2003 2,551.84 6,113.54
September 1, 2003 2,568.71 6,096.10
October 1, 2003 2,585.68 6,078.54
November 1, 2003 2,602.77 6,060.86
December 1, 2003 2,619.97 6,043.07
January 1, 2004 2,637.28 6,025.16
February 1, 2004 2,654.71 6,007.13
March 1, 2004 2,672.25 5,988.98
April 1, 2004 2,689.91 5,970.72
May 1, 2004 2,707.69 5,952.33
June 1, 2004 2,725.58 5,933.82
July 1, 2004 2,743.59 5,915.19
August 1, 2004 2,761.72 5,896.43
September 1, 2004 2,779.97 5,877.55
October 1, 2004 2,798.35 5,858.55
November 1, 2004 2,816.83 5,839.42
December 1, 2004 2,835.45 5,820.17
January 1, 2005 2,854.19 5,800.78
February 1, 2005 2,873.05 5,781.27
March 1, 2005 2,892.03 5,761.63
April 1, 2005 2,911.15 5,741.86
May 1, 2005 2,930.39 5,721.96
June 1, 2005 2,949.75 5,701.93
July 1, 2005 2,969.24 5,681.77
August 1, 2005 2,988.86 5,661.47
September 1, 2005 825,216.14 5,641.04
October 1, 2005 0.00 0.00
November 1, 2005 0.00 0.00
December 1, 2005 0.00 0.00
January 1, 2006 0.00 0.00
February 1, 2006 0.00 0.00
March 1, 2006 0.00 0.00
April 1, 2006 0.00 0.00
May 1, 2006 0.00 0.00
June 1, 2006 0.00 0.00
July 1, 2006 0.00 0.00
August 1, 2006 0.00 0.00
September 1, 2006 0.00 0.00
</TABLE>
D-2
<PAGE>
ANNEX E
J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2000-C9
$732,945,000
J.P. MORGAN & CO. ABN AMRO INCORPORATED
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 1
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-1
<PAGE>
J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2000-C9
$732,945,000
J.P. MORGAN:
TRADING Brian Baker (212) 648-1413
Andrew Taylor (212) 648-1413
Thomas Doherty (212) 648-1414
Theresa Dooley (212) 648-0651
RESEARCH Patrick Corcoran (212) 648-6130
Joshua Philips (212) 648-6562
BANKING/UNDERWRITING Clive Bull (212) 648-9496
Robert Gray (212) 648-7276
Dennis Schuh (212) 648-3060
ABN AMRO
TRADING Frank Forelle (212) 314-1182
Gerald Sneider (212) 314-1182
BANKING/UNDERWRITING Margaret Govern (312) 904-8359
Maria Fregosi (312) 904-8507
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 2
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-2
<PAGE>
J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2000-C9
$732,945,000
TRANSACTION OVERVIEW
<TABLE>
<CAPTION>
CURRENT CERTIFICATES AVG. PRINCIPAL
RATING SIZE % OF CREDIT TO LIFE WINDOW COUPON PRICE
CLASS (FITCH/MOODY'S) ($) (1) TOTAL SUPPORT VALUE(%)(2) (YEARS)(3) (MONTHS)(3) DESCRIPTION PRICE($) TALK ERISA(4)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A-1 AAA / Aaa $200,000,000 24.56% 25.75 50.0% 5.47 1 - 108 Fixed/WAC Yes
A-2 AAA / Aaa 404,682,000 49.69 25.75 50.0 9.53 108 - 117 Fixed/WAC Yes
X AAA / Aaa 814,388,116(5) NA NA NA 5.47(6) NA WAC(7) Yes
B AA / Aa2 36,647,000 4.50 21.25 53.0 9.72 117 - 117 Fixed/WAC No
C A / A2 38,683,000 4.75 16.25 56.2 9.72 117 - 117 Fixed/WAC No
D A- / A3 10,179,000 1.25 15.25 57.1 9.72 117 - 117 Fixed/WAC No
E BBB / Baa2 28,503,000 3.50 11.75 59.4 9.80 117 - 118 Fixed/WAC No
F BBB- / Baa3 14,251,000 1.75 10.00 60.6 9.81 118 - 118 Fixed/WAC No
Private Certificates 81,443,116(8) Fixed/WAC No
TOTAL $814,388,116 100.0% 67.3% 8.75
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Approximate, subject to change
(2) The sum of the principal balance of each bond and the bonds senior to it,
divided by the aggregate appraised value of the properties collateralizing
the mortgage loan pool
(3) Assumes a prepayment rate of 0% CPR, optional redemption is not exercised
and a closing date of January 25, 2000
(4) ERISA eligibility is subject to certain limitations described in the
prospectus supplement under "Certain ERISA Considerations"
(5) Notional balance
(6) Implied average life
(7) The Class X Certificates will receive the net interest on the mortgage
loans less the interest paid on the other certificates
(8) Includes Classes G, H, J, K and NR
MORTGAGE POOL CHARACTERISTICS
The mortgage pool consists of 140 fixed rate mortgage loans secured by one or
more first liens on fee simple and/or leasehold interests in 164 multifamily,
retail, office, hotel and other commercial properties located in 29 states and 4
provinces of Canada. The three largest geographic concentrations are California
(17.9%), New York (12.0%) and Illinois (8.4%). The mortgage loans will have an
initial pool balance of $814,388,116 and individual principal balances as of the
Cut-off Date of at least $798,725 but not more than $49,225,000 with an average
principal balance of approximately $5,817,058. The mortgage pool has a weighted
average loan-to-value of 68.3% and a weighted average debt service coverage
ratio of 1.38x.
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 3
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-3
<PAGE>
DEAL SUMMARY
LEAD MANAGER J.P. Morgan Securities Inc.
CO-MANAGER ABN AMRO Incorporated
PRICING SPEED 0% CPR
DEPOSITOR J.P. Morgan Commercial Mortgage Finance Corp.,
an indirect wholly-owned limited purpose finance
subsidiary of J.P. Morgan & Co. Incorporated and
an affiliate of J.P. Morgan Securities Inc.
("JPMSI"), an Underwriter
ORIGINATOR 84.8% of the mortgage loans were originated or
purchased by Morgan Guaranty Trust Company of
New York ("MGT") and 15.2% were originated or
purchased by LaSalle National Bank ("LSNB")
MASTER SERVICER ORIX Real Estate Capital Markets, LLC
SPECIAL SERVICER ORIX Real Estate Capital Markets, LLC
TRUSTEE Norwest Bank Minnesota, National Association
BOND ADMINISTRATOR LaSalle Bank National Association
BOND ADMINISTRATOR WEBSITE www.lnbabs.com
RATING AGENCIES Fitch IBCA, Inc.
Moody's Investors Service, Inc.
-------------------------------------
LEGAL STATUS All offered certificates are public
CUT-OFF DATE January 1, 2000
SETTLEMENT DATE On or about January 25, 2000
DELIVERY DTC, Euroclear and Cedel
RATED FINAL MATURITY DATE The distribution date in October 2032
MONTHLY DISTRIBUTION DATES Pays monthly on the 15th day of every month or,
if any such 15th day is not a business day, then
the next succeeding business day
FIRST PAYMENT DATE February 15, 2000, 14 day delay
OPTIONAL REDEMPTION When pool pays down to 1% of original pool
balance
DEAL INFORMATION / ANALYTICS Bloomberg, Conquest, Intex and The Trepp Group
ERISA ELIGIBLE(1) Classes A1, A2 and X
(1) ERISA eligibility is subject to certain limitations described in the
prospectus supplement under "Certain ERISA Considerations"
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 4
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-4
<PAGE>
STRUCTURAL OVERVIEW
o Interest payments will be pro-rata to the Class A1, A2 and X Certificates
and then, after payment of the principal distribution amount, interest will
be paid sequentially to the Class B, C, D, E, F, G, H, J, K and NR
Certificates
o The pass-through rate for the Class A1, A2, B, C, D, E, F, G, H, I, J, K
and NR Certificates will be equal to either a fixed rate or a rate based on
the weighted average of the remittance rates on the mortgage loans. The
Class X Certificates will receive the net interest on the mortgage loans
less the interest paid on the other certificates
o All Classes offered will pay interest on a 30/360 basis
o The Class X Certificates will have the same interest payment priority as
the Class A1 and A2 Certificates
o Principal payments will be paid sequentially to the Class A1, A2, B, C, D,
E, F, G, H, J, K and NR Certificates, until each class is retired. The
Class X Certificates do not have a class principal balance and are
therefore not entitled to any principal distributions
o Losses will be born by the Classes in reverse sequential order, from the
Class NR Certificates up to the Class B Certificates and then pro-rata to
the Class A1 and A2 Certificates
o If the principal balance of the mortgage pool is less than or equal to the
aggregate bond balance of the Class A1 and A2 Certificates, the principal
will be allocated pro-rata to the Class A1 and A2 Certificates
o Net prepayment premiums calculated by reference to a U.S. Treasury rate to
the extent received will be allocated first to the interest bearing
certificates, according to a specified formula, with any remaining amount
paid to the Class X Certificates. For the amount payable to any
interest-bearing Class, the formula is as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Principal Paid to Class (Pass-Through Rate on Class - Discount Rate)
Prepayment Premium x ----------------------- x -------------------------------------------
Total Principal Paid (Mortgage Rate on Loan - Discount Rate)
</TABLE>
o Net prepayment premiums not calculated by reference to a U.S. Treasury rate
to the extent received will be allocated solely to the Class X Certificates
o The deal will provide for the standard collateral value adjustment feature
for problem or delinquent loans. Generally, when a loan becomes 90 days
delinquent, the special servicer obtains a new appraisal. To the extent any
such adjustment is not reversed, the interest portion of any P&I Advance
will be reduced in proportion to such adjustment
COLLATERAL CHARACTERISTICS
PRINCIPAL BALANCE $814,388,116
NUMBER OF LOANS 140
NUMBER OF MORTGAGED PROPERTIES 164
AVG. PRINCIPAL BALANCE
PER LOAN $5,817,058
PER PROPERTY $4,965,781
WA MORTGAGE RATE 8.07%
WA REMAINING TERM 112 months
WA REMAINING AMORTIZATION TERM 327 months
WA UNDERWRITTEN DSCR 1.38x
WA CUT-OFF DATE LTV RATIO 68.3%
WA SEASONING 5 months
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 5
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-5
<PAGE>
AVERAGE LIFE SENSITIVITIES
PREPAYMENT SPEEDS (CPR) 1
<TABLE>
<CAPTION>
AVERAGE LIFE (YEARS) 2
-----------------------------------------------------------------------
Class 0% 25% 50% 75% 100%
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
A(1) 5.47 5.40 5.35 5.31 5.16
A(2) 9.53 9.52 9.50 9.47 9.29
B 9.72 9.72 9.72 9.67 9.47
C 9.72 9.72 9.72 9.72 9.47
D 9.72 9.72 9.72 9.72 9.47
E 9.80 9.78 9.76 9.72 9.55
F 9.81 9.81 9.81 9.80 9.56
X(3) 5.47 5.46 5.46 5.44 5.32
</TABLE>
(1) Assumes no prepayment during the lockout and yield maintenance periods and
optional redemption is not exercised
(2) Assumes a closing date of January 25, 2000
(3) Implied average life
PREPAYMENT PROTECTION
PERCENTAGE OF MORTGAGE LOANS BY OUTSTANDING PRINCIPAL BALANCE AS OF
THE CUT-OFF DATE THAT HAVE PREPAYMENT LOCKOUTS OR PENALTIES (ASSUMING
NO PREPAYMENTS)
<TABLE>
<CAPTION>
CURRENT 1/01 1/02 1/03 1/04 1/05 1/06 1/07 1/08 1/09 1/10
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Lockout/Defeasance 100.0 99.1 99.1 99.1 96.9 97.3 97.2 97.1 96.8 96.5 43.5
Yield Maintenance(1) 0.0 0.9 0.9 0.9 3.1 1.8 1.8 1.8 2.2 2.3 56.5
Total Lockout and YM 100.0 100.0 100.0 100.0 100.0 99.1 99.0 99.0 99.0 98.8 100.0
1.00 % 0.0 0.0 0.0 0.0 0.0 0.9 1.0 1.0 0.0 0.0 0.0
No Prepayment Premium 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 1.2 0.0
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
- ----------------------------------------------------------------------------------------------------------------------------
Aggregate Mortgage Balance ($) 814.4 807.0 798.5 789.3 779.3 752.9 679.8 646.5 634.8 590.6 24.7
% of Cut-off Date Balance 100.0 99.1 98.1 96.9 95.7 92.4 83.5 79.4 78.0 72.5 3.0
</TABLE>
(1) U.S. Treasury rate; 1% floor
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 6
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-6
<PAGE>
DEAL SUMMARY BY PROPERTY TYPE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
% OF GROSS REM. WA WA WA %
NO. OF PRINCIPAL PRINCIPAL AVERAGE WAC WAM UW LTV OCC. RATE BALLOON
PROPERTY TYPE PROPERTIES BALANCE ($) BALANCE BALANCE ($) (%) (MONTHS) DSCR RATIO (%) (%) (1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MULTIFAMILY 49 $203,039,876 24.9% $4,143,671 7.89% 113 1.32x 72.3% 95.93% 98.4%
Conventional 45 183,242,204 22.5 4,072,049 7.88 113 1.33 72.7 95.54 98.2
MHC (2) 1 13,985,254 1.7 13,985,254 8.00 114 1.20 71.7 99.90 100.0
MHP (2) 3 5,812,417 0.7 1,937,472 8.06 117 1.32 62.7 98.87 100.0
RETAIL 40 $177,630,087 21.8% $4,440,752 8.08% 116 1.37x 67.9% 93.90% 99.1%
Anchored 15 102,892,766 12.6 6,859,518 7.98 118 1.36 71.1 95.42 98.5
Unanchored 3 22,753,296 2.8 7,584,432 8.46 115 1.45 55.8 85.07 100.0
Factory Outlet 21 46,933,858 5.8 2,234,946 8.09 114 1.36 66.6 94.19 100.0
Specialty 1 5,050,168 0.6 5,050,168 8.29 115 1.45 68.2 100.00 100.0
OFFICE 24 $172,888,583 21.2% $7,203,691 8.18% 100 1.37x 66.0% 95.61% 100.0%
CBD (2) 6 111,907,572 13.7 18,651,262 8.20 95 1.36 64.4 94.82 100.0
Suburban 18 60,981,010 7.5 3,387,834 8.16 110 1.38 69.0 97.05 100.0
INDUSTRIAL 21 $143,444,356 17.6% $6,830,684 7.97% 119 1.31x 69.9% 98.66% 98.8%
Flex Space 15 79,543,735 9.8 5,302,916 8.12 113 1.32 70.3 99.71 100.0
Warehouse 6 63,900,621 7.8 10,650,104 7.79 126 1.30 69.4 97.36 97.4
HOTEL 20 $ 58,780,168 7.2% $2,939,008 8.32% 106 1.67x 62.0% NA 100.0%
Limited Service 16 44,530,876 5.5 2,783,180 8.29 119 1.61 63.1 NA 100.0
Full Service 4 14,249,292 1.7 3,562,323 8.45 65 1.87 58.4 NA 100.0
MIXED USE 5 $ 23,522,959 2.9% $4,704,592 8.11% 117 1.42x 65.5% 97.39% 100.0%
Multifamily/Hotel 1 13,776,427 1.7 13,776,427 8.12 117 1.33 67.2 97.70 100.0
Office/Retail 4 9,746,531 1.2 2,436,633 8.09 116 1.54 63.0 96.95 100.0
NURSING HOME 1 $ 13,918,633 1.7 $13,918,633 8.69% 116 1.75x 61.6% 94.00% 100.0%
CONGREGATE CARE 2 $ 12,637,276 1.6% $6,318,638 8.26% 117 1.49x 67.0% 95.90% 100.0%
SELF-STORAGE 2 $ 8,526,178 1.0% $4,263,089 8.65% 114 1.41x 60.8% 80.42% 100.0%
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL/AVG./WA: 164 $814,388,116 100.0% $4,965,781 8.07% 112 1.38x 68.3% 95.73%(3) 99.2%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Balloon loans deemed to be any loans which are not fully amortizing
(2) "MHC" means manufactured housing community, "MHP" means mobile home park
and "CBD" means central business district
(3) Weighted average deal occupancy excludes hotel properties
RESERVES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
% OF LOANS BY PRINCIPAL CURRENT
BALANCE WITH ANNUAL ESCROWS BALANCES(1) ANNUAL DEPOSIT
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Replacement Reserves 90.5% $6,144,176 $4,167,894
Tenant Improvement /Leasing Commissions(2) 64.6 3,740,624 3,289,863
Taxes 97.7 5,084,189 14,859,273
Insurance 88.2 1,092,858 1,531,290
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Current balance as of December 21, 1999 may include any balance associated
with up-front deposits that have not been completely disbursed
(2) Balances and percentages are for commercial properties only
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 7
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-7
<PAGE>
COLLATERAL SUMMARY
In the following tables, Principal Balance refers to Aggregate Cut-off Date
Principal Balance
PROPERTY TYPES
<TABLE>
<CAPTION>
% OF PRINCIPAL
PROPERTY TYPE NO. OF PROPERTIES PRINCIPAL BALANCE ($) BALANCE WA DSCR WA LTV
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Multifamily 45 $183,242,204 22.5% 1.33x 72.7%
Office 24 172,888,583 21.2 1.37 66.0
Industrial 21 143,444,356 17.6 1.31 69.9
Anchored Retail 15 102,892,766 12.6 1.36 71.1
Hotel 20 58,780,168 7.2 1.67 62.0
Unanchored Retail 21 46,933,858 5.8 1.36 66.6
Mixed Use 5 23,522,959 2.9 1.42 65.5
Factory Outlet 3 22,753,296 2.8 1.45 55.8
MHP/MHC (1) 4 19,797,672 2.4 1.23 69.1
Nursing Home 1 13,918,633 1.7 1.75 61.6
Congregate Care 2 12,637,276 1.6 1.49 67.0
Self-Storage 2 8,526,178 1.0 1.41 60.8
Specialty Retail 1 5,050,168 0.6 1.45 68.2
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL: 164 $814,388,116 100.0% 1.38x 68.3%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) "MHP" means mobile home park and "MHC" means manufactured housing community
GEOGRAPHIC DISTRIBUTION
<TABLE>
<CAPTION>
% OF PRINCIPAL
PROPERTY STATE NO. OF PROPERTIES PRINCIPAL BALANCE ($) BALANCE WA DSCR WA LTV
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
California 26 $145,372,868 17.9% 1.46x 64.5%
New York 12 97,359,852 12.0 1.37 65.7
Illinois 8 68,757,586 8.4 1.27 73.1
Maryland 8 66,441,508 8.2 1.43 68.9
Florida 11 65,512,867 8.0 1.31 70.6
Texas 17 44,658,735 5.5 1.28 72.4
New Jersey 6 40,835,753 5.0 1.30 65.3
Massachusetts 6 30,373,752 3.7 1.38 66.6
North Carolina 7 28,972,220 3.6 1.43 66.5
Nevada 4 27,932,532 3.4 1.26 73.0
Colorado 5 27,839,747 3.4 1.56 64.2
Pennsylvania 7 22,732,097 2.8 1.33 66.7
Canada 10 22,559,278 2.8 1.88 61.7
Michigan 4 21,828,529 2.7 1.31 76.1
Ohio 5 19,599,094 2.4 1.24 71.6
Other 28 83,611,698 10.3 1.35 70.9
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL: 164 $814,388,116 100.0% 1.38x 68.3%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 8
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-8
<PAGE>
CUT-OFF BALANCES
<TABLE>
<CAPTION>
% OF PRINCIPAL
PRINCIPAL BALANCE ($) NO. OF PROPERTIES PRINCIPAL BALANCE ($) BALANCE WA DSCR WA LTV
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$750,001 - $1,000,000 4 $3,508,728 0.4% 1.55x 69.4%
$1,000,001 - $1,500,000 16 20,394,295 2.5 1.38 69.0
$1,500,001 - $2,000,000 21 37,572,553 4.6 1.40 69.0
$2,000,001 - $2,500,000 6 13,780,791 1.7 1.45 64.6
$2,500,001 - $3,000,000 6 16,396,923 2.0 1.32 69.0
$3,000,001 - $3,500,000 12 39,982,838 4.9 1.39 70.5
$3,500,001 - $4,000,000 11 40,240,214 4.9 1.35 71.3
$4,000,001 - $4,500,000 8 34,694,726 4.3 1.46 69.0
$4,500,001 - $5,000,000 10 47,475,531 5.8 1.34 68.7
$5,000,001 - $6,000,000 9 47,701,336 5.9 1.37 68.6
$6,000,001 - $7,500,000 4 26,564,769 3.3 1.58 66.9
$7,500,001 - $10,000,000 9 79,827,988 9.8 1.32 70.5
$10,000,001 - $12,500,000 8 89,415,152 11.0 1.33 65.1
$12,500,001 - $15,000,000 6 82,998,446 10.2 1.39 67.5
$15,000,001 - $17,500,000 3 50,025,765 6.1 1.44 71.9
$17,500,001 - $20,000,000 1 18,689,849 2.3 1.27 76.9
$20,000,001 - $25,000,000 4 88,380,595 10.9 1.39 68.4
$25,000,001 - $30,000,000 1 27,512,617 3.4 1.30 71.3
$45,000,001 - $50,000,000 1 49,225,000 6.0 1.42 57.6
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL: 140 $814,388,116 100.0% 1.38x 68.3%
- ------------------------------------------------------------------------------------------------------------------------------------
AVERAGE PER LOAN: $5,817,058
AVERAGE PER PROPERTY: $4,965,781
</TABLE>
MORTGAGE INTEREST RATES
<TABLE>
<CAPTION>
% OF PRINCIPAL
MORTGAGE INTEREST RATE (%) NO. OF PROPERTIES PRINCIPAL BALANCE ($) BALANCE WA DSCR WA LTV
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7.2500% or less 2 $11,848,313 1.5% 1.95x 58.7%
7.2501% - 7.5000% 7 91,500,449 11.2 1.53 65.6
7.5001% - 7.7500% 7 30,036,516 3.7 1.34 70.7
7.7501% - 8.0000% 31 183,604,316 22.5 1.28 73.9
8.0001% - 8.2500% 49 247,868,667 30.4 1.35 68.5
8.2501% - 8.5000% 23 153,852,251 18.9 1.37 65.8
8.5001% - 9.0000% 18 87,323,273 10.7 1.45 63.8
9.0001% or more 3 8,354,331 1.0 1.48 62.3
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL: 140 $814,388,116 100.0% 1.38x 68.3%
- ------------------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE: 8.07%
</TABLE>
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 9
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-9
<PAGE>
UNDERWRITTEN DEBT SERVICE COVERAGE RATIOS
<TABLE>
<CAPTION>
% OF PRINCIPAL
UW DSCR (X) NO. OF LOANS PRINCIPAL BALANCE ($) BALANCE WA DSCR WA LTV
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1.200x or less (1) 2 4,030,687 0.5% 1.13x 70.1%
1.201x - 1.250x 22 137,869,289 16.9 1.23 73.3
1.251x - 1.300x 34 197,111,662 24.2 1.27 73.4
1.301x - 1.400x 42 223,568,170 27.5 1.33 69.1
1.401x - 1.500x 19 143,449,256 17.6 1.44 61.7
1.501x - 1.600x 4 17,394,528 2.1 1.52 62.8
1.601x - 1.700x 3 12,375,016 1.5 1.64 57.9
1.701x - 1.800x 5 36,863,715 4.5 1.74 60.5
1.801x - 1.900x 3 21,184,183 2.6 1.82 59.3
1.901x - 2.000x 2 5,319,012 0.7 1.94 56.7
2.001x - 2.100x 1 1,998,364 0.2 2.05 68.5
2.201x - 2.300x 1 4,259,809 0.5 2.22 57.1
2.301x - 2.400x 2 8,964,425 1.1 2.31 49.6
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL: 140 $814,388,116 100.0% 1.38x 68.3%
- ------------------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE: 1.38X
</TABLE>
(1) Herndon Village Shoppes ($2,442,396) has an UW DSCR of 1.16x and a 16-year
amortization term. RiteAid Dayton ($1,588,291) is a credit tenant lease and has
an UW DSCR of 1.07x.
LOAN-TO-VALUE RATIOS
<TABLE>
<CAPTION>
% OF PRINCIPAL
LTV (%) NO. OF LOANS PRINCIPAL BALANCE ($) BALANCE WA DSCR WA LTV
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
50.00% or less 4 $22,056,890 2.7% 1.69x 48.4%
50.01% - 55.00% 2 4,772,468 0.6 1.70 53.5
55.01% - 60.00% 16 148,011,324 18.2 1.57 58.0
60.01% - 65.00% 16 61,505,428 7.6 1.50 62.8
65.01% - 70.00% 28 165,346,922 20.3 1.35 67.6
70.01% - 75.00% 46 264,570,713 32.5 1.29 72.1
75.01% - 80.00% 28 148,124,371 18.2 1.26 78.0
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL: 140 $814,388,116 100.0% 1.38x 68.3%
- ------------------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE: 68.3%
</TABLE>
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 10
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-10
<PAGE>
REMAINING TERM TO MATURITY/ARD (MONTHS)
<TABLE>
<CAPTION>
REMAINING TERM TO % OF PRINCIPAL
MATURITY/ARD (MONTHS) NO. OF LOANS PRINCIPAL BALANCE ($) BALANCE WA DSCR WA LTV
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ARD 71 $457,867,272 56.2% 1.35x 68.3%
49 - 60 1 2,789,582 0.3 1.25 75.4
61 - 72 2 51,667,396 6.3 1.41 57.9
73 - 84 3 22,934,032 2.8 1.23 76.0
85 - 120 65 380,476,262 46.7 1.34 69.2
BALLOON 64 $312,428,873 38.4% 1.38x 69.2%
49 - 60 4 14,331,226 1.8 1.54 66.1
61 - 72 8 15,578,384 1.9 2.00 59.9
73 - 84 1 1,132,598 0.1 1.26 70.8
85 - 120 49 256,901,887 31.5 1.34 69.8
121 - 180 2 24,484,778 3.0 1.41 70.4
INTEREST ONLY 2 $37,503,350 4.6% 1.78x 59.0%
85 - 120 2 37,503,350 4.6 1.78 59.0
FULLY AMORTIZING 3 $6,588,621 0.8% 1.23x 73.0%
181 - 240 3 6,588,621 0.8 1.23 73.0
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL: 140 $814,388,116 100.0% 1.38x 68.3%
- ------------------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE: 112 MONTHS
</TABLE>
REMAINING AMORTIZATION TERM (MONTHS) (1), (2)
<TABLE>
<CAPTION>
REMAINING AMORTIZATION TERM % OF PRINCIPAL
(MONTHS) NO. OF LOANS PRINCIPAL BALANCE ($) BALANCE WA DSCR WA LTV
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ARD 71 $457,867,272 58.9% 1.35x 68.3%
181 - 240 8 44,142,290 5.7 1.52 63.2
241 - 300 25 107,497,205 13.8 1.38 63.2
301 - 360 38 306,227,777 39.4 1.31 70.8
BALLOON 64 $312,428,873 40.2% 1.38x 69.2%
181 - 240 13 38,957,346 5.0 1.69 61.7
241 - 300 16 66,060,194 8.5 1.40 68.0
301 - 360 35 207,411,333 26.7 1.32 71.0
FULLY AMORTIZING 3 $6,588,621 0.8% 1.23x 73.0%
181 - 240 3 6,588,621 0.8 1.23 73.0
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL: 138 $776,884,766 100.0% 1.36x 68.3%
- ------------------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE: 327 MONTHS
</TABLE>
(1) Two loans, Abbey Portfolio I ($20,039,350) and Abbey Portfolio II
($17,464,000) are interest only loans and have been excluded from this
analysis
(2) One loan, 711 Third Avenue ($49,225,000) is currently subject to interest
only payments. The remaining amortization term used for this loan applies
to principal and interest payments which begin on November 1, 2000
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 11
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-11
<PAGE>
MONTH AND YEAR OF ORIGINATION
<TABLE>
<CAPTION>
% OF PRINCIPAL
MONTH AND YEAR OF ORIGINATION NO. OF LOANS PRINCIPAL BALANCE ($) BALANCE WA DSCR WA LTV
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
June 1997 1 $3,310,110 0.4% 1.27x 73.6%
December 1997 1 3,429,290 0.4 1.96 57.2
June 1998 1 4,259,809 0.5 2.22 57.1
August 1998 7 11,318,575 1.4 1.92 61.0
September 1998 1 13,619,235 1.7 1.50 65.7
December 1998 2 28,653,235 3.5 1.31 71.6
March 1999 3 17,025,071 2.1 1.36 73.9
May 1999 3 11,779,769 1.4 1.27 73.7
June 1999 11 92,618,380 11.4 1.28 71.9
July 1999 21 104,471,691 12.8 1.36 67.0
August 1999 31 184,372,516 22.6 1.42 66.9
September 1999 33 200,359,191 24.6 1.36 67.1
October 1999 13 81,029,259 9.9 1.39 71.5
November 1999 11 53,581,350 6.6 1.33 67.5
December 1999 1 4,560,634 0.6 1.35 66.8
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL: 140 $814,388,116 100.0% 1.38x 68.3%
- ------------------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE SEASONING: 5 MONTHS
</TABLE>
YEAR OF SCHEDULED MATURITY/ARD
<TABLE>
<CAPTION>
% OF PRINCIPAL
YEAR OF SCHEDULED MATURITY/ARD NO. OF LOANS PRINCIPAL BALANCE ($) BALANCE WA DSCR WA LTV
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2004 4 $13,691,518 1.7% 1.38x 70.2%
2005 11 70,675,070 8.7 1.57 58.3
2006 4 24,066,630 3.0 1.23 75.7
2008 1 7,361,125 0.9 2.31 47.5
2009 115 667,520,374 82.0 1.35 69.1
2013 1 13,619,235 1.7 1.50 65.7
2014 1 10,865,543 1.3 1.30 76.2
2017 1 3,310,110 0.4 1.27 73.6
2018 1 1,588,291 0.2 1.07 79.0
2019 1 1,690,220 0.2 1.30 66.3
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL: 140 $814,388,116 100.0% 1.38x 68.3%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 12
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-12
<PAGE>
TEN LARGEST INDIVIDUAL LOANS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
LOAN PRINCIPAL BALANCE ($) % OF PRINCIPAL BALANCE UW DSCR LTV PROPERTY TYPE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
711 Third Avenue $49,225,000 6.0% 1.42x 57.6% Office
International Airport Center 27,512,617 3.4 1.30 71.3 Industrial
Atlantic Development Portfolio 23,113,978 2.8 1.27 71.8 Industrial
Circle Park Apartments 22,924,768 2.8 1.21 70.3 Multifamily
Penn Mar Shopping Center 22,302,499 2.7 1.38 71.5 Anchored Retail
Abbey Portfolio I 20,039,350 2.5 1.74 59.0 Retail
332 South Michigan Avenue 18,689,849 2.3 1.27 76.9 Office
Abbey Portfolio II 17,464,000 2.1 1.82 59.0 Industrial/ Office/ Retail
Alpine Commons Shopping Center 16,772,760 2.1 1.25 79.9 Anchored Retail
Pirate's Cove Apartments 15,789,005 1.9 1.22 77.7 Multifamily
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL / WEIGHTED AVERAGE $233,833,825 28.7% 1.39x 67.9%
- ------------------------------------------------------------------------------------------------------------------------------------
DEAL TOTAL / WEIGHTED AVERAGE $814,388,116 100.0% 1.38x 68.3%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: any credit ratings referenced for any tenant at a mortgaged property are
those reported by Moody's Investors Service, Inc. and, if two ratings are shown,
by Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc., in that order, as listed by Bloomberg L.P.
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 13
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-13
<PAGE>
711 THIRD AVENUE
LOAN INFORMATION
PRINCIPAL BALANCE
ORIGINAL $49,225,000
CUT-OFF DATE $49,225,000
ORIGINATION DATE September 10, 1999
INTEREST RATE 8.1300%
AMORTIZATION Interest only first year, then 360
HYPERAMORTIZATION After the Anticipated Repayment Date, all excess
cashflow is used to reduce the outstanding principal
ANTICIPATED REPAYMENT October 1, 2005
DATE
MATURITY DATE October 1, 2030
BORROWER/SPONSOR SLG 711 Third LLC and SLG 711 Fee LLC, each a special
purpose New York limited liability company, controlled
by SL Green Realty Corporation, a REIT
CALL PROTECTION Prepayment locked out until on or after April 1, 2005.
U.S. Treasury defeasance allowed, in whole or in part,
on any payment date on or after the second anniversary
of securitization
REMOVAL OF PROPERTY The lender has the right to remove the property
MANAGER manager if there is an event of a default, a 50% or
more change in the ownership of the manager, or the
debt is not repaid on or before the Anticipated
Repayment Date. The lender must approve any
replacement and receive rating agency confirmation
COLLECTION ACCOUNT Hard Lockbox. All rents payable by tenants are
deposited by the property manager directly into a Cash
Management Account, and on the first day of each
month, so long as no Event of Default has occurred,
all funds shall be disbursed upon the discretion of
the lender
MEZZANINE None
LOANS/PREFERRED EQUITY
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO Single Asset
PROPERTY TYPE Office - CBD
LOCATION 711 Third Avenue
New York, New York
YEARS BUILT/RENOVATED 1955
THE COLLATERAL
Built in 1955, 711 Third Avenue is a 20-story Class A office building comprising
528,357 square feet. The building also includes a 165-space parking garaged that
is leased to a third party operator. The property is leased to 25 tenants
including Chicago Title (Baa1/BBB), Parade Publications, Crain's Communication
and street-level tenants include Eddie Bauer and The Avenue.
PROPERTY MANAGEMENT SL Green Realty
Corporation
OCCUPANCY AS OF 9/8/99 96.00%
NET OPERATING INCOME FOR $7,694,928
TRAILING 12 MONTHS ENDING
10/31/99
UNDERWRITTEN NET CASH FLOW $5,902,107
APPRAISED VALUE $85,500,000
APPRAISAL DATE August 9, 1999
CUT-OFF DATE
LOAN PER SQUARE FOOT $93.17
LTV 57.6%
UW DSCR 1.42x
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 14
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-14
<PAGE>
INTERNATIONAL AIRPORT CENTER
LOAN INFORMATION
PRINCIPAL BALANCE
ORIGINAL $27,750,000
CUT-OFF DATE $27,512,617
ORIGINATION DATE December 28, 1998
INTEREST RATE 7.3000%
AMORTIZATION 360
HYPERAMORTIZATION NA
ANTICIPATED REPAYMENT NA
DATE
MATURITY DATE January 1, 2009
BORROWER/SPONSOR IAC Los Angeles LLC, a special purpose entity
CALL PROTECTION Prepayment locked out until on or after October 1,
2008. U.S. Treasury defeasance allowed, in whole but
not in part, on any payment date on or after the
second anniversary of securitization
REMOVAL OF PROPERTY In the event of a material breach of any of the terms
MANAGER of the management agreement, which is not remedied
within 60 days, bankruptcy by the manager or fraud by
the manager, the management agreement is immediately
terminable by the Mortgagor. Borrower must obtain the
lender's consent for any manager changes.
COLLECTION ACCOUNT None
MEZZANINE None
LOANS/PREFERRED EQUITY
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO Single asset
PROPERTY TYPE Multi-tenant
Industrial/
Warehouse
Distribution
LOCATION 5353/5343 Imperial Highway
Los Angeles, CA
YEARS BUILT/RENOVATED 1997
THE COLLATERAL
This Class A property consists of 2 buildings constructed in 1997 totaling
317,184 square feet which is utilized as warehouse distribution space. The
subject property is located approximately 1000 feet east of the LAX Air Cargo
area in Los Angeles, California. In addition, IACLA provides 24 foot ceiling
clear heights, 180 foot turn around space and 153 dock doors/bays, all key
assets to the subject. Major tenants include BAX Global, Expeditors
International and Hankyu International (Baa1). IACLA is one of the newest
warehouse properties within the market.
PROPERTY MANAGEMENT International Airport Centers LLC
OCCUPANCY AS OF 8/1/99 95.00%
NET OPERATING INCOME FOR $2,946,799
TRAILING 12 MONTHS ENDING
8/31/99
UNDERWRITTEN NET CASH FLOW $2,978,957
APPRAISED VALUE $38,600,000
APPRAISAL DATE December 4, 1998
CUT-OFF DATE
LOAN PER SQUARE FOOT $86.74
LTV 71.3%
UW DSCR 1.30x
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 15
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-15
<PAGE>
ATLANTIC DEVELOPMENT PORTFOLIO
LOAN INFORMATION
PRINCIPAL BALANCE
ORIGINAL $23,150,000
CUT-OFF DATE $23,113,978
ORIGINATION DATE September 15, 1999
INTEREST RATE 8.0500%
AMORTIZATION 360
HYPERAMORTIZATION After the Anticipated Repayment Date, all excess
cashflow is used to reduce the outstanding principal
ANTICIPATED REPAYMENT
DATE October 1, 2009
MATURITY DATE October 1, 2029
BORROWER/SPONSOR(1) MBCC 40, LLC, WCA 50, LLC and WCA 100, LLC, each a
special purpose New Jersey limited liability company,
owned by Atlantic Development and Management Corp.
CALL PROTECTION Prepayment locked out until on or after July 1, 2009.
U.S. Treasury defeasance allowed, in whole or in part,
on any payment date on or after the second anniversary
of securitization
REMOVAL OF PROPERTY The lender has the right to remove the property
MANAGER manager at any time for cause, upon event of default
under the loan, if the DSCR falls below 1.20x during
any 12 month period, if the loan is not repaid in full
at ARD or if the manager becomes insolvent. The lender
must approve any replacement
COLLECTION ACCOUNT Hard Lockbox. All rents payable by tenants are
deposited directly into a Cash Management Account, and
on the first day of each month, so long as no Event of
Default has occurred, all funds shall be disbursed
upon the discretion of the lender
MEZZANINE None
LOANS/PREFERRED EQUITY
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO Portfolio
PROPERTY TYPE Industrial -- Flex
Space
LOCATION Warren and Franklin
Township, New Jersey
YEARS BUILT/RENOVATED 1986-1989
THE COLLATERAL
Three industrial - flex space centers located in Warren and Franklin Township,
New Jersey. Square footage totals 334,832 square feet.
Square
Footage Major Tenants
----------------------------------------
40 TECHNOLOGY DRIVE 93,336 Cordis Corp.
Warren, New Jersey
100 RANDOLPH ROAD 152,472 Fountain
Franklin Township, Technologies,
New Jersey Union Carbide
Corp.
(Baa2/BBB),
Silk Blossom
Corp.
50 RANDOLPH ROAD 89,024 Fountain
Franklin Township, Technologies
New Jersey
PROPERTY MANAGEMENT Atlantic Development
and Management Company
OCCUPANCY AS OF 8/1/99(2) 100.00%
NET OPERATING INCOME FOR $2,978,312
6 MONTHS ANNUALIZED AS OF
6/30/99
UNDERWRITTEN NET CASH FLOW $2,610,321
APPRAISED VALUE $32,180,000
APPRAISAL DATE June 8, 1999
CUT-OFF DATE
LOAN PER SQUARE FOOT $69.03
LTV 71.83%
UW DSCR 1.27x
(1) This loan is secured by three-collateralized and cross-defaulted mortgages,
deeds of trust or deeds to secure debt encumbering the three industrial
centers
(2) Weighted average occupancy based on square footage
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 16
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-16
<PAGE>
CIRCLE PARK APARTMENTS
LOAN INFORMATION
PRINCIPAL BALANCE
ORIGINAL $22,975,000
CUT-OFF DATE $22,924,768
ORIGINATION DATE August 30, 1999
INTEREST RATE 8.1300%
AMORTIZATION 360
HYPERAMORTIZATION NA
ANTICIPATED REPAYMENT NA
DATE
MATURITY DATE September 1, 2009
BORROWER/SPONSOR Amalgamated Trust and Savings Bank, as land trustee,
and University Center Associates, as beneficiary. The
principals of the beneficiary are Jeffrey Zarem and
HGK Management Co.
CALL PROTECTION Prepayment locked out until on or after June 1, 2009.
U.S. Treasury defeasance allowed, in whole but not in
part, on any payment date on or after September 1,
2002
REMOVAL OF PROPERTY Either party has the right to terminate the management
MANAGER agreement at the end of any calendar month, with or
without cause, on 30 days written notice. In the event
of a default under the management agreement by the
Mortgagor, the management agreement is terminable
immediately by the lender. Any property manager or
management agreement must be satisfactory to the
lender.
COLLECTION ACCOUNT None
MEZZANINE None
LOANS/PREFERRED EQUITY
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO Single asset
PROPERTY TYPE Multifamily
LOCATION 1111 South Ashland Avenue
Chicago, Illinois
YEARS BUILT/RENOVATED 1983
THE COLLATERAL
Located approximately 2 miles from the Chicago Loop business district, in the
Illinois Medical District / UIC neighborhood, the property is improved by a
418-unit multifamily garden apartment community which includes townhouses,
midrise and age restricted apartments. The property was built in 1982 and has an
ongoing capital replacements program. Project amenities include a swimming pool,
tennis court, volleyball court, mature landscaped grounds and 24-hour security.
When the property was developed it included a portion of Section 8 housing. The
original contract covering 239 units expires in January 2003. The age restricted
midrise building will remain subsidized (120 units representing 29% of the total
units). Current plans are to discontinue the contract for the other 119
subsidized units and convert these to market rate rentals. Note that 179 units
have never been subject to subsidies and are currently rented at market rates.
Underwritten cash flow is based on the current level of operations at the
subject.
PROPERTY MANAGEMENT New Frontier Residential Management
OCCUPANCY AS OF 7/99 91.00%
NET OPERATING INCOME FOR $2,279,802
TRAILING 12 MONTHS ENDING
7/31/99
UNDERWRITTEN NET CASH FLOW $2,472,814
APPRAISED VALUE $32,600,000
APPRAISAL DATE August 2, 1999
CUT-OFF DATE
LOAN PER UNIT $54,843.94
LTV 70.32%
UW DSCR 1.21x
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 17
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-17
<PAGE>
PENN MAR SHOPPING CENTER
LOAN INFORMATION
PRINCIPAL BALANCE
ORIGINAL $22,325,000
CUT-OFF DATE $22,302,499
ORIGINATION DATE October 13, 1999
INTEREST RATE 8.4000%
AMORTIZATION 360
HYPERAMORTIZATION After the Anticipated Repayment Date, all excess
cashflow is used to reduce the outstanding principal
ANTICIPATED REPAYMENT November 1, 2009
DATE
MATURITY DATE November 1, 2029
BORROWER/SPONSOR Penn Mar Associates, L.L.C., a Delaware limited
liability company, the principal of which is Gary
Rappaport
CALL PROTECTION Prepayment locked out until on or after August 1,
2009. U.S. Treasury defeasance allowed, in whole but
not in part, on any payment date on or after the
second anniversary of securitization
REMOVAL OF PROPERTY The lender has the right to remove the property
MANAGER manager at any time upon an event of default under the
loan. The lender must approve any replacement
COLLECTION ACCOUNT All rents payable by tenants are deposited by the
property manager directly into a Cash Management
Account, and on the first day of each month, so long
as no Event of Default has occurred, all funds shall
be disbursed upon the discretion of the lender
MEZZANINE A mezzanine loan with a principal balance of
LOANS/PREFERRED EQUITY $2,976,347 as of January 1, 2000, an original
principal balance of $3,000,000, a maturity date of
November 1, 2009 and an amortization term of 120
months, was made by MGT to PM Investors, LLC, secured
by general partnership interest in the Borrower
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO Single asset
PROPERTY TYPE Retail - Anchored
LOCATION 3000-4000 Donnell Drive
Forestville, Maryland
YEARS BUILT/RENOVATED 1958 / 1998
THE COLLATERAL
The center, originally built in 1958, was purchased by the Borrower in 1995 and
has been continually renovated and expanded since that time. Penn Mar Shopping
Center encompasses 373,592 square feet, has 46 in-line tenants and eight pad
site tenants. The center is anchored by Superfresh (Ba1/BBB-), Marshalls
(A3/A-), CVS (A3/A) and Burlington Coat Factory.
PROPERTY MANAGEMENT Rappaport Management
Company
OCCUPANCY AS OF 7/20/99 97.00%
NET OPERATING INCOME FOR $2,608,264
TRAILING 12 MONTHS ENDING
8/31/99
UNDERWRITTEN NET CASH FLOW $2,819,296
APPRAISED VALUE $31,200,000
APPRAISAL DATE September 1, 1999
CUT-OFF DATE
LOAN PER ROOM $59.70
LTV 71.48%
UW DSCR 1.38x
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 18
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-18
<PAGE>
ABBEY PORTFOLIO I
LOAN INFORMATION
PRINCIPAL BALANCE
ORIGINAL $20,039,350
CUT-OFF DATE $20,039,350
ORIGINATION DATE August 31, 1999
INTEREST RATE 7.4700%
AMORTIZATION Interest only
HYPERAMORTIZATION NA
ANTICIPATED REPAYMENT NA
DATE
MATURITY DATE September 1, 2009
BORROWER/SPONSOR(1) Six individual special purpose borrowers, each a
special purpose limited liability company wholly owned
by Abbey Properties, LLC. Abbey Properties, LLC is
owned 25.7% by Donald G. Abbey and 71.4% by a wholly
owned subsidiary of Rodamco North America NV.
CALL PROTECTION Prepayment locked out until on or after June 1, 2009.
U.S. Treasury defeasance allowed, in whole but not in
part, on any payment date on or after the second
anniversary of securitization
REMOVAL OF PROPERTY The lender has the right to remove the property
MANAGER manager at any time upon an event of default under the
loan. The lender must approve any replacement
COLLECTION ACCOUNT Springing Lockbox. Triggered by an Event of Default
MEZZANINE None
LOANS/PREFERRED EQUITY
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO Portfolio of six
assets
PROPERTY TYPE Retail -- Anchored and Unanchored
LOCATION Southern California
YEARS BUILT/RENOVATED 1980-1989 / 1992
THE COLLATERAL
Three anchored and three unanchored retail centers with a total of 374,027
square feet
Square
Footage Major Tenants
--------------------------
COLTON COMMERCE CENTER 122,081 RiteAid (B1/BB),
Colton, California Beverly Fabrics,
Berean Christian
Stores
PALMDALE PLACE 84,051 Thrifty Drug
COMMERCE CENTER (B1/BB), Molina
Palmdale, California Medical Center,
Family Christian
Bookstore, Inc.
TENTH STREET 96,767 Lucky Stores,
COMMERCE CENTER Inc. (A2/A),
Lancaster, California Whole Wheatery,
Edwards Federal
Credit Union
FOUNTAIN PLAZA 33,022 Chief Auto Parts
(PALMDALE II) (Baa3), Less than
Palmdale, California $1, H. Hawatmeh &
N. Dugom
DIAMOND BAR COMMERCE 20,618 Sizzler
CENTER Restaurant,
Diamond Bar, California Kindercare
Learning Center,
Max Throckmorton
PALM PLAZA (PALMDALE III) 17,488 Manoj
Palmdale, California Soktalardcheep,
$0.98 Store, Palm
Plaza Pet Hospital
PROPERTY MANAGEMENT The Abbey Company
OCCUPANCY AS OF 9/1/99(2) 82.66%
NET OPERATING INCOME FOR $3,175,544
6 MONTHS ANNUALIZED
ENDING 6/30/99
UNDERWRITTEN NET CASH FLOW $2,634,865
APPRAISED VALUE $33,965,000
APPRAISAL DATE June 24 - July 16, 1999
CUT-OFF DATE
LOAN PER SQUARE FOOT $53.58
LTV 59.00%
UW DSCR 1.74x
(1) This loan is secured by six-collateralized and cross-defaulted mortgages,
deeds of trust or deeds to secure debt encumbering the six retail centers
(2) Weighted average occupancy based on square footage
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 19
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-19
<PAGE>
332 SOUTH MICHIGAN AVENUE
LOAN INFORMATION
PRINCIPAL BALANCE
ORIGINAL $18,750,000
CUT-OFF DATE $18,689,849
ORIGINATION DATE June 1, 1999
INTEREST RATE 7.9800%
AMORTIZATION 360
HYPERAMORTIZATION After the Anticipated Repayment Date, all excess
cashflow is used to reduce the outstanding principal
ANTICIPATED REPAYMENT July 1, 2009
DATE
MATURITY DATE July 1, 2029
BORROWER/SPONSOR 332 South Michigan Avenue Office, LLC, a special
purpose Illinois limited liability corporation, the
principal of which is Louis D' Angelo
CALL PROTECTION Prepayment locked out until on or after April 1, 2009.
U.S. Treasury defeasance allowed, in whole but not in
part, on any payment date on or after the second
anniversary of securitization
REMOVAL OF PROPERTY The lender has the right to remove the property
MANAGER manager at any time or upon an event of default under
the loan. The lender must approve any replacement
COLLECTION ACCOUNT All rents payable by tenants are deposited directly
into a Cash Management Account, and on the first day
of each month, so long as no Event of Default has
occurred, all funds shall be disbursed upon the
discretion of the lender
MEZZANINE NA
LOANS/PREFERRED EQUITY
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO Single asset
PROPERTY TYPE Office - CBD
LOCATION 332 South Michigan Avenue
Chicago, Illinois
YEARS BUILT/RENOVATED 1912 / 1980-1985
THE COLLATERAL
This 20-story, 318,266 square foot building is located directly across the
street from Grant Park in the Chicago central business district. The lender's
collateral interest is contained within the first 14 stories of the building,
housing retail and office tenants. The remaining six stories are privately owned
residential condominiums. The building was constructed in 1912 and renovated
between 1980 and 1985.
PROPERTY MANAGEMENT Metropolitan
Properties of Chicago
OCCUPANCY AS OF 11/30/99 94.95%
NET OPERATING INCOME FOR $2,413,022
9 MONTHS ANNUALIZED
ENDING 9/30/99
UNDERWRITTEN NET CASH FLOW $2,100,691
APPRAISED VALUE $24,300,000
APPRAISAL DATE March 26, 1999
CUT-OFF DATE
LOAN PER SQUARE FOOT $58.72
LTV 76.91%
UW DSCR 1.27x
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 20
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-20
<PAGE>
ABBEY PORTFOLIO II
LOAN INFORMATION
PRINCIPAL BALANCE
ORIGINAL $17,464,000
CUT-OFF DATE $17,464,000
ORIGINATION DATE August 31, 1999
INTEREST RATE 7.4700%
AMORTIZATION Interest only
HYPERAMORTIZATION NA
ANTICIPATED REPAYMENT NA
DATE
MATURITY DATE September 1, 2009
BORROWER/SPONSOR(1) Five individual special purpose borrowers, each a
special purpose limited liability company wholly owned
by Abbey Properties, LLC. Abbey Properties, LLC is
owned 25.7% by Donald G. Abbey and 71.4% by a wholly
owned subsidiary of Rodamco North America NV.
CALL PROTECTION Prepayment locked out until on or after June 1, 2009.
U.S. Treasury defeasance allowed, in whole but not in
part, on any payment date on or after the second
anniversary of securitization
REMOVAL OF PROPERTY The lender has the right to remove the property
MANAGER manager at any time upon an event of default under the
loan. The lender must approve any replacement
COLLECTION ACCOUNT Springing Lockbox. Triggered by an Event of Default
MEZZANINE None
LOANS/PREFERRED EQUITY
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO Portfolio of five
assets
PROPERTY TYPE Industrial, Office and Mixed Use
LOCATION Southern California
YEARS BUILT/RENOVATED 1980-1986 / 1989-1997
THE COLLATERAL
Two industrial flex space, two suburban office and one office/ retail properties
located in Southern California with a total of 411,534 square feet
Square
Footage Major Tenants
-----------------------------------------
CITYVIEW PLAZA 135,920 Ask Southern
Garden Grove, California, Inc.,
California O.C. Access
Program, Concord
Credit
GLENDORA COMMERCE 70,180 Mann Theaters,
CENTER Lazer Star,
Glendora, California Tutortime
Corporation
ANAHEIM STADIUM 89,480 Lunada Bay,
INDUSTRIAL PARK Elliott Auto
Anaheim, California Supply, Optical
Science
ARLINGTON AIRPARK 86,154 Greensteel, Inc.,
PLAZA Netseller, Cole
Riverside, California Vocational
Services
EDINGER 29,800 County of Orange
Santa Ana, California (A1)
PROPERTY MANAGEMENT The Abbey Company
OCCUPANCY AS OF 9/1/99 (2) 95.9%
NET OPERATING INCOME FOR $2,854,286
6 MONTHS ANNUALIZED
ENDING 6/30/99
UNDERWRITTEN NET CASH FLOW $2,409,781
APPRAISED VALUE $29,600,000
APPRAISAL DATE June 21 - July 21,
1999
CUT-OFF DATE
LOAN PER SQUARE FOOT $42.44
LTV 59.00%
UW DSCR 1.82x
(1) This loan is secured by five collateralized and cross-defaulted mortgages,
deeds of trust or deeds to secure debt encumbering the five retail centers
(2) Weighted average occupancy based on square footage
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 21
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-21
<PAGE>
ALPINE COMMONS SHOPPING CENTER
LOAN INFORMATION
PRINCIPAL BALANCE
ORIGINAL $16,800,000
CUT-OFF DATE $16,772,760
ORIGINATION DATE September 24, 1999
INTEREST RATE 7.9100%
AMORTIZATION 360
HYPERAMORTIZATION After the Anticipated Repayment Date, all excess
cashflow is used to reduce the outstanding principal
ANTICIPATED REPAYMENT September 1, 2009
DATE
MATURITY DATE October 1, 2029
BORROWER/SPONSOR Alpine Improvements, LLC, a Delaware limited liability
company, the principal of which is Adam W. Ifshin
CALL PROTECTION Prepayment locked out until on or after June 1, 2009.
U.S. Treasury defeasance allowed, in whole or in part,
on any payment date on or after the second anniversary
of securitization
REMOVAL OF PROPERTY The lender has the right to remove the property
MANAGER manager if there is an event of a default, a 50% or
more change in the ownership of the manager, or the
debt is not repaid on or before the Anticipated
Repayment Date. The lender must approve any
replacement and receive rating agency confirmation
COLLECTION ACCOUNT All rents payable by tenants are deposited by the
property manager directly into a Cash Management
Account, and on the first day of each month, so long
as no Event of Default has occurred, all funds shall
be disbursed upon the discretion of the lender
MEZZANINE None
LOANS/PREFERRED EQUITY
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO Single asset
PROPERTY TYPE Retail - Anchored
LOCATION 1357 Route 9
Wappingers Falls, New York
YEARS BUILT/RENOVATED 1994
THE COLLATERAL
Alpine Commons Shopping Center is a 209,950 square foot anchored shopping center
built in 1994. The shopping center's two major tenants are BJ's Wholesale Club
and Stop & Shop. BJ's Wholesale Club, Inc. is a leading wholesale club chain
operating 103 stores in the eastern United Sates. This store's reported sales
are $345 per square foot for 1998. Stop & Shop is owned by the Dutch company
Royal Ahold (A3/A), an international food retailer with leading supermarket
companies in the United States, Europe, Latin America and Asia. This store's
reported sales are $442 per square foot for 1998. Royal Ahold operates over
3,600 stores worldwide and it is the leading supermarket operator the East Coast
operating more than 1000 stores under the names Stop & Shop, Giant Food Stores,
Tops Markets, and Bi-Lo.
PROPERTY MANAGEMENT DLC Management Corp.
OCCUPANCY AS OF 6/1/99 93.00%
NET OPERATING INCOME FOR $1,969,620
YEAR ENDING 12/31/98
UNDERWRITTEN NET CASH FLOW $1,839,378
APPRAISED VALUE $21,000,000
APPRAISAL DATE July 8, 1999
CUT-OFF DATE
LOAN PER SQUARE FOOT $79.89
LTV 79.87%
UW DSCR 1.25x
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 22
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-22
<PAGE>
PIRATE'S COVE APARTMENTS
LOAN INFORMATION
PRINCIPAL BALANCE
ORIGINAL $15,800,000
CUT-OFF DATE $15,789,005
ORIGINATION DATE October 29, 1999
INTEREST RATE 7.8200%
AMORTIZATION 360
HYPERAMORTIZATION After the Anticipated Repayment Date, all excess
cashflow is used to reduce the outstanding principal
ANTICIPATED REPAYMENT December 1, 2006
DATE
MATURITY DATE December 1, 2029
BORROWER/SPONSOR L-F Pirate's Cove Apartments, LLC, a Colorado limited
liability company, principally owned by Steven M.
Leaffer
CALL PROTECTION Prepayment locked out until on or after October 1,
2006. U.S. Treasury defeasance allowed, in whole but
not in part, on any payment date on or after the
second anniversary of securitization
REMOVAL OF PROPERTY The lender has the right to remove the property
MANAGER manager at any time upon an event of default under the
loan, upon the death or six month or greater
disability of Steven Leaffer, or if the property's
vacancy rate exceeds the market vacancy by more than
10%. The lender must approve any replacement
COLLECTION ACCOUNT Springing Lockbox; Triggered by failure to repay the
debt three months prior to Anticipated Repayment Date
MEZZANINE A mezzanine loan with an original principal balance of
LOANS/PREFERRED EQUITY $3,000,000, a maturity date of December 1, 2006 and an
amortization term of 84 months, was made by Ohio
Savings Bank to the Borrower, Steven M. Leaffer,
individually, and Feiner Enterprises, Inc., secured by
equity interests in the Borrower.
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO Single asset
PROPERTY TYPE Multifamily
LOCATION 7200 Pirates Cove Road
Las Vegas, Nevada
YEARS BUILT/RENOVATED 1988
THE COLLATERAL
Located in northwest Las Vegas near the Summerlin Parkway, the property is
improved by a 428-unit multifamily garden apartment complex, with one, two and
three bedroom units. The property was developed over two phases in 1987 and
1988. Onsite amenities include four swimming pools and two spas, as well as two
lighted tennis courts. The clubhouse has a large recreation room, an exercise
room, as well as men and women's restrooms. An onsite playground also exists.
PROPERTY MANAGEMENT Leaffer Management LLC
OCCUPANCY AS OF 10/4/99 94.68%
NET OPERATING INCOME FOR $1,878,438
8 MONTHS ANNUALIZED ENDING
8/31/99
UNDERWRITTEN NET CASH FLOW $1,673,925
APPRAISED VALUE $20,320,000
APPRAISAL DATE September 8, 1999
CUT-OFF DATE
LOAN PER UNIT $36,890.20
LTV 77.70%
UW DSCR 1.22x
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 23
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-23
<PAGE>
COLLATERAL PERFORMANCE OF PREVIOUS JPMC TRANSACTIONS
<TABLE>
<CAPTION>
30 TO 90 DAYS DELINQUENT (1)
-------------------------------------
# OF LOANS AT SECURITIZED LOAN BALANCE % OF TOTAL
DEAL PRICING DATE ISSUANCE BALANCE ($000) ($000) BALANCE # OF LOANS FORECLOSURE LOSSES
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C1 Jul-95 36 $172,165 $12,797(2) 7.43% 1 $0 $0
C2 Jan-96 91 304,650 7,537(3) 2.47 1 0 0
C3 Jun-96 124 400,936 0 0.00 0 0 0
C4 Jan-97 127 406,985 1,538 0.38 1 0 0
C5 Sep-97 93(4) 401,244(4) 2,577(5) 0.64 1 0 0
C6 Mar-98 91 796,414 0 0.00 0 0 0
MC2(6) Jun-98 25(4) 138,896(4) 0 0.00 0 0 0
C7 Apr-99 145 801,352 0 0.00 0 0 0
C8 Aug-99 128 731,517 0 0.00 0 0 0
- -------------------------------------------------------------------------------------------------------------------------
TOTAL 860 $4,154,158 $24,449 0.59% 4 $0 $0
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) As of November 1999 remittances
(2) A retail outlet mall in Martinsburg, VA secures this delinquent loan.
Tenant occupancy has dropped due to competing outlet centers in nearby
Baltimore, MD and Washington, DC
(3) A medical office building in Salt Lake City, UT secures this delinquent
loan. The tenant, Bonneville Health Systems, Inc. ("BHS"), stopped paying
rent in August 1997 due to financial difficulties. Alpine Medical Group, a
medical consulting firm, is currently evaluating a potential acquisition of
BHS. Since November 1998, Alpine has been paying to the borrower monthly
rent of $75,000, an amount that covers the current debt service.
(4) Represents J.P. Morgan's contribution to the total pool
(5) One delinquent loan is secured by a corporate apartment building in
Atlanta, GA. The collateral property has suffered in the last year due to
the construction of two competing properties and the re-routing of the
access road to the subject property
(6) Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage
Pass-Through Certificates, Series 1998-MC2
J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-C9 Page 24
Additional information is available upon request. Information herein is believed
to be reliable but J.P. Morgan and ABN AMRO Incorporated do not warrant its
completeness or accuracy. These materials are subject to change from time to
time without notice. Past performance is not indicative of future results. All
information contained herein, whether regarding the mortgage loans or otherwise,
supersedes any previous such information delivered to you and will be superseded
by any such information subsequently delivered and ultimately by the final
prospectus relating to the securities. These materials are not intended as an
offer or solicitation with respect to the purchase or sale of any security, and
have been provided to you for informational purposes only and may not be relied
upon by you in evaluating the merits of investing in the securities. Any
investment decision with respect to the securities should be made by you based
solely upon the information contained in the final prospectus relating to the
securities. No assurance or representation can be made as to the actual rate or
timing of principal payments or prepayments on any of the mortgage loans or the
performance characteristics of the securities. This information was prepared in
reliance on information regarding the mortgage loans furnished by the sellers of
the mortgage loans. J.P. Morgan and ABN AMRO Incorporated and/or their
affiliates and employees may hold a position or act as market maker in the
financial instruments of any issuer discussed herein or act as underwriter,
placement agent, advisor or lender to such issuer. J.P. Morgan Securities Inc.
and ABN AMRO Incorporated are members of SIPC. Copyright 2000 J.P. Morgan & Co.
Incorporated. Clients should contact analysts at and execute transactions
through a J.P. Morgan or ABN AMRO Incorporated entity in their home jurisdiction
unless governing law permits otherwise.
E-24
<PAGE>
<TABLE>
<CAPTION>
ANNEX F
ABN AMRO J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP. Statement Date: 02/15/00
LaSalle Bank N.A. MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 02/15/00
135 S. LaSalle Street Suite 1625 SERIES 2000-C9 Prior Payment: NA
Chicago, IL 60674-4107 Next Payment: 03/15/99
Record Date: 01/31/99
ABN AMRO Acct: 12-3456-78-9
Administrator: Analyst:
REPORTING PACKAGE TABLE OF CONTENTS
====================================================================================================================================
====================================== ==================================================== ======================================
<S> <C> <C>
Page(s)
Issue Id: JPMC00C9 ------- Closing Date:
ASAP #: 999 REMIC Certificate Report First Payment Date: 2/15/2000
Monthly Data File Name: 0999MMYY.EXE Cash Reconciliation Summary Assumed Final Payment Date: 10/15/2032
Bond Interest Reconciliation
====================================== 15 Month Historical Loan Status Summary ======================================
15 Month Historical Payoff/Loss Summary
Delinquent Loan Detail
Mortgage Loan Characteristics
Loan Level Detail
Specially Serviced Report
Modified Loan Detail
Realized Loss Detail
Historical Collateral Level Prepayment Report
Appraisal Reduction Detail
====================================================
======================================================================================================
CONTACT INFORMATION
------------------------------------------------------------------------------------------------------
DEPOSITOR: J.P. Morgan Commerical Mortgage Finance Corp.
UNDERWRITER: J.P. Morgan Securities Inc.
UNDERWRITER: ABN AMRO Incorporated
MASTER SERVICER: ORIX Real Estate Capital Markets, LLC
SPECIAL SERVICER: ORIX Real Estate Capital Markets, LLC
RATED BY: Fitch IBCA Inc. and Moody's Investor Service, Inc.
======================================================================================================
======================================================================
INFORMATION IS AVAILABLE FOR THIS ISSUE FROM THE FOLLOWING SOURCES
----------------------------------------------------------------------
LaSalle WebSite www.lnbabs.com
Servicer WebSite
LaSalle Bulletin Board (714) 282-3990
LaSalle "ASAP" Fax Back System (714) 282-5518
LaSalle Factor Line (800) 246-5761
======================================================================
====================================================================================================================================
</TABLE>
12/13/99 - 08:54 (M399-M599) (c) 1999 LaSalle Bank N.A.
F-1
<PAGE>
<TABLE>
<CAPTION>
ABN AMRO J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP. Statement Date: 02/15/00
LaSalle Bank N.A. MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 02/15/00
SERIES 2000-C9 Prior Payment: NA
WAC: Next Payment: 03/15/99
WA Life Term: Record Date: 01/31/99
WA Amort Term: ABN AMRO Acct: 12-3456-78-9
Current Index:
Next Index:
====================================================================================================================================
Original Opening Principal Principal Negative Closing Interest Interest Pass-Through
Class Face Value (1) Balance Payment Adj. or Loss Amortization Balance Payment Adjustment Rate (2)
CUSIP Per 1,000 Per 1,000 Per 1,000 Per 1,000 Per 1,000 Per 1,000 Per 1,000 Per 1,000 Next Rate (3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
====================================================================================================================================
Total P&I Payment 0.00
===========================
Note: (1) N denotes notional balance not included in total (2) Interest Paid minus Interest Adjustment minus Deferred Interest
equals Accrual (3) Estimated
</TABLE>
12/13/99 - 08:54 (M399-M599) (c) 1999 LaSalle Bank N.A.
F-2
<PAGE>
<TABLE>
<CAPTION>
ABN AMRO J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP. Statement Date: 02/15/00
LaSalle Bank N.A. MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 02/15/00
SERIES 2000-C9 Prior Payment: NA
Next Payment: 03/15/99
Record Date: 01/31/99
ABN AMRO Acct: 12-3456-78-9
CASH RECONCILIATION SUMMARY
====================================================================================================================================
<S> <C> <C>
--------------------------------------- --------------------------------------- ---------------------------------------
INTEREST SUMMARY SERVICING FEE SUMMARY PRINCIPAL SUMMARY
--------------------------------------- --------------------------------------- ---------------------------------------
Current Scheduled Interest Current Servicing Fees SCHEDULED PRINCIPAL:
Less Deferred Interest Plus Fees Advanced for PPIS --------------------
Plus Advance Interest Less Reduction for PPIS Current Scheduled Principal
Plus Unscheduled Interest Plus Unscheduled Servicing Fees Advance Scheduled Principal
PRIS Reducing Scheduled Interest --------------------------------------- ---------------------------------------
Less Total Fees Paid To Servicer Total Servicing Fees PAid Scheduled Principal Distribution
Plus Fees Advance for PPIS --------------------------------------- ---------------------------------------
Less Fee Strips Paid by Servicer UNSCHEDULED PRINCIPAL:
Less Misc. Fees & Expenses --------------------------------------- ----------------------
Less Non Recoverable Advances PPIS SUMMARY Curtailments
--------------------------------------- --------------------------------------- Prepayment in Full
Interest Due Trust Gross PPIS Liquidation Proceeds
--------------------------------------- Reduced by PPIE Repurchase Proceeds
Less Trustee Fee Reduced by Shortfalls in Fees Other Principal Proceeds
Less Fee Strips Paid by Trust Reduced by Other Amounts ---------------------------------------
Less Misc. Fees Paid by Trust --------------------------------------- Unscheduled Principal Distribution
--------------------------------------- PPIS Reducing Scheduled Interest ---------------------------------------
Remittance Interest --------------------------------------- Remittance Principal
--------------------------------------- PPIS Reducing Servicing Fee ---------------------------------------
---------------------------------------
PPIS Due Certificate ---------------------------------------
--------------------------------------- Servicer Wire Amount
---------------------------------------
---------------------------------------
POOL BALANCE SUMMARY
-------------------------------------------------------------------
Balance Count
-------------------------------------------------------------------
Beginning Pool
Scheduled Principal Distribution
Unscheduled Principal Distribution
Deferred Interest
Liquidations
Repurchases
Ending Pool
-------------------------------------------------------------------
====================================================================================================================================
</TABLE>
12/13/99 - 08:54 (M399-M599) (c) 1999 LaSalle Bank N.A.
F-3
<PAGE>
<TABLE>
<CAPTION>
ABN AMRO J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP. Statement Date: 02/15/00
LaSalle Bank N.A. MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 02/15/00
SERIES 2000-C9 Prior Payment: NA
Next Payment: 03/15/99
Record Date: 01/31/99
ABN AMRO Acct: 12-3456-78-9
BOND INTEREST RECONCILIATION
====================================================================================================================================
Deductions Additions
---------------------------------------------- -------------------------------------
Accrual Accrued Add. Deferred & Prior Prepay- Other
-------------- Certificate Allocable Trust Accretion Interest Int. Short- ment Interest
Class Method Days Interest PPIS Expense(1) Interest Losses falls Due Penalties Proceeds(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
====================================================================================================================================
======================================================================
Remaining
Distributable Interest Outstanding Credit Support
Certificate Payment Interest -----------------------
Interest Amount Shortfalls Original Current(3)
- ----------------------------------------------------------------------
- --------------------------------------------
0.00 0.00 0.00
======================================================================
(1) Additional Trust Expenses are fees allocated directly to the bond resulting in a deduction to accrued interest and not carried
as an outstanding shortfall.
(2) Other Interest Proceeds include default interest, PPIE, interest due on outstanding losses, interest due on outstanding
shortfalls and recoveries of interest.
(3) Determined as follows: (A) the ending balance of all the classses less (B) the sum of (i) the ending balance of the class and
(ii) the ending balance of all classes which are not subordinate to the class divided by (A).
</TABLE>
12/13/99 - 08:54 (M399-M599) (c) 1999 LaSalle Bank N.A.
F-4
<PAGE>
<TABLE>
<CAPTION>
ABN AMRO J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP. Statement Date: 02/15/00
LaSalle Bank N.A. MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 02/15/00
SERIES 2000-C9 Prior Payment: NA
Next Payment: 03/15/99
Record Date: 01/31/99
ABN AMRO Acct: 12-3456-78-9
ASSET BACKED FACTS - 15 MONTH HISTORICAL LOAN STATUS SUMMARY
============ ========================================================================== ====================================
Delinquency Aging Categories Special Event Categories (1)
-------------------------------------------------------------------------- ------------------------------------
Delinq 1 Month Delinq 2 Months Delinq 3+ Months Foreclosure REO Specially
Distribution -------------------------------------------------------------------------- Modifications Serviced Bankruptcy
Date # Balance # Balance # Balance # Balance # Balance # Balance # Balance # Balance
------------ -------------------------------------------------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
02/15/00
============ ========================================================================== ====================================
(1) Note: Modification, Specially Serviced & Bankruptcy Totals are Included in the Appropriate Delinquency Aging Category
</TABLE>
12/13/99 - 08:54 (M399-M599) (c) 1999 LaSalle Bank N.A.
F-5
<PAGE>
<TABLE>
<CAPTION>
ABN AMRO J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP. Statement Date: 02/15/00
LaSalle Bank N.A. MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 02/15/00
SERIES 2000-C9 Prior Payment: NA
Next Payment: 03/15/99
Record Date: 01/31/99
ABN AMRO Acct: 12-3456-78-9
ASSET BACKED FACTS - 15 MONTH HISTORICAL PAYOFF/LOSS SUMMARY
============ ============================================================================= ==================================
Appraisal Realized
Ending Pool(1) Payoffs(2) Penalties Reduct.(2) Liquidations(2) Losses(2) Remaining Term Curr Weighted Avg.
Distribution ----------------------------------------------------------------------------- ----------------------------------
Date # Balance # Balance # Amount # Balance # Balance # Amount Life Amort. Coupon Remit
------------ ----------------------------------------------------------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
02/15/00
============ ============================================================================= ==================================
(1) Percentage based on pool as of cutoff. (2) Percentage based on pool as of beginning of period.
</TABLE>
12/13/99 - 08:54 (M399-M599) (c) 1999 LaSalle Bank N.A.
F-6
<PAGE>
<TABLE>
<CAPTION>
ABN AMRO J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP. Statement Date: 02/15/00
LaSalle Bank N.A. MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 02/15/00
SERIES 2000-C9 Prior Payment: NA
Next Payment: 03/15/99
Record Date: 01/31/99
ABN AMRO Acct: 12-3456-78-9
DELINQUENT LOAN DETAIL
====================================================================================================================================
Paid Outstanding Out. Property Special
Disclosure Doc Thru Current P&I P&I Protection Advance Servicer Foreclosure Bankruptcy REO
Control # Date Advance Advances** Advances Description(1) Transfer Date Date Date Date
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
A. P&I Advance - Loan in Grace Period 1. P&I Advance - Loan delinquent 1 month
B. P&I Advance - Late Payment but (less than) one month delinq 2. P&I Advance - Loan delinquent 2 months
3. P&I Advance - Loan delinquent 3 months or More
4. Matured Balloon/Assumed Scheduled Payment
====================================================================================================================================
** Outstanding P&I Advances include the current period P&I Advance
</TABLE>
12/13/99 - 08:54 (M399-M599) (c) 1999 LaSalle Bank N.A.
F-7
<PAGE>
<TABLE>
<CAPTION>
ABN AMRO J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP. Statement Date: 02/15/00
LaSalle Bank N.A. MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 02/15/00
SERIES 2000-C9 Prior Payment: NA
Next Payment: 03/15/99
Record Date: 01/31/99
ABN AMRO Acct: 12-3456-78-9
MORTGAGE LOAN CHARACTERISTICS
DISTRIBUTION OF PRINCIPAL BALANCES
==================================================================================
Weighted Average
Current Scheduled # of Scheduled % of ------------------------
Balances Loans Balance Balance Term Coupon DSCR
==================================================================================
<S> <C> <C> <C> <C> <C> <C>
==================================================================================
0 0 0.00%
==================================================================================
Average Scheduled Balance
Maximum Scheduled Balance
Minimum Scheduled Balance
DISTRIBUTION OF REMAINING TERM (FULLY AMORTIZING)
==================================================================================
Weighted Average
Fully Amortizing # of Scheduled % of ------------------------
Mortgage Loans Loans Balance Balance Term Coupon DSCR
==================================================================================
==================================================================================
0 0 0.00%
==================================================================================
Minimum Remaining Term
Maximum Remaining Term
DISTRIBUTION OF MORTGAGE INTEREST RATES
==================================================================================
Weighted Average
Current Mortgage # of Scheduled % of ------------------------
Interest Rate Loans Balance Balance Term Coupon DSCR
==================================================================================
==================================================================================
0 0 0.00%
==================================================================================
Minimum Mortgage Interest Rate 10.0000%
Maximum Mortgage Interest Rate 10.0000%
DISTRIBUTION OF REMAINING TERM (BALLOON)
==================================================================================
Weighted Average
Balloon # of Scheduled % of ------------------------
Mortgage Loans Loans Balance Balance Term Coupon DSCR
==================================================================================
0 to 60
61 to 120
121 to 180
181 to 240
241 to 360
==================================================================================
0 0 0.00%
==================================================================================
Minimum Remaining Term 0
Maximum Remaining Term 0
</TABLE>
12/13/99 - 08:54 (M399-M599) (c) 1999 LaSalle Bank N.A.
F-8
<PAGE>
<TABLE>
<CAPTION>
ABN AMRO J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP. Statement Date: 02/15/00
LaSalle Bank N.A. MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 02/15/00
SERIES 2000-C9 Prior Payment: NA
Next Payment: 03/15/99
Record Date: 01/31/99
ABN AMRO Acct: 12-3456-78-9
MORTGAGE LOAN CHARACTERISTICS
DISTRIBUTION OF DSCR (CURRENT)
============================================================================
Debt Service # of Scheduled % of
Coverage Ratio Loans Balance Balance WAMM WAC DSCR
============================================================================
<S> <C> <C> <C> <C> <C> <C>
============================================================================
0 0 0.00%
============================================================================
Maximum DSCR
Minimum DSCR
DISTRIBUTION OF DSCR (CUTOFF)
============================================================================
Debt Service # of Scheduled % of
Coverage Ratio Loans Balance Balance WAMM WAC DSCR
============================================================================
============================================================================
0 0 0.00%
============================================================================
Maximum DSCR 0.00
Minimum DSCR 0.00
GEOGRAPHIC DISTRIBUTION
============================================================================
# of Scheduled % of
State Loans Balance Balance WAMM WAC DSCR
============================================================================
============================================================================
0 0.00%
============================================================================
</TABLE>
12/13/99 - 08:54 (M399-M599) (c) 1999 LaSalle Bank N.A.
F-9
<PAGE>
<TABLE>
<CAPTION>
ABN AMRO J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP. Statement Date: 02/15/00
LaSalle Bank N.A. MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 02/15/00
SERIES 2000-C9 Prior Payment: NA
Next Payment: 03/15/99
Record Date: 01/31/99
ABN AMRO Acct: 12-3456-78-9
MORTGAGE LOAN CHARACTERISTICS
DISTRIBUTION OF PROPERTY TYPES
============================================================================
# of Scheduled % of
Property Type Loans Balance Balance WAMM WAC DSCR
============================================================================
<S> <C> <C> <C> <C> <C> <C>
============================================================================
0 0 0.00%
============================================================================
DISTRIBUTION OF AMORTIZATION TYPE
============================================================================
Current Scheduled # of Scheduled % of
Balances Loans Balance Balance WAMM WAC DSCR
============================================================================
============================================================================
============================================================================
DISTRIBUTION OF LOAN SEASONING
============================================================================
# of Scheduled % of
Number of years Loans Balance Balance WAMM WAC DSCR
============================================================================
============================================================================
0 0 0.00%
============================================================================
DISTRIBUTION OF YEAR LOANS MATURING
============================================================================
# of Scheduled % of
Year Loans Balance Balance WAMM WAC DSCR
============================================================================
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009 & Longer
============================================================================
0 0 0.00%
============================================================================
(1) For adjustable mortgage loans where a minimum rate does not exist the gross margin was used.
</TABLE>
12/13/99 - 08:54 (M399-M599) (c) 1999 LaSalle Bank N.A.
F-10
<PAGE>
<TABLE>
<CAPTION>
ABN AMRO J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP. Statement Date: 02/15/00
LaSalle Bank N.A. MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 02/15/00
SERIES 2000-C9 Prior Payment: NA
Next Payment: 03/15/99
Record Date: 01/31/99
ABN AMRO Acct: 12-3456-78-9
LOAN LEVEL DETAIL
===================================================================================================================================
Operating Ending
Disclosure Property Statement Maturity Principal Note Scheduled
Control # Grp Type State DSCR NOI Date Date Balance Rate P&I
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
W/Avg 0.00 0 0 0
===================================================================================================================================
========================================================================
Spec. Loan Prepayment
Mod. Serv ASER Status ---------------------------
Flag Flag Flag Code(1) Amount Penalty Date
========================================================================
- ------------------------------------------------------------------------
0 0
========================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
* NOI and DSCR, if available and reportable under the terms of the trust agreement, are based on information obtained from the
related borrower, and no other party to the agreement shall be held liable for the accuracy or methodology used to determine
such figures.
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Legend: A. P&I Adv - in Grace Period 1. P&I Adv - delinquent 1 month
B. P&I Adv - (less than) one month delinq 2. P&I Adv - delinquent 2 months
3. P&I Adv - delinquent 3+ months
4. Mat. Balloon/Assumed P&I
5. Prepaid in Full
6. Specially Serviced
7. Foreclosure
8. Bankruptcy
9. REO
10. DPO
11. Modification
====================================================================================================================================
</TABLE>
12/13/99 - 08:54 (M399-M599) (c) 1999 LaSalle Bank N.A.
F-11
<PAGE>
<TABLE>
<CAPTION>
ABN AMRO J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP. Statement Date: 02/15/00
LaSalle Bank N.A. MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 02/15/00
SERIES 2000-C9 Prior Payment: NA
Next Payment: 03/15/99
Record Date: 01/31/99
ABN AMRO Acct: 12-3456-78-9
SPECIALLY SERVICED (PART I) - LOAN DETAIL
===================== =================== ================================ ========================= ===================
Balance Remaining Term
Disclosure Transfer ------------------- Note Maturity -------------- Property NOI
Control # Date Scheduled Actual Rate Date Life Amort. Type State NOI DSCR Date
===================== =================== ================================ ========================= ===================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
===================== =================== ================================ ========================= ===================
</TABLE>
12/13/99 - 08:54 (M399-M599) (c) 1999 LaSalle Bank N.A.
F-12
<PAGE>
<TABLE>
<CAPTION>
ABN AMRO J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP. Statement Date: 02/15/00
LaSalle Bank N.A. MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 02/15/00
SERIES 2000-C9 Prior Payment: NA
Next Payment: 03/15/99
Record Date: 01/31/99
ABN AMRO Acct: 12-3456-78-9
SPECIALLY SERVICED LOAN DETAIL (PART II) - SERVICER COMMENTS
====================================================================================================================================
Disclosure Resolution
Control # Strategy Comments
====================================================================================================================================
<S> <C> <C>
====================================================================================================================================
</TABLE>
12/13/99 - 08:54 (M399-M599) (c) 1999 LaSalle Bank N.A.
F-13
<PAGE>
<TABLE>
<CAPTION>
ABN AMRO J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP. Statement Date: 02/15/00
LaSalle Bank N.A. MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 02/15/00
SERIES 2000-C9 Prior Payment: NA
Next Payment: 03/15/99
Record Date: 01/31/99
ABN AMRO Acct: 12-3456-78-9
MODIFIED LOAN DETAIL
====================================================================================================================================
Disclosure Modification Modification Modification
Control # Date Code Description
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
====================================================================================================================================
</TABLE>
12/13/99 - 08:54 (M399-M599) (c) 1999 LaSalle Bank N.A.
F-14
<PAGE>
<TABLE>
<CAPTION>
ABN AMRO J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP. Statement Date: 02/15/00
LaSalle Bank N.A. MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 02/15/00
SERIES 2000-C9 Prior Payment: NA
Next Payment: 03/15/99
Record Date: 01/31/99
ABN AMRO Acct: 12-3456-78-9
REALIZED LOSS DETAIL
====================================================================================================================================
Gross Net
Proceeds Proceeds
Beginning as a % of Aggregate Net as a %
Distribution Disclosure Appraisal Appraisal Scheduled Gross Sched Liquidation Liquidation of Sched. Realized
Period Control # Date Value Balance Proceeds Principal Expenses* Proceeds Balance Loss
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
CURRENT TOTAL 0.00 0.00 0.00 0.00 0.00
CUMULATIVE 0.00 0.00 0.00 0.00 0.00
====================================================================================================================================
* Aggregate liquidation expenses also include outstanding P&I advances and unpaid servicing fees, unpaid trustee fees, etc..
</TABLE>
12/13/99 - 08:54 (M399-M599) (c) 1999 LaSalle Bank N.A.
F-15
<PAGE>
<TABLE>
<CAPTION>
ABN AMRO J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP. Statement Date: 02/15/00
LaSalle Bank N.A. MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 02/15/00
SERIES 2000-C9 Prior Payment: NA
Next Payment: 03/15/99
Record Date: 01/31/99
ABN AMRO Acct: 12-3456-78-9
HISTORICAL COLLATERAL LEVEL PREPAYMENT REPORT
======================== ============================== ==================== =============== ==========================
Remaining Term
Disclosure Distribution Initial Payoff Penalty Prepayment Maturity Property -------------- Note
Control # Date Balance Code Amount Amount Date Date Type State DSCR Life Amort. Rate
======================== ============================== ==================== =============== ==========================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
======================== ============================== ==================== =============== ==========================
CUMULATIVE 0 0
================
</TABLE>
12/13/99 - 08:54 (M399-M599) (c) 1999 LaSalle Bank N.A.
F-16
<PAGE>
<TABLE>
<CAPTION>
ABN AMRO J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP. Statement Date: 02/15/00
LaSalle Bank N.A. MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 02/15/00
SERIES 2000-C9 Prior Payment: NA
Next Payment: 03/15/99
Record Date: 01/31/99
ABN AMRO Acct: 12-3456-78-9
APPRAISAL REDUCTION DETAIL
===================== ==================== ============================== ========================= ====== ====================
Remaining Term Appraisal
Disclosure Appraisal Scheduled Reduction Note Maturity -------------- Property --------------------
Control # Red. Date Balance Amount Rate Date Life Amort. Type State DSCR Value Date
===================== ==================== ============================== ========================= ====== ====================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
===================== ==================== ============================== ========================= ====== ====================
</TABLE>
12/13/99 - 08:54 (M399-M599) (c) 1999 LaSalle Bank N.A.
F-17
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
ANNEX G
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered J.P. Morgan
Commercial Mortgage Finance Corp. Mortgage Pass-Through Certificates, Series
2000-C9, Class A1, Class A2, Class B, Class C, Class D, Class E and Class F
(the "Global Securities") will be available only in book-entry form. Investors
in the Global Securities may hold such Global Securities through any of DTC,
Cedelbank or Euroclear. The Global Securities will be tradeable as home market
instruments in both the European and U.S. domestic markets. Initial settlement
and all secondary trades will settle in same day funds. Capitalized terms used
but not defined in this Annex G have the meanings assigned to them in the
Prospectus Supplement and the Prospectus.
Secondary market trading between investors holding Global Securities
through Cedelbank and Euroclear will be conducted in the ordinary way in
accordance with their normal rules and operating procedures and in accordance
with conventional eurobond practice. Secondary market trading between investors
holding Global Securities through DTC will be conducted according to the rules
and procedures applicable to U.S. corporate debt obligations.
Secondary cross-market trading between Cedelbank or Euroclear and DTC
Participants holding Certificates will be effected on a
delivery-against-payment basis through the respective Depositories of Cedelbank
and Euroclear (in such capacity) and as DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be subject
to U.S. withholding taxes unless such holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing organizations
or their participants.
INITIAL SETTLEMENT
All Global Securities will be held in book-entry form by DTC in the name
of Cede & Co. as nominee of DTC. Investors' interests in the Global Securities
will be represented through financial institutions acting on their behalf as
direct and indirect Participants in DTC. As a result, Cedelbank and Euroclear
will hold positions on behalf of their participants through their respective
Depositories, which in turn will hold such positions in accounts as DTC
Participants.
Investors electing to hold their Global Securities through DTC will follow
the settlement practices applicable to similar issues of pass-through
certificates. Investors' securities custody accounts will be credited with
their holdings against payment in same-day funds on the settlement date.
Investors electing to hold their Global Securities through Cedelbank or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no "lock-up" or restricted period. Global Securities will be credited to
the securities custody accounts on the settlement date against payments in
same-day funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled using the DTC procedures applicable to similar
issues of pass-through certificates in same-day funds.
Trading between Cedelbank and/or Euroclear Participants. Secondary market
trading between Cedelbank Participants or Euroclear Participants will be
settled using the procedures applicable to conventional eurobonds in same-day
funds.
Trading between DTC seller and Cedelbank or Euroclear purchaser. When
Global Securities are to be transferred from the account of a DTC Participant
to the account of a Cedelbank Participant or a
G-1
<PAGE>
Euroclear Participant, the purchaser will send instructions to Cedelbank or
Euroclear through a Cedelbank Participant or Euroclear Participant at least one
business day prior to settlement. Cedelbank or Euroclear will instruct the
respective Depository, as the case may be, to receive the Global Securities
against payment. Payment will include interest accrued on the Global Securities
from and including the last coupon payment date to and excluding the settlement
date. Payment will then be made by the respective Depository to the DTC
Participant's account against delivery of the Global Securities. After
settlement has been completed, the Global Securities will be credited to the
respective clearing system and by the clearing system, in accordance with its
usual procedures, to the Cedelbank Participant's or Euroclear Participant's
account. The Global Securities credit will appear the next day (Brussels time)
and the cash debit will be back-valued to, and the interest on the Global
Securities will accrue from, the value date (which would be the preceding day
when settlement occurred in New York). If settlement is not completed on the
intended value date (i.e., the trade fails), the Cedelbank or Euroclear cash
debit will be valued instead as of the actual settlement date.
Cedelbank Participants and Euroclear Participants will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. The most direct means of doing so is to pre-position
funds for settlement, either from cash on hand or existing lines of credit, as
they would for any settlement occurring within Cedelbank or Euroclear. Under
this approach, they may take on credit exposure to Cedelbank or Euroclear until
the Global Securities are credited to their accounts one day later.
As an alternative, if Cedelbank or Euroclear has extended a line of credit
to them, Cedelbank Participants or Euroclear Participants can elect not to
pre-position funds and allow that credit line to be drawn upon the finance
settlement. Under this procedure, Cedelbank Participants or Euroclear
Participants purchasing Global Securities would incur overdraft charges for one
day, assuming they cleared the overdraft when the Global Securities were
credited to their accounts. However, interest on the Global Securities would
accrue from the value date. Therefore, in many cases the investment income on
the Global Securities earned during that one day period may substantially
reduce or offset the amount of such overdraft charges, although this result
will depend on each Cedelbank Participant's or Euroclear Participant's
particular cost of funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities to
the respective Depository for the benefit of Cedelbank Participants or
Euroclear Participants. The sale proceeds will be available to the DTC seller
on the settlement date. Thus, to the DTC Participant a cross-market transaction
will settle no differently than a trade between two DTC Participants.
Trading between Cedelbank or Euroclear seller and DTC purchaser. Due to
time zone differences in their favor, Cedelbank Participants and Euroclear
Participants may employ their customary procedures for transactions in which
Global Securities are to be transferred by the respective clearing system,
through the respective Depository, to a DTC Participant. The seller will send
instructions to Cedelbank or Euroclear through a Cedelbank Participant or
Euroclear Participant at least one business day prior to settlement. In these
cases, Cedelbank or Euroclear will instruct the respective Depository, as
appropriate, to deliver the bonds to the DTC Participant's account against
payment. Payment will include interest accrued on the Global Securities from
and including the last coupon payment date to and excluding the settlement
date. The payment will then be reflected in the account of the Cedelbank
Participant or Euroclear Participant the following day, and receipt of the cash
proceeds in the Cedelbank Participant's or Euroclear Participant's account
would be back-valued to the value date (which would be the preceding day, when
settlement occurred in New York). Should the Cedelbank Participant or Euroclear
Participant have a line of credit with its respective clearing system and elect
to be in debit in anticipation of receipt of the sale proceeds in its account,
the back-valuation will extinguish any overdraft charges incurred over that
one-day period. If settlement is not completed on the intended value date
(i.e., the trade fails), receipt of the cash proceeds in the Cedelbank
Participant's or Euroclear Participant's account would instead be valued as of
the actual settlement date. Finally, day traders that use Cedelbank or
Euroclear and that purchase Global Securities from DTC Participants for
delivery to Cedelbank Participants or Euroclear Participants should note that
these trades would automatically fail on the sale side unless affirmative
action were taken. At least three techniques should be readily available to
eliminate this potential problem:
G-2
<PAGE>
(a) borrowing through Cedelbank or Euroclear for one day (until the
purchase side of the day trade is reflected in their Cedelbank or Euroclear
accounts) in accordance with the clearing system's customary procedures;
(b) borrowing the Global Securities in the U.S. from a DTC Participant no
later than one day prior to settlement, which would give the Global
Securities sufficient time to be reflected in their Cedelbank or Euroclear
account in order to settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the trade so
that the value date for the purchase from the DTC Participant is at least
one day prior to the value date for the sale to the Cedelbank Participant
or Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A Beneficial Owner of Global Securities holding securities through
Cedelbank or Euroclear (or through DTC if the holder has an address outside the
U.S.) will be subject to the 30% U.S. withholding tax that generally applies to
payments of interest (including original issue discount) on registered debt
issued by U.S. Persons, unless (i) each clearing system, bank or other
financial institution that holds customers' securities in the ordinary course
of its trade or business in the chain of intermediaries between such Beneficial
Owner and the U.S. entity required to withhold tax complies with applicable
certification requirements and (ii) such beneficial owner takes one of the
following steps to obtain an exemption or reduced tax rate:
Exemption for non-U.S. Persons (Form W-8). Beneficial Owners of
Certificates that are non-U.S. Persons can obtain a complete exemption from the
withholding tax by filing a signed Form W-8 (Certificate of Foreign Status). If
the information shown on Form W-8 changes, a new Form W-8 must be filed within
30 days of such change.
Exemption for non-U.S. Persons with effectively connected income (Form
4224). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its conduct
of a trade or business in the United States can obtain an exemption from the
withholding tax by filing Form 4224 (Exemption from Withholding of Tax on
Income Effectively Connected with the Conduct of a Trade or Business in the
United States).
Exemption or reduced rate for non-U.S. Persons resident in treaty
countries (Form 1001). Non-U.S. Persons that are Beneficial Owners residing in
a country that has a tax treaty with the United States can obtain an exemption
or reduced tax rate (depending on the treaty terms) by filing Form 1001
(Ownership, Exemption or Reduced Rate Certificate). If the treaty provides only
for a reduced rate, withholding tax will be imposed at that rate unless the
filer alternatively files Form W-8. Form 1001 may be filed by the Beneficial
Owner or his agent.
Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a complete
exemption from the withholding tax by filing Form W-9 (Payer's Request for
Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The Beneficial Owner of a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, his agent,
files by submitting the appropriate form to the person through whom it holds
(the clearing agency, in the case of persons holding directly on the books of
the clearing agency). Form W-8 and Form 1001 are effective for three calendar
years and Form 4224 is effective for one calendar year.
The term "U.S. Person" means (i) a citizen or resident of the United
States, (ii) a corporation or partnership or other entity treated as a
corporation or partnership for federal income tax purposes created or organized
in or under the laws of the United States, any State thereof or the District of
Columbia or (iii) an estate the income of which is includable in gross income
for United States tax purposes, regardless of its source or (iv) a trust if a
court within the United States is able to exercise primary supervision of the
administration of the trust and one or more United States fiduciaries have the
authority to control all
G-3
<PAGE>
substantial decisions of the trust. This summary does not deal with all aspects
of U.S. Federal income tax withholding that may be relevant to foreign holders
of the Global Securities. Investors are advised to consult their own tax
advisors for specific tax advice concerning their holding and disposing of the
Global Securities.
G-4
<PAGE>
PROSPECTUS
Mortgage Pass-Through Certificates
(Issuable in Series)
J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP.
DEPOSITOR
J.P. Morgan Commercial Mortgage Finance Corp. will periodically offer
certificates in one or more series. Each series of certificates will represent
the entire beneficial ownership interest in a trust fund. Distributions on the
certificates of any series will be made only from the assets of the related
trust fund.
The certificates of each series will not represent an obligation of the
depositor, any servicer or any of their respective affiliates. Neither the
certificates nor any assets in the related trust fund will be guaranteed or
insured by any governmental agency or instrumentality or by any other person,
unless otherwise provided in the prospectus supplement.
The primary asset of the trust fund may include:
o multifamily and commercial mortgage loans, including participations
therein;
o mortgage-backed securities evidencing interest in or secured by
multifamily and commercial mortgage loans, including participations
therein, and other mortgage-backed securities;
o direct obligations of the United States or other government agencies; or
o a combination of the assets described above
INVESTING IN THE OFFERED CERTIFICATES INVOLVES RISKS. YOU SHOULD REVIEW THE
INFORMATION APPEARING UNDER THE CAPTION "RISK FACTORS" ON PAGE 9 AND IN THE
RELATED PROSPECTUS SUPPLEMENT BEFORE PURCHASING ANY OFFERED CERTIFICATE.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE CERTIFICATES OR DETERMINED THAT
THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
January 1, 2000
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS
AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT
We provide information to you about the certificates in two separate
documents that provide progressively more detail:
o this prospectus, which provides general information, some of which may
not apply to your series of certificates; and
o the accompanying prospectus supplement, which describes the specific
terms of your series of certificates.
IF THE DESCRIPTION OF YOUR CERTIFICATES IN THE ACCOMPANYING PROSPECTUS
SUPPLEMENT DIFFERS FROM THE RELATED DESCRIPTION IN THIS PROSPECTUS, YOU SHOULD
RELY ON THE INFORMATION IN THAT PROSPECTUS SUPPLEMENT.
This prospectus may not be used to consummate sales of the offered certificates
of any series unless accompanied by the prospectus supplement for such series.
Some capitalized terms used in this prospectus are defined in the Glossary
attached hereto.
---------------------
Until 90 days after the date of each prospectus supplement, all dealers
effecting transactions in the offered certificates covered by such prospectus
supplement may be required to deliver such prospectus supplement and this
prospectus. This is in addition to the obligation of dealers to deliver a
prospectus and prospectus supplement when acting as underwriters and with
respect to their unsold allotments or subscriptions.
You should rely only on any information or representations contained or
incorporated by reference in this prospectus and the related prospectus
supplement. This prospectus and any prospectus supplement do not constitute an
offer to sell or a solicitation of an offer to buy any securities in any state
or other jurisdiction in which such offer would be unlawful.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Prospectus ......................................................................... 1
Important Notice about Information Presented in this Prospectus and the Accompanying
Prospectus Supplement ............................................................. 2
Additional Information ............................................................. 3
Incorporation of Certain Information by Reference .................................. 3
Summary of Prospectus .............................................................. 4
Risk Factors ....................................................................... 9
Description of the Trust Funds ..................................................... 9
Use of Proceeds .................................................................... 24
Yield Considerations ............................................................... 24
The Depositor ...................................................................... 27
Description of the Certificates .................................................... 28
Description of the Agreements ...................................................... 35
Description of Credit Support ...................................................... 50
Certain Legal Aspects of the Mortgage Loans and the Leases ......................... 52
Federal Income Tax Consequences .................................................... 68
ERISA Considerations ............................................................... 96
Legal Investment ................................................................... 98
Plan of Distribution ............................................................... 100
Legal Matters ...................................................................... 100
Financial Information .............................................................. 100
Rating ............................................................................. 101
Glossary of Terms .................................................................. 102
</TABLE>
2
<PAGE>
ADDITIONAL INFORMATION
The depositor has filed with the Securities and Exchange 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 do not contain all of the
information set forth in the registration statement. For further information,
you should refer to the registration statement and the exhibits attached
thereto. Such registration statement and exhibits can be inspected and copied
at prescribed rates at the public reference facilities maintained by the
Securities and Exchange Commission at its Public Reference Section, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at its Regional Offices located as
follows: Chicago Regional Office, Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661; and New York Regional Office, Seven World Trade
Center, New York, New York 10048. The Securities and Exchange Commission
maintains a web site at http://www.sec.gov containing reports, proxy and
information statements and other information regarding registrants, including
J.P. Morgan Commercial Mortgage Finance Corp., that file electronically with
the Securities and Exchange Commission.
The depositor will file or cause to be filed with the Securities and
Exchange Commission such periodic reports with respect to each trust fund as
are required under the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Securities and Exchange Commission thereunder.
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.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
We are incorporating herein by reference all documents and reports 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. You may obtain, without charge, a copy of any
or all documents or reports incorporated herein by reference, to the extent
such documents or reports relate to an offered certificate. Exhibits to those
documents will be provided to you only if such exhibits were specifically
incorporated by reference in those documents. Requests to the depositor should
be directed in writing to J.P. Morgan Commercial Mortgage Finance Corp., c/o
J.P. Morgan Securities Inc., 60 Wall Street, New York, New York 10260-0060,
Attention: Secretary.
3
<PAGE>
SUMMARY OF PROSPECTUS
The following summary is a brief description of the main terms of the
offered certificates. For this reason, the summary does not contain all the
information that may be important to you. You will find a detailed description
of the terms of the offered certificates following this summary and in the
accompanying prospectus supplement.
The Trust Assets............ Each series of certificates will represent in
the entire beneficial ownership interest in a
trust fund consisting primarily of any of the
following:
o mortgage assets;
o collection accounts;
o forms of credit support; and
o cash flow agreements.
The Mortgage Assets......... The mortgage assets with respect to each series
of certificates may consist of any of the
following:
o multifamily and commercial mortgage loans,
including participations therein;
o direct obligations of the United States or
other government agencies; and
o mortgage-backed securities.
The mortgage loans will not be guaranteed or
insured by the depositor or any of its
affiliates or, unless otherwise provided in the
prospectus supplement, by any governmental
agency or instrumentality or other person. The
mortgage loans will be primarily secured by
first or junior liens on, or security interests
in fee simple, leasehold or a similar interest
in any of the following types of properties:
o residential properties consisting of five or
more rental or cooperatively owned dwelling
units;
o office buildings;
o retail buildings or centers;
o hotels and motels;
o nursing homes;
o congregate care facilities;
o assisted living facilities;
o industrial properties;
o mini-warehouse facilities or self-storage
facilities;
o mobile home parks; and
o mixed use and other types of commercial
properties.
4
<PAGE>
The mortgage loans may also be secured by
additional collateral.
Some or all of the mortgage loans may also be
secured by an assignment of one or more leases
of one or more lessees of all or a portion of
the related mortgaged properties. A significant
or the sole source of payments on certain
commercial loans will be the rental payments due
under the related leases.
A mortgage loan may have an interest rate that
has any of the following features:
o is fixed over its term,
o adjusts from time to time,
o is partially fixed and partially floating,
o is floating based on one or more indices,
o may be converted from a floating to a fixed
interest rate,
o may be converted from a fixed to a floating
interest rate, or
o interest is not paid currently but is accrued
and added to the principal balance.
A mortgage loan may provide for any of the
following:
o scheduled payments to maturity,
o payments that adjust from time to time,
o negative amortization or accelerated
amortization,
o full amortization or require a balloon
payment due on its stated maturity date,
o prohibitions on prepayment,
o releases or substitutions of collateral,
including defeasance thereof with direct
obligation of the United States, and
o payment of a premium or a yield maintenance
penalty in connection with a principal
prepayment.
The mortgaged properties may be located anywhere
in the world. All mortgage loans will have
original terms to maturity of not more than 40
years. All mortgage loans will have been
originated by persons other than the depositor.
All mortgage assets will have been purchased,
either directly or indirectly, by the depositor
on or before the date of initial issuance of the
related series of certificates.
The mortgage-backed securities will evidence
ownership interests in or be secured by mortgage
loans similar to those described above and other
mortgage-backed securities. Some mortgage-backed
securities may be guaranteed or insured by an
affiliate of the depositor, the Federal Home
Loan Mortgage Corporation, the Federal National
Mortgage Association, the Government National
Mortgage Association, or any other person
specified in the prospectus supplement.
5
<PAGE>
Collection Accounts......... Each trust fund will include one or more
accounts established and maintained on behalf of
the certificateholders. All payments and
collections received or advanced with respect to
the mortgage assets and other assets in the trust
fund will be deposited into those accounts. The
accounts may be maintained as an interest bearing
or a non-interest bearing account, and funds may
be held as cash or reinvested.
Credit Support.............. The following types of credit support may be
used to enhance the likelihood of distributions
on certain classes of certificates:
o subordination of junior certificates,
o letters of credit,
o insurance policies,
o guarantees,
o reserve funds, or
o other types of credit support described in
the prospectus supplement and a combination of
any of the above.
Cash Flow Agreements........ Cash flow agreements are used to reduce the
effects of interest rate or currency exchange
rate fluctuations on the underlying mortgage
assets and increase the likelihood of timely
distributions on the certificates. The trust fund
may include any of the following types of cash
flow agreements:
o guaranteed investment contracts,
o interest rate swap or exchange agreements,
o interest rate cap or floor agreements,
o currency exchange agreements,
o yield supplement agreements.
Description of Certificates.. Each series of certificates will include one or
more classes. Each series of certificates will
represent in the aggregate the entire beneficial
ownership interest in the trust fund. The offered
certificates are the classes of certificates
being offered to you pursuant to the prospectus
supplement. The non-offered certificates are the
classes of certificates not being offered to you
pursuant to the prospectus supplement.
Information on the non-offered certificates is
being provided solely to assist you in your
understanding of the offered certificates.
Distributions on
Certificates................ The certificates may provide for different
methods of distributions to specific classes.
Any class of certificates may:
o provide for the accrual of interest thereon
based on fixed, variable or floating rates;
6
<PAGE>
o be senior or subordinate to one or more other
classes of certificates with respect to
interest or principal distribution and the
allocation of losses on the assets of the
trust fund;
o be entitled to principal distributions, with
disproportionately low, nominal or no interest
distributions;
o be entitled to interest distributions, with
disproportionately low, nominal or no
principal distributions;
o provide for distributions of accrued interest
only after the occurrence of certain events,
such as the retirement of one or more other
classes of certificates;
o provide for distributions of principal
sequentially, based on specified payment
schedules or other methodologies; and
o provide for distributions based on a
combination of any of the above features.
Interest on each class of offered certificates
of each series will accrue at the applicable
pass-through rate on the outstanding certificate
balance or notional balance. Distributions of
interest with respect to one or more classes of
certificates may be reduced to the extent of
certain delinquencies, losses, prepayment
interest shortfalls, and other contingencies
described herein
The certificate balance of a certificate
outstanding from time to time represents the
maximum amount that the holder thereof is then
entitled to receive in respect of principal from
future cash flow on the assets in the related
trust fund. Distributions of principal will be
made on each distribution date to the class or
classes of certificates entitled thereto until
the certificate balance of such certificates is
reduced to zero. Distributions of principal to
any class of certificates will be made on a pro
rata basis among all of the certificates of such
class.
Advances.................... A servicer may be obligated as part of its
servicing responsibilities to make certain
advances with respect to delinquent scheduled
payments and property related expenses which it
deems recoverable. The trust fund may be charged
interest for any advance. Neither the depositor
nor any of its affiliates will have any
responsibility to make such advances.
Termination................. A series of certificates may be subject to
optional early termination through the repurchase
of the mortgage assets in the related trust fund.
Registration of
Certificates................ One or more classes of the offered certificates
may initially be represented by one or more
certificates registered in the name of Cede &
Co., as the nominee of The Depository Trust
Company. If your offered certificates is so
registered, you will not be entitled to receive a
definitive certificate representing your interest
except in the event that physical certificates
are issued under the limited circumstances.
7
<PAGE>
Tax Status of
the Certificates............ The certificates of each series will constitute
either:
o "regular interests" or "residual interests" in
a trust fund treated as a "real estate
mortgage investment conduit" under the
Internal Revenue Code of 1986, or
o interests in a trust fund treated as a grantor
trust under applicable provisions of the
Internal Revenue Code of 1986.
ERISA Considerations........ If you are a fiduciary of an employee benefit
plan or other retirement plan or arrangement that
is subject to the Employee Retirement Income
Security Act of 1974, as amended, or Section 4975
of the Internal Revenue Code of 1986, as amended,
or any person which proposes to use "plan assets"
of any of these plans to acquire any offered
certificates, you should carefully review with
your legal counsel whether the purchase or
holding of any offered certificates could give
rise to transactions not permitted under these
laws. The prospectus supplement will specify if
investment in some certificates may require a
representation that the investor is not a plan or
similar arrangement or investing on behalf of a
plan or similar arrangement.
Legal Investment............ The prospectus supplement will specify whether
the offered certificates will constitute
"mortgage related securities" for purposes of the
Secondary Mortgage Market Enhancement Act of
1984. If your investment authority is subject to
legal restrictions you should consult your legal
counsel to determine whether and to what extent
the offered certificates constitute legal
investments for you.
Rating...................... At the date of issuance, as to each series,
each class of offered certificates will not be
rated lower than investment grade by one or more
nationally recognized statistical rating
agencies. 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.
8
<PAGE>
RISK FACTORS
YOU SHOULD CONSIDER THE FOLLOWING RISK FACTORS, IN ADDITION TO THE RISK
FACTORS IN THE PROSPECTUS SUPPLEMENT, IN DECIDING TO PURCHASE ANY OF THE
OFFERED CERTIFICATES. THE RISKS AND UNCERTAINTIES DESCRIBED BELOW, TOGETHER
WITH THOSE DESCRIBED IN THE PROSPECTUS SUPPLEMENT UNDER "RISK FACTORS,"
SUMMARIZE THE MATERIAL RISKS RELATING TO YOUR CERTIFICATES.
Your ability to resell
certificates may be limited
because of their
characteristics ............ You may not be able to resell your certificates
and the value of your certificates may be less
than you anticipated for a variety of reasons
including:
o A secondary market for your certificates
does not develop;
o Interest rate fluctuations;
o The absence of redemption rights;
o The availability of other mortgage-backed
securities including those backed by loans on
single family residential properties; and
o The request for information in addition to
that provided in the prospectus, the
prospectus supplement and the monthly report
to certificateholders.
The assets of the trust fund may not
be sufficient to pay
your certificates........... The certificates will not represent an interest
in or obligation of the depositor, any servicer,
or any of their affiliates. The only obligations
with respect to the certificates or the mortgage
assets will be the obligations of the depositor
pursuant to certain limited representations and
warranties made with respect to the mortgage
loans. Since certain representations and
warranties with respect to the mortgage assets
may have been made and/or assigned in connection
with transfers of such mortgage assets prior to
the closing date, the rights of the trustee and
the certificateholders with respect to such
representations or warranties will be limited to
their rights as an assignee thereof. None of the
depositor, any servicer or any affiliate thereof
will have any obligation with respect to
representations or warranties made by any other
entity. Neither the certificates nor the
underlying mortgage assets will be guaranteed or
insured by any governmental agency or
instrumentality, or by the depositor, any
servicer or any of their affiliates. Proceeds of
the assets included in the related trust fund for
each series of certificates will be the sole
source of payments on the certificates, and there
will be no recourse to the depositor or any other
entity in the event that such proceeds are
insufficient or otherwise unavailable to make all
payments provided for under the certificates.
Unless otherwise specified in the prospectus
supplement, a series of certificates will not
have any claim against or security interest in
the trust funds for any other series. If the
related trust fund is insufficient to make
payments on such certificates, no other assets
will be available for payment of the deficiency.
Additionally, certain amounts remaining in
certain funds or
9
<PAGE>
accounts may be withdrawn under certain
conditions. In the event of such withdrawal,
such amounts will not be available for future
payment of principal of or interest on the
certificates. If so provided in the prospectus
supplement for a series of certificates
consisting of one or more classes of subordinate
certificates, on any distribution date in
respect of which losses or shortfalls in
collections on the trust assets have been
incurred, the amount of such losses or
shortfalls will be borne first by one or more
classes of the subordinate certificates, and,
thereafter, by the remaining classes of
certificates in the priority and manner and
subject to the limitations specified in the
prospectus supplement.
Prepayments and repurchases
of the mortgage assets will
affect the timing of your
cash flow and may affect
your yield.................. Prepayments (including those caused by defaults
on the mortgage loans and repurchases for breach
of representation or warranty) on the mortgage
assets in any trust fund generally will result in
a faster rate of principal payments on one or
more classes of the related certificates than if
payments on such mortgage assets were made as
scheduled. Thus, the prepayment experience on the
mortgage assets may affect the average life of
each class of related certificates. The rate of
principal payments on pools of mortgage loans
varies between pools and from time to time is
influenced by a variety of economic, demographic,
geographic, social, tax, legal and other factors.
There can be no assurance as to the rate of
voluntary prepayments on the mortgage assets in
any trust fund will conform to any model
described herein or in any prospectus
supplement.
The rate of voluntary prepayments will also be
affected by:
o the voluntary prepayment terms of the
mortgage loan including prepayment lock-out
periods and prepayment premiums
o the ability of a servicer to collect
prepayment premiums
o then-current interest rates being charged on
similar mortgage loans
o the availability of mortgage credit.
If a mortgage loan is in default it may not be
possible to collect a prepayment premium. No
person will be required to pay any premium if a
mortgage loan is repurchased for a breach of
representation or warranty.
The yield on your certificates may be less than
anticipated because the prepayment premium or
yield maintenance required under certain
prepayment scenarios may not be enforceable in
some states or under federal bankruptcy laws.
o Some courts may consider the prepayment
premium to be usurious.
10
<PAGE>
o Even if the prepayment premium is
enforceable, we cannot assure you that
foreclosure proceeds will be sufficient to pay
the prepayment premium.
o Although the collateral substitution
provisions related to defeasance are not
suppose to be treated as a prepayment and
should not affect your certificates, we cannot
assure you that a court will not interpret the
defeasance provisions as requiring a
prepayment premium; nor can we assure you that
if it is treated as a prepayment premium, the
court will find the defeasance income stream
enforceable.
As a result, the actual maturity of your
certificates could occur significantly earlier
than expected and additional cash flow may not
be available to offset any effect this may have
on your yield. A series of certificates may
include one or more classes of certificates with
priorities of payment and, as a result, yields
on other classes of certificates, including
classes of offered certificates, of such series
may be more sensitive to prepayments on mortgage
assets. A series of certificates may include one
or more classes offered at a significant premium
or discount. Yields on such classes of
certificates will be sensitive, and in some
cases extremely sensitive, to prepayments on
mortgage assets and, where the amount of
interest payable with respect to a class is
disproportionately high, as compared to the
amount of principal, a holder might, in some
prepayment scenarios, fail to recoup its
original investment.
Ratings do not guarantee
payment and do not address
prepayment risks............ Any rating assigned by a rating agency to a
class of certificates will reflect such rating
agency's assessment solely of the likelihood that
holders of certificates of such class will
receive payments to which such certificateholders
are entitled under the related agreement. Ratings
do not address:
o the likelihood that principal prepayment
(including those caused by defaults) on the
related mortgage assets will be made,
o the degree to which the rate of such
prepayments might differ from that originally
anticipated,
o the likelihood of early optional termination
of the series of certificates,
o the possibility that prepayment at higher or
lower rates than anticipated by an investor
may cause such investor to experience a lower
than anticipated yield, or
o that an investor purchasing a certificate at
a significant premium might fail to recoup its
initial investment under certain prepayment
scenarios.
The amount, type and nature of credit support,
if any, established with respect to a series of
certificates will be determined on the basis of
criteria established by each rating agency
rating classes of such series. Such criteria are
sometimes based upon
11
<PAGE>
an actuarial analysis of the behavior of mortgage
loans in a larger group. Such analysis is often
the basis upon which each rating agency
determines the amount of credit support required
with respect to each such class. There can be no
assurance that the historical data supporting any
such actuarial analysis will accurately reflect
future experience nor any assurance that the data
derived from a large pool of mortgage loans
accurately predicts the delinquency, foreclosure
or loss experience of any particular pool of
mortgage assets. No assurance can be given that
values of any mortgaged properties have remained
or will remain at their levels on the respective
dates of origination of the related mortgage
loans. Moreover, there is no assurance that
appreciation of real estate values generally will
limit loss experiences on the mortgaged
properties. If the commercial or multifamily
residential real estate markets should experience
an overall decline in property values such that
the outstanding principal balances of the
mortgage loans underlying or comprising the
mortgage assets in a particular trust fund and
any secondary financing on the related mortgaged
properties become equal to or greater than the
value of the mortgaged properties, the rates of
delinquencies, foreclosures and losses could be
higher than those now generally experienced by
institutional lenders. In addition, adverse
economic conditions (which may or may not affect
real property values) may affect the timely
payment by mortgagors of scheduled payments of
principal and interest on the mortgage loans and,
accordingly, the rates of delinquencies,
foreclosures and losses with respect to any trust
fund. To the extent that such losses are not
covered by the credit support, if any, described
in the prospectus supplement, such losses will be
borne, at least in part, by the holders of one or
more classes of the certificates of the related
series.
Net cash flow produced by a
mortgaged property may be
inadequate to repay the
mortgage loan............... Payment on each mortgage loan is dependent
primarily on:
o the net operating income of the related
mortgaged property; and
o at maturity (whether at scheduled maturity
or, in the event of a default under the
mortgage loan, upon the acceleration of such
maturity), the market value of the related
mortgaged property (taking into account any
adverse effect of a foreclosure proceeding on
such market value) or the ability of the
related mortgagor to refinance the mortgage
loan.
If a mortgage loan has a relatively high loan to
value ratio or relatively low debt service
coverage ratio, a foreclosure sale is less
likely to provide enough money to satisfy the
outstanding debt. Therefore, the servicer may
have to modify the mortgage loans that it is
servicing in order to try to maximize
recoveries. However, such flexibility may not
result in a greater recovery on a net present
value basis than liquidation.
12
<PAGE>
Nonrecourse loans limit the
remedies available following
a mortgagor default......... The mortgage loans will not be an obligation
of, or be insured or guaranteed by, any
governmental entity, by any private mortgage
insurer, or by the depositor, the originators,
the Servicers, the Trustee or any of their
respective affiliates.
Each mortgage loan generally is a nonrecourse
loan. If there is a default (other than a
default resulting from voluntary bankruptcy,
fraud or willful misconduct) there will
generally only be recourse against the specific
properties and other assets that have been
pledged to secure such mortgage loan. Even if a
mortgage loan provides for recourse to a
mortgagor or its affiliates, it is unlikely the
trust fund ultimately could recover any amounts
not covered by the mortgaged property.
Future cash flows and
property values are not
predictable................. Commercial and multifamily property values and
cash flows are volatile and may be insufficient
to cover debt service on the related mortgage
loan at any given time. If the cash flow from a
mortgaged property is reduced (for example, if
leases are not obtained or renewed), the
mortgagor may not be able to repay the loan. Cash
flow will determine the mortgagor's ability to
cover debt service and property values affect the
ability to refinance the property and the amount
of the recovery of proceeds upon foreclosure.
Cash flow and property value depend upon a number
of factors, including:
o national, regional and local economic
conditions;
o local real estate conditions, such as an
oversupply of space similar to the related
mortgaged property;
o changes or weakness in a specific industry
segment;
o the nature of expenses:
o as a percentage of revenue;
o whether expenses are fixed or vary with
revenue; and
o the level of required capital expenditures
for proper maintenance and demanded by
tenants;
o demographic factors;
o changes required by retroactive building or
similar codes;
o capable management and adequate maintenance;
o location;
o with respect to properties with uses subject
to significant regulation, changes in
applicable laws;
o perceptions by prospective tenants and, if
applicable, their customers, of the safety,
convenience, services and attractiveness of
the property;
o the age, construction quality and design of
a particular property; and
o whether the mortgaged properties are readily
convertible to alternative uses.
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Poor property management will
adversely affect the
performance of the related
mortgaged property .......... The successful operation of a real estate project
also depends on the performance and viability of
the property manager. Properties deriving
revenues primarily from short-term sources
generally are more management intensive than
properties leased to creditworthy tenants under
long-term leases. The property manager is
generally responsible for:
o operating the properties;
o providing building services;
o establishing and implementing the rental
structure;
o managing operating expenses;
o responding to changes in the local market;
and
o advising the mortgagor with respect to
maintenance and capital improvements.
Property managers may not be in a financial
condition to fulfill their management
responsibilities.
Certain of the mortgaged properties are managed
by affiliates of the applicable mortgagor. If a
mortgage loan is in default or undergoing
special servicing, such relationship could
disrupt the management of the underlying
property. This may adversely affect cash flow.
However, the mortgage loans generally permit the
lender to remove the property manager upon the
occurrence of an event of default, a decline in
cash flow below a specified level or the failure
to satisfy some other specified performance
trigger.
The servicer will have
discretion to handle or avoid
obligor defaults in a manner
which may be adverse to
your interests.............. In order to maximize recoveries on defaulted
mortgage loans, a servicer will be permitted
(within prescribed parameters) to extend and
modify mortgage loans that are in default or as
to which a payment default is imminent. In
addition, a servicer may receive a workout fee
based on receipts from or proceeds of such
mortgage loans. While the servicer will be
required to follow accepted servicing standards,
there can be no assurance that such flexibility
will increase the present value of receipts from
or proceeds of mortgage loans that are in default
or as to which a payment default is imminent.
Mortgagors of commercial
mortgage loans are
sophisticated and may
take actions adverse to
your interests.............. Mortgage loans made to partnerships, corporations
or other entities may entail risks of loss from
delinquency and foreclosure that are greater than
those of mortgage loans made to individuals. The
mortgagor's sophistication and form of
organization may increase the likelihood of
protracted litigation or bankruptcy in default
situations.
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Credit support may not cover
losses or risks which could
adversely affect payment on
your certificates........... The prospectus supplement for a series of
certificates will describe any credit support in
the related trust fund. Any credit support will
be limited in amount and coverage and will not
cover all potential risks. Use of credit support
will be subject to the conditions and limitations
described herein and in the prospectus
supplement. Moreover, such credit support may not
cover all potential losses or risks; for example,
credit support may or may not cover fraud or
negligence by a mortgage loan originator or other
parties.
A series of certificates may include one or more
classes of subordinate certificates, if so
provided in the prospectus supplement. Although
subordination is intended to reduce the risk to
holders of senior certificates of delinquent
distributions or ultimate losses, 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 limits with respect to
the aggregate amount of claims under any related
credit support may be exhausted before the
principal of the lower priority classes of
certificates of such series has been repaid. As
a result, the impact of significant losses and
shortfalls on the trust assets may fall
primarily upon those classes of certificates
having a lower priority of payment. Moreover, if
a form of credit support covers more than one
series of certificates, holders of certificates
evidencing an interest in one covered trust will
be subject to the risk that the credit support
will be exhausted by the claims of other covered
trusts.
The amount of any applicable credit support
supporting one or more classes of offered
certificates, including the subordination of 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, other losses or other
factors. There can, however, be no assurance
that the loss experience on the related mortgage
assets will not exceed such assumed levels.
Regardless of the form of credit enhancement
provided, the amount of coverage will be limited
in amount and in most cases will be subject to
periodic reduction in accordance with a schedule
or formula. The master servicer will generally
be permitted to reduce, terminate or substitute
all or a portion of the credit enhancement for
any series of certificates, if the applicable
rating agency indicates that the then-current
rating thereof will not be adversely affected.
The rating of any series of certificates by any
applicable rating agency may be lowered
following the initial issuance thereof as a
result of the downgrading of the obligations of
any applicable credit support provider, or as a
result of losses on the related mortgage assets
substantially in excess of the levels
contemplated by such rating agency at the time
of its initial rating analysis. None of the
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depositor, the master servicer or any of their
affiliates will have any obligation to replace
or supplement any credit enhancement, or to take
any other action to maintain any rating of any
series of certificates.
Some actions allowed by the
mortgage may be limited
by law...................... The mortgages may contain a due-on-sale clause,
which permits the lender to accelerate the
maturity of the mortgage loan if the mortgagor
sells, transfers or conveys the related mortgaged
property or its interest in the mortgaged
property. The mortgages may also include a
debt-acceleration clause, which permits the
lender to accelerate the debt upon a monetary or
non-monetary 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.
Some of the mortgage loans will be secured by an
assignment of leases and rents pursuant to which
the mortgagor typically assigns its right, title
and interest as landlord under the leases on the
related mortgaged property and the income
derived therefrom to the lender as further
security for the related mortgage loan, while
retaining a license to collect rents for so long
as there is no default. In the event the
mortgagor defaults, the license terminates and
the lender is entitled to collect the rents.
Such assignments are typically not perfected as
security interests prior to actual possession of
the cash flow. Some state laws may require that
the lender take possession of the mortgaged
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 mortgagor, the lender's ability to collect
the rents may be adversely affected.
One action jurisdiction may
limit the ability of the
servicer to foreclose on
a mortgaged property........ Several states (including California) have laws
that prohibit more than one "judicial action" to
enforce a mortgage obligation, and some courts
have construed the term "judicial action"
broadly. The special servicer may need to obtain
advice of counsel prior to enforcing any of the
trust fund's rights under any of the mortgage
loans that include mortgaged properties where the
rule could be applicable.
In the case of a 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 only permitted
method of foreclosure.
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Rights against tenants may be
limited if leases are not
subordinate to mortgage or
do not contain attornment
provisions.................. Some of the tenant leases contain provisions
that require the tenant to attorn to (that is,
recognize as landlord under the lease) a
successor owner of the property following
foreclosure. Some of the leases may be either
subordinate to the liens created by the mortgage
loans or else contain a provision that requires
the tenant to subordinate the lease if the
mortgagee agrees to enter into a non-disturbance
agreement.
In some states, if tenant leases are subordinate
to the liens created by the mortgage loans and
such leases do not contain attornment
provisions, such leases may terminate upon the
transfer of the property to a foreclosing lender
or purchaser at foreclosure. Accordingly, in the
case of the foreclosure of a mortgaged property
located in such a state and leased to one or
more desirable tenants under leases that do not
contain attornment provisions, such mortgaged
property could experience a further decline in
value if such tenants' leases were terminated
(e.g., if such tenants were paying above-market
rents).
If a mortgage is subordinate to a lease, the
lender will not (unless it has otherwise agreed
with the tenant) possess the right to dispossess
the tenant upon foreclosure of the property, and
if the lease contains provisions inconsistent
with the mortgage (e.g., provisions relating to
application of insurance proceeds or
condemnation awards), the provisions of the
lease will take precedence over the provisions
of the mortgage.
If mortgaged properties are
not in compliance with
current zoning laws you may
not be able to restore it
following a casualty
loss........................ Due to changes in applicable building and zoning
ordinances and codes which have come into effect
after the construction of improvements on certain
of the mortgaged properties, some improvements
may not comply fully with current zoning laws
(including density, use, parking and set-back
requirements) but qualify as permitted
non-conforming uses. Such changes may limit the
ability of the related mortgagor to rebuild the
premises "as is" in the event of a substantial
casualty loss. Such limitations may adversely
affect the ability of the mortgagor to meet its
mortgage loan obligations from cash flow.
Insurance proceeds may not 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 then current law, its
value could be less than the remaining balance on
the mortgage loan and it may produce less revenue
than before such repair or restoration.
Inspections of the mortgaged
properties were limited..... The mortgaged properties were inspected by
licensed engineers at the time the mortgage loans
were originated to assess the structure, exterior
walls, roofing interior construction, mechanical
and electrical systems and general condition of
the site,
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buildings and other improvements located on the
mortgaged properties. There can be no assurance
that all conditions requiring repair or
replacement have been identified in such
inspections.
Compliance with Americans
with Disabilities Act may
result in additional
losses...................... Under the Americans with Disabilities Act of
1990, all public accommodations are required to
meet certain federal requirements related to
access and use by disabled persons. To the extent
the mortgaged properties do not comply with the
act, the mortgagors may be required to incur
costs to comply with the act. In addition,
noncompliance could result in the imposition of
fines by the federal government or an award of
damages to private litigants.
Litigation Concerns......... There may be legal proceedings pending and,
from time to time, threatened against the
mortgagors or their affiliates relating to the
business of or arising out of the ordinary course
of business of the mortgagors and their
affiliates. There can be no assurance that such
litigation will not have a material adverse
effect on the distributions to
certificateholders.
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DESCRIPTION OF THE TRUST FUNDS
ASSETS
The primary assets of each trust fund are mortgage assets which include
(i) one or more multifamily and/or commercial mortgage loans and participations
therein, (ii) CMBS, or (iii) a combination of mortgage loans and CMBS. Mortgage
loans refers to both whole mortgage loans, participations therein and mortgage
loans underlying CMBS. No CMBS originally issued in a private placement will be
included as an asset of a trust fund until the holding period provided for
under Rule 144(k) promulgated under the Securities Act of 1933, as amended, has
expired or such CMBS have been registered under the Securities Act of 1933, as
amended. The mortgage assets will not be guaranteed or insured by the depositor
or any of its affiliates or, unless otherwise provided in the prospectus
supplement, by any governmental agency or instrumentality or by any other
person. Each mortgage asset will be selected by the depositor for inclusion in
a trust fund from among those purchased, either directly or indirectly, from a
prior holder thereof, which may be an affiliate of the depositor and may or may
not be the originator of the mortgage loan or the issuer of the CMBS.
Unless otherwise specified in the prospectus supplement, the certificates
will be entitled to payment only from the assets of the related trust fund and
will not be entitled to payments on the assets of any other trust fund
established by the depositor. If specified in the prospectus supplement, the
assets of a trust fund will consist of certificates representing beneficial
ownership interests in another trust fund that contains the mortgage assets.
MORTGAGE LOANS
General
The mortgage loans will be secured by liens on mortgaged properties
consisting of (i) multifamily properties which are residential properties
consisting of five or more rental or cooperatively owned dwelling units in
high-rise, mid-rise or garden apartment buildings or (ii) commercial properties
which are office buildings, retail centers, hotels or motels, nursing homes,
congregate care facilities, industrial properties, mini-warehouse facilities or
self-storage facilities, mobile home parks, mixed use or other types of
commercial properties located in any one of the fifty states, the District of
Columbia or the Commonwealth of Puerto Rico and, if so specified in the related
prospectus supplement, anywhere else in the world. To the extent specified in
the prospectus supplement, the mortgage loans will be secured by first
mortgages or deeds of trust or other similar security instruments creating a
first lien on the mortgaged property. A multifamily property may include mixed
commercial and residential structures and may include apartment buildings owned
by Cooperatives. The mortgaged properties may include leasehold interests in
properties, the title to which is held by third party lessors. Each mortgage
loan will be originated by an originator who is a person other than the
depositor. The prospectus supplement will indicate if any originator is an
affiliate of the depositor. The mortgage loans will be evidenced by mortgage
notes secured by mortgages creating a lien on the mortgaged properties.
Mortgage loans will generally also be secured by an assignment of leases and
rents and/or operating or other cash flow guarantees relating to the mortgage
loan.
Leases
To the extent specified in the prospectus supplement, the commercial
properties may be leased to lessees that occupy all or a portion of these
properties. Pursuant to a lease assignment, a mortgagor may assign its rights,
title and interest as lessor along with the income derived under each lease to
the mortgagee, while retaining a license to collect the rents for so long as
there is no default. If the mortgagor defaults, the license terminates and the
mortgagee or its agent is entitled to collect the rents from the lessee for
application to the monetary obligations of the mortgagor. State law may limit
or restrict the enforcement of the lease assignments by a mortgagee until it
takes possession of the mortgaged property and/or a receiver is appointed. See
"Certain Legal Aspects of the Mortgage Loans and the Leases--Leases and Rents."
Alternatively, to the extent specified in the prospectus supplement, the
mortgagor and the mortgagee may agree that payments under leases are to be made
directly to a servicer.
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To the extent described in the prospectus supplement, the leases may
require the lessees to pay rent that is sufficient in the aggregate to cover
all scheduled payments of principal and interest on the mortgage loans and, in
certain cases, their pro rata share of the operating expenses, insurance
premiums and real estate taxes associated with the mortgaged properties. Some
leases may require the mortgagor to bear costs associated with structural
repairs and/or the maintenance of the exterior or other portions of the
mortgaged property or provide for certain limits on the aggregate amount of
operating expenses, insurance premiums, taxes and other expenses that the
lessees are required to pay. If so specified in the prospectus supplement, the
lessees may be permitted to set off their rental obligations against the
obligations of the mortgagors under the leases. In those cases where payments
under the leases (net of any operating expenses by the mortgagors) are
insufficient to pay all of the scheduled principal and interest on the mortgage
loans, the mortgagors must rely on other income including security deposits
generated by the mortgaged property to make payments on the mortgage loan. To
the extent specified in the prospectus supplement, some commercial properties
may be leased entirely to one lessee. In such cases, absent the availability of
other funds, the mortgagor must rely entirely on rent paid by such lessee in
order for the mortgagor to pay all of the scheduled principal and interest on
the related commercial loan. To the extent specified in the prospectus
supplement, some leases may expire prior to the stated maturity of the mortgage
loan. In such cases, upon expiration of the leases the mortgagors will have to
look to alternative sources of income, including rent payment by any new
lessees or proceeds from the sale or refinancing of the mortgaged property, to
cover the payments of principal and interest due on the mortgage loans unless
the lease is renewed. As specified in the prospectus supplement, some leases
may provide that upon the occurrence of a casualty affecting a mortgaged
property, the lessee will have the right to terminate its lease, unless the
mortgagor, as lessor, is able to cause the mortgaged property to be restored
within a specified period of time. Some leases may provide that it is the
lessor's responsibility to restore the mortgaged property after a casualty to
its original condition. Some leases may provide a right of termination to the
lessee if a taking of a material or specified percentage of the leased space in
the mortgaged property occurs, or if the access to the leased space is
materially impaired.
Default and Loss Considerations with Respect to the Mortgage Loans
Mortgage loans secured by commercial and multifamily properties are
markedly different from owner-occupied single family mortgage loans. The
repayment of loans secured by commercial or multifamily properties is typically
dependent upon the successful operation of such property rather than upon the
liquidation value of the real estate. Unless otherwise specified in the
prospectus supplement, the mortgage loans will be non-recourse loans, which
means that the mortgagee may look only to the Net Operating Income from the
property for repayment of the mortgage debt, and not to any other of the
mortgagor's assets, in the event of the mortgagor's default. Lenders typically
look to the Debt Service Coverage Ratio of a loan secured by income-producing
property as an important measure of the risk of default on such a loan.
As the primary component of Net Operating Income, rental income (as well
as maintenance payments from tenant-stockholders of a Cooperative) is 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 retail centers, office buildings and industrial properties.
Commercial loans may be secured by owner-occupied mortgaged properties or
mortgaged properties leased to a single tenant. Accordingly, a decline in the
financial condition of the mortgagor or single tenant, as applicable, may have
a disproportionately greater effect on the Net Operating Income from such
mortgaged properties than in the case of mortgaged properties with multiple
tenants.
Changes in the expense components of Net Operating Income due to the
general economic climate or economic conditions in a locality or industry
segment, such as increases in interest rates, real estate and personal property
tax rates and other operating expenses, including energy costs; changes in
governmental rules, regulations and fiscal policies, including environmental
legislation; and acts of God may also affect the risk of default on the
mortgage loan. In some cases, leases of mortgaged properties may provide that
the lessee rather than the mortgagor, is responsible for payment of some or all
of these expenses;
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however, because leases are also subject to default risks 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 mortgage loan. See "--Leases"
above.
While the duration of leases and the existence of any "net of expense"
provisions are often viewed as the primary considerations in evaluating the
credit risk of mortgage loans secured by certain income-producing properties,
such risk may be affected equally or to a greater extent by changes in
government regulation of the operator of the property. Examples of the latter
include mortgage loans secured by health care-related facilities, the income
from which and the operating expenses of which are subject to state and/or
federal regulations, such as Medicare and Medicaid, and multifamily properties
and mobile home parks, which may be subject to state or local rent control
regulation and, in certain cases, restrictions on changes in use of the
property. Low-and moderate-income housing in particular may be subject to legal
limitations and regulations but, because of such regulations, may also be less
sensitive to fluctuations in market rents generally.
The Debt Service Coverage Ratio should not be relied upon as the sole
measure of the risk of default of any loan, however, since other factors may
outweigh a high Debt Service Coverage Ratio. With respect to a balloon mortgage
loan, for example, the risk of default as a result of the unavailability of a
source of funds to finance the related balloon payment at maturity on terms
comparable to or better than those of the balloon mortgage loans could be
significant even though the related Debt Service Coverage Ratio is high.
The liquidation value of any mortgaged property may be adversely affected
by risks generally incident to interests in real property, including declines
in rental or occupancy rates. Lenders generally use the Loan-to-Value Ratio of
a mortgage loan as a measure of risk of loss if a property must be liquidated
upon a default by the mortgagor.
Appraised values of income-producing properties may be 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 the date of appraisal), the income capitalization method (a projection of
value based upon the property's projected net cash flow), or upon an
interpolation of the values derived from such methods. Each of these appraisal
methods presents analytical challenges. 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. Where more than one of
these appraisal methods are used and create significantly different results, or
where a high Loan-to-Value Ratio accompanies a high Debt Service Coverage Ratio
(or vice versa), the analysis of default and loss risks is even more difficult.
While the Depositor believes that the foregoing considerations are
important factors that generally distinguish the multifamily and commercial
loans from single family mortgage loans and provide insight to the risks
associated with income-producing real estate, there is no assurance that such
factors will in fact be considered by the Originators of the multifamily and
commercial loans, or that, for any of the mortgage loans, they are complete or
relevant. See "Risk Factors." Net cash flow produced by a mortgaged property
may be inadequate to repay the mortgage loan," "Nonrecourse loans limit the
remedies available following a mortgagor default. Prepayments and repurchases
of the mortgage assets will affect the timing of your cashflow and may affect
your yield. The assets of the trust fund may not be sufficient to pay your
certificates. The servicer will have discretion to handle or avoid obligor
defaults in a manner which may be adverse to your interests. Mortgagors of
commercial loans are sophisticated and may take actions adverse to your
interests.
Mortgage Loan Information in Prospectus Supplements
Each prospectus supplement will contain information with respect to the
mortgage loans, including (i) the aggregate outstanding principal balance and
the largest, smallest and average outstanding principal balance of the mortgage
loans as of the applicable Cut-off Date, (ii) the type of property securing the
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mortgage loans (e.g., multifamily property or commercial property and the type
of property in each such category), (iii) the weighted average (by principal
balance) of the original and remaining terms to maturity of the mortgage loans,
(iv) the earliest and latest origination date and maturity date of the mortgage
loans, (v) the weighted average (by principal balance) of the Loan-to-Value
Ratios at origination of the mortgage loans, (vi) the mortgage interest rates
or range of mortgage interest rates and the weighted average mortgage interest
rate borne by the mortgage loans, (vii) the state or states in which most of
the mortgaged properties are located, (viii) information with respect to the
prepayment provisions, if any, of the mortgage loans, (ix) the weighted average
retained interest, if any, (x) with respect to ARM Loans, the index, the
frequency of the adjustment dates, the highest, lowest and weighted average
note margin and pass-through margin, and the maximum mortgage interest rate or
monthly payment variation at the time of any adjustment thereof and over the
life of the ARM Loan and the frequency of such monthly payment adjustments,
(xi) the Debt Service Coverage Ratio either at origination or as of a more
recent date (or both) and (xii) information regarding the payment
characteristics of the mortgage loans, including without limitation balloon
payment and other amortization provisions. The prospectus supplement will also
contain certain information available to the Depositor with respect to the
provisions of leases and the nature of tenants of the mortgaged properties and
other information referred to in a general manner under "--Mortgage
Loans--Default and Loss Considerations with Respect to the Mortgage Loans"
above. If specific information respecting the mortgage loans is not known to
the Depositor at the time the certificates are initially offered, more general
information of the nature described above will be provided in the prospectus
supplement, and specific information will be set forth in a report which will
be available to purchasers of the related certificates at or before the initial
issuance thereof and will be filed as part of a Current Report on Form 8-K with
the Securities and Exchange Commission within fifteen days after such initial
issuance.
Payment Provisions of the Mortgage Loans
Unless otherwise specified in the prospectus supplement, all of the
mortgage loans will (i) have original terms to maturity of not more than 40
years and (ii) provide for payments of principal, interest or both, on due
dates that occur monthly, quarterly or semi-annually or at such other interval
as is specified in the prospectus supplement. Each mortgage loan may provide
for no accrual of interest or for accrual of interest thereon at an interest
rate that is fixed over its term or that adjusts from time to time, or that is
partially fixed and partially floating, or that may be converted from a
floating to a fixed interest rate, or from a fixed to a floating interest rate,
from time to time pursuant to an election or as otherwise specified on the
related Mortgage Note, in each case as described in the related prospectus
supplement. Each mortgage loan may provide for scheduled payments to maturity
or payments that adjust from time to time to accommodate changes in the
mortgage interest rate or to reflect the occurrence of certain events, and may
provide for negative amortization or accelerated amortization, in each case as
described in the prospectus supplement. Each mortgage loan may be fully
amortizing or require a balloon payment due on its stated maturity date, in
each case as described in the prospectus supplement. Each mortgage loan may
contain a Lock-out Period and a Lock-out Date, or require a Prepayment Premium
in connection with a prepayment, in each case as described in the prospectus
supplement. In the event that holders of any class or classes of certificates
will be entitled to all or a portion of any Prepayment Premiums collected in
respect of the mortgage loans, the prospectus supplement will specify the
method or methods by which any such amounts will be allocated. A mortgage loan
may also contain provisions entitling the mortgagee to Equity Participations,
as described in the prospectus supplement. In the event that holders of any
class or classes of certificates will be entitled to all or a portion of an
Equity Participation, the prospectus supplement will specify the terms and
provisions of the Equity Participation and the method or methods by which
distributions in respect thereof will be allocated among such certificates.
CMBS
Distributions of any principal or interest, as applicable, will be made on
CMBS on the dates specified in the prospectus supplement. The CMBS may be
issued in one or more classes with characteristics similar to the classes of
certificates described in this prospectus.
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Enhancement in the form of reserve funds, subordination or other forms of
credit support similar to that described for the certificates under
"Description of Credit Support" may be provided with respect to the CMBS. The
type, characteristics and amount of such credit support will be a function of
certain characteristics of the mortgage loans or underlying CMBS and other
factors and generally will be established for the CMBS on the basis of
requirements of either any rating agency that may have assigned a rating to the
CMBS or the initial purchasers of the CMBS.
The prospectus supplement for a series of certificates evidencing
interests in mortgage assets that include CMBS will specify, to the extent
available, (i) the aggregate approximate initial and outstanding principal
amount or notional amount, as applicable, and type of the CMBS to be included
in the trust fund, (ii) the original and remaining term to stated maturity of
the CMBS, if applicable, (iii) whether such CMBS is entitled only to interest
payments, only to principal payments or to both, (iv) the pass-through or bond
rate of the CMBS or formula for determining such rates, if any, (v) the
applicable payment provisions for the CMBS, including, but not limited to, any
priorities, payment schedules and subordination features, (vi) the related
issuer, servicer and trustee, as applicable, (vii) certain characteristics of
the credit support, if any, such as subordination, reserve funds, insurance
policies, letters of credit or guarantees relating to the underlying mortgage
loans, the underlying CMBS or directly to such CMBS, (viii) the terms on which
the underlying mortgage loans or underlying CMBS or the CMBS may, or are
required to, be purchased prior to their maturity, (ix) the terms on which
mortgage loans or underlying CMBS may be substituted for those originally
underlying the CMBS, (x) the servicing fees payable under the related servicing
agreement, (xi) to the extent available to the depositor, the type of
information in respect of the underlying mortgage loans described under
"--Mortgage Loans--Mortgage Loan Information in Prospectus Supplements" above,
and the type of information in respect of the CMBS described in this paragraph,
(xii) the characteristics of any cash flow agreements that are included as part
of the trust fund evidenced or secured by the CMBS and (xiii) whether the CMBS
is in certificated form, book-entry form or held through a depository such as
The Depository Trust Company or the Participants Trust Company.
ACCOUNTS
Each trust fund will include one or more accounts established and
maintained on behalf of the certificateholders into which the person or persons
designated in the prospectus supplement will deposit all payments and
collections received or advanced with respect to the mortgage assets and other
assets in the trust fund. Such an account may be maintained as an interest
bearing or a non-interest bearing account, and funds held therein may be held
as cash or reinvested. See "Description of the Agreement--Distribution account
and Other Collection Accounts."
CREDIT SUPPORT
If so provided in the prospectus supplement, partial or full protection
against some types of defaults and losses on the trust assets in the related
trust fund may be provided to one or more classes of certificates in the
related series in the form of subordination of one or more other classes of
certificates in the series or by one or more other types of credit support,
such as a letter of credit, insurance policy, guarantee, reserve fund or
another type of credit support, or a combination thereof. The amount and types
of coverage, the identification of the entity providing the coverage (if
applicable) and related information with respect to each type of credit
support, if any, will be described in the prospectus supplement for each series
of certificates. See "Risk Factors--Credit support may not cover losses or
risks which could adversely affect payment on your certificates" and
"Description of Credit Support."
CASH FLOW AGREEMENTS
If so provided in the related prospectus supplement, the trust fund 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. The trust fund may also include certain other agreements, such
as interest rate exchange agreements, interest rate cap or floor agreements,
currency exchange agreements or similar agreements provided to reduce the
effects of interest rate or currency exchange rate
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fluctuations on the mortgage assets or on one or more classes of certificates.
The principal terms of any such 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 prospectus supplement for the related series. In addition, the
related prospectus supplement will provide certain information with respect to
the obligor under any such cash flow agreement.
USE OF PROCEEDS
The net proceeds to be received from the sale of the certificates will be
applied by the depositor to the purchase of trust assets and to pay for certain
expenses incurred in connection with such purchase of trust assets and sale of
certificates. 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.
YIELD CONSIDERATIONS
GENERAL
The yield on any offered certificate will depend on the price paid by the
certificateholder, the Pass-Through Rate of the certificate, the receipt and
timing of receipt of distributions on the certificate and the weighted average
life of the mortgage assets in the related trust fund (which may be affected by
prepayments, defaults, liquidations or repurchases). See "Risk Factors."
PASS-THROUGH RATE
Certificates of any class within a series may have fixed, variable or
floating Pass-Through Rates, which may or may not be based upon the interest
rates borne by the mortgage assets 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 certificates or, in the case of a variable
or floating Pass-Through Rate, the method of determining the Pass-Through Rate;
the effect, if any, of the prepayment of any mortgage asset on the Pass-Through
Rate of one or more classes of certificates; and whether the distributions of
interest on the certificates of any class will be dependent, in whole or in
part, on the performance of any obligor under a cash flow agreement.
The effective yield to maturity to each holder of certificates entitled to
payments of interest will be below that otherwise produced by the applicable
Pass-Through Rate and purchase price of such certificate because, while
interest may accrue on each mortgage asset during a certain period, the
distribution of such interest will be made on a day which may be several days,
weeks or months following the period of accrual.
TIMING OF PAYMENT OF INTEREST
Each payment of interest on the certificates (or addition to the
certificate balance of a class of Accrual Certificates) on a distribution date
will include interest accrued during the interest accrual period for such
distribution date. As indicated above under "The Pass-Through Rate," if the
interest accrual period ends on a date other than a distribution date for the
related series, the yield realized by the holders of such certificates may be
lower than the yield that would result if the interest accrual period ended on
a distribution date. In addition, if so specified in the prospectus supplement,
interest accrued for an interest accrual period for one or more classes of
certificates may be calculated on the assumption that distributions of
principal (and additions to the certificate balance of Accrual Certificates)
and allocations of losses on the mortgage assets may be made on the first day
of the interest accrual period for a distribution date and not on the
distribution date. Such method would produce a lower effective yield than if
interest were calculated on the basis of the actual principal amount
outstanding during an interest accrual period. The interest accrual period for
any class of offered certificates will be described in the prospectus
supplement.
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PAYMENTS OF PRINCIPAL; PREPAYMENTS
The yield to maturity on the certificates will be affected by the rate of
principal payments on the mortgage assets (including principal prepayments on
mortgage loans resulting from voluntary prepayments by the mortgagors,
insurance proceeds, condemnations and involuntary liquidations). Such payments
may be directly dependent upon the payments on leases underlying the mortgage
loans. The rate at which principal prepayments occur on the mortgage loans will
be affected by a variety of factors, including, without limitation, the terms
of the mortgage loans, the level of prevailing interest rates, the availability
of mortgage credit and economic, demographic, geographic, tax, legal and other
factors. In general, however, if prevailing interest rates fall significantly
below the mortgage interest rates on the mortgage loans comprising or
underlying the mortgage assets in a particular trust fund, the mortgage loans
are likely to be the subject of higher principal prepayments than if prevailing
rates remain at or above the rates borne by the mortgage loans. In this regard,
it should be noted that some mortgage assets may consist of mortgage loans with
different mortgage interest rates and the stated pass-through or pay-through
interest rate of some CMBS may be a number of percentage points higher or lower
than certain of the underlying mortgage loans. The rate of principal payments
on some or all of the classes of certificates of a series will correspond to
the rate of principal payments on the mortgage assets in the related trust fund
and is likely to be affected by the existence of Lock-out Periods and
Prepayment Premium provisions of the mortgage loans underlying or comprising
the mortgage assets, and by the extent to which the servicer of any mortgage
loan is able to enforce these provisions. Mortgage loans with a Lock-out Period
or a Prepayment Premium provision, to the extent enforceable, generally would
be expected to experience a lower rate of principal prepayments than otherwise
identical mortgage loans without such provisions, with shorter Lock-out Periods
or with lower Prepayment Premiums.
If the purchaser of a certificate offered at a discount calculates its
anticipated yield to maturity based on an assumed rate of distributions of
principal that is faster than the rate actually experienced on the mortgage
assets, the actual yield to maturity will be lower than the rate thus
calculated. Conversely, if the purchaser of a certificate offered at a premium
calculates its anticipated yield to maturity based on an assumed rate of
distributions of principal that is slower than the rate actually experienced on
the mortgage assets, the actual yield to maturity will be higher than that so
calculated. In either case, if so provided in the prospectus supplement for a
series of certificates, the effect on yield on one or more classes of the
series of prepayments of the mortgage assets in the related trust fund may be
mitigated or exacerbated by any provisions for sequential or selective
distribution of principal to these classes.
When a full prepayment is made on a mortgage loan, the mortgagor is
charged interest on the principal amount of the mortgage loan prepaid for the
number of days in the month actually elapsed up to the date of the prepayment.
Unless otherwise specified in the prospectus supplement, the effect of
prepayments in full will be to reduce the amount of interest paid in the
following month to holders of certificates entitled to payments of interest
because interest on the principal amount of any mortgage loan so prepaid will
be paid only to the date of prepayment rather than for a full month. Unless
otherwise specified in the prospectus supplement, a partial prepayment of
principal is applied so as to reduce the outstanding principal balance of the
related mortgage loan as of the due date in the month in which such partial
prepayment is received. As a result, unless otherwise specified in the
prospectus supplement, the effect of a partial prepayment on a mortgage loan
will be to reduce the amount of interest passed through to holders of
certificates in the month following the receipt of partial prepayment by an
amount equal to one month's interest at the applicable Pass-Through Rate on the
prepaid amount.
The timing of changes in the rate of principal payments on the mortgage
assets may significantly affect an investor's actual yield to maturity, even if
the average rate of distributions of principal is consistent with an investor's
expectation. In general, the earlier a principal payment is received on the
mortgage assets and distributed on a certificate, the greater the effect on
such investor's yield to maturity. 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 a given period may not be offset by a
subsequent like decrease (or increase) in the rate of principal payments.
PREPAYMENTS--MATURITY AND WEIGHTED AVERAGE LIFE
The rates at which principal payments are received on the mortgage assets
included in a trust fund and the rate at which payments are made from any
credit support or cash flow agreement for a series of
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certificates may affect the ultimate maturity and the weighted average life of
each class of such certificates. Prepayments on the mortgage loans comprising
or underlying the mortgage assets in a particular trust fund will generally
accelerate the rate at which principal is paid on some or all of the classes of
the certificates.
If so provided in the prospectus supplement for a series of certificates,
one or more classes of certificates may have a final scheduled distribution
date, which is the date on or prior to which the certificate balance thereof is
scheduled to be reduced to zero, calculated on the basis of the assumptions
applicable to the Series.
Weighted average life refers to the average amount of time that will
elapse from the date of issue of a security until each dollar of principal of
such security will be repaid to the investor. The weighted average life of a
class of certificates of a series will be influenced by the rate at which
principal on the mortgage loans comprising or underlying the mortgage assets is
paid to such class, which may be in the form of scheduled amortization or
prepayments.
In addition, the weighted average life of the certificates may be affected
by the varying maturities of the mortgage loans comprising or underlying the
CMBS. If any mortgage loans comprising or underlying the mortgage assets in a
particular trust fund have actual terms to maturity of less than those assumed
in calculating final scheduled distribution dates for the classes of
certificates of the related series, one or more classes of certificates may be
fully paid prior to their respective final scheduled distribution dates, even
in the absence of prepayments. Accordingly, the prepayment experience of the
mortgage assets will, to some extent, be a function of the mix of mortgage
interest rates and maturities of the mortgage loans comprising or underlying
the mortgage assets. See "Description of the Trust Funds."
Prepayments on loans are also commonly measured relative to a prepayment
standard or model such as CPR, a constant prepayment rate model. Neither CPR
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 pool of loans, including the mortgage loans underlying or
comprising the mortgage assets. Moreover, CPR was developed based upon
historical prepayment experience for single family loans. Thus, it is likely
that prepayment of any mortgage loans comprising or underlying the mortgage
assets for any series will not conform to any particular level of CPR.
The depositor is not aware of any meaningful publicly available prepayment
statistics for multifamily or commercial mortgage loans.
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 the series 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 the prospectus
supplement, including assumptions that prepayments on the mortgage loans
comprising or underlying the related mortgage assets are made at rates
corresponding to various percentages of CPR or at such other rates specified in
the prospectus supplement. Such tables and assumptions are intended to
illustrate the sensitivity of weighted average life of the certificates to
various prepayment rates and will not be intended to predict or to provide
information that will enable investors to predict the actual weighted average
life of the certificates. It is unlikely that prepayment of any mortgage loans
comprising or underlying the mortgage assets for any series will conform to any
particular level of CPR or any other rate specified in the related prospectus
supplement.
OTHER FACTORS AFFECTING WEIGHTED AVERAGE LIFE
Type of Mortgage Asset
A number of mortgage loans may have balloon payments due at maturity, and
because the ability of a mortgagor to make a balloon payment typically will
depend upon its ability either to refinance the loan or to sell the mortgaged
property, there is a risk that a number of mortgage loans having balloon
payments may default at maturity, or that the servicer may extend the maturity
of such a mortgage loan in
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connection with a workout. In the case of defaults, recovery of proceeds may be
delayed by, among other things, bankruptcy of the mortgagor or adverse
conditions in the market where the property is located. In order to minimize
losses on defaulted mortgage loans, the servicer may, to the extent and under
the circumstances set forth in the prospectus supplement be permitted 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 will tend to extend the weighted average life of
the certificates, thereby lengthening the period of time elapsed from the date
of issuance of a certificate until it is retired.
Foreclosures and Payment Plans
The number of foreclosures and the principal amount of the mortgage loans
comprising or underlying the mortgage assets 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 life of the mortgage loans
and that of the related series of certificates. 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, may also have an effect upon the payment patterns of particular
mortgage loans and thus the weighted average life of the certificates.
Due-on-Sale and Due-on-Encumbrance Clauses
Acceleration of mortgage payments as a result of certain transfers of or
the creation of encumbrances upon the underlying mortgaged property is another
factor affecting prepayment rates that may not be reflected in the prepayment
standards or models used in the relevant prospectus supplement. A number of the
mortgage loans comprising or underlying the mortgage assets may include
"due-on-sale" clauses or "due-on-encumbrance" clauses that allow the holder of
the mortgage loans to demand payment in full of the remaining principal balance
of the mortgage loans upon sale or certain other transfers of or the creation
of encumbrances upon the mortgaged property. With respect to any whole loans,
unless otherwise provided in the prospectus supplement, the master servicer, on
behalf of the trust fund, will be required to exercise (or waive its right to
exercise) any right that the trustee may have as mortgagee to accelerate
payment of the whole loan in a manner consistent with the Servicing Standard.
See "Certain Legal Aspects of the Mortgage Loans and the Leases--Due-on-Sale
and Due-on-Encumbrance" and "Description of the Agreements--Due-on-Sale and
Due-on-Encumbrance Provisions."
Single Mortgage Loan or Single Mortgagor
The mortgage assets in a particular trust fund may consist of a single
mortgage loan or obligations of a single mortgagor or related mortgagors as
specified in the related prospectus supplement. Assumptions used with respect
to the prepayment standards or models based upon analysis of the behavior of
mortgage loans in a larger group will not necessarily be relevant in
determining prepayment experience on a single mortgage loan or with respect to
a single mortgagor.
THE DEPOSITOR
J.P. Morgan Commercial Mortgage Finance Corp., the depositor, is an
indirect wholly-owned subsidiary of J.P. Morgan & Co. Incorporated and was
incorporated in the State of Delaware on September 19, 1994. The principal
executive offices of the Depositor are located at 60 Wall Street, New York, New
York 10260-0060. Its telephone number is (212) 648-3636.
The depositor does not have, nor is it expected in the future to have, any
significant assets.
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DESCRIPTION OF THE CERTIFICATES
GENERAL
The certificates of each series (including any class of certificates not
offered hereby) will represent the entire beneficial ownership interest in the
trust fund created pursuant to the related agreement. Each series of
certificates will consist of one or more classes of certificates that may (i)
provide for the accrual of interest based on fixed, variable or floating rates;
(ii) include senior certificates or subordinate certificates; (iii) Stripped
Principal Certificates; (iv) Stripped Interest Certificates; (v) Accrual
Certificates; (vi) provide for payments of principal sequentially, based on
specified payment schedules, from only a portion of the trust assets in the
trust fund or based on specified calculations, to the extent of available
funds, in each case as described in the related prospectus supplement; and/or
(vii) provide for distributions based on a combination of two or more
components thereof with one or more of the characteristics described in this
paragraph including a Stripped Principal Certificate component and a Stripped
Interest Certificate component. Any such classes may include classes of offered
certificates.
Each class of offered certificates of a series will be issued in minimum
denominations corresponding to the certificate balances or, in case of Stripped
Interest Certificates, notional amounts or percentage interests specified in
the related prospectus supplement. The transfer of any offered certificates may
be registered and such certificates may be exchanged without the payment of any
service charge payable in connection with the registration of a transfer or
exchange, but the Depositor or the trustee or any agent thereof may require
payment of a sum sufficient to cover any tax or other governmental charge. One
or more classes of certificates of a series may be issued as physical
certificates or as book-entry certificates, as provided in the related
prospectus supplement. See "Description of the Certificates--Book-Entry
Registration and Physical Certificates." Physical certificates will be
exchangeable for other certificates of the same class and series of a like
aggregate certificate balance, notional amount or percentage interest but of
different authorized denominations. See "Risk Factors--Your ability to resell
certificates may be limited because of their characteristics" and "The assets
of the trust fund may not be sufficient to pay your certificates."
DISTRIBUTIONS
Distributions on the certificates of each series will be made by or on
behalf of the trustee on each distribution date as specified in the related
prospectus supplement from the Available Distribution Amount for such series
and such distribution date. Except as otherwise specified in the prospectus
supplement, distributions (other than the final distribution) will be made to
the persons in whose names the certificates are registered at the close of
business on a record date specified in the prospectus supplement, and the
amount of each distribution will be determined as of the close of business on
the determination date specified in the 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 the class
or by random selection, as described in the prospectus supplement or otherwise
established by the trustee. 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 so notified the trustee or other person required to make such payments no
later than the date specified in the prospectus supplement (and, if so provided
in the prospectus supplement, holds certificates in the requisite amount
specified therein), or by check mailed to the address of the person entitled to
such payments as it appears on the certificate register; provided, however,
that the final distribution in retirement of the certificates (whether physical
certificates or book-entry certificates) will be made only upon presentation
and surrender of the certificates at the location specified in the notice to
certificateholders of such final distribution.
AVAILABLE DISTRIBUTION AMOUNT
All distributions on the certificates of each series on each distribution
date will be made from the Available Distribution Amount, in accordance with
the terms described in the prospectus supplement. Unless provided otherwise in
the prospectus supplement, the Available Distribution Amount for each
distribution date equals the sum of the following amounts:
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(i) the total amount of all cash on deposit in the related distribution
account as of the corresponding determination date, including servicer
advances, net of any scheduled payments due and payable after the
distribution date;
(ii) interest or investment income on amounts on deposit in the
distribution account, including any net amounts paid under any cash flow
agreements; and
(iii) to the extent not on deposit in the related Distribution account as
of the corresponding Determination Date, any amounts collected under, from
or in respect of any credit support with respect to the distribution date.
As described below, the entire Available Distribution Amount will be
distributed among the related certificates (including any certificates not
offered hereby) on each distribution date, and accordingly will be released
from the trust fund and will not be available for any future distributions.
DISTRIBUTIONS OF INTEREST ON THE CERTIFICATES
Each class of certificates may have a different Pass-Through Rate. The
prospectus supplement will specify the Pass-Through Rate for each class or
component or, in the case of a variable or floating Pass-Through Rate, the
method for determining the Pass-Through Rate. Unless otherwise specified in the
related supplement, interest on the certificates will be calculated on the
basis of a 360-day year consisting of twelve 30-day months.
Distributions of interest in respect of the certificates of any class will
be made on each distribution date (other than any 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 any class of Stripped Principal
Certificates that are not entitled to any distributions of interest) based on
the Accrued Certificate Interest for that class and distribution date, subject
to the sufficiency of the portion of the available distribution amount
allocable to the class on the distribution date. Prior to the time interest is
distributable on any class of Accrual Certificates, the amount of Accrued
Certificate Interest otherwise distributable on the class will be added to the
certificate balance thereof on each distribution date. With respect to each
class of certificates and each distribution date (other than certain classes of
Stripped Interest Certificates), the Accrued Certificate Interest will be equal
to interest accrued for a specified period on the outstanding certificate
balance thereof immediately prior to the distribution date, at the applicable
Pass-Through Rate, reduced as described below. Unless otherwise provided in the
prospectus supplement, the Accrued Certificate Interest on Stripped Interest
Certificates will be equal to interest accrued for a specified period on the
outstanding notional amount thereof immediately prior to each distribution
date, at the applicable Pass-Through Rate, reduced as described below. The
method of determining the notional amount for any class of Stripped Interest
Certificates will be described in the related prospectus supplement. Reference
to notional amount is solely for convenience in certain calculations and does
not represent the right to receive any distributions of principal. Unless
otherwise provided in the prospectus supplement, the Accrued Certificate
Interest on a series of certificates will be reduced in the event of prepayment
interest shortfalls, which are shortfalls in collections of interest for a full
accrual period resulting from prepayments prior to the due date in the accrual
period on the mortgage loans comprising or underlying the mortgage assets in
the trust fund for the series. The particular manner in which such shortfalls
are to be allocated among some or all of the classes of certificates of that
series will be specified in the prospectus supplement.
The 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 loans comprising or underlying the
mortgage assets in the trust fund. Unless otherwise provided in the prospectus
supplement, any reduction in the amount of the Accrued Certificate Interest
otherwise distributable on a class of certificates by reason of the allocation
to that class of a portion of any deferred
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interest on the mortgage loans comprising or underlying the mortgage assets in
the trust fund will result in a corresponding increase in the certificate
balance of the class. See "Risk Factors--Prepayments and repurchases of the
mortgage assets will affect the timing of your cash flow and may affect your
yield."
DISTRIBUTIONS OF PRINCIPAL OF THE CERTIFICATES
The certificates of each series, other than certain classes of Stripped
Interest Certificates, will have a certificate balance which, at any time, will
equal the then maximum amount that the holder will be entitled to receive in
respect of 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 certificate will be reduced to the extent of distributions of
principal thereon from time to time and, if and to the extent so provided in
the prospectus supplement, by the amount of losses incurred in respect of the
related mortgage assets. The certificate balance may be increased in respect of
deferred interest on the mortgage loans to the extent provided in the
prospectus supplement and, in the case of Accrual Certificates prior to the
distribution date on which distributions of interest are required to commence,
will be increased by any Accrued Certificate Interest. Unless otherwise
provided in the prospectus supplement, the initial aggregate certificate
balance of all classes of certificates of a series will not be greater than the
outstanding aggregate principal balance of the related mortgage assets as of
the applicable Cut-off Date. The initial aggregate certificate balance of a
series and each class thereof will be specified in the prospectus supplement.
Unless otherwise provided in the prospectus supplement, distributions of
principal will be made on each distribution date to the class or classes of
certificates entitled thereto in accordance with the provisions described in
the prospectus supplement until the certificate balance of that class has been
reduced to zero. Stripped Interest Certificates with no certificate balance are
not entitled to any distributions of principal.
COMPONENTS
To the extent specified in the prospectus supplement, distribution on a
class of certificates may be based on a combination of two or more different
components as described under "General" above. To that extent, the descriptions
set forth under "Distributions of Interests on the Certificates" and
"Distributions of Principal of the Certificates" above also relate to
components of such a class of certificates. In such case, reference in those
sections to certificate balance and Pass-Through Rate refer to the principal
balance, if any, of any of the components and the Pass-Through Rate, if any, on
any component, respectively.
DISTRIBUTIONS ON THE CERTIFICATES OF PREPAYMENT PREMIUMS OR IN RESPECT OF
EQUITY PARTICIPATIONS
If so provided in the prospectus supplement, Prepayment Premiums or
payments in respect of Equity Participations that are collected on the mortgage
assets in the trust fund will be distributed on each distribution date to the
class or classes of certificates entitled thereto in accordance with the
provisions described in the prospectus supplement.
ALLOCATION OF LOSSES AND SHORTFALLS
If so provided in the prospectus supplement for a series of certificates
consisting of one or more classes of Subordinate Certificates, on any
distribution date in respect of which losses or shortfalls in collections on
the mortgage assets have been incurred, the amount of such losses or shortfalls
will be borne first by a class of subordinate certificates in the priority and
manner and subject to the limitations specified in the prospectus supplement.
See "Description of Credit Support" for a description of the types of
protection that may be included in shortfalls on mortgage assets comprising the
trust fund.
ADVANCES IN RESPECT OF DELINQUENCIES
With respect to any series of certificates evidencing an interest in a
trust fund, unless otherwise provided in the prospectus supplement, a servicer
or another entity described therein will be required as part of its servicing
responsibilities to advance on or before each distribution date its own funds
or funds held in the distribution account that are not included in the
Available Distribution Amount for such
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distribution date, in an amount equal to the aggregate of payments of principal
(other than any balloon payments) and interest (net of related servicing fees
and Retained Interest) that were due on the whole loans in the trust fund and
were delinquent on the related determination date, subject to the servicer's
(or another entity's) good faith determination that such advances will be
reimbursable from the loan proceeds. In the case of a series of certificates
that includes one or more classes of subordinate certificates and if so
provided in the prospectus supplement, each servicer's (or another entity's)
advance obligation may be limited only to the portion of such delinquencies
necessary to make the required distributions on one or more classes of senior
certificates and/or may be subject to the servicer's (or another entity's) good
faith determination that such advances will be reimbursable not only from the
loan proceeds but also from collections on other trust assets otherwise
distributable on one or more classes of Subordinate Certificates. See
"Description of Credit Support."
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. Unless otherwise
provided in the prospectus supplement, advances of a servicer's (or another
entity's) funds will be reimbursable only out of recoveries on the mortgage
loans (including amounts received under any form of credit support) respecting
which advances were made and, if so provided in the prospectus supplement, out
of any amounts otherwise distributable on one or more classes of subordinate
certificates of such series; provided, however, that any advance will be
reimbursable from any amounts in the distribution account prior to any
distributions being made on the certificates to the extent that a servicer (or
such other entity) shall determine in good faith that such advance is not
ultimately recoverable from the Related Proceeds or, if applicable, from
collections on other trust assets otherwise distributable on the Subordinate
Certificates. If advances have been made by a servicer from excess funds in the
Distribution account, the servicer is required to replace such funds in the
Distribution account on any future distribution date to the extent that funds
in the Distribution account on that distribution date are less than payments
required to be made to certificateholders on such date. If so specified in the
prospectus supplement, the obligations of a servicer (or another entity) to
make advances may be secured by a cash advance reserve fund, a surety bond, a
letter of credit or another form of limited guaranty. If applicable,
information regarding the characteristics of, and the identity of any obligor
on, any such surety bond, will be set forth in the prospectus supplement.
If and to the extent so provided in the prospectus supplement, a servicer
(or another entity) will be entitled to receive interest at the rate specified
therein on its outstanding advances and will be entitled to pay itself such
interest periodically from general collections on the trust assets prior to any
payment to certificateholders or as otherwise provided in the related agreement
and described in the prospectus supplement.
The prospectus supplement for any series of certificates evidencing an
interest in a trust fund that includes CMBS will describe any corresponding
advancing obligation of any person in connection with such CMBS.
REPORTS TO CERTIFICATEHOLDERS
Unless otherwise provided in the prospectus supplement, with each
distribution to holders of any class of certificates of a series, the master
servicer or the trustee, as provided in the prospectus supplement, will forward
to each certificateholder, to the Depositor and to such other parties as may be
specified in the related agreement, a statement setting forth, in each case to
the extent applicable and available:
(i) the amount of the distribution to holders of certificates of such
class applied to reduce the certificate balance thereof;
(ii) the amount of the distribution to holders of certificates of such
class allocable to Accrued Certificate Interest;
(iii) the amount of the distribution allocable to (a) Prepayment Premiums
and (b) payments on account of Equity Participations;
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(iv) the amount of related servicing compensation received by each
servicer and such other customary information as any such master servicer
or the trustee deems necessary or desirable, or that a certificateholder
reasonably requests, to enable certificateholders to prepare their tax
returns;
(v) the aggregate amount of advances included in the distribution, and
the aggregate amount of any unreimbursed advances at the close of business
on the distribution date;
(vi) the aggregate principal balance of the mortgage assets at the close
of business on the distribution date;
(vii) the number and aggregate principal balance of whole loans in
respect of which (a) one scheduled payment is delinquent, (b) two scheduled
payments are delinquent, (c) three or more scheduled payments are
delinquent and (d) foreclosure proceedings have been commenced;
(viii) with respect to each whole loan that is delinquent two or more
months, (a) the loan number, (b) the unpaid balance, (c) whether the
delinquency is in respect of any balloon payment, (d) the aggregate amount
of unreimbursed servicing expenses and unreimbursed advances, (e) if
applicable, the aggregate amount of any interest accrued and payable on
related servicing expenses and related advances assuming such mortgage loan
is subsequently liquidated through foreclosure, (f) whether a notice of
acceleration has been sent to the mortgagor and, if so, the date of such
notice, (g) whether foreclosure proceedings have been commenced and, if so,
the date so commenced and (h) if such mortgage loan is more than three
months delinquent and foreclosure has not been commenced, the reason
therefor;
(ix) with respect to any whole loan liquidated during the related Due
Period (other than by payment in full), (a) the loan number, (b) the manner
in which it was liquidated and (c) the aggregate amount of liquidation
proceeds received;
(x) with respect to any whole loan liquidated during the related Due
Period, (a) the portion of such liquidation proceeds payable or
reimbursable to each servicer (or any other entity) in respect of the
mortgage loan and (b) the amount of any loss to certificateholders;
(xi) with respect to each REO Property relating to a whole loan and
included in the trust fund as of the end of a reporting period, (a) the
loan number of the related mortgage loan and (b) the date of acquisition;
(xii) with respect to each REO Property relating to a whole loan and
included in the trust fund as of the end of a reporting period, (a) the
fair market value based on the most recent appraisal obtained by a
servicer, (b) the principal balance of the related mortgage loan
immediately following such distribution date (calculated as if such
mortgage loan were still outstanding taking into account certain limited
modifications to the terms thereof specified in the agreement), (c) the
aggregate amount of unreimbursed servicing expenses and unreimbursed
advances and (d) if applicable, the aggregate amount of interest accrued
and payable on related servicing expenses and related advances;
(xiii) with respect to any REO Property sold during a reporting period
(a) the loan number of the related mortgage loan, (b) the aggregate amount
of sale proceeds, (c) the portion of the sales proceeds payable or
reimbursable to each servicer in respect of such REO Property or the
related mortgage loan and (d) the amount of any loss to certificateholders
in respect of the related mortgage loan;
(xiv) the aggregate certificate balance or notional amount, as the case
may be, of each class of certificates (including any class of certificates
not offered hereby) at the close of business on the distribution date,
separately identifying any reduction in the certificate balance due to the
allocation of any loss and increase in the certificate balance of a class
of Accrual Certificates in the event that Accrued Certificate Interest has
been added to such balance;
(xv) the aggregate amount of principal prepayments made during a
reporting period;
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(xvi) the aggregate Accrued Certificate Interest and unpaid Accrued
Certificate Interest, if any, on each class of certificates at the close of
business on the distribution date;
(xvii) in the case of certificates with a variable Pass-Through Rate, the
Pass-Through Rate applicable to the distribution date, and, if available,
the immediately succeeding distribution date, as calculated in accordance
with the method specified in the prospectus supplement;
(xviii) in the case of certificates with a floating Pass-Through Rate,
for statements to be distributed in any month in which an adjustment date
occurs, the floating Pass-Through Rate applicable to such distribution date
and the immediately succeeding distribution date as calculated in
accordance with the method specified in the prospectus supplement;
(xix) as to any series which includes credit support, the amount of
coverage of each instrument of credit support included therein as of the
close of business on such distribution date; and
(xx) the aggregate amount of payments by the mortgagors of (a) default
interest, (b) late charges and (c) assumption and modification fees
collected during the related Due Period.
In the case of information furnished pursuant to subclauses (i)-(iv)
above, the amounts shall be expressed as a dollar amount per minimum
denomination of certificates or for such other specified portion thereof. In
addition, in the case of information furnished pursuant to subclauses (i),
(ii), (xiv), (xvi) and (xvii) above, such amounts shall also be provided with
respect to each component, if any, of a class of certificates. The master
servicer or the trustee, as specified in the prospectus supplement, will
forward to each holder and to the depositor, a copy of any statements or
reports received by the master servicer or the trustee, as applicable, with
respect to any CMBS. The prospectus supplement for each series of offered
certificates will describe any additional information to be included in reports
to the holders of such certificates.
Within a reasonable period of time after the end of each calendar year,
the master servicer or the trustee, as provided in the prospectus supplement,
shall furnish to each person who at any time during the calendar year was a
holder of a certificate a statement containing the information set forth in
subclauses (i)-(iv) above, aggregated for such calendar year or the applicable
portion thereof during which such person was a certificateholder. This
obligation of the master servicer or the trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the master servicer or the trustee pursuant to any requirements of
the Internal Revenue Code as are from time to time in force.
Unless and until physical certificates are issued, or unless otherwise
provided in the prospectus supplement, such statements or reports will be
forwarded by the master servicer or the trustee to Cede & Co Such statements or
reports may be available to beneficial owners upon request to DTC or their
respective participant or indirect participant. In addition, the trustee shall
furnish a copy of any such statement or report to any beneficial owner who
requests a copy and certifies to the trustee or the master servicer, as
applicable, that he or she is the beneficial owner of a certificate. See
"Description of the Certificates--Book-Entry Registration and Physical
certificates."
TERMINATION
The obligations created by the agreements for each series of certificates
will terminate upon the payment to certificateholders of that series of all
amounts held in the Distribution account or by any servicer, if any, or the
trustee and required to be paid to them pursuant to those agreements following
the earlier of (i) the final payment or other liquidation of the last mortgage
asset subject thereto or the disposition of all property acquired upon
foreclosure of any whole loan subject thereto and (ii) the purchase of all of
the assets of the trust fund by the party entitled to effect such termination,
under the circumstances and in the manner set forth in the prospectus
supplement. In no event, however, will the trust created by the agreements
continue beyond the date specified in the prospectus supplement. Written notice
of termination of the agreements will be given to each certificateholder, and
the final distribution will be made only upon presentation and surrender of the
certificates at the location to be specified in the notice of termination.
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If so specified in the prospectus supplement, a series of certificates may
be subject to optional early termination through the repurchase of the assets
in the related trust fund by the party specified therein, under the
circumstances and in the manner set forth therein. If so provided in the
prospectus supplement, upon the reduction of the certificate balance of a
specified class or classes of certificates by a specified percentage or amount,
the party specified therein will solicit bids for the purchase of all assets of
the trust fund, or of a sufficient portion of such assets to retire such class
or classes or purchase such class or classes at a price set forth in the
prospectus supplement, in each case, under the circumstances and in the manner
set forth therein.
BOOK-ENTRY REGISTRATION AND DEFINITIVE CERTIFICATES
If so provided in the prospectus supplement, one or more classes of the
offered certificates of any series will be issued as book-entry certificates,
and each such class will be represented by one or more single certificates
registered in the name of a nominee for DTC.
DTC is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the Uniform Commercial Code ("UCC") and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended. DTC was created to hold securities
for its participating organizations and facilitate the clearance and settlement
of securities transactions between participants through electronic book-entry
changes in their accounts, thereby eliminating the need for physical movement
of certificates. Participants include J.P. Morgan Securities Inc., securities
brokers and dealers, banks, trust companies and clearing corporations and may
include certain other organizations. Indirect access to the DTC system also is
available to others such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly.
Unless otherwise provided in the prospectus supplement, investors that are
not participants or indirect participants but desire to purchase, sell or
otherwise transfer ownership of, or other interests in Book-Entry Certificates
may do so only as beneficial owners, that is, through participants and indirect
participants. In addition, such beneficial owners will receive all
distributions on the Book-Entry Certificates through DTC and its participants.
Under a book-entry format, beneficial owners will receive payments after the
related distribution date because, while payments are required to be forwarded
to Cede, as nominee for DTC, on each such date DTC will forward payments to its
participants which thereafter will be required to forward them to indirect
participants or beneficial owners. Unless otherwise provided in the prospectus
supplement, the only certificateholder will be Cede & Co., as nominee of DTC,
and the beneficial owners will not be recognized by the trustee as
certificateholders under the agreements. Beneficial owners will be permitted to
exercise the rights of certificateholders under the related agreements only
indirectly through the participants who in turn will exercise their rights
through DTC. Under the rules, regulations and procedures creating and affecting
DTC and its operations, DTC is required to make book-entry transfers among
participants on whose behalf it acts with respect to the Book-Entry
Certificates and is required to receive and transmit distributions of principal
of and interest on the Book-Entry Certificates. Participants and indirect
participants with which beneficial owners have accounts with respect to the
Book-Entry Certificates similarly are required to make book-entry transfers and
receive and transmit such payments on behalf of their respective beneficial
owners.
Because DTC can act only on behalf of participants, who in turn act on
behalf of indirect participants and certain banks, the ability of a beneficial
owner to pledge its interest in the 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 the Book-Entry Certificates, may be limited due
to the lack of a physical certificate evidencing such interest.
DTC has advised the depositor that it will take any action permitted to be
taken by a certificateholder under an agreement only at the direction of one or
more participants to whose account with DTC interests in the Book-Entry
Certificates are credited. Under DTC's procedures, DTC will take actions
permitted to be taken by holders of any class of Book-Entry Certificates under
the pooling and servicing agreement only at the direction of one or more
participants to whose account the Book-Entry Certificates are
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credited and whose aggregate holdings represent no less than any minimum amount
of voting rights required therefor. Therefore, beneficial owners will only be
able to exercise their voting rights to the extent permitted, and subject to
the procedures established, by their participant and/or indirect participant,
as applicable. DTC may take conflicting actions with respect to any action of
certificateholders of any class to the extent that participants authorize such
actions. None of the servicers, the depositor, the trustee or any of their
respective affiliates will have any liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in
the Book-Entry Certificates, or for maintaining, supervising or reviewing any
records relating to those beneficial ownership interests.
Unless otherwise specified in the prospectus supplement, physical
certificates that are initially issued in book-entry form will be issued in
fully registered, certificated form to beneficial owners or their nominees,
rather than to DTC or its nominee only if (i) the depositor advises the trustee
in writing that DTC is no longer willing or able to properly discharge its
responsibilities as depository with respect to the certificates and the
depositor is unable to locate a qualified successor or (ii) the depositor, at
its option, elects to terminate the book-entry system through DTC.
Upon the occurrence of either of the events described in the immediately
preceding paragraph, DTC is required to notify all participants of the
availability through DTC of physical certificates for the beneficial owners.
Upon surrender by DTC of the certificate or certificates representing the
Book-Entry Certificates, together with instructions for reregistration, the
trustee will issue to the beneficial owners identified in the instructions the
physical certificates to which they are entitled, and thereafter the trustee
will recognize the holders of such physical certificates as certificateholders
under the agreement.
DESCRIPTION OF THE AGREEMENTS
The certificates of each series evidencing interests in a trust fund
including whole loans will be issued pursuant to a pooling and servicing
agreement among the depositor, a master servicer, if specified in the
prospectus supplement, a special servicer and the trustee. The certificates of
each series evidencing interests in a trust fund not including whole loans will
be issued pursuant to a trust agreement between the depositor and a trustee.
The master servicer, any special servicer and the trustee with respect to any
series of certificates will be named in the related prospectus supplement. In
lieu of appointing a master servicer, a servicer may be appointed pursuant to
the Pooling and Servicing Agreement for any trust fund. The mortgage loans
shall be serviced pursuant to the terms of the Pooling and Servicing Agreement
and, if specified in the prospectus supplement, a servicing agreement among the
depositor (or an affiliate thereof), a master servicer, a special servicer and
a primary servicer. A manager or administrator may be appointed pursuant to the
trust agreement for any trust fund to administer the trust fund. The provisions
of each agreement will vary depending upon the nature of the certificates to be
issued thereunder and the nature of the related trust fund. 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. Any trust agreement will
generally conform to the form of pooling and servicing agreement filed
herewith, but will not contain provisions with respect to the servicing and
maintenance of whole loans. The following summaries describe certain provisions
that may appear in each agreement. The prospectus supplement for a series of
certificates will describe any provision of the agreements relating to such
series that materially differs from the description thereof contained in this
prospectus. The summaries 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
agreements for each trust fund and the description of such provisions in the
related prospectus supplement. As used herein with respect to any series, the
term "certificate" refers to all of the certificates of that series, whether or
not offered hereby and by the related prospectus supplement, unless the context
otherwise requires. The depositor will provide a copy of the agreements
(without exhibits) relating to any series of certificates without charge upon
written request of a holder of a certificate of such series addressed to the
trustee specified in the related prospectus supplement.
ASSIGNMENT OF ASSETS; REPURCHASES
At the time of issuance of any series of certificates, the depositor will
assign to the designated trustee the trust assets to be included in the related
trust fund, together with all principal and interest to be
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received on or with respect to such trust assets after the cut-off date
specified in the prospectus supplement, other than principal and interest due
on or before the cut-off date and other than any retained interest. The trustee
will, concurrently with such assignment, deliver the certificates to the
depositor in exchange for the trust assets and the other assets comprising the
trust fund for that series. Each mortgage asset will be identified in a
schedule appearing as an exhibit to the related agreement. Unless otherwise
provided in the related prospectus supplement, such schedule will include
detailed information (i) in respect of each whole loan included in the related
trust fund, including without limitation, the address of the related mortgaged
property and type of such property, the mortgage interest rate and, if
applicable, the applicable index, margin, adjustment date and any rate cap
information, the original and remaining term to maturity, the original and
outstanding principal balance and balloon payment, if any, the Loan-to-Value
Ratio as of the date indicated and prepayment provisions, if applicable, and
(ii) in respect of each CMBS included in the related trust fund, including
without limitation, the names of the issuer, servicer and trustee, the
pass-through or bond rate or formula for determining such rate, the issue date
and original and remaining term to maturity, if applicable, the original and
outstanding principal amount and payment provisions, if applicable.
With respect to each mortgage loan, the Depositor will deliver to the
trustee (or to the custodian hereinafter referred to) certain loan documents,
which unless otherwise specified in the related prospectus supplement will
include the original mortgage note endorsed, without recourse, in blank or to
the order of the trustee, the original mortgage (or a certified copy thereof)
with evidence of recording indicated thereon and an assignment of the mortgage
to the trustee in recordable form. 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 to the trustee or the 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. With respect
to such mortgage loans, the trustee may not be able to enforce the mortgage
note against the related borrower. Unless otherwise provided in the related
prospectus supplement, the related agreements will require that the depositor
or another party specified therein promptly cause each such assignment of
mortgage to be recorded in the appropriate public office for real property
records, except in states where, in the opinion of counsel acceptable to the
trustee, such recording is not required to protect the trustee's interest in
the related mortgage loan against the claim of any subsequent transferee or any
successor to or creditor of the depositor, the master servicer, the relevant
asset sellers or any other prior holder of the whole loan.
The trustee (or a custodian) will review such whole loan documents within
a specified period of days after receipt thereof, and the trustee (or a
custodian) will hold such documents in trust for the benefit of the
certificateholders. Unless otherwise specified in the related prospectus
supplement, if any such document is found to be missing or defective in any
material respect, the trustee (or such custodian) shall notify the depositor.
If the Depositor cannot cure the omission or defect within a specified number
of days after receipt of such notice, then unless otherwise specified in the
related prospectus supplement, the depositor will be obligated, within a
specified number of days of receipt of such notice, to repurchase the related
whole loan from the trustee at the purchase price or substitute for such
mortgage loan. Unless otherwise specified in the related prospectus supplement,
this repurchase or substitution obligation constitutes the sole remedy
available to the certificateholders or the trustee for omission of, or a
material defect in, a constituent document. To the extent specified in the
related prospectus supplement, in lieu of curing any omission or defect in the
mortgage asset or repurchasing or substituting for such mortgage asset, the
depositor may agree to cover any losses suffered by the trust fund as a result
of such breach or defect.
If so provided in the related prospectus supplement, the depositor will,
as to some or all of the mortgage loans, assign or cause to be assigned to the
trustee the related lease assignments. In certain cases, the trustee, or
servicer, as applicable, may collect all moneys under the related leases and
distribute amounts, if any, required under the lease for the payment of
maintenance, insurance and taxes, to the extent specified in the related lease
agreement. The trustee, or if so specified in the prospectus supplement, the
master servicer, as agent for the trustee, may hold the lease in trust for the
benefit of the certificateholders.
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With respect to each CMBS in certificated form, the depositor will deliver
or cause to be delivered to the trustee (or the custodian) the original
certificate or other definitive evidence of such CMBS together with bond power
or other instruments, certifications or documents required to transfer fully
such CMBS to the trustee for the benefit of the certificateholders. With
respect to each CMBS in uncertificated or book-entry form or held through a
"clearing corporation" the depositor and the trustee will cause such CMBS to be
registered directly or on the books of such clearing corporation or of a
financial intermediary in the name of the trustee for the benefit of the
certificateholders. Unless otherwise provided in the related prospectus
supplement, the related trust agreement will require that either the depositor
or the trustee promptly cause any CMBS in certificated form not registered in
the name of the trustee to be re-registered, with the applicable persons, in
the name of the trustee.
REPRESENTATIONS AND WARRANTIES; REPURCHASES
Unless otherwise provided in the prospectus supplement the depositor, or
another party specified therein, will, with respect to each mortgage loan, make
as of a specified date covering, by way of example, the following types of
matters: (i) the accuracy of the information set forth for such mortgage loan
on the schedule of mortgage assets appearing as an exhibit to the related
agreement; (ii) the existence of title insurance insuring the lien priority of
the whole loan; (iii) the authority of the warranting party to sell the
mortgage loan; (iv) the payment status of the mortgage loan and the status of
payments of taxes, assessments and other charges affecting the related
mortgaged property; (v) the existence of customary provisions in the related
mortgage note and mortgage to permit realization against the mortgaged property
of the benefit of the security of the mortgage; and (vi) the existence of
hazard and extended perils insurance coverage on the mortgaged property.
Any warranting party, if other than the depositor, shall be an asset
sellers or an affiliate thereof or such other person acceptable to the
depositor and shall be identified in the related prospectus supplement.
Representations and warranties made in respect of a mortgage loan may have
been made as of a date prior to the applicable cut-off date. A substantial
period of time may have elapsed between such date and the date of initial
issuance of the related series of certificates evidencing an interest in the
mortgage loan.
Unless otherwise specified in the prospectus supplement, in the event of a
breach of any representation or warranty, the warranting party will be
obligated to reimburse the trust fund for losses caused by any such breach or
either cure the breach or repurchase or replace the affected whole loan as
described below. Since the representations and warranties may not address
events that may occur following the date as of which they were made, the
warranting party will have a reimbursement, cure, repurchase or substitution
obligation in connection with a breach of such a representation and warranty
only if the relevant event that causes such breach occurs prior to such date.
The warranting party would have no such obligations if the relevant event that
causes such breach occurs after such date.
Unless otherwise provided in the related prospectus supplement, the
Agreements will provide that the master servicer and/or trustee will be
required to notify promptly the relevant warranting party of any breach of any
representation or warranty made by it in respect of a whole loan that
materially and adversely affects the value of the whole loan or the interests
therein of the certificateholders. If the warranting party cannot cure such
breach within a specified period following the date on which the party was
notified of the breach, then the warranting party will be obligated to
repurchase the whole loan from the trustee within a specified period from the
date on which the warranting party was notified of such breach, at the purchase
price therefor.
As to any mortgage loan, unless otherwise specified in the related
prospectus supplement, the purchase price is equal to the sum of the unpaid
principal balance thereof, plus unpaid accrued interest thereon at the mortgage
interest rate from the date as to which interest was last paid to the due date
in the period specified in the agreement in which the relevant purchase is to
occur, plus certain servicing expenses that are reimbursable to each servicer.
If so provided in the prospectus supplement for a series, a warranting party,
rather than repurchase a mortgage loan as to which a breach has occurred, will
have the option, within a specified period after initial issuance of the series
of certificates, to cause the removal of that mortgage loan from the trust fund
and substitute in its place one or more other mortgage loans,
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in accordance with the standards described in the related prospectus
supplement. If so provided in the prospectus supplement for a series, a
warranting party, rather than repurchase or substitute a whole loan as to which
a breach has occurred, will have the option to reimburse the trust fund or the
certificateholders for any losses caused by the breach. Unless otherwise
specified in the related prospectus supplement, this reimbursement, repurchase
or substitution obligation will constitute the sole remedy available to holders
of certificates or the trustee for a breach of representation by a warranting
party.
Neither the depositor (except to the extent that it is the warranting
party) nor any servicer will be obligated to purchase or substitute for a whole
loan if a warranting party defaults on its obligation to do so, and no
assurance can be given that warranting parties will carry out such obligations
with respect to mortgage loans.
Unless otherwise provided in the related prospectus supplement the
warranting party will, with respect to a trust fund that includes CMBS, make or
assign certain representations or warranties, as of a specified date, with
respect to the CMBS, covering (i) the accuracy of the information set forth
therefor on the schedule of mortgage assets appearing as an exhibit to the
related agreement and (ii) the authority of the warranting party to sell such
mortgage assets. The related prospectus supplement will describe the remedies
for a breach thereof.
Each servicer will make certain representations and warranties regarding
its authority to enter into, and its ability to perform its obligations under,
the related agreement. A breach of any such representation in a pooling and
servicing agreement of a master servicer or special servicer which materially
and adversely affects the interests of the certificateholders and which
continues unremedied for thirty days after the giving of written notice of a
breach to the servicer by the trustee or the depositor, or to the servicer, the
depositor and the trustee by the holders of certificates evidencing not less
than 25% of the voting rights (unless otherwise specified in the related
prospectus supplement), will constitute an event of default under the pooling
and servicing agreement. See "Events of Default" and "Rights Upon Event of
Default."
ACCOUNTS
General
Each servicer and/or the trustee will, as to each trust fund, establish
and maintain one or more separate accounts for the collection of payments on
the related mortgage assets, which must generally, among others be either (i)
an account or accounts the deposits in which are insured by the Bank Insurance
Fund or the Savings Association Insurance Fund of the Federal Deposit Insurance
Corporation ("FDIC") (to the limits established by the FDIC) and the uninsured
deposits in which are otherwise secured so that the certificateholders have a
claim with respect to the funds on account or a perfected first priority
security interest against any collateral securing these funds that is superior
to the claims of any other depositors or general creditors of the institution
with which the account is maintained or (ii) otherwise maintained with a bank
or trust company, and in a manner, satisfactory to the rating agency or
agencies rating any class of certificates of that series. The collateral
eligible to secure amounts in an account is limited to United States government
securities and other investment grade obligations specified in the agreement as
permitted investments. An account may be maintained as an interest bearing or a
non-interest bearing account and the funds held therein may be invested pending
each succeeding distribution date in permitted investments under the agreement.
Unless otherwise provided in the prospectus supplement, any interest or other
income earned on funds in an account will be paid to a servicer or its designee
as additional servicing compensation. An account may be maintained with an
institution that is an affiliate of a servicer provided that such institution
meets the standards imposed by the rating agency or agencies. If permitted by
the rating agency or agencies and so specified in the related prospectus
supplement, an account may contain funds relating to more than one series of
mortgage pass-through certificates and may contain other funds respecting
payments on mortgage loans belonging to a servicer or serviced or master
serviced by it on behalf of others.
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Deposits
Unless otherwise provided in the related prospectus supplement, the
primary servicer will deposit in an account on a daily basis, unless otherwise
provided in the related agreement, the following payments and collections
received, or advances made, by the primary servicer:
(i) all payments on account of principal, including principal
prepayments, on the mortgage assets;
(ii) all payments on account of interest on the mortgage assets,
including any default interest collected, in each case net of any portion
thereof retained by a servicer as its servicing compensation;
(iii) all proceeds of the hazard, business interruption and general
liability insurance policies to be maintained in respect of each mortgaged
property securing a whole loan in the trust fund (to the extent such
proceeds are not applied to the restoration of the property or released to
the mortgagor in accordance with the normal servicing procedures of a
servicer, subject to the terms and conditions of the related mortgage and
mortgage note) and all insurance proceeds of rental interruption policies,
if any, insuring against losses arising from the failure of lessees under a
lease to make timely rental payments because of certain casualty events and
all other liquidation proceeds received and retained in connection with the
liquidation of defaulted mortgage loans in the trust fund, by foreclosure,
condemnation or otherwise, together with the net proceeds on a monthly
basis with respect to any mortgaged properties acquired for the benefit of
certificateholders by foreclosure or by deed in lieu of foreclosure or
otherwise;
(iv) any advances made as described under "Description of the
Certificates--Advances in Respect of Delinquencies";
(v) any amounts representing prepayment premiums;
(vi) any amounts received from a special servicer;but excluding any
proceeds from REO Properties and penalties or modification fees which may
be retained by the primary servicer. Proceeds shall be maintained in an
account by the special servicer.
Once a month the special servicer remits funds on deposit in the account
each maintains together with any advances to the master servicer for deposit in
an account maintained by the master servicer.
Withdrawals
A servicer may, from time to time, unless otherwise provided in the
related agreement and described in the prospectus supplement, make withdrawals
from an account for each trust fund for any of the following purposes:
(i) to reimburse a servicer for unreimbursed amounts advanced as
described under "Description of the Certificates--Advances in Respect of
Delinquencies," such reimbursement to be made out of amounts received which
were identified and applied by the servicer as late collections of interest
on and principal of the particular whole loans with respect to which the
advances were made;
(ii) to reimburse a servicer for unpaid servicing fees earned and certain
unreimbursed servicing expenses incurred with respect to whole loans and
properties acquired in respect thereof, such reimbursement to be made out
of amounts that represent liquidation proceeds and insurance proceeds
collected on the particular whole loans and properties, and net income
collected on the particular properties, with respect to which such fees
were earned or such expenses were incurred;
(iii) to reimburse a servicer for any advances described in clause (i)
above and any servicing expenses described in clause (ii) above which, in
the master servicer's good faith judgment, will not be recoverable from the
amounts described in clauses (i) and (ii), respectively, such reimbursement
to be made from amounts collected on other trust assets or, if and to the
extent so provided by the related agreement and described in the prospectus
supplement, just from that portion of amounts collected on other trust
assets that is otherwise distributable on one or more classes of
subordinate certificates, if any, remain outstanding, and otherwise any
outstanding class of certificates, of the related series;
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(iv) if and to the extent described in the related prospectus supplement,
to pay a servicer interest accrued on the advances described in clause (i)
above and the servicing expenses described in clause (ii) above while these
remain outstanding and unreimbursed;
(v) unless otherwise provided in the related prospectus supplement, to
pay a servicer, as additional servicing compensation, interest and
investment income earned in respect of amounts held in the account; and
(vi) to make any other withdrawals permitted by the related agreement and
described in the related prospectus supplement.
If and to the extent specified in the prospectus supplement amounts may be
withdrawn from any account to cover additional costs, expenses or liabilities
associated with: the preparation of environmental site assessments with respect
to, and for containment, clean-up or remediation of hazardous wastes and
materials, the proper operation, management and maintenance of any mortgaged
property acquired for the benefit of certificateholders by foreclosure or by
deed in lieu of foreclosure or otherwise, such payments to be made out of
income received on such property; if one or more elections have been made to
treat the trust fund or designated portions thereof as a "real estate mortgage
investment conduit", 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"; retaining an independent appraiser or other expert in real
estate matters to determine a fair sale price for a defaulted whole loan or a
property acquired in respect thereof in connection with the liquidation of that
whole loan or property; and obtaining various opinions of counsel pursuant to
the related agreement for the benefit of certificateholders.
Distribution Account
Unless otherwise specified in the related prospectus supplement, the
trustee will, as to each trust fund, establish and maintain, or cause to be
established and maintained, one or more distribution accounts. The trustee will
also deposit or cause to be deposited in a distribution account the following
amounts:
(i) any amounts paid under any instrument or drawn from any fund that
constitutes credit support for the related series of certificates as
described under "Description of credit support";
(ii) any amounts paid under any cash flow agreement, as described under
"Description of the trust funds--Cash Flow Agreements";
(iii) all proceeds of any trust asset or, with respect to a whole loan,
property acquired in respect thereof purchased by the depositor, any asset
sellers or any other specified person, and all proceeds of any mortgage
asset purchased as described under "Description of the
Certificates--Termination" (also, "Liquidation Proceeds");
(iv) any other amounts required to be deposited in the distribution
account as provided in the related agreement and described in the related
prospectus supplement.
The trustee may, from time to time, unless otherwise provided in the
related agreements and described in the related prospectus supplement, make a
withdrawal from a distribution account to make distributions to the
certificateholders on each distribution date.
Other Collection Accounts
Notwithstanding the foregoing, if so specified in the prospectus
supplement, the Agreement for any series of certificates may provide for the
establishment and maintenance of a separate collection account into which the
master servicer or any related primary servicer or special servicer will
deposit on a daily basis the amounts described under "--Deposits" above for one
or more series of certificates. Any amounts on deposit in any such collection
account will be withdrawn therefrom and deposited into the appropriate
Distribution account by a time specified in the related prospectus supplement.
To the extent specified in the prospectus supplement, any amounts which could
be withdrawn from the Distribution
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account as described under "--Withdrawals" above, may also be withdrawn from
any such collection account. The prospectus supplement will set forth any
restrictions with respect to any collection account, including investment
restrictions and any restrictions with respect to financial institutions with
which any such collection account may be maintained.
COLLECTION AND OTHER SERVICING PROCEDURES
Primary Servicer
The master servicer or if so specified in the property supplement, a
primary servicer is required to make reasonable efforts to collect all
scheduled payments under the mortgage loans and will follow such collection
procedures as it would follow with respect to mortgage loans that are
comparable to the mortgage loans and held for its own account, provided such
procedures are consistent with (i) the terms of the related agreement, (ii)
applicable law and (iii) the general servicing standard specified in the
related prospectus supplement or, if no such standard is so specified, its
normal servicing practices.
The servicer will also be required to perform other customary functions of
a servicer of comparable loans, including maintaining (or causing the mortgagor
or lessee on each mortgage or lease to maintain) hazard, business interruption
and general liability insurance policies (and, if applicable, rental
interruption policies) as described herein and in any related prospectus
supplement, and filing and settling claims thereunder; maintaining escrow or
impoundment accounts of mortgagors for payment of taxes, insurance and other
items required to be paid by any mortgagor pursuant to the mortgage loan;
processing assumptions or substitutions in accordance with the servicing
standard; attempting to cure delinquencies; supervising foreclosures;
inspecting mortgaged properties under certain circumstances; and maintaining
accounting records relating to the mortgage loans.
Master Servicer
If so specified in the related prospectus supplement, the master servicer
shall monitor the actions of the primary servicer and the special servicer to
confirm compliance with the agreements.
Unless otherwise specified in the related prospectus supplement, a master
servicer, as servicer of the mortgage loans, on behalf of itself, the trustee
and the certificateholders, will present claims to the obligor under each
instrument of credit support, and will take all reasonable steps necessary to
receive payment or to permit recovery thereunder with respect to defaulted
mortgage loans. See "Description of Credit Support."
If a master servicer or its designee recovers payments under any
instrument of credit support with respect to any defaulted mortgage loan, the
master servicer will be entitled to withdraw or cause to be withdrawn from the
Distribution account out of such proceeds, prior to distribution to
certificateholders, amounts representing its normal servicing compensation on
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. See "Hazard Insurance Policies" and "Description
of Credit Support."
Special Servicer
A mortgagor's failure to make required payments may reflect inadequate
income or the diversion of that income from the service of payments due under
the mortgage loan, and may call into question that mortgagor's ability to make
timely payment of taxes and to pay for necessary maintenance of the related
mortgaged property. Unless otherwise provided in the prospectus supplement,
upon the occurrence of any of the following servicing transfer events with
respect to a mortgage loan, servicing for such mortgage loan will be
transferred from the primary servicer to the special servicer and the loan will
thereafter be designated as a specially serviced mortgage loan:
(a) the mortgage loan becomes a defaulted mortgage loan,
(b) the occurrence of certain events indicating the possible insolvency
of the mortgagor,
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(c) the receipt by the primary servicer of a notice of foreclosure of any
other lien on the related mortgaged property,
(d) the master servicer or the primary servicer determines that a
payment default is imminent,
(e) with respect to a balloon mortgage loan, no assurances have been
given as to the ability of the mortgagor to make the final payment thereon,
or
(f) the occurrence of certain other events constituting defaults under
the terms of the mortgage loan.
The special servicer is required to monitor any mortgage loan which is in
default, contact the mortgagor concerning the default, evaluate whether the
causes of the default can be cured over a reasonable period without significant
impairment of the value of the mortgaged property, initiate corrective action
in cooperation with the mortgagor if cure is likely, inspect the mortgaged
property and take any other actions consistent with the servicing standard. A
significant period of time may elapse before the special servicer is able to
assess the success of such corrective action or the need for additional
initiatives.
The time within which the special servicer makes the initial determination
of appropriate action, evaluates the success of corrective action, develops
additional initiatives, institutes foreclosure proceedings and actually
forecloses (or takes a deed to a mortgaged property in lieu of foreclosure) on
behalf of the certificateholders, 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. Under federal
bankruptcy law, the special servicer in certain cases may not be permitted to
accelerate a mortgage loan or to foreclose on a mortgaged property for a
considerable period of time. See "Certain Legal Aspects of the Mortgage Loans
and the Leases."
Any agreement relating to a trust fund that includes mortgage loans may
grant to the master servicer and/or the holder or holders of certain classes of
certificates a right of first refusal to purchase from the trust fund at a
predetermined purchase price any such mortgage loan as to which a specified
number of scheduled payments thereunder are delinquent. Any such right granted
to the holder of an offered certificate will be described in the prospectus
supplement. The prospectus supplement will also describe any such right granted
to any person if the predetermined purchase price is less than the purchase
price described under "Representations and Warranties; Repurchases."
The special servicer may agree to modify, waive or amend any term of any
specially serviced mortgage loan in a manner consistent with the servicing
standard so long as the modification, waiver or amendment will not (i) affect
the amount or timing of any scheduled payments of principal or interest on the
mortgage loan or (ii) in its judgment, materially impair the security for the
mortgage loan or reduce the likelihood of timely payment of amounts due
thereon. The special servicer also may agree to any modification, waiver or
amendment that would so affect or impair the payments on, or the security for,
a mortgage loan if, unless otherwise provided in the related prospectus
supplement, (i) in its judgment, a material default on the mortgage loan has
occurred or a payment default is imminent and (ii) in its judgment, such
modification, waiver or amendment is reasonably likely to produce a greater
recovery with respect to the mortgage loan on a present value basis than would
liquidation. The special servicer is required to notify the trustee in the
event of any modification, waiver or amendment of any mortgage loan.
The special servicer, on behalf of the trustee, may at any time institute
foreclosure proceedings, exercise any power of sale contained in any mortgage,
obtain a deed in lieu of foreclosure, or otherwise acquire title to a mortgaged
property securing a mortgage loan by operation of law or otherwise, if such
action is consistent with the servicing standard and a default on the mortgage
loan has occurred or, in the special servicer's judgment, is imminent. Unless
otherwise specified in the related prospectus supplement, the special servicer
may not acquire title to any related mortgaged property or take any other
action that would cause the trustee, for the benefit 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"
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of the mortgaged property within the meaning of certain federal environmental
laws, unless the special servicer has previously determined, based on a report
prepared by a person who regularly conducts environmental audits (which report
will be an expense of the trust fund), that:
(i) the mortgaged property is in compliance with applicable environmental
laws; or if not, that taking such actions as are necessary to bring the
mortgaged property in compliance therewith is reasonably likely to produce
a greater recovery on a present value basis, after taking into account any
risks associated therewith, than not taking such actions; and
(ii) and there are no circumstances present at the mortgaged property
relating to the use, management or disposal of any hazardous substances,
hazardous materials, wastes, or petroleum-based materials for which
investigation, testing, monitoring, containment, clean-up or remediation
could be required under any federal, state or local law or regulation or
that, if any such materials are present, taking such action with respect to
the affected mortgaged property is reasonably likely to produce a greater
recovery on a present value basis, after taking into account any risks
associated therewith, than not taking such actions.
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 not later than the end of the third
calendar year following the year of acquisition, unless (i) the Internal
Revenue Service grants an extension of time to sell such property or (ii) the
trustee receives an opinion of independent counsel to the effect that the
holding of the property by the trust fund subsequent to the end of the third
year following the year in which such acquisition occurred will not result in
the imposition of a tax on the trust fund or cause the trust fund to fail to
qualify as a REMIC under the Code at any time that any certificate is
outstanding. Subject to the foregoing, the special servicer will be required to
(i) solicit bids or offers for any mortgaged property so acquired in such a
manner as will be reasonably likely to realize a fair price for such property
and (ii) accept the first (and, if multiple bids are contemporaneously
received, the highest) cash bid or offer received from any person that
constitutes a fair price.
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 the property. The retention of an independent contractor,
however, will not relieve the special servicer of any of its obligations with
respect to the management and operation of the mortgaged property. Unless
otherwise specified in the related prospectus supplement, any property acquired
by the trust fund will be managed in a manner consistent with the management
and operation of similar property by a prudent lending institution.
The limitations imposed by the related Agreement and the REMIC provisions
of the Code (if a REMIC election has been made with respect to the related
trust fund) on the operations and ownership of any mortgaged property acquired
on behalf of the trust fund may result in the recovery of an amount less than
the amount that would otherwise be recovered. See "Certain Legal Aspects of the
Mortgage Loans and the Leases--Foreclosure."
If recovery on a defaulted mortgage loan under any related instrument of
credit support is not available, the special servicer nevertheless will be
obligated to follow or cause to be followed such normal practices and
procedures as it deems necessary or advisable to realize upon the defaulted
mortgage loan. If the proceeds of any liquidation of the property securing the
defaulted mortgage loan are less than the outstanding principal balance of the
defaulted mortgage loan plus interest accrued thereon at the mortgage interest
rate plus the aggregate amount of expenses incurred by the special servicer in
connection with such proceedings and which are reimbursable under the
agreement, the trust fund will realize a loss in the amount of that difference.
The servicers will be entitled to withdraw or cause to be withdrawn from a
related account out of the liquidation proceeds recovered on any defaulted
mortgage loan, prior to the distribution of the liquidation proceeds to
certificateholders, amounts representing its normal servicing compensation on
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 with interest thereon.
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HAZARD INSURANCE POLICIES
Unless otherwise specified in the related prospectus supplement, each
agreement for a trust fund that includes whole loans will require the primary
servicer to cause the mortgagor on each whole loan to maintain a hazard
insurance policy providing for the coverage required under the related
mortgage. Unless otherwise specified in the prospectus supplement, the coverage
will be in general in an amount equal to the amount necessary to fully
compensate for any damage or loss to the improvements on the mortgaged property
on a replacement cost basis, but not less than the amount necessary to avoid
the application of any co-insurance clause contained in the hazard insurance
policy. The ability of the primary 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 in
this regard is furnished by mortgagors. All amounts collected by the primary
servicer under any such policy (except for amounts to be applied to the
restoration or repair of the mortgaged property or released to the mortgagor in
accordance with the primary servicer's normal servicing procedures, subject to
the terms and conditions of the related mortgage and Mortgage Note) will be
deposited in a related account.
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 relating to the whole loans 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, the basic terms thereof are dictated by respective state laws, and
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 uninsured risks.
The hazard insurance policies covering the mortgaged properties securing
the whole loans will typically contain a co-insurance clause that in effect
requires the 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, the co-insurance
clause generally provides that the insurer's liability in the event of partial
loss does not exceed the lesser of (i) the replacement cost of the improvements
less physical depreciation and (ii) such proportion of the loss as the amount
of insurance carried bears to the specified percentage of the full replacement
cost of the improvements.
The Agreements for a trust fund that includes whole loans will require the
primary servicer to cause the mortgagor on each whole loan, or, in certain
cases, the related lessee, to maintain all other insurance coverage with
respect to the related mortgaged property as is consistent with the terms of
the mortgage, which insurance may typically include flood insurance (if the
mortgaged property was located at the time of origination in a federally
designated flood area).
In addition, to the extent required by the related mortgage, the primary
servicer may require the mortgagor or lessee to maintain other forms of
insurance including, but not limited to, loss of rent endorsements, business
interruption insurance and comprehensive public liability insurance. Any cost
incurred by the master servicer in maintaining any such insurance policy will
be added to the amount owing under the mortgage loan where the terms of the
mortgage loan so permit; provided, however, that the addition of such cost will
not be taken into account for purposes of calculating the distribution to be
made to certificateholders. Such costs may be recovered by a servicer from a
related account, with interest thereon, as provided by the agreements.
RENTAL INTERRUPTION INSURANCE POLICY
If so specified in the related prospectus supplement, the primary servicer
or the mortgagors will maintain rental interruption insurance policies in full
force and effect with respect to some or all of the leases. Although the terms
of such policies vary to some degree, a rental interruption insurance policy
typically provides that, to the extent that a lessee fails to make timely
rental payments under the lease due
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to a casualty event, such losses will be reimbursed to the insured. If so
specified in the related prospectus supplement, the primary servicer will be
required to pay from its servicing compensation the premiums on the rental
interruption policy on a timely basis. If so specified in the prospectus
supplement, if the rental interruption policy is canceled or terminated for any
reason (other than the exhaustion of total policy coverage), the primary
servicer will exercise its best reasonable efforts to obtain from another
insurer a replacement policy comparable to the rental interruption policy with
a total coverage that is equal to the then existing coverage of the terminated
rental interruption policy; provided that if the cost of any such replacement
policy is greater than the cost of the terminated rental interruption policy,
the amount of coverage under the replacement policy will, unless otherwise
specified in the prospectus supplement, be reduced to a level such that the
applicable premium does not exceed, by a percentage that may be set forth in
the prospectus supplement, the cost of the rental interruption policy that was
replaced. Any amounts collected by the primary servicer under the rental
interruption policy in the nature of insurance proceeds will be deposited in a
related account.
FIDELITY BONDS AND ERRORS AND OMISSIONS INSURANCE
Unless otherwise specified in the related prospectus supplement, the
Agreements will require that the servicers obtain and maintain in effect a
fidelity bond or similar form of insurance coverage (which may provide blanket
coverage) or any combination thereof insuring against loss occasioned by fraud,
theft or other intentional misconduct of the officers and employees of the
servicer. The related agreements will allow a servicer to self-insure against
loss occasioned by the errors and omissions of the officers, employees and
agents of the master servicer or the special servicer so long as certain
criteria set forth in the agreements are met.
DUE-ON-SALE AND DUE-ON-ENCUMBRANCE PROVISIONS
Certain of the whole loans may contain clauses requiring the consent of
the mortgagee to any sale or other transfer of the related mortgaged property,
or due-on-sale clauses entitling the mortgagee to accelerate payment of the
whole loan upon any sale or other transfer of the mortgaged property. Certain
of the whole loans may contain clauses requiring the consent of the mortgagee
to the creation of any other lien or encumbrance on the mortgaged property or
due-on-encumbrance clauses entitling the mortgagee to accelerate payment of the
whole loan upon the creation of any other lien or encumbrance upon the
mortgaged property. Unless otherwise provided in the related prospectus
supplement, the primary servicer, on behalf of the trust fund, will exercise
any right the trustee may have as mortgagee to accelerate payment of any whole
loan or to withhold its consent to any transfer or further encumbrance. Unless
otherwise specified in the related prospectus supplement, any fee collected by
or on behalf of the primary servicer for entering into an assumption agreement
will be retained by or on behalf of the primary servicer as additional
servicing compensation. See "Certain Legal Aspects of the Mortgage Loans and
the Leases--Due-on-Sale and Due-on-Encumbrance."
RETAINED INTEREST; SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The prospectus supplement for a series of certificates will specify
whether there will be any Retained Interest in the mortgage assets, and, if so,
the initial owner thereof. If so, the Retained Interest will be established on
a loan-by-loan basis and will be specified on an exhibit to the related
Agreement. The Retained Interest will be deducted from mortgagor payments as
received and will not be part of the related trust fund.
Unless otherwise specified in the related prospectus supplement, each
servicer's primary servicing compensation with respect to a series of
certificates will come from the periodic payment to it of a portion of the
interest payment on each mortgage asset. Since any Retained Interest and a
servicer's primary compensation are percentages of the principal balance of
each mortgage asset, such amounts will decrease in accordance with the
amortization of the mortgage assets. The prospectus supplement with respect to
a series of certificates evidencing interests in a trust fund that includes
whole loans may provide that, as additional compensation, a servicer may retain
all or a portion of assumption fees, modification fees, late payment charges or
prepayment premiums collected from mortgagors and any interest or other income
which may be earned on funds held in a related account.
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The master servicer may, to the extent provided in the related prospectus
supplement, pay from its servicing compensation certain expenses incurred in
connection with its servicing and managing of the mortgage assets, including,
without limitation, payment of the fees and disbursements of the trustee and
independent accountants, payment of expenses incurred in connection with
distributions and reports to certificateholders, and payment of any other
expenses described in the prospectus supplement. Certain other expenses,
including expenses relating to defaults and liquidations on the whole loans
and, to the extent so provided in the related prospectus supplement, interest
thereon at the rate specified therein, and the fees of any special servicer,
may be borne by the trust fund.
EVIDENCE AS TO COMPLIANCE
Each pooling and servicing agreement will provide that on or before a
specified date in each year, beginning on a date specified therein, a firm of
independent public accountants will furnish a statement to the trustee to the
effect that, on the basis of the examination by such firm conducted
substantially in compliance with either the Uniform Single Attestation Program
for Mortgage Bankers, the servicing by or on behalf of each servicer was
conducted in compliance with the terms of such agreements except for any
exceptions the Uniform Single Attestation Program for Mortgage Bankers requires
it to report.
Each pooling and servicing agreement will also provide for delivery to the
trustee, on or before a specified date in each year, of an annual statement
signed by an officer of each servicer to the effect that the servicer has
fulfilled its obligations in all material respects under the agreement
throughout the preceding calendar year or other specified twelve-month period.
Unless otherwise provided in the related prospectus supplement, copies of
such annual accountants' statement and statements of officers will be
obtainable by certificateholders and beneficial owners without charge upon
written request to the master servicer at the address set forth in the
prospectus supplement; provided that such beneficial owner shall have certified
to the master servicer that he or she is the beneficial owner of a certificate.
CERTAIN MATTERS REGARDING EACH SERVICER AND THE DEPOSITOR
The master servicer and the special servicer, or a servicer for
substantially all the whole loans under each agreement will be named in the
related prospectus supplement. Each entity serving as servicer (or as such
servicer) may be an affiliate of the depositor and may have other normal
business relationships with the depositor or the depositor's affiliates.
Reference herein to a servicer shall be deemed to be to the servicer of
substantially all of the whole loans, if applicable.
Unless otherwise specified in the prospectus supplement, the related
agreement will provide that any servicer may resign from its obligations and
duties thereunder only with the consent of the trustee, which may not be
unreasonably withheld or upon a determination that its duties under the
agreement are no longer permissible under applicable law. No such resignation
will become effective until a successor servicer has assumed that servicer's
obligations and duties under the related pooling and servicing agreement.
Unless otherwise specified in the prospectus supplement, the master servicer
shall assume the obligations of any other servicer which resigns.
Unless otherwise specified in the related prospectus supplement, each
pooling and servicing agreement will further provide that none of the
servicers, or any officer, employee, or agent thereof will be under any
liability to the related trust fund or certificateholders for any action taken,
or for refraining from the taking of any action in accordance with the
servicing standards set forth in the pooling and servicing agreement, in good
faith pursuant to the related pooling and servicing agreement; provided,
however, that no servicer nor any of its officers, employees or agents will be
protected against any breach of a representation or warranty made in the
agreement, or against any liability specifically imposed thereby, or against
any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of duties thereunder or
by reason of reckless disregard of obligations and duties thereunder. Unless
otherwise specified in the prospectus supplement, the depositor shall be liable
only to the extent of its obligations specifically imposed upon and undertaken
by the depositor. Unless otherwise specified in the prospectus supplement, each
pooling and servicing agreement
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will further provide that each servicer will be entitled to indemnification by
the related trust fund against any loss, liability or expense incurred in
connection with any legal action relating to the pooling and servicing
agreement or the mortgage loans; provided, however, that such indemnification
will not extend to any loss, liability or expense incurred by reason of
misfeasance, bad faith or negligence in the performance of obligations or
duties thereunder, or by reason of reckless disregard of such obligations or
duties. In addition, each pooling and servicing agreement will provide that no
servicer will be under any obligation to appear in, prosecute or defend any
legal action which is not incidental to its responsibilities under the pooling
and servicing agreement and which in its opinion may involve it in any expense
or liability. Any servicer may, however, with the consent of the trustee
undertake any such action which it may deem necessary or desirable with respect
to the agreement and the rights and duties of the parties thereto and the
interests of the 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 certificateholders, and the servicer
will be entitled to be reimbursed therefor.
Any person into which a servicer or the depositor may be merged or
consolidated, or any person resulting from any merger or consolidation to which
a servicer or the depositor is a party, or any person succeeding to the
business of a servicer or the depositor will be the successor of such servicer
or the depositor, as applicable, under the related agreements.
EVENTS OF DEFAULT
Unless otherwise provided in the prospectus supplement for a trust fund
that includes whole loans, events of default with respect to a servicer under
the related agreements will include (i) any failure by the servicer to
distribute to the trustee, another servicer or the certificateholders, any
required payment within one business day of the date due; (ii) any failure by
the servicer to timely deliver a report that continues unremedied for two days
after receipt of notice of such failure has been given to the servicer by the
trustee or another servicer; (iii) any failure by the servicer duly to observe
or perform in any material respect any of its other covenants or obligations
under the agreement which continues unremedied for thirty days after written
notice of such failure has been given to the servicer; (iv) any breach of a
representation or warranty made by the servicer under the agreement which
materially and adversely affects the interests of certificateholders and which
continues unremedied for thirty days after written notice of such breach has
been given to the servicer; (v) certain events of insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings and certain
actions by or on behalf of the servicer indicating its insolvency or inability
to pay its obligations; and (vi) any failure by the servicer to maintain a
required license to do business or service the mortgage loans pursuant to the
related agreements which remains uncured as specified in the agreement.
Material variations to the foregoing events of default (other than to shorten
cure periods or eliminate notice requirements) will be specified in the related
prospectus supplement. Unless otherwise specified in the prospectus supplement,
the trustee shall, not later than the later of 60 days after the occurrence of
any event which constitutes or, with notice or lapse of time or both, would
constitute an event of default and five days after certain officers of the
trustee become aware of the occurrence of such an event, transmit by mail to
the depositor and all certificateholders of the applicable series notice of
such occurrence, unless the default is cured or waived.
RIGHTS UPON EVENT OF DEFAULT
So long as an event of default under an agreement remains unremedied, the
depositor or the trustee may, and at the direction of holders of certificates
evidencing not less than 25% of the voting rights, the trustee shall, terminate
all of the rights and obligations of the related servicer under the agreement
and in and to the mortgage loans (other than as a certificateholder or as the
owner of any Retained Interest), whereupon the master servicer (or if such
servicer is the master servicer, the trustee) will succeed to all of the
responsibilities, duties and liabilities of the servicer under the agreements
(except that if the trustee is prohibited by law from obligating itself to make
advances regarding delinquent mortgage loans, or if the related prospectus
supplement so specifies, then 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, in the event that the
trustee is unwilling or unable so to act, it may or, at the
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written request of the holders of certificates entitled to at least 25% of the
voting rights, it shall appoint, or petition a court of competent jurisdiction
for the appointment of, a loan servicing institution acceptable to the rating
agency with a net worth at the time of such appointment of at least $15,000,000
to act as successor to the master servicer under the agreement. Pending such
appointment, the trustee is obligated to act in such capacity. The trustee and
any such successor may agree upon the servicing compensation to be paid, which
in no event may be greater than the compensation payable to the master servicer
under the agreement.
Unless otherwise described in the related prospectus supplement, the
holders of certificates representing at least 662/3% of the voting rights
allocated to the respective classes of certificates affected by any event of
default will be entitled to waive such event of default; provided, however,
that an event of default involving a failure to distribute a required payment
to certificateholders described in clause (i) under "Events of Default" may be
waived only by all of the certificateholders. Upon any such waiver of an event
of default, such event of default shall cease to exist and shall be deemed to
have been remedied for every purpose under the agreement.
No certificateholder will have the right under any agreement to institute
any proceeding with respect thereto unless such holder previously has given to
the trustee written notice of default and unless the holders of certificates
evidencing not less than 25% of the voting rights have made written request
upon the trustee to institute such proceeding in its own name as trustee and
have offered to the trustee reasonable indemnity, and the trustee for sixty
days has neglected or refused to institute any such proceeding. The trustee,
however, is under no obligation to exercise any of the trusts or powers vested
in it by any agreement or to make any investigation of matters arising
thereunder 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 the agreement, unless those certificateholders have
offered to the trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby.
As described under "Description of the Certificates--Book-Entry
Registration and Physical certificates," unless and until Physical certificates
are issued, beneficial owners may only exercise their rights as owners of
certificates indirectly through DTC, or their respective participants and
indirect participants.
AMENDMENT
Each agreement may be amended by the parties thereto, without the consent
of any of the holders of certificates covered by the agreement, (i) to cure any
ambiguity, (ii) to correct, modify or supplement any provision therein which
may be inconsistent with any other provision therein, (iii) to make any other
provisions with respect to matters or questions arising under the agreement
which are not inconsistent with the provisions thereof, or (iv) to comply with
any requirements imposed by the Code; provided that such amendment (other than
an amendment for the purpose specified in clause (iv) above) will not (as
evidenced by an opinion of counsel to such effect) adversely affect in any
material respect the interests of any holder of certificates covered by the
agreement. Unless otherwise specified in the related prospectus supplement,
each agreement may also be amended by the Depositor, the master servicer, if
any, and the trustee, with the consent of the holders of certificates affected
thereby evidencing not less than 51% of the voting rights, for any purpose;
provided, however, that unless otherwise specified in the related prospectus
supplement, no such amendment may (i) reduce in any manner the amount of or
delay the timing of, payments received or advanced on mortgage loans which are
required to be distributed on any certificate without the consent of the holder
of such certificate, (ii) adversely affect in any material respect the
interests of the holders of any class of certificates in a manner other than as
described in (i), without the consent of the holders of all certificates of
such class or (iii) modify the provisions of an agreement described in this
paragraph without the consent of the holders of all certificates covered by
such agreement then outstanding. However, with respect to any series of
certificates as to which a REMIC election is to be made, the trustee will not
consent to any amendment of the agreement unless it shall first have received
an opinion of counsel to the effect that such amendment will not result in the
imposition of a tax on the related trust fund or cause the related trust fund
to fail to qualify as a REMIC at any time that the certificates are
outstanding.
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THE TRUSTEE
The trustee under each agreement will be named in the related prospectus
supplement. The commercial bank, national banking association, banking
corporation or trust company serving as trustee may have a banking relationship
with the Depositor and its affiliates and with any master servicer and its
affiliates.
DUTIES OF THE TRUSTEE
The trustee will make no representations as to the validity or sufficiency
of any agreement, the certificates or any trust asset or related document and
is not accountable for the use or application by or on behalf of any servicer
of any funds paid to such servicer or its designee in respect of the
certificates or the trust assets, or deposited into or withdrawn from any
account or any other account by or on behalf of any servicer. If no event of
default has occurred and is continuing, the trustee is required to perform only
those duties specifically required under the related agreements. However, upon
receipt of the various certificates, reports or other instruments required to
be furnished to it, the trustee is required to examine such documents and to
determine whether they conform to the requirements of the agreements.
CERTAIN MATTERS REGARDING THE TRUSTEE
Unless otherwise specified in the prospectus supplement, the trustee and
any director, officer, employee or agent of the trustee shall be entitled to
indemnification out of the distribution account for any loss, liability or
expense (including costs and expenses of litigation, and of investigation,
counsel fees, damages, judgments and amounts paid in settlement) incurred in
connection with the trustee's (i) enforcing its rights and remedies and
protecting the interests, and enforcing the rights and remedies, of the
certificateholders during the continuance of an event of default, (ii)
defending or prosecuting any legal action in respect of the related agreement
or series of certificates, (iii) being the mortgagee of record with respect to
the mortgage loans in a trust fund and the owner of record with respect to any
mortgaged property acquired in respect thereof for the benefit of
certificateholders, or (iv) acting or refraining from acting in good faith at
the direction of the holders of the related series of certificates entitled to
not less than 25% (or such higher percentage as is specified in the related
agreement with respect to any particular matter) of the voting rights for such
series; provided, however, that such indemnification will not extend to any
loss, liability or expense that constitutes a specific liability of the trustee
pursuant to the related agreement, or to any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence on the part
of the trustee in the performance of its obligations and duties thereunder, or
by reason of its reckless disregard of its obligations or duties, or as may
arise from a breach of any representation, warranty or covenant of the trustee
made therein.
RESIGNATION AND REMOVAL OF THE TRUSTEE
The trustee may at any time resign from its obligations and duties under
an agreement by giving written notice thereof to the depositor, the master
servicer, if any, and all certificateholders. Upon receiving such notice of
resignation, the depositor is required promptly to appoint a successor trustee
acceptable to the master servicer, if any. If no successor trustee shall have
been so appointed and have accepted appointment within 30 days after the giving
of notice of resignation, the resigning trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
If at any time the trustee shall cease to be eligible to continue as such
under the related agreements, or if at any time the trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the trustee or of its property shall be appointed, or any public officer
shall take charge or control of the trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the depositor
may remove the trustee and appoint a successor trustee acceptable to the master
servicer, if any. Holders of the certificates of any series entitled to at
least 51% of the voting rights for the series may at any time remove the
trustee without cause and appoint a successor trustee.
Any resignation or removal of the trustee and appointment of a successor
trustee shall not become effective until acceptance of appointment by the
successor trustee.
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DESCRIPTION OF CREDIT SUPPORT
GENERAL
For any series of certificates, credit support may be provided with
respect to one or more classes thereof or the related mortgage assets. Credit
support may be in the form of the subordination of one or more classes of
certificates, letters of credit, insurance policies, guarantees, the
establishment of one or more reserve funds or another method of credit support
described in the related prospectus supplement, or any combination of the
foregoing. If so provided in the prospectus supplement, any form of credit
support may be structured so as to be drawn upon by more than one series to the
extent described therein.
Unless otherwise provided in the prospectus supplement for a series of
certificates, the credit support will not provide protection against all risks
of loss and will not guarantee repayment of the entire certificate balance of
the certificates and interest thereon. If losses or shortfalls occur that
exceed the amount covered by credit support or that are not covered by credit
support, certificateholders will bear their allocable share of deficiencies.
Moreover, if more than one trust is covered by the same credit support holders
of certificates evidencing interests in the trusts will be subject to the risk
that that credit support will be exhausted by the claims of other trusts prior
to receiving any of its intended share of coverage.
If credit support is provided with respect to one or more classes of
certificates of a series, or the related mortgage assets, the related
prospectus supplement will include a description of (a) the nature and amount
of coverage under such credit support, (b) any conditions to payment thereunder
not otherwise described herein, (c) the conditions (if any) under which the
amount of coverage under the credit support may be reduced and under which such
credit support may be terminated or replaced and (d) the material provisions
relating to such credit support. Additionally, the prospectus supplement will
set forth certain information with respect to the obligor under any instrument
of credit support, including (i) a brief description of its principal business
activities, (ii) its principal place of business, place of incorporation and
the jurisdiction under which it is chartered or licensed to do business, (iii)
if applicable, the identity of regulatory agencies that exercise primary
jurisdiction over the conduct of its business and (iv) its total assets, and
its stockholders' or policyholders' surplus, if applicable, as of the date
specified in the prospectus supplement. See "Risk Factors--Credit support may
not cover losses or risks which could adversely affect payment on your
certificates."
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 prospectus supplement, the rights of the holders of
Subordinate Certificates to receive distributions of principal and interest
from the Distribution account on any distribution date will be subordinated to
such 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 (or may be limited to) certain types of losses or shortfalls. The
related prospectus supplement will set forth information concerning the amount
of subordination of a class or classes of Subordinate Certificates in a series,
the circumstances in which such subordination will be applicable and the
manner, if any, in which the amount of subordination will be effected.
CROSS-SUPPORT PROVISIONS
If the mortgage assets for a series are divided into separate groups, each
supporting a separate class or classes of certificates of a 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 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 WITH RESPECT TO THE MORTGAGE LOANS
If so provided in the prospectus supplement for a series of certificates,
the mortgage loans in the related trust fund will be covered for various
default risks by insurance policies or guarantees.
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LETTER OF CREDIT
If so provided in the prospectus supplement for a series of certificates,
deficiencies in amounts otherwise payable on the certificates or certain
classes thereof will be covered by one or more letters of credit, issued by a
bank or financial institution specified in the prospectus supplement. Under a
letter of credit, the letter of credit issuer 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 the 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 in the event of only 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 prospectus
supplement. The obligations of the letter of credit issuer under the letter of
credit for each series of certificates will expire at the earlier of the date
specified in the prospectus supplement or the termination of the trust fund. A
copy of any such letter of credit for a series will be filed with the
Commission as an exhibit to a Current Report on Form 8-K to be filed within 15
days of issuance of the certificates of the related series.
INSURANCE POLICIES AND SURETY BONDS
If so provided in the prospectus supplement for a series of certificates,
deficiencies in amounts otherwise payable on the certificates or certain
classes thereof will be covered by insurance policies and/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 and/or full 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. A copy
of any such instrument for a series will be filed with the Commission as an
exhibit to a Current Report on Form 8-K to be filed with the Commission within
15 days of issuance of the certificates of the related series.
RESERVE FUNDS
If so provided in the prospectus supplement for a series of certificates,
deficiencies in amounts otherwise payable on the certificates or certain
classes thereof will be covered 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 so specified in the prospectus supplement.
The reserve funds for a series may also be funded over time by depositing
therein a specified amount of the distributions received on the related trust
assets as specified in the prospectus supplement.
Amounts on deposit in any reserve fund for a series, together with the
reinvestment income thereon, if any, will be applied for the purposes, in the
manner, and to the extent specified in the related prospectus supplement. A
reserve fund may be provided to increase the likelihood of timely distributions
of principal of and interest on the certificates. If so specified in the
prospectus supplement, reserve funds may be established to provide limited
protection against only 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 and
will not be available for further application to the certificates.
Moneys deposited in any reserve funds will be invested in permitted
investments, except as otherwise specified in the related prospectus
supplement. Unless otherwise specified in the prospectus supplement, any
reinvestment income or other gain from such investments will be credited to the
reserve fund for the series, and any loss resulting from such investments will
be charged to the reserve fund. However, such income may be payable to any
master servicer or another service provider as additional compensation. The
reserve fund, if any, for a series will not be a part of the trust fund unless
otherwise specified in the prospectus supplement.
Additional information concerning any reserve fund will be set forth in
the related prospectus supplement, including the initial balance of such
reserve fund, the balance required to be maintained in
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the reserve fund, the manner in which such required balance will decrease over
time, the manner of funding the reserve fund, the purposes for which funds in
the reserve fund may be applied to make distributions to certificateholders and
use of investment earnings from the reserve fund, if any.
CREDIT SUPPORT WITH RESPECT TO CMBS
If so provided in the prospectus supplement for a series of certificates,
the CMBS in the related trust fund and/or the mortgage loans underlying such
CMBS 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, to the extent such information
is material and available.
CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS AND THE LEASES
The following discussion contains general summaries of certain legal
aspects of loans secured by commercial and multifamily residential properties
that are general in nature. Because such legal aspects are governed by
applicable state law (which laws may differ substantially), the summaries do
not purport to be complete nor to reflect the laws of any particular state, nor
to encompass the laws of all states in which the security for the mortgage
loans is situated. The summaries are qualified in their entirety by reference
to the applicable federal and state laws governing the mortgage loans. See
"Description of the Trust Funds--Assets."
GENERAL
All of the mortgage loans are loans evidenced by a note or bond and
secured by instruments granting a security interest in real property which may
be mortgages, deeds of trust, security deeds or deeds to secure debt, depending
upon the prevailing practice and law in the state in which the mortgaged
property is located. Mortgages, deeds of trust and deeds to secure debt are
herein collectively referred to as "mortgages." Any of the foregoing types of
mortgages will create a lien upon, or grant a title interest in, the subject
property, the priority of which will depend on the terms of the particular
security instrument, as well as separate, recorded, contractual arrangements
with others holding interests in the mortgaged property, the knowledge of the
parties to such instrument as well as the order of recordation of the
instrument in the appropriate public recording office. However, recording does
not generally establish priority over governmental claims for real estate taxes
and assessments and other charges imposed under governmental police powers.
TYPES OF MORTGAGE INSTRUMENTS
A mortgage either creates a lien against or constitutes a conveyance of
real property between two parties--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 trustor (the equivalent of a
mortgagor), a trustee to whom the mortgaged property is conveyed, and a
beneficiary (the lender) for whose benefit the conveyance is made. As used in
this Prospectus, unless the context otherwise requires, "mortgagor" includes
the trustor under a deed of trust and a grantor under a security deed or a deed
to secure debt. Under a deed of trust, the mortgagor grants the property,
irrevocably until the debt is paid, in trust, generally with a power of sale as
security for the indebtedness evidenced by the related note. A deed to secure
debt typically has two parties. By executing a deed to secure debt, the grantor
conveys title to, as opposed to merely creating a lien upon, the subject
property to the grantee until such time as the underlying debt is repaid,
generally with a power of sale as security for the indebtedness evidenced by
the related mortgage note. In case the mortgagor under a mortgage 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
mortgagor. At origination of a mortgage loan involving a land trust, the
mortgagor executes a separate undertaking to make payments on the mortgage
note. 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 mortgage, the law of the state in
which the real property is located, certain federal laws (including, without
limitation, the Soldiers' and Sailors' Civil Relief Act of 1940) and, in some
cases, in deed of trust transactions, the directions of the beneficiary.
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INTEREST IN REAL PROPERTY
The real property covered by a mortgage, deed of trust, security deed or
deed to secure debt is most often the fee estate in land and improvements.
However, such an instrument may encumber other interests in real property such
as a tenant's interest in a lease of land or improvements, or both, and the
leasehold estate created by such lease. An instrument covering an interest in
real property other than the fee estate requires special provisions in the
instrument creating such interest or in the mortgage, deed of trust, security
deed or deed to secure debt, to protect the mortgagee against termination of
such interest before the mortgage, deed of trust, security deed or deed to
secure debt is paid. The asset sellers will make certain representations and
warranties in the Agreement with respect to the mortgage loans which are
secured by an interest in a leasehold estate. Such representation and
warranties will be set forth in the prospectus supplement if applicable.
LEASES AND RENTS
Mortgages that encumber income-producing property often contain an
assignment of rents and leases, pursuant to which the mortgagor assigns its
right, title and interest as landlord under each lease and the income derived
therefrom to the lender, while the mortgagor retains a revocable license to
collect the rents for so long as there is no default. Under such assignments,
the mortgagor typically assigns its right, title and interest as lessor under
each lease and the income derived therefrom to the mortgagee, while retaining a
license to collect the rents for so long as there is no default under the
mortgage loan documentation. The manner of perfecting the mortgagee's interest
in rents may depend on whether the mortgagor's assignment was absolute or one
granted as security for the loan. Failure to properly perfect the mortgagee's
interest in rents may result in the loss of substantial pool of funds, which
could otherwise serve as a source of repayment for such loan. If the mortgagor
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; generally these rates are either
assigned by the mortgagor, which remains entitled to collect such rates absent
a default, or pledged by the mortgagor, as security for the loan. In general,
the lender must file financing statements in order to perfect its security
interest in the rates and must file continuation statements, generally every
five years, to maintain perfection of such security interest. Even if the
lender's security interest in room rates is perfected under the Uniform
Commercial Code, the lender will generally be required to commence a
foreclosure or otherwise take possession of the property in order to collect
the room rates after a default.
Even after a foreclosure, the potential rent payments from the property
may be less than the periodic payments that had been due under the mortgage.
For instance, the net income that would otherwise be generated from the
property may be less than the amount that would have been needed to service the
mortgage debt if the leases on the property are at below-market rents, or as
the result of excessive maintenance, repair or other obligations which a lender
succeeds to as landlord.
Lenders that actually take possession of the property, however, may incur
potentially substantial risks attendant to being a mortgagee in possession.
Such risks include liability for environmental clean-up costs and other risks
inherent in property ownership. See "Environmental Legislation" below.
PERSONALTY
Certain types of mortgaged properties, such as hotels, motels and
industrial plants, are likely to derive a significant part of their value from
personal property which does not constitute fixtures under applicable state
real property law and, hence, would not be subject to the lien of a mortgage.
Such property is generally pledged or assigned as security to the lender under
the Uniform Commercial Code. In order to perfect its security interest therein,
the lender generally must file Uniform Commercial Code financing statements
and, to maintain perfection of such security interest, file continuation
statements generally every five years.
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COOPERATIVE LOANS
If specified in the prospectus supplement relating to a series of offered
certificates, the mortgage loans may also consist of cooperative apartment
loans secured by security interests in shares issued by a Cooperative and in
the related proprietary leases or occupancy agreements granting exclusive
rights to occupy specific dwelling units in the cooperatives' buildings. The
security agreement will create a lien upon, or grant a title interest in, the
property which it covers, the priority of which will depend on the terms of the
particular security agreement as well as the order of recordation of the
agreement in the appropriate recording office. Such a lien or title interest is
not prior to the lien for real estate taxes and assessments and other charges
imposed under governmental police powers.
Each Cooperative owns in fee or has a leasehold interest in all the real
property and owns in fee or leases the building and all separate dwelling units
therein. The Cooperative is directly responsible for property management and,
in most cases, payment of real estate taxes, other governmental impositions and
hazard and liability insurance. If there is a blanket mortgage or mortgages on
the cooperative apartment building or underlying land, as is generally the
case, or an underlying lease of the land, as is the case in some instances, the
Cooperative, as property mortgagor, or lessee, as the case may be, is also
responsible for meeting these mortgage or rental obligations. A blanket
mortgage is ordinarily incurred by the cooperative in connection with either
the construction or purchase of the cooperative's apartment building or
obtaining of capital by the cooperative. The interest of the occupant under
proprietary leases or occupancy agreements as to which that Cooperative is the
landlord are generally subordinate to the interest of the holder of a blanket
mortgage and to the interest of the holder of a land lease. If the Cooperative
is unable to meet the payment obligations (i) arising under a blanket mortgage,
the mortgagee holding a blanket mortgage could foreclose on that mortgage and
terminate all subordinate proprietary leases and occupancy agreements or (ii)
arising under its land lease, the holder of the landlord's interest under the
land lease could terminate it and all subordinate proprietary leases and
occupancy agreements. Also, a blanket mortgage on a Cooperative may provide
financing in the form of a mortgage that does not fully amortize, with a
significant portion of principal being due in one final payment at maturity.
The inability of the Cooperative to refinance a mortgage and its consequent
inability to make such final payment could lead to foreclosure by the
mortgagee. Similarly, a land lease has an expiration date and the inability of
the Cooperative to extend its term or, in the alternative, to purchase the land
could lead to termination of the Cooperative's interest in the property and
termination of all proprietary leases and occupancy agreements. In either
event, a foreclosure by the holder of a blanket mortgage or the termination of
the underlying lease could eliminate or significantly diminish the value of any
collateral held by whomever financed the purchase by an individual tenant
stockholder of cooperative shares or, in the case of the mortgage loans, the
collateral securing the cooperative loans.
The Cooperative is owned by tenant-stockholders who, through ownership of
stock or shares in the corporation, receive proprietary lease or occupancy
agreements which confer exclusive rights to occupy specific units. Generally, a
tenant-stockholder of a Cooperative must make a monthly payment to the
Cooperative representing such tenant-stockholder's pro rata share of the
Cooperative's payments for its blanket mortgage, real property taxes,
maintenance expenses and other capital or ordinary expenses. An ownership
interest in a Cooperative and accompanying occupancy rights are financed
through a cooperative share loan evidenced by a promissory note and secured by
an assignment of and a security interest in the occupancy agreement or
proprietary lease and a security interest in the related Cooperative shares.
The lender generally takes possession of the share certificate and a
counterpart of the proprietary lease or occupancy agreement and a financing
statement covering the proprietary lease or occupancy agreement and the
cooperative shares is filed in the appropriate state and local offices to
perfect the lender's interest in its collateral. Subject to the limitations
discussed below, upon default of the tenant-stockholder, the lender may sue for
judgment on the promissory note, dispose of the collateral at a public or
private sale or otherwise proceed against the collateral or tenant-stockholder
as an individual as provided in the security agreement covering the assignment
of the proprietary lease or occupancy agreement and the pledge of cooperative
shares. See "Foreclosure--Cooperative Loans" below.
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FORECLOSURE
General
Foreclosure is a legal procedure that allows the mortgagee to recover its
mortgage debt by enforcing its rights and available legal remedies under the
mortgage. If the mortgagor defaults in payment or performance of its
obligations under the note or mortgage, the mortgagee has the right to
institute foreclosure proceedings to sell the mortgaged property at public
auction to satisfy the indebtedness.
Foreclosure procedures with respect to the enforcement of a mortgage vary
from state to state. Two primary methods of foreclosing a mortgage are judicial
foreclosure and non-judicial foreclosure pursuant to a power of sale granted in
the mortgage instrument. There are several other foreclosure procedures
available in some states that are either infrequently used or available only in
certain limited circumstances, such as strict foreclosure.
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 Limitations on Enforceability of Certain Provisions
United States courts have traditionally imposed general equitable
principles to limit the remedies available to a mortgagee in connection with
foreclosure. These equitable principles are generally designed to relieve the
mortgagor from the legal effect of mortgage defaults, to the extent that such
effect is 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 and expensive actions to determine
the cause of the mortgagor's default and the likelihood that the mortgagor 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 mortgagors who are suffering
from a temporary financial disability. In other cases, courts have limited the
right of the lender to foreclose if the default under the mortgage is not
monetary, e.g., the mortgagor failed to maintain the mortgaged property
adequately or the mortgagor executed a junior mortgage on the mortgaged
property. The exercise by the court of its equity powers will depend on the
individual circumstances of each case presented to it. Finally, some courts
have been faced with the issue of whether federal or state constitutional
provisions reflecting due process concerns for adequate notice require that a
mortgagor 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 afford constitutional
protections to the mortgagor.
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 require several years to complete. Moreover, as discussed below, a
non-collusive, regularly conducted foreclosure sale may be challenged as a
fraudulent conveyance, regardless of the parties' intent, if a court determines
that the sale was for less than fair consideration and such sale occurred while
the Mortgagor was insolvent (or the Mortgagor was rendered insolvent as a
result of such sale) and within one year (or within the state statute of
limitations if the trustee in bankruptcy elects to proceed under state
fraudulent conveyance law) of the filing of bankruptcy.
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Non-Judicial Foreclosure/Power of Sale
Foreclosure of a deed of trust is generally accomplished by a non-judicial
trustee's sale pursuant to the power of sale granted in the deed of trust. A
power of sale is typically granted in a deed of trust. It may also be contained
in any other type of mortgage instrument. A power of sale allows a non-judicial
public sale to be conducted generally following a request from the
beneficiary/lender to the trustee to sell the property upon any default by the
mortgagor under the terms of the mortgage note or the mortgage instrument and
after notice of sale is given in accordance with the terms of the mortgage
instrument, as well as applicable state law. In some states, prior to such
sale, the trustee under a deed of trust must record a notice of default and
notice of sale and send a copy to the mortgagor 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
mortgagor 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 acceleration) plus the expenses incurred in
enforcing the obligation. In other states, the mortgagor 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,
the procedure for public sale, the parties entitled to notice, the method of
giving notice and the applicable time periods are governed by state law and
vary among the states. Foreclosure of a deed to secure debt is also generally
accomplished by a non-judicial sale similar to that required by a deed of
trust, except that the lender or its agent, rather than a trustee, is typically
empowered to perform the sale in accordance with the terms of the deed to
secure debt and applicable law.
Public Sale
A third party may be unwilling to purchase a mortgaged property at a
public sale because of the difficulty in determining the value of such property
at the time of sale, due to, among other things, redemption rights which may
exist and the possibility of physical deterioration of the property during the
foreclosure proceedings. For these reasons, it is common for the lender to
purchase the mortgaged property for an amount equal to or less than the
underlying debt and accrued and unpaid interest plus the expenses of
foreclosure. Generally, state law controls the amount of foreclosure costs and
expenses which may be recovered by a lender. Thereafter, subject to the
mortgagor's right in some states to remain in possession during a redemption
period, if applicable, the lender will become the owner of the property and
have both the benefits and burdens of ownership of the mortgaged property. For
example, the lender will have the obligation to pay debt service on any senior
mortgages, to pay taxes, obtain casualty insurance and to make such repairs at
its own expense as are necessary to render the property suitable for sale.
Frequently, the lender employs a third party management company to manage and
operate the property. 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 costs of management and operation of
those mortgaged properties which are hotels, motels, restaurants, nursing or
convalescent homes or hospitals may be particularly significant because of the
expertise, knowledge and, with respect to nursing or convalescent homes or
hospitals, regulatory compliance, required to run such operations and the
effect which foreclosure and a change in ownership may have on the public's and
the industry's (including franchisors') perception of the quality of such
operations. The lender will commonly obtain the services of a real estate
broker and pay the broker's commission in connection with the sale of the
property. Depending upon market conditions, the ultimate proceeds of the sale
of the property may not equal the lender's investment in the property.
Moreover, a lender commonly incurs substantial legal fees and court costs in
acquiring a mortgaged property through contested foreclosure and/or bankruptcy
proceedings. Furthermore, a few states require that any environmental
contamination at certain types of properties be cleaned up before a property
may be resold. In addition, a lender may be responsible under federal or state
law for the cost of cleaning up a mortgaged property that is environmentally
contaminated. See "Environmental Legislation." Generally state law controls the
amount of foreclosure expenses and costs, including attorneys' fees, that may
be recovered by a lender.
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A junior mortgagee may not foreclose on the property securing the junior
mortgage unless it forecloses subject to senior mortgages and any other prior
liens, in which case it may be obliged to make payments on the senior mortgages
to avoid their foreclosure. In addition, in the event that the foreclosure of a
junior mortgage triggers the enforcement of a "due-on-sale" clause contained in
a senior mortgage, the junior mortgagee may be required to pay the full amount
of the senior mortgage to avoid its foreclosure. Accordingly, with respect to
those mortgage loans which are junior mortgage loans, if the lender purchases
the property the lender's title will be subject to all senior mortgages, prior
liens and certain governmental liens.
The proceeds received by the referee or trustee from the sale are applied
first to the costs, fees and expenses of sale and then in satisfaction of the
indebtedness secured by the mortgage under which the sale was conducted. Any
proceeds remaining after satisfaction of senior mortgage debt are generally
payable to the holders of junior mortgages and other liens and claims in order
of their priority, whether or not the mortgagor is in default. Any additional
proceeds are generally payable to the mortgagor. The payment of the proceeds to
the holders of junior mortgages may occur in the foreclosure action of the
senior mortgage or a subsequent ancillary proceeding. In some cases payment to
the holders of junior mortgages may require the institution of separate legal
proceedings by such holders.
In connection with a series of certificates for which an election is made
to qualify the trust fund, or a portion thereof, as a REMIC, the REMIC
Provisions and the Agreement may require the master servicer to hire an
independent contractor to operate any foreclosed property.
Rights of Redemption
The purposes of a foreclosure action are to enable the mortgagee to
realize upon its security and to bar the mortgagor, and all persons who have an
interest in the property which is subordinate to the mortgage being foreclosed,
from exercising their "equity of redemption." The doctrine of equity of
redemption provides that, until the property covered by a mortgage has been
sold in accordance with a properly conducted foreclosure and foreclosure sale,
those having an interest which is subordinate to that of the foreclosing
mortgagee may redeem the property by paying the entire debt with interest. In
addition, in some states, when a foreclosure action has been commenced, the
redeeming party must pay certain costs of such action. 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.
The equity of redemption is a common-law (non-statutory) right which
exists prior to completion of the foreclosure, is not waivable by the mortgagor
and must be exercised prior to foreclosure sale. Equity of redemption is
different from the post-sale statutory rights of redemption. In some states,
after sale pursuant to a deed of trust or foreclosure of a mortgage, the
mortgagor and foreclosed junior lienors are given a statutory period in which
to redeem the property from the foreclosure sale. In some states, statutory
redemption may occur only upon payment of the foreclosure sale price. In other
states, redemption may be authorized if the former mortgagor 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. The
exercise of a right of redemption would defeat the title of any purchaser from
a foreclosure sale or sale under a deed of trust. As a result, the lender is
forced 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.
Under the REMIC provisions currently in effect, property acquired by
foreclosure generally must not be held for more than three calendar years
following the year of acquisition. Unless otherwise provided in the related
prospectus supplement, with respect to a series of certificates for which an
election is made to qualify the trust fund or a part thereof as a REMIC, the
pooling and servicing agreement will permit foreclosed property to be held for
more than two years if the Internal Revenue Service grants an extension of time
within which to sell such property or independent counsel renders an opinion to
the effect that holding such property for such additional period is permissible
under the REMIC provisions.
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Anti-Deficiency Legislation
Some or all of the mortgage loans may be nonrecourse loans, as to which
recourse may be had only against the specific property securing the related
mortgage loan. A personal money judgment may not be obtained against the
mortgagor. Even if a mortgage loan by its terms provides for recourse to the
mortgagor, some states impose prohibitions or limitations on such recourse. For
example, statutes in some states limit the right of the lender to obtain a
deficiency judgment against the mortgagor following foreclosure or sale under a
deed of trust. A deficiency judgment would be a personal judgment against the
former mortgagor equal to the difference between the net amount realized upon
the public sale of the real property and the amount due to the lender.
Some states require the lender to exhaust the security afforded under a
mortgage by foreclosure in an attempt to satisfy the full debt before bringing
a personal action against the mortgagor. Other states give the lender the
option of bringing a personal action against the mortgagor on the debt without
first exhausting such security; however, in some of these states, the lender,
following judgment on such personal action, may be deemed to have elected a
remedy and may be precluded from exercising remedies with respect to the
security. In some cases, a lender will be precluded from exercising any
additional rights under the note or mortgage if it has taken any prior
enforcement action. Consequently, the practical effect of the election
requirement, in those states permitting such election, is that lenders will
usually proceed against the security first rather than bringing a personal
action against the mortgagor. Finally, other statutory provisions limit any
deficiency judgment against the former mortgagor following a judicial sale to
the excess of the outstanding debt over the fair market value of the property
at the time of the public sale. The purpose of these statutes is generally to
prevent a lender from obtaining a large deficiency judgment against the former
mortgagor as a result of low or no bids at the judicial sale.
Leasehold Risks
Mortgage loans may be secured 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 creating the leasehold estate could terminate, leaving
the leasehold mortgagee without its security. 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. This risk may be minimized if the ground lease
contains certain provisions protective of the mortgagee such as:
o the right of the leasehold mortgagee to receive notices from the ground
lessor of any defaults by the mortgagor;
o the right to cure such defaults, with adequate cure periods; if a
default is not susceptible of cure by the leasehold mortgagee;
o the right to acquire the leasehold estate through foreclosure or
otherwise; the ability of the ground lease to be assigned to and by the
leasehold mortgagee or purchaser at a foreclosure sale and for the
concomitant release of the ground lessee's liabilities thereunder; and
o the right of the leasehold mortgagee to enter into a new ground lease
with the ground lessor on the same terms and conditions as the old ground
lease in the event of a termination thereof.
In addition to the foregoing protections, a leasehold mortgagee may
require that the ground lease or leasehold mortgage prohibit the ground lessee
from treating the ground lease as terminated in the event of the ground
lessor's bankruptcy and rejection of the ground lease by the trustee for the
debtor-ground lessor. As further protection, a leasehold mortgage may provide
for the assignment of the debtor-ground lessee's right to reject a lease
pursuant to Section 365 of the Bankruptcy Reform Act of 1978, as amended (Title
11 of the United States Code). The enforceability of such clause has not been
established.
Without the protections described above, a leasehold mortgagee may lose
the collateral securing its leasehold mortgage. The ground leases and the
mortgage that secures the mortgage loan may not contain some of these
provisions. In addition, terms and conditions of a leasehold mortgage are
subject to the terms and conditions of the ground lease. Although certain
rights given to a ground lessee can be limited
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by the terms of a leasehold mortgage, 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.
Cooperative Loans
The cooperative shares owned by the tenant-stockholder and pledged to the
lender are, in almost all cases, subject to restrictions on transfer as set
forth in the Cooperative's Certificate of Incorporation and By-laws, as well as
the proprietary lease or occupancy agreement, and may be cancelled by the
cooperative for failure by the tenant-stockholder to pay rent or other
obligations or charges owed by such tenant-stockholder, including mechanics'
liens against the cooperative apartment building incurred by such
tenant-stockholder. The proprietary lease or occupancy agreement generally
permits the Cooperative to terminate such lease or agreement in the an obligor
fails to make payments or defaults in the performance of covenants required
thereunder. Typically, the lender and the Cooperative enter into a recognition
agreement which establishes the rights and obligations of both parties in the
event of a default by the tenant-stockholder under the proprietary lease or
occupancy agreement will usually constitute a default under the security
agreement between the lender and the tenant-stockholder.
The recognition agreement generally provides that, in the event that the
tenant-stockholder has defaulted under the proprietary lease or occupancy
agreement is terminated, the Cooperative will recognize the lender's lien
against proceeds from the sale of the Cooperative apartment. This is subject to
the Cooperative's right to sums due under such proprietary lease or occupancy
agreement. The total amount owed to the Cooperative by the tenant-stockholder,
which the lender generally cannot restrict and does not monitor, could reduce
the value of the collateral below the outstanding principal balance of the
cooperative loan and accrued and unpaid interest thereon.
Recognition agreements also provide that in the event of a foreclosure on
a Cooperative loan, the lender must obtain the approval or consent of the
Cooperative as required by the proprietary lease before transferring the
Cooperative shares or assigning the proprietary lease. Generally, the lender is
not limited in any rights it may have to dispossess the tenant-stockholders.
In some states, foreclosure on the Cooperative shares is accomplished by a
sale in accordance with the provisions of Article 9 of the Uniform Commercial
Code and the security agreement relating to those shares. Article 9 of the
Uniform Commercial Code requires that a sale be conducted in a "commercially
reasonable" manner. Whether a foreclosure sale has been conducted in a
"commercially reasonable" manner will depend on the facts in each case. In
determining commercial reasonableness, a court will look to the notice given
the debtor and the method, manner, time, place and terms of the foreclosure.
Generally, a sale conducted according to the usual practice of banks selling
similar collateral will be considered reasonably conducted.
Article 9 of the Uniform Commercial Code 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. The
recognition agreement, however, generally provides that the lender's right to
reimbursement is subject to the right of the Cooperatives to receive sums due
under the proprietary lease or occupancy agreement. If there are proceeds
remaining, the lender must account to the tenant-stockholder for the surplus.
Conversely, if a portion of the indebtedness remains unpaid, the tenant-
stockholder is generally responsible for the deficiency.
In the case of foreclosure on a building which was converted from a rental
building to a building owned by a Cooperative under a non-eviction plan, some
states require that a purchaser at a foreclosure sale take the property subject
to rent control and rent stabilization laws which apply to certain tenants who
elected to remain in the building was so converted.
BANKRUPTCY LAWS
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,
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virtually all actions (including foreclosure actions and deficiency judgment
proceedings) are automatically stayed upon the filing of the bankruptcy
petition, and, usually, no interest or principal payments are made during the
course of the bankruptcy case. The delay and the consequences thereof caused by
such automatic stay can be significant. Also, under the Bankruptcy Code, the
filing of a petition in bankruptcy by or on behalf of a junior lienor may stay
the senior lender from taking action to foreclose out such junior lien.
Under the Bankruptcy Code, provided certain substantive and procedural
safeguards for the lender are met, the amount and terms of a mortgage secured
by property of the debtor may be modified under certain circumstances. In many
jurisdictions, the outstanding amount of the loan secured by the real property
may be reduced to the then-current value of the property (with a corresponding
partial reduction of the amount of lender's security interest) pursuant to a
confirmed plan or lien avoidance proceeding. This leaves the lender unsecured
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 in the form of a reduction in the rate of interest and/or the
alteration of the repayment schedule (with or without affecting the unpaid
principal balance of the loan), and/or an extension (or reduction) of the final
maturity date. Some courts with federal bankruptcy jurisdiction have approved
plans, based on the particular facts of the reorganization case, that effected
the curing of a mortgage loan default by paying arrearages over a number of
years. Also, under federal bankruptcy law, a bankruptcy court may permit a
debtor through its rehabilitative plan to de-accelerate a secured loan and to
reinstate the loan even though the lender accelerated the mortgage loan and
final judgment of foreclosure had been entered in state court (provided no sale
of the property had yet occurred) prior to the filing of the debtor's petition.
This may be done even if the full amount due under the original loan is never
repaid.
Federal bankruptcy law provides generally that rights and obligation under
an unexpired lease of the debtor/lessee may not be terminated or modified at
any time after the commencement of a case under the Bankruptcy Code solely on
the basis of a provision in the lease to such effect or because of certain
other similar events. This prohibition could limit the ability of the trustee
for a series of certificates to exercise certain contractual remedies with
respect to the leases. In addition, Section 362 of the Bankruptcy Code operates
as an automatic stay of, among other things, any act to obtain possession of
property from a debtor's estate. This may delay a trustee's exercise of such
remedies for a related series of certificates in the event that a related
lessee or a related mortgagor becomes the subject of a proceeding under the
Bankruptcy Code. For example, a mortgagee would be stayed from enforcing a
lease assignment by a mortgagor related to a mortgaged property if the related
mortgagor was in a bankruptcy proceeding. The legal proceedings necessary to
resolve the issues could be time-consuming and might result in significant
delays in the receipt of the assigned rents. Similarly, the filing of a
petition in bankruptcy by or on behalf of a lessee of a mortgaged property
would result in a stay against the commencement or continuation of any state
court proceeding for past due rent, for accelerated rent, for damages or for a
summary eviction order with respect to a default under the lease that occurred
prior to the filing of the lessee's petition. Rents and other proceeds of a
mortgage loan may also escape an assignment thereof if the assignment is not
fully perfected under state law prior to commencement of the bankruptcy
proceeding. See "--Leases and Rents" above.
In addition, the Bankruptcy Code generally provides that a trustee or
debtor-in-possession may, subject to approval of the court, (a) assume the
lease and retain it or assign it to a third party or (b) reject the lease. If
the lease is assumed, the trustee in bankruptcy on behalf of the lessee, or the
lessee as debtor-in-possession, or the assignee, if applicable, must cure any
defaults under the lease, compensate the lessor for its losses and provide the
lessor with "adequate assurance" of future performance. Such remedies may be
insufficient, however, as the lessor may be forced to continue under the lease
with a lessee that is a poor credit risk or an unfamiliar tenant if the lease
was assigned, and any assurances provided to the lessor may, in fact, be
inadequate. If the lease is rejected, such rejection generally constitutes a
breach of the executory contract or unexpired lease immediately before the date
of filing the petition. As a consequence, the other party or parties to such
lease, such as the mortgagor, as lessor under a lease, would have only an
unsecured claim against the debtor for damages resulting from such breach,
which could adversely affect the security for the related mortgage loan. In
addition, pursuant to Section
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502(b)(6) of the Bankruptcy Code, a lessor's damages for lease rejection in
respect of future rent installments are limited to the rent reserved by the
lease, without acceleration, for the greater of one year or 15% of the
remaining term of the lease, but not more than three years.
If a trustee in bankruptcy on behalf of a lessor, or a lessor as
debtor-in-possession, rejects an unexpired lease of real property, the lessee
may treat such lease as terminated by such rejection or, in the alternative,
the lessee may remain in possession of the leasehold for the balance of such
term and for any renewal or extension of such term that is enforceable by the
lessee under applicable nonbankruptcy law. The Bankruptcy Code provides that if
a lessee elects to remain in possession after such a rejection of a lease, the
lessee may offset any damages occurring after such date caused by the
nonperformance of any obligation of the lessor under the lease after such date
against rents reserved under the lease. To the extent provided in the related
prospectus supplement, the lessee will agree under certain leases to pay all
amounts owing thereunder the master servicer without offset. To the extent that
such a contractual obligation remains enforceable against the lessee, the
lessee would not be able to avail itself of the rights of offset generally
afforded to lessees of real property under the Bankruptcy Code.
In a bankruptcy or similar proceeding of a mortgagor, action may be taken
seeking the recovery, as a preferential transfer or on other grounds, of any
payments made by the mortgagor, or made directly by the related lessee, under
the related mortgage loan to the trust fund. Payments on long-term debt may be
protected from recovery as preferences if they are payments in the ordinary
course of business made on debts incurred in the ordinary course of business.
Whether any particular payment would be protected depends upon the facts
specific to a particular transaction.
A trustee in bankruptcy, in some cases, may be entitled to collect its
costs and expenses in preserving or selling the mortgaged property ahead of
payment to the lender. In certain circumstances, a debtor in bankruptcy may
have the power to grant liens senior to the lien of a mortgage, and analogous
state statutes and general principles of equity may also provide a mortgagor
with means to halt a foreclosure proceeding or sale and to force a
restructuring of a mortgage loan on terms a lender would not otherwise accept.
Moreover, the laws of certain states also give priority to certain tax liens
over the lien of a mortgage or deed of trust. Under the Bankruptcy Code, if the
court finds that actions of the mortgagee have been unreasonable, the lien of
the related mortgage may be subordinated to the claims of unsecured creditors.
To the extent described in the related prospectus supplement, certain of
the mortgagors may be partnerships. The laws governing limited partnerships in
certain states provide that the commencement of a case under the Bankruptcy
Code with respect to a general partner will cause a person to cease to be a
general partner of the limited partnership, unless otherwise provided in
writing in the limited partnership agreement. This provision may be construed
as an "ipso facto" clause and, in the event of the general partner's
bankruptcy, may not be enforceable. To the extent described in the related
prospectus supplement, certain limited partnership agreements of the mortgagors
may provide that the commencement of a case under the Bankruptcy Code with
respect to the related general partner constitutes an event of withdrawal
(assuming the enforceability of the clause is not challenged in bankruptcy
proceedings or, if challenged, is upheld) that might trigger the dissolution of
the limited partnership, the winding up of its affairs and the distribution of
its assets, unless (i) at the time there was at least one other general partner
and the written provisions of the limited partnership permit the business of
the limited partnership to be carried on by the remaining general partner and
that general partner does so or (ii) the written provisions of the limited
partnership agreement permit the limited partner to agree within a specified
time frame (often 60 days) after such withdrawal to continue the business of
the limited partnership and to the appointment of one or more general partners
and the limited partners do so. In addition, the laws governing general
partnerships in certain states provide that the commencement of a case under
the Bankruptcy Code or state bankruptcy laws with respect to a general partner
of such partnerships triggers the dissolution of such partnership, the winding
up of its affairs and the distribution of its assets. Such state laws, however,
may not be enforceable or effective in a bankruptcy case. The dissolution of a
mortgagor, the winding up of its affairs and the distribution of its assets
could result in an acceleration of its payment obligation under a related
mortgage loan, which may reduce the yield on the related series of certificates
in the same manner as a principal prepayment.
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In addition, the bankruptcy of the general partner of a mortgagor that is
a partnership may provide the opportunity for a trustee in bankruptcy for such
general partner, such general partner as a debtor-in-possession, or a creditor
of such general partner to obtain an order from a court consolidating the
assets and liabilities of the general partner with those of the mortgagor
pursuant to the doctrines of substantive consolidation or piercing the
corporate veil. In such a case, the mortgaged property could become property of
the estate of such bankrupt general partner. Not only would the mortgaged
property be available to satisfy the claims of creditors of such general
partner, but an automatic stay would apply to any attempt by the trustee to
exercise remedies with respect to such mortgaged property. However, such an
occurrence should not affect the trustee's status as a secured creditor with
respect to the mortgagor or its security interest in the mortgaged property.
ENVIRONMENTAL LEGISLATION
Real property pledged as security to a lender may be subject to unforeseen
environmental liabilities. Of particular concern may be those mortgaged
properties which are, or have been, the site of manufacturing, industrial or
disposal activity. Such environmental liabilities may give rise to (i) a
diminution in value of property securing any mortgage loan, (ii) limitation on
the ability to foreclose against such property or (iii) in certain
circumstances as more fully described below, liability for clean up costs or
other remedial actions, which liability could exceed the value of the principal
balance of the related mortgage loan or of such mortgaged property.
Under the laws of many states, contamination on a property may give rise
to a lien on the property for cleanup costs. In several states, such a lien has
priority over all existing liens (a "superlien") including those of existing
mortgages; in these states, the lien of a mortgage contemplated by this
transaction may lose its priority to such a superlien.
Under the federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), a lender may be liable either to
the government or to private parties for cleanup costs on a property securing a
loan, even if the lender does not cause or contribute to the contamination.
CERCLA imposes strict, as well as joint and several, liability on several
classes of potentially responsible parties, including current owners and
operators of the property, regardless of whether they caused or contributed to
the contamination. Many states have laws similar to CERCLA.
Lenders may be held liable under CERCLA as owners or operators. 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 exemption for
holders of a security interest such as a secured lender applies only in
circumstances where the lender acts to protect its security interest in the
contaminated facility or property. Thus, if a lender's activities encroach on
the actual management of such facility or property, the lender faces potential
liability as an "owner or operator" under CERCLA. Similarly, when a lender
forecloses and takes title to a contaminated facility or property (whether it
holds the facility or property as an investment or leases it to a third party),
the lender may incur potential CERCLA liability.
Whether actions taken by a lender would constitute such participation in
the management of a facility or property, so that the lender loses the
protection of this "second creditor exclusion," has been a matter of judicial
interpretation of the statutory language, and court decisions have historically
been inconsistent. In 1990, the United States Court of Appeals for the Eleventh
Circuit suggested, in United States v. Fleet Factors Corp., that the mere
capacity of the lender to influence a borrower's decisions regarding disposal
of hazardous substances was sufficient participation in the management of the
borrower's business to deny the protection of the secured creditor exclusion to
the lender, regardless of whether the lender actually exercised such influence.
Other judicial decisions did not interpret the secured creditor exclusion as
narrowly as did the Eleventh Circuit.
This ambiguity appears to have been resolved by the enactment of the Asset
Conservation, Lender Liability and Deposit Insurance Protection Act of 1996
(the "Asset Conservation Act"), which took effect on September 30, 1996. The
Asset Conservation Act provides that in order to be deemed to have participated
in the management of a secured property, a lender must actually participate in
the
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operational affairs of the property or of the borrower. The Asset Conservation
Act also provides that participation in the management of the property does not
include "merely having the capacity to influence, or unexercised right to
control" operations. Rather, a lender will lose the protection of the secured
creditor exclusion 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 all operational
functions of the secured property.
The secured-creditor exemption does not protect a lender from liability
under CERCLA in cases where the lender arranges for disposal of hazardous
substances or for transportation of hazardous substances. The definition of
"hazardous substances" under CERCLA specifically excludes petroleum products,
and the secured-creditor exemption does not govern liability for cleanup costs
under federal laws other than CERCLA, in particular Subtitle I of the federal
Resource Conservation and Recovery Act ("RCRA"), which regulates underground
petroleum (other than heating oil) storage tanks. However, the EPA has adopted
a lender liability rule for underground storage tanks under Subtitle I of RCRA.
Under such rule, a holder of a security interest in an underground storage tank
or real property containing an underground storage tank is not considered an
operator of the underground storage tank as long as petroleum is not added to,
stored in or dispensed from the tank. 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 protections for secured creditors.
If a lender is or becomes liable, it may bring an action for contribution
against the owner or operator who created the environmental hazard, but that
person or entity may be bankrupt or otherwise judgment proof. It is possible
that cleanup costs could become a liability of the trust fund and occasion a
loss to certificateholders in certain circumstances described above if such
remedial costs were incurred.
The related pooling and servicing agreement will provide that the special
servicer, acting on behalf of the trustee, may not acquire title to a mortgaged
property or take over its operation unless the special servicer has previously
determined, based on a report prepared by a person who regularly conducts
environmental assessments, that: (i) such mortgaged property is in compliance
with applicable environmental laws, or, if not, that taking such actions as are
necessary to bring the mortgaged property in compliance therewith is likely to
produce a greater recovery on a present value basis, after taking into account
any risks associated therewith, than not taking such actions and (ii) there are
no circumstances present at the mortgaged property relating to the use,
management or disposal of any hazardous materials for which investigation,
testing, monitoring, containment, clean-up or remediation could be required
under any federal, state or local law or regulation. This requirement
effectively precludes enforcement of the security for the related mortgage note
until a satisfactory environmental inquiry is undertaken, or that, if any
hazardous materials are present for which such action could be required, taking
such actions with respect to the affected mortgaged property is reasonably
likely to produce a greater recovery on a present value basis, after taking
into account any risks associated therewith, than not taking such actions,
reducing the likelihood that a given trust fund will become liable for any
condition or circumstance that may give rise to any environmental claim
affecting a mortgaged property, but making it more difficult to realize on the
security for the mortgage loan. However, there can be no assurance that any
environmental assessment obtained by the special servicer will detect all
possible environmental hazard conditions, that any estimate of the costs of
effecting compliance at any mortgaged property and the recovery thereon will be
correct, or that the other requirements of the pooling and servicing agreement,
even if fully observed by the master servicer or special servicer, as the case
may be, will in fact insulate a given trust fund from liability for
environmental hazard conditions. Any additional restrictions on acquiring
titles to a mortgaged property may be set forth in the related prospectus
supplement.
Unless otherwise specified in the related prospectus supplement, the
depositor generally will not have determined whether environmental assessments
have been conducted with respect to the mortgaged properties. In any event, it
is likely that if any environmental assessments was conducted, with respect to
any of the mortgaged properties, it would have been conducted at the time of
the origination of the related mortgage loans and not thereafter. If specified
in the related prospectus supplement, the seller of the mortgage loan or
another person identified therein will represent and warrant that based on an
environmental audit, as of the date of the origination of a mortgage loan, the
related mortgaged property
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is not affected by a condition which would reasonably be expected to (1)
constitute or result in a violation of applicable environmental laws, (2)
require any expenditure material in relation to the principal balance of the
related mortgage loan to achieve or maintain compliance in all material
respects with any applicable environmental laws, or (3) require substantial
cleanup, remedial action or other extraordinary response under any applicable
environmental laws in excess of a specified escrowed amount.
No such person will however, be responsible for any such condition which
may arise on a mortgaged property after the date of origination of the related
mortgage loan, whether due to actions of the mortgagor, a servicer, or any
other person. It may not always be possible to determine whether such a
condition arose prior or subsequent to the date of the origination of the
related mortgage loan.
"Hazardous materials" are generally defined under several federal and
state statutes, and include dangerous toxic or hazardous pollutants, chemicals,
wastes or substances, including, without limitation, those so identified
pursuant to CERCLA, and specifically including, asbestos and asbestos
containing materials, polychlorinated biphenyls, radon gas, petroleum and
petroleum products and urea formaldehyde.
DUE-ON-SALE AND DUE-ON-ENCUMBRANCE
Certain of the mortgage loans may contain due-on-sale and
due-on-encumbrance clauses. These clauses generally provide that the lender may
accelerate the maturity of the loan if the mortgagor sells or otherwise
transfers or encumbers the mortgaged property. Certain of these clauses may
provide that, upon an attempted breach thereof by the mortgagor of an otherwise
non-recourse loan, the mortgagor becomes personally liable for the mortgage
debt. The enforceability of due-on-sale clauses has been the subject of
legislation or litigation in many states and, in some cases, the enforceability
of these clauses was limited or denied. However, with respect to certain loans
the Garn-St Germain Depository Institutions Act of 1982 preempts state
constitutional, statutory and case law that prohibits the enforcement of
due-on-sale clauses and permits lenders to enforce these clauses in accordance
with their terms subject to certain limited exceptions. Unless otherwise
provided in the related prospectus supplement, a master servicer, on behalf of
the trust fund, will determine whether to exercise any right the trustee may
have as mortgagee to accelerate payment of any such mortgage loan or to
withhold its consent to any transfer or further encumbrance in a manner
consistent with the servicing standard.
In addition, under federal bankruptcy laws, due-on-sale clauses may not be
enforceable in bankruptcy proceedings and may, under certain circumstances, be
eliminated in any modified mortgage resulting from such bankruptcy proceeding.
SUBORDINATE FINANCING
Where the mortgagor encumbers mortgaged property with one or more junior
liens, the senior lender is subjected to additional risk. First, the mortgagor
may have difficulty servicing and repaying multiple loans. In addition, if the
junior loan permits recourse to the mortgagor (as junior loans often do) and
the senior loan does not, a mortgagor may be more likely to repay sums due on
the junior loan than those on the senior 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
mortgagor 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 mortgagor is
additionally burdened. Third, if the mortgagor 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, PREPAYMENT CHARGES AND 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
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provide for 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 of provisions providing for prepayment fees or 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
interest rates, may increase the likelihood of refinancing or other early
retirements of the mortgage loans.
ACCELERATION ON DEFAULT
Unless otherwise specified in the related prospectus supplement, some of
the mortgage loans included in the mortgage pool for a series will include a
"debt-acceleration" clause, which permits the lender to accelerate the full
debt upon a monetary or nonmonetary default of the mortgagor. The courts of all
states will enforce clauses providing for acceleration in the event of a
material payment default after giving effect to any appropriate notices. The
equity courts of the state, however, may refuse to foreclose a mortgage or deed
of trust when an acceleration of the indebtedness would be inequitable or
unjust or the circumstances would render the acceleration unconscionable.
Furthermore, in some states, the mortgagor may avoid foreclosure and reinstate
an accelerated loan by paying only the defaulted amounts and the costs and
attorneys' fees incurred by the lender in collecting such defaulted payments.
APPLICABILITY OF USURY LAWS
Title V of the Depository Institutions Deregulation and Monetary Control
Act of 1980, enacted in March 1980 ("Title V"), provides that state usury
limitations shall not apply to certain types of residential (including
multifamily but not other commercial) first mortgage loans originated by
certain lenders after March 31, 1980. A similar federal statute was in effect
with respect to mortgage loans made during the first three months of 1980. The
statute authorized any state to reimpose interest rate limits by adopting,
before April 1, 1983, a law or constitutional provision that expressly rejects
application of the federal law. In addition, even where Title V is not so
rejected, any state is authorized by the law to adopt a provision limiting
discount points or other charges on mortgage loans covered by Title V. Certain
states have taken action to reimpose interest rate limits and/or to limit
discount points or other charges.
The depositor has been advised by counsel that a court interpreting Title
V would hold that residential first mortgage loans that are originated on or
after January 1, 1980 are subject to federal preemption. Therefore, in a state
that has not taken the requisite action to reject application of Title V or to
adopt a provision limiting discount points or other charges prior to
origination of such mortgage loans, any such limitation under such state's
usury law would not apply to such mortgage loans.
In any state in which application of Title V has been expressly rejected
or a provision limiting discount points or other charges is adopted, no
mortgage loan originated after the date of such state action will be eligible
for inclusion in a trust fund unless (i) the mortgage loan provides for such
interest rate, discount points and charges as are permitted in such state or
(ii) the mortgage loan provides that the terms thereof shall be construed in
accordance with the laws of another state under which such interest rate,
discount points and charges would not be usurious and the mortgagor's counsel
has rendered an opinion that such choice of law provision would be given
effect.
Statutes differ in their provisions as to the consequences of a usurious
loan. One group of statutes requires the lender to forfeit the interest due
above the applicable limit or impose a specified penalty. Under this statutory
scheme, the borrower may cancel the recorded mortgage or deed of trust upon
paying its debt with lawful interest, and the lender may foreclose, but only
for the debt plus lawful interest. A second group of statutes is more severe. A
violation of this type of usury law results in the invalidation of the
transaction, thereby permitting the borrower to cancel the recorded mortgage or
deed of trust without any payment or prohibiting the lender from foreclosing.
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CERTAIN LAWS AND REGULATIONS; TYPES OF MORTGAGED PROPERTIES
The mortgaged properties will be subject to compliance with various
federal, state and local statutes and regulations. Failure to comply (together
with an inability to remedy any such failure) could result in material
diminution in the value of a mortgaged property which could, together with the
possibility of limited alternative uses for a particular mortgaged property
(e.g., a nursing or convalescent home or hospital), result in a failure to
realize the full principal amount of the related mortgage loan. Mortgages on
mortgaged properties which are owned by the mortgagor under a condominium form
of ownership are subject to the declaration, by-laws and other rules and
regulations of the condominium association. Mortgaged properties which are
hotels or motels may present additional risk in that hotels and motels are
typically operated pursuant to franchise, management and operating agreements
which may be terminable by the operator, and the transferability of the hotel's
operating, liquor and other licenses to the entity acquiring the hotel either
through purchases or foreclosure is subject to the vagaries of local law
requirements. In addition, mortgaged properties which are multifamily
residential properties may be subject to rent control laws, which could impact
the future cash flows of such properties.
AMERICANS WITH DISABILITIES ACT
Under Title III of the Americans with Disabilities Act of 1990 and rules
promulgated thereunder 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 Disabilities Act, 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 mortgagor in its capacity as owner or landlord, the
Disabilities Act may also impose such requirements on a foreclosing lender who
succeeds to the interest of the mortgagor as owner of 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 mortgagor of complying with the requirements of the
Disabilities Act may be subject to more stringent requirements than those to
which the mortgagor is subject.
SOLDIERS' AND SAILORS' CIVIL RELIEF ACT OF 1940
Under the terms of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended, a mortgagor who enters military service after the origination of such
mortgagor's mortgage loan (including a mortgagor 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 mortgagor's active duty status, unless a court orders
otherwise upon application of the lender. The Relief Act applies to mortgagors
who are members of the Army, Navy, Air Force, Marines, National Guard,
Reserves, Coast Guard and officers of the U.S. Public Health Service assigned
to duty with the military. Because the Relief Act applies to mortgagors who
enter military service (including reservists who are called to active duty)
after origination of the related mortgage loan, no information can be provided
as to the number of loans 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 any 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 servicer to foreclose on an affected mortgage loan
during the mortgagor's period of active duty status, and, under certain
circumstances, during an additional three month period thereafter. Thus, in the
event that such a mortgage loan goes into default, there may be delays and
losses occasioned thereby.
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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: (i) its mortgage was executed and recorded before commission
of the crime upon which the forfeiture is based, or (ii) 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.
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FEDERAL INCOME TAX CONSEQUENCES
The following summary of the anticipated material federal income tax
consequences of the purchase, ownership and disposition of offered certificates
is based on the advice of Brown & Wood LLP, counsel to the depositor. This
summary is based on laws, regulations, including REMIC Regulations, rulings and
decisions now in effect or with respect to regulations, proposed, all of which
are subject to change either prospectively or retroactively. This summary does
not address the federal income tax consequences of an investment in
certificates applicable to all categories of investors, some of which for
example, banks and insurance companies--may be subject to special rules.
Prospective investors should consult their tax advisors regarding the federal,
state, local and any other tax consequences to them of the purchase, ownership
and disposition of certificates.
GENERAL
The federal income tax consequences to certificateholders will vary
depending on whether an election is made to treat the trust fund relating to a
particular series of certificates as a REMIC under the Code. The prospectus
supplement for each series of certificates will specify whether a REMIC
election will be made.
GRANTOR TRUST FUNDS
If a REMIC election is not made, Brown & Wood LLP will deliver its opinion
that the trust fund will not be classified as an association taxable as a
corporation and that the trust fund will be classified as a grantor trust under
subpart E, Part I of subchapter J of Chapter 1 of Subtitle A of the Code. In
this case, owners of certificates will be treated for federal income tax
purposes as owners of a portion of the trust fund's assets as described in this
section of the prospectus.
a. SINGLE CLASS OF GRANTOR TRUST CERTIFICATES
Characterization. The trust fund may be created with one class of grantor
trust certificates. In this case, each grantor trust certificateholder will be
treated as the owner of a pro rata undivided interest in the interest and
principal portions of the trust fund represented by the grantor trust
certificates and will be considered the equitable owner of a pro rata undivided
interest in each of the mortgage loans and/or MBS in the pool. Any amounts
received by a grantor trust certificateholder in lieu of amounts due with
respect to any mortgage loan and/or MBS because of a default or delinquency in
payment will be treated for federal income tax purposes as having the same
character as the payments they replace.
Each grantor trust certificateholder will be required to report on its
federal income tax return in accordance with the grantor trust
certificateholder's method of accounting its pro rata share of the entire
income from the mortgage loans in the trust fund represented by grantor trust
certificates, including interest, OID, if any, prepayment fees, assumption
fees, any gain recognized upon an assumption and late payment charges received
by the master servicer. Under Code Sections 162 or 212 each grantor trust
certificateholder will be entitled to deduct its pro rata share of servicing
fees, prepayment fees, assumption fees, any loss recognized upon an assumption
and late payment charges retained by the master servicer, provided that the
amounts are reasonable compensation for services rendered to the trust fund.
Grantor trust certificateholders that are individuals, estates or trusts will
be entitled to deduct their share of expenses as itemized deductions only to
the extent these expenses plus all other Code Section 212 expenses exceed two
percent of its adjusted gross income. In addition, the amount of itemized
deductions otherwise allowable for the taxable year for an individual whose
adjusted gross income exceeds the applicable amount under Code Section
68(b)--which amount will be adjusted for inflation--will be reduced by the
lesser of
o 3% of the excess of adjusted gross income over the applicable amount and
o 80% of the amount of itemized deductions otherwise allowable for such
taxable year.
In general, a grantor trust certificateholder using the CASH METHOD OF
ACCOUNTING must take into account its pro rata share of income as and
deductions as and when collected by or paid to the master
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servicer or, with respect to original issue discount or certain other income
items for which the certificateholder has made an election, as the amounts are
accrued by the trust fund on a constant interest basis, and will entitled to
claim its pro rata share of deductions, subject to the foregoing limitations,
when the amounts are paid or the certificateholder would otherwise be entitled
to claim the deductions had it held the mortgage loans and/or MBS directly. A
grantor trust certificateholder using an ACCRUAL METHOD OF ACCOUNTING must take
into account its pro rata share of income as payment becomes due or is made to
the master servicer, whichever is earlier and may deduct its pro rata share of
expense items, subject to the foregoing limitations, when the amounts are paid
or the certificateholder otherwise would be entitled to claim the deductions
had it held the mortgage loans and/or MBS directly. If the servicing fees paid
to the master servicer are deemed to exceed reasonable servicing compensation,
the amount of the excess could be considered as an ownership interest retained
by the master servicer or any person to whom the master servicer assigned for
value all or a portion of the servicing fees in a portion of the interest
payments on the mortgage loans and/or MBS. The mortgage loans and/or MBS would
then be subject to the "coupon stripping" rules of the Code discussed below
under "--Stripped Bonds and Coupons."
Unless otherwise specified in the related prospectus supplement or
otherwise provided below in this section of the prospectus, as to each series
of certificates, counsel to depositor will have advised depositor that:
o a grantor trust certificate owned by a "domestic building and loan
association" within the meaning of Code Section 7701(a)(19) representing
principal and interest payments on mortgage loans and/or MBS will be
considered to represent "loans . . . secured by an interest in real
property which is . . . residential property" within the meaning of Code
Section 7701(a)(19)(C)(v), to the extent that the mortgage loans and/or
MBS represented by that grantor trust certificate are of a type described
in that Code section;
o a grantor trust certificate owned by a real estate investment trust
representing an interest in mortgage loans and/or MBS will be considered
to represent "real estate assets" within the meaning of Code Section
856(c)(4)(A), and interest income on the mortgage loan and/or MBS will be
considered "interest on obligations secured by mortgages on real
property" within the meaning of Code Section 856(c)(3)(B), to the extent
that the mortgage loans and/or MBS represented by that grantor trust
certificate are of a type described in that Code section; and
o a grantor trust certificate owned by a REMIC will represent
"obligation[s] . . . which [are] principally secured by an interest in
real property" within the meaning of Code Section 860G(a)(3).
The Small Business Job Protection Act of 1996, as part of the repeal of
the bad debt reserve method for thrift institutions, repealed the application
of Code Section 593(d) to any taxable year beginning after December 31, 1995.
Stripped Bonds and Coupons. Certain trust funds may consist of government
securities that constitute "stripped bonds" or "stripped coupons" as those
terms are defined in Section 1286 of the Code, and, as a result, these assets
would be subject to the stripped bond provisions of the Code. Under these
rules, these government securities are treated as having original issue
discount based on the purchase price and the stated redemption price at
maturity of each security. As such, grantor trust certificateholders would be
required to include in income their pro rata share of the original issue
discount on each Government Security recognized in any given year on an
economic accrual basis even if the grantor trust certificateholder is a cash
method taxpayer. Accordingly, the sum of the income includible to the grantor
trust certificateholder in any taxable year may exceed amounts actually
received during such year.
Premium. The price paid for a grantor trust certificate by a holder will
be allocated to the holder's undivided interest in each mortgage loan and/or
MBS based on each asset's relative fair market value, so that the holder's
undivided interest in each asset will have its own tax basis. A grantor trust
certificateholder that acquires an interest in mortgage loans and/or MBS at a
premium may elect to amortize the premium under a constant interest method,
provided that the underlying mortgage loans with respect to the mortgage loans
and/or MBS were originated after September 27, 1985. Premium
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allocable to mortgage loans originated on or before September 27, 1985 should
be allocated among the principal payments on such mortgage loans and allowed as
an ordinary deduction as principal payments are made. Amortizable bond premium
will be treated as an offset to interest income on such grantor trust
certificate. The basis for such grantor trust certificate will be reduced to
the extent that amortizable premium is applied to offset interest payments. It
is not clear whether a reasonable prepayment assumption should be used in
computing amortization of premium allowable under Code Section 171. A
certificateholder that makes this election for a mortgage loan or MBS or any
other debt instrument that is acquired at a premium will be deemed to have made
an election to amortize bond premium with respect to all debt instruments
having amortizable bond premium that such certificateholder acquires during the
year of the election or thereafter.
If a premium is not subject to amortization using a reasonable prepayment
assumption, the holder of a grantor trust certificate representing an interest
in a mortgage loan or MBS acquired at a premium should recognize a loss if a
mortgage loan or an underlying mortgage loan with respect to an asset prepays
in full, equal to the difference between the portion of the prepaid principal
amount of such mortgage loan or underlying mortgage loan that is allocable to
the certificate and the portion of the adjusted basis of the certificate that
is allocable to such mortgage loan or underlying mortgage loan. If a reasonable
prepayment assumption is used to amortize the premium, it appears that such a
loss would be available, if at all, only if prepayments have occurred at a rate
faster than the reasonable assumed prepayment rate. It is not clear whether any
other adjustments would be required to reflect differences between an assumed
prepayment rate and the actual rate of prepayments.
The Internal Revenue Service has issued Amortizable Bond Premium
Regulations. The Amortizable Bond Premium Regulations specifically do not apply
to prepayable debt instruments or any pool of debt instruments the yield on
which may be affected by prepayments, such as the trust fund, which are subject
to Section 1272(a)(6) of the Code. Absent further guidance from the IRS and to
the extent set forth in the related prospectus supplement, the trustee will
account for amortizable bond premium in the manner described in this section.
Prospective purchasers should consult their tax advisors regarding amortizable
bond premium and the Amortizable Bond Premium Regulations.
Original Issue Discount. The IRS has stated in published rulings that, in
circumstances similar to those described in this prospectus, the OID
Regulations will be applicable to a grantor trust certificateholder's interest
in those mortgage loans and/or MBS meeting the conditions necessary for these
sections to apply. Rules regarding periodic inclusion of OID income are
applicable to mortgages of corporations originated after May 27, 1969,
mortgages of noncorporate borrowers other than individuals originated after
July 1, 1982, and mortgages of individuals originated after March 2, 1984. Such
OID could arise by the financing of points or other charges by the originator
of the mortgages in an amount greater than a statutory de minimis exception to
the extent that the points are not currently deductible under applicable Code
provisions or are not for services provided by the lender. OID generally must
be reported as ordinary gross income as it accrues under a constant interest
method. See "--Multiple Classes of Grantor Trust Certificates--Accrual of
Original Issue Discount" below.
Market Discount. A grantor trust certificateholder that acquires an
undivided interest in mortgage loans or MBS may be subject to the market
discount rules of Code Sections 1276 through 1278 to the extent an undivided
interest in the asset is considered to have been purchased at a "market
discount." Generally, the amount of market discount is equal to the excess of
the portion of the principal amount of the mortgage loan or MBS allocable to
the holder's undivided interest over the holder's tax basis in such interest.
Market discount with respect to a grantor trust certificate will be considered
to be zero if the amount allocable to the grantor trust certificate is less
than 0.25% of the grantor trust certificate's stated redemption price at
maturity multiplied by the weighted average maturity remaining after the date
of purchase. Treasury regulations implementing the market discount rules have
not yet been issued; therefore, investors should consult their own tax advisors
regarding the application of these rules and the advisability of making any of
the elections allowed under Code Sections 1276 through 1278.
The Code provides that any principal payment, whether a scheduled payment
or a prepayment, or any gain on disposition of a market discount bond acquired
by the taxpayer after October 22, 1986 shall
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be treated as ordinary income to the extent that it does not exceed the accrued
market discount at the time of such payment. The amount of accrued market
discount for purposes of determining the tax treatment of subsequent principal
payments or dispositions of the market discount bond is to be reduced by the
amount so treated as ordinary income.
The Code also grants the Treasury Department authority to issue
regulations providing for the computation of accrued market discount on debt
instruments, the principal of which is payable in more than one installment.
While the Treasury Department has not yet issued regulations, rules described
in the relevant legislative history will apply. Under those rules, the holder
of a market discount bond may elect to accrue market discount either on the
basis of a constant interest rate or according to one of the following methods.
If a grantor trust certificate is issued with OID, the amount of market
discount that accrues during any accrual period would be equal to the product
of
o the total remaining market discount and
o a fraction, the numerator of which is the OID accruing during the period
and the denominator of which is the total remaining OID at the beginning
of the accrual period.
For grantor trust certificates issued without OID, the amount of market
discount that accrues during a period is equal to the product of
o the total remaining market discount and
o a fraction, the numerator of which is the amount of stated interest paid
during the accrual period and the denominator of which is the total
amount of stated interest remaining to be paid at the beginning of the
accrual period.
For purposes of calculating market discount under any of the above methods
in the case of instruments, such as the grantor trust certificates, that
provide for payments that may be accelerated by reason of prepayments of other
obligations securing such instruments, the same prepayment assumption
applicable to calculating the accrual of OID will apply. Because the
regulations described above have not been issued, it is impossible to predict
what effect those regulations might have on the tax treatment of a grantor
trust certificate purchased at a discount or premium in the secondary market.
A holder who acquired a grantor trust certificate at a market discount
also 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 the grantor trust 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 the 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.
Election to Treat All Interest as OID. The OID Regulations permit a
certificateholder to elect to accrue all interest, discount (including de
minimis market or original issue discount) and premium in income as interest,
based on a constant yield method for certificates acquired on or after April 4,
1994. If this election were to be made with respect to a grantor trust
certificate with market discount, the certificateholder would be deemed to have
made an election to include in income currently market discount with respect to
all other debt instruments having market discount that such certificateholder
acquires during the year of the election or thereafter. Similarly, a
certificateholder that makes this election for a certificate that is acquired
at a premium will 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 "--Premium" in this prospectus. The
election to accrue interest, discount and premium on a constant yield method
with respect to a certificate is irrevocable without consent of the IRS.
Anti-Abuse Rule. The IRS can apply or depart from the rules contained in
the OID Regulations as necessary or appropriate to achieve a reasonable result
where a principal purpose in structuring a
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mortgage loan, MBS, or grantor trust certificate or applying the otherwise
applicable rules is to achieve a result that is unreasonable in light of the
purposes of the applicable statues, which generally are intended to achieve the
clear reflection of income for both issuers and holders of debt instruments.
b. MULTIPLE CLASSES OF GRANTOR TRUST CERTIFICATES
1. Stripped Bonds and Stripped Coupons
Pursuant to Code Section 1286, the separation of ownership of the right to
receive some or all of the interest payments on an obligation from ownership of
the right to receive some or all of the principal payments results in the
creation of "stripped bonds" with respect to principal payments and "stripped
coupons" with respect to interest payments. For purposes of Code Section 1271
through 1288, Code Section 1286 treats a stripped bond or a stripped coupon as
an obligation issued on the date that such stripped interest is created.
Excess Servicing will be Treated Under the Stripped Bond Rules. If the
excess servicing fee is less than 100 basis points, i.e., 1% interest on the
principal balance of the assets in the trust fund, or the certificates are
initially sold with a de minimis discount, assuming no prepayment assumption is
required, any non-de minimis discount arising from a subsequent transfer of the
certificates should be treated as market discount. The IRS appears to require
that reasonable servicing fees be calculated on an asset by asset basis, which
could result in some mortgage loans and/or MBS being treated as having more
than 100 basis points of interest stripped off. See "--Non-REMIC Certificates"
and "Multiple Classes of Grantor Trust Certificates--Stripped Bonds and
Stripped Coupons".
Although not entirely clear, a stripped bond certificate generally should
be treated as an interest in mortgage loans and/or MBS issued on the day the
certificate is purchased for purposes of calculating any OID. Generally, if the
discount on a mortgage loan or MBS is larger than a de minimis amount, as
calculated for purposes of the OID rules, a purchaser of such a certificate
will be required to accrue the discount under the OID rules of the code. See
"--Non-REMIC Certificates" and "--Single Class of Grantor Trust
Certificates--Original Issue Discount". However, a purchaser of a stripped bond
certificate will be required to account for any discount on the mortgage loans
and/or MBS as market discount rather than OID if either
o the amount of OID with respect to the mortgage loans and/or MBS is
treated as zero under the OID de minimis rule when the certificate was
stripped or
o no more than 100 basis points, including any excess servicing, is
stripped off of the trust fund's mortgage loans and/or MBS.
Pursuant to Revenue Procedure 91-49, issued on August 8, 1991, purchasers of
stripped bond certificates using an inconsistent method of accounting must
change their method of accounting and request the consent of the IRS to the
change in their accounting method on a statement attached to their first timely
tax return filed after August 8, 1991.
The precise tax treatment of stripped coupon certificates is substantially
uncertain. The Code could be read literally to require that OID computations be
made for each payment from each mortgage loan or MBS. Unless otherwise
specified in the related prospectus supplement, all payments from a mortgage
loan or MBS underlying a stripped coupon certificate will be treated as a
single installment obligation subject to the OID rules of the Code, in which
case, all payments from the mortgage loan or MBS would be included in the
stated redemption price at maturity for the mortgage loan and/or MBS for
purposes of calculating income on the certificate under the OID rules of the
Code.
It is unclear under what circumstances, if any, the prepayment of mortgage
loans and/or MBS will give rise to a loss to the holder of a stripped bond
certificate purchased at a premium or a stripped coupon certificate. If the
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 the grantor trust certificate, it appears that
no loss will be available as a result of any particular prepayment unless
prepayments occur at a rate sufficiently faster than the assumed prepayment
rate so that the certificateholder will not recover its investment. However, if
the certificate is treated as an interest in discrete
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mortgage loans or MBS, or if no prepayment assumption is used, then when a
mortgage loan or MBS is prepaid, the holder of the certificate should be able
to recognize a loss equal to the portion of the adjusted issue price of the
certificate that is allocable to the mortgage loan or MBS.
Holders of stripped bond certificates and striped coupon certificates are
urged to consult with their own tax advisors regarding the proper treatment of
these certificates for federal income tax purposes.
Treatment of Certain Owners. Several Code sections provide beneficial
treatment to certain taxpayers that invest in mortgage loans and/or MBS of the
type that make up the trust fund. With respect to these Code sections, no
specific legal authority exists regarding whether the character of the grantor
trust certificates, for federal income tax purposes, will be the same as that
of the underlying mortgage loans and/or MBS. While Code Section 1286 treats a
stripped obligation as a separate obligation for purposes of the Code
provisions addressing OID, it is not clear whether such characterization would
apply with regard to these other Code sections. Although the issue is not free
from doubt, each class of grantor trust certificates, to the extent set forth
in the related prospectus supplement, should be considered to represent "real
estate assets" within the meaning of Code Section 856(c)(4)(A) and "loans . . .
secured by, an interest in real property which is . . . residential real
property" within the meaning of Code Section 7701(a)(19)(C)(v), and interest
income attributable to grantor trust certificates should be considered to
represent "interest on obligations secured by mortgages on real property"
within the meaning of Code Section 856(c)(3)(B), provided that in each case the
underlying mortgage loans and/or MBS and interest on such mortgage loans and/or
MBS qualify for such treatment. Prospective purchasers to which such
characterization of an investment in certificates is material should consult
their own tax advisors regarding the characterization of the grantor trust
certificates and the income therefrom. Grantor trust certificates will be
"obligation(s) . . . which [are] principally secured by an interest in real
property" within the meaning of Code Section 860G(a)(3)(A) and "permitted
assets" within the meaning of Code Section 860L(c).
2. Grantor Trust Certificates Representing Interests in Loans Other Than
Adjustable Rate Loans
The original issue discount rules of Code Sections 1271 through 1275 will
be applicable to a certificateholder's interest in those mortgage loans and/or
MBS as to which the conditions for the application of those sections are met.
Rules regarding periodic inclusion of original issue discount in income are
applicable to mortgages of corporations originated after May 27, 1969,
mortgages of noncorporate borrowers--other than individuals--originated after
July 1, 1982, and mortgages of individuals originated after March 2, 1984.
Under the OID Regulations, such original issue discount could arise by the
charging of points by the originator of the mortgage in an amount greater than
the statutory de minimis exception, including a payment of points that is
currently deductible by the borrower under applicable Code provisions, or under
certain circumstances, by the presence of "teaser" rates on the mortgage loans
and/or MBS. OID on each grantor trust certificate must be included in the
owner's ordinary income for federal income tax purposes as it accrues, in
accordance with a constant interest method that takes into account the
compounding of interest, in advance of receipt of the cash attributable to such
income. The amount of OID required to be included in an owner's income in any
taxable year with respect to a grantor trust certificate representing an
interest in mortgage loans and/or MBS other than adjustable rate loans likely
will be computed as described below under "--Accrual of Original Issue
Discount" The following discussion is based in part on the OID Regulations and
in part on the provisions of the Tax Reform Act of 1986. The OID Regulations
generally are effective for debt instruments issued on or after April 4, 1994,
but may be relied upon as authority with respect to debt instruments, such as
the grantor trust certificates, issued after December 21, 1992. Alternatively,
proposed Treasury regulations issued December 21, 1992 may be treated as
authority for debt instruments issued after December 21, 1992 and prior to
April 4, 1994, and proposed Treasury regulations issued in 1986 and 1991 may be
treated as authority for instruments issued before December 21, 1992. In
applying these dates, the issue date of the mortgage loans and/or MBS should be
used, or, in the case of stripped bond certificates or stripped coupon
certificates, the date such certificates are acquired. The holder of a
certificate should be aware, however, that neither the proposed OID Regulations
nor the OID Regulations adequately address certain issued relevant to
prepayable securities.
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Under the Code, the mortgage loans and/or MBS underlying the grantor trust
certificate will be treated as having been issued on the date they were
originated with an amount of OID equal to the excess of such mortgage asset's
stated redemption price at maturity over its issue price. The issue price of a
mortgage loans and/or MBS is generally the amount lent to the lender, which may
be adjusted to take into account certain loans origination fees. The stated
redemption price at maturity of a mortgage loans and/or MBS is the sum of all
payments to be made on these assets other than payments that are treated as
qualified stated interest payments. The accrual of this OID, as described below
under "--Accrual of Original Issue Discount," will, to the extent set forth in
the related prospectus supplement, utilize the Prepayment Assumption on the
issue date of such grantor trust certificate and will take into account events
that occur during the calculation period. The Prepayment Assumption will be
determined in the manner prescribed by regulations that have not yet been
issued. In the absence of such regulations, the Prepayment Assumption used will
be the prepayment assumption that is used in determining the offering price of
such certificate. No representation is made that any certificate will prepay at
the Prepayment Assumption or at any other rate.
Accrual of Original Issue Discount. Generally, the owner of a grantor
trust certificate must include in gross income the sum of the "daily portions,"
as defined below in this section, of the OID on the grantor trust certificate
for each day on which it owns the certificate, including the date of purchase
but excluding the date of disposition. In the case of the original owner, the
daily portions of OID with respect to each component generally will be
determined as set forth under the OID Regulations. A calculation will be made
by the master servicer or other entity specified in the related prospectus
supplement of the portion of OID that accrues during each successive monthly
accrual period, or shorter period from the date of original issue, that ends on
the day in the calendar year corresponding to each of the distribution dates on
the grantor trust certificates, or the day prior to each such date. This will
be done, in the case of each full month accrual period, by
o adding (1) the present value at the end of the accrual
period--determined by using as a discount factor the original yield to
maturity of the respective component under the Prepayment Assumption--of
all remaining payments to be received under the Prepayment Assumption on
the respective component and (2) any payments included in the stated
redemption price at maturity received during such accrual period, and
o subtracting from that total the "adjusted issued price" of the
respective component at the beginning of such accrual period.
The adjusted issue price of a grantor trust certificate at the beginning of the
first accrual period is its issue price; the adjusted issue price of a grantor
trust certificate at the beginning of a subsequent accrual period is the
adjusted issue price at the beginning of the immediately preceding accrual
period plus the amount of OID allocable to that accrual period reduced by the
amount of any payment other than a payment of qualified stated interest made at
the end of or during that accrual period. The OID accruing during such accrual
period will then be divided by the number of days in the period to determine
the daily portion of OID for each day in the period. With respect to an initial
accrual period shorter than a full monthly accrual period, the daily portions
of OID must be determined according to an appropriate allocation under any
reasonable method.
Original issue discount generally must be reported as ordinary gross
income as it accrues under a constant interest method that takes into account
the compounding of interest as it accrues rather than when received. However,
the amount of original issue discount includible in the income of a holder of
an obligation is reduced when the obligation is acquired after its initial
issuance at a price greater than the sum of the original issue price and the
previously accrued original issue discount, less prior payments of principal.
Accordingly, if the mortgage loans and/or MBS acquired by a certificateholder
are purchased at a price equal to the then unpaid principal amount of the
asset, no original issue discount attributable to the difference between the
issue price and the original principal amount of the asset--i.e., points--will
be includible by the holder. Other original issue discount on the mortgage
loans and/or MBS--e.g., that arising from a "teaser" rate--would still need to
be accrued.
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3. Grantor Trust Certificates Representing Interests in Adjustable Rate
Loans
The OID Regulations do not address the treatment of instruments, such as
the grantor trust certificates, which represent interests in adjustable rate
loans. Additionally, the IRS has not issued guidance under the Code's coupon
stripping rules with respect to such instruments. In the absence of any
authority, the master servicer will report Stripped ARM Obligations to holders
in a manner it believes is consistent with the rules described above under the
heading "--Grantor Trust Certificates Representing Interests in Loans Other
Than Adjustable Rate Loans" and with the OID Regulations. In general,
application of these rules may require inclusion of income on a Stripped ARM
Obligation in advance of the receipt of cash attributable to such income.
Further, the addition of deferred interest to the principal balance of an
adjustable rate loan may require the inclusion of the amount in the income of
the grantor trust certificateholder when the amount accrues. Furthermore, the
addition of deferred interest to the grantor trust certificate's principal
balance will result in additional income, including possibly OID income, to the
grantor trust certificateholder over the remaining life of such grantor trust
certificates.
Because the treatment of Stripped ARM Obligations is uncertain, investors
are urged to consult their tax advisors regarding how income will be includible
with respect to such certificates.
c. SALE OR EXCHANGE OF A GRANTOR TRUST CERTIFICATE
Sale or exchange of a grantor trust certificate prior to its maturity will
result in gain or loss equal to the difference, if any, between the amount
received and the owner's adjusted basis in the grantor trust certificate. Such
adjusted basis generally will equal the seller's purchase price for the grantor
trust certificate, increased by the OID included in the seller's gross income
with respect to the grantor trust certificate, and reduced by principal
payments on the grantor trust certificate previously received by the seller.
Such gain or loss will be capital gain or loss to an owner for which a grantor
trust certificate is a "capital asset" within the meaning of Code Section 1221,
except to the extent described above with respect to market discount and will
generally be long-term capital gain if the grantor trust certificate has been
owned for more than one year. Long-term capital gains of individuals are
subject to reduced maximum tax rates while capital gains recognized by
individuals on capital assets held less than twelve months are generally
subject to ordinary income tax rates. The use of capital losses is limited.
It is possible that capital gain realized by holders of one or more
classes of grantor trust certificates could be considered gain realized upon
the disposition of property that was part of a "conversion transaction." A sale
of a grantor trust certificate will be part of a conversion transaction if
substantially all of the holder's expected return is attributable to the time
value of the holder's net investment, and:
o the holder entered the contract to sell the grantor trust certificate
substantially contemporaneously with acquiring the grantor trust
certificate;
o the grantor trust certificate is part of a straddle;
o the grantor trust certificate is marketed or sold as producing capital
gain; or
o other transactions to be specified in Treasury regulations that have not
yet been issued. If the sale or other disposition of a grantor trust
certificate is part of a conversion transaction, all or any portion of
the gain realized upon the sale or other disposition would be treated as
ordinary income instead of capital gain.
Grantor trust certificates will be "evidences of indebtedness" within the
meaning of Code Section 582(c)(1), so that gain or loss recognized from the
sale of a grantor trust certificate by a bank or a thrift institution to which
such section applies will be treated as ordinary income or loss.
d. NON-U.S. PERSONS
The term "U.S. Person" means
o a citizen or resident of the United States;
o a corporation (or entity treated as a corporation for tax purposes)
created or organized in the United States or under the laws of the United
States or of any state;
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o a partnership (or entity treated as a partnership for tax purposes)
organized in the United States or under the laws of the United States or
of any state (unless provided otherwise by future Treasury regulations);
o an estate whose income is includible in gross income for United States
income tax purposes regardless of its source; or,
o a trust, if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more U.S.
Persons have authority to control all substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August
20, 1996, and treated as U.S. Persons prior to such date, may elect to
continue to be U.S. Persons.
Generally, to the extent that a grantor trust certificate evidences
ownership in underlying mortgage loans and/or MBS that were issued on or before
July 18, 1984, interest or OID paid by the person required to withhold tax
under Code Section 1441 or 1442 to
o an owner that is not a U.S. Person or
o grantor trust certificateholder holding on behalf of an owner that is
not a U.S. Person will be subject to federal income tax, collected by
withholding, at a rate of 30% or such lower rate as may be provided for
interest by an applicable tax treaty, unless such income is effectively
connected with a U.S. trade or business of such owner or beneficial
owner.
Accrued OID recognized by the owner on the sale or exchange of such a grantor
trust certificate also will be subject to federal income tax at the same rate.
Generally, such payments would not be subject to withholding to the extent that
a grantor trust certificate evidences ownership in mortgage loans and/or MBS
issued after July 18, 1984, by natural persons if such grantor trust
certificateholder complies with certain identification requirements, including
delivery of a statement, signed by the grantor trust certificateholder under
penalties of perjury, certifying that the grantor trust certificateholder is
not a U.S. Person and providing the name and address of the grantor trust
certificateholder. To the extent payments to grantor trust certificateholders
that are not U.S. Persons are payments of "contingent interest" on the
underlying mortgage loans and/or MBS, or the grantor trust certificateholder is
ineligible for the exemption described in the preceding sentence, the 30%
withholding tax will apply unless such withholding taxes are reduced or
eliminated by an applicable tax treaty and such holder meets the eligibility
and certification requirements necessary to obtain the benefits of such treaty.
Additional restrictions apply to mortgage loans and/or MBS where the borrower
is not a natural person in order to qualify for the exemption from withholding.
If capital gain derived from the sale, retirement or other disposition of a
grantor trust certificate is effectively connected with a U.S. trade or
business of a grantor trust certificateholder that is not a U.S. Person,
certificateholder will be taxed on the net gain under the graduated U.S.
federal income tax rates applicable to U.S. Persons and, with respect to
grantor trust certificates held by or on behalf of corporations, also may be
subject to branch profits tax. In addition, if the trust fund acquires a United
States real property interest through foreclosure, deed in lieu of foreclosure
or otherwise on a mortgage loan or MBS secured by such an interest, which for
this purpose includes real property located in the United States and the Virgin
Islands, a grantor trust certificateholder that is not a U.S. person will
potentially be subject to federal income tax on any gain attributable to such
real property interest that is allocable to such holder. Non-U.S. Persons
should consult their tax advisors regarding the application to them of the
foregoing rules.
e. INFORMATION REPORTING AND BACKUP WITHHOLDING
The master servicer will furnish or make available, within a reasonable
time after the end of each calendar year, to each person who was a
certificateholder at any time during such year, the information as may be
deemed necessary or desirable to assist certificateholders in preparing their
federal income tax returns, or to enable holders to make the information
available to beneficial owners or financial intermediaries that hold such
certificates as nominees on behalf of beneficial owners. If a holder,
beneficial owner, financial intermediary or other recipient of a payment on
behalf of a beneficial owner fails to supply a certified taxpayer
identification number or if the Secretary of the Treasury determines that such
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person has not reported all interest and dividend income required to be shown
on its federal income tax return, 31% backup withholding may be required with
respect to any payments to registered owners who are not "exempt recipients."
In addition, upon the sale of a grantor trust certificate to, or through, a
broker, the broker must withhold 31% of the entire purchase price, unless
either
o the broker determines that the seller is a corporation or other exempt
recipient, or
o the seller provides, in the required manner, certain identifying
information and, in the case of a non-U.S. person, certifies that the
seller is a Non-U.S. Person, and other conditions are met.
Such a sale must also be reported by the broker to the IRS, unless either
o the broker determines that the seller is an exempt recipient or
o the seller certifies its non-U.S. Person status and other conditions are
met.
Certification of the registered owner's non-U.S. Person status normally would
be made on IRS Form W-8 under penalties of perjury, although in some cases it
may be possible to submit other documentary evidence. Any amounts deducted and
withheld from a distribution to a recipient would be allowed as a credit
against the recipient's federal income tax liability.
On October 6, 1997, the Treasury Department issued new regulations which
make certain modifications to the withholding, backup withholding and
information reporting rules described above. The New Regulations attempt to
unify certification requirements and modify reliance standards. The New
Regulations will generally be effective for payments made after December 31,
2000, subject to certain transition rules. Prospective investors are urged to
consult their own tax advisors regarding the New Regulations.
REMICS
The trust fund relating to a series of certificates may elect to be
treated as a REMIC. Qualification as a REMIC requires ongoing compliance with
certain conditions. Although a REMIC is not generally subject to federal income
tax (see, however "--Taxation of Owners of REMIC Residual Certificates" and
"--Prohibited Transactions and Other Taxes" below), if a trust fund with
respect to which a REMIC election is made fails to comply with one or more of
the ongoing requirements of the Code for REMIC status during any taxable year,
including the implementation of restrictions on the purchase and transfer of
the residual interests in a REMIC as described below under "--Taxation of
Owners of REMIC Residual Certificates," the Code provides that a trust fund
will not be treated as a REMIC for the year and thereafter. In that event, the
entity may be taxable as a separate corporation, and the REMIC Certificates may
not be accorded the status or given the tax treatment described below in this
section. While the Code authorizes the Treasury Department to issue regulations
providing relief in the event of an inadvertent termination of the status of a
trust fund as a REMIC, no such regulations have been issued. Any relief,
moreover, may be accompanied by sanctions, such as the imposition of a
corporate tax on all or a portion of the REMIC's income for the period in which
the requirements for such status are not satisfied. With respect to each trust
fund that elects REMIC status, Brown & Wood LLP will deliver its opinion
generally to the effect that, under then existing law and assuming compliance
with all provisions of the related Agreement, the trust fund will qualify as a
REMIC, and the related certificates will be considered to be REMIC Regular
Certificates or a sole class of REMIC Residual Certificates. The related
prospectus supplement for each series of certificates will indicate whether the
trust fund will make a REMIC election and whether a class of certificates will
be treated as a regular or residual interest in the REMIC.
A "qualified mortgage" for REMIC purposes includes any obligation,
including certificates of participation in such an obligation and any "regular
interest" in another REMIC, that is principally secured by an interest in real
property and that is transferred to the REMIC within a prescribed time period
in exchange for regular or residual interests in the REMIC.
In general, with respect to each series of certificates for which a REMIC
election is made,
o certificates held by a thrift institution taxed as a "domestic building
and loan association" will constitute assets described in Code Section
7701(a)(19)(C);
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o certificates held by a real estate investment trust will constitute
"real estate assets" within the meaning of Code Section 856(c)(4)(A); and
o interest on certificates held by a real estate investment trust will be
considered "interest on obligations secured by mortgages on real
property" within the meaning of Code Section 856(c)(3)(B).
If less than 95% of the REMIC's assets are assets qualifying under any of the
foregoing Code sections, the certificates will be qualifying assets only to the
extent that the REMIC's assets are qualifying assets.
Tiered REMIC Structures. For certain series of certificates, two or more
separate elections may be made to treat designated portions of the related
trust fund as REMICs for federal income tax purposes. Upon the issuance of any
such series of certificates, Brown & Wood LLP, counsel to the depositor, will
deliver its opinion generally to the effect that, assuming compliance with all
provisions of the related Agreement, the Master REMIC as well as any Subsidiary
REMIC will each qualify as a REMIC, and the REMIC Certificates issued by the
Master REMIC and the Subsidiary REMIC or REMICs, respectively, will be
considered REMIC Regular Certificates or REMIC Residual Certificates in the
related REMIC within the meaning of the REMIC Provisions.
Other than the residual interest in a Subsidiary REMIC, only REMIC
Certificates issued by the Master REMIC will be offered hereunder. The
Subsidiary REMIC or REMICs and the Master REMIC will be treated as one REMIC
solely for purposes of determining whether the REMIC Certificates will be:
o "real estate assets" within the meaning of Section 856(c)(4)(A) of the
Code;
o "loans secured by an interest in real property" under Section
7701(a)(19)(C) of the Code; and
o whether the income on the certificates is interest described in Section
856(c)(3)(B) of the Code.
a. 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 and Premium. The REMIC Regular Certificates may be
issued with OID. Generally, the OID, if any, will equal the difference between
the "stated redemption price at maturity" of a REMIC Regular Certificate and
its "issue price." Holders of any class of certificates issued with OID will be
required to include the OID in gross income for federal income tax purposes as
it accrues, in accordance with a constant interest method based on the
compounding of interest as it accrues rather than in accordance with receipt of
the interest payments. The following discussion is based in part on the OID
Regulations and in part on the provisions of the Tax Reform Act of 1986. The
REMIC Regular Certificates should be aware, however, that the OID Regulations
do not adequately address certain issues relevant to prepayable securities,
such as the REMIC Regular Certificates.
Rules governing OID are set forth in Code Sections 1271 through 1273 and
1275. These rules require that the amount and rate of accrual of OID be
calculated based on the Prepayment Assumption and the anticipated reinvestment
rate, if any, relating to the REMIC Regular Certificates and prescribe a method
for adjusting the amount and rate of accrual of the discount where the actual
prepayment rate differs from the Prepayment Assumption. Under the Code, the
Prepayment Assumption must be determined in the manner prescribed by
regulations, which regulations have not yet been issued. The legislative
history provides, however, that Congress intended the regulations to require
that the Prepayment Assumption be the prepayment assumption that is used in
determining the initial offering price of such REMIC Regular Certificates. The
prospectus supplement for each series of REMIC Regular Certificates will
specify the Prepayment Assumption to be used for the purpose of determining the
amount and rate of accrual of OID. No representation is made that the REMIC
Regular Certificates will prepay at the Prepayment Assumption or at any other
rate.
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In general, each REMIC Regular Certificate will be treated as a single
installment obligation issued with an amount of OID equal to the excess of its
"stated redemption price at maturity" over its "issue price." The issue price
of a REMIC Regular Certificate is the first price at which a substantial amount
of REMIC Regular Certificates of that class are first sold to the public
(excluding bond houses, brokers, underwriters or wholesalers). If less than a
substantial amount of a particular class of REMIC Regular Certificates is sold
for cash on or prior to the closing date, the issue price for that class will
be treated as the fair market value of that class on the closing date. The
issue price of a REMIC Regular Certificate also includes the amount paid by an
initial certificateholder for accrued interest that relates to a period prior
to the issue date of the REMIC Regular Certificate. The stated redemption price
at maturity of a REMIC Regular Certificate includes the original principal
amount of the REMIC Regular Certificate, but generally will not include
distributions of interest if the distributions constitute "qualified stated
interest." Qualified stated interest generally means interest payable at a
single fixed rate or qualified variable rate provided that the interest
payments are unconditionally payable at intervals of one year or less during
the entire term of the REMIC Regular Certificate. Interest is payable at a
single fixed rate only if the rate appropriately takes into account the length
of the interval between payments. Distributions of interest on REMIC Regular
Certificates with respect to which Deferred Interest will accrue will not
constitute qualified stated interest payments, and the stated redemption price
at maturity of the REMIC Regular Certificates includes all distributions of
interest as well as principal thereon.
Where the interval between the issue date and the first distribution date
on a REMIC Regular Certificate is longer than the interval between subsequent
distribution dates, the greater of any original issue discount, disregarding
the rate in the first period, and any interest foregone during the first period
is treated as the amount by which the stated redemption price at maturity of
the certificates exceeds its issue price for purposes of the de minimis rule
described below in this section. The OID Regulations suggest that all interest
on a long first period REMIC Regular Certificate that is issued with non-de
minimis OID, as determined under the foregoing rule, will be treated as OID.
Where the interval between the issue date and the first distribution date on a
REMIC Regular Certificate is shorter than the interval between subsequent
distribution dates, interest due on the first distribution date in excess of
the amount that accrued during the first period would be added to the
certificate's stated redemption price at maturity. REMIC Regular
Certificateholders should consult their own tax advisors to determine the issue
price and stated redemption price at maturity of a REMIC Regular Certificate.
Under the de minimis rule, OID on a REMIC Regular Certificate will be
considered to be zero if the OID is less than 0.25% of the stated redemption
price at maturity of the REMIC Regular Certificate multiplied by the weighted
average maturity of the REMIC Regular Certificate. For this purpose, the
weighted average maturity of the REMIC Regular Certificate is computed as the
sum of the amounts determined by multiplying the number of full years, i.e.,
rounding down partial years, from the issue date until each distribution in
reduction of stated redemption price at maturity is scheduled to be made by a
fraction, the numerator of which is the amount of each distribution included in
the stated redemption price at maturity of the REMIC Regular Certificate and
the denominator of which is the stated redemption price at maturity of the
REMIC Regular Certificate. Although currently unclear, it appears that the
schedule of the distributions should be determined in accordance with the
Prepayment Assumption. The Prepayment Assumption with respect to a series of
REMIC Regular Certificates will be set forth in the related prospectus
supplement. Holders generally must report de minimis OID pro rata as principal
payments are received, and the income will be capital gain if the REMIC Regular
Certificate is held as a capital asset. However, accrual method holders may
elect to accrue all de minimis OID as well as market discount under a constant
interest method.
The prospectus supplement with respect to a trust fund may provide for
super premium certificates. The income tax treatment of such REMIC Regular
Certificates is not entirely certain. For information reporting purposes, the
trust fund intends to take the position that the stated redemption price at
maturity of such REMIC Regular Certificates is the sum of all payments to be
made on such REMIC Regular Certificates determined under the Prepayment
Assumption, with the result that such REMIC Regular Certificates would be
issued with OID. The calculation of income in this manner could result in
negative original issue discount, which delays future accruals of OID rather
than being immediately deductible
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when prepayments on the mortgage loans and/or MBS exceed those estimated under
the Prepayment Assumption. The IRS might contend, however, that certain
contingent payment rules contained in final regulations issued on June 11,
1996, with respect to original issue discount, should apply to such
certificates. Although such rules are not applicable to instruments governed by
Code Section 1272(a)(6), they represent the only guidance regarding the current
views of the IRS with respect to contingent payment instruments. These proposed
regulations, if applicable, generally would require holders of Regular Interest
Certificates to take the payments considered contingent interest payments into
income on a yield to maturity basis in accordance with a schedule of projected
payments provided by the depositor and to make annual adjustments to income to
account for the difference between actual payments received and projected
payment amounts accrued. In the alternative, the IRS could assert that the
stated redemption price at maturity of such REMIC Regular Certificates should
be limited to their principal amount, subject to the discussion below under
"--Accrued Interest Certificates", so that such REMIC Regular Certificates
would be considered for federal income tax purposes to be issued at a premium.
If such a position were to prevail, the rules described below under "--Premium"
would apply. It is unclear when a loss may be claimed for any unrecovered basis
for a Super-Premium Certificate. It is possible that a holder of a
super-premium certificate may only claim a loss when its remaining basis
exceeds the maximum amount of future payments, assuming no further prepayments
or when the final payment is received with respect to such Super-Premium
Certificate. Under the REMIC Regulations, if the issue price of a REMIC Regular
Certificate, other than REMIC Regular Certificate based on a notional amount,
does not exceed 125% of its actual principal amount, the interest rate is not
considered disproportionately high. Accordingly, such REMIC Regular Certificate
generally should not be treated as a super-premium certificate and the rules
described below under "--Premium" should apply. However, it is possible that
holders or REMIC Regular Certificates issued at a premium, even if the premium
is less than 25% of such certificate's actual principal balance, will be
required to amortize the premium under an original issue discount method or
contingent interest method even though no election under Code Section 171 is
made to amortize such premium.
Generally, a REMIC Regular certificateholder must include in gross income
the "daily portions" of the OID that accrues on a REMIC Regular Certificate for
each day a certificateholder holds the REMIC Regular Certificate, including the
purchase date but excluding the disposition date. In the case of an original
holder of a REMIC Regular Certificate, a calculation will be made of the
portion of the OID that accrues during each successive period--"an accrual
period"--that ends on the day in the calendar year corresponding to a
distribution date, or if distribution dates are on the first day or first
business day of the immediately preceding month, interest may be treated as
payable on the last day of the immediately preceding month, and begins on the
day after the end of the immediately preceding accrual period or on the issue
date in the case of the first accrual period. This will be done, in the case of
each full accrual period, by
o adding (1) the present value at the end of the accrual
period--determined by using as a discount factor the original yield to
maturity of the REMIC Regular Certificates as calculated under the
Prepayment Assumption--of all remaining payments to be received on the
REMIC Regular Certificates under the Prepayment Assumption and (2) any
payments included in the stated redemption price at maturity received
during such accrual period, and
o subtracting from that total the adjusted issue price of the REMIC
Regular Certificates at the beginning of such accrual period.
The adjusted issue price of a REMIC Regular Certificate at the beginning of the
first accrual period is its issue price; the adjusted issue price of a REMIC
Regular Certificate at the beginning of a subsequent accrual period is the
adjusted issue price at the beginning of the immediately preceding accrual
period plus the amount of OID allocable to that accrual period and reduced by
the amount of any payment other than a payment of qualified stated interest
made at the end of or during that accrual period. The OID accrued during an
accrual period will then be divided by the number of days in the period to
determine the daily portion of OID for each day in the accrual period. The
calculation of OID under the method described above will cause the accrual of
OID to either increase or decrease--but never below zero--in
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a given accrual period to reflect the fact that prepayments are occurring
faster or slower than under the Prepayment Assumption. With respect to an
initial accrual period shorter than a full accrual period, the "daily portions"
of OID may be determined according to an appropriate allocation under any
reasonable method.
A subsequent purchaser of a REMIC Regular Certificate issued with OID who
purchases the REMIC Regular Certificate at a cost less than the remaining
stated redemption price at maturity will also be required to include in gross
income the sum of the daily portions of OID on that REMIC Regular Certificate.
In computing the daily portions of OID for such a purchaser, as well as an
initial purchaser that purchases at a price higher than the adjusted issue
price but less than the stated redemption price at maturity, however, the daily
portion is reduced by the amount that would be the daily portion for such day,
computed in accordance with the rules set forth above, multiplied by a
fraction, the numerator of which is the amount, if any, by which the price paid
by such holder for that REMIC Regular Certificate exceeds the following amount:
(1) the sum of the issue price plus the aggregate amount of OID that
would have been includible in the gross income of an original REMIC
Regular Certificateholder, who purchased the REMIC Regular Certificate
at its issue price, less
(2) any prior payments included in the stated redemption price at
maturity, and the denominator of which is the sum of the daily
portions for that REMIC Regular Certificate for all days beginning on
the date after the purchase date and ending on the maturity date
computed under the Prepayment Assumption.
A holder who pays an acquisition premium instead may elect to accrue OID by
treating the purchase as a purchase at original issue.
Variable Rate REMIC Regular Certificates. REMIC Regular Certificates may
provide for interest based on a variable rate. Interest based on a variable
rate will constitute qualified stated interest and not contingent interest if,
generally:
o the interest is unconditionally payable at least annually;
o the issue price of the debt instrument does not exceed the total
noncontingent principal payments; and
o interest is based on a "qualified floating rate," an "objective rate," a
combination of a single fixed rate and one or more "qualified floating
rates," one "qualified inverse floating rate," or a combination of
"qualified floating rates" that do not operate in a manner that
significantly accelerates or defers interest payments on the REMIC
Regular Certificates.
The amount of OID with respect to a REMIC Regular Certificate bearing a
variable rate of interest will accrue in the manner described above under
"--Original Issue Discount and Premium" by assuming generally that the Index
used for the variable rate will remain fixed throughout the term of the
certificate at the rate applicable on the date they are issued. Appropriate
adjustments are made for the actual variable rate.
Although unclear at present, the depositor intends to treat interest on a
REMIC Regular Certificate that is a weighted average of the net interest rates
on mortgage loans as qualified stated interest. In such case, the weighted
average rate used to compute the initial pass-through rate on the REMIC Regular
Certificates will be deemed to be the Index in effect through the life of the
REMIC Regular Certificates. It is possible, however, that the IRS may treat
some or all of the interest on REMIC Regular Certificates with a weighted
average rate as taxable under the rules relating to obligations providing for
contingent payments. No guidance is currently available as to how OID would be
determined for debt instruments subject to Code Section 1272(a)(6) that provide
for contingent interest. The treatment of REMIC Regular Certificates as
contingent payment debt instruments may affect the timing of income accruals on
the REMIC Regular Certificates.
Election to Treat All Interest as OID. The OID Regulations permit a
certificateholder to elect to accrue all interest, discount (including de
minimis market discount or original issue discount) and
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premium in income as interest, based on a constant yield method. If such an
election were to be made with respect to a REMIC Regular Certificate with
market discount, the certificateholder would be deemed to have made an election
to include in income currently market discount with respect to all other debt
instruments having market discount that such certificateholder acquires during
the year of the election or thereafter. Similarly, a certificateholder that
makes this election for a certificate that is acquired at a premium will 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 "--Premium" below. The election to accrue interest,
discount and premium on a constant yield method with respect to a certificate
is irrevocable without the consent of the IRS.
Market Discount. A purchaser of a REMIC Regular Certificate may also be
subject to the market discount provisions of Code Sections 1276 through 1278.
Under these provisions and the OID Regulations, "market discount" equals the
excess, if any, of (1) the REMIC Regular Certificate's stated principal amount
or, in the case of a REMIC Regular Certificate with OID, the adjusted issue
price, determined for this purpose as if the purchaser had purchased such REMIC
Regular Certificate from an original holder, over (2) the price for such REMIC
Regular Certificate paid by the purchaser. A certificateholder that purchases a
REMIC Regular Certificate at a market discount will recognize income upon
receipt of each distribution representing amounts included in such
certificate's stated redemption price at maturity. In particular, under Section
1276 of the Code such a holder generally will be required to allocate each such
distribution 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, the election will apply to all market discount bonds acquired by the
certificateholder on or after the first day of the first taxable year to which
the election applies.
Market discount with respect to a REMIC Regular Certificate will be
considered to be zero if the amount allocable to the REMIC Regular Certificate
is less than 0.25% of the REMIC Regular Certificate's stated redemption price
at maturity multiplied by the REMIC Regular Certificate's weighted average
maturity remaining after the date of purchase. If market discount on a REMIC
Regular Certificate is considered to be zero under this rule, the actual amount
of market discount must be allocated to the remaining principal payments on the
REMIC Regular Certificate, and gain equal to the allocated amount will be
recognized when the corresponding principal payment is made. Treasury
regulations implementing the market discount rules have not yet been issued;
therefore, investors should consult their own tax advisors regarding the
application of these rules and the advisability of making any of the elections
allowed under Code Sections 1276 through 1278.
The Code provides that any principal payment, whether a scheduled payment
or a prepayment, or any gain on disposition of a market discount bond acquired
by the taxpayer after October 22, 1986, shall be treated as ordinary income to
the extent that it does not exceed the accrued market discount at the time of
the payment. The amount of accrued market discount for purposes of determining
the tax treatment of subsequent principal payments or dispositions of the
market discount bond is to be reduced by the amount so treated as ordinary
income.
The Code also grants authority to the Treasury Department to issue
regulations providing for the computation of accrued 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, rules described in
the legislative history will apply. Under those rules, the holder of a market
discount bond may elect to accrue market discount either on the basis of a
constant interest method rate or according to one of the following methods. For
REMIC Regular Certificates issued with OID, the amount of market discount that
accrues during a period is equal to the product of
1) the total remaining market discount and
2) a fraction, the numerator of which is the OID accruing during the period
and the denominator of which is the total remaining OID at the beginning
of the period.
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For REMIC Regular Certificates issued without OID, the amount of market
discount that accrues during a period is equal to the product of
1) the total remaining market discount and
2) a fraction, the numerator of which is the amount of stated interest paid
during the accrual period and the denominator of which is the total
amount of stated interest remaining to be paid at the beginning of the
period.
For purposes of calculating market discount under any of the above methods in
the case of instruments (such as the REMIC Regular Certificates) that provide
for payments that may be accelerated by reason of prepayments of other
obligations securing such instruments, the same Prepayment Assumption
applicable to calculating the accrual of OID will apply.
A holder who acquired a REMIC Regular Certificate at a market discount
also 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 the 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 purchaser of a REMIC Regular Certificate that purchases the
REMIC Regular Certificate at a cost, not including accrued qualified stated
interest, greater than its remaining stated redemption price at maturity will
be considered to have purchased the REMIC Regular Certificate at a premium and
may elect to amortize the premium under a constant yield method. A
certificateholder that makes this election for a Certificate that is acquired
at a premium will be deemed to have made an election to amortize bond premium
with respect to all debt instruments having amortizable bond premium that such
certificateholder acquires during the year of the election or thereafter. It is
not clear whether the Prepayment Assumption would be taken into account in
determining the life of the REMIC Regular Certificate for this purpose.
However, the legislative history states that the same rules that apply to
accrual of market discount, which rules require use of a Prepayment Assumption
in accruing market discount with respect to REMIC Regular Certificates without
regard to whether such certificates have OID, will also apply in amortizing
bond premium under Code Section 171. The Code provides that amortizable bond
premium will be allocated among the interest payments on such REMIC Regular
Certificates and will be applied as an offset against the interest payment. The
Amortizable Bond Premium Regulations do not apply to prepayable securities
described in Section 1272(a)(6) of the Code, such as the REMIC Regular
Certificates. Certificateholders should consult their tax advisors regarding
the possibility of making an election to amortize any such bond premium.
Deferred Interest. Certain classes of REMIC Regular Certificates may
provide for the accrual of deferred interest with respect to one or more
adjustable rate loans. Any deferred interest that accrues with respect to a
class of REMIC Regular Certificates will constitute income to the holders of
certificates prior to the time distributions of cash with respect to the
deferred interest are made. It is unclear, under the OID Regulations, whether
any of the interest on certificates will constitute qualified stated interest
or whether all or a portion of the interest payable on such certificates must
be included in the stated redemption price at maturity of the certificates and
accounted for as OID, which could accelerate such inclusion. Interest on REMIC
Regular Certificates must in any event be accounted for under an accrual method
by the holders of such certificates and, therefore, applying the latter
analysis may result only in a slight difference in the timing of the inclusion
in income of interest on such REMIC Regular Certificates.
Sale, Exchange or Redemption. If a REMIC Regular Certificate is sold,
exchanged, redeemed or retired, the seller will recognize gain or loss equal to
the difference between the amount realized on the sale, exchange, redemption,
or retirement and the seller's adjusted basis in the REMIC Regular Certificate.
Such adjusted basis generally will equal the cost of the REMIC Regular
Certificate to the seller, increased by any OID and market discount included in
the seller's gross income with respect to the
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REMIC Regular Certificate, and reduced, but not below zero, by payments
included in the stated redemption price at maturity previously received by the
seller and by any amortized premium. Similarly, a holder who receives a payment
that is part of the stated redemption price at maturity of a REMIC Regular
Certificate will recognize gain equal to the excess, if any, of the amount of
the payment over an allocable portion of the holder's adjusted basis in the
REMIC Regular Certificate. A REMIC Regular certificateholder who receives a
final payment that is less than the holder's adjusted basis in the REMIC
Regular Certificate will generally recognize a loss. Except as provided in the
following paragraph and as provided under "--Market Discount" above, any such
gain or loss will be capital gain or loss, provided that the REMIC Regular
Certificate is held as a "capital asset" (generally, property held for
investment) within the meaning of Code Section 1221.
Such capital gain or loss will generally be long-term capital gain or loss
if the REMIC Regular Certificate was held for more than one year. Long-term
capital gains of individuals are subject to reduced maximum tax rates while
capital gains recognized by individuals on capital assets held less than twelve
months are generally subject to ordinary income tax rates. The use of capital
losses is limited.
Gain from the sale or other disposition of a REMIC Regular Certificate
that might otherwise be capital gain will be treated as ordinary income to the
extent that the gain does not exceed the excess, if any, of
o the amount that would have been includible in the holder's income with
respect to the REMIC Regular Certificate had income accrued thereon at a
rate equal to 110% of the AFR as defined in Code Section 1274(d)
determined as of the date of purchase of such REMIC Regular Certificate,
over
o the amount actually includible in such holder's income.
Gain from the sale or other disposition of a REMIC Regular Certificate that
might otherwise be capital gain will be treated as ordinary income if the REMIC
Regular Certificate is held as part of a "conversion transaction" as defined in
Code Section 1258(c), up to the amount of interest that would have accrued on
the REMIC Regular certificateholder's net investment in the conversion
transaction at 120% of the appropriate applicable federal rate under Code
Section 1274(d) in effect at the time the taxpayer entered into the transaction
minus any amount previously treated as ordinary income with respect to any
prior disposition of property that was held as part of such transaction, or if
the REMIC Regular Certificate is held as part of a straddle. Potential
investors should consult their tax advisors with respect to tax consequences of
ownership and disposition of an investment in REMIC Regular Certificates in
their particular circumstances.
It is possible that capital gain realized by holders of one or more
classes of REMIC Regular Certificates could be considered gain realized upon
the disposition of property that was part of a "conversion transaction." A sale
of a REMIC Regular Certificate will be part of a "conversion transaction" if
substantially all of the holder's expected return is attributable to the time
value of the holder's net investment, and:
o the holder entered the contract to sell the REMIC Regular Certificate
substantially contemporaneously with acquiring the REMIC Regular
Certificate;
o the REMIC Regular Certificate is part of a straddle;
o the REMIC Regular Certificate is marketed or sold as producing capital
gains; or
o other transactions to be specified in Treasury regulations that have not
yet been issued. If the sale or other disposition of a REMIC Regular
Certificate is part of a conversion transaction, all or a portion of the
gain realized upon the sale or other disposition of the REMIC Regular
Certificate would be treated as ordinary income instead of capital gain.
The certificates will be "evidences of indebtedness" within the meaning of
Code Section 582(c)(1), so that gain or loss recognized from the sale of a
REMIC Regular Certificate by a bank or a thrift institution to which this
section applies will be ordinary income or loss.
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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
necessary to compute the accrual of any market discount that may arise upon
secondary trading of REMIC Regular Certificates. Because exact computation of
the accrual of market discount on a constant yield method would require
information relating to the holder's purchase price which the REMIC may not
have, it appears that the information reports will only provide information
pertaining to the appropriate proportionate method of accruing market discount.
Accrued Interest Certificates. Certificates may provide for payments of
interest based on a period that corresponds to the interval between
distribution dates but that ends prior to each distribution date. The period
between the closing date for payment lag certificates and their first
distribution date may or may not exceed the interval. Purchasers of payment lag
certificates for which the period between the closing date and the first
distribution date does not exceed the interval could pay upon purchase of the
REMIC Regular Certificates accrued interest in excess of the accrued interest
that would be paid if the interest paid on the distribution date were interest
accrued from distribution date to distribution date. If a portion of the
initial purchase price of a REMIC Regular Certificate is allocable to
pre-issuance accrued interest and the REMIC Regular Certificate provides for a
payment of stated interest on the first payment date and the first payment date
is within one year of the issue date that equals or exceeds the amount of the
pre-issuance accrued interest, then the REMIC Regular Certificate's issue price
may be computed by subtracting from the issue price the amount of pre-issuance
accrued interest, rather than as an amount payable on the REMIC Regular
Certificate. However, it is unclear under this method how the OID Regulations
treat interest on payment lag certificates. Therefore, in the case of a payment
lag certificate, the trust fund intends to include accrued interest in the
issue price and report interest payments made on the first distribution date as
interest to the extent such payments represent interest for the number of days
that the certificateholder has held the payment lag certificate during the
first accrual period.
Investors should consult their own tax advisors concerning the treatment
for federal income tax purposes of payment lag certificates.
Non-Interest Expenses of the REMIC. Under temporary Treasury regulations,
if the REMIC is considered to be a "single-class REMIC," a portion of the
REMIC's servicing, administrative and other non-interest expenses will be
allocated as a separate item to those REMIC Regular Certificateholders that are
"pass-through interest holders." Certificateholders that are pass-through
interest holders should consult their own tax advisors about the impact of
these rules on an investment in the REMIC Regular Certificates. See
"Pass-Through of Non-Interest Expenses of the REMIC" under "Taxation of Owners
of REMIC Residual Certificates" below.
Effects of Defaults, Delinquencies and Losses. Certain series of
certificates may contain one or more classes of subordinated certificates, and
in the event there are defaults or delinquencies on the mortgage loans and/or
MBS, amounts that would otherwise be distributed on the subordinated
certificates may instead be distributed on the senior certificates.
Subordinated certificateholders nevertheless will be required to report income
with respect to such certificates under an accrual method without giving effect
to delays and reductions in distributions on the subordinated certificates
attributable to defaults and delinquencies on the mortgage loans and/or MBS,
except to the extent that it can be established that the amounts are
uncollectible. As a result, the amount of income reported by a subordinated
certificateholder in any period could significantly exceed the amount of cash
distributed to the holder in that period. The holder will eventually be allowed
a loss (or will be allowed to report a lesser amount of income) to the extent
that the aggregate amount of distributions on the subordinated certificate is
reduced as a result of defaults and delinquencies on the mortgage loans and/or
MBS.
Although not entirely clear, it appears that holders of REMIC Regular
Certificates that are corporations should in general be allowed to deduct as an
ordinary loss any loss sustained during the taxable year on account of any such
certificates becoming wholly or partially worthless, and that, in general,
holders of certificates that are not corporations should be allowed to deduct
as a short-term capital loss any loss sustained during the taxable year on
account of any such certificates becoming wholly worthless. Potential investors
and holders of the certificates are urged to consult their own tax advisors
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regarding the appropriate timing, amount and character of any loss sustained
with respect to such certificates, including any loss resulting from the
failure to recover previously accrued interest or discount income. Special loss
rules are applicable to banks and thrift institutions, including rules
regarding reserves for bad debts. These taxpayers are advised to consult their
tax advisors regarding the treatment of losses on certificates.
Non-U.S. Persons. Generally, payments of interest on the REMIC Regular
Certificates, including any payment with respect to accrued OID, to a REMIC
Regular certificateholder who is not a U.S. Person as defined in "-- Grantor
Trust Funds; Non-U.S. Persons and is not engaged in a trade or business within
the United States will not be subject to federal withholding tax if:
o the REMIC Regular certificateholder does not actually or constructively
own 10 percent or more of the combined voting power of all classes of
equity in the issuer;
o the REMIC Regular certificateholder is not a controlled foreign
corporation, within the meaning of Code Section 957, related to the
issuer; and
o the REMIC Regular certificateholder complies with identification
requirements, including delivery of a statement, signed by the REMIC
Regular certificateholder under penalties of perjury, certifying that the
REMIC Regular certificateholder is a foreign person and providing the
name and address of the REMIC Regular certificateholder.
If a REMIC Regular certificateholder is not exempt from withholding,
distributions of interest to the holder, including distributions in respect of
accrued OID, may be subject to a 30% withholding tax, subject to reduction
under any applicable tax treaty. If the interest on a REMIC Regular Certificate
is effectively connected with the conduct by the Non-U.S. REMIC Regular
Certificateholder of a trade or business within the United States, then the
Non-U.S. REMIC Regular Certificateholder will be subject to U.S. income tax at
regular graduated rates. Such a Non-U.S. REMIC Regular Certificateholder also
may be subject to the branch profits tax.
Further, a REMIC Regular Certificate will not be included in the estate of
a non-resident alien individual that does not actually or constructively own
10% or more of the combined voting power of all classes of equity in the Issuer
and will not be subject to United States estate taxes. However,
certificateholders who are non-resident alien individuals should consult their
tax advisors concerning this question.
REMIC Regular Certificateholders who are not U.S. Persons and persons
related to such holders should not acquire any REMIC Residual Certificates,
REMIC Residual Certificateholder and persons related to REMIC Residual
Certificateholders should not acquire any REMIC Regular Certificates without
consulting their tax advisors as to the possible adverse tax consequences of
doing so. In addition, the IRS may assert that non-U.S. Persons that own
directly or indirectly, a greater than 10% interest in any borrower, and
foreign corporations that are "controlled foreign corporations" as to the
United States of which such a borrower is a "United States shareholder" within
the meaning of Section 951(b) of the Code, are subject to United States
withholding tax on interest distributed to them to the extent of interest
concurrently paid by the related borrower.
Information Reporting and Backup Withholding. The master servicer will
furnish or make available, within a reasonable time after the end of each
calendar year, to each person who was a REMIC Regular Certificateholder at any
time during that year, the information as may be deemed necessary or desirable
to assist REMIC Regular Certificateholders in preparing their federal income
tax returns, or to enable holders to make the information available to
beneficial owners or financial intermediaries that hold the REMIC Regular
Certificates on behalf of beneficial owners. If a holder, beneficial owner,
financial intermediary or other recipient of a payment on behalf of a
beneficial owner fails to supply a certified taxpayer identification number or
if the Secretary of the Treasury determines that such person has not reported
all interest and dividend income required to be shown on its federal income tax
return, 31% backup withholding may be required with respect to any payments to
registered owners who are not "exempt recipients." In addition, upon the sale
of a REMIC Regular Certificate to, or through, a broker, the broker must
withhold 31% of the entire purchase price, unless either:
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o the broker determines that the seller is a corporation or other exempt
recipient, or
o the seller provides, in the required manner, identifying information
and, in the case of a non-U.S. Person, certifies that such seller is a
non-U.S. Person, and other conditions are met.
o A sale of a REMIC Regular Certificate to, or through, a broker must also
be reported by the broker to the IRS, unless either:
o the broker determines that the seller is an exempt recipient, or
o the seller certifies its non-U.S. Person status and other conditions are
met.
Certification of the registered owner's non-U.S. Person status normally would
be made on IRS Form W-8 under penalties of perjury, although in certain cases
it may be possible to submit other documentary evidence. Any amounts deducted
and withheld from a distribution to a recipient would be allowed as a credit
against such recipient's federal income tax liability.
On October 6, 1997, the Treasury Department issued the New Regulations,
which make certain modifications to the withholding, backup withholding and
information reporting rules described above. The New Regulations attempt to
unify certification requirements and modify reliance standards. The New
Regulations will generally be effective for payments made after December 31,
2000, subject to certain transition rules. Prospective investors are urged to
consult their own tax advisors regarding the New Regulations.
B. TAXATION OF OWNERS OF REMIC RESIDUAL CERTIFICATES
Allocation of the Income of the REMIC to the REMIC Residual
Certificates. The REMIC will not be subject to federal income tax except with
respect to income from prohibited transactions and certain other transactions.
See "--Prohibited Transactions and Other Taxes" below. Instead, each original
holder of a REMIC Residual Certificate will report on its federal income tax
return, as ordinary income, its share of the taxable income of the REMIC for
each day during the taxable year on which the holder owns any REMIC Residual
Certificates. The taxable income of the REMIC for each day will be determined
by allocating the taxable income of the REMIC for each calendar quarter ratably
to each day in the quarter. Such a holder's share of the taxable income of the
REMIC for each day will be based on the portion of the outstanding REMIC
Residual Certificates that the holder owns on that day. The taxable income of
the REMIC will be determined under an accrual method and will be taxable to the
holders of REMIC Residual Certificates without regard to the timing or amounts
of cash distributions by the REMIC. Ordinary income derived from REMIC Residual
Certificates will be "portfolio income" for purposes of the taxation of
taxpayers subject to the limitations on the deductibility of "passive losses."
As residual interests, the REMIC Residual Certificates will be subject to tax
rules, described below, that differ from those that would apply if the REMIC
Residual Certificates were treated for federal income tax purposes as direct
ownership interests in the certificates or as debt instruments issued by the
REMIC.
A REMIC Residual Certificateholder may be required to include taxable
income from the REMIC Residual Certificate in excess of the cash distributed.
For example, a structure where principal distributions are made serially on
regular interests, that is, a fast-pay, slow-pay structure, may generate such a
mismatching of income and cash distributions that is, "phantom income". This
mismatching may be caused by the use of certain required tax accounting methods
by the REMIC, variations in the prepayment rate of the underlying mortgage
loans and/or MBS and certain other factors. Depending upon the structure of a
particular transaction, the aforementioned factors may significantly reduce the
after-tax yield of a REMIC Residual Certificate to a REMIC Residual
Certificateholder or cause the REMIC Residual Certificate to have negative
"value." Investors should consult their own tax advisors concerning the federal
income tax treatment of a REMIC Residual Certificate and the impact of the tax
treatment on the after-tax yield of a REMIC Residual Certificate.
A subsequent REMIC Residual Certificateholder also will report on its
federal income tax return amounts representing a daily share of the taxable
income of the REMIC for each day that the REMIC Residual Certificateholder owns
the REMIC Residual Certificate. Those daily amounts generally would equal the
amounts that would have been reported for the same days by an original REMIC
Residual
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Certificateholder, as described above. The legislative history indicates that
certain adjustments may be appropriate to reduce or increase the income of a
subsequent holder of a REMIC Residual Certificate that purchased the REMIC
Residual Certificate at a price greater than or less than the adjusted basis
the REMIC Residual Certificate would have in the hands of an original REMIC
Residual Certificateholder. See "--Sale or Exchange of REMIC Residual
Certificates" below. It is not clear, however, whether the adjustments will in
fact be permitted or required and, if so, how they would be made. The REMIC
Regulations do not provide for any such adjustments.
Taxable Income of the REMIC Attributable to Residual Interests. The
taxable income of the REMIC will reflect a netting of
o the income from the mortgage loans and/or MBS and the REMIC's other
assets and
o the deductions allowed to the REMIC for interest and OID on the REMIC
Regular Certificates and, except as described above under "--Taxation of
Owners of REMIC Regular Certificates--Non-Interest Expenses of the
REMIC," other expenses.
REMIC taxable income is generally determined in the same manner as the taxable
income of an individual using the accrual method of accounting, except that:
o the limitations on deductibility of investment interest expense and
expenses for the production of income do not apply;
o all bad loans will be deductible as business bad debts; and
o the limitation on the deductibility of interest and expenses related to
tax-exempt income will apply.
The REMIC's gross income includes interest, original issue discount income, and
market discount income, if any, on the mortgage loans, reduced by amortization
of any premium on the mortgage loans, plus income on reinvestment of cash flows
and reserve assets, plus any cancellation of indebtedness income upon
allocation of realized losses to the REMIC Regular Certificates. Note that the
timing of cancellation of indebtedness income recognized by REMIC Residual
Certificateholders resulting from defaults and delinquencies on mortgage loans
and/or MBS may differ from the time of the actual loss on the assets. The
REMIC's deductions include interest and original issue discount expense on the
REMIC Regular Certificates, servicing fees on the mortgage loans, other
administrative expenses of the REMIC and realized losses on the mortgage loans.
The requirement that REMIC Residual Certificateholders report their pro rata
share of taxable income or net loss of the REMIC will continue until there are
no certificates of any class of the related series outstanding.
For purposes of determining its taxable income, the REMIC will have an
initial aggregate tax basis in its assets equal to the sum of the issue prices
of the REMIC Regular Certificates and the REMIC Residual Certificates, or, if a
class of certificates is not sold initially, its fair market value. The
aggregate basis will be allocated among the mortgage loans and/or MBS and other
assets of the REMIC in proportion to their respective fair market value. A
mortgage loan or MBS will be deemed to have been acquired with discount or
premium to the extent that the REMIC's basis therein is less than or greater
than its principal balance, respectively. Any such discount, whether market
discount or OID, will be includible in the income of the REMIC as it accrues,
in advance of receipt of the cash attributable to the income, under a method
similar to the method described above for accruing OID on the REMIC Regular
Certificates. The REMIC may elect under Code Section 171 to amortize any
premium on the mortgage loans and/or MBS. Premium on any mortgage loan or MBS
to which the election applies would be amortized under a constant yield method.
It is not clear whether the yield of a mortgage loan or MBS would be calculated
for this purpose based on scheduled payments or taking account of the
Prepayment Assumption. Additionally, such an election would not apply to the
yield with respect to any underlying mortgage loan originated on or before
September 27, 1985. Instead, premium with respect to such a mortgage loan would
be allocated among the principal payments thereon and would be deductible by
the REMIC as those payments become due.
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The REMIC will be allowed a deduction for interest and OID on the REMIC
Regular Certificates. The amount and method of accrual of OID will be
calculated for this purpose in the same manner as described above with respect
to REMIC Regular Certificates except that the 0.25% per annum de minimis rule
and adjustments for subsequent holders described therein will not apply.
A REMIC Residual Certificateholder will not be permitted to amortize the
cost of the REMIC Residual Certificate as an offset to its share of the REMIC's
taxable income. However, REMIC taxable income will not include cash received by
the REMIC that represents a recovery of the REMIC's basis in its assets, and,
as described above, the issue price of the REMIC Residual Certificates will be
added to the issue price of the REMIC Regular Certificates in determining the
REMIC's initial basis in its assets. See "--Sale or Exchange of REMIC Residual
Certificates" below. For a discussion of possible adjustments to income of a
subsequent holder of a REMIC Regular Certificate to reflect any difference
between the actual cost of the REMIC Residual Certificate to the holder and the
adjusted basis the REMIC Residual Certificate would have in the hands of an
original REMIC Residual Certificateholder, see "--Allocation of the Income of
the REMIC to the REMIC Residual Certificates" above.
Net Losses of the REMIC. The REMIC will have a net loss for any calendar
quarter in which its deductions exceed its gross income. The net loss would be
allocated among the REMIC Residual Certificateholders in the same manner as the
REMIC's taxable income. The net loss allocable to any REMIC Residual
Certificate will not be deductible by the holder to the extent that the net
loss exceeds the holder's adjusted basis in the REMIC Residual Certificate. Any
net loss that is not currently deductible by reason of this limitation may only
be used by the REMIC Residual Certificateholder to offset its share of the
REMIC's taxable income in future periods (but not otherwise). The ability of
REMIC Residual Certificateholders that are individuals or closely held
corporations to deduct net losses may be subject to additional limitations
under the Code.
Mark-to-Market Rules. Prospective purchasers of a REMIC Residual
Certificate should be aware that the IRS has finalized Mark-to-Market
Regulations which provide that a REMIC Residual Certificate acquired after
January 3, 1995 cannot be marked to market. The Mark-to-Market Regulations
replaced the temporary regulations which allowed a Residual Certificate to be
marked to market provided that it was not a "negative value" residual interest
and did not have the same economic effect as a "negative value" residual
interest.
Pass-Through of Non-Interest Expenses of the REMIC. As a general rule, all
of the fees and expenses of a REMIC will be taken into account by holders of
the REMIC Residual Certificates. In the case of a single class REMIC, however,
the expenses and a matching amount of additional income will be allocated,
under temporary Treasury regulations, among the REMIC Regular
Certificateholders and the REMIC Residual Certificateholders on a daily basis
in proportion to the relative amounts of income accruing to each
certificateholder on that day. In general terms, a single class REMIC is one
that either:
o would qualify, under existing Treasury regulations, as a grantor trust
if it were not a REMIC, treating all interests as ownership interests,
even if they would be classified as debt for federal income tax purposes,
or
o is similar to such a trust and is structured with the principal purpose
of avoiding the single class REMIC rules.
Unless otherwise stated in the applicable prospectus supplement, the expenses
of the REMIC will be allocated to holders of the related REMIC Residual
Certificates in their entirety and not to holders of the related REMIC Regular
Certificates.
In the case of individuals or trusts, estates or other persons that
compute their income in the same manner as individuals, who own an interest in
a REMIC Regular Certificate or a REMIC Residual Certificate directly or through
a pass-through interest holder that is required to pass miscellaneous itemized
deductions through to its owners or beneficiaries, e.g., a partnership, an S
corporation or a grantor trust, such expenses will be deductible under Code
Section 67 only to the extent that such expenses, plus other "miscellaneous
itemized deductions" of the individual, exceed 2% of such individual's adjusted
gross income. In addition, Code Section 68 provides that the applicable amount
will be reduced by the lesser of
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o 3% of the excess of the individual's adjusted gross income over the
applicable amount or
o 80% of the amount of itemized deductions otherwise allowable for the
taxable year.
The amount of additional taxable income recognized by REMIC Residual
Certificateholders who are subject to the limitations of either Code Section 67
or Code Section 68 may be substantial. Further, holders other than corporations
subject to the alternative minimum tax may not deduct miscellaneous itemized
deductions in determining such holders' alternative minimum taxable income. The
REMIC is required to report to each pass-through interest holder and to the IRS
such holder's allocable share, if any, of the REMIC's non-interest expenses.
The term "pass-through interest holder" generally refers to individuals,
entities taxed as individuals and certain pass-through entities, but does not
include real estate investment trusts. Accordingly, investment in REMIC
Residual Certificates will in general not be suitable for individuals or for
certain pass-through entities, such as partnerships and S corporations, that
have individuals as partners or shareholders.
Excess Inclusions. A portion of the income on a REMIC Residual
Certificate, referred to in the Code as an "excess inclusion", for any calendar
quarter will be subject to federal income tax in all events. Thus, for example,
an excess inclusion:
o may not, except as described below, be offset by any unrelated losses,
deductions or loss carryovers of a REMIC Residual Certificateholder;
o will be treated as "unrelated business taxable income" within the
meaning of Code Section 512 if the REMIC Residual Certificateholder is a
pension fund or any other organization that is subject to tax only on its
unrelated business taxable income, as discussed under "--Tax-Exempt
Investors" below; and
o is not eligible for any reduction in the rate of withholding tax in the
case of a REMIC Residual Certificateholder that is a foreign investor, as
discussed under "--Residual Certificate Payments--Non-U.S. Persons"
below.
Except as discussed in the following paragraph, with respect to any REMIC
Residual Certificateholder, the excess inclusions for any calendar quarter is
the excess, if any, of (1) the income of such REMIC Residual Certificateholder
for that calendar quarter from its REMIC Residual Certificate over (2) the sum
of the "daily accruals" for all days during the calendar quarter on which the
REMIC Residual Certificateholder holds a REMIC Residual Certificate. For this
purpose, the daily accruals with respect to a REMIC Residual Certificate are
determined by allocating to each day in the 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 percent of the
"Federal long-term rate" in effect at the time the REMIC Residual Certificate
is issued. For this purpose, the "adjusted issue price" of a REMIC Residual
Certificate at the beginning of any calendar quarter equals the issue price of
the REMIC Residual Certificate, increased by the amount of daily accruals for
all prior quarters, and decreased--but not below zero--by the aggregate amount
of payments made on the REMIC Residual Certificate before the beginning of the
quarter. The "federal long-term 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.
In the case of any REMIC Residual Certificates held by a real estate
investment trust, the aggregate excess inclusions with respect to the REMIC
Residual Certificates, reduced (but not below zero) by the real estate
investment trust taxable income (within the meaning of Code Section 857(b)(2),
excluding any net capital gain), will be allocated among the shareholders of
such trust in proportion to the dividends received by the 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 the
shareholder. Regulated investment companies, common trust funds and certain
cooperatives are subject to similar rules.
The Small Business Job Protection Act of 1996 has eliminated the special
rule permitting Section 593 institutions ("thrift institutions") to use net
operating losses and other allowable deductions to offset their excess
inclusion income from REMIC residual certificates that have "significant value"
within the meaning of the REMIC Regulations, effective for taxable years
beginning after December 31, 1995, except with respect to residual certificates
continuously held by a thrift institution since November 1, 1995.
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In addition, the Small Business Job Protection Act of 1996 provides three
rules for determining the effect on excess inclusions on the alternative
minimum taxable income of a residual holder. First, alternative minimum taxable
income for the residual holder is determined without regard to the special rule
that taxable income cannot be less than excess inclusions. Second, the amount
of any alternative minimum tax net operating loss deductions must be computed
without regard to any excess inclusions. Third, a residual holder's alternative
minimum taxable income for a tax year cannot be less than excess inclusions for
the year. The effect of this last statutory amendment is to prevent the use of
nonrefundable tax credits to reduce a taxpayer's income tax below its tentative
minimum tax computed only on excess inclusions. These rules are effective for
tax years beginning after December 31, 1986, unless a residual holder elects to
have such rules apply only to tax years beginning after August 20, 1996.
Payments. Any distribution made on a REMIC Residual Certificate to a REMIC
Residual Certificateholder will be treated as a non-taxable return of capital
to the extent it does not exceed the REMIC Residual Certificateholder's
adjusted basis in the REMIC Residual Certificate. To the extent a distribution
exceeds the adjusted basis, it will be treated as gain from the sale of the
REMIC Residual Certificate.
Sale or Exchange of REMIC Residual Certificates. If a REMIC Residual
Certificate is sold or exchanged, the seller will generally recognize gain or
loss equal to the difference between the amount realized on the sale or
exchange and its adjusted basis in the REMIC Residual Certificate except that
the recognition of loss may be limited under the "wash sale" rules described in
the next paragraph. A holder's adjusted basis in a REMIC Residual Certificate
generally equals the cost of the REMIC Residual Certificate to the REMIC
Residual Certificateholder, increased by the taxable income of the REMIC that
was included in the income of the REMIC Residual Certificateholder with respect
to the REMIC Residual Certificate, and decreased--but not below zero--by the
net losses that have been allowed as deductions to the REMIC Residual
Certificateholder with respect to the REMIC Residual Certificate and by the
distributions received thereon by the REMIC Residual Certificateholder. In
general, the gain or loss will be capital gain or loss provided the REMIC
Residual Certificate is held as a capital asset. The capital gain or loss will
generally be long-term capital gain or loss if the REMIC Regular Certificate
was held for more than one year. Long-term capital gains of individuals are
subject to reduced maximum tax rates while capital gains recognized by
individuals on capital assets held less than twelve months are generally
subject to ordinary income tax rates. The use of capital losses is limited.
However, REMIC Residual Certificates will be "evidences of indebtedness" within
the meaning of Code Section 582(c)(1), so that gain or loss recognized from
sale of a REMIC Residual Certificate by a bank or thrift institution to which
such section applies would be ordinary income or loss. In addition, a transfer
of a REMIC Residual Certificate that is a "noneconomic residual interest" may
be subject to different rules. See "--Tax Related Restrictions on Transfers of
REMIC Residual Certificates--Noneconomic REMIC Residual Certificates" below.
Except as 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 REMIC Residual Certificate, any residual interest in another
REMIC or similar interest in a "taxable mortgage pool", as defined in Code
Section 7701(i), 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 Code Section 1091. In that event, any loss realized by the REMIC
Residual Certificateholder on the sale will not be deductible, but, instead,
will increase such REMIC Residual Certificateholder's adjusted basis in the
newly acquired asset.
PROHIBITED TRANSACTIONS AND OTHER TAXES
The Code imposes a tax on REMICs equal to 100% of the net income derived
from "prohibited transactions". In general, subject to certain specified
exceptions, a prohibited transaction means:
o the disposition of a mortgage loan or MBS,
o the receipt of income from a source other than a mortgage loan or MBS or
certain other permitted investments,
o the receipt of compensation for services, or
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o gain from the disposition of an asset purchased with the payments on the
mortgage loans and/or MBS for temporary investment pending distribution
on the certificates.
It is not anticipated that the trust fund for any series of certificates will
engage in any prohibited transactions in which it would recognize a material
amount of net income.
In addition, certain contributions to a trust fund as to which an election
has been made to treat the trust fund as a REMIC made after the day on which
the trust fund issues all of its interests could result in the imposition of
the Contributions Tax. No trust fund for any series of certificates will accept
contributions that would subject it to such tax.
In addition, a trust fund as to which an election has been made to treat
the trust fund as a REMIC may also be subject to federal income tax at the
highest corporate rate on "net income from foreclosure property," determined by
reference to the rules applicable to real estate investment trusts. "Net income
from foreclosure property" generally means income from foreclosure property
other than qualifying income for a real estate investment trust.
Where any prohibited transactions tax, contributions tax, tax on net
income from foreclosure property or state or local income or franchise tax that
may be imposed on a REMIC relating to any series of certificate arises out of
or results from
o a breach of the servicer's, trustee's or depositor's obligations, as the
case may be, under the related Agreement for such series, such tax will
be borne by the servicer, trustee or depositor, as the case may be, out
of its own funds or
o J.P. Morgan Commercial Mortgage Finance Corp.'s obligation to repurchase
a mortgage loan,
such tax will be borne by J.P. Morgan Commercial Mortgage Finance Corp. In the
event that the servicer, trustee or depositor, as the case may be, fails to pay
or is not required to pay any prohibited transactions tax, contributions tax,
tax on net income from foreclosure property or state or local income or
franchise tax, the tax will be payable out of the trust fund for the series and
will result in a reduction in amounts available to be distributed to the
certificateholders of the series.
LIQUIDATION AND TERMINATION
If the REMIC adopts a plan of complete liquidation, within the meaning of
Code Section 860F(a)(4)(A)(i), which may be accomplished by designating in the
REMIC's final tax return a date on which such adoption is deemed to occur, and
sells all of its assets other than cash within a 90-day period beginning on
such date, the REMIC will not be subject to any prohibited transaction tax,
provided that the REMIC credits or distributes in liquidation all of the sale
proceeds plus its cash, other than the amounts retained to meet claims, to
holders of Regular and REMIC Residual Certificates within the 90-day period.
The REMIC will terminate shortly following the retirement of the REMIC
Regular Certificates. If a REMIC Residual Certificateholder's adjusted basis in
the REMIC Residual Certificate exceeds the amount of cash distributed to such
REMIC Residual Certificateholder in final liquidation of its interest, then it
would appear that the REMIC Residual Certificateholder would be entitled to a
loss equal to the amount of such excess. It is unclear whether such a loss, if
allowed, will be a capital loss or an ordinary loss.
ADMINISTRATIVE MATTERS
Solely for the purpose of the administrative provisions of the Code, the
REMIC generally will be treated as a partnership and the REMIC Residual
Certificateholders will be treated as the partners. Information will be
furnished quarterly to each REMIC Residual Certificateholder who held a REMIC
Residual Certificate on any day in the previous calendar quarter.
Each REMIC Residual Certificateholder is required to treat items on its
return consistently with their treatment on the REMIC's return, unless the
REMIC Residual Certificateholder either files a
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statement identifying the inconsistency or establishes that the inconsistency
resulted from incorrect information received from the REMIC. The IRS may assert
a deficiency resulting from a failure to comply with the consistency
requirement without instituting an administrative proceeding at the REMIC
level. The REMIC does not intend to register as a tax shelter pursuant to Code
Section 6111 because it is not anticipated that the 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 the REMIC, in a manner to be provided in Treasury regulations, with the
name and address of such person and other information.
TAX-EXEMPT INVESTORS
Any REMIC Residual Certificateholder that is a pension fund or other
entity that is subject to federal income taxation only on its "unrelated
business taxable income" within the meaning of Code Section 512 will be subject
to such tax on that portion of the distributions received on a REMIC Residual
Certificate that is considered an excess inclusion. See "--Taxation of Owners
of REMIC Residual Certificates--Excess Inclusions" above.
RESIDUAL CERTIFICATE PAYMENTS--NON-U.S. PERSONS
Amounts paid to REMIC Residual Certificateholders who are not U.S. Persons
(see "--Taxation of Owners of REMIC Regular Certificates--Non-U.S. Persons"
above) are treated as interest for purposes of the 30% or lower treaty rate,
United States withholding tax. Amounts distributed to holders of REMIC Residual
Certificates should qualify as "portfolio interest," subject to the conditions
described in "--Taxation of Owners of REMIC Regular Certificates" above, but
only to the extent that the underlying mortgage loans were originated after
July 18, 1984. Furthermore, the rate of withholding on any income on a REMIC
Residual Certificate that is excess inclusion income will not be subject to
reduction under any applicable tax treaties. See "--Taxation of Owners of REMIC
Residual Certificates--Excess Inclusions" above. If the portfolio interest
exemption is unavailable, such amount will be subject to United States
withholding tax when paid or otherwise distributed, or when the REMIC Residual
Certificate is disposed of, under rules similar to those for withholding upon
disposition of debt instruments that have OID. The Code, however, grants the
Treasury Department authority to issue regulations requiring that those amounts
be taken into account earlier than otherwise provided where necessary to
prevent avoidance of tax, for example, where the REMIC Residual Certificates do
not have significant value. See "--Taxation of Owners of REMIC Residual
Certificates--Excess Inclusions" above. If the amounts paid to REMIC Residual
Certificateholders that are not U.S. Persons are effectively connected with
their conduct of a trade or business within the United States, the 30%, or
lower treaty rate, withholding will not apply. Instead, the amounts paid to
such non-U.S. Person will be subject to U.S. federal income taxation at regular
graduated rates. For special restrictions on the transfer of REMIC Residual
Certificates, see "--Tax Related Restrictions on Transfers of REMIC Residual
Certificates" below.
REMIC Regular Certificateholders and persons related to such holders
should not acquire any REMIC Residual Certificates, and REMIC Residual
Certificateholders and persons related to REMIC Residual Certificateholders
should not acquire any REMIC Regular Certificates, without consulting their tax
advisors as to the possible adverse tax consequences of such acquisition.
TAX RELATED RESTRICTIONS ON TRANSFERS OF REMIC RESIDUAL CERTIFICATES
Disqualified Organizations. An entity may not qualify as a REMIC unless
there are reasonable arrangements designed to ensure that residual interests in
the entity are not held by "disqualified organizations". Further, a tax is
imposed on the transfer of a residual interest in a REMIC to a "disqualified
organization." The amount of the tax equals the product of (A) an amount, as
determined under the REMIC Regulations, equal to the present value of the total
anticipated "excess inclusions" with respect to such interest for periods after
the transfer and (B) the highest marginal federal income tax rate applicable to
corporations. The tax is imposed on the transfer unless the transfer is through
an agent, including a broker or other middleman, for a disqualified
organization, in which event the tax is imposed
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on the agent. The person otherwise liable for the tax shall be relieved of
liability for the tax if the transferee furnished to such person an affidavit
that the transferee is not a disqualified organization and, at the time of the
transfer, such person does not have actual knowledge that the affidavit is
false. A "disqualified organization" means:
(A) the United States, any State, possession or political
subdivision thereof, any foreign government, any international
organization or any agency or instrumentality of any of the
foregoing (provided that such term does not include an
instrumentality if all its activities are subject to tax and,
except for FHLMC, a majority of its board of directors is not
selected by any such government agency);
(B) any organization, other than certain farmers' cooperatives,
generally exempt from federal income taxes unless such
organization is subject to the tax on "unrelated business taxable
income"; and
(C) a rural electric or telephone cooperative.
A tax is imposed on a "pass-through entity" holding a residual interest in
a REMIC if at any time during the taxable year of the pass-through entity a
disqualified organization is the record holder of an interest in such entity,
provided that all partners of an "electing large partnership" as defined in
Section 775 of the Code, are deemed to be disqualified organizations. The
amount of the tax is equal to the product of (A) the amount of excess
inclusions for the taxable year allocable to the interest held by the
disqualified organization and (B) the highest marginal federal income tax rate
applicable to corporations. The pass-through entity otherwise liable for the
tax, for any period during which the disqualified organization is the record
holder of an interest in such entity, will be relieved of liability for the tax
if such record holder furnishes to such entity an affidavit that such record
holder is not a disqualified organization and, for such period, the
pass-through entity does not have actual knowledge that the affidavit is false.
For this purpose, a "pass-through entity" means:
o a regulated investment company, real estate investment trust or common
trust fund;
o a partnership, trust or estate; and
o certain cooperatives.
Except as may be provided in Treasury regulations not yet issued, any person
holding an interest in a pass-through entity as a nominee for another will,
with respect to such interest, be treated as a pass-through entity. Electing
large partnerships--generally, non-service partnerships with 100 or more
members electing to be subject to simplified IRS reporting provisions under
Code sections 771 through 777--will be taxable on excess inclusion income as if
all partners were disqualified organizations.
In order to comply with these rules, the Agreement will provide that no
record or beneficial ownership interest in a REMIC Residual Certificate may be
purchased, transferred or sold, directly or indirectly, without the express
written consent of the master servicer. The master servicer will grant consent
to a proposed transfer only if it receives the following:
o an affidavit from the proposed transferee to the effect that it is not a
disqualified organization and is not acquiring the REMIC Residual
Certificate as a nominee or agent for a disqualified organization, and
o a covenant by the proposed transferee to the effect that the proposed
transferee agrees to be bound by and to abide by the transfer
restrictions applicable to the REMIC Residual Certificate.
Noneconomic REMIC Residual Certificates. The REMIC Regulations disregard,
for federal income tax purposes, any transfer of a Noneconomic REMIC Residual
Certificate to a U.S. Person unless no significant purpose of the transfer is
to enable the transferor to impede the assessment or collection of tax. A
Noneconomic REMIC Residual Certificate is any REMIC Residual Certificate,
including a REMIC Residual Certificate with a positive value at issuance,
unless, at the time of transfer, taking into account the Prepayment Assumption
and any required or permitted clean up calls or required liquidation provided
for in the REMIC's organizational documents,
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o the present value of the expected future distributions on the REMIC
Residual Certificate at least equals the product of the present value of
the anticipated excess inclusions and the highest corporate income tax
rate in effect for the year in which the transfer occurs and
o the transferor reasonably expects that the transferee will receive
distributions from the REMIC at or after the time at which taxes accrue
on the anticipated excess inclusions in an amount sufficient to satisfy
the accrued taxes.
A significant purpose to impede the assessment or collection of tax exists if
the transferor, at the time of the transfer, either knew or should have known
that the transferee would be unwilling or unable to pay taxes due on its share
of the taxable income of the REMIC. A transferor is presumed not to have such
knowledge if:
o the transferor conducted a reasonable investigation of the transferee,
and
o the transferee acknowledges to the transferor that the residual interest
may generate tax liabilities in excess of the cash flow and the
transferee represents that it intends to pay such taxes associated with
the residual interest as they become due.
If a transfer of a Noneconomic REMIC Residual Certificate is disregarded, the
transferor would continue to be treated as the owner of the REMIC Residual
Certificate and would continue to be subject to tax on its allocable portion of
the net income of the REMIC.
Foreign Investors. The REMIC Regulations provide that the transfer of a
REMIC Residual Certificate that has a "tax avoidance potential" to a "foreign
person" will be disregarded for federal income tax purposes. This rule appears
to apply to a transferee who is not a U.S. Person unless the transferee's
income in respect of the REMIC Residual Certificate is effectively connected
with the conduct of a United States trade or business. A REMIC Residual
Certificate is deemed to have a tax avoidance potential unless, at the time of
transfer, the transferor reasonably expects that the REMIC will distribute to
the transferee amounts that will equal at least 30 percent of each excess
inclusion, and that such amounts will be distributed at or after the time the
excess inclusion accrues and not later than the end of the calendar year
following the year of accrual. If the non-U.S. Person transfers the REMIC
Residual Certificate to a U.S. Person, the transfer will be disregarded, and
the foreign transferor will continue to be treated as the owner, if the
transfer has the effect of allowing the transferor to avoid tax on accrued
excess inclusions. The provisions in the REMIC Regulations regarding transfers
of REMIC Residual Certificates that have tax avoidance potential to foreign
persons are effective for all transfers after June 30, 1992. The Agreement will
provide that no record or beneficial ownership interest in a REMIC Residual
Certificate may be transferred, directly or indirectly, to a non-U.S. Person
unless the person provides the trustee with a duly completed IRS Form 4224 or
applicable successor form adopted by the IRS for such purpose and the trustee
consents to the transfer in writing.
Any attempted transfer or pledge in violation of the transfer restrictions
shall be absolutely null and void and shall vest no rights in any purported
transferee. Investors in REMIC Residual Certificates are advised to consult
their own tax advisors with respect to transfers of the REMIC Residual
Certificates and, in addition, pass-through entities are advised to consult
their own tax advisors with respect to any tax which may be imposed on a
pass-through entity.
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ERISA CONSIDERATIONS
GENERAL
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and Section 4975 of the Code impose certain restrictions on employee benefit
plans subject to ERISA and on certain other retirement plans and arrangements
(including, but not limited to individual retirement accounts and Keogh plans)
("Plans") and on persons who are parties in interest or disqualified persons
("parties in interest") with respect to such Plans. Certain employee benefit
plans, such as governmental plans and church plans (if no election has been
made under Section 410(d) of the Code), are not subject to the restrictions of
ERISA or Section 4975 of the Code, and assets of these plans may be invested in
the certificates without regard to the ERISA considerations described below,
subject to other applicable federal and state law. However, any governmental or
church plan that is not subject to ERISA but is qualified under Section 401(a)
of the Code and exempt from taxation under Section 501(a) of the Code is
subject to the prohibited transaction rules set forth in Section 503 of the
Code.
Investments by Plans are subject to ERISA's general fiduciary
requirements, including the requirement of investment prudence and
diversification and the requirement that a Plan's investments be made in
accordance with the documents governing the Plan.
PROHIBITED TRANSACTIONS
General
Section 406 of ERISA prohibits parties in interest with respect to a Plan
from engaging in certain transactions involving a Plan and its assets unless a
statutory, regulatory or administrative exemption applies to the transaction.
Section 4975 of the Code imposes excise taxes (or, in some cases, a civil
penalty may be assessed pursuant to Section 502(i) of ERISA) on parties in
interest which engage in nonexempt prohibited transactions.
The United States Department of Labor ("Labor") has issued a final
regulation (29 C.F.R. Section 2510.3-101) containing rules for determining what
constitutes the assets of a Plan. This regulation provides that, as a general
rule, the underlying assets and properties of corporations, partnerships,
trusts and certain other entities in which a Plan makes an "equity investment"
will be deemed for purposes of ERISA to be assets of the Plan unless exception
applies.
Under the terms of the regulation, the Trust may be deemed to hold plan
assets by reason of a Plan's investment in a certificate; such plan assets
would include an undivided interest in the mortgage loans and any other assets
held by the trust. In this event, the Depositor, the servicers, the trustee,
any insurer of the mortgage assets and other persons, in providing services
with respect to the assets of the Trust, may be parties in interest, subject to
the fiduciary responsibility provisions of Title I of ERISA, including the
prohibited transaction provisions of Section 406 of ERISA (and of Section 4975
of the Code), with respect to transactions involving the plan assets unless
such transactions are subject to a statutory, regulatory or administrative
exemption.
The regulations contain a de minimis safe-harbor rule that exempts any
entity from plan assets status as long as the aggregate equity investment in
such entity by Plans is not significant. For this purpose, equity participation
in the entity will be significant if immediately after any acquisition of any
equity interest in the entity, "benefit plan investors" in the aggregate, own
25% or more of the value of any class of equity interest (excluding from the
calculation the value of equity interests held by persons who have
discretionary authority or control with respect to the assets of the entity (or
held by affiliates of such persons)). "Benefit plan investors" include Plans
and employee benefit plans not subject to ERISA (e.g., governmental and foreign
plans) and entities whose underlying assets include plan assets by reason of
Plan investment in such entities. To fit within this safe harbor, benefit plan
investors must own less than 25% of each class of certificates, regardless of
the portion of total equity value represented by such class, on an ongoing
basis.
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Availability of Underwriter's Exemption for Certificates
Labor has granted to J.P. Morgan Securities Inc. Prohibited Transaction
Exemption 90-23 (the "Exemption"), which exempts from the application of the
prohibited transaction rules transactions relating to: (1) the acquisition,
sale and holding by Plans of certain certificates representing an undivided
interest in certain asset-backed pass-through trusts, with respect to which
J.P. Morgan Securities Inc. or any of its affiliates is the sole underwriter or
the manager or co-manager of the underwriting syndicate; and (2) the servicing,
operation and management of these asset-backed pass-through trusts, provided
that the general conditions and certain other conditions set forth in the
Exemption are satisfied.
The Exemption sets forth the following general conditions which must be
satisfied before a transaction involving the acquisition, sale and holding of
the certificates or a transaction in connection with the servicing, operation
and management of the trust fund may be eligible for exemptive relief
thereunder:
(1) The acquisition of the certificates by a Plan is on terms (including
the price for such certificates) that are at least as favorable to the
investing Plan as they would be in an arm's-length transaction with an
unrelated party;
(2) The rights and interests evidenced by the certificates acquired by the
Plan are not subordinated to the rights and interests evidenced by other
certificates of the trust fund;
(3) The certificates acquired by the Plan have received a rating at the
time of such acquisition that is in one of the three highest rating categories
from any of Duff & Phelps Inc., Fitch IBCA, Inc., Moody's Investors Service,
Inc. and Standard & Poor's Ratings Group (each, a "rating agency");
(4) The trustee is not an affiliate of the underwriters, the Depositor,
the servicers, any borrower whose obligations under one or more mortgage loans
constitute more than 5% of the aggregate unamortized principal balance of the
assets in the trust, or any of their respective affiliates (the "Restricted
Group");
(5) The sum of all payments made to and retained by the underwriters in
connection with the distribution of the certificates represents not more than
reasonable compensation for underwriting such certificates; the sum of all
payments made to and retained by the Depositor pursuant to the sale of the
mortgage loans to the trust represents not more than the fair market value of
such mortgage loans; the sum of all payments made to and retained by the
servicers represent not more than reasonable compensation for the servicers'
services under the agreements and reimbursement of the servicer's reasonable
expenses in connection therewith; and
(6) The Plan investing in the certificates is an "accredited investor" as
defined in Rule 501(a)(1) of Regulation D of the Securities and Exchange
Commission under the Securities Act of 1933 as amended.
The trust fund must also meet the following requirements:
(i) the corpus of 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 rating categories of a rating
agency for at least one year prior to the Plan's acquisition of the
certificates; 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 the certificates.
On July 21, 1997, Labor published in the Federal Register an amendment to
the Exemption, which extends exemptive relief to certain mortgage-backed and
asset-backed securities transactions using pre-funding accounts for trusts
issuing pass-through certificates. The amendment generally allows mortgage
loans or other secured receivables supporting payments to certificateholders,
and having a value equal to no more than twenty-five percent (25%) of the total
principal amount of the certificates being offered by the trust, to be
transferred to the trust within a 90-day or three-month period following the
closing date, instead of requiring that all such receivables be either
identified or transferred on or before the closing date. The relief is
available when certain conditions are met.
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Moreover, the Exemption provides relief from certain self-dealing/conflict
of interest prohibited transactions that may occur when any person who has
discretionary authority or renders investment advice with respect to the
investment of plan assets causes a Plan to acquire certificates in a trust,
provided that, among other requirements: (i) such person (or its affiliate) is
an obligor with respect to five percent or less of the fair market value of the
obligations or receivables contained in the trust; (ii) the Plan is not a plan
with respect to which any member of the Restricted Group is the "plan sponsor"
(as defined in Section 3(16)(B) of ERISA); (iii) in the case of an acquisition
in connection with the initial issuance of certificates, at least fifty percent
of each class of certificates in which Plans have invested is acquired by
persons independent of the Restricted Group and at least fifty percent of the
aggregate interest in the trust fund is acquired by persons independent of the
Restricted Group; (iv) a Plan's investment in certificates of any class does
not exceed twenty-five percent of all of the certificates of that class
outstanding at the time of the acquisition; and (v) immediately after the
acquisition, no more than twenty-five percent of the assets of any Plan with
respect to which such person has discretionary authority or renders investment
advice are invested in certificates representing an interest in one or more
trusts containing assets sold or serviced by the same entity. The Exemption
does not apply to Plans sponsored by any member of the Restricted Group.
Before purchasing a certificate, a fiduciary of a Plan should itself
confirm (a) that the certificates constitute "certificates" for purposes of the
Exemption and (b) that the specific and general conditions set forth in the
Exemption and the other requirements set forth in the Exemption would be
satisfied.
REVIEW BY PLAN FIDUCIARIES
Any Plan fiduciary considering whether to purchase any certificates 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. Among other things, before purchasing any
certificates, a fiduciary of a Plan subject to the fiduciary responsibility
provisions of ERISA or an employee benefit plan subject to the prohibited
transaction provisions of the Code should make its own determination as to the
availability of the exemptive relief provided in the Exemption, and also
consider the availability of any other prohibited transaction exemptions. The
prospectus supplement with respect to a series of certificates may contain
additional information regarding the application of the Exemption, or another
exemption with respect to the certificates offered thereby.
LEGAL INVESTMENT
The prospectus supplement for each series of offered certificates will
identify those classes of offered certificates, if any, which constitute
"mortgage related securities" for purposes of the Secondary Mortgage Market
Enhancement Act of 1984 ("SMMEA"). Such classes will constitute "mortgage
related securities" for so long as they are rated in one of the two highest
rating categories by at least one nationally recognized statistical rating
organization (the "SMMEA Certificates"). As "mortgage related securities," the
SMMEA Certificates will constitute legal investments for persons, trusts,
corporations, partnerships, associations, business trusts and business entities
(including, but not limited to, state chartered savings banks, commercial
banks, savings and loan associations and insurance companies, as well as
trustees and state government employee retirement systems) created pursuant to
or existing under the laws of the United States or of any state (including the
District of Columbia and Puerto Rico) whose authorized investments are subject
to state regulation to the same extent that, under applicable law, obligations
issued by or guaranteed as to principal and interest by the United States or
any agency or instrumentality thereof constitute legal investments for such
entities. Alaska, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia,
Illinois, Kansas, Maryland, Michigan, Missouri, Nebraska, New Hampshire, New
York, North Carolina, Ohio, South Dakota, Utah, Virginia and West Virginia
enacted legislation, on or before the October 4, 1991 cutoff established by
SMMEA for such enactments, limiting to varying extents the ability of certain
entities (in particular, insurance companies) to invest in mortgage related
securities, in most cases by requiring the affected investors to rely solely
upon existing state law, and not SMMEA. Accordingly, the investors affected by
such legislation will be authorized to invest in SMMEA Certificates only to the
extent provided in the legislation. Accordingly, investors whose investment
authority is subject
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to legal restrictions should consult their own legal advisors to determine
whether and to what extent the offered certificates constitute legal
investments for them.
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 with "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. 24 (Seventh), subject in each case to such regulations as
the applicable federal regulatory authority may prescribe.
Institutions where investment activities are subject to legal investment
laws or regulations or review by certain regulatory authorities may be subject
to restrictions on investment in certain classes of offered certificates. Any
financial institution which is subject to the jurisdiction of the Comptroller
of the Currency, the Board of Governors of the Federal Reserve System, the
Federal Deposit Insurance Corporation ("FDIC"), the Office of Thrift
Supervision ("OTS"), the National Credit Union Administration ("NCUA") or other
federal or state agencies with similar authority should review any applicable
rules, guidelines and regulations prior to purchasing any offered certificate.
The Federal Financial Institutions Examination Council, for example, has issued
a Supervisory Policy Statement on Securities Activities effective February 10,
1992 (the "Policy Statement"). The Policy Statement has been adopted by the
Comptroller of the Currency, the Federal Reserve Board, the FDIC, the OTS and
the NCUA (with certain modifications), with respect to the depository
institutions that they regulate. The Policy Statement prohibits depository
institutions from investing in certain "high-risk mortgage securities"
(including securities such as certain classes of offered certificates), except
under limited circumstances, and sets forth certain investment practices deemed
to be unsuitable for regulated institutions. The NCUA issued final regulations
effective December 2, 1991 that restrict and in some instances prohibit the
investment by federal credit unions in certain types of mortgage related
securities.
In September 1993 the National Association of Insurance Commissioners
released a draft model investment law (the "Model Law") which sets forth model
investment guidelines for the insurance industry. Institutions subject to
insurance regulatory authorities may be subject to restrictions on investment
similar to those set forth in the Model Law and other restrictions.
If specified in the related prospectus supplement, other classes of
offered certificates offered pursuant to this prospectus will not constitute
"mortgage related securities" under SMMEA. The appropriate characterization of
this offered certificate 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.
Notwithstanding SMMEA, there may be other restrictions on the ability of
certain investors, including depository institutions, either to purchase any
offered certificates or to purchase offered certificates representing more than
a special percentage of the investors' assets.
Except as to the status of SMMEA certificates identified in the prospectus
supplement for a series as "mortgage related securities" under SMMEA, the
Depositor will make no representations as to the proper characterization of the
certificates for legal investment or financial institution regulatory purposes,
or as to the ability of particular investors to purchase any 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
certificates) may adversely affect the liquidity of the certificates.
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 and provisions
which may restrict or prohibit investment in securities which are not "interest
bearing" or "income paying."
There may be other restrictions on the ability of certain investors,
including depository institutions, either to purchase offered certificates or
to purchase offered certificates representing more than a specified percentage
of the investor's assets. Investors should consult their own legal advisors in
determining whether and to what extent the offered certificates constitute
legal investments for them.
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PLAN OF DISTRIBUTION
The offered certificates offered hereby and by the Supplements to this
prospectus will be offered in series. The distribution of the certificates may
be effected from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices to be
determined at the time of sale or at the time of commitment therefor. If so
specified in the prospectus supplement, the offered certificates will be
distributed in a firm commitment underwriting, subject to the terms and
conditions of the underwriting agreement, by J.P. Morgan Securities Inc.
("JPMSI") acting as underwriter with other underwriters, if any, named therein.
In such event, the prospectus supplement may also specify that the underwriters
will not be obligated to pay for any offered certificates agreed to be
purchased by purchasers pursuant to purchase agreements acceptable to the
depositor. In connection with the sale of offered certificates, underwriters
may receive compensation from the depositor or from purchasers of offered
certificates in the form of discounts, concessions or commissions. The
prospectus supplement will describe any such compensation paid by the
depositor.
Alternatively, the prospectus supplement may specify that offered
certificates will be distributed by JPMSI acting as agent or in some cases as
principal with respect to offered certificates that it has previously purchased
or agreed to purchase. If JPMSI acts as agent in the sale of offered
certificates, JPMSI will receive a selling commission with respect to such
offered certificates, depending on market conditions, expressed as a percentage
of the aggregate certificate balance or notional amount of the offered
certificates as of the Cut-off Date. The exact percentage for each series of
certificates will be disclosed in the related prospectus supplement. To the
extent that JPMSI elects to purchase offered certificates as principal, JPMSI
may realize losses or profits based upon the difference between its purchase
price and the sales price. The prospectus supplement with respect to any series
offered other than through underwriters 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 the series.
The depositor will indemnify JPMSI and any underwriters against certain
civil liabilities, including liabilities under the Securities Act of 1933, or
will contribute to payments JPMSI and any underwriters may be required to make
in respect thereof.
In the ordinary course of business, JPMSI and the depositor may engage in
various securities and financing transactions, including repurchase agreements
to provide interim financing of the Depositor's mortgage loans pending the sale
of such mortgage loans or interests therein, including the certificates.
The offered certificates will be sold primarily to institutional
investors. 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 of 1933 in connection
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.
As to each series of certificates, only those classes rated in an
investment grade rating category by any rating agency will be offered hereby.
Any non-investment grade class may be initially retained by the Depositor, and
may be sold by the depositor at any time in private transactions.
LEGAL MATTERS
Certain legal matters in connection with the certificates, including
certain federal income tax consequences, will be passed upon for the depositor
by Brown & Wood llp, New York, New York.
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 he included in this prospectus or in the related prospectus
supplement.
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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 a rating agency.
Ratings on mortgage pass-through certificates address the likelihood of
receipt by certificateholders of all distributions on the underlying mortgage
loans. These ratings address the structural, legal and issuer-related aspects
associated with such certificates, the nature of the underlying mortgage loans
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 mortgagors 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 in extreme cases might fail to recoup their
initial investments.
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.
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GLOSSARY OF TERMS
"Accrual Certificates" means certificates which provide for distributions
of accrued interest thereon commencing only following the occurrence of certain
events, such as the retirement of one or more other classes of certificates of
such series
"Accrued Certificate Interest" means, with respect to each class of
certificates and each distribution date, other than certain classes of Stripped
Interest Certificates, the amount equal to the interest accrued for a specified
period on the outstanding certificate balance immediately prior to the
distribution date, at the applicable pass-through rate, as described in
"Distributions of Interest on the Certificates" in this prospectus.
"ARM Loans" means mortgage loans with floating mortgage interest rates.
"Available Distribution Amount" means the sum of the following amounts:
(i) the total amount of all cash on deposit in the related Distribution
account as of the corresponding Determination Date, including servicer
advances, net of any scheduled payments due and payable after such
Distribution Date;
(ii) interest or investment income on amounts on deposit in the
Distribution account, including any net amounts paid under any Cash Flow
Agreements; and
(iii) to the extent not on deposit in the related Distribution account as
of the corresponding Determination Date, any amounts collected under, from
or in respect of any Credit Support with respect to such Distribution Date.
"Cede" means Cede & Company.
"CMBS" means pass-through certificates or other mortgage-backed securities
evidencing interests in or secured by one or more mortgage loans, certificates
or securities.
"CMBS Trustee" means a trustee or a custodian under the CMBS Agreement.
"Constant Prepayment Rate" or "CPR" means a rate that represents an
assumed constant rate of prepayment each month (which is expressed on a per
annum bases) relative to the then outstanding principal balance of a pool of
mortgage loans for the life of such mortgage loans. CPR does not purport to be
either a historical description of the prepayment experience of any pool of
mortgage loans or a prediction of the anticipated rate of prepayment of any
mortgage loans.
"Cooperative" means a private cooperative housing corporation.
"Covered Trust" means a form of credit support that covers more than one
series of certificates.
"Debt Service Coverage Ratio" means, with respect to a mortgage loan at
any given time, the ratio of the Net Operating Income for a twelve-month period
to the annualized scheduled payments on the mortgage loan.
"DTC" means The Depository Trust Company.
"Equity Participations" means provisions entitling the lender to a share
of profits realized from the operation or disposition of a mortgaged property.
"Loan-to-Value Ratio" means, with respect to a mortgage loan at any given
time, the ratio (expressed as a percentage) of the then outstanding principal
balance of the mortgage loan to the value of the related mortgaged property.
The "value" of a mortgaged property, other than with respect to refinance
loans, is generally the lesser of (a) the appraised value determined in an
appraisal obtained by the originator at origination of such loan and (b) the
sales price for such property. "Refinance loans" are loans made to refinance
existing loans. Unless otherwise set forth in the related prospectus
supplement, the value of the mortgaged property securing a refinance loan is
the appraised value thereof determined in an appraisal obtained at the time of
origination of the refinance loan. 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 at origination and will fluctuate from time to time based upon
changes in economic conditions and the real estate market.
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"Lock-out Date" means the date of expiration of the Lockout Period.
"Lock-out Period" means a period during which prepayments on a mortgage
loan are prohibited.
"Net Operating Income" means, for any given period, unless otherwise
specified in the related prospectus supplement, the total operating revenues
derived from a mortgaged property during that period, minus the total operating
expenses incurred in respect of the mortgaged property during that period other
than (i) non-cash items such as depreciation and amortization, (ii) capital
expenditures and (iii) debt service on loans secured by the mortgaged property.
The Net Operating Income of a mortgaged property will fluctuate over time and
may be sufficient or insufficient to cover debt service on the related mortgage
loan at any given time.
"Pass-Through Rate" means the fixed, variable or floating rate per annum
at which any class of certificates accrues interest.
"REMIC" means a "real estate mortgage investment conduit" under the
Internal Revenue Code of 1986.
"REMIC certificates" means a certificate issued by a trust fund relating
to a series of certificate where an election is made to treat the trust fund as
a REMIC.
"RED Property" means any mortgaged property acquired on behalf of the
trust fund in respect of a defaulted mortgage loan through foreclosure, deed in
lieu of foreclosure or otherwise.
"Retained Interest" means an interest in an asset which represents a
specified portion of the interest payable. the Retained Interest will be
deducted from borrower payments as received and will not be part of the related
trust fund.
"Senior Certificates" means certificates which are senior to one or more
other classes of certificates in respect of certain distributions on the
certificates.
"Stripped Interest Certificates" means certificates which are entitled to
interest distributions with disproportionately low, nominal or no principal
distributions.
"Stripped Principal Certificates" means certificates which are entitled to
pr incipal distributions with disproportionately low, nominal or no interest
distributions.
"Subordinate Certificates" means certificates which are subordinate to one
or more other classes of certificates in respect of certain distributions on
the certificates.
"Warranting Party" means the person making or assigning representations
and warranties.
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The attached diskette contains a Microsoft Excel,(1) Version 5.0
spreadsheet file (the "Spreadsheet File") that can be put on a user-specified
hard drive or network drive. The Spreadsheet File is "2000C9.XLS". It provides,
in electronic format, certain statistical information that appears under the
caption "Description of the Mortgage Pool--Certain Characteristics of the
Mortgage Loans" in the Prospectus Supplement and in Annex A, Annex B, Annex C
and Annex D to the Prospectus Supplement. Defined terms used in the Spreadsheet
File but not otherwise defined therein shall have the respective meanings
assigned to them in the Prospectus Supplement. All the information contained in
the Spreadsheet File is subject to the same limitations and qualifications
contained in this Prospectus Supplement. Prospective investors are strongly
urged to read the Prospectus Supplement in its entirety prior to accessing the
Spreadsheet File.
Open the file as you would normally open any spreadsheet in Microsoft
Excel. Before the file is displayed, a message will appear notifying you that
the file is Read Only. Click the "READ ONLY" button, and after the file is
opened, a securities law legend will be displayed. READ THE LEGEND CAREFULLY.
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(1) Microsoft Excel is a registered trademark of Microsoft Corporation.
