<PAGE>
Filed pursuant to Rule 424(b)(5)
Registration File No. 333-59167
SUBJECT TO COMPLETION, DATED MARCH 1, 1999
Information contained herein is subject to completion or amendment. These
securities may not be sold nor may offers to buy be accepted prior to the time
the Prospectus is delivered in final form. This Prospectus Supplement shall not
constitute an offer to sell or the solicitation of an offer to buy, nor shall
there be any sale of, these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
PROSPECTUS SUPPLEMENT
(to Prospectus dated March 1, 1999)
$1,121,153,000 (Approximate)
DLJ Commercial Mortgage Corp., the Depositor
DLJ Commercial Mortgage Trust 1999-CG1, the Trust
Commercial Mortgage Pass-Through Certificates,
Series 1999-CG1
The Depositor will establish the Trust. The Trust will issue the seven
(7) classes of "Offered Certificates" described in the table below, together
with twelve (12) additional classes of "Private Certificates".
The Offered Certificates are the only securities offered pursuant to
this prospectus supplement. This prospectus supplement may be used to offer and
sell the Offered Certificates only if accompanied by the Depositor's prospectus
dated March 1, 1999.
The Private Certificates are not offered by this prospectus supplement.
The Private Certificates will be subordinated to, and provide credit enhancement
for, the Offered Certificates.
The assets of the Trust will include a pool of 279 fixed rate, monthly
pay mortgage loans secured by first mortgage liens on fee and/or leasehold
interests in various commercial and multifamily residential properties. The
mortgage pool will have an "Initial Pool Balance" of approximately
$1,252,685,456. The mortgage loans and related mortgaged properties are more
fully described in this prospectus supplement.
No governmental agency or instrumentality has insured or guaranteed the
Offered Certificates or the underlying mortgage loans. The Offered Certificates
will represent interests in the Trust only and will not represent an interest in
or obligations of any other party.
--------------------------
<TABLE>
<CAPTION>
Initial Aggregate
Certificate Principal Expected Ratings
Balance or Certificate Initial Pass- Pass-Through Moody's/Fitch Assumed Final
Offering Certificates Notional Amount(1) Through Rate(3) Rate Description(4) (IBCA)(7) Distribution Date(8)
- --------------------- ------------------ --------------- ------------------- --------- --------------------
<S> <C> <C> <C> <C> <C>
Class S...................... N/A (2) Variable Aaa/AAA
Class A-1A................... $219,703,000 Fixed Aaa/AAA
Class A-1B................... $694,757,000 Fixed Aaa/AAA
Class A-2.................... $ 59,502,000 WAC Cap(5) Aa2/AA
Class A-3.................... $ 65,766,000 WAC Cap(5) A2/A
Class B-1.................... $ 65,766,000 WAC(6) Baa2/BBB
Class B-2.................... $ 15,659,000 WAC(6) Baa3/BBB-
</TABLE>
(footnotes to table on next page)
--------------------------
You should fully consider the risk factors beginning on page S-35 in
this prospectus supplement prior to investing in the Offered Certificates.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus supplement or the accompanying
prospectus. Any representation to the contrary is a criminal offense.
--------------------------
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJSC") and
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"; and,
together with DLJSC, the "Underwriters") will purchase the Offered Certificates
from the Depositor, subject to the satisfaction of certain conditions. The
Underwriters currently intend to sell the Offered Certificates 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 sale of the Offered
Certificates will be an amount equal to approximately % of the initial aggregate
Certificate Principal Balance of the Offered Certificates, plus accrued
interest, before deducting expenses payable by the Depositor. See "Method of
Distribution" in this Prospectus Supplement.
Donaldson, Lufkin & Jenrette
Securities Corporation
Merrill Lynch & Co.
The date of this Prospectus Supplement is March , 1999.
<PAGE>
Footnotes to the Table on the Cover of this Prospectus Supplement:
(1) The actual initial aggregate Certificate Principal Balance or
Certificate Notional Amount of any class of Offered Certificates at the
date of issuance may be larger or smaller than the amount shown,
depending on the actual size of the Initial Pool Balance. The Initial
Pool Balance may be as much as 5% larger or smaller than the amount
presented in this Prospectus Supplement. The terms "Certificate
Principal Balance" and "Certificate Notional Amount" are defined in
this Prospectus Supplement under "Description of the Offered
Certificates--General".
(2) The Class S Certificates will not have Certificate Principal Balances
and will not entitle the holders thereof to any distributions of
principal. The Class S Certificates will accrue interest on an
aggregate Certificate Notional Amount that is equal to the aggregate
Certificate Principal Balance outstanding from time to time of all
those Certificates that have Certificate Principal Balances.
(3) The Pass-Through Rates shown in the table on the cover page for the
Class S, Class A-2, Class A-3, Class B-1 and Class B-2 Certificates are
the rates applicable for distributions to be made in April 1999. The
Pass-Through Rates for those classes will be variable or otherwise
subject to change and, in each case, will be calculated pursuant to a
formula described under "Description of the Offered Certificates
--Distributions--Calculation of Pass-Through Rates" in this Prospectus
Supplement. The Pass-Through Rates for the Class A-1A and Class A-1B
Certificates are fixed at the respective rates per annum specified in
the table.
(4) In addition to distributions of interest, the holders of one or more
classes of the Offered Certificates may be entitled to receive a
portion of any prepayment premiums or yield maintenance charges
received from time to time on the underlying mortgage loans.
(5) "WAC Cap" refers to a Pass-Through Rate that is, from time to time,
equal to the lesser of the initial Pass-Through Rate for the subject
class of Certificates and a weighted average coupon derived from
interest rates on the underlying mortgage loans.
(6) "WAC" refers to a Pass-Through Rate that is, from time to time, equal
to a weighted average coupon derived from interest rates on the
underlying mortgage loans.
(7) By Moody's Investors Service, Inc. ("Moody's") and Fitch IBCA, Inc.
("Fitch"; and, together with Moody's, the "Rating Agencies"). See
"Ratings" in this Prospectus Supplement.
(8) The Assumed Final Distribution Date is described under "Summary of
Prospectus Supplement--Relevant Dates and Periods" in this Prospectus
Supplement. The Rated Final Distribution Date, which is also defined
under "Summary of Prospectus Supplement--Relevant Dates and Periods" in
this Prospectus Supplement, will occur in March 2032.
Important Notice about the Information Contained in this Prospectus Supplement
and the Accompanying Prospectus
Information about the Offered Certificates is contained in two separate
documents, each of which provides summary information in the front part thereof
and more detailed information in the text that follows: (a) the accompanying
prospectus dated March 1, 1999 (the "Prospectus"), which provides general
information, some of which may not apply to the Offered Certificates; and (b)
this prospectus supplement dated March , 1999 (this "Prospectus Supplement"),
which describes the specific terms of the Offered Certificates.
You are urged to read both the Prospectus and this Prospectus
Supplement in full to obtain material information concerning the Offered
Certificates. If the descriptions of the Offered Certificates vary between this
Prospectus Supplement and the Prospectus, you should rely on the information
contained in this Prospectus Supplement. You should only rely on the information
contained in this Prospectus Supplement and the Prospectus. The Depositor has
not authorized any person to give any information or to make any representation
that is different.
This Prospectus Supplement and the Prospectus include cross-references
to sections in these materials where you can find further related discussions.
The Table of Contents in this Prospectus Supplement and the Prospectus identify
the pages where these sections are located.
This Prospectus Supplement uses certain capitalized terms that are
defined either in a different section of this Prospectus Supplement or in the
Prospectus. Each of this Prospectus Supplement and the Prospectus includes an
"Index of Principal Definitions" that identifies where to locate the definitions
for those capitalized terms that are most significant or are most commonly used.
S-2
<PAGE>
This Prospectus Supplement and the Prospectus include words such as
"expects", "intends", "anticipates", "estimates" and similar words and
expressions. Such words and expressions are intended to identify forward-looking
statements. Any forward-looking statements are made subject to risks and
uncertainties which could cause actual results to differ materially from those
stated. Such risks and uncertainties include, among other things, declines in
general economic and business conditions, increased competition, changes in
demographics, changes in political and social conditions, regulatory initiatives
and changes in customer preferences, many of which are beyond the control of the
Depositor, the Master Servicer, the Special Servicer, the Trustee or any related
borrower. The forward-looking statements made in this Prospectus Supplement are
accurate as of the date stated on the cover of this Prospectus Supplement. The
Depositor has no obligation to update or revise any such forward-looking
statement.
-----------------------------
The Depositor has filed with the Securities and Exchange Commission
(the "SEC") a registration statement (of which this Prospectus Supplement and
the Prospectus form a part) under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Offered Certificates. This Prospectus
Supplement and the Prospectus do not contain all of the information contained in
the registration statement. For further information regarding the documents
referred to in this Prospectus Supplement and the Prospectus, you should refer
to the registration statement and the exhibits thereto. The registration
statement and such exhibits can be inspected and copied at prescribed rates at
the public reference facilities maintained by the SEC at its Public Reference
Section, 450 Fifth Street, N.W., Washington, D.C. 20549, and at its Regional
Offices located at: Chicago Regional Office, Citicorp Center, 500 West Madison
Street, Chicago, Illinois 6066; and New York Regional Office, Seven World Trade
Center, New York, New York 10048. Copies of such materials can also be obtained
electronically through the SEC's Internet Web Site (http:\\www.sec.gov).
-----------------------------
The Underwriters are offering the Offered Certificates subject to prior
sale, when, as and if delivered to and accepted by them, and subject to certain
other conditions. DLJSC is acting as lead manager and sole bookrunner. It is
expected that the Offered Certificates will be delivered in book-entry form only
through the facilities of The Depository Trust Company, in New York, New York,
on or about March , 1999, against payment therefor in immediately available
funds.
-----------------------------
S-3
<PAGE>
TABLE OF CONTENTS
Page
----
IMPORTANT NOTICE ABOUT THE
INFORMATION CONTAINED IN
THIS PROSPECTUS SUPPLEMENT AND
THE ACCOMPANYING PROSPECTUS..........................................S-2
EXECUTIVE SUMMARY......................................................S-6
SUMMARY OF
PROSPECTUS SUPPLEMENT................................................S-7
RISK FACTORS..........................................................S-35
Risks Related to the Offered Certificates........................S-35
Risks Related to the Mortgage Loans..............................S-38
DESCRIPTION OF THE MORTGAGE POOL......................................S-56
General..........................................................S-56
Certain Terms and Conditions
of the Mortgage Loans..........................................S-59
Certain Mortgage Pool Characteristics............................S-66
Additional Mortgage Loan Information.............................S-72
Certain Underwriting Matters.....................................S-74
Cash Management and
Certain Escrows and Reserves...................................S-79
Significant Mortgage Loans.......................................S-80
The Mortgage Loan Sellers
and the Originators............................................S-89
Assignment of the Mortgage Loans.................................S-90
Representations and Warranties...................................S-91
Cures, Repurchases and Substitutions.............................S-92
Changes in Mortgage Pool Characteristics.........................S-94
SERVICING OF THE MORTGAGE LOANS.......................................S-94
General..........................................................S-94
The Master Servicer and
the Special Servicer...........................................S-97
Servicing and Other Compensation
and Payment of Expenses........................................S-97
Modifications, Waivers,
Amendments and Consents.......................................S-102
The Controlling Class Representative............................S-104
Replacement of the Special Servicer.............................S-107
Sale of Defaulted Mortgage Loans................................S-107
Inspections; Collection of
Operating Information.........................................S-108
Evidence as to Compliance.......................................S-109
Page
----
DESCRIPTION OF THE
OFFERED CERTIFICATES...............................................S-109
General.........................................................S-109
Registration and Denominations..................................S-112
Seniority.......................................................S-113
Certain Relevant Characteristics
of the Mortgage Loans.........................................S-115
Distributions...................................................S-115
Allocation of Realized Losses and
Certain Other Shortfalls and Expenses.........................S-124
P&I Advances....................................................S-125
Appraisal Reductions............................................S-127
Reports to Certificateholders;
Certain Available Information................................S-129
Voting Rights...................................................S-130
Termination.....................................................S-131
The Trustee.....................................................S-131
YIELD AND MATURITY
CONSIDERATIONS.....................................................S-132
Yield Considerations............................................S-132
Weighted Average Lives of
Certain Classes of Offered Certificates.......................S-135
The Maturity Assumptions........................................S-136
Yield Sensitivity of
the Class S Certificates......................................S-137
USE OF PROCEEDS......................................................S-138
FEDERAL INCOME
TAX CONSEQUENCES...................................................S-138
General.........................................................S-138
Discount and Premium;
Prepayment Consideration......................................S-139
Constructive Sales of Class S Certificates......................S-140
Characterization of
Investments in Offered Certificates...........................S-140
Possible Taxes on Income From
Foreclosure Property and Other Taxes.........................S-140
CERTAIN ERISA CONSIDERATIONS.........................................S-141
LEGAL INVESTMENT.....................................................S-145
METHOD OF DISTRIBUTION...............................................S-146
LEGAL MATTERS........................................................S-146
S-4
<PAGE>
Page
----
RATINGS..............................................................S-147
INDEX OF PRINCIPAL DEFINITIONS.......................................S-149
EXHIBIT A-1--
Certain Characteristics of Mortgage Loans
and Mortgaged Properties.......................................A-1-1
EXHIBIT A-2--
Mortgage Pool Information........................................A-2-1
EXHIBIT B--
Form of Trustee Report.............................................B-1
EXHIBIT C--
Decrement Tables for Certain Classes
of Offered Certificates ........................................C-1
EXHIBIT D--
Price/Yield Tables for the
Class S Certificates ...........................................D-1
EXHIBIT E--
Summary Term Sheet.................................................E-1
S-5
<PAGE>
EXECUTIVE SUMMARY
This Executive Summary summarizes selected information relating to the
Offered Certificates. It does not contain all of the information you need to
consider in making your investment decision. To understand all of the terms of
the offering of the Offered Certificates, you should read carefully this
Prospectus Supplement and the accompanying Prospectus in full.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Initial Aggregate
Certificate Principal Approx. Approx. Pass-Through Initial Weighted
Class Ratings(1) Balance or % of Intial Credit Rate Pass- Average Principal
Certificate Notional Initial Pool Support(3) Description Through Life Window(4)
Amount(2) Balance Rate (years)(4)
- ---------------------------------------------------------------------------------------------------------------------------------
Offered Certificates
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
S Aaa/AAA $1,252,685,456(5) N/A N/A Variable 9.315 4/99 - 4/23
(Interest Only)
- ---------------------------------------------------------------------------------------------------------------------------------
A-1A Aaa/AAA $ 219,703,000 17.54 82.46 Fixed 5.700 4/99 - 7/08
- ---------------------------------------------------------------------------------------------------------------------------------
A-1B Aaa/AAA $ 694,757,000 55.46 27.00 Fixed 9.683 7/08 - 1/09
- ---------------------------------------------------------------------------------------------------------------------------------
A-2 Aa2/AA $ 59,502,000 4.75 22.25 WAC Cap(6) 9.854 1/09 - 2/09
- ---------------------------------------------------------------------------------------------------------------------------------
A-3 A2/A $ 65,766,000 5.25 17.00 WAC Cap(6) 9.878 2/09 - 2/09
- ---------------------------------------------------------------------------------------------------------------------------------
B-1 Baa2/BBB $ 65,766,000 5.25 11.75 WAC(7) 9.878 2/09 - 2/09
- ---------------------------------------------------------------------------------------------------------------------------------
B-2 Baa3/BBB- $ 15,659,000 1.25 10.50 WAC(7) 9.878 2/09 - 2/09
- ---------------------------------------------------------------------------------------------------------------------------------
Private Certificates--Not Offered Hereby (8)
- ---------------------------------------------------------------------------------------------------------------------------------
B-3 (9) $ 37,581,000 Fixed
- ---------------------------------------------------------------------------------------------------------------------------------
B-4 (9) $ 21,922,000 Fixed
- ---------------------------------------------------------------------------------------------------------------------------------
B-5 (9) $ 9,395,000 Fixed
- ---------------------------------------------------------------------------------------------------------------------------------
B-6 (9) $ 12,527,000 Fixed
- ---------------------------------------------------------------------------------------------------------------------------------
B-7 (9) $ 12,526,000 Fixed
- ---------------------------------------------------------------------------------------------------------------------------------
B-8 (9) $ 12,527,000 Fixed
- ---------------------------------------------------------------------------------------------------------------------------------
C (9) $ 25,054,456 Fixed
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------------
(1) Ratings shown are those of Moody's and Fitch, respectively. Classes
marked "NR" will not be rated by the applicable rating agency.
(2) The actual initial aggregate Certificate Principal Balance or
Certificate Notional Amount of any Class of Certificates at the date of
issuance may be larger or smaller than the amount shown above,
depending on the actual size of the Initial Pool Balance. The actual
size of the Initial Pool Balance may be as much as 5% larger or smaller
than the amount presented in this Prospectus Supplement.
(3) Represents the initial aggregate Certificate Principal Balance
(expressed as a percentage of the Initial Pool Balance) of all classes
of Certificates subordinate to the indicated class.
(4) Based on the assumptions that each borrower timely makes all payments
on its underlying mortgage loan, that each underlying mortgage loan
with an Anticipated Repayment Date (as defined under "Summary of
Prospectus Supplement--The Mortgage Loans and Mortgaged Properties" in
this Prospectus Supplement) is paid in full on such date, and that no
underlying mortgage loan is otherwise prepaid prior to stated maturity.
Further based on the other Maturity Assumptions (as defined under
"Yield and Maturity Considerations" in this Prospectus Supplement).
(5) Aggregate Certificate Notional Amount.
(6) "WAC Cap" refers to a Pass-Through Rate that is, from time to time,
equal to the lesser of the initial Pass-Through Rate for the subject
class of Certificates and a weighted average coupon derived from rates
on the underlying mortgage loans.
(7) "WAC" refers to a Pass-Through Rate that is, from time to time, equal
to a weighted average coupon derived from rates on the underlying
mortgage loans.
(8) The Private Certificates will also include three (3) classes of
certificated REMIC residual interests and two (2) classes of grantor
trust certificates that are not shown above. Such Private Certificates
do not have Certificate Principal Balances or Pass-Through Rates.
(9) Not presented.
S-6
<PAGE>
SUMMARY OF PROSPECTUS SUPPLEMENT
This summary contains selected information from this Prospectus
Supplement. It does not contain all of the information you need to consider in
making your investment decision. To understand all of the terms of the offering
of the Offered Certificates, you should read carefully this Prospectus
Supplement and the Prospectus in full.
Overview of the Transaction
Establishment of the Trust ....... The Depositor is establishing a trust, to
be designated as DLJ Commercial Mortgage
Trust 1999-CG1 (the "Trust"). The assets of
the Trust (collectively, the "Trust Fund")
will primarily consist of a pool of certain
multifamily and commercial mortgage loans
having the characteristics described in
this Prospectus Supplement (collectively,
the "Mortgage Loans").
Issuance of the Certificates...... The Depositor is establishing the Trust for
purposes of issuing the Series 1999-CG1
Commercial Mortgage Pass-Through
Certificates (the "Certificates") in
multiple classes (each, a "Class"). The
Certificates will, in the aggregate,
represent the entire beneficial ownership
of the Trust. The registered holders of the
Certificates are "Holders" or
"Certificateholders".
Governing Document................ The governing document for purposes of
establishing the Trust and issuing the
Certificates will be a Pooling and
Servicing Agreement to be dated as of the
Cut-off Date, between the Depositor, the
Trustee, the REMIC Administrator, the
Master Servicer and the Special Servicer
(the "Pooling Agreement"). See "--The
Relevant Parties" and "--Relevant Dates and
Periods" below. The Pooling Agreement will
also govern the servicing and
administration of the Mortgage Loans and
the other assets of the Trust. A copy of
the Pooling Agreement will be filed with
the SEC as an exhibit to a Current Report
on Form 8-K (the "Form 8-K"), within 15
days after the initial issuance of the
Offered Certificates. The SEC will make the
Form 8-K and its exhibits available to the
public for inspection.
Relevant Parties
Depositor......................... DLJ Commercial Mortgage Corp., a Delaware
corporation and an affiliate of both Column
(one of the Mortgage Loan Sellers described
below) and DLJSC. See "The Depositor" in
the Prospectus.
Master Servicer................... GE Capital Loan Services, Inc., a Delaware
corporation and an affiliate of GECA (one
of the Mortgage Loan Sellers described
below). See "Servicing of the Mortgage
Loans--The Master Servicer and the Special
Servicer" in this Prospectus Supplement.
Special Servicer..................
, a .
See "Servicing of the Mortgage Loans--The
Master Servicer and the Special Servicer"
in this Prospectus Supplement.
S-7
<PAGE>
The Holders of Certificates representing a
majority interest in the Controlling Class
will have the right, subject to certain
conditions described in this Prospectus
Supplement, to replace the Special Servicer
and, further, to select a representative
that may direct and advise the Special
Servicer on various servicing matters. At
any particular time, the "Controlling
Class" will, in general, be the most
subordinate Class of the Certificates
(other than the Class D-1, Class D-2, Class
S, Class R-I, Class R-II and Class R-III
Certificates) then outstanding that has a
then-current aggregate Certificate
Principal Balance (net of such Class'
allocable share of any Appraisal Reduction
Amounts) that is not less than 20% of such
Class' initial aggregate Certificate
Principal Balance. This Prospectus
Supplement discusses Appraisal Reduction
Amounts under "Description of the Offered
Certificates-- Appraisal Reductions". See
"Servicing of the Mortgage Loans--
Replacement of the Special Servicer" and
"--The Controlling Class Representative" in
this Prospectus Supplement.
Trustee and REMIC Administrator... Norwest Bank Minnesota, National
Association, a national banking
association. See "Description of the
Offered Certificates--The Trustee" in this
Prospectus Supplement. The Trustee will
also have certain duties with respect to
REMIC administration (in such capacity, the
"REMIC Administrator").
Mortgage Loan Sellers............. GE Capital Access, Inc. ("GECA"), a
Delaware corporation and an affiliate of
the Master Servicer; and Column Financial,
Inc. ("Column"), a Delaware corporation and
an affiliate of both the Depositor and
DLJSC. The Mortgage Loan Sellers will sell
their respective Mortgage Loans to the
Depositor, which will, in turn, transfer
them to the Trust. The Mortgage Loans to be
sold by GECA are called the "GECA Mortgage
Loans", and the Mortgage Loans to be sold
by Column are called the "Column Mortgage
Loans".
Mortgage Number of % of Initial
Loan Seller Mortgage Loans Pool Balance
----------- -------------- ------------
GECA 177 69.9%
Column 102 30.1%
GECA acquired all of the GECA Mortgage
Loans from its parent, General Electric
Capital Corporation ("GECC"), by capital
contribution. Column either originated all
of the Column Mortgage Loans or acquired
them, directly or through an affiliate
thereof, from the related originator. See
"Description of the Mortgage Pool--The
Mortgage Loan Sellers and the Originators"
in this Prospectus Supplement.
Originators....................... Each Mortgage Loan was originated by one of
the following parties (collectively, the
"Originators"):
o GECC originated all of the GECA Mortgage
Loans, except that GECC purchased the
Winston Loans (as defined under
"Description of the Mortgage
Pool--Significant Mortgage Loans" in
this Prospectus Supplement) after
underwriting and
S-8
<PAGE>
closing them as origination agent on
behalf of a third party and purchased
the Country Squire Loan (as defined
under "Description of the Mortgage
Pool--Significant Mortgage Loans" in
this Prospectus Supplement) after
underwriting and closing it as
participant with the originator in the
closing and underwriting process.
o Column originated 91 of the Column
Mortgage Loans, representing 26.5% of
the Initial Pool Balance. Column also
sourced, underwrote, closed and
purchased (from an entity other than
Union Capital) one (1) other Column
Mortgage Loan, representing 1.1% of the
Initial Pool Balance.
o Union Capital Investments, LLC ("Union
Capital") originated ten (10) of the
Column Mortgage Loans, representing 2.4%
of the Initial Pool Balance.
See "The Mortgage Loan Sellers and the
Originators" in this Prospectus Supplement.
Relevant Dates and Periods
Cut-off Date...................... March 1, 1999. The Cut-off Date is the date
as of which the Depositor will establish
the Trust.
Closing Date...................... On or about March , 1999. The Closing
Date is the date on which the Offered
Certificates will initially be issued.
Distribution Date................. With respect to any calendar month
(beginning with April 1999), the later of
(i) the 10th day of such month (or, if such
10th day is not a business day, then the
next succeeding business day) and (ii) the
fourth business day following the
Determination Date in such month. The
Distribution Date is the date during any
such calendar month on which distributions
are to be made on the Certificates.
Record Date....................... With respect to any Distribution Date, the
last business day of the calendar month
immediately preceding the month in which
such Distribution Date occurs. The Record
Date is relevant for establishing which
Holders of the Certificates are entitled to
receive distributions on the related
Distribution Date.
Determination Date................ With respect to any calendar month
(beginning with April 1999), the fourth day
of such calendar month (or, if any such
fourth day is not a business day, the
immediately preceding business day). The
Determination Date during any such calendar
month is relevant for purposes of
establishing the end of the Collection
Period for the Distribution Date in such
month.
S-9
<PAGE>
Collection Period................. With respect to any Distribution Date, the
period that begins immediately following
the Determination Date in the calendar
month prior to the month in which such
Distribution Date occurs and continues
through and includes the Determination Date
in the calendar month in which such
Distribution Date occurs, except that the
first Collection Period begins immediately
following the Cut-off Date. Amounts
available for distribution on any
Distribution Date will be a function of the
payments and other collections received,
and any advances of payments due, in
respect of the Mortgage Loans during the
related Collection Period.
Interest Accrual Period........... With respect to any Distribution Date, the
calendar month immediately preceding the
month in which such Distribution Date
occurs. The amount of interest
distributable with respect to the
interest-bearing Certificates on any
Distribution Date will be a function of the
interest accrued during the related
Interest Accrual Period.
Rated Final Distribution Date..... The Distribution Date in March 2032. The
Rated Final Distribution Date is set at the
first Distribution Date following the third
anniversary of the end of the amortization
term for the Mortgage Loan with the longest
remaining amortization term as of the
Closing Date. As discussed in this
Prospectus Supplement, each rating assigned
to the Offered Certificates will represent
the respective Rating Agency's assessment
of the likelihood of timely receipt by the
Holders thereof of all interest to which
they are entitled on each Distribution Date
and, except in the case of the Class S
Certificates, the ultimate receipt by the
Holders thereof of all principal to which
they are entitled by the Rated Final
Distribution Date.
Assumed Final Distribution Date... With respect to any Class of Certificates,
the Distribution Date on which the Holders
of such Certificates would be expected to
receive their last distribution based
upon--
o The assumption that each borrower timely
makes all payments on its Mortgage Loan.
o The assumption that each Mortgage Loan
with an Anticipated Repayment Date is
paid in full on that date.
o The assumption that no borrower
otherwise prepays its Mortgage Loan
prior to stated maturity.
o The other Maturity Assumptions set forth
under "Yield and Maturity
Considerations" in this Prospectus
Supplement.
S-10
<PAGE>
The Assumed Final Distribution Date for
each Class of Offered Certificates is the
Distribution Date occurring in the calendar
month and year set forth below for such
Class.
Assumed Final
Class Distribution Date
----- -----------------
Class S
Class A-1A
Class A-1B
Class A-2
Class A-3
Class B-1
Class B-2
Overview of the Certificates
General........................... The Certificates will consist of 19
Classes, only seven (7) of which are being
offered pursuant to this Prospectus
Supplement and the Prospectus. The Classes
of Certificates that are being so offered
are referred to in this Prospectus
Supplement as the "Offered Certificates".
The Depositor does not intend to register
any of the remaining Classes of
Certificates (collectively, the "Private
Certificates") under the Securities Act,
and is not offering such Certificates
pursuant to this Prospectus Supplement or
the Prospectus. The Depositor has included
information regarding the Private
Certificates in this Prospectus Supplement
because of its potential relevance to an
investment decision with respect to the
Offered Certificates.
The Offered Certificates.......... Each Class of Offered Certificates will
have the approximate initial aggregate
Certificate Principal Balance or
Certificate Notional Amount set forth below
and will accrue interest at an annual rate
(the "Pass-Through Rate") set forth or
otherwise described below:
Approx. Initial
Aggregate Certificate
Principal Balance
or Certificate Pass-Through
Class Notional Amount(1) Rate
- ----- ------------------ ----
Class S N/A(2) %(3)
Class A-1A $219,703,000 %(4)
Class A-1B $694,757,000 %(4)
Class A-2 $ 59,502,000 %(5)
Class A-3 $ 65,766,000 %(5)
Class B-1 $ 65,766,000 %(6)
Class B-2 $ 15,659,000 %(6)
---------------
(1) The actual initial aggregate
Certificate Principal Balance or
Certificate Notional Amount of any
Class of Offered Certificates at the
date of issuance may be larger or
smaller than the amount shown above,
depending on the actual size of
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<PAGE>
the Initial Pool Balance. The actual
size of the Initial Pool Balance may be
as much as 5% larger or smaller than
the amount presented in this Prospectus
Supplement.
(2) The Class S Certificates will accrue
interest based on an aggregate
Certificate Notional Amount equal to
the aggregate Certificate Principal
Balance outstanding from time to time
of all those Certificates that have
Certificate Principal Balances.
(3) The Pass-Through Rate shown above for
the Class S Certificates is the rate
applicable for the Distribution Date in
April 1999. The Pass-Through Rate for
such Class will be variable and will be
determined pursuant to a formula
described under "Description of the
Offered Certificates--Distributions--
Calculation of Pass-Through Rates" in
this Prospectus Supplement. Based on
such formula, the Pass-Through Rate for
such Class will generally equal the
weighted average of the strip rates at
which interest accrues on the
respective components of the aggregate
Certificate Notional Amount of the
Class S Certificates from time to time.
(4) Fixed Pass-Through Rate.
(5) The Pass-Through Rates shown above for
the Class A-2 and Class A-3
Certificates are the rates applicable
for the Distribution Date in April
1999. The Pass-Through Rate for each
such Class will be subject to change
and will be determined pursuant to a
formula described under "Description of
the Offered Certificates--
Distributions--Calculation of
Pass-Through Rates" in this Prospectus
Supplement. Based upon such formula,
the Pass-Through Rate for each such
Class will generally equal the lesser
of the rate per annum specified above
for such Class and a weighted average
coupon derived from interest rates on
the Mortgage Loans.
(6) The Pass-Through Rates shown above for
the Class B-1 and Class B-2
Certificates are the rates applicable
for the Distribution Date in April
1999. The Pass-Through Rate for each
such Class will be variable and will be
determined pursuant to a formula
described under "Description of the
Offered Certificates--Distributions--
Calculation of Pass-Through Rates" in
this Prospectus Supplement. Based upon
such formula, the Pass-Through Rate for
each such Class will generally equal a
weighted average coupon derived from
interest rates on the Mortgage Loans.
See "Description of the Offered
Certificates--General" and
"--Distributions--Calculation of
Pass-Through Rates" in this Prospectus
Supplement.
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<PAGE>
The Private Certificates.......... Each Class of the Private Certificates will
have the approximate initial aggregate
Certificate Principal Balance set forth
below and will accrue interest at the
Pass-Through Rate set forth below:
Approx. Initial
Aggregate Certificate Pass-Through
Class Principal Balance(1) Rate
- ----- -------------------- -----
Class B-3 $37,581,000 %(2)
Class B-4 $21,922,000 %(2)
Class B-5 $ 9,395,000 %(2)
Class B-6 $12,527,000 %(2)
Class B-7 $12,526,000 %(2)
Class B-8 $12,527,000 %(2)
Class C $25,054,456 %(2)
Class D-1 N/A (3) N/A (3)
Class D-2 N/A (3) N/A (3)
Class R-I N/A (4) N/A (4)
Class R-II N/A (4) N/A (4)
Class R-III N/A (4) N/A (4)
---------------
(1) The actual initial aggregate
Certificate Principal Balance of any
Class of Private Certificates at the
date of issuance may be larger or
smaller than the amount shown above,
depending on the actual size of the
Initial Pool Balance. The actual size
of the Initial Pool Balance may be as
much as 5% larger or smaller than the
amount presented in this Prospectus
Supplement.
(2) Fixed Pass-Through Rate.
(3) Holders of the Class D-1 Certificates
will be entitled to receive, if and
when paid, certain additional interest
accrued in respect of each GECA
Mortgage Loan with an Anticipated
Repayment Date that remains outstanding
after such date, and Holders of the
Class D-2 Certificates will be entitled
to receive, if and when paid, certain
additional interest accrued in respect
of each Column Mortgage Loan with an
Anticipated Repayment Date that remains
outstanding after such date. The
payment of such additional interest is
deferred as described in this
Prospectus Supplement. The Class D-1
and Class D-2 Certificates do not have
Certificate Principal Balances or
Pass-Through Rates, however.
(4) The Class R-I, Class R-II and Class
R-III Certificates are REMIC residual
interests and do not have Certificate
Principal Balances or Pass-Through
Rates.
Registration and Denominations.... The Trust will be issuing the Offered
Certificates in book-entry form in original
denominations of: (i) in the case of the
Class S Certificates, $10,000 initial
Certificate Notional Amount and in any
whole dollar denomination in excess
thereof; (ii) in the case of the Class A-1A
and Class A-1B Certificates, $10,000
initial Certificate Principal Balance and
in any whole dollar denomination in excess
thereof; and (ii) in the case of the other
Classes of Offered Certificates, $100,000
initial Certificate Principal Balance and
in any whole dollar denomination in excess
thereof. Each Class of Offered Certificates
will be represented by one or more
Certificates registered in the name of Cede
& Co., as nominee of The Depository Trust
Company ("DTC"). As a result, you --- will
not receive a fully registered physical
certificate representing your
S-13
<PAGE>
interest in any Offered Certificate, except
under the limited circumstances described
in this Prospectus Supplement and in the
Prospectus. See "Description of the Offered
Certificates--Registration and
Denominations" in this Prospectus
Supplement and "Description of the
Certificates--Book-Entry Registration and
Definitive Certificates" in the Prospectus.
Optional Termination.............. The Master Servicer, the Special Servicer
or any single Holder or group of Holders of
Certificates representing a majority
interest in the Controlling Class, in that
order of preference, may terminate the
Trust when the aggregate Stated Principal
Balance (as defined under "Description of
the Offered Certificates--Certain Relevant
Characteristics of the Mortgage Loans" in
this Prospectus Supplement) of the Mortgage
Pool is less than 1.0% of the Initial Pool
Balance. See "Description of the Offered
Certificates--Termination" in this
Prospectus Supplement.
Federal Income Tax Consequences... The REMIC Administrator will make elections
to treat designated portions of the Trust
Fund as three separate "real estate
mortgage investment conduits" (each, a
"REMIC"). The designations for such REMICs
are as follows:
o "REMIC I", the lowest tier REMIC, will
hold, among other things, the Mortgage
Loans, as well as any Mortgaged
Properties (as defined in this
Prospectus Supplement under "--The
Mortgage Loans and Mortgaged
Properties" below) that may have been
acquired by the Trust following a
borrower default, but excludes
collections of certain additional
interest accrued (and deferred as to
payment) in respect of each Mortgage
Loan with an Anticipated Repayment Date
that remains outstanding thereafter
(such excluded collections of
additional interest, the "Non-REMIC
Assets").
o "REMIC II" will hold the "regular
interests" in REMIC I.
o "REMIC III" will hold the "regular
interests" in REMIC II.
The Non-REMIC Assets will collectively
constitute a grantor trust (the "Grantor
Trust") for federal income tax purposes.
The Offered Certificates will be treated as
"regular interests" (or, in the case of the
Class S Certificates, multiple "regular
interests") in REMIC III. This means that
they will be treated as newly issued debt
instruments for federal income tax
purposes. You will have to report income on
your Certificates in accordance with the
accrual method of accounting even if you
are otherwise a cash method taxpayer. The
Offered Certificates will not represent any
interest in the Grantor Trust.
The Class S and Class Certificates will,
and the other Classes of Offered
Certificates will not, be issued with
original issue discount. If you own a
Certificate issued with original issue
discount, you may have
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<PAGE>
to report original issue discount income
(and be subject to a tax thereon) before
you receive a corresponding cash
distribution.
For tax information reporting purposes, the
REMIC Administrator will compute the
accrual of discount and premium on the
Certificates, based on the assumption that
each Mortgage Loan with an Anticipated
Repayment Date will be paid in full on such
date and on the further assumption that no
borrower will otherwise prepay its Mortgage
Loan prior to stated maturity.
Although it is not entirely clear, it is
anticipated that any prepayment premium or
yield maintenance charge allocable to a
Class of Offered Certificates will be
ordinary income to the Holders of such
Class only after the Master Servicer's
actual receipt thereof. See "Description of
the Offered Certificates--Distributions--
Distributions of Prepayment Premiums and
Yield Maintenance Charges" and "Federal
Income Tax Consequences--Discount and
Premium; Prepayment Consideration" in this
Prospectus Supplement.
For a more detailed discussion of the
federal income aspects of investing in the
Certificates, see "Federal Income Tax
Consequences" in this Prospectus Supplement
and "Federal Income Tax Consequences" in
the Prospectus.
ERISA............................. It is anticipated that certain employee
benefit plans and other retirement
arrangements subject to Title I of ERISA or
Section 4975 of the Code will be able to
invest in the Class A-1A, Class A-1B and
Class S Certificates, without giving rise
to a prohibited transaction, based upon an
individual prohibited transaction exemption
granted to DLJSC by the U.S. Department of
Labor. However, investments in the other
Offered Certificates by, on behalf of or
with assets of such entities, will be
restricted as described under "Certain
ERISA Considerations" in this Prospectus
Supplement.
If you are a fiduciary of any employee
benefit plan or other retirement
arrangement subject to Title I of ERISA or
section 4975 of the Code, you should review
carefully with your legal advisors whether
the purchase or holding of the Offered
Certificates could give rise to a
transaction that is prohibited under ERISA
or Section 4975 of the Code. See "Certain
ERISA Considerations" in this Prospectus
Supplement and "ERISA Considerations" in
the Prospectus.
Legal Investment.................. The Offered Certificates will not
constitute "mortgage related securities"
within the meaning of SMMEA.
You should consult your own legal advisors
to determine whether and to what extent the
Offered Certificates constitute legal
investments for you. See "Legal Investment"
in this Prospectus Supplement and in the
Prospectus.
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<PAGE>
Certain Investment
Considerations.................. The rate and timing of payments and other
collections of principal on or in respect
of the Mortgage Loans will affect the yield
to maturity on each Offered Certificate. In
the case of Offered Certificates purchased
at a discount, a slower than anticipated
rate of payments and other collections of
principal could result in a lower than
anticipated yield. In the case of Class S
Certificates or any other Offered
Certificates purchased at a premium, a
faster than anticipated rate of payments
and other collections of principal could
result in a lower than anticipated yield.
If you are contemplating the purchase of
Class S Certificates, you should be aware
that the yield to maturity on the Class S
Certificates will be highly sensitive to
the rate and timing of principal
prepayments and other liquidations of
Mortgage Loans and that an extremely rapid
rate of prepayments and/or other
liquidations in respect of the Mortgage
Loans could result in a complete or partial
loss of your initial investment. See "Yield
and Maturity Considerations" in this
Prospectus Supplement and in the
Prospectus.
Ratings........................... It is a condition to the issuance of the
respective Classes of the Offered
Certificates that they receive the credit
ratings indicated below:
Class Moody's Rating Fitch Rating
- ----- -------------- ------------
Class S Aaa AAA
Class A-1A Aaa AAA
Class A-1B Aaa AAA
Class A-2 Aa2 AA
Class A-3 A2 A
Class B-1 Baa2 BBB
Class B-2 Baa3 BBB-
The ratings of the Offered Certificates
address the timely payment of interest and,
except in the case of the Class S
Certificates, the ultimate payment of
principal on or before the Rated Final
Distribution Date. Such ratings do not
represent any assessment of --
o The tax attributes of the Offered
Certificates or of the Trust.
o Whether or to what extent prepayments of
principal may be received on the
Mortgage Loans.
o The likelihood or frequency of
prepayments of principal on the Mortgage
Loans.
o The degree to which the amount or
frequency of prepayments on the Mortgage
Loans might differ from those originally
anticipated.
o Whether or to what extent the interest
distributable on any Class of
Certificates may be reduced in
connection with interest shortfalls
resulting from the timing of voluntary
prepayments.
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<PAGE>
o The likelihood that prepayment premiums,
yield maintenance charges or interest in
excess of interest at the related
Mortgage Rates will be received with
respect to the Mortgage Loans.
o Whether the Holders of the Class S
Certificates, despite receiving all
distributions of interest to which they
are entitled, would ultimately recover
their initial investments in such
Certificates.
A security rating is not a recommendation
to buy, sell or hold securities and may be
subject to revision or withdrawal at any
time by the assigning rating agency.
For a description of the limitations of the
ratings of the Offered Certificates, see
"Ratings" in this Prospectus Supplement and
"Risk Factors--Limited Nature of Ratings"
in the Prospectus.
Reports to Certificateholders..... On each Distribution Date, the Trustee
Report (substantially in the form of
Exhibit B to this Prospectus Supplement)
will be available to you through the
sources described under "Description of the
Offered Certificates--Reports to
Certificateholders; Certain Available
Information" in this Prospectus Supplement.
You may review a loan-by-loan listing
electronically in the form of the standard
CSSA loan setup file and CSSA loan periodic
update file. The Trustee will
electronically provide such files on a
monthly basis, to the extent that it
receives the information needed to do so.
Upon reasonable prior notice, you may also
review at the Trustee's offices during
normal business hours a variety of
information and documents that pertain to
the Mortgage Loans and Mortgaged
Properties, including loan documents,
borrower operating statements, rent rolls
and property inspection reports, to the
extent the Trustee receives such
information and documents.
See "Description of the Offered
Certificates--Reports to
Certificateholders; Certain Available
Information" in this Prospectus Supplement.
The Certificates: A Structural Summary
Seniority......................... The following chart sets forth the relative
seniority of the respective Classes of
Certificates for purposes of--
o making distributions of interest and, if
and when applicable, distributions of
principal; and
o allocating losses on the Mortgage Loans,
as well as certain default-related and
other unanticipated expenses of the
Trust.
S-17
<PAGE>
Each identified Class of Certificates will,
for the above specified purposes, be
subordinate to each other Class of
Certificates, if any, listed above it in
the following chart.
-------------------------------------------
Summary Seniority Chart
-------------------------------------------
-------------------------------------------
Most Senior
-------------------------------------------
-------------------------------------------
Class S, Class A-1A and Class A-1B
-------------------------------------------
-------------------------------------------
Class A-2
-------------------------------------------
-------------------------------------------
Class A-3
-------------------------------------------
-------------------------------------------
Class B-1
-------------------------------------------
-------------------------------------------
Class B-2
-------------------------------------------
-------------------------------------------
Various Classes of Private Certificates
-------------------------------------------
Most Subordinate
The only form of credit support for any
Class of Offered Certificates will be the
above-referenced subordination of the other
Classes of Certificates to which it is
senior, including all of the Private
Certificates (other than the Class D-1 and
Class D-2 Certificates).
Holders of the Class D-1 Certificates will
be entitled to receive, if and when paid,
certain additional interest accrued in
respect of each GECA Mortgage Loan with an
Anticipated Repayment Date that remains
outstanding after such date, and Holders of
the Class D-2 Certificates will be entitled
to receive, if and when paid, certain
additional interest accrued in respect of
each Column Mortgage Loan with an
Anticipated Repayment Date that remains
outstanding after such date. The payment of
such additional interest is deferred as
described in this Prospectus Supplement.
Accordingly, the Class D-1 and Class D-2
Certificates are neither senior nor
subordinate to any other Class of
Certificates (except to the extent that
amounts received on any particular Mortgage
Loan with an Anticipated Repayment Date are
applied to pay amounts other than such
additional interest).
S-18
<PAGE>
See "Description of the Offered
Certificates--General", "--Seniority",
"--Distributions" and "--Allocation of
Realized Losses and Certain Other
Shortfalls and Expenses" in this Prospectus
Supplement.
Distributions
A. General....................... Distributions of interest and principal
will be made to the Holders of the various
Classes of Certificates entitled thereto,
sequentially based upon their seniority as
depicted in the Summary Seniority Chart
above. See "Description of the Offered
Certificates--Seniority" and
"--Distributions--Priority of Payments" in
this Prospectus Supplement.
B. Distributions of Interest..... Each Class of Certificates (other than the
Class R-I, Class R-II, Class R- III, Class
D-1 and Class D-2 Certificates) will bear
interest. In the case of each such Class,
such interest will accrue during each
Interest Accrual Period based upon--
o the Pass-Through Rate for such Class for
the related Distribution Date,
o the aggregate Certificate Principal
Balance or Certificate Notional Amount,
as the case may be, of such Class
outstanding immediately prior to the
related Distribution Date, and
o the assumption that each year consists
of twelve 30-day months.
The timing of a prepayment on a Mortgage
Loan may result in the collection of less
than a full month's interest on such
Mortgage Loan during the Collection Period
of prepayment. As and to the extent
described in this Prospectus Supplement,
such shortfalls (net of the respective
portions thereof attributable to the fees
of the Master Servicer and certain other
items) will be allocated to reduce the
amount of accrued interest otherwise
payable to the Holders of the respective
Classes of interest-bearing Certificates on
a pro rata basis according to the
respective amounts of such accrued
interest.
On each Distribution Date, subject to
available funds and the payment priorities
described above, you will be entitled to
receive your proportionate share of all
unpaid distributable interest accrued in
respect of your Class of Offered
Certificates through the end of the related
Interest Accrual Period.
See "Description of the Offered
Certificates--Distributions --Calculation
of Interest" and "--Allocation of Realized
Losses and Certain Other Shortfalls and
Expenses" in this Prospectus Supplement.
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<PAGE>
C. Distributions of Principal.... Those Certificates with Certificate
Principal Balances are referred to in this
Prospectus Supplement as "Principal Balance
Certificates". In general, subject to
available funds and the payment priorities
described above, the Holders of each Class
of Principal Balance Certificates will be
entitled to receive a total amount of
principal over time equal to the aggregate
Certificate Principal Balance of such
Class. However, the Pooling Agreement will
require the Trustee to make such
distributions of principal in a specified
sequential order such that--
o No distributions of principal will be
made to the Holders of any Class of
Private Certificates until the aggregate
Certificate Principal Balance of the
Offered Certificates (other than the
Class S Certificates, which do not have
Certificate Principal Balances) is
reduced to zero.
o No distributions of principal will be
made to the Holders of the Class A-2,
Class A-3, Class B-1 or Class B-2
Certificates until, in the case of each
such Class, the aggregate Certificate
Principal Balance of all more senior
Classes of Offered Certificates (other
than the Class S Certificates, which do
not have Certificate Principal Balances)
is reduced to zero.
o No distributions of principal will be
made to the Holders of the Class A-1B
Certificates until either:
(i) the aggregate Certificate Principal
Balance of the Class A-1A
Certificates is reduced to zero; or
(ii) the aggregate Certificate Principal
Balance of the Class A-2, Class
A-3, Class B-1, Class B-2, Class
B-3, Class B-4, Class B-5, Class
B-6, Class B-7, Class B-8 and Class
C Certificates is reduced to zero
due to losses on the Mortgage Loans
and/or certain default- related or
other unanticipated expenses of the
Trust and, as a result, the Class
A-1A and Class A-1B Certificates
are the only outstanding Principal
Balance Certificates (in which
case, distributions of principal
will be made to the Holders of the
Class A-1A Certificates and the
Holders of the Class A-1B
Certificates on a pro rata basis).
The aggregate distributions of principal to
be made on the respective Classes of
Principal Balance Certificates on any
Distribution Date will be a function of--
o the amount of all scheduled payments of
principal due on the Mortgage Loans
during the related Collection Period
that are either received as of the
related Determination Date or advanced
by the Master Servicer, and
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<PAGE>
o the amount of any prepayments and other
unscheduled collections of previously
unadvanced principal in respect of the
Mortgage Loans that are received during
the related Collection Period.
See "Description of the
Offered--Certificates--Distributions--
Calculation of the Principal Distribution
Amount" and "--Distributions--Priority of
Payments" in this Prospectus Supplement.
D. Distributions of
Prepayment Premiums and
Yield Maintenance
Charges................... Any prepayment premium or yield maintenance
charge collected in respect of a Mortgage
Loan will be distributed, in the
proportions described in this Prospectus
Supplement, to the Holders of the Class S
Certificates and/or to the Holders of the
Class or Classes of Principal Balance
Certificates then entitled to receive
distributions of principal. See
"Description of the Offered
Certificates--Distributions of Prepayment
Premiums and Yield Maintenance Charges" in
this Prospectus Supplement.
Allocation of Losses and Certain
Other Shortfalls and
Expenses....................... Losses on the Mortgage Loans, together with
certain default-related and other
unanticipated expenses of the Trust, may
cause the aggregate Stated Principal
Balance of the Mortgage Pool to be less
than the aggregate Certificate Principal
Balance of the Principal Balance
Certificates (any such deficit being
referred to in this Prospectus Supplement
as a "Mortgage Pool Deficit"). If a
Mortgage Pool Deficit exists following the
distributions made on the Certificates on
any Distribution Date, then the aggregate
Certificate Principal Balances of the
respective Classes of Principal Balance
Certificates will be successively reduced
in reverse order of their seniority (as
depicted in the Summary Seniority Chart
above), until such Mortgage Pool Deficit is
eliminated.
In addition, the timing of a prepayment on
a Mortgage Loan may result in the
collection of less than a full month's
interest on such Mortgage Loan during the
Collection Period of prepayment. As and to
the extent described in this Prospectus
Supplement, such shortfalls (net of the
respective portions thereof attributable to
the fees of the Master Servicer and certain
other items) will be allocated to reduce
the aggregate amount of interest otherwise
payable to the Holders of the respective
Classes of interest-bearing Certificates on
a pro rata basis.
See "Description of the Offered
Certificates--Allocation of Realized Losses
and Certain Other Shortfalls and Expenses"
and "Servicing of the Mortgage
Loans--Servicing and Other Compensation and
Payment of Expenses" in this Prospectus
Supplement.
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<PAGE>
Advances.......................... In general, the Master Servicer will be
required to make advances (each, a "P&I
Advance"), for distribution to the
Certificateholders, in the amount of any
delinquent monthly payments (other than
balloon payments) of principal and interest
due on the Mortgage Loans (net of the
respective portions of such monthly
payments attributable to the fees of the
Master Servicer and certain other items).
The Master Servicer and, in limited cases,
the Special Servicer will also generally be
required to make advances (each, a
"Servicing Advance") to cover certain costs
and expenses relating to the servicing and
administration of the Mortgage Loans. P&I
Advances and Servicing Advances are
collectively "Advances". If the Master
Servicer or the Special Servicer fails to
make any Advance that it is required to
make, the Trustee will be required to make
such Advance. None of the Master Servicer,
the Special Servicer or the Trustee,
however, will be required to make any
Advance that it determines, in its good
faith and reasonable judgment, will not be
recoverable from proceeds of the related
Mortgage Loan. As and to the extent
described in this Prospectus Supplement,
any party that makes an Advance will be
entitled to be reimbursed for such Advance,
together with interest thereon.
See "Description of the Offered
Certificates--P&I Advances" and "Servicing
of the Mortgage Loans--Servicing and Other
Compensation and Payment of Expenses" in
this Prospectus Supplement and "Description
of the Certificates--Advances in Respect of
Delinquencies" and "Description of the
Pooling Agreements--Certificate Account" in
the Prospectus.
Appraisal Reductions.............. If certain adverse events or circumstances,
called "Appraisal Trigger Events", occur or
exist with respect to a Mortgage Loan or
the related Mortgaged Property, the Special
Servicer will be obligated to obtain a new
appraisal of such Mortgaged Property. The
new appraised value may reflect an
"Appraisal Reduction Amount", which will,
in general, be equal to any excess of (i)
the principal balance of, and certain other
amounts due under, the subject Mortgage
Loan over (ii) 90% of such new appraised
value. If an Appraisal Reduction Amount
does exist, the amount otherwise required
to be advanced in respect of interest on
the subject Mortgage Loan will be reduced
generally in the same proportion that the
Appraisal Reduction Amount bears to the
principal balance of such Mortgage Loan.
Due to the payment priorities, this will
reduce the funds available to pay interest
on the most subordinate Class of
Certificates then outstanding. See
"Description of the Offered Certificates--
Appraisal Reductions" in this Prospectus
Supplement.
The Mortgage Loans and Mortgaged Properties
The Mortgage Pool................. The Trust Fund will primarily consist of
the pool of Mortgage Loans (the "Mortgage
Pool"). Each Mortgage Loan constitutes the
obligation of one or more persons
(individually and collectively as to such
Mortgage Loan, the "Borrower") to repay a
specified sum with interest.
S-22
<PAGE>
Each Mortgage Loan will be secured by a
first mortgage lien on the fee and/or
leasehold interest of the related Borrower
or another person in one or more commercial
or multifamily residential properties
(each, a "Mortgaged Property").
For more detailed information on the
Mortgage Loans, see the following sections
in this Prospectus Supplement:
o "Description of the Mortgage Pool"
o "Risk Factors--Risks Related to the
Mortgage Loans"
o Exhibit A-1 - Certain Characteristics of
the Mortgage Loans and Mortgaged
Properties
o Exhibit A-2 - Mortgage Pool Information
Listed below is certain statistical
information regarding the Mortgage Loans
and the Mortgaged Properties. In reviewing
such information, as well as the
statistical information regarding the
Mortgage Loans and the Mortgaged Properties
contained elsewhere in this Prospectus
Supplement, you should be aware that--
o All numerical information provided with
respect to the Mortgage Loans is
provided on an approximate basis.
o All weighted average information
provided with respect to the Mortgage
Loans reflects weighting of the Mortgage
Loans by their Cut-off Date Balances.
o When information with respect to the
Mortgaged Properties is expressed as a
percentage of the Initial Pool Balance,
such percentages are based upon the
Cut-off Date Balances of the related
Mortgage Loans.
o Some of the Mortgage Loans are cross-
collateralized and cross-defaulted with
one or more other Mortgage Loans. Except
where otherwise specifically indicated,
each such cross-collateralized Mortgage
Loan is presented as if it were secured
only by a mortgage lien on the
corresponding Mortgaged Property
identified on Exhibit A-1 to this
Prospectus Supplement. See the notes to
the tables set forth in Exhibit A-1.
o In some cases, multiple Mortgaged
Properties secure a single amount of
mortgage loan indebtedness represented
by a single note. For purposes of
presenting statistical information, the
Depositor has allocated the aggregate
Cut-off Date Balance of such
indebtedness among the related Mortgaged
Properties (on the basis of relative
appraised values, the relative
underwritten net cash flow or prior
allocations reflected in the related
mortgage loan documents). Except where
otherwise specifically indicated, each
allocated portion of such aggregate
S-23
<PAGE>
Cut-off Date Balance is presented as if
it were a single "Mortgage Loan" secured
only by a mortgage lien on the
corresponding Mortgaged Property
identified on Exhibit A-1 to this
Prospectus Supplement and is described
as being as cross-collateralized and
cross-defaulted with each other Mortgage
Loan representing an allocable portion
of the related indebtedness. See the
notes to the tables set forth in Exhibit
A-1. Mortgage indebtedness presented on
this basis includes the Winston Loans
(which represents 5.6% of the Initial
Pool Balance).
o In some cases, multiple parcels of real
property securing a single Mortgage Loan
have been treated as a single "Mortgaged
Property" because of their proximity to
each other, the interrelationship of
their operations or for other reasons
deemed appropriate by the Depositor.
Such Mortgage Loans include the Mortgage
Loan secured by the Mortgaged Property
identified on Exhibit A-1 as the Dallas
Design Center.
o This Prospectus Supplement refers to
certain properties specifically by name.
You should construe each reference to a
named property as a reference to the
Mortgaged Property identified by that
name on Exhibit A-1 to this Prospectus
Supplement.
o Statistical information regarding the
Mortgage Loans may change prior to the
date of issuance of the Certificates due
to changes in the composition of the
Mortgage Pool prior to the Closing Date.
o Certain capitalized terms used with
respect to the Mortgage Loans are
defined under "Description of the
Mortgage Pool" in this Prospectus
Supplement.
A. General Characteristics....... The Mortgage Pool will have the following
general characteristics as of the Cut-off
Date:
Initial Pool Balance(1)................................ $1,252,685,456
Number of Mortgage Loans............................... 279
Maximum Cut-off Date Balance(2)........................ $30,446,295
Minimum Cut-off Date Balance........................... $515,269
Average Cut-off Date Balance........................... $4,489,912
Maximum Loan Group Cut-off Date Balance(3)............. $70,750,763
Minimum Loan Group Cut-off Date Balance................ $675,000
Average Loan Group Cut-off Date Balance................ $5,219,523
Maximum Mortgage Rate.................................. 8.440%
Minimum Mortgage Rate.................................. 5.960%
Weighted Average Mortgage Rate......................... 7.317%
S-24
<PAGE>
Maximum Original Term to Maturity
or Anticipated Repayment Date..................... 300 months
Minimum Original Term to Maturity
or Anticipated Repayment Date..................... 60 months
Weighted Average Original Term to Maturity
or Anticipated Repayment Date..................... 125 months
Maximum Remaining Term to Maturity
or Anticipated Repayment Date...................... 289 months
Minimum Remaining Term to Maturity
or Anticipated Repayment Date..................... 58 months
Weighted Average Remaining Term to Maturity
or Anticipated Repayment Date..................... 122 months
Maximum Underwritten Debt
Service Coverage Ratio(4).......................... 2.54x
Minimum Underwritten Debt
Service Coverage Ratio............................. 1.19x
Weighted Average Underwritten
Debt Service Coverage Ratio........................ 1.39x
Maximum Cut-off Date Loan-to-Value Ratio(5)............ 82.5%
Minimum Cut-off Date Loan-to-Value Ratio............... 16.2%
Weighted Average Cut-off Date
Loan-to-Value Ratio................................ 73.2%
Maximum Maturity/ARD Loan-to-Value Ratio(6)............ 73.7%
Minimum Maturity/ARD Loan-to-Value Ratio............... 12.9%
Weighted Average Maturity/ARD 62.6%
Loan-to-Value Ratio................................
---------------------
(1) The "Initial Pool Balance" is equal to
the aggregate Cut-off Date Balance of
the Mortgage Pool and is subject to a
permitted variance of plus or minus 5%.
(2) The "Cut-off Date Balance" of each
Mortgage Loan is equal to its unpaid
principal balance as of the Cut-off
Date, after application of all payments
of principal due in respect of such
Mortgage Loan on or before such date,
whether or not received. The Cut-off
Date Balances of the Mortgage Loans are
presented without regard to the
cross-collateralization of groups of
cross-collateralized Mortgage Loans.
(3) The "Loan Group Cut-off Date Balances"
are the Cut-off Date Balances of the
Mortgage Loans, presenting each group
of cross-collateralized Mortgage Loans
as if it were a single Mortgage Loan.
(4) The "Underwritten Debt Service Coverage
Ratio" for any Mortgage Loan (other
than a Mortgage Loan that is part of a
cross-collateralized group of Mortgage
Loans) is equal to the Underwritten Net
Cash Flow (as such term is defined in
this Prospectus Supplement under
"Description of the Mortgage
Pool--Additional Mortgage Loan
Information") generated by the related
Mortgaged Property, divided by the
product of 12 times the monthly payment
of principal and/or interest due in
respect of such Mortgage Loan on the
Cut-off Date. The Underwritten Debt
Service Coverage Ratio for any Mortgage
Loan that is part of a group of
cross-collateralized Mortgage Loans is
equal to the aggregate Underwritten Net
Cash Flow generated by all of the
Mortgaged
S-25
<PAGE>
Properties securing such group, divided
by the product of 12 times the
aggregate monthly payments of principal
and/or interest due on the Cut-off Date
in respect of all the Mortgage Loans
comprising such group.
(5) The "Cut-off Date Loan-to-Value Ratio"
for any Mortgage Loan is equal to its
Cut-off Date Balance, divided by the
estimated value of the related
Mortgaged Property as set forth in the
most recent appraisal obtained by or
otherwise in the possession of the
Mortgage Loan Seller.
(6) The "Maturity/ARD Loan-to-Value Ratio"
for any Mortgage Loan that provides for
a balloon payment or has an Anticipated
Repayment Date is equal to the unpaid
principal balance of such Mortgage Loan
that will be outstanding as of its
maturity date or Anticipated Repayment
Date, as applicable, assuming no
defaults or prepayments, divided by the
estimated value of the related
Mortgaged Property as set forth in the
most recent appraisal obtained by or
otherwise in the possession of the
Mortgage Loan Seller. Maturity/ARD
Loan-to-Value Ratios have not been
calculated and are not presented for
fully amortizing Mortgage Loans.
B. State Concentration........... The table below shows the number of, and
percentage of the Initial Pool Balance
secured by, Mortgaged Properties located in
the indicated states:
Number of % of Initial
State Mortgaged Properties Pool Balance
- ----- -------------------- ------------
Texas 53 19.7%
California 43 13.5%
Florida 19 9.9%
Michigan 17 4.8%
Tennessee 2 3.7%
The remaining Mortgaged Properties are
located throughout 31 other states and the
District of Columbia. No more than 3.4% of
the Initial Pool Balance is secured by
Mortgaged Properties located in any such
other jurisdiction.
C. Property Types................ The table below shows the number of, and
percentage of the Initial Pool Balance
secured by, Mortgaged Properties operated
for each indicated purpose:
Number of % of Initial
Property Type Mortgaged Properties Pool Balance
- ------------- -------------------- ------------
Multifamily Rental 107 36.3%
Retail 59 24.8%
Hospitality 26 9.3%
Office 24 8.8%
Mixed Use 18 8.2%
Manufactured Housing 6%
Community 24 6.
Self Storage 16 3.1%
Industrial 5 2.8%
S-26
<PAGE>
D. Security for the Mortgage
Loans..................... The table below shows the number and
percentage (based on Cut-off Date Balance)
of the Mortgage Loans that are secured by
first mortgage liens on each of the
specified interests in the related
Mortgaged Properties.
Encumbered Interest
in the Related Number of % of Initial
Mortgaged Property Mortgaged Properties Pool Balance
------------------ -------------------- ------------
Fee 270 96.4%
Leasehold 7 1.7%
Fee in Part, Leasehold in Part 2 1.9%
E. Cut-off Date Balances......... The table below shows the range of Cut-off
Date Balances for the Mortgage Loans,
presented without regard to the
cross-collateralization of the groups of
cross-collateralized Mortgage Loans.
Range of Number of % of Initial
Cut-off Date Balances Mortgage Loans Pool Balance
--------------------- -------------- ------------
$515,269 - $749,999 4 0.2%
$750,000 - $1,249,999 17 1.4%
$1,250,000 - $1,999,999 63 8.4%
$2,000,000 - $2,999,999 60 12.2%
$3,000,000 - $3,999,999 33 9.3%
$4,000,000 - $4,999,999 22 8.0%
$5,000,000 - $5,999,999 17 7.3%
$6,000,000 - $9,999,999 39 22.6%
$10,000,000 - $14,999,999 13 12.6%
$15,000,000 - $19,999,999 6 7.9%
$20,000,000 - $24,999,999 3 5.4%
$25,000,000 - $30,446,295 2 4.8%
F. Loan Group Cut-off Date
Balances.................... The table below shows the range of Cut-off
Date Balances for the Mortgage Loans,
presenting each group of
cross-collateralized Mortgage Loans as a
single Mortgage Loan.
Range of
Loan Group Number of % of Initial
Cut-off Date Balances Mortgage Loans Pool Balance
--------------------- -------------- ------------
$675,000 - $749,999 2 0.1%
$750,000 - $1,249,999 13 1.0%
$1,250,000 - $1,999,999 54 7.2%
$2,000,000 - $2,999,999 55 11.2%
$3,000,000 - $3,999,999 29 8.1%
$4,000,000 - $4,999,999 17 6.1%
$5,000,000 - $5,999,999 13 5.7%
$6,000,000 - $9,999,999 34 20.2%
$10,000,000 - $14,999,999 11 11.0%
$15,000,000 - $19,999,999 5 6.6%
$20,000,000 - $24,999,999 2 3.3%
$25,000,000 - $70,750,763 5 19.4%
S-27
<PAGE>
G. Mortgage Rates ............... The table below shows the range of Mortgage
Rates for the Mortgage Loans as of the
Cut-off Date.
Range of Cut-off Number of % of Initial
Mortgage Rates Mortgage Loans Pool Balance
--------------- -------------- ------------
5.960% - 6.499% 9 1.9%
6.500% - 6.749% 11 4.7%
6.750% - 6.999% 30 12.1%
7.000% - 7.249% 55 20.7%
7.250% - 7.499% 74 28.7%
7.500% - 7.999% 88 24.5%
8.000% - 8.440% 12 7.4%
H. Original Terms to
Maturity or ARD........... The table below shows the range of original
terms to stated maturity or Anticipated
Repayment Date, as applicable, for the
Mortgage Loans.
Range of Original
Terms to Maturity Number of % of Initial
or ARD (in Months) Mortgage Loans Pool Balance
------------------ -------------- ------------
60 - 108 6 3.7%
109 - 120 261 91.7%
121 - 204 5 1.1%
205 - 300 7 3.6%
I. Remaining Terms to
Maturity or ARD........... The table below shows the range of
remaining terms to stated maturity or
Anticipated Repayment Date, as applicable,
for the Mortgage Loans as of the Cut-off
Date.
Range of Remaining
Terms to Maturity Number of % of Initial
or ARD (in Months) Mortgage Loans Pool Balance
------------------ -------------- ------------
58 - 108 7 3.9%
109 - 120 260 91.4%
121 - 204 5 1.1%
205 - 289 7 3.6%
S-28
<PAGE>
J. Underwritten Debt Service
Coverage Ratios............ The table below shows the range of
Underwritten Debt Service Coverage Ratios
for the Mortgage Loans.
Range of
Underwritten
Debt Service Number of % of Initial
Coverage Ratios Mortgage Loans Pool Balance
--------------- -------------- ------------
1.19x - 1.29x 108 50.4%
1.30x - 1.39x 87 26.7%
1.40x - 1.49x 46 12.4%
1.50x - 1.59x 12 2.0%
1.60x - 2.54x 26 8.6%
K. Cut-off Date Loan-to-Value
Ratios...................... The table below shows the range of Cut-off
Date Loan-to-Value Ratios for the Mortgage
Loans.
Range of
Cut-off Date Number of % of Initial
Loan-to-Value Ratios Mortgage Loans Pool Balance
-------------------- -------------- ------------
16.20% - 50.00% 18 6.2%
50.01% - 60.00% 19 4.4%
60.01% - 70.00% 41 10.0%
70.01% - 75.00% 73 22.3%
75.01% - 80.00% 121 52.9%
80.01% - 82.50% 7 4.2%
L. Maturity/ARD
Loan-to-Value Ratios...... The table below shows the range of
Maturity/ARD Loan-to-Value Ratios for the
Balloon Loans and the ARD Loans described
in this Prospectus Supplement.
Range of
Maturity/ARD Number of % of Initial
Loan-to-Value Ratios(1) Mortgage Loans Pool Balance
----------------------- -------------- ------------
12.90% - 20.00% 3 0.5%
20.01% - 30.00% 2 1.4%
30.01% - 40.00% 17 6.4%
40.01% - 50.00% 20 4.6%
50.01% - 60.00% 52 11.3%
60.01% - 73.70% 182 74.4%
-------------------
(1) Maturity/ARD Loan-to-Value Ratios have
not been calculated and are not
presented for fully amortizing Mortgage
Loans.
S-29
<PAGE>
The Large Mortgage Loans and Groups
A. The Winston Loans............. Set forth below is certain loan and
property information in respect of the
group of cross-collateralized Mortgage
Loans identified in this Prospectus
Supplement as the "Winston Loans". See
"Description of the Mortgage Pool--
Significant Mortgage Loans--The Winston
Loans" in this Prospectus Supplement.
Cut-off Date Balance............................... $70,750,763
% of Initial Pool Balance.......................... 5.6%
No. of Mortgaged Properties........................ 14
No. of Mortgage Loans.............................. 1
Property Type...................................... Hotel
Mortgage Rate...................................... 7.375%
Scheduled P&I Payment.............................. $518,924.55
Stated Maturity Date............................... December 1, 2023
Anticipated Repayment Date......................... December 1, 2008
Appraised Value.................................... $162,120,000
Appraisal Dates.................................... 6/30/98 - 8/17/98
Underwritten Debt Service Coverage Ratio........... 2.54x
Cut-off Date Loan-to-Value Ratio................... 43.6%
Maturity/ARD Loan-to-Value Ratio................... 34.8%
B. The Swerdlow Loans............ Set forth below is certain loan and
property information in respect of the
group of cross-collateralized Mortgage
Loans identified in this Prospectus
Supplement as the "Swerdlow Loans". See
"Description of the Mortgage Pool--
Significant Mortgage Loans--The Swerdlow
Loans" in this Prospectus Supplement.
Cut-off Date Balance.............................. $63,806,653
% of Initial Pool Balance......................... 5.1%
No. of Mortgage Loans............................. 3
No. of Mortgaged Properties....................... 3
Property Types.................................... Retail/Office
Mortgage Rate..................................... 8.180%
Scheduled P&I Payment............................. $476,746.78
Stated Maturity Date.............................. February 1, 2029
Anticipated Repayment Date........................ February 1, 2009
Appraised Value................................... $80,900,000
Appraisal Dates................................... 10/9/98 - 10/20/98
Underwritten Debt Service Coverage Ratio.......... 1.25x
Cut-off Date Loan-to-Value Ratio.................. 78.9%
Maturity/ARD Loan-to-Value Ratio.................. 70.9%
S-30
<PAGE>
C. The Alliance Loans............ Set forth below is certain loan and
property information in respect of the
group of cross-collateralized Mortgage
Loans identified in this Prospectus
Supplement as the "Alliance Loans". See
"Description of the Mortgage Pool--
Significant Mortgage Loans--The Alliance
Loans" in this Prospectus Supplement.
Cut-off Date Balance.............................. $48,831,350
% of Initial Pool Balance......................... 3.9%
No. of Mortgage Loans............................. 5
No. of Mortgaged Properties....................... 5
Property Types.................................... Multifamily
Mortgage Rate..................................... 7.220%
Scheduled P&I Payment............................. $332,517.17
Stated Maturity Date.............................. February 1, 2009
Appraised Value................................... $62,250,000
Appraisal Dates................................... 1/15/99 - 1/20/99
Underwritten Debt Service Coverage Ratio.......... 1.30x
Cut-off Date Loan-to-Value Ratio.................. 78.4%
Maturity/ARD Loan-to-Value Ratio.................. 68.9%
D. The Country Squire Loan....... Set forth below is certain loan and
property information in respect of the
Mortgage Loan identified in this Prospectus
Supplement as the "Country Squire Loan".
See "Description of the Mortgage Pool--
Significant Mortgage Loans--The Country
Squire Loan" in this Prospectus Supplement.
Cut-off Date Balance.............................. $30,446,295
% of Initial Pool Balance......................... 2.4%
No. of Mortgaged Properties....................... 1
Property Types.................................... Multifamily
Mortgage Rate..................................... 6.650%
Scheduled P&I Payment............................. $195,799.29
Stated Maturity Date.............................. January 1, 2009
Appraised Value................................... $39,000,000
Appraisal Dates................................... 8/13/98
Underwritten Debt Service Coverage Ratio.......... 1.28x
Cut-off Date Loan-to-Value Ratio.................. 78.1%
Maturity/ARD Loan-to-Value Ratio.................. 66.5%
S-31
<PAGE>
E. The American Loans............ Set forth below is certain loan and
property information in respect of the
group of cross-collateralized Mortgage
Loans identified in this Prospectus
Supplement as the "American Loans". See
"Description of the Mortgage Pool--
Significant Mortgage Loans--The American
Loans" in this Prospectus Supplement.
Cut-off Date Balance.............................. $29,312,901
% of Initial Pool Balance......................... 2.3%
No. of Mortgage Loans............................. 4
No. of Mortgaged Properties....................... 4
Property Types.................................... Office/Industrial
Mortgage Rate..................................... 7.550%
Scheduled P&I Payment............................. $206,576.59
Stated Maturity Date.............................. November 1, 2008
Appraised Value................................... $36,750,000
Appraisal Dates................................... 6/17/98 - 8/31/98
Underwritten Debt Service Coverage Ratio.......... 1.40x
Cut-off Date Loan-to-Value Ratio.................. 79.8%
Maturity/ARD Loan-to-Value Ratio.................. 70.8%
Payment Terms..................... Each Mortgage Loan accrues interest at the
annual rate (its "Mortgage Rate") set forth
with respect thereto on Exhibit A-1 to this
Prospectus Supplement. The Mortgage Rate
for each Mortgage Loan is fixed for the
entire term of such Mortgage Loan.
Each Mortgage Loan provides for scheduled
payments of principal and/or interest
("Scheduled P&I Payments") to be due on the
first day of each month (its monthly "Due
Date").
Each Mortgage Loan identified in this
Prospectus Supplement as a "Balloon Loan"
provides for an amortization schedule that
is significantly longer than its remaining
term to stated maturity and which, in some
cases, begins only after the end of an
initial interest-only period. A Balloon
Loan will require a substantial payment of
principal on its maturity date (such
payment, together with the corresponding
interest payment, a "Balloon Payment").
Three (3) Balloon Loans, representing 1.2%
of the Initial Pool Balance, provide that
the amount of the Scheduled P&I Payment
(but not the related Mortgage Rate) will
increase one time on the date on which an
initial interest-only period ends and the
amortization period commences.
Mortgage Loans identified in this
Prospectus Supplement as "ARD Loans"
provide material disincentives to the
related Borrower to allow its Mortgage Loan
to remain outstanding past a certain date
(the "Anticipated Repayment Date" or
"ARD"). There can be no assurance, however,
that such disincentives will result in any
ARD Loan being paid in full on or before
its Anticipated Repayment Date. Such
disincentives, which in each case will
begin effective as of the related
Anticipated Repayment Date, include:
S-32
<PAGE>
o The accrual of interest in excess of that
accrued at the related Mortgage Rate.
Such additional interest will be
deferred and will be payable only after
the outstanding principal balance of the
ARD Loan is paid in full.
o The application of certain excess cash
flow from the related Mortgaged Property
to pay principal. Such payment of
principal will be in addition to the
principal portion of the Scheduled P&I
Payment.
The remaining Mortgage Loans, referred to
in this Prospectus Supplement as "Fully
Amortizing Loans", have amortization
schedules that amortize such Mortgage Loans
in full or substantially in full by their
respective maturity dates. The Fully
Amortizing Loans do not include the ARD
Loans.
The table below shows the number and
percentage of Mortgage Loans that are
Balloon Loans, ARD Loans and Fully
Amortizing Loans, respectively:
Number of % of Initial
Loan Type Mortgage Loans Pool Balance
--------- -------------- ------------
Balloon Loans 208 72.4%
ARD Loans 68 26.2%
Fully Amortizing Loans 3 1.4%
No Mortgage Loan is a "premium loan" (i.e.,
no Borrower received more loan proceeds
than the original principal balance of its
Mortgage Loan in exchange for agreeing to a
higher Mortgage Rate).
Delinquency Status................ No Mortgage Loan was more than 30 days
delinquent in respect of any Scheduled P&I
Payment as of the Cut-off Date or at any
time during the twelve (12) month period
preceding the Cut-off Date.
Prepayment Lock-out Periods....... A prepayment lock-out period is currently
in effect for all of the Mortgage Loans.
Set forth below is information regarding
the remaining lock-out periods for the
Mortgage Loans:
Maximum Remaining Lock-out Period: 232 months
Minimum Remaining Lock-out Period: 21 months
Weighted Average Remaining Lock-out Period: 108 months
S-33
<PAGE>
Defeasance........................ Certain Mortgage Loans identified in this
Prospectus Supplement as "Defeasance Loans"
permit the related Borrower, no earlier
than the second anniversary of the Closing
Date, to obtain a release of the related
Mortgaged Property (or, where applicable,
one or more of the related Mortgaged
Properties) from the lien of the related
mortgage or other security instrument by
delivering U.S. Treasury obligations as
substitute collateral.
Number of % of Initial
Loan Type Mortgage Loans Pool Balance
--------- -------------- ------------
Defeasance Loans 254 91.6%
Non-Defeasance Loans 25 8.4%
S-34
<PAGE>
RISK FACTORS
You should consider the following factors (as well as the factors set
forth under "Risk Factors" in the Prospectus) in deciding whether to purchase
the Offered Certificates of any Class.
Risks Related to the Offered Certificates
The Offered Certificates are Supported by Limited Assets. If the assets
of the Trust are insufficient to make payments on your Certificates, no other
assets will be available to you for payment of the deficiency. See "--Risk
Factors--Limited Assets" in the Prospectus.
Risks Associated With Liquidity and Market Value. There is currently no
secondary market for the Offered Certificates. The Underwriters have informed
the Depositor that they intend to make a secondary market in the Offered
Certificates, but they are under no obligation to do so. There can be no
assurance that a secondary market for the Offered Certificates will develop.
Even if a secondary market does develop for the Offered Certificates, there is
no assurance that it will provide you with liquidity of investment or that the
market will continue for the life of the Offered Certificates. The Depositor
will not list the Offered Certificates on any securities exchange. Lack of
liquidity could result in a significant reduction in the market value of your
Certificates. In addition, the market value of your Certificates at any time may
be affected by many factors, including then prevailing interest rates and the
then perceived riskiness of commercial mortgage-backed securities relative to
other investments. See "Risk Factors--Limited Liquidity of Offered Certificates"
in the Prospectus.
Uncertain Yields to Maturity. The yield on your Certificates will
depend on (a) the price you paid for such Certificates and (b) the rate, timing
and amount of distributions on such Certificates. The rate, timing and amount of
distributions on your Certificates will, in turn, depend on:
o the Pass-Through Rate(s) for your Certificates;
o the rate and timing of payments and other collections of principal
on the Mortgage Loans;
o the rate and timing of defaults, and the severity of losses, if
any, on the Mortgage Loans;
o the rate, timing, severity and allocation of other shortfalls and
expenses that reduce amounts available for distribution on your
Certificates; and
o the collection and distribution of prepayment premiums and yield
maintenance charges with respect to the Mortgage Loans.
In general, these factors cannot be predicted with any certainty.
Accordingly, you may find it difficult to analyze the effect that such factors
might have on the yield to maturity of your Certificates. See "Description of
the Mortgage Pool", "Description of the Offered Certificates--Distributions" and
"--Allocation of Realized Losses and Certain Other Shortfalls and Expenses" and
"Yield and Maturity Considerations" in this Prospectus Supplement. See also
"Yield and Maturity Considerations" in the Prospectus.
Risks Related to the Rate of Prepayment. If you purchase your
Certificates at a premium, and if payments and other collections of principal on
the Mortgage Loans occur at a rate faster than you anticipated at the time of
your purchase, then your actual yield to maturity may be lower than you had
assumed at the time of your purchase. Conversely, if you purchase your
Certificates at a discount, and if payments and other collections of principal
on the Mortgage Loans occur at a rate slower than you anticipated at the time of
your purchase, then your actual yield to maturity may be lower than you had
assumed at the time of your purchase. You should consider that prepayment
premiums and yield maintenance charges, even if available and distributable in
respect of your Certificates, may not be sufficient to offset fully any loss in
yield on your Certificates.
S-35
<PAGE>
The investment performance of your Certificates may vary materially and
adversely from your expectations due to the rate of prepayments and other
unscheduled collections of principal on the Mortgage Loans being faster or
slower than you anticipated. The actual yield to you, as a Holder of an Offered
Certificate, may not be equal to the yield you anticipated at the time of your
purchase, and the total return on investment that you expected may not be
realized. In deciding whether to purchase any Offered Certificates, you should
make an independent decision as to the appropriate prepayment assumptions to be
used.
If you purchase Class S Certificates, your yield to maturity will be
highly sensitive to the rate and timing of principal payments and losses on the
Mortgage Loans. Prior to investing in the Class S Certificates, you should fully
consider the associated risks, including the risk that an extremely rapid rate
of amortization, prepayment or other liquidation of the Mortgage Loans could
result in your failure to recoup fully your initial investment. The ratings on
the Class S Certificates do not address whether a purchaser of such Certificates
would be able to recover its initial investment therein.
See "Yield and Maturity Considerations" in this Prospectus Supplement
and in the Prospectus. See also "Risk Factors--Effect of Prepayments on Yield of
Certificates" in the Prospectus.
Risks Associated with Borrower Defaults; Delinquencies and Defaults by
Borrowers May Delay Payments to You. The rate and timing of delinquencies and
defaults on the Mortgage Loans will affect the amount of distributions on your
Certificates, the yield to maturity of your Certificates, the rate of principal
payments on your Certificates and the weighted average life of your
Certificates. Delinquencies on the Mortgage Loans, unless covered by P&I
Advances, may result in shortfalls in distributions of interest and/or principal
on your Certificates for the current month. Even if such shortfalls are made up
on future Distribution Dates, no interest would accrue on any such shortfalls.
Thus, any such shortfalls would adversely affect the yield to maturity of your
Certificates.
If you calculate the anticipated yield to maturity for your
Certificates based on an assumed rate of default and amount of losses on the
Mortgage Loans that is lower than the default rate and amount of losses actually
experienced and such additional losses result in a reduction of the aggregate
distributions on or the aggregate Certificate Principal Balance or Certificate
Notional Amount of your Certificates, your actual yield to maturity will be
lower than you calculated and could, under certain scenarios, be negative. The
timing of any loss on a liquidated Mortgage Loan that results in a reduction of
the aggregate distributions on or the aggregate Certificate Principal Balance or
Certificate Notional Amount of your Certificates will also affect the actual
yield to maturity of your Certificates, even if the rate of defaults and
severity of losses are consistent with your expectations. In general, the
earlier your loss occurs, the greater the negative effect on your yield to
maturity.
Even if losses on the Mortgage Loans do not result in a reduction of
the aggregate distributions on or the aggregate Certificate Principal Balance or
Certificate Notional Amount of your Certificates, such losses may still affect
the timing of distributions on (and, accordingly, the weighted average life and
yield to maturity of) your Certificates. See "Yield and Maturity Considerations"
in this Prospectus Supplement.
Potential Conflicts of Interest. An affiliate of the Master Servicer
owns a limited partnership interest in the Borrower under the
cross-collateralized group of GECA Mortgage Loans secured by mortgage liens on
the Princeton Court Apartments, Pinewood Estates Apartments and Arbor Court
Apartments. An affiliate of the Master Servicer also owns certain unsecured
profit participation interests in the partners of the Borrower under the
cross-collateralized group of Mortgage Loans secured by mortgage liens on Keller
Oaks Apartments, Sycamore Hill Apartments, Clarendon Apartments and Woodchase
Apartments. In addition, affiliates of the Master Servicer and the Special
Servicer may also have in the future additional financing relationships with
other Borrowers (or affiliates). Furthermore, with respect to one group of
affiliated Borrowers involving six (6) GECA Mortgage Loans (the "Hyrail Group"),
representing 1.6% of the Initial Pool Balance, an affiliate of the Master
Servicer has made a "mezzanine" loan secured by partnership or membership
interests of partners of the related Borrowers. The Hyrail Group consists of the
GECA Mortgage Loans that are secured by mortgage liens on the Mortgaged
Properties identified on Exhibit A-1 as All Aboard Mini-Storage -
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Alhambra, - Fremont, - Stanton, - Anaheim, - San Gabriel and - Santa Ana. In
addition, an affiliate of the Master Servicer has extended a revolving credit
facility to the real estate investment trust ("REIT") that controls the
Borrowers under the GECA Mortgage Loans that are secured by mortgage liens on
Kendale Lakes Plaza, Cypress Creek Station and Oakwood Business Center and to
certain affiliates of such REIT, and the collateral for such credit facility
includes, among other things, a pledge of the REIT's equity interests in such
Borrowers. Certain of the GECA Mortgage Loans constituted refinancings of
indebtedness previously held by GECA affiliates.
The Master Servicer and the Special Servicer each may acquire
Certificates. In addition, the Holders of Certificates representing a majority
interest in the Controlling Class may replace the Special Servicer. See
"Servicing of the Mortgage Loans--Replacement of the Special Servicer" in this
Prospectus Supplement.
The Master Servicer and the Special Servicer each will be obligated to
observe the terms of the Pooling Agreement and will be governed by the servicing
standard described in this Prospectus Supplement. However, either such party
may, especially if it or an affiliate is a Certificateholder, or has financial
interests in or other financial dealings with the related Borrower, have
interests when dealing with Mortgage Loans that are in conflict with those of
Holders of the Offered Certificates. For instance, a Special Servicer that is a
Certificateholder could seek to mitigate the potential for loss to its Class
from a troubled Mortgage Loan by deferring enforcement in the hope of maximizing
future proceeds. However, such action could result in less proceeds to the Trust
than would have been realized if earlier action had been taken. In general,
neither the Master Servicer nor the Special Servicer is required to act in a
manner more favorable to the Offered Certificates or any particular Class
thereof than to the Private Certificates.
In addition, the Master Servicer and the Special Servicer each services
(and will, in the future, service) existing and new loans for third parties,
including portfolios of loans similar to the Mortgage Loans, in the ordinary
course of its business. The properties securing these mortgage loans may be in
the same markets as certain of the Mortgaged Properties. Consequently, personnel
of the Master Servicer and Special Servicer may perform services, on behalf of
the Trust, with respect to the Mortgage Loans at the same time as they are
performing services, on behalf of other persons, with respect to other mortgage
loans secured by properties that compete with the Mortgaged Properties. This may
pose inherent conflicts for the Master Servicer or Special Servicer.
Certain Rights to Payment that are Senior to Distributions on the
Certificates. The Master Servicer, the Special Servicer and the Trustee are each
entitled to receive out of payments on or proceeds of specific Mortgage Loans
(or, in some cases, out of general collections on the Mortgage Pool) certain
payments or reimbursements for or in respect of compensation, Advances (with
interest thereon) and indemnities, prior to distributions on the Certificates.
In particular, Advances are intended to provide liquidity not credit support,
and the advancing party is entitled to be reimbursed for its Advances, together
with interest thereon to offset its cost of funds.
ERISA Considerations. The regulations that govern pension and other
employee benefit plans subject to ERISA and plans and other retirement
arrangements subject to Section 4975(c) of the Code are complex. Accordingly, if
you are using the assets of such plans or arrangements to acquire Offered
Certificates, you are urged to consult legal counsel regarding consequences
under ERISA and the Code of the acquisition, ownership and disposition of
Offered Certificates. In particular, the purchase or holding of the Class A-2,
Class A-3, Class B-1 and Class B-2 Certificates by any such plan or arrangement
may result in a prohibited transaction or the imposition of excise taxes or
civil penalties. As a result, such Certificates should not be acquired by, on
behalf of, or with assets of any such plan or arrangement, unless the purchase
and continued holding of any such Certificate or interest therein is exempt from
the prohibited transaction provisions of Section 406 of ERISA and Section 4975
of the Code under Sections I and III of Prohibited Transaction Class Exemption
("PTCE") 95-60. Sections I and III of PTCE 95-60 provide an exemption from the
prohibited transaction rules for certain transactions involving an insurance
company general account. See "Certain ERISA Considerations" in this Prospectus
Supplement and "ERISA Considerations" in the Prospectus.
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Risk of Year 2000. The transition from the year 1999 to the year 2000
may disrupt the ability of computerized systems to process information. The
collection of payments on the Mortgage Loans, the servicing of the Mortgage
Loans and the distributions on your Certificates are highly dependent upon
computer systems of the Master Servicer, the Special Servicer, the Trustee, the
Borrowers and other third parties.
The Trustee has advised the Depositor that the Trustee is currently
modifying its computer systems and applications and expects that it will be year
2000 capable prior to December 31, 1999. The Trustee has also advised the
Depositor that the Trustee is assessing the year 2000 capability of key vendors
and subcontractors to determine whether key processes and business activity will
be interrupted. To the extent that the computer systems of the Trustee rely on
the computer systems of other companies, there can be no assurance that such
other computer systems will be year 2000 capable or (even if they are year 2000
capable) that they will be compatible with the computer systems of the Trustee.
The Master Servicer and the Special Servicer have advised the Depositor that,
with respect to those computer systems identified as being mission critical for
the performance of the servicing function described herein, they are committed
to either (i) modifying their respective existing systems to the extent required
to cause them to be year 2000 capable, or (ii) acquiring new and/or upgraded
computer systems that are year 2000 capable, in each case prior to December 31,
1999. The Master Servicer, the Special Servicer and the Trustee consider their
products and services to be "year 2000 capable" if the product or service will
be capable of accurately processing, providing and receiving date data from,
into and between the twentieth and twenty-first centuries, and will correctly
create, store, process and output information related to or including dates on
or after December 31, 1999 as a result of the changing of the date from 1999 to
2000, including leap year calculations, when used for the purpose for which it
was intended, assuming that all other products, including hardware and software,
when used in combination with the product or service, properly exchange date
data. However, neither the Depositor nor any affiliate of the Depositor has made
any independent investigation of the computer systems of the Master Servicer,
the Special Servicer or the Trustee. In the event that the computer systems of
the Master Servicer, the Special Servicer or the Trustee are not fully year 2000
capable, or to the extent its computer systems depend on other companies'
computer systems that are not year 2000 capable or are incompatible with its
systems, the resulting disruptions in the collection or distribution of receipts
on the Mortgage Loans could materially adversely affect the Certificateholders.
Risks Related to the Mortgage Loans
Repayment of the Mortgage Loans Depends on the Operation of the
Mortgaged Properties. The Mortgage Loans are secured by first mortgage liens on
fee and/or leasehold interests in the following types of real property:
o Multifamily Rental
o Retail
o Hospitality
o Office
o Manufactured Housing Community
o Industrial
o Self Storage
o Mixed-Use
Lending on multifamily and commercial properties is generally perceived
as involving greater risk than lending on the security of single-family
residential properties. This is because multifamily and commercial real estate
lending involves larger loans, and repayment is dependent upon the successful
operation of the related real estate project.
The following factors, among others, will affect the ability of a
Mortgaged Property to generate net operating income:
o the age, design and construction quality of the property;
o perceptions regarding the safety, convenience and attractiveness
of the property;
o the proximity and attractiveness of competing properties;
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o new construction of competing properties;
o the adequacy of the property's management and maintenance;
o national, regional or local economic conditions (including plant
closings, industry slowdowns and unemployment rates);
o local real estate conditions (including an increase in or
oversupply of comparable commercial or residential space);
o demographic factors;
o customer tastes and preferences; and
o retroactive changes in building codes.
Particular factors that may adversely affect the ability of a Mortgaged
Property to generate net operating income include:
o an increase in operating expenses;
o an increase in the capital expenditures needed to maintain the
property or make improvements;
o a decline in the financial condition of a major tenant
(in particular, a sole tenant or anchor tenant);
o an increase in vacancy rates; and
o a decline in rental rates as leases are renewed or replaced.
The volatility of net operating income generated by a Mortgaged
Property over time will be influenced by many of the foregoing factors, as well
as by:
o the length of tenant leases;
o the creditworthiness of tenants;
o the rental rates at which leases are renewed or replaced;
o the percentage of total property expenses in relation to revenue;
o the ratio of fixed operating expenses to those that vary with
revenues; and
o the level of capital expenditures required to maintain the
property and to maintain or replace tenants.
Therefore, Mortgaged Properties with short-term or less creditworthy sources of
revenue and/or relatively high operating costs, such as those operated as
hospitality and self-storage properties, can be expected to have more volatile
cash flows than Mortgaged Properties with medium- to long-term leases from
creditworthy tenants and/or relatively low operating costs. A decline in the
real estate market will tend to have a more immediate effect on the net
operating income of Mortgaged Properties with short-term revenue sources and may
lead to higher rates of delinquency or defaults.
Issues Involving Single-Tenant Mortgage Loans. In the case of seven (7)
Mortgage Loans, representing 1.2% of the Initial Pool Balance, the related
Borrower has leased the related Mortgaged Property entirely to a single tenant
(each such Mortgaged Property, a "Single-Tenant Mortgaged Property" and each
such Mortgage Loan, a "Single-Tenant Mortgage Loan"). In some cases, the
Single-Tenant Mortgaged Properties are subject to a single space lease with a
primary lease term that expires on or after the scheduled maturity date or
Anticipated Repayment Date, as applicable, of the related Mortgage Loan. The
amount of the monthly rental payment payable by the tenant under such lease is
equal to or greater than the scheduled payment of all principal, interest and
other amounts (other than any Balloon Payment) due each month on the related
Single-Tenant Mortgage Loan.
The underwriting of a Single-Tenant Mortgage Loan is often based
primarily upon the monthly rental payments due from the tenant under the lease
of the related Mortgaged Property. Where the primary lease term expires before
the scheduled maturity date (or Anticipated Repayment Date, where applicable) of
a Single-Tenant Mortgage Loan, the Originator considered the incentives for the
tenant to re-lease the premises and the anticipated rental value of the premises
at the end of the primary lease term.
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Each lease encumbering a Single-Tenant Mortgaged Property generally
requires the related tenant to pay all real property taxes and assessments
levied or assessed against such Mortgaged Property and all charges for utility
services, insurance and other operating expenses incurred in connection with
operating such Mortgaged Property. Generally, the tenants under such leases are
required, at their expense, to maintain the related Single-Tenant Mortgaged
Properties in good order and repair.
Tenant Concentration Entails Risk. In those cases where a Mortgaged
Property is leased to a single tenant or is primarily leased to one or a small
number of major tenants, a deterioration in the financial condition or a change
in the plan of operations of any such tenant can have particularly significant
effects on the net cash flow generated by such Mortgaged Property. If any such
tenant defaults under or fails to renew its lease, the resulting adverse
financial effect on the operation of such Mortgaged Property will be
substantially more severe than would be the case with respect to a property
occupied by a large number of less significant tenants.
Any Mortgaged Property operated for retail, office or industrial
purposes also may be adversely affected by a decline in a particular business or
industry if a concentration of tenants at the property is engaged in that
business or industry.
Tenant Bankruptcy Entails Special Risks. The bankruptcy or insolvency
of a major tenant, or a number of smaller tenants, at any particular Mortgaged
Property may adversely affect the income produced by such property. Under the
federal Bankruptcy Code, a tenant has the option of assuming or rejecting any
unexpired lease. If the tenant rejects the lease, the landlord's claim for
breach of the lease would be a general unsecured claim against the tenant
(absent collateral securing the claim). The claim would be limited to the unpaid
rent reserved under the lease for the periods prior to the bankruptcy petition
(or earlier surrender of the leased premises) which are unrelated to the
rejection, plus the greater of one year's rent or 15% of the remaining reserved
rent (but not more than three years' rent).
Certain Additional Risks Relating to Tenants. The Mortgaged Properties
will be affected by the ability of the respective Borrowers to renew leases or
relet space on comparable terms when existing leases expire and/or become
defaulted. Most of the Mortgaged Properties are in whole or in part occupied
under leases that expire during the respective terms of the related Mortgage
Loans. Even if vacated space is successfully relet, the costs associated with
reletting, including tenant improvements and leasing commissions in the case of
Mortgaged Properties operated for retail, office or industrial purposes, can be
substantial and could reduce cash flow from the Mortgaged Properties. Moreover,
if a tenant at any Mortgaged Property defaults in its lease obligations, the
Borrower may incur substantial costs and experience significant delays
associated with enforcing its rights and protecting its investment, including
costs incurred in renovating and reletting the property.
Property Value May Be Adversely Affected Even When Current Operating
Income Is Not. Various factors may affect the value of the Mortgaged Properties
without affecting their current net operating income, including:
o changes in interest rates;
o the availability of refinancing sources;
o changes in governmental regulations or fiscal policy;
o changes in zoning or tax laws; and
o potential environmental or other legal liabilities.
Property Management May Affect Property Value. The operation of a
Mortgaged Property will depend upon the property manager's performance and
viability. The property manager generally is responsible for the following:
o responding to changes in the local market;
o planning and implementing the rental structure;
o operating the property and providing building services;
o managing operating expenses; and
o ensuring that maintenance and capital improvements are carried out
in a timely fashion.
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Mortgaged Properties that derive revenues primarily from short-term
rental commitments, such as hospitality or self-storage properties, generally
require more intensive management than properties leased to tenants under
long-term leases.
By controlling costs, providing appropriate and efficient services to
tenants and maintaining improvements in good condition, a property manager can
maintain or improve occupancy rates, business and cash flow, reduce operating
and repair costs and preserve building value. On the other hand, management
errors can, in some cases, impair the long term viability of a Mortgaged
Property. See the table entitled "Managers and Locations of the Mortgaged
Properties" on Exhibit A-1 to this Prospectus Supplement for the names of the
various property managers.
Factors Affecting the Operation of Multifamily Rental Properties. One
hundred-seven (107) Mortgage Loans, representing 36.3% of the Initial Pool
Balance, are secured by multifamily apartment buildings (such Mortgaged
Properties, the "Multifamily Rental Properties"). Factors that will affect the
value and operation of a Multifamily Rental Property include:
o the physical attributes of the apartment building (e.g., its age,
appearance, amenities and construction quality);
o the location of the property;
o the characteristics of the surrounding neighborhood (which may
change over time);
o the ability of management to provide adequate maintenance and
insurance;
o the property's reputation;
o the level of mortgage interest rates (which may encourage tenants
to purchase rather than lease housing);
o the presence of competing properties;
o the tenant mix (e.g., the tenant population may be predominantly
students or may be heavily dependent on workers from a particular
business or personnel from a local military base);
o adverse local, regional or national economic conditions (which may
limit the amount that may be charged and may result in a reduction
in timely rent payments or a reduction in occupancy levels);
o state and local regulations (which may affect the building owner's
ability to increase rent to the market rent for an equivalent
apartment); and
o the extent to which the property is subject to land use
restrictive covenants or contractual covenants that require that
units be rented to low income tenants.
Effects of State and Local Regulations. Certain states where the
Multifamily Rental Properties are located regulate the relationship between
owner and tenants and require a written lease, good cause for eviction,
disclosure of fees and notification to residents of changed land use. Certain
states where the Multifamily Rental Properties are located also prohibit
retaliatory evictions, limit the reasons for which a landlord may terminate a
tenancy, limit the reasons for which a landlord may increase rent and prohibit a
landlord from terminating a tenancy solely because the building has been sold.
In addition, numerous counties and municipalities impose rent control
regulations on apartment buildings and others may impose such restrictions in
the future. These regulations may limit rent increases to fixed percentages, to
percentages of increases in the consumer price index, to increases set or
approved by a governmental agency, or to increases determined through mediation
or binding arbitration. In many cases, the rent control laws do not permit
vacancy decontrol. Any limitations on a Borrower's ability to raise property
rents may impair such Borrower's ability to repay its Mortgage Loan from its net
operating income or the proceeds of a sale or refinancing of the related
Multifamily Rental Property.
Moderate- and Low-Income Tenants. Some of the Multifamily Rental
Properties are subject to land use restrictive covenants or contractual
covenants in favor of federal or state housing agencies. These covenants
generally require that a minimum number or percentage of units be rented to
tenants who have incomes that are substantially lower than median incomes in the
area or region. Such covenants may limit the potential rental rates that may
govern rentals at a Multifamily Rental Property, the potential tenant base for
the property or both.
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Two (2) Mortgage Loans (the Mortgage Loans secured by the Pines of
Westbury Property and the New Franklin Apartments Property, respectively),
representing 1.4% of the Initial Pool Balance, are secured by Multifamily Rental
Properties that are eligible for low income rent subsidies from the United
States Department of Housing and Urban Development ("HUD") under its "Section 8"
program ("Section 8"). The payment of such rent subsidies to a particular
project owner is made pursuant to a Housing Assistance Payment contract (a "HAP
Contract") between HUD and the owner of the project or a local public housing
authority. Upon expiration of a HAP Contract, the rental subsidies terminate,
thereby eliminating a source of funds for the related Borrower to make payments
under its Mortgage Loan).
Factors Affecting the Repayment of Mortgage Loans Secured by
Condominium Properties. Certain of the Mortgage Loans are secured by the related
Borrower's interest in all or a majority of the units in a residential
condominium project and the related voting rights in the owners' association for
such project. Due to the nature of condominiums and each Borrower's ownership
interest therein, a default on any such Mortgage Loan will not allow the holder
of the Mortgage Loan the same flexibility in realizing upon the Mortgaged
Property as is generally available with respect to Multifamily Rental Properties
that are not condominiums. The rights of other unit owners, the governing
documents of the owners' association and the state and local laws applicable to
condominiums must be considered and respected. Consequently, servicing and
realizing upon the collateral of such Mortgage Loans could subject the Trust to
greater delay, expense and risk than a loan secured by a Multifamily Rental
Property that is not a condominium.
See "Risk Factors--Certain Factors Affecting Delinquency, Foreclosure
and Loss of the Mortgage Loans--Risks Particular to Multifamily Rental
Properties" in the Prospectus.
Factors Affecting the Operation of Retail Properties. Fifty-nine (59)
Mortgage Loans, representing 24.8% of the Initial Pool Balance, are secured by
retail properties at which businesses offer consumer goods, other products and
various entertainment, recreational or personal services (such Mortgaged
Properties, the "Retail Properties").
The Retail Properties consist of--
o Neighborhood shopping centers;
o Strip shopping centers;
o Power centers; and
o Individual stores and businesses.
A variety of stores and businesses are located at the Retail
Properties, including--
o Department stores;
o Grocery stores;
o Convenience stores;
o Restaurants;
o Discount stores;
o Drug stores;
o Electronics stores;
o Automotive parts supply stores;
o Automotive repair stores;
o Hardware and home improvement stores;
o Fitness centers;
o Banks;
o Specialty shops;
o Gasoline stations;
o Movie theaters;
o Salons; and
o Dry cleaners.
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The value and operation of a Retail Property depend on (among other
things) the qualities and success of its tenants. The success of tenants
generally at a Retail Property will be affected by a number of factors,
including--
o competition from other retail properties;
o perceptions regarding the safety, convenience and attractiveness
of the property;
o demographics of the surrounding area;
o the strength and stability of the local, regional and national
economies;
o traffic patterns and access to major thoroughfares;
o availability of parking;
o the particular mixture of the goods and services offered at the
property;
o customer tastes and preferences; and
o the drawing power of other tenants (some tenants may have clauses
in their leases that permit them to cease operations at the
property if certain other stores are not operated at the
property).
A Retail Property generally must compete with comparable properties for
tenants. Such competition is generally based on--
o rent (the owner of a Retail Property may be required to offer a
potential tenant a "free rent" or "reduced rent" period);
o tenant improvements (the owner of a Retail Property may at its own
expense significantly renovate and/or adapt space at the property
to meet a particular tenant's needs); and
o the age and location of the property.
Issues Involving Anchor Tenants. The presence or absence of an "anchor
tenant" in a retail center can be important, because anchor tenants play a key
role in generating customer traffic and making the center desirable for other
tenants. An "anchor tenant" is, in general, a retail tenant whose space is
substantially larger in size than that of other tenants at the same retail
center and whose operation is vital in attracting customers to the property. The
Depositor considers many of the Retail Properties to be "anchored", although in
some cases the premises occupied by the "anchor tenant" is not part of the
security for the particular Mortgage Loan. In such cases, to the extent the
Borrower does not control the space rented to the "anchor tenant", the Borrower
may not be able to take actions with respect to such space that it otherwise
typically would, such as granting concessions to retain an "anchor tenant" or
removing an ineffective "anchor tenant".
Various factors will adversely affect the economic performance of an
"anchored" Retail Property, including:
o an anchor tenant's failure to renew its lease;
o termination of an anchor tenant's lease;
o the bankruptcy or economic decline of an anchor tenant or a self-
owned anchor;
o the cessation of the business of a self-owned anchor or of an
anchor tenant (notwithstanding its continued payment of rent); or
o a loss of an anchor tenant's ability to attract shoppers.
New Forms of Competition. The Retail Properties may also face
competition from sources outside a given real estate market or with lower
operating costs. For example, all of the following compete with more traditional
department stores and specialty shops for consumer dollars:
o factory outlet centers;
o discount shopping centers and clubs;
o catalogue retailers;
o television shopping networks and programs;
o internet web sites; and
o telemarketing.
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See "Risk Factors--Certain Factors Affecting Delinquency, Foreclosure
and Loss of the Mortgage Loans--Risks Particular to Retail Sales and Service
Properties" in the Prospectus.
Factors Affecting the Operation of Hospitality Properties. Twenty-six
(26) Mortgage Loans, representing 9.3% of the Initial Pool Balance, are secured
by full service hotels, limited service hotels or motels or other similar
lodging facilities (such Mortgaged Properties, the "Hospitality Properties").
Certain of the Hospitality Properties are associated with national or regional
franchise chains, while others are not affiliated with any franchise chain but
may have their own brand identity.
Various factors may adversely affect the economic performance of a
Hospitality Property, including:
o adverse economic or social conditions, whether local, regional or
national (which may limit the amount that can be charged for a
room and reduce occupancy levels);
o the construction of competing hotels or motels;
o the need for continuing expenditures for modernizing, refurbishing
and maintaining existing facilities prior to the expiration of
their anticipated useful lives (to satisfy such costs, the related
Mortgage Loans generally require the Borrowers to fund reserves
for furniture, fixtures and equipment);
o negative perceptions regarding safety or attractiveness of the
property or the amenities offered;
o a lack of proximity to businesses, airports or resort areas;
o a deterioration in the financial strength or managerial
capabilities of the owner and operator of a Hospitality Property;
and
o changes in travel patterns caused by changes in access, energy
prices, labor strikes, relocation of highways, the construction of
additional highways or other factors.
In addition, because hotel and motel rooms generally are rented for
short periods of time, Hospitality Properties tend to respond more quickly to
adverse economic conditions and competition than do other commercial properties.
In some markets, the supply of limited service hotel rooms has surpassed demand.
Risks Relating to Affiliation with a Franchise or Hotel Management
Company. The performance of a Hospitality Property that is affiliated with a
franchise or hotel management company depends in part on:
o the continued existence and financial strength of the franchisor
or hotel management company;
o the public perception of the franchise or hotel chain service
mark; and
o the duration of the franchise licensing or management agreements.
Franchise agreements for certain of the Hospitality Properties may
terminate prior to the effective maturity date of the related Mortgage Loan.
Replacement franchises may require significantly higher fees.
The transferability of franchise license agreements is generally
restricted. In the event of a foreclosure of a Hospitality Property, neither the
Trustee nor the Special Servicer would have the right to use any franchise
license applicable to such property without the franchisor's consent.
Conversely, in the case of certain Mortgage Loans, the Trustee and the Special
Servicer may be unable to remove a franchisor or a hotel management company that
it desires to replace following a foreclosure.
Some states require that liquor licenses be held by a natural person
and/or prohibit the transfer of liquor licenses to any person without the prior
approval of the relevant licensing authority. In the event of a foreclosure of a
Hospitality Property, it is unlikely that the Trustee (or the Special Servicer
on its behalf) or any other purchaser in the foreclosure sale would be entitled
to the rights under any liquor license for such property. If such is the case,
it is possible that a new liquor license, if applied for, could not be obtained.
See "Risk Factors--Certain Factors Affecting Delinquency, Foreclosure
and Loss of the Mortgage Loans--Risks Particular to Hotel and Motel Properties"
in the Prospectus.
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Factors Affecting the Operation of Office Properties. Twenty-four (24)
Mortgage Loans, representing 8.8% of the Initial Pool Balance, are secured by
office properties (such Mortgaged Properties, the "Office Properties"). A number
of factors will affect the value and operation of an Office Property, including:
o the number and quality of tenants in the building;
o the physical attributes of the building in relation to competing
buildings;
o access to transportation;
o the strength and stability of the local, regional and national
economies;
o the availability of tax benefits;
o the desirability of the location of the building;
o changes in zoning laws; and
o the cost of refitting office space for a new tenant (which is
often significantly higher than the cost of refitting other types
of properties for new tenants).
See "Risk Factors--Certain Factors Affecting Delinquency, Foreclosure
and Loss of the Mortgage Loans--Risks Particular to Office Properties" in the
Prospectus.
Some of the Mortgaged Properties May Not Be Readily Convertible to
Alternative Uses. Some of the Mortgaged Properties (in particular, those
operated as manufactured housing communities or those operated for industrial
purposes) may not be converted to alternative uses without substantial capital
expenditures. If a Mortgaged Property is not readily adaptable to other uses,
its liquidation value may be substantially less than would otherwise be the
case.
Risks Associated with Related Parties. Certain groups of Borrowers
under the Mortgage Loans are under common control. For example, several GECA
Mortgage Loans (which are neither cross-collateralized nor the allocable
portions of the indebtedness evidenced by a single note), together representing
approximately 3.2% of the Initial Pool Balance, are made to the same Borrower or
have related Borrowers that are directly or indirectly affiliated with one
another. In addition, certain tenants lease space at more than one Mortgaged
Property, and certain tenants are related to or affiliated with a Borrower. See
Exhibit A-1 to this Prospectus Supplement for a list of the three most
significant tenants at each of the Office Properties, the Retail Properties and
the Mortgaged Properties used for industrial purposes. The bankruptcy or
insolvency of, or other financial problems with respect to, any such Borrower or
tenant could have an adverse effect on the operation of all of the related
Mortgaged Properties and on the ability of such related Mortgaged Properties to
produce sufficient cash flow to make required payments on the related Mortgage
Loans. See "Certain Legal Aspects of Mortgage Loans--Bankruptcy Laws" in the
Prospectus.
Loan Concentration Entails Risk. In general, the inclusion in a
mortgage pool of one or more Mortgage Loans that have outstanding principal
balances that are substantially larger than the other Mortgage Loans in the pool
can result in losses that are more severe, relative to the size of the pool,
than would be the case if the aggregate balance of such pool were distributed
more evenly. Without regard to the cross-collateralization of the groups of
cross-collateralized Mortgage Loans, the average Cut-off Date Balance of the
Mortgage Loans is $4,489,912. Presenting each group of cross-collateralized
Mortgage Loans as a single Mortgage Loan, the average Loan Group Cut-off Date
Balance of the Mortgage Loans is $5,219,523. Several of the individual Mortgage
Loans have Cut-off Date Balances, and several of the groups of
cross-collateralized Mortgage Loans have aggregate Cut-off Date Balances, that
are substantially higher than such average Cut-off Date Balance or Loan Group
Cut-off Date Balance. The following table sets forth Cut-off Date Balances for
the five largest individual Mortgage Loans and groups of cross-collateralized
Mortgage Loans.
S-45
<PAGE>
Cut-off Date Balances and Concentration of Mortgage Loans
Individual Mortgage Loan % of Initial
or Group of Mortgage Loans Cut-off Date Balance Pool Balance
- -------------------------- -------------------- ------------
The Winston Loans $70,750,763 5.6%
The Swerdlow Loans $63,806,653 5.1%
The Alliance Loans $48,831,350 3.9%
The Country Squire Loan $30,446,295 2.4%
The American Loans $29,312,901 2.3%
Basis of Presentation Affects Certain Information. As described above,
where a single mortgage note is secured by two or more Mortgaged Properties,
this Prospectus Supplement generally reflects an allocation of such indebtedness
among those Mortgaged Properties and presents each allocated portion as if it
were an individual Mortgage Loan secured by the Mortgaged Property for which the
allocation was made. Where multiple mortgage notes are cross-collateralized and
cross-defaulted, this Prospectus Supplement generally presents the individual
Mortgage Loans without regard to the cross-collateralization or cross-default
provisions. The basis of presentation described above affects the information
set forth in this Prospectus Supplement. For example, under such basis of
presentation, the maximum Cut-off Date Balance of the Mortgage Loans is
$30,446,295, the minimum Cut-off Date Balance of the Mortgage Loans is $515,269
and the average Cut-off Date Balance of the Mortgage Loans is $4,489,912.
However, presenting as a single Mortgage Loan each individual mortgage note that
is secured by multiple Mortgaged Properties and each group of
cross-collateralized Mortgage Loans, the maximum Cut-off Date Balance of the
Mortgage Loans is $70,750,763, the minimum Cut-off Date Balance of the Mortgage
Loans is $675,000 and the average Cut-off Date Balance of the Mortgage Loans is
$5,219,523. In addition, in the case of some such groups of Mortgage Loans,
including the Winston Loans, the information presented in this Prospectus
Supplement with respect to each related Mortgaged Property (such as the
Underwritten Debt Service Coverage Ratio) reflects the aggregation and
allocation of the characteristics of all Mortgaged Properties in the group
relative to the aggregate indebtedness, rather than the information related to
that specific Mortgaged Property. See the notes to the tables set forth in
Exhibit A-1 to this Prospectus Supplement for an identification of each group of
Mortgage Loans that together represent a single indebtedness represented by a
single note or form a group of cross-collateralized and cross-defaulted Mortgage
Loans.
Geographic Concentration Entails Risks. A concentration of Mortgaged
Properties in a particular locale, state or region increases the exposure of the
Mortgage Pool to various factors including:
o any adverse economic developments that occur in the locale, state
or region where such Mortgaged Properties are located;
o changes in the real estate market where such Mortgaged Properties
are located;
o changes in governmental rules and fiscal policies in the
governmental jurisdiction where such Mortgaged Properties are
located; and
o acts of nature, including floods, tornadoes and earthquakes in the
areas where such Mortgaged Properties are located.
S-46
<PAGE>
The Mortgaged Properties are located in 36 states and the District of
Columbia. The Mortgaged Properties located in each of the following states
secure Mortgage Loans (or allocated portions thereof) that represent more than
5% or more of the Initial Pool Balance:
Total Cut-off Date Balance
of Mortgage Loans
(or Allocated Portions thereof) % of Initial
State Secured by Mortgaged Properties in State Pool Balance
- ----- ---------------------------------------- ------------
Texas $247,283,354 19.7%
California $169,156,706 13.5%
Florida $123,548,452 9.9%
Risk of Changes in Mortgage Pool Composition. The Mortgage Loans
amortize at different rates and, to some extent, mature on different dates. In
addition, certain Mortgage Loans may be prepaid or liquidated. As a result of
the foregoing, the relative composition of the Mortgage Pool will change over
time.
If you purchase Certificates with a Pass-Through Rate that is equal to
or calculated based upon a weighted average of interest rates on the Mortgage
Loans, your Pass-Through Rate will be affected (and may decline) as the relative
composition of the Mortgage Pool changes.
In addition, as payments and other collections of principal are
received with respect to the Mortgage Loans, the remaining Mortgage Pool may
exhibit an increased concentration with respect to property type, number and
affiliation of Borrowers and geographic location. If you purchase any Offered
Certificates other than the Class A-1A Certificates, you will be more exposed to
any risks associated with changes in concentrations of Borrower, loan or
property characteristics than are persons who own Offered Certificates that have
an earlier Assumed Final Distribution Date than your Certificates.
Extension and Default Risks Associated With Balloon Loans and ARD
Loans. Two hundred-eight (208) Mortgage Loans, representing 72.4% of the Initial
Pool Balance, are Balloon Loans, and sixty-eight (68) Mortgage Loans,
representing 26.2% of the Initial Pool Balance, are ARD Loans. The ability of a
Borrower under a Balloon Loan to make the required Balloon Payment at maturity,
and the ability of a Borrower under an ARD Loan to repay such Mortgage Loan on
or before the related Anticipated Repayment Date, in each case depends upon its
ability either to refinance the loan or to sell the related Mortgaged Property.
The ability of a Borrower to refinance its Mortgage Loan or sell the related
Mortgaged Property will depend on a number of factors occurring at the time of
attempted refinancing or sale, including:
o the level of available mortgage rates;
o the fair market value of the related Mortgaged Property;
o the Borrower's equity in the related Mortgaged Property;
o the financial condition of the Borrower;
o operating history of the related Mortgaged Property;
o tax laws;
o prevailing general and regional economic conditions;
o the state of the fixed income and mortgage markets; and
o the availability of credit for multifamily or commercial
properties.
One hundred seventy-eight (178) Balloon Loans (representing 62% of the
Initial Pool Balance) have maturity dates, and thirty-seven (37) ARD Loans
(representing 17.7% of the Initial Pool Balance) have Anticipated Repayment
Dates, that in each case occur during the four (4) month period from November
2008 to February 2009. See "Description of the Mortgage Pool--Certain Terms and
Conditions of the Mortgage Loans" and "--Additional Mortgage Loan Information"
in this Prospectus Supplement and "Risk Factors--Certain Factors Affecting
Delinquency, Foreclosure and Loss of the Mortgage Loans" in the Prospectus.
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<PAGE>
Any failure of a Borrower under a Balloon Loan to timely pay its
Balloon Payment will be a default thereunder. Subject to certain limitations,
the Special Servicer may extend, modify or otherwise deal with Mortgage Loans
that are in material default or as to which a payment default is reasonably
foreseeable. See "Servicing of the Mortgage Loans--Modifications, Waivers,
Amendments and Consents" in this Prospectus Supplement. There can be no
assurance that any extension or modification will increase the recoveries in a
given case.
The failure of a Borrower under an ARD Loan to repay such Mortgage Loan
by the related Anticipated Repayment Date will not constitute a default
thereunder. Although an ARD Loan includes several provisions that may give the
Borrower an incentive to repay such Mortgage Loan by the related Anticipated
Repayment Date, there can be no assurance that such Borrower will be
sufficiently motivated or able to do so.
If any Balloon Loan remains outstanding past its stated maturity, or if
any ARD Loan remains outstanding past its Anticipated Repayment Date, the
weighted average lives of certain Classes of the Offered Certificates may be
extended. See "Yield and Maturity Considerations" in this Prospectus Supplement
and in the Prospectus.
Risks of Subordinate and Other Additional Financing. The following
table identifies those Mortgaged Properties which are known to the Depositor to
be encumbered by secured subordinate debt, the initial principal amount of the
debt and the Cut-off Date Balances of the related Mortgage Loans and also notes,
in the case of each such Mortgaged Property, whether the subordinate lender has
entered into an agreement with the mortgagee under the related Mortgage Loan
whereby such subordinate lender--
o expressly subordinates its rights to receive collections and
proceeds from, and otherwise deal with, such Mortgaged Property
and the related Borrower (any such agreement, a "Subordination
Agreement"), and/or
o agrees, for so long as the related Mortgage Loan is outstanding,
not to take any enforcement or other legal action against such
Mortgaged Property or the related Borrower as long as the
mortgagee under the related Mortgage Loan has not done so (any
such agreement, a "Standstill Agreement").
<TABLE>
<CAPTION>
% of Initial
Pool Balance
Cut-off Date Balance Represented Initial Principal
of Related by Related Amount of Secured
Mortgaged Property Mortgage Loan Mortgage Loan Subordinate Debt
- ------------------ -------------- ------------- ----------------
<S> <C> <C> <C>
Pines of Westbury $12,967,894 1.0% $1,670,000 (1)(2)
Comfort Inn - Hopewell, VA $ 5,181,769 0.4% $3,733,102 (2)
South Street Seaport Office Center $ 2,242,342 0.2% $1,659,674 (2)
Friendship Crossing Apartments $ 4,603,093 0.4% $ 900,000 (2)
Centennial Creek Office Park $ 2,493,826 0.2% $ 114,000 (2)
Market Plaza $ 1,563,876 0.1% $ 582,425 (2)
</TABLE>
- ------------------
(1) The related Borrower also has unsecured subordinated debt in the initial
principal amount of $2,780,241.
(2) The subordinate lender has executed a Subordination Agreement and a
Standstill Agreement.
Except as described above, each Mortgage Loan either (i) prohibits the
related Borrower from encumbering the Mortgaged Property with additional secured
debt or (ii) requires the consent of the holder of such Mortgage Loan prior to
so encumbering such property. However, a violation of such prohibition may not
become evident until the related Mortgage Loan otherwise defaults, and the Trust
may not realistically be able to prevent a Borrower from incurring
S-48
<PAGE>
subordinate debt. The existence of any secured subordinated indebtedness
increases the difficulty of refinancing the related Mortgage Loan at maturity,
and the related Borrower may have difficulty repaying multiple loans. In
addition, the Trust's foreclosure of the related Mortgage Loan may be delayed by
the bankruptcy or similar proceedings involving the subordinate lender or other
legal action by such subordinate lender. See "Certain Legal Aspects of Mortgage
Loans--Subordinate Financing" in the Prospectus.
Borrowers under nine (9) other Mortgage Loans, representing 3.0% of the
Initial Pool Balance, have unsecured debt of which the Depositor is aware. In
some such cases, the lender on such debt is an affiliate of the Borrower. In
each such case, the lender on such unsecured debt has executed and delivered a
Subordination Agreement and a Standstill Agreement in favor of the mortgagee
under the related Mortgage Loan. In addition, some of the Mortgage Loans permit
the related Borrower to incur unsecured subordinated debt in the future, subject
to delivery of a Subordination Agreement and/or Standstill Agreement and, in
certain cases, provisions that limit the use of proceeds to refurbishing or
renovating the property and/or acquiring furniture, fixtures and equipment for
the property. Additional debt, in any form, may cause a diversion of funds from
property maintenance and increase the likelihood that the Borrower will become
the subject of a bankruptcy proceeding.
Except as described above, the Depositor has not been able to confirm
whether the respective Borrowers under the Mortgage Loans have any other debt
outstanding.
Owners of certain Borrowers under the Mortgage Loans have incurred
so-called "mezzanine debt" that is secured by their ownership interests in such
Borrowers. Such financing effectively reduces the indirect equity interest of
any such owner in the related Mortgaged Property. With respect to at least nine
(9) Mortgage Loans, including the Hyrail Group, representing 3.0% of the Initial
Pool Balance, owners of the related Borrower have pledged their equity interests
in such Borrower to secure "mezzanine debt". In addition, the owners of the
Borrower under the Swerdlow Loans described below have pledged their equity
interests in such Borrower (together with other collateral) to secure a
revolving credit facility. With respect to the Hyrail Group and the Swerdlow
Loans, an affiliate of GECA is the lender of the related "mezzanine debt". See
"Risks Related to the Offered Certificates--Potential Conflicts of Interest".
Limited Recourse. You should consider all of the Mortgage Loans to be
nonrecourse loans (i.e., in the event of a default, recourse will be limited to
the related Mortgaged Property or Properties securing the defaulted Mortgage
Loan). In those cases where recourse to a Borrower or guarantor is permitted by
the loan documents, the Depositor has not undertaken any evaluation of the
financial condition of such Borrower or guarantor. Consequently, as described
more fully above, payment on each Mortgage Loan at or prior to maturity is
dependent on one or more of the following:
o the sufficiency of the net operating income;
o the market value of the property at maturity; and
o the ability of the Borrower to refinance or sell the Mortgaged
Property.
None of the Mortgage Loans is insured or guaranteed by any governmental entity
or private mortgage insurer.
Environmental Risks. In general, a third-party consultant conducted an
environmental site assessment (or updated a previously conducted assessment)
with respect to all of the Mortgaged Properties within the seventeen (17)-month
period preceding the Cut-off Date. Each environmental site assessment or update
generally complied with industry-wide standards. In the case of certain
Mortgaged Properties, a "Phase II" environmental assessment was also performed.
If any such assessment or update revealed a material adverse environmental
condition or circumstance at any Mortgaged Property and the consultant
recommended action, then (depending on the nature of the condition or
circumstance) the Borrower--
S-49
<PAGE>
o has implemented or agreed to implement an operations and
maintenance plan (including, in several cases, in respect of
asbestos-containing materials ("ACMs"), lead-based paint and/or
radon) or periodic monitoring of nearby properties in the manner
and within the time frames specified in the related Mortgage Loan
documents; or
o established an escrow reserve with the lender to cover the
estimated cost of remediation.
There can be no assurance, however, that the environmental assessments
identified all adverse environmental conditions and risks, that the related
Borrowers will implement all recommended operations and maintenance plans or
that the recommended action will fully remediate or otherwise address all the
adverse environmental conditions and risks. In addition, the current
environmental condition of a Mortgaged Property could be adversely affected by
tenants (such as gasoline stations or dry cleaners) or by the conditions or
operations in the vicinity of the Mortgaged Properties (e.g., leaking
underground storage tanks) at another property nearby. See "Description of the
Mortgage Pool--Certain Underwriting Matters--Environmental Assessments".
Liability of the Trust Under Environmental Laws. Various environmental
laws may make a current or previous owner or operator of real property liable
for the costs of removal or remediation of hazardous or toxic substances on,
under or adjacent to such property. Those laws often impose liability whether or
not the owner or operator knew of, or was responsible for, the presence of such
hazardous or toxic substances. For example, certain laws impose liability for
release of ACMs into the air or require the removal or containment of ACMs. The
owner's liability for any required remediation generally is not limited by law
and accordingly 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 remediate the adverse environmental condition, may adversely
affect the owner's or operator's ability to use such property. In certain
states, contamination of a property may give rise to a lien on the property to
ensure the costs of cleanup. In some such states this lien has priority over the
lien of an existing mortgage. In addition, third parties may seek recovery from
owners or operators of real property for personal injury associated with
exposure to hazardous substances. Persons who arrange for the disposal or
treatment of hazardous or toxic substances may be liable for the costs of
removal or remediation of such substances at the disposal or treatment facility.
The federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), as well as certain other federal
and state laws, provide that a secured lender (such as the Trust) may be liable,
as an "owner" or "operator" of the real property, regardless of whether the
Borrower or a previous owner caused the environmental damage, if (i) agents or
employees of the lender are deemed to have participated in the management of the
Borrower or (ii) under certain conditions the lender actually takes possession
of a Borrower's property or control of its day-to-day operations (as for
example, through the appointment of a receiver or foreclosure). Although
recently enacted legislation clarifies the activities in which a lender may
engage without becoming subject to liability under CERCLA and similar federal
laws, such legislation has no applicability to state environmental laws.
Moreover, future laws, ordinances or regulations could impose material
environmental liability.
See "Certain Legal Aspects of the Mortgage Loans--Environmental
Considerations" in the Prospectus.
Risks Related to Lead-Based Paint at Multifamily Properties. Federal
law requires owners of residential housing constructed prior to 1978 to disclose
to potential residents or purchasers any condition on the property that causes
exposure to lead-based paint and the potential hazards to pregnant women and
young children, including that the ingestion of lead-based paint chips and/or
the inhalation of dust particles from lead-based paint by children can cause
permanent injury, even at low levels of exposure. Property owners can be held
liable for injuries to their tenants resulting from exposure under various laws
that impose affirmative obligations on property owners of residential housing
containing lead-based paint. The environmental assessments revealed the
existence of lead-based paint at certain of the Multifamily Properties. In these
cases, the Borrowers have either implemented operations and maintenance programs
or are in the process of removing the lead-based paint.
S-50
<PAGE>
Risks Related to Off-Site LUSTs. Certain of the Mortgaged Properties
are in the vicinity of sites containing leaking underground storage tanks
("LUSTs") or other potential sources of soil or groundwater contamination.
Although the owners of those Mortgaged Properties and the Trust may not have
legal liability for contamination of the Mortgaged Properties from such off-site
sources, the enforcement of rights against third parties may result in
additional transaction costs.
Risks Related to ACMs. At several of the Mortgaged Properties, ACMs
have been detected through sampling by environmental consultants. The ACMs found
at these Mortgaged Properties are not expected to present a significant risk as
long as the related Mortgaged Property continues to be properly managed. In
connection therewith, the related Borrowers have agreed to establish and
maintain operations and maintenance or abatement programs. Nonetheless, there
can be no assurance that the value of a Mortgaged Property as collateral for the
Mortgage Loan will not be adversely affected by the presence of ACMs.
Risks Related to the Special Servicer Obtaining an Environmental
Assessment Prior to taking Remedial Action. The Pooling Agreement will provide
that before the Special Servicer acquires title to a Mortgaged Property on
behalf of the Trust or assumes operation of a Mortgaged Property, it must obtain
an environmental assessment of the property. Although this requirement will
decrease the likelihood that the Trust will become liable under any
environmental law, it will effectively preclude foreclosure until a satisfactory
environmental assessment is obtained (or until any required remedial action is
thereafter taken or a determination is made that such action need not be taken
or need not be taken prior to foreclosure). Accordingly, there is some risk that
the Mortgaged Property will decline in value while this assessment is being
obtained. Moreover, there is no assurance that this requirement will effectively
insulate the Trust from potential liability under environmental laws. See
"Description of the Pooling Agreements--Realization Upon Defaulted Mortgage
Loans" in the Prospectus.
Risks Related to Property Condition. Licensed engineers inspected all
of the Mortgaged Properties during the sixteen (16) month period preceding the
Cut-off Date to assess the structure, exterior walls, roofing, interior
construction, mechanical and electrical systems and general condition of the
site, buildings and other improvements located at each Mortgaged Property. In
some cases, the inspections identified conditions requiring repairs or
replacements estimated to cost in excess of $100,000. In such cases, the
Originator of the related Mortgage Loan generally required the related Borrower
to fund reserves, or deliver letters of credit or other instruments, to cover
such costs. In certain cases, no reserve was required because of the
creditworthiness of the Borrower or a significant tenant responsible for most of
the costs. There is no assurance, however, that all conditions requiring repair
or replacement were identified or that such reserves, letters of credit or other
instruments will be adequate to cover the corresponding costs or that the
creditworthiness of the particular Borrower or any significant tenant
responsible for such repair or replacement will not decline.
Reserves May Be Insufficient. Certain of the Mortgage Loans require
that reserves be funded on a monthly basis from cash flow generated by the
related Mortgaged Property to cover ongoing monthly, semi-annual or annual
expenses such as taxes and insurance. Most of the Mortgage Loans also required
reserves to be established, or letters of credit or other instruments to be
delivered, upon the closing of the Mortgage Loan to fund capital expenditure
items, certain leasing costs, environmental remediation costs or engineering
remediation costs when such needs were identified. Such reserves, letters of
credit or other instruments may not be sufficient to offset the actual costs of
the items which they were intended to cover. In addition, cash flow from the
Mortgaged Properties may not be sufficient to fund fully the ongoing monthly
reserve requirements.
Limitations on Enforceability of Cross-Collateralization. Twelve (12)
separate groups of Mortgage Loans, representing 5.6%, 5.1%, 3.9%, 2.3%, 1.6%,
0.7%, 0.7%, 0.6%, 0.5%, 0.4%, 0.3% and 0.2%, respectively, of the Initial Pool
Balance, provide for some form of cross-collateralization between the Mortgage
Loans in each such group (such Mortgage Loans, collectively, the
"Cross-Collateralized Mortgage Loans"; and each such group, a
"Cross-Collateralized
S-51
<PAGE>
Group"). The Mortgage Loans comprising each Cross-Collateralized Group are
identified in the tables set forth in Exhibit A-1. The purpose of these
cross-collateralization arrangements is to reduce the risk of default or
ultimate loss as a result of an inability of a particular Mortgaged Property to
generate sufficient net operating income to pay debt service. However, certain
of the Cross-Collateralized Groups permit--
o the replacement of one or more of the related Mortgaged Properties
with substitute properties,
o the release of one or more of the related Mortgaged Properties
from the related mortgage lien, and/or
o a full or partial termination of the applicable cross-
collateralization,
in each such case, upon the satisfaction of the conditions described under
"Description of the Mortgage Pool--Certain Terms and Conditions of the Mortgage
Loans" in this Prospectus Supplement.
In addition, the amount of the mortgage encumbering any particular
Mortgaged Property may be less than the full amount of the related
Cross-Collateralized Group (in general, to avoid recording tax). Such mortgage
amount may equal the appraised value or allocated loan amount for such Mortgaged
Property, thereby limiting the extent to which proceeds therefrom will be
available to offset declines in value with respect to other Mortgaged Properties
securing the same Cross-Collateralized Group.
Certain of the Cross-Collateralized Groups are, in each such case,
secured by Mortgaged Properties located in two or more states. Such
Cross-Collateralized Groups collectively represent 13.1% of the Initial Pool
Balance. Foreclosure actions are brought in state court and the courts of one
state cannot exercise jurisdiction over property in another state. Therefore,
upon a default under any such Cross-Collateralized Group, it may not be possible
to foreclose on the related Mortgaged Properties simultaneously.
Certain of the Cross-Collateralized Groups involve, in each such case,
multiple Borrowers. Cross-collateralization arrangements involving more than one
Borrower could be challenged as a fraudulent conveyance by creditors of a
Borrower or by the representative of the bankruptcy estate of a Borrower, if
such Borrower were to become a debtor in a bankruptcy case. A lien granted by a
Borrower to secure repayment of another Borrower's Mortgage Loan could be
avoided if a court were to determine that (i) the first such Borrower was
insolvent at the time of granting the lien, was rendered insolvent by the
granting of the lien, was left with inadequate capital, or was not able to pay
its debts as they matured and (ii) the first such Borrower did not, when it
allowed its Mortgaged Property to be encumbered by a lien securing the entire
indebtedness represented by the other Borrower's Mortgage Loan, receive fair
consideration or reasonably equivalent value for pledging such Mortgaged
Property for the equal benefit of the other Borrower. Among other things, a
legal challenge to the granting of the liens may focus on the benefits realized
by the bankrupt or insolvent Borrower from the respective Mortgage Loan
proceeds, as well as the benefit to it from the cross-collateralization. If a
court were to conclude that the granting of the liens was an avoidable
fraudulent conveyance, that court could nullify the lien or mortgage effecting
the cross-collateralization and nullify or subordinate all or part of the
pertinent Mortgage Loan to existing or future indebtedness of the bankrupt or
insolvent Borrower. The court could also allow the bankrupt or insolvent
Borrower to recover payments it made pursuant to the avoided
cross-collateralization.
Limitations on Enforceability and Collectability of Prepayment Premiums
and Yield Maintenance Charges. Twenty-four (24) Mortgage Loans, representing
8.3% of the Initial Pool Balance, require the related Borrowers during some
period of the related loan term to pay an additional amount ("Prepayment
Consideration") when they make a voluntary principal prepayment. In general, the
Prepayment Consideration is calculated either solely on the basis of a yield
maintenance formula (a "Yield Maintenance Charge") or as the higher of a
percentage of the principal amount prepaid (a "Prepayment Premium") and a Yield
Maintenance Charge. See "Description of the Mortgage Pool--Certain Terms and
Conditions of the Mortgage Loans--Prepayment Provisions" in this Prospectus
Supplement. Any Prepayment Premiums or Yield Maintenance Charges collected on
the Mortgage Loans will be distributed to the persons, in the amounts and in
accordance with the priorities described in this Prospectus Supplement under
"Description of the Certificates--Distributions--Distributions of Prepayment
Premiums and Yield Maintenance Charges". The Depositor makes no representation
or warranty as to the collectability of any Prepayment Premium or Yield
Maintenance Charge.
S-52
<PAGE>
Under the laws of a number of states, the enforceability of any
Mortgage Loan provisions that require a Prepayment Premium or Yield Maintenance
Charge upon an involuntary prepayment is unclear. Even if the obligation is
enforceable, the Special Servicer has authority to waive it in connection with
obtaining a pay-off of a defaulted Mortgage Loan. Even if the obligation is
enforceable and enforced, the related liquidation proceeds may not be sufficient
to make such payment because the Pooling Agreement generally requires the
Special Servicer to apply liquidation proceeds to cover outstanding servicing
expenses and unpaid principal and interest before applying them to cover any
Prepayment Premium or Yield Maintenance Charge due in connection with the
liquidation of such Mortgage Loan. Accordingly, the Holders of the more
subordinate Classes of Certificates may receive distributions of interest and/or
principal with respect to the liquidated Mortgage Loan, while the Holders of the
more senior Classes of Certificates receive none (or less than all) of the
required Prepayment Consideration in connection with the liquidation. See
"Servicing of the Mortgage Loans--Modifications, Waivers, Amendments and
Consents" in this Prospectus Supplement and "Certain Legal Aspects of Mortgage
Loans--Default Interest and Limitations on Prepayments" in the Prospectus.
In certain circumstances involving the sale of Mortgage Loans by the
Trust, no Prepayment Premium or Yield Maintenance Charge will be payable. See
"Description of the Mortgage Pool--Cures, Repurchases and Substitutions",
"Servicing of the Mortgage Loans--Sale of Defaulted Mortgage Loans" and
"Description of the Offered Certificates--Termination" in this Prospectus
Supplement.
Limitations on Enforceability of Other Provisions. Most of the Mortgage
Loans contain due-on-sale clauses, each of which permits the lender (with
limited exception) to accelerate the maturity of the Mortgage Loan upon the
sale, transfer or conveyance of (i) the related Mortgaged Property or (ii) a
majority ownership interest in the related Borrower. All of the Mortgage Loans
also include debt-acceleration clauses, each of which permits the lender to
accelerate the debt upon specified monetary or non-monetary defaults by the
related Borrower. The courts of all states will enforce acceleration clauses in
the event of a material payment default. The equity courts of any state,
however, may refuse to allow the foreclosure of a mortgage or deed of trust or
to permit the acceleration of the indebtedness if--
o the default is deemed to be immaterial,
o the exercise of such remedies would be inequitable or unjust, or
o the circumstances would render the acceleration unconscionable.
Most of the Mortgage Loans are secured by, in each such case, an
assignment of leases and rents pursuant to which the related Borrower assigned
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 Borrower defaults,
the license terminates and the lender is entitled to collect rents. In some
cases, such assignments may not be perfected as security interests prior to
actual possession of the cash flow. In some cases, state law 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, the commencement of bankruptcy or similar proceedings by or in respect
of the Borrower will adversely affect the lender's ability to collect the rents.
See "Certain Legal Aspects of Mortgage Loans--Bankruptcy Laws" in the
Prospectus.
If a Mortgage Loan is a Defeasance Loan, such Mortgage Loan, during
specified periods and subject to certain conditions, permits the related
Borrower to pledge to the holder of such Mortgage Loan the amount of direct,
non-callable United States government securities described in this Prospectus
Supplement under "Description of the Mortgage Pool--Certain Terms and Conditions
of the Mortgage Loans--Defeasance Loans" and thereby obtain a release of the
related Mortgaged Property. The cash amount which a Borrower must expend to
purchase, or must deliver to the Master Servicer in order for the Master
Servicer to purchase, such United States government securities may be in excess
of the principal balance of the related Defeasance Loan. The portion of such
reduced cash amount that exceeds the principal balance of such Defeasance Loan
is called the "Excess Defeasance Payment" in this Prospectus Supplement. There
can be no assurance that a court would not interpret such Excess Defeasance
Payment as a form of Prepayment Consideration or would not take it into account
for usury purposes. In some states, some forms of Prepayment Considerations are
unenforceable. See "--Limitations on Enforceability and Collectability of
Prepayment Premiums and Yield Maintenance Charges" above. If the Excess
Defeasance Payment were held to be unenforceable, the remaining portion of such
cash
S-53
<PAGE>
amount may be insufficient to purchase the requisite amount of United States
government securities. Acting in accordance with the Servicing Standard, the
Master Servicer could apply such reduced cash amount as a prepayment of the
subject Mortgage Loan instead of purchasing United States government securities.
Limitations of Appraisals. The respective Originators obtained
Appraisals for all of the Mortgaged Properties. Appraisals represent the
analysis and opinion of an appraiser. They are not guaranties of, and may not be
indicative of, present or future value. There can be no assurance that another
appraiser would not have arrived at a different valuation, even if such
appraiser used the same general approach to and same method of appraising the
property. Moreover, 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
appraised value of each Mortgaged Property at or about the time of origination
of the related Mortgage Loan is presented, for illustrative purposes only, on
Exhibit A-1 to this Prospectus Supplement. Furthermore, in the case of certain
Mortgage Loans that constitute acquisition financing, the related Borrower may
have acquired the related Mortgaged Property at a price less than the appraised
value on which such Mortgage Loan was underwritten.
Risks Associated With Substitution Provisions. Certain
Cross-Collateralized Groups, including the Winston Loans and the American Loans,
permit the related Borrower the opportunity to obtain the release of one or more
of the related Mortgaged Properties by substituting comparable real property.
See "Description of the Mortgage Pool--Certain Terms and Conditions of the
Mortgage Loans--Substitution" in this Prospectus Supplement. Although each
related Mortgage Loan sets forth conditions to substitution that are intended to
avoid a deterioration in the quality of the properties securing the Mortgage
Loan (including Rating Agency confirmation that any such substitution will not
result in a qualification, downgrade or withdrawal of any rating on the
Certificates), there is no assurance that any substitute property will be of
equal or better quality as the Mortgaged Property that it replaces or that the
value and operating results of any substitute property will ultimately equal or
exceed those of the Mortgaged Property that it replaces.
Tax Considerations Related to Foreclosure. If the Trust were to acquire
a Mortgaged Property pursuant to a foreclosure or deed in lieu of foreclosure,
the Special Servicer would be required to retain an independent contractor to
operate and manage the Mortgaged Property. Any net income from such operation
and management, other than qualifying "rents from real property" (as defined in
section 856(d) of the Code), or any rental income based on the net profits of a
tenant or sub-tenant or allocable to a service that is non-customary in the
relevant area for the type of building involved, will subject the Trust to
federal (and possibly state or local) tax on such income at the highest marginal
corporate tax rate (currently 35% for federal purposes), thereby reducing net
proceeds available for distribution to the holders of the Certificates.
Uninsured Loss; Sufficiency of Insurance. The Borrowers are generally
required to maintain comprehensive liability insurance, "all-risk" fire,
casualty and hazard insurance, flood insurance (if improvements on the related
Mortgaged Property are located in the 100-year flood plain) and rental income
insurance with respect to the Mortgaged Properties with policy specifications,
limits and deductibles customarily carried for similar properties. Certain types
of losses, however, may be either uninsurable or not economically insurable,
such as losses due to riots or acts of war or earthquakes. Earthquake insurance
is generally not required to be maintained by a Borrower, even in respect of
Mortgaged Properties located in California. Should an uninsured loss occur, the
Borrower could lose both its investment in and its anticipated profits and cash
flow from its Mortgaged Property, which would adversely affect the Borrower's
ability to make payments under its Mortgage Loan. Although the Borrowers have
covenanted to insure their respective Mortgaged Properties as and to the extent
described under "Description of the Mortgage Pool--Certain Underwriting
Matters--Hazard, Liability and Other Insurance" in this Prospectus Supplement,
there is a possibility of casualty losses with respect to a Mortgaged Property
that are not covered by insurance or for which insurance proceeds may not be
adequate. Consequently, there can be no assurance that any loss incurred will
not exceed the limits of policies obtained.
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<PAGE>
In addition, various forms of insurance maintained with respect to a
Mortgaged Property, including casualty insurance, environmental insurance (in
the limited number of cases where it was obtained), earthquake insurance (in the
limited number cases where it was obtained) or other insurance, may be provided
under a blanket policy that also covers other Mortgaged Properties and/or other
properties not securing the Mortgage Loans. As a result of aggregate loss limits
under any such blanket policy, losses at other properties covered thereby may
reduce the amount of insurance coverage with respect to a Mortgaged Property
covered thereby.
Risks Particular to Ground Leases. Several of the Mortgage Loans are
secured by first mortgage liens on the related Borrower's leasehold interest in
all or a portion of the related Mortgaged Property. Upon the bankruptcy of a
lessor or a lessee under a ground lease, the debtor entity has the right to
assume (continue) or reject (breach and vacate the premises) the ground lease.
If a debtor lessor rejects the lease, the lessee has the right to remain in
possession of its leased premises under the rent reserved in the lease for the
term (including renewals). If a debtor lessee/Borrower rejects any or all of its
leases, the Borrower's lender may not be able to succeed to the
lessee/Borrower's position under the lease unless the lessor has specifically
granted the lender such right. If both the lessor and the lessee/Borrower are
involved in bankruptcy proceedings, the Trustee may be unable to enforce the
bankrupt lessee/Borrower's obligation to refuse to treat as terminated a ground
lease rejected by a bankrupt lessor. In such circumstances, it is possible that
the Trustee could be deprived of its security interest in the leasehold estate,
notwithstanding lender protection provisions contained in the lease or mortgage.
See "Certain Legal Aspects of Mortgage Loans--Foreclosure--Leasehold
Considerations" in the Prospectus.
Risks Associated With Zoning Compliance. Due to changes in zoning
requirements since the construction thereof, certain of the Mortgaged Properties
may not comply with current zoning laws, including density, use, parking and set
back requirements. In such cases, either the Mortgaged Property is considered a
"permitted non-conforming structure" or the operation of the Mortgaged Property
is considered to be a "permitted non-conforming use". This means that the
Borrower is not required to alter the property's structure or use to comply with
the new law; however, the Borrower may be limited in its ability to rebuild the
premises "as is" in the event of a substantial casualty loss. This may adversely
affect the cash flow available following such loss. If a substantial casualty
were to occur, insurance proceeds may not be sufficient to pay the Mortgage Loan
in full. In addition, if the Mortgaged Property were repaired or restored in
conformity with the current law, the value of the Mortgaged Property or the
revenue-producing potential of the Mortgaged Property may be less than that
which existed before the casualty.
Costs Associated With Compliance With ADA. Under the Americans with
Disabilities Act of 1990 (the "ADA"), all public accommodations are required to
meet certain federal requirements related to access and use by disabled persons.
If a Mortgaged Property does not currently comply with the ADA, the related
Borrower may be required to incur significant costs in order to effect such
compliance. In addition, noncompliance could result in the imposition of fines
by the federal government or an award or damages to private litigants.
Limited Information Causes Uncertainty. Certain Mortgage Loans
constitute acquisition financing. Accordingly, limited or no operating
information is available with respect to the related Mortgaged Property. As a
result, you may find it difficult to analyze the performance of any such
Mortgaged Property.
Litigation. You should be aware that there may be legal proceedings
pending and, from time to time, threatened against the Borrowers. The Depositor
cannot provide any assurance that such litigation will not have a material
adverse effect on the distributions to you. In the case of the Mortgage Loan
secured by the Lamplighter Mobile Home Park Property, which represents 1.3% of
the Initial Pool Balance, the local government has filed suit against the
related Borrower and its principals seeking damages for the Borrower's alleged
failure to comply with rent control regulations as to 17 of the 265 units
comprising the Mortgaged Property.
Prior Bankruptcies. Certain affiliates of Borrowers have been parties
to, and/or certain Mortgaged Properties have been the subject of, prior
bankruptcy proceedings. Two (2) Mortgage Loans, representing 0.7% of the Initial
Pool Balance, funded the related Borrower's performance of its plan of
reorganization.
S-55
<PAGE>
DESCRIPTION OF THE MORTGAGE POOL
General
The Mortgage Pool has an Initial Pool Balance of $1,252,685,456,
subject to a variance of plus or minus 5%. The Initial Pool Balance is equal to
the aggregate Cut-off Date Balance of the Mortgage Loans. The "Cut-off Date
Balance" of each Mortgage Loan is equal to its unpaid principal balance as of
the Cut-off Date, after application of all payments due in respect of such
Mortgage Loan on or before such date, whether or not received. Without regard to
the cross-collateralization of the groups of cross-collateralized Mortgage
Loans, the Cut-off Date Balances of the Mortgage Loans range from $30,446,295 to
$515,269, and the average Cut-off Date Balance of the Mortgage Loans is
$4,489,912. Presenting each group of cross-collateralized Mortgage Loans as a
single Mortgage Loan, the Loan Group Cut-off Date Balances of the Mortgage Loans
range from $70,750,763 to $675,000 and the average Loan Group Cut-off Date
Balance of the Mortgage Loans is $5,219,523.
This "Description of the Mortgage Pool" section contains certain
statistical information regarding the Mortgage Loans and the Mortgaged
Properties. In reviewing such information, as well as the statistical
information regarding the Mortgage Loans and the Mortgaged Properties contained
elsewhere in this Prospectus Supplement, you should be aware that--
o All numerical information provided with respect to the Mortgage
Loans is provided on an approximate basis.
o All weighted average information provided with respect to the
Mortgage Loans reflects weighting of the Mortgage Loans by their
Cut-off Date Balances.
o When information with respect to the Mortgaged Properties is
expressed as a percentage of the Initial Pool Balance, such
percentage is based upon the Cut-off Date Balances of the related
Mortgage Loans.
o Some of the Mortgage Loans are cross-collateralized and
cross-defaulted with one or more other Mortgage Loans. Except
where otherwise specifically indicated, each cross-collateralized
Mortgage Loan is presented as if it were secured only by the
corresponding Mortgaged Property identified on Exhibit A-1 to this
Prospectus Supplement. See the notes to the tables set forth in
Exhibit A-1.
o In some cases, multiple Mortgaged Properties secure a single
amount of mortgage loan indebtedness. For purposes of presenting
statistical information, the Depositor has allocated the aggregate
Cut-off Date Balance of such indebtedness among the related
Mortgaged Properties (on the basis of relative appraised values,
the relative underwritten net cash flow or prior allocations
reflected in the related mortgage loan documents). Except where
otherwise specifically indicated, each allocated portion of such
aggregate Cut-off Date Balance is presented as if it were a single
"Mortgage Loan" secured only by a mortgage lien on the
corresponding Mortgaged Property identified on Exhibit A-1 to this
Prospectus Supplement and is described as being
cross-collateralized and cross-defaulted with each other Mortgage
Loan representing an allocable portion of the related
indebtedness. See the notes to the tables set forth in Exhibit
A-1. Mortgage indebtedness presented on this basis includes the
Winston Loans (which represents 5.6% of the Initial Pool Balance).
o In some cases, multiple parcels of real property securing a single
Mortgage Loan have been treated as a single "Mortgaged Property"
because of their proximity to each other, the interrelationship of
their operations or for other reasons deemed appropriate by the
Depositor. Such Mortgage Loans include the Mortgage Loan secured
by the Mortgaged Property identified on Exhibit A-1 as the Dallas
Design Center.
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<PAGE>
o This Prospectus Supplement refers to certain properties
specifically by name. You should construe each reference to a
named property as a reference to the Mortgaged Property identified
by that name on Exhibit A-1 to this Prospectus Supplement.
o Statistical information regarding the Mortgage Loans may change
prior to the date of issuance of the Certificates due to changes
in the composition of the Mortgage Pool prior to the Closing Date.
o Certain capitalized terms used with respect to the Mortgage Loans
are defined under "Summary of Prospectus Supplement--The Mortgage
Loans and Mortgaged Properties" in this Prospectus Supplement.
Each Mortgage Loan constitutes an obligation of the related Borrower to
repay a specified sum with interest. Each Mortgage Loan is evidenced by a
promissory note ( a "Mortgage Note") and secured by a mortgage, deed of trust,
deed to secure debt or other similar security instrument (a "Mortgage") that
creates a first mortgage lien on the fee simple and/or leasehold interest of the
related Borrower or another party in one or more Mortgaged Properties.
The table below shows the number of, and percentage of the Initial Pool
Balance secured by, Mortgaged Properties located in the indicated states.
Number of % of Initial
State Mortgaged Properties Pool Balance
- ----- -------------------- ------------
Texas 53 19.7%
California 43 13.5%
Florida 19 9.9%
Michigan 17 4.8%
Tennessee 2 3.7%
The remaining Mortgaged Properties are located throughout 31 other
states and the District of Columbia. No more than 3.4% of the Initial Pool
Balance is secured by Mortgaged Properties located in any such other
jurisdiction.
The table below shows the number of, and percentage of the Initial Pool
Balance secured by, Mortgaged Properties operated for each indicated purpose:
Number of % of Initial
Property Type Mortgaged Properties Pool Balance
- ------------- -------------------- ------------
Multifamily Rental 107 36.3%
Retail 59 24.8%
Hospitality 26 9.3%
Office 24 8.8%
Mixed Use 18 8.2%
Manufactured Housing Community 24 6.6%
Self Storage 16 3.1%
Industrial 5 2.8%
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<PAGE>
See "Description of the Trust Funds--Mortgage Loans--Mortgage Loans
Secured by Multifamily Rental Properties", "--Mortgage Loans Secured by Retail
Sales and Service Properties", "--Mortgage Loans Secured by Hospitality
Properties", "--Mortgage Loans Secured by Office Properties" and "--Mortgage
Loans Secured by Other Types of Properties" in the Prospectus. Certain of the
Multifamily Rental Properties are subject to land use restrictive covenants or
contractual covenants that require all or a portion of the units to be rented to
low income tenants. Several of the Multifamily Rental Properties have
concentrations of student tenants. Certain Multifamily Rental Properties consist
of all or a majority of the individual units, and the corresponding interests in
the common areas and facilities, of a condominium property whose homeowners
association is controlled by the related Borrower.
The table below shows the number and percentage (based on Cut-off Date
Balance) of Mortgage Loans that are secured by first mortgage liens on each of
the specified interests in the related Mortgaged Properties.
Encumbered Interest
in the Related Number of % of Initial
Mortgaged Property Mortgaged Properties Pool Balance
------------------ -------------------- ------------
Fee 270 96.4%
Leasehold 7 1.7%
Fee in Part, Leasehold in Part 2 1.9%
The Mortgage Pool includes 12 Cross-Collateralized Groups. Each
Cross-Collateralized Group consists of two or more Mortgage Loans that either
(i) are cross-collateralized and cross-defaulted with each other or (ii)
represent the allocated portions of a single amount of mortgage loan
indebtedness. However, the amount of the Mortgage encumbering any particular
Mortgaged Property may be less than the full amount of the related
Cross-Collateralized Group (in general, to avoid recording tax). Such Mortgage
amount may equal the appraised value or allocated loan amount for such Mortgaged
Property, thereby limiting the extent to which proceeds therefrom would be
available to offset declines in value with respect to other Mortgaged Properties
securing the same Cross-Collateralized Group. For example, each of the
respective Mortgages encumbering three (3) of the four (4) American Properties
secures the aggregate indebtedness evidenced by the American Loans only to the
extent of the Appraised Value (as set forth on Exhibit A-1 to this Prospectus
Supplement) for such Mortgaged Property.
Certain Cross-Collateralized Groups entitle the related Borrower(s) to
obtain (at any time following the related Lock-out Period) a release of one or
more of the related Mortgaged Properties and/or a termination of the applicable
cross-collateralization, subject, in each such case, to the fulfillment of one
or more of the following conditions--
o the pay down of the loan(s) in an amount equal to a specified
percentage (generally 125%) of the portion of the aggregate loan
amount allocated to the Mortgaged Property to be released;
o the satisfaction of certain debt service coverage and
loan-to-value tests for the remaining Mortgaged Properties; and/or
o receipt by the lender of confirmation from each Rating Agency that
such action will not result in a qualification, downgrade or
withdrawal of any of the then-current ratings of the Certificates.
In addition, certain of the Cross-Collateralized Groups also entitle
the related Borrower to a release of one or more of the related Mortgaged
Properties under defeasance provisions and/or permit the related Borrower to
substitute one or more other commercial properties in place of one or more of
the existing Mortgaged Properties as security for the loan. See "--Certain Terms
and Conditions of the Mortgage Loans--Defeasance Loans" and "--Certain Terms and
Conditions of the Mortgage Loans--Substitution" below.
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<PAGE>
Set forth below are the number of Mortgaged Properties securing, and
the percentage of the Initial Pool Balance represented by, each
Cross-Collateralized Group that has an aggregate Cut-off Date Balance
representing at least 1.0% of the Initial Pool Balance.
<TABLE>
<CAPTION>
Number of States
Where the
Number of Mortgaged
Mortgaged Properties % of Initial
Cross-Collateralized Group Properties are Located Pool Balance
- -------------------------- ---------- ----------- ------------
<S> <C> <C> <C>
The Winston Loans 14 9 5.6%
The Swerdlow Loans 3 1 5.1%
The Alliance Loans 5 2 3.9%
The American Loans 4 2 2.3%
The Mortgage Loans secured by Keller Oaks Apartments, 4 1 1.6%
Sycamore Hill Apartments, Clarendon Apartments
and Woodchase Condominiums Properties
</TABLE>
You should consider each Mortgage Loan to be a nonrecourse obligation
of the related Borrower (i.e., in the event of a payment default by such
Borrower, recourse will be limited to the related Mortgaged Property or
Properties for satisfaction of the Borrower's obligations). In those cases where
recourse to a Borrower or guarantor is permitted under the related Mortgage Loan
documents, the Depositor has not undertaken an evaluation of the financial
condition of any such person. None of the Mortgage Loans is insured or
guaranteed by any governmental entity or by any other person.
Certain Terms and Conditions of the Mortgage Loans
Due Dates. All of the Mortgage Loans provide for Scheduled P&I Payments
to be due on the first day of each month.
Mortgage Rates; Calculations of Interest. Each Mortgage Loan bears
interest at a Mortgage Rate that is fixed until maturity. However, as described
below, each ARD Loan will accrue interest after its Anticipated Repayment Date
at a rate that is in excess of its Mortgage Rate prior to the Anticipated
Repayment Date.
As used in this Prospectus Supplement, the term "Mortgage Rate" does
not include the incremental increase in the rate at which interest may accrue on
any Mortgage Loan due to a default or on any ARD Loan after its Anticipated
Repayment Date. As of the Cut-off Date, the Mortgage Rates for the Mortgage
Loans ranged from 5.960% per annum to 8.440% per annum, and the weighted average
Mortgage Rate for the Mortgage Loans was 7.317%.
No Mortgage Loan provides for negative amortization or, except as
described below with respect to the ARD Loans, for the deferral of excess
interest.
Each Mortgage Loan will accrue interest on the basis of one of the
following conventions:
o The actual number of days elapsed during each one-month accrual
period in a year of 360 days (an "Actual/360 Basis"). Mortgage
Loans that accrue interest on an Actual/360 Basis are referred to
in this Prospectus Supplement as "Actual/360 Mortgage Loans".
o A 360-day year consisting of twelve 30-day months (a "30/360
Basis"). Mortgage loans that accrue interest on a 30/360 Basis are
referred to in this Prospectus Supplement as "30/360 Mortgage
Loans".
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<PAGE>
The table below shows the number of, and percentage of Initial Pool
Balance represented by, Mortgage Loans that accrue interest based on each of the
foregoing conventions.
Number of % of Initial
Interest Accrual Basis Mortgage Loans Pool Balance
- ---------------------- -------------- ------------
Actual/360 Basis 257 88.4%
30/360 Basis 22 11.6%
ARD Loans. Sixty-eight (68) Mortgage Loans, representing 26.2% of the
Initial Pool Balance, are ARD Loans.
An "ARD Loan" is characterized by the following features:
o A maturity date that is approximately 25 to 30 years following
origination.
o The designation of an Anticipated Repayment Date that is generally
10 years following origination. The Anticipated Repayment Date for
each ARD Loan is listed on Exhibit A-1 to this Prospectus
Supplement.
o The ability of the related Borrower to prepay such Mortgage Loan,
without restriction (including without any obligation to pay a
Prepayment Premium or a Yield Maintenance Charge), at any time on
or after a date that is generally three (3) to six (6) months
prior to the related Anticipated Repayment Date.
o Until its Anticipated Repayment Date, the accrual of interest at
its fixed Mortgage Rate.
o From and after its Anticipated Repayment Date, the accrual of
interest at a fixed annual rate (the "Revised Rate") that is, in
most cases, equal to the sum of (i) its Mortgage Rate, plus (ii) a
specified margin (such margin, the "Additional Interest Rate")
that is in some cases (including the Winston Loans and the
Swerdlow Loans) not more than two percentage points.
o The deferral of any interest accrued in respect of such Mortgage
Loan at its Additional Interest Rate from and after the related
Anticipated Repayment Date (such excess interest being referred to
in this Prospectus Supplement as "Additional Interest"). Any
Additional Interest accrued in respect of an ARD Loan following
its Anticipated Repayment Date will not be payable until the
entire principal balance of such Mortgage Loan has been paid in
full.
o From and after its Anticipated Repayment Date, the accelerated
amortization of such Mortgage Loan out of any and all monthly cash
flow from the related Mortgaged Property which remains after
payment of the applicable Scheduled P&I Payment and permitted
operating expenses and capital expenditures. Such additional
monthly payments of principal are referred to in this Prospectus
Supplement as "Accelerated Amortization Payments". Accelerated
Amortization Payments and Additional Interest are considered
separate from Scheduled P&I Payments due in respect of any ARD
Loan.
In general, the Borrower under each ARD Loan has agreed to enter into a
cash management agreement not less than three (3) months prior to the related
Anticipated Repayment Date (if it has not already executed such an agreement)
whereby the Borrower or the manager of the Mortgaged Property is required to
deposit or cause the deposit of all revenue from the related Mortgaged Property
received after the related Anticipated Repayment Date into a designated account
controlled by the mortgagee under such ARD Loan (a "Lock-Box Account"). The
Borrowers under the Winston Loans, the Swerdlow Loans and the Mortgage Loan
secured by the Tierra Verde Property have already established Lock-Box Accounts.
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<PAGE>
Balloon Loans. Two hundred-eight (208) Mortgage Loans, representing
72.4% of the Initial Pool Balance, are Balloon Loans.
A "Balloon Loan" is characterized by an amortization schedule that is
significantly longer than the actual term of such Mortgage Loan and which, in
some cases, begins only after the end of an initial interest-only period, which
results in a Balloon Payment being due in respect of such Mortgage Loan on its
stated maturity date.
Three (3) Balloon Loans, representing 1.2% of the Initial Pool
Balance, provide that the amount of the Scheduled P&I Payment (but not the
related Mortgage Rate) will increase one time at the date on which an
interest-only period ends and the amortization period commences.
Fully Amortizing Loans. Three (3) Mortgage Loans, representing 1.4% of
the Initial Pool Balance, are Fully Amortizing Loans.
A "Fully Amortizing Loan" is characterized by:
o equal Scheduled P&I Payments throughout the substantial term of
such Mortgage Loan, and
o an amortization schedule that is approximately equal to the actual
term of such Mortgage Loan;
such that the Mortgage Loan will fully or substantially amortize over its term
if the Borrower timely makes all Scheduled P&I Payments.
Amortization of Principal. The table below shows (in months) the
original and remaining amortization schedules and terms to maturity (or, in the
case of the ARD Loans, terms to their respective Anticipated Repayment Dates)
for the Mortgage Loans (or the specified sub-groups thereof) as of the Cut-off
Date.
<TABLE>
<CAPTION>
Fully Amortizing
Balloon Loans ARD Loans Loans All Mortgage Loans
------------- --------- ---------------- ------------------
<S> <C> <C> <C> <C>
Original Term to Maturity
Maximum 300 240 300 300
Minimum 60 84 240 60
Weighted Average 123 121 290 125
Remaining Term to Maturity
Maximum 289 229 288 289
Minimum 58 80 237 58
Weighted Average 120 117 280 122
Original Amortization Term
Maximum 360 360 300 360
Minimum 180 300 240 180
Weighted Average 346 344 290 345
Remaining Amortization Term
Maximum 360 359 288 360
Minimum 177 292 237 177
Weighted Average 344 340 280 342
</TABLE>
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<PAGE>
Certain Mortgage Loans provide for a recast of the amortization
schedule and an adjustment of the Scheduled P&I Payments thereon upon
application of specified amounts of condemnation proceeds or insurance proceeds
to pay the unpaid principal balance of the Mortgage Loan.
Voluntary Prepayment Provisions. In general, as of their respective
dates of origination, the Mortgage Loans provided for:
o a period (a "Lock-out Period") during which voluntary principal
prepayments are prohibited, followed by
o a period (an "Open Period") during which voluntary principal
prepayments may be made without any Prepayment Consideration.
Exceptions to the foregoing include twenty-four (24) Mortgage Loans,
representing 8.3% of the Initial Pool Balance, each of which provides for:
o a Lock-out Period, followed by
o a period (a "Prepayment Consideration Period") during which
any voluntary principal prepayment must be accompanied by a
form of Prepayment Consideration, followed by
o an Open Period.
Partial prepayments of certain Mortgage Loans are required under
certain circumstances, notwithstanding otherwise applicable Lock-out Periods.
See "Certain Terms and Conditions of the Mortgage Loans--Other Payment
Provisions" below.
The table titled "Characteristics of the Mortgage Loans" on Exhibit A-1
shows the type of prepayment provision that corresponds to each Mortgage Loan as
of its respective date of origination. In addition, the table titled "Prepayment
Provisions as of the Cut-off Date" on Exhibit A-2 shows a breakdown of the
Mortgage Loans based on (i) remaining term to stated maturity (or, in the case
of the ARD Loans, to their respective Anticipated Repayment Dates) and (ii) the
remaining Lock-out Period and/or Prepayment Consideration Period applicable to
each. The prepayment restrictions relating to each Mortgage Loan generally do
not apply to prepayments arising out of a casualty or condemnation of the
related Mortgaged Property, and prepayments of such type are generally not
required to be accompanied by any Prepayment Consideration. The aggregate
characteristics of the prepayment provisions of the Mortgage Pool will vary over
time as Lock-out Periods expire and Mortgage Loans enter periods during which a
Prepayment Consideration may be required in connection with principal
prepayments and, thereafter, enter Open Periods, and as Mortgage Loans are
prepaid, repurchased, replaced or liquidated on account of default or
delinquency. The table titled "Mortgage Pool Prepayment Profile" on Exhibit A-2
shows the percentage of the aggregate Stated Principal Balance of the Mortgage
Loans scheduled to be outstanding immediately prior to the Distribution Date
occurring in March of each year (through 2018) as to which each type of
prepayment provision would be in effect based on the "Maturity Assumptions" and
a 0% CPR. See "Yield and Maturity Considerations--The Maturity Assumptions" in
this Prospectus Supplement.
As described below under "--Defeasance Loans", most of the Mortgage
Loans permit the Borrower (no earlier than the second anniversary of the Closing
Date) to obtain a release of the related Mortgaged Property (or, where
applicable, one or more of the related Mortgaged Properties) from the lien of
the related mortgage or other security instrument by delivering United States
government securities as substitute collateral. The Borrower under a Defeasance
Loan may effect a defeasance during a Lock-out Period. The table titled
"Prepayment Type as of the Cut-off Date" on Exhibit A-2 shows a breakdown of the
Mortgage Loans based on (i) the type of combination of prepayment and/or
defeasance provisions and (ii) the remaining Lock-out Period and/or Prepayment
Consideration Period applicable to each.
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Lock-out Periods. All of the Mortgage Loans provide for Lock-out
Periods as of the Cut-off Date and--
o the maximum remaining Lock-out Period as of the Cut-off Date is
232 months,
o the minimum remaining Lock-out Period as of the Cut-off Date is 21
months, and
o the weighted average remaining Lock-out Period as of the Cut-off
Date is 108 months.
Partial prepayments of certain Mortgage Loans are required under
certain circumstances, notwithstanding such Lock-out Periods. See "--Certain
Terms and Conditions of the Mortgage Loans--Other Prepayment Provisions" below.
Prepayment Consideration. In the case of most Mortgage Loans that
provide for a Prepayment Consideration Period, the applicable Prepayment
Consideration will equal the greater of a Prepayment Premium (calculated at 1.0%
of the amount prepaid) and a Yield Maintenance Charge.
When applicable with respect to a GECA Mortgage Loan (except in the
case of one GECA Mortgage Loan, representing 2.4% of the Initial Pool Balance),
a Yield Maintenance Charge will generally equal the sum of the present values on
the date of prepayment of the "monthly interest shortfalls" for the remaining
term of such Mortgage Loan to its stated maturity date or Anticipated Repayment
Date (as applicable in accordance with the terms of the related loan documents),
discounted at a monthly compounded rate equal to the yield to maturity computed
by a linear interpolation of the on-the-run United States Treasury curve of the
then remaining weighted average life of such Mortgage Loan (calculated in
accordance with the related loan documents). The "monthly interest shortfall"
will be calculated for each applicable Due Date following the date of prepayment
and will equal 1/12 of the product of--
(a) the principal amount being prepaid, multiplied by
(b) the excess, if any, of (i) the yield derived from compounding
semi-annually the Mortgage Rate of such Mortgage Loan, over (ii)
the Treasury yield described above compounded on a semi-annual
basis.
When applicable with respect to a Column Mortgage Loan (and in the case
of one GECA Mortgage Loan, representing 2.4% of the Initial Pool Balance), a
Yield Maintenance Charge will generally equal the product of--
(a) the principal amount being prepaid (expressed as a percentage of
the outstanding principal balance of such Mortgage Loan, prior to
giving effect to the prepayment), multiplied by
(b) as determined on or shortly before the date of prepayment, the
excess, if any, of:
(i) the present value of all future Scheduled P&I Payments
(including the related Balloon Payment) on such Mortgage Loan
through and including maturity, as determined by discounting
at a semi-annual rate equal to the yield per annum on United
States Treasury securities having a maturity closest to the
maturity of such Mortgage Loan, over
(ii) the outstanding principal balance of such Mortgage Loan
immediately prior to the prepayment.
For purposes of calculating a Yield Maintenance Charge in respect of an
ARD Loan, however, such Mortgage Loan will generally be treated as if it is a
Balloon Loan that matures on its Anticipated Repayment Date.
Prepayment Premiums and Yield Maintenance Charges received on the
Mortgage Loans will be allocated and distributed to the persons, in the amounts
and in accordance with the priorities described under "Description of the
Offered Certificates--Distributions--Distributions of Prepayment Premiums and
Yield Maintenance Charges" in this Prospectus Supplement. Limitations may exist
under applicable state law on the enforceability of the provisions of the
Mortgage Loans that require payment of Prepayment Premiums or Yield Maintenance
Charges, and neither the Depositor nor either
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Underwriter makes any representation or warranty as to the collectability of any
Prepayment Premium or Yield Maintenance Charge in respect of any Mortgage Loan.
See "Risk Factors--Risks Related to the Mortgage Loans--Limitations on the
Enforceability and Collectability of Prepayment Premiums and Yield Maintenance
Charges" in this Prospectus Supplement and "Certain Legal Aspects of Mortgage
Loans--Default Interest and Limitations on Prepayments" in the Prospectus.
Open Periods. Where a Mortgage Loan provides for an Open Period, the
Open Period generally begins three (3) to six (6) months prior to stated
maturity (or, in the case of an ARD Loan, prior to the related Anticipated
Repayment Date). However, one Mortgage Loan, representing 1.2% of the Initial
Pool Balance, provides for an Open Period during the last five (5) years of its
25-year loan term; another Mortgage Loan, representing 0.2% of the Initial Pool
Balance, provides for an Open Period during the last 10.5 years of its 20-year
loan term; and a third Mortgage Loan, representing 0.1% of the Initial Pool
Balance, provides for an Open Period during the last 7.75 years of its 10-year
loan term.
Other Prepayment Provisions. Certain of the Mortgage Loans provide for
mandatory partial prepayments, notwithstanding any Lock-out Period that may
otherwise be in effect:
o In a limited number of cases, the related Borrower established
reserves that will be applied to a partial prepayment of the
respective Mortgage Loan if certain tenants at the Mortgaged
Property do not renew their leases or take possession of leased
space or if certain expense reductions do not occur by a specified
date.
o In a limited number of cases, the related Borrower is required
(upon the expiration of six months from the origination date and
subject to certain conditions) to prepay its Mortgage Loan in part
to the extent (if any) necessary to achieve a specified debt
service coverage ratio (on a pro forma basis) with respect to the
Mortgage Loan based on post-origination operating results of the
related Mortgaged Property.
In certain of these cases, the applicable Mortgage Loan requires the
Borrower to pay a Prepayment Consideration in connection with a mandatory
partial prepayment. Such Prepayment Consideration may be less than the
Prepayment Consideration that would be required if the Borrower made a voluntary
principal prepayment during any applicable Prepayment Consideration Period for
the subject Mortgage Loan.
Defeasance Loans. Two hundred fifty-four (254) Mortgage Loans,
representing 91.6% of the Initial Pool Balance, are Defeasance Loans.
A "Defeasance Loan" is a Mortgage Loan that, during specified periods
and subject to certain conditions, permits the related Borrower to pledge to the
holder of such Mortgage Loan the requisite amount of direct, non-callable United
States government securities (the "Defeasance Collateral") and thereby obtain a
release of the related Mortgaged Property (or, in the case of a
Cross-Collateralized Group, one or more of the related Mortgaged Properties). In
general, the Defeasance Collateral to be delivered in connection with the
defeasance of any Defeasance Loan must provide for a series of payments that--
o will be made prior, but as closely as possible, to all successive
Due Dates through and including the maturity date, and
o will, in the case of each such Due Date, be in an aggregate amount
equal to or greater than the Scheduled P&I Payment (including, if
applicable, the Balloon Payment) due on such date (with any excess
to be returned to the related Borrower).
For purposes of determining the Defeasance Collateral in respect of an ARD Loan,
however, such ARD Loan will be treated as if it is a Balloon Loan that matures
on its Anticipated Repayment Date.
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If fewer than all of the Mortgaged Properties securing any
Cross-Collateralized Group are to be released in connection with any such
defeasance, the amount of the Defeasance Collateral will be calculated based on
the allocated loan amount for the Mortgaged Properties to be released and the
portion of the Scheduled P&I Payments attributable to such allocated loan
amount.
In connection with any such defeasance, the related Borrower will be
required to deliver a security agreement granting the Trust a first priority
security interest in the Defeasance Collateral, together with an opinion of
counsel confirming the first priority status of such security interest.
No such defeasance will be permitted prior to the second anniversary of
the Closing Date.
Substitution. Certain Cross-Collateralized Groups (including the
Winston Loans and the American Loans) permit the related Borrower the
opportunity to obtain the release of one or more of the related Mortgaged
Properties by substituting comparable real estate property. Any such
substitution, however, is subject to the satisfaction of certain conditions,
which generally include:
o in some cases, limitations on the number and/or aggregate
appraised value of the Mortgaged Properties that may be replaced;
o a requirement that the appraised value of the substitute property
(based on a current appraisal) must not be less than the greater
of (i) the appraised value of the Mortgaged Property to be
released as of the relevant origination date and (ii) the current
appraised value of such Mortgaged Property;
o a requirement that, after giving effect to the substitution, the
debt service coverage ratio of the applicable Cross-Collateralized
Group (based on all of the Mortgaged Properties then pledged
thereunder) must not be less than the debt service coverage ratio
for the applicable Cross-Collateralized Group immediately prior to
the substitution date; and
o a requirement that each Rating Agency must have confirmed that the
substitution will not result in a qualification, downgrade or
withdrawal of any of its then-current ratings of the Certificates.
"Due-on-Sale" and "Due-on-Encumbrance" Provisions. The Mortgage Loans
generally contain both a "due-on-sale" clause and a "due-on-encumbrance" clause.
In general, these clauses either permit the holder of the Mortgage to accelerate
the maturity of the related Mortgage Loan if the Borrower sells or otherwise
transfers or encumbers the related Mortgaged Property or prohibit the Borrower
from doing so without the consent of the holder of the Mortgage. See, however,
"Risk Factors--Risks Related to the Mortgage Loans--Limitations on
Enforceability of Other Provisions" in this Prospectus Supplement and "Risk
Factors--Certain Factors Affecting Delinquency, Foreclosure and Loss of the
Mortgage Loans--Limitations on Enforceability of Due-on-Sale and
Debt-Acceleration Clauses" and "Certain Legal Aspects of Mortgage Loans--Due on
Sale and Due-on-Encumbrance Provisions" in the Prospectus. Certain of the
Mortgage Loans, however, permit one or more of the following:
o a one-time or two-time transfer (or, in several cases, an
unlimited number of transfers) of the related Mortgaged Property
if specified conditions are satisfied (which, in general, include
confirmation by each Rating Agency that the transfer will not
result in a qualification, downgrade or withdrawal of any of its
then current ratings of the Certificates) or if the transfer is to
a transferee reasonably acceptable to the lender;
o a transfer of the related Mortgaged Property to a person that is
affiliated with or otherwise related to the Borrower;
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o a transfer of the related Mortgaged Property to a REIT; or
o a transfer of certain beneficial interests in the Borrower.
In general, the Master Servicer or the Special Servicer, as applicable,
will be required to determine, in a manner consistent with the servicing
standard described in this Prospectus Supplement under "Servicing of the
Mortgage Loans--General", whether to exercise any right the holder of any
Mortgage may have under either a "due-on-sale" or "due-on-encumbrance clause" to
accelerate payment of the related Mortgage Loan. However, in the case of certain
Mortgage Loans, neither the Master Servicer nor the Special Servicer may waive
its rights or grant its consent under any "due-on-sale" or "due-on-encumbrance"
clause unless it has received written confirmation from each Rating Agency that
such action would not result in the qualification, downgrade or withdrawal of
any of its then-current ratings then assigned by such Rating Agency to any Class
of Certificates. With respect to "due-on-sale" clauses, this requirement will be
applicable only if the outstanding principal balance of the subject Mortgage
Loan (together with the aggregate outstanding principal balance of all other
Mortgage Loans that are cross-collateralized with the subject Mortgage Loan or
have been made to the same Borrower or affiliated Borrowers) is greater than or
equal to a specified percentage of the then aggregate principal balance of the
Mortgage Pool. In the case of "due-on-encumbrance" provisions, this requirement
will always be applicable.
See "Certain Legal Aspects of Mortgage Loans--Due-on-Sale and
Due-on-Encumbrance" in the Prospectus.
Certain Mortgage Pool Characteristics
General. A detailed presentation of certain characteristics of the
Mortgage Loans and Mortgaged Properties, on an individual basis and in tabular
format, is set forth in Exhibits A-1 and A-2 to this Prospectus Supplement.
Certain capitalized terms that appear in those exhibits, as well as elsewhere in
this Prospectus Supplement, are defined below. Due to rounding, percentages and
amounts in the tables set forth in Exhibits A-1 and A-2 to this Prospectus
Supplement may not add to the indicated totals. See the notes to the tables set
forth in Exhibit A-1 for an identification of each group of Mortgage Loans that
together represent a single mortgage note or form a group of
cross-collateralized Mortgage Loans.
1. "Underwritten Cash Flow", "Underwritten NCF" or "U/W NCF" means,
with respect to any Mortgaged Property, an estimate, made at or about the time
of origination (or, in certain cases, in connection with the sale of the
Mortgage Loans to the Depositor) of the related Mortgage Loan, of the total cash
flow anticipated to be available for annual debt service on such Mortgage Loan,
calculated as the excess of Estimated Annual Revenues over Estimated Annual
Operating Expenses. Estimated Annual Revenues and Estimated Annual Operating
Expenses were generally derived in the manner described below.
(a) The "Estimated Annual Revenues" for any Mortgaged Property
generally equal the Base Estimated Annual Revenues for such Mortgaged
Property, adjusted upward or downward, as appropriate, to reflect any
Revenue Modifications made thereto.
The "Base Estimated Annual Revenues" for each Mortgaged Property
were generally assumed to equal--
o in the case of Multifamily Rental Properties and Mortgaged
Properties that constitute manufactured housing communities
("Manufactured Housing Properties"), the annualized amounts of
gross potential rents,
o in the case of Mortgaged Properties primarily used for commercial
purposes ("Commercial Properties"), other than Hospitality
Properties, monthly contractual base rents as reflected in the
rent roll or leases, plus tenant reimbursements, and
o in the case of Hospitality Properties, estimated average room
sales.
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The "Revenue Modifications" made to the Base Estimated Annual
Revenues for any Mortgaged Property for purposes of establishing its
Estimated Annual Revenues include--
o adjusting such revenues downwards by applying a combined vacancy
and rent loss (including concessions) adjustment that reflected
then current occupancy (or, in some cases, an occupancy that was
itself adjusted for historical trends or market rates of occupancy
with consideration to competitive properties),
o adjusting such revenues upwards to reflect, in the case of some
tenants, increases in base rents scheduled to occur during the
following 12 months,
o adjusting such revenues upwards for percentage rents based on
contractual requirements, sales history and historical trends and,
additionally, for other estimated income consisting of, among
other items, late fees, laundry income, application fees, cable
television fees, storage charges, electrical pass throughs, pet
charges, janitorial services, furniture rental and parking fees,
o adjusting such revenues downwards in certain instances where
rental rates were determined to be significantly above market
rates and the subject space was then currently leased to tenants
that did not have long-term leases or were believed to be unlikely
to renew their leases, and
o in the case of Hospitality Properties, adjusting such revenues
upwards to include estimated revenues from food and beverage,
telephones and other hotel related income.
By way of example, Estimated Annual Revenues generally include:
o for Multifamily Rental Properties and Manufactured Housing
Properties, rental and other revenues;
o for Hospitality Properties, room, food and beverage, telephone and
other revenues; and
o for other Commercial Properties, base rent, percentage rent,
expense reimbursements and other revenues.
In the case of an owner-occupied Mortgaged Property for which no
leases exist, the Estimated Annual Revenues were determined on the
assumption that such property was "net leased" to a single tenant at
market rents and were derived from rental rate and vacancy information
for the surrounding real estate market.
(b) The "Estimated Annual Operating Expenses" for any Mortgaged
Property generally equal the Historical Annual Operating Expenses for
such Mortgaged Property, adjusted upward or downward, as appropriate,
to reflect any Expense Modifications made thereto.
The "Historical Annual Operating Expenses" for any Mortgaged
Property generally consist of historical expenses reflected in the
operating statements and/or other financial information provided by the
related Borrower. Such historical expenses with respect to any
Mortgaged Property were generally obtained/estimated--
o from operating statements relating to a complete fiscal year of
the Borrower ended in 1995, 1996 or 1997 or a trailing twelve (12)
month period ended in 1997 or 1998,
o by annualizing the amount of expenses for partial 1996, 1997 or
1998 periods for which operating statements were available, with
certain adjustments for certain items deemed inappropriate for
annualization,
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o by calculating a stabilized estimate of operating expenses which
takes into consideration historical financial statements and
material changes in the operating position of the related
Mortgaged Property (such as newly signed leases and market data),
or
o if the property was recently constructed, by calculating an
estimate of operating expenses based upon the appraisal of the
Mortgaged Property or market data.
The "Expense Modifications" made to the Historical Annual
Operating Expenses for any Mortgaged Property for purposes of
calculating its Estimated Annual Operating Expenses include--
o assuming that a management fee (in most cases, equal to
approximately 3% to 5% of net rental revenues) was payable to the
property manager,
o adjusting certain historical expense items upwards or downwards to
reflect inflation and/or industry norms for the particular type of
property,
o including the underwritten recurring replacement reserve amounts
(the "U/W Recurring Replacement Reserves"),
o adjusting historical expenses downwards by eliminating certain
items which are considered non-recurring in nature or which are
considered capital improvements, including recurring capital
improvements,
o in the case of Hospitality Properties, adjusting historical
expenses to reflect reserves for furniture, fixtures and equipment
("FF&E") of between 4% and 5% of net rental revenues,
o in the case of Hospitality Properties and certain Multifamily
Rental Properties, Retail Properties and Mortgaged Properties
operated for industrial purposes, adjusting historical expenses
upward or downward to result in an expense-to-room or
expense-to-total revenues ratio that approximates historical or
industry norms, and
o in the case of certain Mortgaged Properties used primarily for
office, retail and industrial purposes, adjusting historical
expenses to account for stabilized tenant improvements and leasing
commissions ("U/W Leasing Commissions and Tenant Improvements") at
costs consistent with historical trends or prevailing market
conditions (however, for certain tenants with longer than average
lease terms or which were considered anchor tenants at a
particular Retail Property, or in areas which were considered not
to require such improvements, adjustments were not made to reflect
tenant improvements and leasing commissions).
The amount of any U/W Recurring Replacement Reserves and/or U/W
Leasing Commissions and Tenant Improvements for each Mortgaged Property
is shown in the table titled "Engineering Reserves and Recurring
Replacement Reserves" on Exhibit A-1. The U/W Recurring Replacement
Reserves shown on Exhibit A-1 are expressed as dollars per Unit in the
case of Multifamily Rental Properties and Manufactured Housing
Properties, total departmental revenues in the case of Hospitality
Properties and dollars per Leasable Square Footage in the case of other
Commercial Properties.
By way of example, Estimated Annual Operating Expenses generally
include salaries and wages, the costs or fees of utilities, repairs and
maintenance, replacement reserves, marketing, insurance, management,
landscaping, security (if provided at the property) and the amount of
taxes, general and administrative expenses, ground lease payments and
other costs, but without any deductions for debt service, depreciation
and amortization or capital expenditures or reserves therefor (except
as described above). In the case of Mortgaged Properties used in whole
or in part for retail, office and industrial purposes, Estimated Annual
Operating Expenses include both expenses that may be recovered from
tenants and those that are non-recoverable. In the case of certain
Mortgaged
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Properties used in whole or in part for retail, office and industrial
purposes, Estimated Annual Operating Expenses may have included leasing
commissions and tenant improvement costs. In the case of the
Hospitality Properties, Estimated Annual Operating Expenses include
departmental expenses, reserves for FF&E, management fees and (where
applicable) franchise fees.
In the case of an owner-occupied Mortgaged Property for which no
leases exist, Estimated Annual Operating Expenses were determined on
the assumption that such property was "net leased" to a single tenant,
and that expenses consisted solely of management fees and replacement
reserves for expense or capital items generally not required to be paid
by a tenant under a net lease.
The management fees and reserves assumed in calculating Underwritten
Net Cash Flow differ in many cases from actual management fees and reserves
actually required under the loan documents for the Mortgage Loans. In addition,
actual conditions at the Mortgaged Properties will differ, and may differ
substantially, from the conditions assumed in calculating Underwritten Net Cash
Flow. In particular, in the case of Mortgaged Properties used for retail, office
and industrial purposes, the assumptions regarding tenant vacancies, tenant
improvements and leasing commissions, future rental rates, future expenses and
other conditions used in calculating Underwritten Net Cash Flow may differ
substantially from actual conditions. Furthermore, the Underwritten Net Cash
Flow for a Mortgaged Property does not reflect the effects of future competition
or economic cycles. Accordingly, there can be no assurance that the Underwritten
Net Cash Flow for a Mortgaged Property shown on Exhibit A-1 to this Prospectus
Supplement will be representative of the actual future net cash flow for such
property.
Underwritten Net Cash Flow and the revenues and expenditures used to
determine Underwritten Net Cash Flow for each Mortgaged Property are derived
from generally unaudited information furnished by the related Borrower (however,
in certain cases, an accounting firm performed agreed upon procedures, or
employees of the related originator performed cash flow verification procedures,
that were intended to identify any errors in the information provided by the
related Borrower). Audits of information furnished by Borrowers could result in
changes to such information. Such changes could in turn result in the
Underwritten Net Cash Flow shown on Exhibit A-1 to this Prospectus Supplement
being overstated. Net income for a Mortgaged Property as determined under
generally accepted accounting principles ("GAAP") would not be the same as the
Underwritten Net Cash Flow for such Mortgaged Property shown on Exhibit A-1 to
this Prospectus Supplement. In addition, Underwritten Net Cash Flow is not a
substitute for or comparable to operating income as determined in accordance
with GAAP as a measure of the results of a property's operations nor a
substitute for cash flows from operating activities determined in accordance
with GAAP as a measure of liquidity.
2. "Underwritten Net Operating Income", "Underwritten NOI" or "U/W NOI"
means, with respect to any Mortgaged Property, the Underwritten Net Cash Flow
for such Mortgaged Property, increased by any and all of the following items
that were included in the Estimated Annual Operating Expenses for purposes of
calculating the Underwritten Net Cash Flow for such Mortgaged Property--
o U/W Recurring Replacement Reserves;
o capital improvements, including recurring capital improvements;
o in the case of Hospitality Properties, expenses for FF&E; and
o in the case of certain Mortgaged Properties used primarily for
office, retail and industrial purposes, U/W Leasing Commissions
and Tenant Improvements.
3. "Appraised Value" means, for any Mortgaged Property, the "as is"
(or, if provided, the "as cured") value estimate reflected in the most recent
appraisal. The appraiser's "cured value", as stated in the appraisal, is
generally calculated as the sum of the "as is" value set forth in the related
appraisal plus the estimated costs (as of the date of appraisal of the related
Mortgaged Property), if any, of implementing any deferred maintenance required
to be undertaken
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immediately or in the short term under the terms of the Mortgage Loan. In
general, the amount of costs assumed by the appraiser for such purposes is based
on an estimate by the individual appraiser, an estimate by the related Borrower,
the estimate set forth in the property condition assessment conducted in
connection with the origination of the related Mortgage Loan or a combination of
such estimates.
4. "Annual Debt Service" means, for any Mortgage Loan, twelve times the
amount of the Scheduled P&I Payment under such Mortgage Loan as of the first Due
Date that follows the Cut-off Date or, in the case of any Balloon Loan that has
an interest-only period followed by an amortization period, the amount of the
Scheduled P&I Payment under such Mortgage Loan as of the commencement of the
amortization period.
5. "Underwritten Debt Service Coverage Ratio", "Underwritten DSCR" or
"U/W DSCR" means:
(a) with respect to any Mortgage Loan (other than a
Cross-Collateralized Mortgage Loan), the ratio of (i) the
Underwritten Net Cash Flow for the related Mortgaged
Property, to (ii) the Annual Debt Service for such Mortgage
Loan; and
(b) with respect to a Cross-Collateralized Mortgage Loan, the
ratio of (i) the aggregate Underwritten Net Cash Flow for the
related Mortgaged Properties and all other Mortgaged
Properties that secure the related Cross-Collateralized Group
to which such Mortgage Loan belongs, to (ii) the aggregate
Annual Debt Service with respect to such Mortgage Loan and
all the other Mortgage Loans that constitute part of the
applicable Cross-Collateralized Group.
6. "Cut-off Date Loan-to-Value Ratio" or "Cut-off Date LTV Ratio"
means, with respect to any Mortgage Loan, the ratio of (a) the Cut-off Date
Balance of such Mortgage Loan, to (b) the Appraised Value of the related
Mortgaged Property.
7. "Leasable Square Footage", "S.F." or "Sq. Ft." means, in the case of
a Commercial Property (other than a Hospitality Property), the estimated square
footage of the gross leasable area at such property, as reflected in information
provided by the related Borrower or in the appraisal on which the related
Appraised Value is based.
8. "Units" means, (a) in the case of a Multifamily Rental Property, the
estimated number of apartments at such property, regardless of the number or
size of the rooms in such apartments and (b) in the case of a Manufactured
Housing Property, the estimated number of pads at such property upon which a
mobile home can be hooked up, in each such case, as reflected in information
provided by the related Borrower or in the appraisal on which the related
Appraised Value is based.
9. "Rooms" means, in the case of a Hospitality Property, the estimated
number of rooms and/or suites, without regard to the size of such rooms or the
number or size of the rooms in such suites, as reflected in information provided
by the related Borrower or in the appraisal on which the related Appraised Value
is based.
10. "Occupancy Rate at Underwriting" or "Occupancy Rate at U/W"
generally means the percentage of Leasable Square Footage (in the case of
Commercial Properties other than Hospitality Properties) or Units (in the case
of Multifamily Rental Properties and Manufactured Housing Properties) of the
subject Mortgaged Property that were occupied or leased as of the approximate
date of the original underwriting of the related Mortgage Loan (as updated, in
certain cases when the Depositor deemed appropriate and information was
available, with more current occupancy information), as reflected in information
provided by the related Borrower or in the appraisal on which the related
Appraised Value is based. Information shown in this Prospectus Supplement with
respect to any weighted average of Occupancy Rates at U/W excludes Hospitality
Properties from the relevant calculations.
11. "Major Tenant" means a tenant of a Commercial Property that leases
10% or more of the net rentable area of such property.
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12. "LC & TI" means, with respect to any Mortgaged Property, leasing
commissions and tenant improvements.
13. "Year Built" means, with respect to any Mortgage Loan, the year
when construction of the related Mortgaged Property was principally completed,
as reflected in information provided by the related Borrower or in the appraisal
on which the related Appraised Value is based. With respect to Mortgage Loans
secured by multiple properties or by properties built in phases, the Year Built
may relate to the earliest, latest or average year in which such properties or
phases were built, as the Depositor deems relevant.
14. "Year Renovated" means, with respect to any Mortgage Loan, the year
when the most recent substantial renovation of the related Mortgaged Property
(or any particular aspect thereof) was principally completed, as reflected in
information provided by the related Borrower or in the appraisal on which the
related Appraised Value is based. With respect to Mortgage Loans secured by
multiple properties or by properties renovated in phases, the Year Renovated may
relate to the earliest, latest or average year in which such properties or
phases were renovated, as the Depositor deems relevant.
15. "Most Recent DSCR" means, with respect to any Mortgage Loan, the
ratio of (a) the Most Recent NOI for the related Mortgaged Property, to (b) the
Annual Debt Service for such Mortgage Loan.
16. "Most Recent Operating Statement Date" means, with respect to each
Mortgage Loan, the date indicated on Exhibit A-1 as the "Most Recent Operating
Statement Date" with respect to such Mortgage Loan. In general, such date is the
end date of the period covered by the latest available annual (or, in some
cases, partial-year) operating statement.
17. "Most Recent NOI" means, with respect to any Mortgaged Property,
the NOI derived therefrom that was available for debt service, calculated as
Most Recent Revenues less Most Recent Expenses. (See also "NOI" below.) For
purposes of Most Recent NOI--
o "Most Recent Revenues" are the Revenues (see "Revenues" in
Paragraph No. 18 below) received (or annualized or estimated in
certain cases) in respect of a Mortgaged Property for the twelve
(12) month period ended as of the Most Recent Operating Statement
Date, based upon the latest available annual (or, in some cases,
partial-year) operating statement and other information furnished
by the related Borrower.
o "Most Recent Expenses" are the Expenses (see "Expenses" in
Paragraph No. 18 below) incurred (or annualized or estimated in
certain cases) for a Mortgaged Property for the twelve (12) month
period ended as of the Most Recent Operating Statement End Date,
based upon the latest available annual (or, in some cases,
partial-year) operating statement and other information furnished
by the related Borrower.
18. "NOI" means, with respect to any Mortgaged Property, the total cash
flow available for annual debt service on the related Mortgage Loan, generally
calculated as the excess of Revenues over Expenses. For purposes of NOI:
o "Revenues" generally consist of all revenues received in respect
of a Mortgaged Property, including--
(i) for the Multifamily Rental Properties and Manufactured
Housing Properties, rental and other revenues;
(ii) for the Commercial Properties other than Hospitality
Properties, base rent, percentage rent, expense
reimbursements and other revenues; and
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(iii) for the Hospitality Properties, guest room rates, food and
beverage charges, telephone charges and other revenues.
o "Expenses" generally consist of all expenses incurred for a
Mortgaged Property, including salaries and wages, the costs or
fees of utilities, repairs and maintenance, marketing, insurance,
management, landscaping, security (if provided at the property)
and the amount of real estate taxes, general and administrative
expenses, ground lease payments and other costs but without any
deductions for debt service, depreciation, amortization, capital
expenditures, leasing commissions and tenant improvements or FF&E.
In the case of Hospitality Properties, Expenses also include
expenses relating to guest rooms, food and beverage costs,
telephone bills and rental and other expenses, and such operating
expenses as general administrative expenses, marketing expenses
and franchise fees.
19. "Maturity/ARD Balance" means, with respect to any Mortgage Loan,
the principal balance thereof due at stated maturity (or, in the case of any ARD
Loan, on the related Anticipated Repayment Date) pursuant to the payment
schedule for such Mortgage Loan (and otherwise assuming no prepayments, defaults
or extensions).
20. "Maturity/ARD Loan-to-Value Ratio" or "Maturity/ARD LTV" means,
with respect to any Mortgage Loan, the ratio of (a) the Maturity/ARD Balance for
such Mortgage Loan to (b) the Appraised Value of the related Mortgaged Property.
Additional Mortgage Loan Information
Delinquencies. No Mortgage Loan will be as of the Cut-off Date, or has
been at any time during the twelve (12) month period preceding the Cut-off Date,
30 days or more delinquent in respect of any Scheduled P&I Payment.
No "Premium Loans". No Mortgage Loan is a "premium loan", (i.e., no
Borrower received more loan proceeds than the original principal balance of its
Mortgage Loan in exchange for agreeing to a higher Mortgage Rate).
Tenant Matters. Set forth below are certain special considerations
regarding tenants at the Mortgaged Properties--
o Certain Mortgage Loans are, in each case, secured by a Retail
Property, an Office Property or a Mortgaged Property used for
industrial purposes that is leased to one or more Major Tenants.
o Certain companies are Major Tenants with respect to more than one
Mortgaged Property.
o There are several cases in which a particular entity is a tenant
at multiple Mortgaged Properties, and although it may not be a
Major Tenant at any such property, it may be significant to the
success of such properties.
o Certain of the Multifamily Rental Properties have material
concentrations of student tenants.
Ground Leases. Seven (7) of the Mortgage Loans, representing 1.7% of
the Initial Pool Balance, are secured, in whole or in material part, by a
Mortgage on the Borrower's leasehold interest in the related Mortgaged Property.
In each such case, either:
o the ground lessor has subordinated its interest in the related
Mortgaged Property to the interest of the holder of the related
Mortgage Loan; or
o the ground lessor has agreed to give the holder of the related
Mortgage Loan notice of, and the right to cure, any default or
breach by the lessee and the related ground lease (giving effect
to all extension options) expires more than 10 years after the
stated maturity of the related Mortgage Loan.
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See "Certain Legal Aspects of Mortgage Loans--Foreclosure--Leasehold
Considerations" in the Prospectus.
In the case of the Tierra Verde Marine Center Property, certain
submerged lands on which are built wet slips for 110 boats are subject to a
ground lease on which the State of Florida is the lessor. The related Mortgage
Loan, which represents 0.5% of the Initial Pool Balance, is an ARD Loan. The
term of the ground lease runs 10 years after the related Anticipated Repayment
Date but terminates five (5) years prior to the related Mortgage Loan's stated
maturity date. Extensions of the ground lease are at the lessor's sole option.
Most of the Mortgaged Property (including the portion on which all of the other
improvements are located) is held by the related Borrower in fee. However, no
assurance can be given as to the effect that a termination of such ground lease
would have on the operations at the marine center.
Additional and Other Financing. The following table indicates those
Mortgaged Properties that are known to the Depositor to be encumbered by secured
subordinate debt, the initial principal amount of the debt and the Cut-off Date
Balances of the related Mortgage Loans and also notes, in the case of each such
Mortgaged Property, the initial principal amount of such secured subordinate
debt:
<TABLE>
<CAPTION>
% of Initial
Pool Balance Initial Principal
Cut-off Date Balance Represented Amount of
of Related by Related Secured
Mortgaged Property Mortgage Loan Mortgage Loan Subordinate Debt
- ------------------ -------------- ------------- ----------------
<S> <C> <C> <C>
Pines of Westbury $12,967,894 1.0% $1,670,000 (1)(2)
Comfort Inn - Hopewell, VA $ 5,181,769 0.4% $3,733,102 (2)
South Street Seaport Office Center $ 2,242,342 0.2% $1,659,674 (2)
Friendship Crossing Apartments $ 4,603,093 0.4% $ 900,000 (2)
Centennial Creek Office Park $ 2,493,826 0.2% $ 114,000 (2)
Market Plaza $ 1,563,876 0.1% $ 582,425 (2)
</TABLE>
- ------------------
(1) The related Borrower also has unsecured subordinated debt in the initial
principal amount of $2,780,241.
(2) The subordinate lender has executed a Subordination Agreement and a
Standstill Agreement.
In addition, Borrowers under nine (9) Mortgage Loans, representing 3.0%
of the Initial Pool Balance, have unsecured debt of which the Depositor is
aware. In some such cases, the lender on such debt is an affiliate of the
Borrower. In each such case, the lender on such unsecured debt has executed and
delivered a Subordination Agreement and a Standstill Agreement in favor of the
mortgagee under the related Mortgage Loan. In addition, some of the Mortgage
Loans permit the related Borrower to incur unsecured subordinated debt in the
future, subject to delivery of a Subordination Agreement and/or Standstill
Agreement and, in certain cases, provisions that limit the use of proceeds to
refurbishing or renovating the property and/or acquiring furniture, fixtures and
equipment for the property. Additional debt, in any form, may cause a diversion
of funds from property maintenance and increase the likelihood that the Borrower
will become the subject of a bankruptcy proceeding.
Except as described above, the Depositor has not been able to confirm
whether the respective Borrowers under the Mortgage Loans have any other debt
outstanding.
Owners of certain Borrowers under the Mortgage Loans have incurred
so-called "mezzanine debt" that is secured by their ownership interests in such
Borrowers. Such financing effectively reduces the indirect equity interest of
any such owner in the related Mortgaged Property. With respect to at least nine
(9) Mortgage Loans, including the Hyrail Group, representing 3.0% of the Initial
Pool Balance, owners of the related Borrower have pledged their equity interests
in such
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Borrower to secure "mezzanine debt". In addition, the owners of the Borrowers
under the Swerdlow Loans described below have pledged their equity interests in
such Borrowers (together with other collateral) to secure a revolving credit
facility. With respect to the Hyrail Group and the Swerdlow Loans, an affiliate
of GECA is the lender of the related "mezzanine debt". See "Risks Related to the
Offered Certificates--Potential Conflicts of Interest". No such "mezzanine debt"
is included in the Mortgage Pool.
See "Risk Factors--Risks Related to the Mortgage Loans--Risks of
Subordinate Debt and Other Additional Financing" in this Prospectus Supplement.
Certain Underwriting Matters
General. In connection with the origination of the respective Mortgage
Loans, the related Originator evaluated each Mortgaged Property in a manner
generally consistent with the standards described below. See also "Description
of the Trust Funds--Mortgage Loans--Default and Loss Considerations with Respect
to the Mortgage Loans" in the Prospectus.
Environmental Assessments. In general, a third-party environmental
consultant conducted a "Phase I" environmental site assessment (or updated a
previously conducted assessment) with respect to each Mortgaged Property during
the seventeen (17) month period preceding the Cut-off Date. In some cases,
additional environmental testing was conducted. Such environmental testing at
any particular Mortgaged Property did not necessarily cover all potential
environmental issues. For example, tests for radon, lead-based paint and lead in
water were performed only at Multifamily Rental Properties and only when the
Originator of the related Mortgage Loan believed such testing was warranted
under the circumstances.
The above-described environmental testing identified various adverse or
potentially adverse environmental conditions at the respective Mortgaged
Properties. In many such cases, the identified condition related to the presence
of ACMs, lead-based paint and/or radon. Where such substances were present, the
environmental consultant generally recommended, and the related Mortgage Loan
documents required, the establishment of an operation and maintenance plan (an
"O&M Plan") to address the issue or, in the case of ACMs and lead-based paint,
an abatement or removal program.
In some cases, the cost to remediate or prevent an adverse
environmental condition at a particular Mortgaged Property was estimated to cost
more than $50,000. Such cases include--
o with respect to the Northwood Hills Shopping Center Property,
benzene-related remediation;
o with respect to the Brookwood Village Shopping Center Property,
asbestos abatement work;
o with respect to the Imperial Plaza Property, the removal of
contaminated soil;
o with respect to the Ware's Van and Storage Property,
implementation of an approved soil remediation plan and
installation of two (2) additional groundwater monitoring wells, a
holdback of $75,000 and a letter of credit for $140,000 for the
anticipated costs of the soil remediation and groundwater
monitoring plans; and
o with respect to the Tech Center 29 Property, the installation of a
secondary containment around two (2) above-ground storage tanks.
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In cases where the environmental consultant recommended specific
remediation of an adverse environmental condition, the related Originator
generally required the related Borrower either: (i) to effect such remediation
prior to closing; or (ii) to effect such remediation post-closing and, in
connection therewith, to deposit with the lender a cash reserve in a sum
sufficient (generally equal to 100% to 125% of the estimated cost) to complete
the remediation. Some Borrowers have not satisfied all post-closing obligations
required by the related Mortgage Loan documents with respect to environmental
matters. There can be no assurance that recommended O&M Plans have been or will
continue to be implemented.
In several cases, the environmental site assessment for a Mortgaged
Property identified potential environmental problems at nearby properties but
indicated that the subject Mortgaged Property had not been affected (or had been
minimally affected), the potential for the problem to affect the subject
Mortgaged Property was limited and/or a person responsible for remediation had
been identified.
The information contained herein regarding environmental conditions at
the Mortgaged Properties is based on the environmental assessments and has not
been independently verified by the Depositor, the Mortgage Loan Sellers, the
Underwriters, the Master Servicer, the Special Servicer, the Trustee, the REMIC
Administrator, or any of their respective affiliates. There can be no assurance
that such environmental assessments or studies, as applicable, identified all
environmental conditions and risks, or that any such environmental conditions
will not have a material adverse effect on the value of or cash flow from the
related Mortgaged Property.
The Pooling Agreement requires that the Special Servicer obtain an
environmental site assessment of a Mortgaged Property prior to acquiring title
thereto or assuming its operation. Such requirement precludes enforcement of the
security for the related Mortgage Loan until a satisfactory environmental site
assessment is obtained (or until any required remedial action is taken). In
addition, there can be no assurance that the requirements of the Pooling
Agreement will effectively insulate the Trust from potential liability for a
materially adverse environmental condition at any Mortgaged Property. See
"Servicing of the Mortgage Loans" herein and "Description of the Pooling
Agreements--Realization Upon Defaulted Mortgage Loans", "Risk Factors--Certain
Factors Affecting Delinquency, Foreclosure and Loss of the Mortgage Loans--Risk
of Liability Arising from Environmental Conditions" and "Certain Legal Aspects
of Mortgage Loans--Environmental Considerations" in the Prospectus.
Property Condition Assessments. Third-party engineering firms inspected
all of the Mortgaged Properties (or updated previously conducted inspections)
during the sixteen (16) month period preceding the Cut-off Date to assess
exterior walls, roofing, interior construction, mechanical and electrical
systems and general condition of the site, buildings and other improvements
located at each such Mortgaged Property.
Such inspections identified various deferred maintenance items and
necessary capital improvements at certain of the Mortgaged Properties. The
resulting inspection reports generally included an estimate of cost for any
recommended repairs or replacements at a Mortgaged Property. When repairs or
replacements were recommended, the related Borrower was required to undertake
necessary repairs or replacements and, in some instances, to establish reserves,
generally in the amount of 100% to 125% of the cost estimated in the inspection
report, to fund deferred maintenance or replacement items that the reports
characterized as in need of prompt attention. See the table titled "Engineering
Reserves and Recurring Replacement Reserves" on Exhibit A-1 to this Prospectus
Supplement. There can be no assurance that another inspector would not have
discovered additional maintenance problems or risks, or arrived at different,
and perhaps significantly different, judgments regarding the problems and risks
disclosed by the respective inspection reports and the cost of corrective
action.
Appraisals and Market Studies. An independent appraiser that is
state-certified and/or a member of the Appraisal Institute conducted an
appraisal of each Mortgaged Property during the seventeen (17) month period
preceding the Cut-off Date in order to establish the property value of such
Mortgaged Property. Such appraisals (collectively, the "Appraisals") constitute
the basis for the "Appraised Values" set forth for the respective Mortgaged
Properties on Exhibit A-1 to this Prospectus Supplement.
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The Appraisals represent the analysis and opinions of the respective
appraisers at or before the origination of the respective Mortgage Loans. The
Appraisals have not been updated following the origination of the respective
Mortgage Loans and are not guarantees of, and may not be indicative of, the
present or future value of the Mortgaged Properties. There can be no assurance
that another appraiser would not have arrived at a different valuation of any
particular Mortgaged Property, even if such appraiser used the same general
approach to, and the same method of, appraising such Mortgaged Property. Neither
the Depositor nor either Underwriter has confirmed the values of the respective
Mortgaged Properties set forth in the Appraisals.
In general, appraisals seek to establish the amount a typically
motivated buyer would pay a typically motivated seller. However, such amount
could be significantly higher than the amount obtained from the sale of a
Mortgaged Property under a distress or liquidation sale. Implicit in the
Appraised Values for the Mortgaged Properties shown on Exhibit A-1 to this
Prospectus Supplement, is the consummation of a sale as of a specific date and
the passing of title from seller to buyer under conditions whereby:
o buyer and seller are typically motivated;
o both parties are well informed or well advised, and each is acting
in what he considers his own best interests;
o a reasonable time is allowed for exposure in the open market;
o payment is made in terms of cash in U.S. dollars or in terms of
financial arrangements comparable thereto; and
o the price represents the normal consideration for the property
sold unaffected by special or creative financing or sales
concessions granted by anyone associated with the sale.
Each Appraisal involved a physical inspection of the related Mortgaged
Property and reflects a correlation of value based on indicated values by the
Sales Comparison Approach, the Income Approach and/or the Cost Approach.
o In the "Sales Comparison Approach", the subject property is
compared to similar properties that have been sold recently or for
which listing prices or offering figures are known. Data for
generally comparable properties are used and comparisons are made
to demonstrate a probable price at which the subject property
would sell if offered on the market.
o Under the "Income Approach", market value is determined by using
the "discounted cash flow" method of valuation or by the "direct
capitalization" method. The discounted cash flow analysis is used
in order to measure the return on a real estate investment and to
determine the present value of the future income stream expected
to be generated by the property. The future income of the
property, as projected over an anticipated holding period, and the
resulting net operating incomes or cash flows are then discounted
to present value using an appropriate discount rate. The direct
capitalization method generally converts an estimate of a single
year's income expectancy (or, in some cases, a hypothetical
stabilized single years' income expectancy) into an indication of
value by dividing the income estimate by an appropriate
capitalization rate. An applicable capitalization method and
appropriate capitalization rates are developed for use in
computations that lead to an indication of value. In utilizing the
Income Approach, the appraiser's method of determination of gross
income, gross expense and net operating income may vary from the
method of determining Underwritten Net Cash Flow, resulting in
variances in the related net operating income values.
o Under the "Cost Approach" of valuing a property, the estimated
value of the land is added to an estimate of the current
replacement cost of the improvements less depreciation from all
sources.
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The Appraisal for each Mortgaged Property or a separate letter contains
a statement by the respective appraiser to the effect that the appraisal
guidelines set forth in Title XI of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, as amended ("FIRREA"), were followed in preparing
such Appraisal. However, none of the Depositor, either Underwriter, either
Mortgage Loan Seller or any Originator has independently verified the accuracy
of such statement.
In the case of certain Mortgage Loans that constitute acquisition
financing, the related Borrower may have acquired the related Mortgaged Property
at a price less than the Appraised Value on which such Mortgage Loan was
underwritten.
Zoning and Building Code Compliance. In connection with the origination
of each Mortgage Loan, the related Originator examined whether the use and
operation of the related Mortgaged Property were in material compliance with
zoning, land-use, environmental, building, fire and health ordinances, rules,
regulations and orders then-applicable to such Mortgaged Property. Evidence of
such compliance may have been in the form of legal opinions, certifications from
government officials, title insurance endorsements, engineering or consulting
reports and/or representations by the related Borrower. In certain instances, a
certificate of occupancy was not available. Where the Mortgaged Property as
currently operated constituted a permitted nonconforming use and/or structure,
an analysis was generally conducted as to (i) the likelihood that a material
casualty would occur that would prevent the Mortgaged Property from being
rebuilt in its current form and (ii) whether existing replacement cost hazard
insurance would, in the event of a material casualty, be sufficient to satisfy
the entire Mortgage Loan or, taking into account the cost of repair, be
sufficient to pay down the Mortgage Loan to a level that the remaining
collateral would constitute adequate security for the remaining loan amount.
Hazard, Liability and Other Insurance. Although exceptions exist, each
Mortgage generally requires the related Borrower to maintain the following
insurance coverage--
o Hazard insurance in an amount that is (subject to a customary
deductible) at least equal to the lesser of the outstanding
principal balance of the related Mortgage Loan and 100% of the
full insurable replacement cost of the improvements located on the
such Mortgaged Property. In general, the standard form of hazard
insurance policy covers physical damage to, or destruction of, the
improvements on a Mortgaged Property by fire, lightning,
explosion, smoke, windstorm and hail, riot or strike and civil
commotion, subject to the conditions and exclusions set forth in
each policy. In some cases, however, a Borrower or tenant is
permitted to self-insure the subject Mortgaged Property, provided
that such party or an affiliate maintains a specified net worth.
o If any portion of a Mortgaged Property was in an area identified
in the Federal Register by the Flood Emergency Management Agency
as having special flood hazards, flood insurance meeting the
requirements of the Federal Insurance Administration guidelines,
if available, in an amount that is not less than the least of: (i)
the outstanding principal balance of such Mortgage Loan; (ii)
except in certain cases, the full insurable value of such
Mortgaged Property; and (iii) the maximum amount of insurance
available under the National Flood Insurance Act of 1968, as
amended.
o Comprehensive general liability insurance against claims for
personal and bodily injury, death or property damage occurring on,
in or about such Mortgaged Property, in an amount at least equal
to $1 million per occurrence.
o Business interruption or rent loss insurance in an amount not less
than 100% of the projected rental income or revenue from such
Mortgaged Property for at least six months (or, alternatively, in
a specified dollar amount).
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In general, the Mortgaged Properties (including those located in
California) are not insured against earthquake risks. In the case of Mortgaged
Properties (other than those that are manufactured housing communities) located
in California; however, a third party consultant to the related Originator
conducted seismic studies to assess the "probable maximum loss" for such
Mortgaged Property. In general, when the resulting reports concluded that a
Mortgaged Property was likely to experience a "probable maximum loss" in excess
of 25% of the estimated replacement cost of the improvements, the related
Originator required the Borrower to obtain earthquake insurance or establish
reserves to cover the estimated costs of completing seismic retrofitting
recommended by the consultant, unless the original loan-to-value ratio was
relatively low.
With respect to each Mortgaged Property (including each Mortgaged
Property securing a Specially Serviced Mortgage Loan), the Master Servicer is
required to cause the maintenance of all such insurance coverage as is required
under the related Mortgage to the extent the Trust has an insurable interest.
Under the terms of several Mortgage Loans, the related Borrower is
required to keep its Mortgaged Property insured against loss by fire, hazards,
rent loss and such other hazards, casualties, liabilities and contingencies as
the mortgagee determines to require in its discretion and in such amounts and
for such periods as the mortgagee determines to require in its discretion. In
such cases, the Master Servicer will be required to use reasonable efforts
consistent with the Servicing Standard (as defined in this Prospectus Supplement
under "Servicing of the Mortgage Loans--General") to cause the related Borrowers
under the Mortgage Loans to maintain insurance generally in the amounts, type
and scopes of coverage required under the other Mortgage Loans as described
above.
Various forms of insurance maintained with respect to a Mortgaged
Property, including casualty insurance, environmental insurance (in the limited
number of cases where it was obtained), earthquake insurance (in the limited
number cases where it was obtained) or other insurance, may be provided under a
blanket policy that also covers other Mortgaged Properties and/or other
properties not securing the Mortgage Loans. As a result of aggregate limits
under any such blanket policy, losses at other properties covered thereby may
reduce the amount of insurance coverage with respect to a Mortgaged Property
covered thereby. See "Risk Factors--Risks Related to the Mortgage
Loans--Uninsured Loss; Sufficiency of Insurance".
With limited exception, the Mortgage Loans generally provide that
insurance and condemnation proceeds are to be applied either--
o to restore the related Mortgaged Property; or
o towards payment of the related Mortgage Loan.
The Special Servicer is required to maintain for each REO Property
generally the same types of insurance policies providing coverages in the same
amounts as were previously required under the Mortgage that had covered such
property.
The Master Servicer and the Special Servicer may each satisfy its
obligations regarding maintenance of the hazard insurance policies referred to
in this Prospectus Supplement by maintaining a blanket policy or master force
placed insurance policy insuring against hazard losses on all of the related
Mortgage Loans. If any such blanket or master policy contains a deductible
clause, the Master Servicer or the Special Servicer, as the case may be, will be
required, in the event of a casualty covered by such blanket or master policy,
to deposit or cause to be deposited in the Certificate Account (as defined in
the Prospectus) all sums that would have been deposited therein but for such
deductible clause (but only to the extent such sums would have been paid if an
individual hazard insurance policy referred to above had been in place). See
"Description of the Pooling Agreements--Hazard Insurance Policies" in the
Prospectus.
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The applicable Originator and its successors and assigns are the
beneficiaries under separate title insurance policies with respect to each
Mortgage Loan. Each title insurer will enter into such co-insurance and
reinsurance arrangements with respect to the title insurance policy as are
customary in the title insurance industry. Subject to certain exceptions,
including standard exceptions regarding claims made in the context of insolvency
proceedings, the title insurance policy will provide coverage to the Trustee for
the benefit of Certificateholders for claims made against the Trustee regarding
the priority and validity of the Borrowers' title to the Mortgaged Properties.
Cash Management and Certain Escrows and Reserves
Cash Management. In the case of 33 of the Mortgage Loans, representing
approximately 19.8% of the Initial Pool Balance, a "cash management" system has
been implemented for the deposit of property revenues into a separate account.
In the case of the Swerdlow Loans and the Winston Loans, tenants are required to
remit rental payments to an account that is under the sole control of the
mortgagee and the Borrower is not authorized to make withdrawals from such
account. In the other cases, the related Borrower or the manager of the related
Mortgaged Property is required to deposit property revenues into an account that
is under the joint control of the related Borrower and the Master Servicer. In
such cases, the Borrower is authorized to make withdrawals from such account
from time to time until the occurrence of an event of default under such
Mortgage Loan, in which case the Master Servicer or the Special Servicer would
be entitled, under preexisting instructions furnished to the depository
institution at which such account is maintained, to direct such depository
institution to no longer honor payment requests made by the Borrower.
Under each of those Mortgage Loans, central accounts ("Central
Accounts") were established and, upon the Closing Date, will be under the sole
control of the Master Servicer, for the purpose of holding amounts required to
be on deposit as reserves for taxes and insurance, capital improvements, FF&E
and certain other purposes as applicable. In certain cases, the related Borrower
established a lockbox account that is under the sole control of the mortgagee.
In general, no later than the related Anticipated Repayment Date, the Borrower
under each ARD Loan will be required (if it has not previously done so) to enter
into a lockbox agreement whereby all revenue from the related Mortgaged Property
will be deposited directly into a designated account under the sole control of
the Master Servicer.
Tax and Insurance Escrows. In the case of 248 Mortgage Loans,
representing 85.8% of the Initial Pool Balance, tax and insurance escrows (the
"Tax and Insurance Escrows") were established, either as separate accounts or,
if applicable, as sub-accounts of any related Central Account, and each related
Borrower is generally required to deposit on a monthly basis an amount equal to
one-twelfth of the annual real estate taxes and assessments and one-twelfth of
the annual premiums payable on insurance policies that the Borrower is required
to maintain. If an escrow was established, such funds will generally be applied
by the Master Servicer to pay for items such as taxes, assessments and insurance
premiums at the related Mortgaged Property.
Under certain other Mortgage Loans, the insurance carried by the
related Borrower is in the form of a blanket policy. In such cases, the amount
of the escrow is an estimate of the pro rata share of the premium allocable to
the related Mortgaged Property, or the related Borrower pays the premium
directly. Under certain Mortgage Loans, the related Borrower delivered letters
of credit from third parties in lieu of establishing and funding a deposit
account for tax and insurance escrows. Under certain Mortgage Loans, a tenant at
the related Mortgaged Property is responsible for paying all or a portion of the
real estate taxes and assessments and/or insurance premiums directly. In such
cases, escrows generally are not required.
Recurring Replacement Reserves. The table titled "Engineering Reserves
and Recurring Replacement Reserves" on Exhibit A-1 to this Prospectus Supplement
shows the replacement reserve deposits that Borrowers are, in each case,
required to make into a separate account or, if applicable, a sub-account of any
related Central Account for certain capital replacements, repairs, FF&E, tenant
improvements and leasing commissions on the related Mortgaged Property under the
terms of the respective Mortgage Loan (a "Contractual Recurring Replacement
Reserve").
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The Contractual Recurring Replacement Reserves shown in such table are
expressed as dollars per Unit for Multifamily Rental Properties and Manufactured
Housing Properties, total departmental revenues for Hospitality Properties and
dollars per Leasable Square Foot for other Commercial Properties. The
Contractual Recurring Replacement Reserves set forth in such table for most of
the Mortgaged Properties are initial amounts and may vary over time. Such
amounts include both replacement reserves and/or reserves for tenant
improvements and leasing commissions. In such cases, the related Mortgage Note
and/or other related documents may provide for replacement reserve deposits to
cease upon achieving predetermined maximum amounts in the reserve account. In
addition, in some such cases, replacement reserves were determined for specific
tenant spaces, in which cases, the execution of a lease covering such space
could result in the termination and/or release of such reserve. Under certain
Mortgage Loans, the related Borrowers are permitted to deliver letters of credit
from third parties in lieu of establishing and funding a deposit account for
replacement reserves.
Engineering Reserves. The table titled "Engineering Reserves and
Recurring Replacement Reserves" on Exhibit A-1 to this Prospectus Supplement
shows the reserves (the "Engineering Reserves") established, either as a
separate account (or, if applicable, as a sub-account of any related Central
Account), or in some cases in the form of a letter of credit pledged to the
lender, as a result of the inspections of certain Mortgaged Properties described
above under "--Certain Underwriting Matters--Property Condition Assessments".
The repair/replacement items for which such reserves were established are
generally items identified by the property inspection firm as in need of repair
or replacement in order to restore the Mortgaged Property to a condition
generally consistent with competitive properties of similar age and quality or
to comply with regulatory requirements. Because the Engineering Reserve for any
Mortgaged Property shown in such table reflects only the cost estimate
determined by the respective inspection firm for items that the related
Originator determined significant enough to require a reserve, and/or because in
some cases items identified in a report were corrected prior to closing of the
Mortgage Loan, the Engineering Reserve for certain Mortgage Loans is less than
the cost estimate set forth in the related report.
The Engineering Reserve for several Mortgaged Properties was a
significant amount and substantially in excess of the cost estimate set forth in
the related inspection report because the related Originator required the
Borrower to establish reserves for the completion of major work that had been
commenced. No Engineering Reserve is required to be replenished. The amounts set
forth in such table represent the amounts of the Engineering Reserves required
at the respective dates of origination of the Mortgage Loans, and there can be
no assurance that the work for which reserves were required will be completed in
a timely manner or that the reserved amount will be sufficient therefor.
Significant Mortgage Loans
The Winston Loan. The "Winston Loan" is a Cross-Collateralized Group
with an aggregate Cut-off Date Balance of $70,750,763, representing 5.6% of the
Initial Pool Balance. GECC sourced, underwrote and closed the Winston Loan, as
origination agent for CMF Capital Company, LLC ("CMF"), and subsequently
acquired such Mortgage Loan from CMF. CMF is an affiliate of Liberty Hampshire
Company, a Delaware limited liability company. The Winston Loan is secured by
Mortgages (collectively, the "Winston Mortgages") on the fee interests in
fourteen (14) limited service hotel properties (collectively, the "Winston
Properties"). The hotels are located in nine (9) states, with four (4) in North
Carolina, two (2) in each of South Carolina and Georgia, and one (1) in each of
Texas, Arizona, Florida, Michigan, New York, and Massachusetts. The Winston Loan
was made to a special purpose entity (the "Winston Borrower"), affiliated with
Winston Hotels, Inc. (WXH - NYSE) ("Winston REIT"). Winston REIT, which first
went public in June 1994, is in the business of developing, acquiring and
rehabilitating premium limited-service, full service and high-end extended stay
hotel properties. Winston REIT owns over 90% of WINN Limited Partnership, the
operating partnership through which the Winston REIT controls its hotel
properties. Winston REIT controls 49 hotels in 11 states throughout the
southeast, southwest and northeast United States, with over 6,927 rooms.
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The Winston Loan is an ARD Loan with an Anticipated Repayment Date of
December 1, 2008 and a final maturity of December 1, 2023. The Winston Loan
amortizes on a 25-year schedule. The fixed Mortgage Rate on the Winston Loan is
7.375% per annum. However, on the related Anticipated Repayment Date, the per
annum rate at which interest accrues on the Winston Loan is required to increase
to the sum of the original Mortgage Rate and three (3) percentage points (3%),
until the loan is repaid in full.
The Winston Borrower may not voluntarily prepay the Winston Loan until
ninety (90) days prior to the Anticipated Repayment Date. After the second
anniversary of the Closing Date, but prior to the Anticipated Repayment Date,
the Borrower may obtain a release of any of the Winston Properties from the lien
of the Winston Mortgages through defeasance of an amount equal to the applicable
release price of the property or properties to be released. The release prices
are 125% of the allocated loan amounts for the respective Winston Properties.
Defeasance is only permitted upon the satisfaction of certain conditions,
including--
(1) confirmation from the Rating Agencies that such defeasance will
not result in a withdrawal, downgrade or qualification of any of
the then current ratings on the Certificates,
(2) delivery of certain legal opinions and documentation, and
(3) confirmation that the debt service coverage ratio for the
non-defeased portion of the Winston Loan (based on the Winston
Properties then remaining subject to the liens of the Winston
Mortgages) is at least equal to the greater of (a) the debt
service coverage ratio for the entire Winston Loan for the twelve
(12) full calendar months immediately preceding the date of
origination and (b) the debt service coverage ratio for the entire
Winston Loan for the twelve full calendar months immediately
preceding the defeasance, in each case based on all the Winston
Properties (including those to be released).
The Winston Properties. The Winston Properties consist of fourteen (14)
hotels described in the table below. Six (6) of the hotels are operated as
Hampton Inns, two (2) of the hotels are operated as Marriott Courtyards, two (2)
of the hotels are operated as Homewood Suites, one (1) of the hotels is operated
as a Marriott Residence Inn, one (1) of the hotels is operated as a Comfort
Suites, one (1) of the hotels is operated as a Comfort Inn, and one (1) of the
hotels is operated as a Quality Suites.
<TABLE>
<CAPTION>
Allocated
No. of Yr. Built/ Occupancy Appraised Loan
Hotel Location Rooms Renovated at U/W Value Amount
- ----- -------- ----- --------- ------ ----- ------
<S> <C> <C> <C> <C> <C> <C>
Hampton Inn - Elmsford Elmsford, NY 156 1968/1996 78% $15,300,000 $7,598,233
Quality Suites - Charleston Charleston, SC 168 1989/1997 80% $14,000,000 $6,277,885
Courtyard by Marriott - Ann Arbor Ann Arbor, MI 160 1989/1998 81% $13,900,000 $6,277,885
Residence Inn - Phoenix Phoenix, AZ 168 1988/1997 74% $16,300,000 $6,277,885
Homewood Suites - Cary Cary, NC 120 1994 84% $11,800,000 $6,003,850
Hampton Inn & Suites - Gwinnett Duluth, GA 135 1996 73% $11,300,000 $5,381,044
Hampton Inn - Raleigh Raleigh, NC 141 1986/1996 85% $11,200,000 $5,281,395
Comfort Suites - Orlando Orlando, FL 215 1990/1997 86% $12,500,000 $5,156,834
Hampton Inn - Perimeter Atlanta, GA 131 1996 71% $10,300,000 $4,982,448
Hampton Inn - Charlotte, NC Charlotte, NC 125 1991/1997 83% $ 9,600,000 $4,558,940
Courtyard by Marriott - Wilmington Wilmington, NC 128 1996 75% $ 9,300,000 $4,259,993
Hampton Inn - West Springfield West Springfield, MA 126 1989/1998 70% $ 8,220,000 $3,687,012
Homewood Suites - Clear Lake Houston, TX 92 1995 80% $ 8,700,000 $3,437,889
Comfort Inn - Charleston Charleston, SC 128 1989/1997 76% $ 9,700,000 $1,569,471
</TABLE>
Property Management. Each of the hotels is leased to CapStar Winston
Company, L.L.C. ("CapStar"), pursuant to an operating lease (each, a "CapStar
Operating Lease"). Each CapStar Operating Lease has a term which expires on
November 30, 2012 (except for the CapStar Operating Lease covering the Marriott
Residence Inn in Phoenix, Arizona, which expires on March 31, 2013). CMF,
CapStar and the Winston Borrower have entered into a subordination,
non-disturbance and attornment agreement for the benefit of the holder of the
related Mortgage. CapStar is not affiliated with the Winston Borrower and is not
a special purpose entity. The four (4) Winston Properties located in North
Carolina are
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subject to management agreements between CapStar and Interstate Management &
Investment Corp. ("Interstate"), with terms which are co-terminus with the
termination of the underlying CapStar Operating Leases. The other ten (10)
Winston Properties are self-managed by CapStar. MeriStar Hotels & Resorts, Inc.
(NMH: NYSE) ("MeriStar") is the general partner of the owner of CapStar.
MeriStar operates 212 hotels in North America. Interstate manages nine (9)
hotels in four (4) states located in the southeast United States.
Lockbox. The Winston Borrower has established a Lock-Box Account with
an eligible institution pursuant to the terms and conditions of a cash
management agreement. Under the terms of each CapStar Operating Lease, CapStar
receives all revenues and receipts from the operation of the hotels and remits a
monthly rent payment to the lockbox account for the benefit of the Winston
Borrower. CapStar has agreed to deposit all rent under the CapStar Operating
Leases directly into such Lock-Box Account.
Debt Service Reserve. The Winston Borrower has funded a two-month debt
service reserve account.
Appraised Value. The Winston Loan has a Cut-off Date LTV Ratio of 43.6%
based upon an aggregate Appraised Value of the Winston Properties that was (as
of June 30, 1998 - August 17, 1998) equal to $162,120,000.
Underwritten DSCR. The Underwritten DSCR of the Winston Loan is 2.54x,
based on trailing twelve (12) months Underwritten NCF as of June 30, 1998.
Additional Indebtedness Prohibited. The Winston Borrower may not
encumber any of the Winston Properties with any subordinate financing (except
for limited amounts of trade debt or equipment financing), and no equity owner
may pledge its interests in the Winston Borrower.
Transfer of Ownership Interests. The Winston Mortgages prohibit the
transfer of interests in the Winston Properties or in the Winston Borrower
without the consent of the lender under the Winston Loan, except in connection
with (1) a release of a Winston Property in connection with the defeasance of
the Winston Loan, (2) a release of a Winston Property in connection with a
substitution of another hotel property in accordance with the Winston Loan
documents, or (3) a sale or transfer of all of the Winston Properties in
accordance with the Winston Loan documents, where each of such releases or
transfers is conditioned upon written confirmation by the Rating Agencies of no
downgrade, withdrawal or qualification of the ratings of the Certificates.
Releases and Substitutions. Prior to the Anticipated Repayment Date,
the Winston Borrower may obtain a release of one or more of the Winston
Properties from the lien of the Winston Mortgages upon the substitution of its
fee interest in another hotel property of like kind and quality for each
released property, provided certain terms and conditions are satisfied,
including--
(1) the appraised value of the substitute property must be at least
equal to the greater of the appraised value of the released
property as of (a) the date of origination or (b) the date
immediately preceding the release and substitution,
(2) the debt service coverage ratio for the Winston Loan (based on the
Winston Properties remaining subject to the lien of the Winston
Mortgages) after giving effect to the release and substitution
must be greater than or equal to the debt service coverage ratio
for the Winston Loan (based upon all Winston Properties then
encumbered by the lien of the Winston Mortgage) as of the date
immediately preceding the release and substitution, and
(3) confirmation from the Rating Agencies that such release and
substitution will not result in a withdrawal, downgrade or
qualification of any of the then current ratings on the
Certificates.
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The Swerdlow Loans. The "Swerdlow Loans" consist of three (3)
cross-defaulted and cross-collateralized Mortgage Loans with Cut-off Date
Balances of $29,580,388, $23,829,728 and $10,396,538, representing 2.4%, 1.9%
and 0.8%, respectively, of the Initial Pool Balance. GECC originated the
Swerdlow Loans. Such Mortgage Loans are collectively secured by Mortgages
(collectively, the "Swerdlow Mortgages") encumbering the fee interest in two
Retail Properties and one Office Property (collectively, the "Swerdlow
Properties"), all of which properties are located in southern Florida. The
Swerdlow Loans were made to each of three separate special purpose entities
(collectively, the "Swerdlow Borrowers"). The Swerdlow Borrowers are affiliated
with Swerdlow Real Estate Group, Inc. ("Swerdlow REIT"), which REIT is the sole
general partner of SREG Operating Limited Partnership ("Swerdlow Operating
Partnership"). The Swerdlow REIT, which is privately held, was formed December
1998, and holds a commercial portfolio of properties in various stages of
development. The Swerdlow REIT was capitalized by various equity investors
including MJS SREG, LLC, PM SREG Holdings, LLC, Fidelity Management Trust
Company, Fidelity Management Research Company, Colony Capital, Inc., Landmark
Partners, Inc., The Board of Trustees of the Leland Stanford Jr.
University and Institutional Property Consultants, Inc.
Each Swerdlow Loan is an ARD Loan with an Anticipated Repayment Date of
February 1, 2009 and a final maturity of February 1, 2029. The Swerdlow Loans
amortize on a 30-year schedule. The fixed Mortgage Rate on the Swerdlow Loans is
8.18% per annum. However, on the related Anticipated Repayment Date, the per
annum rate at which interest accrues on the Swerdlow Loans will increase to the
original Mortgage Rate plus two percentage points (2%).
The Swerdlow Properties. The Swerdlow Properties are controlled by
Swerdlow REIT. The Swerdlow Properties consist of two retail centers and one
office center described in the table below.
<TABLE>
<CAPTION>
No. of Yr. Built/ Occupancy Appraised
Property Location Square Feet Renovated at U/W Value
- -------- -------- ----------- --------- ------ -----
<S> <C> <C> <C> <C> <C>
Kendale Lakes Plaza West Kendall, FL 404,553 1977/1995 98% $36,100,000
Cypress Creek Station Fort Lauderdale, FL 229,009 1997 99% $30,800,000
Oakwood Business Center Hollywood, FL 141,150 1987 97% $14,000,000
</TABLE>
The Kendale Lakes Plaza Property is a regional shopping center located
in an in-fill location. Primary access to the property is provided by the
Florida Turnpike. Anchor tenants of the property are K-Mart (114,000 sq. ft.),
Syms (40,000 sq. ft.), Marshall's (27,808 sq. ft.) and Office Max (23,500 sq.
ft.). The Cypress Creek Station Property is comprised of two main buildings and
is surrounded by commercial and hospitality properties. The major tenants of the
property include Regal Cinema (101,415 sq. ft.), Office Depot (36,929 sq. ft.)
and Just for Feet (15,675 sq. ft.). The Oakwood Business Center Property is a
suburban office building with access to Interstate 95, the Fort Lauderdale
central business district and the Fort Lauderdale International Airport. The
major tenants of the property include Trader Publishing (16,816 sq. ft.) and KOS
Pharmaceuticals (23,499 sq. ft.).
Lockbox. Simultaneously with the closing of the Swerdlow Loans, the
Swerdlow Borrowers established a LockBox Account. The Swerdlow Borrowers have
required that all tenants at the Swerdlow Properties deposit rent directly in
such Lock-Box Account.
Property Management. The Swerdlow Properties are each subject to a long
term management agreement with Swerdlow Operating Partnership. The management
agreement is not terminable by the Swerdlow Borrower, the manager or any other
party, except with the express written consent of the mortgagee under the
Swerdlow Loans. The base management fee under each management agreement is 3% of
gross revenue. The management fee structure also provides for compensation for
additional services such as retail leasing, expansion, renovation and tenant
improvement work. The management agreements are each terminable by the mortgagee
under the Swerdlow Loans upon completion of foreclosure or upon an event of
default under such management agreement.
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<PAGE>
Appraised Value. The Swerdlow Loans have a Cut-off Date LTV Ratio of
78.9% based upon an aggregate Appraised Value of the Swerdlow Properties that
was (as of October 9, 1998 - October 20, 1998) equal to $80,900,000.
Underwritten DSCR. The Underwritten DSCR of the Swerdlow Loans is
1.25x.
Additional Indebtedness. The Swerdlow Borrowers may not encumber any of
the Swerdlow Properties with subordinate financing, and no equity owner may
further pledge its interests in any of the Swerdlow Borrowers. Simultaneously
with the closing of the Swerdlow Loans, GECC provided Swerdlow REIT, the
Swerdlow Operating Partnership and certain affiliates (not the Swerdlow
Borrowers) with a revolving line of credit. The line of credit is a fully
recourse loan to Swerdlow REIT, the Swerdlow Operating Partnership and certain
affiliates and secured by Swerdlow REIT's, the Swerdlow Operating Partnership's
and such affiliate's assets, which mainly consist of: (i) ownership interests in
eleven entities (including the Swerdlow Borrowers), each of which owns real
estate (some of which are stabilized assets and others of which are in various
stages of development); and (ii) certain management and development agreements
or a pledge of some or all of the direct or indirect ownership interests in the
manager under certain management and development agreements. All of such
ownership interests, management and development agreements and pledged ownership
interests in such managers are pledged as security for the line of credit. GECC,
as lender under the line of credit, has entered into a subordination and
intercreditor agreement with GECC as lender under the Swerdlow Loans (which
agreement will be assigned to the Trustee for the benefit of the Trust). GECC
may not exercise its remedies under the line of credit to transfer title to the
pledged interests unless (a) GECC receives confirmation from the Rating Agencies
that such transfer will not result in a withdrawal, downgrade or qualification
of any of the then current ratings of the Certificates, or (b) the transferee is
GECC or another institutional transferee.
Transfer of Ownership Interests. The Swerdlow Mortgages prohibit the
transfer of interests in the Swerdlow Properties or in the Swerdlow Borrowers
without the consent of the lender under the Swerdlow Loans. However, the
Swerdlow Mortgages permit transfers of ownership interests in Swerdlow REIT,
provided, that (a) (i) one or more certain pre-approved investors (the "Approved
Investors") continue to own 51% of the outstanding ownership interest in
Swerdlow REIT, and (ii) one or more Approved Investors maintain control of the
management and policies of the Swerdlow Borrowers, or (b) (i) such transfers are
pursuant, or subsequent, to a registered public offering on a nationally
recognized exchange (other than pursuant to consolidation or merger with, or
acquisition by, a publicly traded entity), and (ii) one or more Approved
Investors continue to own 51% of the outstanding ownership interest in Swerdlow
REIT, or (c) the lender under the Swerdlow Loans receives confirmation from the
Rating Agencies that such transfer will not result in a withdrawal, downgrade or
qualification of any of the then current ratings of the Certificates.
Releases. The Swerdlow Borrowers may not voluntarily prepay the
Swerdlow Loans until three (3) months prior to the Anticipated Repayment Date.
At any time following the second anniversary of the Closing Date, but prior to
the Anticipated Repayment Date, each of the Swerdlow Properties may be released
from the lien of its respective Swerdlow Mortgage through a defeasance of an
amount equal to 125% of the unpaid principal balance of the applicable Swerdlow
Mortgage. Defeasance is only permitted upon the satisfaction of certain terms
and conditions, including--
(1) the debt service coverage ratio for the non-defeased Swerdlow
Loans (based on all of the remaining Swerdlow Properties then
remaining subject to liens in favor of the lender) must be at
least equal to the greater of (a) the debt service coverage ratio
for all the Swerdlow Loans at origination (based on all the
Swerdlow Properties, including those to be released), and (b) the
debt service coverage ratio for all the Swerdlow Loans for the
twelve (12) full calendar months immediately preceding the
defeasance (based on all the Swerdlow Properties, including those
to be released),
(2) the loan-to-value ratio for all the non-defeased Swerdlow Loans
(based on all of the Swerdlow Loans remaining subject to the liens
of the Swerdlow Mortgages) must be at least equal to the lesser of
(a) the loan-to-value ratio for all the Swerdlow Loans at
origination (based on all the Swerdlow Properties, including those
to be released), and (b) the loan-to value ratio for the Swerdlow
Loans immediately prior to the defeasance (based on all the
Swerdlow Properties, including those to be released), as each is
determined by the lender in its reasonable discretion,
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<PAGE>
(3) confirmation from the Rating Agencies that such defeasance will
not result in a withdrawal, downgrade or qualification of the then
current ratings on the Certificates, and
(4) delivery of certain legal opinions and documentation.
The Alliance Loans. The "Alliance Loans" consist of five (5)
cross-defaulted and cross-collateralized Mortgage Loans with Cut-off Date
Balances of $22,529,265, $10,387,667, $7,111,557, $5,193,833 and $3,609,027,
collectively representing 3.9% of the Initial Pool Balance. Column originated
the Alliance Loans. The Alliance Loans are secured by Mortgages (the "Alliance
Mortgages") on the fee simple interests in five (5) Multifamily Rental
Properties (the "Alliance Properties"), four (4) of which are located in Texas
and one (1) of which is located in Florida. The Alliance Loan was made to a
special purpose limited partnership (the "Alliance Borrower"), the general
partner of which is Alliance OG Portfolio I, Inc. (the "Alliance GP"). The
Alliance Properties are controlled by Alliance Holdings, Inc.
Each Alliance Loan is a Balloon Loan which matures on February 1, 2009
and amortizes on a 30-year schedule. Each Alliance Loan accrues interest on an
Actual/360 Basis at a fixed Mortgage Rate of 7.22% per annum.
The Alliance Borrower may not voluntarily prepay the Alliance Loan
until six (6) months prior to maturity. After the second anniversary of the
Closing Date, the Alliance Borrower may obtain a release of any of the Alliance
Properties from the lien of the Alliance Mortgages through a defeasance of an
amount equal to 125% of the allocated loan amount for the Alliance Properties to
be released. Defeasance is only permitted upon the satisfaction of certain
conditions, including--
o delivery of certain legal opinions and documentation,
o the debt service coverage ratio for the non-defeased Alliance
Loans (based on the Alliance Properties then remaining subject to
the liens of the Alliance Mortgages) must be at least equal to the
greater of (a) the debt service coverage ratio for all the
Alliance Loans (based on all the Alliance Properties, including
those that are being released) immediately prior to the defeasance
and (b) the debt service coverage ratio for all the Alliance Loans
(based on all the Alliance Properties, including those that are
being released) at origination, and
o the loan-to-value ratio for all the Alliance Loans (based on all
the Alliance Properties, including those that are being released)
is not greater than 75%.
The Alliance Properties. The Alliance Properties are controlled by
Alliance Holdings, Inc. The Alliance Properties consist of the five (5)
Multifamily Rental Properties described in the table below.
<TABLE>
<CAPTION>
Allocated
No. of Yr. Built/ Occupancy Appraised Loan
Property Location Apts. Renovated at U/W Value Amount
- -------- -------- ------ --------- -------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Westchase Ranch Apts. Houston, TX 776 1977/1994 96% $29,150,000 $22,529,265
Westwood Village Apts. Irving, TX 320 1983/1996 92% $13,000,000 $10,387,667
Normandy Woods Apts. Houston, TX 268 1981/1997 95% $ 9,000,000 $ 7,111,557
Savoy Manor Apts. Houston, TX 192 1980/1997 97% $ 6,500,000 $ 5,193,833
San Marin Apts. Tampa, FL 193 1972/1997 86% $ 4,600,000 $ 3,609,027
</TABLE>
Property Management. The Alliance Properties are subject to management
agreements between the Alliance Borrower and Alliance Residential Management,
L.L.C. (the "Alliance Property Manager"), an affiliate of the Alliance Borrower.
The lender under the Alliance Loans may replace the Alliance Property Manager
only upon--
o the lender acquiring title to an Alliance Property by foreclosure
or otherwise,
o default by the Alliance Property Manager under the management
agreement,
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<PAGE>
o a fifty percent (50%) or more change in control of the ownership
of the Alliance Property Manager, if such change of control has
not been confirmed in writing by the Rating Agencies, or
o at any time for cause upon thirty (30) days' prior written notice.
Cash Management. The Alliance Borrower must cause all rents from the
Alliance Properties to be deposited into a "rent account" within one day of
receipt. Unless and until an event of default occurs under the Alliance Loans,
the Alliance Borrower will have access to such rent account.
Appraised Value. The Alliance Loans have a Cut-off Date LTV Ratio of
78.4% based upon an aggregate Appraised Value of the Alliance Properties of
$62,250,000 (determined as of January 15, 1999 - January 20, 1999).
Underwritten DSCR. The Underwritten DSCR of the Alliance Loans is
1.30x.
Additional Indebtedness Prohibited. The Alliance Borrower may not
encumber the Alliance Properties with subordinate financing.
Transfer of Ownership Interests. In general, the Alliance Mortgages
prohibit the transfer of interests in the Alliance Properties or controlling
interests in the Alliance Borrower without the consent of the lender under the
Alliance Loan, except in limited circumstances where the transfer is conditioned
upon receipt of written confirmation from the Rating Agencies to the effect that
such transfer will not result in any downgrade, withdrawal or qualification of
any of the ratings of the Certificates.
The Country Squire Loan. The "Country Squire Loan" has a Cut-off Date
Balance of $30,466,295, representing 2.4% of the Initial Pool Balance. The
Country Squire Loan was originated by Chastain Capital Corporation, an affiliate
of Lend Lease Real Estate Investments, Inc. and acquired at closing by GECC.
GECC participated in the underwriting and closing of the Country Squire Loan.
The Country Squire Loan is secured by a Mortgage (the "Country Squire Mortgage")
on the fee interest in a 726-unit multifamily project in Cordova, Tennessee (the
"Country Squire Property"). The Country Squire Loan was made to a special
purpose entity (the "Country Squire Borrower") affiliated with Fogelman
Properties ("Fogelman"). Fogelman is in the business of developing, acquiring
and rehabilitating multi-family properties. As of December 12, 1998, Fogelman
Properties had developed over 8,000 multi-family units. Through ownership and/or
management, Fogelman controls over 23,000 multifamily units, which are located
in six states throughout the southeastern United States.
The Country Squire Loan has a maturity date of January 1, 2009. The
Country Squire Loan amortizes on a 30- year schedule. The Country Squire Loan
accrues interest on a 30/360 Basis at a fixed Mortgage Rate of 6.65% per annum.
The Country Squire Borrower may not voluntarily prepay the Country
Squire Loan until the expiration of 36 months following the first day of the
first calendar month following the date of the loan (January 1, 2002).
Thereafter, the Country Squire Loan may be prepaid in whole but not in part if
accompanied by a Prepayment Premium equal to the greater of 1% of the principal
balance or a Yield Maintenance Charge. No Prepayment Consideration is due in
connection with prepayment within six months of the maturity date.
The Country Squire Property. The Country Squire Property is described
in the table below.
No. of Yr. Built/ Occupancy Appraised
Units Renovated at U/W Value
- ----- --------- ------ -----
726 1984/1987 94% $39,000,000
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<PAGE>
Property Management. The Country Squire Property is subject to a
long-term management agreement with Fogelman Management Group. The base
management fee under the management agreement is 5% of gross monthly revenue.
The management fee structure also provides for compensation for additional
services such as supervision of construction. The management agreement is
terminable by the lender upon the occurrence of an event of default under the
Country Squire Loan or upon an event of default under such management agreement.
Appraised Value. The Country Squire Loan has a Cut-off Date LTV Ratio
of 78.1% based upon an Appraised Value of the Country Squire Property that was
(as of August 13, 1998) equal to $39,000,000.
Underwritten DSCR. The Underwritten DSCR of the Country Squire Loan is
1.28x, based on trailing twelve (12) months Underwritten NCF as of July 31,
1998.
Additional Indebtedness Prohibited. The Country Squire Borrower may not
encumber the Country Squire Property with any subordinate financing.
Transfer of Ownership Interests. The Country Squire Mortgage prohibits
the transfer of interests in the Country Squire Property or in the Country
Squire Borrower without the consent of the lender under the Country Squire Loan,
except in connection with a sale or transfer of the Country Squire Property in
accordance with the Country Squire Loan documents, where such transfer is
conditioned upon written confirmation by the Rating Agencies of no downgrade,
withdrawal or qualification of the ratings of the Certificates. The Country
Squire Mortgage permits the following transfers without the consent of the
lenders: transfers of the partnership interests, membership interests or
corporate shares in the Country Squire Borrower or any person holding an
interest in Country Squire Borrower between or among partners, members or
shareholders existing as such on the date of the loan, or transfers of such
interests to immediate family members of existing partners, members or
shareholders or to trusts for estate planning purposes for the benefit of
existing partners, members or shareholders or members of the transferror's
immediate family, provided that in no event shall the Country Squire Borrower
and any person holding an interest in the Country Squire Borrower who is a
Single-Purpose Entity cease to be a Single-Purpose Entity and provided no such
transfer results in a change of control of the Country Squire Borrower.
The American Loans. The "American Loans" consist of four (4)
cross-collateralized Mortgage Loans with Cutoff Date Balances of $17,149,044,
$7,178,670, $4,469,918 and $515,269, collectively representing 2.3% of the
Initial Pool Balance. Column originated the American Loans. The American Loans
are secured by Mortgages (the "American Mortgages") on the fee simple interests
in one (1) industrial property and three (3) Office Properties (the "American
Properties"), which are located in Pennsylvania and New York, respectively. The
American Loans were made to a limited liability company and a special purpose
limited partnership (together, the "American Borrower"). The managing member of
the limited liability company is American DE/SPE 2, Inc., and the general
partner of the limited partnership is American DE/SPE 4, Inc. The American
Borrower is controlled by American Real Estate Investment, L.P.
Each American Loan accrues interest on an Actual/360 Basis at a fixed
Mortgage Rate of 7.55% per annum.
The American Borrowers may not voluntarily prepay the American Loans
prior to the 114th monthly installment of principal and interest. After the
second anniversary of the Closing Date, the American Borrower may obtain a
release of any of the American Properties from the lien of the American
Mortgages through a defeasance of an amount equal to 125% of the allocated loan
amount for the American Properties to be released. Defeasance is only permitted
upon the satisfaction of certain conditions, including--
o delivery of certain legal opinions and documentation, and
o the debt service coverage ratio for the non-defeased American
Loans (based on the American Properties then remaining subject to
the liens of the American Mortgages) is not less than the greater
of (i) the debt service coverage ratio for the American
Properties, including those that are being released and (ii) the
debt service coverage ratio of the American Loan (based on all the
American Properties, including those
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to be released) at the time of closing; and the loan-to-value
ratio of the American Properties which are not being released is
not less than 75%.
The American Properties. The American Properties consist of the one (1)
industrial property and three (3) Office Properties described in the table
below, which properties are located in Pennsylvania and New York, respectively.
<TABLE>
<CAPTION>
Yr. Built/ Occupancy Appraised
Property Location Square Feet Renovated at U/W Value
- -------- -------- ----------- --------- ------ -----
<S> <C> <C> <C> <C> <C>
2294 Molly Pitcher Highway* Chambersburg, PA 621,400 1960/1991 100% $21,500,000
5009 Campuswood Drive East Syracuse, NY 6,584 1987 100% $ 650,000
5010 Campuswood Drive East Syracuse, NY 70,163 1989 94% $ 5,600,000
5015 Campuswood Drive East Syracuse, NY 99,476 1992 100% $ 9,000,000
</TABLE>
- ----------------
* Industrial Property.
Mortgage Amount Limits. Each of the respective Mortgages encumbering
the American Properties located in New York secures the aggregate indebtedness
secured by the American Loans only to the extent of the Appraised Value (as set
forth above) for such Mortgaged Property.
Property Management. The American Properties are subject to management
agreements between the American Borrower and American Real Estate Management,
Inc. (the "American Property Manager"), an affiliate of the American Borrower.
The lender under the American Loans may replace the American Property Manager
only upon--
o default by the American Borrower under the American Mortgages,
o default by the American Property Manager under the management
agreement, or
o upon 30 days' prior written notice to the American Property
Manager.
Cash Management. During the entire term of the American Loans, the
American Borrower must cause all rents from the American Properties to be
deposited into a "rent account" within one day of receipt. Unless and until an
event of default occurs under the American Loans, the American Borrower will
have access to such rent account.
Appraised Value. The American Loans have a Cut-off Date LTV Ratio of
79.8% based upon an aggregate Appraised Value of the American Properties of
$36,750,000 (determined as of June 17, 1998 - August 31, 1998).
Underwritten DSCR. The Underwritten DSCR of the American Loans is
1.40x.
Additional Indebtedness Prohibited. The American Borrower may not
encumber the American Properties with subordinate financing without the prior
written consent of the lender.
Transfer of Ownership Interests. In general, the American Mortgages
prohibit the transfer of interests in the American Properties or controlling
interests in the American Borrower without the consent of the lender under the
American Loan, except in limited circumstances where the transfer is conditioned
upon receipt of written confirmation from the Rating Agencies to the effect that
such transfer will not result in any downgrade, withdrawal or qualification of
any of the ratings of the Certificates.
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Substitutions. Prior to May 1, 2008, the American Borrower may obtain
the release of one or more of the American Properties from the lien of the
American Mortgages upon the substitution of its fee interest in another property
of the same use as the released property, whether office, retail or industrial,
provided that certain terms and conditions are satisfied, including:
(1) the receipt by the lender of an appraisal of the substitute
property dated not more than sixty (60) days prior to the
substitution by an appraiser acceptable to the Rating Agencies,
indicating that the appraised value of the substitute property is
not less than the greater of (a) the value of the released
property as of the closing date and (b) the value of the released
property as of the date of such appraisal,
(2) the debt service coverage ratio for the American Loans (based on
the American Loans remaining subject to the lien of the American
Mortgages) after giving effect to the release and substitution
must be greater than or equal to the debt service coverage ratio
for the American Loans (based upon all of the American Properties
then encumbered by the lien of the American Mortgage) as of the
date immediately preceding the release and substitution, and
(3) written confirmation from the Rating Agencies that such release
and substitution will not result in a withdrawal, qualification or
downgrade of any of the then-current ratings on the Certificates.
The Mortgage Loan Sellers and the Originators
General. GECA acquired all of the GECA Mortgage Loans, representing
69.9% of the Initial Pool Balance, from GECC through a contribution of capital.
GECC directly originated all of the GECA Mortgage Loans, except that GECC
purchased the Winston Loans (as defined herein) after underwriting and closing
them as origination agent for the originator and purchased the Country Squire
Loan (as defined herein) after underwriting and closing it as participant with
the originator in the closing and underwriting process.
Column originated 91 of the Column Mortgage Loans, representing 26.5%
of the Initial Pool Balance. Column also sourced, underwrote, closed and
purchased from an entity other than Union Capital one (1) other Column Mortgage
Loan, representing 1.1% of the Initial Pool Balance. Column acquired, directly
or through an affiliate, all ten (10) of the remaining Column Mortgage Loans,
representing 2.4% of the Initial Pool Balance, from Union Capital. Union Capital
directly originated all the Column Mortgage Loans that it transferred to Column
and its affiliates.
GE Capital Access, Inc. and General Electric Capital Corporation. GECA
is a wholly owned subsidiary of General Electric Capital Corporation ("GECC").
Since 1996, GECA and its affiliates have originated or acquired approximately $5
billion of commercial mortgage loans in connection with its capital markets
programs. Through its GE Capital Real Estate division, GECC has been lending and
investing in the commercial real estate industry for over 25 years and has a
portfolio of approximately $15 billion of assets. GE Capital Real Estate
originates and acquires commercial mortgage loans through approximately 20
offices located throughout North America.
Column Financial, Inc. Column is a corporation organized under the laws
of Delaware, and its principal offices are in Atlanta, Georgia. Column
underwrites and closes multifamily and commercial mortgage loans through its own
origination offices and various correspondents in local markets across the
country. Loan underwriting and quality control procedures are undertaken
principally in thirteen regional offices located in Bethesda, Maryland; Dallas,
Texas; Chicago, Illinois; Cleveland, Ohio; Denver, Colorado; Hollywood, Florida;
Houston, Texas; Los Angeles, California; New York, New York; Newport Beach,
California; Norwalk, Connecticut; San Francisco, California and Seattle,
Washington. Column has closed more than $6.2 billion of commercial and
multifamily mortgage loans since beginning operations in 1993. Column is a
wholly-owned subsidiary of DLJ Mortgage Capital, Inc., which in turn is a
wholly-owned subsidiary of Donaldson, Lufkin & Jenrette, Inc., the parent of the
Depositor and DLJSC.
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Union Capital Investments LLC. Union Capital is a limited liability
company, with its principal offices in Atlanta, Georgia. Union Capital is
primarily involved in conduit lending, and it originates, underwrites and closes
first mortgage loans secured by all types of multifamily and commercial real
estate throughout the United States. The principals of Union Capital have been
involved in the conduit lending field since January 1993.
The information set forth in this Prospectus Supplement concerning the
Mortgage Loan Sellers and the Originators has, in each case, been provided by
such party, and neither the Depositor nor either Underwriter makes any
representation or warranty as to the accuracy or completeness of such
information.
Assignment of the Mortgage Loans
On or before the Closing Date, the following transfers of the Mortgage
Loans will occur. In each case, the transferor will assign the subject Mortgage
Loans, without recourse, to the transferee.
- ------------------- -------------------
GECA Column
- ------------------- -------------------
All GECA All Column
Mortgage Loans Mortgage Loans
------------------------
Depositor
------------------------
All Mortgage Loans
------------------------
Trust
------------------------
In connection with the foregoing transfers, each Mortgage Loan Seller
will be required to deliver the following documents, among others, to the
Trustee (and, upon request, to the Master Servicer) with respect to its Mortgage
Loans--
o the original Mortgage Note, endorsed (without recourse) to the
order of the Trustee (or, if such original Mortgage Note has been
lost, a copy thereof, together with a lost note affidavit);
o the original or a copy of the related Mortgage(s), together with
originals or copies of any intervening assignments of such
document(s), in each case (unless the particular document has not
been returned from the applicable recording office) with evidence
of recording thereon;
o the original or a copy of any related assignment(s) of leases and
rents, together with originals or copies of any intervening
assignments of such document(s), in each case (unless the
particular document has not been returned from the applicable
recording office) with evidence of recording thereon;
o a completed assignment of each related Mortgage in favor of the
Trustee, in recordable form (or a certified copy of such
assignment as sent for recording);
o a completed assignment of any related assignment(s) of leases and
rents in favor of the Trustee, in recordable form (or a certified
copy of such assignment as sent for recording);
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o originals or copies of all assumption, modifications and
substitution agreements in those instances where the terms or
provisions of the Mortgage or Mortgage Note have been modified or
the Mortgage Loan has been assumed;
o an original or copy of the related lender's title insurance policy
(or, if a title insurance policy has not yet been issued, a
commitment for title insurance "marked-up" at the closing of such
Mortgage Loan);
o in those cases where applicable, the original or a copy of the
related ground lease.
The Trustee (either directly or through a custodian on its behalf (the
"Custodian")) is required to hold all of the documents so delivered to it with
respect to the Mortgage Loans in trust for the benefit of the Certificateholders
and, within a specified period of time following such delivery, to conduct a
review of such documents. All of the above-described documents actually
delivered to the Trustee in respect of any Mortgage Loan will collectively
constitute the "Mortgage File" for such Mortgage Loan. The scope of the
Trustee's review of each Mortgage File is, in general, limited solely to
confirming that certain of the documents listed above have been received. None
of the Trustee, the Master Servicer, the Special Servicer or the Custodian is
under any duty or obligation to inspect, review or examine any of the documents
relating to the Mortgage Loans to determine whether such document is valid,
effective, enforceable, in recordable form or otherwise appropriate for the
represented purpose.
The Pooling Agreement will require the Trustee, within a specified
period following the later of the Closing Date and the date on which all
recording information necessary to complete the subject document is received by
the Trustee, to cause each of the assignments of recorded loan documents in its
favor described above to be submitted for recording in the real property records
of the jurisdiction in which the related Mortgaged Property is located. Because
the Mortgage Loans are, in general, newly originated, many such assignments
cannot be completed and recorded until the related Mortgage and/or assignment of
leases and rents, reflecting the necessary recording information, is returned
from the applicable recording office.
Representations and Warranties
GECA will make with respect to each GECA Mortgage Loan, Union Capital
will make with respect to each Column Mortgage Loan originated by Union Capital
and Column will make with respect to each other Column Mortgage Loan, as of the
Closing Date, certain representations and warranties generally to the effect
listed below, together with such other representations and warranties as may be
required by the Rating Agencies; provided that the respective representations
and warranties of GECA, Union Capital and Column may not be identical. For
purposes of this Prospectus Supplement, GECA will constitute the "Warranting
Party" with respect to each GECA Mortgage Loan, Union Capital will constitute
the "Warranting Party" with respect to each Column Mortgage Loan originated by
Union Capital and Column will constitute the "Warranting Party" with respect to
each other Column Mortgage Loan. The representations and warranties to be made
in respect of each Mortgage Loan by the related Warranting Party will include:
o The information relating to such Mortgage Loan, substantially
similar to that set forth in the loan schedule attached to the
Pooling Agreement, will be accurate and complete in all material
respects as of the Cut-off Date.
o Immediately prior to its transfer and assignment of such Mortgage
Loan, such Warranting Party had good and marketable title to, and
was the sole owner of, such Mortgage Loan.
o The related Mortgage constitutes a valid enforceable first lien
upon the related Mortgaged Property, free and clear of all liens
and encumbrances other than certain permitted liens and
encumbrances.
o The related Mortgage has not been satisfied, canceled, rescinded
or subordinated.
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o To such Warranting Party's knowledge, there is no proceeding
pending for the total or partial condemnation of the related
Mortgaged Property.
o The lien of the related Mortgage is insured by an American Land
Title Association or equivalent form of lender's title insurance
policy (or there exists a marked up title insurance commitment to
issue such a policy or a pro forma policy on which the required
premium has been paid) insuring the related Originator, its
successors and assigns, as to the first priority lien of the
related Mortgage in the original principal amount of such Mortgage
Loan after all advances of principal, subject only to (i) the lien
of current real property taxes, ground rents, water charges, sewer
rents and assessments not yet due and payable and (ii) such other
exceptions (general and specific) set forth in such policy.
o The proceeds of such Mortgage Loan have been fully disbursed
(except in those cases where the full amount of the Mortgage Loan
has been made, but a portion thereof is being held back pending
satisfaction of certain leasing criteria, repairs and other
matters with respect to the related Mortgaged Property) and there
is no requirement for future advances thereunder.
o If the related Mortgage is a deed of trust, a trustee, duly
qualified under applicable law to serve as such, has been properly
designated and currently so serves.
o To such Warranting Party's knowledge, the related Mortgaged
Property is free and clear of any damage that would materially and
adversely affect its value as security for such Mortgage Loan.
o Each Mortgage Note, Mortgage and other agreement executed by or on
behalf of the related Borrower in connection with such Mortgage
Loan is the legal, valid and binding obligation of the related
maker thereof (subject to any non-recourse provisions contained in
any of the foregoing agreements and any applicable state
anti-deficiency or market value limit deficiency legislation),
enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement
of creditors' rights generally, or by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
The representations and warranties made by GECA, Column and Union
Capital as described above will be assigned by the Depositor to the Trustee
pursuant to the Pooling Agreement. If there exists a breach of any of the
above-described representations and warranties made by GECA, Column or Union
Capital, and such breach materially and adversely affects the value of the
subject Mortgage Loan or the interests of the Certificateholders therein, such
breach will constitute a "Material Breach" of such representation and warranty.
The rights of the Trust against the applicable Warranting Party with respect to
any such Material Breach are described under "--Cures, Repurchases and
Substitutions" below.
Cures, Repurchases and Substitutions
If there exists a Material Breach of any of the representations and
warranties made with respect to any of the Mortgage Loans, as discussed under
"--Representations and Warranties" above, the related Warranting Party will be
required either:
(a) to cure the Material Breach in all material respects; or
(b) subject to the discussion below regarding substitution, to
repurchase such Mortgage Loan at a price (the "Purchase
Price") generally equal to the sum of
(i) the unpaid principal balance of such Mortgage Loan,
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(ii) accrued and unpaid interest at the related Mortgage
Rate to but not including the Due Date occurring in the
Collection Period in which such repurchase occurs and
(iii) the amount of any related unreimbursed Servicing
Advances and, to the extent not otherwise included in
such Servicing Advances, the costs and expenses of
enforcing such repurchase obligation (provided that, in
the case of a Column Mortgage Loan originated by Union
Capital, Union Capital may be required to repurchase
such Mortgage Loan at a lesser price, with Column to
make up the difference).
The time period within which the applicable Warranting Party must complete such
cure or repurchase will be limited to 90 days (or, if it is diligently
attempting to correct the problem and certain other conditions are satisfied,
180 days) following its receipt of notice of the subject Material Breach.
Notwithstanding the foregoing, if any Warranting Party is required to
repurchase any Mortgage Loans as a result of a Material Breach of any of its
representations and warranties, as contemplated above, then such Warranting
Party may, at any time during the three (3) month period commencing on the
Closing Date (or at any time during the two-year period commencing on the
Closing Date if the affected Mortgage Loan is a "defective obligation" within
the meaning of Section 860G(a)(4)(B)(ii) of the Code and Treasury Regulation
Section 1.860G-2(f)), in lieu of repurchasing the affected Mortgage Loan (but in
no event later than such repurchase would have to have been completed):
(a) replace such Mortgage Loan with one or more substitute
mortgage loans (each, a "Replacement Mortgage Loan") that (i) has
certain payment terms comparable to the Mortgage Loan to be replaced
and (ii) is otherwise acceptable to the Controlling Class
Representative (or, if none has been appointed, to the Holder(s) of
Certificates representing a majority interest in the Controlling
Class); and
(b) pay an amount (a "Substitution Shortfall Amount") generally
equal to the excess of the applicable Purchase Price for the Mortgage
Loan to be replaced (calculated as if it were to be repurchased instead
of replaced), over the unpaid principal balance of the applicable
Replacement Mortgage Loan(s) as of the date of substitution, after
application of all payments due on or before such date, whether or not
received;
provided that no such substitution will be permitted unless, as confirmed in
writing by each Rating Agency, it would not result in a qualification, downgrade
or withdrawal of the rating then assigned to any Class of Certificates by either
Rating Agency.
None of GECA, Column or Union Capital is obligated, however, to replace
(rather than repurchase) any Mortgage Loan as to which there is a Material
Breach. Any such substitution will be at the sole discretion of the responsible
Warranting Party. Furthermore, the Certificateholders of the Controlling Class
and the Controlling Class Representative, as their representative, will
generally have a disincentive to find any prospective Replacement Mortgage Loan
acceptable.
If the applicable Warranting Party fails to repurchase or replace any
Mortgage Loan affected by a Material Breach of such Warranting Party's
representations and warranties, none of the Depositor, either Underwriter or,
except as described in the next paragraph, any other person will have any
obligation to do so.
Notwithstanding the foregoing, Column will make the same
representations and warranties (including those discussed under
"--Representations and Warranties" above) with respect to each Column Mortgage
Loan originated by Union Capital as it does with respect to each other Column
Mortgage Loan and will have similar cure, repurchase or replacement obligations
in the event of Material Breaches thereof. In general, however, if (i) there
exists a breach of any such representation or warranty and a breach of any
representation or warranty made by Union Capital with respect to such Mortgage
Loan, (ii) such breaches otherwise give rise to a cure, repurchase or
replacement obligation on the part of
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both Column and Union Capital and (iii) Union Capital fails to satisfy its cure,
repurchase or replacement obligation within the period provided therefor, then
Column will be required to cure the Material Breach of its representation or
warranty as to, or repurchase or replace, the affected Mortgage Loan. For this
purpose, the cure, repurchase or replacement period for Column (as otherwise
described above) will be deemed to commence only upon expiration of the cure,
repurchase or replacement period for Union Capital.
Each of GECA, Column and Union Capital may only have limited assets
with which to fulfill any repurchase/substitution obligations that may arise in
respect of breaches of its representations or warranties. There can be no
assurance that GECA, Column or Union Capital has or will have sufficient assets
with which to fulfill any repurchase/substitution obligations that may arise.
Expenses incurred by the Master Servicer and the Trustee with respect to
enforcing any such repurchase/substitution obligation will be borne by the
applicable Warranting Party (or, if not, will be reimbursable out of the
Certificate Account).
Changes in Mortgage Pool Characteristics
The description in this Prospectus Supplement of the Mortgage Pool and
the Mortgaged Properties is based upon the Mortgage Pool as it is expected to be
constituted at the time the Offered Certificates are issued, with adjustments
for the scheduled principal payments due on the Mortgage Loans on or before the
Cut-off Date. Prior to the issuance of the Offered Certificates, one or more
Mortgage Loans may be removed from the Mortgage Pool if the Depositor deems such
removal necessary or appropriate. A limited number of other mortgage loans may
be included in the Mortgage Pool prior to the issuance of the Offered
Certificates, unless including such mortgage loans would materially alter the
characteristics of the Mortgage Pool as described in this Prospectus Supplement.
The Depositor believes that the information set forth in this Prospectus
Supplement will be generally representative of the characteristics of the
Mortgage Pool as it will be constituted at the time the Offered Certificates are
issued; however, the range of Mortgage Rates and maturities, as well as the
other characteristics of the Mortgage Loans described in this Prospectus
Supplement, may vary, and the actual Initial Pool Balance may be as much as 5%
larger or smaller than the Initial Pool Balance set forth in this Prospectus
Supplement.
A Current Report on Form 8-K will be available to purchasers of the
Offered Certificates on or shortly after the Closing Date. Such Current Report
on Form 8-K will be filed, together with the Pooling Agreement, with the
Securities and Exchange Commission within fifteen days after the initial
issuance of the Offered Certificates. In the event Mortgage Loans are removed
from or added to the Mortgage Pool such removal or addition will be noted in
such Current Report on Form 8-K.
SERVICING OF THE MORTGAGE LOANS
General
The Pooling Agreement provides that the Master Servicer and the Special
Servicer must each service and administer the Mortgage Loans and any REO
Properties for which it is responsible, directly or through sub-servicers, for
the benefit of the Certificateholders (as a collective whole), in accordance
with any and all applicable laws and the express terms of the Pooling Agreement
and the respective Mortgage Loans. Furthermore, to the extent consistent with
the foregoing, the Master Servicer and the Special Servicer must each service
and administer the Mortgage Loans and any REO Properties for which it is
responsible in accordance with the following standard (the "Servicing
Standard"):
o with the higher of (i) the same care, skill, prudence and
diligence with which the Master Servicer or the Special Servicer,
as the case may be, generally services and administers comparable
mortgage loans and real properties for other third parties
pursuant to agreements similar to the Pooling Agreement, giving
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due consideration to customary and usual standards of practice of
prudent institutional commercial mortgage lenders and loan
servicers servicing and administering their own mortgage loans and
real properties, and (ii) the same care, skill, prudence and
diligence with which the Master Servicer or the Special Servicer,
as the case may be, generally services comparable mortgage loans
and real properties owned by it;
o with a view to the timely collection of all Scheduled P&I Payments
under the Mortgage Loans, the full collection of all Prepayment
Premiums and Yield Maintenance Charges that may become payable
under the Mortgage Loans and, if a Mortgage Loan comes into and
continues in default and no satisfactory arrangements can be made
for the collection of the delinquent payments (including payments
of Prepayment Premiums and Yield Maintenance Charges), the
maximization of the recovery on such Mortgage Loan to
Certificateholders (as a collective whole) on a present value
basis; and
o without regard to:
(i) any relationship that the Master Servicer or the Special
Servicer, as the case may be, or any of its affiliates may
have with the related Borrower or any other party to the
Pooling Agreement;
(ii) the ownership of any Certificate by the Master Servicer or
the Special Servicer, as the case may be, or by any of its
affiliates;
(iii) any obligations of the Master Servicer or the Special
Servicer, as the case may be, to make Advances;
(iv) the right of the Master Servicer or the Special Servicer, as
the case may be, or any of its affiliates to receive
compensation for its services or reimbursement of costs
under the Pooling Agreement generally or with respect to any
particular transaction;
(v) the ownership by the Master Servicer or the Special
Servicer, as the case may be, or any of its affiliates, of
any other mortgage loans or real property or of the right to
service or manage for others any other mortgage loans or
real property; and
(vi) any obligation of the Master Servicer or the Special
Servicer, as the case may be, or any affiliate thereof, as a
Mortgage Loan Seller, to pay any indemnity or cure a breach
of representation or warranty with respect to, or to
repurchase or replace, any Mortgage Loan.
In general, the Master Servicer will be responsible for the servicing
and administration of--
o all Mortgage Loans as to which no Servicing Transfer Event (as
defined below) has occurred, and
o all Corrected Mortgage Loans (also as defined below).
The Special Servicer, on the other hand, will be responsible for the
servicing and administration of--
o each Mortgage Loan (other than a Corrected Mortgage Loan) as to
which a Servicing Transfer Event has occurred (each, a "Specially
Serviced Mortgage Loan"), and
o each Mortgaged Property that has been acquired by the Trust in
respect of a defaulted Mortgage Loan through foreclosure,
deed-in-lieu of foreclosure or otherwise (each, upon acquisition,
an "REO Property").
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Corrected Mortgage Loans and Mortgage Loans as to which no Servicing
Transfer Event has occurred are collectively referred to in this Prospectus
Supplement as "Performing Mortgage Loans"; and Specially Serviced Mortgage Loans
and REO Properties are collectively referred to in this Prospectus Supplement as
"Specially Serviced Assets". Performing Mortgage Loans will include Mortgage
Loans which may be delinquent, but not to the point of resulting in a Servicing
Transfer Event.
Despite the foregoing, the Pooling Agreement will require the Master
Servicer to continue to collect information and prepare reports to the Trustee
required thereunder with respect to any Specially Serviced Assets and,
otherwise, to render certain incidental services with respect to any Specially
Serviced Assets.
A Mortgage Loan will become a Specially Serviced Mortgage Loan (if it
has not already done so) upon the occurrence of a Servicing Transfer Event. Each
of the following events will constitute a "Servicing Transfer Event" in respect
of any Mortgage Loan:
(1) the failure of the related Borrower to make when due any Scheduled
P&I Payment (including a Balloon Payment) or any other material
payment required under the related Mortgage Note or the related
Mortgage(s), which failure continues, or the Master Servicer
determines in its good faith and reasonable judgment will
continue, unremedied for 60 days;
(2) if the Master Servicer or any of its affiliates then owns a
material economic interest in the related Borrower, such Borrower
fails to make any Scheduled P&I Payment and the Master Servicer is
required to make a P&I Advance in respect thereof;
(3) the determination by the Master Servicer in its good faith and
reasonable judgment that a default in the making of a Scheduled
P&I Payment (including a Balloon Payment) or any other payment
required under the related Mortgage Note or the related
Mortgage(s) is likely to occur within 30 days and either (a) such
default is likely to remain unremedied for at least 60 days or (b)
the related Borrower has requested a material modification of the
related Mortgage Loan (other than the waiver of a "due-on-sale"
clause or the extension of the related maturity date);
(4) the determination by the Master Servicer in its good faith and
reasonable judgment that a default, other than a payment default,
has occurred that may materially impair the value of the related
Mortgaged Property as security for the Mortgage Loan, which
default continues unremedied for the applicable cure period under
the terms of the Mortgage Loan (or, if no cure period is
specified, for 30 days);
(5) certain events of bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities, or similar proceedings in
respect of or relating to the related Borrower or the related
Mortgaged Property, and certain actions by or on behalf of the
related Borrower indicating its bankruptcy, insolvency or
inability to pay its obligations; or
(6) the Master Servicer shall have received notice of the commencement
of foreclosure or similar proceedings with respect to the related
Mortgaged Property or Properties.
So long as no other Servicing Transfer Event then exists, a Mortgage
Loan will cease to be a Specially Serviced Mortgage Loan (and will become a
"Corrected Mortgage Loan" as to which the Master Servicer will re-assume
servicing responsibilities) if and when:
(a) with respect to the circumstances described in clauses (1) and (2)
of the preceding paragraph, the related Borrower has made three
consecutive full and timely Scheduled P&I Payments under the terms
of such Mortgage Loan (as such terms may be changed or modified in
connection with a bankruptcy or similar proceeding involving the
related Borrower or by reason of a modification, waiver or
amendment granted or agreed to by the Master Servicer or the
Special Servicer);
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(b) with respect to the circumstances described in clauses (3) and (5)
above, such circumstances cease to exist in the good faith and
reasonable judgment of the Special Servicer;
(c) with respect to the circumstances described in clause (4) above,
such default is cured; and
(d) with respect to the circumstances described in clause (6) above,
such proceedings are terminated.
Set forth below is a description of certain pertinent provisions of the
Pooling Agreement relating to the servicing of the Mortgage Loans. You should
also refer to the Prospectus, in particular the section captioned "Description
of the Pooling Agreements", for additional important information regarding the
terms and conditions of the Pooling Agreement as such terms and conditions
relate to the rights and obligations of the Master Servicer and the Special
Servicer.
The Master Servicer and the Special Servicer
The Master Servicer. GE Capital Loan Services, Inc., a Delaware
corporation ("GECLS"), will act as Master Servicer with respect to the Mortgage
Pool. GECLS is a wholly owned subsidiary of GECIA Holdings, Inc., which is
itself a wholly owned subsidiary of GE Capital Services Corporation, which is
itself a wholly owned subsidiary of the General Electric Company and an
affiliate of GECA and GECC. GECLS's principal servicing offices are located at
363 N. Sam Houston Parkway E., Suite 1200, Houston, Texas 77060.
As of December 31, 1998, GECLS serviced approximately 2,805 commercial
and multifamily loans, totaling approximately $17.8 billion in aggregate
outstanding principal amounts, including loans securitized in mortgage-backed
securities transactions.
The information set forth herein concerning GECLS has been provided by
it, and neither the Depositor nor either Underwriter makes any representation or
warranty as to the accuracy or completeness of such information.
The Special Servicer.
The information concerning set forth in this Prospectus Supplement has
been provided by it, and neither the Depositor nor either Underwriter makes any
representation or warranty as to the accuracy thereof.
Servicing and Other Compensation and Payment of Expenses
The Master Servicing Fee. The principal compensation to be paid to the
Master Servicer in respect of its master servicing activities will be the Master
Servicing Fee.
The "Master Servicing Fee"--
o will be earned in respect of each and every Mortgage Loan
(including Specially Serviced Mortgage Loans and Mortgage Loans as
to which the related Mortgaged Property has become an REO
Property),
o will be computed on a 30/360 Basis and accrue at 0.048% per annum
(the "Master Servicing Fee Rate") on the same principal amount as
interest accrues or is deemed to accrue from time to time in
respect of each and every Mortgage Loan, and
o will be payable monthly from amounts received in respect of
interest on the particular Mortgage Loan as to which it was
earned.
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Additional Master Servicing Compensation. As additional servicing
compensation, the Master Servicer will be entitled to receive--
o All Prepayment Interest Excesses, if any, collected in respect of
the entire Mortgage Pool. If a Borrower prepays its Mortgage Loan,
in whole or in part, after the related Due Date during any
Collection Period, the amount of interest (less the amount of
related Master Servicing Fees payable therefrom and any Default
Interest (as defined below) and Additional Interest included
therein) will, to the extent actually collected, constitute a
"Prepayment Interest Excess".
o All modification fees, assumption fees, assumption application
fees and other comparable transaction fees and charges, if any,
collected in respect of Performing Mortgage Loans.
o All late payment charges and Default Interest, if any, that were
collected in respect of any Mortgage Loan and that accrued while
such Mortgage Loan was a Performing Mortgage Loan (but only to the
extent that any such late payment charges and Default Interest
have not otherwise been applied to pay the Master Servicer, the
Special Servicer or the Trustee, as applicable, interest on
Advances made thereby with respect to the related Mortgage Loan as
described in this Prospectus Supplement). "Default Interest"
is any interest that (i) accrues on a defaulted Mortgage Loan
solely by reason of the subject default and (ii) is in excess of
all interest at the related Mortgage Rate and any Additional
Interest accrued on such Mortgage Loan.
In addition, the Master Servicer will be authorized to invest or direct
the investment of funds held in any and all accounts maintained by it that
constitute part of the Certificate Account, or in any and all accounts
maintained by it that constitute escrow and/or reserve accounts, in certain
government securities and other investment grade obligations specified in the
Pooling Agreement ("Permitted Investments"). The Master Servicer will be
entitled to retain any interest or other income earned on such funds and will be
required to cover any losses of principal from its own funds without any right
to reimbursement. The Master Servicer will not be obligated, however, to cover
any losses resulting from the bankruptcy or insolvency of any depository
institution or trust company holding any account required to be maintained under
the Pooling Agreement.
Prepayment Interest Shortfalls. If a Borrower prepays a Mortgage Loan,
in whole or in part, prior to the related Due Date during any Collection Period
and does not pay interest on such prepayment through such Due Date, then the
shortfall in a full month's interest (less the amount of related Master
Servicing Fees and, if applicable, exclusive of any related Default Interest or
Additional Interest) on such prepayment will constitute a "Prepayment Interest
Shortfall".
The Pooling Agreement will provide that, if any Prepayment Interest
Shortfalls are incurred with respect to the Mortgage Pool during any Collection
Period, the Master Servicer must make a non-reimbursable payment (a
"Compensating Interest Payment") with respect to the related Distribution Date
in an amount equal to the lesser of:
(a) the aggregate of all Prepayment Interest Shortfalls incurred with
respect to the Mortgage Pool during such Collection Period, and
(b) the aggregate of all Master Servicing Fees and Prepayment Interest
Excesses, if any, collected with respect to the Mortgage Pool
during such Collection Period.
Any Compensating Interest Payment made by the Master Servicer with
respect to any Distribution Date will be included among the amounts
distributable as principal and interest on the Certificates on such Distribution
Date as described under "Description of the Offered Certificates--Distributions"
in this Prospectus Supplement. If the amount of the Compensating Interest
Payment made by the Master Servicer with respect to any Distribution Date is
less than the
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aggregate of all Prepayment Interest Shortfalls incurred with respect to the
Mortgage Pool during the related Collection Period, such shortfall (the "Net
Aggregate Prepayment Interest Shortfall" for such Distribution Date) will be
allocated among the respective Classes of REMIC Regular Certificates, in
reduction of the interest payable thereon, as and to the extent described under
"Description of the Offered Certificates--Allocation of Realized Losses and
Certain Other Shortfalls and Expenses" in this Prospectus Supplement.
Principal Special Servicing Compensation. The principal compensation to
be paid to the Special Servicer in respect of its special servicing activities
will be--
o the Special Servicing Fee,
o the Workout Fee, and
o the Liquidation Fee.
The Special Servicing Fee. The "Special Servicing Fee"--
o will be earned in respect of each and every Specially Serviced
Mortgage Loan, if any, and each and every Mortgage Loan, if
any, as to which the related Mortgaged Property has become an
REO Property,
o will be computed on a 30/360 Basis and accrue at 0.25% per
annum on the Stated Principal Balance outstanding from time to
time in respect of each and every Specially Serviced Mortgage
Loan, if any, and each and every Mortgage Loan, if any, as to
which the related Mortgaged Property has become an REO
Property, and
o will be payable monthly from general collections on all the
Mortgage Loans and any REO Properties on deposit in the
Certificate Account from time to time.
Special Servicing Fees and Master Servicing Fees are collectively
referred to in this Prospectus Supplement as "Servicing Fees".
The Workout Fee. The Special Servicer will, in general, be entitled to
receive a Workout Fee with respect to each Corrected Mortgage Loan. As to each
Corrected Mortgage Loan, the "Workout Fee" will be payable out of, and will be
calculated by application of a "Workout Fee Rate" of 1.0% to, each collection of
interest (other than Default Interest and Additional Interest) and principal
(including scheduled payments, prepayments and Balloon Payments at maturity)
received on such Mortgage Loan for so long as it remains a Corrected Mortgage
Loan (net of any portion of such collection payable or reimbursable to the
Master Servicer, the Special Servicer or the Trustee for Master Servicing Fees
and Advances). The Workout Fee with respect to any Corrected Mortgage Loan will
cease to be payable if such loan again becomes a Specially Serviced Mortgage
Loan or if the related Mortgaged Property becomes an REO Property. Nevertheless,
a new Workout Fee would become payable if and when such Mortgage Loan again
became a Corrected Mortgage Loan. If the Special Servicer is terminated (other
than for cause) or resigns, it shall retain the right to receive any and all
Workout Fees payable with respect to Mortgage Loans that became Corrected
Mortgage Loans during the period that it acted as Special Servicer and remained
Corrected Mortgage Loans at the time of such termination or resignation. The
successor Special Servicer shall not be entitled to any portion of such Workout
Fees. Although Workout Fees are intended to provide the Special Servicer with an
incentive to better perform its duties, the payment of any Workout Fee will
reduce amounts distributable to Certificateholders.
The Liquidation Fee. The Special Servicer will be entitled to receive a
Liquidation Fee with respect to each Specially Serviced Mortgage Loan as to
which the Special Servicer obtains a full or discounted payoff from the related
Borrower and, except as otherwise described below, with respect to any Specially
Serviced Mortgage Loan or REO Property as to which the Special Servicer receives
any Liquidation Proceeds, Condemnation Proceeds or Insurance
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Proceeds (each as defined in the Prospectus). As to each such Specially Serviced
Mortgage Loan and REO Property, the "Liquidation Fee" will be payable from, and
will be calculated by application of a "Liquidation Fee Rate" of 1.0% to, the
related payment or proceeds (other than any portion thereof that represents a
recovery of Default Interest or Additional Interest, and net of any portion
thereof payable or reimbursable to the Master Servicer, the Special Servicer or
the Trustee for Master Servicing Fees and Advances).
Notwithstanding anything to the contrary described above, no
Liquidation Fee will be payable based on, or out of, Liquidation Proceeds
received in connection with:
o the repurchase or replacement of any Mortgage Loan by GECA,
Column or Union Capital for a breach of representation or
warranty (see "Description of the Mortgage Pool--Cures,
Repurchases and Substitutions" in this Prospectus Supplement);
o the purchase of any defaulted Mortgage Loan or REO Property by
the Master Servicer, the Special Servicer or any Holder or
Holders of Certificates evidencing a majority interest in the
Controlling Class (see "--Sale of Defaulted Mortgage Loans"
below); or
o the purchase of all of the Mortgage Loans and REO Properties
by the Master Servicer, the Special Servicer or any Holder or
Holders of Certificates evidencing a majority interest in the
Controlling Class in connection with the termination of the
Trust (see "Description of the Offered
Certificates--Termination" in this Prospectus Supplement).
Although Liquidation Fees are intended to provide the Special Servicer
with an incentive to better perform its duties, the payment of any Liquidation
Fee will reduce amounts distributable to Certificateholders.
Additional Special Servicing Compensation. As additional special
servicing compensation, the Special Servicer will be entitled to receive--
o all modification fees, assumption fees, assumption application
fees and other comparable transaction fees and charges, if
any, collected in respect of the Specially Serviced Mortgage
Loans, and
o all late payment charges and Default Interest, if any, that
were collected in respect of any Mortgage Loan and that
accrued while such Mortgage Loan was a Specially Serviced
Mortgage Loan (but only to the extent that such late payment
charges and Default Interest have not otherwise been applied
to pay the Master Servicer, the Special Servicer or the
Trustee, as applicable, interest on Advances made thereby with
respect to the related Mortgage Loan as described in this
Prospectus Supplement).
In addition, the Special Servicer will be authorized to invest or
direct the investment of funds held in any accounts maintained by it that
constitute part of the Certificate Account, in Permitted Investments. The
Special Servicer will be entitled to retain any interest or other income earned
on such funds and will be required to cover any losses of principal from its own
funds without any right to reimbursement. The Special Servicer will not be
obligated, however, to cover any losses resulting from the bankruptcy or
insolvency of any depository institution or trust company holding any account
required to be maintained under the Pooling Agreement.
Sub-Servicing Compensation. The Master Servicer and the Special
Servicer will each be responsible for all compensation payable to the
sub-servicers retained thereby. Such sub-servicers may, in some cases, be
entitled to a significant portion of the servicing compensation described above
as being payable to Master Servicer or the Special Servicer, as applicable.
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Payment of Expenses; Servicing Advances. Each of the Master Servicer
and the Special Servicer will be required to pay its overhead and any general
and administrative expenses incurred by it in connection with its servicing
activities under the Pooling Agreement. Neither the Master Servicer nor the
Special Servicer will be entitled to reimbursement for these expenses except as
expressly provided in the Pooling Agreement.
Any and all customary, reasonable and necessary "out of pocket" costs
and expenses incurred by the Master Servicer or the Special Servicer in
connection with the servicing of a Mortgage Loan after a default, delinquency or
other unanticipated event, or in connection with the administration of any REO
Property, will constitute Servicing Advances. Servicing Advances will be
reimbursable from future payments and other collections, including in the form
of Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds, on or in
respect of the related Mortgage Loan or REO Property ("Related Proceeds"). In
addition, the Special Servicer may once per calendar month require the Master
Servicer to reimburse the Special Servicer for any Servicing Advances made by
it. Upon so reimbursing the Special Servicer for any Servicing Advance, the
Master Servicer will thereafter be deemed to have been made such Advance.
In general, the Special Servicer may request the Master Servicer to
make Servicing Advances in respect of a Specially Serviced Mortgage Loan or REO
Property (in lieu of the Special Servicer making such Advances). Any such
request is to be made, in writing, in a timely manner that does not adversely
affect the interests of any Certificateholder (and, in any event, to the extent
reasonably practicable, at least five (5) business days in advance of the date
on which the Servicing Advance is required to be made). The Master Servicer must
make any such Servicing Advance that it is requested by the Special Servicer to
so make within ten days of the Master Servicer's receipt of such request. If the
request is timely and properly made, the Special Servicer will be relieved of
any obligations with respect to an Advance that it timely requests the Master
Servicer to make (regardless of whether or not the Master Servicer makes that
Advance).
If the Master Servicer or the Special Servicer is required under the
Pooling Agreement to make a Servicing Advance, but neither does so within 15
days after such Servicing Advance is required to be made, then the Trustee will
be required: (a) if it has actual knowledge of such failure, to give the
defaulting party notice of its failure; and (b) if such failure continues for
three more business days, to make such Servicing Advance.
Notwithstanding the foregoing discussion or anything else to the
contrary in this Prospectus Supplement, none of the Master Servicer, the Special
Servicer or the Trustee will be obligated to make Servicing Advances that, in
the reasonable and good faith judgment of the Master Servicer, the Special
Servicer or the Trustee, as the case may be, would not be ultimately recoverable
from Related Proceeds (any Servicing Advance not so recoverable, a
"Nonrecoverable Servicing Advance"). If the Master Servicer, the Special
Servicer or the Trustee makes any Servicing Advance that it subsequently
determines, in its good faith and reasonable judgment, is a Nonrecoverable
Servicing Advance, it may obtain reimbursement for such Servicing Advance
(together with interest accrued thereon as described below) out of general
collections on the Mortgage Loans and any REO Properties on deposit in the
Certificate Account from time to time.
The Master Servicer will be permitted to pay, and the Special Servicer
may direct the payment of, certain servicing expenses directly out of the
Certificate Account and at times without regard to the relationship between the
expense and the funds from which it is being paid (including in connection with
the remediation of any adverse environmental circumstance or condition at a
Mortgaged Property or an REO Property). In addition, the Pooling Agreement will
require the Master Servicer (at the direction of the Special Servicer if a
Specially Serviced Asset is involved) to pay directly out of the Certificate
Account any servicing expense that, if paid by the Master Servicer or the
Special Servicer, would constitute a Nonrecoverable Servicing Advance, provided
that the Master Servicer (or the Special Servicer, if a Specially Serviced Asset
is involved) has determined in accordance with the Servicing Standard that
making such payment is in the best interests of the Certificateholders (as a
collective whole).
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The Master Servicer, the Special Servicer and the Trustee will each be
entitled to receive interest on Servicing Advances made thereby. Such interest
will accrue on the amount of each Servicing Advance, and compound monthly, for
so long as such Servicing Advance is outstanding at a rate per annum equal to
the "prime rate" as published in the "Money Rates" section of The Wall Street
Journal, as such "prime rate" may change from time to time. Interest so accrued
with respect to any Servicing Advance will be payable--
o first, out of Default Interest and late payment charges
collected on the related Mortgage Loan, and
o then, if and to the extent that (i) such Servicing Advance has
been or is being reimbursed and (ii) the Default Interest and
late charges collected on the related Mortgage Loan while such
Servicing Advance was outstanding were insufficient to cover
such Advance Interest, out of any amounts then on deposit in
the Certificate Account.
Modifications, Waivers, Amendments and Consents
The Special Servicer (as to Specially Serviced Mortgage Loans) and, to
the limited extent described below, the Master Servicer (as to Performing
Mortgage Loans) each may (consistent with the Servicing Standard) agree to any
assumption, modification, waiver or amendment of any term of, extend the
maturity of, forgive interest (including, without limitation, Default Interest
and Additional Interest) on and principal of, forgive Prepayment Premiums, Yield
Maintenance Charges and late payment charges on, defer the payment of interest
on, permit the release, addition or substitution of collateral securing, and/or
permit the release, addition or substitution of the Borrower on or any guarantor
of, any Mortgage Loan it is required to service and administer, subject,
however, to the discussion under "Description of the Mortgage Pool--Certain
Terms and Conditions of the Mortgage Loans--"Due-on-Sale" and
"Due-on-Encumbrance" Provisions" in this Prospectus Supplement and under "--The
Controlling Class Representative--Certain Rights and Powers of the Controlling
Class Representative" below, and, further, to each of the following limitations,
conditions and restrictions:
o With limited exception (including as described below with
respect to Additional Interest and with respect to certain
routine matters), the Master Servicer may not agree to any
modification, waiver or amendment of any term of, or take any
of the other above-referenced actions with respect to, any
Mortgage Loan without the consent of the Special Servicer,
provided that such consent--
(i) is to be withheld or granted by the Special Servicer
in accordance with the Servicing Standard, and
(ii) will be deemed to have been granted if not expressly
denied within 10 business days following the Special
Servicer's receipt from the Master Servicer of all
information reasonably requested thereby in order to
make an informed decision.
o With limited exception (including as described below with
respect to Additional Interest), the Special Servicer may not,
in the case of Specially Serviced Mortgage Loans, agree to
(or, in the case of Performing Mortgage Loans, consent to the
Master Servicer's agreeing to) any modification, waiver or
amendment of any term of, or, in the case of Specially
Serviced Mortgage Loans, take (or, in the case of Performing
Mortgage Loans, consent to the Master Servicer's taking) any
of the other above- referenced actions with respect to, any
Mortgage Loan that would affect the amount or timing of any
related payment of principal, interest or other amount payable
thereunder or, in the Special Servicer's reasonable, good
faith judgment, would materially impair the security for such
Mortgage Loan or reduce the likelihood of timely payment of
amounts due thereon, unless a material default on such
Mortgage Loan has occurred or, in the Special Servicer's
reasonable, good faith judgment, a default in respect of
payment on such Mortgage Loan is reasonably foreseeable, and
such modification, waiver, amendment or other action is
reasonably likely to produce a greater recovery to
Certificateholders on a present value basis than would
liquidation.
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o The Special Servicer may not, in the case of Specially
Serviced Mortgage Loans, extend (or, in the case of Performing
Mortgage Loans, consent to the Master Servicer's extending)
the date on which any Balloon Payment is scheduled to be due
on any Mortgage Loan to a date beyond the earliest of--
(i) the fifth anniversary of such Mortgage Loan's
original stated maturity date,
(ii) two years prior to the Rated Final Distribution Date,
and
(iii) if such Mortgage Loan is secured by a Mortgage solely
or primarily on the related Borrower's leasehold
interest in the related Mortgaged Property, ten years
prior to the end of the then current term of the
related ground lease.
o Neither the Master Servicer nor the Special Servicer may make
or permit any modification, waiver or amendment of any term
of, or take any of the other above-referenced actions with
respect to, any Mortgage Loan that would cause any of REMIC I,
REMIC II or REMIC III to fail to qualify as a REMIC under the
Code, result in the imposition of any tax on "prohibited
transactions" or "contributions" after the startup date of any
such REMIC under the REMIC Provisions (as defined in the
Prospectus) or adversely affect the status of the Grantor
Trust as a grantor trust under the Code;
o The Special Servicer may not, in the case of Specially
Serviced Mortgage Loans, permit (or, in the case of Performing
Mortgage Loans, consent to the Master Servicer's permitting)
any Borrower to add or substitute any collateral for its
Mortgage Loan, unless the Special Servicer has first--
(i) determined, in its reasonable, good faith judgment,
based upon an environmental assessment prepared by an
independent person who regularly conducts
environmental assessments, at the expense of the
Borrower, that such additional or substitute
collateral is in compliance with applicable
environmental laws and regulations and that there are
no circumstances or conditions present with respect
to such new collateral relating to the use,
management or disposal of any hazardous materials for
which investigation, testing, monitoring,
containment, clean-up or remediation would be
required under any then applicable environmental laws
and/or regulations, and
(ii) received confirmation from each Rating Agency that
such addition or substitution of collateral will not
result in a qualification, downgrade or withdrawal of
any rating then assigned by such Rating Agency to a
Class of Certificates.
o Subject to limited exceptions, the Special Servicer may not,
in the case of Specially Serviced Mortgage Loans, release (or,
in the case of Performing Mortgage Loans, consent to the
Master Servicer's releasing) any collateral securing an
outstanding Mortgage Loan (other than in accordance with the
terms of, or upon satisfaction of, a Mortgage Loan).
The limitations, conditions and restrictions described above will not
apply to any of the acts referenced in this "--Modifications, Waivers,
Amendments and Consents" section with respect to any Mortgage Loan that is
required under the terms of such Mortgage Loan in effect on the Closing Date
(or, in the case of a Replacement Mortgage Loan, on the related date of
substitution) or that is solely within the control of the related Borrower.
Also, notwithstanding the discussion above, neither the Master Servicer nor the
Special Servicer will be required to oppose the confirmation of a plan in any
bankruptcy or similar proceeding involving a Borrower if, in its good faith
judgment, such opposition would not ultimately prevent the confirmation of such
plan or one substantially similar.
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Notwithstanding the provisions described above, in the case of the
Winston Loans and Swerdlow Loans, the Master Servicer will be permitted, in its
discretion, after the related Anticipated Repayment Date, to waive any or all of
the accrued Additional Interest in respect of any such ARD Loan, if, prior to
the related maturity date, the related Borrower has requested the right to
prepay such ARD Loan in full, together with all payments required by the related
loan documents in connection with such prepayment except for such accrued
Additional Interest. However, the Master Servicer's determination to waive the
Trust's right to receive such accrued Additional Interest must be reasonably
likely to produce a greater payment to Certificateholders on a present value
basis than a refusal to waive the right to such Additional Interest. The Master
Servicer will not have any liability to the Trust, the Certificateholders or any
other person for any such determination that is made in accordance with the
Servicing Standard. The Pooling Agreement will also limit the Master Servicer's
and the Special Servicer's ability to institute an enforcement action solely for
the collection of Additional Interest.
All modifications, waivers and amendments entered into in respect of
the Mortgage Loans are to be in writing. Each of the Master Servicer and the
Special Servicer must deliver to the Trustee for deposit in the related Mortgage
File, an original counterpart of the agreement relating to each such
modification, waiver or amendment agreed to thereby, promptly following the
execution thereof.
The Controlling Class Representative
Election, Resignation and Removal. The Holders (or, in the case of
Certificates held in book-entry form, the beneficial owners) of Certificates
representing greater than 50% of the aggregate Certificate Principal Balance of
the Controlling Class will be entitled to select a representative (the
"Controlling Class Representative") having certain rights and powers described
below or replace an existing Controlling Class Representative.
Upon (i) the receipt by the Trustee of written requests for the
selection of a Controlling Class Representative from the Holders (or, in the
case of Certificates held in book-entry form, the beneficial owners) of
Certificates representing greater than 50% of the aggregate Certificate
Principal Balance of the Controlling Class, (ii) the resignation or removal of
the person acting as Controlling Class Representative or (iii) a determination
by the Trustee that the Controlling Class has changed, the Trustee will be
required to promptly notify all the Holders (and, in the case of Certificates
held in book-entry form, to the extent actually known to certain designated
officers (each, a "Responsible Officer") of the Trustee, all the beneficial
owners) of Certificates of the Controlling Class that they may select a
Controlling Class Representative.
Such notice will explain the process established by the Trustee in
order to select a Controlling Class Representative. The process may include the
designation of the Controlling Class Representative by any Holder of
Certificates representing a majority interest in the Controlling Class by a
writing delivered to the Trustee. No appointment of any person as a Controlling
Class Representative will be effective until such person provides the Trustee
with written confirmation of its acceptance of such appointment, an address and
telecopy number for the delivery of notices and other correspondence and a list
of officers or employees of such person with whom the parties to the Pooling
Agreement may deal (including their names, titles, work addresses and telecopy
numbers).
Controlling Class. As of any date of determination, the "Controlling
Class" will be the most subordinate Class of Principal Balance Certificates then
outstanding (the Class A-1A and Class A-1B Certificates being treated as a
single Class for this purpose) that has a then-current aggregate Certificate
Principal Balance (net of such Class' allocable share of any Appraisal Reduction
Amounts then in effect) that is not less than 20% of such Class' initial
aggregate Certificate Principal Balance as of the Closing Date; provided that,
if no Class of Principal Balance Certificates has an aggregate Certificate
Principal Balance that satisfies such requirement, then the "Controlling Class"
will be the Class of Principal Balance Certificates with the largest aggregate
Certificate Principal Balance then outstanding.
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Solely for purposes of determining the Controlling Class, the aggregate
amount of any Appraisal Reduction Amounts existing from time to time will be
allocated among the respective Classes of Principal Balance Certificates as
follows:
o first, to the Class C, Class B-8, Class B-7, Class B-6, Class
B-5, Class B-4, Class B-3, Class B-2, Class B-1, Class A-3 and
Class A-2 Certificates, in that order, in each case to the
lesser of (i) to the extent of the related Class Principal
Balance and (ii) the portion of such aggregate amount of
Appraisal Reduction Amounts not already allocated to a more
subordinate Class; and
o then, to the extent that any portion of such aggregate amount
of Appraisal Reduction Amounts still remains, to the Class
A-1, Class A-2 and Class A -3 Certificates on a pro rata basis
in accordance with the relative sizes of their Class Principal
Balances.
No actual reduction in the Class Principal Balances of the Principal Balance
Certificates will occur in connection with such allocation.
Resignation and Removal of the Controlling Class Representative. The
Controlling Class Representative may at any time resign as such by giving
written notice to the Trustee and to each Holder (or, in the case of
Certificates held in book-entry form, each beneficial owner) of Certificates of
the Controlling Class. The Holders (or, in the case of Certificates held in
book-entry form, the beneficial owners) of Certificates representing greater
than 50% of the aggregate Certificate Principal Balance of the Controlling Class
will be entitled to remove any existing Controlling Class Representative by
giving written notice to the Trustee and to such existing Controlling Class
Representative.
Certain Rights and Powers of the Controlling Class Representative. No
later than 30 days after a Servicing Transfer Event for a Specially Serviced
Mortgage Loan, the Special Servicer must deliver to the Trustee, each Rating
Agency, the Master Servicer and the Controlling Class Representative a report
(the "Asset Status Report") with respect to such Mortgage Loan and the related
Mortgaged Property. Such Asset Status Report should include the following
information to the extent reasonably determinable:
(i) a summary of the status of such Specially Serviced Mortgage
Loan;
(ii) a discussion of the legal and environmental considerations
reasonably known to the Special Servicer, consistent with the
Servicing Standard, that are applicable to the exercise of
remedies and to the enforcement of any related guaranties or
other collateral for such Specially Serviced Mortgage Loan and
whether outside legal counsel has been retained;
(iii) the most current rent roll and income or operating statement
available for the related Mortgaged Property;
(iv) the Appraised Value of the related Mortgaged Property,
together with the assumptions used in the calculation thereof;
(v) a summary of the Special Servicer's recommended action with
respect to such Specially Serviced Mortgage Loan; and
(vi) such other information as the Special Servicer deems relevant
in light of the Servicing Standard.
If within ten (10) business days of receiving an Asset Status Report,
the Controlling Class Representative does not disapprove such Asset Status
Report in writing, the Special Servicer will implement the recommended action as
S-105
<PAGE>
outlined in such Asset Status Report (provided that the Special Servicer may not
take any action that is contrary to applicable law or the terms of the
applicable loan documents). If the Controlling Class Representative disapproves
such Asset Status Report, the Special Servicer must revise such Asset Status
Report and deliver to the Trustee, the Controlling Class Representative, the
Rating Agencies and the Master Servicer a new Asset Status Report as soon as
practicable, but in no event later than 30 days after such disapproval.
The Special Servicer must revise such Asset Status Report as described
above until the earlier of (a) the failure of the Controlling Class
Representative to disapprove such revised Asset Status Report in writing within
ten (10) business days of is receipt thereof; (b) a determination by the Special
Servicer as set forth below or (c) the passage of 90 days from the date of
preparation of the first Asset Status Report. The Special Servicer may, from
time to time, modify any Asset Status Report it has previously delivered and
implement the new action in such revised report so long as such revised report
has been prepared, reviewed and not rejected as described above. However, the
Special Servicer may take any action set forth in an Asset Status Report before
the expiration of the ten (10) business day period during which the Controlling
Class Representative may reject such report if the Special Servicer has
reasonably determined that failure to take such action would materially and
adversely affect the interests of the Certificateholders and it has made a
reasonable effort to contact the Controlling Class Representative.
In addition, the Special Servicer may determine whether any affirmative
disapproval of an Asset Status Report by the Controlling Class Representative is
not in the best interest of all the Certificateholders pursuant to the Servicing
Standard. Upon making such determination referred to in the prior sentence, the
Special Servicer will notify the Trustee of such determination and deliver to
the Trustee a proposed notice to Certificateholders which is to include a copy
of the Asset Status Report. The Trustee will thereupon send such notice to all
Certificateholders. If the Holders of Certificates representing a majority of
the Voting Rights fail, within five (5) business days of the Trustee's sending
such notice, to reject such Asset Status Report, the Special Servicer will
implement the same. If the Asset Status Report is rejected by the Holders of
Certificates representing a majority of the Voting Rights within such five (5)
business day period, the Special Servicer must revise such Asset Status Report
as described above. The Trustee will be entitled to reimbursement from the Trust
for the reasonable expenses of providing such notices.
The Special Servicer may not take any action inconsistent with an Asset
Status Report that has been adopted as described above, unless such action would
be required in order to act in accordance with the Servicing Standard.
The Controlling Class Representative may not direct the Special
Servicer to act in any manner (and the Special Servicer is to ignore any such
direction) that would--
(a) require or cause the Special Servicer to violate the terms of
a Specially Serviced Mortgage Loan, applicable law or any
provision of the Pooling Agreement, including the Special
Servicer's obligation to act in accordance with the Servicing
Standard, or
(b) result in the imposition of a "prohibited transaction" or
"contribution" tax under the REMIC Provisions on any of REMIC
I, REMIC II and REMIC III, or
(c) expose the Master Servicer, the Special Servicer, the
Depositor, any Mortgage Loan Seller, the Trust, the Trustee or
their affiliates, officers, directors, employees or agents to
any claim, suit or liability, or
(d) materially expand the scope of the Trustee's, the Special
Servicer's or the Master Servicer's responsibilities under the
Pooling Agreement.
Liability to Borrowers. Any and all expenses of the Controlling Class
Representative are to be borne by the Holders (or, if applicable, the beneficial
owners) of the Certificates of the Controlling Class, pro rata according to
their respective percentage interests in such Class, and not by the Trust.
S-106
<PAGE>
Notwithstanding the foregoing, if a claim is made against the
Controlling Class Representative by a Borrower with respect to the Pooling
Agreement or any particular Mortgage Loan, the Controlling Class Representative
is to immediately notify the Trustee, the Master Servicer and the Special
Servicer. If (a) the Special Servicer or the Trust are also named parties to the
same action, and (b) in the sole judgment of the Special Servicer, (i) the
Controlling Class Representative acted in good faith, without gross negligence
or willful misfeasance, with regard to the particular matter at issue, and (ii)
there is no potential for the Special Servicer or the Trust to be an adverse
party in such action as regards the Controlling Class Representative, then the
Special Servicer on behalf of the Trust will, subject to the discussion under
"Description of the Pooling Agreements--Certain Matters Regarding the Master
Servicer, the Special Servicer, the REMIC Administrator, the Manager and the
Depositor" in the Prospectus, assume the defense of any such claim against the
Controlling Class Representative.
Liability to the Trust and Certificateholders. The Controlling Class
Representative may have special relationships and interests that conflict with
those of the Holders of one or more Classes of Certificates. In addition, the
Controlling Class Representative does not have any duties to the Holders of any
Class of Certificates other than the Controlling Class. It may act solely in the
interests of the Certificateholders of the Controlling Class and will have no
liability to any other Certificateholders for having done so. No
Certificateholder may take any action against the Controlling Class
Representative for having acted solely in the interests of the
Certificateholders of the Controlling Class.
Replacement of the Special Servicer
The Holders (or, in the case of Certificates held in book-entry form,
the beneficial owners) of Certificates representing more than 50% of the
aggregate Certificate Principal Balance of the Controlling Class may terminate
an existing Special Servicer and appoint a successor. Any such appointment of a
successor special servicer will be subject to, among other things, receipt by
the Trustee of--
(i) written confirmation from each Rating Agency that the
appointment will not result in a qualification,
downgrade or withdrawal of any of the ratings then
assigned thereby to the Certificates, and
(ii) the written agreement of the proposed Special
Servicer to be bound by the terms and conditions of
the Pooling Agreement, together with an opinion of
counsel regarding, among other things, the
enforceability of the Pooling Agreement against the
proposed Special Servicer.
Subject to the foregoing, any Holder (or, in the case of Certificates
held in book-entry form, any beneficial owner) of a Certificate or any affiliate
thereof may be appointed as Special Servicer.
If the termination of an existing Special Servicer is without cause,
the reasonable "out-of-pocket" costs and expenses of any related transfer of
servicing duties are to be paid by the successor Special Servicer or the Holders
(or, if applicable, the beneficial owners) of Certificates of the Controlling
Class that voted to remove the terminated Special Servicer, as such parties may
agree. The terminated Special Servicer will be entitled to: payment out of the
Certificate Account for all accrued and unpaid Special Servicing Fees; and
reimbursement by the successor Special Servicer for any outstanding Servicing
Advances made by the terminated Special Servicer, together with interest
thereon. Upon such reimbursement, any such Advance will be treated as if it were
made by the successor Special Servicer.
Sale of Defaulted Mortgage Loans
The Pooling Agreement grants to the Master Servicer, the Special
Servicer and any single Holder or group of Holders of Certificates evidencing a
majority interest in the Controlling Class a right to purchase from the Trust
certain defaulted Mortgage Loans in the priority described below. If the Special
Servicer has determined, in its reasonable, good faith judgment, that any
defaulted Mortgage Loan will become subject to foreclosure proceedings and that
the sale of such Mortgage Loan under the circumstances described below is in
accordance with the Servicing Standard, the Special Servicer must give prompt
written notice of such determination to the Trustee and the Master Servicer. The
Trustee will then be
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required, within five (5) days after receipt of such notice, to provide a
similar notice to all Holders of Certificates of the Controlling Class. Any
single Holder or group of Holders of Certificates evidencing a majority interest
in the Controlling Class may (at its or their option) purchase from the Trust,
at a cash price equal to the applicable Purchase Price, any such defaulted
Mortgage Loan. If such Certificateholders have not purchased such defaulted
Mortgage Loan within 30 days of their having received notice in respect thereof,
either the Special Servicer or the Master Servicer, in that order of priority,
may at its option purchase such defaulted Mortgage Loan from the Trust at a cash
price equal to the applicable Purchase Price. Each of the Master Servicer and
the Special Servicer may designate an affiliate thereof to effect such purchase.
Subject to the discussion under "--The Controlling Class
Representative--Certain Rights and Powers of the Controlling Class
Representative" above, the Special Servicer may offer to sell any such defaulted
Mortgage Loan not otherwise purchased as described in the preceding paragraph,
if and when the Special Servicer determines, consistent with the Servicing
Standard, that such a sale would be in the best economic interests of the
Certificateholders (as a collective whole). Any such offer must be made in a
commercially reasonable manner for a period of not less than ten days. Subject
to the discussion in the next paragraph, the Special Servicer will be required
to accept the highest cash bid received from any person that constitutes a "fair
price" (determined in accordance with the Pooling Agreement) for such Mortgage
Loan.
Notwithstanding any of the foregoing, the Special Servicer will not be
obligated to accept the highest cash bid if the Special Servicer determines, in
accordance with the Servicing Standard, that rejection of such bid would be in
the best interests of the Certificateholders (as a collective whole).
Furthermore, the Special Servicer may accept a lower cash bid (from any person
or entity other than itself or an affiliate) if it determines, in accordance
with the Servicing Standard, that acceptance of such bid would be in the best
interests of the Certificateholders (as a collective whole) (for example, if the
prospective buyer making the lower bid is more likely to perform its obligations
or the terms (other than the price) offered by the prospective buyer making the
lower bid are more favorable).
Neither the Trustee, in its individual capacity, nor any of its
affiliates may bid for or purchase any defaulted Mortgage Loan or any REO
Property.
In connection with the sale of any defaulted Mortgage Loan, the Special
Servicer may charge prospective bidders, and retain, fees that approximate the
Special Servicer's actual costs in the preparation and delivery of information
pertaining to such sales or evaluating bids without obligation to deposit such
amounts into the Certificate Account.
If a defaulted Mortgage Loan is neither sold as described above in this
"--Sale of Defaulted Mortgage Loans" section nor modified as contemplated under
"--Modifications, Waivers, Amendments and Consents" above, the Special Servicer
is to proceed with respect thereto as described under "Description of the
Pooling Agreements--Realization Upon Defaulted Mortgage Loans" in the
Prospectus.
Inspections; Collection of Operating Information
The Special Servicer will be required, at the expense of the Trust, to
inspect or cause an inspection of the related Mortgaged Property as soon as
practicable after any Mortgage Loan becomes a Specially Serviced Mortgage Loan.
In addition, beginning in 2000, the Master Servicer will be required, at its own
expense, to inspect or cause an inspection of each Mortgaged Property at least
once per calendar year (or, in the case of each Mortgage Loan with an unpaid
principal balance of under $2,000,000, once every two years), if the Special
Servicer has not already done so in that period as described in the preceding
sentence. The Master Servicer and the Special Servicer will each be required to
prepare a written report of each such inspection performed by it that generally
describes the condition of the Mortgaged Property and that specifies (i) any
sale, transfer or abandonment of the property of which the Master Servicer or
the Special Servicer, as applicable, is aware or (ii) any change in the
property's condition, occupancy or value that the Master Servicer or the Special
Servicer, as applicable, considers to be material.
The Special Servicer, in the case of each Specially Serviced Mortgage
Loan, and the Master Servicer, in the case of each Performing Mortgage Loan,
will each be required to use reasonable efforts to collect from the related
Borrower
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<PAGE>
and review the following items (to the extent that they are required to be
delivered pursuant to the related loan documents): (i) the annual operating
statements, budgets and rent rolls of the related Mortgaged Property and (ii)
the financial statements of such Borrower. The Special Servicer will also be
required to cause quarterly and annual operating statements, budgets and rent
rolls to be prepared for each REO Property. However, there can be no assurance
that any operating statements required to be delivered by a Borrower will in
fact be delivered, nor is the Master Servicer or the Special Servicer likely to
have any practical means of compelling such delivery.
Evidence as to Compliance
On or before April 15 of each year, beginning April 15, 2000, each of
the Master Servicer and the Special Servicer must--
o at its expense, cause a firm of independent public accountants
that is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Trustee, among
others, to the effect that such firm has examined the
servicing operations of the Master Servicer or Special
Servicer, as the case may be, for the previous year and, on
the basis of such examination, conducted substantially in
compliance with the Uniform Single Attestation Program for
Mortgage Bankers established by the Mortgage Bankers
Association of America ("USAP"), such firm confirms that the
Master Servicer or the Special Servicer, as applicable,
complied with the minimum servicing standards identified in
USAP, in all material respects, except for such significant
exceptions or errors in records that, in the opinion of such
firm, USAP requires it to report (except that, in rendering
its report, such firm may rely, as to matters relating to the
direct servicing of commercial and multifamily mortgage loans
by sub-servicers, upon comparable reports of firms of
independent certified public accountants rendered on the basis
of examinations conducted in accordance with the same
standards (rendered within one year of such report) with
respect to those sub-servicers); and
o deliver to the Trustee, among others, a statement signed by
one or more officers of the Master Servicer or the Special
Servicer, as the case may be, to the effect that, to the best
knowledge of such officer or officers, the Master Servicer or
Special Servicer, as applicable, has in all material respects
fulfilled its obligations under the Pooling Agreement
throughout the preceding calendar year (or the portion thereof
during which the Certificates were outstanding).
Copies of the foregoing annual accountants' statement and officer's
certificate of each of the Master Servicer and the Special Servicer will be made
available to Certificateholders (at their expense) upon written request to the
Trustee. The Master Servicer and the Special Servicer will each deliver or cause
the delivery of the foregoing annual accountants' statements and officers'
certificates in lieu of the items described under "Description of the Pooling
Agreements--Evidence of Compliance" in the Prospectus.
DESCRIPTION OF THE OFFERED CERTIFICATES
General
The Certificates will be issued, on or about the Closing Date, pursuant
to the Pooling Agreement. They will represent in the aggregate the entire
beneficial ownership interest in the Trust Fund. The Trust Fund will include:
o the Mortgage Loans;
o any and all payments under and proceeds of the Mortgage Loans
received after the Cut-off Date (exclusive of payments of
principal, interest and other amounts due thereon on or before
the Cut-off Date or, in the case of a Replacement Mortgage
Loan, on or before the related date of substitution);
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<PAGE>
o the Mortgage Files for the Mortgage Loans;
o any REO Properties;
o such funds or assets as from time to time are deposited in the
Certificate Account (see "Description of the Pooling
Agreements--Certificate Account" in the Prospectus) or the
Interest Reserve Account; and
o certain rights incidental to the representations and
warranties made by GECA, Column and Union Capital as described
under "Description of the Mortgage Pool--Representations and
Warranties" and "--Cures, Repurchases and Substitutions" in
this Prospectus Supplement.
The Certificates will include 19 separate Classes, seven (7) of which
are Classes of Offered Certificates and twelve (12) of which are Classes of
Private Certificates. The tables below set forth the Class designation, the
approximate initial aggregate Certificate Principal Balance or Certificate
Notional Amount and the initial Pass-Through Rate for each Class of
Certificates.
The Offered Certificates
<TABLE>
<CAPTION>
Initial
Aggregate Certificate
Principal Balance
or Certificate Approx. % of Initial
Class Designation Notional Amount(1) Initial Pool Balance Pass-Through Rate(3)
- ----------------- ------------------ -------------------- --------------------
<S> <C> <C> <C>
Class S $1,252,685,456 (2) N/A %
Class A-1A $ 219,703,000 17.54% %
Class A-1B $ 694,757,000 55.46% %
Class A-2 $ 59,502,000 4.75% %
Class A-3 $ 65,766,000 5.25% %
Class B-1 $ 65,766,000 5.25% %
Class B-2 $ 15,659,000 1.25% %
</TABLE>
- ---------------
(1) The actual initial aggregate Certificate Principal Balance or Certificate
Notional Amount of any Class of Offered Certificates at the date of
issuance may be larger or smaller than the amount shown above, depending on
the actual size of the Initial Pool Balance. The actual size of the Initial
Pool Balance may be as much as 5% larger or smaller than the amount
presented in this Prospectus Supplement.
(2) Aggregate Certificate Notional Amount. The Class S Certificates will not
have Certificate Principal Balances.
(3) The Pass-Through Rates for the Class A-1A and Class A-1B Certificates will,
in the case of each such Class, be fixed. The Pass-Through Rate for each
other Class of Offered Certificates will be variable or otherwise subject
to change and will be calculated pursuant to a formula described under
"--Distributions--Calculation of Pass-Through Rates" below.
S-110
<PAGE>
The Private Certificates
<TABLE>
<CAPTION>
Initial
Aggregate Certificate Approx. % of Initial
Class Designation Principal Balance(1) Initial Pool Balance Pass-Through Rate(3)
- ----------------- -------------------- -------------------- --------------------
<S> <C> <C> <C>
Class B-3 $ 37,581,000 %
Class B-4 $ 21,922,000 %
Class B-5 $ 9,395,000 %
Class B-6 $ 12,527,000 %
Class B-7 $ 12,526,000 %
Class B-8 $ 12,527,000 %
Class C $ 25,054,456 %
Class D-1 N/A(2) N/A(2) N/A(2)
Class D-2 N/A(2) N/A(2) N/A(2)
Class R-I N/A(2) N/A(2) N/A(2)
Class R-II N/A(2) N/A(2) N/A(2)
Class R-III N/A(2) N/A(2) N/A(2)
</TABLE>
- ---------------
(1) The initial aggregate Certificate Principal Balance of any Class of Private
Certificates may be as much as 5% larger or smaller than the aggregate
principal balance shown above.
(2) The Class D-1, Class D-2, Class R-I, Class R-II and Class R-III
Certificates do not have Certificate Principal Balances, Certificate
Notional Amounts or Pass-Through Rates.
(3) The Pass-Through Rates for the Class B-3, Class B-4, Class B-5, Class B-6,
Class B-7, Class B-8 and Class C Certificates will, in each case, be fixed.
The "Certificate Principal Balance" of any Principal Balance
Certificate will represent the aggregate distributions of principal to which the
Holder of such Certificate is entitled over time out of payments (or Advances in
lieu thereof) and other collections on the assets of the Trust. The aggregate
Certificate Principal Balance of an entire Class of Principal Balance
Certificates is referred to in this Prospectus Supplement as the "Class
Principal Balance" of such Class. On each Distribution Date, the Class Principal
Balance of each Class of Principal Balance Certificates will be permanently
reduced by any distributions of principal actually made with respect to such
Class of Certificates on such Distribution Date. On any particular Distribution
Date, the Class Principal Balance of a Class of Principal Balance Certificates
may also be permanently reduced, as and to the extent described under
"--Allocations of Realized Losses and Certain Other Shortfalls and Expenses"
below, in connection with Realized Losses and Additional Trust Fund Expenses
(each as defined in such section).
The Class S Certificates will not have Certificate Principal Balances
or entitle the Holders thereof to receive distributions of principal. The
"Certificate Notional Amount" of any Class S Certificate will represent the
principal amount on which interest will accrue in respect of such Certificate
from time to time. The aggregate Certificate Notional Amount of all the Class S
Certificates is referred to in this Prospectus Supplement as the "Class Notional
Amount" of such Class.
The Class Notional Amount of the Class S Certificates will equal the
aggregate of the Class Principal Balances of the respective Classes of Principal
Balance Certificates outstanding from time to time. Each such Class Principal
Balance will constitute a separate component (a "Component") of the Class
Notional Amount of the Class S Certificates (such Component to have the same
alphabetical and/or numerical designation as the alphabetical and/or numerical
Class designation for the related Class of Principal Balance Certificates (e.g.,
the Class Principal Balance of the Class A-1A Certificates outstanding from time
to time will constitute Component A-1A of the Class Notional Amount of the Class
S Certificates)).
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<PAGE>
For purposes of determining the Certificate Principal Balance or
Certificate Notional Amount of any of your Certificates from time to time, you
can multiply the original Certificate Principal Balance or Certificate Notional
Amount of such Certificate as of the Closing Date, by the then applicable
Certificate Factor for the relevant Class. The "Certificate Factor" for any
Class of Offered Certificates, as of any date of determination, will be a
fraction (expressed as a percentage), the numerator of which will be the
outstanding Class Principal Balance or Class Notional Amount, as applicable, of
such Class as of such date of determination, and the denominator of which will
be the original Class Principal Balance or Class Notional Amount, as applicable,
of such Class as of the Closing Date. Certificate Factors will be reported
monthly in the Trustee Report.
A Class of Offered Certificates will be considered to be outstanding
until its Class Principal Balance or Class Notional Amount, as the case may be,
is reduced to zero. Under very limited circumstances, however, the prior Holders
of a retired Class of Principal Balance Certificates may thereafter be entitled
to certain payments in reimbursement of any reductions made in the Class
Principal Balance, if any, of such Class of Certificates, as described under
"--Allocations of Realized Losses and Certain Other Shortfalls and Expenses" in
this Prospectus Supplement, in connection with Realized Losses and Additional
Trust Fund Expenses.
As described under "Federal Income Tax Consequences" in this Prospectus
Supplement, the Class R-I, Class R-II and Class R-III Certificates will
constitute REMIC residual interests and are referred to in this Prospectus
Supplement as the "REMIC Residual Certificates". The Principal Balance
Certificates and the Class S Certificates will evidence REMIC regular interests
and are referred to in this Prospectus Supplement as the "REMIC Regular
Certificates". The Class D-1 and Class D-2 Certificates (collectively, the
"Class D Certificates") will evidence undivided interests in the Grantor Trust.
The Depositor is only offering the Offered Certificates pursuant to
this Prospectus Supplement and the accompanying Prospectus. The Private
Certificates have not been registered under the Securities Act and are not being
offered to you. Accordingly, to the extent that this Prospectus Supplement
contains information regarding the terms of the Private Certificates, the
Depositor has provided such information because of its potential relevance to
you as a prospective purchaser of Offered Certificates.
Registration and Denominations
The Offered Certificates will be issued in book-entry form in original
denominations of:
o in the case of the Class S Certificates, $10,000 initial
Certificate Notional Amount and in any whole dollar
denomination in excess thereof;
o in the case of the Class A-1A and Class A-1B Certificates,
$10,000 initial Certificate Principal Balance and in any whole
dollar denomination in excess thereof; and
o in the case of the other Offered Certificates, $100,000
initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof.
Each Class of Offered Certificates will initially be represented by one
or more Certificates registered in the name of Cede & Co., as nominee of DTC.
You will not be entitled to receive a fully registered physical
certificate (a "Definitive Certificate") representing your interest in the
Offered Certificates, except under the limited circumstances described under
"Description of the Certificates--Book-Entry Registration and Definitive
Certificates" in the Prospectus. Unless and until Definitive Certificates are
issued in respect of the Offered Certificates, beneficial ownership interests in
such Certificates will be maintained and transferred on the book-entry records
of DTC and its participating organizations (the "DTC Participants").
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<PAGE>
All references in this Prospectus Supplement to actions by Holders of
the Offered Certificates will refer to actions taken by DTC upon instructions
received from the related beneficial owners through their respective DTC
Participants in accordance with DTC procedures. In addition, all references in
this Prospectus Supplement to payments, notices, reports and statements to
Holders of the Offered Certificates will refer to payments, notices, reports and
statements to DTC or Cede & Co., as the registered holder thereof, for
distribution to the related beneficial owners through their respective DTC
Participants in accordance with DTC procedures.
As a result of the foregoing, you may experience certain delays in the
receipt of payments on, and notices, reports and statements with respect to,
your Certificates and may have difficulty in pledging your Certificates. See
"Description of the Certificates--Book-Entry Registration and Definitive
Certificates" and "Risk Factors--Book-Entry Registration" in the Prospectus.
The Trustee will initially serve as registrar (in such capacity, the
"Certificate Registrar") for purposes of providing for the registration of the
Offered Certificates and, if and to the extent Definitive Certificates are
issued in respect thereof, the registration of transfers and exchanges of the
Offered Certificates.
Seniority
The following chart sets forth the relative seniority of the respective
Classes of Certificates for purposes of--
o making distributions of interest and, if and when applicable,
distributions of principal, and
o allocating Realized Losses and Additional Trust Fund Expenses.
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<PAGE>
Each identified Class of Certificates will, for the above-specified
purposes, be subordinate to each other Class of Certificates, if any, listed
above it in the following chart.
Expanded Seniority Chart
------------------------------------
Most Senior | Class A-1A, Class A-1B and Class S | Most Senior
------------------------------------
|
|
-----------
| Class A-2 |
-----------
|
|
-----------
| Class A-3 |
-----------
|
|
-----------
| Class B-1 |
-----------
|
|
-----------
| Class B-2 |
-----------
|
|
-----------
| Class B-3 |
-----------
|
|
-----------
| Class B-4 |
-----------
|
|
-----------
| Class B-5 |
-----------
|
|
-----------
| Class B-6 |
-----------
|
|
-----------
| Class B-7 |
-----------
|
|
-----------
| Class B-8 |
-----------
|
|
-----------
| Class C |
-----------
|
|
----------------------------------------
Most Subordinate | Classes of REMIC Residual Certificates | Most Subordinate
----------------------------------------
The only form of credit support for any Class of Offered Certificates
will be the above-referenced subordination of the other Classes of Certificates
listed below it in the Expanded Seniority Chart, including all of the Private
Certificates (other than the Class D Certificates).
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<PAGE>
The Class D-1 Certificates will entitle the Holders thereof only to
those amounts, if any, applied as Additional Interest in respect of the GECA
Mortgage Loans that are ARD Loans; and the Class D-2 Certificates will entitle
the Holders thereof only to those amounts, if any, applied as Additional
Interest in respect of the Column Mortgage Loans that are ARD Loans.
Accordingly, the Class D Certificates are not necessarily senior or subordinate
to any other Class of Certificates (except to the extent that amounts received
on any particular ARD Loan are applied first to pay amounts other than
Additional Interest).
Certain Relevant Characteristics of the Mortgage Loans
The following characteristics of the Mortgage Loans are, in addition to
those described elsewhere in this Prospectus Supplement, relevant to the
following discussions in this "Description of the Offered Certificates" section:
The "Mortgage Pass-Through Rate" in respect of any Mortgage Loan for
any Distribution Date will, in general, equal--
o in the case of each 30/360 Mortgage Loan, an annual rate equal
to (a) the Mortgage Rate for such Mortgage Loan as of the
Cut-off Date, minus (b) 0.05% per annum, and
o in the case of each Actual/360 Mortgage Loan, an annual rate
generally equal to (a) a fraction (expressed as a percentage),
the numerator of which is twelve (12) times the aggregate
amount of interest accrued (or, in the event of prepayments or
liquidations, that would have accrued) in respect of such
Mortgage Loan during the calendar month immediately preceding
the month in which such Distribution Date occurs, and the
denominator of which is the Stated Principal Balance of such
Mortgage Loan immediately prior to such Distribution Date,
minus (b) 0.05% per annum; provided that the numerator of the
fraction described in clause (a) above will, when the accrual
of interest occurs during the calendar months of December
(except in a year preceding a leap year) and January, be
decreased by the amount of any Interest Reserve Amount
transferred from the Certificate Account to the Interest
Reserve Account in respect of such Mortgage Loan in the
following calendar month and will, when the accrual of
interest occurs during the calendar month of February, be
increased by the Interest Reserve Amounts to be transferred
from the Interest Reserve Account to the Certificate Account
in respect of such Mortgage Loan in the following calendar
month. See "--Distributions--Interest Reserve Account" below.
Stated Principal Balance. The "Stated Principal Balance" of each
Mortgage Loan will initially equal its Cut-off Date Balance (or, in the case of
a Replacement Mortgage Loan, the unpaid principal balance thereof as of the
related date of substitution, after application of all payments of principal due
thereon on or before such date, whether or not received) and will permanently be
reduced on each subsequent Distribution Date (to not less than zero) by--
o that portion, if any, of the Principal Distribution Amount for
such Distribution Date that is attributable to such Mortgage
Loan (see "--Distributions--Calculation of the Principal
Distribution Amount" below), and
o the principal portion of any Realized Loss incurred in respect
of such Mortgage Loan during the related Collection Period
(see "--Allocation of Realized Losses and Certain Other
Shortfalls and Expenses" below).
Distributions
General. Subject to available funds, the Trustee will, in general, make
all distributions required to be made on the Certificates on each Distribution
Date to the Certificateholders of record as of the close of business on the
related Record Date. Notwithstanding the foregoing, the final distribution of
principal and/or interest on any REMIC Regular Certificate will be made only
upon presentation and surrender of such Certificate at the location that will be
specified in a notice of the pendency of such final distribution.
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In order to receive its distributions by wire transfer, a
Certificateholder must provide the Trustee with written wiring instructions no
less than five business days prior to the related Record Date. Otherwise, such
Certificateholder will receive its distributions by check mailed to it.
Until Definitive Certificates are issued, Cede & Co. will be the
registered holder of your Certificates, and you will receive distributions on
your Certificates through DTC and your DTC Participant. See "--Registration and
Denominations" above.
The Available Distribution Amount. The aggregate amount available to
make distributions of interest and principal on the Certificates on each
Distribution Date is referred to in this Prospectus Supplement as the "Available
Distribution Amount". The Available Distribution Amount for any Distribution
Date will include--
(1) all payments and other collections on the Mortgage Loans and
any REO Properties that are on deposit in the Certificate
Account (see "Description of the Pooling
Agreements--Certificate Account" in the Prospectus) as of the
close of business on the related Determination Date, exclusive
of any portion thereof that represents one or more of the
following:
(a) Scheduled P&I Payments due on a Due Date subsequent
to the end of the related Collection Period;
(b) Prepayment Premiums, Yield Maintenance Charges and
Additional Interest (which are separately
distributable on the Certificates as described below
in this Prospectus Supplement);
(c) amounts that are payable or reimbursable to any
person other than the Certificateholders, including
(i) amounts payable to the Master Servicer, the
Special Servicer, any Sub-Servicers or the Trustee as
compensation (including Trustee Fees (as defined
below), Servicing Fees, Workout Fees, Liquidation
Fees, assumption fees, modification fees and, to the
extent not otherwise applied to cover interest on
Advances, Default Interest and late payment charges),
(ii) amounts payable in reimbursement of outstanding
Advances, together with interest thereon, and (iii)
amounts payable in respect of other expenses of the
Trust;
(d) if such Distribution Date occurs during February of
any year or during January of any year that is not a
leap year, the Interest Reserve Amounts that are to
be transferred with respect to the Actual/360
Mortgage Loans from the Certificate Account to the
Interest Reserve Account during such month and held
for future distribution; and
(e) amounts deposited in the Certificate Account in
error;
(2) any P&I Advances and Compensating Interest Payments made with
respect to such Distribution Date; and
(3) if such Distribution Date occurs during March of any year, the
Interest Reserve Amounts that are to be transferred with
respect to the Actual/360 Mortgage Loans from the Interest
Reserve Account to the Certificate Account during such month.
See "--Interest Reserve Account" and "--Allocations of Losses and
Certain Other Shortfalls and Expenses" below and "Description of the Pooling
Agreements--Certificate Account" in the Prospectus.
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Interest Reserve Account. The Trustee will establish and maintain an
"Interest Reserve Account" in its name for the benefit of the
Certificateholders. During January (except in a leap year) and February of each
calendar year, beginning in 2000, the Trustee will, on or before the
Distribution Date in such month, withdraw from those accounts constituting part
of the Certificate Account that are maintained by it and deposit in the Interest
Reserve Account the Interest Reserve Amount with respect to each Actual/360
Mortgage Loan as to which the Scheduled P&I Payment due in such month was either
received or advanced. The "Interest Reserve Amount" in respect of any such
Mortgage Loan for either such month will, in general, equal one day's interest
accrued at the related Mortgage Rate on the Stated Principal Balance of such
Mortgage Loan outstanding immediately following the Distribution Date in the
preceding calendar month. During March of each calendar year, beginning in 2000,
the Trustee will, on or before the Distribution Date in such month, withdraw
from the Interest Reserve Account and deposit in those accounts constituting
part of the Certificate Account maintained by it any and all Interest Reserve
Amounts with respect to the Actual/360 Mortgage Loans then on deposit in the
Interest Reserve Account. All such Interest Reserve Amounts that are so
transferred from the Interest Reserve Account to the Certificate Account will be
included in the Available Distribution Amount for the Distribution Date during
the month of transfer.
Calculation of Interest. Each Class of REMIC Regular Certificates will
bear interest, such interest to accrue during each Interest Accrual Period based
upon--
o The Pass-Through Rate for such Class for the related
Distribution Date.
o The Class Principal Balance or Class Notional Amount, as the
case may be, of such Class outstanding immediately prior to
the related Distribution Date.
o The assumption that each year consists of twelve 30-day
months.
The total amount of interest accrued from time to time with respect to
each Class of REMIC Regular Certificates is referred to in this Prospectus
Supplement as "Accrued Certificate Interest". However, less than the full amount
of Accrued Certificate Interest in respect of any Class of REMIC Regular
Certificates for any Interest Accrual Period may be distributable thereon as a
result of the allocation of any Net Aggregate Prepayment Interest Shortfall for
the related Distribution Date.
The portion of the Accrued Certificate Interest in respect of any Class
of REMIC Regular Certificates for any Interest Accrual Period that is actually
distributable thereon is referred to in this Prospectus Supplement as the
"Distributable Certificate Interest" for such Class. The Distributable
Certificate Interest in respect of any Class of REMIC Regular Certificates for
any Interest Accrual Period will equal the Accrued Certificate Interest in
respect of such Class for such Interest Accrual Period, reduced (to not less
than zero) by any portion of the Net Aggregate Prepayment Interest Shortfall for
the related Distribution Date that has been allocated to such Class as described
under "--Allocation of Realized Losses and Certain Other Shortfalls and
Expenses" below.
Calculation of Pass-Through Rates. The Pass-Through Rates for the Class
A-1A and Class A-1B Certificates will be fixed at % and % per annum,
respectively. The Pass-Through Rate for the Class A-2 Certificates for any
Distribution Date will equal the lesser of % and the Weighted Average
Mortgage Pass-Through Rate for such Distribution Date. The Pass-Through Rate
for the Class A-3 Certificates for any Distribution Date will equal the lesser
of % and the Weighted Average Mortgage Pass-Through Rate for such
Distribution Date. The Pass-Through Rates for the Class B-1 and Class B-2
Certificates for any Distribution Date will, in the case of each such Class,
equal the Weighted Average Mortgage Pass-Through Rate for such Distribution
Date.
The Pass-Through Rate applicable to the Class S Certificates for each
Distribution Date will equal the weighted average of the then applicable Class S
Strip Rates for the respective Components of the Class Notional Amount of the
Class S Certificates (weighted on the basis of the relative sizes of such
Components immediately prior to such Distribution Date). The "Class S Strip
Rate" in respect of any Component of the Class Notional Amount of the Class S
Certificates for any Distribution Date will equal the excess, if any, of (i) the
Weighted Average Mortgage Pass-Through Rate for such
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Distribution Date, over (ii) the Pass-Through Rate then applicable to the Class
of Principal Balance Certificates whose Class Principal Balance constitutes such
Component. The Class S Strip Rates for Components B-1 and B-2 of the Class
Notional Amount of the Class S Certificates will in all cases be 0% per annum.
The Pass-Through Rates for the Class B-3, Class B-4, Class B-5, Class
B-6, Class B-7, Class B-8 and Class C Certificates will be fixed at %, %,
%, %, %, % and % per annum, respectively.
The Class D Certificates and the REMIC Residual Certificates will not
have Pass-Through Rates.
The "Weighted Average Mortgage Pass-Through Rate" for each Distribution
Date will, in general, equal the weighted average of the Mortgage Pass-Through
Rates in effect for all the Mortgage Loans for such Distribution Date (weighted
on the basis of such Mortgage Loans' respective Stated Principal Balances
immediately prior to such Distribution Date).
Calculation of the Principal Distribution Amount. The "Principal
Distribution Amount" for any Distribution Date represents the maximum amount of
principal distributable in respect of the Principal Balance Certificates for
such Distribution Date. The Principal Distribution Amount for any Distribution
Date will, in general, equal the aggregate (without duplication) of the
following:
(a) all payments of principal (other than voluntary principal
prepayments) received on the Mortgage Loans during the related
Collection Period, in each case net of any portion of the particular
payment that represents a late collection of principal for which a P&I
Advance was previously made for a prior Distribution Date or that
represents the principal portion of a Scheduled P&I Payment due on or
before the Cut-off Date or on a Due Date subsequent to the end of the
related Collection Period;
(b) the principal portions of all Scheduled P&I Payments due
in respect of the Mortgage Loans for their respective Due Dates
occurring during the related Collection Period, that were received
prior to the related Collection Period;
(c) all voluntary principal prepayments received on the
Mortgage Loans during the related Collection Period;
(d) all other collections (including Liquidation Proceeds,
Condemnation Proceeds and Insurance Proceeds) that were received on or
in respect of the Mortgage Loans during the related Collection Period
and that were identified and applied by the Master Servicer as
recoveries of principal thereof, in each case net of any portion of the
particular collection that represents a late collection of principal
due on or before the Cut-off Date or for which a P&I Advance was
previously made for a prior Distribution Date; and
(e) the principal portions of all P&I Advances made in respect
of the Mortgage Loans for such Distribution Date.
Priority of Payments.
General. Distributions of interest and principal are to be made to the
Holders of the various Classes of REMIC Regular Certificates sequentially based
on their relative seniority as depicted in the Expanded Seniority Chart under
"--Seniority" above. Accordingly, the Trustee will make distributions of
interest and principal on the Class A-1A, Class A-1B and Class S Certificates
(collectively, the "Senior Certificates") prior to making such distributions in
respect of any other Class of REMIC Regular Certificates.
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Distributions of Interest and Principal on the Senior Certificates. On
each Distribution Date, the Trustee will apply the Available Distribution Amount
for such date for the following purposes and in the following order of priority:
(1) to pay interest to the Holders of the respective Classes
of Senior Certificates, up to an amount equal to, and pro rata as among
such Classes in accordance with, all unpaid Distributable Certificate
Interest accrued in respect of each such Class of Certificates through
the end of the related Interest Accrual Period,
(2) to pay principal to the Holders of the Class A-1A and
Class A-1B Certificates (allocable between such two Classes of
Certificateholders as described below), up to an amount equal to the
lesser of (a) the aggregate of the then outstanding Class Principal
Balances of such Classes of Certificates and (b) the Principal
Distribution Amount for such Distribution Date, and
(3) if applicable, to reimburse the Holders of the Class A-1A
and Class A-1B Certificates, up to an amount equal to, and pro rata as
between such two Classes of Certificateholders in accordance with, the
aggregate of all unreimbursed reductions, if any, made to the Class
Principal Balance of each such Class of Certificates as described under
"--Allocation of Realized Losses and Certain Other Shortfalls and
Expenses" below in connection with Realized Losses and Additional Trust
Fund Expenses.
In general, all distributions of principal on the Class A-1A and Class
A-1B Certificates on any Distribution Date will be distributable, first, to the
Holders of the Class A-1A Certificates, until the Class Principal Balance of the
Class A-1A Certificates is reduced to zero, and thereafter, to the Holders of
the Class A-1B Certificates. However, if (1) the aggregate Certificate Principal
Balance of the Class A-1A and Class A-1B Certificates outstanding immediately
prior to any Distribution Date equals or exceeds (2) the sum of (a) the
aggregate Stated Principal Balance of the Mortgage Pool expected to be
outstanding immediately following such Distribution Date, plus (b) the lesser of
(i) the Principal Distribution Amount for such Distribution Date and (ii) the
portion of the Available Distribution Amount for such Distribution Date that
will remain after all required distributions of interest on the Senior
Certificates have been made, then (assuming the Class A-1A Certificates still
remain outstanding) all distributions of principal in respect of the Class A-1A
and Class A-1B Certificates on such Distribution Date and on each Distribution
Date thereafter will be made on a pro rata basis in accordance with the
respective Class Principal Balances of such Certificates. Similarly, all
distributions of principal, if any, in respect of the Class A-1A and Class A-1B
Certificates on the final Distribution Date in connection with a termination of
the Trust (see "--Termination" below) will be made on the same pro rata basis.
All Certificates, other than the Senior Certificates, collectively
constitute the "Subordinate Certificates". The portion, if any, of the Available
Distribution Amount for any Distribution Date that remains after the foregoing
distributions on the Senior Certificates is referred to in this Prospectus
Supplement as the "Subordinate Available Distribution Amount". The Subordinate
Available Distribution Amount for each Distribution Date will be applied to make
distributions on the Subordinate Certificates as described below.
Distributions of Interest and Principal on the Subordinate
Certificates. On each Distribution Date, the Trustee will apply the Subordinate
Available Distribution Amount for such date for the following purposes and in
the following order of priority:
(1) to pay interest to the Holders of the Class A-2
Certificates, up to an amount equal to all unpaid Distributable
Certificate Interest accrued in respect of such Class of Certificates
through the end of the related Interest Accrual Period;
(2) if the Class Principal Balances of all more senior Classes
of Principal Balance Certificates have been reduced to zero, to pay
principal to the Holders of the Class A-2 Certificates, up to an amount
equal to the lesser of (a) the then outstanding Class Principal Balance
of such Class of Certificates and (b) the remaining portion of the
Principal Distribution Amount for such Distribution Date;
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(3) if applicable, to reimburse the Holders of the Class A-2
Certificates, up to an amount equal to the aggregate of all
unreimbursed reductions, if any, made to the Class Principal Balance of
such Class of Certificates as described under "--Allocation of Realized
Losses and Certain Other Shortfalls and Expenses" below in connection
with Realized Losses and Additional Trust Fund Expenses;
(4) to pay interest to the Holders of the Class A-3
Certificates, up to an amount equal to all unpaid Distributable
Certificate Interest accrued in respect of such Class of Certificates
through the end of the related Interest Accrual Period;
(5) if the Class Principal Balances of all more senior Classes
of Principal Balance Certificates have been reduced to zero, to pay
principal to the Holders of the Class A-3 Certificates, up to an amount
equal to the lesser of (a) the then outstanding Class Principal Balance
of such Class of Certificates and (b) the remaining portion of the
Principal Distribution Amount for such Distribution Date;
(6) if applicable, to reimburse the Holders of the Class A-3
Certificates, up to an amount equal to the aggregate of all
unreimbursed reductions, if any, made to the Class Principal Balance of
such Class of Certificates as described under "--Allocation of Realized
Losses and Certain Other Shortfalls and Expenses" below in connection
with Realized Losses and Additional Trust Fund Expenses;
(7) to pay interest to the Holders of the Class B-1
Certificates, up to an amount equal to all unpaid Distributable
Certificate Interest accrued in respect of such Class of Certificates
through the end of the related Interest Accrual Period;
(8) if the Class Principal Balances of all more senior Classes
of Principal Balance Certificates have been reduced to zero, to pay
principal to the Holders of the Class B-1 Certificates, up to an amount
equal to the lesser of (a) the then outstanding Class Principal Balance
of such Class of Certificates and (b) the remaining portion of the
Principal Distribution Amount for such Distribution Date;
(9) if applicable, to reimburse the Holders of the Class B-1
Certificates, up to an amount equal to the aggregate of all
unreimbursed reductions, if any, made to the Class Principal Balance of
such Class of Certificates as described under "--Allocation of Realized
Losses and Certain Other Shortfalls and Expenses" below in connection
with Realized Losses and Additional Trust Fund Expenses;
(10) to pay interest to the Holders of the Class B-2
Certificates, up to an amount equal to all unpaid Distributable
Certificate Interest accrued in respect of such Class of Certificates
through the end of the related Interest Accrual Period;
(11) if the Class Principal Balances of all more senior
Classes of Principal Balance Certificates have been reduced to zero, to
pay principal to the Holders of the Class B-2 Certificates, up to an
amount equal to the lesser of (a) the then outstanding Class Principal
Balance of such Class of Certificates and (b) the remaining portion of
the Principal Distribution Amount for such Distribution Date;
(12) if applicable, to reimburse the Holders of the Class B-2
Certificates, up to an amount equal to the aggregate of all
unreimbursed reductions, if any, made to the Class Principal Balance of
such Class of Certificates as described under "--Allocation of Realized
Losses and Certain Other Shortfalls and Expenses" below in connection
with Realized Losses and Additional Trust Fund Expenses;
(13) to pay interest to the Holders of the Class B-3
Certificates, up to an amount equal to all unpaid Distributable
Certificate Interest accrued in respect of such Class of Certificates
through the end of the related Interest Accrual Period;
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(14) if the Class Principal Balances of all more senior
Classes of Principal Balance Certificates have been reduced to zero, to
pay principal to the Holders of the Class B-3 Certificates, up to an
amount equal to the lesser of (a) the then outstanding Class Principal
Balance of such Class of Certificates and (b) the remaining portion of
the Principal Distribution Amount for such Distribution Date;
(15) if applicable, to reimburse the Holders of the Class B-3
Certificates, up to an amount equal to the aggregate of all
unreimbursed reductions, if any, made to the Class Principal Balance of
such Class of Certificates as described under "--Allocation of Realized
Losses and Certain Other Shortfalls and Expenses" below in connection
with Realized Losses and Additional Trust Fund Expenses;
(16) to pay interest to the Holders of the Class B-4
Certificates, up to an amount equal to all unpaid Distributable
Certificate Interest accrued in respect of such Class of Certificates
through the end of the related Interest Accrual Period;
(17) if the Class Principal Balances of all more senior
Classes of Principal Balance Certificates have been reduced to zero, to
pay principal to the Holders of the Class B-4 Certificates, up to an
amount equal to the lesser of (a) the then outstanding Class Principal
Balance of such Class of Certificates and (b) the remaining portion of
the Principal Distribution Amount for such Distribution Date;
(18) if applicable, to reimburse the Holders of the Class B-4
Certificates, up to an amount equal to the aggregate of all
unreimbursed reductions, if any, made to the Class Principal Balance of
such Class of Certificates as described under "--Allocation of Realized
Losses and Certain Other Shortfalls and Expenses" below in connection
with Realized Losses and Additional Trust Fund Expenses;
(19) to pay interest to the Holders of the Class B-5
Certificates, up to an amount equal to all unpaid Distributable
Certificate Interest accrued in respect of such Class of Certificates
through the end of the related Interest Accrual Period;
(20) if the Class Principal Balances of all more senior
Classes of Principal Balance Certificates have been reduced to zero, to
pay principal to the Holders of the Class B-5 Certificates, up to an
amount equal to the lesser of (a) the then outstanding Class Principal
Balance of such Class of Certificates and (b) the remaining portion of
the Principal Distribution Amount for such Distribution Date;
(21) if applicable, to reimburse the Holders of the Class B-5
Certificates, up to an amount equal to the aggregate of all
unreimbursed reductions, if any, made to the Class Principal Balance of
such Class of Certificates as described under "--Allocation of Realized
Losses and Certain Other Shortfalls and Expenses" below in connection
with Realized Losses and Additional Trust Fund Expenses;
(22) to pay interest to the Holders of the Class B-6
Certificates, up to an amount equal to all unpaid Distributable
Certificate Interest accrued in respect of such Class of Certificates
through the end of the related Interest Accrual Period;
(23) if the Class Principal Balances of all more senior
Classes of Principal Balance Certificates have been reduced to zero, to
pay principal to the Holders of the Class B-6 Certificates, up to an
amount equal to the lesser of (a) the then outstanding Class Principal
Balance of such Class of Certificates and (b) the remaining portion of
the Principal Distribution Amount for such Distribution Date;
(24) if applicable, to reimburse the Holders of the Class B-6
Certificates, up to an amount equal to the aggregate of all
unreimbursed reductions, if any, made to the Class Principal Balance of
such Class of Certificates as described under "--Allocation of Realized
Losses and Certain Other Shortfalls and Expenses" below in connection
with Realized Losses and Additional Trust Fund Expenses;
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(25) to pay interest to the Holders of the Class B-7
Certificates, up to an amount equal to all unpaid Distributable
Certificate Interest accrued in respect of such Class of Certificates
through the end of the related Interest Accrual Period;
(26) if the Class Principal Balances of all more senior
Classes of Principal Balance Certificates have been reduced to zero, to
pay principal to the Holders of the Class B-7 Certificates, up to an
amount equal to the lesser of (a) the then outstanding Class Principal
Balance of such Class of Certificates and (b) the remaining portion of
the Principal Distribution Amount for such Distribution Date;
(27) if applicable, to reimburse the Holders of the Class B-7
Certificates, up to an amount equal to the aggregate of all
unreimbursed reductions, if any, made to the Class Principal Balance of
such Class of Certificates as described under "--Allocation of Realized
Losses and Certain Other Shortfalls and Expenses" below in connection
with Realized Losses and Additional Trust Fund Expenses;
(28) to pay interest to the Holders of the Class B-8
Certificates, up to an amount equal to all unpaid Distributable
Certificate Interest accrued in respect of such Class of Certificates
through the end of the related Interest Accrual Period;
(29) if the Class Principal Balances of all more senior
Classes of Principal Balance Certificates have been reduced to zero, to
pay principal to the Holders of the Class B-8 Certificates, up to an
amount equal to the lesser of (a) the then outstanding Class Principal
Balance of such Class of Certificates and (b) the remaining portion of
the Principal Distribution Amount for such Distribution Date;
(30) if applicable, to reimburse the Holders of the Class B-8
Certificates, up to an amount equal to the aggregate of all
unreimbursed reductions, if any, made to the Class Principal Balance of
such Class of Certificates as described under "--Allocation of Realized
Losses and Certain Other Shortfalls and Expenses" below in connection
with Realized Losses and Additional Trust Fund Expenses;
(31) to pay interest to the Holders of the Class C
Certificates, up to an amount equal to all unpaid Distributable
Certificate Interest accrued in respect of such Class of Certificates
through the end of the related Interest Accrual Period;
(32) if the Class Principal Balances of all more senior
Classes of Principal Balance Certificates have been reduced to zero, to
pay principal to the Holders of the Class C Certificates, up to an
amount equal to the lesser of (a) the then outstanding Class Principal
Balance of such Class of Certificates and (b) the remaining portion of
the Principal Distribution Amount for such Distribution Date;
(33) if applicable, to reimburse the Holders of the Class C
Certificates, up to an amount equal to the aggregate of all
unreimbursed reductions, if any, made to the Class Principal Balance of
such Class of Certificates as described under "--Allocation of Realized
Losses and Certain Other Shortfalls and Expenses" below in connection
with Realized Losses and Additional Trust Fund Expenses; and
(34) to pay to the Holders of the REMIC Residual Certificates,
the balance, if any, of the Subordinate Available Distribution Amount
for such Distribution Date;
provided that, on the final Distribution Date in connection with a termination
of the Trust, the distributions of principal to be made pursuant to clauses (2),
(5), (8), (11), (14), (17), (20), (23), (26), (29) and (32) above shall, in each
case, subject to the then remaining portion of the Subordinate Available
Distribution Amount for such date, be made to the Holders of the relevant Class
of Principal Balance Certificates otherwise entitled to distributions of
principal pursuant to such clause in an amount equal to the entire then
remaining Class Principal Balance of such Class of Certificates outstanding
immediately prior to such final Distribution Date (and without regard to the
Principal Distribution Amount for such Distribution Date).
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Distributions of Prepayment Premiums and Yield Maintenance Charges. If
any Prepayment Premium is collected during any particular Collection Period in
respect of any Mortgage Loan that provides for Prepayment Consideration equal to
the greater of a specified Prepayment Premium and a Yield Maintenance Charge,
then such Prepayment Premium will be distributed as additional interest on the
Distribution Date corresponding to such Collection Period to the Holders of the
Class S Certificates.
If any Yield Maintenance Charge is collected with respect to any
Mortgage Loan during any particular Collection Period (including a Yield
Maintenance Charge collected in respect of a Mortgage Loan that provides for
Prepayment Consideration equal to the greater of a specified Prepayment Premium
and a Yield Maintenance Charge), then such Yield Maintenance Charge will be
distributed as additional interest on the Distribution Date corresponding to
such Collection Period as follows:
o The Holders of the Class (or Classes) of Principal Balance
Certificates then entitled to distributions of principal on
such Distribution Date will be entitled to an aggregate amount
(allocable among such Classes, if more than one, as described
below) equal to the product of (1) the amount of such Yield
Maintenance Charge, multiplied by (2) a fraction (not greater
than one or less than zero), the numerator of which is equal
to the excess, if any, of the Pass-Through Rate applicable to
such Class of Principal Balance Certificates for such
Distribution Date (or, if two or more Classes are involved,
the Pass- Through Rate applicable to such of those Classes as
has the most senior right of payment or, in the case of the
Class A-1A and Class A-1B Certificates, the earlier Assumed
Final Distribution Date), over the relevant Discount Rate, and
the denominator of which is equal to the excess, if any, of
the Mortgage Rate for the prepaid Mortgage Loan, over the
relevant Discount Rate. If more than one Class of Principal
Balance Certificates is entitled to distributions of principal
on such Distribution Date, the aggregate amount described in
the preceding sentence will be allocated among such Classes on
a pro rata basis in accordance with the relative amounts of
such distributions of principal.
o Any portion of such Yield Maintenance Charge that may remain
after such distributions on the Principal Balance Certificates
will be distributed to the Holders of the Class S
Certificates.
For purposes of the foregoing, the relevant "Discount Rate" will be the
rate which, when compounded monthly, is equivalent to the Treasury Rate when
compounded semi-annually (e.g., a 6% per annum Treasury Rate would equate to a
5.9263% per annum Discount Rate). The "Treasury Rate" is the yield calculated by
the linear interpolation of the yields, as reported in Federal Reserve
Statistical Release H.15--Selected Interest Rates under the heading "U.S.
government securities/Treasury constant maturities" for the week ending prior to
the date of the relevant principal prepayment, of U.S. Treasury constant
maturities with a maturity date (one longer and one shorter) most nearly
approximating (a) in the case of any GECA Mortgage Loan (except in the case of
one GECA Mortgage Loan, representing 2.4% of the Initial Pool Balance), the
weighted average life (calculated in accordance with the related loan documents)
of the prepaid Mortgage Loan immediately prior to the prepayment and (b) in the
case of any Column Mortgage Loan (and in the case of one GECA Mortgage Loan,
representing 2.4% of the Initial Pool Balance), the stated maturity (or, in the
case of any Column Mortgage Loan that is an ARD Loan, the Anticipated Repayment
Date) of the prepaid Mortgage Loan. If Release H.15 is no longer published, the
Master Servicer will select a comparable publication to determine the Treasury
Rate.
Neither the Depositor nor either Underwriter makes any representation
as to the enforceability of the provision of any Mortgage Note requiring the
payment of a Prepayment Premium or Yield Maintenance Charge or as to the
collectability of any Prepayment Premium or Yield Maintenance Charge. See
"Description of the Mortgage Pool--Certain Terms and Conditions of the Mortgage
Loans--Prepayment Provisions" and "Risk Factors--Risks Related to the Mortgage
Loans--Limitations on Enforceability and Collectability of Prepayment Premiums
and Yield Maintenance Charges" in this Prospectus Supplement.
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Distributions of Additional Interest. It is anticipated that the Class
D-1 Certificates will be delivered to and retained by GECA or an affiliate
thereof. The Class D-1 Certificates will entitle the Holders thereof to all
amounts, if any, applied as Additional Interest on the GECA Mortgage Loans that
are ARD Loans.
It is anticipated that the Class D-2 Certificates will be delivered to
and retained by Column or an affiliate thereof. The Class D-2 Certificates will
entitle the Holders thereof to all amounts, if any, applied as Additional
Interest on the Column Mortgage Loans that are ARD Loans.
Treatment of REO Properties. Notwithstanding that any Mortgaged
Property may be acquired as part of the Trust Fund through foreclosure, deed in
lieu of foreclosure or otherwise, the related Mortgage Loan will be treated as
having remained outstanding until such REO Property is liquidated for purposes
of determining--
o distributions on the Certificates,
o allocations of Realized Losses and Additional Trust Fund
Expenses to the Certificates, and
o the amount of all fees payable under the Pooling Agreement.
The Mortgage Loan will be taken into account when determining the Weighted
Average Mortgage Pass-Through Rate and the Principal Distribution Amount for
each Distribution Date. Operating revenues and other proceeds derived from such
REO Property (after application thereof to pay, or to reimburse the Master
Servicer, the Special Servicer and/or the Trustee for the payment of, certain
costs and expenses incurred in connection with the operation and disposition of
such REO Property) will be "applied" by the Master Servicer as principal,
interest and other amounts "due" on such Mortgage Loan. As and to the extent
described under "--P&I Advances" below, the Master Servicer and the Trustee will
be required to make P&I Advances in respect of such Mortgage Loan, in all cases
as if such Mortgage Loan had remained outstanding.
Allocation of Realized Losses and Certain Other Shortfalls and Expenses
As a result of Realized Losses and Additional Trust Fund Expenses, the
aggregate Stated Principal Balance of the Mortgage Pool may decline below the
aggregate Certificate Principal Balance of the Principal Balance Certificates,
thereby resulting in a Mortgage Pool Deficit equal to the difference. If a
Mortgage Pool Deficit exists following the distributions made to
Certificateholders on any Distribution Date, then the respective Class Principal
Balances of the various Classes of Principal Balance Certificates are to be
successively reduced in reverse order of seniority as depicted on the Expanded
Seniority Chart under "--Seniority" above, until such Mortgage Pool Deficit is
eliminated. The first Class Principal Balance to be reduced would be that of the
most subordinate Class of Principal Balance Certificates then outstanding. No
such reduction will be made to the Class Principal Balance of any Class of
Principal Balance Certificates until the Class Principal Balance of each more
subordinate Class of Principal Balance Certificates, if any, is reduced to zero.
If it is necessary to make any such reductions in the Class Principal Balances
of the Class A-1A and Class A-1B Certificates at a time when both such Classes
are outstanding, such reductions will be made on a pro rata basis in accordance
with relative sizes of such Class Principal Balances.
The foregoing reductions in the Class Principal Balances of the
respective Classes of the Principal Balance Certificates will effectively
constitute an allocation of the Realized Losses and/or Additional Trust Fund
Expenses that caused the particular Mortgage Pool Deficit. Any such reduction in
the Class Principal Balance of a Class of Principal Balance Certificates will
result in a corresponding reduction in the Notional Amount of the Class S
Certificates.
"Realized Losses" are losses on or in respect of the Mortgage Loans
arising from the inability of the Master Servicer and/or the Special Servicer to
collect all amounts due and owing under any such Mortgage Loan, including by
reason of the fraud or bankruptcy of a Borrower or, to the extent not covered by
insurance, a casualty of any nature at a Mortgaged Property. The Realized Loss
in respect of a liquidated Mortgage Loan (or related REO Property) is an amount
generally equal to the excess, if any, of (a) the outstanding principal balance
of such Mortgage Loan as of the date of
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liquidation, together with (i) all accrued and unpaid interest thereon to but
not including the Due Date in the Collection Period in which the liquidation
occurred (exclusive, however, of any such accrued and unpaid interest that
constitutes Default Interest or Additional Interest) and (ii) all related
unreimbursed Servicing Advances and unpaid liquidation expenses, over (b) the
aggregate amount of Liquidation Proceeds, if any, recovered in connection with
such liquidation. If any portion of the debt due under a Mortgage Loan is
forgiven, whether in connection with a modification, waiver or amendment granted
or agreed to by the Master Servicer or the Special Servicer or in connection
with the bankruptcy or similar proceeding involving the related Borrower, the
amount so forgiven (other than Default Interest and Additional Interest) also
will be treated as a Realized Loss.
An "Additional Trust Fund Expense" is, in general, an expense of the
Trust that arises out of a default on a Mortgage Loan or an otherwise
unanticipated event and that is not covered by a Servicing Advance or a
corresponding collection from the related Borrower. Some examples of Additional
Trust Fund Expenses are:
o any Special Servicing Fees, Workout Fees and Liquidation Fees
paid to the Special Servicer;
o any interest paid to the Master Servicer, the Special Servicer
and/or the Trustee in respect of unreimbursed Advances (to the
extent not covered out of late payment charges and Default
Interest actually collected on the related Mortgage Loans);
o the cost of various opinions of counsel required or permitted
to be obtained in connection with the servicing of the
Mortgage Loans and the administration of the Trust Fund;
o certain unanticipated, non-Mortgage Loan specific expenses of
the Trust, including certain reimbursements and
indemnifications to the Trustee as described under
"Description of the Pooling Agreements--Certain Matters
Regarding the Trustee" in the Prospectus, certain
reimbursements to the Master Servicer, the Special Servicer,
the REMIC Administrator and the Depositor as described under
"Description of the Pooling Agreements--Certain Matters
Regarding the Master Servicer, the Special Servicer, the REMIC
Administrator and the Depositor" in the Prospectus and certain
federal, state and local taxes, and certain tax-related
expenses, payable out of the Trust Fund as described under
"Federal Income Tax Consequences--Possible Taxes on Income
From Foreclosure Property and Other Taxes" in this Prospectus
Supplement and "Federal Income Tax Consequences--Taxation of
Owners of REMIC Regular Certificates--Prohibited Transactions
Tax and Other Taxes" in the Prospectus; and
o any amounts expended on behalf of the Trust to remediate an
adverse environmental condition at any Mortgaged Property
securing a defaulted Mortgage Loan (see "Description of the
Pooling Agreements--Realization Upon Defaulted Mortgage Loans"
in the Prospectus).
The Net Aggregate Prepayment Interest Shortfall, if any, for each
Distribution Date will be allocated on such Distribution Date among the
respective Classes of REMIC Regular Certificates, up to, and on a pro rata
basis, in accordance with, the respective amounts of Accrued Certificate
Interest for each such Class of Certificates for the related Interest Accrual
Period.
P&I Advances
The Master Servicer will be required to make for each Distribution Date
(either out of its own funds or, subject to the replacement thereof as and to
the extent provided in the Pooling Agreement, funds held in the Certificate
Account that are not required to be part of the Available Distribution Amount
for such Distribution Date) an aggregate amount of P&I Advances generally equal
to all Scheduled P&I Payments (other than Balloon Payments) and any Assumed P&I
Payments, in each case net of related Master Servicing Fees and/or Workout Fees,
that (a) were due or deemed due, as the case may be, in respect of the Mortgage
Loans during the related Collection Period and (b) were not paid by or on behalf
of the respective Borrowers or otherwise collected as of the close of business
on the last day of the related Collection Period. Notwithstanding the foregoing,
if it is determined that an Appraisal Reduction Amount (as defined
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below) exists with respect to any Required Appraisal Loan (also as defined
below), then the Master Servicer will reduce the interest portion (but not the
principal portion) of each P&I Advance that it must make in respect of such
Required Appraisal Loan during the period that such Appraisal Reduction Amount
exists. The interest portion of any P&I Advance required to be made in respect
of a Required Appraisal Loan as to which there exists an Appraisal Reduction
Amount, will 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 and the prior sentence, multiplied by (ii)
a fraction, the numerator of which is equal to the Stated Principal Balance of
such Mortgage Loan, net of such Appraisal Reduction Amount, and the denominator
of which is equal to the Stated Principal Balance of such Mortgage Loan. See
"--Appraisal Reductions" below.
If the Master Servicer fails to make a required P&I Advance, the
Trustee will be obligated to make such Advance. See "--The Trustee" below.
The Master Servicer and the Trustee will each be entitled to recover
any P&I Advance made by it (out of its own funds) from Related Proceeds. Neither
the Master Servicer nor the Trustee will be obligated to make any P&I Advance
that, in its reasonable, good faith judgment, would not ultimately be
recoverable out of Related Proceeds (any P&I Advance not so recoverable, a
"Nonrecoverable P&I Advance"). If the Master Servicer or the Trustee makes any
P&I Advance that it subsequently determines, in its reasonable, good faith
judgment, is a Nonrecoverable P&I Advance, it may obtain reimbursement for such
P&I Advance (together with interest accrued thereon as described below) out of
general collections on the Mortgage Loans and any REO Properties on deposit in
the Certificate Account from time to time. See "Description of the
Certificates--Advances in Respect of Delinquencies" and "Description of the
Pooling Agreements--Certificate Account" in the Prospectus.
The Master Servicer and the Trustee will each be entitled to receive
interest on P&I Advances made thereby. Such interest will accrue on the amount
of each P&I Advance, and compounded monthly, for so long as such P&I Advance is
outstanding at a rate per annum equal to the "prime rate" as published in the
"Money Rates" section of The Wall Street Journal, as such "prime rate" may
change from time to time. Interest so accrued with respect to any P&I Advance
will be payable--
o first, out of Default Interest and late payment charges
collected on the related Mortgage Loan, and
o then, if and to the extent that (i) if such P&I Advance has
been or is being reimbursed and (ii) the Default Interest and
late charges collected on the related Mortgage Loan while such
Servicing Advance was outstanding were insufficient to cover
such Advance Interest, out of any amounts then on deposit in
the Certificate Account.
Any delay between a Sub-Servicer's receipt of a late collection of a
Scheduled P&I Payment as to which a P&I Advance was made and the forwarding of
such late collection to the Master Servicer will increase the amount of interest
accrued and payable to the Master Servicer or the Trustee, as the case may be,
on such P&I Advance. To the extent not offset by Default Interest and/or late
payment charges accrued and actually collected, interest accrued on outstanding
P&I Advances will result in a reduction in amounts payable on the Certificates.
An "Assumed P&I Payment" is an amount deemed due in respect of:
o each Mortgage Loan that is delinquent in respect of its
Balloon Payment beyond the first Determination Date that
follows its most recent maturity date and as to which no
arrangements have been agreed to for collection of the
delinquent amounts, including an extension of maturity; and
o each Mortgage Loan as to which the related Mortgaged Property
has become an REO Property.
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The Assumed P&I Payment deemed due on any such Mortgage Loan that is delinquent
as to its Balloon Payment, for its stated maturity date and for each successive
Due Date that it remains outstanding, will equal the Scheduled P&I Payment that
would have been due on the Mortgage Loan on such date if the related Balloon
Payment had not come due (but instead the Mortgage Loan had continued to
amortize and accrue interest in accordance with its terms in effect prior to
such maturity date). The Assumed P&I Payment deemed due on any such Mortgage
Loan as to which the related Mortgaged Property has become an REO Property, for
each Due Date that such REO Property remains part of the Trust Fund, will equal
the Scheduled P&I Payment (or, in the case of a Mortgage Loan delinquent in
respect of its Balloon Payment, the Assumed P&I Payment) due (or deemed due) on
the last Due Date prior to the acquisition of such REO Property. Assumed P&I
Payments for ARD Loans do not include Additional Interest or Accelerated
Amortization Payments.
Appraisal Reductions
Promptly following the occurrence of any of the following events (each,
an "Appraisal Trigger Event") with respect to any Mortgage Loan (upon the
occurrence of any such event, a "Required Appraisal Loan"), the Special Servicer
must obtain (and deliver to the Trustee and Master Servicer a copy of) an
appraisal of the related Mortgaged Property from an independent appraiser
meeting certain specified qualifications (any such appraisal, a "Required
Appraisal"), unless such an appraisal had previously been obtained within the
prior twelve months--
o Such Mortgage Loan becomes a Modified Mortgage Loan (as
defined below).
o The related Borrower fails to make any Scheduled P&I Payment
with respect to such Mortgage Loan and the failure continues
for 60 days (or, in certain cases, 30 days).
o A receiver is appointed and continues in such capacity in
respect of the Mortgaged Property securing such Mortgage Loan.
o The related Borrower becomes the subject of bankruptcy,
insolvency or similar proceedings.
o The Mortgaged Property securing such Mortgage Loan becomes an
REO Property.
As a result of any such appraisal, it may be determined that an
Appraisal Reduction Amount exists with respect to the related Required Appraisal
Loan. The "Appraisal Reduction Amount" for any Required Appraisal Loan will, in
general, be an amount (determined as of the Determination Date immediately
succeeding the later of the date on which the relevant appraisal is or was
obtained and the first relevant Appraisal Trigger Event occurred) equal to the
excess, if any, of "x" over "y" where--
o "x" is equal to the sum of:
(i) the Stated Principal Balance of such Required
Appraisal Loan;
(ii) to the extent not previously advanced by or on behalf
of the Master Servicer or the Trustee, all unpaid
interest (less related Servicing Fees and excluding
Default Interest and, in the case of an ARD Loan
after its Anticipated Repayment Date, Additional
Interest) accrued on the Required Appraisal Loan
through the most recent Due Date prior to such
Determination Date;
(iii) all accrued but unpaid Servicing Fees in respect of
such Required Appraisal Loan;
(iv) all related unreimbursed Advances made by or on
behalf of the Master Servicer, the Special Servicer
or the Trustee with respect to such Required
Appraisal Loan, together with interest thereon; and
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(v) all currently due and unpaid real estate taxes and
assessments, insurance premiums and, if applicable,
ground rents in respect of the related Mortgaged
Property (net of any escrow reserves held by the
Master Servicer or the Special Servicer to cover any
such item); and
o "y" is equal to 90% of the resulting appraised value of the
related Mortgaged Property or REO Property (as such appraised
value may be reduced (to not less than zero) by the amount of
any obligations secured by liens on such property that are
prior to the lien of the Required Appraisal Loan).
Appraisal Reduction Amounts are relevant to the determination of the
amount of any P&I Advance required to be made in respect of the related Required
Appraisal Loan. See "--P&I Advances" above.
If, however, any Required Appraisal is not obtained within 60 days of
an Appraisal Trigger Event (and no comparable appraisal had been obtained during
the twelve (12) month period prior to such Appraisal Trigger Event), then until
such Required Appraisal is obtained the "Appraisal Reduction Amount" for the
subject Required Appraisal Loan will be deemed to equal 25% of the Stated
Principal Balance of such Required Appraisal Loan. After receipt of such
Required Appraisal, the Appraisal Reduction Amount, if any, for such Required
Appraisal Loan will be calculated as described above.
For so long as any Mortgage Loan remains a Required Appraisal Loan, the
Special Servicer is required, within 30 days of each annual anniversary of such
Mortgage Loan's becoming a Required Appraisal Loan, to order (and deliver to the
Trustee and the Master Servicer a copy of) an update of the prior appraisal.
Based upon such update, the Special Servicer is to redetermine and report to the
Trustee and the Master Servicer the new Appraisal Reduction Amount, if any, with
respect to such Mortgage Loan. A Mortgage Loan will cease to be a Required
Appraisal Loan if and when such Mortgage Loan has become a Corrected Mortgage
Loan and has remained current for at least twelve consecutive Scheduled P&I
Payments, and no other Servicing Transfer Event has occurred during the
preceding twelve months.
The cost of each Required Appraisal (and any update thereof) will be
advanced by the Master Servicer and will be reimbursable thereto as a Servicing
Advance.
At any time that an Appraisal Reduction Amount exists with respect to
any Required Appraisal Loan, the Controlling Class Representative will be
entitled, at its own expense, to obtain and deliver to the Master Servicer, the
Special Servicer and the Trustee an appraisal that satisfies the criteria for a
Required Appraisal. In addition, at any such time that is not less than six (6)
months following the initial establishment of such Appraisal Reduction Amount
(and on one occasion at least six (6) months after the first occasion), the
Holders of any then outstanding Class of Certificates that is subordinate to the
Controlling Class will be entitled to obtain and deliver to the Master Servicer,
the Special Servicer and the Trustee an appraisal that satisfies the criteria
for a Required Appraisal. Upon the written request of the Controlling Class
Representative or such Holders, the Special Servicer will be required to
recalculate the Appraisal Reduction Amount in respect of such Required Appraisal
Loan based on the appraisal delivered by such party and notify the Trustee, the
Master Servicer and the Controlling Class Representative of the recalculated
Appraisal Reduction Amount.
A "Modified Mortgage Loan" is any Mortgage Loan as to which any
Servicing Transfer Event has occurred and which has been modified by the Special
Servicer in a manner that:
(A) affects the amount or timing of any payment of principal or
interest due thereon (other than, or in addition to, bringing
current Scheduled P&I Payments with respect to such Mortgage
Loan);
(B) except as expressly contemplated by the related Mortgage,
results in a release of the lien of the Mortgage on any
material portion of the related Mortgaged Property without a
corresponding principal prepayment in an amount not less than
the fair market value (as is) of the property to be released;
or
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(C) in the reasonable, good faith judgment of the Special
Servicer, otherwise materially impairs the security for such
Mortgage Loan or reduces the likelihood of timely payment of
amounts due thereon.
Reports to Certificateholders; Certain Available Information
Trustee Reports. Based solely on information provided in monthly
reports prepared by the Master Servicer and the Special Servicer and delivered
to the Trustee, the Trustee will prepare and provide or make available
electronically (or, upon request, by first class mail) on each Distribution Date
to each Certificateholder a statement (the "Trustee Report") substantially in
the form of, and containing the information set forth in, Exhibit B hereto,
detailing the distributions on such Distribution Date and the performance, both
in the aggregate and individually to the extent available, of the Mortgage Loans
and Mortgaged Properties.
Book-Entry Certificates. Even if you hold your Certificates in
book-entry from through DTC, you may obtain direct access to Trustee Reports as
if you were a Certificateholder, provided that you deliver a written
certification to the Trustee confirming your beneficial ownership in the Offered
Certificates. Otherwise, until such time as Definitive Certificates are issued
in respect of your Certificates, the information contained in the Trustee
Reports will be available to you only to the extent that it is made available
through DTC and the DTC Participants or is available on the Trustee's Internet
Web Site. Conveyance of notices and other communications by DTC to the DTC
Participants, and by the DTC Participants to beneficial owners of the Offered
Certificates, will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to time. The
Master Servicer, the Special Servicer, the Trustee, the Depositor, the REMIC
Administrator and the Certificate Registrar are required to recognize as
Certificateholders only those persons in whose names the Certificates are
registered on the books and records of the Certificate Registrar.
Information Available Electronically. The Trustee will make available
each month, to any interested party, the Trustee Report via the Trustee's
Internet Website, electronic bulletin board and fax-on-demand service. In
addition, the Trustee will also make certain Mortgage Loan information as
presented in the CSSA loan setup file and CSSA loan periodic update file formats
available to any Holder or beneficial owner of a Certificate held in book-entry
form, via the Trustee's Internet Website. The Trustee's Internet Website will
initially be located at "www.ctslink.com/cmbs". "CSSA" refers to the Commercial
Real Estate Secondary Market and Securitization Association.
The Trustee's electronic bulletin board may be accessed by calling
(301) 815-6620, and its fax-on-demand service may be accessed by calling (301)
815-6610. For assistance with regard to the above-mentioned services, investors
may call (301) 815-6600.
The Trustee will make no representations or warranties as to the
accuracy or completeness of such documents and will assume no responsibility
therefor. In addition, the Trustee may disclaim responsibility for any
information made available by the Trustee for which it is not the original
source.
In connection with providing access to the Trustee's electronic
bulletin board and Trustee's Internet Website, the Trustee may require
registration and the acceptance of a disclaimer. The Trustee shall not be liable
for the dissemination of information made in accordance with the Pooling
Agreement.
Other Information. The Pooling Agreement will obligate the Trustee to
make available at its offices, during normal business hours, upon reasonable
advance written notice, for review by any Holder or beneficial owner of an
Offered Certificate or any person identified to the Trustee by any such Holder
or beneficial owner as a prospective transferee of an Offered Certificate or any
interest therein, subject to the discussion in the following paragraph,
originals or copies of, among other things, the following items:
o the Pooling Agreement and any amendments thereto;
o all Trustee Reports delivered to Certificateholders since the
Closing Date;
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o all officer's certificates delivered to the Trustee by the
Master Servicer and/or the Special Servicer since the Closing
Date as described under "Servicing of the Mortgage
Loans--Evidence as to Compliance" in this Prospectus
Supplement;
o all accountant's reports delivered to the Trustee in respect
of the Master Servicer and/or the Special Servicer since the
Closing Date as described under "Servicing of the Mortgage
Loans--Evidence as to Compliance" in this Prospectus
Supplement;
o the most recent inspection report in respect of each Mortgaged
Property prepared by the Master Servicer or the Special
Servicer and delivered to the Trustee as described under
"Servicing of the Mortgage Loans--Inspections; Collection of
Operating Information" in this Prospectus Supplement;
o the most recent appraisal, if any, with respect to each
Mortgaged Property obtained by the Master Servicer or the
Special Servicer and delivered to the Trustee (see
"--Appraisal Reductions" above);
o the most recent quarterly and annual operating statement and
rent roll for each Mortgaged Property and financial statements
of the related Borrower collected by the Master Servicer or
the Special Servicer and delivered to the Trustee as described
under "Servicing of the Mortgage Loans--Inspections;
Collection of Operating Information" in this Prospectus
Supplement; and
o the Mortgage Files, including all documents (e.g.,
modifications, waivers and amendments of the Mortgage Loans)
that are to be added thereto from time to time.
Copies of any and all of the foregoing items will be available from the Trustee
upon request. However, the Trustee will be permitted to require payment of a sum
sufficient to cover the reasonable costs and expenses of providing such copies.
In connection with providing access to or copies of the items described
above, the Trustee may require:
o in the case of a beneficial owner of a Certificate held in
book-entry form, a written confirmation executed by the
requesting person or entity, in a form reasonably acceptable
to the Trustee, generally to the effect that such person or
entity is a beneficial owner of Offered Certificates and will
keep such information confidential; and
o in the case of a prospective purchaser of Certificates or
interests therein, confirmation executed by the requesting
person or entity, in a form reasonably acceptable to the
Trustee, generally to the effect that such person or entity is
a prospective purchaser of Certificates or an interest
therein, is requesting the information for use in evaluating a
possible investment in such Certificates and will otherwise
keep such information confidential.
Certificateholders, by the acceptance of their Certificates, will be deemed to
have agreed to keep such information confidential. Notwithstanding the
foregoing, however, no Holder, beneficial owner or prospective transferee of any
Certificate or interest therein will be required to keep confidential any
information that has previously been filed with the SEC, and the Trustee will
not be required to obtain either of the confirmations referred to in the second
preceding sentence in connection with providing any information that has
previously been filed with the SEC.
Voting Rights
At all times during the term of the Pooling Agreement, 99% of the
voting rights for the series offered by this Prospectus Supplement (the "Voting
Rights") will be allocated among the respective Classes of Principal Balance
Certificates in proportion to the Class Principal Balances thereof. 1% of such
Voting Rights will be allocated to the Class S Certificates. Voting Rights
allocated to a Class of Certificates will be allocated among such Certificates
in proportion to the percentage interests in such Class evidenced thereby.
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Termination
The obligations created by the Pooling Agreement will terminate
following the earliest of
(i) the final payment (or advance in respect thereof) or other
liquidation of the last Mortgage Loan or related REO Property
remaining in the Trust Fund, and
(ii) the purchase of all of the Mortgage Loans and REO Properties
remaining in the Trust Fund by the Master Servicer, the
Special Servicer or any single Holder or group of Holders of
Certificates representing a majority interest in the
Controlling Class (in that order of preference).
Written notice of termination of the Pooling Agreement will be given to
each Certificateholder, and the final distribution with respect to each
Certificate will be made only upon surrender and cancellation of such
Certificate at the office of the Certificate Registrar or at such other location
specified in such notice of termination.
Any such purchase by the Master Servicer, the Special Servicer or any
majority Holder or Holders of the Controlling Class of all the Mortgage Loans
and REO Properties remaining in the Trust Fund is required to be made at a price
(the "Termination Price") equal to (a) the sum of (i) the aggregate Purchase
Price of all the Mortgage Loans then included in the Trust Fund (other than any
Mortgage Loans as to which the related Mortgaged Properties have become REO
Properties) and (ii) the appraised value of all REO Properties then included in
the Trust Fund, as determined by an appraiser mutually agreed upon by the Master
Servicer and the Trustee, minus (b) (solely in the case of a purchase by the
Master Servicer or the Special Servicer) the aggregate of all amounts payable or
reimbursable to the purchaser under the Pooling Agreement. Such purchase will
effect early retirement of the then outstanding Certificates, but the right of
the Master Servicer, the Special Servicer or any majority Holder or Holders of
the Controlling Class to effect such termination is subject to the requirement
that the then aggregate Stated Principal Balance of the Mortgage Pool be less
than 1.0% of the Initial Pool Balance. The Termination Price (exclusive of any
portion thereof payable or reimbursable to any person other than the
Certificateholders) will constitute part of the Available Distribution Amount
for the final Distribution Date.
The Trustee
Norwest Bank Minnesota, National Association ("Norwest Bank") will act
as Trustee pursuant to the Pooling Agreement. Norwest Bank, a direct, wholly
owned subsidiary of Wells Fargo & Company, is a national banking association
originally chartered in 1872 and is engaged in a wide range of activities
typical of a national bank. Norwest Bank maintains an office at Norwest Center,
Sixth and Marquette, Minneapolis, Minnesota 55479-0113. Certificate transfer
services are conducted at Norwest Bank's offices in Minneapolis. Norwest Bank
otherwise conducts its trustee and securities administration services at its
offices in Columbia, Maryland. Its address there is 11000 Broken Land Parkway,
Columbia, Maryland 21044-3562. In addition, Norwest Bank maintains a trust
office in New York located at 3 New York Plaza, New York, New York 10004.
Certificateholders and other interested parties should direct their inquiries to
the New York office. The telephone number is (212) 515-5240.
The Trustee is at all times required to be a corporation, bank, trust
company or association organized and doing business under the laws of the United
States of America or any State thereof or the District of Columbia, authorized
under such laws to exercise trust powers, having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by federal or
state authority. If such corporation, bank, trust company or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of the foregoing, the combined capital and surplus of such corporation,
bank, trust company or association will be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
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The Depositor, the Master Servicer, the Special Servicer and their
respective affiliates may from time to time enter into normal banking and
trustee relationships with the Trustee and its affiliates. The Trustee and any
of its respective affiliates may hold Certificates in their own names. In
addition, for purposes of meeting the legal requirements of certain local
jurisdictions, the Master Servicer and the Trustee acting jointly will have the
power to appoint a co-trustee or separate trustee of all or any part of the
Trust Fund. All rights, powers, duties and obligations conferred or imposed upon
the Trustee will be conferred or imposed upon the Trustee and such separate
trustee or co-trustee jointly (or, in any jurisdiction in which the Trustee
shall be incompetent or unqualified to perform certain acts, singly upon such
separate trustee or co-trustee who shall exercise and perform such rights,
powers, duties and obligations solely at the direction of the Trustee).
The Trustee will be entitled to a monthly fee (the "Trustee Fee") for
its services, which fee will accrue (on a 30/360 Basis) at 0.002% per annum on
the Stated Principal Balance outstanding from time to time of each and every
Mortgage Loan. The Trustee Fee is payable out of general collections on the
Mortgage Loans and any REO Properties.
For so long as the same entity acts as Trustee and REMIC Administrator,
such entity will be entitled, in its capacity as REMIC Administrator, to the
same limitations on liability and rights to reimbursement and indemnification as
it has in its capacity as Trustee.
See also "Description of the Pooling Agreements--the Trustee",
"--Duties of the Trustee", "--Certain Matters Regarding the Trustee" and
"--Resignation and Removal of the Trustee" in the Prospectus.
YIELD AND MATURITY CONSIDERATIONS
Yield Considerations
General. The yield on any Offered Certificate will depend on (a) the
price at which such Certificate is purchased by an investor and (b) the rate,
timing and amount of distributions on such Certificate. The rate, timing and
amount of distributions on any Offered Certificate will in turn depend on, among
other things,
(i) the Pass-Through Rate for such Certificate,
(ii) the rate and timing of principal payments (including principal
prepayments) and other principal collections on the Mortgage
Loans and the extent to which such amounts are to be applied
or otherwise result in reduction of the Certificate Principal
Balance or Certificate Notional Amount of such Certificate,
(iii) the rate, timing and severity of Realized Losses and
Additional Trust Fund Expenses and the extent to which such
losses and shortfalls result in the reduction of the
Certificate Principal Balance or Certificate Notional Amount
of such Certificate, and
(iv) the timing and severity of any Net Aggregate Prepayment
Interest Shortfalls and the extent to which such shortfalls
result in the reduction of the Distributable Certificate
Interest payable on such Certificate.
Pass-Through Rates. The Pass-Through Rate applicable to the Class S
Certificates will be variable and will equal the weighted average of the Class S
Strip Rates at which interest accrues on the respective Components of the
related Class Notional Amount from time to time. Each such strip rate (as well
as the Pass-Through Rates for the Class A-2, Class A-3, Class B-1 and Class B-2
Certificates) will, in turn, be calculated based on the Weighted Average
Mortgage Pass-Through Rate from time to time. Accordingly, the yields on the
Class S, Class A-2, Class A-3, Class B-1 and Class B-2 Certificates will be
sensitive in varying degrees to changes in the relative composition of the
Mortgage Pool as a result of scheduled amortization, voluntary prepayments and
liquidations of Mortgage Loans following default. In addition, the Pass-Through
Rate for the Class S Certificates will vary with changes in the relative sizes
of the Class
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Principal Balances of the respective Classes of Principal Balance Certificates.
See "Description of the Offered Certificates--Distributions--Calculation of
Pass-Through Rates" and "Description of the Mortgage Pool" in this Prospectus
Supplement and "--Rate and Timing of Principal Payments" below.
Rate and Timing of Principal Payments. The yield to maturity on the
Class S Certificates will be extremely sensitive to, and the yield to maturity
on other Offered Certificates purchased at a discount or premium will be
affected by, the rate and timing of principal payments made in reduction of the
Certificate Principal Balances or Certificate Notional Amounts of such
Certificates. In turn, the rate and timing of principal payments that are
distributed or otherwise result in reduction of the Class Principal Balance or
Class Notional Amount, as the case may be, of each Class of Offered Certificates
will be directly related to the rate and timing of principal payments on or in
respect of the Mortgage Loans. Finally, the rate and timing of principal
payments on or in respect of the Mortgage Loans will be affected by the
amortization schedules thereof, the dates on which Balloon Payments are due and
the rate and timing of principal prepayments and other unscheduled collections
thereon (including for this purpose, collections made in connection with
liquidations of Mortgage Loans due to defaults, casualties or condemnations
affecting the Mortgaged Properties, or purchases or other removals of Mortgage
Loans out of the Trust Fund). Prepayments and, assuming the respective maturity
dates therefor have not occurred, liquidations of the Mortgage Loans will result
in distributions on the Principal Balance Certificates of amounts that would
otherwise be distributed over the remaining terms of the Mortgage Loans and will
tend to shorten the weighted average lives of those Certificates. Defaults on
the Mortgage Loans, particularly at or near their maturity dates, may result in
significant delays in payments of principal on the Mortgage Loans (and,
accordingly, on the Principal Balance Certificates) while work-outs are
negotiated or foreclosures are completed, and such delays will tend to lengthen
the weighted average lives of those Certificates. See "Servicing of The Mortgage
Loans--Modifications, Waivers, Amendment and Consent" in this Prospectus
Supplement. Furthermore, the ability of a Borrower under an ARD Loan to repay
its Mortgage Loan on the related Anticipated Repayment Date will generally
depend on its ability to either refinance the Mortgage Loan or sell the related
Mortgaged Property. In addition, such Borrower may have little incentive to
repay its Mortgage Loan on the related Anticipated Repayment Date if then
prevailing interest rates are relatively high. Accordingly, there can be no
assurance that any ARD Loan will be paid in full as of its Anticipated Repayment
Date.
The extent to which the yield to maturity on any Certificate may vary
from the anticipated yield will depend upon the degree to which such Certificate
is purchased at a discount or premium and when, and to what degree, payments of
principal on the Mortgage Loans are in turn distributed or otherwise result in a
reduction of the Certificate Principal Balance or Certificate Notional Amount of
such Certificate. If you purchase your Offered Certificates at a discount, you
should consider the risk that a slower than anticipated rate of principal
payments on the Mortgage Loans could result in an actual yield to you that is
lower than your anticipated yield. If you purchase Class S Certificates or if
you purchase any other Offered Certificates at a premium, you should consider
the risk that a faster than anticipated rate of principal payments on the
Mortgage Loans could result in an actual yield to you that is lower than your
anticipated yield.
In general, assuming you purchased your Certificates at a discount or a
premium, the earlier a payment of principal on or in respect of the Mortgage
Loans is distributed or otherwise results in reduction of the Certificate
Principal Balance or Certificate Notional Amount of your Certificates, the
greater will be the effect on your yield to maturity. As a result, the effect on
your yield of principal payments occurring at a rate higher (or lower) than you
anticipated during any particular period may not be fully offset by a subsequent
like reduction (or increase) in the rate of principal payments.
If you are contemplating an investment in the Class S Certificates, you
should fully consider the risk that an extremely rapid rate of principal
payments on the Mortgage Loans could result in your failure to recoup fully your
initial investment.
Because the rate of principal payments on or in respect of the Mortgage
Loans will depend on future events and a variety of factors (as described more
fully below), no assurance can be given as to such rate or the rate of principal
prepayments in particular. The Depositor is not aware of any relevant publicly
available or authoritative statistics with respect to the historical prepayment
experience of a large group of mortgage loans comparable to the Mortgage Loans.
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Even if they are available and distributable on your Certificates,
Prepayment Premiums and Yield Maintenance Charges may not be sufficient to
offset fully any loss in yield on your Certificates attributable to the related
prepayments of the Mortgage Loans.
Delinquencies and Defaults on the Mortgage Loans. The rate and timing
of delinquencies and defaults on the Mortgage Loans will affect the amount of
distributions on your Certificates, the yield to maturity of your Certificates,
the rate of principal payments on your Certificates and the weighted average
life of your Certificates. Delinquencies on the Mortgage Loans, unless covered
by P&I Advances, may result in shortfalls in distributions of interest and/or
principal on your Certificates for the current month. Although any such
shortfalls may be made up on future Distribution Dates, no interest would accrue
on any such shortfalls. Thus, any such shortfalls would adversely affect the
yield to maturity of your Certificates.
If you calculate the anticipated yield to maturity for your
Certificates based on an assumed rate of default and amount of losses on the
Mortgage Loans that is lower than the default rate and amount of losses actually
experienced and such additional losses result in a reduction of the aggregate
distributions on or the aggregate Certificate Principal Balance or Certificate
Notional Amount of your Certificates, your actual yield to maturity will be
lower than you calculated and could, under certain scenarios, be negative. The
timing of any loss on a liquidated Mortgage Loan that results in a reduction of
the aggregate distributions on or the aggregate Certificate Principal Balance or
Certificate Notional Amount of your Certificates will also affect your actual
yield to maturity, even if the rate of defaults and severity of losses are
consistent with your expectations. In general, the earlier your loss occurs, the
greater the effect on your yield to maturity.
Even if losses on the Mortgage Loans do not result in a reduction of
the aggregate distributions on or the aggregate Certificate Principal Balance or
Certificate Notional Amount of your Certificates, such losses may still affect
the timing of distributions on (and, accordingly, the weighted average life and
yield to maturity of) your Certificates.
Certain Relevant Factors. The following factors, among others, will
affect the rate and timing of principal payments and defaults and the severity
of losses on or in respect of the Mortgage Loans:
o prevailing interest rates;
o the terms of the Mortgage Loans (for example, provisions
requiring the payment of Prepayment Premiums and Yield
Maintenance Charges, provisions requiring Lock-out Periods and
amortization terms that require Balloon Payments);
o the demographics and relative economic vitality of the areas
in which the Mortgaged Properties are located;
o the general supply and demand for commercial and multifamily
residential space of the type available at the Mortgaged
Properties in the areas in which the Mortgaged Properties are
located;
o the quality of management of the Mortgaged Properties;
o the servicing of the Mortgage Loans;
o possible changes in tax laws; and
o other opportunities for investment.
See "Risk Factors--Risks Related to the Mortgage Loans", "Description
of the Mortgage Pool" and "Servicing of the Mortgage Loans" in this Prospectus
Supplement and "Description of the Pooling Agreements" and "Yield and Maturity
Considerations--Yield and Prepayment Considerations" in the Prospectus.
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The rate of prepayment on the Mortgage Loans is likely to be affected
by prevailing market interest rates for mortgage loans of a comparable type,
term and risk level. When the prevailing market interest rate is below the
Mortgage Rate (or, in the case of an ARD Loan after its Anticipated Repayment
Date, the Revised Rate) at which a Mortgage Loan accrues interest, a Borrower
may have an increased incentive to refinance such Mortgage Loan. Conversely, to
the extent prevailing market interest rates exceed the applicable Mortgage Rate
(or, in the case of an ARD Loan after its Anticipated Repayment Date, the
Revised Rate) for any Mortgage Loan, such Mortgage Loan may be less likely to
prepay (other than, in the case of an ARD Loan, out of certain net cash flow
from the related Mortgaged Property). Assuming prevailing market interest rates
exceed the related Revised Rate, the primary incentive to prepay an ARD Loan on
or before its Anticipated Repayment Date is to give the Borrower access to
excess cash flow, all of which (net of the minimum required debt service,
approved property expenses and any required reserves) must be applied to pay
down principal of the Mortgage Loan. Accordingly, there can be no assurance that
any ARD Loan will be prepaid on or before its Anticipated Repayment Date or on
any other date prior to maturity.
Depending on prevailing market interest rates, the outlook for market
interest rates and economic conditions generally, some Borrowers may sell
Mortgaged Properties in order to realize their equity therein, to meet cash flow
needs or to make other investments. In addition, some mortgagors may be
motivated by federal and state tax laws (which are subject to change) to sell
Mortgaged Properties prior to the exhaustion of tax depreciation benefits.
A number of the Borrowers are limited or general partnerships. Under
certain circumstances, the bankruptcy of the general partner in a partnership
may result in the dissolution of such partnership. The dissolution of a Borrower
partnership, the winding-up of its affairs and the distribution of its assets
could result in an acceleration of its payment obligations under the related
Mortgage Loan.
The Depositor makes no representation or warranty as to the particular
factors that will affect the rate and timing of prepayments and defaults on the
Mortgage Loans, as to the relative importance of such factors, as to the
percentage of the aggregate principal balance of the Mortgage Loans that will be
prepaid or as to which a default will have occurred as of any date or as to the
overall rate of prepayment or default on the Mortgage Loans.
CPR Model. Prepayments on mortgage loans are commonly measured relative
to a prepayment standard or model. The prepayment model used in this Prospectus
Supplement is the "constant prepayment rate" ("CPR") model, which represents an
assumed constant rate of prepayment each month (which is quoted on a per annum
basis) relative to the then outstanding principal balance of a pool of mortgage
loans for the life of such mortgage loans. The CPR model does not purport to be
either an historical description of the prepayment experience of any pool of
mortgage loans or a prediction of the anticipated rate of prepayment of any pool
of mortgage loans, including the Mortgage Pool. The Depositor does not make any
representations about the appropriateness of the CPR model.
Unpaid Distributable Certificate Interest. If the portion of the
Available Distribution Amount distributable in respect of interest on any Class
of Offered Certificates on any Distribution Date is less than the Distributable
Certificate Interest then payable for such Class, the shortfall will be
distributable to Holders of such Class of Certificates on subsequent
Distribution Dates, to the extent of available funds. Any such shortfall will
not bear interest, however, and will therefore negatively affect the yield to
maturity of such Class of Certificates for so long as it is outstanding.
Weighted Average Lives of Certain Classes of Offered Certificates
Subject to the following discussion and the Maturity Assumptions
specified below, the tables set forth on Exhibit C to this Prospectus Supplement
indicate the respective weighted average lives of the Class A-1A, Class A-1B,
Class A-2, Class A-3, Class B-1 and Class B-2 Certificates, and set forth the
percentages of the respective initial Class Principal Balances of such Classes
of Offered Certificates that would be outstanding after the Distribution Dates
in each of the calendar months shown.
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For purposes in this Prospectus Supplement, weighted average life
refers to the average amount of time that will elapse from the date of issuance
of a security until each dollar of principal of such security will be repaid to
the investor (assuming no losses). For purposes of this "Yield and Maturity
Considerations" section and Exhibit C to this Prospectus Supplement, the
weighted average life of a Principal Balance Certificate (such as a Class A-1A,
Class A-1B, Class A-2, Class A-3, Class B-1 or Class B-2 Certificate) is
determined by (i) multiplying the amount of each principal distribution thereon
by the number of years from the Assumed Settlement Date (as defined under "--The
Maturity Assumptions" below) to the related Distribution Date, (ii) summing the
results and (iii) dividing the sum by the aggregate amount of the reductions in
the Certificate Principal Balance of such Principal Balance Certificate. The
weighted average life of any Principal Balance Certificate will be influenced
by, among other things, the rate at which principal of the Mortgage Loans is
paid, which may be in the form of scheduled amortization, Balloon Payments,
prepayments or liquidations with respect to the Mortgage Loans as described in
this Prospectus Supplement. The weighted average life of any Principal Balance
Certificate may also be affected to the extent that additional distributions in
reduction of the Certificate Principal Balance of such Certificate occur as a
result of the purchase of a Mortgage Loan from the Trust or the optional
termination of the Trust as described under "Description of the Offered
Certificates--Termination" in this Prospectus Supplement. Such a purchase from
the Trust will have the same effect on distributions to the Certificateholders
as if the related Mortgage Loan(s) had prepaid in full, except that no
Prepayment Premiums or Yield Maintenance Charges are collectible in respect
thereof.
The actual characteristics and performance of the Mortgage Loans will
differ from the Maturity Assumptions used in calculating the tables set forth on
Exhibit C to this Prospectus Supplement, which are hypothetical in nature and
are provided only to give a general sense of how the principal cash flows might
behave under the assumed prepayment and loss scenarios. Any difference between
such assumptions and the actual characteristics and performance of the Mortgage
Loans, or actual prepayment or loss experience, will affect the percentages of
initial Class Principal Balances outstanding over time and the weighted average
lives of the respective Classes of Principal Balance Certificates. You must make
your own decisions as to the appropriate prepayment, liquidation and loss
assumptions to be used in deciding whether to purchase any Offered Certificate.
The Maturity Assumptions
The tables set forth on Exhibits C and D to this Prospectus Supplement
have been prepared on the basis of the following assumptions (the "Maturity
Assumptions") regarding the characteristics of the Certificates and the Mortgage
Loans and the performance thereof:
o as of the date of issuance of the Certificates, the Mortgage
Loans have the terms identified in the table titled
"Characteristics of the Mortgage Loans" in Exhibit A-1 to this
Prospectus Supplement;
o each ARD Loan is paid in full on its Anticipated Repayment
Date, no Mortgage Loan is prepaid during its Lock-out Period,
during any Prepayment Consideration Period during which a
Yield Maintenance Charge is required or during any period that
defeasance thereof may be required and, otherwise, each
Mortgage Loan is assumed to prepay at the specified CPR;
o no Mortgage Loan is repurchased or replaced as a result of a
Material Breach of a representation or warranty, and none of
the Master Servicer, the Special Servicer or any single Holder
or group of Holders of Certificates evidencing a majority
interest in the Controlling Class exercises its option to
purchase the Mortgage Loans and thereby cause a termination of
the Trust;
o there are no delinquencies or Realized Losses on the Mortgage
Loans, and there is no extension of the maturity date of any
Mortgage Loan;
o payments on the Certificates will be made on the 10th day of
each month, commencing in April 1999;
o payments on the Mortgage Loans earn no reinvestment return;
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o there are no additional ongoing Trust expenses payable out of
the Trust Fund other than the Master Servicing Fee (out of
which the primary servicing fees will be paid) and the Trustee
Fee (which, together with the Master Servicing Fee, will
accrue at a combined rate of 0.05% per annum), and there are
no Additional Trust Fund Expenses;
o the respective Classes of REMIC Regular Certificates will, in
each such case, be issued with the initial Class Principal
Balance or Class Notional Amount set forth in this Prospectus
Supplement;
o the Pass-Through Rates for the respective Classes of REMIC
Regular Certificates will be as set forth or described in this
Prospectus Supplement; and
o the Certificates will be settled with investors on March ,
1999 (the "Assumed Settlement Date").
Yield Sensitivity of the Class S Certificates
The yield to investors on the Class S Certificates will be highly
sensitive to the rate and timing of principal payments (including prepayments)
on the Mortgage Loans. If you are contemplating an investment in the Class S
Certificates, you should fully consider the associated risks, including the risk
that an extremely rapid rate of prepayment and/or liquidation of the Mortgage
Loans could result in your the failure to recoup fully your initial investment.
The tables set forth on Exhibit D to this Prospectus Supplement show
pre-tax corporate bond equivalent ("CBE") yields for the Class S Certificates
based on the Maturity Assumptions and assuming the specified purchase prices and
the indicated prepayment scenarios. Assumed purchase prices are expressed in
32nds (e.g., means %) as a percentage of the initial Class Notional Amount of
the Class S Certificates and are exclusive of accrued interest.
The yields set forth in the tables on Exhibit D to this Prospectus
Supplement were calculated by--
o determining the monthly discount rates that, when applied to
the assumed stream of cash flows to be paid on the Class S
Certificates, would cause the discounted present value of each
assumed stream of cash flows to equal (i) the assumed
aggregate purchase prices of such Class of Certificates, plus
(ii) accrued interest at the initial Pass-Through Rate for
such Class of Certificates from and including the Cut-off Date
to but excluding the Assumed Settlement Date, and
o converting such monthly rates to corporate bond equivalent
rates.
Such calculations do not take into account variations that may occur in the
interest rates at which investors may be able to reinvest funds received by them
as distributions on the Class S Certificates and consequently do not purport to
reflect the return on any investment on such Class of Certificates when such
reinvestment rates are considered.
There can be no assurance that--
o the Mortgage Loans will prepay in accordance with the
assumptions used in preparing the tables on Exhibit D to this
Prospectus Supplement,
o the Mortgage Loans will prepay as assumed at any of the rates
shown in such tables,
o the Mortgage Loans will not experience losses,
o Mortgage Loans will not be liquidated during any applicable
Lock-out Period or during any other period that prepayments
are assumed not to occur,
o the ARD Loans will be paid in full on their respective
Anticipated Repayment Dates,
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o the cash flows on the Class S Certificates will correspond to
the cash flows shown in this Prospectus Supplement, or
o the aggregate purchase price of the Class S Certificates will
be as assumed.
It is unlikely that the Mortgage Loans will prepay as assumed at any of the
specified percentages of CPR until maturity or that all of the Mortgage Loans
will so prepay at the same rate. Actual yields to maturity for investors in the
Class S Certificates may be materially different than those indicated on Exhibit
D to this Prospectus Supplement and, under certain circumstances, could be
negative. Timing of changes in rate of prepayments and other liquidations may
significantly affect the actual yield to maturity to investors, even if the
average rate of principal prepayments and other liquidations is consistent with
the expectations of investors. You must make your own decisions as to the
appropriate prepayment, liquidation and loss assumptions to be used in deciding
whether to purchase any Offered Certificates.
USE OF PROCEEDS
Substantially all of the proceeds from the sale of the Offered
Certificates will be used by the Depositor to purchase the Mortgage Loans and to
pay certain expenses in connection with the issuance of the Certificates.
FEDERAL INCOME TAX CONSEQUENCES
General
Upon the issuance of the Certificates, Sidley & Austin, counsel to the
Depositor, will deliver its opinion generally to the effect that, assuming
compliance with the Pooling Agreement (and subject to certain other assumptions
set forth in such opinion), REMIC I, REMIC II and REMIC III, respectively, will
each qualify as a REMIC under the Code. The assets of REMIC I will include the
Mortgage Loans, any REO Properties acquired on behalf of the Certificateholders,
the Certificate Account and the Interest Reserve Account, but will exclude any
collections of Additional Interest on the ARD Loans. For federal income tax
purposes,
o the separate non-certificated regular interests in REMIC I
will be the "regular interests" in REMIC I and will constitute
the assets of REMIC II,
o the Class R-I Certificates will evidence the sole class of
"residual interests" in REMIC I,
o the separate non-certificated regular interests in REMIC II
will be the "regular interests" in REMIC II and will
constitute the assets of REMIC III,
o the Class R-II Certificates will evidence the sole class of
"residual interests" in REMIC II,
o the REMIC Regular Certificates will evidence the "regular
interests" in, and will generally be treated as debt
obligations of, REMIC III,
o the Class R-III Certificates will evidence the sole class of
"residual interests" in REMIC III, and
o the Class D Certificates will represent beneficial interests
in the portion of the Trust Fund consisting of any amounts
applied as Additional Interest on the ARD Loans, and such
portion will be treated as a grantor trust for federal income
tax purposes.
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Discount and Premium; Prepayment Consideration
For federal income tax reporting purposes, it is anticipated that the
Class S and Class Certificates will, and the other Classes of Offered
Certificates will not, be treated as having been issued with original issue
discount. The prepayment assumption that will be used in determining the rate of
accrual of market discount and premium, if any, for federal income tax purposes
will be based on the assumption (the "Prepayment Assumption") that subsequent to
the date of any determination the ARD Loans will be paid in full on their
respective Anticipated Repayment Dates, no Mortgage Loan will otherwise be
prepaid prior to maturity and there will be no extension of maturity for any
Mortgage Loan. However, no representation is made as to the actual rate at which
the Mortgage Loans will prepay, if at all. See "Federal Income Tax
Consequences--REMICs--Taxation of Owners of REMIC Regular Certificates" in the
Prospectus.
The Internal Revenue Service (the "IRS") has issued regulations (the
"OID Regulations") under Sections 1271 to 1275 of the Code generally addressing
the treatment of debt instruments issued with original issue discount. You
should be aware, however, that the OID Regulations and Section 1272(a)(6) of the
Code do not adequately address certain issues relevant to, or are not applicable
to, prepayable securities such as the Offered Certificates. It is recommended
that you consult with your own tax advisor concerning the tax treatment of your
Certificates.
If the method for computing original issue discount described in the
Prospectus results in a negative amount for any period with respect to any
Holder of Certificates, a possibility of particular relevance to a Holder of
Class S Certificates, the amount of original issue discount allocable to such
period would be zero and such Holder would be permitted to offset such negative
amount only against future original issue discount (if any) attributable to such
Certificates. Although the matter is not free from doubt, a Holder of a Class S
Certificate may be permitted to deduct a loss to the extent that his or her
respective remaining basis in such Certificate exceeds the maximum amount of
future payments to which such Holder is entitled, assuming no further
prepayments of the Mortgage Loans. Any such loss might be treated as a capital
loss.
The OID regulations provide in general that original issue discount
with respect to debt instruments issued in connection with the same or related
transactions are treated as a single debt instrument for purposes of computing
the accrual of original issue discount with respect to such debt instruments.
This aggregation rule ordinarily is only to be applied when single debt
instruments are issued by a single issuer to a single holder. Although it is not
clear that this aggregation rule technically applies to REMIC regular interests
or other instruments subject to Section 1272(a)(6) of the Code, information
reports or returns sent to Certificateholders and the IRS with respect to the
Class S Certificates (which Certificates evidence the ownership of multiple
regular interests) will be based on such aggregate method of computing the yield
on the related regular interests. If you are contemplating the purchase of Class
S Certificates, it is recommended that you consult your own tax advisor about
the use of this methodology and the potential consequences of being required to
report original issue discount separately with respect to each of the regular
interests evidenced by the Class S Certificates.
Certain Classes of 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. If you acquire an interest in any
such Class of Certificates, you should consider consulting your own tax advisor
regarding the possibility of making an election to amortize such premium. See
"Federal Income Tax Consequences--REMICs--Taxation of Owners of REMIC Regular
Certificates--Premium" in the Prospectus.
Prepayment Premiums and Yield Maintenance Charges actually collected on
the Mortgage Loans will be distributed on the Offered Certificates as and to the
extent described in this Prospectus Supplement. It is not entirely clear under
the Code when the amount of a Prepayment Premium or Yield Maintenance Charge
should be taxed to the Holder of a Class of Certificates entitled thereto. For
federal income tax reporting purposes, Prepayment Premiums or Yield Maintenance
Charges will be treated as income to the Holders of a Class of Certificates
entitled thereto only after the Master Servicer's actual receipt thereof. The
IRS may nevertheless seek to require that an assumed amount of Prepayment
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Premiums and Yield Maintenance Charges be included in distributions projected to
be made on the Certificates and that taxable income be reported based on the
projected constant yield to maturity of the Certificates, including such
projected Prepayment Premiums and Yield Maintenance Charges prior to their
actual receipt. If such projected Prepayment Premiums and Yield Maintenance
Charges were not actually received, presumably the Holder of a Certificate would
be allowed to claim a deduction or reduction in gross income at the time such
unpaid Prepayment Premiums and Yield Maintenance Charges had been projected to
be received. Moreover, it appears that Prepayment Premiums and Yield Maintenance
Charges are to be treated as ordinary income rather than capital gain. The
correct characterization of such income is not entirely clear, however, and you
should consider consulting your own tax advisors concerning the treatment of
Prepayment Premiums and Yield Maintenance Charges.
Constructive Sales of Class S Certificates
The Taxpayer Relief Act of 1997 added a provision to the Code that
requires the recognition of gain upon the "constructive sale of an appreciated
financial position". A constructive sale of a financial position occurs if a
taxpayer enters into certain transactions or series of such transactions that
have the effect of substantially eliminating the taxpayer's risk of loss and
opportunity for gain with respect to the financial instrument. Debt instruments
that (i) entitle the Holder to a specified principal amount, (ii) pay interest
at a fixed or variable rate and (iii) are not convertible into the stock of the
issuer or a related party, cannot be the subject of a constructive sale for this
purpose. Accordingly, only Class S Certificates, which do not have Certificate
Principal Balances, could be subject to this provision and only if a Holder of a
Class S Certificate engages in a constructive sale transaction.
Characterization of Investments in Offered Certificates
Generally, except to the extent noted below, the Offered Certificates
will be "real estate assets" within the meaning of Section 856(c)(5)(B) of the
Code in the same proportion that the assets of the Trust would be so treated. In
addition, interest (including original issue discount, if any) on the Offered
Certificates will be interest described in Section 856(c)(3)(B) of the Code to
the extent that such Certificates are treated as "real estate assets" within the
meaning of Section 856(c)(5)(B) of the Code.
Most of the Mortgage Loans are not secured by real estate used for
residential or certain other purposes prescribed in Section 7701(a)(19)(C) of
the Code, and consequently the Offered Certificates will be treated as assets
qualifying under that section to only a limited extent. Accordingly, investment
in the Offered Certificates may not be suitable for thrift institutions seeking
to be treated as a "domestic building and loan association" under Section
7701(a)(19)(C) of the Code.
The Offered Certificates will be treated as "qualified mortgages" for
another REMIC under Section 860G(a)(3)(C) of the Code and "permitted assets" for
a "financial asset securitization investment trust" under Section 860L(c) of the
Code. To the extent that an Offered Certificate represents ownership of an
interest in any Mortgage Loan that is secured in part by the related Borrower's
interest in an account containing any holdback of loan proceeds, a portion of
such Certificate may not represent ownership of assets described in Section
7701(a)(19)(C) of the Code and "real estate assets" under Section 856(c)(5)(B)
of the Code, and the interest thereon may not constitute "interest on
obligations secured by mortgages on real property" within the meaning of Section
856(c)(3)(B) of the Code. See "Description of the Mortgage Pool" in this
Prospectus Supplement and "Federal Income Tax
Consequences--REMICs--Characterization of Investments in REMIC Certificates" in
the Prospectus.
Possible Taxes on Income From Foreclosure Property and Other Taxes
In general, the Special Servicer will be obligated to operate and
manage any Mortgaged Property acquired as REO Property in accordance with the
Servicing Standard. After the Special Servicer reviews the operation of such REO
Property and consults with the REMIC Administrator to determine the Trust's
federal income tax reporting position with respect to income it is anticipated
that the Trust would derive from such REO Property, the Special Servicer could
determine that it would not be commercially reasonable to manage and operate
such REO Property in a manner that would avoid the imposition of a tax on "net
income from foreclosure property" (generally, income not derived from renting or
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<PAGE>
selling real property) within the meaning of the REMIC Provisions or a tax on
"prohibited transactions" under Section 860F of the Code (either such tax
referred to in this Prospectus Supplement as an "REO Tax"). To the extent that
income the Trust receives from an REO Property is subject to a tax on "net
income from foreclosure property", such income would be subject to federal tax
at the highest marginal corporate tax rate (currently 35%), and to the extent
that income the Trust receives from an REO Property is subject to a tax on
"prohibited transactions", such income would be subject to federal tax at a 100%
rate. The determination as to whether income from an REO Property would be
subject to an REO Tax will depend on the specific facts and circumstances
relating to the management and operation of each REO Property. Generally, income
from an REO Property that is directly operated by the Special Servicer would be
apportioned and classified as "service" or "non-service" income. The "service"
portion of such income could be subject to federal tax either at the highest
marginal corporate tax rate or at the 100% rate on "prohibited transactions",
and the "non-service" portion of such income could be subject to federal tax at
the highest marginal corporate tax rate or, although it appears unlikely, at the
100% rate applicable to "prohibited transactions". These considerations will be
of particular relevance with respect to any hospitality property that becomes an
REO Property. However, unless otherwise required by expressly applicable
authority, it is anticipated that the Trust will take the position that no
income from foreclosure property will be subject to the 100% "prohibited
transactions" tax. Any REO Tax imposed on the Trust's income from an REO
Property would reduce the amount available for distribution to
Certificateholders.
To the extent permitted by then applicable laws, any Prohibited
Transactions Tax (as defined in the Prospectus), Contributions Tax (also as
defined in the Prospectus) or tax on "net income from foreclosure property" that
may be imposed on any of REMIC I, REMIC II or REMIC III will be borne by the
REMIC Administrator, the Trustee, the Master Servicer or the Special Servicer,
in any case out of its own funds, if (but only if)--
o such person has sufficient assets to do so, and
o such tax arises out of a breach of such person's obligations
under certain specified sections of the Pooling Agreement.
Any such tax not borne by the REMIC Administrator, the Trustee, the Master
Servicer or the Special Servicer will be charged against the Trust resulting in
a reduction in amounts available for distribution to the Certificateholders. See
"Federal Income Tax Consequences--REMICs--Prohibited Transactions Tax and Other
Taxes" in the Prospectus.
For further information regarding the federal income tax consequences
of investing in the Offered Certificates, see "Federal Income Tax
Consequences--REMICs" in the Prospectus.
CERTAIN ERISA CONSIDERATIONS
A fiduciary of any employee benefit plan or other retirement plan or
arrangement, including individual retirement accounts and annuities, Keogh plans
and collective investment funds and separate accounts in which such plans,
accounts or arrangements are invested, including insurance company general
accounts, that is subject to Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or Section 4975 of the Code (each, a "Plan")
should carefully review with its legal advisors whether the purchase or holding
of Offered Certificates could constitute or give rise to a transaction that is
prohibited or is not otherwise permitted either under ERISA or Section 4975 of
the Code or whether there exists any statutory or administrative exemption
applicable thereto. Certain fiduciary and prohibited transaction issues arise
only if the assets of the Trust constitute "plan assets" for purposes of Part 4
of Title I of ERISA and Section 4975 of the Code ("Plan Assets"). Whether the
assets of the Trust will constitute Plan Assets at any time will depend on a
number of factors, including the portion of any Class of Certificates that is
held by "benefit plan investors" (as defined in U.S. Department of Labor
Regulation Section 2510.3-101).
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<PAGE>
The U.S. Department of Labor has issued an individual prohibited
transaction exemption (a "PTE") to DLJSC (PTE 90-83). Subject to the
satisfaction of certain conditions set forth therein, PTE 90-83 (referred to in
this Prospectus Supplement as the "Exemption") generally exempts from the
application of the prohibited transaction provisions of Sections 406(a) and (b)
and 407(a) of ERISA, and the excise taxes imposed on such prohibited
transactions pursuant to Sections 4975(a) and (b) of the Code, certain
transactions relating to, among other things, the servicing and operation of
mortgage pools, such as the Mortgage Pool, and the purchase, sale and holding of
mortgage pass-through certificates, such as the Senior Certificates, that are
underwritten by one of the following parties (collectively, the "Exemption
Favored Parties")--
(a) DLJSC,
(b) any person directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common
control with DLJSC, 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 Senior Certificates.
The Exemption sets forth six general conditions which must be satisfied
for a transaction involving the purchase, sale and holding of a Senior
Certificate to be eligible for exemptive relief thereunder. The conditions are
as follows:
o first, the acquisition of such Senior Certificate by a Plan
must be on terms that are at least as favorable to the Plan as
they would be in an arm's-length transaction with an unrelated
party;
o second, the rights and interests evidenced by such Senior
Certificate must not be subordinated to the rights and
interests evidenced by the other Certificates;
o third, at the time of its acquisition by the Plan, such Senior
Certificate must be rated in one of the three highest generic
rating categories by Moody's, Fitch, Duff & Phelps Credit
Rating Co. ("DCR") or Standard & Poor's Ratings Service, a
Division of the McGraw-Hill Companies, Inc. ("S&P").
o fourth, the Trustee cannot be an affiliate of any other member
of the "Restricted Group", which (in addition to the Trustee)
consists of the Exemption-Favored Parties, the Depositor, the
Master Servicer, the Special Servicer, any sub-servicers, the
Mortgage Loan Sellers, each Borrower, if any, with respect to
Mortgage Loans constituting more than 5% of the aggregate
unamortized principal balance of the Mortgage Pool as of the
date of initial issuance of the Certificates and any and all
affiliates of any of the aforementioned persons;
o fifth, the sum of all payments made to and retained by the
Exemption-Favored Parties must represent not more than
reasonable compensation for underwriting the Senior
Certificates; the sum of all payments made to and retained by
the Depositor pursuant to the assignment of the Mortgage Loans
to the Trust must represent not more than the fair market
value of such obligations; and the sum of all payments made to
and retained by the Master Servicer, the Special Servicer and
any sub-servicer must represent not more than reasonable
compensation for such person's services under the Pooling
Agreement and reimbursement of such person's reasonable
expenses in connection therewith; and
o sixth, the investing Plan must be an accredited investor as
defined in Rule 501(a)(1) of Regulation D under the Securities
Act.
Because the Senior Certificates are not subordinated to any other Class
of Certificates, the second general condition set forth above is satisfied with
respect to such Certificates. It is a condition of their issuance that the
Senior Certificates be rated not lower than "Aaa" by Moody's and "AAA" by Fitch.
In addition, the initial Trustee is not an affiliate of any other member of the
Restricted Group. Accordingly, as of the Closing Date, the third and fourth
general
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conditions set forth above will be satisfied with respect to the Senior
Certificates. A fiduciary of a Plan contemplating purchasing a Senior
Certificate in the secondary market must make its own determination that, at the
time of such purchase, such Certificate continues to satisfy the third and
fourth general conditions set forth above. A fiduciary of a Plan contemplating
purchasing a Senior Certificate, whether in the initial issuance of such
Certificate or in the secondary market, must make its own determination that the
first and fifth general conditions set forth above will be satisfied with
respect to such Certificate as of the date of such purchase. A Plan's
authorizing fiduciary will be deemed to make a representation regarding
satisfaction of the sixth general condition set forth above in connection with
the purchase of a Senior Certificate.
The Exemption also requires that the Trust meet the following
requirements:
o the Trust Fund must consist solely of assets of the type that
have been included in other investment pools;
o certificates evidencing interests in such other investment
pools must have been rated in one of the three highest generic
categories of Moody's, Fitch, DCR or S&P for at least one year
prior to the Plan's acquisition of a Senior Certificate; and
o certificates evidencing interests in such other investment
pools must have been purchased by investors other than Plans
for at least one year prior to any Plan's acquisition of a
Senior Certificate.
The Depositor has confirmed to its satisfaction that such requirements have been
satisfied as of the date in this Prospectus Supplement.
If the general conditions of the Exemption are satisfied, the Exemption
may provide an exemption from the restrictions imposed by Sections 406(a) and
407(a) of ERISA (as well as the excise taxes imposed by Sections 4975(a) and (b)
of the Code by reason of Sections 4975(c)(1)(A) through (D) of the Code) in
connection with--
o the direct or indirect sale, exchange or transfer of Senior
Certificates acquired by a Plan upon initial issuance from the
Depositor or an Exemption-Favored Party when the Depositor, a
Mortgage Loan Seller, the Trustee, the Master Servicer, the
Special Servicer or any sub-servicer, provider of credit
support, Exemption-Favored Party or Mortgagor is a Party in
Interest (as defined in the Prospectus) with respect to the
investing Plan,
o the direct or indirect acquisition or disposition in the
secondary market of Senior Certificates by a Plan, and
o the continued holding of Senior Certificates by a Plan.
However, no exemption is provided from the restrictions of Sections
406(a)(1)(E), 406(a)(2) and 407 of ERISA for the acquisition or holding of a
Senior Certificate on behalf of an Excluded Plan (as defined in the following
sentence) by any person who has discretionary authority or renders investment
advice with respect to the assets of such Excluded Plan. For purposes of this
Prospectus Supplement, an "Excluded Plan" is a Plan sponsored by any member of
the Restricted Group.
Moreover, if the general conditions of the Exemption, as well as
certain other conditions set forth in the Exemption, are satisfied, the
Exemption may also provide an exemption from the restrictions imposed by
Sections 406(b)(1) and (b)(2) of ERISA and the taxes imposed by Section
4975(c)(1)(E) of the Code in connection with--
(1) the direct or indirect sale, exchange or transfer of Senior
Certificates in the initial issuance of Senior Certificates
between the Depositor or an Exemption-Favored Party and a Plan
when the person who has discretionary authority or renders
investment advice with respect to the investment of Plan
assets in such
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Certificates is (a) a Borrower with respect to 5% or less of
the fair market value of the Mortgage Loans or (b) an
affiliate of such a person,
(2) the direct or indirect acquisition or disposition in the
secondary market of Senior Certificates by a Plan, and
(3) the holding of Senior Certificates by a Plan.
Further, if the general conditions of the Exemption, as well as certain
other conditions set forth in the Exemption, are satisfied, the Exemption may
provide an exemption from the restrictions imposed by Sections 406(a), 406(b)
and 407(a) of ERISA, and the taxes imposed by Sections 4975(a) and (b) of the
Code by reason of Section 4975(c) of the Code, for transactions in connection
with the servicing, management and operation of the Trust Fund.
Lastly, if the general conditions of the Exemption are satisfied, the
Exemption also may provide an exemption from the restrictions imposed by
Sections 406(a) and 407(a) of ERISA, and the taxes imposed by Section 4975(a)
and (b) of the Code by reason of Sections 4975(c)(1)(A) through (D) of the Code
if such restrictions are deemed to otherwise apply merely because a person is
deemed to be a Party in Interest with respect to an investing Plan by virtue of
providing services to the Plan (or by virtue of having certain specified
relationships to such a person) solely as a result of the Plan's ownership of
Senior Certificates.
Before purchasing a Senior Certificate, a fiduciary of a Plan should
itself confirm that:
o the Senior Certificates constitute "certificates" for purposes
of the Exemption, and
o the general and other conditions set forth in the Exemption
and the other requirements set forth in the Exemption would be
satisfied at the time of such purchase.
In addition to determining the availability of the exemptive relief
provided in the Exemption, a Plan fiduciary considering an investment in Senior
Certificates should consider the availability of any other prohibited
transaction class exemptions. See "ERISA Considerations" in the Prospectus.
There can be no assurance that any such class exemptions will apply with respect
to any particular Plan investment in Senior Certificates or, even if it were
deemed to apply, that any exemption would apply to all prohibited transactions
that may occur in connection with such investment. A purchaser of Senior
Certificates should be aware, however, that even if the conditions specified in
one or more exemptions are satisfied, the scope of relief provided by an
exemption may not cover all acts which might be construed as prohibited
transactions.
The characteristics of the Class A-2, Class A-3, Class B-1 and Class
B-2 Certificates do not meet the requirements of the Exemption. Accordingly, the
Certificates of those Classes may not be acquired by or on behalf of a Plan or
with Plan assets, except in the case of an insurance company using funds in its
general account, which may be able to rely on Section III of PTCE 95-60
(discussed below).
Section III of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60") exempts from the application of the prohibited transaction provisions of
Sections 406(a), 406(b) and 407(a) of ERISA and Section 4975 of the Code
transactions in connection with the servicing, management and operation of a
trust (such as the Trust) in which an insurance company general account has an
interest as a result of its acquisition of certificates issued by the trust,
provided that certain conditions are satisfied. If these conditions are met,
insurance company general accounts would be allowed to purchase certain Classes
of Certificates (such as the Class A-2, Class A-3, Class B-1 and Class B-2
Certificates) that do not meet the requirements of the Exemptions solely because
they (a) are subordinated to other Classes of Certificates in the Trust or (b)
have not received a rating at the time of the purchase in one of the three
highest rating categories from Moody's, Fitch, DCR or S&P. All other conditions
of the Exemptions would have to be satisfied in order for PTCE 95-60 to be
available. Before purchasing Class A-2, Class A-3, Class B-1 and Class B-2
Certificates, an insurance company
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general account seeking to rely on Section III of PTCE 95-60 should itself
confirm that all applicable conditions and other requirements have been
satisfied.
A governmental plan as defined in Section 3(32) of ERISA is not subject
to Title I of ERISA or Section 4975 of the Code. However, such a governmental
plan may be subject to a federal, state or local law which is, to a material
extent, similar to the foregoing provisions of ERISA or the Code ("Similar
Law"). A fiduciary of a governmental plan should make its own determination as
to the need for and the availability of any exemptive relief under Similar Law.
Any Plan fiduciary considering whether to purchase an Offered
Certificate on behalf of a Plan should consult with its counsel regarding the
applicability of the fiduciary responsibility and prohibited transaction
provisions of ERISA and the Code to such investment.
The sale of Offered Certificates to a Plan is in no respect a
representation or warranty by the Depositor or either Underwriter that this
investment meets all relevant legal requirements with respect to investments by
Plans generally or by any particular Plan, or that this investment is
appropriate for Plans generally or for any particular Plan.
LEGAL INVESTMENT
The Offered Certificates will not be "mortgage related securities" for
purposes of SMMEA. As a result, the appropriate characterization of the Offered
Certificates under various legal investment restrictions, and thus the ability
of investors subject to these restrictions to purchase Offered Certificates, is
subject to significant interpretive uncertainties.
Neither the Depositor nor either Underwriter makes any representation
as to the ability of particular investors to purchase the Offered Certificates
under applicable legal investment or other restrictions. All institutions whose
investment activities are subject to legal investment laws and regulations,
regulatory capital requirements or review by regulatory authorities should
consult with their own legal advisors in determining whether and to what extent
the Offered Certificates constitute legal investments for them or are subject to
investment, capital or other restrictions.
All depository institutions considering an investment in the Offered
Certificates should review the Federal Financial Institutions Examination
Council's Supervisory Policy Statement on the Selection of Securities Dealers
and Unsuitable Investment Practices (to the extent adopted by their respective
regulatory authorities), setting forth, in relevant part, certain investment
practices deemed to be unsuitable for an institution's investment portfolio, as
well as guidelines for investing in certain types of mortgage related
securities.
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 such investors.
See "Legal Investment" in the Prospectus.
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<PAGE>
METHOD OF DISTRIBUTION
Subject to the terms and conditions set forth in an Underwriting
Agreement dated March , 1999 (the "Underwriting Agreement"), between the
Depositor and the Underwriters, each Underwriter has agreed to purchase from the
Depositor and the Depositor has agreed to sell to such Underwriter its allocable
share (as specified below) of each Class of the Offered Certificates. It is
expected that delivery of the Offered Certificates will be made to the
Underwriters in book-entry form through the Same Day Funds Settlement System of
DTC on or about March , 1999, against payment therefor in immediately available
funds.
<TABLE>
<CAPTION>
Underwriter Class S Class A-1A Class A-1B Class A-2 Class A-3 Class B-1 Class B-2
- ----------- ------- ---------- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Donaldson, Lufkin & Jenrette
Securities Corporation
Merrill, Lynch, Pierce,
Fenner & Smith Incorporated
Total................... 100% 100% 100% 100% 100% 100% 100%
</TABLE>
The Underwriting Agreement provides that the obligation of the
Underwriters to pay for and accept delivery of the Offered Certificates is
subject to, among other things, the receipt of certain legal opinions and to the
conditions, among others, that no stop order suspending the effectiveness of the
Depositor's Registration Statement shall be in effect, and that no proceedings
for such purpose shall be pending before or threatened by the Commission.
The distribution of the Offered Certificates by the Underwriters may be
effected from time to time in one or more negotiated transactions, or otherwise,
at varying prices to be determined at the time of sale. Proceeds to the
Depositor from the sale of the Offered Certificates, before deducting expenses
payable by the Depositor, will be approximately % of the aggregate Certificate
Principal Balance of the Offered Certificates, plus accrued interest on all the
Offered Certificates from the Cut-off Date. The Underwriters may effect such
transactions by selling the Offered Certificates to or through dealers, and such
dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Underwriters. In connection with the sale of
the Offered Certificates, the Underwriters may be deemed to have received
compensation from the Depositor in the form of underwriting compensation. The
Underwriters and any dealers that participate with the Underwriters in the
distribution of the Offered Certificates may be deemed to be underwriters and
any profit on the resale of the Offered Certificates positioned by them may be
deemed to be underwriting discounts and commissions under the Securities Act.
The Underwriting Agreement provides that the Depositor will indemnify
each Underwriter, and that under limited circumstances each Underwriter will
indemnify the Depositor, against certain civil liabilities under the Securities
Act or contribute to payments required to be made in respect thereof.
The Depositor has also been advised by the Underwriters that they
presently intend to make a market in the Offered Certificates; however, the
Underwriters 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. See "Risk Factors--Risks Related to the
Certificates--Risks Associated With Liquidity and Market Value" in this
Prospectus Supplement and "Risk Factors--Limited Liquidity of Offered
Certificates" in the Prospectus.
LEGAL MATTERS
Certain legal matters relating to the Certificates will be passed upon
for each of the Depositor and the Underwriters by Sidley & Austin, New York, New
York.
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<PAGE>
RATINGS
It is a condition to the issuance of the Certificates that the
respective Classes of Offered Certificates receive the following credit ratings
from Moody's and Fitch:
Class Moody's Fitch
- ----- ------- -----
Class S Aaa AAA
Class A-1A Aaa AAA
Class A-1B Aaa AAA
Class A-2 Aa2 AA
Class A-3 A2 A
Class B-1 Baa2 BBB
Class B-2 Baa3 BBB-
The ratings on the Offered Certificates address the likelihood of the
timely receipt by Holders thereof of all payments of interest to which they are
entitled on each Distribution Date and, except in the case of the Class S
Certificates, the ultimate receipt by the Holders thereof of all payments of
principal to which they are entitled on or before the Rated Final Distribution
Date. The ratings take into consideration the credit quality of the Mortgage
Pool, structural and legal aspects associated with the Offered Certificates, and
the extent to which the payment stream from the Mortgage Pool is adequate to
make payments of interest and/or principal required under the Offered
Certificates.
The ratings on the respective Classes of Offered Certificates do not
represent any assessment of--
o The tax attributes of the Offered Certificates or of the
Trust.
o Whether or to what extent prepayments of principal may be
received on the Mortgage Loans.
o The likelihood or frequency of prepayments of principal on the
Mortgage Loans.
o The degree to which the amount or frequency of such
prepayments might differ from those originally anticipated.
o Whether or to what extent the interest distributable on any
Class of Certificates may be reduced in connection with Net
Aggregate Prepayment Interest Shortfalls.
o Whether and to what extent Prepayment Premiums, Yield
Maintenance Charges, Default Interest and/or Additional
Interest will be received.
Also a security rating does not represent any assessment of the yield
to maturity that investors may experience or the possibility that the Class S
Certificateholders might not fully recover their investment in the event of
rapid prepayments and/or other liquidations of the Mortgage Loans.
In general, the ratings address credit risk and not prepayment risk. As
described in this Prospectus Supplement, the amounts payable with respect to the
Class S Certificates consist only of interest (and, to the extent described in
this Prospectus Supplement, may consist of a portion of the Yield Maintenance
Charges and Prepayment Premiums actually collected on the Mortgage Loans). Even
if the entire pool were to prepay in the initial month, with the result that the
Class S Certificateholders receive only a single month's Distributable
Certificate Interest and thus suffer a nearly complete loss of their investment,
all amounts "due" to such Certificateholders will nevertheless have been paid.
Such result would be consistent with the respective ratings received on the
Class S Certificates. The Class Notional Amount of the Class S Certificates is
subject to reduction in connection with each reduction in the Class Principal
Balance of a Class of Principal Balance Certificates, whether as a result of
payments of principal or in connection with Realized Losses and Additional
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Trust Fund Expenses. The ratings of the Class S Certificates do not address the
timing or magnitude of reduction of the Class Notional Amount of such
Certificates, but only the obligation to pay interest timely on such Class
Notional Amount as so reduced from time to time.
There can be no assurance as to whether any rating agency not requested
to rate the Offered Certificates will nonetheless issue a rating to any Class
thereof and, if so, what such rating would be. A rating assigned to any Class of
Offered Certificates by a rating agency that has not been requested by the
Depositor to do so may be lower than the rating assigned thereto by either
Rating Agency.
The ratings on the Offered Certificates should be evaluated
independently from similar ratings on other types of securities. A security
rating is not a recommendation to buy, sell or hold securities and may be
subject to revision or withdrawal at any time by the assigning rating
organization. Each security rating should be evaluated independently of any
other security rating. See "Risk Factors--Limited Nature of Ratings" in the
Prospectus.
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INDEX OF PRINCIPAL DEFINITIONS
30/360 Basis ...............................................................S-59
30/360 Mortgage Loans.......................................................S-59
Accelerated Amortization Payments...........................................S-60
Accrued Certificate Interest...............................................S-117
ACMs........................................................................S-50
Actual/360 Basis............................................................S-59
Actual/360 Mortgage Loans...................................................S-59
ADA ........................................................................S-55
Additional Interest.........................................................S-60
Additional Interest Rate....................................................S-60
Additional Trust Fund Expense..............................................S-125
Advances....................................................................S-22
Alliance Borrower ..........................................................S-85
Alliance GP.................................................................S-85
Alliance Loans..............................................................S-85
Alliance Mortgages..........................................................S-85
Alliance Properties.........................................................S-85
Alliance Property Manager...................................................S-85
American Borrower...........................................................S-87
American Loans..............................................................S-87
American Mortgages..........................................................S-87
American Properties.........................................................S-87
American Property Manager...................................................S-88
Annual Debt Service.........................................................S-70
Anticipated Repayment Date..................................................S-32
Appraisal Reduction Amount.................................................S-127
Appraisal Trigger Event....................................................S-127
Appraisals..................................................................S-75
Appraised Value.............................................................S-69
ARD.........................................................................S-32
ARD Loan....................................................................S-60
ARD Loans...................................................................S-32
Asset Status Report........................................................S-105
Assumed Final Distribution Date.............................................S-10
Assumed P&I Payment........................................................S-126
Assumed Settlement Date....................................................S-137
Available Distribution Amount..............................................S-116
Balloon Loan................................................................S-61
Balloon Payment.............................................................S-32
Base Estimated Annual Revenues..............................................S-66
Borrower....................................................................S-22
CapStar.....................................................................S-81
CapStar Operating Lease.....................................................S-81
CBE........................................................................S-137
Central Accounts............................................................S-79
CERCLA......................................................................S-50
Certificate Factor.........................................................S-112
Certificate Notional Amount................................................S-111
Certificate Principal Balance..............................................S-111
Certificate Registrar......................................................S-113
Certificateholders...........................................................S-7
Certificates.................................................................S-7
Class........................................................................S-7
Class D Certificates.......................................................S-112
Class Notional Amount......................................................S-111
Class Principal Balance....................................................S-111
Class S Strip Rate.........................................................S-117
Closing Date.................................................................S-9
CMF.........................................................................S-80
Collection Period...........................................................S-10
Column.......................................................................S-8
Column Mortgage Loans........................................................S-8
Commercial Properties.......................................................S-66
Compensating Interest Payment...............................................S-98
Component..................................................................S-111
Contractual Recurring Replacement Reserve...................................S-79
Controlling Class..........................................................S-104
Controlling Class Representative...........................................S-104
Corrected Mortgage Loan.....................................................S-96
Cost Approach...............................................................S-76
Country Squire Borrower.....................................................S-86
Country Squire Loan.........................................................S-86
Country Squire Mortgage.....................................................S-86
Country Squire Property.....................................................S-86
CPR........................................................................S-135
Cross-Collateralized Group..................................................S-51
Cross-Collateralized Mortgage Loans.........................................S-51
CSSA.......................................................................S-129
Custodian...................................................................S-91
Cut-off Date.................................................................S-9
Cut-off Date Balance........................................................S-56
Cut-off Date Loan-to-Value Ratio............................................S-70
Cut-off Date LTV Ratio......................................................S-70
DCR........................................................................S-142
Default Interest............................................................S-98
Defeasance Collateral.......................................................S-64
Defeasance Loan.............................................................S-64
Defeasance Loans............................................................S-34
Definitive Certificate.....................................................S-112
Determination Date...........................................................S-9
Discount Rate..............................................................S-123
Distributable Certificate Interest.........................................S-117
Distribution Date ...........................................................S-9
DLJSC........................................................................S-1
DTC.........................................................................S-13
DTC Participants...........................................................S-112
Due Date....................................................................S-32
Engineering Reserves........................................................S-80
S-149
<PAGE>
ERISA......................................................................S-141
Estimated Annual Operating Expenses.........................................S-67
Estimated Annual Revenues...................................................S-66
Excess Defeasance Payment...................................................S-53
Excluded Plan..............................................................S-143
Exemption..................................................................S-142
Exemption Favored Parties..................................................S-142
Expense Modifications.......................................................S-68
Expenses....................................................................S-72
FF&E........................................................................S-68
FIRREA......................................................................S-77
Fitch........................................................................S-2
Fogelman....................................................................S-86
Form 8-K.....................................................................S-7
Fully Amortizing Loan.......................................................S-61
Fully Amortizing Loans......................................................S-33
GAAP........................................................................S-69
GECA.........................................................................S-8
GECA Mortgage Loans..........................................................S-8
GECC...................................................................S-8, S-89
GECLS.......................................................................S-97
Grantor Trust...............................................................S-14
HAP Contract................................................................S-42
Historical Annual Operating Expenses........................................S-67
Holders......................................................................S-7
Hospitality Properties......................................................S-44
HUD.........................................................................S-42
Hyrail Group................................................................S-36
Income Approach.............................................................S-76
Interest Accrual Period.....................................................S-10
Interest Reserve Account...................................................S-117
Interest Reserve Amount....................................................S-117
Interstate..................................................................S-82
IRS........................................................................S-139
LC & TI.....................................................................S-71
Leasable Square Footage.....................................................S-70
Liquidation Fee............................................................S-100
Liquidation Fee Rate.......................................................S-100
Loan Group Cut-off Date Balances............................................S-27
Lock-Box Account............................................................S-60
Lock-out Period.............................................................S-62
LUSTs.......................................................................S-51
Major Tenant................................................................S-70
Manufactured Housing Properties.............................................S-66
Master Servicer..............................................................S-7
Master Servicing Fee........................................................S-97
Master Servicing Fee Rate...................................................S-97
Material Breach.............................................................S-92
Maturity Assumptions.......................................................S-136
Maturity/ARD Balance........................................................S-72
Maturity/ARD Loan-to-Value Ratio............................................S-72
Maturity/ARD LTV............................................................S-72
MeriStar....................................................................S-82
Merrill Lynch................................................................S-1
Modified Mortgage Loan.....................................................S-128
Moody's......................................................................S-2
Mortgage....................................................................S-57
Mortgage File...............................................................S-91
Mortgage Loan Sellers........................................................S-8
Mortgage Loans...............................................................S-7
Mortgage Note...............................................................S-57
Mortgage Pass-Through Rate.................................................S-115
Mortgage Pool...............................................................S-22
Mortgage Pool Deficit.......................................................S-21
Mortgage Rate...............................................................S-32
Mortgaged Property..........................................................S-23
Most Recent DSCR............................................................S-71
Most Recent Expenses........................................................S-71
Most Recent NOI.............................................................S-71
Most Recent Operating Statement Date........................................S-71
Most Recent Revenues........................................................S-71
Multifamily Rental Properties...............................................S-41
Net Aggregate Prepayment Interest Shortfall.................................S-99
NOI.........................................................................S-71
Non-REMIC Assets............................................................S-14
Nonrecoverable P&I Advance.................................................S-126
Nonrecoverable Servicing Advance...........................................S-101
Norwest Bank...............................................................S-131
O&M Plan....................................................................S-74
Occupancy Rate at U/W.......................................................S-70
Occupancy Rate at Underwriting..............................................S-70
Offered Certificates........................................................S-11
Office Properties...........................................................S-45
OID Regulations............................................................S-139
Open Period.................................................................S-62
Originators..................................................................S-8
P&I Advance.................................................................S-22
Pass-Through Rate...........................................................S-11
Performing Mortgage Loans...................................................S-96
Permitted Investments.......................................................S-98
Plan.......................................................................S-141
Plan Assets................................................................S-141
Pooling Agreement............................................................S-7
Prepayment Assumption......................................................S-139
Prepayment Consideration....................................................S-52
Prepayment Consideration Period.............................................S-62
Prepayment Interest Excess..................................................S-98
Prepayment Interest Shortfall...............................................S-98
Prepayment Premium..........................................................S-52
Principal Balance Certificates..............................................S-20
Principal Distribution Amount..............................................S-118
Private Certificates........................................................S-11
Prospectus...................................................................S-2
S-150
<PAGE>
Prospectus Supplement........................................................S-2
PTCE........................................................................S-37
PTCE 95-60.................................................................S-144
PTE........................................................................S-142
Purchase Price..............................................................S-92
Rated Final Distribution Date...............................................S-10
Rating Agencies..............................................................S-2
Realized Losses............................................................S-124
Record Date..................................................................S-9
REIT........................................................................S-37
Related Proceeds...........................................................S-101
REMIC.......................................................................S-14
REMIC Administrator..........................................................S-8
REMIC I.....................................................................S-14
REMIC II....................................................................S-14
REMIC III...................................................................S-14
REMIC Regular Certificates.................................................S-112
REMIC Residual Certificates................................................S-112
REO Property................................................................S-95
REO Tax....................................................................S-141
Replacement Mortgage Loan...................................................S-93
Required Appraisal.........................................................S-127
Required Appraisal Loan....................................................S-127
Responsible Officer........................................................S-104
Restricted Group...........................................................S-142
Retail Properties...........................................................S-42
Revenue Modifications.......................................................S-67
Revenues....................................................................S-71
Revised Rate................................................................S-60
Rooms.......................................................................S-70
S.F. .......................................................................S-70
S&P........................................................................S-142
Sales Comparison Approach...................................................S-76
Scheduled P&I Payments......................................................S-32
SEC..........................................................................S-3
Section 8...................................................................S-42
Securities Act...............................................................S-3
Senior Certificates........................................................S-118
Servicing Advance...........................................................S-22
Servicing Fees..............................................................S-99
Servicing Standard..........................................................S-94
Servicing Transfer Event....................................................S-96
Similar Law................................................................S-145
Single-Tenant Mortgage Loan.................................................S-39
Single-Tenant Mortgaged Property............................................S-39
Special Servicer.............................................................S-7
Special Servicing Fee.......................................................S-99
Specially Serviced Assets...................................................S-96
Specially Serviced Mortgage Loan............................................S-95
Sq. Ft. ....................................................................S-70
Standstill Agreement........................................................S-48
Stated Principal Balance...................................................S-115
Subordinate Available Distribution Amount..................................S-119
Subordinate Certificates...................................................S-119
Subordination Agreement.....................................................S-48
Substitution Shortfall Amount...............................................S-93
Swerdlow Borrowers..........................................................S-83
Swerdlow Loans..............................................................S-83
Swerdlow Mortgages..........................................................S-83
Swerdlow Operating Partnership..............................................S-83
Swerdlow Properties.........................................................S-83
Swerdlow REIT...............................................................S-83
Tax and Insurance Escrows...................................................S-79
Termination Price .........................................................S-131
Treasury Rate..............................................................S-123
Trust........................................................................S-7
Trust Fund...................................................................S-7
Trustee......................................................................S-8
Trustee Fee................................................................S-132
Trustee Report.............................................................S-129
U/W DSCR....................................................................S-70
U/W Leasing Commissions and Tenant Improvements.............................S-68
U/W NCF.....................................................................S-66
U/W NOI.....................................................................S-69
U/W Recurring Replacement Reserves..........................................S-68
Underwriters.................................................................S-1
Underwriting Agreement.....................................................S-146
Underwritten Debt Service Coverage Ratio...................................S-70
Underwritten Cash Flow......................................................S-66
Underwritten DSCR...........................................................S-70
Underwritten NCF............................................................S-66
Underwritten Net Operating Income...........................................S-69
Underwritten NOI............................................................S-69
Union Capital................................................................S-9
Units.......................................................................S-70
USAP.......................................................................S-109
Voting Rights..............................................................S-130
Warranting Party............................................................S-91
Weighted Average Mortgage Pass-Through Rate................................S-118
Winston Borrower............................................................S-80
Winston Loan................................................................S-80
Winston Mortgages...........................................................S-80
Winston Properties..........................................................S-80
Winston REIT................................................................S-80
Workout Fee.................................................................S-99
Workout Fee Rate............................................................S-99
Year Built..................................................................S-71
Year Renovated..............................................................S-71
Yield Maintenance Charge....................................................S-52
S-151
<PAGE>
EXHIBIT A-1
CERTAIN CHARACTERISTICS OF THE
MORTGAGE LOANS AND MORTGAGED PROPERTIES
See this Exhibit for tables titled:
Managers and Locations of the Mortgaged Properties
Descriptions of the Mortgaged Properties
Characteristics of the Mortgage Loans
Engineering Reserves and Recurring Replacement Reserves
Major Tenants of the Commercial Mortgaged Properties
Additional Mortgage Loan Information
Multifamily Schedule
A-1-1
<PAGE>
Managers and Locations of the Mortgaged Properties
<TABLE>
<CAPTION>
# Property Name Manager
- ------------- -------
<S> <C> <C>
1 Hampton Inn - Elmsford (1A) Meristar Hotel & Resorts, Inc.
2 Quality Suites - Charleston (1A) Meristar Hotel & Resorts, Inc.
3 Courtyard by Marriott - Ann Arbor (1A) Meristar Hotel & Resorts, Inc.
4 Residence Inn - Phoenix (1A) Meristar Hotel & Resorts, Inc.
5 Homewood Suites - Cary (1A) Meristar Hotel & Resorts, Inc.
6 Hampton Inn & Suites - Gwinnett (1A) Meristar Hotel & Resorts, Inc.
7 Hampton Inn - Raleigh (1A) Meristar Hotel & Resorts, Inc.
8 Comfort Suites - Orlando (1A) Meristar Hotel & Resorts, Inc.
9 Hampton Inn - Perimeter (1A) Meristar Hotel & Resorts, Inc.
10 Hampton Inn - Charlotte, NC (1A) Meristar Hotel & Resorts, Inc.
11 Courtyard by Marriott - Wilmington (1A) Meristar Hotel & Resorts, Inc.
12 Hampton Inn - West Springfield (1A) Meristar Hotel & Resorts, Inc.
13 Homewood Suites - Clear Lake (1A) Meristar Hotel & Resorts, Inc.
14 Comfort Inn - Charleston (1A) Meristar Hotel & Resorts, Inc.
15 Kendale Lakes Plaza (1B) SREG Operating Limited Partnership
16 Cypress Creek Station (1B) SREG Operating Limited Partnership
17 Oakwood Business Center (1B) SREG Operating Limited Partnership
18 Westchase Ranch Apartments (1C) Alliance Residential Management, LLC
19 Westwood Village Apartments (1C) Alliance Residential Management, LLC
20 Normandy Woods Apartments (1C) Alliance Residential Management, LLC
21 Savoy Manor Apartments (1C) Alliance Residential Management, LLC
22 San Marin Apartments (1C) Alliance Residential Management, LLC
23 Country Squire Apartments - South Fogelman Management Group
24 2294 Molly Pitcher Highway (1D) American Real Estate Management, Inc.
25 5015 Campuswood Drive (1D) American Real Estate Management, Inc.
26 5010 Campuswood Drive (1D) American Real Estate Management, Inc.
27 5009 Campuswood Drive (1D) American Real Estate Management, Inc.
28 Fair Lakes Promenade H/P Management, L.P.
29 Keller Oaks Apartments (1E) Jupiter Realty Corporation
30 Sycamore Hill Apartments (1E) Jupiter Realty Corporation
31 Clarendon Apartments (1E) Jupiter Realty Corporation
32 Woodchase Condominiums (1E) Jupiter Realty Corporation
33 Dallas Design Center Portfolio Crow Design Centers, Ltd.
34 Assembly Square Office Building R. D. Management Corp.
35 Spicetree Apartments Hall Apartment Management
36 Lamplighter Mobile Home Park Owner Managed
37 White Station Tower Trammell Crow Company
38 Holiday Inn New Orleans Veterans Bray & Gillespie, Inc.
39 The Links at Bixby Lindsey Management Company
40 Southwood Apartments Intervest Resources, Inc.
41 The Shoppes at Longwood R.J. Waters & Associates, Inc.
42 Pines of Westbury The Pines Management Group
43 Edentree Apartments Hall Apartment Management
44 Becker Village Mall Brookhill Management Corp.
45 Tiffany Square TMP Management, Inc.
46 The Mint Apartments Barry S. Nussbaum Company
47 River Park Shopping Center Select Properties
48 Rancho Destino Apartments Juliet Property Company
49 Conestoga Mobile Home Park Thomas J. Horner Real Estate
50 Huntington Chase Apartments Landsouth
51 Parkshore Centre Office Building Durlach Corporation
52 Kenwood Pavilion Jeffrey R. Anderson Real Estate, Inc.
53 Newsome Park Apartments Great Atlantic Company
54 Princeton Court Apartments (1F) Princeton Properties
55 Pinewood Estates Apartments (1F) Princeton Properties
56 Arbor Court Apartments (1F) Princeton Properties
57 U-Store of Brighton Self Storage Facility (1G) North LLC
58 U-Store of South Lyon Self Storage Facility (1G) North LLC
59 U-Store of Saline Self Storage Facility (1G) North LLC
60 U-Store of Davison Self Storage Facility (1G) North LLC
61 U-Store of Holly Self Storage Facility (1G) North LLC
62 U-Store of Jackson Self Storage Facility (1G) North LLC
63 Birches Apartments Sigma Management
<CAPTION>
Zip
# Address City County State Code
- ------- ---- ------ ----- ----
<S> <C> <C> <C> <C> <C>
1 200 Tarrytown Road Elmsford Westchester NY 10523
2 5224 N. Arco Ln Charleston Charleston SC 29418
3 3205 Boardwalk Ann Arbor Washtenaw MI 48108
4 8242 N. Black Canyon Phoenix Maricopa AZ 85051
5 100 MacAlyson Ct. Cary Wake NC 27511
6 1725 Pineland Rd. Duluth Gwinnett GA 30136
7 6209 Glenwood Drive Raleigh Wake NC 27612
8 9350 Turkey Ln Orlando Orange FL 32819
9 769 Hammond Drive Atlanta Fulton GA 30136
10 8419 N. Tyron St Charlotte Mecklenburg NC 28262
11 151 Van Kampen Blvd. Wilmington New Hanover NC 28403
12 1011 Riverdale St. West Springfield Hampden MA 01089
13 401 Bay Area Blvd. Houston Harris TX 77058
14 144 Bee Street Charleston Charleston SC 29401
15 14091 North Kendall Drive (Southwest 88th Street) West Kendall Miami-Dade FL 33426
16 N/W/C Cypress Creek Road & North Andrews Avenue Fort Lauderdale Broward FL 33309
17 Various Hollywood Broward FL 33020
18 2101 Hayes Houston Harris TX 77077
19 4310 W. Northgate Drive Irving Dallas TX 75062
20 695 Normandy Drive Houston Harris TX 77015
21 5915 Flintock Drive Houston Harris TX 77040
22 3501 W. Waters Avenue Tampa Hillsborough FL 33614
23 8056 Country Squire Lane Cordova Shelby TN 38018
24 2294 Molly Pitcher Highway Chambersburg Franklin PA 17201
25 5015 Campuswood Drive East Syracuse Onondaga NY 13057
26 5010 Campuswood Drive East Syracuse Onondaga NY 13057
27 5009 Campuswood Drive East Syracuse Onondaga NY 13057
28 12169-12249 Fair Lakes Parkway Fair Oaks Fairfax VA 22033
29 2121 Marsh Lane Carrollton Dallas TX 75006
30 7500 South Hulen St. Fort Worth Tarrant TX 76054
31 3800 N. Beltline Rd. Irving Dallas TX 75038
32 4060 N. Beltline Rd. Irving Dallas TX 75038
33 Various Dallas Dallas TX 75207
34 5 Middlesex Avenue Somerville Middlesex MA 02145
35 4854 Washtenaw Avenue Ann Arbor Washtenaw MI 48108
36 4201 North First Street San Jose Santa Clara CA 95134
37 5050 Poplar Avenue Memphis Shelby TN 38157
38 6401 Veterans Boulevard Metairie Jefferson LA 70003
39 11500 Links Court/11500 Block of South Memorial Bixby Tulsa OK 74008
40 5601 Paramount Blvd. Long Beach Los Angeles CA 90805
41 823-883 E. Baltimore Pike Kennett Square Chester PA 19348
42 12500 - 12600 Dunlap Houston Harris TX 77035
43 1721 E. Frankford Rd. Carrollton Denton TX 75007
44 Becker Drive & East 10th Street Roanoke Rapids Halifax NC 27870
45 6805 Corporate Drive Colorado Springs El Paso CO 80919
46 6700 Dairy Ashford Road Houston Harris TX 77072
47 4240 East Judge Perez Rd. Mereaux St. Bernard Parish LA 70075
48 4355 S. Durango Drive Las Vegas Clark NV 89117
49 1199 East Santa Fe Gardner Johnson KS 66030
50 1010 S. Houston Lake Boulevard Warner Robins Houston GA 31088
51 1 Poston Road Charleston Charleston SC 29407
52 8115-8133 Montgomery Rd. Cincinnati Hamilton OH 45242
53 4801 Marshall Avenue Newport News None VA 23607
54 31 Andrew Street Manchester Hillsborough NH 03104
55 135 English Village Rd. Manchester Hillsborough NH 03102
56 37 Hosmer Street Marlborough Middlesex MA 01752
57 5850 Whitmore Lake Dr. Brighton Livingston MI 48116
58 271 Lottie St. South Lyon Oakland MI 48178
59 1145 Industrial Park Dr. Saline Washtenaw MI 48176
60 10026 Lapeer Rd. Davison Genesee MI 48423
61 4228 Grange Hall Rd. Holly Oakland MI 48442
62 155 N. Dettman Jackson Jackson MI 49202
63 195 Fries Mill Rd. Washington Township Gloucester NJ 08012
</TABLE>
<PAGE>
Managers and Locations of the Mortgaged Properties
<TABLE>
<CAPTION>
# Property Name Manager
- ------------- -------
<S> <C> <C>
64 Hollywood Plaza Westport Realty, Inc.
65 50-60 Worcester Rd. A & C Associates, Inc.
66 Mahwah Business Park Owner Managed
67 Silvernail Shopping Center Marlin Properties, Inc.
68 Tech Center 29 Office/Warehouse Complex Cambridge Asset Advisors Limited Partnership
69 Centre North Shopping Center Centre Properties Management
70 Cranbrook Centre Apartments (1H) Amurcon Corporation
71 Cranbrook Centre Office Buildings (1H) Amurcon Corporation
72 Lubbock Shopping Parkade Richmond Realty LLC
73 Marin Club Apartments PMG Real Estate Management and Consulting
74 Prunedale Center Greg Burch
75 Lamplighter Ontario MHP Morgan Properties, Inc.
76 Marycrest Shopping Center (2) Infinity Property Management, Corp.
77 Elm Plaza Shopping Center Owner Managed
78 Century Plaza East Triple Net Properties, LLC
79 Keller Springs Tech Center Today Management, Inc.
80 Mobile Gardens/Holly View Mobile Home Park (1I) K.D.M. Development Corporation
81 Stony Chase/Rock Creek Mobile Home Park (1I) K.D.M. Development Corporation
82 Briarwood Manor (1I) K.D.M. Development Corporation
83 Tierra Verde Marine Center TPA Resorts, Inc.
84 Aurora Square ACF Property Management, Inc.
85 Merchant's Square (3) Infinity Property Management, Corp.
86 Northwood Hills Shopping Center Sabre Realty Management, Inc.
87 36th Street Office Center Eenhoorn, LLC
88 Fifth Avenue Apartments Anterra Management Corporation
89 The Watermill Apartments BMS Management, Inc.
90 Brooks Corner Brooks, Torrey & Scott, Inc.
91 Hollywood Ardmore Apartments David N. Schultz, Inc.
92 Chasewood Apartments Hall Apartment Management
93 Kingsgate North Graco Real Estate Development, Inc.
94 Fairfield Suites Pittsburgh/Airport Concord Hospitality Enterprises, Inc.
95 Seatree Apartments Hall Apartment Management
96 All Aboard Mini Storage - Alhambra Management Enterprises, Inc.
97 West Century Center PlazaCorp Realty Advisors, Inc.
98 Universal Plaza Rubin Pikus Associates, LP
99 Crestview Market Place Gulf Land, LLC
100 New Franklin Apartments (4) Dube & Cabral Investments
101 Windjammer Apartments JMG Realty, Inc.
102 Woodlake Village Apartments SJS Enterprises
103 Comfort Inn - Hopewell, VA Sky Management, Inc.
104 Linens N Things Clinton International Group
105 The Woods Apartments JRD Management Corporation
106 Moonlight Garden Apartments Cove Properties
107 Sagamore Court Apartments Forest Properties Management, Inc.
108 Carriage Hill Apartments Capital Investment Group, Inc.
109 Dowling Office Building R. D. Management Corp.
110 Main Street Plaza Shopping Center KMI Real Estate Group, Inc.
111 Friendship Crossing Apartments CIH Uplands, L.P.
112 Spruce Properties (1J) Oak Grove Realty Services, Inc.
113 Oak Grove Apartments (1J) Oak Grove Realty Services, Inc.
114 Aldrich Apartments (1J) Oak Grove Realty Services, Inc.
115 One Bellemead Center U.L. Coleman Companies
116 Denver Tech Center #30 ACF Property Management, Inc.
117 Preston Racquet Club Condominiums and Apartments Leaders Property Management
118 Sand Lake Apartments A & M Properties, Inc.
119 Mobile Estate Mobile Home Park Horizon Management Co.
120 Colonia Shopping Center Rosen Associates Management Corp.
121 Vista Ridge Center III Strode Property Company
122 Parkside East Apartments Realty Management Services Inc.
123 Northpark Village GRACO Real Estate Development, Inc.
124 Breakers Apartments First Lake Properties, Inc.
125 Picnic Lawn Apartments Brandon M. Burress
126 32nd Street and McDowell Road Shopping Center Eagle Property Management, Inc.
<CAPTION>
Zip
# Address City County State Code
- ------- ---- ------ ----- ----
<S> <C> <C> <C> <C> <C>
64 4627-4641 Santa Monica Blvd. & 1100-1134 N. Vermont Ave. Los Angeles Los Angeles CA 90029
65 50-60 Worcester Rd. Framingham Middlesex MA 01701
66 Ramapo Valley Road Mahwah Bergen NJ 07430
67 1900 Silvernail Rd. Waukesha Milwaukee WI 53072
68 12120 and 12140 Industrial Parkway Silver Spring Montgomery MD 20904
69 8600 East 96th Street Fishers Hamilton IN 46038
70 18333 South Drive Southfield Oakland MI 48076
71 30161, 30215, 30233 Southfield Road Southfield Oakland MI 48076
72 7020 Quaker Avenue Lubbock Lubbock TX 79424
73 2261 West Valley Blvd Pomona Los Angeles CA 91768
74 7915-8093 San Miguel Canyon Rd. & 17760-17880 Moro Rd. Prunedale Monterey CA 93901
75 2139 East Fourth Street Ontario Riverside CA 91764
76 2126 West Jefferson Street Joliet Will IL 60435
77 338 Main Street Waterville Kennebec ME 04901
78 1790-1884 Avenue J Lancaster Los Angeles CA 93535
79 3220 Keller Springs Rd. Carrollton Dallas TX 75006
80 601 N. Dual Highway & 1020 Brickyard Rd. / 1030 Brickyard Rd. Seaford Hundred Sussex DE 19973
81 ES Bouchelle Rd. Elkton Cecil MD 21921
82 Trussum Pond Rd. Little Creek Hundred Sussex DE 19956
83 100 Pinellas Bayway Tierra Verde Pinellas FL 33715
84 15801-15925 Westminister Way North Seattle King WA 98133
85 7195 Highway 85 Riverdale Clayton GA 30274
86 8010-8152 Spring Valley Rd. Dallas Dallas TX 75240
87 5251-3 36th Street Grand Rapids Kent MI 60521
88 11530 Vance Jackson Rd. San Antonio Bexar TX 75230
89 6505 Westheimer Road Houston Harris TX 77057
90 136 Main Street Westport Fairfield CT 06880
91 1850 Whitley Avenue Los Angeles Los Angeles CA 90028
92 3420 South Coulter Amarillo Randall TX 79109
93 4010-4230 82nd Street Lubbock Lubbock TX 79423
94 239 Summit Park Drive Pittsburgh Allegheny PA 15275
95 2800 Nasa Rd 1 Seabrook Harris TX 77586
96 2000 West Mission Rd. Alhambra Los Angeles CA 91803
97 5015-5063 West Main Street Oshtemo Township Kalamazoo MI 49009
98 2533-2793 NW 79th Avenue Miami Dade FL 33122
99 1308-1334 North Ferndon Blvd. (Hwy 85) Crestview Okaloosa FL 32536
100 Various Franklin/Tilton Belknap/Merrimack NH Various
101 950 F.M. 1959 Houston Harris TX 77034
102 5080 Westerville Road Columbus Franklin OH 43081
103 5380 Oaklawn Boulevard (VSH 36) Hopewell Price George VA 23875
104 U.S. Highway 441 at Glades Rd. Boca Raton Palm Beach FL 33428
105 2375 NE 173rd Street North Miami Beach Dade FL 33160
106 12227 Osborne Place Pacoima Los Angeles CA 91331
107 555-567 Sagamore Avenue Portsmouth Rockingham NH 03801
108 935 - 1385 Carraige Hill Lane Hamilton Butler OH 45013
109 6-22 Pleasant Street Malden Middlesex MA 02148
110 701-725 East Main Street Alhambra Los Angeles CA 91801
111 17 - 127 Galveston St. Washington District of Columbia DC 20032
112 116 Oak Grove Street & 1400-1408 Spruce Place Minneapolis Hennepin MN 55403
113 225, 227, and 233 Oak Grove St. Minneapolis Hennepin MN 55403
114 1926, 1928, 1930, 1934, and 1936 Aldrich Ave. Minneapolis Hennepin MN 55403
115 6425 Youree Drive Shreveport Caddo LA 71105
116 8301 East Prentice Ave Englewood (Denver) Arapahoe CO 80111
117 5840 Spring Valley Rd. Dallas Dallas TX 75240
118 1302 Coopers Town Ct. Tampa Hillsborough FL 33613
119 16745 SE Division Street Portland Multnomah OR 97233
120 1250 Lincoln Highway Colonia Middlesex NJ 07067
121 2417 South Stemmons Freeway Lewisville Denton TX 75067
122 710 Roeder Rd. Silver Spring Montgomery MD 20910
123 401 Slide Rd. Lubbock Lubbock TX 79416
124 1309 Lake Avenue Metairie Jefferson LA 70005
125 24137 Stateline Rd. Bright Dearborn IN 47025
126 3205-3297 E. McDowell Rd. Phoenix Maricopa AZ 85008
</TABLE>
<PAGE>
Managers and Locations of the Mortgaged Properties
<TABLE>
<CAPTION>
# Property Name Manager
- ------------- -------
<S> <C> <C>
127 Triangle Corporate Center American Landmark Properties
128 One West Hills Office Owner Managed
129 Harper Regency Apartments Tri-Center Group, Inc.
130 Heritage Green Shopping Center Tedford Properties
131 Captain's Landing Apartments BH Management
132 All Aboard Mini Storage - Fremont Management Enterprises, Inc.
133 Century Plaza Strip Shopping Center (1K) Owner Managed
134 Albany Square Strip Shopping Center (1K) Owner Managed
135 Larrabee Complex MacBride Management, Inc.
136 Cedar Garden Apartments Sigma Management
137 All Aboard Mini Storage - Stanton Management Enterprises, Inc.
138 Windtree Apartments - Phase I Floyd Properties
139 Lake City Mini-Storage Owner Managed
140 Huntington Mobile Estates Marcare Group
141 Everhart Park Shopping Center LandLord Resources
142 Rafael North Executive Park Williams Development Company
143 Westwind Estates Bessire and Casenhiser, Inc.
144 Hewlett Shopping Center Jonathan Austern
145 Forest Park Village J. Hester Properties
146 2700 Richards Building Scott C. Hannah
147 Lincoln Park Center Milestone Property Management Corp.
148 Cedar Heights Apartments Evans Realty, Inc.
149 The North Oak Apartments Con Am Management
150 Arrowhead Court Apartments Halfpenny Management Company
151 The Citibank Building Gilles Bouchacourt
152 Petco/Starbucks S/C Owner Managed
153 1870 Ogden Drive Insignia Commercial Group of California, Inc.
154 Woodland Park Office Building P & K, Inc.
155 Costa Mesa Mobile Estates Owner Managed
156 Tree Top Apartments Floyd Properties
157 Greenville Village Mobile Home Park Wolff Holdings, Inc.
158 Brookwood Village Regency Realty Group, Inc.
159 Rose Grove Mobile Home Park Dorothy E. Royce
160 Little River Shopping Center Rosen Associates Management Corp.
161 The Amberton Apartments A&M Properties, Inc.
162 Best Western Worlds of Fun Pacifica Companies
163 All Aboard Mini Storage - Anaheim Management Enterprises, Inc.
164 Waterway Crossing Apartments Intersouth Management, Inc.
165 The Borders Building Westheimer Properties
166 Ken-Caryl Business Center ACF Property Management, Inc.
167 Alta Vista Mobile Home Park Alta Vista Associates, LLC
168 Palm Springs Self Storage G.T. Kelly General Contractors, Inc.
169 Holiday Inn Express Auburn C & D Management, Inc.
170 Caruth Haven Retail Center Cencor Realty Services, Inc.
171 3456 Ridge Property American Landmark Properties
172 Campus Plaza Shopping Center Kwok Yan Yee
173 All Aboard Mini Storage - San Gabriel Management Enterprises, Inc.
174 Point O' Woods Apartments Evans Realty
175 Williamsburg on the Lake Apartments Gene B. Glick Company
176 Airport Business Center Margolis Company
177 Staples - Wilmington Jeffrey R. Anderson Real Estate, Inc.
178 Felicita Junction James Crone & Associates
179 The Bordeaux Apartments Lanlord Resources, Inc.
180 High Point Village I Apartments Knudson Management Co.
181 Assured Self Storage Facility NAP
182 Staples - Valparaiso Jeffrey R. Anderson Real Estate, Inc.
183 Fruitland Grove Family Park Community Asset Management
184 Centennial Creek Office Park CC Management LP
185 Park Lane Village Apartments (1L) Craig A. Lane and Leon J. Parr
186 Rynearson Lane Village Apartments (1L) Craig A. Lane and Leon J. Parr
187 Holiday Inn Express Ottawa C & D Management, Inc.
188 Ross Apartments Charles and Holly Clifford
189 339 S. Ardmore Apartments Abra Management, Inc.
<CAPTION>
Zip
# Address City County State Code
- ------- ---- ------ ----- ----
<S> <C> <C> <C> <C> <C>
127 1400-1538 Elmhurst Rd. Elk Grove Village Cook IL 60007
128 3901 South Lamar Blvd. Austin Travis TX 78704
129 1428 N. Harper Avenue West Hollywood Los Angeles CA 90046
130 8203 South Holly Street Littleton Unincorporated Arapahoe CO 80122
131 3102 69th Street Galveston Galveston TX 77551
132 3560 Washington Blvd. Fremont Alameda CA 94539
133 355-385 W. Northwest Highway Palatine Cook IL 60067
134 4445 N. Pulaski Road Chicago Cook IL 60618
135 100 Main Street Westbrook Cumberland ME 04092
136 1030 Cedar Bridge Rd. Brick Ocean NJ 08723
137 10741 Dale Ave. Stanton Orange CA 90680
138 409 Tradewinds Dr. Fayetteville Cumberland NC 28314
139 3116-3136 N.E. 130th Street Seattle King WA 98125
140 7652 Garfield Avenue Huntington Beach Orange CA 92648
141 6601 Everhart Rd. Corpus Christi Nueces TX 78413
142 165,175, 185 North Redwood Drive San Rafael Marin CA 94903
143 1399 Sacramento Ave. West Sacramento Yolo CA 95605
144 1296-1318 Broadway Hewlett Nassau NY 11557
145 3423 Forest Lane Dallas Dallas TX 75234
146 2700 Richards Rd. Bellevue King WA 98005
147 6800 Stirling Rd. Davie Broward FL 33024
148 2600 N. Denton Rd. Dothan Houston AL 36303
149 225 Aldine Bender Houston Harris TX 77060
150 700 Cherry Tree Rd. Upper Chichester Township Delaware PA 19014
151 225-255 East Dania Beach Blvd. Dania Broward FL 33004
152 12800-12824 Ventura Boulevard Studio City Los Angeles CA 91604
153 1868-1870 Ogden Drive Burlingame San Mateo CA 94010
154 21731 Ventura Boulevard Woodland Hills Los Angeles CA 91364
155 327 West Wilson Street Costa Mesa Orange CA 92627
156 910-C Greenleaf Drive Fayetteville Cumberland NC 28304
157 6509 Greenville Loop Road Wilmington New Hanover NC 28409
158 1923 - 1943 Peachtree Rd. Atlanta Fulton GA 30309
159 3839 Pacific Ave. Forest Grove Washington OR 97116
160 1699 Highway 17 Little River Horry SC 29566
161 1550 University Woods Place Tampa Hillsborough FL 33612
162 7100 NE Parvin Rd. Kansas City Clay MO 64117
163 1705 S. State College Blvd. Anaheim Orange CA 92806
164 685 Burcale Rd. Myrtle Beach Horry SC 29579
165 9633 Westheimer Rd. Houston Harris TX 77063
166 10499 & 10579 W. Bradford & 10394 W. Chatfield Ave. Littleton Jefferson CO 80127
167 711 East Lake Mead Drive Henderson Clark NV 89015
168 4200 Forest Hill Blvd. Palm Springs Palm Beach FL 33406
169 404 Touring Drive Auburn DeKalb IN 46706
170 6101 Greenville Avenue Dallas Dallas TX 75206
171 3456 Ridge Avenue Arlington Heights Cook IL 60004
172 3601-3629 S. Vermont Ave. Los Angeles Los Angeles CA 90007
173 405 S. Del Mar Ave. San Gabriel Los Angeles CA 91776
174 520 N. 38th Avenue Hattiesburg Forrest and Lamar MS 39401
175 302 Village Drive Mishawaka St. Joseph IN 46545
176 555 West Layton Avenue Milwaukee Milwaukee WI 53207
177 1215 Rombach Avenue Wilmington Clinton OH 45177
178 1611-1677 S. Centre City Parkway Escondido San Diego CA 92025
179 523 Airline Rd. Corpus Christi Nueces TX 78412
180 139 South Clark Road Cedar Hill Dallas TX 75014
181 3003 Big Town Blvd. Mesquite Dallas TX 75150
182 2106 Morthland Blvd. (U.S. 30) Valparaiso Porter IN 46383
183 19850 E. Arrow Highway Covina Los Angeles CA 91724
184 2955 & 2975 Valmont Rd. Boulder Boulder CO 80301
185 7746 Red Arrow Highway Watervliet Berrien MI 49098
186 1386 Leisure Lane Buchanan Berrien MI 49107
187 120 West Stevenson Ottawa LaSalle IL 61350
188 1118 Sir Francis Drake Boulevard Kentfield Marin CA 94904
189 339 South Ardmore Avenue Los Angeles Los Angeles CA 90020
</TABLE>
<PAGE>
Managers and Locations of the Mortgaged Properties
<TABLE>
<CAPTION>
# Property Name Manager
- ------------- -------
<S> <C> <C>
190 Edgewater Beach Resort Yvonne Hanna
191 Fondren Hill Apartments Homewood Company, LLC
192 Cottonwood Plaza Partners Management and Consultants Inc.
193 Southport Shops Centre Properties Management
194 Hawthorne Hill Apartments Pache Management Company, Inc.
195 Days Inn Waccamaw Winner Hotels, Inc.
196 Turtle Oaks Apartments Performance Properties, LLC
197 Linden Place Mobile Home Park D.R.S. Realty Company
198 Moore Lake Commons Shopping Center Hexad Management Company
199 Imperial Manor West Apartments Southfield Management Inc.
200 Brown School Station Apts. Baltes Commercial Realty
201 South Street Seaport Office Center Beacon Management Group, LLC
202 Hathaway Commerce Center Walsworth Property Management
203 Corinthian Apartments L'Abri Management Co.
204 Walgreen's Drug Store - Swansea Owner Managed
205 Catalina Apartments J. Hester Properties
206 Devonshire Square Retail Center Westwood Financial
207 1440 N. Vine Street Worchell Properties
208 College Park Apartments Owner Managed
209 Country Brooke Apartments Baltes Commercial Realty
210 Hillside View Apartments Fox Creek Management
211 Benihana Restaurant GraeGrove One, LLC
212 Crosswinds Apartments National Realty Management, Inc.
213 Imperial Plaza Retail Center Abbas Satrap
214 Twin Lakes Mobile Home Park D.R.S. Realty Company
215 Antietam Village Center Fitzgerald & Matan Property Management, Inc.
216 Gateway Shoppes Morgan Real Estate, Inc.
217 Red Onion Building Owner Managed
218 526 South Ardmore Avenue Abra Management, Inc
219 All Aboard Mini Storage - Santa Ana Management Enterprises, Inc.
220 Villa East I & II Matrix Group, Inc.
221 Courtyard Apartments Christopher Homes, Inc.
222 Sunset View Village Apartments Owner Managed
223 Wilmington Plaza La Caze Development Company
224 The Nations Bank Building The Shear Companies
225 Quail Ridge Apartments Piper Management Co.
226 Best Western KCI Airport Pacifica Companies
227 Laurel Heights Apartments Property Management Professionals, Inc.
228 El Monte Mobile Air Mobile Home Park Community Asset Management
229 Harold Gilstrap Shopping Center Sierra Management Corp.
230 Lakeside Apartments Orphelia Hennes
231 Park Glen Apartments Tricap Management, Inc.
232 St. Lucie Mobile Village Owner Managed
233 Ravenscroft Apartments Owner Managed
234 Coach Country Corral MHP Owner Managed
235 Seaside Village Shopping Center WQ Real Estate Services, Inc.
236 Sherwood Park Apartments Great West Management Group, Inc.
237 Ravenna Plaza Emmco Corporation
238 Holiday Inn Express Oglesby C & D Management, Inc.
239 Central/Magnolia Retail Center H.S. Brown & Associates, Inc.
240 Rolling Hills Estates Team Properties
241 Saticoy-Royale Apartments G.H. Cooper Properties, Inc.
242 Holiday/Park Riviera Mobile Home Park McGlamry Properties
243 Gottschalk's Department Store Jack Baskin, Inc.
244 Justin Apartments Gaska, Inc. and Development
245 Fountain Square Apartments Drumm Real Estate Management, Inc.
246 383 St. Johns Place Certified Servicing Associates, Inc.
247 Days Inn Owner Managed
248 Market Plaza Real Estate Alliance Company Ltd., LLC
249 Michigan Plaza & Bender Plaza (5) Owner Managed
250 Mockingbird Park Retail Building Corrigan Real Estate Services
251 Poolesville Village Center Darnestown Management Corporation, Inc.
252 Executive Park Offices REMA, Inc.
<CAPTION>
Zip
# Address City County State Code
- ------- ---- ------ ----- ----
<S> <C> <C> <C> <C> <C>
190 95 Chase Avenue Dennisport Barnstable MA 02639
191 770 Lakeland Jackson Hinds MS 39216
192 7250-7356 North Oracle Rd. Tucson Pima AZ 85704
193 7225 US 31 South Indianapolis Marion IN 46227
194 3200-3361 & 3419-3498 Valerie Arms Drive Dayton Montgomery OH 45405
195 3650 Highway 501 Myrtle Beach Horry SC 29577
196 4111-21, 4140 & 4141 Newton Ave Dallas Dallas TX 75219
197 G-4192 South Linden Road Flint Genessee MI 48507
198 1001 East Moore Lake Drive Fridley Anoka MN 55432
199 19200 Appleton Detroit Wayne MI 48219
200 402-A Brown School Rd. Vandalia Montgomery OH 45377
201 19 Fulton Street & 133 Beekman Street New York New York NY 10038
202 1004 - 1010 South Hathaway Street Santa Ana Orange CA 92705
203 9063 Florence Ave. Downey Los Angeles CA 90240
204 2532 North Illinois Street Swansea St. Clair IL 62226
205 815 W. Abram Street Arlington Tarrant TX 76013
206 16913-16933 Devonshire Street Granada Hills Los Angeles CA 91344
207 1400-1440 Vine Street Los Angeles Los Angeles CA 90028
208 401 College Drive Hanceville Cullman AL 35055
209 2980 Stop Eight Rd. Dayton Montgomery OH 45414
210 243 Pleasant Street Concord Merrimack NH 03301
211 4250 Birch Street Newport Beach Orange CA 92660
212 4355 South Jones Blvd. Las Vegas Clark NV 89103
213 8847 Imperial Highway Downey Los Angeles CA 90242
214 7001 Lakes Boulevard Fort Mill York SC 29715
215 1595 Opposumtown Pike Frederick Frederick MD 21702
216 1001-27 North Federal Highway Fort Lauderdale Broward FL 33304
217 420 and 422 East Cooper Avenue Aspen Pitkin CO 81611
218 526 South Ardmore Avenue Los Angeles Los Angeles CA 90020
219 1030 E. Fourth Street Santa Ana Orange CA 92701
220 363 and 393 South Harlan St. Lakewood Jefferson CO 80226
221 1620 Carol Sue Ave. Gretna Jefferson LA 70056
222 7510 SW 152nd Avenue Miami Dade FL 33193
223 311 Pacific Coast Highway Wilmington Los Angeles CA 90744
224 4000 Garth Road Baytown Harris TX 77521
225 1001 North State Road Davison Genesee MI 48423
226 11900 NW Plaza Circle Kansas City Platte MO 64153
227 483 Laurel Lane New Braunfels Comal TX 78130
228 1517-1601Merced Avenue South El Monte Los Angeles CA 91733
229 601 S. Main Street Salem Washington IN 47167
230 1355 West Maple Avenue Mundelein Lake IL 61941
231 Parke West Drive Glen Burnie Anne Arundel MD 21061
232 11500 SW Kanner Highway Indiantown Martin FL 34956
233 25 Fairview Avenue Phillipsburg Warren NJ 08865
234 1921 208th Street East Spanaway Pierce WA 98387
235 4908 Seawall Boulevard Galveston Galveston TX 77551
236 2300 - 2470 62nd Avenue East Fife Pierce WA 98424
237 1139-49 East Main Street Ravenna Portage OH 44266
238 900 Holiday Street Oglesby LaSalle IL 61348
239 4100 Central Avenue Riverside Riverside CA 92506
240 4457 Popps Ferry Rd. D'Iberville Harrison MS 39532
241 14630 Saticoy Street Van Nuys Los Angeles CA 91405
242 319 Brady Drive Warner Robins Houston GA 31088
243 372 Elm Avenue Auburn Placer CA 95603
244 1039 Justin Avenue Glendale Los Angeles CA 91201
245 1925 8th Avenue Tuscaloosa Tuscaloosa AL 35401
246 383 St. Johns Place Brooklyn Kings NY 11238
247 2117 Aerotech Drive Colorado Springs El Paso CO 80916
248 2015 - 79 West 25th Street Cleveland Cuyahoga OH 44113
249 726-32 E. Michigan / 205-225 E. Bender Hobbs Lea NM 88240
250 5706 E. Mockingbird Lane Dallas Dallas TX 75206
251 19710 Fisher Avenue Poolesville Montgomery MD 20837
252 921-925 East Executive Park Drive Murray Salt Lake UT 84117
</TABLE>
<PAGE>
Managers and Locations of the Mortgaged Properties
<TABLE>
<CAPTION>
# Property Name Manager Address
- ------------- ------- -------
<S> <C> <C> <C>
253 Citadel Square Shopping Center (6) Infinity Property Management, Corp. 5060 Memorial Drive
254 Sherwood Mobile Home Estates D.R.S. Realty Company 314 Tallman Circle
255 Ware's Van & Storage Co. Owner Managed 1344 North West Boulevard
256 Sunrise Terrace Mobile Home Park Owner Managed 7311 Chambers Creek Road West
257 Best Western Country Inn North Pacifica Companies 2633 N.E. 43rd Street
258 Woodlake Resort Village Apartments Owner Managed 6000 Woodlake Parkway
259 Plantation Pines Apartments Owner Managed 2713 South Broadway
260 Pacific Mini Storage Owner Managed 5120 Pacific Highway
261 Sunridge Apartments Owner Managed 6608 South Freeway
262 Parkside Place Apartments J & EE Property Management, Inc. 2833 Community Drive
263 Courtyards of Granbury Las Brisas Nuevo, LLC 905 Paluxy Road
264 University Apartments Polo Club Management 3512 South University Drive
265 Isaqueena Village Apartments P.I.C. Properties 843 Isaqueena Trail
266 Turtle Dove I Apartments Owner Managed 3516 Matilda Street
267 Carson Gardens Mobile Home Park Community Asset Management 437 West Carson St.
268 Valerie Apartments J.L. & G. 6226 Valerie Street
269 Huddersfield Apartments Huddersfield Properties, LLC 197 Pine Street
270 1457 & 1519 - 1527 Park Road, NW 1457 Park Road, LLC 1457 & 1519 - 1527 Park Road, NW
271 Winter Garden Village Apartments Affirmative Management Inc. 521 South Park Avenue
272 Long Point Plaza Apartments Owner Managed 1742 Woodvine Drive
273 The Place of Tempe Apartments Owner Managed 607-627 West 19th Street
274 Valley Garden Apartments Valley Garden, LLC 5236 & 5286 East Tropicana Avenue
275 Devereaux Apartments Owner Managed 3616-3636 Warwick Boulevard
276 Bloomingdale Shopping Center Bloomingdale Plaza Associates, LLC 47 Main Street
277 Cottonwood Apartments Invest America 1714 Patton Lane
278 Royal North Apartments SSL Investments, LLC 4422 & 4525 Weaver Road
279 Turtle Dove II Apartments G & G Properties 5737 McCommas Street
<CAPTION>
Zip
# City County State Code
- ---- ------ ----- ----
<S> <C> <C> <C> <C>
253 Stone Mountain DeKalb GA 30083
254 Midway Park Onslow NC 28544
255 Vineland Cumberland NJ 08360
256 University Place Pierce WA 98467
257 Kansas City Clay MO 64117
258 San Antonio Bexar TX 78244
259 Tyler Smith TX 75701
260 Ferndale Whatcom WA 98248
261 Forth Worth Tarrant TX 76134
262 Dallas Dallas TX 75220
263 Granbury Hood TX 76048
264 Fort Worth Tarrant TX 76109
265 Central Pickens SC 29630
266 Dallas Dallas TX 75206
267 Carson Los Angeles CA 90745
268 Houston Harris TX 77081
269 Portland Cumberland ME 04103
270 Washington District of Columbia DC 20010
271 Winter Garden Orange FL 34787
272 Houston Harris TX 77055
273 Tempe Maricopa AZ 85281
274 Las Vegas Clark NV 89122
275 Kansas City Jackson MO 64111
276 Bloomingdale Passaic NJ 07403
277 Austin Travis TX 78723
278 Houston Harris TX 77016
279 Dallas Dallas TX 75206
</TABLE>
(1A) The Winston Loan is secured by Hampton Inn - Elmsford, Quality Suites -
Charleston, Courtyard by Marriott - Ann Arbor, Residence Inn - Phoenix,
Homewood Suites - Cary, Hampton Inn & Suites - Gwinnett, Hampton Inn -
Raleigh, Comfort Suites - Orlando, Hampton Inn - Perimeter, Hampton Inn -
Charlotte, NC, Courtyard by Marriott - Wilmington, Hampton Inn - West
Springfield, Homewood Suites - Clear Lake and Comfort Inn - Charleston,
respectively.
(1B) The Mortgage Loans secured by Kendale Lakes Plaza, Cypress Creek Station
and Oakwood Business Center, respectively, are cross-collateralized and
cross-defaulted.
(1C) A Single Mortgage Note is secured by Westchase Ranch Apartments, Westwood
Village Apartments, Normandy Woods Apartments, Savoy Manor Apartments and
San Marin Apartments, respectively.
(1D) A Single Mortgage Note is secured by 2294 Molly Pitcher Highway, 5015
Campuswood Drive, 5010 Campuswood Drive and 5009 Campuswood Drive,
respectively.
(1E) A Single Mortgage Note is secured by Keller Oaks Apartments, Sycamore Hill
Apartments, Clarendon Apartments and Woodchase Condominiums, respectively.
(1F) A Single Mortgage Note is secured by Princeton Court Apartments, Pinewood
Estates Apartments and Arbor Court Apartments, respectively.
(1G) A Single Mortgage Note is secured by U-Store of Brighton Self Storage
Facility, U-Store of South Lyon Self Storage Facility, U-Store of Saline
Self Storage Facility, U-Store of Davison Self Storage Facility, U-Store of
Holly Self Storage Facility and U-Store of Jackson Self Storage Facility,
respectively.
(1H) The Mortgage Loans secured by Cranbrook Centre Apartments and Cranbrook
Centre Office Buildings, respectively, are cross-collateralized and
cross-defaulted.
(1I) A Single Mortgage Note is secured by Mobile Gardens/Holly View Mobile Home
Park, Stony Chase/Rock Creek Mobile Home Park and Briarwood Manor,
respectively.
(1J) A Single Mortgage Note is secured by Spruce Properties, Oak Grove
Apartments and Aldrich Apartments, respectively. The Mortgage Loan secured
by Spruce Properties contains two properties that are operated as one.
(1K) The Mortgage Loans secured by Century Plaza Strip Shopping Center and
Albany Square Strip Shopping Center, respectively, are cross-collateralized
and cross-defaulted.
(1L) A Single Mortgage Note secured by Park Lane Village Apartments and
Rynearson Lane Village Apartments, respectively.
(2) Marycrest Shopping Center has an interest only period of 24 months from
origination and thereafter is scheduled to amortize over 360 months with
the payment presented reflecting the amount due during the amortization
term.
(3) Merchant's Square has an interest only period of 24 months from origination
and thereafter is scheduled to amortize over 336 months with the payment
presented reflecting the amount due during the amortization term.
(4) The Mortgage Loan secured by New Franklin Apartments contains four
properties that are operated as one.
(5) The Mortgage Loan secured by Michigan & Bender Plaza contains two
properties that are operated as one.
(6) Citadel Square Shopping Center has an interest only period of 36 months
from origination and thereafter is scheduled to amortize over 300 months
with the payment presented reflecting the amount due during the
amortization term.
<PAGE>
Descriptions of the Mortgaged Properties
<TABLE>
<CAPTION>
Units/
Sq. Ft./
Rooms/ Fee Simple/
# Property Name Property Type Pads Leasehold
- - ------------- ------------- ---- ---------
<S> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) Hotel 156 Fee
2 Quality Suites - Charleston (1A) Hotel 168 Fee
3 Courtyard by Marriott - Ann Arbor (1A) Hotel 160 Fee
4 Residence Inn - Phoenix (1A) Hotel 168 Fee
5 Homewood Suites - Cary (1A) Hotel 120 Fee
6 Hampton Inn & Suites - Gwinnett (1A) Hotel 135 Fee
7 Hampton Inn - Raleigh (1A) Hotel 141 Fee
8 Comfort Suites - Orlando (1A) Hotel 215 Fee
9 Hampton Inn - Perimeter (1A) Hotel 131 Fee
10 Hampton Inn - Charlotte, NC (1A) Hotel 125 Fee
11 Courtyard by Marriott - Wilmington (1A) Hotel 128 Fee
12 Hampton Inn - West Springfield (1A) Hotel 126 Fee
13 Homewood Suites - Clear Lake (1A) Hotel 92 Fee
14 Comfort Inn - Charleston (1A) Hotel 128 Fee
15 Kendale Lakes Plaza (1B) Retail 404,553 Fee
16 Cypress Creek Station (1B) Retail 229,009 Fee
17 Oakwood Business Center (1B) Office 141,150 Fee
18 Westchase Ranch Apartments (1C) Multifamily 776 Fee
19 Westwood Village Apartments (1C) Multifamily 320 Fee
20 Normandy Woods Apartments (1C) Multifamily 268 Fee
21 Savoy Manor Apartments (1C) Multifamily 192 Fee
22 San Marin Apartments (1C) Multifamily 193 Fee
23 Country Squire Apartments - South Multifamily 726 Fee
24 2294 Molly Pitcher Highway (1D) Industrial 621,400 Fee
25 5015 Campuswood Drive (1D) Office 99,476 Fee
26 5010 Campuswood Drive (1D) Office 70,163 Fee
27 5009 Campuswood Drive (1D) Office 6,584 Fee
28 Fair Lakes Promenade Retail 143,789 Fee
29 Keller Oaks Apartments (1E) Multifamily 220 Fee
30 Sycamore Hill Apartments (1E) Multifamily 264 Fee
31 Clarendon Apartments (1E) Multifamily 192 Fee
32 Woodchase Condominiums (1E) Multifamily 74 Fee
33 Dallas Design Center Portfolio Mixed Use 355,826 Fee/Leasehold
34 Assembly Square Office Building Mixed Use 202,616 Fee
35 Spicetree Apartments Multifamily 551 Fee
36 Lamplighter Mobile Home Park Manufactured Housing 265 Fee
37 White Station Tower Office 247,718 Fee
38 Holiday Inn New Orleans Veterans Hotel 222 Fee
39 The Links at Bixby Multifamily 324 Fee
40 Southwood Apartments Multifamily 358 Fee
41 The Shoppes at Longwood Retail 136,200 Fee
42 Pines of Westbury Multifamily 940 Fee
43 Edentree Apartments Multifamily 360 Fee
44 Becker Village Mall Retail 305,629 Fee
45 Tiffany Square Office 179,910 Fee
46 The Mint Apartments Multifamily 592 Fee
47 River Park Shopping Center Retail 230,659 Fee
48 Rancho Destino Apartments Multifamily 184 Fee
49 Conestoga Mobile Home Park Manufactured Housing 581 Fee
50 Huntington Chase Apartments Multifamily 200 Fee
51 Parkshore Centre Office Building Office 117,151 Fee
52 Kenwood Pavilion Retail 57,144 Fee
53 Newsome Park Apartments Multifamily 650 Fee
54 Princeton Court Apartments (1F) Multifamily 90 Fee
55 Pinewood Estates Apartments (1F) Multifamily 144 Fee
56 Arbor Court Apartments (1F) Multifamily 108 Fee
57 U-Store of Brighton Self Storage Facility (1G) Self Storage 91,650 Fee
58 U-Store of South Lyon Self Storage Facility (1G) Self Storage 51,450 Fee
59 U-Store of Saline Self Storage Facility (1G) Self Storage 63,900 Fee
60 U-Store of Davison Self Storage Facility (1G) Self Storage 46,500 Fee
61 U-Store of Holly Self Storage Facility (1G) Self Storage 46,700 Fee
62 U-Store of Jackson Self Storage Facility (1G) Self Storage 32,400 Fee
63 Birches Apartments Multifamily 296 Fee
<CAPTION>
Occupancy
Year Year Rate at Appraised Cut-off Date
# Property Name Built Renovated U/W (7) Value LTV Ratio
- - ------------- ----- --------- ------- ----- ---------
<S> <C> <C> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) 1968 1996 N/A $15,300,000 49.7%
2 Quality Suites - Charleston (1A) 1989 1997 N/A 14,000,000 44.8%
3 Courtyard by Marriott - Ann Arbor (1A) 1989 1998 N/A 13,900,000 45.2%
4 Residence Inn - Phoenix (1A) 1988 1997 N/A 16,300,000 38.5%
5 Homewood Suites - Cary (1A) 1994 N/A N/A 11,800,000 50.9%
6 Hampton Inn & Suites - Gwinnett (1A) 1996 N/A N/A 11,300,000 47.6%
7 Hampton Inn - Raleigh (1A) 1986 1996 N/A 11,200,000 47.2%
8 Comfort Suites - Orlando (1A) 1990 1997 N/A 12,500,000 41.3%
9 Hampton Inn - Perimeter (1A) 1996 N/A N/A 10,300,000 48.4%
10 Hampton Inn - Charlotte, NC (1A) 1991 1997 N/A 9,600,000 47.5%
11 Courtyard by Marriott - Wilmington (1A) 1996 N/A N/A 9,300,000 45.8%
12 Hampton Inn - West Springfield (1A) 1989 1998 N/A 8,220,000 44.9%
13 Homewood Suites - Clear Lake (1A) 1995 N/A N/A 8,700,000 39.5%
14 Comfort Inn - Charleston (1A) 1989 1997 N/A 9,700,000 16.2%
15 Kendale Lakes Plaza (1B) 1977 1995 98.0% 36,100,000 81.9%
16 Cypress Creek Station (1B) 1997 N/A 99.0% 30,800,000 77.4%
17 Oakwood Business Center (1B) 1987 N/A 97.0% 14,000,000 74.3%
18 Westchase Ranch Apartments (1C) 1977 1994 96.0% 29,150,000 77.3%
19 Westwood Village Apartments (1C) 1983 1996 92.0% 13,000,000 79.9%
20 Normandy Woods Apartments (1C) 1981 1997 95.0% 9,000,000 79.0%
21 Savoy Manor Apartments (1C) 1980 1997 97.0% 6,500,000 79.9%
22 San Marin Apartments (1C) 1972 1997 86.0% 4,600,000 78.5%
23 Country Squire Apartments - South 1984 1987 94.0% 39,000,000 78.1%
24 2294 Molly Pitcher Highway (1D) 1960 1991 100.0% 21,500,000 79.8%
25 5015 Campuswood Drive (1D) 1992 N/A 100.0% 9,000,000 79.8%
26 5010 Campuswood Drive (1D) 1989 N/A 94.0% 5,600,000 79.8%
27 5009 Campuswood Drive (1D) 1987 N/A 100.0% 650,000 79.3%
28 Fair Lakes Promenade 1996 N/A 100.0% 26,700,000 78.5%
29 Keller Oaks Apartments (1E) 1985 N/A 98.0% 8,800,000 81.2%
30 Sycamore Hill Apartments (1E) 1983 1991 96.0% 7,625,000 81.2%
31 Clarendon Apartments (1E) 1979 N/A 95.0% 5,600,000 81.2%
32 Woodchase Condominiums (1E) 1983 N/A 99.0% 2,960,000 81.2%
33 Dallas Design Center Portfolio 1951 1995 98.0% 26,400,000 66.2%
34 Assembly Square Office Building 1960 1979 100.0% 22,800,000 73.5%
35 Spicetree Apartments 1971 1977 96.0% 21,300,000 77.9%
36 Lamplighter Mobile Home Park 1971 N/A 100.0% 20,030,000 79.7%
37 White Station Tower 1967 1996 93.0% 22,100,000 70.1%
38 Holiday Inn New Orleans Veterans 1973 1996 N/A 20,100,000 74.5%
39 The Links at Bixby 1997 N/A 98.0% 18,400,000 78.7%
40 Southwood Apartments 1964 1998 94.0% 18,200,000 79.5%
41 The Shoppes at Longwood 1991 N/A 100.0% 17,800,000 79.6%
42 Pines of Westbury 1972 1996 83.0% 18,100,000 71.6%
43 Edentree Apartments 1983 N/A 96.0% 14,350,000 80.0%
44 Becker Village Mall 1979 N/A 99.0% 14,180,000 79.8%
45 Tiffany Square 1984 1995 100.0% 16,200,000 69.3%
46 The Mint Apartments 1980 1982 93.0% 15,100,000 73.8%
47 River Park Shopping Center 1989 1997 94.0% 13,800,000 79.2%
48 Rancho Destino Apartments 1998 N/A 100.0% 12,980,000 78.4%
49 Conestoga Mobile Home Park 1972 1998 96.0% 12,700,000 77.5%
50 Huntington Chase Apartments 1997 N/A 96.0% 12,150,000 79.6%
51 Parkshore Centre Office Building 1985 1986 100.0% 12,000,000 77.2%
52 Kenwood Pavilion 1998 N/A 100.0% 11,100,000 79.9%
53 Newsome Park Apartments 1967 N/A 97.0% 10,700,000 79.1%
54 Princeton Court Apartments (1F) 1973 N/A 97.0% 6,500,000 59.7%
55 Pinewood Estates Apartments (1F) 1972 N/A 95.0% 4,000,000 59.7%
56 Arbor Court Apartments (1F) 1963 1995 94.0% 3,500,000 59.7%
57 U-Store of Brighton Self Storage Facility (1G) 1988 N/A 92.0% 3,860,000 74.3%
58 U-Store of South Lyon Self Storage Facility (1G) 1988 N/A 94.0% 2,050,000 74.3%
59 U-Store of Saline Self Storage Facility (1G) 1988 N/A 88.0% 1,870,000 74.3%
60 U-Store of Davison Self Storage Facility (1G) 1988 N/A 94.0% 1,340,000 74.3%
61 U-Store of Holly Self Storage Facility (1G) 1988 N/A 86.0% 1,240,000 74.3%
62 U-Store of Jackson Self Storage Facility (1G) 1988 N/A 86.0% 770,000 74.3%
63 Birches Apartments 1968 N/A 94.0% 10,250,000 79.7%
<CAPTION>
Maturity/ARD Maturity/ARD U/W U/W
# Property Name Balance LTV Ratio (8) NCF (9) DSCR (10)
- - ------------- ------- ------------- ------- ---------
<S> <C> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) $ 6,058,068 39.6% $ 1,374,994 2.54x
2 Quality Suites - Charleston (1A) 5,005,354 35.8% 1,271,697 2.54
3 Courtyard by Marriott - Ann Arbor (1A) 5,005,354 36.0% 1,216,246 2.54
4 Residence Inn - Phoenix (1A) 5,005,354 30.7% 1,920,777 2.54
5 Homewood Suites - Cary (1A) 4,786,866 40.6% 1,452,430 2.54
6 Hampton Inn & Suites - Gwinnett (1A) 4,290,304 38.0% 1,114,219 2.54
7 Hampton Inn - Raleigh (1A) 4,210,854 37.6% 1,000,261 2.54
8 Comfort Suites - Orlando (1A) 4,111,541 32.9% 1,205,152 2.54
9 Hampton Inn - Perimeter (1A) 3,972,504 38.6% 1,067,607 2.54
10 Hampton Inn - Charlotte, NC (1A) 3,634,841 37.9% 920,667 2.54
11 Courtyard by Marriott - Wilmington (1A) 3,396,489 36.5% 824,922 2.54
12 Hampton Inn - West Springfield (1A) 2,939,652 35.8% 769,690 2.54
13 Homewood Suites - Clear Lake (1A) 2,741,027 31.5% 755,838 2.54
14 Comfort Inn - Charleston (1A) 1,251,339 12.9% 897,540 2.54
15 Kendale Lakes Plaza (1B) 26,589,367 73.7% 3,241,994 1.25
16 Cypress Creek Station (1B) 21,420,185 69.5% 2,700,441 1.25
17 Oakwood Business Center (1B) 9,345,291 66.8% 1,228,249 1.25
18 Westchase Ranch Apartments (1C) 19,781,228 67.9% 2,332,825 1.30
19 Westwood Village Apartments (1C) 9,120,616 70.2% 1,092,658 1.30
20 Normandy Woods Apartments (1C) 6,244,114 69.4% 849,348 1.30
21 Savoy Manor Apartments (1C) 4,560,308 70.2% 540,292 1.30
22 San Marin Apartments (1C) 3,168,810 68.9% 369,487 1.30
23 Country Squire Apartments - South 25,953,264 66.5% 3,008,930 1.28
24 2294 Molly Pitcher Highway (1D) 15,214,068 70.8% 1,791,007 1.40
25 5015 Campuswood Drive (1D) 6,368,679 70.8% 972,949 1.40
26 5010 Campuswood Drive (1D) 3,965,565 70.8% 639,225 1.40
27 5009 Campuswood Drive (1D) 457,130 70.3% 65,758 1.40
28 Fair Lakes Promenade 18,441,364 69.1% 2,223,209 1.29
29 Keller Oaks Apartments (1E) 6,234,223 70.8% 762,660 1.24
30 Sycamore Hill Apartments (1E) 5,401,812 70.8% 516,741 1.24
31 Clarendon Apartments (1E) 3,967,233 70.8% 471,616 1.24
32 Woodchase Condominiums (1E) 2,096,966 70.8% 249,140 1.24
33 Dallas Design Center Portfolio 15,460,794 58.6% 1,917,103 1.30
34 Assembly Square Office Building 14,787,835 64.9% 1,757,340 1.26
35 Spicetree Apartments 15,107,036 70.9% 1,706,242 1.32
36 Lamplighter Mobile Home Park 14,055,614 70.2% 1,584,956 1.21
37 White Station Tower 13,669,002 61.9% 1,656,723 1.29
38 Holiday Inn New Orleans Veterans 12,360,062 61.5% 1,975,611 1.42
39 The Links at Bixby 790,074 4.3% 1,580,202 1.27
40 Southwood Apartments 13,387,850 73.6% 1,486,121 1.26
41 The Shoppes at Longwood 4,994,453 28.1% 1,520,138 1.29
42 Pines of Westbury 11,338,707 62.6% 1,249,652 1.20
43 Edentree Apartments 10,092,763 70.3% 1,150,799 1.22
44 Becker Village Mall 10,043,046 70.8% 1,209,229 1.26
45 Tiffany Square 9,920,727 61.2% 1,220,026 1.30
46 The Mint Apartments 9,780,878 64.8% 1,238,164 1.36
47 River Park Shopping Center 9,694,230 70.2% 1,171,613 1.27
48 Rancho Destino Apartments 8,953,537 69.0% 1,002,185 1.20
49 Conestoga Mobile Home Park 8,570,728 67.5% 1,085,388 1.40
50 Huntington Chase Apartments 8,425,652 69.3% 972,130 1.27
51 Parkshore Centre Office Building 8,056,376 67.1% 999,241 1.38
52 Kenwood Pavilion 7,853,093 70.7% 932,783 1.25
53 Newsome Park Apartments 7,407,263 69.2% 837,903 1.24
54 Princeton Court Apartments (1F) 3,426,132 52.7% 221,950 1.23
55 Pinewood Estates Apartments (1F) 2,108,388 52.7% 178,233 1.23
56 Arbor Court Apartments (1F) 1,844,839 52.7% 455,933 1.23
57 U-Store of Brighton Self Storage Facility (1G) 2,362,801 61.2% 320,352 1.30
58 U-Store of South Lyon Self Storage Facility (1G) 1,254,855 61.2% 191,789 1.30
59 U-Store of Saline Self Storage Facility (1G) 1,144,674 61.2% 180,049 1.30
60 U-Store of Davison Self Storage Facility (1G) 820,247 61.2% 130,795 1.30
61 U-Store of Holly Self Storage Facility (1G) 759,035 61.2% 96,173 1.30
62 U-Store of Jackson Self Storage Facility (1G) 471,336 61.2% 70,634 1.30
63 Birches Apartments 7,235,137 70.6% 825,589 1.20
</TABLE>
<PAGE>
Descriptions of the Mortgaged Properties
<TABLE>
<CAPTION>
Units/
Sq. Ft./
Rooms/ Fee Simple/
# Property Name Property Type Pads Leasehold
- - ------------- ------------- ---- ---------
<S> <C> <C> <C>
64 Hollywood Plaza Retail 59,383 Fee
65 50-60 Worcester Rd. Mixed Use 59,965 Fee
66 Mahwah Business Park Mixed Use 401,074 Fee
67 Silvernail Shopping Center Retail 110,425 Fee
68 Tech Center 29 Office/Warehouse Complex Industrial 176,914 Fee
69 Centre North Shopping Center Retail 80,897 Fee
70 Cranbrook Centre Apartments (1H) Multifamily 132 Fee
71 Cranbrook Centre Office Buildings (1H) Office 74,816 Fee
72 Lubbock Shopping Parkade Retail 160,393 Fee
73 Marin Club Apartments Multifamily 220 Fee
74 Prunedale Center Mixed Use 103,852 Fee
75 Lamplighter Ontario MHP Manufactured Housing 246 Fee
76 Marycrest Shopping Center (2) Retail 172,030 Fee
77 Elm Plaza Shopping Center Retail 292,426 Leasehold
78 Century Plaza East Retail 121,192 Fee
79 Keller Springs Tech Center Industrial 80,000 Fee
80 Mobile Gardens/Holly View Mobile Home Park (1I) Manufactured Housing 277 Fee
81 Stony Chase/Rock Creek Mobile Home Park (1I) Manufactured Housing 104 Fee
82 Briarwood Manor (1I) Manufactured Housing 99 Fee
83 Tierra Verde Marine Center Mixed Use 82,271 Fee/Leasehold
84 Aurora Square Retail 65,348 Fee
85 Merchant's Square (3) Retail 102,734 Fee
86 Northwood Hills Shopping Center Retail 117,287 Fee
87 36th Street Office Center Office 158,737 Fee
88 Fifth Avenue Apartments Multifamily 198 Fee
89 The Watermill Apartments Multifamily 191 Fee
90 Brooks Corner Mixed Use 23,839 Fee
91 Hollywood Ardmore Apartments Multifamily 161 Fee
92 Chasewood Apartments Multifamily 224 Fee
93 Kingsgate North Mixed Use 92,057 Fee
94 Fairfield Suites Pittsburgh/Airport Hotel 102 Fee
95 Seatree Apartments Multifamily 220 Fee
96 All Aboard Mini Storage - Alhambra Self Storage 76,085 Fee
97 West Century Center Retail 57,176 Fee
98 Universal Plaza Retail 43,836 Fee
99 Crestview Market Place Retail 66,882 Fee
100 New Franklin Apartments (4) Multifamily 171 Fee
101 Windjammer Apartments Multifamily 200 Fee
102 Woodlake Village Apartments Multifamily 237 Fee
103 Comfort Inn - Hopewell, VA Hotel 126 Fee
104 Linens N Things Retail 41,520 Fee
105 The Woods Apartments Multifamily 156 Fee
106 Moonlight Garden Apartments Multifamily 108 Fee
107 Sagamore Court Apartments Multifamily 123 Fee
108 Carriage Hill Apartments Multifamily 224 Fee
109 Dowling Office Building Mixed Use 90,046 Fee
110 Main Street Plaza Shopping Center Retail 31,377 Fee
111 Friendship Crossing Apartments Multifamily 223 Fee
112 Spruce Properties (1J) Multifamily 90 Fee
113 Oak Grove Apartments (1J) Multifamily 78 Fee
114 Aldrich Apartments (1J) Multifamily 47 Fee
115 One Bellemead Center Office 87,275 Fee
116 Denver Tech Center #30 Office 55,664 Fee
117 Preston Racquet Club Condominiums and Apartments Multifamily 111 Fee
118 Sand Lake Apartments Multifamily 212 Fee
119 Mobile Estate Mobile Home Park Manufactured Housing 207 Fee
120 Colonia Shopping Center Retail 59,709 Fee
121 Vista Ridge Center III Retail 15,444 Fee
122 Parkside East Apartments Multifamily 104 Fee
123 Northpark Village Retail 70,600 Fee
124 Breakers Apartments Multifamily 72 Fee
125 Picnic Lawn Apartments Multifamily 146 Fee
126 32nd Street and McDowell Road Shopping Center Retail 63,987 Fee
<CAPTION>
Occupancy
Year Year Rate at Appraised Cut-off Date
# Property Name Built Renovated U/W (7) Value LTV Ratio
- - ------------- ----- --------- ------- ----- ---------
<S> <C> <C> <C> <C> <C>
64 Hollywood Plaza 1970 1977 98.0% 10,130,000 79.7%
65 50-60 Worcester Rd. 1986 1986 100.0% 10,000,000 79.9%
66 Mahwah Business Park 1902 1997 88.0% 13,850,000 57.3%
67 Silvernail Shopping Center 1985 N/A 92.0% 10,400,000 75.0%
68 Tech Center 29 Office/Warehouse Complex 1971 N/A 86.0% 13,000,000 58.4%
69 Centre North Shopping Center 1997 N/A 97.0% 9,700,000 78.1%
70 Cranbrook Centre Apartments (1H) 1969 1988 94.0% 7,000,000 70.2%
71 Cranbrook Centre Office Buildings (1H) 1969 1973 95.0% 3,700,000 67.5%
72 Lubbock Shopping Parkade 1985 N/A 100.0% 9,950,000 74.0%
73 Marin Club Apartments 1971 N/A 99.0% 9,200,000 79.9%
74 Prunedale Center 1974 1989 99.0% 9,500,000 76.3%
75 Lamplighter Ontario MHP 1970 N/A 96.0% 9,720,000 73.4%
76 Marycrest Shopping Center (2) 1955 1998 90.0% 8,850,000 79.1%
77 Elm Plaza Shopping Center 1969 1997 100.0% 11,400,000 61.2%
78 Century Plaza East 1990 N/A 93.0% 9,100,000 76.0%
79 Keller Springs Tech Center 1998 N/A 96.0% 8,630,000 79.8%
80 Mobile Gardens/Holly View Mobile Home Park (1I) 1950 1989 100.0% 4,550,000 79.7%
81 Stony Chase/Rock Creek Mobile Home Park (1I) 1970 N/A 100.0% 2,400,000 79.7%
82 Briarwood Manor (1I) 1960 1984 78.0% 1,675,000 79.7%
83 Tierra Verde Marine Center 1963 1994 100.0% 9,300,000 73.5%
84 Aurora Square 1987 N/A 96.0% 8,500,000 78.9%
85 Merchant's Square (3) 1987 N/A 100.0% 8,800,000 75.0%
86 Northwood Hills Shopping Center 1963 1992 98.0% 9,000,000 72.1%
87 36th Street Office Center 1986 N/A 100.0% 9,800,000 66.2%
88 Fifth Avenue Apartments 1982 N/A 98.0% 8,000,000 79.9%
89 The Watermill Apartments 1970 1987 98.0% 8,000,000 79.7%
90 Brooks Corner 1960 1996 96.0% 9,000,000 70.0%
91 Hollywood Ardmore Apartments 1962 N/A 100.0% 8,500,000 73.4%
92 Chasewood Apartments 1984 N/A 91.0% 7,700,000 79.9%
93 Kingsgate North 1989 N/A 93.0% 8,200,000 71.5%
94 Fairfield Suites Pittsburgh/Airport 1997 N/A N/A 8,000,000 72.9%
95 Seatree Apartments 1983 N/A 91.0% 7,300,000 79.9%
96 All Aboard Mini Storage - Alhambra 1993 N/A 97.0% 7,100,000 79.7%
97 West Century Center 1990 N/A 90.0% 7,000,000 79.9%
98 Universal Plaza 1997 N/A 94.0% 6,950,000 79.9%
99 Crestview Market Place 1998 N/A 98.0% 6,900,000 79.4%
100 New Franklin Apartments (4) 1978 1980 100.0% 6,750,000 79.2%
101 Windjammer Apartments 1982 N/A 97.0% 6,900,000 75.7%
102 Woodlake Village Apartments 1974 1995 95.0% 6,750,000 77.3%
103 Comfort Inn - Hopewell, VA 1987 1997 N/A 6,900,000 75.1%
104 Linens N Things 1997 N/A 100.0% 7,000,000 73.5%
105 The Woods Apartments 1969 N/A 94.0% 6,310,000 79.9%
106 Moonlight Garden Apartments 1991 N/A 99.0% 6,250,000 79.7%
107 Sagamore Court Apartments 1973 1997 98.0% 6,870,000 72.2%
108 Carriage Hill Apartments 1972 1976 97.0% 6,600,000 74.7%
109 Dowling Office Building 1900 1993 89.0% 6,500,000 73.9%
110 Main Street Plaza Shopping Center 1963 1997 93.0% 6,300,000 75.5%
111 Friendship Crossing Apartments 1947 1992 97.0% 5,800,000 79.4%
112 Spruce Properties (1J) 1903 1970 99.0% 2,580,000 76.4%
113 Oak Grove Apartments (1J) 1919 1976 100.0% 1,920,000 76.7%
114 Aldrich Apartments (1J) 1905 1997 100.0% 1,303,000 80.4%
115 One Bellemead Center 1987 N/A 95.0% 5,900,000 76.1%
116 Denver Tech Center #30 1974 N/A 98.0% 6,250,000 71.4%
117 Preston Racquet Club Condominiums and Apartments 1982 N/A 97.0% 5,560,000 78.9%
118 Sand Lake Apartments 1987 N/A 97.0% 5,500,000 79.3%
119 Mobile Estate Mobile Home Park 1962 N/A 100.0% 5,374,000 79.8%
120 Colonia Shopping Center 1965 N/A 97.0% 5,500,000 77.8%
121 Vista Ridge Center III 1998 N/A 90.0% 5,350,000 79.8%
122 Parkside East Apartments 1967 1989 96.0% 5,300,000 79.1%
123 Northpark Village 1990 N/A 95.0% 5,150,000 79.7%
124 Breakers Apartments 1998 N/A 100.0% 5,120,000 79.7%
125 Picnic Lawn Apartments 1986 1997 100.0% 5,400,000 73.9%
126 32nd Street and McDowell Road Shopping Center 1955 1971 98.0% 5,010,000 79.6%
<CAPTION>
Maturity/ARD Maturity/ARD U/W U/W
# Property Name Balance LTV Ratio (8) NCF (9) DSCR (10)
- - ------------- ------- ------------- ------- ---------
<S> <C> <C> <C> <C>
64 Hollywood Plaza 7,091,987 70.0% 858,507 1.31
65 50-60 Worcester Rd. 7,097,668 71.0% 857,491 1.26
66 Mahwah Business Park 6,444,227 46.5% 949,154 1.37
67 Silvernail Shopping Center 6,858,064 65.9% 801,780 1.25
68 Tech Center 29 Office/Warehouse Complex 6,139,889 47.2% 1,116,490 1.68
69 Centre North Shopping Center 6,671,488 68.8% 797,131 1.28
70 Cranbrook Centre Apartments (1H) 4,348,557 62.1% 558,574 1.35
71 Cranbrook Centre Office Buildings (1H) 2,207,388 59.7% 279,678 1.35
72 Lubbock Shopping Parkade 6,558,223 65.9% 814,392 1.28
73 Marin Club Apartments 6,539,021 71.1% 788,055 1.25
74 Prunedale Center 6,384,439 67.2% 743,912 1.25
75 Lamplighter Ontario MHP 6,798,572 69.9% 766,229 1.30
76 Marycrest Shopping Center (2) 6,433,091 72.7% 787,474 1.30
77 Elm Plaza Shopping Center 6,222,464 54.6% 744,969 1.24
78 Century Plaza East 6,050,509 66.5% 819,901 1.48
79 Keller Springs Tech Center 6,081,631 70.5% 729,895 1.27
80 Mobile Gardens/Holly View Mobile Home Park (1I) 3,147,228 69.2% 400,244 1.35
81 Stony Chase/Rock Creek Mobile Home Park (1I) 1,660,076 69.2% 181,846 1.35
82 Briarwood Manor (1I) 1,158,594 69.2% 140,316 1.35
83 Tierra Verde Marine Center 5,577,855 60.0% 729,130 1.21
84 Aurora Square 5,861,239 69.0% 672,017 1.25
85 Merchant's Square (3) 5,871,653 66.7% 757,642 1.39
86 Northwood Hills Shopping Center 5,751,187 63.9% 746,198 1.36
87 36th Street Office Center 5,749,293 58.7% 684,578 1.25
88 Fifth Avenue Apartments 5,604,821 70.1% 652,519 1.26
89 The Watermill Apartments 5,607,923 70.1% 651,109 1.25
90 Brooks Corner 5,136,870 57.1% 713,267 1.26
91 Hollywood Ardmore Apartments 5,563,329 65.5% 658,696 1.22
92 Chasewood Apartments 5,412,803 70.3% 637,768 1.26
93 Kingsgate North 5,128,004 62.5% 628,782 1.34
94 Fairfield Suites Pittsburgh/Airport 4,764,798 59.6% 735,487 1.40
95 Seatree Apartments 5,131,618 70.3% 602,905 1.26
96 All Aboard Mini Storage - Alhambra 4,979,081 70.1% 669,076 1.45
97 West Century Center 4,980,535 71.2% 613,803 1.27
98 Universal Plaza 4,930,088 70.9% 647,013 1.37
99 Crestview Market Place 4,796,602 69.5% 567,639 1.29
100 New Franklin Apartments (4) 3,201,212 47.4% 669,840 1.34
101 Windjammer Apartments 4,611,242 66.8% 556,029 1.27
102 Woodlake Village Apartments 4,528,735 67.1% 565,278 1.40
103 Comfort Inn - Hopewell, VA 4,208,252 61.0% 742,101 1.63
104 Linens N Things 2,559,142 36.6% 618,984 1.45
105 The Woods Apartments 4,427,691 70.2% 581,081 1.41
106 Moonlight Garden Apartments 4,430,720 70.9% 513,492 1.20
107 Sagamore Court Apartments 4,325,037 63.0% 534,766 1.36
108 Carriage Hill Apartments 4,308,709 65.3% 548,218 1.39
109 Dowling Office Building 4,238,439 65.2% 499,635 1.25
110 Main Street Plaza Shopping Center 4,161,706 66.1% 483,188 1.27
111 Friendship Crossing Apartments 4,066,176 70.1% 480,828 1.25
112 Spruce Properties (1J) 1,749,373 67.8% 243,299 1.43
113 Oak Grove Apartments (1J) 1,306,495 68.0% 180,059 1.43
114 Aldrich Apartments (1J) 930,048 71.4% 123,685 1.43
115 One Bellemead Center 4,013,609 68.0% 490,702 1.25
116 Denver Tech Center #30 3,903,131 62.5% 446,359 1.25
117 Preston Racquet Club Condominiums and Apartments 3,905,333 70.2% 454,730 1.20
118 Sand Lake Apartments 1,777,726 32.3% 493,672 1.38
119 Mobile Estate Mobile Home Park 3,334,689 62.1% 471,208 1.33
120 Colonia Shopping Center 3,783,854 68.8% 474,687 1.32
121 Vista Ridge Center III 3,800,001 71.0% 442,929 1.21
122 Parkside East Apartments 3,687,321 69.6% 418,053 1.22
123 Northpark Village 3,593,092 69.8% 415,499 1.26
124 Breakers Apartments 3,558,376 69.5% 410,544 1.27
125 Picnic Lawn Apartments 3,530,044 65.4% 427,029 1.28
126 32nd Street and McDowell Road Shopping Center 3,502,216 69.9% 426,854 1.32
</TABLE>
<PAGE>
Descriptions of the Mortgaged Properties
<TABLE>
<CAPTION>
Units/
Sq. Ft./
Rooms/ Fee Simple/
# Property Name Property Type Pads Leasehold
- - ------------- ------------- ---- ---------
<S> <C> <C> <C>
127 Triangle Corporate Center Mixed Use 77,404 Fee
128 One West Hills Office Office 57,967 Fee
129 Harper Regency Apartments Multifamily 38 Fee
130 Heritage Green Shopping Center Retail 66,984 Fee
131 Captain's Landing Apartments Multifamily 174 Fee
132 All Aboard Mini Storage - Fremont Self Storage 62,165 Fee
133 Century Plaza Strip Shopping Center (1K) Retail 36,622 Fee
134 Albany Square Strip Shopping Center (1K) Retail 30,479 Fee
135 Larrabee Complex Mixed Use 100,304 Fee
136 Cedar Garden Apartments Multifamily 90 Fee
137 All Aboard Mini Storage - Stanton Self Storage 63,705 Fee
138 Windtree Apartments - Phase I Multifamily 126 Fee
139 Lake City Mini-Storage Self Storage 48,808 Fee
140 Huntington Mobile Estates Manufactured Housing 105 Fee
141 Everhart Park Shopping Center Retail 63,277 Fee
142 Rafael North Executive Park Office 30,503 Fee
143 Westwind Estates Manufactured Housing 156 Leasehold
144 Hewlett Shopping Center Retail 32,800 Fee
145 Forest Park Village Multifamily 138 Fee
146 2700 Richards Building Office 31,962 Fee
147 Lincoln Park Center Retail 46,190 Fee
148 Cedar Heights Apartments Multifamily 256 Fee
149 The North Oak Apartments Multifamily 256 Fee
150 Arrowhead Court Apartments Multifamily 126 Fee
151 The Citibank Building Office 62,632 Fee
152 Petco/Starbucks S/C Retail 12,016 Fee
153 1870 Ogden Drive Office 25,995 Fee
154 Woodland Park Office Building Office 51,231 Fee
155 Costa Mesa Mobile Estates Manufactured Housing 104 Fee
156 Tree Top Apartments Multifamily 146 Fee
157 Greenville Village Mobile Home Park Manufactured Housing 223 Fee
158 Brookwood Village Retail 28,774 Fee
159 Rose Grove Mobile Home Park Manufactured Housing 332 Fee
160 Little River Shopping Center Retail 51,560 Fee
161 The Amberton Apartments Multifamily 112 Fee
162 Best Western Worlds of Fun Hotel 86 Fee
163 All Aboard Mini Storage - Anaheim Self Storage 54,130 Fee
164 Waterway Crossing Apartments Multifamily 102 Fee
165 The Borders Building Retail 80,000 Fee
166 Ken-Caryl Business Center Office 50,636 Fee
167 Alta Vista Mobile Home Park Manufactured Housing 140 Fee
168 Palm Springs Self Storage Self Storage 68,327 Fee
169 Holiday Inn Express Auburn Hotel 69 Fee
170 Caruth Haven Retail Center Retail 16,800 Fee
171 3456 Ridge Property Mixed Use 100,207 Fee
172 Campus Plaza Shopping Center Retail 26,457 Fee
173 All Aboard Mini Storage - San Gabriel Self Storage 40,059 Fee
174 Point O' Woods Apartments Multifamily 150 Fee
175 Williamsburg on the Lake Apartments Multifamily 150 Fee
176 Airport Business Center Mixed Use 41,660 Fee
177 Staples - Wilmington Retail 29,049 Fee
178 Felicita Junction Retail 41,682 Leasehold
179 The Bordeaux Apartments Multifamily 102 Fee
180 High Point Village I Apartments Multifamily 168 Fee
181 Assured Self Storage Facility Self Storage 87,400 Fee
182 Staples - Valparaiso Retail 24,049 Fee
183 Fruitland Grove Family Park Manufactured Housing 99 Fee
184 Centennial Creek Office Park Office 28,540 Fee
185 Park Lane Village Apartments (1L) Multifamily 75 Fee
186 Rynearson Lane Village Apartments (1L) Multifamily 78 Fee
187 Holiday Inn Express Ottawa Hotel 70 Fee
188 Ross Apartments Multifamily 31 Fee
189 339 S. Ardmore Apartments Multifamily 84 Fee
<CAPTION>
Occupancy
Year Year Rate at Appraised Cut-off Date
# Property Name Built Renovated U/W (7) Value LTV Ratio
- - ------------- ----- --------- ------- ----- ---------
<S> <C> <C> <C> <C> <C>
127 Triangle Corporate Center 1985 N/A 84.0% 5,600,000 71.2%
128 One West Hills Office 1985 N/A 100.0% 5,300,000 74.4%
129 Harper Regency Apartments 1991 N/A 97.0% 4,970,000 79.3%
130 Heritage Green Shopping Center 1983 N/A 100.0% 5,400,000 71.2%
131 Captain's Landing Apartments 1983 1998 93.0% 5,350,000 71.1%
132 All Aboard Mini Storage - Fremont 1997 N/A 92.0% 5,150,000 73.5%
133 Century Plaza Strip Shopping Center (1K) 1988 N/A 100.0% 2,900,000 72.0%
134 Albany Square Strip Shopping Center (1K) 1988 N/A 100.0% 2,270,000 74.5%
135 Larrabee Complex 1970 1975 100.0% 5,640,000 65.3%
136 Cedar Garden Apartments 1963 N/A 96.0% 4,600,000 79.9%
137 All Aboard Mini Storage - Stanton 1995 N/A 92.0% 4,800,000 76.4%
138 Windtree Apartments - Phase I 1980 1993 100.0% 5,200,000 69.1%
139 Lake City Mini-Storage 1988 1989 100.0% 5,150,000 69.6%
140 Huntington Mobile Estates 1961 1995 100.0% 4,600,000 75.8%
141 Everhart Park Shopping Center 1985 N/A 98.0% 4,400,000 79.3%
142 Rafael North Executive Park 1981 N/A 100.0% 4,590,000 75.9%
143 Westwind Estates 1985 N/A 99.0% 4,310,000 79.8%
144 Hewlett Shopping Center 1953 N/A 100.0% 5,650,000 60.0%
145 Forest Park Village 1971 1994 96.0% 4,100,000 79.8%
146 2700 Richards Building 1991 N/A 100.0% 4,250,000 76.2%
147 Lincoln Park Center 1987 N/A 100.0% 4,240,000 75.8%
148 Cedar Heights Apartments 1977 N/A 100.0% 4,100,000 75.5%
149 The North Oak Apartments 1974 1993 92.0% 4,400,000 70.4%
150 Arrowhead Court Apartments 1968 N/A 98.0% 3,900,000 79.2%
151 The Citibank Building 1955 1985 79.0% 4,350,000 71.0%
152 Petco/Starbucks S/C 1990 N/A 100.0% 4,100,000 75.1%
153 1870 Ogden Drive 1964 N/A 100.0% 3,850,000 79.9%
154 Woodland Park Office Building 1978 1991 100.0% 5,000,000 60.9%
155 Costa Mesa Mobile Estates 1950 1985 96.0% 3,890,000 77.0%
156 Tree Top Apartments 1976 N/A 95.0% 4,500,000 66.6%
157 Greenville Village Mobile Home Park 1986 1987 99.0% 4,300,000 69.6%
158 Brookwood Village 1920 1997 100.0% 4,300,000 69.5%
159 Rose Grove Mobile Home Park 1960 N/A 97.0% 9,150,000 32.7%
160 Little River Shopping Center 1985 1996 100.0% 3,700,000 79.9%
161 The Amberton Apartments 1986 N/A 94.0% 3,640,000 79.4%
162 Best Western Worlds of Fun 1986 N/A N/A 4,300,000 67.2%
163 All Aboard Mini Storage - Anaheim 1994 N/A 92.0% 4,450,000 64.9%
164 Waterway Crossing Apartments 1986 N/A 64.0% 3,800,000 74.3%
165 The Borders Building 1973 1995 50.0% 8,000,000 35.3%
166 Ken-Caryl Business Center 1981 N/A 100.0% 4,000,000 70.5%
167 Alta Vista Mobile Home Park 1961 N/A 95.0% 3,700,000 75.6%
168 Palm Springs Self Storage 1998 N/A 96.0% 4,640,000 60.1%
169 Holiday Inn Express Auburn 1995 N/A N/A 4,500,000 62.0%
170 Caruth Haven Retail Center 1976 1991 96.0% 3,750,000 74.4%
171 3456 Ridge Property 1983 N/A 100.0% 3,820,000 73.0%
172 Campus Plaza Shopping Center 1995 N/A 90.0% 4,000,000 68.5%
173 All Aboard Mini Storage - San Gabriel 1991 N/A 95.0% 3,450,000 79.1%
174 Point O' Woods Apartments 1979 N/A 98.0% 3,400,000 79.9%
175 Williamsburg on the Lake Apartments 1977 N/A 96.0% 4,500,000 59.9%
176 Airport Business Center 1990 1993 84.0% 3,575,000 75.4%
177 Staples - Wilmington 1998 N/A 100.0% 3,350,000 79.9%
178 Felicita Junction 1997 N/A 100.0% 3,640,000 73.4%
179 The Bordeaux Apartments 1968 1997 97.0% 3,350,000 79.6%
180 High Point Village I Apartments 1980 N/A 93.0% 3,450,000 76.8%
181 Assured Self Storage Facility 1996 1998 89.0% 3,550,000 74.5%
182 Staples - Valparaiso 1998 N/A 100.0% 3,200,000 79.9%
183 Fruitland Grove Family Park 1956 N/A 93.0% 3,150,000 79.5%
184 Centennial Creek Office Park 1984 N/A 100.0% 3,300,000 75.6%
185 Park Lane Village Apartments (1L) 1975 N/A 95.0% 1,630,000 82.5%
186 Rynearson Lane Village Apartments (1L) 1971 1973 95.0% 1,570,000 73.0%
187 Holiday Inn Express Ottawa 1994 1995 N/A 4,000,000 62.3%
188 Ross Apartments 1954 1998 97.0% 4,225,000 58.9%
189 339 S. Ardmore Apartments 1972 N/A 96.0% 3,250,000 76.5%
<CAPTION>
Maturity/ARD Maturity/ARD U/W U/W
# Property Name Balance LTV Ratio (8) NCF (9) DSCR (10)
- - ------------- ------- ------------- ------- ---------
<S> <C> <C> <C> <C>
127 Triangle Corporate Center 3,444,193 61.5% 430,309 1.41
128 One West Hills Office 3,471,762 65.5% 404,673 1.25
129 Harper Regency Apartments 1,611,618 32.4% 420,535 1.30
130 Heritage Green Shopping Center 3,401,088 63.0% 418,221 1.29
131 Captain's Landing Apartments 3,508,099 65.6% 379,610 1.20
132 All Aboard Mini Storage - Fremont 3,331,076 64.7% 419,044 1.36
133 Century Plaza Strip Shopping Center (1K) 1,649,553 56.9% 233,802 1.47
134 Albany Square Strip Shopping Center (1K) 1,335,352 58.8% 216,883 1.47
135 Larrabee Complex 2,936,804 52.1% 470,600 1.53
136 Cedar Garden Apartments 3,252,542 70.7% 383,413 1.24
137 All Aboard Mini Storage - Stanton 3,225,883 67.2% 406,330 1.36
138 Windtree Apartments - Phase I 3,184,223 61.2% 400,132 1.32
139 Lake City Mini-Storage 2,893,054 56.2% 422,341 1.36
140 Huntington Mobile Estates 3,072,396 66.8% 386,163 1.35
141 Everhart Park Shopping Center 3,003,433 68.3% 381,992 1.37
142 Rafael North Executive Park 2,887,687 62.9% 360,744 1.29
143 Westwind Estates 3,034,125 70.4% 344,733 1.21
144 Hewlett Shopping Center 2,984,975 52.8% 421,364 1.51
145 Forest Park Village 2,916,071 71.1% 343,163 1.22
146 2700 Richards Building 2,861,511 67.3% 338,887 1.25
147 Lincoln Park Center 2,849,839 67.2% 354,000 1.30
148 Cedar Heights Apartments 2,727,724 66.5% 320,314 1.25
149 The North Oak Apartments 2,720,750 61.8% 319,862 1.26
150 Arrowhead Court Apartments 2,703,539 69.3% 313,250 1.27
151 The Citibank Building 2,703,539 62.2% 344,452 1.39
152 Petco/Starbucks S/C 2,731,205 66.6% 326,170 1.25
153 1870 Ogden Drive 2,728,562 70.9% 328,356 1.26
154 Woodland Park Office Building 2,719,851 54.4% 323,640 1.22
155 Costa Mesa Mobile Estates 2,613,095 67.2% 329,715 1.38
156 Tree Top Apartments 2,652,410 58.9% 323,814 1.28
157 Greenville Village Mobile Home Park 2,436,534 56.7% 392,445 1.48
158 Brookwood Village 2,586,734 60.2% 323,517 1.41
159 Rose Grove Mobile Home Park 2,611,136 28.5% 598,395 2.52
160 Little River Shopping Center 2,508,391 67.8% 316,754 1.27
161 The Amberton Apartments 2,545,700 69.9% 302,350 1.27
162 Best Western Worlds of Fun 2,387,655 55.5% 375,710 1.40
163 All Aboard Mini Storage - Anaheim 2,542,136 57.1% 326,011 1.38
164 Waterway Crossing Apartments 2,164,148 57.0% 348,203 1.56
165 The Borders Building 1,341,480 16.8% 380,785 1.22
166 Ken-Caryl Business Center 2,480,775 62.0% 289,277 1.26
167 Alta Vista Mobile Home Park 2,607,622 70.5% 325,939 1.36
168 Palm Springs Self Storage 2,288,776 49.3% 363,027 1.44
169 Holiday Inn Express Auburn 2,240,017 49.8% 435,968 1.84
170 Caruth Haven Retail Center 2,449,997 65.3% 289,029 1.28
171 3456 Ridge Property 2,373,224 62.1% 295,618 1.47
172 Campus Plaza Shopping Center 2,414,025 60.4% 319,976 1.42
173 All Aboard Mini Storage - San Gabriel 2,401,881 69.6% 303,478 1.36
174 Point O' Woods Apartments 2,393,359 70.4% 297,240 1.32
175 Williamsburg on the Lake Apartments 2,186,749 48.6% 424,033 1.74
176 Airport Business Center 2,385,573 66.7% 298,101 1.32
177 Staples - Wilmington 2,373,027 70.8% 277,738 1.22
178 Felicita Junction 2,355,559 64.7% 276,898 1.25
179 The Bordeaux Apartments 2,240,376 66.9% 312,189 1.63
180 High Point Village I Apartments 2,356,944 68.3% 284,086 1.25
181 Assured Self Storage Facility 2,184,083 61.5% 319,385 1.30
182 Staples - Valparaiso 2,266,772 70.8% 263,712 1.22
183 Fruitland Grove Family Park 2,214,596 70.3% 269,093 1.30
184 Centennial Creek Office Park 2,180,521 66.1% 259,636 1.30
185 Park Lane Village Apartments (1L) 1,100,747 67.5% 158,897 1.28
186 Rynearson Lane Village Apartments (1L) 937,673 59.7% 128,642 1.28
187 Holiday Inn Express Ottawa 2,000,016 50.0% 389,479 1.84
188 Ross Apartments 2,124,170 50.3% 270,732 1.50
189 339 S. Ardmore Apartments 2,143,794 66.0% 256,182 1.29
</TABLE>
<PAGE>
Descriptions of the Mortgaged Properties
<TABLE>
<CAPTION>
Units/
Sq. Ft./
Rooms/ Fee Simple/
# Property Name Property Type Pads Leasehold
- - ------------- ------------- ---- ---------
<S> <C> <C> <C>
190 Edgewater Beach Resort Hotel 86 Fee
191 Fondren Hill Apartments Multifamily 96 Fee
192 Cottonwood Plaza Mixed Use 45,778 Fee
193 Southport Shops Retail 17,763 Fee
194 Hawthorne Hill Apartments Multifamily 168 Fee
195 Days Inn Waccamaw Hotel 159 Leasehold
196 Turtle Oaks Apartments Multifamily 81 Fee
197 Linden Place Mobile Home Park Manufactured Housing 162 Fee
198 Moore Lake Commons Shopping Center Retail 64,905 Fee
199 Imperial Manor West Apartments Multifamily 164 Fee
200 Brown School Station Apts. Multifamily 112 Fee
201 South Street Seaport Office Center Office 48,177 Leasehold
202 Hathaway Commerce Center Industrial 67,214 Fee
203 Corinthian Apartments Multifamily 55 Fee
204 Walgreen's Drug Store - Swansea Retail 13,905 Fee
205 Catalina Apartments Multifamily 120 Fee
206 Devonshire Square Retail Center Retail 16,725 Fee
207 1440 N. Vine Street Retail 14,401 Fee
208 College Park Apartments Multifamily 88 Fee
209 Country Brooke Apartments Multifamily 108 Fee
210 Hillside View Apartments Multifamily 92 Fee
211 Benihana Restaurant Retail 8,284 Fee
212 Crosswinds Apartments Multifamily 64 Fee
213 Imperial Plaza Retail Center Retail 26,337 Fee
214 Twin Lakes Mobile Home Park Manufactured Housing 254 Fee
215 Antietam Village Center Retail 26,789 Fee
216 Gateway Shoppes Retail 21,920 Fee
217 Red Onion Building Mixed Use 8,200 Fee
218 526 South Ardmore Avenue Multifamily 63 Fee
219 All Aboard Mini Storage - Santa Ana Self Storage 44,830 Fee
220 Villa East I & II Office 49,725 Fee
221 Courtyard Apartments Multifamily 84 Fee
222 Sunset View Village Apartments Multifamily 48 Fee
223 Wilmington Plaza Retail 54,401 Leasehold
224 The Nations Bank Building Office 33,726 Fee
225 Quail Ridge Apartments Multifamily 104 Fee
226 Best Western KCI Airport Hotel 43 Fee
227 Laurel Heights Apartments Multifamily 72 Fee
228 El Monte Mobile Air Mobile Home Park Manufactured Housing 77 Fee
229 Harold Gilstrap Shopping Center Retail 83,131 Fee
230 Lakeside Apartments Multifamily 39 Fee
231 Park Glen Apartments Multifamily 174 Fee
232 St. Lucie Mobile Village Manufactured Housing 226 Fee
233 Ravenscroft Apartments Multifamily 75 Fee
234 Coach Country Corral MHP Manufactured Housing 82 Fee
235 Seaside Village Shopping Center Retail 50,144 Fee
236 Sherwood Park Apartments Multifamily 72 Fee
237 Ravenna Plaza Retail 87,644 Fee
238 Holiday Inn Express Oglesby Hotel 68 Fee
239 Central/Magnolia Retail Center Mixed Use 17,556 Fee
240 Rolling Hills Estates Manufactured Housing 217 Fee
241 Saticoy-Royale Apartments Multifamily 65 Fee
242 Holiday/Park Riviera Mobile Home Park Manufactured Housing 263 Fee
243 Gottschalk's Department Store Retail 40,000 Fee
244 Justin Apartments Multifamily 25 Fee
245 Fountain Square Apartments Multifamily 120 Fee
246 383 St. Johns Place Multifamily 16 Fee
247 Days Inn Hotel 44 Fee
248 Market Plaza Retail 22,534 Fee
249 Michigan Plaza & Bender Plaza (5) Office 63,331 Fee
250 Mockingbird Park Retail Building Mixed Use 46,802 Leasehold
251 Poolesville Village Center Retail 16,715 Fee
252 Executive Park Offices Office 23,274 Fee
<CAPTION>
Occupancy
Year Year Rate at Appraised Cut-off Date
# Property Name Built Renovated U/W (7) Value LTV Ratio
- - ------------- ----- --------- ------- ----- ---------
<S> <C> <C> <C> <C> <C>
190 Edgewater Beach Resort 1962 1980 N/A 4,000,000 62.2%
191 Fondren Hill Apartments 1974 1996 99.0% 3,300,000 73.9%
192 Cottonwood Plaza 1980 N/A 100.0% 4,980,000 48.1%
193 Southport Shops 1997 N/A 91.0% 3,200,000 74.8%
194 Hawthorne Hill Apartments 1968 N/A 95.0% 3,920,000 61.0%
195 Days Inn Waccamaw 1985 1997 N/A 4,100,000 58.2%
196 Turtle Oaks Apartments 1962 1998 99.0% 3,190,000 73.4%
197 Linden Place Mobile Home Park 1970 N/A 98.0% 3,100,000 74.6%
198 Moore Lake Commons Shopping Center 1965 1988 98.0% 3,300,000 69.6%
199 Imperial Manor West Apartments 1963 N/A 92.0% 2,900,000 78.7%
200 Brown School Station Apts. 1971 N/A 94.0% 2,825,000 79.6%
201 South Street Seaport Office Center 1750 1997 99.0% 4,500,000 49.8%
202 Hathaway Commerce Center 1987 N/A 99.0% 3,020,000 72.7%
203 Corinthian Apartments 1969 N/A 95.0% 3,810,000 57.4%
204 Walgreen's Drug Store - Swansea 1997 1997 100.0% 2,800,000 78.0%
205 Catalina Apartments 1969 N/A 100.0% 2,840,000 76.5%
206 Devonshire Square Retail Center 1965 1998 100.0% 2,915,000 72.7%
207 1440 N. Vine Street 1978 N/A 100.0% 2,900,000 72.2%
208 College Park Apartments 1994 N/A 99.0% 2,750,000 75.9%
209 Country Brooke Apartments 1968 1995 94.0% 2,625,000 78.3%
210 Hillside View Apartments 1986 N/A 98.0% 2,900,000 70.3%
211 Benihana Restaurant 1977 N/A 100.0% 2,650,000 75.4%
212 Crosswinds Apartments 1977 1978 98.0% 2,700,000 73.9%
213 Imperial Plaza Retail Center 1989 N/A 92.0% 2,710,000 73.6%
214 Twin Lakes Mobile Home Park 1970 1976 99.0% 2,600,000 76.6%
215 Antietam Village Center 1984 N/A 86.0% 2,700,000 73.7%
216 Gateway Shoppes 1986 N/A 100.0% 2,680,000 74.2%
217 Red Onion Building 1892 1984 100.0% 4,100,000 48.5%
218 526 South Ardmore Avenue 1972 N/A 97.0% 2,500,000 79.4%
219 All Aboard Mini Storage - Santa Ana 1995 N/A 95.0% 2,680,000 70.4%
220 Villa East I & II 1981 N/A 100.0% 2,900,000 64.4%
221 Courtyard Apartments 1985 N/A 100.0% 2,365,000 78.1%
222 Sunset View Village Apartments 1989 N/A 92.0% 2,320,000 79.6%
223 Wilmington Plaza 1990 N/A 100.0% 2,800,000 65.8%
224 The Nations Bank Building 1983 N/A 100.0% 3,400,000 54.1%
225 Quail Ridge Apartments 1973 1996 94.0% 2,410,000 75.9%
226 Best Western KCI Airport 1987 N/A N/A 2,750,000 66.2%
227 Laurel Heights Apartments 1984 N/A 97.0% 2,250,000 79.6%
228 El Monte Mobile Air Mobile Home Park 1951 N/A 96.0% 2,300,000 77.8%
229 Harold Gilstrap Shopping Center 1982 N/A 97.0% 2,600,000 68.7%
230 Lakeside Apartments 1995 N/A 100.0% 2,775,000 64.2%
231 Park Glen Apartments 1971 1992 99.0% 2,700,000 64.6%
232 St. Lucie Mobile Village 1970 N/A 90.0% 2,800,000 62.3%
233 Ravenscroft Apartments 1965 N/A 92.0% 2,350,000 74.1%
234 Coach Country Corral MHP 1971 N/A 100.0% 2,375,000 73.0%
235 Seaside Village Shopping Center 1985 N/A 83.0% 3,000,000 57.4%
236 Sherwood Park Apartments 1979 N/A 99.0% 2,600,000 65.2%
237 Ravenna Plaza 1978 1998 100.0% 2,860,000 59.3%
238 Holiday Inn Express Oglesby 1995 N/A N/A 2,900,000 58.4%
239 Central/Magnolia Retail Center 1940 1989 100.0% 2,260,000 74.7%
240 Rolling Hills Estates 1971 N/A 92.0% 2,340,000 72.1%
241 Saticoy-Royale Apartments 1972 N/A 100.0% 2,200,000 75.7%
242 Holiday/Park Riviera Mobile Home Park 1970 N/A 99.0% 2,060,000 79.5%
243 Gottschalk's Department Store 1979 1994 100.0% 2,300,000 69.7%
244 Justin Apartments 1993 N/A 100.0% 2,425,000 65.9%
245 Fountain Square Apartments 1974 N/A 83.0% 2,200,000 72.5%
246 383 St. Johns Place 1930 1998 96.0% 2,000,000 79.7%
247 Days Inn 1997 N/A N/A 2,750,000 57.9%
248 Market Plaza 1988 1989 100.0% 2,500,000 62.6%
249 Michigan Plaza & Bender Plaza (5) 1978 1992 90.0% 2,625,000 58.9%
250 Mockingbird Park Retail Building 1986 N/A 96.0% 3,000,000 51.2%
251 Poolesville Village Center 1989 1990 100.0% 1,910,000 79.6%
252 Executive Park Offices 1983 N/A 95.0% 1,925,000 77.9%
<CAPTION>
Maturity/ARD Maturity/ARD U/W U/W
# Property Name Balance LTV Ratio (8) NCF (9) DSCR (10)
- - ------------- ------- ------------- ------- ---------
<S> <C> <C> <C> <C>
190 Edgewater Beach Resort 2,041,014 51.0% 317,175 1.40
191 Fondren Hill Apartments 2,091,383 63.4% 239,799 1.33
192 Cottonwood Plaza 2,107,585 42.3% 377,424 1.92
193 Southport Shops 2,106,786 65.8% 249,897 1.27
194 Hawthorne Hill Apartments 2,062,154 52.6% 270,357 1.49
195 Days Inn Waccamaw 1,907,139 46.5% 294,722 1.48
196 Turtle Oaks Apartments 2,065,134 64.7% 233,715 1.20
197 Linden Place Mobile Home Park 1,866,992 60.2% 277,440 1.39
198 Moore Lake Commons Shopping Center 2,048,801 62.1% 245,905 1.23
199 Imperial Manor West Apartments 1,847,590 63.7% 284,864 1.44
200 Brown School Station Apts. 1,973,636 69.9% 219,798 1.21
201 South Street Seaport Office Center 1,831,032 40.7% 353,923 1.76
202 Hathaway Commerce Center 1,943,800 64.4% 249,639 1.35
203 Corinthian Apartments 1,910,779 50.2% 346,996 2.01
204 Walgreen's Drug Store - Swansea 1,927,620 68.8% 220,044 1.22
205 Catalina Apartments 1,925,166 67.8% 238,787 1.30
206 Devonshire Square Retail Center 1,756,799 60.3% 262,983 1.32
207 1440 N. Vine Street 1,831,431 63.2% 260,240 1.55
208 College Park Apartments 1,830,291 66.6% 202,138 1.21
209 Country Brooke Apartments 1,802,967 68.7% 219,014 1.33
210 Hillside View Apartments 66,343 2.3% 239,606 1.26
211 Benihana Restaurant 1,631,299 61.6% 228,878 1.27
212 Crosswinds Apartments 1,756,049 65.0% 227,211 1.39
213 Imperial Plaza Retail Center 1,646,465 60.8% 263,199 1.43
214 Twin Lakes Mobile Home Park 1,606,233 61.8% 271,848 1.58
215 Antietam Village Center 1,612,189 59.7% 232,782 1.34
216 Gateway Shoppes 1,583,731 59.1% 232,300 1.41
217 Red Onion Building 1,578,149 38.5% 227,410 1.39
218 526 South Ardmore Avenue 1,719,863 68.8% 222,603 1.38
219 All Aboard Mini Storage - Santa Ana 1,660,278 62.0% 202,980 1.32
220 Villa East I & II 1,665,161 57.4% 206,609 1.28
221 Courtyard Apartments 1,626,016 68.8% 213,784 1.40
222 Sunset View Village Apartments 1,609,123 69.4% 175,789 1.21
223 Wilmington Plaza 1,632,323 58.3% 194,476 1.25
224 The Nations Bank Building 1,293,129 38.0% 273,705 1.50
225 Quail Ridge Apartments 1,601,117 66.4% 195,528 1.34
226 Best Western KCI Airport 1,504,958 54.7% 236,864 1.40
227 Laurel Heights Apartments 1,561,037 69.4% 206,258 1.47
228 El Monte Mobile Air Mobile Home Park 1,581,038 68.7% 218,879 1.48
229 Harold Gilstrap Shopping Center 1,438,079 55.3% 259,819 1.71
230 Lakeside Apartments 488,843 17.6% 231,063 1.38
231 Park Glen Apartments 1,522,134 56.4% 193,547 1.40
232 St. Lucie Mobile Village 1,405,453 50.2% 214,430 1.43
233 Ravenscroft Apartments 1,507,294 64.1% 192,877 1.45
234 Coach Country Corral MHP 1,408,622 59.3% 198,945 1.32
235 Seaside Village Shopping Center 1,416,496 47.2% 204,940 1.30
236 Sherwood Park Apartments 1,315,427 50.6% 188,722 1.36
237 Ravenna Plaza 1,396,966 48.8% 195,219 1.25
238 Holiday Inn Express Oglesby 1,360,010 46.9% 247,822 1.72
239 Central/Magnolia Retail Center 1,476,474 65.3% 181,971 1.35
240 Rolling Hills Estates 1,371,077 58.6% 224,339 1.52
241 Saticoy-Royale Apartments 1,465,973 66.6% 184,516 1.35
242 Holiday/Park Riviera Mobile Home Park 1,336,090 64.9% 209,835 1.44
243 Gottschalk's Department Store 1,307,661 56.9% 195,623 1.37
244 Justin Apartments 1,404,476 57.9% 158,407 1.21
245 Fountain Square Apartments 1,289,701 58.6% 190,882 1.38
246 383 St. Johns Place 1,396,851 69.8% 162,275 1.27
247 Days Inn 1,301,094 47.3% 201,447 1.41
248 Market Plaza 1,118,106 44.7% 220,836 1.54
249 Michigan Plaza & Bender Plaza (5) 1,273,430 48.5% 189,622 1.33
250 Mockingbird Park Retail Building 1,335,877 44.5% 154,133 1.28
251 Poolesville Village Center 1,347,233 70.5% 171,998 1.34
252 Executive Park Offices 1,333,007 69.2% 160,925 1.25
</TABLE>
<PAGE>
Descriptions of the Mortgaged Properties
<TABLE>
<CAPTION>
Units/
Sq. Ft./
Rooms/ Fee Simple/
# Property Name Property Type Pads Leasehold
- - ------------- ------------- ---- ---------
<S> <C> <C> <C>
253 Citadel Square Shopping Center (6) Retail 50,173 Fee
254 Sherwood Mobile Home Estates Manufactured Housing 206 Fee
255 Ware's Van & Storage Co. Industrial 56,600 Fee
256 Sunrise Terrace Mobile Home Park Manufactured Housing 54 Fee
257 Best Western Country Inn North Hotel 44 Fee
258 Woodlake Resort Village Apartments Multifamily 50 Fee
259 Plantation Pines Apartments Multifamily 88 Fee
260 Pacific Mini Storage Self Storage 65,763 Fee
261 Sunridge Apartments Multifamily 99 Fee
262 Parkside Place Apartments Multifamily 84 Fee
263 Courtyards of Granbury Mixed Use 47,340 Fee
264 University Apartments Multifamily 62 Fee
265 Isaqueena Village Apartments Multifamily 60 Fee
266 Turtle Dove I Apartments Multifamily 79 Fee
267 Carson Gardens Mobile Home Park Manufactured Housing 98 Fee
268 Valerie Apartments Multifamily 64 Fee
269 Huddersfield Apartments Multifamily 31 Fee
270 1457 & 1519 - 1527 Park Road, NW Multifamily 78 Fee
271 Winter Garden Village Apartments Multifamily 64 Fee
272 Long Point Plaza Apartments Multifamily 85 Fee
273 The Place of Tempe Apartments Multifamily 30 Fee
274 Valley Garden Apartments Multifamily 48 Fee
275 Devereaux Apartments Multifamily 59 Fee
276 Bloomingdale Shopping Center Retail 11,000 Fee
277 Cottonwood Apartments Multifamily 30 Fee
278 Royal North Apartments Multifamily 85 Fee
279 Turtle Dove II Apartments Multifamily 40 Fee
Total/Weighted Average
Maximum:
Minimum:
<CAPTION>
Occupancy
Year Year Rate at Appraised Cut-off Date
# Property Name Built Renovated U/W (7) Value LTV Ratio
- - ------------- ----- --------- ------- ----- ---------
<S> <C> <C> <C> <C> <C>
253 Citadel Square Shopping Center (6) 1977 N/A 98.0% 2,150,000 69.8%
254 Sherwood Mobile Home Estates 1968 1985 94.0% 1,900,000 78.6%
255 Ware's Van & Storage Co. 1973 1986 100.0% 2,000,000 74.5%
256 Sunrise Terrace Mobile Home Park 1962 1965 100.0% 1,850,000 78.1%
257 Best Western Country Inn North 1988 N/A N/A 2,100,000 68.8%
258 Woodlake Resort Village Apartments 1986 1994 94.0% 1,800,000 77.4%
259 Plantation Pines Apartments 1973 1996 95.0% 2,000,000 67.4%
260 Pacific Mini Storage 1967 1994 86.0% 2,200,000 61.2%
261 Sunridge Apartments 1971 1996 95.0% 1,830,000 73.3%
262 Parkside Place Apartments 1971 1997 99.0% 1,800,000 71.7%
263 Courtyards of Granbury 1985 1992 96.0% 1,800,000 72.0%
264 University Apartments 1954 1998 92.0% 1,700,000 74.0%
265 Isaqueena Village Apartments 1972 1994 90.0% 1,730,000 71.9%
266 Turtle Dove I Apartments 1972 1997 100.0% 1,730,000 70.8%
267 Carson Gardens Mobile Home Park 1934 1955 99.0% 1,550,000 76.9%
268 Valerie Apartments 1964 N/A 100.0% 1,340,000 79.9%
269 Huddersfield Apartments 1940 1998 100.0% 1,500,000 70.6%
270 1457 & 1519 - 1527 Park Road, NW 1909 1997 96.0% 1,580,000 66.4%
271 Winter Garden Village Apartments 1972 N/A 98.0% 1,425,000 70.0%
272 Long Point Plaza Apartments 1960 N/A 96.0% 1,240,000 76.7%
273 The Place of Tempe Apartments 1964 1998 100.0% 1,200,000 74.9%
274 Valley Garden Apartments 1962 1998 96.0% 1,500,000 59.8%
275 Devereaux Apartments 1968 1998 95.0% 1,130,000 78.5%
276 Bloomingdale Shopping Center 1989 N/A 91.0% 1,100,000 72.5%
277 Cottonwood Apartments 1983 1997 93.0% 1,160,000 68.7%
278 Royal North Apartments 1973 1997 98.0% 980,000 73.3%
279 Turtle Dove II Apartments 1968 N/A 95.0% 1,000,000 67.5%
--------------------------------------
Total/Weighted Average 96.2% $1,758,167,000 73.2%
======================================
Maximum: 100.0% $ 39,000,000 82.5%
Minimum: 50.0% $ 650,000 16.2%
<CAPTION>
Maturity/ARD Maturity/ARD U/W U/W
# Property Name Balance LTV Ratio (8) NCF (9) DSCR (10)
- - ------------- ------- ------------- ------- ---------
<S> <C> <C> <C> <C>
253 Citadel Square Shopping Center (6) 1,344,797 62.5% 193,811 1.37
254 Sherwood Mobile Home Estates 1,204,511 63.4% 184,157 1.43
255 Ware's Van & Storage Co. 1,048,641 52.4% 183,158 1.24
256 Sunrise Terrace Mobile Home Park 1,266,897 68.5% 157,819 1.35
257 Best Western Country Inn North 1,193,416 56.8% 187,874 1.40
258 Woodlake Resort Village Apartments 1,230,897 68.4% 157,372 1.37
259 Plantation Pines Apartments 1,105,986 55.3% 156,306 1.27
260 Pacific Mini Storage 1,112,243 50.6% 179,744 1.44
261 Sunridge Apartments 1,099,857 60.1% 147,157 1.21
262 Parkside Place Apartments 892,842 49.6% 164,658 1.34
263 Courtyards of Granbury 1,155,032 64.2% 141,596 1.20
264 University Apartments 1,019,316 60.0% 157,654 1.43
265 Isaqueena Village Apartments 1,084,349 62.7% 151,341 1.55
266 Turtle Dove I Apartments 1,000,027 57.8% 146,577 1.33
267 Carson Gardens Mobile Home Park 1,056,336 68.2% 138,047 1.39
268 Valerie Apartments 869,969 64.9% 146,951 1.55
269 Huddersfield Apartments 863,822 57.6% 132,650 1.40
270 1457 & 1519 - 1527 Park Road, NW 858,954 54.4% 125,535 1.32
271 Winter Garden Village Apartments 812,179 57.0% 111,930 1.26
272 Long Point Plaza Apartments 665,406 53.7% 123,475 1.33
273 The Place of Tempe Apartments 734,084 61.2% 109,070 1.35
274 Valley Garden Apartments 731,100 48.7% 117,741 1.48
275 Devereaux Apartments 727,067 64.3% 110,125 1.36
276 Bloomingdale Shopping Center 649,743 59.1% 91,276 1.29
277 Cottonwood Apartments 38,784 3.3% 111,566 1.35
278 Royal North Apartments 596,384 60.9% 100,651 1.50
279 Turtle Dove II Apartments 551,036 55.1% 90,279 1.49
------------------------------------------------------------------
Total/Weighted Average $1,054,822,904 62.6% $146,517,353 1.39x
==================================================================
Maximum: $ 26,589,367 73.7% $ 3,241,994 2.54x
Minimum: $ 38,784 12.9% $ 65,758 1.20x
</TABLE>
(1A) The Winston Loan is secured by Hampton Inn - Elmsford, Quality Suites -
Charleston, Courtyard by Marriott - Ann Arbor, Residence Inn - Phoenix,
Homewood Suites - Cary, Hampton Inn & Suites - Gwinnett, Hampton Inn -
Raleigh, Comfort Suites - Orlando, Hampton Inn - Perimeter, Hampton Inn -
Charlotte, NC, Courtyard by Marriott - Wilmington, Hampton Inn - West
Springfield, Homewood Suites - Clear Lake and Comfort Inn - Charleston,
respectively.
(1B) The Mortgage Loans secured by Kendale Lakes Plaza, Cypress Creek Station
and Oakwood Business Center, respectively, are cross-collateralized and
cross-defaulted.
(1C) A Single Mortgage Note is secured by Westchase Ranch Apartments, Westwood
Village Apartments, Normandy Woods Apartments, Savoy Manor Apartments and
San Marin Apartments, respectively.
(1D) A Single Mortgage Note is secured by 2294 Molly Pitcher Highway, 5015
Campuswood Drive, 5010 Campuswood Drive and 5009 Campuswood Drive,
respectively.
(1E) A Single Mortgage Note is secured by Keller Oaks Apartments, Sycamore Hill
Apartments, Claremdon Apartments and Woodchase Condominiums, respectively.
(1F) A Single Mortgage Note is secured by Princeton Court Apartments, Pinewood
Estates Apartments and Arbor Court Apartments, respectively.
(1G) A Single Mortgage Note is secured by U-Store of Brighton Self Storage
Facility, U-Store of South Lyon Self Storage Facility, U-Store of Saline
Self Storage Facility, U-Store of Davison Self Storage Facility, U-Store of
Holly Self Storage Facility and U-Store of Jackson Self Storage Facility,
respectively.
(1H) The Mortgage Loans secured by Cranbrook Centre Apartments and Cranbrook
Centre Office Buildings, respectively, are cross-collateralized and
cross-defaulted.
(1I) A Single Mortgage Note is secured by Mobile Gardens/Holly View Mobile Home
Park, Stony Chase/Rock Creek Mobile Home Park and Briarwood Manor,
respectively.
(1J) A Single Mortgage Note is secured by Spruce Properties, Oak Grove
Apartments and Aldrich Apartments, respectively. The Mortgage Loan secured
by Spruce Properties contains two properties that are operated as one.
(1K) The Mortgage Loans secured by Century Plaza Strip Shopping Center and
Albany Square Strip Shopping Center, respectively, are cross-collateralized
and cross-defaulted.
(1L) A Single Mortgage Note secured by Park Lane Village Apartments and
Rynearson Lane Village Apartments, respectively.
(2) Marycrest Shopping Center has an interest only period of 24 months from
origination and thereafter is scheduled to amortize over 360 months with
the payment presented reflecting the amount due during the amortization
term.
(3) Merchant's Square has an interest only period of 24 months from origination
and thereafter is scheduled to amortize over 336 months with the payment
presented reflecting the amount due during the amortization term.
(4) The Mortgage Loan secured by New Franklin Apartments contains four
properties that are operated as one.
(5) The Mortgage Loan secured by Michigan & Bender Plaza contains two
properties that are operated as one.
(6) Citadel Square Shopping Center has an interest only period of 36 months
from origination and thereafter is scheduled to amortize over 300 months
with the payment presented reflecting the amount due during the
amortization term.
(7) Does not include any Mortgage Loans secured by hotel properties.
(8) At maturity with respect to Balloon Loans, Fully Amortizing Loans or at the
ARD in the case of ARD Loans . There can be no assurance that the value of
any particular Mortgaged Property will not have declined from the original
appraised value. Weighted Average, Maximum and Minimum presented are
calculated without regard to any Fully Amortizing Loans.
(9) Underwriting NCF reflects the Net Cash Flow after U/W Replacement Reserves,
U/W LC's and TI's and FF&E.
(10) U/W DSCR is based on the amount of the monthly payments presented. In the
case of cross-collateralized and cross-defaulted Mortgage Loans the
combined U/W DSCR is presented for each and every related Mortgage Loan.
<PAGE>
Characteristics of the Mortgage Loans
<TABLE>
<CAPTION>
Original
Original Percentage of Amortization
Mortgage Loan Principal Cut-off Date Initial Term
# Property Name Seller Balance Balance(7) Pool Balance (months)
--------------- ------------- --------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) G.E. Capital Access $7,625,000 $7,598,233 0.6% 300
2 Quality Suites - Charleston (1A) G.E. Capital Access 6,300,000 6,277,885 0.5% 300
3 Courtyard by Marriott - Ann Arbor (1A) G.E. Capital Access 6,300,000 6,277,885 0.5% 300
4 Residence Inn - Phoenix (1A) G.E. Capital Access 6,300,000 6,277,885 0.5% 300
5 Homewood Suites - Cary (1A) G.E. Capital Access 6,025,000 6,003,850 0.5% 300
6 Hampton Inn & Suites - Gwinnett (1A) G.E. Capital Access 5,400,000 5,381,044 0.4% 300
7 Hampton Inn - Raleigh (1A) G.E. Capital Access 5,300,000 5,281,395 0.4% 300
8 Comfort Suites - Orlando (1A) G.E. Capital Access 5,175,000 5,156,834 0.4% 300
9 Hampton Inn - Perimeter (1A) G.E. Capital Access 5,000,000 4,982,448 0.4% 300
10 Hampton Inn - Charlotte, NC (1A) G.E. Capital Access 4,575,000 4,558,940 0.4% 300
11 Courtyard by Marriott - Wilmington (1A) G.E. Capital Access 4,275,000 4,259,993 0.3% 300
12 Hampton Inn - West Springfield (1A) G.E. Capital Access 3,700,000 3,687,012 0.3% 300
13 Homewood Suites - Clear Lake (1A) G.E. Capital Access 3,450,000 3,437,889 0.3% 300
14 Comfort Inn - Charleston (1A) G.E. Capital Access 1,575,000 1,569,471 0.1% 300
15 Kendale Lakes Plaza (1B) G.E. Capital Access 29,613,000 29,580,388 2.4% 360
16 Cypress Creek Station (1B) G.E. Capital Access 23,856,000 23,829,728 1.9% 360
17 Oakwood Business Center (1B) G.E. Capital Access 10,408,000 10,396,538 0.8% 360
18 Westchase Ranch Apartments (1C) Column 22,556,014 22,529,265 1.8% 360
19 Westwood Village Apartments (1C) Column 10,400,000 10,387,667 0.8% 360
20 Normandy Woods Apartments (1C) Column 7,120,000 7,111,557 0.6% 360
21 Savoy Manor Apartments (1C) Column 5,200,000 5,193,833 0.4% 360
22 San Marin Apartments (1C) Column 3,613,312 3,609,027 0.3% 360
23 Country Squire Apartments - South G.E. Capital Access 30,500,000 30,446,295 2.4% 360
24 2294 Molly Pitcher Highway (1D) Column 17,200,000 17,149,044 1.4% 360
25 5015 Campuswood Drive (1D) Column 7,200,000 7,178,670 0.6% 360
26 5010 Campuswood Drive (1D) Column 4,483,200 4,469,918 0.4% 360
27 5009 Campuswood Drive (1D) Column 516,800 515,269 0.0% 360
28 Fair Lakes Promenade G.E. Capital Access 21,000,000 20,950,739 1.7% 360
29 Keller Oaks Apartments (1E) G.E. Capital Access 7,167,501 7,143,351 0.6% 360
30 Sycamore Hill Apartments (1E) G.E. Capital Access 6,210,476 6,189,551 0.5% 360
31 Clarendon Apartments (1E) G.E. Capital Access 4,561,137 4,545,769 0.4% 360
32 Woodchase Condominiums (1E) G.E. Capital Access 2,410,887 2,402,764 0.2% 360
33 Dallas Design Center Portfolio G.E. Capital Access 17,500,000 17,479,737 1.4% 360
34 Assembly Square Office Building G.E. Capital Access 16,782,000 16,753,085 1.3% 360
35 Spicetree Apartments G.E. Capital Access 16,640,000 16,582,208 1.3% 360
36 Lamplighter Mobile Home Park G.E. Capital Access 16,000,000 15,971,898 1.3% 360
37 White Station Tower Column 15,500,000 15,500,000 1.2% 360
38 Holiday Inn New Orleans Veterans Column 15,000,000 14,977,561 1.2% 300
39 The Links at Bixby G.E. Capital Access 14,700,000 14,487,822 1.2% 300
40 Southwood Apartments G.E. Capital Access 14,500,000 14,474,162 1.2% 360
41 The Shoppes at Longwood Column 14,200,000 14,163,600 1.1% 300
42 Pines of Westbury G.E. Capital Access 13,000,000 12,967,894 1.0% 360
43 Edentree Apartments G.E. Capital Access 11,480,000 11,480,000 0.9% 360
44 Becker Village Mall G.E. Capital Access 11,344,000 11,319,037 0.9% 360
45 Tiffany Square Column 11,250,000 11,230,709 0.9% 360
46 The Mint Apartments Column 11,150,000 11,136,789 0.9% 360
47 River Park Shopping Center G.E. Capital Access 10,950,000 10,925,904 0.9% 360
48 Rancho Destino Apartments G.E. Capital Access 10,200,000 10,181,999 0.8% 360
49 Conestoga Mobile Home Park G.E. Capital Access 9,875,000 9,841,203 0.8% 360
50 Huntington Chase Apartments G.E. Capital Access 9,700,000 9,666,997 0.8% 360
51 Parkshore Centre Office Building Column 9,300,000 9,267,733 0.7% 360
52 Kenwood Pavilion G.E. Capital Access 8,880,000 8,869,751 0.7% 360
53 Newsome Park Apartments G.E. Capital Access 8,500,000 8,459,047 0.7% 360
54 Princeton Court Apartments (1F) G.E. Capital Access 3,884,214 3,877,564 0.3% 360
55 Pinewood Estates Apartments (1F) G.E. Capital Access 2,390,286 2,386,193 0.2% 360
56 Arbor Court Apartments (1F) G.E. Capital Access 2,091,500 2,087,919 0.2% 360
57 U-Store of Brighton Self Storage Facility (1G) G.E. Capital Access 2,871,590 2,867,278 0.2% 300
58 U-Store of South Lyon Self Storage Facility (1G) G.E. Capital Access 1,525,067 1,522,777 0.1% 300
59 U-Store of Saline Self Storage Facility (1G) G.E. Capital Access 1,391,159 1,389,070 0.1% 300
60 U-Store of Davison Self Storage Facility (1G) G.E. Capital Access 996,873 995,376 0.1% 300
61 U-Store of Holly Self Storage Facility (1G) G.E. Capital Access 922,480 921,094 0.1% 300
62 U-Store of Jackson Self Storage Facility (1G) G.E. Capital Access 572,830 571,970 0.0% 300
63 Birches Apartments G.E. Capital Access 8,186,000 8,172,163 0.7% 360
64 Hollywood Plaza G.E. Capital Access 8,100,000 8,074,019 0.6% 360
65 50-60 Worcester Rd. G.E. Capital Access 8,000,000 7,990,860 0.6% 360
66 Mahwah Business Park Column 8,000,000 7,935,363 0.6% 300
67 Silvernail Shopping Center G.E. Capital Access 7,808,000 7,798,787 0.6% 360
<CAPTION>
Remaining Original Remaining
Amortization Term to Term to
Term Maturity Maturity Mortgage Monthly
# Property Name (months) (months)(8) (months)(8) Rate Payment
--------------- ------------ ----------- ----------- -------- -------
<S> <C> <C> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) 297 120 117 7.375% $55,729.57
2 Quality Suites - Charleston (1A) 297 120 117 7.375% 46,045.42
3 Courtyard by Marriott - Ann Arbor (1A) 297 120 117 7.375% 46,045.42
4 Residence Inn - Phoenix (1A) 297 120 117 7.375% 46,045.42
5 Homewood Suites - Cary (1A) 297 120 117 7.375% 44,035.50
6 Hampton Inn & Suites - Gwinnett (1A) 297 120 117 7.375% 39,467.50
7 Hampton Inn - Raleigh (1A) 297 120 117 7.375% 38,736.62
8 Comfort Suites - Orlando (1A) 297 120 117 7.375% 37,823.02
9 Hampton Inn - Perimeter (1A) 297 120 117 7.375% 36,543.98
10 Hampton Inn - Charlotte, NC (1A) 297 120 117 7.375% 33,437.74
11 Courtyard by Marriott - Wilmington (1A) 297 120 117 7.375% 31,245.11
12 Hampton Inn - West Springfield (1A) 297 120 117 7.375% 27,042.55
13 Homewood Suites - Clear Lake (1A) 297 120 117 7.375% 25,215.35
14 Comfort Inn - Charleston (1A) 297 120 117 7.375% 11,511.35
15 Kendale Lakes Plaza (1B) 359 120 119 8.180% 221,016.99
16 Cypress Creek Station (1B) 359 120 119 8.180% 178,049.55
17 Oakwood Business Center (1B) 359 120 119 8.180% 77,680.24
18 Westchase Ranch Apartments (1C) 359 120 119 7.220% 153,413.07
19 Westwood Village Apartments (1C) 359 120 119 7.220% 70,734.84
20 Normandy Woods Apartments (1C) 359 120 119 7.220% 48,426.16
21 Savoy Manor Apartments (1C) 359 120 119 7.220% 35,367.42
22 San Marin Apartments (1C) 359 120 119 7.220% 24,575.68
23 Country Squire Apartments - South 358 120 118 6.650% 195,799.29
24 2294 Molly Pitcher Highway (1D) 356 120 116 7.550% 120,854.33
25 5015 Campuswood Drive (1D) 356 120 116 7.550% 50,590.19
26 5010 Campuswood Drive (1D) 356 120 116 7.550% 31,500.82
27 5009 Campuswood Drive (1D) 356 120 116 7.550% 3,631.25
28 Fair Lakes Promenade 357 120 117 7.260% 143,399.48
29 Keller Oaks Apartments (1E) 356 120 116 6.900% 47,205.17
30 Sycamore Hill Apartments (1E) 356 120 116 6.900% 40,902.21
31 Clarendon Apartments (1E) 356 120 116 6.900% 30,039.65
32 Woodchase Condominiums (1E) 356 120 116 6.900% 15,878.10
33 Dallas Design Center Portfolio 359 120 119 7.510% 122,482.39
34 Assembly Square Office Building 358 120 118 7.400% 116,195.18
35 Spicetree Apartments 356 84 80 6.750% 107,926.72
36 Lamplighter Mobile Home Park 358 120 118 7.280% 109,473.97
37 White Station Tower 360 120 120 7.410% 107,424.63
38 Holiday Inn New Orleans Veterans 299 120 119 8.000% 115,772.43
39 The Links at Bixby 288 300 288 6.940% 103,334.57
40 Southwood Apartments 358 84 82 7.190% 98,326.15
41 The Shoppes at Longwood 298 240 238 6.780% 98,378.61
42 Pines of Westbury 357 120 117 7.000% 86,489.32
43 Edentree Apartments 360 120 120 7.290% 78,625.54
44 Becker Village Mall 357 120 117 7.580% 79,941.24
45 Tiffany Square 358 120 118 7.430% 78,123.10
46 The Mint Apartments 359 120 119 7.230% 75,911.46
47 River Park Shopping Center 357 120 117 7.580% 77,164.72
48 Rancho Destino Apartments 358 120 118 7.250% 69,581.98
49 Conestoga Mobile Home Park 356 120 116 6.820% 64,509.22
50 Huntington Chase Apartments 356 120 116 6.850% 63,560.14
51 Parkshore Centre Office Building 356 120 116 6.750% 60,319.62
52 Kenwood Pavilion 359 120 119 7.550% 62,394.56
53 Newsome Park Apartments 354 120 114 6.970% 56,379.56
54 Princeton Court Apartments (1F) 358 120 118 7.440% 26,999.58
55 Pinewood Estates Apartments (1F) 358 120 118 7.440% 16,615.13
56 Arbor Court Apartments (1F) 358 120 118 7.440% 14,538.24
57 U-Store of Brighton Self Storage Facility (1G) 299 120 119 7.950% 22,068.37
58 U-Store of South Lyon Self Storage Facility (1G) 299 120 119 7.950% 11,720.25
59 U-Store of Saline Self Storage Facility (1G) 299 120 119 7.950% 10,691.15
60 U-Store of Davison Self Storage Facility (1G) 299 120 119 7.950% 7,661.04
61 U-Store of Holly Self Storage Facility (1G) 299 120 119 7.950% 7,089.32
62 U-Store of Jackson Self Storage Facility (1G) 299 120 119 7.950% 4,402.24
63 Birches Apartments 358 120 118 7.520% 57,349.85
64 Hollywood Plaza 356 120 116 7.150% 54,707.95
65 50-60 Worcester Rd. 359 120 119 7.680% 56,926.49
66 Mahwah Business Park 293 120 113 7.220% 57,670.02
67 Silvernail Shopping Center 359 120 119 7.280% 53,423.29
<CAPTION>
First
Payment Maturity
# Property Name Date Date ARD(9)
--------------- ------- -------- ------
<S> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) 01/01/99 12/01/23 12/01/08
2 Quality Suites - Charleston (1A) 01/01/99 12/01/23 12/01/08
3 Courtyard by Marriott - Ann Arbor (1A) 01/01/99 12/01/23 12/01/08
4 Residence Inn - Phoenix (1A) 01/01/99 12/01/23 12/01/08
5 Homewood Suites - Cary (1A) 01/01/99 12/01/23 12/01/08
6 Hampton Inn & Suites - Gwinnett (1A) 01/01/99 12/01/23 12/01/08
7 Hampton Inn - Raleigh (1A) 01/01/99 12/01/23 12/01/08
8 Comfort Suites - Orlando (1A) 01/01/99 12/01/23 12/01/08
9 Hampton Inn - Perimeter (1A) 01/01/99 12/01/23 12/01/08
10 Hampton Inn - Charlotte, NC (1A) 01/01/99 12/01/23 12/01/08
11 Courtyard by Marriott - Wilmington (1A) 01/01/99 12/01/23 12/01/08
12 Hampton Inn - West Springfield (1A) 01/01/99 12/01/23 12/01/08
13 Homewood Suites - Clear Lake (1A) 01/01/99 12/01/23 12/01/08
14 Comfort Inn - Charleston (1A) 01/01/99 12/01/23 12/01/08
15 Kendale Lakes Plaza (1B) 03/01/99 02/01/29 02/01/09
16 Cypress Creek Station (1B) 03/01/99 02/01/29 02/01/09
17 Oakwood Business Center (1B) 03/01/99 02/01/29 02/01/09
18 Westchase Ranch Apartments (1C) 03/01/99 02/01/09
19 Westwood Village Apartments (1C) 03/01/99 02/01/09
20 Normandy Woods Apartments (1C) 03/01/99 02/01/09
21 Savoy Manor Apartments (1C) 03/01/99 02/01/09
22 San Marin Apartments (1C) 03/01/99 02/01/09
23 Country Squire Apartments - South 02/01/99 01/01/09
24 2294 Molly Pitcher Highway (1D) 12/01/98 11/01/08
25 5015 Campuswood Drive (1D) 12/01/98 11/01/08
26 5010 Campuswood Drive (1D) 12/01/98 11/01/08
27 5009 Campuswood Drive (1D) 12/01/98 11/01/08
28 Fair Lakes Promenade 01/01/99 12/01/08
29 Keller Oaks Apartments (1E) 12/01/98 11/01/28 11/01/08
30 Sycamore Hill Apartments (1E) 12/01/98 11/01/28 11/01/08
31 Clarendon Apartments (1E) 12/01/98 11/01/28 11/01/08
32 Woodchase Condominiums (1E) 12/01/98 11/01/28 11/01/08
33 Dallas Design Center Portfolio 03/01/99 02/01/09
34 Assembly Square Office Building 02/01/99 01/01/09
35 Spicetree Apartments 12/01/98 11/01/28 11/01/05
36 Lamplighter Mobile Home Park 02/01/99 01/01/09
37 White Station Tower 04/01/99 03/01/09
38 Holiday Inn New Orleans Veterans 03/01/99 02/01/09
39 The Links at Bixby 04/01/98 03/01/23
40 Southwood Apartments 02/01/99 01/01/06
41 The Shoppes at Longwood 02/01/99 01/01/19
42 Pines of Westbury 01/01/99 12/01/28 12/01/08
43 Edentree Apartments 04/01/99 03/01/09
44 Becker Village Mall 01/01/99 12/01/08
45 Tiffany Square 02/01/99 01/01/09
46 The Mint Apartments 03/01/99 02/01/09
47 River Park Shopping Center 01/01/99 12/01/08
48 Rancho Destino Apartments 02/01/99 01/01/09
49 Conestoga Mobile Home Park 12/01/98 11/01/08
50 Huntington Chase Apartments 12/01/98 11/01/08
51 Parkshore Centre Office Building 12/01/98 11/01/08
52 Kenwood Pavilion 03/01/99 02/01/09
53 Newsome Park Apartments 10/01/98 09/01/28 09/01/08
54 Princeton Court Apartments (1F) 02/01/99 01/01/09
55 Pinewood Estates Apartments (1F) 02/01/99 01/01/09
56 Arbor Court Apartments (1F) 02/01/99 01/01/09
57 U-Store of Brighton Self Storage Facility (1G) 03/01/99 02/01/09
58 U-Store of South Lyon Self Storage Facility (1G) 03/01/99 02/01/09
59 U-Store of Saline Self Storage Facility (1G) 03/01/99 02/01/09
60 U-Store of Davison Self Storage Facility (1G) 03/01/99 02/01/09
61 U-Store of Holly Self Storage Facility (1G) 03/01/99 02/01/09
62 U-Store of Jackson Self Storage Facility (1G) 03/01/99 02/01/09
63 Birches Apartments 02/01/99 01/01/09
64 Hollywood Plaza 12/01/98 11/01/28 11/01/08
65 50-60 Worcester Rd. 03/01/99 02/01/09
66 Mahwah Business Park 09/01/98 08/01/08
67 Silvernail Shopping Center 03/01/99 02/01/09
<CAPTION>
Prepayment Provision Defeasance
# Property Name as of Origination(10) Option(11)
--------------- --------------------- ----------
<S> <C> <C>
1 Hampton Inn - Elmsford (1A) L (9.75), O (0.25) Yes
2 Quality Suites - Charleston (1A) L (9.75), O (0.25) Yes
3 Courtyard by Marriott - Ann Arbor (1A) L (9.75), O (0.25) Yes
4 Residence Inn - Phoenix (1A) L (9.75), O (0.25) Yes
5 Homewood Suites - Cary (1A) L (9.75), O (0.25) Yes
6 Hampton Inn & Suites - Gwinnett (1A) L (9.75), O (0.25) Yes
7 Hampton Inn - Raleigh (1A) L (9.75), O (0.25) Yes
8 Comfort Suites - Orlando (1A) L (9.75), O (0.25) Yes
9 Hampton Inn - Perimeter (1A) L (9.75), O (0.25) Yes
10 Hampton Inn - Charlotte, NC (1A) L (9.75), O (0.25) Yes
11 Courtyard by Marriott - Wilmington (1A) L (9.75), O (0.25) Yes
12 Hampton Inn - West Springfield (1A) L (9.75), O (0.25) Yes
13 Homewood Suites - Clear Lake (1A) L (9.75), O (0.25) Yes
14 Comfort Inn - Charleston (1A) L (9.75), O (0.25) Yes
15 Kendale Lakes Plaza (1B) L (9.75), O (0.25) Yes
16 Cypress Creek Station (1B) L (9.75), O (0.25) Yes
17 Oakwood Business Center (1B) L (9.75), O (0.25) Yes
18 Westchase Ranch Apartments (1C) L (9.5), O (0.5) Yes
19 Westwood Village Apartments (1C) L (9.5), O (0.5) Yes
20 Normandy Woods Apartments (1C) L (9.5), O (0.5) Yes
21 Savoy Manor Apartments (1C) L (9.5), O (0.5) Yes
22 San Marin Apartments (1C) L (9.5), O (0.5) Yes
23 Country Squire Apartments - South L (3), YM 1% (6.5), O (0.5) No
24 2294 Molly Pitcher Highway (1D) L (9.5), O (0.5) Yes
25 5015 Campuswood Drive (1D) L (9.5), O (0.5) Yes
26 5010 Campuswood Drive (1D) L (9.5), O (0.5) Yes
27 5009 Campuswood Drive (1D) L (9.5), O (0.5) Yes
28 Fair Lakes Promenade L (9.75), O (0.25) Yes
29 Keller Oaks Apartments (1E) L (9.75), O (0.25) Yes
30 Sycamore Hill Apartments (1E) L (9.75), O (0.25) Yes
31 Clarendon Apartments (1E) L (9.75), O (0.25) Yes
32 Woodchase Condominiums (1E) L (9.75), O (0.25) Yes
33 Dallas Design Center Portfolio L (9.75), O (0.25) Yes
34 Assembly Square Office Building L (9.75), O (0.25) Yes
35 Spicetree Apartments L (6.67), O (0.33) Yes
36 Lamplighter Mobile Home Park L (9.5), O (0.5) Yes
37 White Station Tower L (9.5), O (0.5) Yes
38 Holiday Inn New Orleans Veterans L (9.5), O (0.5) Yes
39 The Links at Bixby L (9.92), YM 1% (10.08), O (5) No
40 Southwood Apartments L (6.5), O (0.5) Yes
41 The Shoppes at Longwood L (10), YM 1% (9.75), O (0.25) No
42 Pines of Westbury L (9.75), O (0.25) Yes
43 Edentree Apartments L (9.75), O (0.25) Yes
44 Becker Village Mall L (9.75), O (0.25) Yes
45 Tiffany Square L (9.5), O (0.5) Yes
46 The Mint Apartments L (9.5), O (0.5) Yes
47 River Park Shopping Center L (9.75), O (0.25) Yes
48 Rancho Destino Apartments L (9.75), O (0.25) Yes
49 Conestoga Mobile Home Park L (9.5), O (0.5) Yes
50 Huntington Chase Apartments L (9.75), O (0.25) Yes
51 Parkshore Centre Office Building L (9.5), O (0.5) Yes
52 Kenwood Pavilion L (9.75), O (0.25) Yes
53 Newsome Park Apartments L (9.75), O (0.25) Yes
54 Princeton Court Apartments (1F) L (9.75), O (0.25) Yes
55 Pinewood Estates Apartments (1F) L (9.75), O (0.25) Yes
56 Arbor Court Apartments (1F) L (9.75), O (0.25) Yes
57 U-Store of Brighton Self Storage Facility (1G) L (9.75), O (0.25) Yes
58 U-Store of South Lyon Self Storage Facility (1G) L (9.75), O (0.25) Yes
59 U-Store of Saline Self Storage Facility (1G) L (9.75), O (0.25) Yes
60 U-Store of Davison Self Storage Facility (1G) L (9.75), O (0.25) Yes
61 U-Store of Holly Self Storage Facility (1G) L (9.75), O (0.25) Yes
62 U-Store of Jackson Self Storage Facility (1G) L (9.75), O (0.25) Yes
63 Birches Apartments L (9.75), O (0.25) Yes
64 Hollywood Plaza L (9.75), O (0.25) Yes
65 50-60 Worcester Rd. L (9.75), O (0.25) Yes
66 Mahwah Business Park L (9.5), O (0.5) Yes
67 Silvernail Shopping Center L (9.67), O (0.33) Yes
</TABLE>
<PAGE>
Characteristics of the Mortgage Loans
<TABLE>
<CAPTION>
Original
Original Percentage of Amortization
Mortgage Loan Principal Cut-off Date Initial Term
# Property Name Seller Balance Balance(7) Pool Balance (months)
--------------- ------------- --------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
68 Tech Center 29 Office/Warehouse Complex Column 7,600,000 7,588,003 0.6% 300
69 Centre North Shopping Center G.E. Capital Access 7,600,000 7,576,100 0.6% 360
70 Cranbrook Centre Apartments (1H) Column 4,925,000 4,916,622 0.4% 360
71 Cranbrook Centre Office Buildings (1H) Column 2,500,000 2,495,747 0.2% 360
72 Lubbock Shopping Parkade G.E. Capital Access 7,378,000 7,365,975 0.6% 360
73 Marin Club Apartments G.E. Capital Access 7,360,000 7,347,967 0.6% 360
74 Prunedale Center G.E. Capital Access 7,273,000 7,250,128 0.6% 360
75 Lamplighter Ontario MHP G.E. Capital Access 7,150,000 7,137,562 0.6% 360
76 Marycrest Shopping Center (2) Column 7,000,000 7,000,000 0.6% 360
77 Elm Plaza Shopping Center Column 7,000,000 6,980,077 0.6% 360
78 Century Plaza East G.E. Capital Access 6,937,000 6,919,868 0.6% 360
79 Keller Springs Tech Center G.E. Capital Access 6,900,000 6,888,130 0.5% 360
80 Mobile Gardens/Holly View Mobile Home Park (1I) G.E. Capital Access 3,640,000 3,627,197 0.3% 360
81 Stony Chase/Rock Creek Mobile Home Park (1I) G.E. Capital Access 1,920,000 1,913,247 0.2% 360
82 Briarwood Manor (1I) G.E. Capital Access 1,340,000 1,335,287 0.1% 360
83 Tierra Verde Marine Center Column 6,900,000 6,838,329 0.5% 300
84 Aurora Square G.E. Capital Access 6,720,000 6,703,404 0.5% 360
85 Merchant's Square (3) Column 6,600,000 6,600,000 0.5% 336
86 Northwood Hills Shopping Center G.E. Capital Access 6,500,000 6,492,510 0.5% 360
87 36th Street Office Center G.E. Capital Access 6,500,000 6,489,065 0.5% 360
88 Fifth Avenue Apartments G.E. Capital Access 6,400,000 6,388,541 0.5% 360
89 The Watermill Apartments Column 6,400,000 6,379,593 0.5% 360
90 Brooks Corner Column 6,300,000 6,300,000 0.5% 300
91 Hollywood Ardmore Apartments Column 6,250,000 6,236,842 0.5% 360
92 Chasewood Apartments G.E. Capital Access 6,160,000 6,149,198 0.5% 360
93 Kingsgate North G.E. Capital Access 5,880,000 5,860,574 0.5% 360
94 Fairfield Suites Pittsburgh/Airport G.E. Capital Access 5,840,000 5,831,027 0.5% 300
95 Seatree Apartments G.E. Capital Access 5,840,000 5,829,759 0.5% 360
96 All Aboard Mini Storage - Alhambra G.E. Capital Access 5,680,000 5,658,494 0.5% 360
97 West Century Center G.E. Capital Access 5,600,000 5,593,651 0.4% 360
98 Universal Plaza G.E. Capital Access 5,560,000 5,550,794 0.4% 360
99 Crestview Market Place G.E. Capital Access 5,500,000 5,481,829 0.4% 360
100 New Franklin Apartments (4) Column 5,400,000 5,345,280 0.4% 216
101 Windjammer Apartments Column 5,226,000 5,219,924 0.4% 360
102 Woodlake Village Apartments Column 5,240,000 5,217,795 0.4% 360
103 Comfort Inn - Hopewell, VA Column 5,200,000 5,181,769 0.4% 300
104 Linens N Things G.E. Capital Access 5,200,000 5,142,114 0.4% 324
105 The Woods Apartments G.E. Capital Access 5,048,000 5,039,048 0.4% 360
106 Moonlight Garden Apartments G.E. Capital Access 4,987,000 4,978,846 0.4% 360
107 Sagamore Court Apartments Column 4,970,000 4,960,750 0.4% 360
108 Carriage Hill Apartments Column 4,940,000 4,927,800 0.4% 360
109 Dowling Office Building G.E. Capital Access 4,810,000 4,801,712 0.4% 360
110 Main Street Plaza Shopping Center G.E. Capital Access 4,772,000 4,756,234 0.4% 360
111 Friendship Crossing Apartments G.E. Capital Access 4,611,000 4,603,093 0.4% 360
112 Spruce Properties (1J) Column 1,975,000 1,970,671 0.2% 360
113 Oak Grove Apartments (1J) Column 1,475,000 1,471,767 0.1% 360
114 Aldrich Apartments (1J) Column 1,050,000 1,047,699 0.1% 360
115 One Bellemead Center G.E. Capital Access 4,497,000 4,487,741 0.4% 360
116 Denver Tech Center #30 G.E. Capital Access 4,475,000 4,463,948 0.4% 360
117 Preston Racquet Club Condominiums and Apartments G.E. Capital Access 4,390,000 4,385,027 0.4% 360
118 Sand Lake Apartments G.E. Capital Access 4,400,000 4,364,206 0.3% 360
119 Mobile Estate Mobile Home Park Column 4,300,000 4,289,993 0.3% 360
120 Colonia Shopping Center G.E. Capital Access 4,284,000 4,279,036 0.3% 360
121 Vista Ridge Center III G.E. Capital Access 4,275,000 4,268,033 0.3% 360
122 Parkside East Apartments G.E. Capital Access 4,200,000 4,190,128 0.3% 360
123 Northpark Village G.E. Capital Access 4,120,000 4,106,388 0.3% 360
124 Breakers Apartments G.E. Capital Access 4,096,000 4,079,323 0.3% 360
125 Picnic Lawn Apartments G.E. Capital Access 4,000,000 3,993,174 0.3% 360
126 32nd Street and McDowell Road Shopping Center G.E. Capital Access 4,000,000 3,987,170 0.3% 360
127 Triangle Corporate Center G.E. Capital Access 4,000,000 3,985,516 0.3% 360
128 One West Hills Office G.E. Capital Access 3,950,000 3,943,084 0.3% 360
129 Harper Regency Apartments G.E. Capital Access 3,975,000 3,942,885 0.3% 360
130 Heritage Green Shopping Center G.E. Capital Access 3,850,000 3,843,471 0.3% 360
131 Captain's Landing Apartments G.E. Capital Access 3,811,000 3,802,289 0.3% 360
132 All Aboard Mini Storage - Fremont G.E. Capital Access 3,800,000 3,785,612 0.3% 360
133 Century Plaza Strip Shopping Center (1K) Column 2,100,000 2,088,575 0.2% 300
134 Albany Square Strip Shopping Center (1K) Column 1,700,000 1,690,752 0.1% 300
<CAPTION>
Remaining Original Remaining
Amortization Term to Term to
Term Maturity Maturity Mortgage Monthly
# Property Name (months) (months)(8) (months)(8) Rate Payment
--------------- ------------ ----------- ----------- -------- -------
<S> <C> <C> <C> <C> <C>
68 Tech Center 29 Office/Warehouse Complex 299 120 119 7.330% 55,325.64
69 Centre North Shopping Center 356 120 116 7.250% 51,845.40
70 Cranbrook Centre Apartments (1H) 358 120 118 7.480% 34,368.89
71 Cranbrook Centre Office Buildings (1H) 358 120 118 7.480% 17,446.14
72 Lubbock Shopping Parkade 358 120 118 7.750% 52,856.90
73 Marin Club Apartments 358 120 118 7.730% 52,626.26
74 Prunedale Center 356 120 116 7.250% 49,614.68
75 Lamplighter Ontario MHP 358 60 58 7.340% 49,212.83
76 Marycrest Shopping Center (2) 360 120 117 7.780% 50,294.05
77 Elm Plaza Shopping Center 356 120 116 7.750% 50,148.86
78 Century Plaza East 357 120 117 7.000% 46,152.03
79 Keller Springs Tech Center 358 120 118 7.410% 47,821.29
80 Mobile Gardens/Holly View Mobile Home Park (1I) 356 120 116 6.680% 23,439.85
81 Stony Chase/Rock Creek Mobile Home Park (1I) 356 120 116 6.680% 12,363.88
82 Briarwood Manor (1I) 356 120 116 6.680% 8,628.96
83 Tierra Verde Marine Center 292 120 112 7.330% 50,229.86
84 Aurora Square 357 120 117 7.000% 44,708.33
85 Merchant's Square (3) 336 120 118 7.150% 45,508.18
86 Northwood Hills Shopping Center 359 120 119 7.570% 45,760.91
87 36th Street Office Center 358 120 118 7.550% 45,671.69
88 Fifth Avenue Apartments 358 120 118 7.160% 43,269.28
89 The Watermill Apartments 356 120 116 7.180% 43,355.83
90 Brooks Corner 300 120 120 7.610% 47,008.15
91 Hollywood Ardmore Apartments 357 120 117 7.800% 44,991.91
92 Chasewood Apartments 358 120 118 7.290% 42,189.31
93 Kingsgate North 356 120 116 7.000% 39,119.79
94 Fairfield Suites Pittsburgh/Airport 299 120 119 7.660% 43,766.70
95 Seatree Apartments 358 120 118 7.290% 39,997.66
96 All Aboard Mini Storage - Alhambra 355 120 115 7.190% 38,516.73
97 West Century Center 359 120 119 7.780% 40,235.24
98 Universal Plaza 358 120 118 7.650% 39,449.00
99 Crestview Market Place 356 120 116 7.000% 36,591.64
100 New Franklin Apartments (4) 212 120 116 6.250% 41,703.84
101 Windjammer Apartments 359 120 119 7.460% 36,397.92
102 Woodlake Village Apartments 355 120 115 6.660% 33,673.65
103 Comfort Inn - Hopewell, VA 297 120 117 7.375% 38,005.74
104 Linens N Things 313 240 229 6.950% 35,597.06
105 The Woods Apartments 358 120 118 7.220% 34,333.60
106 Moonlight Garden Apartments 358 120 118 7.730% 35,658.58
107 Sagamore Court Apartments 358 120 118 6.920% 32,798.94
108 Carriage Hill Apartments 357 120 117 7.000% 32,865.94
109 Dowling Office Building 358 120 118 7.400% 33,303.47
110 Main Street Plaza Shopping Center 356 120 116 7.000% 31,748.24
111 Friendship Crossing Apartments 358 120 118 7.430% 32,020.05
112 Spruce Properties (1J) 357 120 117 7.600% 13,944.98
113 Oak Grove Apartments (1J) 357 120 117 7.600% 10,414.60
114 Aldrich Apartments (1J) 357 120 117 7.600% 7,413.78
115 One Bellemead Center 357 120 117 7.910% 32,715.69
116 Denver Tech Center #30 357 120 117 7.000% 29,772.29
117 Preston Racquet Club Condominiums and Apartments 359 120 119 7.790% 31,571.93
118 Sand Lake Apartments 349 300 289 7.180% 29,807.13
119 Mobile Estate Mobile Home Park 357 180 177 7.300% 29,479.55
120 Colonia Shopping Center 359 120 119 7.500% 29,954.35
121 Vista Ridge Center III 358 120 118 7.750% 30,626.62
122 Parkside East Apartments 357 120 117 7.250% 28,651.40
123 Northpark Village 356 120 116 7.000% 27,410.46
124 Breakers Apartments 355 120 115 6.850% 26,839.42
125 Picnic Lawn Apartments 358 120 118 7.460% 27,859.10
126 32nd Street and McDowell Road Shopping Center 356 120 116 7.150% 27,016.27
127 Triangle Corporate Center 356 120 116 6.530% 25,361.69
128 One West Hills Office 358 120 118 7.300% 27,080.05
129 Harper Regency Apartments 349 300 289 7.210% 27,008.75
130 Heritage Green Shopping Center 358 120 118 7.500% 26,919.76
131 Captain's Landing Apartments 357 89 86 7.390% 26,360.60
132 All Aboard Mini Storage - Fremont 355 120 115 7.190% 25,768.23
133 Century Plaza Strip Shopping Center (1K) 296 120 116 6.430% 14,087.63
134 Albany Square Strip Shopping Center (1K) 296 120 116 6.430% 11,404.27
<CAPTION>
First
Payment Maturity
# Property Name Date Date ARD(9)
--------------- ------- -------- ------
<S> <C> <C> <C>
68 Tech Center 29 Office/Warehouse Complex 03/01/99 02/01/09
69 Centre North Shopping Center 12/01/98 11/01/08
70 Cranbrook Centre Apartments (1H) 02/01/99 01/01/09
71 Cranbrook Centre Office Buildings (1H) 02/01/99 01/01/09
72 Lubbock Shopping Parkade 02/01/99 01/01/09
73 Marin Club Apartments 02/01/99 01/01/09
74 Prunedale Center 12/01/98 11/01/28 11/01/08
75 Lamplighter Ontario MHP 02/01/99 01/01/04
76 Marycrest Shopping Center (2) 01/01/99 12/01/08
77 Elm Plaza Shopping Center 12/01/98 11/01/08
78 Century Plaza East 01/01/99 12/01/08
79 Keller Springs Tech Center 02/01/99 01/01/09
80 Mobile Gardens/Holly View Mobile Home Park (1I) 12/01/98 11/01/28 11/01/08
81 Stony Chase/Rock Creek Mobile Home Park (1I) 12/01/98 11/01/28 11/01/08
82 Briarwood Manor (1I) 12/01/98 11/01/28 11/01/08
83 Tierra Verde Marine Center 08/01/98 07/01/23 07/01/08
84 Aurora Square 01/01/99 12/01/08
85 Merchant's Square (3) 02/01/99 01/01/09
86 Northwood Hills Shopping Center 03/01/99 02/01/09
87 36th Street Office Center 02/01/99 01/01/09
88 Fifth Avenue Apartments 02/01/99 01/01/09
89 The Watermill Apartments 12/01/98 11/01/08
90 Brooks Corner 04/01/99 03/01/09
91 Hollywood Ardmore Apartments 01/01/99 12/01/08
92 Chasewood Apartments 02/01/99 01/01/09
93 Kingsgate North 12/01/98 11/01/08
94 Fairfield Suites Pittsburgh/Airport 03/01/99 02/01/09
95 Seatree Apartments 02/01/99 01/01/09
96 All Aboard Mini Storage - Alhambra 11/01/98 10/01/28 10/01/08
97 West Century Center 03/01/99 02/01/09
98 Universal Plaza 02/01/99 01/01/09
99 Crestview Market Place 12/01/98 11/01/08
100 New Franklin Apartments (4) 12/01/98 11/01/08
101 Windjammer Apartments 03/01/99 02/01/09
102 Woodlake Village Apartments 11/01/98 10/01/08
103 Comfort Inn - Hopewell, VA 01/01/99 12/01/08
104 Linens N Things 05/01/98 04/01/25 04/01/18
105 The Woods Apartments 02/01/99 01/01/09
106 Moonlight Garden Apartments 02/01/99 01/01/09
107 Sagamore Court Apartments 02/01/99 01/01/09
108 Carriage Hill Apartments 01/01/99 12/01/08
109 Dowling Office Building 02/01/99 01/01/09
110 Main Street Plaza Shopping Center 12/01/98 11/01/08 11/01/08
111 Friendship Crossing Apartments 02/01/99 01/01/09
112 Spruce Properties (1J) 01/01/99 12/01/08
113 Oak Grove Apartments (1J) 01/01/99 12/01/08
114 Aldrich Apartments (1J) 01/01/99 12/01/08
115 One Bellemead Center 01/01/99 12/01/08
116 Denver Tech Center #30 01/01/99 12/01/08
117 Preston Racquet Club Condominiums and Apartments 03/01/99 02/01/09
118 Sand Lake Apartments 05/01/98 04/01/23
119 Mobile Estate Mobile Home Park 01/01/99 12/01/13
120 Colonia Shopping Center 03/01/99 02/01/09
121 Vista Ridge Center III 02/01/99 01/01/09
122 Parkside East Apartments 01/01/99 12/01/08
123 Northpark Village 12/01/98 11/01/08
124 Breakers Apartments 11/01/98 10/01/28 10/01/08
125 Picnic Lawn Apartments 02/01/99 01/01/09
126 32nd Street and McDowell Road Shopping Center 12/01/98 11/01/08
127 Triangle Corporate Center 12/01/98 11/01/28 11/01/08
128 One West Hills Office 02/01/99 01/01/09
129 Harper Regency Apartments 05/01/98 04/01/23
130 Heritage Green Shopping Center 02/01/99 01/01/09
131 Captain's Landing Apartments 01/01/99 05/01/06
132 All Aboard Mini Storage - Fremont 11/01/98 10/01/28 10/01/08
133 Century Plaza Strip Shopping Center (1K) 12/01/98 11/01/08
134 Albany Square Strip Shopping Center (1K) 12/01/98 11/01/08
<CAPTION>
Prepayment Provision Defeasance
# Property Name as of Origination(10) Option(11)
--------------- --------------------- ----------
<S> <C> <C>
68 Tech Center 29 Office/Warehouse Complex L (9.5), O (0.5) Yes
69 Centre North Shopping Center L (9.75), O (0.25) Yes
70 Cranbrook Centre Apartments (1H) L (9.5), O (0.5) Yes
71 Cranbrook Centre Office Buildings (1H) L (9.5), O (0.5) Yes
72 Lubbock Shopping Parkade L (9.75), O (0.25) Yes
73 Marin Club Apartments L (9.75), O (0.25) Yes
74 Prunedale Center L (9.75), O (0.25) Yes
75 Lamplighter Ontario MHP L (4.75), O (0.25) Yes
76 Marycrest Shopping Center (2) L (9.5), O (0.5) Yes
77 Elm Plaza Shopping Center L (9.5), O (0.5) Yes
78 Century Plaza East L (9.75), O (0.25) Yes
79 Keller Springs Tech Center L (9.75), O (0.25) Yes
80 Mobile Gardens/Holly View Mobile Home Park (1I) L (9.75), O (0.25) Yes
81 Stony Chase/Rock Creek Mobile Home Park (1I) L (9.75), O (0.25) Yes
82 Briarwood Manor (1I) L (9.75), O (0.25) Yes
83 Tierra Verde Marine Center L (9.5), O (0.5) Yes
84 Aurora Square L (9.75), O (0.25) Yes
85 Merchant's Square (3) L (9.5), O (0.5) Yes
86 Northwood Hills Shopping Center L (9.5), O (0.5) Yes
87 36th Street Office Center L (9.75), O (0.25) Yes
88 Fifth Avenue Apartments L (9.5), O (0.5) Yes
89 The Watermill Apartments L (9.5), O (0.5) Yes
90 Brooks Corner L (9.5), O (0.5) Yes
91 Hollywood Ardmore Apartments L (9.5), O (0.5) Yes
92 Chasewood Apartments L (9.75), O (0.25) Yes
93 Kingsgate North L (9.75), O (0.25) Yes
94 Fairfield Suites Pittsburgh/Airport L (9.75), O (0.25) Yes
95 Seatree Apartments L (9.75), O (0.25) Yes
96 All Aboard Mini Storage - Alhambra L (9.75), O (0.25) Yes
97 West Century Center L (9.75), O (0.25) Yes
98 Universal Plaza L (9.75), O (0.25) Yes
99 Crestview Market Place L (9.75), O (0.25) Yes
100 New Franklin Apartments (4) L (9.5), O (0.5) Yes
101 Windjammer Apartments L (9.5), O (0.5) Yes
102 Woodlake Village Apartments L (9.5), O (0.5) Yes
103 Comfort Inn - Hopewell, VA L (9.5), O (0.5) Yes
104 Linens N Things L (9.92), YM 1% (9.58), O (0.5) No
105 The Woods Apartments L (9.75), O (0.25) Yes
106 Moonlight Garden Apartments L (9.75), O (0.25) Yes
107 Sagamore Court Apartments L (9.5), O (0.5) Yes
108 Carriage Hill Apartments L (9.5), O (0.5) Yes
109 Dowling Office Building L (9.75), O (0.25) Yes
110 Main Street Plaza Shopping Center L (9.75), O (0.25) Yes
111 Friendship Crossing Apartments L (9.75), O (0.25) Yes
112 Spruce Properties (1J) L (9.5), O (0.5) Yes
113 Oak Grove Apartments (1J) L (9.5), O (0.5) Yes
114 Aldrich Apartments (1J) L (9.5), O (0.5) Yes
115 One Bellemead Center L (9.67), O (0.33) Yes
116 Denver Tech Center #30 L (9.75), O (0.25) Yes
117 Preston Racquet Club Condominiums and Apartments L (9.75), O (0.25) Yes
118 Sand Lake Apartments L (9.92), YM 1% (14.83), O (0.25) No
119 Mobile Estate Mobile Home Park L (14.5), O (0.5) Yes
120 Colonia Shopping Center L (9.67), O (0.33) Yes
121 Vista Ridge Center III L (9.75), O (0.25) Yes
122 Parkside East Apartments L (9.75), O (0.25) Yes
123 Northpark Village L (9.75), O (0.25) Yes
124 Breakers Apartments L (9.5), O (0.5) Yes
125 Picnic Lawn Apartments L (9.75), O (0.25) Yes
126 32nd Street and McDowell Road Shopping Center L (9.75), O (0.25) Yes
127 Triangle Corporate Center L (9.75), O (0.25) Yes
128 One West Hills Office L (9.75), O (0.25) Yes
129 Harper Regency Apartments L (7.92), YM 1% (16.83), O (0.25) No
130 Heritage Green Shopping Center L (9.75), O (0.25) Yes
131 Captain's Landing Apartments L (4), YM 1% (2.92), O (0.5) No
132 All Aboard Mini Storage - Fremont L (9.75), O (0.25) Yes
133 Century Plaza Strip Shopping Center (1K) L (9.5), O (0.5) Yes
134 Albany Square Strip Shopping Center (1K) L (9.5), O (0.5) Yes
</TABLE>
<PAGE>
Characteristics of the Mortgage Loans
<TABLE>
<CAPTION>
Original
Original Percentage of Amortization
Mortgage Loan Principal Cut-off Date Initial Term
# Property Name Seller Balance Balance(7) Pool Balance (months)
--------------- ------------- --------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
135 Larrabee Complex Column 3,700,000 3,685,680 0.3% 300
136 Cedar Garden Apartments G.E. Capital Access 3,680,000 3,673,780 0.3% 360
137 All Aboard Mini Storage - Stanton G.E. Capital Access 3,680,000 3,666,066 0.3% 360
138 Windtree Apartments - Phase I G.E. Capital Access 3,600,000 3,593,944 0.3% 360
139 Lake City Mini-Storage G.E. Capital Access 3,600,000 3,582,501 0.3% 300
140 Huntington Mobile Estates G.E. Capital Access 3,500,000 3,488,993 0.3% 360
141 Everhart Park Shopping Center G.E. Capital Access 3,500,000 3,488,424 0.3% 360
142 Rafael North Executive Park G.E. Capital Access 3,500,000 3,484,424 0.3% 324
143 Westwind Estates G.E. Capital Access 3,448,000 3,440,039 0.3% 360
144 Hewlett Shopping Center G.E. Capital Access 3,400,000 3,392,008 0.3% 360
145 Forest Park Village G.E. Capital Access 3,280,000 3,273,025 0.3% 360
146 2700 Richards Building G.E. Capital Access 3,243,000 3,239,230 0.3% 360
147 Lincoln Park Center G.E. Capital Access 3,219,000 3,211,916 0.3% 360
148 Cedar Heights Apartments G.E. Capital Access 3,100,000 3,096,364 0.2% 360
149 The North Oak Apartments G.E. Capital Access 3,100,000 3,096,333 0.2% 360
150 Arrowhead Court Apartments G.E. Capital Access 3,100,000 3,089,758 0.2% 360
151 The Citibank Building G.E. Capital Access 3,100,000 3,089,758 0.2% 360
152 Petco/Starbucks S/C G.E. Capital Access 3,085,000 3,078,211 0.2% 360
153 1870 Ogden Drive G.E. Capital Access 3,080,000 3,076,465 0.2% 360
154 Woodland Park Office Building Column 3,050,000 3,043,676 0.2% 360
155 Costa Mesa Mobile Estates Column 3,000,000 2,996,361 0.2% 360
156 Tree Top Apartments G.E. Capital Access 3,000,000 2,996,535 0.2% 360
157 Greenville Village Mobile Home Park Column 3,000,000 2,992,519 0.2% 300
158 Brookwood Village G.E. Capital Access 3,000,000 2,989,241 0.2% 360
159 Rose Grove Mobile Home Park G.E. Capital Access 3,000,000 2,987,966 0.2% 360
160 Little River Shopping Center G.E. Capital Access 2,960,000 2,956,573 0.2% 360
161 The Amberton Apartments Column 2,900,000 2,890,880 0.2% 360
162 Best Western Worlds of Fun G.E. Capital Access 2,897,000 2,890,249 0.2% 300
163 All Aboard Mini Storage - Anaheim G.E. Capital Access 2,900,000 2,889,020 0.2% 360
164 Waterway Crossing Apartments G.E. Capital Access 2,850,000 2,824,908 0.2% 360
165 The Borders Building G.E. Capital Access 2,850,000 2,823,462 0.2% 180
166 Ken-Caryl Business Center G.E. Capital Access 2,830,000 2,819,285 0.2% 360
167 Alta Vista Mobile Home Park G.E. Capital Access 2,800,000 2,795,415 0.2% 360
168 Palm Springs Self Storage G.E. Capital Access 2,800,000 2,790,696 0.2% 300
169 Holiday Inn Express Auburn Column 2,800,000 2,789,581 0.2% 300
170 Caruth Haven Retail Center G.E. Capital Access 2,800,000 2,789,237 0.2% 360
171 3456 Ridge Property G.E. Capital Access 2,800,000 2,788,732 0.2% 360
172 Campus Plaza Shopping Center G.E. Capital Access 2,750,000 2,741,352 0.2% 360
173 All Aboard Mini Storage - San Gabriel G.E. Capital Access 2,740,000 2,729,626 0.2% 360
174 Point O' Woods Apartments G.E. Capital Access 2,720,000 2,716,809 0.2% 360
175 Williamsburg on the Lake Apartments G.E. Capital Access 2,743,468 2,694,425 0.2% 300
176 Airport Business Center Column 2,700,000 2,693,962 0.2% 360
177 Staples - Wilmington G.E. Capital Access 2,680,000 2,676,919 0.2% 360
178 Felicita Junction G.E. Capital Access 2,675,000 2,671,870 0.2% 360
179 The Bordeaux Apartments G.E. Capital Access 2,680,000 2,666,424 0.2% 360
180 High Point Village I Apartments Column 2,650,000 2,650,000 0.2% 360
181 Assured Self Storage Facility G.E. Capital Access 2,650,000 2,643,825 0.2% 300
182 Staples - Valparaiso G.E. Capital Access 2,560,000 2,557,057 0.2% 360
183 Fruitland Grove Family Park G.E. Capital Access 2,520,000 2,505,622 0.2% 360
184 Centennial Creek Office Park G.E. Capital Access 2,500,000 2,493,826 0.2% 360
185 Park Lane Village Apartments (1L) Column 1,350,000 1,345,453 0.1% 300
186 Rynearson Lane Village Apartments (1L) Column 1,150,000 1,146,126 0.1% 300
187 Holiday Inn Express Ottawa Column 2,500,000 2,490,697 0.2% 300
188 Ross Apartments G.E. Capital Access 2,500,000 2,488,010 0.2% 360
189 339 S. Ardmore Apartments G.E. Capital Access 2,500,000 2,487,451 0.2% 360
190 Edgewater Beach Resort G.E. Capital Access 2,493,000 2,487,007 0.2% 300
191 Fondren Hill Apartments G.E. Capital Access 2,450,000 2,438,627 0.2% 360
192 Cottonwood Plaza G.E. Capital Access 2,400,000 2,394,370 0.2% 360
193 Southport Shops G.E. Capital Access 2,400,000 2,392,453 0.2% 360
194 Hawthorne Hill Apartments G.E. Capital Access 2,400,000 2,389,375 0.2% 360
195 Days Inn Waccamaw G.E. Capital Access 2,400,000 2,387,655 0.2% 300
196 Turtle Oaks Apartments G.E. Capital Access 2,344,000 2,341,262 0.2% 360
197 Linden Place Mobile Home Park Column 2,325,000 2,313,654 0.2% 300
198 Moore Lake Commons Shopping Center Column 2,300,000 2,295,187 0.2% 360
199 Imperial Manor West Apartments G.E. Capital Access 2,300,000 2,281,127 0.2% 300
200 Brown School Station Apts. G.E. Capital Access 2,260,000 2,249,293 0.2% 360
201 South Street Seaport Office Center Column 2,250,000 2,242,342 0.2% 300
<CAPTION>
Remaining Original Remaining
Amortization Term to Term to
Term Maturity Maturity Mortgage Monthly
# Property Name (months) (months)(8) (months)(8) Rate Payment
--------------- ------------ ----------- ----------- -------- -------
<S> <C> <C> <C> <C> <C>
135 Larrabee Complex 297 120 117 6.750% 25,563.73
136 Cedar Garden Apartments 358 120 118 7.520% 25,781.51
137 All Aboard Mini Storage - Stanton 355 120 115 7.190% 24,954.50
138 Windtree Apartments - Phase I 358 120 118 7.550% 25,295.09
139 Lake City Mini-Storage 296 120 116 7.150% 25,789.57
140 Huntington Mobile Estates 356 120 116 7.250% 23,876.17
141 Everhart Park Shopping Center 356 120 116 7.000% 23,285.59
142 Rafael North Executive Park 320 120 116 6.680% 23,348.17
143 Westwind Estates 357 120 117 7.340% 23,732.29
144 Hewlett Shopping Center 357 120 117 7.250% 23,193.99
145 Forest Park Village 357 120 117 7.750% 23,498.32
146 2700 Richards Building 359 120 119 7.460% 22,586.77
147 Lincoln Park Center 357 120 117 7.580% 22,684.31
148 Cedar Heights Apartments 359 120 119 7.350% 21,358.14
149 The North Oak Apartments 359 120 119 7.250% 21,147.46
150 Arrowhead Court Apartments 356 120 116 7.000% 20,624.38
151 The Citibank Building 356 120 116 7.000% 20,624.38
152 Petco/Starbucks S/C 357 120 117 7.580% 21,740.02
153 1870 Ogden Drive 359 120 119 7.620% 21,789.45
154 Woodland Park Office Building 357 120 117 7.875% 22,114.62
155 Costa Mesa Mobile Estates 359 120 119 6.960% 19,878.55
156 Tree Top Apartments 359 120 119 7.540% 21,058.67
157 Greenville Village Mobile Home Park 298 120 118 7.500% 22,169.74
158 Brookwood Village 356 120 116 6.580% 19,120.15
159 Rose Grove Mobile Home Park 355 120 115 6.920% 19,798.15
160 Little River Shopping Center 359 144 143 7.510% 20,717.02
161 The Amberton Apartments 356 120 116 7.250% 19,783.11
162 Best Western Worlds of Fun 298 120 118 8.000% 22,359.52
163 All Aboard Mini Storage - Anaheim 355 120 115 7.190% 19,665.23
164 Waterway Crossing Apartments 349 180 169 6.830% 18,636.86
165 The Borders Building 177 120 117 7.250% 26,016.59
166 Ken-Caryl Business Center 355 120 115 7.190% 19,190.55
167 Alta Vista Mobile Home Park 358 84 82 7.720% 20,001.53
168 Palm Springs Self Storage 297 120 117 7.710% 21,075.73
169 Holiday Inn Express Auburn 297 120 117 7.000% 19,789.82
170 Caruth Haven Retail Center 355 120 115 7.120% 18,854.67
171 3456 Ridge Property 356 120 116 5.980% 16,751.43
172 Campus Plaza Shopping Center 356 120 116 7.250% 18,759.85
173 All Aboard Mini Storage - San Gabriel 355 120 115 7.190% 18,580.25
174 Point O' Woods Apartments 359 120 119 7.350% 18,740.04
175 Williamsburg on the Lake Apartments 285 120 105 7.500% 20,275.53
176 Airport Business Center 357 120 117 7.500% 18,878.79
177 Staples - Wilmington 359 120 119 7.600% 18,922.80
178 Felicita Junction 359 120 119 7.380% 18,484.68
179 The Bordeaux Apartments 355 120 115 5.960% 15,999.10
180 High Point Village I Apartments 360 120 120 7.750% 18,984.92
181 Assured Self Storage Facility 298 120 118 8.000% 20,453.13
182 Staples - Valparaiso 359 120 119 7.600% 18,075.51
183 Fruitland Grove Family Park 352 120 112 7.280% 17,242.15
184 Centennial Creek Office Park 357 120 117 7.000% 16,632.56
185 Park Lane Village Apartments (1L) 297 120 117 7.625% 10,086.40
186 Rynearson Lane Village Apartments (1L) 297 120 117 7.625% 8,592.12
187 Holiday Inn Express Ottawa 297 120 117 7.000% 17,669.48
188 Ross Apartments 355 120 115 6.060% 15,085.34
189 339 S. Ardmore Apartments 354 120 114 6.970% 16,582.22
190 Edgewater Beach Resort 298 120 118 7.770% 18,863.09
191 Fondren Hill Apartments 355 120 115 6.220% 15,037.30
192 Cottonwood Plaza 357 120 117 7.260% 16,388.51
193 Southport Shops 356 120 116 7.250% 16,372.23
194 Hawthorne Hill Apartments 355 120 115 6.450% 15,090.80
195 Days Inn Waccamaw 296 120 116 6.790% 16,642.55
196 Turtle Oaks Apartments 359 120 119 7.400% 16,229.38
197 Linden Place Mobile Home Park 296 120 116 7.125% 16,618.48
198 Moore Lake Commons Shopping Center 357 120 117 7.830% 16,604.81
199 Imperial Manor West Apartments 293 120 113 7.130% 16,447.16
200 Brown School Station Apts. 354 120 114 7.050% 15,111.80
201 South Street Seaport Office Center 297 120 117 7.560% 16,715.21
<CAPTION>
First
Payment Maturity
# Property Name Date Date ARD(9)
--------------- ------- -------- ------
<S> <C> <C> <C>
135 Larrabee Complex 01/01/99 12/01/08
136 Cedar Garden Apartments 02/01/99 01/01/09
137 All Aboard Mini Storage - Stanton 11/01/98 10/01/28 10/01/08
138 Windtree Apartments - Phase I 02/01/99 01/01/09
139 Lake City Mini-Storage 12/01/98 11/01/08
140 Huntington Mobile Estates 12/01/98 11/01/28 11/01/08
141 Everhart Park Shopping Center 12/01/98 11/01/28 11/01/08
142 Rafael North Executive Park 12/01/98 11/01/08
143 Westwind Estates 01/01/99 12/01/28 12/01/08
144 Hewlett Shopping Center 01/01/99 12/01/08
145 Forest Park Village 01/01/99 12/01/08
146 2700 Richards Building 03/01/99 02/01/09
147 Lincoln Park Center 01/01/99 12/01/08
148 Cedar Heights Apartments 03/01/99 02/01/09
149 The North Oak Apartments 03/01/99 02/01/09
150 Arrowhead Court Apartments 12/01/98 11/01/08
151 The Citibank Building 12/01/98 11/01/28 11/01/08
152 Petco/Starbucks S/C 01/01/99 12/01/08
153 1870 Ogden Drive 03/01/99 02/01/09
154 Woodland Park Office Building 01/01/99 12/01/08
155 Costa Mesa Mobile Estates 03/01/99 02/01/09
156 Tree Top Apartments 03/01/99 02/01/09
157 Greenville Village Mobile Home Park 02/01/99 01/01/09
158 Brookwood Village 12/01/98 11/01/08
159 Rose Grove Mobile Home Park 11/01/98 10/01/28 10/01/08
160 Little River Shopping Center 03/01/99 02/01/11
161 The Amberton Apartments 12/01/98 11/01/08
162 Best Western Worlds of Fun 02/01/99 01/01/09
163 All Aboard Mini Storage - Anaheim 11/01/98 10/01/28 10/01/08
164 Waterway Crossing Apartments 05/01/98 04/01/28 04/01/13
165 The Borders Building 01/01/99 12/01/08
166 Ken-Caryl Business Center 11/01/98 10/01/28 10/01/08
167 Alta Vista Mobile Home Park 02/01/99 01/01/06
168 Palm Springs Self Storage 01/01/99 12/01/08
169 Holiday Inn Express Auburn 01/01/99 12/01/08
170 Caruth Haven Retail Center 11/01/98 10/01/28 10/01/08
171 3456 Ridge Property 12/01/98 11/01/28 11/01/08
172 Campus Plaza Shopping Center 12/01/98 11/01/28 11/01/08
173 All Aboard Mini Storage - San Gabriel 11/01/98 10/01/28 10/01/08
174 Point O' Woods Apartments 03/01/99 02/01/09
175 Williamsburg on the Lake Apartments 01/01/98 12/01/07
176 Airport Business Center 01/01/99 12/01/08
177 Staples - Wilmington 03/01/99 02/01/09
178 Felicita Junction 03/01/99 02/01/09
179 The Bordeaux Apartments 11/01/98 10/01/28 10/01/08
180 High Point Village I Apartments 04/01/99 03/01/09
181 Assured Self Storage Facility 02/01/99 01/01/09
182 Staples - Valparaiso 03/01/99 02/01/09
183 Fruitland Grove Family Park 08/01/98 07/01/28 07/01/08
184 Centennial Creek Office Park 01/01/99 12/01/08
185 Park Lane Village Apartments (1L) 01/01/99 12/01/08
186 Rynearson Lane Village Apartments (1L) 01/01/99 12/01/08
187 Holiday Inn Express Ottawa 01/01/99 12/01/08
188 Ross Apartments 11/01/98 10/01/28 10/01/08
189 339 S. Ardmore Apartments 10/01/98 09/01/28 09/01/08
190 Edgewater Beach Resort 02/01/99 01/01/09
191 Fondren Hill Apartments 11/01/98 10/01/28 10/01/08
192 Cottonwood Plaza 01/01/99 12/01/08
193 Southport Shops 12/01/98 11/01/08
194 Hawthorne Hill Apartments 11/01/98 10/01/28 10/01/08
195 Days Inn Waccamaw 12/01/98 11/01/08
196 Turtle Oaks Apartments 03/01/99 02/01/09
197 Linden Place Mobile Home Park 12/01/98 11/01/08
198 Moore Lake Commons Shopping Center 01/01/99 12/01/08
199 Imperial Manor West Apartments 09/01/98 08/01/23 08/01/08
200 Brown School Station Apts. 10/01/98 09/01/28 09/01/08
201 South Street Seaport Office Center 01/01/99 12/01/08
<CAPTION>
Prepayment Provision Defeasance
# Property Name as of Origination(10) Option(11)
--------------- --------------------- ----------
<S> <C> <C>
135 Larrabee Complex L (9.5), O (0.5) Yes
136 Cedar Garden Apartments L (9.75), O (0.25) Yes
137 All Aboard Mini Storage - Stanton L (9.75), O (0.25) Yes
138 Windtree Apartments - Phase I L (9.75), O (0.25) Yes
139 Lake City Mini-Storage L (9.75), O (0.25) Yes
140 Huntington Mobile Estates L (9.75), O (0.25) Yes
141 Everhart Park Shopping Center L (9.67), O (0.33) Yes
142 Rafael North Executive Park L (9.75), O (0.25) Yes
143 Westwind Estates L (9.75), O (0.25) Yes
144 Hewlett Shopping Center L (9.75), O (0.25) Yes
145 Forest Park Village L (9.75), O (0.25) Yes
146 2700 Richards Building L (9.75), O (0.25) Yes
147 Lincoln Park Center L (9.5), O (0.5) Yes
148 Cedar Heights Apartments L (9.75), O (0.25) Yes
149 The North Oak Apartments L (9.75), O (0.25) Yes
150 Arrowhead Court Apartments L (9.75), O (0.25) Yes
151 The Citibank Building L (9.75), O (0.25) Yes
152 Petco/Starbucks S/C L (9.75), O (0.25) Yes
153 1870 Ogden Drive L (9.75), O (0.25) Yes
154 Woodland Park Office Building L (9.5), O (0.5) Yes
155 Costa Mesa Mobile Estates L (9.5), O (0.5) Yes
156 Tree Top Apartments L (9.75), O (0.25) Yes
157 Greenville Village Mobile Home Park L (9.5), O (0.5) Yes
158 Brookwood Village L (9.75), O (0.25) Yes
159 Rose Grove Mobile Home Park L (9.5), O (0.5) Yes
160 Little River Shopping Center L (11.67), O (0.33) Yes
161 The Amberton Apartments L (9.5), O (0.5) Yes
162 Best Western Worlds of Fun L (9.75), O (0.25) Yes
163 All Aboard Mini Storage - Anaheim L (9.75), O (0.25) Yes
164 Waterway Crossing Apartments L (4.92), YM 1% (9.83), O (0.25) No
165 The Borders Building L (9.75), O (0.25) Yes
166 Ken-Caryl Business Center L (9.75), O (0.25) Yes
167 Alta Vista Mobile Home Park L (6.75), O (0.25) Yes
168 Palm Springs Self Storage L (9.75), O (0.25) Yes
169 Holiday Inn Express Auburn L (9.5), O (0.5) Yes
170 Caruth Haven Retail Center L (9.75), O (0.25) Yes
171 3456 Ridge Property L (9.75), O (0.25) Yes
172 Campus Plaza Shopping Center L (3), YM 1% (6.5), O (0.5) No
173 All Aboard Mini Storage - San Gabriel L (9.75), O (0.25) Yes
174 Point O' Woods Apartments L (9.75), O (0.25) Yes
175 Williamsburg on the Lake Apartments L (3), YM 1% (7) No
176 Airport Business Center L (9.5), O (0.5) Yes
177 Staples - Wilmington L (9.75), O (0.25) Yes
178 Felicita Junction L (9.75), O (0.25) Yes
179 The Bordeaux Apartments L (9.67), O (0.33) Yes
180 High Point Village I Apartments L (9.5), O (0.5) Yes
181 Assured Self Storage Facility L (9.75), O (0.25) Yes
182 Staples - Valparaiso L (9.75), O (0.25) Yes
183 Fruitland Grove Family Park L (4), YM 1% (5.75), O (0.25) No
184 Centennial Creek Office Park L (9.75), O (0.25) Yes
185 Park Lane Village Apartments (1L) L (9.5), O (0.5) Yes
186 Rynearson Lane Village Apartments (1L) L (9.5), O (0.5) Yes
187 Holiday Inn Express Ottawa L (9.5), O (0.5) Yes
188 Ross Apartments L (9.75), O (0.25) Yes
189 339 S. Ardmore Apartments L (9.75), O (0.25) Yes
190 Edgewater Beach Resort L (9.75), O (0.25) Yes
191 Fondren Hill Apartments L (9.75), O (0.25) Yes
192 Cottonwood Plaza L (9.75), O (0.25) Yes
193 Southport Shops L (9.75), O (0.25) Yes
194 Hawthorne Hill Apartments L (9.75), O (0.25) Yes
195 Days Inn Waccamaw L (9.75), O (0.25) Yes
196 Turtle Oaks Apartments L (9.75), O (0.25) Yes
197 Linden Place Mobile Home Park L (9.5), O (0.5) Yes
198 Moore Lake Commons Shopping Center L (9.5), O (0.5) Yes
199 Imperial Manor West Apartments L (9.75), O (0.25) Yes
200 Brown School Station Apts. L (9.75), O (0.25) Yes
201 South Street Seaport Office Center L (9.5), O (0.5) Yes
</TABLE>
<PAGE>
Characteristics of the Mortgage Loans
<TABLE>
<CAPTION>
Original
Original Percentage of Amortization
Mortgage Loan Principal Cut-off Date Initial Term
# Property Name Seller Balance Balance(7) Pool Balance (months)
--------------- ------------- --------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
202 Hathaway Commerce Center Column 2,200,000 2,195,081 0.2% 360
203 Corinthian Apartments G.E. Capital Access 2,200,000 2,187,615 0.2% 360
204 Walgreen's Drug Store - Swansea G.E. Capital Access 2,190,000 2,184,954 0.2% 360
205 Catalina Apartments G.E. Capital Access 2,176,000 2,172,345 0.2% 360
206 Devonshire Square Retail Center Column 2,125,000 2,118,371 0.2% 300
207 1440 N. Vine Street G.E. Capital Access 2,100,000 2,093,062 0.2% 360
208 College Park Apartments G.E. Capital Access 2,100,000 2,088,510 0.2% 360
209 Country Brooke Apartments G.E. Capital Access 2,067,000 2,055,765 0.2% 360
210 Hillside View Apartments Column 2,050,000 2,038,134 0.2% 240
211 Benihana Restaurant Column 2,000,000 1,996,924 0.2% 300
212 Crosswinds Apartments Column 2,000,000 1,996,476 0.2% 360
213 Imperial Plaza Retail Center G.E. Capital Access 2,000,000 1,995,314 0.2% 300
214 Twin Lakes Mobile Home Park Column 2,000,000 1,992,704 0.2% 300
215 Antietam Village Center Column 2,000,000 1,990,431 0.2% 300
216 Gateway Shoppes G.E. Capital Access 2,000,000 1,989,534 0.2% 300
217 Red Onion Building G.E. Capital Access 2,000,000 1,989,353 0.2% 300
218 526 South Ardmore Avenue G.E. Capital Access 2,000,000 1,985,158 0.2% 360
219 All Aboard Mini Storage - Santa Ana G.E. Capital Access 1,894,000 1,886,829 0.2% 360
220 Villa East I & II G.E. Capital Access 1,870,000 1,867,888 0.1% 360
221 Courtyard Apartments G.E. Capital Access 1,850,000 1,846,761 0.1% 360
222 Sunset View Village Apartments G.E. Capital Access 1,852,000 1,845,711 0.1% 360
223 Wilmington Plaza G.E. Capital Access 1,845,000 1,841,901 0.1% 360
224 The Nations Bank Building Column 1,850,000 1,840,216 0.1% 240
225 Quail Ridge Apartments Column 1,840,000 1,829,799 0.1% 360
226 Best Western KCI Airport G.E. Capital Access 1,826,000 1,821,745 0.1% 300
227 Laurel Heights Apartments G.E. Capital Access 1,800,000 1,790,996 0.1% 360
228 El Monte Mobile Air Mobile Home Park G.E. Capital Access 1,800,000 1,789,682 0.1% 360
229 Harold Gilstrap Shopping Center Column 1,800,000 1,786,750 0.1% 300
230 Lakeside Apartments Column 1,800,000 1,781,950 0.1% 216
231 Park Glen Apartments Column 1,750,000 1,744,104 0.1% 360
232 St. Lucie Mobile Village Column 1,750,000 1,743,616 0.1% 300
233 Ravenscroft Apartments Column 1,750,000 1,740,783 0.1% 360
234 Coach Country Corral MHP Column 1,750,000 1,733,966 0.1% 300
235 Seaside Village Shopping Center Column 1,725,000 1,722,395 0.1% 300
236 Sherwood Park Apartments Column 1,700,000 1,696,004 0.1% 360
237 Ravenna Plaza G.E. Capital Access 1,701,000 1,695,492 0.1% 300
238 Holiday Inn Express Oglesby Column 1,700,000 1,693,674 0.1% 300
239 Central/Magnolia Retail Center G.E. Capital Access 1,695,000 1,688,244 0.1% 360
240 Rolling Hills Estates G.E. Capital Access 1,700,000 1,686,359 0.1% 300
241 Saticoy-Royale Apartments Column 1,670,000 1,664,748 0.1% 360
242 Holiday/Park Riviera Mobile Home Park Column 1,645,000 1,637,436 0.1% 300
243 Gottschalk's Department Store Column 1,610,000 1,602,597 0.1% 300
244 Justin Apartments Column 1,600,000 1,597,176 0.1% 360
245 Fountain Square Apartments Column 1,600,000 1,595,872 0.1% 300
246 383 St. Johns Place G.E. Capital Access 1,600,000 1,594,755 0.1% 360
247 Days Inn G.E. Capital Access 1,600,000 1,592,690 0.1% 300
248 Market Plaza Column 1,575,000 1,563,876 0.1% 252
249 Michigan Plaza & Bender Plaza (5) Column 1,550,000 1,546,334 0.1% 300
250 Mockingbird Park Retail Building Column 1,540,000 1,534,709 0.1% 360
251 Poolesville Village Center Column 1,525,000 1,520,437 0.1% 360
252 Executive Park Offices G.E. Capital Access 1,501,000 1,499,290 0.1% 360
253 Citadel Square Shopping Center (6) Column 1,500,000 1,500,000 0.1% 300
254 Sherwood Mobile Home Estates Column 1,500,000 1,492,680 0.1% 300
255 Ware's Van & Storage Co. Column 1,500,000 1,489,399 0.1% 240
256 Sunrise Terrace Mobile Home Park Column 1,450,000 1,445,275 0.1% 360
257 Best Western Country Inn North G.E. Capital Access 1,448,000 1,444,626 0.1% 300
258 Woodlake Resort Village Apartments Column 1,400,000 1,393,722 0.1% 360
259 Plantation Pines Apartments Column 1,350,000 1,347,949 0.1% 300
260 Pacific Mini Storage G.E. Capital Access 1,350,000 1,345,706 0.1% 300
261 Sunridge Apartments Column 1,345,000 1,341,749 0.1% 300
262 Parkside Place Apartments Column 1,300,000 1,290,235 0.1% 240
263 Courtyards of Granbury Column 1,300,000 1,296,871 0.1% 300
264 University Apartments Column 1,260,000 1,258,018 0.1% 300
265 Isaqueena Village Apartments G.E. Capital Access 1,250,000 1,243,760 0.1% 360
266 Turtle Dove I Apartments Column 1,225,000 1,225,000 0.1% 300
267 Carson Gardens Mobile Home Park G.E. Capital Access 1,200,000 1,192,300 0.1% 360
268 Valerie Apartments Column 1,072,000 1,070,329 0.1% 300
<CAPTION>
Remaining Original Remaining
Amortization Term to Term to
Term Maturity Maturity Mortgage Monthly
# Property Name (months) (months)(8) (months)(8) Rate Payment
--------------- ------------ ----------- ----------- -------- -------
<S> <C> <C> <C> <C> <C>
202 Hathaway Commerce Center 357 120 117 7.500% 15,382.72
203 Corinthian Apartments 353 120 113 6.840% 14,401.02
204 Walgreen's Drug Store - Swansea 357 120 117 7.350% 15,088.49
205 Catalina Apartments 358 120 118 7.560% 15,304.41
206 Devonshire Square Retail Center 297 120 117 8.100% 16,542.11
207 1440 N. Vine Street 356 120 116 7.000% 13,971.35
208 College Park Apartments 353 120 113 6.970% 13,929.07
209 Country Brooke Apartments 353 120 113 7.000% 13,751.80
210 Hillside View Apartments 237 240 237 7.000% 15,893.63
211 Benihana Restaurant 299 120 119 7.650% 14,975.51
212 Crosswinds Apartments 358 120 118 7.260% 13,657.09
213 Imperial Plaza Retail Center 298 120 118 7.960% 15,383.37
214 Twin Lakes Mobile Home Park 297 120 117 7.125% 14,295.46
215 Antietam Village Center 296 120 116 7.250% 14,456.14
216 Gateway Shoppes 296 120 116 6.680% 13,729.95
217 Red Onion Building 296 120 116 6.570% 13,591.75
218 526 South Ardmore Avenue 351 120 111 7.090% 13,427.16
219 All Aboard Mini Storage - Santa Ana 355 120 115 7.190% 12,843.43
220 Villa East I & II 359 120 119 7.830% 13,500.44
221 Courtyard Apartments 358 120 118 7.300% 12,683.06
222 Sunset View Village Apartments 356 120 116 6.860% 12,147.77
223 Wilmington Plaza 358 120 118 7.560% 12,976.39
224 The Nations Bank Building 237 120 117 7.740% 15,176.14
225 Quail Ridge Apartments 353 120 113 6.910% 12,130.55
226 Best Western KCI Airport 298 120 118 8.000% 14,093.36
227 Laurel Heights Apartments 354 120 114 6.790% 11,722.67
228 El Monte Mobile Air Mobile Home Park 352 120 112 7.260% 12,291.38
229 Harold Gilstrap Shopping Center 294 120 114 6.960% 12,676.13
230 Lakeside Apartments 212 180 176 6.350% 14,003.72
231 Park Glen Apartments 356 120 116 6.900% 11,525.50
232 St. Lucie Mobile Village 297 120 117 7.125% 12,508.53
233 Ravenscroft Apartments 354 120 114 6.540% 11,107.27
234 Coach Country Corral MHP 292 120 112 7.190% 12,581.55
235 Seaside Village Shopping Center 299 120 119 7.880% 13,176.99
236 Sherwood Park Apartments 357 180 177 7.250% 11,597.00
237 Ravenna Plaza 297 120 117 7.870% 12,982.44
238 Holiday Inn Express Oglesby 297 120 117 7.000% 12,015.25
239 Central/Magnolia Retail Center 355 120 115 6.950% 11,220.02
240 Rolling Hills Estates 293 120 113 7.260% 12,298.67
241 Saticoy-Royale Apartments 356 120 116 7.250% 11,392.34
242 Holiday/Park Riviera Mobile Home Park 296 120 116 7.500% 12,156.40
243 Gottschalk's Department Store 296 120 116 7.500% 11,897.76
244 Justin Apartments 358 120 118 7.250% 10,914.82
245 Fountain Square Apartments 298 120 118 7.250% 11,564.91
246 383 St. Johns Place 356 120 116 7.040% 10,687.86
247 Days Inn 296 120 116 7.540% 11,865.52
248 Market Plaza 248 120 116 7.000% 11,945.93
249 Michigan Plaza & Bender Plaza (5) 298 120 118 7.890% 11,850.42
250 Mockingbird Park Retail Building 356 120 116 6.800% 10,039.65
251 Poolesville Village Center 356 120 116 7.500% 10,663.02
252 Executive Park Offices 359 120 119 7.720% 10,722.25
253 Citadel Square Shopping Center (6) 300 120 116 8.250% 11,826.75
254 Sherwood Mobile Home Estates 296 120 116 7.125% 10,721.60
255 Ware's Van & Storage Co. 236 120 116 7.750% 12,314.23
256 Sunrise Terrace Mobile Home Park 356 120 116 7.070% 9,715.15
257 Best Western Country Inn North 298 120 118 8.000% 11,175.90
258 Woodlake Resort Village Apartments 354 120 114 7.310% 9,607.51
259 Plantation Pines Apartments 299 120 119 7.800% 10,241.29
260 Pacific Mini Storage 297 120 117 7.980% 10,401.64
261 Sunridge Apartments 298 120 118 7.730% 10,141.52
262 Parkside Place Apartments 236 120 116 7.250% 10,274.89
263 Courtyards of Granbury 298 84 82 7.760% 9,827.81
264 University Apartments 299 120 119 7.375% 9,209.08
265 Isaqueena Village Apartments 354 120 114 6.800% 8,149.06
266 Turtle Dove I Apartments 300 120 120 7.650% 9,172.50
267 Carson Gardens Mobile Home Park 351 120 111 7.350% 8,267.67
268 Valerie Apartments 299 120 119 7.480% 7,908.04
<CAPTION>
First
Payment Maturity
# Property Name Date Date ARD(9)
--------------- ------- -------- ------
<S> <C> <C> <C>
202 Hathaway Commerce Center 01/01/99 12/01/08
203 Corinthian Apartments 09/01/98 08/01/28 08/01/08
204 Walgreen's Drug Store - Swansea 01/01/99 12/01/08
205 Catalina Apartments 02/01/99 01/01/09
206 Devonshire Square Retail Center 01/01/99 12/01/08
207 1440 N. Vine Street 12/01/98 11/01/08
208 College Park Apartments 09/01/98 08/01/28 08/01/08
209 Country Brooke Apartments 09/01/98 08/01/28 08/01/08
210 Hillside View Apartments 01/01/99 12/01/18
211 Benihana Restaurant 03/01/99 02/01/09
212 Crosswinds Apartments 02/01/99 01/01/09
213 Imperial Plaza Retail Center 02/01/99 01/01/09
214 Twin Lakes Mobile Home Park 01/01/99 12/01/08
215 Antietam Village Center 12/01/98 11/01/08
216 Gateway Shoppes 12/01/98 11/01/23 11/01/08
217 Red Onion Building 12/01/98 11/01/23 11/01/08
218 526 South Ardmore Avenue 07/01/98 06/01/08
219 All Aboard Mini Storage - Santa Ana 11/01/98 10/01/28 10/01/08
220 Villa East I & II 03/01/99 02/01/09
221 Courtyard Apartments 02/01/99 01/01/09
222 Sunset View Village Apartments 12/01/98 11/01/08
223 Wilmington Plaza 02/01/99 01/01/09
224 The Nations Bank Building 01/01/99 12/01/08
225 Quail Ridge Apartments 09/01/98 08/01/08
226 Best Western KCI Airport 02/01/99 01/01/09
227 Laurel Heights Apartments 10/01/98 09/01/28 09/01/08
228 El Monte Mobile Air Mobile Home Park 08/01/98 07/01/28 07/01/08
229 Harold Gilstrap Shopping Center 10/01/98 09/01/08
230 Lakeside Apartments 12/01/98 11/01/13
231 Park Glen Apartments 12/01/98 11/01/08
232 St. Lucie Mobile Village 01/01/99 12/01/08
233 Ravenscroft Apartments 10/01/98 09/01/08
234 Coach Country Corral MHP 08/01/98 07/01/08
235 Seaside Village Shopping Center 03/01/99 02/01/09
236 Sherwood Park Apartments 01/01/99 12/01/13
237 Ravenna Plaza 01/01/99 12/01/08
238 Holiday Inn Express Oglesby 01/01/99 12/01/08
239 Central/Magnolia Retail Center 11/01/98 10/01/28 10/01/08
240 Rolling Hills Estates 09/01/98 08/01/08
241 Saticoy-Royale Apartments 12/01/98 11/01/08
242 Holiday/Park Riviera Mobile Home Park 12/01/98 11/01/08
243 Gottschalk's Department Store 12/01/98 11/01/08
244 Justin Apartments 02/01/99 01/01/09
245 Fountain Square Apartments 02/01/99 01/01/09
246 383 St. Johns Place 12/01/98 11/01/08
247 Days Inn 12/01/98 11/01/08
248 Market Plaza 12/01/98 11/01/08
249 Michigan Plaza & Bender Plaza (5) 02/01/99 01/01/09
250 Mockingbird Park Retail Building 12/01/98 11/01/08
251 Poolesville Village Center 12/01/98 11/01/08
252 Executive Park Offices 03/01/99 02/01/09
253 Citadel Square Shopping Center (6) 12/01/98 11/01/08
254 Sherwood Mobile Home Estates 12/01/98 11/01/08
255 Ware's Van & Storage Co. 12/01/98 11/01/08
256 Sunrise Terrace Mobile Home Park 12/01/98 11/01/08
257 Best Western Country Inn North 02/01/99 01/01/09
258 Woodlake Resort Village Apartments 10/01/98 09/01/08
259 Plantation Pines Apartments 03/01/99 02/01/09
260 Pacific Mini Storage 01/01/99 12/01/08
261 Sunridge Apartments 02/01/99 01/01/09
262 Parkside Place Apartments 12/01/98 11/01/08
263 Courtyards of Granbury 02/01/99 01/01/06
264 University Apartments 03/01/99 02/01/09
265 Isaqueena Village Apartments 10/01/98 09/01/28 09/01/08
266 Turtle Dove I Apartments 04/01/99 03/01/09
267 Carson Gardens Mobile Home Park 07/01/98 06/01/28 06/01/08
268 Valerie Apartments 03/01/99 02/01/09
<CAPTION>
Prepayment Provision Defeasance
# Property Name as of Origination(10) Option(11)
--------------- --------------------- ----------
<S> <C> <C>
202 Hathaway Commerce Center L (9.5), O (0.5) Yes
203 Corinthian Apartments L (9.75), O (0.25) Yes
204 Walgreen's Drug Store - Swansea L (9.75), O (0.25) Yes
205 Catalina Apartments L (9.75), O (0.25) Yes
206 Devonshire Square Retail Center L (9.5), O (0.5) Yes
207 1440 N. Vine Street L (9.75), O (0.25) Yes
208 College Park Apartments L (9.75), O (0.25) Yes
209 Country Brooke Apartments L (9.75), O (0.25) Yes
210 Hillside View Apartments L (9.5), O (10.5) Yes
211 Benihana Restaurant L (9.5), O (0.5) Yes
212 Crosswinds Apartments L (9.5), O (0.5) Yes
213 Imperial Plaza Retail Center L (4), YM 1% (5.75), O (0.25) No
214 Twin Lakes Mobile Home Park L (9.5), O (0.5) Yes
215 Antietam Village Center L (9.5), O (0.5) Yes
216 Gateway Shoppes L (9.75), O (0.25) Yes
217 Red Onion Building L (9.75), O (0.25) Yes
218 526 South Ardmore Avenue L (9.75), O (0.25) Yes
219 All Aboard Mini Storage - Santa Ana L (9.75), O (0.25) Yes
220 Villa East I & II L (9.75), O (0.25) Yes
221 Courtyard Apartments L (9.75), O (0.25) Yes
222 Sunset View Village Apartments L (9.75), O (0.25) Yes
223 Wilmington Plaza L (9.75), O (0.25) Yes
224 The Nations Bank Building L (9.5), O (0.5) Yes
225 Quail Ridge Apartments L (9.5), O (0.5) Yes
226 Best Western KCI Airport L (9.75), O (0.25) Yes
227 Laurel Heights Apartments L (9.75), O (0.25) Yes
228 El Monte Mobile Air Mobile Home Park L (3.92), YM 1% (5.83), O (0.25) No
229 Harold Gilstrap Shopping Center L (9.5), O (0.5) Yes
230 Lakeside Apartments L (14.5), O (0.5) Yes
231 Park Glen Apartments L (9.5), O (0.5) Yes
232 St. Lucie Mobile Village L (9.5), O (0.5) Yes
233 Ravenscroft Apartments L (9.5), O (0.5) Yes
234 Coach Country Corral MHP L (9.5), O (0.5) Yes
235 Seaside Village Shopping Center L (9.5), O (0.5) Yes
236 Sherwood Park Apartments L (14.5), O (0.5) Yes
237 Ravenna Plaza L (9.75), O (0.25) Yes
238 Holiday Inn Express Oglesby L (9.5), O (0.5) Yes
239 Central/Magnolia Retail Center L (9.75), O (0.25) Yes
240 Rolling Hills Estates L (3), YM 1% (6.75), O (0.25) No
241 Saticoy-Royale Apartments L (9.5), O (0.5) Yes
242 Holiday/Park Riviera Mobile Home Park L (9.5), O (0.5) Yes
243 Gottschalk's Department Store L (3), YM 1% (6.58), O (0.42) No
244 Justin Apartments L (9.5), O (0.5) Yes
245 Fountain Square Apartments L (9.5), O (0.5) Yes
246 383 St. Johns Place L (9.75), O (0.25) Yes
247 Days Inn L (9.75), O (0.25) Yes
248 Market Plaza L (9.5), O (0.5) Yes
249 Michigan Plaza & Bender Plaza (5) L (9.5), O (0.5) Yes
250 Mockingbird Park Retail Building L (9.5), O (0.5) Yes
251 Poolesville Village Center L (9.5), O (0.5) Yes
252 Executive Park Offices L (9.75), O (0.25) Yes
253 Citadel Square Shopping Center (6) L (9.5), O (0.5) Yes
254 Sherwood Mobile Home Estates L (9.5), O (0.5) Yes
255 Ware's Van & Storage Co. L (3), YM 1% (6.5), O (0.5) No
256 Sunrise Terrace Mobile Home Park L (2.25), O (7.75) No
257 Best Western Country Inn North L (9.75), O (0.25) Yes
258 Woodlake Resort Village Apartments L (3), YM 1% (6.5), O (0.5) No
259 Plantation Pines Apartments L (9.5), O (0.5) Yes
260 Pacific Mini Storage L (9.75), O (0.25) Yes
261 Sunridge Apartments L (9.5), O (0.5) Yes
262 Parkside Place Apartments L (3), YM 1% (6.5), O (0.5) No
263 Courtyards of Granbury L (6.5), O (0.5) Yes
264 University Apartments L (9.5), O (0.5) Yes
265 Isaqueena Village Apartments L (9.75), O (0.25) Yes
266 Turtle Dove I Apartments L (3), YM 1% (6.5), O (0.5) No
267 Carson Gardens Mobile Home Park L (3.92), YM 1% (5.83), O (0.25) No
268 Valerie Apartments L (9.5), O (0.5) Yes
</TABLE>
<PAGE>
Characteristics of the Mortgage Loans
<TABLE>
<CAPTION>
Original
Original Percentage of Amortization
Mortgage Loan Principal Cut-off Date Initial Term
# Property Name Seller Balance Balance(7) Pool Balance (months)
--------------- ------------- --------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
269 Huddersfield Apartments Column 1,060,000 1,058,366 0.1% 300
270 1457 & 1519 - 1527 Park Road, NW Column 1,050,000 1,048,398 0.1% 300
271 Winter Garden Village Apartments Column 1,000,000 997,506 0.1% 300
272 Long Point Plaza Apartments Column 960,000 951,432 0.1% 240
273 The Place of Tempe Apartments Column 900,000 898,616 0.1% 300
274 Valley Garden Apartments Column 900,000 896,907 0.1% 300
275 Devereaux Apartments Column 888,000 886,649 0.1% 300
276 Bloomingdale Shopping Center Column 800,000 798,005 0.1% 300
277 Cottonwood Apartments Column 800,000 797,234 0.1% 240
278 Royal North Apartments Column 722,500 718,072 0.1% 300
279 Turtle Dove II Apartments Column 675,000 675,000 0.1% 300
-------------------------------------------------------------
Total/Weighted Average $1,256,207,294 $1,252,685,456 100.0% 345
=============================================================
Maximum: $30,500,000 $30,446,295 2.4% 360
Minimum: $516,800 $515,269 0.0% 180
<CAPTION>
Remaining Original Remaining
Amortization Term to Term to
Term Maturity Maturity Mortgage Monthly
# Property Name (months) (months)(8) (months)(8) Rate Payment
--------------- ------------ ----------- ----------- -------- -------
<S> <C> <C> <C> <C> <C>
269 Huddersfield Apartments 299 120 119 7.620% 7,916.23
270 1457 & 1519 - 1527 Park Road, NW 299 120 119 7.750% 7,930.95
271 Winter Garden Village Apartments 298 120 118 7.500% 7,389.91
272 Long Point Plaza Apartments 235 120 115 7.500% 7,733.69
273 The Place of Tempe Apartments 299 120 119 7.650% 6,738.98
274 Valley Garden Apartments 297 120 117 7.500% 6,650.92
275 Devereaux Apartments 299 120 119 7.780% 6,724.82
276 Bloomingdale Shopping Center 298 120 118 7.500% 5,911.93
277 Cottonwood Apartments 238 240 238 8.440% 6,912.24
278 Royal North Apartments 294 120 114 8.050% 5,600.32
279 Turtle Dove II Apartments 300 120 120 7.650% 5,054.23
---------------------------------------------------------------------------------
Total/Weighted Average 342 125 122 7.317% $8,766,539
=================================================================================
Maximum: 360 300 289 8.440% $221,017
Minimum: 177 60 58 5.960% $3,631
<CAPTION>
First
Payment Maturity
# Property Name Date Date ARD(9)
--------------- ------- -------- ------
<S> <C> <C>
269 Huddersfield Apartments 03/01/99 02/01/09
270 1457 & 1519 - 1527 Park Road, NW 03/01/99 02/01/09
271 Winter Garden Village Apartments 02/01/99 01/01/09
272 Long Point Plaza Apartments 11/01/98 10/01/08
273 The Place of Tempe Apartments 03/01/99 02/01/09
274 Valley Garden Apartments 01/01/99 12/01/08
275 Devereaux Apartments 03/01/99 02/01/09
276 Bloomingdale Shopping Center 02/01/99 01/01/09
277 Cottonwood Apartments 02/01/99 01/01/19
278 Royal North Apartments 10/01/98 09/01/08
279 Turtle Dove II Apartments 04/01/99 03/01/09
----------------------------------
Total/Weighted Average 01/02/99 09/20/13
==================================
Maximum: 04/01/99 02/01/29
Minimum: 01/01/98 01/01/04
<CAPTION>
Prepayment Provision Defeasance
# Property Name as of Origination(10) Option(11)
--------------- --------------------- ----------
<S> <C> <C>
269 Huddersfield Apartments L (9.5), O (0.5) Yes
270 1457 & 1519 - 1527 Park Road, NW L (9.5), O (0.5) Yes
271 Winter Garden Village Apartments L (9.5), O (0.5) Yes
272 Long Point Plaza Apartments L (3), YM 1% (6.58), O (0.42) No
273 The Place of Tempe Apartments L (9.5), O (0.5) Yes
274 Valley Garden Apartments L (3), YM 1% (6.5), O (0.5) No
275 Devereaux Apartments L (9.5), O (0.5) Yes
276 Bloomingdale Shopping Center L (9.5), O (0.5) Yes
277 Cottonwood Apartments L (19.5), O (0.5) Yes
278 Royal North Apartments L (3), YM 1% (6.5), O (0.5) No
279 Turtle Dove II Apartments L (3), YM 1% (6.5), O (0.5) No
</TABLE>
(1A) The Winston Loan is secured by Hampton Inn - Elmsford, Quality Suites -
Charleston, Courtyard by Marriott - Ann Arbor, Residence Inn - Phoenix,
Homewood Suites - Cary, Hampton Inn & Suites - Gwinnett, Hampton Inn -
Raleigh, Comfort Suites - Orlando, Hampton Inn - Perimeter, Hampton Inn -
Charlotte, NC, Courtyard by Marriott - Wilmington, Hampton Inn - West
Springfield, Homewood Suites - Clear Lake and Comfort Inn - Charleston,
respectively.
(1B) The Mortgage Loans secured by Kendale Lakes Plaza, Cypress Creek Station
and Oakwood Business Center, respectively, are cross-collateralized and
cross-defaulted.
(1C) A Single Mortgage Note is secured by Westchase Ranch Apartments, Westwood
Village Apartments, Normandy Woods Apartments, Savoy Manor Apartments and
San Marin Apartments, respectively.
(1D) A Single Mortgage Note is secured by 2294 Molly Pitcher Highway, 5015
Campuswood Drive, 5010 Campuswood Drive and 5009 Campuswood Drive,
respectively.
(1E) A Single Mortgage Note is secured by Keller Oaks Apartments, Sycamore Hill
Apartments, Claremdon Apartments and Woodchase Condominiums, respectively.
(1F) A Single Mortgage Note is secured by Princeton Court Apartments, Pinewood
Estates Apartments and Arbor Court Apartments, respectively.
(1G) A Single Mortgage Note is secured by U-Store of Brighton Self Storage
Facility, U-Store of South Lyon Self Storage Facility, U-Store of Saline
Self Storage Facility, U-Store of Davison Self Storage Facility, U-Store of
Holly Self Storage Facility and U-Store of Jackson Self Storage Facility,
respectively.
(1H) The Mortgage Loans secured by Cranbrook Centre Apartments and Cranbrook
Centre Office Buildings, respectively, are cross-collateralized and
cross-defaulted.
(1I) A Single Mortgage Note is secured by Mobile Gardens/Holly View Mobile Home
Park, Stony Chase/Rock Creek Mobile Home Park and Briarwood Manor,
respectively.
(1J) A Single Mortgage Note is secured by Spruce Properties, Oak Grove
Apartments and Aldrich Apartments, respectively. The Mortgage Loan secured
by Spruce Properties contains two properties that are operated as one.
(1K) The Mortgage Loans secured by Century Plaza Strip Shopping Center and
Albany Square Strip Shopping Center, respectively, are cross-collateralized
and cross-defaulted.
(1L) A Single Mortgage Note secured by Park Lane Village Apartments and
Rynearson Lane Village Apartments, respectively.
(2) Marycrest Shopping Center has an interest only period of 24 months from
origination and thereafter is scheduled to amortize over 360 months with
the payment presented reflecting the amount due during the amortization
term.
(3) Merchant's Square has an interest only period of 24 months from origination
and thereafter is scheduled to amortize over 336 months with the payment
presented reflecting the amount due during the amortization term.
(4) The Mortgage Loan secured by New Franklin Apartments contains four
properties that are operated as one.
(5) The Mortgage Loan secured by Michigan & Bender Plaza contains two
properties that are operated as one.
(6) Citadel Square Shopping Center has an interest only period of 36 months
from origination and thereafter is scheduled to amortize over 300 months
with the payment presented reflecting the amount due during the
amortization term.
(7) Assumes a Cut-off Date of March 1, 1999.
(8) In the case of the Anticipated Repayment Date loans, the Anticipated
Repayment Date is assumed to be the maturity date for the purposes of the
indicated column.
(9) Anticipated Repayment Date.
(10) Prepayment Provision as of Origination:
L (x) = Lockout or Defeasance for x years
YM A% (x) = Greater of Yield Maintenance Premium and A% Prepayment
for x years
O (x) = Prepayable at par for x years
(11) "Yes" means that defeasance is permitted notwithstanding the Lockout
Period.
<PAGE>
Engineering Reserves and Recurring Replacement Reserves
<TABLE>
<CAPTION>
Contractual U/W
Engineering Recurring Recurring
Property Reserve at Replacement Replacement
# Property Name Type Origination Reserve Reserve
- ------------- ---- ----------- ------- -------
<S> <C> <C> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) Hotel $19,156 5.00% 4.50%
2 Quality Suites - Charleston (1A) Hotel $15,828 5.00% 4.50%
3 Courtyard by Marriott - Ann Arbor (1A) Hotel $15,828 5.00% 4.50%
4 Residence Inn - Phoenix (1A) Hotel $15,828 5.00% 4.50%
5 Homewood Suites - Cary (1A) Hotel $15,137 5.00% 4.50%
6 Hampton Inn & Suites - Gwinnett (1A) Hotel $13,567 5.00% 4.50%
7 Hampton Inn - Raleigh (1A) Hotel $13,315 5.00% 4.50%
8 Comfort Suites - Orlando (1A) Hotel $13,001 5.00% 4.50%
9 Hampton Inn - Perimeter (1A) Hotel $12,562 5.00% 4.50%
10 Hampton Inn - Charlotte, NC (1A) Hotel $11,494 5.00% 4.50%
11 Courtyard by Marriott - Wilmington (1A) Hotel $10,740 5.00% 4.50%
12 Hampton Inn - West Springfield (1A) Hotel $9,296 5.00% 4.50%
13 Homewood Suites - Clear Lake (1A) Hotel $8,668 5.00% 4.50%
14 Comfort Inn - Charleston (1A) Hotel $3,957 5.00% 4.50%
15 Kendale Lakes Plaza (1B) Retail $115,000 $0.13 N/A
16 Cypress Creek Station (1B) Retail N/A $0.14 N/A
17 Oakwood Business Center (1B) Office $153,000 $0.50 N/A
18 Westchase Ranch Apartments (1C) Multifamily $46,063 $250 $250
19 Westwood Village Apartments (1C) Multifamily $62,563 $250 $250
20 Normandy Woods Apartments (1C) Multifamily $31,063 $250 $250
21 Savoy Manor Apartments (1C) Multifamily $4,875 $250 $250
22 San Marin Apartments (1C) Multifamily $46,250 $250 $250
23 Country Squire Apartments - South Multifamily $700,000 $225 $250
24 2294 Molly Pitcher Highway (1D) Industrial $2,815 $0.10 $0.10
25 5015 Campuswood Drive (1D) Office N/A $0.25 $0.25
26 5010 Campuswood Drive (1D) Office $813 $0.25 $0.25
27 5009 Campuswood Drive (1D) Office $1,563 $0.25 $0.27
28 Fair Lakes Promenade Retail $2,500 $0.13 $0.13
29 Keller Oaks Apartments (1E) Multifamily $118,322 $300 $224
30 Sycamore Hill Apartments (1E) Multifamily $102,524 $300 $272
31 Clarendon Apartments (1E) Multifamily $75,296 $300 $473
32 Woodchase Condominiums (1E) Multifamily $39,799 $300 $294
33 Dallas Design Center Portfolio Mixed Use $928,438 $0.20 $0.20
34 Assembly Square Office Building Mixed Use N/A $0.20 $0.20
35 Spicetree Apartments Multifamily $146,375 $350 $262
36 Lamplighter Mobile Home Park Manufactured Housing N/A $25 $25
37 White Station Tower Office $384,625 N/A $0.17
38 Holiday Inn New Orleans Veterans Hotel N/A 4.00% 4.00%
39 The Links at Bixby Multifamily $50,413 $150 $285
40 Southwood Apartments Multifamily $4,375 $253 $253
41 The Shoppes at Longwood Retail $47,000 $0.14 $0.15
42 Pines of Westbury Multifamily $5,000 $200 $250
43 Edentree Apartments Multifamily $37,000 $229 $229
44 Becker Village Mall Retail N/A $0.13 $0.13
45 Tiffany Square Office $7,026 N/A $0.20
46 The Mint Apartments Multifamily $265,625 $250 $250
47 River Park Shopping Center Retail $25,458 $0.17 $0.17
48 Rancho Destino Apartments Multifamily N/A $200 $200
49 Conestoga Mobile Home Park Manufactured Housing $22,793 $25 $25
50 Huntington Chase Apartments Multifamily $6,875 $200 $200
51 Parkshore Centre Office Building Office $12,822 N/A $0.20
<CAPTION>
Contractual
Recurring U/W Tax &
LC&TI LC&TI Insurance
# Per Sq. Ft. Per Sq. Ft. Escrows
- ----------- ----------- -------
<S> <C> <C> <C>
1 N/A N/A Both
2 N/A N/A Both
3 N/A N/A Both
4 N/A N/A Both
5 N/A N/A Both
6 N/A N/A Both
7 N/A N/A Both
8 N/A N/A Both
9 N/A N/A Both
10 N/A N/A Both
11 N/A N/A Both
12 N/A N/A Both
13 N/A N/A Both
14 N/A N/A Both
15 $0.47 $0.44 Both
16 $0.35 $0.33 Both
17 $1.01 $0.95 Both
18 N/A N/A Both
19 N/A N/A Both
20 N/A N/A Both
21 N/A N/A Both
22 N/A N/A Both
23 N/A N/A Tax
24 $0.25 $0.25 Both
25 $1.50 $1.55 Both
26 $1.50 $1.50 Both
27 $1.50 $1.54 Both
28 N/A $0.42 Both
29 N/A N/A Both
30 N/A N/A Both
31 N/A N/A Both
32 N/A N/A Both
33 $0.91 $0.91 Both
34 $1.00 $0.93 Both
35 N/A N/A Both
36 N/A N/A Tax
37 N/A $1.43 Both
38 N/A N/A Both
39 N/A N/A Tax
40 N/A N/A Both
41 N/A $0.52 Tax
42 N/A N/A Both
43 N/A N/A Both
44 $0.14 $0.20 Both
45 $0.95 $1.38 Both
46 N/A N/A Both
47 $0.28 $0.32 Both
48 N/A N/A Both
49 N/A N/A Both
50 N/A N/A Both
51 $1.02 $1.10 Both
</TABLE>
<PAGE>
Engineering Reserves and Recurring Replacement Reserves
<TABLE>
<CAPTION>
Contractual U/W
Engineering Recurring Recurring
Property Reserve at Replacement Replacement
# Property Name Type Origination Reserve Reserve
- ------------- ---- ----------- ------- -------
<S> <C> <C> <C> <C> <C>
52 Kenwood Pavilion Retail $6,688 $0.15 $0.15
53 Newsome Park Apartments Multifamily $524,000 $378 $378
54 Princeton Court Apartments (1F) Multifamily $20,907 $250 $250
55 Pinewood Estates Apartments (1F) Multifamily $12,866 $250 $250
56 Arbor Court Apartments (1F) Multifamily $11,258 $250 $250
57 U-Store of Brighton Self Storage Facility (1G) Self Storage $12,289 $0.15 $0.15
58 U-Store of South Lyon Self Storage Facility (1G) Self Storage $6,527 $0.15 $0.15
59 U-Store of Saline Self Storage Facility (1G) Self Storage $5,954 $0.15 $0.15
60 U-Store of Davison Self Storage Facility (1G) Self Storage $4,266 $0.15 $0.15
61 U-Store of Holly Self Storage Facility (1G) Self Storage $3,948 $0.15 $0.15
62 U-Store of Jackson Self Storage Facility (1G) Self Storage $2,451 $0.15 $0.15
63 Birches Apartments Multifamily $30,250 $300 $300
64 Hollywood Plaza Retail $12,753 N/A $0.20
65 50-60 Worcester Rd. Mixed Use $3,375 $0.25 $0.25
66 Mahwah Business Park Mixed Use $214,870 N/A $0.21
67 Silvernail Shopping Center Retail $34,013 $0.30 $0.29
68 Tech Center 29 Office/Warehouse Complex Industrial $2,625 N/A $0.15
69 Centre North Shopping Center Retail $6,375 $0.15 $0.15
70 Cranbrook Centre Apartments (1H) Multifamily $6,250 $250 $250
71 Cranbrook Centre Office Buildings (1H) Office $29,188 N/A $0.15
72 Lubbock Shopping Parkade Retail $256,230 $0.17 $0.17
73 Marin Club Apartments Multifamily $1,875 $250 $225
74 Prunedale Center Mixed Use $30,125 $0.19 $0.19
75 Lamplighter Ontario MHP Manufactured Housing $2,500 $26 $26
76 Marycrest Shopping Center (2) Retail $24,500 $0.15 $0.15
77 Elm Plaza Shopping Center Retail $93,438 $0.15 $0.15
78 Century Plaza East Retail $49,350 $0.15 $0.15
79 Keller Springs Tech Center Industrial N/A $0.15 $0.15
80 Mobile Gardens/Holly View Mobile Home Park (1I) Manufactured Housing $39,565 $15 $55
81 Stony Chase/Rock Creek Mobile Home Park (1I) Manufactured Housing $20,870 $15 $50
82 Briarwood Manor (1I) Manufactured Housing $14,565 $15 $50
83 Tierra Verde Marine Center Mixed Use $4,675 $0.15 $0.15
84 Aurora Square Retail N/A $0.20 $0.20
85 Merchant's Square (3) Retail N/A $0.17 $0.15
86 Northwood Hills Shopping Center Retail $3,750 $0.16 $0.16
87 36th Street Office Center Office $81,188 $0.15 $0.15
88 Fifth Avenue Apartments Multifamily $114,375 $237 $237
89 The Watermill Apartments Multifamily $106,488 $251 $251
90 Brooks Corner Mixed Use $188 N/A $0.15
91 Hollywood Ardmore Apartments Multifamily $32,563 $318 $376
92 Chasewood Apartments Multifamily $20,688 $262 $262
93 Kingsgate North Mixed Use $21,155 $0.15 $0.15
94 Fairfield Suites Pittsburgh/Airport Hotel $3,485 5.00% 5.00%
95 Seatree Apartments Multifamily $299,750 $238 $238
96 All Aboard Mini Storage - Alhambra Self Storage N/A N/A $0.15
97 West Century Center Retail $19,580 $0.35 $0.35
98 Universal Plaza Retail $11,844 $0.16 $0.16
99 Crestview Market Place Retail N/A $0.03 $0.03
100 New Franklin Apartments (4) Multifamily $838 $250 $250
101 Windjammer Apartments Multifamily $88,967 $250 $250
102 Woodlake Village Apartments Multifamily $43,923 $250 $250
<CAPTION>
Contractual
Recurring U/W Tax &
LC&TI LC&TI Insurance
# Per Sq. Ft. Per Sq. Ft. Escrows
- ----------- ----------- -------
<S> <C> <C> <C>
52 N/A $0.72 Both
53 N/A N/A Both
54 N/A N/A Both
55 N/A N/A Both
56 N/A N/A Both
57 N/A N/A Both
58 N/A N/A Both
59 N/A N/A Both
60 N/A N/A Both
61 N/A N/A Both
62 N/A N/A Both
63 N/A N/A Both
64 $0.86 $0.84 Tax
65 $1.10 $0.94 Both
66 $0.26 $0.30 Both
67 $0.45 $0.45 Both
68 $0.20 $0.90 Both
69 $0.37 $0.38 Both
70 N/A N/A Both
71 $1.04 $1.00 Both
72 $0.50 $0.42 Both
73 N/A N/A Tax
74 $0.65 $0.61 Both
75 N/A N/A Tax
76 N/A $0.39 Both
77 N/A $0.24 Both
78 $0.10 $0.25 Both
79 $0.60 $0.60 Both
80 N/A N/A Both
81 N/A N/A Both
82 N/A N/A Both
83 N/A $0.30 Both
84 $0.90 $0.88 Both
85 N/A $0.39 Both
86 $0.72 $0.72 Tax
87 $0.95 $0.95 Both
88 N/A N/A Both
89 N/A N/A Both
90 $0.92 $1.40 Both
91 N/A N/A Both
92 N/A N/A Both
93 $0.74 $0.74 Both
94 N/A N/A Both
95 N/A N/A Both
96 N/A N/A Tax
97 $0.74 $0.74 Both
98 $0.98 $0.81 Both
99 $0.10 $0.10 Both
100 N/A N/A Both
101 N/A N/A Both
102 N/A N/A Both
</TABLE>
<PAGE>
Engineering Reserves and Recurring Replacement Reserves
<TABLE>
<CAPTION>
Contractual U/W
Engineering Recurring Recurring
Property Reserve at Replacement Replacement
# Property Name Type Origination Reserve Reserve
- ------------- ---- ----------- ------- -------
<S> <C> <C> <C> <C> <C>
103 Comfort Inn - Hopewell, VA Hotel N/A 5.00% 5.00%
104 Linens N Things Retail $1,000 $0.10 $0.25
105 The Woods Apartments Multifamily $37,659 $357 $357
106 Moonlight Garden Apartments Multifamily $2,500 $250 $250
107 Sagamore Court Apartments Multifamily $20,375 $250 $250
108 Carriage Hill Apartments Multifamily $8,875 $250 $250
109 Dowling Office Building Mixed Use N/A $0.20 $0.20
110 Main Street Plaza Shopping Center Retail N/A $0.15 $0.15
111 Friendship Crossing Apartments Multifamily N/A $199 $200
112 Spruce Properties (1J) Multifamily $24,375 $250 $250
113 Oak Grove Apartments (1J) Multifamily $8,750 $250 $250
114 Aldrich Apartments (1J) Multifamily $178,375 $250 $250
115 One Bellemead Center Office N/A $0.28 $0.28
116 Denver Tech Center #30 Office $5,313 $0.33 $0.33
117 Preston Racquet Club Condominiums and Apartments Multifamily $163,215 $363 $362
118 Sand Lake Apartments Multifamily $4,265 $260 $260
119 Mobile Estate Mobile Home Park Manufactured Housing N/A N/A $60
120 Colonia Shopping Center Retail N/A $0.10 $0.15
121 Vista Ridge Center III Retail N/A N/A $0.15
122 Parkside East Apartments Multifamily $2,625 $287 $286
123 Northpark Village Retail $19,389 $0.15 $0.15
124 Breakers Apartments Multifamily $4,031 $200 $200
125 Picnic Lawn Apartments Multifamily $4,563 $268 $268
126 32nd Street and McDowell Road Shopping Center Retail $176,250 $0.20 $0.20
127 Triangle Corporate Center Mixed Use $18,156 $0.26 $0.26
128 One West Hills Office Office N/A $0.20 $0.20
129 Harper Regency Apartments Multifamily $17,653 $200 $200
130 Heritage Green Shopping Center Retail $13,475 $0.21 $0.22
131 Captain's Landing Apartments Multifamily $24,063 $200 $200
132 All Aboard Mini Storage - Fremont Self Storage N/A N/A $0.15
133 Century Plaza Strip Shopping Center (1K) Retail $5,625 N/A $0.18
134 Albany Square Strip Shopping Center (1K) Retail $1,875 N/A $0.15
135 Larrabee Complex Mixed Use $73,725 N/A $0.15
136 Cedar Garden Apartments Multifamily $4,063 $300 $300
137 All Aboard Mini Storage - Stanton Self Storage N/A N/A $0.15
138 Windtree Apartments - Phase I Multifamily $34,037 $250 $250
139 Lake City Mini-Storage Self Storage $995 N/A $0.15
140 Huntington Mobile Estates Manufactured Housing $13,031 $25 $25
141 Everhart Park Shopping Center Retail $6,750 $0.24 $0.24
142 Rafael North Executive Park Office $4,450 $0.28 $0.27
143 Westwind Estates Manufactured Housing $19,725 $25 $25
144 Hewlett Shopping Center Retail $375 $0.15 $0.15
145 Forest Park Village Multifamily $208,709 $280 $280
146 2700 Richards Building Office $4,138 $0.20 $0.20
147 Lincoln Park Center Retail $11,100 $0.24 $0.24
148 Cedar Heights Apartments Multifamily $213,781 $274 $274
149 The North Oak Apartments Multifamily $48,563 $250 $250
150 Arrowhead Court Apartments Multifamily $41,225 $93 $250
151 The Citibank Building Office $15,250 $0.24 $0.24
152 Petco/Starbucks S/C Retail $41,563 $0.15 $0.15
153 1870 Ogden Drive Office $5,000 $0.20 $0.20
<CAPTION>
Contractual
Recurring U/W Tax &
LC&TI LC&TI Insurance
# Per Sq. Ft. Per Sq. Ft. Escrows
- ----------- ----------- -------
<S> <C> <C> <C>
103 N/A N/A Both
104 N/A N/A Both
105 N/A N/A Both
106 N/A N/A Tax
107 N/A N/A Both
108 N/A N/A Both
109 $0.90 $0.90 Both
110 $0.31 $0.30 Both
111 N/A N/A Both
112 N/A N/A Both
113 N/A N/A Both
114 N/A N/A Both
115 $0.79 $0.79 Both
116 $1.02 $1.02 Both
117 N/A N/A Both
118 N/A N/A Both
119 N/A N/A Both
120 $0.34 $0.31 Tax
121 $0.80 $0.80 None
122 N/A N/A Both
123 $0.21 $0.16 Both
124 N/A N/A Tax
125 N/A N/A Both
126 N/A $0.58 Both
127 $0.72 $0.52 Tax
128 $0.91 $0.91 Both
129 N/A N/A Both
130 $1.19 $1.19 Both
131 N/A N/A Both
132 N/A N/A Tax
133 N/A $0.66 Both
134 N/A $0.64 Both
135 $1.00 $0.47 Both
136 N/A N/A Both
137 N/A N/A Tax
138 N/A N/A Both
139 N/A N/A Both
140 N/A N/A Tax
141 $0.85 $0.85 Tax
142 $1.00 $0.79 Both
143 N/A N/A Both
144 $1.83 $0.59 Both
145 N/A N/A Both
146 $1.30 $1.00 Both
147 $0.54 $0.83 Tax
148 N/A N/A Both
149 N/A N/A Both
150 N/A N/A Both
151 $1.22 $1.22 Both
152 $0.93 $0.93 Both
153 $0.80 $0.80 Both
</TABLE>
<PAGE>
Engineering Reserves and Recurring Replacement Reserves
<TABLE>
<CAPTION>
Contractual U/W
Engineering Recurring Recurring
Property Reserve at Replacement Replacement
# Property Name Type Origination Reserve Reserve
- ------------- ---- ----------- ------- -------
<S> <C> <C> <C> <C> <C>
154 Woodland Park Office Building Office $15,425 N/A $0.23
155 Costa Mesa Mobile Estates Manufactured Housing N/A N/A $50
156 Tree Top Apartments Multifamily $3,750 $250 $250
157 Greenville Village Mobile Home Park Manufactured Housing $750 $50 $50
158 Brookwood Village Retail $16,638 $0.62 $0.62
159 Rose Grove Mobile Home Park Manufactured Housing $8,438 $50 $53
160 Little River Shopping Center Retail N/A $0.29 $0.29
161 The Amberton Apartments Multifamily $250,000 $250 $250
162 Best Western Worlds of Fun Hotel N/A 5.00% 5.00%
163 All Aboard Mini Storage - Anaheim Self Storage $250 N/A $0.15
164 Waterway Crossing Apartments Multifamily $77,144 $260 $260
165 The Borders Building Retail N/A $0.15 $0.15
166 Ken-Caryl Business Center Office $3,688 $0.17 $0.16
167 Alta Vista Mobile Home Park Manufactured Housing $1,625 $25 $25
168 Palm Springs Self Storage Self Storage $7,000 N/A $0.15
169 Holiday Inn Express Auburn Hotel N/A 4.0% 4.0%
170 Caruth Haven Retail Center Retail $37,063 N/A $0.55
171 3456 Ridge Property Mixed Use $3,000 $0.32 $0.32
172 Campus Plaza Shopping Center Retail $938 $0.20 $0.20
173 All Aboard Mini Storage - San Gabriel Self Storage $15,044 N/A $0.15
174 Point O' Woods Apartments Multifamily $1,875 $350 $350
175 Williamsburg on the Lake Apartments Multifamily N/A N/A $362
176 Airport Business Center Mixed Use $1,250 N/A $0.15
177 Staples - Wilmington Retail N/A $0.15 $0.15
178 Felicita Junction Retail N/A $0.15 $0.15
179 The Bordeaux Apartments Multifamily $79,375 $304 $304
180 High Point Village I Apartments Multifamily N/A $250 $250
181 Assured Self Storage Facility Self Storage $938 $0.15 $0.15
182 Staples - Valparaiso Retail N/A $0.15 $0.15
183 Fruitland Grove Family Park Manufactured Housing $5,419 $83 $83
184 Centennial Creek Office Park Office $8,000 $0.22 $0.22
185 Park Lane Village Apartments (1L) Multifamily $1,125 $250 $250
186 Rynearson Lane Village Apartments (1L) Multifamily $30,000 $250 $260
187 Holiday Inn Express Ottawa Hotel N/A 4.00% 4.00%
188 Ross Apartments Multifamily $17,550 N/A $300
189 339 S. Ardmore Apartments Multifamily $9,375 N/A $229
190 Edgewater Beach Resort Hotel $41,375 5.0% 5.5%
191 Fondren Hill Apartments Multifamily $85,750 $200 $200
192 Cottonwood Plaza Mixed Use $875 N/A $0.22
193 Southport Shops Retail $375 $0.25 $0.25
194 Hawthorne Hill Apartments Multifamily $31,094 $200 $200
195 Days Inn Waccamaw Hotel $150,913 5.00% 5.00%
196 Turtle Oaks Apartments Multifamily $30,544 $250 $249
197 Linden Place Mobile Home Park Manufactured Housing $1,063 $50 $50
198 Moore Lake Commons Shopping Center Retail $111,875 N/A $0.15
199 Imperial Manor West Apartments Multifamily $37,625 $350 $250
200 Brown School Station Apts. Multifamily $11,375 $250 $318
201 South Street Seaport Office Center Office N/A $0.20 $0.25
202 Hathaway Commerce Center Industrial N/A N/A $0.21
203 Corinthian Apartments Multifamily $37,908 $668 $668
204 Walgreen's Drug Store - Swansea Retail $1,000 $0.15 $0.15
<CAPTION>
Contractual
Recurring U/W Tax &
LC&TI LC&TI Insurance
# Per Sq. Ft. Per Sq. Ft. Escrows
- ----------- ----------- -------
<S> <C> <C> <C>
154 N/A $1.04 Both
155 N/A N/A Both
156 N/A N/A Both
157 N/A N/A Both
158 N/A $0.61 Both
159 N/A N/A Tax
160 $0.24 $0.24 Tax
161 N/A N/A Both
162 N/A N/A Both
163 N/A N/A Tax
164 N/A N/A Both
165 N/A N/A Both
166 $0.81 $0.81 Both
167 N/A N/A Both
168 N/A N/A Both
169 N/A N/A Both
170 N/A $1.47 Both
171 $0.31 $0.18 Tax
172 N/A $0.51 Both
173 N/A N/A Tax
174 N/A N/A Both
175 N/A N/A Both
176 $0.15 $1.18 Both
177 $0.09 $0.09 Both
178 $0.10 $0.10 Both
179 N/A N/A Tax
180 N/A N/A Both
181 N/A N/A Both
182 N/A N/A Both
183 N/A N/A Tax
184 $0.95 $0.95 Both
185 N/A N/A Both
186 N/A N/A Both
187 N/A N/A Both
188 N/A N/A Tax
189 N/A N/A Both
190 N/A N/A Both
191 N/A N/A Both
192 N/A $0.93 Both
193 $1.01 $0.79 Both
194 N/A N/A Both
195 N/A N/A Both
196 N/A N/A Both
197 N/A N/A Both
198 $0.62 $0.81 Both
199 N/A N/A Both
200 N/A N/A Both
201 N/A $1.72 Both
202 N/A $0.38 Both
203 N/A N/A Both
204 N/A N/A Both
</TABLE>
<PAGE>
Engineering Reserves and Recurring Replacement Reserves
<TABLE>
<CAPTION>
Contractual U/W
Engineering Recurring Recurring
Property Reserve at Replacement Replacement
# Property Name Type Origination Reserve Reserve
- ------------- ---- ----------- ------- -------
<S> <C> <C> <C> <C> <C>
205 Catalina Apartments Multifamily $102,035 $300 $270
206 Devonshire Square Retail Center Retail $1,250 $0.15 $0.25
207 1440 N. Vine Street Retail $22,148 $0.15 $0.15
208 College Park Apartments Multifamily $6,800 $351 $350
209 Country Brooke Apartments Multifamily $13,988 $250 $250
210 Hillside View Apartments Multifamily $240 $250 $275
211 Benihana Restaurant Retail $17,609 N/A $0.18
212 Crosswinds Apartments Multifamily $68,938 $265 $265
213 Imperial Plaza Retail Center Retail $7,250 $0.19 $0.20
214 Twin Lakes Mobile Home Park Manufactured Housing $5,781 $50 $54
215 Antietam Village Center Retail $3,125 N/A $0.17
216 Gateway Shoppes Retail $36,496 $0.22 $0.22
217 Red Onion Building Mixed Use $1,875 $0.45 $0.45
218 526 South Ardmore Avenue Multifamily $24,031 N/A $300
219 All Aboard Mini Storage - Santa Ana Self Storage $781 N/A $0.15
220 Villa East I & II Office $8,563 $0.20 $0.20
221 Courtyard Apartments Multifamily $14,225 $250 $250
222 Sunset View Village Apartments Multifamily $4,409 $304 $304
223 Wilmington Plaza Retail $3,938 $0.24 $0.24
224 The Nations Bank Building Office $1,500 N/A $0.15
225 Quail Ridge Apartments Multifamily $29,525 $250 $250
226 Best Western KCI Airport Hotel N/A 5.00% 5.00%
227 Laurel Heights Apartments Multifamily $4,875 $263 $262
228 El Monte Mobile Air Mobile Home Park Manufactured Housing $21,000 $62 $25
229 Harold Gilstrap Shopping Center Retail $9,761 $0.15 $0.15
230 Lakeside Apartments Multifamily $4,625 $250 $250
231 Park Glen Apartments Multifamily $2,150 $250 $250
232 St. Lucie Mobile Village Manufactured Housing N/A $49 $50
233 Ravenscroft Apartments Multifamily $37,375 $250 $250
234 Coach Country Corral MHP Manufactured Housing N/A N/A $50
235 Seaside Village Shopping Center Retail $20,275 $0.25 $0.21
236 Sherwood Park Apartments Multifamily N/A N/A $250
237 Ravenna Plaza Retail $25,500 $0.27 $0.27
238 Holiday Inn Express Oglesby Hotel N/A 4.00% 4.00%
239 Central/Magnolia Retail Center Mixed Use $4,594 $0.32 $0.32
240 Rolling Hills Estates Manufactured Housing $27,541 $50 $50
241 Saticoy-Royale Apartments Multifamily $17,640 $246 $246
242 Holiday/Park Riviera Mobile Home Park Manufactured Housing $24,750 N/A $50
243 Gottschalk's Department Store Retail N/A $0.18 $0.18
244 Justin Apartments Multifamily N/A $250 $250
245 Fountain Square Apartments Multifamily $95,500 $262 $262
246 383 St. Johns Place Multifamily $563 $251 $250
247 Days Inn Hotel $1,750 5.00% 5.00%
248 Market Plaza Retail $31,166 N/A $0.21
249 Michigan Plaza & Bender Plaza (5) Office N/A $0.15 $0.20
250 Mockingbird Park Retail Building Mixed Use N/A N/A $0.15
251 Poolesville Village Center Retail N/A N/A $0.15
252 Executive Park Offices Office $24,688 $0.32 $0.32
253 Citadel Square Shopping Center (6) Retail $46,988 $0.15 $0.18
254 Sherwood Mobile Home Estates Manufactured Housing $2,750 $75 $50
255 Ware's Van & Storage Co. Industrial $77,064 $0.15 $0.15
<CAPTION>
Contractual
Recurring U/W Tax &
LC&TI LC&TI Insurance
# Per Sq. Ft. Per Sq. Ft. Escrows
- ----------- ----------- -------
<S> <C> <C> <C>
205 N/A N/A Both
206 N/A $1.01 Both
207 $0.95 $0.95 Both
208 N/A N/A Both
209 N/A N/A Both
210 N/A N/A Both
211 N/A N/A Both
212 N/A N/A Both
213 $0.98 $0.98 Both
214 N/A N/A Both
215 $0.50 $0.69 Both
216 $0.70 $0.70 Both
217 $1.87 $1.87 Both
218 N/A N/A Both
219 N/A N/A Tax
220 $0.81 $0.81 Both
221 N/A N/A Both
222 N/A N/A Both
223 $0.45 $0.26 Both
224 N/A $0.99 Both
225 N/A N/A Both
226 N/A N/A Both
227 N/A N/A Both
228 N/A N/A Tax
229 N/A $0.04 Both
230 N/A N/A Both
231 N/A N/A Both
232 N/A N/A Both
233 N/A N/A Both
234 N/A N/A Both
235 $0.48 $1.00 Both
236 N/A N/A Both
237 $0.42 $0.55 Both
238 N/A N/A Both
239 $0.89 $0.91 Both
240 N/A N/A Tax
241 N/A N/A Both
242 N/A N/A Both
243 N/A N/A Both
244 N/A N/A Both
245 N/A N/A Both
246 N/A N/A Both
247 N/A N/A Both
248 $0.71 $0.76 Both
249 N/A $0.93 Both
250 N/A $0.78 Both
251 N/A $1.21 Both
252 $0.92 $0.92 Both
253 N/A $0.18 Both
254 N/A N/A Both
255 N/A $0.30 Both
</TABLE>
<PAGE>
Engineering Reserves and Recurring Replacement Reserves
<TABLE>
<CAPTION>
Contractual U/W
Engineering Recurring Recurring
Property Reserve at Replacement Replacement
# Property Name Type Origination Reserve Reserve
- ------------- ---- ----------- ------- -------
<S> <C> <C> <C> <C> <C>
256 Sunrise Terrace Mobile Home Park Manufactured Housing $10,006 N/A $47
257 Best Western Country Inn North Hotel N/A 5.00% 5.00%
258 Woodlake Resort Village Apartments Multifamily $7,625 $249 $250
259 Plantation Pines Apartments Multifamily N/A $250 $250
260 Pacific Mini Storage Self Storage $3,125 $0.18 $0.15
261 Sunridge Apartments Multifamily $7,125 $252 $250
262 Parkside Place Apartments Multifamily $14,125 $250 $250
263 Courtyards of Granbury Mixed Use $5,650 $0.25 $0.25
264 University Apartments Multifamily $75,185 $175 $250
265 Isaqueena Village Apartments Multifamily N/A $295 $295
266 Turtle Dove I Apartments Multifamily $5,750 $250 $250
267 Carson Gardens Mobile Home Park Manufactured Housing $3,250 $27 $27
268 Valerie Apartments Multifamily N/A $250 $250
269 Huddersfield Apartments Multifamily N/A $250 $250
270 1457 & 1519 - 1527 Park Road, NW Multifamily $1,250 $250 $250
271 Winter Garden Village Apartments Multifamily N/A $250 $250
272 Long Point Plaza Apartments Multifamily $60,000 $250 $287
273 The Place of Tempe Apartments Multifamily $563 $250 $250
274 Valley Garden Apartments Multifamily N/A $250 $250
275 Devereaux Apartments Multifamily $1,875 $254 $250
276 Bloomingdale Shopping Center Retail N/A $0.17 $0.17
277 Cottonwood Apartments Multifamily $4,130 $252 $252
278 Royal North Apartments Multifamily $750 $250 $250
279 Turtle Dove II Apartments Multifamily $625 $242 $250
<CAPTION>
Contractual
Recurring U/W Tax &
LC&TI LC&TI Insurance
# Per Sq. Ft. Per Sq. Ft. Escrows
- ----------- ----------- -------
<S> <C> <C> <C>
256 N/A N/A Both
257 N/A N/A Both
258 N/A N/A Both
259 N/A N/A Both
260 N/A N/A Both
261 N/A N/A Both
262 N/A N/A Both
263 N/A N/A Both
264 N/A N/A Both
265 N/A N/A Both
266 N/A N/A Both
267 N/A N/A Tax
268 N/A N/A Both
269 N/A N/A Both
270 N/A N/A Both
271 N/A N/A Both
272 N/A N/A Both
273 N/A N/A Both
274 N/A N/A Both
275 N/A N/A Both
276 N/A $1.00 Both
277 N/A N/A Both
278 N/A N/A Both
279 N/A N/A Both
</TABLE>
(1A) The Winston Loan is secured by Hampton Inn - Elmsford, Quality Suites -
Charleston, Courtyard by Marriott - Ann Arbor, Residence Inn - Phoenix,
Homewood Suites - Cary, Hampton Inn & Suites - Gwinnett, Hampton Inn -
Raleigh, Comfort Suites - Orlando, Hampton Inn - Perimeter, Hampton Inn -
Charlotte, NC, Courtyard by Marriott - Wilmington, Hampton Inn - West
Springfield, Homewood Suites - Clear Lake and Comfort Inn - Charleston,
respectively.
(1B) The Mortgage Loans secured by Kendale Lakes Plaza, Cypress Creek Station
and Oakwood Business Center, respectively, are cross-collateralized and
cross-defaulted.
(1C) A Single Mortgage Note is secured by Westchase Ranch Apartments, Westwood
Village Apartments, Normandy Woods Apartments, Savoy Manor Apartments and
San Marin Apartments, respectively.
(1D) A Single Mortgage Note is secured by 2294 Molly Pitcher Highway, 5015
Campuswood Drive, 5010 Campuswood Drive and 5009 Campuswood Drive,
respectively.
(1E) A Single Mortgage Note is secured by Keller Oaks Apartments, Sycamore Hill
Apartments, Clarendon Apartments and Woodchase Condominiums, respectively.
(1F) A Single Mortgage Note is secured by Princeton Court Apartments, Pinewood
Estates Apartments and Arbor Court Apartments, respectively.
(1G) A Single Mortgage Note is secured by U-Store of Brighton Self Storage
Facility, U-Store of South Lyon Self Storage Facility, U-Store of Saline
Self Storage Facility, U-Store of Davison Self Storage Facility, U-Store of
Holly Self Storage Facility and U-Store of Jackson Self Storage Facility,
respectively.
(1H) The Mortgage Loans secured by Cranbrook Centre Apartments and Cranbrook
Centre Office Buildings, respectively, are cross-collateralized and
cross-defaulted.
(1I) A Single Mortgage Note is secured by Mobile Gardens/Holly View Mobile Home
Park, Stony Chase/Rock Creek Mobile Home Park and Briarwood Manor,
respectively.
(1J) A Single Mortgage Note is secured by Spruce Properties, Oak Grove
Apartments and Aldrich Apartments, respectively. The Mortgage Loan secured
by Spruce Properties contains two properties that are operated as one.
(1K) The Mortgage Loans secured by Century Plaza Strip Shopping Center and
Albany Square Strip Shopping Center, respectively, are cross-collateralized
and cross-defaulted.
(1L) A Single Mortgage Note secured by Park Lane Village Apartments and
Rynearson Lane Village Apartments, respectively.
(2) Marycrest Shopping Center has an interest only period of 24 months from
origination and thereafter is scheduled to amortize over 360 months with
the payment presented reflecting the amount due during the amortization
term.
(3) Merchant's Square has an interest only period of 24 months from origination
and thereafter is scheduled to amortize over 336 months with the payment
presented reflecting the amount due during the amortization term.
(4) The Mortgage Loan secured by New Franklin Apartments contains four
properties that are operated as one.
(5) The Mortgage Loan secured by Michigan & Bender Plaza contains two
properties that are operated as one.
(6) Citadel Square Shopping Center has an interest only period of 36 months
from origination and thereafter is scheduled to amortize over 300 months
with the payment presented reflecting the amount due during the
amortization term.
<PAGE>
Major Tenants of the Commercial Mortgaged Properties (6)
<TABLE>
<CAPTION>
Major
Tenant #1
Major Lease
Property Major Tenant #1 Tenant #1 Expiration
# Property Name Type Sq. Ft. Name Sq. Ft. Date
--------------- -------- ------- --------------- --------- ----------
<S> <C> <C> <C> <C> <C>
15 Kendale Lakes Plaza (1B) Retail 404,553 K-Mart Corporation 114,000 11/30/12
16 Cypress Creek Station (1B) Retail 229,009 Regal Cinemas, Inc. 101,415 07/31/17
17 Oakwood Business Center (1B) Office 141,150 KOS Pharmaceuticals Inc. 23,499 11/30/00
24 2294 Molly Pitcher Highway (1D) Industrial 621,400 Franklin Storage 366,400 08/01/02
25 5015 Campuswood Drive (1D) Office 99,476 Time Warner/Intermed 39,444 10/31/01
26 5010 Campuswood Drive (1D) Office 70,163 National Grange 20,000 09/30/04
27 5009 Campuswood Drive (1D) Office 6,584 Apple-a-daycare 6,584 10/01/04
28 Fair Lakes Promenade Retail 143,789 Linens & Things 37,683 05/02/11
33 Dallas Design Center Portfolio Mixed Use 355,826 N/A N/A N/A
34 Assembly Square Office Building Mixed Use 202,616 FiServ Inc. 34,994 12/01/03
37 White Station Tower Office 247,718 N/A N/A N/A
41 The Shoppes at Longwood Retail 136,200 Super Fresh 40,184 08/31/12
44 Becker Village Mall Retail 305,629 Kmart 82,842 08/01/10
45 Tiffany Square Office 179,910 MCI Telecommunications 96,334 12/01/01
47 River Park Shopping Center Retail 230,659 K-Mart 86,479 09/30/14
51 Parkshore Centre Office Building Office 117,151 Medical University of SC 45,907 02/01/02
52 Kenwood Pavilion Retail 57,144 Organized Living 24,251 11/30/13
64 Hollywood Plaza Retail 59,383 Hollytron Electronics 36,400 07/31/05
65 50-60 Worcester Rd. Mixed Use 59,965 Strawberries 12,726 06/30/08
66 Mahwah Business Park Mixed Use 401,074 Mahwah Self Storage 96,838 05/31/26
67 Silvernail Shopping Center Retail 110,425 Pick N Save / Roundy's 53,324 12/31/04
68 Tech Center 29 Office/Warehouse Complex Industrial 176,914 Banc Tec USA Inc. 47,400 06/01/02
69 Centre North Shopping Center Retail 80,897 Staples 23,897 09/30/12
71 Cranbrook Centre Office Buildings (1H) Office 74,816 Orchards Children's Services 22,564 09/30/99
72 Lubbock Shopping Parkade Retail 160,393 Stein Mart 41,922 11/08/05
74 Prunedale Center Mixed Use 103,852 Fairway Stores, Inc. 17,048 01/31/09
76 Marycrest Shopping Center (2) Retail 172,030 Dominick's 67,761 01/01/06
77 Elm Plaza Shopping Center Retail 292,426 K-Mart Corporation 99,502 07/01/00
78 Century Plaza East Retail 121,192 Albertson's 42,630 08/01/20
79 Keller Springs Tech Center Industrial 80,000 Concentra 35,000 10/01/05
83 Tierra Verde Marine Center Mixed Use 82,271 Tierra Verde Marina 61,450 06/30/18
84 Aurora Square Retail 65,348 Marshalls 25,736 01/31/02
85 Merchant's Square (3) Retail 102,734 Kroger 59,134 12/31/06
86 Northwood Hills Shopping Center Retail 117,287 Cullum Companies, Inc. 48,900 03/31/09
87 36th Street Office Center Office 158,737 Amway Corporation 77,452 02/28/02
90 Brooks Corner Mixed Use 23,839 Brooks Brothers 5,190 03/01/05
93 Kingsgate North Mixed Use 92,057 Fox & Hound 10,642 11/12/03
97 West Century Center Retail 57,176 Blockbuster Video 7,094 09/15/01
98 Universal Plaza Retail 43,836 Telan Tech. 4,694 06/30/02
99 Crestview Market Place Retail 66,882 Winn-Dixie 51,282 07/29/18
104 Linens N Things Retail 41,520 Linens N' Things 41,520 01/31/18
109 Dowling Office Building Mixed Use 90,046 Department of Social Services 13,200 02/28/04
110 Main Street Plaza Shopping Center Retail 31,377 Smart & Final 21,057 11/30/17
115 One Bellemead Center Office 87,275 N/A N/A N/A
116 Denver Tech Center #30 Office 55,664 Rocky Mountain Consultants 13,119 07/31/02
120 Colonia Shopping Center Retail 59,709 Town Sports International, Inc. 20,160 09/30/13
121 Vista Ridge Center III Retail 15,444 Hallmark Cards 6,000 02/29/04
123 Northpark Village Retail 70,600 United Supermarket 50,700 03/31/10
126 32nd Street and McDowell Road Shopping Center Retail 63,987 Southwest Supermarkets 15,048 05/01/01
127 Triangle Corporate Center Mixed Use 77,404 ACME-Wiley Corporation 11,895 10/01/02
128 One West Hills Office Office 57,967 Faulkner Group Affiliate 34,952 12/31/99
130 Heritage Green Shopping Center Retail 66,984 Berean 16,000 11/30/99
133 Century Plaza Strip Shopping Center (1K) Retail 36,622 Woman Care 7,208 03/01/03
134 Albany Square Strip Shopping Center (1K) Retail 30,479 Chicago School 7,347 08/31/99
135 Larrabee Complex Mixed Use 100,304 North America Marketing 19,118 03/01/03
141 Everhart Park Shopping Center Retail 63,277 Future Firm, Inc. 15,000 04/15/03
<CAPTION>
Tenant #2
Major Lease
Major Tenant #2 Tenant #2 Expiration
# Property Name Name Sq. Ft. Date
--------------- --------------- --------- ----------
<S> <C> <C> <C>
15 Kendale Lakes Plaza (1B) Builders Square #1009 109,800 03/31/21
16 Cypress Creek Station (1B) Office Depot Inc. 36,929 12/31/11
17 Oakwood Business Center (1B) Trader Publishing Company 16,816 10/31/02
24 2294 Molly Pitcher Highway (1D) Staples 255,000 11/01/00
25 5015 Campuswood Drive (1D) Travelers Indemnity 25,903 11/30/01
26 5010 Campuswood Drive (1D) Deutsche Financial 11,131 03/14/00
27 5009 Campuswood Drive (1D) N/A N/A N/A
28 Fair Lakes Promenade CompUSA - The Computer
Super Store 24,560 11/30/13
33 Dallas Design Center Portfolio N/A N/A N/A
34 Assembly Square Office Building Loews Theatres 34,153 01/31/07
37 White Station Tower N/A N/A N/A
41 The Shoppes at Longwood T.J. Maxx 24,300 09/30/02
44 Becker Village Mall Belk's 52,544 02/01/00
45 Tiffany Square Fluke Networks 29,913 11/01/02
47 River Park Shopping Center Sav-A-Center 44,880 01/31/11
51 Parkshore Centre Office Building Triton PCS Property
Company LLC 19,697 07/01/03
52 Kenwood Pavilion Cost Plus 19,071 07/31/13
64 Hollywood Plaza Rite Aid Corporation 18,140 12/31/29
65 50-60 Worcester Rd. A & C Associates, Inc. 9,914 01/31/01
66 Mahwah Business Park Acupac Corp. 78,241 06/30/07
67 Silvernail Shopping Center N/A N/A N/A
68 Tech Center 29 Office/Warehouse Complex Elite Autohaus 19,951 08/01/07
69 Centre North Shopping Center Pep Boys (Ground Lease) 22,500 05/31/18
71 Cranbrook Centre Office Buildings (1H) N/A N/A N/A
72 Lubbock Shopping Parkade Hobby Lobby 40,000 03/31/02
74 Prunedale Center Long's Drugs 12,000 02/28/05
76 Marycrest Shopping Center (2) N/A N/A N/A
77 Elm Plaza Shopping Center Guiguere Enterprises,
Inc. d/b/a Champions 55,000 08/01/06
78 Century Plaza East Longs Drug Stores 25,822 02/28/16
79 Keller Springs Tech Center Howmedica Leibinger 26,236 08/01/03
83 Tierra Verde Marine Center N/A N/A N/A
84 Aurora Square Pier 1 7,500 02/28/08
85 Merchant's Square (3) Advanced Career Training 13,500 05/31/04
86 Northwood Hills Shopping Center Calloway's Nursery 22,000 06/30/02
87 36th Street Office Center Old Kent Bank 43,895 06/30/00
90 Brooks Corner Gray & Graham 4,180 01/01/00
93 Kingsgate North N/A N/A N/A
97 West Century Center United Consumer Club
of Kalamazoo 5,875 11/30/03
98 Universal Plaza N/A N/A N/A
99 Crestview Market Place N/A N/A N/A
104 Linens N Things N/A N/A N/A
109 Dowling Office Building N/A N/A N/A
110 Main Street Plaza Shopping Center Hollywood Video 6,562 03/30/08
115 One Bellemead Center N/A N/A N/A
116 Denver Tech Center #30 N/A N/A N/A
120 Colonia Shopping Center JoAnn's Fabrics & Crafts 15,700 06/30/06
121 Vista Ridge Center III La Madeline French Bakery 4,200 11/30/08
123 Northpark Village N/A N/A N/A
126 32nd Street and McDowell Road Shopping Center Factory 2 U 9,728 10/01/99
127 Triangle Corporate Center Rowe Marketing Group 8,581 05/31/08
128 One West Hills Office N/A N/A N/A
130 Heritage Green Shopping Center Holiday Fantasies, Inc. 9,508 02/28/00
133 Century Plaza Strip Shopping Center (1K) Pool & Spa 4,037 10/01/02
134 Albany Square Strip Shopping Center (1K) Nick's Billiards 6,240 03/01/99
135 Larrabee Complex S.D. Warren Company 21,147 12/01/99
141 Everhart Park Shopping Center Saratoga Tire & Service 9,567 06/30/99
<CAPTION>
Tenant #3
Major Lease
Major Tenant #3 Tenant #3 Expiration
# Property Name Name Sq. Ft. Date
--------------- --------------- --------- ----------
<S> <C> <C> <C>
15 Kendale Lakes Plaza (1B) N/A N/A N/A
16 Cypress Creek Station (1B) N/A N/A N/A
17 Oakwood Business Center (1B) N/A N/A N/A
24 2294 Molly Pitcher Highway (1D) N/A N/A N/A
25 5015 Campuswood Drive (1D) Liberty Mutual 21,773 08/27/03
26 5010 Campuswood Drive (1D) Dun & Bradstreet 7,257 01/31/99
27 5009 Campuswood Drive (1D) N/A N/A N/A
28 Fair Lakes Promenade Barnes & Noble Booksellers 24,000 08/31/11
33 Dallas Design Center Portfolio N/A N/A N/A
34 Assembly Square Office Building Unisys Corporation 31,223 07/31/00
37 White Station Tower N/A N/A N/A
41 The Shoppes at Longwood N/A N/A N/A
44 Becker Village Mall JC Penney 52,349 02/01/00
45 Tiffany Square AMC 19,883 10/01/00
47 River Park Shopping Center Sears 46,856 10/31/04
51 Parkshore Centre Office Building N/A N/A N/A
52 Kenwood Pavilion Mikasa 10,370 07/30/08
64 Hollywood Plaza N/A N/A N/A
65 50-60 Worcester Rd. Houlihan's Restaurant 9,450 01/31/07
66 Mahwah Business Park N/A N/A N/A
67 Silvernail Shopping Center N/A N/A N/A
68 Tech Center 29 Office/Warehouse Complex N/A N/A N/A
69 Centre North Shopping Center Flower City 10,500 11/30/02
71 Cranbrook Centre Office Buildings (1H) N/A N/A N/A
72 Lubbock Shopping Parkade T.J. Maxx 30,754 03/30/05
74 Prunedale Center N/A N/A N/A
76 Marycrest Shopping Center (2) N/A N/A N/A
77 Elm Plaza Shopping Center J.C. Penney 45,000 08/01/99
78 Century Plaza East N/A N/A N/A
79 Keller Springs Tech Center Technifax 15,892 11/01/03
83 Tierra Verde Marine Center N/A N/A N/A
84 Aurora Square N/A N/A N/A
85 Merchant's Square (3) N/A N/A N/A
86 Northwood Hills Shopping Center N/A N/A N/A
87 36th Street Office Center Cascade Engineering 23,141 02/28/05
90 Brooks Corner Connoisseur Communications 3,859 06/01/02
93 Kingsgate North N/A N/A N/A
97 West Century Center N/A N/A N/A
98 Universal Plaza N/A N/A N/A
99 Crestview Market Place N/A N/A N/A
104 Linens N Things N/A N/A N/A
109 Dowling Office Building N/A N/A N/A
110 Main Street Plaza Shopping Center N/A N/A N/A
115 One Bellemead Center N/A N/A N/A
116 Denver Tech Center #30 N/A N/A N/A
120 Colonia Shopping Center Bio-Medical
Applications of Co. 7,087 09/07/04
121 Vista Ridge Center III Jos. A. Bank Clothiers 3,750 01/31/08
123 Northpark Village N/A N/A N/A
126 32nd Street and McDowell Road Shopping Center N/A N/A N/A
127 Triangle Corporate Center Sting International 8,103 06/30/02
128 One West Hills Office N/A N/A N/A
130 Heritage Green Shopping Center N/A N/A N/A
133 Century Plaza Strip Shopping Center (1K) N/A N/A N/A
134 Albany Square Strip Shopping Center (1K) Bedding Expert 3,475 03/01/99
135 Larrabee Complex Sherwin Williams Company 13,565 07/01/01
141 Everhart Park Shopping Center Eckerd's 8,775 03/18/11
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Major
Tenant #1
Major Lease
Property Major Tenant #1 Tenant #1 Expiration
# Property Name Type Sq. Ft. Name Sq. Ft. Date
--------------- -------- ------- --------------- --------- ----------
<S> <C> <C> <C> <C> <C>
142 Rafael North Executive Park Office 30,503 MCGI, Inc. 3,219 03/31/00
144 Hewlett Shopping Center Retail 32,800 Loehmann 12,500 01/01/02
146 2700 Richards Building Office 31,962 Spectrum Controls 19,289 06/30/01
147 Lincoln Park Center Retail 46,190 Sterling Country 5,360 12/31/00
151 The Citibank Building Office 62,632 Citibank 17,689 06/30/00
152 Petco/Starbucks S/C Retail 12,016 Petco 7,427 11/13/05
153 1870 Ogden Drive Office 25,995 LCI - LEM Construction, Inc. 17,155 11/30/07
154 Woodland Park Office Building Office 51,231 State of California 9,526 10/31/01
158 Brookwood Village Retail 28,774 CVS 8,150 01/31/13
160 Little River Shopping Center Retail 51,560 Food Lion, Inc. 30,280 11/03/16
165 The Borders Building Retail 80,000 Borders, Inc. 40,000 10/31/09
166 Ken-Caryl Business Center Offic 50,636 Ana Tech 27,714 12/31/01
170 Caruth Haven Retail Center Retail 16,800 RAJ Enterprises Rick's Futons 4,400 04/30/11
171 3456 Ridge Property Mixed Use 100,207 Signode 30,030 10/31/02
172 Campus Plaza Shopping Center Retail 26,457 Smart and Final 14,800 07/31/14
176 Airport Business Center Mixed Use 41,660 St. Mary's Medical Clinic 12,231 02/01/03
177 Staples - Wilmington Retail 29,049 Staples The Office Superstore 24,049 08/31/13
178 Felicita Junction Retail 41,682 Jimbo's Natural Foods 16,293 12/31/17
182 Staples - Valparaiso Retail 24,049 Staples 24,049 10/31/13
184 Centennial Creek Office Park Office 28,540 Qualix Group 3,277 09/30/00
192 Cottonwood Plaza Mixed Use 45,778 Alphagraphics 9,190 02/28/01
193 Southport Shops Retail 17,763 Experts on Sight 3,892 07/31/03
198 Moore Lake Commons Shopping Center Retail 64,905 Dave's Sport Shop 16,810 03/31/08
201 South Street Seaport Office Center Office 48,177 South Street Seaport Museum 8,339 12/01/99
202 Hathaway Commerce Center Industrial 67,214 Simons Bakery 17,280 04/30/00
204 Walgreen's Drug Store - Swansea Retail 13,905 Walgreens 13,905 08/30/16
206 Devonshire Square Retail Center Retail 16,725 Quality Medical Management, Inc. 2,800 09/30/99
207 1440 N. Vine Street Retail 14,401 Kinko Copies 5,821 08/30/08
211 Benihana Restaurant Retail 8,284 Benihana Restaurant 8,284 07/01/18
213 Imperial Plaza Retail Center Retail 26,337 US Social Security 4,576 06/07/99
215 Antietam Village Center Retail 26,789 Mountainview Liquors, Inc. 3,500 12/31/03
216 Gateway Shoppes Retail 21,920 Wolf Camera 4,550 10/31/02
217 Red Onion Building Mixed Use 8,200 Red Onion Restaurant 2,651 06/30/04
220 Villa East I & II Office 49,725 Lutheran Family 8,624 05/31/03
223 Wilmington Plaza Retail 54,401 Sav-On 22,250 02/28/10
224 The Nations Bank Building Office 33,726 Nations Bank of Texas 13,658 12/01/04
229 Harold Gilstrap Shopping Center Retail 83,131 Pamidia, Inc. 48,506 05/01/02
235 Seaside Village Shopping Center Retail 50,144 L.L. Wings, Inc. 10,000 02/28/03
237 Ravenna Plaza Retail 87,644 Central Tractor 40,000 01/31/04
239 Central/Magnolia Retail Center Mixed Use 17,556 Blockbuster Video 6,424 01/15/00
243 Gottschalk's Department Store Retail 40,000 Gottschalk's, Inc. 40,000 02/28/05
248 Market Plaza Retail 22,534 Key Bank 3,859 03/30/01
249 Michigan Plaza & Bender Plaza (4) Office 63,331 Texaco 18,128 06/30/00
250 Mockingbird Park Retail Building Mixed Use 46,802 Fitness Connection, Inc. 16,719 05/01/06
251 Poolesville Village Center Retail 16,715 CVS Pharmacy 7,642 05/01/06
252 Executive Park Offices Office 23,274 FWC 5,823 04/03/01
253 Citadel Square Shopping Center (5) Retail 50,173 A&P/Office Depot 42,688 02/28/03
255 Ware's Van & Storage Co. Industrial 56,600 Northwest Operations, LLC 56,600 10/30/13
263 Courtyards of Granbury Mixed Use 47,340 N/A N/A N/A
276 Bloomingdale Shopping Center Retail 11,000 Twinkling Stars Nursery 2,000 06/30/00
<CAPTION>
Tenant #2
Major Lease
Major Tenant #2 Tenant #2 Expiration
# Property Name Name Sq. Ft. Date
--------------- --------------- --------- ----------
<S> <C> <C> <C>
142 Rafael North Executive Park N/A N/A N/A
144 Hewlett Shopping Center Dime Savings 5,500 08/01/07
146 2700 Richards Building Chili! Soft Inc. 4,377 12/02/00
147 Lincoln Park Center N/A N/A N/A
151 The Citibank Building Maxnet Communication Systems 12,685 02/28/02
152 Petco/Starbucks S/C Cox Communications 1,550 10/06/02
153 1870 Ogden Drive Trendwest Resorts, Inc. 8,440 03/31/03
154 Woodland Park Office Building Dodge, Warren and Peters 8,460 05/31/02
158 Brookwood Village The Bread Market 3,511 07/31/99
160 Little River Shopping Center CVS Pharmacy, Inc. 8,450 09/30/00
165 The Borders Building N/A N/A N/A
166 Ken-Caryl Business Center Peak 1 Resources, Inc. 9,152 09/30/01
170 Caruth Haven Retail Center Fast Stop Food Store 2,600 Month to Month
171 3456 Ridge Property Rollex 25,100 01/31/99
172 Campus Plaza Shopping Center N/A N/A N/A
176 Airport Business Center Quest Diagnostics, Inc. 6,045 03/01/99
177 Staples - Wilmington Shastar 5,000 03/31/04
178 Felicita Junction Sav-On (Ground Lease) 16,854 06/30/17
182 Staples - Valparaiso N/A N/A N/A
184 Centennial Creek Office Park Hulet-Watson 3,125 09/01/99
192 Cottonwood Plaza Bon Voyage Travel 7,787 11/30/01
193 Southport Shops Mancino's Pizza and Grinders 3,038 11/30/01
198 Moore Lake Commons Shopping Center Pawn America 7,625 10/31/00
201 South Street Seaport Office Center Putnam Lovell 6,968 09/01/02
202 Hathaway Commerce Center California Mortgage 8,272 11/30/00
204 Walgreen's Drug Store - Swansea N/A N/A N/A
206 Devonshire Square Retail Center Murray Goldstein and
Marion Goldstein 2,000 12/31/99
207 1440 N. Vine Street AAA Flag & Banner 3,850 06/06/02
211 Benihana Restaurant N/A N/A N/A
213 Imperial Plaza Retail Center St. Francis 3,000 12/18/02
215 Antietam Village Center Southland Corp. 7-11 2,750 10/06/99
216 Gateway Shoppes House of Golf 3,000 04/30/03
217 Red Onion Building Omnibus Gallery 1,835 05/30/03
220 Villa East I & II Dahlin Dental 6,031 07/31/03
223 Wilmington Plaza Goodwill 14,250 05/31/03
224 The Nations Bank Building Prudential Health Care 13,700 01/01/02
229 Harold Gilstrap Shopping Center J.C. Food Store 21,375 09/01/07
235 Seaside Village Shopping Center Gold's Gym 9,000 02/28/06
237 Ravenna Plaza Ravenna IGA 31,575 05/31/08
239 Central/Magnolia Retail Center Appian Escrow 3,516 03/10/02
243 Gottschalk's Department Store N/A N/A N/A
248 Market Plaza Rent-A-Center, Inc. 3,008 01/31/99
249 Michigan Plaza & Bender Plaza (4) Miller Johnson 10,245 04/30/02
250 Mockingbird Park Retail Building I Dance 2 6,026 10/01/99
251 Poolesville Village Center Sax, Leonard, M.D. 2,192 02/01/01
252 Executive Park Offices N/A N/A N/A
253 Citadel Square Shopping Center (5) N/A N/A N/A
255 Ware's Van & Storage Co. N/A N/A N/A
263 Courtyards of Granbury N/A N/A N/A
276 Bloomingdale Shopping Center N/A N/A N/A
<CAPTION>
Tenant #3
Major Lease
Major Tenant #3 Tenant #3 Expiration
# Property Name Name Sq. Ft. Date
--------------- --------------- --------- ----------
<S> <C> <C> <C>
142 Rafael North Executive Park N/A N/A N/A
144 Hewlett Shopping Center Citibank 5,500 11/01/03
146 2700 Richards Building N/A N/A N/A
147 Lincoln Park Center N/A N/A N/A
151 The Citibank Building Superior Bank 9,515 02/28/02
152 Petco/Starbucks S/C N/A N/A N/A
153 1870 Ogden Drive N/A N/A N/A
154 Woodland Park Office Building GN Mortgage 5,251 04/30/02
158 Brookwood Village N/A N/A N/A
160 Little River Shopping Center N/A N/A N/A
165 The Borders Building N/A N/A N/A
166 Ken-Caryl Business Center N/A N/A N/A
170 Caruth Haven Retail Center Starbucks 2,000 10/05/08
171 3456 Ridge Property MEDX 25,027 02/28/01
172 Campus Plaza Shopping Center N/A N/A N/A
176 Airport Business Center Decision One Corporation 5,987 07/01/99
177 Staples - Wilmington N/A N/A N/A
178 Felicita Junction N/A N/A N/A
182 Staples - Valparaiso N/A N/A N/A
184 Centennial Creek Office Park N/A N/A N/A
192 Cottonwood Plaza Coco's 5,400 06/30/05
193 Southport Shops Duron Paints 3,038 11/30/01
198 Moore Lake Commons Shopping Center New Horizon 7,532 12/31/07
201 South Street Seaport Office Center N/A N/A N/A
202 Hathaway Commerce Center Paul Thibodeau 6,946 06/30/02
204 Walgreen's Drug Store - Swansea N/A N/A N/A
206 Devonshire Square Retail Center Edward Yepremian
(Jasmine Cleaners) 2,000 02/28/04
207 1440 N. Vine Street Out of the Closet 3,780 06/13/00
211 Benihana Restaurant N/A N/A N/A
213 Imperial Plaza Retail Center N/A N/A N/A
215 Antietam Village Center N/A N/A N/A
216 Gateway Shoppes Neptune Bar & Grill 2,470 11/30/00
217 Red Onion Building N/A N/A N/A
220 Villa East I & II Complex Skin 5,859 03/31/01
223 Wilmington Plaza Hollywood Video 6,440 05/31/08
224 The Nations Bank Building Rehability Center 4,543 10/01/03
229 Harold Gilstrap Shopping Center Rite Aid 8,450 09/01/02
235 Seaside Village Shopping Center U.S. Government/
Gen.Svc.Adm 8,042 03/09/04
237 Ravenna Plaza Gray Drug/Rite-Aid 10,069 09/30/00
239 Central/Magnolia Retail Center N/A N/A N/A
243 Gottschalk's Department Store N/A N/A N/A
248 Market Plaza Fashion Retail, Inc. 3,008 04/30/00
249 Michigan Plaza & Bender Plaza (4) State of New Mexico:
Children Youth & Families 10,910 02/29/08
250 Mockingbird Park Retail Building N/A N/A N/A
251 Poolesville Village Center B & S Beer and Wine 1,768 06/01/01
252 Executive Park Offices N/A N/A N/A
253 Citadel Square Shopping Center (5) N/A N/A N/A
255 Ware's Van & Storage Co. N/A N/A N/A
263 Courtyards of Granbury N/A N/A N/A
276 Bloomingdale Shopping Center N/A N/A N/A
</TABLE>
(1B) The Mortgage Loans secured by Kendale Lakes Plaza, Cypress Creek Station
and Oakwood Business Center, respectively, are cross-collateralized and
cross-defaulted.
(1D) A Single Mortgage Note is secured by 2294 Molly Pitcher Highway, 5015
Campuswood Drive, 5010 Campuswood Drive and 5009 Campuswood Drive,
respectively.
(1H) The Mortgage Loans secured by Cranbrook Centre Apartments and Cranbrook
Centre Office Buildings, respectively, are cross-collateralized and
cross-defaulted.
(1K) The Mortgage Loans secured by Century Plaza Strip Shopping Center and
Albany Square Strip Shopping Center, respectively, are
cross-collateralized and cross-defaulted.
(2) Marycrest Shopping Center has an interest only period of 24 months from
origination and thereafter is scheduled to amortize over 360 months with
the payment presented reflecting the amount due during the amortization
term.
(3) Merchant's Square has an interest only period of 24 months from
origination and thereafter is scheduled to amortize over 336 months with
the payment presented reflecting the amount due during the amortization
term.
(4) The Mortgage Loan secured by Michigan & Bender Plaza contains two
properties that are operated as one.
(5) Citadel Square Shopping Center has an interest only period of 36 months
from origination and thereafter is scheduled to amortize over 300 months
with the payment presented reflecting the amount due during the
amortization term.
(6) Only those tenants which occupy 10% or more of the property area.
<PAGE>
Additional Mortgage Loan Information
<TABLE>
<CAPTION>
Property Property Hotel
# Property Name Type Sub-type Franchise
------------- ---- -------- ---------
<S> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) Hotel Limited Service Hampton Inn
2 Quality Suites - Charleston (1A) Hotel Limited Service Quality Suites
3 Courtyard by Marriott - Ann Arbor (1A) Hotel Limited Service Courtyard by Marriott
4 Residence Inn - Phoenix (1A) Hotel Limited Service Residence Inn
5 Homewood Suites - Cary (1A) Hotel Full Service Homewood Suites
6 Hampton Inn & Suites - Gwinnett (1A) Hotel Limited Service Hampton Inn
7 Hampton Inn - Raleigh (1A) Hotel Limited Service Hampton Inn
8 Comfort Suites - Orlando (1A) Hotel Limited Service Comfort Suites
9 Hampton Inn - Perimeter (1A) Hotel Limited Service Hampton Inn
10 Hampton Inn - Charlotte, NC (1A) Hotel Limited Service Hampton Inn
11 Courtyard by Marriott - Wilmington (1A) Hotel Limited Service Courtyard by Marriott
12 Hampton Inn - West Springfield (1A) Hotel Limited Service Hampton Inn
13 Homewood Suites - Clear Lake (1A) Hotel Limited Service Homewood Suites
14 Comfort Inn - Charleston (1A) Hotel Limited Service Comfort Suites
15 Kendale Lakes Plaza (1B) Retail Anchored
16 Cypress Creek Station (1B) Retail Anchored
17 Oakwood Business Center (1B) Office
18 Westchase Ranch Apartments (1C) Multifamily
19 Westwood Village Apartments (1C) Multifamily
20 Normandy Woods Apartments (1C) Multifamily
21 Savoy Manor Apartments (1C) Multifamily
22 San Marin Apartments (1C) Multifamily
23 Country Squire Apartments - South Multifamily
24 2294 Molly Pitcher Highway (1D) Industrial
25 5015 Campuswood Drive (1D) Office
26 5010 Campuswood Drive (1D) Office
27 5009 Campuswood Drive (1D) Office
28 Fair Lakes Promenade Retail Anchored
29 Keller Oaks Apartments (1E) Multifamily
30 Sycamore Hill Apartments (1E) Multifamily
31 Clarendon Apartments (1E) Multifamily
32 Woodchase Condominiums (1E) Multifamily
33 Dallas Design Center Portfolio Mixed Use Office/Showroom
34 Assembly Square Office Building Mixed Use Office/Theater
35 Spicetree Apartments Multifamily
36 Lamplighter Mobile Home Park Manufactured Housing
37 White Station Tower Office
38 Holiday Inn New Orleans Veterans Hotel Full Service Holiday Inn
39 The Links at Bixby Multifamily
40 Southwood Apartments Multifamily
41 The Shoppes at Longwood Retail Anchored
42 Pines of Westbury Multifamily
43 Edentree Apartments Multifamily
44 Becker Village Mall Retail Anchored
45 Tiffany Square Office
46 The Mint Apartments Multifamily
47 River Park Shopping Center Retail Anchored
48 Rancho Destino Apartments Multifamily
49 Conestoga Mobile Home Park Manufactured Housing
<CAPTION>
Most Recent
Occupancy Date of Operating Most
Rate at Occupancy Statement Recent
Underwriting(7) Rate Date Revenue
--------------- ---- ---- -------
<S> <C> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) N/A 06/01/98 06/30/98 $4,527,399
2 Quality Suites - Charleston (1A) N/A 06/01/98 06/30/98 4,035,455
3 Courtyard by Marriott - Ann Arbor (1A) N/A 06/01/98 06/30/98 4,518,538
4 Residence Inn - Phoenix (1A) N/A 06/01/98 06/30/98 4,450,180
5 Homewood Suites - Cary (1A) N/A 06/01/98 06/30/98 3,754,058
6 Hampton Inn & Suites - Gwinnett (1A) N/A 06/01/98 06/30/98 2,948,428
7 Hampton Inn - Raleigh (1A) N/A 06/01/98 06/30/98 3,096,774
8 Comfort Suites - Orlando (1A) N/A 06/01/98 06/30/98 4,616,248
9 Hampton Inn - Perimeter (1A) N/A 06/01/98 06/30/98 2,812,138
10 Hampton Inn - Charlotte, NC (1A) N/A 06/01/98 06/30/98 2,921,820
11 Courtyard by Marriott - Wilmington (1A) N/A 06/01/98 06/30/98 2,813,774
12 Hampton Inn - West Springfield (1A) N/A 06/01/98 06/30/98 2,404,755
13 Homewood Suites - Clear Lake (1A) N/A 06/01/98 06/30/98 2,679,263
14 Comfort Inn - Charleston (1A) N/A 06/01/98 06/30/98 2,529,059
15 Kendale Lakes Plaza (1B) 98.0% 12/31/98 12/31/98 4,323,975
16 Cypress Creek Station (1B) 99.0% 12/31/98 12/31/98 3,531,600
17 Oakwood Business Center (1B) 97.0% 12/31/98 12/31/98 2,081,735
18 Westchase Ranch Apartments (1C) 96.0% 01/20/99 11/30/98 4,363,700
19 Westwood Village Apartments (1C) 92.0% 01/20/99 11/30/98 2,102,611
20 Normandy Woods Apartments (1C) 95.0% 01/21/99 11/30/98 1,558,074
21 Savoy Manor Apartments (1C) 97.0% 01/20/99 11/30/98 1,097,275
22 San Marin Apartments (1C) 86.0% 01/20/99 11/30/98 1,031,864
23 Country Squire Apartments - South 94.0% 09/30/98 07/31/98 5,539,068
24 2294 Molly Pitcher Highway (1D) 100.0% 09/01/98 06/30/98 1,021,900
25 5015 Campuswood Drive (1D) 100.0% 09/23/98 06/30/98 1,916,382
26 5010 Campuswood Drive (1D) 94.0% 09/23/98 06/30/98 1,298,598
27 5009 Campuswood Drive (1D) 100.0% 07/01/98 06/30/98 116,380
28 Fair Lakes Promenade 100.0% 08/20/98 07/31/98 2,749,232
29 Keller Oaks Apartments (1E) 98.0% 03/24/98 02/28/98 1,455,655
30 Sycamore Hill Apartments (1E) 96.0% 03/24/98 02/28/98 1,281,315
31 Clarendon Apartments (1E) 95.0% 03/24/98 02/28/98 1,167,429
32 Woodchase Condominiums (1E) 99.0% 03/24/98 02/28/98 507,456
33 Dallas Design Center Portfolio 98.0% 12/31/98 09/30/98 3,625,438
34 Assembly Square Office Building 100.0% 11/04/98 10/31/98 3,111,337
35 Spicetree Apartments 96.0% 06/25/98 06/30/98 3,564,426
36 Lamplighter Mobile Home Park 100.0% 09/30/98 10/31/98 2,549,837
37 White Station Tower 93.0% 01/01/99 12/31/98 3,743,661
38 Holiday Inn New Orleans Veterans N/A 12/31/98 12/31/98 5,290,884
39 The Links at Bixby 98.0% 11/25/97 11/19/97 2,259,394
40 Southwood Apartments 94.0% 09/30/98 10/31/98 2,771,592
41 The Shoppes at Longwood 100.0% 07/31/98 07/31/98 2,217,124
42 Pines of Westbury 83.0% 02/03/99 10/31/98 4,088,292
43 Edentree Apartments 96.0% 08/25/98 07/31/98 2,410,703
44 Becker Village Mall 99.0% 09/01/98 08/31/98 2,065,029
45 Tiffany Square 100.0% 09/01/98 08/31/98 2,057,196
46 The Mint Apartments 93.0% 11/16/98 11/30/98 3,075,010
47 River Park Shopping Center 94.0% 09/01/98 08/31/98 1,488,679
48 Rancho Destino Apartments 100.0% 10/30/98 07/27/98 1,668,788
49 Conestoga Mobile Home Park 96.0% 07/31/98 05/31/98 1,266,178
<CAPTION>
Most Most Most
Recent Recent Recent U/W
Expenses NOI DSCR (8) NOI
-------- --- -------- ---
<S> <C> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) $2,396,594 $2,130,805 3.19x $1,864,954
2 Quality Suites - Charleston (1A) 2,213,839 1,821,616 3.30 1,677,663
3 Courtyard by Marriott - Ann Arbor (1A) 2,464,313 2,054,225 3.72 1,863,278
4 Residence Inn - Phoenix (1A) 2,512,651 1,937,529 3.51 1,937,667
5 Homewood Suites - Cary (1A) 1,754,101 1,999,957 3.78 1,546,338
6 Hampton Inn & Suites - Gwinnett (1A) 1,473,551 1,474,877 3.11 1,372,668
7 Hampton Inn - Raleigh (1A) 1,542,413 1,554,361 3.34 1,298,209
8 Comfort Suites - Orlando (1A) 2,772,827 1,843,421 4.06 1,693,305
9 Hampton Inn - Perimeter (1A) 1,442,108 1,370,030 3.12 1,357,456
10 Hampton Inn - Charlotte, NC (1A) 1,427,239 1,494,581 3.72 1,257,125
11 Courtyard by Marriott - Wilmington (1A) 1,563,057 1,250,717 3.34 1,230,807
12 Hampton Inn - West Springfield (1A) 1,415,059 989,696 3.05 939,245
13 Homewood Suites - Clear Lake (1A) 1,637,937 1,041,326 3.44 965,176
14 Comfort Inn - Charleston (1A) 1,398,148 1,130,911 8.19 1,093,638
15 Kendale Lakes Plaza (1B) 763,912 3,560,063 1.34 3,313,246
16 Cypress Creek Station (1B) 985,132 2,546,468 1.19 2,806,268
17 Oakwood Business Center (1B) 626,494 1,455,241 1.56 1,421,743
18 Westchase Ranch Apartments (1C) 1,975,659 2,388,041 1.30 2,526,825
19 Westwood Village Apartments (1C) 937,939 1,164,672 1.37 1,172,658
20 Normandy Woods Apartments (1C) 740,640 817,434 1.41 916,348
21 Savoy Manor Apartments (1C) 534,537 562,738 1.33 588,292
22 San Marin Apartments (1C) 691,063 340,801 1.16 417,737
23 Country Squire Apartments - South 2,481,348 3,057,720 1.30 3,008,930
24 2294 Molly Pitcher Highway (1D) 476,006 545,894 0.38 2,008,217
25 5015 Campuswood Drive (1D) 631,694 1,284,688 2.12 1,151,781
26 5010 Campuswood Drive (1D) 469,760 828,838 2.19 761,819
27 5009 Campuswood Drive (1D) 29,180 87,200 2.00 77,688
28 Fair Lakes Promenade 455,844 2,293,388 1.33 2,284,188
29 Keller Oaks Apartments (1E) 648,950 806,705 1.42 762,660
30 Sycamore Hill Apartments (1E) 668,024 613,291 1.25 516,741
31 Clarendon Apartments (1E) 642,274 525,155 1.46 471,616
32 Woodchase Condominiums (1E) 227,158 280,298 1.47 249,140
33 Dallas Design Center Portfolio 1,670,242 1,955,196 1.33 2,241,935
34 Assembly Square Office Building 1,250,496 1,860,841 1.33 1,945,253
35 Spicetree Apartments 1,696,697 1,867,729 1.44 1,706,242
36 Lamplighter Mobile Home Park 790,813 1,759,025 1.34 1,584,956
37 White Station Tower 1,589,466 2,154,195 1.67 2,052,581
38 Holiday Inn New Orleans Veterans 2,897,142 2,393,742 1.72 2,194,699
39 The Links at Bixby 557,063 1,702,331 1.37 1,580,202
40 Southwood Apartments 1,283,495 1,488,097 1.26 1,486,121
41 The Shoppes at Longwood 513,557 1,703,567 1.44 1,611,293
42 Pines of Westbury 2,857,957 1,230,335 1.19 1,249,652
43 Edentree Apartments 1,218,160 1,192,543 1.26 1,150,799
44 Becker Village Mall 579,693 1,485,336 1.55 1,270,355
45 Tiffany Square 770,093 1,287,103 1.37 1,505,018
46 The Mint Apartments 1,768,861 1,306,149 1.43 1,386,164
47 River Park Shopping Center 249,488 1,239,191 1.34 1,246,521
48 Rancho Destino Apartments 532,648 1,136,140 1.36 1,002,185
49 Conestoga Mobile Home Park 352,603 913,575 1.18 1,085,388
<CAPTION>
U/W U/W
NCF DSCR (8)
--- --------
<S> <C> <C>
1 Hampton Inn - Elmsford (1A) $1,374,994 2.54x
2 Quality Suites - Charleston (1A) 1,271,697 2.54
3 Courtyard by Marriott - Ann Arbor (1A) 1,216,246 2.54
4 Residence Inn - Phoenix (1A) 1,920,777 2.54
5 Homewood Suites - Cary (1A) 1,452,430 2.54
6 Hampton Inn & Suites - Gwinnett (1A) 1,114,219 2.54
7 Hampton Inn - Raleigh (1A) 1,000,261 2.54
8 Comfort Suites - Orlando (1A) 1,205,152 2.54
9 Hampton Inn - Perimeter (1A) 1,067,607 2.54
10 Hampton Inn - Charlotte, NC (1A) 920,667 2.54
11 Courtyard by Marriott - Wilmington (1A) 824,922 2.54
12 Hampton Inn - West Springfield (1A) 769,690 2.54
13 Homewood Suites - Clear Lake (1A) 755,838 2.54
14 Comfort Inn - Charleston (1A) 897,540 2.54
15 Kendale Lakes Plaza (1B) 3,241,994 1.25
16 Cypress Creek Station (1B) 2,700,441 1.25
17 Oakwood Business Center (1B) 1,228,249 1.25
18 Westchase Ranch Apartments (1C) 2,332,825 1.30
19 Westwood Village Apartments (1C) 1,092,658 1.30
20 Normandy Woods Apartments (1C) 849,348 1.30
21 Savoy Manor Apartments (1C) 540,292 1.30
22 San Marin Apartments (1C) 369,487 1.30
23 Country Squire Apartments - South 3,008,930 1.28
24 2294 Molly Pitcher Highway (1D) 1,791,007 1.40
25 5015 Campuswood Drive (1D) 972,949 1.40
26 5010 Campuswood Drive (1D) 639,225 1.40
27 5009 Campuswood Drive (1D) 65,758 1.40
28 Fair Lakes Promenade 2,223,209 1.29
29 Keller Oaks Apartments (1E) 762,660 1.24
30 Sycamore Hill Apartments (1E) 516,741 1.24
31 Clarendon Apartments (1E) 471,616 1.24
32 Woodchase Condominiums (1E) 249,140 1.24
33 Dallas Design Center Portfolio 1,917,103 1.30
34 Assembly Square Office Building 1,757,340 1.26
35 Spicetree Apartments 1,706,242 1.32
36 Lamplighter Mobile Home Park 1,584,956 1.21
37 White Station Tower 1,656,723 1.29
38 Holiday Inn New Orleans Veterans 1,975,611 1.42
39 The Links at Bixby 1,580,202 1.27
40 Southwood Apartments 1,486,121 1.26
41 The Shoppes at Longwood 1,520,138 1.29
42 Pines of Westbury 1,249,652 1.20
43 Edentree Apartments 1,150,799 1.22
44 Becker Village Mall 1,209,229 1.26
45 Tiffany Square 1,220,026 1.30
46 The Mint Apartments 1,238,164 1.36
47 River Park Shopping Center 1,171,613 1.27
48 Rancho Destino Apartments 1,002,185 1.20
49 Conestoga Mobile Home Park 1,085,388 1.40
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Property Property Hotel
# Property Name Type Sub-type Franchise
------------- ---- -------- ---------
<S> <C> <C> <C>
50 Huntington Chase Apartments Multifamily
51 Parkshore Centre Office Building Office
52 Kenwood Pavilion Retail Unanchored
53 Newsome Park Apartments Multifamily
54 Princeton Court Apartments (1F) Multifamily
55 Pinewood Estates Apartments (1F) Multifamily
56 Arbor Court Apartments (1F) Multifamily
57 U-Store of Brighton Self Storage Facility (1G) Self Storage
58 U-Store of South Lyon Self Storage Facility (1G) Self Storage
59 U-Store of Saline Self Storage Facility (1G) Self Storage
60 U-Store of Davison Self Storage Facility (1G) Self Storage
61 U-Store of Holly Self Storage Facility (1G) Self Storage
62 U-Store of Jackson Self Storage Facility (1G) Self Storage
63 Birches Apartments Multifamily
64 Hollywood Plaza Retail Anchored
65 50-60 Worcester Rd. Mixed Use Office/Retail
66 Mahwah Business Park Mixed Use Office/Industrial
67 Silvernail Shopping Center Retail Anchored
68 Tech Center 29 Office/Warehouse Complex Industrial
69 Centre North Shopping Center Retail Anchored
70 Cranbrook Centre Apartments (1H) Multifamily
71 Cranbrook Centre Office Buildings (1H) Office
72 Lubbock Shopping Parkade Retail Anchored
73 Marin Club Apartments Multifamily
74 Prunedale Center Mixed Use Office/Retail
75 Lamplighter Ontario MHP Manufactured Housing
76 Marycrest Shopping Center (2) Retail Anchored
77 Elm Plaza Shopping Center Retail Anchored
78 Century Plaza East Retail Anchored
79 Keller Springs Tech Center Industrial
80 Mobile Gardens/Holly View Mobile Home Park (1I) Manufactured Housing
81 Stony Chase/Rock Creek Mobile Home Park (1I) Manufactured Housing
82 Briarwood Manor (1I) Manufactured Housing
83 Tierra Verde Marine Center Mixed Use Marina/Retail
84 Aurora Square Retail Anchored
85 Merchant's Square (3) Retail Anchored
86 Northwood Hills Shopping Center Retail Anchored
87 36th Street Office Center Office
88 Fifth Avenue Apartments Multifamily
89 The Watermill Apartments Multifamily
90 Brooks Corner Mixed Use Office/Retail
91 Hollywood Ardmore Apartments Multifamily
92 Chasewood Apartments Multifamily
93 Kingsgate North Mixed Use Office/Retail
94 Fairfield Suites Pittsburgh/Airport Hotel Limited Service Fairfield Suites
95 Seatree Apartments Multifamily
96 All Aboard Mini Storage - Alhambra Self Storage
97 West Century Center Retail Unanchored
98 Universal Plaza Retail Unanchored
99 Crestview Market Place Retail Anchored
100 New Franklin Apartments (4) Multifamily
101 Windjammer Apartments Multifamily
102 Woodlake Village Apartments Multifamily
103 Comfort Inn - Hopewell, VA Hotel Limited Service Comfort Inn
104 Linens N Things Retail Anchored
105 The Woods Apartments Multifamily
106 Moonlight Garden Apartments Multifamily
<CAPTION>
Most Recent
Occupancy Date of Operating Most
Rate at Occupancy Statement Recent
Underwriting(7) Rate Date Revenue
--------------- ---- ---- -------
<S> <C> <C> <C> <C>
50 Huntington Chase Apartments 96.0% 09/22/98 09/17/98 1,662,680
51 Parkshore Centre Office Building 100.0% 04/01/98 12/31/98 1,870,976
52 Kenwood Pavilion 100.0% 11/10/98 09/01/98 1,243,208
53 Newsome Park Apartments 97.0% 06/12/98 06/30/98 2,583,467
54 Princeton Court Apartments (1F) 97.0% 08/18/98 07/31/98 816,227
55 Pinewood Estates Apartments (1F) 95.0% 08/18/98 07/31/98 970,823
56 Arbor Court Apartments (1F) 94.0% 08/18/98 07/31/98 1,123,222
57 U-Store of Brighton Self Storage Facility (1G) 92.0% 10/15/98 09/30/98 560,026
58 U-Store of South Lyon Self Storage Facility (1G) 94.0% 10/15/98 09/30/98 363,469
59 U-Store of Saline Self Storage Facility (1G) 88.0% 10/15/98 09/30/98 376,707
60 U-Store of Davison Self Storage Facility (1G) 94.0% 10/15/98 09/30/98 248,209
61 U-Store of Holly Self Storage Facility (1G) 86.0% 10/15/98 09/30/98 220,913
62 U-Store of Jackson Self Storage Facility (1G) 86.0% 10/15/98 09/30/98 135,727
63 Birches Apartments 94.0% 11/24/98 10/31/98 1,736,205
64 Hollywood Plaza 98.0% 07/01/98 05/31/98 1,387,441
65 50-60 Worcester Rd. 100.0% 09/10/98 08/31/98 1,539,490
66 Mahwah Business Park 88.0% 12/24/98 12/31/98 1,356,732
67 Silvernail Shopping Center 92.0% 08/31/98 08/30/98 1,139,018
68 Tech Center 29 Office/Warehouse Complex 86.0% 12/01/98 11/30/98 1,638,476
69 Centre North Shopping Center 97.0% 07/28/98 08/11/98 1,062,374
70 Cranbrook Centre Apartments (1H) 94.0% 06/25/98 06/30/98 1,131,803
71 Cranbrook Centre Office Buildings (1H) 95.0% 06/30/98 06/30/98 959,938
72 Lubbock Shopping Parkade 100.0% 11/24/98 09/30/98 1,207,485
73 Marin Club Apartments 99.0% 08/24/98 08/31/98 1,415,508
74 Prunedale Center 99.0% 05/01/98 03/31/98 1,094,489
75 Lamplighter Ontario MHP 96.0% 10/01/98 09/30/98 1,387,335
76 Marycrest Shopping Center (2) 90.0% 10/01/98 12/31/98 1,293,903
77 Elm Plaza Shopping Center 100.0% 09/01/98 08/31/98 1,375,513
78 Century Plaza East 93.0% 09/11/98 05/31/98 1,079,483
79 Keller Springs Tech Center 96.0% 09/01/98 11/01/98 1,042,840
80 Mobile Gardens/Holly View Mobile Home Park (1I) 100.0% 07/09/98 06/30/98 621,643
81 Stony Chase/Rock Creek Mobile Home Park (1I) 100.0% 07/09/98 06/30/98 347,419
82 Briarwood Manor (1I) 78.0% 07/10/98 06/30/98 190,402
83 Tierra Verde Marine Center 100.0% 06/01/98 12/31/98 1,223,175
84 Aurora Square 96.0% 09/16/98 09/30/98 971,019
85 Merchant's Square (3) 100.0% 10/31/98 10/31/98 990,486
86 Northwood Hills Shopping Center 98.0% 10/26/98 08/31/98 1,322,058
87 36th Street Office Center 100.0% 10/30/98 09/30/98 1,405,101
88 Fifth Avenue Apartments 98.0% 07/29/98 07/31/98 1,320,522
89 The Watermill Apartments 98.0% 07/27/98 12/31/98 1,361,545
90 Brooks Corner 96.0% 07/01/98 06/30/98 940,016
91 Hollywood Ardmore Apartments 100.0% 09/30/98 12/31/98 2,085,224
92 Chasewood Apartments 91.0% 10/08/98 07/31/98 1,257,469
93 Kingsgate North 93.0% 09/01/98 08/31/98 1,069,353
94 Fairfield Suites Pittsburgh/Airport N/A 10/31/98 09/30/98 2,338,638
95 Seatree Apartments 91.0% 10/09/98 07/31/98 1,411,082
96 All Aboard Mini Storage - Alhambra 97.0% 07/31/98 07/31/98 926,677
97 West Century Center 90.0% 08/01/98 08/31/98 854,259
98 Universal Plaza 94.0% 09/01/98 08/01/98 762,805
99 Crestview Market Place 98.0% 08/13/98 08/19/98 743,438
100 New Franklin Apartments (4) 100.0% 08/14/98 06/30/98 1,401,419
101 Windjammer Apartments 97.0% 11/25/98 12/31/98 1,162,799
102 Woodlake Village Apartments 95.0% 01/04/99 12/31/98 1,231,780
103 Comfort Inn - Hopewell, VA N/A 05/31/98 05/31/98 2,327,267
104 Linens N Things 100.0% 02/19/98 02/19/98 790,859
105 The Woods Apartments 94.0% 10/01/98 07/31/98 1,105,902
106 Moonlight Garden Apartments 99.0% 08/31/98 08/31/98 893,811
<CAPTION>
Most Most Most
Recent Recent Recent U/W
Expenses NOI DSCR (8) NOI
-------- --- -------- ---
<S> <C> <C> <C> <C>
50 Huntington Chase Apartments 569,643 1,093,037 1.43 972,130
51 Parkshore Centre Office Building 752,341 1,118,635 1.55 1,151,267
52 Kenwood Pavilion 226,116 1,017,092 1.36 974,108
53 Newsome Park Apartments 1,774,994 808,473 1.19 837,903
54 Princeton Court Apartments (1F) 576,624 239,603 0.74 221,950
55 Pinewood Estates Apartments (1F) 756,562 214,261 1.07 178,233
56 Arbor Court Apartments (1F) 665,327 457,895 2.62 455,933
57 U-Store of Brighton Self Storage Facility (1G) 163,976 396,050 1.50 320,352
58 U-Store of South Lyon Self Storage Facility (1G) 88,350 275,119 1.96 191,789
59 U-Store of Saline Self Storage Facility (1G) 131,174 245,533 1.91 180,049
60 U-Store of Davison Self Storage Facility (1G) 85,611 162,598 1.77 130,795
61 U-Store of Holly Self Storage Facility (1G) 77,535 143,378 1.69 96,173
62 U-Store of Jackson Self Storage Facility (1G) 41,468 94,259 1.78 70,634
63 Birches Apartments 690,705 1,045,500 1.52 825,589
64 Hollywood Plaza 360,280 1,027,161 1.56 908,388
65 50-60 Worcester Rd. 467,005 1,072,485 1.57 913,595
66 Mahwah Business Park 398,060 958,672 1.39 1,153,211
67 Silvernail Shopping Center 323,515 815,503 1.27 851,839
68 Tech Center 29 Office/Warehouse Complex 326,282 1,312,194 1.98 1,302,426
69 Centre North Shopping Center 194,491 867,883 1.39 827,978
70 Cranbrook Centre Apartments (1H) 552,029 579,774 1.41 591,574
71 Cranbrook Centre Office Buildings (1H) 511,222 448,716 2.14 365,696
72 Lubbock Shopping Parkade 219,152 988,333 1.56 881,396
73 Marin Club Apartments 503,976 911,532 1.44 788,055
74 Prunedale Center 206,963 887,526 1.49 807,722
75 Lamplighter Ontario MHP 567,827 819,508 1.39 766,229
76 Marycrest Shopping Center (2) 442,070 851,833 1.41 880,177
77 Elm Plaza Shopping Center 517,559 857,954 1.43 858,428
78 Century Plaza East 271,886 807,597 1.46 849,874
79 Keller Springs Tech Center 244,247 798,593 1.39 778,197
80 Mobile Gardens/Holly View Mobile Home Park (1I) 147,937 473,706 1.68 400,244
81 Stony Chase/Rock Creek Mobile Home Park (1I) 102,966 244,453 1.65 181,846
82 Briarwood Manor (1I) 50,568 139,834 1.35 140,316
83 Tierra Verde Marine Center 239,353 983,822 1.63 756,040
84 Aurora Square 222,912 748,107 1.39 729,213
85 Merchant's Square (3) 213,562 776,924 1.42 812,900
86 Northwood Hills Shopping Center 386,484 935,574 1.70 830,309
87 36th Street Office Center 619,132 785,969 1.43 834,772
88 Fifth Avenue Apartments 618,333 702,189 1.35 652,519
89 The Watermill Apartments 584,054 777,491 1.49 699,109
90 Brooks Corner 148,183 791,833 1.40 750,313
91 Hollywood Ardmore Apartments 1,280,811 804,413 1.49 719,171
92 Chasewood Apartments 592,911 664,558 1.31 637,768
93 Kingsgate North 391,786 677,567 1.44 696,942
94 Fairfield Suites Pittsburgh/Airport 1,196,776 1,141,862 2.17 735,487
95 Seatree Apartments 745,016 666,066 1.39 602,905
96 All Aboard Mini Storage - Alhambra 227,801 698,876 1.51 669,076
97 West Century Center 227,557 626,702 1.30 655,894
98 Universal Plaza 120,718 642,087 1.36 682,719
99 Crestview Market Place 159,594 583,844 1.33 574,631
100 New Franklin Apartments (4) 564,512 836,907 1.67 712,590
101 Windjammer Apartments 513,360 649,439 1.49 606,029
102 Woodlake Village Apartments 644,118 587,662 1.45 624,528
103 Comfort Inn - Hopewell, VA 1,263,159 1,064,108 2.33 846,123
104 Linens N Things 132,192 658,667 1.54 618,984
105 The Woods Apartments 454,162 651,740 1.58 581,081
106 Moonlight Garden Apartments 278,896 614,915 1.44 513,492
<CAPTION>
U/W U/W
NCF DSCR (8)
--- --------
<S> <C> <C>
50 Huntington Chase Apartments 972,130 1.27
51 Parkshore Centre Office Building 999,241 1.38
52 Kenwood Pavilion 932,783 1.25
53 Newsome Park Apartments 837,903 1.24
54 Princeton Court Apartments (1F) 221,950 1.23
55 Pinewood Estates Apartments (1F) 178,233 1.23
56 Arbor Court Apartments (1F) 455,933 1.23
57 U-Store of Brighton Self Storage Facility (1G) 320,352 1.30
58 U-Store of South Lyon Self Storage Facility (1G) 191,789 1.30
59 U-Store of Saline Self Storage Facility (1G) 180,049 1.30
60 U-Store of Davison Self Storage Facility (1G) 130,795 1.30
61 U-Store of Holly Self Storage Facility (1G) 96,173 1.30
62 U-Store of Jackson Self Storage Facility (1G) 70,634 1.30
63 Birches Apartments 825,589 1.20
64 Hollywood Plaza 858,507 1.31
65 50-60 Worcester Rd. 857,491 1.26
66 Mahwah Business Park 949,154 1.37
67 Silvernail Shopping Center 801,780 1.25
68 Tech Center 29 Office/Warehouse Complex 1,116,490 1.68
69 Centre North Shopping Center 797,131 1.28
70 Cranbrook Centre Apartments (1H) 558,574 1.35
71 Cranbrook Centre Office Buildings (1H) 279,678 1.35
72 Lubbock Shopping Parkade 814,392 1.28
73 Marin Club Apartments 788,055 1.25
74 Prunedale Center 743,912 1.25
75 Lamplighter Ontario MHP 766,229 1.30
76 Marycrest Shopping Center (2) 787,474 1.30
77 Elm Plaza Shopping Center 744,969 1.24
78 Century Plaza East 819,901 1.48
79 Keller Springs Tech Center 729,895 1.27
80 Mobile Gardens/Holly View Mobile Home Park (1I) 400,244 1.35
81 Stony Chase/Rock Creek Mobile Home Park (1I) 181,846 1.35
82 Briarwood Manor (1I) 140,316 1.35
83 Tierra Verde Marine Center 729,130 1.21
84 Aurora Square 672,017 1.25
85 Merchant's Square (3) 757,642 1.39
86 Northwood Hills Shopping Center 746,198 1.36
87 36th Street Office Center 684,578 1.25
88 Fifth Avenue Apartments 652,519 1.26
89 The Watermill Apartments 651,109 1.25
90 Brooks Corner 713,267 1.26
91 Hollywood Ardmore Apartments 658,696 1.22
92 Chasewood Apartments 637,768 1.26
93 Kingsgate North 628,782 1.34
94 Fairfield Suites Pittsburgh/Airport 735,487 1.40
95 Seatree Apartments 602,905 1.26
96 All Aboard Mini Storage - Alhambra 669,076 1.45
97 West Century Center 613,803 1.27
98 Universal Plaza 647,013 1.37
99 Crestview Market Place 567,639 1.29
100 New Franklin Apartments (4) 669,840 1.34
101 Windjammer Apartments 556,029 1.27
102 Woodlake Village Apartments 565,278 1.40
103 Comfort Inn - Hopewell, VA 742,101 1.63
104 Linens N Things 618,984 1.45
105 The Woods Apartments 581,081 1.41
106 Moonlight Garden Apartments 513,492 1.20
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Property Property Hotel
# Property Name Type Sub-type Franchise
------------- ---- -------- ---------
<S> <C> <C> <C>
107 Sagamore Court Apartments Multifamily
108 Carriage Hill Apartments Multifamily
109 Dowling Office Building Mixed Use Office/Retail
110 Main Street Plaza Shopping Center Retail Anchored
111 Friendship Crossing Apartments Multifamily
112 Spruce Properties (1J) Multifamily
113 Oak Grove Apartments (1J) Multifamily
114 Aldrich Apartments (1J) Multifamily
115 One Bellemead Center Office
116 Denver Tech Center #30 Office
117 Preston Racquet Club Condominiums and Apartments Multifamily
118 Sand Lake Apartments Multifamily
119 Mobile Estate Mobile Home Park Manufactured Housing
120 Colonia Shopping Center Retail Unanchored
121 Vista Ridge Center III Retail Unanchored
122 Parkside East Apartments Multifamily
123 Northpark Village Retail Anchored
124 Breakers Apartments Multifamily
125 Picnic Lawn Apartments Multifamily
126 32nd Street and McDowell Road Shopping Center Retail Unanchored
127 Triangle Corporate Center Mixed Use Office/Industrial
128 One West Hills Office Office
129 Harper Regency Apartments Multifamily
130 Heritage Green Shopping Center Retail Unanchored
131 Captain's Landing Apartments Multifamily
132 All Aboard Mini Storage - Fremont Self Storage
133 Century Plaza Strip Shopping Center (1K) Retail Unanchored
134 Albany Square Strip Shopping Center (1K) Retail Unanchored
135 Larrabee Complex Mixed Use Office/Retail
136 Cedar Garden Apartments Multifamily
137 All Aboard Mini Storage - Stanton Self Storage
138 Windtree Apartments - Phase I Multifamily
139 Lake City Mini-Storage Self Storage
140 Huntington Mobile Estates Manufactured Housing
141 Everhart Park Shopping Center Retail Unanchored
142 Rafael North Executive Park Office
143 Westwind Estates Manufactured Housing
144 Hewlett Shopping Center Retail Anchored
145 Forest Park Village Multifamily
146 2700 Richards Building Office
147 Lincoln Park Center Retail Unanchored
148 Cedar Heights Apartments Multifamily
149 The North Oak Apartments Multifamily
150 Arrowhead Court Apartments Multifamily
151 The Citibank Building Office
152 Petco/Starbucks S/C Retail Anchored
153 1870 Ogden Drive Office
154 Woodland Park Office Building Office
155 Costa Mesa Mobile Estates Manufactured Housing
156 Tree Top Apartments Multifamily
157 Greenville Village Mobile Home Park Manufactured Housing
158 Brookwood Village Retail Anchored
159 Rose Grove Mobile Home Park Manufactured Housing
160 Little River Shopping Center Retail Anchored
161 The Amberton Apartments Multifamily
162 Best Western Worlds of Fun Hotel Limited Service Best Western
163 All Aboard Mini Storage - Anaheim Self Storage
<CAPTION>
Most Recent
Occupancy Date of Operating Most
Rate at Occupancy Statement Recent
Underwriting(7) Rate Date Revenue
--------------- ---- ---- -------
<S> <C> <C> <C> <C>
107 Sagamore Court Apartments 98.0% 12/01/98 09/30/98 1,018,092
108 Carriage Hill Apartments 97.0% 08/01/98 12/31/98 1,199,807
109 Dowling Office Building 89.0% 11/04/98 10/31/98 983,568
110 Main Street Plaza Shopping Center 93.0% 07/20/98 07/31/98 607,725
111 Friendship Crossing Apartments 97.0% 09/01/98 07/31/98 1,375,667
112 Spruce Properties (1J) 99.0% 11/01/98 10/31/98 530,327
113 Oak Grove Apartments (1J) 100.0% 11/01/98 10/31/98 413,368
114 Aldrich Apartments (1J) 100.0% 11/07/98 10/31/98 317,154
115 One Bellemead Center 95.0% 07/15/98 06/30/98 1,091,179
116 Denver Tech Center #30 98.0% 01/01/99 09/30/98 905,537
117 Preston Racquet Club Condominiums and Apartments 97.0% 11/30/98 11/30/98 995,418
118 Sand Lake Apartments 97.0% 01/15/98 12/31/98 1,130,589
119 Mobile Estate Mobile Home Park 100.0% 11/07/98 12/31/98 744,590
120 Colonia Shopping Center 97.0% 08/11/98 09/30/98 731,449
121 Vista Ridge Center III 90.0% 10/22/98 11/14/98 609,880
122 Parkside East Apartments 96.0% 09/01/98 07/31/98 965,791
123 Northpark Village 95.0% 09/01/98 08/31/98 629,557
124 Breakers Apartments 100.0% 08/20/98 06/30/98 647,752
125 Picnic Lawn Apartments 100.0% 10/19/98 10/31/98 749,539
126 32nd Street and McDowell Road Shopping Center 98.0% 07/14/98 06/30/98 682,568
127 Triangle Corporate Center 84.0% 06/30/98 04/30/98 714,909
128 One West Hills Office 100.0% 10/01/98 09/30/98 1,003,911
129 Harper Regency Apartments 97.0% 01/30/98 12/31/97 602,880
130 Heritage Green Shopping Center 100.0% 09/25/98 10/31/98 835,837
131 Captain's Landing Apartments 93.0% 10/08/98 10/11/98 1,081,626
132 All Aboard Mini Storage - Fremont 92.0% 07/31/98 07/31/98 611,236
133 Century Plaza Strip Shopping Center (1K) 100.0% 07/01/98 12/31/98 524,259
134 Albany Square Strip Shopping Center (1K) 100.0% 07/01/98 12/31/98 455,856
135 Larrabee Complex 100.0% 06/01/98 04/30/98 804,199
136 Cedar Garden Apartments 96.0% 11/24/98 10/31/98 735,879
137 All Aboard Mini Storage - Stanton 92.0% 07/31/98 07/31/98 565,740
138 Windtree Apartments - Phase I 100.0% 10/01/98 09/30/98 741,566
139 Lake City Mini-Storage 100.0% 07/28/98 06/30/98 713,049
140 Huntington Mobile Estates 100.0% 07/01/98 06/30/98 658,382
141 Everhart Park Shopping Center 98.0% 09/04/98 06/30/98 662,103
142 Rafael North Executive Park 100.0% 08/01/98 06/30/98 666,241
143 Westwind Estates 99.0% 07/01/98 07/31/98 751,342
144 Hewlett Shopping Center 100.0% 05/29/98 08/31/98 576,937
145 Forest Park Village 96.0% 11/05/98 08/31/98 852,593
146 2700 Richards Building 100.0% 09/01/98 09/30/98 558,094
147 Lincoln Park Center 100.0% 09/18/98 07/31/98 648,278
148 Cedar Heights Apartments 100.0% 08/05/98 06/30/98 798,354
149 The North Oak Apartments 92.0% 01/04/99 09/30/98 1,082,433
150 Arrowhead Court Apartments 98.0% 07/24/98 06/30/98 819,244
151 The Citibank Building 79.0% 07/13/98 06/30/98 553,793
152 Petco/Starbucks S/C 100.0% 12/01/97 06/16/98 549,692
153 1870 Ogden Drive 100.0% 10/20/98 09/30/98 358,252
154 Woodland Park Office Building 100.0% 08/10/98 07/30/98 899,653
155 Costa Mesa Mobile Estates 96.0% 12/01/98 11/30/98 550,401
156 Tree Top Apartments 95.0% 10/01/98 09/30/98 654,336
157 Greenville Village Mobile Home Park 99.0% 11/13/98 06/30/98 559,536
158 Brookwood Village 100.0% 09/14/98 07/31/98 472,056
159 Rose Grove Mobile Home Park 97.0% 06/01/98 03/31/98 1,304,005
160 Little River Shopping Center 100.0% 08/05/98 09/30/98 446,400
161 The Amberton Apartments 94.0% 10/15/98 12/31/98 687,225
162 Best Western Worlds of Fun N/A 08/31/98 09/30/98 1,215,329
163 All Aboard Mini Storage - Anaheim 92.0% 07/31/98 07/31/98 480,843
<CAPTION>
Most Most Most
Recent Recent Recent U/W
Expenses NOI DSCR (8) NOI
-------- --- -------- ---
<S> <C> <C> <C> <C>
107 Sagamore Court Apartments 444,612 573,480 1.46 565,516
108 Carriage Hill Apartments 593,019 606,788 1.54 604,218
109 Dowling Office Building 487,055 496,513 1.24 580,417
110 Main Street Plaza Shopping Center 83,155 524,570 1.38 492,755
111 Friendship Crossing Apartments 813,423 562,244 1.46 480,828
112 Spruce Properties (1J) 249,115 281,212 1.68 265,799
113 Oak Grove Apartments (1J) 204,054 209,314 1.67 199,559
114 Aldrich Apartments (1J) 186,084 131,070 1.47 135,435
115 One Bellemead Center 503,232 587,947 1.50 559,526
116 Denver Tech Center #30 335,866 569,671 1.59 503,196
117 Preston Racquet Club Condominiums and Apartments 500,962 494,456 1.31 454,730
118 Sand Lake Apartments 593,244 537,345 1.50 493,672
119 Mobile Estate Mobile Home Park 265,468 479,122 1.35 483,713
120 Colonia Shopping Center 197,191 534,258 1.49 493,164
121 Vista Ridge Center III 148,162 461,718 1.26 455,289
122 Parkside East Apartments 516,254 449,537 1.31 418,053
123 Northpark Village 138,666 490,891 1.49 427,100
124 Breakers Apartments 156,714 491,038 1.52 410,544
125 Picnic Lawn Apartments 225,644 523,895 1.57 427,029
126 32nd Street and McDowell Road Shopping Center 183,807 498,761 1.54 464,106
127 Triangle Corporate Center 248,913 465,996 1.53 470,231
128 One West Hills Office 456,905 547,006 1.68 457,319
129 Harper Regency Apartments 150,982 451,898 1.39 428,135
130 Heritage Green Shopping Center 294,774 541,062 1.67 497,871
131 Captain's Landing Apartments 576,779 504,847 1.60 379,610
132 All Aboard Mini Storage - Fremont 187,980 423,256 1.37 419,044
133 Century Plaza Strip Shopping Center (1K) 246,313 277,946 1.64 264,318
134 Albany Square Strip Shopping Center (1K) 212,153 243,703 1.78 241,102
135 Larrabee Complex 271,897 532,302 1.74 532,363
136 Cedar Garden Apartments 302,024 433,855 1.40 383,413
137 All Aboard Mini Storage - Stanton 208,649 357,091 1.19 406,330
138 Windtree Apartments - Phase I 253,290 488,276 1.61 400,132
139 Lake City Mini-Storage 182,922 530,127 1.71 422,341
140 Huntington Mobile Estates 217,212 441,170 1.54 386,163
141 Everhart Park Shopping Center 171,383 490,720 1.76 435,528
142 Rafael North Executive Park 215,462 450,779 1.61 384,951
143 Westwind Estates 380,423 370,919 1.30 344,733
144 Hewlett Shopping Center 67,184 509,753 1.83 440,664
145 Forest Park Village 492,087 360,506 1.28 343,163
146 2700 Richards Building 151,094 407,000 1.50 370,945
147 Lincoln Park Center 211,563 436,715 1.60 392,384
148 Cedar Heights Apartments 359,662 438,692 1.71 320,314
149 The North Oak Apartments 662,555 419,878 1.65 319,862
150 Arrowhead Court Apartments 447,009 372,235 1.50 313,250
151 The Citibank Building 210,720 343,073 1.39 420,618
152 Petco/Starbucks S/C 126,648 423,044 1.62 337,337
153 1870 Ogden Drive 141,876 216,376 0.83 349,073
154 Woodland Park Office Building 435,254 464,399 1.75 388,703
155 Costa Mesa Mobile Estates 205,322 345,079 1.45 334,915
156 Tree Top Apartments 249,179 405,157 1.60 323,814
157 Greenville Village Mobile Home Park 203,296 356,240 1.34 403,595
158 Brookwood Village 139,388 332,668 1.45 341,131
159 Rose Grove Mobile Home Park 571,077 732,929 3.09 599,403
160 Little River Shopping Center 98,117 348,283 1.40 329,347
161 The Amberton Apartments 364,802 322,423 1.36 330,350
162 Best Western Worlds of Fun 742,334 472,995 1.76 375,710
163 All Aboard Mini Storage - Anaheim 195,497 285,346 1.21 326,281
<CAPTION>
U/W U/W
NCF DSCR (8)
--- --------
<S> <C> <C>
107 Sagamore Court Apartments 534,766 1.36
108 Carriage Hill Apartments 548,218 1.39
109 Dowling Office Building 499,635 1.25
110 Main Street Plaza Shopping Center 483,188 1.27
111 Friendship Crossing Apartments 480,828 1.25
112 Spruce Properties (1J) 243,299 1.43
113 Oak Grove Apartments (1J) 180,059 1.43
114 Aldrich Apartments (1J) 123,685 1.43
115 One Bellemead Center 490,702 1.25
116 Denver Tech Center #30 446,359 1.25
117 Preston Racquet Club Condominiums and Apartments 454,730 1.20
118 Sand Lake Apartments 493,672 1.38
119 Mobile Estate Mobile Home Park 471,208 1.33
120 Colonia Shopping Center 474,687 1.32
121 Vista Ridge Center III 442,929 1.21
122 Parkside East Apartments 418,053 1.22
123 Northpark Village 415,499 1.26
124 Breakers Apartments 410,544 1.27
125 Picnic Lawn Apartments 427,029 1.28
126 32nd Street and McDowell Road Shopping Center 426,854 1.32
127 Triangle Corporate Center 430,309 1.41
128 One West Hills Office 404,673 1.25
129 Harper Regency Apartments 420,535 1.30
130 Heritage Green Shopping Center 418,221 1.29
131 Captain's Landing Apartments 379,610 1.20
132 All Aboard Mini Storage - Fremont 419,044 1.36
133 Century Plaza Strip Shopping Center (1K) 233,802 1.47
134 Albany Square Strip Shopping Center (1K) 216,883 1.47
135 Larrabee Complex 470,600 1.53
136 Cedar Garden Apartments 383,413 1.24
137 All Aboard Mini Storage - Stanton 406,330 1.36
138 Windtree Apartments - Phase I 400,132 1.32
139 Lake City Mini-Storage 422,341 1.36
140 Huntington Mobile Estates 386,163 1.35
141 Everhart Park Shopping Center 381,992 1.37
142 Rafael North Executive Park 360,744 1.29
143 Westwind Estates 344,733 1.21
144 Hewlett Shopping Center 421,364 1.51
145 Forest Park Village 343,163 1.22
146 2700 Richards Building 338,887 1.25
147 Lincoln Park Center 354,000 1.30
148 Cedar Heights Apartments 320,314 1.25
149 The North Oak Apartments 319,862 1.26
150 Arrowhead Court Apartments 313,250 1.27
151 The Citibank Building 344,452 1.39
152 Petco/Starbucks S/C 326,170 1.25
153 1870 Ogden Drive 328,356 1.26
154 Woodland Park Office Building 323,640 1.22
155 Costa Mesa Mobile Estates 329,715 1.38
156 Tree Top Apartments 323,814 1.28
157 Greenville Village Mobile Home Park 392,445 1.48
158 Brookwood Village 323,517 1.41
159 Rose Grove Mobile Home Park 598,395 2.52
160 Little River Shopping Center 316,754 1.27
161 The Amberton Apartments 302,350 1.27
162 Best Western Worlds of Fun 375,710 1.40
163 All Aboard Mini Storage - Anaheim 326,011 1.38
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Property Property Hotel
# Property Name Type Sub-type Franchise
------------- ---- -------- ---------
<S> <C> <C> <C>
164 Waterway Crossing Apartments Multifamily
165 The Borders Building Retail Anchored
166 Ken-Caryl Business Center Office
167 Alta Vista Mobile Home Park Manufactured Housing
168 Palm Springs Self Storage Self Storage
169 Holiday Inn Express Auburn Hotel Limited Service Holiday Inn
170 Caruth Haven Retail Center Retail Unanchored
171 3456 Ridge Property Mixed Use Office/Industrial
172 Campus Plaza Shopping Center Retail Unanchored
173 All Aboard Mini Storage - San Gabriel Self Storage
174 Point O' Woods Apartments Multifamily
175 Williamsburg on the Lake Apartments Multifamily
176 Airport Business Center Mixed Use Office/Industrial
177 Staples - Wilmington Retail Anchored
178 Felicita Junction Retail Anchored
179 The Bordeaux Apartments Multifamily
180 High Point Village I Apartments Multifamily
181 Assured Self Storage Facility Self Storage
182 Staples - Valparaiso Retail Anchored
183 Fruitland Grove Family Park Manufactured Housing
184 Centennial Creek Office Park Office
185 Park Lane Village Apartments (1L) Multifamily
186 Rynearson Lane Village Apartments (1L) Multifamily
187 Holiday Inn Express Ottawa Hotel Limited Service Holiday Inn
188 Ross Apartments Multifamily
189 339 S. Ardmore Apartments Multifamily
190 Edgewater Beach Resort Hotel Limited Service N/A
191 Fondren Hill Apartments Multifamily
192 Cottonwood Plaza Mixed Use Office/Retail
193 Southport Shops Retail Unanchored
194 Hawthorne Hill Apartments Multifamily
195 Days Inn Waccamaw Hotel Full Service Days Inn
196 Turtle Oaks Apartments Multifamily
197 Linden Place Mobile Home Park Manufactured Housing
198 Moore Lake Commons Shopping Center Retail Unanchored
199 Imperial Manor West Apartments Multifamily
200 Brown School Station Apts. Multifamily
201 South Street Seaport Office Center Office
202 Hathaway Commerce Center Industrial
203 Corinthian Apartments Multifamily
204 Walgreen's Drug Store - Swansea Retail Anchored
205 Catalina Apartments Multifamily
206 Devonshire Square Retail Center Retail Unanchored
207 1440 N. Vine Street Retail Unanchored
208 College Park Apartments Multifamily
209 Country Brooke Apartments Multifamily
210 Hillside View Apartments Multifamily
211 Benihana Restaurant Retail Unanchored
212 Crosswinds Apartments Multifamily
213 Imperial Plaza Retail Center Retail Unanchored
214 Twin Lakes Mobile Home Park Manufactured Housing
215 Antietam Village Center Retail Unanchored
216 Gateway Shoppes Retail Unanchored
217 Red Onion Building Mixed Use Office/Retail
218 526 South Ardmore Avenue Multifamily
219 All Aboard Mini Storage - Santa Ana Self Storage
220 Villa East I & II Office
<CAPTION>
Most Recent
Occupancy Date of Operating Most
Rate at Occupancy Statement Recent
Underwriting(7) Rate Date Revenue
--------------- ---- ---- -------
<S> <C> <C> <C> <C>
164 Waterway Crossing Apartments 64.0% 02/09/98 12/31/97 682,582
165 The Borders Building 50.0% 08/28/98 08/31/98 789,472
166 Ken-Caryl Business Center 100.0% 08/12/98 04/30/98 517,639
167 Alta Vista Mobile Home Park 95.0% 11/14/98 08/31/98 503,703
168 Palm Springs Self Storage 96.0% 10/08/98 09/22/98 694,187
169 Holiday Inn Express Auburn N/A 08/01/98 06/30/98 1,297,393
170 Caruth Haven Retail Center 96.0% 09/14/98 08/31/98 384,290
171 3456 Ridge Property 100.0% 06/30/98 05/31/98 532,240
172 Campus Plaza Shopping Center 90.0% 01/01/98 12/31/97 396,867
173 All Aboard Mini Storage - San Gabriel 95.0% 07/31/98 07/31/98 450,588
174 Point O' Woods Apartments 98.0% 08/24/98 06/30/98 715,479
175 Williamsburg on the Lake Apartments 96.0% 05/06/98 04/30/98 995,256
176 Airport Business Center 84.0% 12/31/97 12/31/98 527,531
177 Staples - Wilmington 100.0% 01/06/99 09/09/98 311,314
178 Felicita Junction 100.0% 09/30/98 11/30/98 514,385
179 The Bordeaux Apartments 97.0% 07/01/98 06/30/98 737,693
180 High Point Village I Apartments 93.0% 11/27/98 10/31/98 846,654
181 Assured Self Storage Facility 89.0% 07/15/98 09/30/98 460,133
182 Staples - Valparaiso 100.0% 11/10/98 09/09/98 294,601
183 Fruitland Grove Family Park 93.0% 04/01/98 03/31/98 489,562
184 Centennial Creek Office Park 100.0% 08/01/98 08/31/98 423,348
185 Park Lane Village Apartments (1L) 95.0% 07/01/98 12/31/98 322,792
186 Rynearson Lane Village Apartments (1L) 95.0% 08/28/98 12/31/98 262,716
187 Holiday Inn Express Ottawa N/A 06/30/98 06/30/98 1,245,320
188 Ross Apartments 97.0% 08/01/98 07/31/98 359,670
189 339 S. Ardmore Apartments 96.0% 05/26/98 06/11/98 528,493
190 Edgewater Beach Resort N/A 12/31/97 09/28/98 1,071,377
191 Fondren Hill Apartments 99.0% 06/15/98 05/31/98 519,667
192 Cottonwood Plaza 100.0% 07/20/98 07/31/98 719,751
193 Southport Shops 91.0% 08/11/98 08/11/98 339,308
194 Hawthorne Hill Apartments 95.0% 05/13/98 07/31/98 773,164
195 Days Inn Waccamaw N/A 12/31/97 05/31/98 1,791,324
196 Turtle Oaks Apartments 99.0% 11/01/98 11/30/98 566,114
197 Linden Place Mobile Home Park 98.0% 08/31/98 06/30/98 459,769
198 Moore Lake Commons Shopping Center 98.0% 11/01/98 07/31/98 421,040
199 Imperial Manor West Apartments 92.0% 03/09/98 03/31/98 739,174
200 Brown School Station Apts. 94.0% 06/01/98 06/30/98 471,628
201 South Street Seaport Office Center 99.0% 08/01/98 08/01/98 838,412
202 Hathaway Commerce Center 99.0% 01/31/99 12/31/98 403,352
203 Corinthian Apartments 95.0% 03/27/98 02/28/98 584,833
204 Walgreen's Drug Store - Swansea 100.0% 10/07/98 10/15/98 229,000
205 Catalina Apartments 100.0% 09/01/98 09/30/98 672,765
206 Devonshire Square Retail Center 100.0% 09/04/98 08/31/98 405,904
207 1440 N. Vine Street 100.0% 05/19/98 07/16/98 294,416
208 College Park Apartments 99.0% 04/01/98 03/31/98 342,138
209 Country Brooke Apartments 94.0% 05/14/98 03/31/98 472,312
210 Hillside View Apartments 98.0% 06/30/98 06/30/98 527,955
211 Benihana Restaurant 100.0% 09/09/98 10/31/98 342,803
212 Crosswinds Apartments 98.0% 09/23/98 09/30/98 493,544
213 Imperial Plaza Retail Center 92.0% 07/28/98 07/31/98 439,992
214 Twin Lakes Mobile Home Park 99.0% 08/31/98 06/30/98 593,757
215 Antietam Village Center 86.0% 10/15/98 05/31/98 374,140
216 Gateway Shoppes 100.0% 06/30/98 06/30/98 373,775
217 Red Onion Building 100.0% 06/01/98 06/01/98 516,216
218 526 South Ardmore Avenue 97.0% 04/23/98 03/31/98 395,693
219 All Aboard Mini Storage - Santa Ana 95.0% 07/31/98 07/31/98 419,100
220 Villa East I & II 100.0% 10/13/98 10/31/98 473,410
<CAPTION>
Most Most Most
Recent Recent Recent U/W
Expenses NOI DSCR (8) NOI
-------- --- -------- ---
<S> <C> <C> <C> <C>
164 Waterway Crossing Apartments 277,888 404,694 1.81 348,203
165 The Borders Building 165,597 623,875 2.00 380,785
166 Ken-Caryl Business Center 191,807 325,832 1.41 330,080
167 Alta Vista Mobile Home Park 121,615 382,089 1.59 325,939
168 Palm Springs Self Storage 244,118 450,069 1.78 363,027
169 Holiday Inn Express Auburn 732,821 564,572 2.38 483,802
170 Caruth Haven Retail Center 79,371 304,919 1.35 313,649
171 3456 Ridge Property 231,329 300,911 1.50 313,765
172 Campus Plaza Shopping Center 54,541 342,326 1.52 333,415
173 All Aboard Mini Storage - San Gabriel 149,404 301,184 1.35 303,478
174 Point O' Woods Apartments 327,692 387,787 1.72 297,240
175 Williamsburg on the Lake Apartments 541,172 454,084 1.87 424,033
176 Airport Business Center 130,238 397,293 1.75 353,542
177 Staples - Wilmington 10,131 301,183 1.33 280,432
178 Felicita Junction 169,199 345,186 1.56 281,066
179 The Bordeaux Apartments 373,501 364,192 1.90 312,189
180 High Point Village I Apartments 523,783 322,871 1.42 326,086
181 Assured Self Storage Facility 80,138 379,995 1.55 319,385
182 Staples - Valparaiso 9,297 285,304 1.32 263,712
183 Fruitland Grove Family Park 197,019 292,543 1.41 269,093
184 Centennial Creek Office Park 127,003 296,345 1.48 286,769
185 Park Lane Village Apartments (1L) 132,905 189,887 1.57 177,647
186 Rynearson Lane Village Apartments (1L) 136,504 126,212 1.22 148,922
187 Holiday Inn Express Ottawa 713,865 531,455 2.51 432,762
188 Ross Apartments 77,277 282,393 1.56 270,732
189 339 S. Ardmore Apartments 217,642 310,851 1.56 256,182
190 Edgewater Beach Resort 639,721 431,656 1.91 317,175
191 Fondren Hill Apartments 270,173 249,494 1.38 239,799
192 Cottonwood Plaza 200,337 519,415 2.64 420,226
193 Southport Shops 53,160 286,148 1.46 263,970
194 Hawthorne Hill Apartments 450,438 322,726 1.78 270,357
195 Days Inn Waccamaw 1,282,594 508,730 2.55 294,722
196 Turtle Oaks Apartments 317,614 248,500 1.28 233,715
197 Linden Place Mobile Home Park 157,669 302,100 1.51 285,540
198 Moore Lake Commons Shopping Center 220,378 200,662 1.01 307,844
199 Imperial Manor West Apartments 364,213 374,961 1.90 284,864
200 Brown School Station Apts. 217,189 254,439 1.40 219,798
201 South Street Seaport Office Center 351,129 487,283 2.43 449,042
202 Hathaway Commerce Center 103,821 299,531 1.62 289,412
203 Corinthian Apartments 207,006 377,827 2.19 338,163
204 Walgreen's Drug Store - Swansea 4,376 224,624 1.24 220,044
205 Catalina Apartments 368,128 304,637 1.66 238,787
206 Devonshire Square Retail Center 84,203 321,701 1.62 284,086
207 1440 N. Vine Street 18,283 276,133 1.65 273,885
208 College Park Apartments 90,143 251,995 1.51 202,138
209 Country Brooke Apartments 265,539 206,773 1.25 219,014
210 Hillside View Apartments 232,277 295,678 1.55 264,906
211 Benihana Restaurant 6,995 335,808 1.87 230,371
212 Crosswinds Apartments 245,315 248,229 1.51 244,171
213 Imperial Plaza Retail Center 113,381 326,611 1.77 289,348
214 Twin Lakes Mobile Home Park 276,955 316,802 1.85 285,564
215 Antietam Village Center 109,123 265,017 1.53 255,641
216 Gateway Shoppes 122,411 251,364 1.53 247,644
217 Red Onion Building 79,040 437,176 2.68 242,747
218 526 South Ardmore Avenue 159,681 236,012 1.46 222,603
219 All Aboard Mini Storage - Santa Ana 165,936 253,164 1.64 202,980
220 Villa East I & II 202,452 270,957 1.67 246,642
<CAPTION>
U/W U/W
NCF DSCR (8)
--- --------
<S> <C> <C>
164 Waterway Crossing Apartments 348,203 1.56
165 The Borders Building 380,785 1.22
166 Ken-Caryl Business Center 289,277 1.26
167 Alta Vista Mobile Home Park 325,939 1.36
168 Palm Springs Self Storage 363,027 1.44
169 Holiday Inn Express Auburn 435,968 1.84
170 Caruth Haven Retail Center 289,029 1.28
171 3456 Ridge Property 295,618 1.47
172 Campus Plaza Shopping Center 319,976 1.42
173 All Aboard Mini Storage - San Gabriel 303,478 1.36
174 Point O' Woods Apartments 297,240 1.32
175 Williamsburg on the Lake Apartments 424,033 1.74
176 Airport Business Center 298,101 1.32
177 Staples - Wilmington 277,738 1.22
178 Felicita Junction 276,898 1.25
179 The Bordeaux Apartments 312,189 1.63
180 High Point Village I Apartments 284,086 1.25
181 Assured Self Storage Facility 319,385 1.30
182 Staples - Valparaiso 263,712 1.22
183 Fruitland Grove Family Park 269,093 1.30
184 Centennial Creek Office Park 259,636 1.30
185 Park Lane Village Apartments (1L) 158,897 1.28
186 Rynearson Lane Village Apartments (1L) 128,642 1.28
187 Holiday Inn Express Ottawa 389,479 1.84
188 Ross Apartments 270,732 1.50
189 339 S. Ardmore Apartments 256,182 1.29
190 Edgewater Beach Resort 317,175 1.40
191 Fondren Hill Apartments 239,799 1.33
192 Cottonwood Plaza 377,424 1.92
193 Southport Shops 249,897 1.27
194 Hawthorne Hill Apartments 270,357 1.49
195 Days Inn Waccamaw 294,722 1.48
196 Turtle Oaks Apartments 233,715 1.20
197 Linden Place Mobile Home Park 277,440 1.39
198 Moore Lake Commons Shopping Center 245,905 1.23
199 Imperial Manor West Apartments 284,864 1.44
200 Brown School Station Apts. 219,798 1.21
201 South Street Seaport Office Center 353,923 1.76
202 Hathaway Commerce Center 249,639 1.35
203 Corinthian Apartments 346,996 2.01
204 Walgreen's Drug Store - Swansea 220,044 1.22
205 Catalina Apartments 238,787 1.30
206 Devonshire Square Retail Center 262,983 1.32
207 1440 N. Vine Street 260,240 1.55
208 College Park Apartments 202,138 1.21
209 Country Brooke Apartments 219,014 1.33
210 Hillside View Apartments 239,606 1.26
211 Benihana Restaurant 228,878 1.27
212 Crosswinds Apartments 227,211 1.39
213 Imperial Plaza Retail Center 263,199 1.43
214 Twin Lakes Mobile Home Park 271,848 1.58
215 Antietam Village Center 232,782 1.34
216 Gateway Shoppes 232,300 1.41
217 Red Onion Building 227,410 1.39
218 526 South Ardmore Avenue 222,603 1.38
219 All Aboard Mini Storage - Santa Ana 202,980 1.32
220 Villa East I & II 206,609 1.28
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Property Property Hotel
# Property Name Type Sub-type Franchise
------------- ---- -------- ---------
<S> <C> <C> <C>
221 Courtyard Apartments Multifamily
222 Sunset View Village Apartments Multifamily
223 Wilmington Plaza Retail Anchored
224 The Nations Bank Building Office
225 Quail Ridge Apartments Multifamily
226 Best Western KCI Airport Hotel Limited Service Best Western
227 Laurel Heights Apartments Multifamily
228 El Monte Mobile Air Mobile Home Park Manufactured Housing
229 Harold Gilstrap Shopping Center Retail Anchored
230 Lakeside Apartments Multifamily
231 Park Glen Apartments Multifamily
232 St. Lucie Mobile Village Manufactured Housing
233 Ravenscroft Apartments Multifamily
234 Coach Country Corral MHP Manufactured Housing
235 Seaside Village Shopping Center Retail Unanchored
236 Sherwood Park Apartments Multifamily
237 Ravenna Plaza Retail Anchored
238 Holiday Inn Express Oglesby Hotel Limited Service Holiday Inn
239 Central/Magnolia Retail Center Mixed Use Office/Retail
240 Rolling Hills Estates Manufactured Housing
241 Saticoy-Royale Apartments Multifamily
242 Holiday/Park Riviera Mobile Home Park Manufactured Housing
243 Gottschalk's Department Store Retail Unanchored
244 Justin Apartments Multifamily
245 Fountain Square Apartments Multifamily
246 383 St. Johns Place Multifamily
247 Days Inn Hotel Limited Service Days Inn
248 Market Plaza Retail Unanchored
249 Michigan Plaza & Bender Plaza (5) Office
250 Mockingbird Park Retail Building Mixed Use Office/Retail
251 Poolesville Village Center Retail Anchored
252 Executive Park Offices Office
253 Citadel Square Shopping Center (6) Retail Anchored
254 Sherwood Mobile Home Estates Manufactured Housing
255 Ware's Van & Storage Co. Industrial
256 Sunrise Terrace Mobile Home Park Manufactured Housing
257 Best Western Country Inn North Hotel Limited Service Best Western
258 Woodlake Resort Village Apartments Multifamily
259 Plantation Pines Apartments Multifamily
260 Pacific Mini Storage Self Storage
261 Sunridge Apartments Multifamily
262 Parkside Place Apartments Multifamily
263 Courtyards of Granbury Mixed Use Multifamily/Self Storage
264 University Apartments Multifamily
265 Isaqueena Village Apartments Multifamily
266 Turtle Dove I Apartments Multifamily
267 Carson Gardens Mobile Home Park Manufactured Housing
268 Valerie Apartments Multifamily
269 Huddersfield Apartments Multifamily
270 1457 & 1519 - 1527 Park Road, NW Multifamily
271 Winter Garden Village Apartments Multifamily
272 Long Point Plaza Apartments Multifamily
273 The Place of Tempe Apartments Multifamily
274 Valley Garden Apartments Multifamily
275 Devereaux Apartments Multifamily
276 Bloomingdale Shopping Center Retail Unanchored
277 Cottonwood Apartments Multifamily
278 Royal North Apartments Multifamily
279 Turtle Dove II Apartments Multifamily
Total/Weighted Average
Maximum:
Minimum:
<CAPTION>
Most Recent
Occupancy Date of Operating Most
Rate at Occupancy Statement Recent
Underwriting(7) Rate Date Revenue
--------------- ---- ---- -------
<S> <C> <C> <C> <C>
221 Courtyard Apartments 100.0% 09/30/98 07/31/98 472,114
222 Sunset View Village Apartments 92.0% 09/01/98 06/30/98 348,948
223 Wilmington Plaza 100.0% 06/10/98 09/14/98 756,500
224 The Nations Bank Building 100.0% 09/01/98 08/31/98 533,808
225 Quail Ridge Apartments 94.0% 04/01/98 12/31/97 508,983
226 Best Western KCI Airport N/A 08/01/98 09/30/98 752,921
227 Laurel Heights Apartments 97.0% 05/19/98 04/30/98 402,361
228 El Monte Mobile Air Mobile Home Park 96.0% 02/01/98 12/31/97 376,701
229 Harold Gilstrap Shopping Center 97.0% 04/01/98 12/31/98 459,332
230 Lakeside Apartments 100.0% 05/01/98 05/31/98 404,973
231 Park Glen Apartments 99.0% 09/14/98 12/31/98 848,495
232 St. Lucie Mobile Village 90.0% 08/31/98 06/30/98 501,259
233 Ravenscroft Apartments 92.0% 07/01/98 12/31/98 474,451
234 Coach Country Corral MHP 100.0% 12/01/97 12/31/98 314,555
235 Seaside Village Shopping Center 83.0% 01/20/99 09/30/98 457,540
236 Sherwood Park Apartments 99.0% 06/10/98 12/31/98 417,048
237 Ravenna Plaza 100.0% 11/10/98 08/09/98 430,621
238 Holiday Inn Express Oglesby N/A 06/30/98 06/30/98 942,666
239 Central/Magnolia Retail Center 100.0% 08/26/98 06/25/98 278,961
240 Rolling Hills Estates 92.0% 04/01/98 04/30/98 353,006
241 Saticoy-Royale Apartments 100.0% 09/11/98 07/31/98 370,355
242 Holiday/Park Riviera Mobile Home Park 99.0% 09/15/98 12/31/98 410,022
243 Gottschalk's Department Store 100.0% 08/12/98 06/30/98 285,177
244 Justin Apartments 100.0% 09/01/98 12/31/98 256,064
245 Fountain Square Apartments 83.0% 06/30/98 08/31/98 463,349
246 383 St. Johns Place 96.0% 08/28/98 08/28/98 245,799
247 Days Inn N/A 06/30/98 07/31/98 576,934
248 Market Plaza 100.0% 07/28/98 12/31/98 403,720
249 Michigan Plaza & Bender Plaza (5) 90.0% 09/01/98 11/30/98 462,011
250 Mockingbird Park Retail Building 96.0% 08/01/98 07/31/98 667,000
251 Poolesville Village Center 100.0% 07/01/98 06/30/98 231,698
252 Executive Park Offices 95.0% 12/01/98 11/30/98 259,452
253 Citadel Square Shopping Center (6) 98.0% 09/30/98 12/31/98 268,596
254 Sherwood Mobile Home Estates 94.0% 08/31/98 06/30/98 490,034
255 Ware's Van & Storage Co. 100.0% 10/13/98 09/10/98 268,909
256 Sunrise Terrace Mobile Home Park 100.0% 06/01/98 12/31/98 209,231
257 Best Western Country Inn North N/A 09/30/98 09/30/98 640,031
258 Woodlake Resort Village Apartments 94.0% 06/01/98 05/31/98 310,023
259 Plantation Pines Apartments 95.0% 11/05/98 09/30/98 482,560
260 Pacific Mini Storage 86.0% 09/10/98 09/30/98 356,551
261 Sunridge Apartments 95.0% 10/01/98 12/31/98 558,480
262 Parkside Place Apartments 99.0% 08/29/98 08/29/98 496,494
263 Courtyards of Granbury 96.0% 09/30/98 09/30/98 340,733
264 University Apartments 92.0% 10/07/98 08/31/98 304,467
265 Isaqueena Village Apartments 90.0% 05/01/98 05/31/98 344,372
266 Turtle Dove I Apartments 100.0% 11/30/98 12/31/98 443,975
267 Carson Gardens Mobile Home Park 99.0% 02/01/98 12/31/97 271,978
268 Valerie Apartments 100.0% 12/01/98 12/31/98 310,583
269 Huddersfield Apartments 100.0% 12/01/98 09/30/98 236,505
270 1457 & 1519 - 1527 Park Road, NW 96.0% 09/29/98 01/31/99 402,945
271 Winter Garden Village Apartments 98.0% 11/10/98 12/31/98 317,012
272 Long Point Plaza Apartments 96.0% 07/31/98 06/30/98 460,945
273 The Place of Tempe Apartments 100.0% 01/01/99 10/31/98 190,119
274 Valley Garden Apartments 96.0% 09/10/98 07/30/98 287,781
275 Devereaux Apartments 95.0% 12/11/98 11/30/98 266,678
276 Bloomingdale Shopping Center 91.0% 01/10/99 12/31/98 147,825
277 Cottonwood Apartments 93.0% 12/03/98 10/31/98 212,182
278 Royal North Apartments 98.0% 06/15/98 12/31/97 379,388
279 Turtle Dove II Apartments 95.0% 11/30/98 12/31/98 216,664
--------------------------- -------------
96.2% 09/01/98 $296,343,213
=========================== =============
100.0% 02/03/99 $5,539,068
50.0% 11/25/97 $116,380
<CAPTION>
Most Most Most
Recent Recent Recent U/W
Expenses NOI DSCR (8) NOI
-------- --- -------- ---
<S> <C> <C> <C> <C>
221 Courtyard Apartments 205,623 266,491 1.75 213,784
222 Sunset View Village Apartments 131,967 216,981 1.49 175,789
223 Wilmington Plaza 455,433 301,067 1.93 208,554
224 The Nations Bank Building 162,987 370,821 2.04 312,026
225 Quail Ridge Apartments 284,457 224,526 1.54 221,528
226 Best Western KCI Airport 453,231 299,690 1.77 236,864
227 Laurel Heights Apartments 173,100 229,261 1.63 206,258
228 El Monte Mobile Air Mobile Home Park 142,496 234,205 1.59 218,879
229 Harold Gilstrap Shopping Center 153,616 305,716 2.01 275,428
230 Lakeside Apartments 115,240 289,733 1.72 240,813
231 Park Glen Apartments 572,292 276,203 2.00 237,047
232 St. Lucie Mobile Village 289,957 211,302 1.41 225,730
233 Ravenscroft Apartments 298,551 175,900 1.32 211,627
234 Coach Country Corral MHP 82,524 232,031 1.54 203,045
235 Seaside Village Shopping Center 205,016 252,524 1.60 265,601
236 Sherwood Park Apartments 206,245 210,803 1.51 206,722
237 Ravenna Plaza 133,300 297,321 1.91 243,176
238 Holiday Inn Express Oglesby 578,141 364,525 2.53 281,276
239 Central/Magnolia Retail Center 61,188 217,773 1.62 197,869
240 Rolling Hills Estates 107,825 245,181 1.66 224,339
241 Saticoy-Royale Apartments 197,963 172,392 1.26 200,516
242 Holiday/Park Riviera Mobile Home Park 185,303 224,719 1.54 223,085
243 Gottschalk's Department Store 51,739 233,438 1.64 202,823
244 Justin Apartments 84,795 171,269 1.31 164,657
245 Fountain Square Apartments 307,761 155,588 1.12 222,322
246 383 St. Johns Place 76,174 169,625 1.32 162,275
247 Days Inn 263,572 313,362 2.20 201,447
248 Market Plaza 116,561 287,159 2.00 242,598
249 Michigan Plaza & Bender Plaza (5) 186,595 275,416 1.94 261,101
250 Mockingbird Park Retail Building 396,656 270,344 2.24 197,760
251 Poolesville Village Center 48,247 183,451 1.43 194,681
252 Executive Park Offices 61,786 197,666 1.54 182,318
253 Citadel Square Shopping Center (6) 79,767 188,829 1.33 212,096
254 Sherwood Mobile Home Estates 284,829 205,205 1.59 194,457
255 Ware's Van & Storage Co. 65,385 203,524 1.38 208,628
256 Sunrise Terrace Mobile Home Park 39,848 169,383 1.45 160,369
257 Best Western Country Inn North 409,673 230,358 1.72 187,874
258 Woodlake Resort Village Apartments 154,600 155,423 1.35 169,872
259 Plantation Pines Apartments 327,014 155,546 1.27 178,306
260 Pacific Mini Storage 146,803 209,748 1.68 179,744
261 Sunridge Apartments 376,818 181,662 1.49 171,907
262 Parkside Place Apartments 271,040 225,454 1.83 185,658
263 Courtyards of Granbury 170,546 170,187 1.44 153,596
264 University Apartments 90,174 214,293 1.94 173,154
265 Isaqueena Village Apartments 180,799 163,573 1.67 150,275
266 Turtle Dove I Apartments 240,730 203,245 1.85 166,327
267 Carson Gardens Mobile Home Park 80,650 191,328 1.93 138,047
268 Valerie Apartments 137,798 172,785 1.82 162,951
269 Huddersfield Apartments 75,793 160,712 1.69 140,400
270 1457 & 1519 - 1527 Park Road, NW 241,581 161,364 1.70 145,035
271 Winter Garden Village Apartments 200,475 116,537 1.31 127,930
272 Long Point Plaza Apartments 256,545 204,400 2.20 147,870
273 The Place of Tempe Apartments 59,496 130,623 1.62 116,570
274 Valley Garden Apartments 91,000 196,781 2.47 129,741
275 Devereaux Apartments 155,985 110,693 1.37 124,875
276 Bloomingdale Shopping Center 57,164 90,661 1.28 104,146
277 Cottonwood Apartments 83,428 128,754 1.55 119,114
278 Royal North Apartments 265,537 113,851 1.69 121,901
279 Turtle Dove II Apartments 103,026 113,638 1.87 100,279
--------------------------------------------------------------------------
$127,722,602 $168,620,613 1.59x $159,192,766
==========================================================================
$2,897,142 $3,560,063 8.19x $3,313,246
$4,376 $87,200 0.38x $70,634
<CAPTION>
U/W U/W
NCF DSCR (8)
--- --------
<S> <C> <C>
221 Courtyard Apartments 213,784 1.40
222 Sunset View Village Apartments 175,789 1.21
223 Wilmington Plaza 194,476 1.25
224 The Nations Bank Building 273,705 1.50
225 Quail Ridge Apartments 195,528 1.34
226 Best Western KCI Airport 236,864 1.40
227 Laurel Heights Apartments 206,258 1.47
228 El Monte Mobile Air Mobile Home Park 218,879 1.48
229 Harold Gilstrap Shopping Center 259,819 1.71
230 Lakeside Apartments 231,063 1.38
231 Park Glen Apartments 193,547 1.40
232 St. Lucie Mobile Village 214,430 1.43
233 Ravenscroft Apartments 192,877 1.45
234 Coach Country Corral MHP 198,945 1.32
235 Seaside Village Shopping Center 204,940 1.30
236 Sherwood Park Apartments 188,722 1.36
237 Ravenna Plaza 195,219 1.25
238 Holiday Inn Express Oglesby 247,822 1.72
239 Central/Magnolia Retail Center 181,971 1.35
240 Rolling Hills Estates 224,339 1.52
241 Saticoy-Royale Apartments 184,516 1.35
242 Holiday/Park Riviera Mobile Home Park 209,835 1.44
243 Gottschalk's Department Store 195,623 1.37
244 Justin Apartments 158,407 1.21
245 Fountain Square Apartments 190,882 1.38
246 383 St. Johns Place 162,275 1.27
247 Days Inn 201,447 1.41
248 Market Plaza 220,836 1.54
249 Michigan Plaza & Bender Plaza (5) 189,622 1.33
250 Mockingbird Park Retail Building 154,133 1.28
251 Poolesville Village Center 171,998 1.34
252 Executive Park Offices 160,925 1.25
253 Citadel Square Shopping Center (6) 193,811 1.37
254 Sherwood Mobile Home Estates 184,157 1.43
255 Ware's Van & Storage Co. 183,158 1.24
256 Sunrise Terrace Mobile Home Park 157,819 1.35
257 Best Western Country Inn North 187,874 1.40
258 Woodlake Resort Village Apartments 157,372 1.37
259 Plantation Pines Apartments 156,306 1.27
260 Pacific Mini Storage 179,744 1.44
261 Sunridge Apartments 147,157 1.21
262 Parkside Place Apartments 164,658 1.34
263 Courtyards of Granbury 141,596 1.20
264 University Apartments 157,654 1.43
265 Isaqueena Village Apartments 151,341 1.55
266 Turtle Dove I Apartments 146,577 1.33
267 Carson Gardens Mobile Home Park 138,047 1.39
268 Valerie Apartments 146,951 1.55
269 Huddersfield Apartments 132,650 1.40
270 1457 & 1519 - 1527 Park Road, NW 125,535 1.32
271 Winter Garden Village Apartments 111,930 1.26
272 Long Point Plaza Apartments 123,475 1.33
273 The Place of Tempe Apartments 109,070 1.35
274 Valley Garden Apartments 117,741 1.48
275 Devereaux Apartments 110,125 1.36
276 Bloomingdale Shopping Center 91,276 1.29
277 Cottonwood Apartments 111,566 1.35
278 Royal North Apartments 100,651 1.50
279 Turtle Dove II Apartments 90,279 1.49
-------------------------------
$146,517,353 1.39x
===============================
$3,241,994 2.54x
$65,758 1.20x
</TABLE>
(1A) The Winston Loan is secured by Hampton Inn - Elmsford, Quality Suites -
Charleston, Courtyard by Marriott - Ann Arbor, Residence Inn - Phoenix,
Homewood Suites - Cary, Hampton Inn & Suites - Gwinnett, Hampton Inn -
Raleigh, Comfort Suites - Orlando, Hampton Inn - Perimeter, Hampton Inn -
Charlotte, NC, Courtyard by Marriott - Wilmington, Hampton Inn - West
Springfield, Homewood Suites - Clear Lake and Comfort Inn - Charleston,
respectively.
(1B) The Mortgage Loans secured by Kendale Lakes Plaza, Cypress Creek Station
and Oakwood Business Center, respectively, are cross-collateralized and
cross-defaulted.
(1C) A Single Mortgage Note is secured by Westchase Ranch Apartments, Westwood
Village Apartments, Normandy Woods Apartments, Savoy Manor Apartments and
San Marin Apartments, respectively.
(1D) A Single Mortgage Note is secured by 2294 Molly Pitcher Highway, 5015
Campuswood Drive, 5010 Campuswood Drive and 5009 Campuswood Drive,
respectively.
(1E) A Single Mortgage Note is secured by Keller Oaks Apartments, Sycamore Hill
Apartments, Claremdon Apartments and Woodchase Condominiums, respectively.
(1F) A Single Mortgage Note is secured by Princeton Court Apartments, Pinewood
Estates Apartments and Arbor Court Apartments, respectively.
(1G) A Single Mortgage Note is secured by U-Store of Brighton Self Storage
Facility, U-Store of South Lyon Self Storage Facility, U-Store of Saline
Self Storage Facility, U-Store of Davison Self Storage Facility, U-Store of
Holly Self Storage Facility and U-Store of Jackson Self Storage Facility,
respectively.
(1H) The Mortgage Loans secured by Cranbrook Centre Apartments and Cranbrook
Centre Office Buildings, respectively, are cross-collateralized and
cross-defaulted.
(1I) A Single Mortgage Note is secured by Mobile Gardens/Holly View Mobile Home
Park, Stony Chase/Rock Creek Mobile Home Park and Briarwood Manor,
respectively.
(1J) A Single Mortgage Note is secured by Spruce Properties, Oak Grove
Apartments and Aldrich Apartments, respectively. The Mortgage Loan secured
by Spruce Properties contains two properties that are operated as one.
(1K) The Mortgage Loans secured by Century Plaza Strip Shopping Center and
Albany Square Strip Shopping Center, respectively, are cross-collateralized
and cross-defaulted.
(1L) A Single Mortgage Note secured by Park Lane Village Apartments and
Rynearson Lane Village Apartments, respectively.
(2) Marycrest Shopping Center has an interest only period of 24 months from
origination and thereafter is scheduled to amortize over 360 months with
the payment presented reflecting the amount due during the amortization
term.
(3) Merchant's Square has an interest only period of 24 months from origination
and thereafter is scheduled to amortize over 336 months with the payment
presented reflecting the amount due during the amortization term.
(4) The Mortgage Loan secured by New Franklin Apartments contains four
properties that are operated as one.
(5) The Mortgage Loan secured by Michigan & Bender Plaza contains two
properties that are operated as one.
(6) Citadel Square Shopping Center has an interest only period of 36 months
from origination and thereafter is scheduled to amortize over 300 months
with the payment presented reflecting the amount due during the
amortization term.
(7) Does not include any Mortgage Loans secured by hotel properties.
(8) DSCR is based on the amount of the monthly payments presented. In the case
of cross-collaterlized and cross-defaulted Mortgage Loans the combined U/W
DSCR is presented for each and every related Mortgage Loan.
<PAGE>
Multifamily Schedule
<TABLE>
<CAPTION>
Utilities Subject Subject Subject
Cut-off Date Tenant Elevator Studio Studio Studio
# Property Name Balance (3) Pays (Y/N) Units Avg. Rent Max. Rent
- --------------- ------------ --------- -------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
18 Westchase Ranch Apartments (1C) $22,529,265 Electric No N/A N/A N/A
19 Westwood Village Apartments (1C) 10,387,667 Electric No N/A N/A N/A
20 Normandy Woods Apartments (1C) 7,111,557 Electric No N/A N/A N/A
21 Savoy Manor Apartments (1C) 5,193,833 Electric No N/A N/A N/A
22 San Marin Apartments (1C) 3,609,027 Electric No 24 $408 $420
23 Country Squire Apartments - South 30,446,295 Electric No N/A N/A N/A
29 Keller Oaks Apartments (1E) 7,143,351 Electric No 16 $446 $450
30 Sycamore Hill Apartments (1E) 6,189,551 Electric No N/A N/A N/A
31 Clarendon Apartments (1E) 4,545,769 Electric No N/A N/A N/A
32 Woodchase Condominiums (1E) 2,402,764 Electric No N/A N/A N/A
35 Spicetree Apartments 16,582,208 Electric No N/A N/A N/A
39 The Links at Bixby 14,487,822 Electric/Water No N/A N/A N/A
40 Southwood Apartments 14,474,162 Electric/Gas No N/A N/A N/A
42 Pines of Westbury 12,967,894 Electric No N/A N/A N/A
43 Edentree Apartments 11,480,000 Electric No N/A N/A N/A
46 The Mint Apartments 11,136,789 Electric No N/A N/A N/A
48 Rancho Destino Apartments 10,181,999 Electric No N/A N/A N/A
50 Huntington Chase Apartments 9,666,997 Electric/Gas No N/A N/A N/A
53 Newsome Park Apartments 8,459,047 Electric/Gas No N/A N/A N/A
54 Princeton Court Apartments (1F) 3,877,564 Electric No 3 $723 $1,100
55 Pinewood Estates Apartments (1F) 2,386,193 Electric No 12 $501 $515
56 Arbor Court Apartments (1F) 2,087,919 Electric No 1 $600 $600
63 Birches Apartments 8,172,163 Electric No N/A N/A N/A
70 Cranbrook Centre Apartments (1H) 4,916,622 Electric/Gas No N/A N/A N/A
73 Marin Club Apartments 7,347,967 Electric/Gas Yes 28 $490 $490
88 Fifth Avenue Apartments 6,388,541 Electric/Gas No N/A N/A N/A
89 The Watermill Apartments 6,379,593 Electric/Gas Yes 4 $486 $500
91 Hollywood Ardmore Apartments 6,236,842 None Yes 8 $352 $647
92 Chasewood Apartments 6,149,198 Electric No N/A N/A N/A
95 Seatree Apartments 5,829,759 Electric No N/A N/A N/A
100 New Franklin Apartments (2) 5,345,280 None No N/A N/A N/A
101 Windjammer Apartments 5,219,924 Electric No N/A N/A N/A
102 Woodlake Village Apartments 5,217,795 Electric/Water/Sewer No N/A N/A N/A
105 The Woods Apartments 5,039,048 None Yes N/A N/A N/A
106 Moonlight Garden Apartments 4,978,846 Electric/Gas No N/A N/A N/A
107 Sagamore Court Apartments 4,960,750 Electric No 5 $525 $550
108 Carriage Hill Apartments 4,927,800 Electric/Gas No N/A N/A N/A
111 Friendship Crossing Apartments 4,603,093 Electric No N/A N/A N/A
112 Spruce Properties (1J) 1,970,671 Electric No 48 $421 $500
113 Oak Grove Apartments (1J) 1,471,767 Electric No N/A N/A N/A
114 Aldrich Apartments (1J) 1,047,699 Electric No N/A N/A N/A
117 Preston Racquet Club Condominiums and Apartments 4,385,027 Electric No N/A N/A N/A
118 Sand Lake Apartments 4,364,206 Water/Sewer No N/A N/A N/A
122 Parkside East Apartments 4,190,128 None Yes 16 $607 $660
124 Breakers Apartments 4,079,323 Electric/Water No N/A N/A N/A
125 Picnic Lawn Apartments 3,993,174 Electric No 9 $299 $299
129 Harper Regency Apartments 3,942,885 Electric/Gas Yes N/A N/A N/A
131 Captain's Landing Apartments 3,802,289 Electric No N/A N/A N/A
136 Cedar Garden Apartments 3,673,780 Electric No N/A N/A N/A
138 Windtree Apartments - Phase I 3,593,944 Electric No N/A N/A N/A
145 Forest Park Village 3,273,025 Electric No N/A N/A N/A
148 Cedar Heights Apartments 3,096,364 Electric No N/A N/A N/A
149 The North Oak Apartments 3,096,333 Electric No N/A N/A N/A
150 Arrowhead Court Apartments 3,089,758 Electric No N/A N/A N/A
156 Tree Top Apartments 2,996,535 Electric No N/A N/A N/A
161 The Amberton Apartments 2,890,880 Electric No N/A N/A N/A
164 Waterway Crossing Apartments 2,824,908 Electric No N/A N/A N/A
174 Point O' Woods Apartments 2,716,809 Electric No N/A N/A N/A
175 Williamsburg on the Lake Apartments 2,694,425 Electric No N/A N/A N/A
179 The Bordeaux Apartments 2,666,424 None No 8 $342 $445
180 High Point Village I Apartments 2,650,000 Electric No N/A N/A N/A
185 Park Lane Village Apartments (1L) 1,345,453 Electric No 4 $318 $335
186 Rynearson Lane Village Apartments (1L) 1,146,126 Electric/Gas No 3 $217 $245
188 Ross Apartments 2,488,010 Electric/Gas No 1 $900 $900
189 339 S. Ardmore Apartments 2,487,451 Electric/Gas Yes 6 $442 $450
191 Fondren Hill Apartments 2,438,627 Electric No 5 $405 $405
<CAPTION>
Subject Subject Subject Subject Subject Subject
1 BR 1 BR 1 BR 2 BR 2 BR 2 BR
# Property Name Units Avg. Rent Max. Rent Units Avg. Rent Max. Rent
- --------------- ------- --------- --------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
18 Westchase Ranch Apartments (1C) 488 $430 $525 232 $573 $695
19 Westwood Village Apartments (1C) 168 $503 $580 128 $601 $675
20 Normandy Woods Apartments (1C) 128 $463 $530 140 $592 $615
21 Savoy Manor Apartments (1C) 120 $447 $580 72 $553 $685
22 San Marin Apartments (1C) 57 $471 $525 92 $584 $680
23 Country Squire Apartments - South 216 $625 $820 510 $700 $915
29 Keller Oaks Apartments (1E) 128 $532 $620 76 $696 $765
30 Sycamore Hill Apartments (1E) 112 $423 $550 152 $440 $600
31 Clarendon Apartments (1E) 80 $462 $535 96 $564 $644
32 Woodchase Condominiums (1E) 56 $572 $655 18 $619 $775
35 Spicetree Apartments 235 $487 $555 316 $609 $640
39 The Links at Bixby 108 $471 $495 216 $638 $675
40 Southwood Apartments 77 $564 $650 223 $664 $795
42 Pines of Westbury 184 $370 $390 473 $470 $590
43 Edentree Apartments 180 $546 $629 180 $681 $799
46 The Mint Apartments 210 $398 $550 270 $465 $565
48 Rancho Destino Apartments 64 $660 $690 80 $768 $950
50 Huntington Chase Apartments 48 $590 $650 114 $699 $795
53 Newsome Park Apartments 60 $305 $305 338 $330 $330
54 Princeton Court Apartments (1F) 15 $916 $1,750 66 $886 $2,050
55 Pinewood Estates Apartments (1F) 60 $594 $620 72 $651 $715
56 Arbor Court Apartments (1F) 20 $775 $1,900 87 $1,147 $3,000
63 Birches Apartments 165 $482 $581 131 $564 $652
70 Cranbrook Centre Apartments (1H) 44 $679 $720 88 $788 $860
73 Marin Club Apartments 152 $550 $550 40 $700 $700
88 Fifth Avenue Apartments 130 $534 $640 68 $716 $840
89 The Watermill Apartments 153 $574 $660 34 $795 $1,100
91 Hollywood Ardmore Apartments 106 $808 $1,104 46 $1,001 $2,111
92 Chasewood Apartments 136 $449 $500 88 $559 $630
95 Seatree Apartments 154 $529 $605 66 $758 $819
100 New Franklin Apartments (2) 166 $676 $764 5 $753 $753
101 Windjammer Apartments 144 $462 $620 56 $584 $705
102 Woodlake Village Apartments 48 $432 $449 141 $482 $519
105 The Woods Apartments 72 $540 $550 84 $687 $756
106 Moonlight Garden Apartments 5 $575 $600 89 $675 $725
107 Sagamore Court Apartments 31 $657 $750 87 $784 $900
108 Carriage Hill Apartments 160 $419 $450 64 $515 $545
111 Friendship Crossing Apartments 104 $479 $550 119 $580 $675
112 Spruce Properties (1J) 36 $457 $530 6 $713 $750
113 Oak Grove Apartments (1J) 76 $442 $530 2 $635 $650
114 Aldrich Apartments (1J) 32 $459 $550 15 $774 $875
117 Preston Racquet Club Condominiums and Apartments 15 $605 $825 96 $854 $950
118 Sand Lake Apartments 88 $399 $399 124 $514 $559
122 Parkside East Apartments 45 $775 $890 43 $922 $1,035
124 Breakers Apartments 48 $690 $715 24 $851 $885
125 Picnic Lawn Apartments 54 $409 $409 83 $539 $569
129 Harper Regency Apartments 15 $1,046 $1,600 17 $1,487 $1,700
131 Captain's Landing Apartments 100 $457 $560 74 $582 $615
136 Cedar Garden Apartments 71 $685 $780 19 $800 $850
138 Windtree Apartments - Phase I 28 $458 $465 98 $521 $565
145 Forest Park Village 54 $485 $525 84 $573 $630
148 Cedar Heights Apartments 172 $255 $255 84 $300 $300
149 The North Oak Apartments 148 $357 $390 108 $488 $525
150 Arrowhead Court Apartments 65 $548 $575 61 $624 $665
156 Tree Top Apartments 146 $389 $420 0 $0 $0
161 The Amberton Apartments N/A N/A N/A 112 $563 $595
164 Waterway Crossing Apartments 51 $492 $585 51 $614 $703
174 Point O' Woods Apartments 130 $382 $415 20 $525 $525
175 Williamsburg on the Lake Apartments 60 $509 $537 74 $614 $682
179 The Bordeaux Apartments 42 $521 $575 40 $682 $795
180 High Point Village I Apartments 48 $377 $400 96 $475 $510
185 Park Lane Village Apartments (1L) 16 $388 $410 55 $447 $450
186 Rynearson Lane Village Apartments (1L) 22 $295 $300 51 $377 $390
188 Ross Apartments 26 $1,065 $1,200 4 $1,169 $1,300
189 339 S. Ardmore Apartments 71 $532 $590 7 $713 $750
191 Fondren Hill Apartments 46 $465 $465 45 $565 $565
<CAPTION>
Subject Subject Subject Subject Subject Subject
3 BR 3 BR 3 BR 4 BR 4 BR 4 BR
# Property Name Units Avg. Rent Max. Rent Units Avg. Rent Max. Rent
- --------------- ------- --------- --------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
18 Westchase Ranch Apartments (1C) 56 $728 $780 N/A N/A N/A
19 Westwood Village Apartments (1C) 24 $865 $920 N/A N/A N/A
20 Normandy Woods Apartments (1C) N/A N/A N/A N/A N/A N/A
21 Savoy Manor Apartments (1C) N/A N/A N/A N/A N/A N/A
22 San Marin Apartments (1C) 20 $724 $750 N/A N/A N/A
23 Country Squire Apartments - South N/A N/A N/A N/A N/A N/A
29 Keller Oaks Apartments (1E) N/A N/A N/A N/A N/A N/A
30 Sycamore Hill Apartments (1E) N/A N/A N/A N/A N/A N/A
31 Clarendon Apartments (1E) 16 $748 $850 N/A N/A N/A
32 Woodchase Condominiums (1E) N/A N/A N/A N/A N/A N/A
35 Spicetree Apartments N/A N/A N/A N/A N/A N/A
39 The Links at Bixby N/A N/A N/A N/A N/A N/A
40 Southwood Apartments 58 $883 $940 N/A N/A N/A
42 Pines of Westbury 283 $609 $675 N/A N/A N/A
43 Edentree Apartments N/A N/A N/A N/A N/A N/A
46 The Mint Apartments 112 $602 $750 N/A N/A N/A
48 Rancho Destino Apartments 40 $947 $970 N/A N/A N/A
50 Huntington Chase Apartments 38 $810 $920 N/A N/A N/A
53 Newsome Park Apartments 222 $390 $390 30 $450 $450
54 Princeton Court Apartments (1F) 6 $955 $1,750 N/A N/A N/A
55 Pinewood Estates Apartments (1F) N/A N/A N/A N/A N/A N/A
56 Arbor Court Apartments (1F) N/A N/A N/A N/A N/A N/A
63 Birches Apartments N/A N/A N/A N/A N/A N/A
70 Cranbrook Centre Apartments (1H) N/A N/A N/A N/A N/A N/A
73 Marin Club Apartments N/A N/A N/A N/A N/A N/A
88 Fifth Avenue Apartments N/A N/A N/A N/A N/A N/A
89 The Watermill Apartments N/A N/A N/A N/A N/A N/A
91 Hollywood Ardmore Apartments 1 $1,500 $1,500 N/A N/A N/A
92 Chasewood Apartments N/A N/A N/A N/A N/A N/A
95 Seatree Apartments N/A N/A N/A N/A N/A N/A
100 New Franklin Apartments (2) N/A N/A N/A N/A N/A N/A
101 Windjammer Apartments N/A N/A N/A N/A N/A N/A
102 Woodlake Village Apartments 48 $567 $599 N/A N/A N/A
105 The Woods Apartments N/A N/A N/A N/A N/A N/A
106 Moonlight Garden Apartments 14 $900 $950 N/A N/A N/A
107 Sagamore Court Apartments N/A N/A N/A N/A N/A N/A
108 Carriage Hill Apartments N/A N/A N/A N/A N/A N/A
111 Friendship Crossing Apartments N/A N/A N/A N/A N/A N/A
112 Spruce Properties (1J) N/A N/A N/A N/A N/A N/A
113 Oak Grove Apartments (1J) N/A N/A N/A N/A N/A N/A
114 Aldrich Apartments (1J) N/A N/A N/A N/A N/A N/A
117 Preston Racquet Club Condominiums
and Apartments N/A N/A N/A N/A N/A N/A
118 Sand Lake Apartments N/A N/A N/A N/A N/A N/A
122 Parkside East Apartments N/A N/A N/A N/A N/A N/A
124 Breakers Apartments N/A N/A N/A N/A N/A N/A
125 Picnic Lawn Apartments N/A N/A N/A N/A N/A N/A
129 Harper Regency Apartments 6 $2,075 $2,300 N/A N/A N/A
131 Captain's Landing Apartments N/A N/A N/A N/A N/A N/A
136 Cedar Garden Apartments N/A N/A N/A N/A N/A N/A
138 Windtree Apartments - Phase I N/A N/A N/A N/A N/A N/A
145 Forest Park Village N/A N/A N/A N/A N/A N/A
148 Cedar Heights Apartments N/A N/A N/A N/A N/A N/A
149 The North Oak Apartments N/A N/A N/A N/A N/A N/A
150 Arrowhead Court Apartments N/A N/A N/A N/A N/A N/A
156 Tree Top Apartments N/A N/A N/A N/A N/A N/A
161 The Amberton Apartments N/A N/A N/A N/A N/A N/A
164 Waterway Crossing Apartments N/A N/A N/A N/A N/A N/A
174 Point O' Woods Apartments N/A N/A N/A N/A N/A N/A
175 Williamsburg on the Lake Apartments 16 $798 $825 N/A N/A N/A
179 The Bordeaux Apartments 12 $756 $930 N/A N/A N/A
180 High Point Village I Apartments 24 $547 $590 N/A N/A N/A
185 Park Lane Village Apartments (1L) N/A N/A N/A N/A N/A N/A
186 Rynearson Lane Village Apartments (1L) 2 $390 $390 N/A N/A N/A
188 Ross Apartments N/A N/A N/A N/A N/A N/A
189 339 S. Ardmore Apartments N/A N/A N/A N/A N/A N/A
191 Fondren Hill Apartments N/A N/A N/A N/A N/A N/A
</TABLE>
<PAGE>
Multifamily Schedule
<TABLE>
<CAPTION>
Utilities Subject Subject Subject
Cut-off Date Tenant Elevator Studio Studio Studio
# Property Name Balance (3) Pays (Y/N) Units Avg. Rent Max. Rent
- --------------- ------------ --------- -------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
194 Hawthorne Hill Apartments 2,389,375 Electric/Gas No N/A N/A N/A
196 Turtle Oaks Apartments 2,341,262 Electric No N/A N/A N/A
199 Imperial Manor West Apartments 2,281,127 Electric No N/A N/A N/A
200 Brown School Station Apts. 2,249,293 Electric/Gas No N/A N/A N/A
203 Corinthian Apartments 2,187,615 Electric No 1 $500 $500
205 Catalina Apartments 2,172,345 Electric No N/A N/A N/A
208 College Park Apartments 2,088,510 Electric/Water No N/A N/A N/A
209 Country Brooke Apartments 2,055,765 Electric No N/A N/A N/A
210 Hillside View Apartments 2,038,134 Electric No N/A N/A N/A
212 Crosswinds Apartments 1,996,476 Electric No N/A N/A N/A
218 526 South Ardmore Avenue 1,985,158 Electric Yes N/A N/A N/A
221 Courtyard Apartments 1,846,761 Electric No N/A N/A N/A
222 Sunset View Village Apartments 1,845,711 None No N/A N/A N/A
225 Quail Ridge Apartments 1,829,799 Electric/Gas/Water/Sewer No N/A N/A N/A
227 Laurel Heights Apartments 1,790,996 Electric No N/A N/A N/A
230 Lakeside Apartments 1,781,950 Electric No N/A N/A N/A
231 Park Glen Apartments 1,744,104 Electric/Gas No N/A N/A N/A
233 Ravenscroft Apartments 1,740,783 Electric No N/A N/A N/A
236 Sherwood Park Apartments 1,696,004 Electric No N/A N/A N/A
241 Saticoy-Royale Apartments 1,664,748 Electric/Gas No 8 $421 $425
244 Justin Apartments 1,597,176 Electric/Gas No N/A N/A N/A
245 Fountain Square Apartments 1,595,872 Electric/Gas No N/A N/A N/A
246 383 St. Johns Place 1,594,755 None No N/A N/A N/A
258 Woodlake Resort Village Apartments 1,393,722 Electric/Gas No N/A N/A N/A
259 Plantation Pines Apartments 1,347,949 Electric/Gas No N/A N/A N/A
261 Sunridge Apartments 1,341,749 None No N/A N/A N/A
262 Parkside Place Apartments 1,290,235 Electric/Gas No 2 $373 $375
264 University Apartments 1,258,018 Electric/Gas No 2 $355 $425
265 Isaqueena Village Apartments 1,243,760 Electric No N/A N/A N/A
266 Turtle Dove I Apartments 1,225,000 Electric No 30 $336 $395
268 Valerie Apartments 1,070,329 Electric No N/A N/A N/A
269 Huddersfield Apartments 1,058,366 Electric/Gas Yes N/A N/A N/A
270 1457 & 1519 - 1527 Park Road, NW 1,048,398 Electric/Gas Yes 27 $334 $400
271 Winter Garden Village Apartments 997,506 Electric No N/A N/A N/A
272 Long Point Plaza Apartments 951,432 None No N/A N/A N/A
273 The Place of Tempe Apartments 898,616 Electric/Gas No 2 $405 $405
274 Valley Garden Apartments 896,907 Electric/Gas No N/A N/A N/A
275 Devereaux Apartments 886,649 Electric/Gas No N/A N/A N/A
277 Cottonwood Apartments 797,234 Electric No N/A N/A N/A
278 Royal North Apartments 718,072 None No 1 $310 $310
279 Turtle Dove II Apartments 675,000 Electric/Gas No N/A N/A N/A
<CAPTION>
Subject Subject Subject Subject Subject Subject
1 BR 1 BR 1 BR 2 BR 2 BR 2 BR
# Property Name Units Avg. Rent Max. Rent Units Avg. Rent Max. Rent
- --------------- ------- --------- --------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
194 Hawthorne Hill Apartments 20 $340 $365 128 $426 $460
196 Turtle Oaks Apartments 54 $523 $585 27 $707 $755
199 Imperial Manor West Apartments 132 $411 $440 32 $493 $520
200 Brown School Station Apts. 21 $379 $385 91 $407 $430
203 Corinthian Apartments 1 $730 $730 47 $904 $980
205 Catalina Apartments 61 $368 $385 59 $467 $505
208 College Park Apartments 34 $251 $295 44 $402 $425
209 Country Brooke Apartments 6 $314 $325 102 $413 $445
210 Hillside View Apartments 4 $450 $475 88 $510 $570
212 Crosswinds Apartments N/A N/A N/A 53 $631 $635
218 526 South Ardmore Avenue 45 $532 $603 18 $702 $783
221 Courtyard Apartments 48 $442 $450 36 $539 $590
222 Sunset View Village Apartments N/A N/A N/A 48 $668 $670
225 Quail Ridge Apartments 36 $415 $465 68 $476 $540
227 Laurel Heights Apartments 24 $450 $465 48 $485 $520
230 Lakeside Apartments 11 $760 $760 28 $838 $875
231 Park Glen Apartments 26 $338 $364 130 $396 $436
233 Ravenscroft Apartments 19 $542 $627 55 $623 $647
236 Sherwood Park Apartments 44 $458 $480 28 $527 $560
241 Saticoy-Royale Apartments 48 $541 $550 9 $688 $725
244 Justin Apartments N/A N/A N/A 21 $849 $875
245 Fountain Square Apartments 24 $354 $355 96 $390 $405
246 383 St. Johns Place N/A N/A N/A 13 $1,331 $1,400
258 Woodlake Resort Village Apartments 12 $515 $525 38 $624 $725
259 Plantation Pines Apartments 64 $410 $410 8 $470 $470
261 Sunridge Apartments 34 $456 $510 55 $497 $600
262 Parkside Place Apartments 55 $381 $465 27 $496 $515
264 University Apartments 25 $331 $495 26 $498 $725
265 Isaqueena Village Apartments N/A N/A N/A 60 $517 $545
266 Turtle Dove I Apartments 41 $468 $515 8 $679 $740
268 Valerie Apartments 32 $363 $370 31 $464 $490
269 Huddersfield Apartments 12 $580 $580 19 $671 $720
270 1457 & 1519 - 1527 Park Road, NW 21 $457 $495 24 $577 $791
271 Winter Garden Village Apartments N/A N/A N/A 64 $418 $475
272 Long Point Plaza Apartments 37 $427 $445 36 $487 $525
273 The Place of Tempe Apartments 14 $470 $475 14 $581 $595
274 Valley Garden Apartments N/A N/A N/A 48 $523 $525
275 Devereaux Apartments 11 $344 $379 48 $420 $420
277 Cottonwood Apartments N/A N/A N/A 29 $595 $595
278 Royal North Apartments 24 $380 $385 60 $455 $465
279 Turtle Dove II Apartments 32 $427 $450 8 $527 $550
<CAPTION>
Subject Subject Subject Subject Subject Subject
3 BR 3 BR 3 BR 4 BR 4 BR 4 BR
# Property Name Units Avg. Rent Max. Rent Units Avg. Rent Max. Rent
- --------------- ------- --------- --------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
194 Hawthorne Hill Apartments 20 $471 $500 N/A N/A N/A
196 Turtle Oaks Apartments N/A N/A N/A N/A N/A N/A
199 Imperial Manor West Apartments N/A N/A N/A N/A N/A N/A
200 Brown School Station Apts. N/A N/A N/A N/A N/A N/A
203 Corinthian Apartments 6 $1,135 $1,200 N/A N/A N/A
205 Catalina Apartments N/A N/A N/A N/A N/A N/A
208 College Park Apartments 10 $514 $525 N/A N/A N/A
209 Country Brooke Apartments N/A N/A N/A N/A N/A N/A
210 Hillside View Apartments N/A N/A N/A N/A N/A N/A
212 Crosswinds Apartments 11 $795 $810 N/A N/A N/A
218 526 South Ardmore Avenue N/A N/A N/A N/A N/A N/A
221 Courtyard Apartments N/A N/A N/A N/A N/A N/A
222 Sunset View Village Apartments N/A N/A N/A N/A N/A N/A
225 Quail Ridge Apartments N/A N/A N/A N/A N/A N/A
227 Laurel Heights Apartments N/A N/A N/A N/A N/A N/A
230 Lakeside Apartments N/A N/A N/A N/A N/A N/A
231 Park Glen Apartments 18 $459 $505 N/A N/A N/A
233 Ravenscroft Apartments 1 $752 $752 N/A N/A N/A
236 Sherwood Park Apartments N/A N/A N/A N/A N/A N/A
241 Saticoy-Royale Apartments N/A N/A N/A N/A N/A N/A
244 Justin Apartments 4 $1,073 $1,100 N/A N/A N/A
245 Fountain Square Apartments N/A N/A N/A N/A N/A N/A
246 383 St. Johns Place 3 $1,575 $1,575 N/A N/A N/A
258 Woodlake Resort Village Apartments N/A N/A N/A N/A N/A N/A
259 Plantation Pines Apartments 16 $595 $595 N/A N/A N/A
261 Sunridge Apartments 10 $628 $650 N/A N/A N/A
262 Parkside Place Apartments N/A N/A N/A N/A N/A N/A
264 University Apartments 9 $609 $800 N/A N/A N/A
265 Isaqueena Village Apartments N/A N/A N/A N/A N/A N/A
266 Turtle Dove I Apartments N/A N/A N/A N/A N/A N/A
268 Valerie Apartments 1 $560 $560 N/A N/A N/A
269 Huddersfield Apartments N/A N/A N/A N/A N/A N/A
270 1457 & 1519 - 1527 Park Road, NW 6 $753 $766 N/A N/A N/A
271 Winter Garden Village Apartments N/A N/A N/A N/A N/A N/A
272 Long Point Plaza Apartments 12 $556 $565 N/A N/A N/A
273 The Place of Tempe Apartments N/A N/A N/A N/A N/A N/A
274 Valley Garden Apartments N/A N/A N/A N/A N/A N/A
275 Devereaux Apartments N/A N/A N/A N/A N/A N/A
277 Cottonwood Apartments 1 $750 $750 N/A N/A N/A
278 Royal North Apartments N/A N/A N/A N/A N/A N/A
279 Turtle Dove II Apartments N/A N/A N/A N/A N/A N/A
</TABLE>
(1C) A Single Mortgage Note is secured by Westchase Ranch Apartments, Westwood
Village Apartments, Normandy Woods Apartments, Savoy Manor Apartments and
San Marin Apartments, respectively.
(1E) A Single Mortgage Note is secured by Keller Oaks Apartments, Sycamore Hill
Apartments, Claredon Apartments and Woodchase Condominiums, respectively.
(1F) A Single Mortgage Note is secured by Princeton Court Apartments, Pinewood
Estates Apartments and Arbor Court Apartments, respectively.
(1H) The Mortgage Loans secured by Cranbrook Centre Apartments and Cranbrook
Centre Office Buildings, respectively, are cross-collateralized and
cross-defaulted.
(1J) A Single Mortgage Note is secured by Spruce Properties, Oak Grove
Apartments and Aldrich Apartments, respectively. The Mortgage Loan secured
by Spruce Properties contains two properties that operated are as one.
(1L) A Single Mortgage Note secured by Park Lane Village Apartments and
Rynearson Lane Village Apartments, respectively.
(2) The Mortgage Loan secured by New Franklin Apartments contains four
properties that are operated as one.
(3) Assumes a Cut-off Date of March 1, 1999.
<PAGE>
EXHIBIT A-2
MORTGAGE POOL INFORMATION
See this Exhibit for tables titled:
Mortgage Rates
Mortgage Loans by Amortization Type
Cut-off Date Balances
Loan Group Cut-off Date Balances
Original Amortization Terms
Original Terms to Stated Maturity
Remaining Amortization Terms
Remaining Terms to Stated Maturity
Years Built/Years Renovated
Occupancy Rates at Underwriting
Underwriting Debt Service Coverage Ratios
Cut-off Date Loan-to-Value Ratios
Mortgage Loans by State
Mortgage Loan Seller
Mortgage Loans by Property Type
Mortgage Loans by Property Sub-Type
Prepayment Provision as of the Cut-off Date
Prepayment Option
Mortgage Pool Prepayment Profile
A-2-1
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Mortgage Rates
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Range of Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Mortgage Rates Loans Balance(1) Balance Rate U/W DSCR LTV Ratio
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
5.960% - 6.499% 9 $23,677,724 1.9% 6.219% 1.44x 71.9%
6.500% - 6.749% 11 58,718,671 4.7% 6.640% 1.33 75.9%
6.750% - 6.999% 30 152,042,451 12.1% 6.858% 1.36 75.9%
7.000% - 7.249% 55 258,866,516 20.7% 7.127% 1.34 75.5%
7.250% - 7.499% 74 359,148,517 28.7% 7.340% 1.54 68.2%
7.500% - 7.999% 88 307,513,241 24.5% 7.644% 1.31 74.1%
8.000% - 8.440% 12 92,718,334 7.4% 8.134% 1.30 76.9%
-----------------------------------------------------------------------------------------------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
=====================================================================================================
</TABLE>
Maximum Mortgage Rate: 8.440%
Minimum Mortgage Rate: 5.960%
Wtd. Avg. Mortgage Rate: 7.317%
(1) Cut-off balance as of 3/1/99.
Mortgage Loans by Amortization Type
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Loan Type Loans Balance(1) Balance Rate U/W DSCR LTV Ratio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balloon 208 $906,916,844 72.4% 7.337% 1.32x 74.5%
Hyper Amortizing 68 328,445,422 26.2% 7.276% 1.59 69.3%
Fully Amortizing 3 17,323,190 1.4% 7.016% 1.27 77.3%
-----------------------------------------------------------------------------------------------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
=====================================================================================================
</TABLE>
(1) Cut-off balance as of 3/1/99.
<PAGE>
Cut-off Date Balances
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Range of Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Cut-off Date Balances Loans Balance (1) Balance Rate U/W DSCR LTV Ratio
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$515,269 - 749,999 4 $2,480,311 0.2% 7.814% 1.43x 73.2%
750,000 - 1,249,999 17 17,174,799 1.4% 7.602% 1.37 73.0%
1,250,000 - 1,999,999 63 104,815,403 8.4% 7.313% 1.39 70.0%
2,000,000 - 2,999,999 60 152,593,198 12.2% 7.211% 1.41 69.6%
3,000,000 - 3,999,999 33 116,312,485 9.3% 7.264% 1.38 71.8%
4,000,000 - 4,999,999 22 99,675,950 8.0% 7.322% 1.46 73.0%
5,000,000 - 5,999,999 17 91,965,164 7.3% 7.229% 1.57 71.9%
6,000,000 - 9,999,999 39 282,766,080 22.6% 7.306% 1.44 72.3%
10,000,000 - 14,999,999 13 158,129,681 12.6% 7.344% 1.28 76.8%
15,000,000 - 19,999,999 6 99,435,972 7.9% 7.319% 1.30 74.5%
20,000,000 - 24,999,999 3 67,309,732 5.4% 7.572% 1.28 77.7%
25,000,000 - $30,446,295 2 60,026,682 4.8% 7.404% 1.27 80.0%
------------------------------------------------------------------------------------------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
================================================================================================
</TABLE>
Maximum Cut-off Date Balance: $30,446,295
Minimum Cut-off Date Balance: $515,269
Average Cut-off Date Balance: $4,489,912
(1) Cut-off balance as of 3/1/99.
Loan Group Cut-off Date Balances
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Range of Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Cut-off Date Balances Loans Balance (1) Balance Rate U/W DSCR LTV Ratio
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$675,000 - 749,999 2 $1,393,072 0.1% 7.856% 1.50x 70.5%
750,000 - 1,249,999 13 13,064,503 1.0% 7.549% 1.39 72.2%
1,250,000 - 1,999,999 54 90,606,908 7.2% 7.316% 1.38 70.0%
2,000,000 - 2,999,999 55 140,756,300 11.2% 7.208% 1.42 69.8%
3,000,000 - 3,999,999 29 101,853,122 8.1% 7.241% 1.32 73.9%
4,000,000 - 4,999,999 17 76,432,397 6.1% 7.330% 1.29 77.2%
5,000,000 - 5,999,999 13 70,952,058 5.7% 7.197% 1.37 77.2%
6,000,000 - 9,999,999 34 253,614,557 20.2% 7.328% 1.30 74.5%
10,000,000 - 14,999,999 11 137,345,476 11.0% 7.291% 1.28 76.8%
15,000,000 - 19,999,999 5 82,286,927 6.6% 7.271% 1.28 73.4%
20,000,000 - 24,999,999 2 41,232,174 3.3% 7.083% 1.27 79.8%
25,000,000 - $70,750,763 5 243,147,962 19.4% 7.485% 1.66 68.5%
------------------------------------------------------------------------------------------------
Total/Weighted Average: 240 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
================================================================================================
</TABLE>
Maximum Cut-off Date Balance: $70,750,763
Minimum Cut-off Date Balance: $675,000
Average Cut-off Date Balance: $5,219,523
(1) Cut-off balance as of 3/1/99. Presents each group of cross-collateralized
Mortgage Loans as a single Mortgage Loan.
<PAGE>
Original Amortization Terms
<TABLE>
<CAPTION>
Weighted Weighted
Range of Number of Percentage of Average Weighted Average
Original Amortization Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Terms (Months) Loans Balance (1) Balance Rate U/W DSCR LTV Ratio
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
180 - 239 3 $9,950,692 0.8% 6.552% 1.31x 64.1%
240 - 299 7 9,970,526 0.8% 7.444% 1.37 67.4%
300 - 313 86 264,096,668 21.1% 7.393% 1.71 63.5%
314 - 360 183 968,667,570 77.3% 7.303% 1.30 76.0%
----------------------------------------------------------------------------------------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
==============================================================================================
</TABLE>
Maximum Original Amortization Term (Months): 360
Minimum Original Amortization Term (Months): 180
Wtd. Avg. Original Amortization Term (Months): 345
(1) Cut-off balance as of 3/1/99.
Original Terms to Stated Maturity (1)
<TABLE>
<CAPTION>
Weighted Weighted
Range of Number of Percentage of Average Weighted Average
Original Terms Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
to Maturity (Months) Loans Balance (2) Balance Rate U/W DSCR LTV Ratio
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
60 - 108 6 $46,088,506 3.7% 7.120% 1.29x 76.8%
109 - 120 261 1,148,111,527 91.7% 7.341% 1.40 72.8%
121 - 204 5 13,549,427 1.1% 7.117% 1.38 74.8%
205 - 300 7 44,935,996 3.6% 6.967% 1.31 77.9%
---------------------------------------------------------------------------------------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
=============================================================================================
</TABLE>
Maximum Original Term to Maturity (Months): 300
Minimum Original Term to Maturity (Months): 60
Wtd. Avg. Original Term to Maturity (Months): 125
(1) In the case of Anticipated Repayment Date loans, the Anticipated Repayment
Date is assumed to be the maturity date for the purposes of the table.
(2) Cut-off balance as of 3/1/99.
<PAGE>
Remaining Amortization Terms
<TABLE>
<CAPTION>
Weighted Weighted
Range of Number of Percentage of Average Weighted Average
Remaining Amortization Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Terms (Months) Loans Balance (1) Balance Rate U/W DSCR LTV Ratio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
177 - 239 9 $18,357,342 1.5% 6.998% 1.32x 66.0%
240 - 299 83 255,960,545 20.4% 7.379% 1.73 63.2%
300 - 313 5 14,842,114 1.2% 7.451% 1.35 71.1%
314 - 360 182 963,525,455 76.9% 7.304% 1.30 76.0%
--------------------------------------------------------------------------------------------------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
========================================================================================================
</TABLE>
Maximum Remaining Amortization Term (Months): 360
Minimum Remaining Amortization Term (Months): 177
Wtd. Avg. Remaining Amortization Term (Months): 342
(1) Cut-off balance as of 3/1/99.
Remaining Terms to Stated Maturity (1)
<TABLE>
<CAPTION>
Weighted Weighted
Range of Number of Percentage of Average Weighted Average
Remaining Terms Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
to Maturity (Months) Loans Balance (2) Balance Rate U/W DSCR LTV Ratio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
58 - 108 7 $48,782,931 3.9% 7.141% 1.31x 75.9%
109 - 120 260 1,145,417,102 91.4% 7.340% 1.40 72.9%
121 - 204 5 13,549,427 1.1% 7.117% 1.38 74.8%
205 - 289 7 44,935,996 3.6% 6.967% 1.31 77.9%
--------------------------------------------------------------------------------------------------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
========================================================================================================
</TABLE>
Maximum Remaining Term to Maturity (Months): 289
Minimum Remaining Term to Maturity (Months): 58
Wtd. Avg. Remaining Term to Maturity (Months): 122
(1) In the case of Anticipated Repayment Date loans, the Anticipated Repayment
Date is assumed to be the maturity date for the purposes of the table.
(2) Cut-off balance as of 3/1/99.
<PAGE>
Years Built/Years Renovated (1)
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Range of Years Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Built/Renovated Loans Balance (2) Balance Rate U/W DSCR LTV Ratio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1951 - 1960 6 $12,819,010 1.0% 7.208% 1.68x 62.7%
1961 - 1970 24 79,789,581 6.4% 7.298% 1.33 76.2%
1971 - 1980 40 168,025,746 13.4% 7.241% 1.33 74.1%
1981 - 1990 83 330,990,240 26.4% 7.236% 1.31 75.4%
1991 - 1998 126 661,060,879 52.8% 7.381% 1.44 71.7%
-------------------------------------------------------------------------------------------------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
=======================================================================================================
</TABLE>
Maximum Year Built/Renovated: 1998
Minimum Year Built/Renovated: 1951
Wtd. Avg. Year Built/Renovated: 1988
(1) Year Built/Renovated reflects the later of the Year Built or the Year
Renovated.
(2) Cut-off balance as of 3/1/99.
Occupancy Rates at Underwriting
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Range of Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Occupancy Rates at U/W Loans (1) Balance (2) Balance Rate U/W DSCR LTV Ratio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
50.0% - 69.9% 2 $5,648,370 0.5% 7.040% 1.39x 54.8%
70.0% - 79.9% 2 4,425,045 0.4% 6.903% 1.38 73.6%
80.0% - 89.9% 15 55,761,841 4.5% 7.279% 1.35 68.3%
90.0% - 94.9% 50 239,045,962 19.1% 7.262% 1.31 76.1%
95.0% - 100.0% 184 831,465,195 66.4% 7.317% 1.31 75.4%
----------------------------------------------------------------------------------------------------
Total/Weighted Average: 279 $1,136,346,413 90.7% 7.300% 1.31x 75.1%
====================================================================================================
</TABLE>
Maximum Occupancy Rate at U/W: 100.0%
Minimum Occupancy Rate at U/W: 50.0%
Wtd. Avg. Occupancy Rate at U/W: 87.3%
(1) Does not include any Mortgage Loans secured by hotel properties.
(2) Cut-off balance as of 3/1/99.
<PAGE>
Underwriting Debt Service Coverage Ratios
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Range of Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
U/W DSCRs Loans Balance(1) Balance Rate U/W DSCR LTV Ratio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1.20x - 1.29 108 $631,478,078 50.4% 7.379% 1.25x 76.5%
1.30 - 1.39 87 334,357,109 26.7% 7.243% 1.33 74.4%
1.40 - 1.49 46 154,796,906 12.4% 7.291% 1.42 74.2%
1.50 - 1.59 12 24,598,983 2.0% 7.007% 1.53 67.1%
1.60 - 2.54x 26 107,454,379 8.6% 7.286% 2.29 50.2%
----------------------------------------------------------------------------------------------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
====================================================================================================
</TABLE>
Maximum Underwriting DSCR: 2.54x
Minimum Underwriting DSCR: 1.20x
Wtd. Avg. Underwriting DSCR: 1.39x
(1) Cut-off balance as of 3/1/99.
Cut-off Date Loan-to-Value Ratios
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Range of Cut-off Date Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Loan-to-Value Ratios Loans Balance(1) Balance Rate U/W DSCR LTV Ratio
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
16.20% - 50.00% 18 $77,184,406 6.2% 7.334% 2.42x 44.1%
50.01% - 60.00% 19 55,551,024 4.4% 7.286% 1.59 57.4%
60.01% - 70.00% 41 125,826,621 10.0% 7.443% 1.36 66.2%
70.01% - 75.00% 73 279,229,072 22.3% 7.355% 1.32 73.0%
75.01% - 80.00% 121 662,639,360 52.9% 7.250% 1.30 78.6%
80.01% - 82.50% 7 52,254,974 4.2% 7.657% 1.25 81.6%
--------------------------------------------------------------------------------------------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
==================================================================================================
</TABLE>
Maximum Cut-off Date LTV Ratio: 82.5%
Minimum Cut-off Date LTV Ratio: 16.2%
Wtd. Avg. Cut-off Date LTV Ratio: 73.2%
(1) Cut-off balance as of 3/1/99.
<PAGE>
Mortgage Loans by State
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
State Loans Balance(1) Balance Rate U/W DSCR LTV Ratio
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Texas 53 $247,283,354 19.7% 7.292% 1.30x 74.8%
California 43 169,156,706 13.5% 7.287% 1.31 75.7%
Florida 19 123,548,452 9.9% 7.728% 1.34 75.9%
Michigan 17 59,538,902 4.8% 7.328% 1.44 71.6%
Tennessee 2 45,946,295 3.7% 6.906% 1.28 75.4%
North Carolina 9 42,498,893 3.4% 7.456% 1.89 62.2%
Pennsylvania 4 40,233,429 3.2% 7.253% 1.35 78.7%
Massachusetts 6 37,807,595 3.0% 7.483% 1.39 70.6%
Louisiana 5 36,317,290 2.9% 7.698% 1.34 76.9%
Virginia 3 34,591,554 2.8% 7.206% 1.33 78.1%
Georgia 7 32,757,166 2.6% 7.149% 1.72 67.3%
Ohio 9 31,646,065 2.5% 7.157% 1.33 75.2%
Colorado 8 30,301,170 2.4% 7.292% 1.30 68.2%
South Carolina 8 28,520,688 2.3% 7.040% 1.74 64.8%
New Jersey 7 28,088,527 2.2% 7.383% 1.29 72.3%
New York 7 26,991,196 2.2% 7.434% 1.76 66.3%
Illinois 9 25,704,850 2.1% 6.930% 1.44 72.2%
Indiana 7 23,789,539 1.9% 7.300% 1.42 72.6%
Washington 7 19,746,085 1.6% 7.213% 1.31 73.8%
Maryland 6 18,946,349 1.5% 7.212% 1.46 69.0%
New Hampshire 5 18,607,922 1.5% 6.911% 1.30 69.8%
Nevada 4 15,870,796 1.3% 7.348% 1.27 76.3%
Oklahoma 1 14,487,822 1.2% 6.940% 1.27 78.7%
Arizona 4 13,558,040 1.1% 7.307% 1.99 54.7%
Maine 3 11,724,123 0.9% 7.424% 1.35 63.3%
Wisconsin 2 10,492,750 0.8% 7.336% 1.27 75.1%
Kansas 1 9,841,203 0.8% 6.820% 1.40 77.5%
Oregon 2 7,277,959 0.6% 7.144% 1.82 60.5%
Missouri 4 7,043,268 0.6% 7.972% 1.39 68.7%
Mississippi 3 6,841,796 0.5% 6.925% 1.37 75.8%
Minnesota 4 6,785,324 0.5% 7.678% 1.36 74.8%
Alabama 3 6,780,746 0.5% 7.209% 1.27 74.9%
Connecticut 1 6,300,000 0.5% 7.610% 1.26 70.0%
District of Columbia 2 5,651,491 0.5% 7.489% 1.26 77.0%
Delaware 2 4,962,484 0.4% 6.680% 1.35 79.7%
New Mexico 1 1,546,334 0.1% 7.890% 1.33 58.9%
Utah 1 1,499,290 0.1% 7.720% 1.25 77.9%
------------------------------------------------------------------------------------------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
================================================================================================
</TABLE>
(1) Cut-off balance as of 3/1/99.
Mortgage Loan Seller
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Mortgage Loan Seller Loans Balance(1) Balance Rate U/W DSCR LTV Ratio
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
G.E. Capital Access 177 $876,223,369 69.9% 7.314% 1.40x 73.2%
Column 102 376,462,087 30.1% 7.324% 1.36 73.2%
-----------------------------------------------------------------------------------------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
===============================================================================================
</TABLE>
(1) Cut-off balance as of 3/1/99.
<PAGE>
Mortgage Loans by Property Type
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Property Type Loans Balance(1) Balance Rate U/W DSCR LTV Ratio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Multifamily 107 $455,089,577 36.3% 7.140% 1.30x 76.5%
Retail 59 310,401,887 24.8% 7.483% 1.30 76.2%
Hotel 26 116,339,043 9.3% 7.479% 2.13 54.5%
Office 24 110,681,155 8.8% 7.451% 1.31 71.9%
Mixed Use 18 103,267,224 8.2% 7.278% 1.32 69.7%
Manufactured Housing 24 82,350,974 6.6% 7.165% 1.38 75.4%
Self Storage 16 39,245,939 3.1% 7.465% 1.36 72.8%
Industrial 5 35,309,656 2.8% 7.481% 1.42 74.5%
------------------------------------------------------------------------------------------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
================================================================================================
</TABLE>
(1) Cut-off balance as of 3/1/99.
Mortgage Loans by Property Sub-Type
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Property Property Sub-Type Loans Balance(1) Balance Rate U/W DSCR LTV Ratio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Retail
Anchored 34 $235,441,576 18.8% 7.500% 1.29x 76.5%
Unanchored 25 74,960,311 6.0% 7.428% 1.33 75.5%
- -----------------------------------------------------------------------------------------------------------------------------------
Total/Weighted Average: 59 $310,401,887 24.8% 7.483% 1.30x 76.2%
===================================================================================================================================
Hotel
Limited Service (2) 23 $92,969,978 7.4% 7.420% 2.24x 51.5%
Full Service 3 23,369,066 1.9% 7.716% 1.71 66.8%
- -----------------------------------------------------------------------------------------------------------------------------------
Total/Weighted Average: 26 $116,339,043 9.3% 7.479% 2.13x 54.5%
===================================================================================================================================
</TABLE>
(1) Cut-off balance as of 3/1/99.
(2) 76.1% comprised of the Winston Loan, which consists of 14 properties with a
2.54x DSCR and 43.6% LTV.
<PAGE>
Prepayment Provision as of the Cut-off Date
<TABLE>
<CAPTION>
Weighted Weighted
Average Average
Remaining Remaining Weighted
Range of Number of Percentage of Lockout Lockout Average
Remaining Terms to Mortgage Cut-off Date Initial Pool Period Plus YM Period Maturity
Stated Maturity (Years) (1) Loans Balance (2) Balance (Years) (Years) (Years)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
4.0 - 4.9 1 $7,137,562 0.6% 4.6 4.6 4.8
6.0 - 6.9 4 35,148,655 2.8% 6.4 6.4 6.8
7.0 - 7.9 1 3,802,289 0.3% 3.8 6.7 7.2
8.0 - 8.9 1 2,694,425 0.2% 1.8 8.8 8.8
9.0 - 9.9 254 1,107,587,102 88.4% 9.1 9.4 9.8
10.0 - 10.9 6 37,830,000 3.0% 9.2 9.6 10.0
11.0 - 11.9 1 2,956,573 0.2% 11.6 11.6 11.9
14.0 - 14.9 4 10,592,854 0.8% 11.5 14.1 14.6
19.0 - 19.9 4 22,141,083 1.8% 9.9 18.4 19.7
24.0 - 24.9 3 22,794,913 1.8% 8.6 20.8 24.0
-----------------------------------------------------------------------------------------------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 9.0 9.7 10.1
=====================================================================================================
</TABLE>
(1) In the case of the ARD Loans, the Anticipated Repayment Date is assumed to
be the maturity date for the purposes of the table.
(2) Cut-off balance as of 3/1/99.
Prepayment Option
<TABLE>
<CAPTION>
Weighted Weighted
Average Average
Remaining Remaining Weighted
Percentage of Lockout Lockout Average
Number of Cut-off Date Initial Period Plus YM Period Maturity
Prepayment Option Loans Balance (1) Pool Balance (Years) (Years) (Years) (2)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Lockout / Defeasance 254 $1,147,218,645 91.6% 9.4 9.4 9.7
Lockout / Yield Maintenance 24 104,021,536 8.3% 5.4 13.7 14.7
Lockout 1 1,445,275 0.1% 1.9 1.9 9.7
-----------------------------------------------------------------------------------------------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 9.0 9.7 10.1
=====================================================================================================
</TABLE>
(1) Cut-off balance as of 3/1/99.
(2) In the case of the ARD Loans, the Anticipated Repayment Date is assumed to
be the maturity date for the purposes of the table.
<PAGE>
Mortgage Pool Prepayment Profile (1)
<TABLE>
<CAPTION>
% of Pool
Months Since Number of Outstanding % of Pool Yield % of Pool
Date Cut-off Date Loans Balance (mm) Lockout Maintenance Open Total
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Mar-99 0 279 $1,252.7 100.0% 0.0% 0.0% 100.0%
Mar-00 12 279 $1,240.2 100.0% 0.0% 0.0% 100.0%
Mar-01 24 279 $1,226.6 99.7% 0.2% 0.1% 100.0%
Mar-02 36 279 $1,211.8 96.2% 3.6% 0.1% 100.0%
Mar-03 48 279 $1,195.8 95.2% 4.7% 0.1% 100.0%
Mar-04 60 278 $1,172.1 95.0% 4.9% 0.1% 100.0%
Mar-05 72 278 $1,153.8 95.0% 4.9% 0.1% 100.0%
Mar-06 84 274 $1,101.9 94.8% 4.7% 0.4% 100.0%
Mar-07 96 273 $1,077.8 94.8% 5.1% 0.1% 100.0%
Mar-08 108 272 $1,053.6 92.5% 6.0% 1.6% 100.0%
Mar-09 120 12 $47.0 20.1% 77.0% 2.9% 100.0%
Mar-10 132 12 $45.4 20.2% 77.0% 2.8% 100.0%
Mar-11 144 11 $41.1 15.4% 81.7% 2.9% 100.0%
Mar-12 156 11 $39.2 15.4% 81.9% 2.7% 100.0%
Mar-13 168 11 $37.3 15.4% 76.2% 8.4% 100.0%
Mar-14 180 7 $28.0 1.3% 95.8% 2.9% 100.0%
Mar-15 192 7 $26.1 1.1% 96.3% 2.6% 100.0%
Mar-16 204 7 $24.1 1.0% 96.8% 2.2% 100.0%
Mar-17 216 7 $21.9 0.8% 97.5% 1.7% 100.0%
Mar-18 228 7 $19.6 0.5% 85.3% 14.2% 100.0%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Calculated assuming that no Mortgage Loan prepays, defaults or is
repurchased prior to stated maturity, except that the ARD Loans are assumed
to pay in full on their respective Anticipated Repayment Dates. Otherwise
calculated based on Maturity Assumptions to be set forth in the final
prospectus supplement.
<PAGE>
EXHIBIT B
FORM OF TRUSTEE REPORT
B-1
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates
Series 1999-CG1
------------------------------------------
[LOGO] For Additional Information, please contact
Norwest Bank Minnesota, N.A. Leslie Gaskill
Corporate Trust Services (212) 515-5254
3 New York Plaza, 15th Floor Reports Available on the World Wide Web
New York, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
Payment Date: 04/12/1999
Record Date: 03/31/1999
- --------------------------------------------------------------------------------
TRUSTEE REPORT
Table of Contents
==================================================================
STATEMENT SECTIONS PAGE(s)
- ----------------- -------
Certificate Distribution Detail 2
Certificate Factor Detail 3
Reconciliation Detail 4
Other Required Information 5
Ratings Detail 6
Current Mortgage Loan and Property
Stratification Tables 7-9
Mortgage Loan Detail 10
Principal Prepayment Detail 11
Historical Detail 12
Delinquency Loan Detail 13
Specially Serviced Loan Detail 14-15
Modified Loan Detail 16
Liquidated Loan Detail 17
==================================================================
<TABLE>
<CAPTION>
Underwriter Servicer Special Servicer
============================ ===================================== ============================
<S> <C> <C>
Donaldson, Lufkin & Jenrette GE Capital Loan Services Inc.
Securities Corporation 363 North Sam Houston Parkway, East
277 Park Avenue Suite 1200
New York, NY 10172 Houston, TX 77060
Contact: N. Dante LaRocca Contact: Shelly Shrimpton
Phone Number: (212) 892-3000 Phone Number: (281) 405-7087
============================ ==================================== ============================
</TABLE>
This report has been compiled from information provided to Norwest by various
third parties, which may include the Servicer, Master Servicer, Special Servicer
and others. Norwest has not independently confirmed the accuracy of information
received from these third parties and assumes no duty to do so. Norwest
expressly disclaims any responsibility for the accuracy or completeness of
information furnished by third parties.
- --------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A. Page 1 of 17
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates
Series 1999-CG1
------------------------------------------
[LOGO] For Additional Information, please contact
Norwest Bank Minnesota, N.A. Leslie Gaskill
Corporate Trust Services (212) 515-5254
3 New York Plaza, 15th Floor Reports Available on the World Wide Web
New York, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
Payment Date: 04/12/1999
Record Date: 03/31/1999
Certificate Distribution Detail
<TABLE>
<CAPTION>
=========================================================================================================================
Pass-Through Original Beginning Principal Interest
Class CUSIP Rate Balance Balance Distribution Distribution
=========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
A-1A 0.000000% 0.00 0.00 0.00 0.00
A-1B 0.000000% 0.00 0.00 0.00 0.00
A-2 0.000000% 0.00 0.00 0.00 0.00
A-3 0.000000% 0.00 0.00 0.00 0.00
B-1 0.000000% 0.00 0.00 0.00 0.00
B-2 0.000000% 0.00 0.00 0.00 0.00
B-3 0.000000% 0.00 0.00 0.00 0.00
B-4 0.000000% 0.00 0.00 0.00 0.00
B-5 0.000000% 0.00 0.00 0.00 0.00
B-6 0.000000% 0.00 0.00 0.00 0.00
B-7 0.000000% 0.00 0.00 0.00 0.00
B-8 0.000000% 0.00 0.00 0.00 0.00
C 0.000000% 0.00 0.00 0.00 0.00
D-1 0.000000% 0.00 0.00 0.00 0.00
D-2 0.000000% 0.00 0.00 0.00 0.00
R-I 0.000000% 0.00 0.00 0.00 0.00
R-II 0.000000% 0.00 0.00 0.00 0.00
R-III 0.000000% 0.00 0.00 0.00 0.00
=========================================================================================================================
Totals 0.00 0.00 0.00 0.00
=========================================================================================================================
<CAPTION>
===========================================================================================================
Realized Loss/ Current
Prepayment Additional Trust Total Ending Subordination
Class Penalties Fund Expenses Distribution Balance Level (1)
===========================================================================================================
<S> <C> <C> <C> <C> <C>
A-1A 0.00 0.00 0.00 0.00 0.00%
A-1B 0.00 0.00 0.00 0.00 0.00%
A-2 0.00 0.00 0.00 0.00 0.00%
A-3 0.00 0.00 0.00 0.00 0.00%
B-1 0.00 0.00 0.00 0.00 0.00%
B-2 0.00 0.00 0.00 0.00 0.00%
B-3 0.00 0.00 0.00 0.00 0.00%
B-4 0.00 0.00 0.00 0.00 0.00%
B-5 0.00 0.00 0.00 0.00 0.00%
B-6 0.00 0.00 0.00 0.00 0.00%
B-7 0.00 0.00 0.00 0.00 0.00%
B-8 0.00 0.00 0.00 0.00 0.00%
C 0.00 0.00 0.00 0.00 0.00%
D-1 0.00 0.00 0.00 0.00 0.00%
D-2 0.00 0.00 0.00 0.00 0.00%
R-I 0.00 0.00 0.00 0.00 0.00%
R-II 0.00 0.00 0.00 0.00 0.00%
R-III 0.00 0.00 0.00 0.00 0.00%
===========================================================================================================
Totals 0.00 0.00 0.00 0.00
===========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
Original Beginning Ending
Pass-Through Notional Notional Interest Prepayment Total Notional
Class CUSIP Rate Amount Amount Distribution Penalties Distribution Amount
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
S 0.000000% 0.00 0.00 0.00 0.00 0.00
====================================================================================================================================
</TABLE>
(1) Calculated by taking (A) the sum of the ending certificate balance of all
classes less (B) the sum of (i) the ending certificate balance of the designated
class and (ii) the ending certificate balance of all classes which are not
subordinate to the designated class and dividing the result by (A).
Copyright 1997, Norwest Bank Minnesota, N.A. Page 2 of 17
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates
Series 1999-CG1
------------------------------------------
[LOGO] For Additional Information, please contact
Norwest Bank Minnesota, N.A. Leslie Gaskill
Corporate Trust Services (212) 515-5254
3 New York Plaza, 15th Floor Reports Available on the World Wide Web
New York, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
Payment Date: 04/12/1999
Record Date: 03/31/1999
- --------------------------------------------------------------------------------
Certificate Factor Detail
<TABLE>
<CAPTION>
====================================================================================================================
Beginning Principal Interest Prepayment Realized Loss/ Ending
Class CUSIP Balance Distribution Distribution Penalties Additional Trust Balance
Fund Expenses
====================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
A-1A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
A-1B 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
A-2 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
A-3 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
B-1 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
B-2 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
B-3 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
B-4 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
B-5 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
B-6 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
B-7 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
B-8 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
C 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
D-1 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
D-2 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
R-I 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
R-II 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
R-III 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
====================================================================================================================
</TABLE>
===============================================================================
Beginning Ending
Class CUSIP National Interest Prepayment Notional
Amount Distribution Penalties Amount
===============================================================================
S 0.00000000 0.00000000 0.00000000 0.00000000
===============================================================================
Copyright 1997, Norwest Bank Minnesota, N.A. Page 3 of 17
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates
Series 1999-CG1
------------------------------------------
[LOGO] For Additional Information, please contact
Norwest Bank Minnesota, N.A. Leslie Gaskill
Corporate Trust Services (212) 515-5254
3 New York Plaza, 15th Floor Reports Available on the World Wide Web
New York, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
Payment Date: 04/12/1999
Record Date: 03/31/1999
Reconciliation Detail
<TABLE>
<CAPTION>
Advance Summary Servicing Fee Breakdowns
<S> <C> <C> <C>
P & I Advances Outstanding 0.00 Current Period Accrued Master Servicing Fees 0.00
Servicing Advances Outstanding 0.00 Less Delinquent Master Servicing Fees 0.00
Less Reductions to Master Servicing Fees 0.00
Reimbursement for Interest on Advances 0.00 Plus Master Servicing Fees for Delinquent Payments Received 0.00
Paid from general collections Plus Adjustments for Prior Master Servicing Calculation 0.00
Total Master Servicing Fees Collected 0.00
</TABLE>
<TABLE>
<CAPTION>
Certificate Interest Reconciliation
====================================================================================================================================
Accrued Net Aggregate Distributable Distributable Additional Remaining Unpaid
Certificate Prepayment Certificate Certificate Interest Trust Fund Interest Distributable
Class Interest Interest Shortfall Interest Adjustment Expenses Distribution Certificate Interest
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
S 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-1A 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-1B 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-2 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-3 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B-1 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B-2 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B-3 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B-4 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B-5 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B-6 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B-7 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B-8 0.00 0.00 0.00 0.00 0.00 0.00 0.00
C 0.00 0.00 0.00 0.00 0.00 0.00 0.00
D-1 0.00 0.00 0.00 0.00 0.00 0.00 0.00
D-2 0.00 0.00 0.00 0.00 0.00 0.00 0.00
====================================================================================================================================
Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00
====================================================================================================================================
</TABLE>
Copyright 1997, Norwest Bank Minnesota, N.A. Page 4 of 17
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates
Series 1999-CG1
------------------------------------------
[LOGO] For Additional Information, please contact
Norwest Bank Minnesota, N.A. Leslie Gaskill
Corporate Trust Services (212) 515-5254
3 New York Plaza, 15th Floor Reports Available on the World Wide Web
New York, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
Payment Date: 04/12/1999
Record Date: 03/31/1999
Other Required Information
<TABLE>
<S> <C>
Available Distribution Amount 0.00 Cumulative Realized Losses
Class A-1A 0.00
Class A-1B 0.00
Original Number of Outstanding Loans 0 Class A-2 0.00
Class A-3 0.00
Aggregate Number of Outstanding Loans 0 Class B-1 0.00
Class B-2 0.00
Aggregate Stated Principal Balance of Loans 0.00 Class B-3 0.00
Class B-4 0.00
Aggregate Unpaid Principal Balance of Loans 0.00 Class B-5 0.00
Class B-6 0.00
Class B-7 0.00
Aggregate Amount of Master Servicing Fee 0.00 Class C 0.00
Aggregate Amount of Special Servicing Fee 0.00 Appraised Reduction Amount
Aggregate Amount of Trustee Fee 0.00 ============================================================
Appraisal Date Appraisal
Aggregate Trust Fund Expenses 0.00 Loan Reduction Reduction
Number Amount Effected
Interest Reserve Deposit 0.00 ============================================================
Specially Serviced Loans not Delinquent
Number of Outstanding Loans 0
Aggregate Unpaid Principal Balance 0.00 Total
============================================================
</TABLE>
Copyright 1997, Norwest Bank Minnesota, N.A. Page 5 of 17
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates
Series 1999-CG1
------------------------------------------
[LOGO] For Additional Information, please contact
Norwest Bank Minnesota, N.A. Leslie Gaskill
Corporate Trust Services (212) 515-5254
3 New York Plaza, 15th Floor Reports Available on the World Wide Web
New York, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
Payment Date: 04/12/1999
Record Date: 03/31/1999
Ratings Detail
<TABLE>
<CAPTION>
====================================================================================================================
Original Ratings Current Ratings (1)
Class CUSIP ----------------------------------- -----------------------------------
DCR Fitch Moody's S & P DCR Fitch Moody's S & P
====================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
S
A-1A
A-1B
A-2
A-3
B-1
B-2
B-3
B-4
B-5
B-6
B-7
B-8
C
D-1
D-2
====================================================================================================================
</TABLE>
NR - Designates that the class was not rated by the above agency at the time of
original issuance.
X - Designates that the above rating agency did not rate any classes in this
transaction at the time of original issuance.
N/A - Data not available this period.
1) For any class not rated at the time of original issuance by any particular
rating agency, no request has been made subsequent to issuance to obtain rating
information, if any, from such rating agency. The current ratings were obtained
directly from the applicable rating agency within 30 days of the payment date
listed above. The ratings may have changed since they were obtained. Because the
ratings may have changed, you may want to obtain current ratings directly from
the rating agencies.
<TABLE>
<S> <C> <C> <C>
Duff & Phelps Credit Rating Co. Fitch IBCA, Inc. Moody's Investors Service Standard & Poor's Rating Services
55 East Monroe Street One State Street Plaza 99 Church Street 26 Broadway
Chicago, Illinois 60603 New York, New York 10004 New York, New York 10007 New York, New York 10004
(312) 368-3100 (212) 908-0500 (212) 553-0300 (212) 208-8000
</TABLE>
Copyright 1997, Norwest Bank Minnesota, N.A. Page 6 of 17
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates
Series 1999-CG1
------------------------------------------
[LOGO] For Additional Information, please contact
Norwest Bank Minnesota, N.A. Leslie Gaskill
Corporate Trust Services (212) 515-5254
3 New York Plaza, 15th Floor Reports Available on the World Wide Web
New York, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
Payment Date: 04/12/1999
Record Date: 03/31/1999
Current Mortgage Loan and Property Stratification Tables
<TABLE>
<CAPTION>
Scheduled Balance State(3)
================================================================= =============================================================
% of % of
Scheduled # of Scheduled Agg. WAM Weighted # of Scheduled Agg. WAM Weighted
Balance Loans Balance Bal. (2) WAC Avg DSCR(1) State Props. Balance Bal. (2) WAC Avg DSCR(1)
================================================================= =============================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
================================================================= ============================================================
Totals Totals
================================================================= ============================================================
</TABLE>
See footnotes on last page of this section.
Copyright 1997, Norwest Bank Minnesota, N.A. Page 7 of 17
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates
Series 1999-CG1
------------------------------------------
[LOGO] For Additional Information, please contact
Norwest Bank Minnesota, N.A. Leslie Gaskill
Corporate Trust Services (212) 515-5254
3 New York Plaza, 15th Floor Reports Available on the World Wide Web
New York, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
Payment Date: 04/12/1999
Record Date: 03/31/1999
Current Mortgage Loan and Property Stratification Tables
Debt Service Coverage Ratio
================================================================================
% of
Debt Service # of Scheduled Agg. WAM Weighted
Coverage Ratio Loans Balance Bal. (2) WAC Avg DSCR(1)
================================================================================
================================================================================
Totals
================================================================================
Property Type(3)
================================================================================
% of
Property # of Scheduled Agg. WAM Weighted
Type Props. Balance Bal. (2) WAC Avg DSCR(1)
================================================================================
================================================================================
Totals
================================================================================
Note Rate
================================================================================
% of
Note # of Scheduled Agg. WAM Weighted
Rate Loans Balance Bal. (2) WAC Avg DSCR(1)
================================================================================
================================================================================
Totals
================================================================================
Seasoning
================================================================================
% of
# of Scheduled Agg. WAM Weighted
Seasoning Loans Balance Bal. (2) WAC Avg DSCR(1)
================================================================================
================================================================================
Totals
================================================================================
See footnotes on last page of this section.
Copyright 1997, Norwest Bank Minnesota, N.A. Page 8 of 17
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates
Series 1999-CG1
------------------------------------------
[LOGO] For Additional Information, please contact
Norwest Bank Minnesota, N.A. Leslie Gaskill
Corporate Trust Services (212) 515-5254
3 New York Plaza, 15th Floor Reports Available on the World Wide Web
New York, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
Payment Date: 04/12/1999
Record Date: 03/31/1999
Current Mortgage Loan and Property Stratification Table
<TABLE>
<CAPTION>
Anticipated Remaining Term (ARD and Balloon Loans)
==========================================================================================================
% of
Anticipated Remaining # of Scheduled Agg. WAM Weighted
Term(2) Loans Balance Bal. (2) WAC Avg DSCR(1)
==========================================================================================================
<S> <C> <C> <C> <C> <C> <C>
==========================================================================================================
Totals
==========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Remaining Stated Term (Fully Amortizing Loans)
==========================================================================================================
% of
Remaining Stated # of Scheduled Agg. WAM Weighted
Term Loans Balance Bal. (2) WAC Avg DSCR(1)
==========================================================================================================
<S> <C> <C> <C> <C> <C> <C>
==========================================================================================================
Totals
==========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Remaining Amortization Term (ARD and Balloon Loans)
==========================================================================================================
% of
Remaining Amortization # of Scheduled Agg. WAM Weighted
Term Loans Balance Bal. (2) WAC Avg DSCR (1)
==========================================================================================================
<S> <C> <C> <C> <C> <C> <C>
==========================================================================================================
Totals
==========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Age of Most Recent NOI
==========================================================================================================
% of
Age of Most # of Scheduled Agg. WAM Weighted
Recent NOI Loans Balance Bal. (2) WAC Avg DSCR(1)
==========================================================================================================
<S> <C> <C> <C> <C> <C> <C>
==========================================================================================================
Totals
==========================================================================================================
</TABLE>
(1) Debt Service Coverage Ratios are updated periodically as new NOI figures
become available from borrowers on an asset level. In all cases the most current
DSCR provided by the Servicer is used. To the extent that no DSCR is provided by
the Servicer, information from the offering document is used. The Trustee makes
no representations as to the accuracy of the data provided by the borrower for
this calculation.
(2) Anticipated Remaining Term and WAM are each calculated based upon the term
from the current month to the earlier of the Anticipated Repayment Date, if
applicable, and the maturity date.
(3) Data in this table was calculated by allocating pro-rata the current loan
information to the properties based upon the Cut-off Date Balance of the related
mortgage loan as disclosed in the offering document.
Note: (i) "Scheduled Balance" has the meaning assigned thereto in the CSSA
Standard Information Package.
(ii) An ARD Loan constitutes a "Hyper-Amortization Loan" as defined in the
offering document.
Copyright 1997, Norwest Bank Minnesota, N.A. Page 9 of 17
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates
Series 1999-CG1
------------------------------------------
[LOGO] For Additional Information, please contact
Norwest Bank Minnesota, N.A. Leslie Gaskill
Corporate Trust Services (212) 515-5254
3 New York Plaza, 15th Floor Reports Available on the World Wide Web
New York, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
Payment Date: 04/12/1999
Record Date: 03/31/1999
Mortgage Loan Detail
<TABLE>
<CAPTION>
===========================================================================================================================
Anticipated
Loan Property Interest Principal Gross Repayment Maturity
Number ODCR Type(1) City State Payment Payment Coupon Date Date
===========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
===========================================================================================================================
Totals
===========================================================================================================================
<CAPTION>
===========================================================================================================================
Neg. Beginning Ending Paid Appraisal Appraisal Res. Mod.
Loan Amount Scheduled Scheduled Thru Reduction Reduction Strat. Code
Number (Y/N) Balance Balance Date Date Amount (2) (3)
===========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
===========================================================================================================================
Totals
===========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
(1) Property Type Code (2) Resolution Strategy Code (3) Modification Code
---------------------- ---------------------------- ---------------------
<S> <C> <C> <C> <C>
MF - Multi-Family OF - Office 1 - Modification 7 - REO 1 - Maturity Date Extension
RT - Retail MU - Mixed Use 2 - Foreclosure 8 - Resolved 2 - Amortization Change
HC - Health Care LO - Lodging 3 - Bankruptcy 9 - Pending Return 3 - Principal Write-Off
IN - Industrial SS - Self Storage 4 - Extension to Master Servicer 4 - Combination
WH - Warehouse OT - Other 5 - Note Sale 10 - Deed in Lieu Of
MH - Mobile Home Park 6 - DPO Foreclosure
</TABLE>
Copyright 1997, Norwest Bank Minnesota, N.A. Page 10 of 17
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates
Series 1999-CG1
------------------------------------------
[LOGO] For Additional Information, please contact
Norwest Bank Minnesota, N.A. Leslie Gaskill
Corporate Trust Services (212) 515-5254
3 New York Plaza, 15th Floor Reports Available on the World Wide Web
New York, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
Payment Date: 04/12/1999
Record Date: 03/31/1999
Principal Prepayment Detail
<TABLE>
<CAPTION>
============================================================================================================================
Principal Prepayment Amount Prepayment Penalities
Offering Document ----------------------------------- -----------------------------------------------
Loan Number Cross-Reference Payoff Amount Curtailment Amount Prepayment Premium Yield Maintenance Premium
============================================================================================================================
<S> <C> <C> <C> <C> <C>
============================================================================================================================
Totals
============================================================================================================================
</TABLE>
Copyright 1997, Norwest Bank Minnesota, N.A. Page 11 of 17
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates
Series 1999-CG1
------------------------------------------
[LOGO] For Additional Information, please contact
Norwest Bank Minnesota, N.A. Leslie Gaskill
Corporate Trust Services (212) 515-5254
3 New York Plaza, 15th Floor Reports Available on the World Wide Web
New York, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
Payment Date: 04/12/1999
Record Date: 03/31/1999
Historical Detail
<TABLE>
<CAPTION>
====================================================================================================================================
Delinquencies Prepayments Rate and Maturities
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution 30-59 Days 60-89 Days 90 Days or More Foreclosure REO Modifications Curtailments Payoff Next Weighted Avg.
Date # Balance # Balance # Balance # Balance # Balance # Balance # Amount Amount Coupon Remit WAM
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Note: Foreclosure and REO Totals are excluded from the delinquencies aging
categories.
Copyright 1997, Norwest Bank Minnesota, N.A. Page 12 of 17
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates
Series 1999-CG1
------------------------------------------
[LOGO] For Additional Information, please contact
Norwest Bank Minnesota, N.A. Leslie Gaskill
Corporate Trust Services (212) 515-5254
3 New York Plaza, 15th Floor Reports Available on the World Wide Web
New York, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
Payment Date: 04/12/1999
Record Date: 03/31/1999
Delinquency Loan Detail
</TABLE>
<TABLE>
<CAPTION>
=====================================================================================================================
Offering # of Current Outstanding Status of Resolution
Loan Document Months Paid Through P & I P & I Mortgage Strategy
Number Cross-Reference Delinq. Date Advances Advances Loan(1) Code(2)
=====================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
=====================================================================================================================
Totals
=====================================================================================================================
<CAPTION>
=====================================================================================================================
Current Outstanding
Loan Servicing Foreclosure Servicing Servicing REO
Number Transfer Date Date Advances Advances Bankruptcy Date Date
=====================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
=====================================================================================================================
Totals
=====================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
(1) Status of Mortgage Loan (2) Resolution Strategy Code
--------------------------- ----------------------------
<S> <C> <C> <C>
A - Payment Not Received 2 - Two Months Delinquent 1 - Modification 7 - REO
But Still in Grace Period 3 - Three Or More Months Delinquent 2 - Foreclosure 8 - Resolved
B - Late Payment But Less 4 - Assumed Scheduled Payment 3 - Bankruptcy 9 - Pending Return
Than 1 Month Delinquent (Performing Matured Balloon) 4 - Extension to Master Servicer
0 - Current 7 - Foreclosure 5 - Note Sale 10 - Deed in Lieu Of
1 - One Month Delinquent 9 - REO 6 - DPO Foreclosure
</TABLE>
**Outstanding P & I Advances include the current period advance
Copyright 1997, Norwest Bank Minnesota, N.A. Page 13 of 17
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates
Series 1999-CG1
------------------------------------------
[LOGO] For Additional Information, please contact
Norwest Bank Minnesota, N.A. Leslie Gaskill
Corporate Trust Services (212) 515-5254
3 New York Plaza, 15th Floor Reports Available on the World Wide Web
New York, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
Payment Date: 04/12/1999
Record Date: 03/31/1999
Specially Serviced Loan Detail - Part 1
<TABLE>
<CAPTION>
==================================================================================================================================
Offering Servicing Resolution
Distribution Loan Document Transfer Strategy Scheduled Property Interest
Date Number Cross-Reference Date Code(1) Balance Type(2) State Rate
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
==================================================================================================================================
<CAPTION>
==================================================================================================================================
Net Remaining
Distribution Actual Operating NOI Note Maturity Amortization
Date Balance Income Date DSCR Date Date Term
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
==================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
(1) Resolution Strategy Code (2) Property Type Code
---------------------------- ----------------------
<S> <C> <C> <C>
1 - Modification 7 - REO MF - Multi-Family OF - Office
2 - Foreclosure 8 - Resolved RT - Retail MU - Mixed Use
3 - Bankruptcy 9 - Pending Return HC - Health Care LO - Lodging
4 - Extension to Master Servicer IN - Industrial SS - Self Storage
5 - Note Sale 10 - Deed in Lieu Of WH - Warehouse OT - Other
6 - DPO Foreclosure MH - Mobile Home Park
</TABLE>
Copyright 1997, Norwest Bank Minnesota, N.A. Page 14 of 17
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates
Series 1999-CG1
------------------------------------------
[LOGO] For Additional Information, please contact
Norwest Bank Minnesota, N.A. Leslie Gaskill
Corporate Trust Services (212) 515-5254
3 New York Plaza, 15th Floor Reports Available on the World Wide Web
New York, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
Payment Date: 04/12/1999
Record Date: 03/31/1999
Specially Serviced Loan Detail - Part 2
<TABLE>
<CAPTION>
===================================================================================================================================
Offering Resolution Site
Distribution Loan Document Strategy Inspection
Date Number Cross-Reference Code(1) Date Comment
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
===================================================================================================================================
<CAPTION>
===================================================================================================================================
Distribution Appraisal Appraisal Other REO
Date Phase 1 Date Date Value Property Revenue Comment
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
===================================================================================================================================
</TABLE>
(1) Resolution Strategy Code
----------------------------
1 - Modification 7 - REO
2 - Foreclosure 8 - Resolved
3 - Bankruptcy 9 - Pending Return
4 - Extension to Master Servicer
5 - Note Sale 10 - Deed in Lieu Of
6 - DPO Foreclosure
Copyright 1997, Norwest Bank Minnesota, N.A. Page 15 of 17
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates
Series 1999-CG1
------------------------------------------
[LOGO] For Additional Information, please contact
Norwest Bank Minnesota, N.A. Leslie Gaskill
Corporate Trust Services (212) 515-5254
3 New York Plaza, 15th Floor Reports Available on the World Wide Web
New York, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
Payment Date: 04/12/1999
Record Date: 03/31/1999
Modified Loan Detail
<TABLE>
<CAPTION>
===================================================================================================================================
Offering
Loan Document Pre-Modification Modification
Number Cross-Reference Balance Balance Modification Description
===================================================================================================================================
<S> <C> <C> <C> <C>
===================================================================================================================================
Total
===================================================================================================================================
</TABLE>
Copyright 1997, Norwest Bank Minnesota, N.A. Page 16 of 17
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates
Series 1999-CG1
------------------------------------------
[LOGO] For Additional Information, please contact
Norwest Bank Minnesota, N.A. Leslie Gaskill
Corporate Trust Services (212) 515-5254
3 New York Plaza, 15th Floor Reports Available on the World Wide Web
New York, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
Payment Date: 04/12/1999
Record Date: 03/31/1999
Liquidated Loan Detail
<TABLE>
<CAPTION>
=====================================================================================================================
Final Recovery Offering Gross Proceeds
Loan Determination Docuument Appraisal Appraisal Actual Gross as a % of
Number Date Cross-Reference Date Value Balance Proceeds Actual Balance
=====================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
=====================================================================================================================
Current Total
=====================================================================================================================
Cumulative Total
=====================================================================================================================
<CAPTION>
===========================================================================================
Aggregate Net Net Proceeds Repurchased
Loan Liquidation Liquidation as a % of Realized by Seller
Number Expenses Expenses Actual Balance Loss (Y/N)
===========================================================================================
<S> <C> <C> <C> <C> <C>
===========================================================================================
Current Total
===========================================================================================
Cumulative Total
===========================================================================================
</TABLE>
* Aggregate liquidation expenses also include outstanding P & I advances and
unpaid fees (servicing, trustee, etc.).
Copyright 1997, Norwest Bank Minnesota, N.A. Page 17 of 17
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<PAGE>
EXHIBIT C
DECREMENT TABLES FOR CLASS A, CLASS B-1
AND CLASS B-2 CERTIFICATES
Percentage of Initial Class Principal Balance Outstanding For:
Class A-1A Certificates
<TABLE>
<CAPTION>
Distribution Date 0.00% CPR 25.00% CPR 50.00% CPR 75.00% CPR 100.00% CPR
--------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Closing Date................
March 2000.................
March 2001.................
March 2002.................
March 2003.................
March 2004.................
March 2005.................
March 2006.................
March 2007.................
March 2008.................
March 2009 and thereafter..
Wtd. Avg. Life (yrs):.......
</TABLE>
Class A-1B Certificates
<TABLE>
<CAPTION>
Distribution Date 0.00% CPR 25.00% CPR 50.00% CPR 75.00% CPR 100.00% CPR
--------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Closing Date................
March 2000.................
March 2001.................
March 2002.................
March 2003.................
March 2004.................
March 2005.................
March 2006.................
March 2007.................
March 2008.................
March 2009 and thereafter..
Wtd. Avg. Life (yrs):.......
</TABLE>
C-1
<PAGE>
Percentage of Initial Class Principal Balance Outstanding For:
Class A-2 Certificates
<TABLE>
<CAPTION>
Distribution Date 0.00% CPR 25.00% CPR 50.00% CPR 75.00% CPR 100.00% CPR
--------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Closing Date................
March 2000.................
March 2001.................
March 2002.................
March 2003.................
March 2004.................
March 2005.................
March 2006.................
March 2007.................
March 2008.................
March 2009 and thereafter..
Wtd. Avg. Life (yrs):.......
</TABLE>
Class A-3 Certificates
<TABLE>
<CAPTION>
Distribution Date 0.00% CPR 25.00% CPR 50.00% CPR 75.00% CPR 100.00% CPR
--------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Closing Date................
March 2000.................
March 2001.................
March 2002.................
March 2003.................
March 2004.................
March 2005.................
March 2006.................
March 2007.................
March 2008.................
March 2009 and thereafter..
Wtd. Avg. Life (yrs):.......
</TABLE>
C-2
<PAGE>
Percentage of Initial Class Principal Balance Outstanding For:
Class B-1 Certificates
<TABLE>
<CAPTION>
Distribution Date 0.00% CPR 25.00% CPR 50.00% CPR 75.00% CPR 100.00% CPR
--------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Closing Date................
March 2000.................
March 2001.................
March 2002.................
March 2003.................
March 2004.................
March 2005.................
March 2006.................
March 2007.................
March 2008.................
March 2009 and thereafter..
Wtd. Avg. Life (yrs):.......
</TABLE>
Class B-2 Certificates
<TABLE>
<CAPTION>
Distribution Date 0.00% CPR 25.00% CPR 50.00% CPR 75.00% CPR 100.00% CPR
--------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Closing Date................
March 2000.................
March 2001.................
March 2002.................
March 2003.................
March 2004.................
March 2005.................
March 2006.................
March 2007.................
March 2008.................
March 2009 and thereafter..
Wtd. Avg. Life (yrs):.......
</TABLE>
C-3
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
C-4
<PAGE>
EXHIBIT D
PRICE/YIELD TABLES FOR THE CLASS S CERTIFICATES
Corporate Bond Equivalent (CBE) Yield of the Class S Certificates
at Various CPRs
_____% Initial Pass-Through Rate
Initial Class Notional Amount $______________
Price (32nds)* 0.00% CPR 25.00% CPR 50.00% CPR 75.00% CPR 100.00% CPR
- -------------- --------- ---------- ---------- ---------- -----------
CBE Yield % CBE Yield % CBE Yield % CBE Yield % CBE Yield %
----------- ----------- ----------- ----------- -----------
5-12
5-16
5-20
5-24
5-28
6-00
6-04
6-08
6-12
- ------------
* Exclusive of accrued interest.
D-1
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
EXHIBIT E
SUMMARY TERM SHEET
E-1
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates,
Series 1999-CG1
$1,121,153,000
(Approximate)
Offered Certificates
GE Capital [LOGO OF COLUMN FINANCIAL, A
Access, Inc. DONALDSON, LUFKIN & JENRETTE COMPANY]
Donaldson, Lufkin & Jenrette
Merrill Lynch & Co.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
In some cases, multiple Mortgage Properties secure a single amount of Mortgage
Loan indebtedness. For purpose of presenting statistical information, the
Depositor has allocated the aggregate Cut-off Date Balance of such indebtedness
among the related Mortgaged Properties on the basis of relative Appraised
Values, Underwritten Net Cash Flows or allocations reflected in the related loan
documents.
Page 1
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Transaction Offering:
- ---------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
(%) of Initial
Initial Initial Pass- Wtd.
Expected Certificate Pool Credit Through Avg. Principal
Class Ratings(1) Balance Balance Support Rate Description Life(4) Maturity(4) Window(4) Legal Status ERISA(5)
- ----- ---------- ----------- ------- ------- ------- ----------- ------- ----------- ---------- ------------ --------
Publicly Offered Certificates:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
S Aaa/AAA $1,252,685,456(2) -- -- -- Variable 9.3 Apr-23 -- Public Yes
A-1A Aaa/AAA 219,703,000 17.54 27.00 -- Fixed 5.7 Jul-08 4/99 - 7/08 Public Yes
A-1B Aaa/AAA 694,757,000 55.46 27.00 -- Fixed 9.7 Jan-09 7/08 - 1/09 Public Yes
A-2 Aa2/AA 59,502,000 4.75 22.25 -- WAC Cap(3) 9.9 Feb-09 1/09 - 2/09 Public No
A-3 A2/A 65,766,000 5.25 17.00 -- WAC Cap(3) 9.9 Feb-09 2/09 - 2/09 Public No
B-1 Baa2/BBB 65,766,000 5.25 11.75 -- WAC 9.9 Feb-09 2/09 - 2/09 Public No
B-2 Baa3/BBB- 15,659,000 1.25 10.50 -- WAC 9.9 Feb-09 2/09 - 2/09 Public No
<CAPTION>
Privately Offered Certificates(6):
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
B-3 -- -- -- -- -- -- -- -- -- Private-144A No
B-4 -- -- -- -- -- -- -- -- -- Private-144A No
B-5 -- -- -- -- -- -- -- -- -- Private-144A No
B-6 -- -- -- -- -- -- -- -- -- Private-144A No
B-7 -- -- -- -- -- -- -- -- -- Private-144A No
B-8 -- -- -- -- -- -- -- -- -- Private-144A No
C -- -- -- -- -- -- -- -- -- Private-144A No
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Moody's Investors Service, Inc. / Fitch IBCA, Inc.
(2) Notional amount. The Class S certificates will be interest only and not be
entitled to distributions of principal.
(3) WAC Cap refers to a Pass-Through Rate that is, from time to time, equal to
the lesser of the initial Pass-through Rate for the subject class of
certificates and a weighted average coupon derived from interest rates on
the underlying mortgage loans.
(4) Reflects average life, maturity and principal window. Assumes 0% CPR, no
defaults, no extensions and ARD Loans pay in full on the ARD. Otherwise
based on "Maturity Assumptions" set forth in the Prospectus Supplement.
(5) Expected to be eligible for DLJ's individual prohibited transaction
exemption under ERISA.
(6) Not offered herein.
- --------------------------------------------------------------------------------
Originator Profile:
- -------------------
The mortgage loans were originated or acquired primarily by affiliates of GE
Capital Access, Inc. (GECA) and Column Financial, Inc. (Column). Approximately
70% (by balance) of the mortgage loans are being contributed by GECA and 30% (by
balance) are being contributed by Column to the Trust Fund. Approximately 97% of
the mortgage loans were originated between 1998 and 1999.
GECA is a wholly owned subsidiary of General Electric Capital Corporation
(GECC). Since 1996, GECA and its affiliates have originated or acquired
approximately $5 billion of commercial mortgage loans in connection with its
capital markets programs. Through its GE Capital Real Estate division, GECC has
been lending and investing in the commercial real estate industry for over 25
years and has a portfolio of approximately $15 billion of assets. GE Capital
Real Estate originates and acquires commercial mortgage loans through
approximately 20 offices located throughout North America.
Column, a wholly owned subsidiary of Donaldson, Lufkin & Jenrette, Inc., was
created in August 1993. Column has originated over 1,800 loans for $7.5 billion
commercial mortgage loans since its inception. Column sources, underwrites and
closes various mortgage loan products through 15 production offices located
throughout the country.
- --------------------------------------------------------------------------------
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 2
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
<TABLE>
<CAPTION>
Collateral Overview:
- --------------------
<S> <C>
o Total Collateral Balance: $1,252,685,456
o Avg. Balance per Property: $4,489,912
o Loans: 240 loans / 279 properties
o Property Type: Multifamily (36.3%), Retail (24.8%), Hotel (9.3%), Other (29.5%).
o Geographic Distribution: 36 states. TX (19.7%), CA (13.5%), FL (9.9%), Other (56.7%).
o Amortization Types: Balloon (72.4%), Hyper Amortizing (26.2%), Fully Amortizing (1.4%).
o Wtd. Avg. DSCR: 1.39x
o Wtd. Avg. LTV: 73.2%
o Appraisals: 100% of the appraisals state that they follow the guidelines set
forth in Title XI of FIRREA.
o Largest Loan: 5.6%
o Five Largest Loans: 19.4%
o Ten Largest Loans: 26.8%
o Wtd. Avg. RTM: 122 months
o Wtd. Avg. Seasoning: 3 months
o Gross WAC: 7.317%
o Call Protection: All of the Mortgage Loans provide for either a prepayment lockout period
("Lockout"), a defeasance period ("Defeasance") and/or a yield maintenance
premium ("YMP") period or a combination thereof. As of the Cut-off Date, 100% of
the Mortgage Loans provide for initial lockout periods. The weighted average
lockout and defeasance period for all loans is 9.0 years. All yield maintenance
charges are calculated at flat-to-treasuries.
o Defeasance: 91.6%
o Credit Tenant Lease: None
o Premium Loans: None
o Participation Loans: None
o Secured Subordinate Debt: 2.0%
</TABLE>
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 3
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
<TABLE>
<S> <C>
o Leasehold: 1.7%
o Delinquency: No loan delinquent 30 days or more as of the Cut-off Date.
Transaction Overview:
- ---------------------
o Structure: Senior/subordinated, sequential pay pass-through bonds.
o Managers: Donaldson, Lufkin & Jenrette (Book-Lead Manager) / Merrill Lynch
o Mortgage Loan Sellers: GE Capital Access, Inc. / Column Financial, Inc.
o Rating Agencies: Moody's Investors Service, Inc. / Fitch IBCA, Inc.
o Master Servicer: GE Capital Loan Services, Inc.
o Special Servicer: TBA
o Trustee: Norwest Bank Minnesota, National Association
o Cut-off Date: March 1, 1999
o Settlement Date: TBA
o Distribution: The 10th day of the month, or if such is not a business day, the following
business day.
o Delivery: The Depository Trust Company ("DTC") through Cede & Co.
o ERISA: Classes A-1A, A-1B and S are expected to be eligible for DLJ's individual
prohibited transaction exemption with respect to ERISA subject to certain
conditions of eligibility.
o SMMEA: None of the Offered Securities are SMMEA eligible.
o Tax Treatment: REMIC
o Optional Termination: 1%
o Analytics: Cashflows are expected to be available through Bloomberg, the Trepp Group, Intex
Solutions and Charter Research.
o Extensions: The Special Servicer will be responsible for performing certain servicing
functions with respect to Mortgage Loans that, in general, are in default or as
to which default is imminent, and for administering any REO properties. The
Pooling and Servicing Agreement will generally permit the Special Servicer to
modify, waive or amend any term of any Mortgage Loan if it determines, in
accordance with the servicing standard, that it is appropriate to do so. The
Special Servicer will not be
</TABLE>
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 4
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
<TABLE>
<S> <C>
permitted to grant any extension of the maturity of a mortgage loan beyond 60
months after its stated maturity date.
o Controlling Class: The Controlling Class of Certificateholders may advise and appoint a Special
Servicer and replace the existing Special Servicer. The Controlling Class will
be the most subordinate class of certificates which has a current aggregate
certificate principal amount no less than 20% of its original aggregate
certificate principal balance.
o Advances: The Master Servicer will be obligated to make advances of scheduled principal
and interest payments, excluding balloon payments, subject to recoverability
determination and appraisal reductions. If the Master Servicer fails to make a
required Advance, the Trustee will be obligated to make such advances.
o Appraisal Reductions: An appraisal reduction generally will be created in the amount, if any, by which
the Stated Principal Balance of a Specially Serviced Mortgage Loan (plus other
amounts overdue in connection with such loan) exceeds 90% of the appraised value
of the related Mortgaged Property. The Appraisal Reduction Amount will reduce
proportionately the interest portion (but not the principal portion) of any
amount of P&I Advances for such loan, which reduction will result, in general,
in a reduction of interest distributable to the most subordinate Class of
Principal Balance Certificates outstanding. An Appraisal Reduction will be
reduced to zero as of the date the related Mortgage Loan has been brought
current for at least three consecutive months, paid in full, liquidated,
repurchased, or otherwise disposed of.
</TABLE>
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 5
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Structure Description:
- ----------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Administrative Fee
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
Class A-1A Aaa/AAA Public
Class A-1B Aaa/AAA Public
Class A-2 Aa2/AA Public
Class A-3 A2/A Public
Class B-1 Baa2/BBB Public
Class B-2 Baa3/BBB- Public
Class B-3 -- Private
Class B-4 -- Private
Class B-5 -- Private
Class B-6 -- Private
Class B-7 -- Private
Class B-8 -- Private
Class C -- Private
Class S Aaa/AAA Public
- --------------------------------------------------------------------------------
[BAR CHART OF PRIORITY OF CASHFLOWS]
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 6
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Interest Distributions:
- -----------------------
Each Class of Certificates will be entitled on each Distribution Date
to interest accrued at its Pass-Through Rate on the outstanding
Certificate Balance balance of such class. The Class S Certificates
will be entitled on each Distribution Date to the aggregate interest
accrued at the related Class S Strip Rate on each of its notional
components. All classes will pay interest on a 30/360 basis.
Principal Distributions:
- ------------------------
Available principal will be distributed on each Distribution Date to
the Class of Principal Balance Certificates outstanding in sequential
order to the Class A-1A, A-1B, A-2, A-3, B-1, B-2, B-3, B-4, B-5, B-6,
B-7, B-8 and C Certificates. If in any period, Class A-2 to C have been
retired, Class A-1A and A-1B will receive principal on a pro-rata
basis.
Realized losses and Expense losses:
- -----------------------------------
Realized losses from any Mortgage Loan and additional trust fund
expenses will be allocated in reverse sequential order (i.e. Classes C,
B-8, B-7, B-6, B-5, B-4, B-3, B-2, B-1, A-3 and A-2, in that order). If
Classes A-2 through C have been reduced to $0 by losses, realized
losses shall be applied to A-1A and A-1B Classes pro-rata.
Credit Enhancements:
- --------------------
Credit enhancement for each class of Publicly Traded Certificates will
be provided by the classes of Certificates which are subordinate in
priority with respect to payments of interest and principal.
Allocation of Prepayment Premiums:
- ----------------------------------
The certificate yield maintenance amount ("CYMA") for the Class A-1A,
A-1B, A-2, A-3, B-1, B-2, B-3, B-4, B-5, B-6, B-7, B-8 and/or C
Certificates (collectively, "Principal Balance Certificates") equals
the total yield maintenance premium collected, multiplied by a fraction
(not greater than one or less than zero) which is based upon a formula
involving the relationship between the Pass-Through Rate(s) of such
Class(es) currently receiving principal, the allocation of principal
among such Class(es) if more than one, the mortgage rate of the
Mortgage Loan that has prepaid, and current interest rates. In general,
the CYMA for any Distribution Date will be calculated in respect of and
payable to the class(es) of Principal Balance Certificates entitled to
receive distributions of principal on such Distribution Date.
-----------------------------------------------------------------
CYMA (Pass-Through Rate - Discount Rate)
= -----------------------------------
Allocation % (Mortgage Rate - Discount Rate)
to Non-IO Certificates
-----------------------------------------------------------------
The yield maintenance amount payable to the Class S, interest only
certificates, will equal the total yield maintenance premium less the
CYMA as defined above.
All prepayment premiums collected on the Mortgage Loans will be
distributed to the Interest Only Certificates, Class S.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 7
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Credit Enhancements (Continued):
- --------------------------------
In general, this formula provides for an increase in the allocation of
prepayment premiums to the Principal Balance Certificates as interest rates
decrease and a decrease in the allocation to such classes as interest rate
rises.
Allocation of Yield Maintenance Premiums Example:
- -------------------------------------------------
Discount Rate Fraction Methodology:
- -----------------------------------
Mortgage Rate = 8%
Bond Class Rate = 6%
Treasury Rate = 5%
% of Principal Distributed to Class = 100%
Bond Class Allocation Class S Allocation
- --------------------- ------------------
6% - 5% x 100% = 33 1/3% Receives excess premiums = 66 2/3% thereof
- -------
8% - 5%
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 8
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Stratification Overview:
- ------------------------
[MAP GRAPHIC OMITTED]
Mortgage Loans by State
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
State Loans Balance (1) Balance Rate U/W DSCR LTV Ratio
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Texas 53 $247,283,354 19.7% 7.292% 1.30x 74.8%
California 43 169,156,706 13.5% 7.287% 1.31 75.7%
Florida 19 123,548,452 9.9% 7.728% 1.34 75.9%
Michigan 17 59,538,902 4.8% 7.328% 1.44 71.6%
Tennessee 2 45,946,295 3.7% 6.906% 1.28 75.4%
North Carolina 9 42,498,893 3.4% 7.456% 1.89 62.2%
Pennsylvania 4 40,233,429 3.2% 7.253% 1.35 78.7%
Massachusetts 6 37,807,595 3.0% 7.483% 1.39 70.6%
Louisiana 5 36,317,290 2.9% 7.698% 1.34 76.9%
Virginia 3 34,591,554 2.8% 7.206% 1.33 78.1%
Georgia 7 32,757,166 2.6% 7.149% 1.72 67.3%
Ohio 9 31,646,065 2.5% 7.157% 1.33 75.2%
Colorado 8 30,301,170 2.4% 7.292% 1.30 68.2%
South Carolina 8 28,520,688 2.3% 7.040% 1.74 64.8%
New Jersey 7 28,088,527 2.2% 7.383% 1.29 72.3%
New York 7 26,991,196 2.2% 7.434% 1.76 66.3%
Illinois 9 25,704,850 2.1% 6.930% 1.44 72.2%
Indiana 7 23,789,539 1.9% 7.300% 1.42 72.6%
Washington 7 19,746,085 1.6% 7.213% 1.31 73.8%
Maryland 6 18,946,349 1.5% 7.212% 1.46 69.0%
New Hampshire 5 18,607,922 1.5% 6.911% 1.30 69.8%
Nevada 4 15,870,796 1.3% 7.348% 1.27 76.3%
Oklahoma 1 14,487,822 1.2% 6.940% 1.27 78.7%
Arizona 4 13,558,040 1.1% 7.307% 1.99 54.7%
Maine 3 11,724,123 0.9% 7.424% 1.35 63.3%
Wisconsin 2 10,492,750 0.8% 7.336% 1.27 75.1%
Kansas 1 9,841,203 0.8% 6.820% 1.40 77.5%
Oregon 2 7,277,959 0.6% 7.144% 1.82 60.5%
Missouri 4 7,043,268 0.6% 7.972% 1.39 68.7%
Mississippi 3 6,841,796 0.5% 6.925% 1.37 75.8%
Minnesota 4 6,785,324 0.5% 7.678% 1.36 74.8%
Alabama 3 6,780,746 0.5% 7.209% 1.27 74.9%
Connecticut 1 6,300,000 0.5% 7.610% 1.26 70.0%
District of Columbia 2 5,651,491 0.5% 7.489% 1.26 77.0%
Delaware 2 4,962,484 0.4% 6.680% 1.35 79.7%
New Mexico 1 1,546,334 0.1% 7.890% 1.33 58.9%
Utah 1 1,499,290 0.1% 7.720% 1.25 77.9%
----------------------------------------------------------------------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
============================================================================
</TABLE>
(1) Cut-off balance as of 3/1/99.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 9
<PAGE>
DLJCMC Series 1999-CG1
Summary Term Sheet March 1, 1999
Manufactured Housing 6.6%
Industrial 2.8%
Self Storage 3.1%
Hotel 9.3%
Retail 24.8%
Office 8.8%
Mixed Use 8.2%
Multifamily 36.3%
Mortgage Loans by Property Type
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Property Type Loans Balance(1) Balance Rate U/W DSCR LTV Ratio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Multifamily 107 $455,089,577 36.3% 7.140% 1.30x 76.5%
Retail 59 310,401,887 24.8% 7.483% 1.30 76.2%
Hotel 26 116,339,043 9.3% 7.479% 2.13 54.5%
Office 24 110,681,155 8.8% 7.451% 1.31 71.9%
Mixed Use 18 103,267,224 8.2% 7.278% 1.32 69.7%
Manufactured Housing 24 82,350,974 6.6% 7.165% 1.38 75.4%
Self Storage 16 39,245,939 3.1% 7.465% 1.36 72.8%
Industrial 5 35,309,656 2.8% 7.481% 1.42 74.5%
--------------------------------------------------------------------------------------------------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
========================================================================================================
</TABLE>
(1) Cut-off balance as of 3/1/99.
Mortgage Loans by Property Sub-Type
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Property Type Property Sub-Type Loans Balance(1) Balance Rate U/W DSCR LTV Ratio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Retail
Anchored 34 $235,441,576 18.8% 7.500% 1.29x 76.5%
Unanchored 25 74,960,311 6.0% 7.428% 1.33 75.5%
-----------------------------------------------------------------------------------------------
Total/Weighted Average: 59 $310,401,887 24.8% 7.483% 1.30x 76.2%
===============================================================================================
Hotel
Limited Service(2) 23 $92,969,978 7.4% 7.420% 2.24x 51.5%
Full Service 3 23,369,066 1.9% 7.716% 1.71 66.8%
-----------------------------------------------------------------------------------------------
Total/Weighted Average: 26 $116,339,043 9.3% 7.479% 2.13x 54.5%
===============================================================================================
</TABLE>
(1) Cut-off balance as of 3/1/99.
(2) 76.1% comprised of the Winston Loan, which consists of 14 properties with a
2.54x DSCR and 43.6% LTV.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 10
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Original Amortization Terms
<TABLE>
<CAPTION>
Weighted Weighted
Range of Number of Percentage of Average Weighted Average
Original Amortization Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Terms (Months) Loans Balance (1) Balance Rate U/W DSCR LTV Ratio
- --------------------- ------------- --------------- ----------------- ----------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
180 - 239 3 $9,950,692 0.8% 6.552% 1.31x 64.1%
240 - 299 7 9,970,526 0.8% 7.444% 1.37 67.4%
300 - 313 86 264,096,668 21.1% 7.393% 1.71 63.5%
314 - 360 183 968,667,570 77.3% 7.303% 1.30 76.0%
--------- ------------------ --------- ------------- ----------- ------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
--------- ------------------ --------- ------------- ----------- ------------
--------- ------------------ --------- ------------- ----------- ------------
</TABLE>
Maximum Original Amortization Term (Months): 360
Minimum Original Amortization Term (Months): 180
Wtd. Avg. Original Amortization Term (Months): 345
(1) Cut-off balance as of 3/1/99.
Original Terms to Stated Maturity (1)
<TABLE>
<CAPTION>
Weighted Weighted
Range of Number of Percentage of Average Weighted Average
Original Terms Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
to Maturity (Months) Loans Balance (2) Balance Rate U/W DSCR LTV Ratio
- --------------------- ------------- --------------- ----------------- ----------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
60 - 108 6 $46,088,506 3.7% 7.120% 1.29x 76.8%
109 - 120 261 1,148,111,527 91.7% 7.341% 1.40 72.8%
121 - 204 5 13,549,427 1.1% 7.117% 1.38 74.8%
205 - 300 7 44,935,996 3.6% 6.967% 1.31 77.9%
--------- ------------------ --------- ------------- ----------- ------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
--------- ------------------ --------- ------------- ----------- ------------
--------- ------------------ --------- ------------- ----------- ------------
</TABLE>
Maximum Original Amortization Term (Months): 360
Minimum Original Amortization Term (Months): 60
Wtd. Avg. Original Amortization Term (Months): 125
(1) In the case of Anticipated Repayment Date loans, the Anticipated Repayment
Date is assumed to be the maturity date for the purposes of the table.
(2) Cut-off balance as of 3/1/99.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 11
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Remaining Amortization Terms
<TABLE>
<CAPTION>
Weighted Weighted
Range of Number of Percentage of Average Weighted Average
Remaining Amortization Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Terms (Months) Loans Balance(1) Balance Rate U/W DSCR LTV Ratio
- ---------------------- --------- -------------- ------------- --------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
177 - 239 9 $ 18,357,342 1.5% 6.998% 1.32x 66.0%
240 - 299 83 255,960,545 20.4% 7.379% 1.73 63.2%
300 - 313 5 14,842,114 1.2% 7.451% 1.35 71.1%
314 - 360 182 963,525,455 76.9% 7.304% 1.30 76.0%
--------- -------------- ------------- --------- -------- -----------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
========= ============== ============= ========= ======== ===========
</TABLE>
Maximum Remaining Amortization Term (Months) 360
Minimum Remaining Amortization Term (Months): 177
Wtd. Avg. Remaining Amortization Term (Months) 342
(1) Cut-off balance as of 3/1/99.
Remaining Terms to Stated Maturity (1)
<TABLE>
<CAPTION>
Weighted Weighted
Range of Number of Percentage of Average Weighted Average
Remaining Terms Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
to Maturity (Months) Loans Balance(2) Balance Rate U/W DSCR LTV Ratio
- ---------------------- --------- -------------- ------------- --------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
58 - 108 7 $ 48,782,931 3.9% 7.141% 1.31x 75.9%
109 - 120 260 1,145,417,102 91.4% 7.340% 1.40 72.9%
121 - 204 5 13,549,427 1.1% 7.117% 1.38 74.8%
205 - 289 7 44,935,996 3.6% 6.967% 1.31 77.9%
--------- -------------- ------------- --------- -------- ------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
========= ============== ============= ========= ======== ============
</TABLE>
Maximum Remaining Term to Maturity (Months): 289
Minimum Remaining Term to Maturity (Months): 58
Wtd. Avg. Remaining Term to Maturity (Months): 122
(1) In the case of Anticipated Repayment Date loans, the Anticipated Repayment
Date is assumed to be the maturity date for the purposes of the table.
(2) Cut-off balance as of 3/1/99.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 12
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Mortgage Loan Seller
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Mortgage Loan Seller Loans Balance (1) Balance Rate U/W DSCR LTV Ratio
- -------------------- --------- ------------- ------------- -------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
G.E. Capital Access 177 $876,223,369 69.9% 7.314% 1.40x 73.2%
Column 102 376,462,087 30.1% 7.324% 1.36 73.2%
---- -------------- ----- ----- ---- ----
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
==== ============== ===== ===== ==== ====
</TABLE>
(1) Cut-off balance as of 3/1/99.
Mortgage Loans by Amortization Type
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Loan Type Loans Balance (1) Balance Rate U/W DSCR LTV Ratio
- -------------------- --------- -------------- ------------- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balloon 208 $906,916,844 72.4% 7.337% 1.32x 74.5%
Hyper Amortizing 68 328,445,422 26.2% 7.276% 1.59 69.3%
Fully Amortizing 3 17,323,190 1.4% 7.016% 1.27 77.3%
---- -------------- ----- ----- ---- -----
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
==== ============== ===== ===== ==== =====
</TABLE>
(1) Cut-off balance as of 3/1/99.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 13
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Underwriting Debt Service Coverage Ratios
Weighted Weighted
Number of Percentage of Average Weighted Average
Range of Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
U/W DSCRs Loans Balance(1) Balance Rate U/W DSCR LTV Ratio
- --------------------------------------------------------------------------------
1.20x-1.29 108 $ 631,478,078 50.4% 7.379% 1.25x 76.5%
1.30 -1.39 87 334,357,109 26.7% 7.243% 1.33 74.4%
1.40 -1.49 46 154,796,906 12.4% 7.291% 1.42 74.2%
1.50 -1.59 12 24,598,983 2.0% 7.007% 1.53 67.1%
1.60 -2.54x 26 107,454,379 8.6% 7.286% 2.29 50.2%
-----------------------------------------------------------------
Total/Weighted
Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
-----------------------------------------------------------------
-----------------------------------------------------------------
Maximum
Underwriting
DSCR: 2.54x
Minimum
Underwriting
DSCR: 1.20x
Wtd. Avg.
Underwriting
DSCR: 1.39x
(1) Cut-off balance as of 3/1/99.
Cut-off Date Loan-to-Value Ratios
Range of Cut- Weighted Weighted
off Date Number of Percentage of Average Weighted Average
Loan-to- Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Value Ratios Loans Balance(1) Balance Rate U/W DSCR LTV Ratio
- --------------------------------------------------------------------------------
16.20%-50.00% 18 $ 77,184,406 6.2% 7.334% 2.42x 44.1%
50.01%-60.00% 19 55,551,024 4.4% 7.286% 1.59 57.4%
60.01%.70.00% 41 125,826,621 10.0% 7.443% 1.36 66.2%
70.01%-75.00% 73 279,229,072 22.3% 7.355% 1.32 73.0%
75.01%-80.00% 121 662,639,360 52.9% 7.250% 1.30 78.6%
80.01%-82.50% 7 52,254,974 4.2% 7.657% 1.25 81.6%
-----------------------------------------------------------------
Total/Weighted
Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
-----------------------------------------------------------------
-----------------------------------------------------------------
Maximum
Cut-off Date
LTV Ratio: 82.5%
Minimum
Cut-off Date
LTV Ratio: 16.2%
Wtd. Avg.
Cut-off Date
LTV Ratio: 73.2%
(1) Cut-off balance as of 3/1/99.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 14
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Cut-off Date Balances
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Range of Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Cut-off Date Balances Loans Balance (1) Balance Rate U/W DSCR LTV Ratio
- --------------------- -------- ------------- ------------- -------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
$515,269 - 749,999 4 $2,480,311 0.2% 7.814% 1.43x 73.2%
750,000 - 1,249,999 17 17,174,799 1.4% 7.602% 1.37 73.0%
1,250,000 - 1,999,999 63 104,815,403 8.4% 7.313% 1.39 70.0%
2,000,000 - 2,999,999 60 152,593,198 12.2% 7.211% 1.41 69.6%
3,000,000 - 3,999,999 33 116,312,485 9.3% 7.264% 1.38 71.8%
4,000,000 - 4,999,999 22 99,675,950 8.0% 7.322% 1.46 73.0%
5,000,000 - 5,999,999 17 91,965,164 7.3% 7.229% 1.57 71.9%
6,000,000 - 9,999,999 39 282,766,080 22.6% 7.306% 1.44 72.3%
10,000,000 - 14,999,999 13 158,129,681 12.6% 7.344% 1.28 76.8%
15,000,000 - 19,999,999 6 99,435,972 7.9% 7.319% 1.30 74.5%
20,000,000 - 24,999,999 3 67,309,732 5.4% 7.572% 1.28 77.7%
25,000,000 - $30,446,295 2 60,026,682 4.8% 7.404% 1.27 80.0%
---- -------------- ----- ----- ---- ----
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
==== ============== ===== ===== ==== ====
</TABLE>
Maximum Cut-off Date Balance: $30,446,295
Minimum Cut-off Date Balance: $515,269
Average Cut-off Date Balance: $4,489,912
(1) Cut-off balance as of 3/1/99.
Loan Group Cut-off Date Balances
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Range of Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Cut-off Date Balances Loans Balance (1) Balance Rate U/W DSCR LTV Ratio
- --------------------- --------- -------------- ------------- -------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
$675,000 - 749,999 2 $1,393,072 0.1% 7.856% 1.50x 70.5%
750,000 - 1,249,999 13 13,064,503 1.0% 7.549% 1.39 72.2%
1,250,000 - 1,999,999 54 90,606,908 7.2% 7.316% 1.38 70.0%
2,000,000 - 2,999,999 55 140,756,300 11.2% 7.208% 1.42 69.8%
3,000,000 - 3,999,999 29 101,853,122 8.1% 7.241% 1.32 73.9%
4,000,000 - 4,999,999 17 76,432,397 6.1% 7.330% 1.29 77.2%
5,000,000 - 5,999,999 13 70,952,058 5.7% 7.197% 1.37 77.2%
6,000,000 - 9,999,999 34 253,614,557 20.2% 7.328% 1.30 74.5%
10,000,000 - 14,999,999 11 137,345,476 11.0% 7.291% 1.28 76.8%
15,000,000 - 19,999,999 5 82,286,927 6.6% 7.271% 1.28 73.4%
20,000,000 - 24,999,999 2 41,232,174 3.3% 7.083% 1.27 79.8%
25,000,000 - $70,750,763 5 243,147,962 19.4% 7.485% 1.66 68.5%
---- -------------- ----- ----- ---- ----
Total/Weighted Average: 240 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
==== ============== ===== ===== ==== ====
</TABLE>
Maximum Cut-off Date Balance: $70,750,763
Minimum Cut-off Date Balance: $675,000
Average Cut-off Date Balance: $5,219,523
(1) Cut-off balance as of 3/1/99. Presents each group of cross-collaterized
Mortgage Loans as a single Mortgage Loan.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 15
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Mortgage Rates
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Range of Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Mortgage Rates Loans Balance(1) Balance Rate U/W DSCR LTV Ratio
- --------------- --------- -------------- ------------- -------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
5.960% - 6.499% 9 $ 23,677,724 1.9% 6.219% 1.44x 71.9%
6.500% - 6.749% 11 58,718,671 4.7% 6.640% 1.33 75.9%
6.750% - 6.999% 30 152,042,451 12.1% 6.858% 1.36 75.9%
7.000% - 7.249% 55 258,866,516 20.7% 7.127% 1.34 75.5%
7.250% - 7.499% 74 359,148,517 28.7% 7.340% 1.54 68.2%
7.500% - 7.999% 88 307,513,241 24.5% 7.644% 1.31 74.1%
8.000% - 8.440% 12 92,718,334 7.4% 8.134% 1.30 76.9%
--- -------------- ----- ----- ---- ----
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
=== ============== ===== ===== ==== ====
Maximum Mortgage Rate: 8.440%
Minimum Mortgage Rate: 5.960%
Wtd. Avg. Mortgage Rate: 7.317%
</TABLE>
(1) Cut-off balance as of 3/1/99.
Occupancy Rates at Underwriting
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Range of Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Occupancy Rates at U/W Loans(1) Balance(2) Balance Rate U/W DSCR LTV Ratio
- ---------------------- --------- -------------- ------------- -------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
50.0% - 69.9% 2 $ 5,648,370 0.5% 7.040% 1.39x 54.8%
70.0% - 79.9% 2 4,425,045 0.4% 6.903% 1.38 73.6%
80.0% - 89.9% 15 55,761,841 4.5% 7.279% 1.35 68.3%
90.0% - 94.9% 50 239,045,962 19.1% 7.262% 1.31 76.1%
95.0% - 100.0% 184 831,465,195 66.4% 7.317% 1.31 75.4%
--- -------------- ----- ----- ---- ----
Total/Weighted Average: 279 $1,136,346,413 90.7% 7.300% 1.31x 75.1%
=== ============== ===== ===== ==== ====
Maximum Occupancy Rate at U/W: 100.0%
Minimum Occupancy Rate at U/W: 50.0%
Wtd. Avg. Occupancy Rate at U/W: 87.3%
</TABLE>
(1) Does not include any Mortgage Loans secured by hotel properties.
(2) Cut-off balance as of 3/1/99.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 16
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Years Built/Years Renovated (1)
<TABLE>
<CAPTION>
Weighted Weighted
Number of Percentage of Average Weighted Average
Range of Years Mortgage Cut-off Date Initial Pool Mortgage Average Cut-off Date
Built/Renovated Loans Balance(2) Balance Rate U/W DSCR LTV Ratio
- ---------------------- --------- -------------- ------------- --------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
1951 - 1960 6 $ 12,819,010 1.0% 7.208% 1.68x 62.7%
1961 - 1970 24 79,789,581 6.4% 7.298% 1.33 76.2%
1971 - 1980 40 168,025,746 13.4% 7.241% 1.33 74.1%
1981 - 1990 83 330,990,240 26.4% 7.236% 1.31 75.4%
1991 - 1998 126 661,060,879 52.8% 7.381% 1.44 71.7%
--------- -------------- ------------- --------- -------- -----------
Total/Weighted Average: 279 $1,252,685,456 100.0% 7.317% 1.39x 73.2%
========= ============== ============= ========= ======== ===========
</TABLE>
Maximum Year Built/Renovated: 1998
Minimum Year Built/Renovated: 1951
Wtd. Avg. Year Built/Renovated: 1988
(1) Year Built/Renovated reflects the later of the Year Built or the Year
Renovated.
(2) Cut-off balance as of 3/1/99.
Mortgage Pool Prepayment Profile (1)
<TABLE>
<CAPTION>
% of Pool
Months Since Number of Outstanding % of Pool Yield % of Pool
Date Cut-off Date Loans Balance (mm) Lockout Maintenance Open Total
- ----------- ------------ --------- ------------ --------- ----------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Mar-99 0 279 $1,252.7 100.0% 0.0% 0.0% 100.0%
Mar-00 12 279 $1,240.2 100.0% 0.0% 0.0% 100.0%
Mar-01 24 279 $1,226.6 99.7% 0.2% 0.1% 100.0%
Mar-02 36 279 $1,211.8 96.2% 3.6% 0.1% 100.0%
Mar-03 48 279 $1,195.8 95.2% 4.7% 0.1% 100.0%
Mar-04 60 278 $1,172.1 95.0% 4.9% 0.1% 100.0%
Mar-05 72 278 $1,153.8 95.0% 4.9% 0.1% 100.0%
Mar-06 84 274 $1,101.9 94.8% 4.7% 0.4% 100.0%
Mar-07 96 273 $1,077.8 94.8% 5.1% 0.1% 100.0%
Mar-08 108 272 $1,053.6 92.5% 6.0% 1.6% 100.0%
Mar-09 120 12 $47.0 20.1% 77.0% 2.9% 100.0%
Mar-10 132 12 $45.4 20.2% 77.0% 2.8% 100.0%
Mar-11 144 11 $41.1 15.4% 81.7% 2.9% 100.0%
Mar-12 156 11 $39.2 15.4% 81.9% 2.7% 100.0%
Mar-13 168 11 $37.3 15.4% 76.2% 8.4% 100.0%
Mar-14 180 7 $28.0 1.3% 95.8% 2.9% 100.0%
Mar-15 192 7 $26.1 1.1% 96.3% 2.6% 100.0%
Mar-16 204 7 $24.1 1.0% 96.8% 2.2% 100.0%
Mar-17 216 7 $21.9 0.8% 97.5% 1.7% 100.0%
Mar-18 228 7 $19.6 0.5% 85.3% 14.2% 100.0%
</TABLE>
(1) Calculated assuming that no Mortgage Loan prepays, defaults or is
repurchased prior to stated maturity, except that the ARD Loans are
assumed to pay in full on their respective Anticipated Repayment Dates.
Otherwise calculated based on Maturity Assumptions to be set forth in the
final prospectuts supplement.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 17
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Prepayment Provision as of the Cut-off Date
<TABLE>
<CAPTION>
Weighted Weighted
Average Average
Remaining Remaining Weighted
Range of Number of Percentage of Lockout Lockout Average
Remaining Terms to Mortgage Cut-off Date Initial Pool Period Plus YM Period Maturity
Stated Maturity(Years)(1) Loans Balance (2) Balance (Years) (Years) (Years)
- ------------------------- ------------- --------------- ----------------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
4.0 - 4.9 1 $7,137,562 0.6% 4.6 4.6 4.8
6.0 - 6.9 4 35,148,655 2.8% 6.4 6.4 6.8
7.0 - 7.9 1 3,802,289 0.3% 3.8 6.7 7.2
8.0 - 8.9 1 2,694,425 0.2% 1.8 8.8 8.8
9.0 - 9.9 254 1,107,587,102 88.4% 9.1 9.4 9.8
10.0 - 10.9 6 37,830,000 3.0% 9.2 9.6 10.0
11.0 - 11.9 1 2,956,573 0.2% 11.6 11.6 11.9
14.0 - 14.9 4 10,592,854 0.8% 11.5 14.1 14.6
19.0 - 19.9 4 22,141,083 1.8% 9.9 18.4 19.7
24.0 - 24.9 3 22,794,913 1.8% 8.6 20.8 24.0
------------- --------------- ----------------- ----------- --------------- ---------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 9.0 9.7 10.1
------------- --------------- ----------------- ----------- --------------- ---------------
------------- --------------- ----------------- ----------- --------------- ---------------
</TABLE>
(1) In the case of the ARD Loans, the Anticipated Repayment Date is assumed to
be the maturity date for the purposes of the table.
(2) Cut-off balance as of 3/1/99.
Prepayment Option
<TABLE>
<CAPTION>
Weighted Weighted
Average Average
Remaining Remaining Weighted
Percentage of Lockout Lockout Average
Number of Cut-off Date Initial Period Plus YM Period Maturity
Prepayment Option Loans Balance (1) Pool Balance (Years) (Years) (Years)(2)
- --------------------- ------------ -------------- ---------------- ------------ ------------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Lockout/Defeasance 254 $1,147,218,645 91.6% 9.4 9.4 9.7
Lockout/Yield Maintenance 24 104,021,536 8.3% 5.4 13.7 14.7
Lockout 1 1,445,275 0.1% 1.9 1.9 9.7
------------ -------------- ---------------- ------------ ------------------ ----------------
Total/Weighted Average: 279 $1,252,685,456 100.0% 9.0 9.7 10.1
------------- --------------- ----------------- ----------- --------------- ---------------
------------- --------------- ----------------- ----------- --------------- ---------------
</TABLE>
(1) Cut-off balance as of 3/1/99.
(2) In the case of the ARD Loans, the Anticipated Repayment Date is assumed to
be the maturity date for the purposes of the table.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 18
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Top Five Mortgage Loans:
- ------------------------
Overview
<TABLE>
<CAPTION>
Percentage of
Property Units/Rooms/ Cut-off Date Initial Pool
# Property Name Type Square Feet Balance(1) Balance
- ---------------- ---------------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
1 Winston Loan (2) Hotel 1,993 $ 70,750,763 5.6%
2 Swerdlow Loans (3) Retail/Office 774,712 63,806,653 5.1%
3 Alliance Loans (4) Multifamily 1,749 48,831,350 3.9%
4 Country Squire Apartments - South Multifamily 726 30,446,295 2.4%
5 American Real Estate Loans (5) Industrial/Office 797,623 29,312,901 2.3%
Total/Weighted Average: ------------ -------------
$243,147,962 19.4%
============ =============
Appraised Cut-off Date
# Property Name Value Mortgage Rate U/W DSCR LTV Ratio
- ---------------- ------------ ------------- -------- ------------
<S> <C> <C> <C> <C>
1 Winston Loan (2) $162,120,000 7.375% 2.54x 43.6%
2 Swerdlow Loans (3) 80,900,000 8.180% 1.25 78.9%
3 Alliance Loans (4) 62,250,000 7.220% 1.30 78.4%
4 Country Squire Apartments - South 39,000,000 6.650% 1.28 78.1%
5 American Real Estate Loans (5) 36,750,000 7.550% 1.40 79.8%
------------ ------------- -------- ------------
Total/Weighted Average: $381,020,000 7.485% 1.66x 68.5%
============ ============= ======== ============
</TABLE>
(1) Cut-off balance of 3/l/99.
(2) The Winston Loan is secured by Hampton Inn - Elmsford, Quality Suites -
Charleston, Courtyard by Marriott - Ann Arbor, Residence Inn - Phoenix,
Homewood Suites - Cary, Hampton Inn & Suites - Gwinnett, Hampton Inn -
Raleigh, Comfort Suites - Orlando, Hampton Inn - Perimeter, Hampton Inn -
Charlotte, NC, Courtyard by Marriott - Wilmington, Hampton Inn - West
Springfield, Homewood Suites - Clear Lake and Comfort Inn - Charleston,
respectively.
(3) The Mortgage Loans secured by Kendale Lakes Plaza, Cypress Creek Station
and Oakwood Business Center, respectively, are cross-collateralized and
cross-defaulted.
(4) A Single Mortgage Note is secured by Westchase Ranch Apartments, Westwood
Village Apartments, Normandy Woods Apartments, Savoy Manor Apartments and
San Marin Apartments, respectively, are cross-collateralized and
cross-defaulted.
(5) A Single Mortgage Note is secured by 2294 Molly Pitcher Highway, 5015
Campuswood Drive, 5010 Campuswood Drive and 5009 Campuswood Drive,
respectively, are cross-collateralized and cross-defaulted.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 19
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Top Five Mortgage Loans (Continued):
- ------------------------------------
WINSTON LOAN
LOAN INFORMATION
- -------------------------------------------------------------------------------
Cut-off Date Balance: $70,750,763
% of Initial Pool: 5.6%
Mortgage Loan Seller: GE Capital Access, Inc.
Interest Rate: 7.375%
Balloon Term: 10 years
Amortization Term: 25 years
Call Protection: Prepayment lockout;U.S. Treasury
defeasance permitted as of the 2 year
anniversary of ClosingDate
Cut-Off Date LTV: 43.6%
Balloon LTV: 34.8%
U/W DSCR: 2.54x
Cross Collateralization/ Yes/Yes
Default:
Special Provisions: ARD loan, lock box
- -------------------------------------------------------------------------------
PROPERTY INFORMATION
- -------------------------------------------------------------------------------
Single Asset/Portfolio: Portfolio of 14 assets
Property Type: Hotel
Location: Arizona, Florida, Georgia,
Massachusetts, Michigan, North
Carolina, New York, South Carolina,
Texas
Years Built/Renovated: 1968 to 1998
Collateral: 14 limited service hotels with flags
including Hampton Inn and
Courtyard by Marriott.
Property Operator: Meristar Hotel & Resorts, Inc.
U/W Net Cash Flow: $15,792,040
Appraised Value: $162,120,000
Appraisal Date: June 30, 1998 to August 17, 1998
- -------------------------------------------------------------------------------
Year Built/
Property Name City State Renovated Rooms
- -------------------------------------------------------------------------------
Hampton Inn Elmsford NY 1968/1996 156
Courtyard by Marriott Ann Arbor MI 1989/1998 160
Quality Suites Charleston SC 1989/1997 168
Residence Inn Phoenix AZ 1988/1997 168
Homewood Suites Cary NC 1994 120
Hampton Inn & Suites Duluth GA 1996 135
Hampton Inn Raleigh NC 1986/1996 141
Comfort Suites Orlando FL 1990/1997 215
Hampton Inn Atlanta GA 1996 131
Hampton Inn Charlotte NC 1991/1997 125
Courtyard by Marriott Wilmington NC 1996 128
Hampton Inn West Springfield MA 1989/1998 126
Homewood Suites Houston TX 1995 92
Comfort Inn Charleston SC 1989/1997 128
- -------------------------------------------------------------------------------
Additional Information:
The borrower is a single-purpose entity affiliated with Winston Hotels,
Inc., a public REIT (NYSE: WXH) based in Raleigh, North Carolina. The REIT is
in the business of developing, acquiring and rehabilitating premium limited
service, full service, and high-end extended-stay hotel properties.
The properties are operated by an affiliate of Meristar Hotel & Resorts,
Inc. which currently operates 212 hotels in North America. Meristar manages
the portfolio under a 15 year operating lease of which approximately 14 years
are remaining.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 20
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Top Five Mortgage Loans (Continued):
- ------------------------------------
SWERDLOW LOAN
LOAN INFORMATION
- --------------------------------------------------------------------------------
Cut-off Date Balance: $63,806,653
% of Initial Pool: 5.1%
Mortgage Loan Seller: GE Capital Access, Inc.
Interest Rate: 8.180%
Balloon Term: 10 years
Amortization Term: 30 years
Call Protection: Prepayment lockout; U.S. Treasury defeasance
permitted as of the 2 year anniversary of Closing
Date
Cut-Off Date LTV: 78.9%
Balloon LTV: 70.9%
U/W DSCR: 1.25x
Cross Collateralization/ Yes/Yes
Default:
Special Provisions: ARD loan, lock box
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
Single Asset/Portfolio: Portfolio of 3 assets
Property Type: 2 anchored retail, 1 office
Location: Florida
Years Built/Renovated: 1977 to 1997
Collateral: 2 regional shopping centers and 1 suburban business
office building, all located in south Florida.
Property Management: SREG Operating Limited Partnership
U/W Net Cash Flow: $7,170,684
Appraised Value: $80,900,000
Appraisal Date: October 9, 1998 to October 20, 1998
Wtd. Avg. Occupancy Rate 98.2%
at U/W:
- --------------------------------------------------------------------------------
Year Built/ Square
Property Name City State Renovated Feet
- ------------- ---- ----- ---------- ------
Kendale Lakes Plaza West Kendall FL 1977/1995 404,553
Cypress Creek Station Ft. Lauderdale FL 1997 229,009
Oakwood Business Center Hollywood FL 1987 140,150
Additional Information:
Kendale Lakes Plaza is a regional shopping center located in an in-fill
location. The subject is 98.2% leased. Primary access to the property is
provided by the Florida Turnpike. Anchor tenants include K-Mart (114,000 sf),
Syms (40,000 sf), Marshall's (27,808 sf) and Office Max (23,500 sf).
Cypress Creek Station property contains two main buildings surrounded primarily
by commercial and hospitality properties. The subject is 98.7% leased with major
tenants signing long-term leases and the first rollover for a major tenant
occurring in 2007. Major tenants include Regal Cinemas (101,415 sf), Office
Depot (36,929 sf) and Just for Feet (15,675 sf).
Oakwood Business Center is a suburban business office building with convenient
access to Interstate 95, Ft. Lauderdale CBD and the Ft. Lauderdale International
Airport. The subject is 97.3% leased. Major tenants include Trader Publishing
(16,816 sf) and KOS Pharmaceuticals (23,499 sf).
The borrower is a single-purpose entity affiliated with Swerdlow Real Estate
Group, Inc., a recently formed private REIT specializing in development, leasing
and management of commercial properties in South Florida. The REIT was
capitalized with a $173mm equity offering with major institutional investors.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 21
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Top Five Mortgage Loans (Continued):
- ------------------------------------
ALLIANCE LOAN
LOAN INFORMATION
- -------------------------------------------------------------------------------
Cut-off Date Balance: $48,831,350
% of Initial Pool: 3.9%
Mortgage Loan Seller: Column Financial, Inc.
Interest Rate: 7.220%
Balloon Term: 10 years
Amortization Term: 30 years
Call Protection: Prepayment lockout; U.S. Treasury
defeasance permitted as of the 2 year
anniversary of Closing Date
Cut-Off Date LTV: 78.4%
Balloon LTV: 65.9%
U/W DSCR: 1.30x
Cross Collateralization/ Yes/Yes
Default:
Special Provisions: Cash management
- -------------------------------------------------------------------------------
PROPERTY INFORMATION
- -------------------------------------------------------------------------------
Single Asset/Portfolio: Portfolio of 5 assets
Property Type: Multifamily
Location: Texas and Florida
Years Built/Renovated: 1972 to 1997
Collateral: 5 multifamily properties with 1,749
total units
Property Management: Alliance Residential Management,
LLC
U/W Net Cash Flow: $5,184,610
Appraised Value: $62,250,000
Appraisal Date: January 15, 1999 to January 20, 1999
Wtd. Avg. Occupancy Rate 94.1%
at U/W:
- -------------------------------------------------------------------------------
<TABLE>
Allocated
Cut-off Date Loan Amount
Property Name City State Units Year Built/Renovated LTV at Cut-off Date
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Westchase Ranch Apartments Houston TX 776 1977/1994 77.3% $22,529,265
Westwood Village Apartments Irving TX 320 1983/1996 79.9% $10,387,667
Normandy Woods Apartments Houston TX 268 1981/1997 79.0% $7,111,557
Savoy Manor Apartments Houston TX 192 1980/1997 79.9% $5,193,833
San Marin Apartments Tampa FL 193 1972/1997 78.5% $3,609,027
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Additional Information:
The subject multifamily properties' amenities include tennis courts, pools,
parking, laundry facilities, on-site management office and fitness centers. In
general, the properties are 94.1% occupied.
Principals of the borrower, Alliance Holdings, include Andrew Schor and Steven
Ivankovich. The borrowers are affiliated with Alliance, a privately owned real
estate investment, development, and finance firm concentrated in the multifamily
housing business. Alliance and its affiliates own interests in and manages more
than 24,000 units throughout Texas, in the Midwest and along the Eastern
Seaboard from Virginia to Florida.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 22
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Top Five Mortgage Loans (Continued):
- ------------------------------------
COUNTRY SQUIRE APARTMENTS - SOUTH
LOAN INFORMATION
- -------------------------------------------------------------------------------
Cut-off Date Balance: $30,446,295
% of Initial Pool: 2.4%
Mortgage Loan Seller: GE Capital Access, Inc.
Interest Rate: 6.650%
Balloon Term: 10 years
Amortization Term: 30 years
Call Protection: Prepayment lockout; Yield maintenance
Cut-Off Date LTV: 78.1%
Balloon LTV: 66.5%
U/W DSCR: 1.28x
Cross Collateralization/ No/No
Default:
- -------------------------------------------------------------------------------
PROPERTY INFORMATION
- -------------------------------------------------------------------------------
Single Asset/Portfolio: Single Asset
Property Type: Multifamily
Location: Tennessee
Years Built/Renovated: 1984/1987
Collateral: 726 unit multifamily complex in
suburban Memphis, TN
Property Management: Fogelman Management Group
U/W Net Cash Flow: $3,008,930
Appraised Value: $39,000,000
Appraisal Date: August 13, 1998
Occupancy Rate at U/W: 94.0%
- -------------------------------------------------------------------------------
Additional Information:
Country Squire Apartments -- South consists of 81 residential buildings
containing 726 rental units located within the Cordova/Germantown submarket of
the Memphis, TN MSA. Project amenities include clubhouse with party room,
billiard room, indoor driving range, exercise room, 4 swimming pools, and 3
lighted tennis courts on 57 acres of land.
The borrower is Country Squire South, LLC, a single purpose entity controlled by
Avron Fogelman, founder and principal of Fogelman Properties and Fogelman
Management of Memphis, TN. These companies were founded in 1963 and through them
Mr. Fogelman has developed over 8,000 multifamily units in the Southeastern U.S.
Headquartered in Memphis, Fogelman's companies manage 23,000 multifamily units
in 6 states.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 23
<PAGE>
DLJCMC Series 1999-CG1 Summary Term Sheet March 1, 1999
Top Five Loans Summaries (Continued):
- -------------------------------------
AMERICAN REAL ESTATE LOAN
LOAN INFORMATION
- -------------------------------------------------------------------------------
Cut-off Date Balance: $29,312,901
% of Initial Pool: 2.3%
Mortgage Loan Seller: Column Financial, Inc.
Interest Rate: 7.550%
Balloon Term: 10 years
Amortization Term: 30 years
Call Protection: Prepayment lockout; U.S. Treasury
defeasance permitted as of the 2 year
anniversary of Closing Date
Cut-Off Date LTV: 79.8%
Balloon LTV: 70.8%
U/W DSCR: 1.40x
Cross Collateralization/ Yes/Yes
Default:
Special Provisions: Cash management
- -------------------------------------------------------------------------------
PROPERTY INFORMATION
- -------------------------------------------------------------------------------
Single Asset/Portfolio: Portfolio of 4 assets
Property Type: 3 office, 1 industrial
Location: New York, Pennsylvania
Years Built/Renovated: 1960 to 1991
Collateral: 3 adjacent office buildings and 1
warehouse
Property Management: American Real Estate Management,
Inc.
U/W Net Cash Flow: $3,468,939
Appraised Value: $36,750,000
Appraisal Date: June 17, 1998 to August 31, 1998
Wtd. Avg. Occupancy Rate 99.1%
at U/W:
- -------------------------------------------------------------------------------
<TABLE>
Allocated
Square Cut-off Date Loan Amount
Property Name City State feet Year Built/Renovated LTV at Cut-off Date
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
2294 Molly Pitcher Highway Chambersburg PA 621,400 1960/1991 79.8% $17,149,044
5015 Campuswood Drive East Syracuse NY 99,476 1992 79.8% $7,178,670
5010 Campuswood Drive East Syracuse NY 70,163 1989 79.8% $4,469,918
5009 Campuswood Drive East Syracuse NY 6,584 1987 79.3% $515,269
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Additional Information:
The borrower, American Real Estate Investment Corporation (AREIC), is a
fully-integrated, self-administered and self-managed REIT. Based in Plymouth
Meeting, Pennsylvania, AREIC focuses on industrial facilities and suburban Class
A office properties in secondary markets in the Northeast. AREIC owns 67 office
and industrial properties containing an aggregate of 7.3 million square feet.
The securities described herein will be offered only pursuant to, and will be
superseded by, a definitive prospectus supplement and prospectus. Prospective
investors who consider purchasing any such securities should make their
investment decision based only upon the information provided therein.
Capitalized terms used but not defined herein have meaning given to such terms
in the prospectus supplement.
Page 24
<PAGE>
DLJ COMMERCIAL MORTGAGE CORP.
Mortgage Pass-Through Certificates
The mortgage pass-through certificates offered hereby (the "Offered
Certificates") and by the supplements hereto (each, a "Prospectus Supplement")
will be offered from time to time in series (each, a "Series"). The Offered
Certificates of any Series, together with any other mortgage pass-through
certificates of such Series, are collectively referred to herein as the
"Certificates". Each Series will consist of one or more classes (each, a
"Class") of Certificates.
Each Series will represent in the aggregate the entire beneficial
ownership interest in a trust fund (with respect to any Series, the "Trust
Fund") to be formed by DLJ Commercial Mortgage Corp. (the "Depositor") and
including a segregated pool (a "Mortgage Asset Pool") of various types of
multifamily and commercial mortgage loans ("Mortgage Loans"), mortgage-backed
securities ("MBS") that evidence interests in, or that are secured by pledges
of, one or more of various types of multifamily or commercial mortgage loans, or
a combination of Mortgage Loans and MBS (collectively, "Mortgage Assets"). The
Mortgage Loans in (and the mortgage loans underlying the MBS in) any Trust Fund
will be secured by first or junior liens on, or security interests in, fee
and/or leasehold estates in, or cooperative shares with respect to, one or more
of the following types of real property: (i) residential properties consisting
of rental or cooperatively-owned buildings with multiple dwelling units,
manufactured housing communities and mobile home parks; (ii) commercial
properties consisting of office buildings, properties related to the sales of
consumer goods and other products and/or related to providing entertainment,
recreation or personal services to the general public, hospitality properties,
casinos, health care-related facilities, recreational vehicle parks, golf
courses, marinas, ski resorts, amusement parks and other resort and recreational
properties, arenas, warehouse facilities, mini-warehouse facilities,
self-storage facilities, industrial facilities, parking lots and garages,
churches and other religious facilities, and restaurants; and (iii) mixed use
properties (that is, any combination of the foregoing) and unimproved land.
Multifamily properties consisting of rental or cooperatively owned buildings
with multiple dwelling units, properties related to the sale of consumer goods
and other products and/or providing entertainment, recreation and personal
services to the general public, hospitality properties and office properties
will represent security for a material concentration of the Mortgage Loans (and
the mortgage loans underlying the MBS) constituting the Trust Fund for any
Series, based on principal balance at the time such Series is issued. If so
specified in the related Prospectus Supplement, the Trust Fund for a Series may
also include letters of credit, surety bonds, insurance policies, guarantees,
reserve funds, guaranteed investment contracts, interest rate exchange
agreements, interest rate cap or floor agreements, or other agreements designed
to reduce the effects of interest rate fluctuations on the Mortgage Assets. See
"Description of the Trust Funds", "Description of the Certificates" and
"Description of Credit Support".
-----------
(cover continued on next page)
PROCEEDS OF THE ASSETS IN THE RELATED TRUST FUND WILL BE THE SOLE SOURCE OF
PAYMENTS ON THE OFFERED CERTIFICATES. THE OFFERED CERTIFICATES WILL NOT
REPRESENT AN INTEREST IN OR OBLIGATION OF THE DEPOSITOR, DONALDSON, LUFKIN &
JENRETTE SECURITIES CORPORATION, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, THE REMIC ADMINISTRATOR OR ANY OF THEIR RESPECTIVE AFFILIATES,
OFFICERS, DIRECTORS, TRUSTEES, BENEFICIARIES, SHAREHOLDERS, EMPLOYEES OR AGENTS.
NEITHER THE OFFERED CERTIFICATES NOR THE MORTGAGE ASSETS WILL BE GUARANTEED OR
INSURED BY THE DEPOSITOR OR ANY OF ITS AFFILIATES OR, UNLESS OTHERWISE SPECIFIED
IN THE RELATED PROSPECTUS SUPPLEMENT, BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-----------
Prospective investors should review the information appearing on page
17 herein under the caption "Risk Factors" and such information as may be set
forth under the caption "Risk Factors" in the related Prospectus Supplement
before purchasing any Offered Certificate.
The Offered Certificates of any Series may be offered through one or
more different methods, including offerings through underwriters, as described
herein under "Method of Distribution" and in the related Prospectus Supplement.
Retain this Prospectus for future reference. 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.
The date of this Prospectus is March 1, 1999
<PAGE>
(cover continued)
The yield on each Class of a Series will be affected by, among other
things, the rate of payment of principal (including prepayments) on the Mortgage
Assets in the related Trust Fund and the timing of receipt of such payments as
described herein and in the related Prospectus Supplement. See "Yield and
Maturity Considerations". A Trust Fund may be subject to early termination under
the circumstances described herein and in the related Prospectus Supplement. See
"Description of the Certificates--Termination; Retirement of the Certificates".
As described in the related Prospectus Supplement, the Certificates of
each Series, including the Offered Certificates of such Series, may consist of
one or more Classes of Certificates that: (i) provide for the accrual of
interest thereon based on a fixed, variable or adjustable interest rate; (ii)
are senior or subordinate to one or more other Classes of Certificates in
entitlement to certain distributions on the Certificates; (iii) are entitled to
distributions of principal, with disproportionate, nominal or no distributions
of interest; (iv) are entitled to distributions of interest, with
disproportionate, nominal or no distributions of principal; (v) provide for
distributions of interest thereon or principal thereof that commence only
following the occurrence of certain events, such as the retirement of one or
more other Classes of Certificates of such Series; (vi) provide for
distributions of principal thereof to be made, from time to time or for
designated periods, at a rate that is faster (and, in some cases, substantially
faster) or slower (and, in some cases, substantially slower) than the rate at
which payments or other collections of principal are received on the Mortgage
Assets in the related Trust Fund; or (vii) provide for distributions of
principal thereof to be made, subject to available funds, based on a specified
principal payment schedule or other methodology. Distributions in respect of the
Certificates of each Series will be made on a monthly, quarterly, semi-annual,
annual or other periodic basis as specified in the related Prospectus
Supplement. See "Description of the Certificates".
If so provided in the related Prospectus Supplement, one or more
elections may be made to treat the related Trust Fund or a designated portion
thereof as a "real estate mortgage investment conduit" (each, a "REMIC") for
federal income tax purposes. If applicable, the Prospectus Supplement for the
Offered Certificates of any Series will specify which Class or Classes of
Certificates of such Series will be considered to be regular interests in the
related REMIC and which Class of Certificates of such Series or other interests
will be designated as the residual interest in the related REMIC. See "Federal
Income Tax Consequences".
There will be no secondary market for the Offered Certificates of any
Series prior to the offering thereof. There can be no assurance that a secondary
market for any Offered Certificates will develop or, if one does develop, that
it will continue. Unless otherwise provided in the related Prospectus
Supplement, the Certificates will not be listed on any securities exchange.
An Index of Principal Definitions is included at the end of this
Prospectus specifying the location of definitions of important or frequently
used defined terms.
-2-
<PAGE>
AVAILABLE INFORMATION
The Depositor has filed with the Securities and Exchange Commission
(the "Commission") a Registration Statement (of which this Prospectus forms a
part) under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Offered Certificates. This Prospectus and the Prospectus
Supplement relating to the Offered Certificates of each Series will contain
summaries of the material terms of the documents referred to herein and therein,
but do not contain all of the information set forth in the Registration
Statement pursuant to the rules and regulations of the Commission. For further
information, reference is made to such Registration Statement and the exhibits
thereto. Such Registration Statement and exhibits can be inspected and copied at
prescribed rates at the public reference facilities maintained by the Commission
at its Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at its Regional Offices located as follows: Chicago Regional Office, 500
West Madison, 14th Floor, Chicago, Illinois 60661; New York Regional Office,
Seven World Trade Center, New York, New York 10048. Copies of such material can
also be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates and electronically
through the Commission's Electronic Data Gathering, Analysis and Retrieval
system at the Commission's Web site (http://www.sec.gov).
No dealer, salesman, or other person has been authorized to give any
information, or to make any representations, other than those contained in this
Prospectus or any related Prospectus Supplement, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Depositor or any other person. Neither the delivery of this Prospectus or
any related Prospectus Supplement nor any sale made hereunder or thereunder
shall under any circumstances create an implication that there has been no
change in the information herein since the date hereof or therein since the date
thereof. This Prospectus and any related Prospectus Supplement are not an offer
to sell or a solicitation of an offer to buy any security in any jurisdiction in
which it is unlawful to make such offer or solicitation.
The Master Servicer, the Trustee or another specified person will cause
to be provided to registered holders of the Offered Certificates of each Series
periodic unaudited reports concerning the related Trust Fund. If beneficial
interests in a Class or Series of Offered Certificates are being held and
transferred in book-entry format through the facilities of The Depository Trust
Company ("DTC") as described herein, then unless otherwise provided in the
related Prospectus Supplement, such reports will be sent on behalf of the
related Trust Fund to a nominee of DTC as the registered holder of the Offered
Certificates. Conveyance of notices and other communications by DTC to its
participating organizations, and directly or indirectly through such
participating organizations to the beneficial owners of the applicable Offered
Certificates, will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to time. See
"Description of the Certificates--Reports to Certificateholders" and
"--Book-Entry Registration and Definitive Certificates".
The Depositor will file or cause to be filed with the Commission such
periodic reports with respect to each Trust Fund as are required under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations of the Commission thereunder. The Depositor intends to make a
written request to the staff of the Commission that the staff either (i) issue
an order pursuant to Section 12(h) of the Exchange Act exempting the Depositor
from certain reporting requirements under the Exchange Act with respect to each
Trust Fund or (ii) state that the staff will not recommend that the Commission
take enforcement action if the Depositor fulfills its reporting obligations as
described in its written request. If such request is granted, the Depositor will
file or cause to be filed with the Commission as to each Trust Fund the periodic
unaudited reports to holders of the Offered Certificates referenced in the
preceding paragraph; however, because of the nature of the Trust Funds, it is
unlikely that any significant additional information will be filed. In
addition, because of the limited number of Certificateholders expected for each
Series, the Depositor anticipates that a significant portion of such reporting
requirements will be permanently suspended following the
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first fiscal year for the related Trust Fund.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
There are incorporated herein by reference all documents and reports
filed or caused to be filed by the Depositor with respect to a Trust Fund
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of an offering of Offered Certificates evidencing interests therein.
The Depositor will provide or cause to be provided without charge to each person
to whom this Prospectus is delivered in connection with the offering of one or
more Classes of Offered Certificates, upon written or oral request of such
person, a copy of any or all documents or reports incorporated herein by
reference, in each case to the extent such documents or reports relate to one or
more of such Classes of such Offered Certificates, other than the exhibits to
such documents (unless such exhibits are specifically incorporated by reference
in such documents). Such requests to the Depositor should be directed in writing
to the Depositor at 277 Park Avenue, 9th Floor, New York, New York 10172,
Attention: N. Dante LaRocca, or by telephone at (212) 892-3000.
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TABLE OF CONTENTS
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SUMMARY OF PROSPECTUS.............................................................................................8
RISK FACTORS.....................................................................................................17
Limited Liquidity of Offered Certificates........................................................................17
Limited Assets...................................................................................................18
Credit Support Limitations.......................................................................................18
Effect of Prepayments on Average Life of Certificates............................................................19
Effect of Prepayments on Yield of Certificates...................................................................20
Limited Nature of Ratings........................................................................................20
Certain Factors Affecting Delinquency, Foreclosure and Loss of the Mortgage Loans................................21
Inclusion of Delinquent and Nonperforming Mortgage Loans in a Mortgage Asset Pool................................28
Federal Tax Considerations Regarding REMIC Residual Certificates.................................................28
Book-Entry Registration..........................................................................................29
Potential Conflicts of Interest..................................................................................29
Termination......................................................................................................30
DESCRIPTION OF THE TRUST FUNDS...................................................................................30
General..........................................................................................................30
Mortgage Loans...................................................................................................30
MBS..............................................................................................................42
Undelivered Mortgage Assets......................................................................................43
Certificate Accounts.............................................................................................43
Credit Support...................................................................................................43
Cash Flow Agreements.............................................................................................43
YIELD AND MATURITY CONSIDERATIONS................................................................................44
General..........................................................................................................44
Pass-Through Rate................................................................................................44
Payment Delays...................................................................................................44
Certain Shortfalls in Collections of Interest....................................................................44
Yield and Prepayment Considerations..............................................................................45
Weighted Average Life and Maturity...............................................................................47
Other Factors Affecting Yield, Weighted Average Life and Maturity................................................47
THE DEPOSITOR....................................................................................................49
DESCRIPTION OF THE CERTIFICATES..................................................................................50
General..........................................................................................................50
Distributions....................................................................................................50
Distributions of Interest on the Certificates....................................................................51
Distributions of Principal of the Certificates...................................................................52
Distributions on the Certificates in Respect of Prepayment Premiums
or in Respect of Equity Participations.........................................................................53
Allocation of Losses and Shortfalls..............................................................................53
Advances in Respect of Delinquencies.............................................................................53
Reports to Certificateholders....................................................................................54
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Voting Rights....................................................................................................55
Termination......................................................................................................55
Book-Entry Registration and Definitive Certificates..............................................................56
DESCRIPTION OF THE POOLING AGREEMENTS............................................................................57
General..........................................................................................................57
Assignment of Mortgage Assets....................................................................................58
Representations and Warranties with respect to Mortgage Assets; Repurchases and Other Remedies...................59
Collection and Other Servicing Procedures with respect to Mortgage Loans.........................................60
Sub-Servicers....................................................................................................62
Collection of Payments on MBS....................................................................................62
Certificate Account..............................................................................................63
Modifications, Waivers and Amendments of Mortgage Loans..........................................................66
Realization Upon Defaulted Mortgage Loans........................................................................66
Hazard Insurance Policies........................................................................................68
Due-on-Sale and Due-on-Encumbrance Provisions....................................................................69
Servicing Compensation and Payment of Expenses...................................................................69
Evidence as to Compliance........................................................................................70
Certain Matters Regarding the Master Servicer, the Special Servicer,
the REMIC Administrator, the Manager and the Depositor ........................................................70
Events of Default................................................................................................71
Rights Upon Event of Default.....................................................................................72
Amendment........................................................................................................73
List of Certificateholders.......................................................................................74
The Trustee......................................................................................................74
Duties of the Trustee............................................................................................74
Certain Matters Regarding the Trustee............................................................................75
Resignation and Removal of the Trustee...........................................................................75
DESCRIPTION OF CREDIT SUPPORT....................................................................................75
General..........................................................................................................75
Subordinate Certificates.........................................................................................76
Insurance or Guarantees with Respect to Mortgage Loans...........................................................76
Letter of Credit.................................................................................................76
Certificate Insurance and Surety Bonds...........................................................................77
Reserve Funds....................................................................................................77
Credit Support with Respect to MBS...............................................................................77
CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS..........................................................................78
General..........................................................................................................78
Types of Mortgage Instruments....................................................................................78
Leases and Rents.................................................................................................78
Personalty.......................................................................................................79
Foreclosure......................................................................................................79
Bankruptcy Laws..................................................................................................82
Environmental Considerations.....................................................................................84
Due-on-Sale and Due-on-Encumbrance Provisions....................................................................86
Junior Liens; Rights of Holders of Senior Liens..................................................................86
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Subordinate Financing............................................................................................86
Default Interest and Limitations on Prepayments..................................................................87
Applicability of Usury Laws......................................................................................87
Certain Laws and Regulations.....................................................................................87
Americans with Disabilities Act..................................................................................87
Soldiers' and Sailors' Civil Relief Act of 1940..................................................................88
Forfeitures in Drug and RICO Proceedings.........................................................................88
FEDERAL INCOME TAX CONSEQUENCES..................................................................................89
General..........................................................................................................89
REMICs...........................................................................................................90
Grantor Trust Funds.............................................................................................107
STATE AND OTHER TAX CONSEQUENCES................................................................................116
ERISA CONSIDERATIONS............................................................................................116
General.........................................................................................................116
Plan Asset Regulations..........................................................................................117
Prohibited Transaction Exemptions...............................................................................118
Insurance Company General Accounts..............................................................................118
Consultation With Counsel.......................................................................................119
Tax Exempt Investors............................................................................................119
LEGAL INVESTMENT................................................................................................119
USE OF PROCEEDS.................................................................................................121
METHOD OF DISTRIBUTION..........................................................................................121
LEGAL MATTERS...................................................................................................123
FINANCIAL INFORMATION...........................................................................................123
RATING..........................................................................................................123
INDEX OF PRINCIPAL DEFINITIONS..................................................................................124
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SUMMARY OF PROSPECTUS
The following summary of certain pertinent information is qualified in
its entirety by reference to the more detailed information appearing elsewhere
in this Prospectus and by reference to the information with respect to each
Series of Certificates contained in the Prospectus Supplement to be prepared and
delivered in connection with the offering of Offered Certificates of such
Series. An Index of Principal Definitions is included at the end of this
Prospectus.
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Securities Offered................................. Mortgage pass-through certificates.
Depositor.......................................... DLJ Commercial Mortgage Corp., a Delaware corporation.
See "The Depositor".
Trustee............................................ The trustee (the "Trustee") for each Series will be named in
the related Prospectus Supplement. See "Description of the
Pooling Agreements--The Trustee".
Master Servicer.................................... If a Trust Fund includes Mortgage Loans, then the master
servicer (the "Master Servicer") for the corresponding
Series will be named in the related Prospectus Supplement.
See "Description of the Pooling Agreements".
Special Servicer................................... If a Trust Fund includes Mortgage Loans, then the special
servicer (the "Special Servicer") for the corresponding Series
will be named, or the circumstances under which a Special
Servicer may be appointed will be described, in the related
Prospectus Supplement. See "Description of the Pooling
Agreements--Collection and Other Servicing Procedures
with respect to Mortgage Loans".
MBS Administrator.................................. If a Trust Fund includes MBS, then the entity responsible for
administering such MBS (the "MBS Administrator") will be
named in the related Prospectus Supplement. If an entity
other than the Trustee or the Master Servicer is the MBS
Administrator, such entity will be referred to herein as the
"Manager".
REMIC Administrator................................ The person (the "REMIC Administrator") responsible for the
various tax-related administration duties for a Series as to
which one or more REMIC elections have been made will be
named in the related Prospectus Supplement. See "Federal
Income Tax Consequences" and "REMICs".
The Mortgage Assets................................ The Mortgage Assets will be the primary assets of any Trust
Fund. The Mortgage Assets with respect to each Series will,
in general, consist of a pool of mortgage loans ("Mortgage
Loans") secured by first or junior liens on, or security
interests in, fee and/or leasehold estates in, or cooperative
shares with respect to, one or more of the following types of
real property: (i) residential properties consisting of rental
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or cooperatively-owned buildings with multiple dwelling units,
manufactured housing communities and mobile home parks; (ii)
commercial properties consisting of office buildings, properties
related to the sale of goods and other products (such as shopping
centers, malls, factory outlet centers, automotive sales centers
and individual stores, shops and businesses related to sales of
consumer goods and other products, including individual department
stores and other retail stores, grocery stores, specialty shops,
convenience stores and gas stations), properties related to
providing entertainment, recreation or personal services (such as
movie theaters, fitness centers, bowling alleys, salons, dry
cleaners and automotive service centers), hospitality properties
(such as hotels, motels and other lodging facilities) casinos,
health care-related facilities (such as hospitals, skilled nursing
facilities, nursing homes, congregate care facilities and, in some
cases, senior housing), recreational and resort properties (such as
recreational vehicle parks, golf courses, marinas, ski resorts,
amusement parks and other recreational properties), arenas, storage
properties (such as warehouse facilities, mini-warehouse facilities
and self-storage facilities), industrial facilities, parking lots
and garages, churches and other religious facilities and
restaurants; and (iii) mixed use properties (that is, any
combination of the foregoing) and unimproved land. The Mortgage
Loans will not be guaranteed or insured by the Depositor or any of
its affiliates or, unless otherwise provided in the related
Prospectus Supplement, by any governmental agency or
instrumentality or by any other person. If so specified in the
related Prospectus Supplement, some Mortgage Loans may be
delinquent or nonperforming as of the date the related Trust Fund
is formed.
As and to the extent described in the related Prospectus
Supplement, a Mortgage Loan (i) may provide for no accrual of
interest or for accrual of interest thereon at an interest rate
(a "Mortgage Rate") that is fixed over its term or that adjusts
from time to time, or that may be converted at the borrower's
election from an adjustable to a fixed Mortgage Rate, or from a
fixed to an adjustable Mortgage Rate, (ii) may provide for level
payments to maturity or for payments that adjust from time to
time to accommodate changes in the Mortgage Rate or to reflect
the occurrence of certain events, and may permit negative
amortization, (iii) may be fully amortizing or may be partially
amortizing or nonamortizing, with a balloon payment due on its
stated maturity date, (iv) may prohibit over its term or for a
certain period prepayments and/or require payment of a premium or a
yield maintenance payment in connection with certain prepayments
and (v) may provide for payments of principal, interest or
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both, on due dates that occur monthly, quarterly, semi-annually or
at such other interval as is specified in the related Prospectus
Supplement. Each Mortgage Loan will have had an original term to
maturity of not more than approximately 40 years. No Mortgage Loan
will have been originated by the Depositor. See "Description of the
Trust Funds--Mortgage Loans".
If any Mortgage Loan, or group of related Mortgage Loans (by
reason of cross-collateralization, common borrower or
affiliation of borrowers), constitutes a material concentration
of credit risk, financial statements or other financial
information with respect to the related Mortgaged Property or
Mortgaged Properties will be included in the related Prospectus
Supplement. See "Description of the Trust Funds--Mortgage
Loans--Mortgage Loan Information" in the Prospectus Supplement.
If and to the extent specified in the related Prospectus
Supplement, the Mortgage Assets with respect to a Series may
also include, or consist of, mortgage participations, mortgage
pass-through certificates, collateralized mortgage obligations
and/or other mortgage-backed securities (collectively, "MBS"),
that evidence an interest in, or are secured by a pledge of, one
or more mortgage loans that conform to the descriptions of the
Mortgage Loans contained herein and which may or may not be
issued, insured or guaranteed by the United States or an agency
or instrumentality thereof. See "Description of the Trust
Funds--MBS".
Unless otherwise specified in the related Prospectus Supplement,
the aggregate outstanding principal balance of a Mortgage Asset
Pool as of the date it is formed (the "Cutoff Date") will equal
or exceed the aggregate outstanding principal balance of the
related Series as of the date the Certificates of such Series
are initially issued (the "Closing Date"). In the event that the
Mortgage Assets initially delivered do not have an aggregate
outstanding principal balance as of the related Cut-off Date at
least equal to the aggregate outstanding principal balance of
the related Series as of the related Closing Date, the Depositor
may deposit cash or Permitted Investments (as defined herein) on
an interim basis with the Trustee for such Series on the related
Closing Date in lieu of delivering Mortgage Assets (the
"Undelivered Mortgage Assets") with an aggregate outstanding
principal balance as of the related Cut-off Date equal to the
shortfall amount. During the 90-day period following the related
Closing Date, the Depositor will be entitled to obtain a release of
such cash or Permitted
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Investments to the extent that the Depositor delivers
a corresponding amount of the Undelivered Mortgage Assets. If
and to the extent that all the Undelivered Mortgage Assets are
not delivered during the 90-day period following the related
Closing Date, such cash or, following liquidation, such
Permitted Investments will be applied to pay a corresponding
amount of principal of the Certificates of such Series to the
extent set forth, and on the dates specified, in the related
Prospectus Supplement.
The Certificates................................... Each Series will be issued in one or more Classes of
Certificates pursuant to a pooling and servicing agreement or
other agreement specified in the related Prospectus
Supplement (in any case, a "Pooling Agreement") and will
represent in the aggregate the entire beneficial ownership
interest in the related Trust Fund.
As described in the related Prospectus Supplement, the
Certificates of each Series, including the Offered Certificates
of such Series, may consist of one or more Classes of
Certificates that, among other things: (i) are senior
(collectively, "Senior Certificates") or subordinate
(collectively, "Subordinate Certificates") to one or more other
Classes of Certificates of the same Series in entitlement to
certain distributions on the Certificates; (ii) are entitled to
distributions of principal, with disproportionate, nominal or no
distributions of interest (collectively, "Stripped Principal
Certificates"); (iii) are entitled to distributions of interest,
with disproportionate, nominal or no distributions of principal
(collectively, "Stripped Interest Certificates"); (iv) provide
for distributions of interest thereon or principal thereof that
commence only after the occurrence of certain events, such as
the retirement of one or more other Classes of Certificates of
such Series; (v) provide for distributions of principal thereof
to be made, from time to time or for designated periods, at a
rate that is faster (and, in some cases, substantially faster)
or slower (and, in some cases, substantially slower) than the
rate at which payments or other collections of principal are
received on the Mortgage Assets in the related Trust Fund; (vi)
provide for distributions of principal thereof to be made,
subject to available funds, based on a specified principal
payment schedule or other methodology; or (vii) provide for
distributions based on collections on the Mortgage Assets in the
related Trust Fund attributable to prepayment premiums, yield
maintenance payments or equity participations.
If so specified in the related Prospectus Supplement, a Series
may include one or more "Controlled Amortization Classes", which
will entitle the holders thereof to receive principal
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distributions according to a specified principal payment
schedule. Although prepayment risk cannot be eliminated entirely
for any Class of Certificates, a Controlled Amortization Class
will generally provide a relatively stable cash flow so long as
the actual rate of prepayment on the Mortgage Loans in the
related Trust Fund remains relatively constant at the rate, or
within the range of rates, of prepayment used to establish the
specific principal payment schedule for such Certificates.
Prepayment risk with respect to a given Mortgage Asset Pool does
not disappear, however, and the stability afforded to a
Controlled Amortization Class comes at the expense of one or
more other Classes of Certificates of the same Series, any of
which other Classes of Certificates may also be a Class of
Offered Certificates. See "Risk Factors--Effect of Prepayments
on Average Life of Certificates" and "--Effect of Prepayments on
Yield of Certificates".
Each Certificate, other than certain Stripped Interest
Certificates and certain REMIC Residual Certificates (as defined
herein), will have an initial stated principal amount (a
"Certificate Principal Balance"); and each Certificate, other
than certain Stripped Principal Certificates and certain REMIC
Residual Certificates, will accrue interest on its Certificate
Principal Balance or, in the case of certain Stripped Interest
Certificates, on a notional amount (a "Certificate Notional
Amount"), based on a fixed, variable or adjustable interest rate
(a "Pass-Through Rate"). The related Prospectus Supplement will
specify the aggregate Certificate Principal Balance, aggregate
Certificate Notional Amount and/or Pass-Through Rate (or, in the
case of a variable or adjustable Pass-Through Rate, the method
for determining such rate), as applicable, for each Class of
Offered Certificates.
If so specified in the related Prospectus Supplement, a Class of
Offered Certificates may have two or more component parts, each
having characteristics that are otherwise described herein as
being attributable to separate and distinct Classes.
The Certificates will not be guaranteed or insured by the
Depositor or any of its affiliates, by any governmental agency
or instrumentality or by any other person or entity, unless
otherwise provided in the related Prospectus Supplement. See
"Risk Factors--Limited Assets".
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Distributions of Interest on the
Certificates....................................... Interest on each Class of Offered Certificates (other than
certain Classes of Stripped Principal Certificates and certain
Classes of REMIC Residual Certificates) of each Series will
accrue at the applicable Pass-Through Rate on the aggregate
Certificate Principal Balance or, in the case of certain
Classes of Stripped Interest Certificates, the aggregate
Certificate Notional Amount thereof outstanding from time
to time and will be distributed to Certificateholders as
provided in the related Prospectus Supplement (each of the
specified dates on which distributions are to be made, a
"Distribution Date"). Distributions of interest with respect
to one or more Classes of Certificates (collectively, "Accrual
Certificates") may not commence until the occurrence of
certain events, such as the retirement of one or more other
Classes of Certificates, and interest accrued with respect to
a Class of Accrual Certificates prior to the occurrence of
such an event will either be added to the Certificate Principal
Balance thereof or otherwise deferred as described in the
related Prospectus Supplement. Distributions of interest
with respect to one or more Classes of Certificates may be
reduced to the extent of certain delinquencies, losses and
other contingencies described herein and in the related
Prospectus Supplement. See "Risk Factors--Effect of
Prepayments on Average Life of Certificates" and "--Effect
of Prepayments on Yield of Certificates", "Yield and
Maturity Considerations--Certain Shortfalls in Collections
of Interest" and "Description of the Certificates
--Distributions of Interest on the Certificates".
Distributions of Principal of the
Certificates....................................... Each Class of Certificates of each Series (other than certain
Classes of Stripped Interest Certificates and certain Classes
of REMIC Residual Certificates) will have an aggregate
Certificate Principal Balance. The aggregate Certificate
Principal Balance of a Class of Certificates outstanding from
time to time will represent the maximum amount that the
holders thereof are then entitled to receive in respect of
principal from future cash flow on the assets in the related
Trust Fund. Unless otherwise specified in the related
Prospectus Supplement, the initial aggregate Certificate
Principal Balance of all Classes of a Series will
not be greater than the outstanding principal balance of the
related Mortgage Assets as of the related Cut-off Date. As and
to the extent described in each Prospectus Supplement,
distributions of principal with respect to the related Series
will be made on each Distribution Date to the holders of the
Class or Classes of Certificates of such Series then entitled
thereto until the Certificate Principal Balances of such
Certificates have been reduced to zero. Distributions of
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principal with respect to one or more Classes of Certificates:
(i) may be made at a rate that is faster (and, in some cases,
substantially faster) or slower (and, in some cases,
substantially slower) than the rate at which payments or other
collections of principal are received on the Mortgage Assets in
the related Trust Fund; (ii) may not commence until the
occurrence of certain events, such as the retirement of one or
more other Classes of Certificates of the same Series; (iii) may
be made, subject to certain limitations, based on a specified
principal payment schedule; or (iv) may be contingent on the
specified principal payment schedule for another Class of the
same Series and the rate at which payments and other collections
of principal on the Mortgage Assets in the related Trust Fund
are received. Unless otherwise specified in the related
Prospectus Supplement, distributions of principal of any Class
of Offered Certificates will be made on a pro rata basis among
all of the Certificates of such Class. See "Description of the
Certificates --Distributions of Principal of the Certificates".
Credit Support and Cash
Flow Agreements.................................... If so provided in the related Prospectus Supplement, partial
or full protection against certain defaults and losses on the
Mortgage Assets in the related Trust Fund may be provided
to one or more Classes of Certificates of the related Series in
the form of subordination of one or more other Classes of
Certificates of such Series, which other Classes may include
one or more Classes of Offered Certificates, or by one or
more other types of credit support, which may include a letter
of credit, a surety bond, an insurance policy, a guarantee, a
reserve fund, or a combination thereof (any such coverage
with respect to the Certificates of any Series, "Credit
Support"). If so provided in the related Prospectus
Supplement, a Trust Fund may include: (i) guaranteed
investment contracts pursuant to which moneys held in the
funds and accounts established for the related Series will be
invested at a specified rate; or (ii) interest rate exchange
agreements, interest rate cap or floor agreements, or other
agreements designed to reduce the effects of interest rate
fluctuations on the Mortgage Assets or on one or more Classes of
Certificates (any such agreement, in the case of clause (i) or
(ii), a "Cash Flow Agreement"). Certain relevant information
regarding any Credit Support or Cash Flow Agreement applicable to
the Offered Certificates of any Series will be set forth in the
related Prospectus Supplement. See "Risk Factors--Credit Support
Limitations", "Description of the Trust Funds--Credit Support" and
"--Cash Flow Agreements" and "Description of Credit Support".
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Advances........................................... If and to the extent provided in the related Prospectus
Supplement, if a Trust Fund includes Mortgage Loans, the
Master Servicer, the Special Servicer, the Trustee, any
provider of Credit Support and/or any other specified person
may be obligated to make, or have the option of making,
certain advances with respect to delinquent scheduled
payments of principal and/or interest on such Mortgage
Loans. Any such advances made with respect to a particular
Mortgage Loan will be reimbursable from subsequent
recoveries in respect of such Mortgage Loan and otherwise
to the extent described herein and in the related Prospectus
Supplement. See "Description of the Certificates
--Advances in Respect of Delinquencies". If and to the
extent provided in the Prospectus Supplement for the
Offered Certificates of any Series, any entity making such
advances may be entitled to receive interest thereon for a
specified period during which certain or all of such advances
are outstanding, payable from amounts in the related Trust
Fund. See "Description of the Certificates--Advances in
Respect of Delinquencies". If a Trust Fund includes MBS,
any comparable advancing obligation of a party to the related
Pooling Agreement, or of a party to the related MBS
Agreement, will be described in the related Prospectus
Supplement.
Optional Termination............................... If so specified in the related Prospectus Supplement, a Trust
Fund may be subject to optional early termination through
the repurchase of the Mortgage Assets included in such Trust
Fund by the party or parties specified in such Prospectus
Supplement, under the circumstances and in the manner set
forth therein, thereby resulting in early retirement for the
Certificates of the related Series. If so provided in the related
Prospectus Supplement, upon the reduction of the aggregate
Certificate Principal Balance of a specified Class or Classes
of Certificates by a specified percentage or amount or upon
a specified date, a party specified therein may be authorized
or required to solicit bids for the purchase of all of the
Mortgage Assets of the related Trust Fund, or of a sufficient
portion of such Mortgage Assets to retire such Class or Classes,
under the circumstances and in the manner set forth therein. See
"Description of the Certificates--Termination".
Federal Income Tax Consequences.................... The Certificates of each Series will constitute or evidence
ownership of either (i) "regular interests" ("REMIC Regular
Certificates") and "residual interests" ("REMIC Residual
Certificates") in a Trust Fund, or a designated portion
thereof, treated as a REMIC under Sections 860A through
860G of the Internal Revenue Code of 1986 (the "Code"), or
(ii) interests ("Grantor Trust Certificates") in a Trust Fund
treated as a grantor trust under applicable provisions of the
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Code. It is recommended that Investors consult their tax
advisors concerning the specific tax consequences to them of
the purchase, ownership and disposition of the Offered
Certificates and to review "Federal Income Tax
Consequences" herein and in the related Prospectus
Supplement.
ERISA Considerations............................... Fiduciaries of employee benefit plans and certain other
retirement plans and arrangements, including individual
retirement accounts, annuities, Keogh plans, and collective
investment funds and separate accounts in which such plans,
accounts, annuities or arrangements are invested, that are
subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Code,
should review with their legal advisors whether the purchase
or holding of Offered Certificates could give rise to a
transaction that is prohibited or is not otherwise permissible
either under ERISA or Section 4975 of the Code. See
"ERISA Considerations" herein and in the related Prospectus
Supplement.
Legal Investment................................... The Offered Certificates will constitute "mortgage related
securities" for purposes of the Secondary Mortgage Market
Enhancement Act of 1984, as amended ("SMMEA"), only if
so specified in the related Prospectus Supplement. Investors
whose investment authority is subject to legal restrictions
should consult their legal advisors to determine whether and
to what extent the Offered Certificates constitute legal
investments for them. See "Legal Investment" herein and in
the related Prospectus Supplement.
Rating............................................. At their respective dates of issuance, each Class of Offered
Certificates will be rated not lower than investment grade by
one or more nationally recognized statistical rating agencies
(each, a "Rating Agency"). See "Rating" herein and in the
related Prospectus Supplement.
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RISK FACTORS
In considering an investment in the Offered Certificates of any Series,
investors should consider, among other things, the following risk factors and
any other factors set forth under the heading "Risk Factors" in the related
Prospectus Supplement. In general, to the extent that the factors discussed
below pertain to or are influenced by the characteristics or behavior of
Mortgage Loans included in a particular Trust Fund, they would similarly pertain
to and be influenced by the characteristics or behavior of the mortgage loans
underlying any MBS included in such Trust Fund.
Limited Liquidity of Offered Certificates
General. The Offered Certificates of any Series may have limited or no
liquidity. Accordingly, an investor may be forced to bear the risk of its
investment in any Offered Certificates for an indefinite period of time.
Furthermore, except to the extent described herein and in the related Prospectus
Supplement, Certificateholders will have no redemption rights, and the Offered
Certificates of each Series are subject to early retirement only under certain
specified circumstances described herein and in the related Prospectus
Supplement. See "Description of the Certificates--Termination".
Lack of a Secondary Market. There can be no assurance that a secondary
market for the Offered Certificates of any Series will develop or, if it does
develop, that it will provide holders with liquidity of investment or that it
will continue for as long as such Certificates remain outstanding. The
Prospectus Supplement for the Offered Certificates of any Series may indicate
that an underwriter specified therein intends to establish a secondary market in
such Offered Certificates; however, no underwriter will be obligated to do so.
Any such secondary market may provide less liquidity to investors than any
comparable market for securities that evidence interests in single-family
mortgage loans. Unless otherwise provided in the related Prospectus Supplement,
the Certificates will not be listed on any securities exchange.
Limited Nature of Ongoing Information. The primary source of ongoing
information regarding the Offered Certificates of any Series, including
information regarding the status of the related Mortgage Assets and any Credit
Support for such Certificates, will be the periodic reports to
Certificateholders to be delivered pursuant to the related Pooling Agreement as
described herein under the heading "Description of the Certificates--Reports to
Certificateholders". There can be no assurance that any additional ongoing
information regarding the Offered Certificates of any Series will be available
through any other source. The limited nature of such information in respect of
the Offered Certificates of any Series may adversely affect the liquidity
thereof, even if a secondary market for such Certificates does develop.
Sensitivity to Fluctuations in Prevailing Interest Rates. Insofar as a
secondary market does develop with respect to Offered Certificates of any Series
or with respect to any Class thereof, the market value of such Certificates will
be affected by several factors, including the perceived liquidity thereof, the
anticipated cash flow thereon (which may vary widely depending upon the
prepayment and default assumptions applied in respect of the underlying Mortgage
Loans) and prevailing interest rates. The price payable at any given time in
respect of certain Classes of Offered Certificates (in particular, a Class with
a relatively long average life, a Companion Class (as defined herein) or a Class
of Stripped Interest Certificates or Stripped Principal Certificates) may be
extremely sensitive to small fluctuations in prevailing interest rates; and the
relative change in price for an Offered Certificate in response to an upward or
downward movement in prevailing interest rates may not necessarily equal the
relative change in price for such Offered Certificate in response to an equal
but opposite movement in such rates. Accordingly, the sale of Offered
Certificates by a holder in any secondary market that may develop may be at a
discount from the price paid by such holder. The Depositor is not aware of any
source through which price information about the Offered Certificates will be
generally available on an ongoing basis.
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Limited Assets
Unless otherwise specified in the related Prospectus Supplement,
neither the Offered Certificates of any Series nor the Mortgage Assets in the
related Trust Fund will be guaranteed or insured by the Depositor or any of its
affiliates, by any governmental agency or instrumentality or by any other person
or entity; and no Offered Certificate of any Series will represent a claim
against or security interest in the Trust Fund for any other Series.
Accordingly, if the related Trust Fund has insufficient assets to make payments
on a Series of Offered Certificates, no other assets will be available for
payment of the deficiency, and the holders of one or more Classes of such
Offered Certificates will be required to bear the consequent loss. Furthermore,
certain amounts on deposit from time to time in certain funds or accounts
constituting part of a Trust Fund, including the Certificate Account (as defined
herein) and any accounts maintained as Credit Support, may be withdrawn under
certain conditions, if and to the extent described in the related Prospectus
Supplement, for purposes other than the payment of principal of or interest on
the Certificates of the related Series. If and to the extent so provided in the
Prospectus Supplement relating to a Series 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, all or a
portion of 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 such Prospectus Supplement.
Credit Support Limitations
Limitations Regarding Types of Losses Covered. The Prospectus
Supplement for the Offered Certificates of any Series will describe any Credit
Support provided with respect thereto. Use of Credit Support will be subject to
the conditions and limitations described herein and in the related Prospectus
Supplement. Moreover, such Credit Support may not cover all potential losses;
for example, Credit Support may or may not cover loss by reason of fraud or
negligence by a mortgage loan originator or other parties. Any such losses not
covered by Credit Support may, at least in part, be allocated to one or more
Classes of Offered Certificates.
Disproportionate Benefits to Certain Classes and Series. A Series may
include one or more Classes of Subordinate Certificates (which may include
Offered Certificates), if so provided in the related Prospectus Supplement.
Although subordination is intended to reduce the likelihood of temporary
shortfalls and ultimate losses to holders of Senior Certificates, the amount of
subordination will be limited and may decline under certain circumstances. In
addition, if principal payments on one or more Classes of Offered Certificates
of a Series are made in a specified order of priority, any related Credit
Support may be exhausted before the principal of the later paid Classes of
Offered Certificates of such Series has been repaid in full. As a result, the
impact of losses and shortfalls experienced with respect to the Mortgage Assets
may fall primarily upon those Classes of Offered Certificates having a later
right of payment. Moreover, if a form of Credit Support covers the Offered
Certificates of more than one Series and losses on the related Mortgage Assets
exceed the amount of such Credit Support, it is possible that the holders of
Offered Certificates of one (or more) such Series will be disproportionately
benefited by such Credit Support to the detriment of the holders of Offered
Certificates of one (or more) other such Series.
Limitations Regarding the Amount of Credit Support. The amount of any
applicable Credit Support supporting one or more Classes of Offered
Certificates, including the subordination of one or more other Classes of
Certificates, will be determined on the basis of criteria established by each
Rating Agency rating such Classes of Certificates based on an assumed level of
defaults, delinquencies and losses on the underlying Mortgage Assets and certain
other factors. There can, however, be no assurance that the loss experience on
the related Mortgage Assets will not exceed such assumed levels. See
"Description of the Certificates--Allocation of Losses and Shortfalls" and
"Description of Credit Support". If the losses on the related Mortgage Assets do
exceed such
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assumed levels, the holders of one or more Classes of Offered Certificates
will be required to bear such additional losses.
Effect of Prepayments on Average Life of Certificates
As a result of prepayments on the Mortgage Loans in any Trust Fund, the
amount and timing of distributions of principal and/or interest on the Offered
Certificates of the related Series may be highly unpredictable. Prepayments on
the Mortgage Loans in any Trust Fund will result in a faster rate of principal
payments on one or more Classes of Certificates of the related Series than if
payments on such Mortgage Loans were made as scheduled. Thus, the prepayment
experience on the Mortgage Loans in a Trust Fund may affect the average life of
one or more Classes of Certificates of the related Series, including a Class of
Offered Certificates. The rate of principal payments on pools of mortgage loans
varies among pools and from time to time is influenced by a variety of economic,
demographic, geographic, social, tax and legal factors. For example, if
prevailing interest rates fall significantly below the Mortgage Rates borne by
the Mortgage Loans included in a Trust Fund, then, subject to the particular
terms of the Mortgage Loans (e.g., provisions that prohibit voluntary
prepayments during specified periods or impose penalties in connection
therewith) and the ability of borrowers to obtain new financing, principal
prepayments on such Mortgage Loans are likely to be higher than if prevailing
interest rates remain at or above the rates borne by those Mortgage Loans.
Conversely, if prevailing interest rates rise significantly above the Mortgage
Rates borne by the Mortgage Loans included in a Trust Fund, then principal
prepayments on such Mortgage Loans are likely to be lower than if prevailing
interest rates remain at or below the Mortgage Rates borne by those Mortgage
Loans. There can be no assurance as to the actual rate of prepayment on the
Mortgage Loans in any Trust Fund or that such rate of prepayment will conform to
any model described herein or in any Prospectus Supplement. As a result,
depending on the anticipated rate of prepayment for the Mortgage Loans in any
Trust Fund, the retirement of any Class of Certificates of the related Series
could occur significantly earlier or later, and the average life thereof could
be significantly shorter or longer, than expected.
The extent to which prepayments on the Mortgage Loans in any Trust Fund
ultimately affect the average life of any Class of Certificates of the related
Series will depend on the terms and provisions of such Certificates. A Class of
Certificates, including a Class of Offered Certificates, may provide that on any
Distribution Date the holders of such Certificates are entitled to a pro rata
share of the prepayments on the Mortgage Loans in the related Trust Fund that
are distributable on such date, to a disproportionately large share (which, in
some cases, may be all) of such prepayments, or to a disproportionately small
share (which, in some cases, may be none) of such prepayments. A Class of
Certificates that entitles the holders thereof to a disproportionately large
share of the prepayments on the Mortgage Loans in the related Trust Fund
increases the likelihood of early retirement of such Class ("Call Risk") if the
rate of prepayment is relatively fast; while a Class of Certificates that
entitles the holders thereof to a disproportionately small share of the
prepayments on the Mortgage Loans in the related Trust Fund increases the
likelihood of an extended average life of such Class ("Extension Risk") if the
rate of prepayment is relatively slow. As and to the extent described in the
related Prospectus Supplement, the respective entitlements of the various
Classes of Certificateholders of any Series to receive payments (and, in
particular, prepayments) of principal of the Mortgage Loans in the related Trust
Fund may vary based on the occurrence of certain events (e.g., the retirement of
one or more Classes of Certificates of such Series) or subject to certain
contingencies (e.g., prepayment and default rates with respect to such Mortgage
Loans).
A Series may include one or more Controlled Amortization Classes, which
will entitle the holders thereof to receive principal distributions according to
a specified principal payment schedule. Although prepayment risk cannot be
eliminated entirely for any Class of Certificates, a Controlled Amortization
Class will generally provide a relatively stable cash flow so long as the actual
rate of prepayment on the Mortgage Loans in the related Trust Fund remains
relatively constant at the rate, or within the range of rates, of prepayment
used to establish the specific principal payment schedule for such Certificates.
Prepayment risk with respect to a given Mortgage
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Asset Pool does not disappear, however, and the stability afforded to a
Controlled Amortization Class comes at the expense of one or more Companion
Classes of the same Series, any of which Companion Classes may also be a Class
of Offered Certificates. In general, and as more specifically described in the
related Prospectus Supplement, a Companion Class may entitle the holders thereof
to a disproportionately large share of prepayments on the Mortgage Loans in the
related Trust Fund when the rate of prepayment is relatively fast, and/or may
entitle the holders thereof to a disproportionately small share of prepayments
on the Mortgage Loans in the related Trust Fund when the rate of prepayment is
relatively slow. As and to the extent described in the related Prospectus
Supplement, a Companion Class absorbs some (but not all) of the Call Risk and/or
Extension Risk that would otherwise belong to the related Controlled
Amortization Class if all payments of principal of the Mortgage Loans in the
related Trust Fund were allocated on a pro rata basis.
Effect of Prepayments on Yield of Certificates
A Series may include one or more Classes of Offered Certificates
offered at a premium or discount. Yields on such Classes of Certificates will be
sensitive, and in some cases extremely sensitive, to prepayments on the Mortgage
Loans in the related Trust Fund and, where the amount of interest payable with
respect to a Class is disproportionately large, as compared to the amount of
principal, as with certain Classes of Stripped Interest Certificates, a holder
might fail to recover its original investment under some prepayment scenarios.
The extent to which the yield to maturity of any Class of Offered Certificates
may vary from the anticipated yield will depend upon the degree to which such
Certificates are purchased at a discount or premium and the amount and timing of
distributions thereon. An investor should consider, in the case of any Offered
Certificate purchased at a discount, the risk that a slower than anticipated
rate of principal payments on the Mortgage Loans could result in an actual yield
to such investor that is lower than the anticipated yield and, in the case of
any Offered Certificate purchased at a premium, the risk that a faster than
anticipated rate of principal payments could result in an actual yield to such
investor that is lower than the anticipated yield. See "Yield and Maturity
Considerations".
Limited Nature of Ratings
Any rating assigned by a Rating Agency to a Class of Offered
Certificates will reflect only its assessment of the likelihood that holders of
such Offered Certificates will receive payments to which such Certificateholders
are entitled under the related Pooling Agreement. Such rating will not
constitute an assessment of the likelihood that principal prepayments on the
related Mortgage Loans will be made, the degree to which the rate of such
prepayments might differ from that originally anticipated or the likelihood of
early optional termination of the related Trust Fund. Furthermore, such rating
will not address the possibility that prepayment of the related Mortgage Loans
at a higher or lower rate than anticipated by an investor may cause such
investor to experience a lower than anticipated yield or that an investor that
purchases an Offered Certificate at a significant premium might fail to recover
its initial investment under certain prepayment scenarios. Hence, a rating
assigned by a Rating Agency does not guarantee or ensure the realization of any
anticipated yield on a Class of Offered Certificates.
The amount, type and nature of Credit Support, if any, provided with
respect to a Series will be determined on the basis of criteria established by
each Rating Agency rating one or more Classes of the Certificates of such
Series. Those criteria are sometimes based upon an actuarial analysis of the
behavior of mortgage loans in a larger group. However, there can be no assurance
that the historical data supporting any such actuarial analysis will accurately
reflect future experience, or that the data derived from a large pool
of mortgage loans will accurately predict the delinquency, foreclosure or loss
experience of any particular pool of Mortgage Loans. In other cases, such
criteria may be based upon determinations of the values of the Mortgaged
Properties that provide security for the Mortgage Loans. However, no assurance
can be given that those values will not decline in the future. As a result,
the Credit Support required in respect of the Offered Certificates of any
Series
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may be insufficient to fully protect the holders thereof from losses on
the related Mortgage Asset Pool. See "Description of Credit Support" and
"Rating".
Certain Factors Affecting Delinquency, Foreclosure and Loss of the Mortgage
Loans
General. The payment performance of the Offered Certificates of any
Series will be directly related to the payment performance of the underlying
Mortgage Loans. Set forth below is a discussion of certain factors that will
affect the full and timely payment of the Mortgage Loans in any Trust Fund. In
addition, a description of certain material considerations associated with
investments in mortgage loans is included herein under "Certain Legal Aspects of
Mortgage Loans".
The Offered Certificates will be directly or indirectly backed by
mortgage loans secured by multifamily and/or commercial properties. Mortgage
loans made on the security of multifamily or commercial property may have a
greater likelihood of delinquency and foreclosure, and a greater likelihood of
loss in the event thereof, than loans made on the security of an owner-occupied
single-family property. See "Description of the Trust Funds--Mortgage
Loans--Default and Loss Considerations with Respect to the Mortgage Loans". The
ability of a borrower to repay a loan secured by an income-producing property
typically is dependent primarily upon the successful operation of such property
rather than upon the existence of independent income or assets of the borrower;
thus, the value of an income-producing property is directly related to the net
operating income derived from such property. If the net operating income of the
property is reduced (for example, if rental or occupancy rates decline or real
estate tax rates or other operating expenses increase), the borrower's ability
to repay the loan may be impaired. A number of the Mortgage Loans may be secured
by liens on owner-occupied Mortgaged Properties or on Mortgaged Properties
leased to a single tenant or a small number of significant tenants. Accordingly,
a decline in the financial condition of the borrower or a significant tenant, as
applicable, may have a disproportionately greater effect on the net operating
income from such Mortgaged Properties than would be the case with respect to
Mortgaged Properties with multiple tenants. Furthermore, the value of any
Mortgaged Property may be adversely affected by factors generally incident to
interests in real property, including changes in general or local economic
conditions and/or specific industry segments; declines in real estate values;
declines in rental or occupancy rates; increases in interest rates, real estate
tax rates and other operating expenses; increases in competition, changes in
governmental rules, regulations and fiscal policies, including environmental
legislation; natural disasters and civil disturbances such as earthquakes,
hurricanes, floods, eruptions or riots; and other circumstances, conditions or
events beyond the control of a borrower, a Master Servicer or a Special
Servicer.
Additional considerations may be presented by the type and use of a
particular Mortgaged Property. For instance, Mortgaged Properties that operate
as hospitals, nursing homes and other health care-related facilities, as well as
casinos, may present special risks to lenders due to the significant
governmental regulation of the ownership, operation, maintenance and/or
financing of such properties. Hotel, motel and restaurant properties are often
operated pursuant to franchise, management or operating agreements, which may be
terminable by the franchisor or operator. Moreover, the transferability of a
hotel's or restaurant's operating, liquor and other licenses upon a transfer of
the hotel or restaurant, as the case may be, whether through purchase or
foreclosure, is subject to local law requirements. Because of the nature of
their business, recreational and entertainment facilities (including arenas,
golf courses, marinas, ski resorts, amusement parks, movie theaters, bowling
alleys and similar type businesses), hotels and motels and restaurants will tend
to be adversely affected more quickly by a general economic downturn than other
types of commercial properties as potential patrons respond to having less
disposable income. In addition, marinas will be affected by various statutes and
government regulations that govern the use of, and construction on, rivers,
lakes and other waterways. Certain recreational properties, as well as certain
hotels and motels, may have seasonal fluctuations and/or may be adversely
affected by prolonged unfavorable weather conditions. Churches and other
religious facilities may be highly dependent on donations which are likely to
decline as economic conditions decline. Properties used as gas stations, dry
cleaners and
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industrial facilities may be more likely to have environmental issues. Many
types of commercial properties are not readily convertible to alternative uses
if the use for which any such property was originally intended is not
successful.
In addition, the concentration of default, foreclosure and loss risks
in individual Mortgage Loans in a particular Trust Fund will generally be
greater than for pools of single-family loans because Mortgage Loans in a Trust
Fund will generally consist of a smaller number of higher balance loans than
would a pool of single-family loans of comparable aggregate unpaid principal
balance.
Risks Particular to Multifamily Rental Properties. Adverse economic
conditions, either local, regional or national, may limit the amount of rent
that can be charged for rental units, may adversely affect tenants' ability to
pay rent and may result in a reduction in timely rent payments or a reduction in
occupancy levels without a corresponding decrease in expenses. Occupancy and
rent levels may also be affected by construction of additional housing units,
local military base closings, company relocations and closings and national and
local politics, including current or future rent stabilization and rent control
laws and agreements. Multifamily apartment units are typically leased on a
short-term basis, and consequently, the occupancy rate of a multifamily rental
property may be subject to rapid decline, including for some of the foregoing
reasons. In addition, the level of mortgage interest rates may encourage tenants
in multifamily rental properties to purchase single-family housing rather than
continue to lease housing or the characteristics of the neighborhood in which a
multifamily rental property is located may change over time in relation to newer
developments. Further, the cost of operating a multifamily rental property may
increase, including the cost of utilities and the costs of required capital
expenditures. Also, multifamily rental properties may be subject to rent control
laws which could impact the future cash flows of such properties.
Certain multifamily rental properties are eligible to receive
low-income housing tax credits pursuant to Section 42 of the Code ("Section 42
Properties"). However, rent limitations associated therewith may adversely
affect the ability of the applicable borrowers to increase rents to maintain
such Mortgaged Properties in proper condition during periods of rapid inflation
or declining market value of such Mortgaged Properties. In addition, the income
restrictions on tenants imposed by Section 42 of the Code may reduce the number
of eligible tenants in such Mortgaged Properties and result in a reduction in
occupancy rates applicable thereto. Furthermore, some eligible tenants may not
find any differences in rents between the Section 42 Properties and other
multifamily rental properties in the same area to be a sufficient economic
incentive to reside at a Section 42 Property, which may have fewer amenities or
otherwise be less attractive as a residence. Additionally, the characteristics
of a neighborhood may change over time or in relation to newer developments. All
of these conditions and events may increase the possibility that a borrower may
be unable to meet its obligations under its Mortgage Loan.
Risks Particular to Cooperatively-Owned Apartment Buildings. Generally,
a tenant-shareholder of a cooperative corporation must make a monthly
maintenance payment to the cooperative corporation that owns the subject
apartment building representing such tenant-shareholder's pro rata share of the
corporation's payments in respect of the Mortgage Loan secured by, and all real
property taxes, maintenance expenses and other capital and ordinary expenses
with respect to, such property, less any other income that the cooperative
corporation may realize. Adverse economic conditions, either local regional or
national, may adversely affect tenant-shareholders' ability to make required
maintenance payments, either because such adverse economic conditions have
impaired the individual financial conditions of such tenant-shareholders
or their ability to sub-let the subject apartments. To the extent that a large
number of tenant-shareholders in a cooperatively-owned apartment building rely
on subletting their apartments to make maintenance payments, the lender on any
mortgage loan secured by such building will be subject to all the risks that it
would have in connection with lending on the security of a multifamily rental
property. See "--Risks Particular to Multifamily Rental Properties" above. In
addition, if in connection with any cooperative conversion of an apartment
building, the sponsor holds the shares allocated to a large number
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of the apartment units, any lender secured by a mortgage on such building will
be subject to a risk associated with such sponsor's creditworthiness.
Risks Particular to Retail Sales and Service Properties. In addition to
risks generally associated with real estate, Retail Sales and Service Properties
(as defined herein) are also affected significantly by adverse changes in
consumer spending patterns, local competitive conditions (such as the supply of
retail space or the existence or construction of new competitive shopping
centers, malls or individual stores, shops and consumer oriented businesses),
alternative forms of retailing (such as direct mail, video shopping networks and
selling through the Internet, which reduce the need for retail space by retail
companies), the quality and management philosophy of management, the
attractiveness of the properties and the surrounding neighborhood to tenants and
their customers, the public perception of the safety of customers (at shopping
centers and malls, for example) and the need to make major repairs or
improvements to satisfy the needs of major tenants.
Retail Sales and Service Properties may be adversely affected if a
significant tenant ceases operations at such locations (which may occur on
account of a voluntary decision not to renew a lease, bankruptcy or insolvency
of such tenant, such tenant's general cessation of business activities or for
other reasons). Significant tenants at a retail property play an important part
in generating customer traffic and making a retail property a desirable location
for other tenants at such property. In addition, certain tenants at retail
properties may be entitled to terminate their leases if an anchor tenant ceases
operations at such property. In such cases, there can be no assurance that any
such anchor tenants will continue to occupy space in the related shopping
centers.
Risks Particular to Hospitality Properties. Hospitality properties are
subject to operating risks common to the lodging industry. These risks include,
among other things, a high level of continuing capital expenditures to keep
necessary furniture, fixtures and equipment updated, competition from other
hospitality properties, increases in operating costs (which increases may not
necessarily in the future be offset by increased room rates), dependence on
business and commercial travelers and tourism, increases in energy costs and
other expenses of travel and adverse effects of general and local economic
conditions. These factors could adversely affect the related borrower's ability
to make payments on the related Mortgage Loans. Since limited service hotels and
motels are relatively quick and inexpensive to construct and may quickly reflect
a positive value, an over-building of such hotels and motels could occur in any
given region, which would likely adversely affect occupancy and daily room
rates. Further, because rooms at hospitality properties are generally rented for
short periods of time, such properties tend to be more sensitive to adverse
economic conditions and competition than many other types of commercial
properties. Additionally, the revenues of certain hospitality properties,
particularly those located in regions whose economies depend upon tourism, may
be highly seasonal in nature.
A hospitality property may present additional risks as compared to
other commercial property types in that: (i) hospitality properties may be
operated pursuant to franchise, management and operating agreements that may be
terminable by the franchisor, the manager or the operator; (ii) the
transferability of any operating, liquor and other licenses to the entity
acquiring a hospitality property (either through purchase or foreclosure) is
subject to local law requirements; (iii) it may be difficult to terminate an
ineffective operator of a hospitality property subsequent to a foreclosure of
such property; and (iv) future occupancy rates may be adversely affected by,
among other factors, any negative perception of a hospitality property based
upon its historical reputation.
Hospitality properties may be operated pursuant to franchise
agreements. The continuation of franchises is typically subject to specified
operating standards and other terms and conditions. The franchisor periodically
inspects its licensed properties to confirm adherence to its operating
standards. The failure of the hospitality property to maintain such standards or
adhere to such other terms and conditions could result in the loss or
cancellation of the franchise license. It is possible that the franchisor could
condition the continuation of a franchise license on the completion of capital
improvements or the making of certain capital expenditures that the related
borrower determines are too expensive or are otherwise unwarranted in light of
general economic
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conditions or the operating results or prospects of the affected hospitality
properties. In that event, the related borrower may elect to allow the franchise
license to lapse. In any case, if the franchise is terminated, the related
borrower may seek to obtain a suitable replacement franchise or to operate any
such hospitality property independently of a franchise license. The loss of a
franchise license could have a material adverse effect upon the operations or
the underlying value of the hospitality property covered by the franchise
because of the loss of associated name recognition, marketing support and
centralized reservation systems provided by the franchisor.
Risks Particular to Office Properties. In addition to risks generally
associated with real estate, Mortgage Loans secured by office properties are
also affected significantly by adverse changes in population and employment
growth (which generally creates demand for office space), local competitive
conditions (such as the supply of office space or the existence or construction
of new competitive office buildings), the quality and management philosophy of
management, the attractiveness of the properties to tenants and their customers
or clients, the attractiveness of the surrounding neighborhood and the need to
make major repairs or improvements to satisfy the needs of major tenants. Office
properties that are not equipped to accommodate the needs of modern business may
become functionally obsolete and thus noncompetitive. In addition, office
properties may be adversely affected by an economic decline in the business
operated by their tenants. Such decline may result in one or more significant
tenants ceasing operations at such locations (which may occur on account of a
voluntary decision not to renew a lease, bankruptcy or insolvency of such
tenants, such tenants' general cessation of business activities or for other
reasons). The risk of such an economic decline is increased if revenue is
dependent on a single tenant or if there is a significant concentration of
tenants in a particular business or industry.
Limited Recourse Nature of the Mortgage Loans. It is anticipated that
some or all of the Mortgage Loans included in any Trust Fund will be nonrecourse
loans or loans for which recourse may be restricted or unenforceable. As to any
such Mortgage Loan, recourse in the event of borrower default will be limited to
the specific real property and other assets, if any, that were pledged to secure
the Mortgage Loan. However, even with respect to those Mortgage Loans that
provide for recourse against the borrower and its assets generally, there can be
no assurance that enforcement of such recourse provisions will be practicable,
or that the assets of the borrower will be sufficient to permit a recovery in
respect of a defaulted Mortgage Loan in excess of the liquidation value of the
related Mortgaged Property. See "Certain Legal Aspects of Mortgage
Loans-Foreclosure--Anti-Deficiency Legislation".
Dependence on Management. In general, a Mortgaged Property will be
managed by a manager (which may be the borrower or an affiliate of the
borrower), which is responsible for responding to changes in the local market
for the facilities offered at the property, planning and implementing the rental
or pricing structure, including staggering durations of leases and establishing
levels of rent payments, and causing maintenance and capital improvements to be
carried out in a timely fashion. Management errors may adversely affect the
long-term viability of a Mortgaged Property. In the case of certain Trust Funds,
multiple Mortgaged Properties may be managed by the same property manager. A
concentration of property management of Mortgaged Properties securing or
underlying the Mortgage Assets in any Trust Fund will increase the risk that the
poor performance of a single property manager will have widespread effect on the
related Mortgage Asset Pool.
Dependence on Tenants. In most cases, the Mortgaged Properties will be
subject to leases, and the related borrowers will rely on periodic lease or
rental payments from tenants to pay for maintenance and other operating expenses
of such Mortgaged Properties, to fund capital improvements at such Mortgaged
Properties and to service the related Mortgage Loans and any other outstanding
debt or obligations they may have outstanding. Generally, there will be existing
leases that expire during the term of the related Mortgage Loans. There can be
no guaranty that tenants will renew leases upon expiration or, in the case of a
commercial tenant, that it will continue operations throughout the term of its
lease. Such borrowers' income would be adversely affected if tenants were unable
to pay rent, if space were unable to be rented on favorable terms or at all, or
if a
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significant tenant were to become a debtor in a bankruptcy case under the
United States Bankruptcy Code. For example, if any such borrower were to relet
or renew the existing leases for a significant amount of retail or office space
at rental rates significantly lower than expected rates, then such borrower's
funds from operations may be adversely affected. Changes in payment patterns by
tenants may result from a variety of social, legal and economic factors,
including, without limitation, the rate of inflation and unemployment levels
and may be reflected in the rental rates offered for comparable space. In
addition, upon reletting or renewing existing leases at commercial properties,
borrowers will likely be required to pay leasing commissions and tenant
improvement costs which may adversely affect cash flow from the related
Mortgaged Property. There can be no assurances whether, or to what extent,
economic, legal or social factors will affect future rental or repayment
patterns.
In the case of Mortgaged Properties used for certain commercial
purposes, the performance and liquidation value of such properties may be
dependent upon the business operated by tenants, the creditworthiness of such
tenants and/or the number of tenants. In some cases, a single tenant or a
relatively small number of tenants may account for all or a disproportionately
large share of the rentable space or rental income of a Mortgaged Property.
Accordingly, a decline in the financial condition of a significant or sole
tenant, as the case may be, or other adverse circumstances of such a tenant
(such as bankruptcy or insolvency), may have a disproportionately greater effect
on the net operating income derived from such property than would be the case if
rentable space or rental income were more evenly distributed among a greater
number of tenants at such property.
Property Location and Condition. The location and construction quality
of a particular Mortgaged Property may affect the occupancy level as well as the
rents that may be charged. The characteristics of an area or neighborhood in
which a Mortgaged Property is located may change over time or in relation to
competing facilities. The effects of poor construction quality will increase
over time in the form of increased maintenance and capital improvements. Even
good construction will deteriorate over time if the management company does not
schedule and perform adequate maintenance in a timely fashion. Although the
Master Servicer or the Special Servicer, as applicable, generally will be
required to inspect the related Mortgaged Properties (but not mortgaged
properties securing mortgage loans underlying MBS) periodically, there can be no
assurance that such inspections will detect damage or prevent a default.
Competition. Other comparable multifamily/commercial properties located
in the same areas will compete with the Mortgaged Properties to attract
residents, retail sellers, tenants, customers, patients and/or guests. The
leasing of real estate is highly competitive. The principal means of competition
are price, location and the nature and condition of the facility to be leased. A
mortgagor competes with all lessors and developers of comparable types of real
estate in the area in which the related Mortgaged Property is located. Such
lessors or developers could have lower rents, lower operating costs, more
favorable locations or better facilities. While a mortgagor may renovate,
refurbish or expand the related Mortgaged Property to maintain such Mortgaged
Property and remain competitive, such renovation, refurbishment or expansion may
itself entail significant risks. Increased competition could adversely affect
income from and the market value of the Mortgaged Properties. In addition, the
business conducted at each Mortgaged Property may face competition from other
industries and industry segments.
Changes in Laws. Increases in income, service or other taxes (other
than real estate taxes) in respect of a Mortgaged Property generally are not
passed through to tenants under leases and may adversely affect the related
mortgagor's funds from operations. Similarly, changes in laws increasing the
potential liability for environmental conditions existing on a Mortgaged
Property or increasing the restrictions on discharges or other conditions may
result in significant unanticipated expenditures, which could adversely affect
the related mortgagor's funds from operations. See "--Risks of Liability Arising
From Environmental Conditions" herein. In the case of properties used as
casinos, gambling could become prohibited in the relevant jurisdiction.
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Litigation. There may be legal proceedings pending and, from time to
time, threatened against certain mortgagors under the Mortgage Loans, managers
of the Mortgaged Properties and their respective affiliates arising out of the
ordinary business of such mortgagors, managers and affiliates. There can be no
assurance that such litigation may not have a material adverse effect on
distributions to Certificateholders of the related Trust Fund.
Limitations on Enforceability of Assignments of Leases and Rents. In
general, any Mortgage Loan that is secured by a Mortgaged Property subject to
leases, will be secured by an assignment of leases and rents pursuant to which
the borrower assigns to the lender its right, title and interest as landlord
under the leases of the related Mortgaged Property, and the income derived
therefrom, as further security for the related Mortgage Loan, while retaining a
license to collect rents for so long as there is no default. If the borrower
defaults, the license terminates and the lender is entitled to collect rents.
Some state laws may require that the lender take possession of the 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 borrower, the lender's ability to collect
the rents may be adversely affected. See "Certain Legal Aspects of Mortgage
Loans--Leases and Rents".
Limitations on Enforceability of Cross-Collateralization. A Mortgage
Asset Pool may include groups of Mortgage Loans which are cross-collateralized
and cross-defaulted. These arrangements are designed primarily to ensure that
all of the collateral pledged to secure the respective Mortgage Loans in a
cross-collateralized group, and the cash flows generated thereby, are available
to support debt service on, and ultimate repayment of, the aggregate
indebtedness evidenced by those Mortgage Loans. These arrangements thus seek to
reduce the risk that the inability of one or more of the Mortgaged Properties
securing any such group of Mortgage Loans to generate net operating income
sufficient to pay debt service will result in defaults and ultimate losses.
There may not be complete identity of ownership of the Mortgaged
Properties securing a group of cross-collateralized Mortgage Loans. In such an
instance, creditors of one or more of the related borrowers could challenge the
cross-collateralization arrangement as a fraudulent conveyance. Generally, under
federal and state fraudulent conveyance statutes, the incurring of an obligation
or the transfer of property by a person will be subject to avoidance under
certain circumstances if the person did not receive fair consideration or
reasonably equivalent value in exchange for such obligation or transfer and was
then insolvent or was rendered insolvent by such obligation or transfer.
Accordingly, a creditor seeking to realize against a Mortgaged Property subject
to such cross-collateralization to repay such creditor's claim against the
related borrower could assert (i) that such borrower was insolvent at the time
the cross-collateralized Mortgage Loans were made and (ii) that such borrower
did not, when it allowed its property to be encumbered by a lien securing the
indebtedness represented by the other Mortgage Loans in the group of
cross-collateralized Mortgage Loans, receive fair consideration or reasonably
equivalent value for, in effect, "guaranteeing" the performance of the other
borrowers. Although the borrower making such "guarantee" will be receiving
"guarantees" from each of the other borrowers in return, there can be no
assurance that such exchanged "guarantees" would be found to constitute fair
consideration or be of reasonably equivalent value, and no unqualified legal
opinion to that effect will be obtained.
The cross-collateralized Mortgage Loans constituting any group thereof
may be secured by mortgage liens on Mortgaged Properties located in different
states. Because of various state laws governing foreclosure or the exercise of a
power of sale, and because, in general, foreclosure actions are brought in state
court, and the courts of one state cannot exercise jurisdiction over property in
another state, it may be necessary upon a default under any such Mortgage Loan
to foreclose on the related Mortgaged Properties in a particular order rather
than simultaneously in order to ensure that the lien of the related Mortgages is
not impaired or released.
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Increased Risk of Default Associated With Balloon Payments. Certain of
the Mortgage Loans included in a Trust Fund may be nonamortizing or only
partially amortizing over their terms to maturity and, thus, will require
substantial payments of principal and interest (that is, balloon payments) at
their stated maturity. Mortgage Loans of this type involve a greater likelihood
of default than self-amortizing loans because the ability of a borrower to make
a balloon payment typically will depend upon its ability either to refinance the
loan or to sell the related Mortgaged Property. The ability of a borrower to
accomplish either of these goals will be affected by a number of factors,
including the value of the related Mortgaged Property, the level of available
mortgage rates at the time of sale or refinancing, the borrower's equity in the
related Mortgaged Property, the financial condition and operating history of the
borrower and the related Mortgaged Property, tax laws, rent control laws (with
respect to certain residential properties), Medicaid and Medicare reimbursement
rates (with respect to hospitals and nursing homes), prevailing general economic
conditions and the availability of credit for loans secured by multifamily or
commercial, as the case may be, real properties generally. Neither the Depositor
nor any of its affiliates will be required to refinance any Mortgage Loan.
If and to the extent described herein and in the related Prospectus
Supplement, in order to maximize recoveries on defaulted Mortgage Loans, the
Master Servicer or the Special Servicer will be permitted (within prescribed
limits) to extend and modify Mortgage Loans that are in default or as to which a
payment default is imminent. See "Description of the Pooling
Agreements--Realization Upon Defaulted Mortgage Loans". While the Master
Servicer or the Special Servicer generally will be required to determine that
any such extension or modification is reasonably likely to produce a greater
recovery than liquidation, taking into account the time value of money, there
can be no assurance that any such extension or modification will in fact
increase the present value of receipts from or proceeds of the affected Mortgage
Loans.
Limitations on Enforceability of Due-on-Sale and Debt-Acceleration
Clauses. Mortgages may contain a due-on- sale clause, which permits the lender
to accelerate the maturity of the Mortgage Loan if the borrower sells, transfers
or conveys the related Mortgaged Property or its interest in the Mortgaged
Property. Mortgages also may include a debt-acceleration clause, which permits
the lender to accelerate the debt upon a monetary or nonmonetary default of the
mortgagor. Such clauses are generally enforceable subject to certain exceptions.
The courts of all states will enforce clauses providing for acceleration in the
event of a material payment default. The equity courts of any state, however,
may refuse the foreclosure of a mortgage or deed of trust when an acceleration
of the indebtedness would be inequitable or unjust or the circumstances would
render the acceleration unconscionable.
Risk of Liability Arising From Environmental Conditions. Under the laws
of certain states, contamination of real property may give rise to a lien on the
property to assure the costs of cleanup. In several states, such a lien has
priority over an existing mortgage lien on such property. In addition, under the
laws of some states and under the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, a lender may be liable, as
an "owner" or "operator", for costs of addressing releases or threatened
releases of hazardous substances at a property, if agents or employees of the
lender have become sufficiently involved in the operations of the borrower,
regardless of whether the environmental damage or threat was caused by the
borrower or a prior owner. A lender also risks such liability on foreclosure of
the mortgage. Unless otherwise specified in the related Prospectus Supplement,
if a Trust Fund includes Mortgage Loans, then the related Pooling Agreement will
contain provisions generally to the effect that neither the Master Servicer nor
the Special Servicer may, on behalf of the Trust Fund, acquire title to a
Mortgaged Property or assume control of its operation unless the Special
Servicer, based upon a report prepared by a person who regularly conducts
environmental site assessments, has made the determination that it is
appropriate to do so, as described under "Description of the Pooling
Agreements--Realization Upon Defaulted Mortgage Loans". See "Certain Legal
Aspects of Mortgage Loans--Environmental Considerations".
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Lack of Insurance Coverage for Certain Special Hazard Losses. Unless
otherwise specified in a Prospectus Supplement, the Master Servicer and Special
Servicer for the related Trust Fund will be required to cause the borrower on
each Mortgage Loan in such Trust Fund to maintain such insurance coverage in
respect of the related Mortgaged Property as is required under the related
Mortgage, including hazard insurance; provided that, as and to the extent
described herein and in the related Prospectus Supplement, each of the Master
Servicer and the Special Servicer may satisfy its obligation to cause hazard
insurance to be maintained with respect to any Mortgaged Property through
acquisition of a blanket policy. In general, the standard form of fire and
extended coverage policy covers physical damage to or destruction of the
improvements of the property by fire, lightning, explosion, smoke, windstorm and
hail, and riot, strike and civil commotion, subject to the conditions and
exclusions specified in each policy. Although the policies covering the
Mortgaged Properties will be underwritten by different insurers under different
state laws in accordance with different applicable state forms, and therefore
will not contain identical terms and conditions, most such policies typically do
not cover any physical damage resulting from war, revolution, governmental
actions, floods and other water-related causes, earth movement (including
earthquakes, landslides and mudflows), wet or dry rot, vermin, domestic animals
and certain other kinds of risks. Unless the related Mortgage specifically
requires the mortgagor to insure against physical damage arising from such
causes, then, to the extent any consequent losses are not covered by Credit
Support, such losses may be borne, at least in part, by the holders of one or
more Classes of Offered Certificates of the related Series.
See "Description of the Pooling Agreements--Hazard Insurance Policies".
Risks of Geographic Concentration. Certain geographic regions of the
United States from time to time will experience weaker regional economic
conditions and housing markets, and, consequently, will experience higher rates
of loss and delinquency than will be experienced on mortgage loans generally.
For example, a region's economic condition and housing market may be directly,
or indirectly, adversely affected by natural disasters or civil disturbances
such as earthquakes, hurricanes, floods, eruptions or riots. The economic impact
of any of these types of events may also be felt in areas beyond the region
immediately affected by the disaster or disturbance. The Mortgage Loans
underlying certain Series may be concentrated in these regions, and such
concentration may present risk considerations in addition to those generally
present for similar mortgage-backed securities without such concentration.
Inclusion of Delinquent and Nonperforming Mortgage Loans in a Mortgage Asset
Pool
If so provided in the related Prospectus Supplement, the Trust Fund for
a particular Series may include Mortgage Loans that are past due or are
nonperforming. If so specified in the related Prospectus Supplement, the
servicing of such Mortgage Loans will be performed by the Special Servicer;
however, the same entity may act as both Master Servicer and Special Servicer.
Credit Support provided with respect to a particular Series may not cover all
losses related to such delinquent or nonperforming Mortgage Loans, and investors
should consider the risk that the inclusion of such Mortgage Loans in the Trust
Fund may adversely affect the rate of defaults and prepayments in respect of the
subject Mortgage Asset Pool and the yield on the Offered Certificates of such
Series. See "Description of the Trust Funds--Mortgage Loans--General".
Federal Tax Considerations Regarding REMIC Residual Certificates
Holders of REMIC Residual Certificates will be required to report on
their federal income tax returns as ordinary income their pro rata share of the
taxable income of the related REMIC, regardless of the amount or timing of their
possible receipt of cash payments, if any, from such REMIC, as described under
"Federal Income Tax Consequences--REMICs". REMIC Residual Certificates may have
"phantom income" associated with them. That is, taxable income may be reportable
with respect to a REMIC Residual Certificate early in the term of the related
REMIC with a corresponding amount of tax losses reportable in later years of
that REMIC's term. Under these circumstances, the present value of the tax
detriments with respect to the related REMIC Residual Certificate may
significantly exceed the present value of the related tax benefits accruing
later. Therefore,
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the after-tax yield on a REMIC Residual Certificate may be significantly less
than that of a corporate bond or stripped instrument having similar cash flow
characteristics, and certain REMIC Residual Certificates may have a negative
"value". The requirement that holders of REMIC Residual Certificates report
their pro rata share of the taxable income and net loss of the related REMIC
will continue until the Certificate Principal Balances of all Certificates of
the related Series have been reduced to zero. All or a portion of such
Certificateholder's share of the related REMIC's taxable income may be treated
as "excess inclusion" income to such holder, which (i) generally will not be
subject to offset by losses from other activities, (ii) for a tax-exempt holder,
will be treated as unrelated business taxable income and (iii) for a foreign
holder, will not qualify for exemption from withholding tax. Moreover, because
an amount of gross income equal to the fees and non-interest expenses of each
REMIC will be allocated to the REMIC Residual Certificates, but such expenses
will be deductible by holders of REMIC Residual Certificates who are individuals
only as miscellaneous itemized deductions, REMIC Residual Certificates will
generally not be appropriate investments for individuals, estates or trusts or
for pass-through entities (including partnerships and S corporations)
beneficially owned by, or having as partners or shareholders, one or more
individuals, estates or trusts. In addition, REMIC Residual Certificates are
subject to certain restrictions on transfer, including, but not limited to
prohibition on transfers to investors that are not U.S. persons. See "Federal
Income Tax Consequences" and "REMICs - Taxation of Owners of REMIC Residual
Certificates".
Book-Entry Registration
If so provided in the related Prospectus Supplement, one or more
Classes of the Offered Certificates of any Series will be issued as Book-Entry
Certificates. Each Class of Book-Entry Certificates will be initially
represented by one or more Certificates registered in the name of a nominee for
DTC. As a result, unless and until corresponding Definitive Certificates are
issued, the Certificate Owners with respect to any Class of Book-Entry
Certificates will be able to exercise the rights of Certificateholders only
indirectly through DTC and its participating organizations ("DTC Participants").
In addition, the access of Certificate Owners to information regarding the
Book-Entry Certificates in which they hold interests may be limited.
Conveyance of notices and other communications by DTC to DTC Participants, and
directly and indirectly through such DTC Participants to Certificate Owners,
will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time. Furthermore, as
described herein, Certificate Owners may suffer delays in the receipt of
payments on the Book-Entry Certificates, and the ability of any Certificate
Owner to pledge or otherwise take actions with respect to its interest in the
Book-Entry Certificates may be limited due to the lack of physical certificate
evidencing such interest. See "Description of the Certificates--Book-Entry
Registration and Definitive Certificates".
Potential Conflicts of Interest
If so specified in the related Prospectus Supplement, the Master
Servicer may also perform the duties of Special Servicer, and the Master
Servicer, the Special Servicer or the Trustee may also perform the duties of
REMIC Administrator and/or MBS Administrator, as applicable. If so specified in
the related Prospectus Supplement, an affiliate of the Depositor, or the
Mortgage Asset Seller or an affiliate thereof, may perform the functions of
Master Servicer, Special Servicer, REMIC Administrator and/or MBS Administrator,
as applicable. In addition, any party to a Pooling Agreement or any affiliate
thereof may own Certificates. Investors in the Offered Certificates should
consider that any resulting conflicts of interest could affect the performance
of duties under the related Pooling Agreement. For example, if the Master
Servicer or Special Servicer for any Trust Fund owns a significant portion of
any Class of Certificates of the related Series, then, notwithstanding the
applicable servicing standard imposed by the related Pooling Agreement, such
fact could influence servicing decisions in respect of the Mortgage Loans in
such Trust Fund. Also, if specified in the related Prospectus Supplement, the
holders of a specified Class or Classes of Subordinate Certificates may have the
ability to replace the Special Servicer or direct the Special Servicer's actions
in connection with liquidating or modifying defaulted Mortgage
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Loans. Investors in such specified Class or Classes of Subordinate Certificates
may have interests when dealing with defaulted Mortgage Loans that are in
conflict with those of the holders of the Offered Certificates of the same
Series.
Termination
If so provided in the related Prospectus Supplement, upon a specified
date or upon the reduction of the aggregate Certificate Principal Balance of a
specified Class or Classes of Certificates to a specified amount, a party
designated therein may be authorized or required to solicit bids for the
purchase of all the Mortgage Assets of the related Trust Fund, or of a
sufficient portion of such Mortgage Assets to retire such Class or Classes,
under the circumstances and in the manner set forth therein. The solicitation of
bids will be conducted in a commercially reasonable manner and, generally,
assets will be sold at their fair market value. In addition, if so specified in
the related Prospectus Supplement, upon the reduction of the aggregate principal
balance of some or all of the Mortgage Assets to a specified amount, a party or
parties designated therein may be authorized to purchase such Mortgage Assets,
generally at a price equal to, in the case of any Mortgage Asset, the unpaid
principal balance thereof plus accrued interest (or, in some cases, at fair
market value). However, circumstances may arise in which such fair market value
may be less than the unpaid balance of the related Mortgage Assets sold or
purchased, together with interest thereon, and therefore, as a result of such a
sale or purchase, the Certificateholders of one or more Classes of Certificates
may receive an amount less than the aggregate Certificate Principal Balance of,
and accrued unpaid interest on, their Certificates. See "Description of the
Certificates--Termination".
DESCRIPTION OF THE TRUST FUNDS
General
The primary assets of each Trust Fund will consist of (i) various types
of multifamily or commercial mortgage loans ("Mortgage Loans"), (ii) mortgage
participations, pass-through certificates, collateralized mortgage obligations
or other mortgage-backed securities ("MBS") that evidence interests in, or that
are secured by pledges of, one or more of various types of multifamily or
commercial mortgage loans or (iii) a combination of Mortgage Loans and MBS
(collectively, "Mortgage Assets"). Each Trust Fund will be established by the
Depositor. Each Mortgage Asset will be selected by the Depositor for inclusion
in a Trust Fund from among those purchased, either directly or indirectly, from
a prior holder thereof (a "Mortgage Asset Seller"), which prior holder may or
may not be the originator of such Mortgage Loan or the issuer of such MBS. The
Mortgage Assets will not be guaranteed or insured by the Depositor or any of its
affiliates or, unless otherwise provided in the related Prospectus Supplement,
by any governmental agency or instrumentality or by any other person. The
discussion below under the heading "--Mortgage Loans", unless otherwise noted,
applies equally to mortgage loans underlying any MBS included in a particular
Trust Fund.
Mortgage Loans
General. The Mortgage Loans will be evidenced by promissory notes (the
"Mortgage Notes") and secured by mortgages, deeds of trust or similar security
instruments (the "Mortgages") that create first or junior liens on, or security
interests in, fee or leasehold estates in, or cooperative shares with respect
to, properties (the "Mortgaged Properties") consisting of one or more of the
following types of real property: (i) residential properties ("Multifamily
Properties") consisting of rental or cooperatively-owned buildings with multiple
dwelling units, manufactured housing communities and mobile home parks; (ii)
commercial properties ("Commercial Properties") consisting of office buildings,
properties related to the sale of consumer goods and other products (such as
shopping centers, malls, factory outlet centers, automotive sales centers and
individual stores, shops and businesses related to sales of consumer goods and
other products, including individual
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department stores and other retail stores, grocery stores, specialty shops,
convenience stores and gas stations), properties related to providing
entertainment, recreation and personal services (such as movie theaters, fitness
centers, bowling alleys, salons, dry cleaners and automotive service centers),
hospitality properties (such as hotels, motels and other lodging facilities),
casinos, health care-related facilities (such as hospitals, skilled nursing
facilities, nursing homes, congregate care facilities and, in some cases, senior
housing), recreational and resort properties (such as recreational vehicle
parks, golf courses, marinas, ski resorts, amusement parks and other
recreational properties), arenas, storage properties (such as warehouse
facilities, mini-warehouse facilities and self-storage facilities), industrial
facilities, parking lots and garages, churches and other religious facilities,
and restaurants; and (iii) mixed use properties (that is, any combination of the
foregoing) and unimproved land. The Mortgaged Properties may include commercial
and/or residential structures owned by private cooperative corporations
("Cooperatives"). Unless otherwise specified in the related Prospectus
Supplement, each Mortgage will create a first priority mortgage lien on a fee
estate in a Mortgaged Property. If a Mortgage creates a lien on a borrower's
leasehold estate in a property, then, unless otherwise specified in the related
Prospectus Supplement, the term of any such leasehold (together with any
extension options) will exceed the term of the Mortgage Note by at least ten
years. Unless otherwise specified in the related Prospectus Supplement, each
Mortgage Loan will have been originated by a person (the "Originator") other
than the Depositor.
If so provided in the related Prospectus Supplement, Mortgage Assets
for a Series may include Mortgage Loans secured by junior liens, and the loans
secured by the related senior liens ("Senior Liens") may not be included in the
Mortgage Asset Pool. The primary risk to holders of Mortgage Loans secured by
junior liens is the possibility that adequate funds will not be received in
connection with a foreclosure of the related Senior Liens to satisfy fully both
the Senior Liens and the Mortgage Loan. In the event that a holder of a Senior
Lien forecloses on a Mortgaged Property, the proceeds of the foreclosure or
similar sale will be applied first to the payment of court costs and fees in
connection with the foreclosure, second to real estate taxes, third in
satisfaction of all principal, interest, prepayment or acceleration penalties,
if any, and any other sums due and owing to the holder of the Senior Liens. The
claims of the holders of the Senior Liens will be satisfied in full out of
proceeds of the liquidation of the related Mortgaged Property, if such proceeds
are sufficient, before the Trust Fund as holder of the junior lien receives any
payments in respect of the Mortgage Loan. If the Master Servicer were to
foreclose on any Mortgage Loan, it would do so subject to any related Senior
Liens. In order for the debt related to such Mortgage Loan to be paid in full at
such sale, a bidder at the foreclosure sale of such Mortgage Loan would have to
bid an amount sufficient to pay off all sums due under the Mortgage Loan and any
Senior Liens or purchase the Mortgaged Property subject to such Senior Liens. In
the event that such proceeds from a foreclosure or similar sale of the related
Mortgaged Property are insufficient to satisfy all Senior Liens and the Mortgage
Loan in the aggregate, the Trust Fund, as the holder of the junior lien, and,
accordingly, holders of one or more Classes of the Certificates of the related
Series bear (i) the risk of delay in distributions while a deficiency judgment
against the borrower is obtained and (ii) the risk of loss if the deficiency
judgment is not obtained and satisfied. Moreover, deficiency judgments may not
be available in certain jurisdictions, or the particular Mortgage Loan may be a
nonrecourse loan, which means that, absent special facts, recourse in the case
of default will be limited to the Mortgaged Property and such other assets, if
any, that were pledged to secure repayment of the Mortgage Loan.
If so specified in the related Prospectus Supplement, the Mortgage
Assets for a particular Series may include Mortgage Loans that are delinquent or
nonperforming as of the date such Certificates are issued. In that case, the
related Prospectus Supplement will set forth, as to each such Mortgage Loan,
available information as to the period of such delinquency or nonperformance,
any forbearance arrangement then in effect, the condition of the related
Mortgaged Property and the ability of the Mortgaged Property to generate income
to service the mortgage debt.
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Mortgage Loans Secured by Multifamily Rental Properties. Significant
factors determining the value and successful operation of a multifamily rental
property are the location of the property, the number of competing residential
developments in the local market (such as apartment buildings, manufactured
housing communities and site-built single family homes), the physical attributes
of the multifamily building (such as its age and appearance) and state and local
regulations affecting such property. In addition, the successful operation of an
apartment building will depend upon other factors such as its reputation, the
ability of management to provide adequate maintenance and insurance, and the
types of services it provides.
Certain states regulate the relationship of an owner and its tenants.
Commonly, these laws require a written lease, good cause for eviction,
disclosure of fees, and notification to residents of changed land use, while
prohibiting unreasonable rules, retaliatory evictions, and restrictions on a
resident's choice of unit vendors. Apartment building owners have been the
subject of suits under state "Unfair and Deceptive Practices Acts" and other
general consumer protection statutes for coercive, abusive or unconscionable
leasing and sales practices. A few states offer more significant protection. For
example, there are provisions that limit the basis on which a landlord may
terminate a tenancy or increase its rent or prohibit a landlord from terminating
a tenancy solely by reason of the sale of the owner's building.
In addition to state regulation of the landlord-tenant relationship,
numerous counties and municipalities impose rent control on apartment buildings.
These ordinances may limit rent increases to fixed percentages, to percentages
of increases in the consumer price index, to increases set or approved by a
governmental agency, or to increases determined through mediation or binding
arbitration. In many cases, the rent control laws do not provide for decontrol
of rental rates upon vacancy of individual units. Any limitations on a
borrower's ability to raise property rents may impair such borrower's ability to
repay its Mortgage Loan from its net operating income or the proceeds of a sale
or refinancing of the related Mortgaged Property.
Adverse economic conditions, either local, regional or national, may
limit the amount of rent that can be charged, may adversely affect tenants'
ability to pay rent and may result in a reduction in timely rent payments or a
reduction in occupancy levels. Occupancy and rent levels may also be affected by
construction of additional housing units, local military base closings, company
relocations and closings and national and local politics, including current or
future rent stabilization and rent control laws and agreements. Multifamily
apartment units are typically leased on a short-term basis, and consequently,
the occupancy rate of a multifamily rental property may be subject to rapid
decline, including for some of the foregoing reasons. In addition, the level of
mortgage interest rates may encourage tenants to purchase single-family housing
rather than continue to lease housing. The location and construction quality of
a particular building may affect the occupancy level as well as the rents that
may be charged for individual units. The characteristics of a neighborhood may
change over time or in relation to newer developments.
Mortgage Loans Secured by Cooperatively-Owned Apartment Buildings. A
cooperative apartment building and the land under the building are owned or
leased by a non-profit cooperative corporation. The cooperative corporation is
in turn owned by tenant-shareholders who, through ownership of stock, shares or
membership certificates in the corporation, receive proprietary leases or
occupancy agreements which confer exclusive rights to occupy specific apartments
or units. Generally, a tenant-shareholder of a cooperative corporation must make
a monthly maintenance payment to the corporation representing such
tenant-shareholder's pro rata share of the corporation's payments in respect of
any mortgage loan secured by, and all real property taxes, maintenance expenses
and other capital and ordinary expenses with respect to, the real property owned
by such cooperative corporation, less any other income that the cooperative
corporation may realize. Such payments to the cooperative corporation are in
addition to any payments of principal and interest the tenant-shareholder must
make on any loans of the tenant-shareholder secured by its shares in the
corporation.
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A cooperative corporation is directly responsible for building
management and payment of real estate taxes and hazard and liability insurance
premiums. A cooperative corporation's ability to meet debt service obligations
on a mortgage loan secured by the real property owned by such corporation, as
well as to pay all other operating expenses of such property, is dependent
primarily upon the receipt of maintenance payments from the tenant-shareholders,
together with any rental income from units or commercial space that the
cooperative corporation might control. Unanticipated expenditures may in some
cases have to be paid by special assessments on the tenant-shareholders. A
cooperative corporation's ability to pay the amount of any balloon payment due
at the maturity of a mortgage loan secured by the real property owned by such
cooperative corporation depends primarily on its ability to refinance the
mortgage loan. Neither the Depositor nor any other person will have any
obligation to provide refinancing for any of the Mortgage Loans.
In a typical cooperative conversion plan, the owner of a rental
apartment building contracts to sell the building to a newly formed cooperative
corporation. Shares are allocated to each apartment unit by the owner or
sponsor, and the current tenants have a certain period to subscribe at prices
discounted from the prices to be offered to the public after such period. As
part of the consideration for the sale, the owner or sponsor receives all the
unsold shares of the cooperative corporation. The sponsor usually also controls
the corporation's board of directors and management for a limited period of
time.
Each purchaser of shares in the cooperative corporation generally
enters into a long-term proprietary lease which provides the shareholder with
the right to occupy a particular apartment unit. However, many cooperative
conversion plans are "non-eviction" plans. Under a non-eviction plan, a tenant
at the time of conversion who chooses not to purchase shares is entitled to
reside in the unit as a subtenant from the owner of the shares allocated to such
apartment unit. Any applicable rent control or rent stabilization laws would
continue to be applicable to such subtenancy, and the subtenant may be entitled
to renew its lease for an indefinite number of times, with continued protection
from rent increases above those permitted by any applicable rent control and
rent stabilization laws. The shareholder is responsible for the maintenance
payments to the cooperative without regard to its receipt or non-receipt of rent
from the subtenant, which may be lower than maintenance payments on the unit.
Newly-formed cooperative corporations typically have the greatest concentration
of non-tenant shareholders.
Mortgage Loans Secured by Retail Sales and Service Properties. Retail
properties and other properties related to the sale of consumer goods and other
products and/or providing entertainment, recreation and personal services to the
general public ("Retail Sales and Service Properties") may include shopping
centers, factory outlet centers, malls, automotive sales and service centers and
other individual stores, shops and consumer oriented businesses, such as
department stores and other retail stores, grocery stores, convenience stores,
specialty shops, gas stations, movie theaters, fitness centers, bowling alleys,
salons and dry cleaners. Such properties (if not owner occupied) generally
derive all or a substantial percentage of their income from lease payments from
commercial tenants. Income from and the market value of Retail Sales and Service
Properties is dependent on various factors including, but not limited to, the
ability to lease space in such properties, the ability of tenants to meet their
lease obligations, and the possibility of a significant tenant becoming bankrupt
or insolvent. Retail Sales and Service Properties will be affected by
perceptions by prospective customers of the safety, convenience, services and
attractiveness of such property and by market demographics, consumer habits and
traffic patterns, the access to and visibility of such property and the
availability of parking at such property.
The correlation between the success of tenant businesses and property
value is more direct with respect to Retail Sales and Service Properties than
other types of commercial property because a significant component of the total
rent paid by such tenants is often tied to a percentage of gross sales or
revenues. Declines in sales or revenues of tenants of such types of properties
will likely cause a corresponding decline in percentage rents and such tenants
may become unable to pay their rent or other occupancy costs. The default by a
tenant under its lease could result in delays and costs in enforcing the
lessor's rights. Repayment of the related Mortgage
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Loans will be affected by the expiration of space leases and the ability of the
respective borrowers to renew or relet the space on comparable terms. Even if
vacated space is successfully relet, the costs associated with reletting,
including tenant improvements, leasing commissions and free rent, could be
substantial and could reduce cash flow from Retail Sales and Service Properties.
The correlation between the success of the shops and other businesses at a
Retail Sales and Service Property and the value of such property is increased
when the property is a single tenant property or is largely owner occupied.
Retail Sales and Service Properties would be expected to be directly and
adversely affected by a decline in the local, regional and/or national economy
and reduced consumer spending.
Whether a mall or shopping center is "anchored" or "unanchored" is also
an important distinction. Anchor tenants in malls and shopping centers
traditionally have been a major factor in the public's perception of such types
of properties. The anchor tenants at a mall or shopping center play an important
part in generating customer traffic and making the property a desirable location
for other tenants. The failure of an anchor tenant to renew its leases, the
termination of an anchor tenant's lease, the bankruptcy or economic decline of
an anchor tenant, or the cessation of the business of an anchor tenant
(notwithstanding any continued payment of rent) can have a material negative
effect on the economic performance of a mall or shopping center.
Unlike certain other types of commercial properties, Retail Sales and
Service Properties also face competition from sources outside a given real
estate market. Catalogue retailers, home shopping networks, telemarketing,
selling through the Internet, and outlet centers all compete with more
traditional retail properties for consumer dollars. Similarly, home movie
rentals and pay-per-view movies provide alternate sources of entertainment to
movie theaters. Continued growth of these alternative retail outlets (which are
often characterized by lower operating costs) and entertainment sources could
adversely affect the rents collectible at Retail Sales and Service Properties.
Gas stations, automotive sales and service centers and dry cleaners
also pose unique environmental risks because of the nature of their businesses.
Some Retail Sales and Service Properties, such as malls and shopping
centers, include food and beverage establishments, and prospective investors
should also consider risks associated with such properties.
Mortgage Loans Secured by Hospitality Properties. Hospitality
properties may involve different types of hotels and motels, including full
service hotels, resort hotels with many amenities, limited service hotels,
hotels and motels associated with national franchise chains, hotels and motels
associated with regional franchise chains, hotels that are not affiliated with
any franchise chain but may have their own brand identity, and other lodging
facilities. Various factors, including location, quality and franchise
affiliation affect the economic performance of a hospitality property. Adverse
economic conditions, either local, regional or national, may limit the amount
that can be charged for a room and may result in a reduction in occupancy
levels. The construction of competing hospitality properties can have similar
effects. To meet competition in the industry and to maintain economic values,
continuing expenditures must be made for modernizing, refurbishing, and
maintaining existing facilities prior to the expiration of their anticipated
useful lives. Because rooms at hospitality properties generally are rented for
short periods of time, such properties tend to respond more quickly to adverse
economic conditions and competition than do many other types of commercial
properties. Furthermore, the financial strength and capabilities of the owner
and operator of a hospitality property may have an impact on such property's
quality of service and economic performance. Additionally, the lodging industry,
in certain locations, is seasonal in nature and this seasonality can be expected
to cause periodic fluctuations in room and other revenues, occupancy levels,
room rates and operating expenses. The demand for particular accommodations may
also be affected by changes in travel patterns caused by changes in energy
prices, strikes, relocation of highways, construction of additional highways and
other factors.
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The viability of any hospitality property that is a franchise of a
national or a regional hotel or motel chain depends in part on the continued
existence and financial strength of the franchisor, the public perception of the
franchise service mark and the duration of the franchise licensing agreement.
The transferability of franchise license agreements may be restricted and, in
the event of a foreclosure on any such hotel or motel property, the consent of
the franchisor for the continued use of the franchise license by the hotel or
motel property would be required. Conversely, a lender may be unable to remove a
franchisor that it desires to replace following a foreclosure. Further, in the
event of a foreclosure on a hospitality property, it is unlikely that the
purchaser (or the trustee, servicer or special servicer, as the case may be) of
such hospitality property may be entitled to the rights under any associated
liquor license, and such party would be required to apply in its own right for
such license or licenses. There can be no assurance that a new license could be
obtained or that it could be obtained promptly.
The extent to which a hospitality property may be affected by any of
the factors described above, including competition from other hospitality
properties, may depend on the nature and quality of services provided by, and
facilities (in addition to guest rooms) included at, the subject property. For
example, a full service hotel with restaurants and a health club would be
expected to attract more guests than a hospitality property that provides just
rooms (subject to market demographics and the cost of the rooms).
Mortgage Loans Secured by Office Properties. Significant factors
affecting the value of office properties include, without limitation, the
quality of the tenants in the building, the physical attributes of the building
in relation to competing buildings, the location of the building with respect to
the central business district or population centers, demographic trends within
the metropolitan area to move away from or towards the central business
district, social trends combined with space management trends (which may change
towards options such as telecommuting or hoteling to satisfy space needs), tax
incentives offered to businesses or property owners by cities or suburbs
adjacent to or near where the building is located and the strength and stability
of the area where the building is located as a desirable business location.
Office properties may be adversely affected by an economic decline in the
business operated by their tenants. The risk of such an economic decline is
increased if revenue is dependent on a single tenant or if there is a
significant concentration of tenants in a particular business or industry.
Office properties are also subject to competition with other office
properties in the same market. Competition is affected by a building's age,
condition, design (including floor sizes and layout), access to transportation,
availability of parking and ability to offer certain amenities to its tenants
(including sophisticated building systems, such as fiberoptic cables, satellite
communications or other base building technological features). Office properties
that are not equipped to accommodate the needs of modern business may become
functionally obsolete and thus non-competitive.
The success of an office property also depends on the local economy. A
company's decision to locate office headquarters in a given area, for example,
may be affected by such factors as labor cost and quality, tax environment and
quality of life matters, such as schools and cultural amenities. A central
business district may have a substantially different economy from that of a
suburb. The local economy will affect an office property's ability to attract
stable tenants on a consistent basis. In addition, the cost of refitting office
space for a new tenant is often higher than for other property types.
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Mortgage Loans Secured by Other Types of Mortgaged Properties. A
Mortgage Asset Pool may also include Mortgage Loans secured by any of the
following types of real property:
Casinos. Various factors, including location and appearance, affect the
economic performance of a casino. Adverse economic conditions, either local,
regional or national, may limit the amount of disposable income that potential
patrons may have for gambling. The construction of competing casinos can also
have an adverse affect on the performance of a casino property. To meet
competition, significant expenditures must be made to attract potential patrons,
including, but not limited to, improving facilities, providing alternative forms
of entertainment and providing free or low-cost food and lodging. Depending on
the geographic location of a casino property, it may be heavily dependent on
tourism for its clientele. In addition, the ownership and operation of casino
properties is often subject to local or state governmental regulation, and a
governmental agency or authority may have jurisdiction or influence with respect
to the foreclosure of a casino property, the holding and transfer of a gaming
license and/or the bankruptcy or insolvency of a casino owner or operator.
Health Care-Related Properties. Health-care related properties include
hospitals, skilled nursing facilities, nursing homes, congregate care facilities
and, in some cases, depending on the services provided, senior housing. Certain
types of health care-related facilities (including nursing homes) typically
receive a substantial portion of their revenues from government reimbursement
programs, primarily Medicaid and Medicare. Medicaid and Medicare are subject to
statutory and regulatory changes, retroactive rate adjustments, administrative
rulings, policy interpretations, delays by fiscal intermediaries and government
funding restrictions, all of which can adversely affect revenues from operation.
Moreover, governmental payors have employed cost-containment measures that limit
payments to health care providers, and there are currently under consideration
various proposals for national health care relief that could further limit these
payments. In addition, providers of long-term nursing care and other medical
services are highly regulated by federal, state and local law and are subject
to, among other things, federal and state licensing requirements, facility
inspection, rate setting, reimbursement policies, and laws relating to the
adequacy of medical care, distribution of pharmaceuticals, equipment, personnel
operating policies and maintenance of and additions to facilities and services,
any or all of which factors can increase the cost of operation, limit growth
and, in extreme cases, require or result in suspension or cessation of
operations.
Under applicable federal and state laws and regulations, Medicare and
Medicaid reimbursements are generally not permitted to be made to any person
other than the provider who actually furnished the related medical goods and
services. Accordingly, in the event of foreclosure on a Mortgaged Property that
is operated as a health care-related facility, none of the Trustee, the Special
Servicer or a subsequent lessee or operator of the Mortgaged Property would
generally be entitled to obtain from federal or state governments any
outstanding reimbursement payments relating to services furnished at the
respective Mortgaged Properties prior to such foreclosure. Furthermore, in the
event of foreclosure, there can be no assurance that the Trustee (or Special
Servicer) or purchaser in a foreclosure sale would be entitled to the rights
under any required licenses and regulatory approvals and such party may have to
apply in its own right for such licenses and approvals. There can be no
assurance that a new license could be obtained or that a new approval would be
granted. In addition, health care-related facilities are generally "special
purpose" properties that could not be readily converted to general residential,
retail or office use, and transfers of health care-related facilities are
subject to regulatory approvals under such state, and in some cases federal, law
not required for transfers of most other types of commercial operations and
other types of real estate, all of which may adversely affect the liquidation
value.
Industrial Properties. Significant factors determining the value of
industrial properties are the quality of tenants, building design and
adaptability, the functionality of the finish-out and the location of the
property. Industrial properties may be adversely affected by reduced demand for
industrial space occasioned by a decline in a particular industry segment and/or
by a general slow down in the economy, and an industrial property that suited
the particular needs of its original tenant may be difficult to relet to another
tenant or may become
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functionally obsolete relative to newer properties. Furthermore, industrial
properties may be adversely affected by the availability of labor sources or a
change in the proximity of other supply sources. Because industrial properties
frequently have a single tenant, any such property is heavily dependent on the
success of such tenant's business. In addition, depending upon the business
conducted at the particular property, an industrial property may be more likely
than other types of commercial properties to have environmental issues.
Warehouse, Mini-Warehouse and Self-Storage Facilities. Warehouse,
mini-warehouse and self-storage properties (collectively, "Storage Properties")
are considered vulnerable to competition because both acquisition costs and
break-even occupancy are relatively low. The conversion of Storage Properties to
alternative uses would generally require substantial capital expenditures. Thus,
if the operation of a Storage Property becomes unprofitable due to decreased
demand, competition, age of improvements or other factors such that the borrower
becomes unable to meet its obligations under the related Mortgage Loan, the
liquidation value of that Storage Property may be substantially less, relative
to the amount owing on the Mortgage Loan, than would be the case if the Storage
Property were readily adaptable to other uses. Tenant privacy, anonymity and
efficient access are important to the success of a Storage Property, as is
building design and location.
Restaurants. Various factors may affect the economic viability of
individual restaurants and other establishments that are part of the food and
beverage service industry ("Restaurants"), including but not limited to
competition from facilities having businesses similar to the particular
Restaurant; perceptions by prospective customers of the safety, convenience,
services and attractiveness of the Restaurant; the cost, quality and
availability of food and beverage products, negative publicity resulting from
instances of food contamination, food-borne illness and similar events; changes
in demographics, consumer habits and traffic patterns; the ability to provide or
contract for capable management and adequate maintenance; and retroactive
changes to building codes, similar ordinances and other legal requirements.
Adverse economic conditions, whether local, regional or national, may limit the
amount that may be charged for food and beverages and the extent to which
customers dine out, and may result in a reduction in customers. The construction
of competing food/drink establishments can have similar effects. Because of the
nature of the business, Restaurants tend to respond to adverse economic
conditions more quickly than do many other types of commercial properties.
Furthermore, the transferability of any operating, liquor and other licenses to
an entity acquiring a Restaurant (either through purchase or foreclosure) is
subject to local law requirements.
Additional factors that can affect the success of a regionally or
nationally-known chain Restaurant include actions and omissions of any
franchisor (including management practices that adversely affect the nature of
the business or that require renovation, refurbishment, expansion or other
expenditures); the degree of support provided or arranged by any franchisor,
such franchisor's franchisee organizations and third-party providers of products
or services; the bankruptcy or business discontinuation of any such franchisor
or third-party provider; and increases in operating expenses. Chain Restaurants
may be operated under franchise agreements, and such agreements typically do not
contain provisions protective of lenders. A lender may be unable to succeed to
the rights of the franchisee under the related franchise agreement, or the
transferability of a franchise may be subject to numerous restrictions.
Manufactured Housing Communities, Mobile Home Parks and Recreational
Vehicle Parks. The successful operation of a Mortgaged Property operated as a
manufactured housing community, mobile home park or recreational vehicle park
will generally depend on the number of comparable competing properties in the
local market, as well as upon other factors such as its age, appearance,
reputation, management and the types of facilities and services it provides.
Manufactured housing communities and mobile home parks also compete against
alternative forms of residential housing, including multifamily rental
properties, cooperatively-owned apartment buildings, condominium complexes and
single-family residential developments. Recreational vehicle parks also compete
against alternative forms of recreation and short-term lodging (for example,
staying at a hotel at the beach).
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Manufactured housing communities, mobile home parks and recreational
vehicle parks are "special purpose" properties that could not be readily
converted to general residential, retail or office use. Thus, if the operation
of any Mortgaged Property constituting a manufactured housing community, mobile
home park or recreational vehicle park becomes unprofitable due to competition,
age of the improvements or other factors such that the borrower becomes unable
to meet its obligations on the related Mortgage Loan, the liquidation value of
that Mortgaged Property may be substantially less, relative to the amount owing
on the Mortgage Loan, than would be the case if the Mortgaged Property were
readily adaptable to other uses.
Recreational and Resort Properties. The Mortgaged Properties may
include various recreational and resort properties such as recreational vehicle
parks, golf courses, marinas, ski resorts and amusement parks ("R&R
Properties"). Various factors, including the location and appearance of and the
appeal of the recreational activities offered by the subject property, affect
the economic performance of an R&R Property.
The construction of competing properties of the same type can also have an
adverse effect on the performance of an R&R Property. In many cases, different
types of R&R Properties compete with each other for patrons. In the case of
certain types of R&R Properties, significant expenditures must be made to
maintain, refurbish, improve and/or expand facilities in order to attract
potential patrons. Depending on the geographic location of an R&R Property, it
may be heavily dependent on tourism for its clientele and, accordingly, may be
affected by changes in travel patterns caused by changes in energy prices,
strikes, location of highways, construction of additional highways and similar
factors. In some cases, business of an R&R Property may be seasonal in nature
and this seasonality can be expected to cause periodic fluctuations in
operating revenues and expenses. Furthermore, business at such properties can
be very weather sensitive. The performance of an R&R Property will also be
affected by local, regional and national economic conditions insofar as such
conditions affect the amount of disposable income that potential patrons have
to spend at such property. Because of the nature of the business, R&R
Properties tend to respond to adverse economic conditions more quickly than do
many other types of commercial properties. In addition, a marina or other R&R
Properties located next to water will be affected by various statutes and
government regulations that govern the use of, and construction on, rivers,
lakes and other waterways.
Arenas. The success of an arena generally depends on its ability to
attract patrons to a variety of events, including (depending on the nature of
the arena) sporting events, musical events, theatrical events, animal shows and
circuses. Such ability will depend on, among other things, the appeal of the
particular event, the cost of admission, perceptions by prospective patrons of
the safety, convenience, services and attractiveness of the arena, and the
alternative forms of entertainment available in the particular locale. In some
cases, an arena's success will depend on its ability to attract and keep a
sporting team as a tenant. An arena may become unprofitable (or unacceptable to
such a tenant) due to decreased attendance, competition and age of improvements.
Often, substantial expenditures must be made to modernize, refurbish and/or
maintain existing facilities. Arenas constitute "special purpose" properties
which could not be readily convertible to alternative uses.
Churches and Other Religious Facilities. Churches and other religious
facilities ("Religious Facilities") generally depend on charitable donations to
meet expenses and pay for maintenance and capital expenditures. The extent of
such donations is dependent on the attendance at any particular Religious
Facility and the extent to which attendees are prepared to make donations, all
of which is influenced by a variety of social, political and economic factors.
It would be expected, however, that adverse economic conditions would adversely
affect donations as disposable income of patrons declines. Religious Facilities
are "special purpose" properties that are not readily convertible to alternative
uses.
Parking Lots and Garages. The primary source of income for parking lots
and garages is the rental fees charged for and in connection with parking
spaces. The amount of such fees will depend on the number of spaces rented and
the rates at which they are rented, which, in turn, will depend on a number of
factors, including the proximity of the lot or garage to locations where large
numbers of people work, shop or live, the amount of alternative parking space
(including free parking space) in the area where the lot or garage is located,
whether
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the area where the lot or garage is located is otherwise accessible by
mass transit (thereby limiting the number of potential vehicles requiring
parking spaces) and the perceptions of potential patrons of the safety,
convenience and services of the lot or garage.
Default and Loss Considerations with Respect to the Mortgage Loans.
Mortgage loans secured by liens on income-producing properties are substantially
different from loans made on the security of owner-occupied single-family homes.
The repayment of a loan secured by a lien on an income-producing property is
typically dependent upon the successful operation of such property (that is, its
ability to generate income). Moreover, as noted above, some or all of the
Mortgage Loans included in a particular Trust Fund may be nonrecourse loans.
Lenders typically look to the Debt Service Coverage Ratio of a loan
secured by income-producing property as an important factor in evaluating the
likelihood of default on such a loan. Unless otherwise defined in the related
Prospectus Supplement, the "Debt Service Coverage Ratio" of a Mortgage Loan at
any given time is the ratio of (i) the Net Operating Income derived from the
related Mortgaged Property for a twelve-month period to (ii) the annualized
scheduled payments of principal and/or interest on the Mortgage Loan and any
other loans senior thereto that are secured by the related Mortgaged Property.
Unless otherwise defined in the related Prospectus Supplement, "Net Operating
Income" means, for any given period, the total operating revenues derived from a
Mortgaged Property during such period, minus the total operating expenses
incurred in respect of such Mortgaged Property during such period other than (i)
noncash items such as depreciation and amortization, (ii) capital expenditures
and (iii) debt service on the related Mortgage Loan or on any other loans that
are secured by such Mortgaged Property. The Net Operating Income of a Mortgaged
Property will generally fluctuate over time and may or may not be sufficient to
cover debt service on the related Mortgage Loan at any given time. As the
primary source of the operating revenues of a nonowner-occupied,
income-producing property, rental income (and, with respect to a Mortgage Loan
secured by a Cooperative apartment building, maintenance payments from
tenant-stockholders of a Cooperative) may be affected by the condition of the
applicable real estate market and/or area economy. In addition, properties
typically leased, occupied or used on a short-term basis, such as certain health
care-related facilities, hotels and motels, recreational vehicle parks, and
mini-warehouse and self-storage facilities, tend to be affected more rapidly by
changes in market or business conditions than do properties typically leased for
longer periods, such as warehouses, retail stores, office buildings and
industrial facilities. Commercial Properties may be owner-occupied or leased to
a small number of tenants. Thus, the Net Operating Income of such a Mortgaged
Property may depend substantially on the financial condition of the borrower or
a tenant, and Mortgage Loans secured by liens on such properties may pose a
greater likelihood of default and loss than loans secured by liens on
Multifamily Properties or on multi-tenant Commercial Properties.
Increases in operating expenses due to the general economic climate or
economic conditions in a locality or industry segment, such as increases in
interest rates, real estate tax rates, energy costs, labor costs and other
operating expenses, and/or to changes in governmental rules, regulations and
fiscal policies, may also affect the likelihood of default on a Mortgage Loan.
As may be further described in the related Prospectus Supplement, in some cases
leases of Mortgaged Properties may provide that the lessee, rather than the
borrower/landlord, is responsible for payment of operating expenses ("Net
Leases"). However, the existence of such "net of expense" provisions will result
in stable Net Operating Income to the borrower/landlord only to the extent that
the lessee is able to absorb operating expense increases while continuing to
make rent payments.
Lenders also look to the Loan-to-Value Ratio of a mortgage loan as a
factor in evaluating the likelihood of loss if a property must be liquidated
following a default. Unless otherwise defined in the related Prospectus
Supplement, the "Loan-to-Value Ratio" of a Mortgage Loan at any given time is
the ratio (expressed as a percentage) of (i) the then outstanding principal
balance of the Mortgage Loan and any other loans senior thereto that are secured
by the related Mortgaged Property to (ii) the Value of the related Mortgaged
Property. Unless
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otherwise specified in the related Prospectus Supplement, the
"Value" of a Mortgaged Property will be its fair market value as determined by
an appraisal of such property conducted by or on behalf of the Originator in
connection with the origination of such loan. The lower the Loan-to-Value
Ratio, the greater the percentage of the borrower's equity in a Mortgaged
Property, and thus (a) the greater the incentive of the borrower to perform
under the terms of the related Mortgage Loan (in order to protect such equity)
and (b) the greater the cushion provided to the lender against loss on
liquidation following a default.
Loan-to-Value Ratios will not necessarily constitute an accurate
measure of the likelihood of liquidation loss in a pool of Mortgage Loans. For
example, the Value of a Mortgaged Property as of the date of initial issuance of
the Certificates of the related Series may be less than the Value determined at
loan origination, and will likely continue to fluctuate from time to time based
upon certain factors including changes in economic conditions and the real
estate market. Moreover, even when current, an appraisal is not necessarily a
reliable estimate of value. Appraised values of income-producing properties are
generally based on the market comparison method (recent resale value of
comparable properties at the date of the appraisal), the cost replacement method
(the cost of replacing the property at such date), the income capitalization
method (a projection of value based upon the property's projected net cash
flow), or upon a selection from or interpolation of the values derived from such
methods. Each of these appraisal methods can present analytical difficulties. It
is often difficult to find truly comparable properties that have recently been
sold; the replacement cost of a property may have little to do with its current
market value; and income capitalization is inherently based on inexact
projections of income and expense and the selection of an appropriate
capitalization rate and discount rate. Where more than one of these appraisal
methods are used and provide significantly different results, an accurate
determination of value and, correspondingly, a reliable analysis of the
likelihood of default and loss, is even more difficult.
Although there may be multiple methods for determining the Value of a
Mortgaged Property, Value will in all cases be affected by property performance.
As a result, if a Mortgage Loan defaults because the income generated by the
related Mortgaged Property is insufficient to cover operating costs and expenses
and pay debt service, then the Value of the Mortgaged Property will reflect such
and a liquidation loss may occur.
While the Depositor believes that the foregoing considerations are
important factors that generally distinguish loans secured by liens on
income-producing real estate from single-family mortgage loans, there can be no
assurance that all of such factors will in fact have been prudently considered
by the Originators of the Mortgage Loans, or that, for a particular Mortgage
Loan, they are complete or relevant. See "Risk Factors--Certain Factors
Affecting Delinquency, Foreclosure and Loss of the Mortgage Loans--General" and
"--Certain Factors Affecting Delinquency, Foreclosure and Loss of the Mortgage
Loans--Increased Risk of Default Associated With Balloon Payments".
Payment Provisions of the Mortgage Loans. All of the Mortgage Loans
will (i) have had original terms to maturity of not more than approximately 40
years and (ii) provide for scheduled payments of principal, interest or both, to
be made on specified dates ("Due Dates") that occur monthly, quarterly,
semi-annually or annually. A Mortgage Loan (i) may provide for no accrual of
interest or for accrual of interest thereon at a Mortgage Rate that is fixed
over its term or that adjusts from time to time, or that may be converted at the
borrower's election from an adjustable to a fixed Mortgage Rate, or from a fixed
to an adjustable Mortgage Rate, (ii) may provide for level payments to maturity
or for payments that adjust from time to time to accommodate changes in the
Mortgage Rate or to reflect the occurrence of certain events, and may permit
negative amortization, (iii) may be fully amortizing or may be partially
amortizing or nonamortizing, with a balloon payment due on its stated maturity
date, and (iv) may prohibit over its term or for a certain period prepayments
(the period of such prohibition, a "Lock-out Period" and its date of expiration,
a "Lock-out Date") and/or require payment of a premium or a yield maintenance
payment (a "Prepayment Premium") in connection with certain prepayments, in each
case as described in the related Prospectus Supplement. A Mortgage Loan may also
contain a provision
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that entitles the lender to a share of appreciation of the related Mortgaged
Property, or profits realized from the operation or disposition of such
Mortgaged Property or the benefit, if any, resulting from the refinancing of the
Mortgage Loan (any such provision, an "Equity Participation"), as described in
the related Prospectus Supplement.
Mortgage Loan Information in Prospectus Supplements. Each Prospectus
Supplement will contain certain information pertaining to the Mortgage Loans in
the related Trust Fund, which, to the extent then applicable, will generally
include the following: (i) the aggregate outstanding principal balance and the
largest, smallest and average outstanding principal balance of the Mortgage
Loans, (ii) the type or types of property that provide security for repayment of
the Mortgage Loans, (iii) the earliest and latest origination date and maturity
date of the Mortgage Loans, (iv) the original and remaining terms to maturity of
the Mortgage Loans, or the respective ranges thereof, and the weighted average
original and remaining terms to maturity of the Mortgage Loans, (v) the
Loan-to-Value Ratios of the Mortgage Loans (either at origination or as of a
more recent date), or the range thereof, and the weighted average of such
Loan-to-Value Ratios, (vi) the Mortgage Rates borne by the Mortgage Loans, or
the range thereof, and the weighted average Mortgage Rate borne by the Mortgage
Loans, (vii) with respect to Mortgage Loans with adjustable Mortgage Rates ("ARM
Loans"), the index or indices upon which such adjustments are based, the
adjustment dates, the range of gross margins and the weighted average gross
margin, and any limits on Mortgage Rate adjustments at the time of any
adjustment and over the life of the ARM Loan, (viii) information regarding the
payment characteristics of the Mortgage Loans, including, without limitation,
balloon payment and other amortization provisions, Lock-out Periods and
Prepayment Premiums, (ix) the Debt Service Coverage Ratios of the Mortgage Loans
(either at origination or as of a more recent date), or the range thereof, and
the weighted average of such Debt Service Coverage Ratios, and (x) the
geographic distribution of the Mortgaged Properties on a state-by-state basis.
In appropriate cases, the related Prospectus Supplement will also contain
certain information available to the Depositor that pertains to the provisions
of leases and the nature of tenants of the Mortgaged Properties. If the
Depositor is unable to provide the specific information described above at the
time Offered Certificates of a Series are initially offered, more general
information of the nature described above will be provided in the related
Prospectus Supplement, and specific information will be set forth in a report
which will be available to purchasers of those Certificates at or before the
initial issuance thereof and will be filed as part of a Current Report on Form
8-K with the Commission within fifteen days following such issuance.
If any Mortgage Loan, or group of related Mortgage Loans, constitutes a
concentration of credit risk, financial statements or other financial
information with respect to the related Mortgaged Property or Mortgaged
Properties will be included in the related Prospectus Supplement.
If and to the extent available and relevant to an investment decision
in the Offered Certificates of the related Series, information regarding the
prepayment experience of a Master Servicer's multifamily and/or commercial
mortgage loan servicing portfolio will be included in the related Prospectus
Supplement. However, many servicers do not maintain records regarding such
matters or, at least, not in a format that can be readily aggregated. In
addition, the relevant characteristics of a Master Servicer's servicing
portfolio may be so materially different from those of the related Mortgage
Asset Pool that such prepayment experience would not be meaningful to an
investor. For example, differences in geographic dispersion, property type
and/or loan terms (e.g., mortgage rates, terms to maturity and/or prepayment
restrictions) between the two pools of loans could render the Master Servicer's
prepayment experience irrelevant. Because of the nature of the assets to be
serviced and administered by a Special Servicer, no comparable prepayment
information will be presented with respect to the Special Servicer's multifamily
and/or commercial mortgage loan servicing portfolio.
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MBS
MBS may include (i) private-label (that is, not issued, insured or
guaranteed by the United States or any agency or instrumentality thereof)
mortgage participations, mortgage pass-through certificates, collateralized
mortgage obligations or other mortgage-backed securities or (ii) certificates
issued and/or insured or guaranteed by the Federal Home Loan Mortgage
Corporation ("FHLMC"; and such certificates issued and/or insured or guaranteed
thereby, "FHLMC Certificates"), the Federal National Mortgage Association
("FN\MA"; and such certificates issued and/or insured or guaranteed thereby,
"FNMA Certificates"), the Governmental National Mortgage Association ("GNMA";
and such certificates issued and/or insured or guaranteed thereby, "GNMA
Certificates") or the Federal Agricultural Mortgage Corporation ("FAMC"; and
such certificates issued and/or insured or guaranteed thereby, "FAMC
Certificates"), provided that, unless otherwise specified in the related
Prospectus Supplement, each MBS will evidence an interest in, or will be secured
by a pledge of, mortgage loans that conform to the descriptions of the Mortgage
Loans contained herein.
Except in the case of a pro rata mortgage participation in a single
mortgage loan or a pool of mortgage loans, or unless otherwise discussed with
the Commission, each MBS included in a Mortgage Asset Pool: (a) either will (i)
have been acquired (other than from the Depositor or an affiliate thereof) in
bona fide secondary market transactions or (ii) if so specified in the related
Prospectus Supplement, be part of the Depositor's (or an affiliate's) unsold
allotments from the Depositor's (or an affiliate's) previous offerings; and (b)
unless it was issued by the Depositor or a trust established thereby, will
either (i) have been previously registered under the Securities Act, (ii) be
exempt from such registration requirements or (iii) have been held for at least
the holding period specified in Rule 144(k) under the Securities Act.
Any MBS will have been issued pursuant to a participation and servicing
agreement, a pooling and servicing agreement, an indenture or similar agreement
(an "MBS Agreement"). The issuer of the MBS (the "MBS Issuer") and/or the
servicer of the underlying mortgage loans (the "MBS Servicer") will be parties
to the MBS Agreement, generally together with a trustee (the "MBS Trustee") or,
in the alternative, with the original purchaser or purchasers of the MBS.
The MBS may have been issued in one or more classes with
characteristics similar to the Classes of Certificates described herein.
Distributions in respect of the MBS will be made by the MBS Issuer, the MBS
Servicer or the MBS Trustee on the dates specified in the related Prospectus
Supplement. The MBS Issuer or the MBS Servicer or another person specified in
the related Prospectus Supplement may have the right or obligation to repurchase
or substitute assets underlying the MBS after a certain date or under other
circumstances specified in the related Prospectus Supplement.
Reserve funds, subordination or other credit support similar to that
described for the Certificates under "Description of Credit Support" may have
been provided with respect to the MBS. The type, characteristics and amount of
such credit support, if any, will be a function of the characteristics of the
underlying mortgage loans and other factors and generally will have been
established on the basis of the requirements of any rating agency that may have
assigned a rating to the MBS, or by the initial purchasers of the MBS.
The Prospectus Supplement for a Series that evidence interests in MBS
will specify: (i) the aggregate approximate initial and outstanding principal
amount(s) and type of the MBS to be included in the Trust Fund, (ii) the
original and remaining term(s) to stated maturity of the MBS, if applicable,
(iii) the pass-through or bond rate(s) of the MBS or the formula for determining
such rate(s), (iv) the payment characteristics of the MBS, (v) the MBS Issuer,
MBS Servicer and MBS Trustee, as applicable, of each of the MBS, (vi) a
description of the related credit support, if any, (vii) the circumstances under
which the related underlying mortgage loans, or the MBS themselves, may be
purchased prior to their maturity, (viii) the terms on which mortgage loans may
be substituted for those originally underlying the MBS, (ix) the type of
mortgage loans underlying the MBS and,
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to the extent appropriate under the circumstances, such other information in
respect of the underlying mortgage loans described under "--Mortgage
Loans--Mortgage Loan Information in Prospectus Supplements", and (x) the
characteristics of any cash flow agreements that relate to the MBS.
The Depositor will provide the same information regarding the MBS in
any Trust Fund in its reports filed under the Exchange Act with respect to such
Trust Fund as was provided by the related MBS Issuer in its own such reports if
such MBS was publicly offered or the reports the related MBS Issuer provides the
related MBS Trustee if such MBS was privately issued.
Undelivered Mortgage Assets
Unless otherwise specified in the related Prospectus Supplement, the
aggregate outstanding principal balance of a Mortgage Asset Pool as of the
related Cut-off Date will equal or exceed the aggregate Certificate Principal
Balance of the related Series as of the related Closing Date. In the event that
Mortgage Assets initially delivered do not have an aggregate outstanding
principal balance as of the related Cut-off Date at least equal to the aggregate
Certificate Principal Balance of the related Series as of the related Closing
Date, the Depositor may deposit cash or Permitted Investments on an interim
basis with the Trustee for such Series on the related Closing Date in lieu of
delivering Mortgage Assets with an aggregate outstanding principal balance as of
the related Cutoff Date equal to the shortfall amount. During the 90-day period
following the related Closing Date, the Depositor will be entitled to obtain a
release of such cash or Permitted Investments to the extent that the Depositor
delivers a corresponding amount of the Undelivered Mortgage Assets. If and to
the extent all the Undelivered Mortgage Assets are not delivered during the
90-day period following the related Closing Date, such cash or, following
liquidation, such Permitted Investments will be applied to pay a corresponding
amount of principal of the Certificates of such Series to the extent set forth,
and on the dates specified, in the related Prospectus Supplement.
Certificate Accounts
Each Trust Fund will include a Certificate Account consisting of one or
more accounts established and maintained on behalf of the Certificateholders
into which all payments and collections received or advanced with respect to the
Mortgage Assets and other assets in the Trust Fund will be deposited to the
extent described herein and in the related Prospectus Supplement. See
"Description of the Pooling Agreements--Certificate Account".
Credit Support
If so provided in the Prospectus Supplement for the Offered
Certificates of any Series, partial or full protection against certain defaults
and losses on the Mortgage Assets in the related Trust Fund may be provided to
one or more Classes of Certificates of such Series in the form of subordination
of one or more other Classes of Certificates of such Series or by one or more
other types of Credit Support, which may include a letter of credit, a surety
bond, an insurance policy, a guarantee, a reserve fund or any combination
thereof. The amount and types of such Credit Support, the identity of the entity
providing it (if applicable) and related information with respect to each type
of Credit Support, if any, will be set forth in the Prospectus Supplement for
the Offered Certificate of any Series. See "Risk Factors--Credit Support
Limitations" and "Description of Credit Support".
Cash Flow Agreements
If so provided in the Prospectus Supplement for the Offered
Certificates of any Series, the related Trust Fund may include guaranteed
investment contracts pursuant to which moneys held in the funds and accounts
established for such Series will be invested at a specified rate. The Trust Fund
may also include interest rate exchange agreements, interest rate cap or floor
agreements, or other agreements designed to reduce the effects
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of interest rate fluctuations on the Mortgage Assets 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 related Prospectus Supplement. The related Prospectus
Supplement will also identify the obligor under the Cash Flow Agreement.
YIELD AND MATURITY CONSIDERATIONS
General
The yield on any Offered Certificate will depend on the price paid by
the Certificateholder, the Pass-Through Rate of the Certificate and the amount
and timing of distributions on the Certificate. See "Risk Factors--Effect of
Prepayments on Average Life of Certificates". The following discussion
contemplates a Trust Fund that consists solely of Mortgage Loans. While the
characteristics and behavior of mortgage loans underlying an MBS can generally
be expected to have the same effect on the yield to maturity and/or weighted
average life of a Class of Certificates as will the characteristics and behavior
of comparable Mortgage Loans, the effect may differ due to the payment
characteristics of the MBS. If a Trust Fund includes MBS, the related Prospectus
Supplement will discuss the effect, if any, that the payment characteristics of
the MBS may have on the yield to maturity and weighted average lives of the
Offered Certificates of the related Series.
Pass-Through Rate
The Certificates of any Class within a Series may have a fixed,
variable or adjustable Pass-Through Rate, which may or may not be based upon the
interest rates borne by the Mortgage Loans in the related Trust Fund. The
Prospectus Supplement with respect to the Offered Certificates of any Series
will specify the Pass-Through Rate for each Class of such Offered Certificates
or, in the case of a Class of Offered Certificates with a variable or adjustable
Pass-Through Rate, the method of determining the Pass-Through Rate; the effect,
if any, of the prepayment of any Mortgage Loan on the Pass-Through Rate of one
or more Classes of such Offered Certificates; and whether the distributions of
interest on any Class of such Offered Certificates will be dependent, in whole
or in part, on the performance of any obligor under a Cash Flow Agreement.
Payment Delays
With respect to any Series, a period of time will elapse between the
date upon which payments on the Mortgage Loans in the related Trust Fund are due
and the Distribution Date on which such payments are passed through to
Certificateholders. That delay will effectively reduce the yield that would
otherwise be produced if payments on such Mortgage Loans were distributed to
Certificateholders on the date they were due.
Certain Shortfalls in Collections of Interest
When a principal prepayment in full or in part is made on a Mortgage
Loan, the borrower is generally charged interest on the amount of such
prepayment only through the date of such prepayment, instead of through the Due
Date for the next succeeding scheduled payment. However, interest accrued on the
Offered Certificates of any Series and distributable thereon on any Distribution
Date will generally correspond to interest accrued on the Mortgage Loans to
their respective Due Dates during the related Due Period. A "Due Period" will be
a specified time period (generally corresponding in length to the period between
Distribution Dates) and all scheduled payments on the Mortgage Loans in the
related Trust Fund that are due during a given Due Period will, to the extent
received the related Determination Date (as defined herein) or otherwise
advanced by the related Master Servicer, Special Servicer or other specified
person, be distributed to the holders of the Certificates of
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such Series on the next succeeding Distribution Date. Consequently, if a
prepayment on any Mortgage Loan is distributable to Certificateholders on a
particular Distribution Date, but such prepayment is not accompanied by
interest thereon to the Due Date for such Mortgage Loan in the related Due
Period, then the interest charged to the borrower (net of servicing and
administrative fees) may be less (such shortfall, a "Prepayment Interest
Shortfall") than the corresponding amount of interest accrued and otherwise
payable on the Certificates of the related Series. If and to the extent that
any such shortfall is allocated to a Class of Offered Certificates, the yield
thereon will be adversely affected. The Prospectus Supplement for the Offered
Certificates of each Series will describe the manner in which any such
shortfalls will be allocated among the respective Classes of Certificates of
such Series. The related Prospectus Supplement will also describe any amounts
available to offset such shortfalls.
Yield and Prepayment Considerations
A Certificate's yield to maturity will be affected by the rate of
principal payments on the Mortgage Loans in the related Trust Fund and the
allocation thereof to reduce the Certificate Principal Balance (or the
Certificate Notional Amount, if applicable) of such Certificate. The rate of
principal payments on the Mortgage Loans in any Trust Fund will in turn be
affected by the amortization schedules thereof (which, in the case of ARM Loans,
may change periodically to accommodate adjustments to the Mortgage Rates
thereon), the dates on which any balloon payments are due, and the rate of
principal prepayments thereon (including for this purpose, voluntary prepayments
by borrowers and also prepayments resulting from liquidations of Mortgage Loans
due to defaults, casualties or condemnations affecting the related Mortgaged
Properties, or purchases of Mortgage Loans out of the related Trust Fund).
Because the rate of principal prepayments on the Mortgage Loans in any Trust
Fund will depend on future events and a variety of factors (as described below),
no assurance can be given as to such rate.
The extent to which the yield to maturity of a Class of Offered
Certificates of any Series may vary from the anticipated yield will depend upon
the degree to which they are purchased at a discount or premium and when, and to
what degree, payments of principal on the Mortgage Loans in the related Trust
Fund are in turn distributed on such Certificates (or, in the case of a Class of
Stripped Interest Certificates, result in the reduction of the aggregate
Certificate Notional Amount thereof). An investor should consider, in the case
of any Offered Certificate purchased at a discount, the risk that a slower than
anticipated rate of principal payments on the Mortgage Loans in the related
Trust Fund could result in an actual yield to such investor that is lower than
the anticipated yield and, in the case of any Offered Certificate purchased at a
premium, the risk that a faster than anticipated rate of principal payments on
such Mortgage Loans could result in an actual yield to such investor that is
lower than the anticipated yield. In addition, if an investor purchases an
Offered Certificate at a discount (or premium), and principal payments are made
in reduction of the Certificate Principal Balance or Certificate Notional Amount
of such investor's Offered Certificate at a rate slower (or faster) than the
rate anticipated by the investor during any particular period, any consequent
adverse effects on such investor's yield would not be fully offset by a
subsequent like increase (or decrease) in the rate of principal payments.
In general, the aggregate Certificate Notional Amount of a Class of
Stripped Interest Certificates will either (i) be based on the principal
balances of some or all of the Mortgage Assets in the related Trust Fund or (ii)
equal the aggregate Certificate Principal Balance of one or more of the other
Classes of Certificates of the same Series.
Accordingly, the yield on such Stripped Interest Certificates will be
inversely related to the rate at which payments and other collections of
principal are received on such Mortgage Assets or distributions are made in
reduction of the aggregate Certificate Principal Balance of such Class or
Classes of Certificates, as the case may be.
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Consistent with the foregoing, if a Class of Certificates of any Series
consists of Stripped Interest Certificates or Stripped Principal Certificates, a
lower than anticipated rate of principal prepayments on the Mortgage Loans in
the related Trust Fund will negatively affect the yield to investors in Stripped
Principal Certificates, and a higher than anticipated rate of principal
prepayments on such Mortgage Loans will negatively affect the yield to investors
in Stripped Interest Certificates. If the Offered Certificates of a Series
include any such Certificates, the related Prospectus Supplement will include a
table showing the effect of various constant assumed levels of prepayment on
yields on such Certificates. Such tables will be intended to illustrate the
sensitivity of yields to various constant assumed prepayment rates and will not
be intended to predict, or to provide information that will enable investors to
predict, yields or prepayment rates.
The extent of prepayments of principal of the Mortgage Loans in any
Trust Fund may be affected by a number of factors, including, without
limitation, the availability of mortgage credit, the relative economic vitality
of the area in which the Mortgaged Properties are located, the quality of
management of the Mortgaged Properties, the servicing of the Mortgage Loans,
possible changes in tax laws and other opportunities for investment. In general,
those factors which increase the attractiveness of selling a Mortgaged Property
or refinancing a Mortgage Loan or which enhance a borrower's ability to do so,
as well as those factors which increase the likelihood of default under a
Mortgage Loan, would be expected to cause the rate of prepayment in respect of
any Mortgage Asset Pool to accelerate. In contrast, those factors having an
opposite effect would be expected to cause the rate of prepayment of any
Mortgage Asset Pool to slow.
The rate of principal payments on the Mortgage Loans in any Trust Fund
may also be affected by the existence of Lock-out Periods and requirements that
principal prepayments be accompanied by Prepayment Premiums, and by the extent
to which such provisions may be practicably enforced. To the extent enforceable,
such provisions could constitute either an absolute prohibition (in the case of
a Lock-out Period) or a disincentive (in the case of a Prepayment Premium) to a
borrower's voluntarily prepaying its Mortgage Loan, thereby slowing the rate of
prepayments.
The rate of prepayment on a pool of mortgage loans is likely to be
affected by prevailing market interest rates for mortgage loans of a comparable
type, term and risk level. When the prevailing market interest rate is below a
mortgage coupon, a borrower may have an increased incentive to refinance its
mortgage loan. Even in the case of ARM Loans, as prevailing market interest
rates decline, and without regard to whether the Mortgage Rates on such ARM
Loans decline in a manner consistent therewith, the related borrowers may have
an increased incentive to refinance for purposes of either (i) converting to a
fixed rate loan and thereby "locking in" such rate or (ii) taking advantage of a
different index, margin or rate cap or floor on another adjustable rate mortgage
loan. Therefore, as prevailing market interest rates decline, prepayment speeds
would be expected to accelerate.
Depending on prevailing market interest rates, the outlook for market
interest rates and economic conditions generally, some borrowers may sell
Mortgaged Properties in order to realize their equity therein, to meet cash flow
needs or to make other investments. In addition, some borrowers may be motivated
by federal and state tax laws (which are subject to change) to sell Mortgaged
Properties prior to the exhaustion of tax depreciation benefits. The Depositor
makes no representation as to the particular factors that will affect the
prepayment of the Mortgage Loans in any Trust Fund, as to the relative
importance of such factors, as to the percentage of the principal balance of
such Mortgage Loans that will be paid as of any date or as to the overall rate
of prepayment on such Mortgage Loans.
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Weighted Average Life and Maturity
The rate at which principal payments are received on the Mortgage Loans
in any Trust Fund will affect the ultimate maturity and the weighted average
life of one or more Classes of the Certificates of the related Series. Unless
otherwise specified in the related Prospectus Supplement, weighted average life
refers to the average amount of time that will elapse from the date of issuance
of an instrument until each dollar allocable as principal of such instrument is
repaid to the investor.
The weighted average life and maturity of a Class of Certificates of
any Series will be influenced by the rate at which principal on the related
Mortgage Loans, whether in the form of scheduled amortization or prepayments
(for this purpose, the term "prepayment" includes voluntary prepayments by
borrowers and also prepayments resulting from liquidations of Mortgage Loans due
to default, casualties or condemnations affecting the related Mortgaged
Properties and purchases of Mortgage Loans out of the related Trust Fund), is
paid to such Class. Prepayment rates on loans are commonly measured relative to
a prepayment standard or model, such as the Constant Prepayment Rate ("CPR")
prepayment model or the Standard Prepayment Assumption ("SPA") prepayment model.
CPR represents an assumed constant rate of prepayment each month (expressed as
an annual percentage) relative to the then outstanding principal balance of a
pool of mortgage loans for the life of such loans. SPA represents an assumed
variable rate of prepayment each month (expressed as an annual percentage)
relative to the then outstanding principal balance of a pool of mortgage loans,
with different prepayment assumptions often expressed as percentages of SPA. For
example, a prepayment assumption of 100% of SPA assumes prepayment rates of 0.2%
per annum of the then outstanding principal balance of such loans in the first
month of the life of the loans and an additional 0.2% per annum in each month
thereafter until the thirtieth month. Beginning in the thirtieth month, and in
each month thereafter during the life of the loans, 100% of SPA assumes a
constant prepayment rate of 6% per annum each month.
Neither CPR nor SPA nor any other prepayment model or assumption
purports to be a historical description of prepayment experience or a prediction
of the anticipated rate of prepayment of any particular pool of mortgage loans.
Moreover, the CPR and SPA models were developed based upon historical prepayment
experience for single-family mortgage loans. Thus, it is unlikely that the
prepayment experience of the Mortgage Loans included in any Trust Fund will
conform to any particular level of CPR or SPA.
The Prospectus Supplement with respect to the Offered Certificates of
any Series will contain tables, if applicable, setting forth the projected
weighted average life of each Class of Offered Certificates of such Series with
an aggregate Certificate Principal Balance, and the percentage of the initial
aggregate Certificate Principal Balance of each such Class that would be
outstanding on specified Distribution Dates, based on the assumptions stated in
such Prospectus Supplement, including assumptions that prepayments on the
related Mortgage Loans are made at rates corresponding to various percentages of
CPR or SPA, or at such other rates specified in such Prospectus Supplement. Such
tables and assumptions will illustrate the sensitivity of the weighted average
lives of the Certificates to various assumed prepayment rates and will not be
intended to predict, or to provide information that will enable investors to
predict, the actual weighted average lives of the Certificates.
Other Factors Affecting Yield, Weighted Average Life and Maturity
Balloon Payments; Extensions of Maturity. Some or all of the Mortgage
Loans included in a particular Trust Fund may require that balloon payments be
made at maturity. Because the ability of a borrower to make a balloon payment
typically will depend upon its ability either to refinance the loan or to sell
the related Mortgaged Property, there is a possibility that Mortgage Loans that
require balloon payments may default at maturity, or that the maturity of such a
Mortgage Loan may be extended in connection with a workout. In the case of
defaults, recovery of proceeds may be delayed by, among other things, bankruptcy
of the borrower or adverse conditions in the market where the property is
located. In order to minimize losses on defaulted Mortgage
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Loans, the Master Servicer or the Special Servicer, to the extent and
under the circumstances set forth herein and in the related Prospectus
Supplement, may be authorized to modify Mortgage Loans that are in default or
as to which a payment default is imminent. Any defaulted balloon payment or
modification that extends the maturity of a Mortgage Loan may delay
distributions of principal on a Class of Offered Certificates and thereby
extend the weighted average life of such Certificates and, if such Certificates
were purchased at a discount, reduce the yield thereon.
Negative Amortization. The weighted average life of a Class of
Certificates can be affected by Mortgage Loans that permit negative amortization
to occur (that is, Mortgage Loans that provide for the current payment of
interest calculated at a rate lower than the rate at which interest accrues
thereon, with the unpaid portion of such interest being added to the related
principal balance). Negative amortization on one or more Mortgage Loans in any
Trust Fund may result in negative amortization on the Offered Certificates of
the related Series. The related Prospectus Supplement will describe, if
applicable, the manner in which negative amortization in respect of the Mortgage
Loans in any Trust Fund is allocated among the respective Classes of
Certificates of the related Series. The portion of any Mortgage Loan negative
amortization allocated to a Class of Certificates may result in a deferral of
some or all of the interest payable thereon, which deferred interest may be
added to the aggregate Certificate Principal Balance thereof. In addition, an
ARM Loan that permits negative amortization would be expected during a period of
increasing interest rates to amortize at a slower rate (and perhaps not at all)
than if interest rates were declining or were remaining constant. Such slower
rate of Mortgage Loan amortization would correspondingly be reflected in a
slower rate of amortization for one or more Classes of Certificates of the
related Series. Accordingly, the weighted average lives of Mortgage Loans that
permit negative amortization (and that of the Classes of Certificates to which
any such negative amortization would be allocated or that would bear the effects
of a slower rate of amortization on such Mortgage Loans) may increase as a
result of such feature.
Negative amortization may occur in respect of an ARM Loan that (i)
limits the amount by which its scheduled payment may adjust in response to a
change in its Mortgage Rate, (ii) provides that its scheduled payment will
adjust less frequently than its Mortgage Rate or (iii) provides for constant
scheduled payments notwithstanding adjustments to its Mortgage Rate.
Accordingly, during a period of declining interest rates, the scheduled payment
on such a Mortgage Loan may exceed the amount necessary to amortize the loan
fully over its remaining amortization schedule and pay interest at the then
applicable Mortgage Rate, thereby resulting in the accelerated amortization of
such Mortgage Loan. Any such acceleration in amortization of its principal
balance will shorten the weighted average life of such Mortgage Loan and,
correspondingly, the weighted average lives of those Classes of Certificates
entitled to a portion of the principal payments on such Mortgage Loan.
The extent to which the yield on any Offered Certificate will be
affected by the inclusion in the related Trust Fund of Mortgage Loans that
permit negative amortization, will depend upon (i) whether such Offered
Certificate was purchased at a premium or a discount and (ii) the extent to
which the payment characteristics of such Mortgage Loans delay or accelerate the
distributions of principal on such Certificate (or, in the case of a Stripped
Interest Certificate, delay or accelerate the reduction of the Certificate
Notional Amount thereof). See "--Yield and Prepayment Considerations" above.
Foreclosures and Payment Plans. The number of foreclosures and the
principal amount of the Mortgage Loans that are foreclosed in relation to the
number and principal amount of Mortgage Loans that are repaid in accordance with
their terms will affect the weighted average lives of those Mortgage Loans and,
accordingly, the weighted average lives of and yields on the Certificates of the
related Series. Servicing decisions made with respect to the Mortgage Loans,
including the use of payment plans prior to a demand for acceleration and the
restructuring of Mortgage Loans in bankruptcy proceedings or otherwise, may also
have an effect upon the payment patterns of particular Mortgage Loans and thus
the weighted average lives of and yields on the Certificates of the related
Series.
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Losses and Shortfalls on the Mortgage Assets. The yield to holders of
the Offered Certificates of any Series will directly depend on the extent to
which such holders are required to bear the effects of any losses or shortfalls
in collections arising out of defaults on the Mortgage Loans in the related
Trust Fund and the timing of such losses and shortfalls. In general, the earlier
that any such loss or shortfall occurs, the greater will be the negative effect
on yield for any Class of Certificates that is required to bear the effects
thereof.
The amount of any losses or shortfalls in collections on the Mortgage
Assets in any Trust Fund (to the extent not covered or offset by draws on any
reserve fund or under any instrument of Credit Support) will be allocated among
the respective Classes of Certificates of the related Series in the priority and
manner, and subject to the limitations, specified in the related Prospectus
Supplement. As described in the related Prospectus Supplement, such allocations
may be effected by (i) a reduction in the entitlements to interest and/or the
aggregate Certificate Principal Balances of one or more such Classes of
Certificates and/or (ii) establishing a priority of payments among such Classes
of Certificates.
The yield to maturity on a Class of Subordinate Certificates may be
extremely sensitive to losses and shortfalls in collections on the Mortgage
Loans in the related Trust Fund.
Additional Certificate Amortization. In addition to entitling the
holders thereof to a specified portion (which may during specified periods range
from none to all) of the principal payments received on the Mortgage Assets in
the related Trust Fund, one or more Classes of Certificates of any Series,
including one or more Classes of Offered Certificates of such Series, may
provide for distributions of principal thereof from (i) amounts attributable to
interest accrued but not currently distributable on one or more Classes of
Accrual Certificates, (ii) Excess Funds or (iii) any other amounts described in
the related Prospectus Supplement. Unless otherwise specified in the related
Prospectus Supplement, "Excess Funds" will, in general, represent that portion
of the amounts distributable in respect of the Certificates of any Series on any
Distribution Date that represent (i) interest received or advanced on the
Mortgage Assets in the related Trust Fund that is in excess of the interest
currently accrued on the Certificates of such Series, or (ii) Prepayment
Premiums, payments from Equity Participations or any other amounts received on
the Mortgage Assets in the related Trust Fund that do not constitute interest
thereon or principal thereof.
The amortization of any Class of Certificates out of the sources
described in the preceding paragraph would shorten the weighted average life of
such Certificates and, if such Certificates were purchased at a premium, reduce
the yield thereon. The related Prospectus Supplement will discuss the relevant
factors to be considered in determining whether distributions of principal of
any Class of Certificates out of such sources is likely to have any material
effect on the rate at which such Certificates are amortized and the consequent
yield with respect thereto.
THE DEPOSITOR
The Depositor was incorporated in the State of Delaware on July 10,
1997 and is a wholly-owned subsidiary of Donaldson, Lufkin & Jenrette Inc., a
Delaware corporation. The Depositor was organized, among other things, for the
purposes of issuing debt securities and establishing trusts, selling beneficial
interests therein and acquiring and selling mortgage assets to such trusts. The
principal executive offices of the Depositor are located at 277 Park Avenue, New
York, New York 10172. Its telephone number is (212) 892-3000. The Depositor does
not have and is not expected to have any significant assets.
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DESCRIPTION OF THE CERTIFICATES
General
Each Series will represent the entire beneficial ownership interest in
the Trust Fund created pursuant to the related Pooling Agreement. As described
in the related Prospectus Supplement, the Certificates of each Series, including
the Offered Certificates of such Series, may consist of one or more Classes of
Certificates that, among other things: (i) provide for the accrual of interest
on the aggregate Certificate Principal Balance or Certificate Notional Amount
thereof at a fixed, variable or adjustable rate; (ii) constitute Senior
Certificates or Subordinate Certificates; (iii) constitute Stripped Interest
Certificates or Stripped Principal Certificates; (iv) provide for distributions
of interest thereon or principal thereof that commence only after the occurrence
of certain events, such as the retirement of one or more other Classes of
Certificates of such Series; (v) provide for distributions of principal thereof
to be made, from time to time or for designated periods, at a rate that is
faster (and, in some cases, substantially faster) or slower (and, in some cases,
substantially slower) than the rate at which payments or other collections of
principal are received on the Mortgage Assets in the related Trust Fund; (vi)
provide for distributions of principal thereof to be made, subject to available
funds, based on a specified principal payment schedule or other methodology; or
(vii) provide for distributions based on collections on the Mortgage Assets in
the related Trust Fund attributable to Prepayment Premiums and Equity
Participations.
If so specified in the related Prospectus Supplement, a Class of
Offered Certificates may have two or more component parts, each having
characteristics that are otherwise described herein as being attributable to
separate and distinct Classes. For example, a Class of Offered Certificates may
have an aggregate Certificate Principal Balance on which it accrues interest at
a fixed, variable or adjustable rate. Such Class of Offered Certificates may
also have certain characteristics attributable to Stripped Interest Certificates
insofar as it may also entitle the holders thereof to distributions of interest
accrued on an aggregate Certificate Notional Amount at a different fixed,
variable or adjustable rate. In addition, a Class of Certificates may accrue
interest on one portion of its aggregate Certificate Principal Balance or
Certificate Notional Amount at one fixed, variable or adjustable rate and on
another portion of its aggregate Certificate Principal Balance or Certificate
Notional Amount at a different fixed, variable or adjustable rate.
Each Class of Offered Certificates of a Series will be issued in
minimum denominations corresponding to the Certificate Principal Balances or, in
case of certain Classes of Stripped Interest Certificates or REMIC Residual
Certificates, Certificate Notional Amounts or percentage interests, specified in
the related Prospectus Supplement. As provided in the related Prospectus
Supplement, one or more Classes of Offered Certificates of any Series may be
issued in fully registered, definitive form (such Certificates, "Definitive
Certificates") or may be offered in book-entry format (such Certificates,
"Book-Entry Certificates") through the facilities of DTC. The Offered
Certificates of each Series (if issued as Definitive Certificates) may be
transferred or exchanged, subject to any restrictions on transfer described in
the related Prospectus Supplement, at the location specified in the related
Prospectus Supplement, without the payment of any service charges, other than
any tax or other governmental charge payable in connection therewith. Interests
in a Class of Book-Entry Certificates will be transferred on the book-entry
records of DTC and its participating organizations. If so specified in the
related Prospectus Supplement, arrangements may be made for clearance and
settlement through CEDEL, S.A. or the Euroclear System, if they are participants
in DTC.
Distributions
Distributions on the Certificates of each Series will be made on each
Distribution Date from the Available Distribution Amount for such Series and
such Distribution Date. Unless otherwise provided in the related Prospectus
Supplement, the "Available Distribution Amount" for any Series and any
Distribution Date will refer to the total of all payments or other collections
(or advances in lieu thereof) on, under or in respect of
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the Mortgage Assets and any other assets included in the related Trust Fund that
are available for distribution to the holders of Certificates of such Series
("Certificateholders") on such date. The particular components of the Available
Distribution Amount for any Series and Distribution Date will be more
specifically described in the related Prospectus Supplement. In general, the
Distribution Date for a Series will be the 25th day of each month (or, if any
such 25th day is not a business day, the next succeeding business day),
commencing in the month immediately following the month in which such Series is
issued.
Except as otherwise specified in the related Prospectus Supplement,
distributions on the Certificates of each Series (other than the final
distribution in retirement of any such Certificate) will be made to the persons
in whose names such Certificates are registered at the close of business on the
last business day of the month preceding the month in which the applicable
Distribution Date occurs (the "Record Date"), and the amount of each
distribution will be determined as of the close of business on the date (the
"Determination Date") specified in the related Prospectus Supplement. All
distributions with respect to each Class of Certificates on each Distribution
Date will be allocated pro rata among the outstanding Certificates in such Class
in proportion to the respective Percentage Interests evidenced thereby unless
otherwise specified in the related Prospectus Supplement. Payments will be made
either by wire transfer in immediately available funds to the account of a
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has provided the person required to make
such payments with wiring instructions no later than the related Record Date or
such other date specified in the related Prospectus Supplement (and, if so
provided in the related Prospectus Supplement, such Certificateholder holds
Certificates in the requisite amount or denomination specified therein), or by
check mailed to the address of such Certificateholder as it appears on the
Certificate Register; provided, however, that the final distribution in
retirement of any Class of Certificates (whether Definitive Certificates or
Book-Entry Certificates) will be made only upon presentation and surrender of
such Certificates at the location specified in the notice to Certificateholders
of such final distribution. The undivided percentage interest (the "Percentage
Interest") in any particular Class of Offered Certificates represented by any
Certificate of such Class will be equal to the percentage obtained by dividing
the initial Certificate Principal Balance or Certificate Notional Amount, as
applicable, of such Certificate by the initial aggregate Certificate Principal
Balance or Certificate Notional Amount, as the case may be, of such Class.
Distributions of Interest on the Certificates
Each Class of Certificates of each Series (other than certain Classes
of Stripped Principal Certificates and certain Classes of REMIC Residual
Certificates that have no Pass-Through Rate) may have a different Pass-Through
Rate, which in each case may be fixed, variable or adjustable. The related
Prospectus Supplement will specify the Pass-Through Rate or, in the case of a
variable or adjustable Pass-Through Rate, the method for determining the
Pass-Through Rate, for each Class of Offered Certificates. Unless otherwise
specified in the related Prospectus Supplement, interest on the Certificates of
each Series will be calculated on the basis of a 360- day year consisting of
twelve 30-day months.
Distributions of interest in respect of any Class of Certificates
(other than a Class of Accrual Certificates, which will be entitled to
distributions of accrued interest commencing only on the Distribution Date, or
under the circumstances, specified in the related Prospectus Supplement, and
other than any Class of Stripped Principal Certificates or REMIC Residual
Certificates that is not entitled to any distributions of interest) will be made
on each Distribution Date based on the Accrued Certificate Interest for such
Class and such Distribution Date, subject to the sufficiency of that portion, if
any, of the Available Distribution Amount allocable to such Class on such
Distribution Date. Prior to the time interest is distributable on any Class of
Accrual Certificates, the amount of Accrued Certificate Interest otherwise
distributable on such Class will be added to the aggregate Certificate Principal
Balance thereof on each Distribution Date or otherwise deferred as described in
the related Prospectus Supplement. With respect to each Class of Certificates
(other than certain Classes of Stripped Interest Certificates and certain
Classes of REMIC Residual Certificates), the "Accrued Certificate Interest" for
each
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Distribution Date will be equal to interest at the applicable Pass-Through
Rate accrued for a specified period (generally the most recently ended calendar
month) on the aggregate Certificate Principal Balance of such Class of
Certificates outstanding immediately prior to such Distribution Date. Unless
otherwise provided in the related Prospectus Supplement, the Accrued Certificate
Interest for each Distribution Date with respect to a Class of Stripped Interest
Certificates will be similarly calculated except that it will accrue on an
aggregate Certificate Notional Amount that, in general, will either be (i) based
on the principal balances of some or all of the Mortgage Assets in the related
Trust Fund or (ii) equal to the aggregate Certificate Principal Balances of one
or more other Classes of Certificates of the same Series. Reference to a
Certificate Notional Amount with respect to a Stripped Interest Certificate is
solely for convenience in making certain calculations and does not represent the
right to receive any distributions of principal. If so specified in the related
Prospectus Supplement, the amount of Accrued Certificate Interest that is
otherwise distributable on (or, in the case of Accrual Certificates, that may
otherwise be added to the aggregate Certificate Principal Balance of) one or
more Classes of the Certificates of a Series may be reduced to the extent that
any Prepayment Interest Shortfalls, as described under "Yield and Maturity
Considerations--Certain Shortfalls in Collections of Interest", exceed the
amount of any sums that are applied to offset the amount of such shortfalls. The
particular manner in which such shortfalls will be allocated among some or all
of the Classes of Certificates of that Series will be specified in the related
Prospectus Supplement. The related Prospectus Supplement will also describe the
extent to which the amount of Accrued Certificate Interest that is otherwise
distributable on (or, in the case of Accrual Certificates, that may otherwise be
added to the aggregate Certificate Principal Balance of) a Class of Offered
Certificates may be reduced as a result of any other contingencies, including
delinquencies, losses and deferred interest on or in respect of the Mortgage
Assets in the related Trust Fund. Unless otherwise provided in the related
Prospectus Supplement, any reduction in the amount of Accrued Certificate
Interest otherwise distributable on a Class of Certificates by reason of the
allocation to such Class of a portion of any deferred interest on or in respect
of the Mortgage Assets in the related Trust Fund will result in a corresponding
increase in the aggregate Certificate Principal Balance of such Class. See "Risk
Factors--Effect of Prepayments on Average Life of Certificates" and "--Effect of
Prepayments on Yield of Certificates" and "Yield and Maturity
Considerations--Certain Shortfalls in Collections of Interest".
Distributions of Principal of the Certificates
Each Class of Certificates of each Series (other than certain Classes
of Stripped Interest Certificates and certain Classes of REMIC Residual
Certificates) will have an aggregate Certificate Principal Balance, which, at
any time, will equal the then maximum amount that the holders of Certificates of
such Class will be entitled to receive as principal out of the future cash flow
on the Mortgage Assets and other assets included in the related Trust Fund. The
aggregate outstanding Certificate Principal Balance of a Class of Certificates
will be reduced by distributions of principal made thereon from time to time
and, if and to the extent so provided in the related Prospectus Supplement,
further by any losses incurred in respect of the related Mortgage Assets
allocated thereto from time to time. In turn, the outstanding aggregate
Certificate Principal Balance of a Class of Certificates may be increased as a
result of any deferred interest on or in respect of the related Mortgage Assets
being allocated thereto from time to time, and will be increased, in the case of
a Class of Accrual Certificates prior to the Distribution Date on which
distributions of interest thereon are required to commence, by the amount of any
Accrued Certificate Interest in respect thereof (reduced as described above).
Unless otherwise specified in the related Prospectus Supplement, the initial
aggregate Certificate Principal Balance of all Classes of a Series will not be
greater than the aggregate outstanding principal balance of the related Mortgage
Assets as of the related Cut-off Date. The initial aggregate Certificate
Principal Balance of each Class of Offered Certificates will be specified in the
related Prospectus Supplement. As and to the extent described in the related
Prospectus Supplement, distributions of principal with respect to a Series will
be made on each Distribution Date to the holders of the Class or Classes of
Certificates of such Series entitled thereto until the Certificate Principal
Balances of such Certificates have been reduced to zero. Distributions of
principal with respect to one or more Classes of Certificates may be made at a
rate that is faster (and, in some cases, substantially faster) than the rate
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at which payments or other collections of principal are received on the Mortgage
Assets in the related Trust Fund. Distributions of principal with respect to one
or more Classes of Certificates may not commence until the occurrence of certain
events, such as the retirement of one or more other Classes of Certificates of
the same Series, or may be made at a rate that is slower (and, in some cases,
substantially slower) than the rate at which payments or other collections of
principal are received on the Mortgage Assets in the related Trust Fund.
Distributions of principal with respect to one or more Classes of Certificates
(each such Class, a "Controlled Amortization Class") may be made, subject to
available funds, based on a specified principal payment schedule. Distributions
of principal with respect to one or more other Classes of Certificates (each
such Class, a "Companion Class") may be contingent on the specified principal
payment schedule for a Controlled Amortization Class of the same Series and the
rate at which payments and other collections of principal on the Mortgage Assets
in the related Trust Fund are received. Unless otherwise specified in the
related Prospectus Supplement, distributions of principal of any Class of
Offered Certificates will be made on a pro rata basis among all of the
Certificates of such Class.
Distributions on the Certificates in Respect of Prepayment Premiums or in
Respect of Equity Participations.
If so provided in the related Prospectus Supplement, Prepayment
Premiums or payments in respect of Equity Participations received on or in
connection with the Mortgage Assets in any Trust Fund will be distributed on
each Distribution Date to the holders of the Class of Certificates of the
related Series entitled thereto in accordance with the provisions described in
such Prospectus Supplement. Alternatively, such items may be retained by the
Depositor or any of its affiliates or by any other specified person and/or may
be excluded as Trust Assets.
Allocation of Losses and Shortfalls
The amount of any losses or shortfalls in collections on the Mortgage
Assets in any Trust Fund (to the extent not covered or offset by draws on any
reserve fund or under any instrument of Credit Support) will be allocated among
the respective Classes of Certificates of the related Series in the priority and
manner, and subject to the limitations, specified in the related Prospectus
Supplement. As described in the related Prospectus Supplement, such allocations
may be effected by (i) a reduction in the entitlements to interest and/or the
aggregate Certificate Principal Balances of one or more such Classes of
Certificates and/or (ii) establishing a priority of payments among such Classes
of Certificates. See "Description of Credit Support".
Advances in Respect of Delinquencies
If and to the extent provided in the related Prospectus Supplement, if
a Trust Fund includes Mortgage Loans, the Master Servicer, the Special Servicer,
the Trustee, any provider of Credit Support and/or any other specified person
may be obligated to advance, or have the option of advancing, on or before each
Distribution Date, from its or their own funds or from excess funds held in the
related Certificate Account that are not part of the Available Distribution
Amount for the related Series for such Distribution Date, an amount up to the
aggregate of any payments of principal (other than the principal portion of any
balloon payments) and interest that were due on or in respect of such Mortgage
Loans during the related Due Period and were delinquent on the related
Determination Date.
Advances are intended to maintain a regular flow of scheduled interest
and principal payments to holders of the Class or Classes of Certificates
entitled thereto, rather than to guarantee or insure against losses.
Accordingly, all advances made out of a specific entity's own funds will be
reimbursable out of related recoveries on the Mortgage Loans (including amounts
drawn under any fund or instrument constituting Credit Support) with respect to
which such advances were made (as to any Mortgage Loan, "Related Proceeds") and
such other specific
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sources as may be identified in the related Prospectus Supplement, including, in
the case of a Series that includes one or more Classes of Subordinate
Certificates, if so identified, collections on other Mortgage Assets in the
related Trust Fund that would otherwise be distributable to the holders of one
or more Classes of such Subordinate Certificates. No advance will be required to
be made by a Master Servicer, Special Servicer or Trustee if, in the judgment of
the Master Servicer, Special Servicer or Trustee, as the case may be, such
advance would not be recoverable from Related Proceeds or another specifically
identified source (any such advance, a "Nonrecoverable Advance"); and, if
previously made by a Master Servicer, Special Servicer or Trustee, a
Nonrecoverable Advance will be reimbursable thereto from any amounts in the
related Certificate Account prior to any distributions being made to the related
Series of Certificateholders.
If advances have been made by a Master Servicer, Special Servicer,
Trustee or other entity from excess funds in a Certificate Account, such Master
Servicer, Special Servicer, Trustee or other entity, as the case may be, will be
required to replace such funds in such Certificate Account on or prior to any
future Distribution Date to the extent that funds in such Certificate Account on
such Distribution Date are less than payments required to be made to the related
Series of Certificateholders on such date. If so specified in the related
Prospectus Supplement, the obligation of a Master Servicer, Special Servicer,
Trustee or other entity to make advances may be secured by a cash advance
reserve fund or a surety bond. If applicable, information regarding the
characteristics of, and the identity of any obligor on, any such surety bond,
will be set forth in the related Prospectus Supplement.
If and to the extent so provided in the related Prospectus Supplement,
any entity making advances will be entitled to receive interest on certain or
all of such advances for a specified period during which such advances are
outstanding at the rate specified in such Prospectus Supplement, and such entity
will be entitled to payment of such interest periodically from general
collections on the Mortgage Loans in the related Trust Fund prior to any payment
to the related Series of Certificateholders or as otherwise provided in the
related Pooling Agreement and described in such Prospectus Supplement.
The Prospectus Supplement for the Offered Certificates of any Series
evidencing an interest in a Trust Fund that includes MBS will describe any
comparable advancing obligation of a party to the related Pooling Agreement or
of a party to the related MBS Agreement.
Reports to Certificateholders
On each Distribution Date, together with the distribution to the
holders of each Class of the Offered Certificates of a Series, a Master
Servicer, Manager or Trustee, as provided in the related Prospectus Supplement,
will forward to each such holder, a statement (a "Distribution Date Statement")
substantially in the form, or specifying the information, set forth in the
related Prospectus Supplement. In general, the Distribution Date Statement for
each Distribution Date will detail the distributions on the Certificates of the
related Series on such Distribution Date and the performance of the Mortgage
Assets in the related Trust Fund.
Within a reasonable period of time after the end of each calendar year,
the Master Servicer, Manager or Trustee, as the case may be, for a Series will
be required to furnish to each person who at any time during the calendar year
was a holder of an Offered Certificate of such Series a statement containing
information regarding the principal, interest and other distributions on the
applicable Class of Offered Certificates, aggregated for such calendar year or
the applicable portion thereof during which such person was a Certificateholder.
Such obligation will be deemed to have been satisfied to the extent that
substantially comparable information is provided pursuant to any requirements of
the Code as are from time to time in force. See, however, "--Book-Entry
Registration and Definitive Certificates" below.
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If the Trust Fund for a Series includes MBS, the ability of the related
Master Servicer, Manager or Trustee, as the case may be, to include in any
Distribution Date Statement information regarding the mortgage loans underlying
such MBS will depend on the reports received with respect to such MBS. In such
cases, the related Prospectus Supplement will describe the loan-specific
information to be included in the Distribution Date Statements that will be
forwarded to the holders of the Offered Certificates of that Series in
connection with distributions made to them.
Voting Rights
The voting rights evidenced by each Series (as to such Series, the
"Voting Rights") will be allocated among the respective Classes of Certificates
of such Series in the manner described in the related Prospectus Supplement.
Certificateholders will generally not have a right to vote, except with
respect to certain amendments to the related Pooling Agreement and as otherwise
specified in the related Prospectus Supplement. See "Description of the Pooling
Agreements--Amendment". The holders of specified amounts of Certificates of a
particular Series will have the right to act as a group to remove the related
Trustee and also upon the occurrence of certain events which if continuing would
constitute an Event of Default on the part of the related Master Servicer,
Special Servicer or REMIC Administrator. See "Description of the Pooling
Agreements--Events of Default", "--Rights Upon Event of Default" and
"--Resignation and Removal of the Trustee".
Termination
The obligations created by the Pooling Agreement for each Series will
terminate following (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 Mortgage Loan subject thereto and (ii) the payment (or
provision for payment) to the Certificateholders of that Series of all amounts
required to be paid to them pursuant to such Pooling Agreement. Written notice
of termination of a Pooling Agreement will be given to each Certificateholder of
the related Series, and the final distribution will be made only upon
presentation and surrender of the Certificates of such Series at the location to
be specified in the notice of termination.
If so specified in the related Prospectus Supplement, the Certificates
of any Series may be subject to optional early retirement through the repurchase
of the Mortgage Assets in the related Trust Fund by the party or parties
specified therein, under the circumstances and in the manner set forth therein.
In addition, if so provided in the related Prospectus Supplement, upon
the reduction of the aggregate Certificate Principal Balance of a specified
Class or Classes of Certificates by a specified percentage or amount or upon a
specified date, a party designated therein may be authorized or required to
solicit bids for the purchase of all the Mortgage Assets of the related Trust
Fund, or of a sufficient portion of such Mortgage Assets to retire such Class or
Classes of Certificates, under the circumstances and in the manner set forth
therein. The solicitation of bids will be conducted in a commercially reasonable
manner and, generally, assets will be sold at their fair market value.
Circumstances may arise in which such fair market value may be less than the
unpaid balance of the Mortgage Loans sold and therefore, as a result of such a
sale, the Certificateholders of one or more Classes of Certificates may receive
an amount less than the aggregate Certificate Principal Balance of, and accrued
unpaid interest on, their Certificates.
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Book-Entry Registration and Definitive Certificates
If so provided in the Prospectus Supplement for the Offered
Certificates of any Series, one or more Classes of such Offered Certificates
will be offered in book-entry format through the facilities of DTC, and each
such Class will be represented by one or more global Certificates registered in
the name of DTC or its nominee. If so provided in the Prospectus Supplement,
arrangements may be made for clearance and settlement through the Euroclear
System or CEDEL, S.A., if they are participants in DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking corporation" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
was created to hold securities for DTC Participants and facilitate the clearance
and settlement of securities transactions between DTC Participants through
electronic computerized book-entry changes in their accounts, thereby
eliminating the need for physical movement of securities certificates. DTC
Participants that maintain accounts with DTC include securities brokers and
dealers, banks, trust companies and clearing corporations and may include other
organizations. DTC is owned by a number of DTC Participants and by the New York
Stock Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to others such as banks, brokers, dealers and trust companies that
directly or indirectly clear through or maintain a custodial relationship with a
DTC Participant that maintains as account with DTC. The rules applicable to DTC
and DTC Participants are on file with the Commission.
Purchases of Book-Entry Certificates under the DTC system must be made
by or through, and will be recorded on the records of, the brokerage firm, bank,
thrift institution or other financial intermediary (each, a "Financial
Intermediary") that maintains the beneficial owner's account for such purpose.
In turn, the Financial Intermediary's ownership of such Certificates will be
recorded on the records of DTC (or of a participating firm that acts as agent
for the Financial Intermediary, whose interest will in turn be recorded on the
records of DTC, if the beneficial owner's Financial Intermediary is not a DTC
Participant). Therefore, the beneficial owner must rely on the foregoing
procedures to evidence its beneficial ownership of such Certificates. The
beneficial ownership interest of the owner of a Book-Entry Certificate (a
"Certificate Owner") may only be transferred by compliance with the rules,
regulations and procedures of such Financial Intermediaries and DTC
Participants.
DTC has no knowledge of the actual Certificate Owners; DTC's records
reflect only the identity of the DTC Participants to whose accounts such
Certificates are credited, which may or may not be the Certificate Owners. The
DTC Participants will remain responsible for keeping account of their holdings
on behalf of their customers.
Conveyance of notices and other communications by DTC to DTC
Participants and by DTC Participants to Financial Intermediaries and Certificate
Owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
Distributions on the Book-Entry Certificates will be made to DTC. DTC's
practice is to credit DTC Participants' accounts on the related Distribution
Date in accordance with their respective holdings shown on DTC's records unless
DTC has reason to believe that it will not receive payment on such date.
Disbursement of such distributions by DTC Participants to Financial
Intermediaries and Certificate Owners will be governed by standing instructions
and customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name", and will be the
responsibility of each such DTC Participant (and not of DTC, the Depositor or
any Trustee, Master Servicer, Special Servicer or Manager), subject to any
statutory or regulatory requirements as may be in effect from time to time.
Accordingly, under a book-entry system, Certificate Owners may receive payments
after the related Distribution Date.
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Unless otherwise provided in the related Prospectus Supplement, the
only "Certificateholder" (as such term is used in the related Pooling Agreement)
of Book-Entry Certificates will be the nominee of DTC, and the Certificate
Owners will not be recognized as Certificateholders under the Pooling Agreement.
Certificate Owners will be permitted to exercise the rights of
Certificateholders under the related Pooling Agreement only indirectly through
the DTC Participants who in turn will exercise their rights through DTC. The
Depositor has been informed that DTC will take action permitted to be taken by a
Certificateholder under a Pooling Agreement only at the direction of one or more
DTC Participants to whose account with DTC interests in the Book-Entry
Certificates are credited. DTC may take conflicting actions with respect to the
Book-Entry Certificates to the extent that such actions are taken on behalf of
Financial Intermediaries whose holdings include such Certificates.
Because DTC can act only on behalf of DTC Participants, who in turn act
on behalf of Financial Intermediaries and certain Certificate Owners, the
ability of a Certificate Owner to pledge its interest in Book-Entry Certificates
to persons or entities that do not participate in the DTC system, or otherwise
take actions in respect of its interest in Book-Entry Certificates, may be
limited due to the lack of a physical certificate evidencing such interest.
Unless otherwise specified in the related Prospectus Supplement,
Certificates initially issued in book-entry form will be issued as Definitive
Certificates to Certificate Owners or their nominees, rather than to DTC or its
nominee, only if (i) the Depositor advises the Trustee in writing that DTC is no
longer willing or able to discharge properly its responsibilities as depository
with respect to such Certificates and the Depositor is unable to locate a
qualified successor or (ii) the Depositor, at its option, elects to terminate
the book-entry system through DTC with respect to such Certificates. Upon the
occurrence of either of the events described in the preceding sentence, DTC will
be required to notify all DTC Participants of the availability through DTC of
Definitive Certificates. Upon surrender by DTC of the certificate or
certificates representing a Class of Book-Entry Certificates, together with
instructions for registration, the Trustee for the related Series or other
designated party will be required to issue to the Certificate Owners identified
in such instructions the Definitive Certificates to which they are entitled, and
thereafter the holders of such Definitive Certificates will be recognized as
"Certificateholders" under and within the meaning of the related Pooling
Agreement.
DESCRIPTION OF THE POOLING AGREEMENTS
General
The Certificates of each Series will be issued pursuant to a Pooling
Agreement. In general, the parties to a Pooling Agreement will include the
Depositor, the Trustee, the Master Servicer, the Special Servicer and, if one or
more REMIC elections have been made with respect to the Trust Fund, the REMIC
Administrator. However, a Pooling Agreement that relates to a Trust Fund that
includes MBS may include a Manager as a party, but may not include a Master
Servicer, Special Servicer or other servicer as a party. All parties to each
Pooling Agreement under which Certificates of a Series are issued will be
identified in the related Prospectus Supplement. If so specified in the related
Prospectus Supplement, the Mortgage Asset Seller or an affiliate thereof may
perform the functions of Master Servicer, Special Servicer, Manager or REMIC
Administrator. If so specified in the related Prospectus Supplement, the Master
Servicer may also perform the duties of Special Servicer, and the Master
Servicer, the Special Servicer or the Trustee may also perform the duties of
REMIC Administrator. Any party to a Pooling Agreement or any affiliate thereof
may own Certificates issued thereunder; however, except in limited circumstances
(including with respect to required consents to certain amendments to a Pooling
Agreement), Certificates issued thereunder that are held by the Master Servicer
or Special Servicer for the related Series will not be allocated Voting Rights.
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A form of a pooling and servicing agreement has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part.
However, the provisions of each Pooling Agreement will vary depending upon the
nature of the Certificates to be issued thereunder and the nature of the related
Trust Fund. The following summaries describe certain provisions that may appear
in a Pooling Agreement. The Prospectus Supplement for the Offered Certificates
of any Series will describe any provision of the related Pooling Agreement that
materially differs from the description thereof contained in this Prospectus.
The summaries herein do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all of the provisions of the
Pooling Agreement for each Series and the description of such provisions in the
related Prospectus Supplement. The Depositor will provide a copy of the Pooling
Agreement (without exhibits) that relates to any Series without charge upon
written request of a holder of a Certificate of such Series addressed to it at
its principal executive offices specified herein under "The Depositor".
Assignment of Mortgage Assets
General. At the time of initial issuance of any Series, the Depositor
will assign (or cause to be assigned) to the designated Trustee the Mortgage
Assets to be included in the related Trust Fund, together with, unless otherwise
specified in the related Prospectus Supplement, all principal and interest to be
received on or with respect to such Mortgage Assets after the related Cut-off
Date, other than principal and interest due on or before the related Cut-off
Date. The Trustee will, concurrently with such assignment, deliver the
Certificates of such Series to or at the direction of the Depositor in exchange
for the Mortgage Assets and the other assets to be included in the related Trust
Fund. Each Mortgage Asset will be identified in a schedule appearing as an
exhibit to the related Pooling Agreement. Such schedule generally will include
detailed information that pertains to each Mortgage Asset included in the
related Trust Fund, which information will typically include: (i) in the case of
a Mortgage Loan, the address of the related Mortgaged Property and type of such
property, the Mortgage Rate (and, if applicable, the applicable index, gross
margin, adjustment date and any rate cap information), the original and
remaining term to maturity, the amortization term, and the original and
outstanding principal balance; and (ii) in the case of an MBS, the outstanding
principal balance and the pass-through rate or coupon rate.
Delivery of Mortgage Loans. In addition, unless otherwise specified in
the related Prospectus Supplement, the Depositor will, as to each Mortgage Loan
to be included in a Trust Fund, deliver, or cause to be delivered, to the
related Trustee (or to a custodian appointed by the Trustee as described below)
the Mortgage Note endorsed, without recourse, either in blank or to the order of
such Trustee (or its nominee), the Mortgage with evidence of recording indicated
thereon (except for any Mortgage not returned from the public recording office),
an assignment of the Mortgage in blank or to the Trustee (or its nominee) in
recordable form, together with any intervening assignments of the Mortgage with
evidence of recording thereon (except for any such assignment not returned from
the public recording office), and, if applicable, any riders or modifications to
such Mortgage Note and Mortgage, together with certain other documents at such
times as set forth in the related Pooling Agreement. Such assignments may be
blanket assignments covering Mortgages on Mortgaged Properties located in the
same county, if permitted by law. Notwithstanding the foregoing, a Trust Fund
may include Mortgage Loans where the original Mortgage Note is not delivered to
the Trustee if the Depositor delivers, or causes to be delivered, to the related
Trustee (or such custodian) a copy or a duplicate original of the Mortgage Note,
together with an affidavit of the Depositor or a prior holder of such Mortgage
Note certifying that the original thereof has been lost or destroyed. In
addition, if the Depositor cannot deliver, with respect to any Mortgage Loan,
the Mortgage or any intervening assignment with evidence of recording
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thereon concurrently with the execution and delivery of the related Pooling
Agreement because of a delay caused by the public recording office, the
Depositor will deliver, or cause to be delivered, to the related Trustee (or
such custodian) a true and correct photocopy of such Mortgage or assignment as
submitted for recording. The Depositor will deliver, or cause to be delivered,
to the related Trustee (or such custodian) such Mortgage or assignment with
evidence of recording indicated thereon after receipt thereof from the public
recording office. If the Depositor cannot deliver, with respect to any Mortgage
Loan, the Mortgage or any intervening assignment with evidence of recording
thereon concurrently with the execution and delivery of the related Pooling
Agreement because such Mortgage or assignment has been lost, the Depositor will
deliver, or cause to be delivered, to the related Trustee (or such custodian) a
true and correct photocopy of such Mortgage or assignment with evidence of
recording thereon. Unless otherwise specified in the related Prospectus
Supplement, assignments of Mortgage to the Trustee (or its nominee) will be
recorded in the appropriate public recording office, except in states where, in
the opinion of counsel acceptable to the Trustee, such recording is not required
to protect the Trustee's interests in the Mortgage Loan against the claim of any
subsequent transferee or any successor to or creditor of the Depositor or the
originator of such Mortgage Loan.
The Trustee (or a custodian appointed by the Trustee) for a Series will
be required to review the Mortgage Loan documents delivered to it within a
specified period of days after receipt thereof, and the Trustee (or such
custodian) will hold such documents in trust for the benefit of the
Certificateholders of such Series.
The Trustee will be authorized at any time to appoint one or more
custodians pursuant to a custodial agreement to hold title to the Mortgage Loans
in any Trust Fund and to maintain possession of and, if applicable, to review
the documents relating to such Mortgage Loans, in any case as the agent of the
Trustee.
Delivery of MBS. Unless otherwise specified in the related Prospectus
Supplement, the related Pooling Agreement will provide that such steps will be
taken as will be necessary to cause the Trustee to become the registered owner
of each MBS which is included in a Trust Fund and to provide for all
distributions on each such MBS to be made either directly to the Trustee or to
an MBS Administrator other than the Trustee, if any. Representations and
Warranties with respect to Mortgage Assets; Repurchases and Other Remedies
Unless otherwise provided in the Prospectus Supplement for the Offered
Certificates of any Series, the Depositor will, with respect to each Mortgage
Asset in the related Trust Fund, make or assign, or cause to be made or
assigned, certain representations and warranties (the person making such
representations and warranties, the "Warranting Party") covering, by way of
example: (i) the accuracy of the information set forth for such Mortgage Asset
on the schedule of Mortgage Loans appearing as an exhibit to the related Pooling
Agreement; (ii) the Warranting Party's title to the Mortgage Loan and the
authority of the Warranting Party to sell the Mortgage Loan; and (iii) in the
case of a Mortgage Loan, the enforceability of the related Mortgage Note and
Mortgage, the existence of title insurance insuring the lien priority of the
related Mortgage, the payment status of the Mortgage Loan and the delivery of
all documents required to be delivered with respect to the Mortgage Loan as
contemplated under "--Assignment of Mortgage Assets--Delivery of Mortgage Loans"
above. It is expected that in most cases the Warranting Party will be the
Mortgage Asset Seller; however, the Warranting Party may also be the Depositor,
an affiliate of the Mortgage Asset Seller or the Depositor, the Master Servicer,
the Special Servicer or another person acceptable to the Depositor. The
Warranting Party, if other than the Mortgage Asset Seller, will be identified in
the related Prospectus Supplement.
Unless otherwise provided in the related Prospectus Supplement, each
Pooling Agreement will provide that the Master Servicer and/or Trustee will be
required to notify promptly any Warranting Party of any breach of any
representation or warranty made by it in respect of a Mortgage Asset that
materially and adversely affects the interests of the Certificateholders of the
related Series. If such Warranting Party cannot cure such breach within a
specified period following the date on which it was notified of such breach,
then, unless otherwise provided in the related Prospectus Supplement, it will be
obligated to repurchase such Mortgage Asset from the Trustee at a price not less
than the unpaid principal balance of such Mortgage Asset as of the date of
purchase, together with interest thereon at the related Mortgage Rate (or, in
the case of an MBS, at the related pass-through rate or coupon rate) to a date
on or about the date of purchase (in any event, the "Purchase Price"). If so
provided in the Prospectus Supplement for the Offered Certificates of any
Series, in lieu of repurchasing a Mortgage Asset as to which a breach has
occurred, a Warranting Party will have the option, exercisable upon certain
conditions
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and/or within a specified period after initial issuance of such Series, to
replace such Mortgage Asset with one or more other mortgage loans or
mortgage-backed securities that conform to the description of "Mortgage Asset"
herein, in accordance with standards that will be described in the Prospectus
Supplement. Unless otherwise specified in the related Prospectus Supplement,
this repurchase or substitution obligation will constitute the sole remedy
available to holders of the Certificates of any Series or to the related Trustee
on their behalf for a breach of representation and warranty by a Warranting
Party, and no other person or entity will be obligated to purchase or replace a
Mortgage Asset if a Warranting Party defaults on its obligation to do so.
In some cases, representations and warranties will have been made in
respect of a Mortgage Asset as of a date prior to the date upon which the
related Series is initially issued, and thus may not address events that may
occur following the date as of which they were made. The date as of which the
representations and warranties regarding the Mortgage Assets in any Trust Fund
were made will be specified in the related Prospectus Supplement.
Collection and Other Servicing Procedures with respect to Mortgage Loans
Unless otherwise specified in the related Prospectus Supplement, the
Master Servicer and the Special Servicer for any Mortgage Asset Pool, directly
or through Sub-Servicers, will each be obligated under the related Pooling
Agreement to service and administer the Mortgage Loans in such Mortgage Asset
Pool for the benefit of the related Certificateholders, in accordance with
applicable law and further in accordance with the terms of such Pooling
Agreement, such Mortgage Loans and any instrument of Credit Support included in
the related Trust Fund. Subject to the foregoing, the Master Servicer and the
Special Servicer will each have full power and authority to do any and all
things in connection with such servicing and administration that it may deem
necessary and desirable.
As part of its servicing duties, each of the Master Servicer and the
Special Servicer will be required to make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans that it
services and will be obligated to follow such collection procedures as it would
follow with respect to mortgage loans that are comparable to such Mortgage Loans
and held for its own account, provided (i) such procedures are consistent with
the terms of the related Pooling Agreement and (ii) do not impair recovery under
any instrument of Credit Support included in the related Trust Fund. Consistent
with the foregoing, the Master Servicer and the Special Servicer will each be
permitted, in its discretion, unless otherwise specified in the related
Prospectus Supplement, to waive any Prepayment Premium, late payment charge or
other charge in connection with any Mortgage Loan.
The Master Servicer and the Special Servicer for any Trust Fund, either
separately or jointly, directly or through Sub-Servicers, will also be required
to perform as to the Mortgage Loans in such Trust Fund various other customary
functions of a servicer of comparable loans, including maintaining escrow or
impound accounts, if required under the related Pooling Agreement, for payment
of taxes, insurance premiums, ground rents and similar items, or otherwise
monitoring the timely payment of those items; attempting to collect delinquent
payments; supervising foreclosures; negotiating modifications; conducting
property inspections on a periodic or other basis; managing (or overseeing the
management of) Mortgaged Properties acquired on behalf of such Trust Fund
through foreclosure, deed-in-lieu of foreclosure or otherwise (each, an "REO
Property"); and maintaining servicing records relating to such Mortgage Loans.
The related Prospectus Supplement will specify when and the extent to which
servicing of a Mortgage Loan is to be transferred from the Master Servicer to
the Special Servicer. In general, and subject to the discussion in the related
Prospectus Supplement, a Special Servicer will be responsible for the servicing
and administration of: (i) Mortgage Loans that are delinquent in respect of a
specified number of scheduled payments; (ii) Mortgage Loans as to which the
related borrower has entered into or consented to bankruptcy, appointment of a
receiver or conservator or similar insolvency proceeding, or the related
borrower has become the subject of a decree or order for such a proceeding which
shall have remained
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in force undischarged or unstayed for a specified number of days; and (iii) REO
Properties. If so specified in the related Prospectus Supplement, a Pooling
Agreement also may provide that if a default on a Mortgage Loan has occurred or,
in the judgment of the related Master Servicer, a payment default is reasonably
foreseeable, the related Master Servicer may elect to transfer the servicing
thereof, in whole or in part, to the related Special Servicer. Unless otherwise
provided in the related Prospectus Supplement, when the circumstances no longer
warrant a Special Servicer's continuing to service a particular Mortgage Loan
(e.g., the related borrower is paying in accordance with the forbearance
arrangement entered into between the Special Servicer and such borrower), the
Master Servicer will resume the servicing duties with respect thereto. If and to
the extent provided in the related Pooling Agreement and described in the
related Prospectus Supplement, a Special Servicer may perform certain limited
duties in respect of Mortgage Loans for which the Master Servicer is primarily
responsible (including, if so specified, performing property inspections and
evaluating financial statements); and a Master Servicer may perform certain
limited duties in respect of any Mortgage Loan for which the Special Servicer is
primarily responsible (including, if so specified, continuing to receive
payments on such Mortgage Loan (including amounts collected by the Special
Servicer), making certain calculations with respect to such Mortgage Loan and
making remittances and preparing certain reports to the Trustee and/or
Certificateholders with respect to such Mortgage Loan. Unless otherwise
specified in the related Prospectus Supplement, the Master Servicer will be
responsible for filing and settling claims in respect of particular Mortgage
Loans under any applicable instrument of Credit Support. See "Description of
Credit Support".
A mortgagor's failure to make required Mortgage Loan payments may mean
that operating income is insufficient to service the mortgage debt, or may
reflect the diversion of that income from the servicing of the mortgage debt. In
addition, a mortgagor that is unable to make Mortgage Loan payments may also be
unable to make timely payment of taxes and otherwise to maintain and insure the
related Mortgaged Property. In general, the related Special Servicer will be
required to monitor any Mortgage Loan that is in default, evaluate whether the
causes of the default can be corrected over a reasonable period without
significant impairment of the value of the related Mortgaged Property, initiate
corrective action in cooperation with the mortgagor if cure is likely, inspect
the related Mortgaged Property and take such other actions as it deems necessary
and appropriate. A significant period of time may elapse before the Special
Servicer is able to assess the success of any such corrective action or the need
for additional initiatives. The time within which the Special Servicer can make
the initial determination of appropriate action, evaluate the success of
corrective action, develop additional initiatives, institute foreclosure
proceedings and actually foreclose (or accept a deed to a Mortgaged Property in
lieu of foreclosure) on behalf of the Certificateholders of the related Series
may vary considerably depending on the particular Mortgage Loan, the Mortgaged
Property, the mortgagor, the presence of an acceptable party to assume the
Mortgage Loan and the laws of the jurisdiction in which the Mortgaged Property
is located. If a mortgagor files a bankruptcy petition, the Special Servicer may
not be permitted to accelerate the maturity of the Mortgage Loan or to foreclose
on the related Mortgaged Property for a considerable period of time. See
"Certain Legal Aspects of Mortgage Loans--Bankruptcy Laws". Mortgagors may, from
time to time, request partial releases of the Mortgaged Properties, easements,
consents to alteration or demolition and other similar matters. In general, the
Master Servicer may approve such a request if it has determined, exercising its
business judgment in accordance with the applicable servicing standard, that
such approval will not adversely affect the security for, or the timely and full
collectability of, the related Mortgage Loan. Any fee collected by the Master
Servicer for processing such request will be retained by the Master Servicer as
additional servicing compensation.
In the case of Mortgage Loans secured by junior liens on the related
Mortgaged Properties, unless otherwise provided in the related Prospectus
Supplement, the Master Servicer will be required to file (or cause to be filed)
of record a request for notice of any action by a superior lienholder under the
Senior Lien for the protection of the related Trustee's interest, where
permitted by local law and whenever applicable state law does not require that a
junior lienholder be named as a party defendant in foreclosure proceedings in
order to foreclose such junior lienholder's equity of redemption. Unless
otherwise specified in the related Prospectus Supplement, the Master Servicer
also will be required to notify any superior lienholder in writing of the
existence of the
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Mortgage Loan and request notification of any action (as described below) to be
taken against the mortgagor or the Mortgaged Property by the superior
lienholder. If the Master Servicer is notified that any superior lienholder has
accelerated or intends to accelerate the obligations secured by the related
Senior Lien, or has declared or intends to declare a default under the mortgage
or the promissory note secured thereby, or has filed or intends to file an
election to have the related Mortgaged Property sold or foreclosed, then, unless
otherwise specified in the related Prospectus Supplement, the Master Servicer
and the Special Servicer will each be required to take, on behalf of the related
Trust Fund, whatever actions are necessary to protect the interests of the
related Certificateholders and/or to preserve the security of the related
Mortgage Loan, subject to the application of the REMIC Provisions (as defined
herein). Unless otherwise specified in the related Prospectus Supplement, the
Master Servicer or Special Servicer, as applicable, will be required to advance
the necessary funds to cure the default or reinstate the Senior Lien, if such
advance is in the best interests of the related Certificateholders and the
Master Servicer or Special Servicer, as applicable, determines such advances are
recoverable out of payments on or proceeds of the related Mortgage Loan.
Sub-Servicers
A Master Servicer or Special Servicer may delegate its servicing
obligations in respect of the Mortgage Loans serviced thereby to one or more
third-party servicers (each, a "Sub-Servicer"); provided that, unless otherwise
specified in the related Prospectus Supplement, such Master Servicer or Special
Servicer will remain obligated under the related Pooling Agreement. Unless
otherwise provided in the related Prospectus Supplement, each sub-servicing
agreement between a Master Servicer or Special Servicer, as applicable, and a
Sub-Servicer (a "Sub-Servicing Agreement") must provide for servicing of the
applicable Mortgage Loans consistent with the related Pooling Agreement. The
Master Servicer and Special Servicer in respect of any Mortgage Asset Pool will
each be required to monitor the performance of Sub-Servicers retained by it and
will have the right to remove a Sub-Servicer retained by it at any time it
considers such removal to be in the best interests of Certificateholders.
Unless otherwise provided in the related Prospectus Supplement, a
Master Servicer or Special Servicer will be solely liable for all fees owed by
it to any Sub-Servicer, irrespective of whether the Master Servicer's or Special
Servicer's compensation pursuant to the related Pooling Agreement is sufficient
to pay such fees. Each Sub-Servicer will be reimbursed by the Master Servicer or
Special Servicer, as the case may be, that retained it for certain expenditures
which it makes, generally to the same extent such Master Servicer or Special
Servicer would be reimbursed under a Pooling Agreement. See "--Certificate
Account" and "--Servicing Compensation and Payment of Expenses".
Collection of Payments on MBS
Unless otherwise specified in the related Prospectus Supplement, the
MBS, if any, included in the Trust Fund for any Series will be registered in the
name of the Trustee. All distributions thereon will be made either directly to
the Trustee or to an MBS Administrator other than the Trustee, if any. Unless
otherwise specified in the related Prospectus Supplement, the related Pooling
Agreement will provide that, if the Trustee or such other MBS Administrator, as
applicable, has not received a distribution with respect to any MBS by a
specified day after the date on which such distribution was due and payable
pursuant to the terms of such MBS, the Trustee or such other MBS Administrator,
as applicable, is to request the issuer or guarantor, if any, of such MBS to
make such payment as promptly as possible and legally permitted and is to take
such legal action against such issuer or guarantor as the Trustee or such other
MBS Administrator, as applicable, deems appropriate under the circumstances,
including the prosecution of any claims in connection therewith. The reasonable
legal fees and expenses incurred by the Trustee or such other MBS Administrator,
as applicable, in connection with the prosecution of any such legal action will
be reimbursable thereto (with interest) out of the proceeds of any such action
and will be retained by the Trustee or such other MBS Administrator, as
applicable, prior to the deposit of any remaining proceeds in the Certificate
Account pending distribution thereof to Certificateholders of the
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affected Series. In the event that the Trustee or such other MBS Administrator,
as applicable, has reason to believe that the proceeds of any such legal action
may be insufficient to reimburse it (with interest) for its projected legal fees
and expenses, the Trustee or such other MBS Administrator, as applicable, will
notify the Certificateholders of the affected Series that it is not obligated to
pursue any such available remedies unless adequate indemnity for its legal fees
and expenses is provided by such Certificateholders.
Certificate Account
General. The related Trustee and any related Master Servicer, Special
Servicer and/or Manager, as applicable, will establish and maintain, or cause to
be established and maintained, in respect of each Trust Fund, one or more
accounts (collectively, the "Certificate Account"), which will be established so
as to comply with the standards of each Rating Agency that has rated any one or
more Classes of Certificates of the related Series. A Certificate Account may be
maintained as an interest-bearing or a noninterest-bearing account and the funds
held therein may be invested pending each succeeding Distribution Date in United
States government securities and other obligations that are acceptable to each
Rating Agency that has rated any one or more Classes of Certificates of the
related Series ("Permitted Investments"). Unless otherwise provided in the
related Prospectus Supplement, any interest or other income earned on funds in a
Certificate Account will be paid to the related Trustee, Master Servicer,
Special Servicer and/or Manager, as applicable, as additional compensation. A
Certificate Account may be maintained with the related Trustee, Master Servicer,
Special Servicer, Manager or Mortgage Asset Seller or with a depository
institution that is an affiliate of any of the foregoing or of the Depositor,
provided that it complies with applicable Rating Agency standards. If permitted
by the applicable Rating Agency or Agencies, a Certificate Account may contain
funds relating to more than one series of mortgage pass-through certificates and
may contain other funds representing payments on mortgage assets owned by the
related Master Servicer or Special Servicer or serviced by either on behalf of
others.
Deposits. Unless otherwise provided in the related Pooling Agreement
and described in the related Prospectus Supplement, the following payments and
collections in respect of the Trust Assets included in any Trust Fund, that are
received or made by the Trustee, the Master Servicer, the Special Servicer, the
MBS Administrator or the Manager, as applicable, subsequent to the Cut-off Date
(other than payments due on or before the Cut-off Date), are to be deposited in
the Certificate Account for such Trust Fund within a certain period following
receipt (in the case of collections on or in respect of the Trust Assets) or
otherwise as provided in the related Pooling Agreement:
(i) if such Trust Fund includes Mortgage Loans, all payments
on account of principal, including principal prepayments, on such
Mortgage Loans;
(ii) if such Trust Fund includes Mortgage Loans, all payments
on account of interest on such Mortgage Loans, including any default
interest collected, in each case net of any portion thereof retained by
the Master Servicer or the Special Servicer as its servicing
compensation or as compensation to the Trustee;
(iii) if such Trust Fund includes Mortgage Loans, all proceeds
received under any hazard, title or other insurance policy that
provides coverage with respect to a Mortgaged Property or the related
Mortgage Loan or in connection with the full or partial condemnation of
a Mortgaged Property (other than proceeds applied to the restoration of
the property or released to the related borrower) ("Insurance Proceeds"
and "Condemnation Proceeds", respectively) and all other amounts
received and retained in connection with the liquidation of defaulted
Mortgage Loans or property acquired in respect thereof, by foreclosure
or otherwise (such amounts, together with those amounts listed in
clause (vii) below, "Liquidation Proceeds"), together with the net
operating income (less reasonable reserves for future
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expenses) derived from the operation of any Mortgaged Properties
acquired by the Trust Fund through foreclosure or otherwise;
(iv) any amounts paid under any instrument or drawn from any
fund that constitutes Credit Support for the related Series;
(v) if such Trust Fund includes Mortgage Loans, any advances
made with respect to delinquent scheduled payments of
principal and interest on such Mortgage Loans;
(vi) any amounts paid under any Cash Flow Agreement for the
related Series;
(vii) if such Trust Fund includes Mortgage Loans, all proceeds
of the purchase of any Mortgage Loan, or property acquired in respect
thereof, by the Depositor, any Mortgage Asset Seller or any other
specified person as described under "--Representations and Warranties
with respect to Mortgage Assets; Repurchases and Other Remedies", all
proceeds of the purchase of any defaulted Mortgage Loan as described
under "--Realization Upon Defaulted Mortgage Loans", and all proceeds
of any Mortgage Loan purchased as described under "Description of the
Certificates--Termination";
(viii) if such Trust Fund includes Mortgage Loans, and to the
extent that any such item does not constitute additional servicing
compensation to the Master Servicer or the Special Servicer and is not
otherwise retained by the Depositor or another specified person, any
payments on account of modification or assumption fees, late payment
charges, Prepayment Premiums or Equity Participations with respect to
the Mortgage Loans;
(ix) if such Trust Fund includes Mortgage Loans, all payments
required to be deposited in the Certificate Account with respect to any
deductible clause in any blanket insurance policy as described under
"--Hazard Insurance Policies";
(x) any amount required to be deposited by the Master
Servicer, the Special Servicer, the Manager or the Trustee in
connection with losses realized on investments for the benefit of the
Master Servicer, the Special Servicer, the Manager or the Trustee, as
the case may be, of funds held in the Certificate Account;
(xi) if such Trust Fund includes MBS, all payments on such
MBS;
(xii) if such Trust Fund includes MBS, all proceeds of the
purchase of any MBS by the Depositor or any other specified person as
described under "--Representations and Warranties with respect to
Mortgage Assets; Repurchases and Other Remedies" and all proceeds of
any MBS purchased as described under "Description of the
Certificates--Termination"; and
(xiii) any other amounts received on or in respect of the
Mortgage Assets required to be deposited in the Certificate Account as
provided in the related Pooling Agreement and described in the related
Prospectus Supplement.
Withdrawals. Unless otherwise provided in the related Pooling Agreement
and described in the related Prospectus Supplement, a Trustee, Master Servicer,
Special Servicer or Manager, as applicable, in respect of any Trust Fund may
make withdrawals from the Certificate Account for such Trust Fund for any of the
following purposes:
(i) to make distributions to the Certificateholders on each
Distribution Date;
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(ii) if such Trust Fund includes Mortgage Loans, then as and
to the extent, and from the sources, described in the related
Prospectus Supplement, to pay the related Master Servicer or Special
Servicer any servicing fees and other compensation to which it is
entitled in respect of such Mortgage Loans and that was not previously
retained thereby;
(iii) if such Trust Fund includes Mortgage Loans, to reimburse
the related Master Servicer, the related Special Servicer or any other
specified person for unreimbursed advances of delinquent scheduled
payments of principal and interest made by it, and certain unreimbursed
servicing expenses incurred by it, with respect to such Mortgage Loans
and any properties acquired in respect thereof, such reimbursement to
be made out of amounts that represent late payments collected on the
particular Mortgage Loans, Liquidation Proceeds, Insurance Proceeds and
Condemnation Proceeds collected on the particular Mortgage Loans and
properties, and net operating income collected on the particular
properties, with respect to which such advances were made or such
expenses were incurred or out of amounts drawn under any form of Credit
Support with respect to such Mortgage Loans and properties, or if in
the judgment of the Master Servicer, the Special Servicer or such other
person, as applicable, such advances and/or expenses will not be
recoverable from such amounts, such reimbursement to be made from
amounts collected on other Mortgage Assets in the same Trust Fund or,
if and to the extent so provided by the related Pooling Agreement and
described in the related Prospectus Supplement, only from that portion
of amounts collected on such other Mortgage Assets that is otherwise
distributable on one or more Classes of Subordinate Certificates of the
related Series;
(iv) if and to the extent, and from the sources, described in
the related Prospectus Supplement, to pay the related Master Servicer,
the related Special Servicer or any other specified person interest
accrued on the advances and servicing expenses, if any, described in
clause (iii) above made or incurred by it while such advances and
servicing expenses remain outstanding and unreimbursed;
(v) if such Trust Fund includes Mortgage Loans, to pay any
servicing expenses not otherwise required to be advanced by the related
Master Servicer, the related Special Servicer or any other specified
person, including, if applicable, costs and expenses incurred by the
Trust Fund for environmental site assessments performed with respect to
Mortgaged Properties that constitute security for defaulted Mortgage
Loans, and for any containment, clean-up or remediation of hazardous
wastes and materials present on such Mortgaged Properties, as described
below under "--Realization Upon Defaulted Mortgage Loans";
(vi) to reimburse the Depositor, the related Trustee, any
related Master Servicer, Special Servicer, REMIC Administrator or
Manager and/or any of their respective directors, officers, employees
and agents, as the case may be, for certain expenses, costs and
liabilities incurred thereby, as and to the extent described below
under "--Certain Matters Regarding the Master Servicer, the Special
Servicer, the REMIC Administrator, the Manager and the Depositor" and
"--Certain Matters Regarding the Trustee";
(vii) if and to the extent, and from the sources, described in
the related Prospectus Supplement, to pay the fees of the related
Trustee and of any related REMIC Administrator, Manager, provider of
Credit Support and obligor on a Cash Flow Agreement;
(viii) if and to the extent, and from the sources, described
in the related Prospectus Supplement, to reimburse prior draws on any
form of Credit Support in respect of the related Series;
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(ix) to pay the related Master Servicer, the related Special
Servicer, the related Manager and/or the related Trustee, as
appropriate, interest and investment income earned in respect of
amounts held in the Certificate Account as additional compensation;
(x) if one or more elections have been made to treat such
Trust Fund or designated portions thereof as a REMIC, to pay any
federal, state or local taxes imposed on the Trust Fund or its assets
or transactions, as and to the extent described under "Federal Income
Tax Consequences--REMICs --Prohibited Transactions Tax and Other
Taxes";
(xi) to pay for the cost of various opinions of counsel
obtained pursuant to the related Pooling Agreement for the benefit of
Certificateholders or otherwise in connection with the servicing or
administration of the related Trust Assets;
(xii) to make any other withdrawals permitted by the related
Pooling Agreement and described in the related Prospectus Supplement;
and
(xiii) to clear and terminate the Certificate Account upon the
termination of the Trust Fund.
Modifications, Waivers and Amendments of Mortgage Loans
Unless otherwise specified in the related Prospectus Supplement, the
Master Servicer and the Special Servicer may each agree to modify, waive or
amend any term of any Mortgage Loan serviced by it in a manner consistent with
the applicable servicing standard to be described in the related Prospectus
Supplement; provided that the modification, waiver or amendment (i) will not
affect the amount or timing of any scheduled payments of principal or interest
on the Mortgage Loan, and (ii) will not, in the judgment of the Master Servicer
or the Special Servicer, as the case may be, materially impair the security for
the Mortgage Loan or reduce the likelihood of timely payment of amounts due
thereon. Unless otherwise provided in the related Prospectus Supplement, the
Special Servicer also may agree to any other modification, waiver or amendment
if, in its judgment (i) a material default on the Mortgage Loan has occurred or
a payment default is reasonably foreseeable, (ii) such modification, waiver or
amendment is reasonably likely to produce a greater recovery with respect to the
Mortgage Loan, taking into account the time value of money, than would
liquidation and (iii) such modification, waiver or amendment will not adversely
affect the coverage under any applicable instrument of Credit Support.
Realization Upon Defaulted Mortgage Loans
If a default on a Mortgage Loan has occurred or, in the Special
Servicer's judgment, a payment default is imminent, the Special Servicer, on
behalf of the Trustee, may at any time institute foreclosure proceedings,
exercise any power of sale contained in the related Mortgage, obtain a deed in
lieu of foreclosure, or otherwise acquire title to the related Mortgaged
Property, by operation of law or otherwise. Unless otherwise specified in the
related Prospectus Supplement, the Special Servicer may not, however, acquire
title to any Mortgaged Property, have a receiver of rents appointed with respect
to any Mortgaged Property or take any other action with respect to any Mortgaged
Property that would cause the Trustee, for the benefit of the related Series of
Certificateholders, or any other specified person to be considered to hold title
to, to be a "mortgagee-in-possession" of, or to be an "owner" or an "operator"
of such Mortgaged Property within the meaning of certain federal environmental
laws, unless the Special Servicer has previously received a report prepared by a
person who regularly conducts environmental audits (which report will be an
expense of the Trust Fund) and either:
(i) such report indicates that (a) the Mortgaged Property is
in compliance with applicable environmental laws and regulations and
(b) there are no circumstances or conditions present at the Mortgaged
Property that have resulted in any contamination for which
investigation, testing, monitoring,
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containment, clean-up or remediation could be required under any
applicable environmental laws and regulations; or
(ii) the Special Servicer, based solely (as to environmental
matters and related costs) on the information set forth in such report,
determines that taking such actions as are necessary to bring the
Mortgaged Property into compliance with applicable environmental laws
and regulations and/or taking the actions contemplated by clause (i)(b)
above, is reasonably likely to produce a greater recovery, taking into
account the time value of money, than not taking such actions. See
"Certain Legal Aspects of Mortgage Loans--Environmental
Considerations".
A Pooling Agreement may grant to the Master Servicer, the Special
Servicer, a provider of Credit Support and/or the holder or holders of certain
Classes of Certificates of the related Series a right of first refusal to
purchase from the Trust Fund, at a predetermined price (which, if less than the
Purchase Price specified herein, will be specified in the related Prospectus
Supplement), any Mortgage Loan as to which a specified number of scheduled
payments are delinquent. In addition, unless otherwise specified in the related
Prospectus Supplement, the Special Servicer may offer to sell any defaulted
Mortgage Loan if and when the Special Servicer determines, consistent with its
normal servicing procedures, that such a sale would produce a greater recovery,
taking into account the time value of money, than would liquidation of the
related Mortgaged Property. In the absence of any such sale, the Special
Servicer will generally be required to proceed against the related Mortgaged
Property, subject to the discussion above.
Unless otherwise provided in the related Prospectus Supplement, if
title to any Mortgaged Property is acquired by a Trust Fund as to which a REMIC
election has been made, the Special Servicer, on behalf of the Trust Fund, will
be required to sell the Mortgaged Property prior to the close of the third
taxable year following the taxable year in which the Trust Fund acquires such
Mortgaged Property, unless (i) the IRS 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 thereafter will not
result in the imposition of a tax on the Trust Fund or cause the Trust Fund (or
any designated portion thereof) to fail to qualify as a REMIC under the Code at
any time that any Certificate is outstanding. Subject to the foregoing and any
other tax-related limitations, the Special Servicer will generally be required
to attempt to sell any Mortgaged Property so acquired on the same terms and
conditions it would if it were the owner. Unless otherwise provided in the
related Prospectus Supplement, if title to any Mortgaged Property is acquired by
a Trust Fund as to which a REMIC election has been made, the Special Servicer
will also be required to ensure that the Mortgaged Property is administered so
that it constitutes "foreclosure property" within the meaning of Section
860G(a)(8) of the Code at all times. If the Trust Fund acquires title to any
Mortgaged Property, the Special Servicer, on behalf of the Trust Fund, may
retain an independent contractor to manage and operate such property. The
retention of an independent contractor, however, will not relieve the Special
Servicer of its obligation to manage such Mortgaged Property as required under
the related Pooling Agreement. The Special Servicer may be authorized to allow
the Trust Fund to incur a federal income or other tax if doing so would, in the
reasonable discretion of the Special Servicer, maximize the net after-tax
proceeds to Certificateholders.
If Liquidation Proceeds collected with respect to a defaulted Mortgage
Loan are less than the outstanding principal balance of the defaulted Mortgage
Loan plus interest accrued thereon plus the aggregate amount of reimbursable
expenses incurred by the Special Servicer and/or the Master Servicer in
connection with such Mortgage Loan, then, to the extent that such shortfall is
not covered by any instrument or fund constituting Credit Support, the Trust
Fund will realize a loss in the amount of such shortfall. The Special Servicer
and/or the Master Servicer will be entitled to reimbursement out of the
Liquidation Proceeds recovered on any defaulted Mortgage Loan, prior to the
distribution of such Liquidation Proceeds to Certificateholders, any and all
amounts that represent unpaid servicing compensation in respect of the Mortgage
Loan, unreimbursed servicing expenses incurred with
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respect to the Mortgage Loan and any unreimbursed advances of delinquent
payments made with respect to the Mortgage Loan. In addition, if and to the
extent set forth in the related Prospectus Supplement, amounts otherwise
distributable on the Certificates may be further reduced by interest payable to
the Master Servicer and/or Special Servicer on such servicing expenses and
advances.
If any Mortgaged Property suffers damage such that the proceeds, if
any, of the related hazard insurance policy are insufficient to restore fully
the damaged property, neither the Special Servicer nor the Master Servicer will
be required to expend its own funds to effect such restoration unless (and to
the extent not otherwise provided in the related Prospectus Supplement) it
determines (i) that such restoration will increase the proceeds to
Certificateholders on liquidation of the Mortgage Loan after reimbursement of
the Special Servicer or the Master Servicer, as the case may be, for its
expenses and (ii) that such expenses will be recoverable by it from related
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and/or amounts
drawn on any instrument or fund constituting Credit Support.
Hazard Insurance Policies
Unless otherwise specified in the related Prospectus Supplement, if a
Trust Fund includes Mortgage Loans, the related Pooling Agreement will require
the Master Servicer (or the Special Servicer with respect to Mortgage Loans
serviced thereby) to use reasonable efforts to cause each Mortgage Loan borrower
to maintain a hazard insurance policy that provides for such coverage as is
required under the related Mortgage or, if the Mortgage permits the holder
thereof to dictate to the borrower the insurance coverage to be maintained on
the related Mortgaged Property, such coverage as is consistent with the Master
Servicer's (or Special Servicer's) normal servicing procedures. Unless otherwise
specified in the related Prospectus Supplement, such coverage generally will be
in an amount equal to the lesser of the principal balance owing on such Mortgage
Loan and the replacement cost of the related Mortgaged Property. The ability of
a Master Servicer (or Special Servicer) to assure that hazard insurance proceeds
are appropriately applied may be dependent upon its being named as an additional
insured under any hazard insurance policy and under any other insurance policy
referred to below, or upon the extent to which information concerning covered
losses is furnished by borrowers. All amounts collected by a Master Servicer (or
Special Servicer) under any such policy (except for amounts to be applied to the
restoration or repair of the Mortgaged Property or released to the borrower in
accordance with the Master Servicer's (or Special Servicer's) normal servicing
procedures and/or to the terms and conditions of the related Mortgage and
Mortgage Note) will be deposited in the related Certificate Account. The Master
Servicer (or Special Servicer) may satisfy its obligation to cause each borrower
to maintain such a hazard insurance policy by maintaining a blanket policy
insuring against hazard losses on the Mortgage Loans in a Trust Fund. If such
blanket policy contains a deductible clause, the Master Servicer (or Special
Servicer) will be required, in the event of a casualty covered by such blanket
policy, to deposit in the related Certificate Account all additional sums that
would have been deposited therein under an individual policy but were not
because of such deductible clause.
In general, the standard form of fire and extended coverage policy
covers physical damage to or destruction of the improvements of the property by
fire, lightning, explosion, smoke, windstorm and hail, and riot, strike and
civil commotion, subject to the conditions and exclusions specified in each
policy. Although the policies covering the Mortgaged Properties will be
underwritten by different insurers under different state laws in accordance with
different applicable state forms, and therefore will not contain identical terms
and conditions, most such policies typically do not cover any physical damage
resulting from war, revolution, governmental actions, floods and other
water-related causes, earth movement (including earthquakes, landslides and
mudflows), wet or dry rot, vermin and domestic animals. Accordingly, a Mortgaged
Property may not be insured for losses arising from any such cause unless the
related Mortgage specifically requires, or permits the holder thereof to
require, such coverage.
The hazard insurance policies covering the Mortgaged Properties will
typically contain co-insurance clauses that in effect require an insured at all
times to carry insurance of a specified percentage (generally 80%
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to 90%) of the full replacement value of the improvements on the property in
order to recover the full amount of any partial loss. If the insured's coverage
falls below this specified percentage, such clauses generally provide that the
insurer's liability in the event of partial loss does not exceed the lesser of
(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 such improvements.
Due-on-Sale and Due-on-Encumbrance Provisions
Certain of the Mortgage Loans may contain a due-on-sale clause that
entitles the lender to accelerate payment of the Mortgage Loan upon any sale or
other transfer of the related Mortgaged Property made without the lender's
consent. Certain of the Mortgage Loans may also contain a due-on-encumbrance
clause that entitles the lender to accelerate the maturity of the Mortgage Loan
upon the creation of any other lien or encumbrance upon the Mortgaged Property.
Unless otherwise provided in the related Prospectus Supplement, the Master
Servicer (or Special Servicer) will determine whether to exercise any right the
Trustee may have under any such provision in a manner consistent with the Master
Servicer's (or Special Servicer's) normal servicing procedures. Unless otherwise
specified in the related Prospectus Supplement, the Master Servicer or Special
Servicer, as applicable, will be entitled to retain as additional servicing
compensation any fee collected in connection with the permitted transfer of a
Mortgaged Property. See "Certain Legal Aspects of Mortgage Loans-Due-on-Sale and
Due-on-Encumbrance Provisions".
Servicing Compensation and Payment of Expenses
Unless otherwise specified in the related Prospectus Supplement, a
Master Servicer's primary servicing compensation with respect to a Series will
come from the periodic payment to it of a specified portion of the interest
payments on each Mortgage Loan in the related Trust Fund, including Mortgage
Loans serviced by the related Special Servicer. If and to the extent described
in the related Prospectus Supplement, a Special Servicer's primary compensation
with respect to a Series may consist of any or all of the following components:
(i) a specified portion of the interest payments on each Mortgage Loan in the
related Trust Fund, whether or not serviced by it; (ii) an additional specified
portion of the interest payments on each Mortgage Loan then currently serviced
by it; and (iii) subject to any specified limitations, a fixed percentage of
some or all of the collections and proceeds received with respect to each
Mortgage Loan which was at any time serviced by it, including Mortgage Loans for
which servicing was returned to the Master Servicer. Insofar as any portion of
the Master Servicer's or Special Servicer's compensation consists of a specified
portion of the interest payments on a Mortgage Loan, such compensation will
generally be based on a percentage of the principal balance of such Mortgage
Loan outstanding from time to time and, accordingly, will decrease with the
amortization of the Mortgage Loan. As additional compensation, a Master Servicer
or Special Servicer may be entitled to retain all or a portion of late payment
charges, Prepayment Premiums, modification fees and other fees collected from
borrowers and any interest or other income that may be earned on funds held in
the related Certificate Account. A more detailed description of each Master
Servicer's and Special Servicer's compensation will be provided in the related
Prospectus Supplement. Any Sub-Servicer will receive as its sub-servicing
compensation a portion of the servicing compensation to be paid to the Master
Servicer or Special Servicer that retained such Sub-Servicer.
In addition to amounts payable to any Sub-Servicer, a Master Servicer
or Special Servicer may be required, to the extent provided in the related
Prospectus Supplement, to pay from amounts that represent its servicing
compensation certain expenses incurred in connection with the administration of
the related Trust Fund, including, without limitation, payment of the fees and
disbursements of independent accountants, payment of fees and disbursements of
the Trustee and any custodians appointed thereby and payment of expenses
incurred in connection with distributions and reports to Certificateholders.
Certain other expenses, including certain expenses related to Mortgage Loan
defaults and liquidations and, to the extent so provided in the related
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Prospectus Supplement, interest on such expenses at the rate specified therein,
may be required to be borne by the Trust Fund.
Evidence as to Compliance
Unless otherwise specified in the related Prospectus Supplement, if a
Trust Fund includes Mortgage Loans, the related Master Servicer and Special
Servicer will each be required, at its expense, to cause a firm of independent
public accountants to furnish to the Trustee, on or before a specified date in
each year, beginning the first such date that is at least a specified number of
months after the Cut-off Date, a statement generally to the effect that such
firm has examined such documents and records as it has deemed necessary and
appropriate relating to the Master Servicer's or Special Servicer's as the case
may be, servicing of the Mortgage Loans under the Pooling Agreement or servicing
of mortgage loans similar to the Mortgage Loans under substantially similar
agreements for the preceding calendar year (or during the period from the date
of commencement of the Master Servicer's or Special Servicer's, as the case may
be, duties under the Pooling Agreement until the end of such preceding calendar
year in the case of the first such statement) and that the assertion of the
management of the Master Servicer or Special Servicer, as the case may be, that
it maintained an effective internal control system over servicing of the
Mortgage Loans or similar mortgage loans is fairly stated in all material
respects, based upon established criteria, which statement meets the standards
applicable to accountants' reports intended for general distribution. In
rendering its report such firm may rely, as to the matters relating to the
direct servicing of commercial and multifamily mortgage loans by sub-servicers,
upon comparable reports of firms of independent public accountants rendered on
the basis of examinations conducted in accordance the same standards (rendered
within one year of such report) with respect to those sub-servicers. The
Prospectus Supplement may provide that additional reports of independent
certified public accountants relating to the servicing of mortgage loans may be
required to be delivered to the Trustee.
If a Trust Fund includes Mortgage Loans, the related Pooling Agreement
will also provide that, on or before a specified date in each year, beginning
the first such date that is at least a specified number of months after the
Cut-off Date, the Master Servicer and Special Servicer shall each deliver to the
related Trustee an annual statement signed by one or more officers of the Master
Servicer or the Special Servicer, as the case may be, to the effect that, to the
best knowledge of each such officer, the Master Servicer or the Special
Servicer, as the case may be, has fulfilled in all material respects its
obligations under the Pooling Agreement throughout the preceding year or, if
there has been a material default in the fulfillment of any such obligation,
such statement shall specify each such known default and the nature and status
thereof. Such statement may be provided as a single form making the required
statements as to more than one Pooling Agreement.
Unless otherwise specified in the related Prospectus Supplement, copies
of the annual accountants' statement and the annual statement of officers of a
Master Servicer or Special Servicer may be obtained by Certificateholders upon
written request to the Trustee.
Certain Matters Regarding the Master Servicer, the Special Servicer, the REMIC
Administrator, the Manager and the Depositor
Unless otherwise specified in the Prospectus Supplement for a Series,
the related Pooling Agreement will permit any related Master Servicer, Special
Servicer, REMIC Administrator or Manager to resign from its obligations in such
capacity thereunder only upon (a) the appointment of, and the acceptance of such
appointment by, a successor thereto and receipt by the Trustee of written
confirmation from each applicable Rating Agency that such resignation and
appointment will not have an adverse effect on the rating assigned by such
Rating Agency to any Class of Certificates of such Series or (b) a determination
that such obligations are no longer permissible under applicable law or are in
material conflict by reason of applicable law with any other activities carried
on by it. No such resignation will become effective until the Trustee or other
successor has assumed the
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obligations and duties of the resigning Master Servicer, Special Servicer, REMIC
Administrator or Manager, as the case may be, under the related Pooling
Agreement. Each Master Servicer, Special Servicer and, if it receives
distributions on MBS, Manager for a Trust Fund will be required to maintain a
fidelity bond and errors and omissions policy or their equivalent that provides
coverage against losses that may be sustained as a result of an officer's or
employee's misappropriation of funds or errors and omissions, subject to certain
limitations as to amount of coverage, deductible amounts, conditions, exclusions
and exceptions permitted by the related Pooling Agreement.
Unless otherwise specified in the related Prospectus Supplement, each
Pooling Agreement will further provide that none of the Depositor, any related
Master Servicer, Special Servicer, REMIC Administrator or Manager, or any
director, officer, employee or agent of any of them will be under any liability
to the related Trust Fund or Certificateholders for any action taken, or not
taken, in good faith pursuant to such Pooling Agreement or for errors in
judgment; provided, however, that no such person or entity will be protected
against any liability that would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of obligations or
duties thereunder or by reason of reckless disregard of such obligations and
duties. Unless otherwise specified in the related Prospectus Supplement, each
Pooling Agreement will further provide that the Depositor, any related Master
Servicer, Special Servicer, REMIC Administrator and Manager, and any director,
officer, employee or agent of any of them will be entitled to indemnification by
the related Trust Fund against any loss, liability or expense incurred in
connection with any legal action that relates to such Pooling Agreement or the
related Series; provided, however, that such indemnification will not extend to
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or gross negligence in the performance of obligations or duties under such
Pooling Agreement, or by reason of reckless disregard of such obligations or
duties. In addition, each Pooling Agreement will provide that neither the
Depositor nor any related Master Servicer, Special Servicer, REMIC Administrator
or Manager will be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its respective responsibilities under the
Pooling Agreement or that in its opinion may involve it in any ultimate expense
or liability. However, any such party may be permitted, in the exercise of its
discretion, to undertake any such action that it may deem necessary or desirable
with respect to the enforcement and/or protection of the rights and duties of
the parties to the Pooling Agreement and the interests of the related Series of
Certificateholders thereunder. In such event, the legal expenses and costs of
such action, and any liability resulting therefrom, will be expenses, costs and
liabilities of the related Series of Certificateholders, and the Depositor, the
Master Servicer, the Special Servicer, the REMIC Administrator or the Manager,
as the case may be, will be entitled to charge the related Certificate Account
therefor.
Any person into which a Master Servicer, a Special Servicer, a REMIC
Administrator, a Manager or the Depositor may be merged or consolidated, or any
person resulting from any merger or consolidation to which a Master Servicer, a
Special Servicer, a REMIC Administrator, a Manager or the Depositor is a party,
or any person succeeding to the business of a Master Servicer, a Special
Servicer, a REMIC Administrator, a Manager or the Depositor, will be the
successor of the Master Servicer, the Special Servicer, the REMIC Administrator,
the Manager or the Depositor, as the case may be, under the related Pooling
Agreement.
Unless otherwise specified in the related Prospectus Supplement, a
REMIC Administrator will be entitled to perform any of its duties under the
related Pooling Agreement either directly or by or through agents or attorneys,
and the REMIC Administrator will not be responsible for any willful misconduct
or gross negligence on the part of any such agent or attorney appointed by it
with due care.
Events of Default
Unless otherwise provided in the Prospectus Supplement for the Offered
Certificates of any Series, "Events of Default" under the related Pooling
Agreement will include, without limitation, (i) any failure by a Master Servicer
or a Manager to distribute or cause to be distributed to the Certificateholders
of such Series, or
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to remit to the related Trustee for distribution to such Certificateholders, any
amount required to be so distributed or remitted, which failure continues
unremedied for five days after written notice thereof has been given to the
Master Servicer or the Manager, as the case may be, by any other party to the
related Pooling Agreement, or to the Master Servicer or the Manager, as the case
may be, with a copy to each other party to the related Pooling Agreement, by
Certificateholders entitled to not less than 25% (or such other percentage
specified in the related Prospectus Supplement) of the Voting Rights for such
Series; (ii) any failure by a Special Servicer to remit to the related Master
Servicer or Trustee, as applicable, any amount required to be so remitted, which
failure continues unremedied for five days after written notice thereof has been
given to the Special Servicer by any other party to the related Pooling
Agreement, or to the Special Servicer, with a copy to each other party to the
related Pooling Agreement, by the Certificateholders entitled to not less than
25% (or such other percentage specified in the related Prospectus Supplement) of
the Voting Rights of such Series; (iii) any failure by a Master Servicer, a
Special Servicer or a Manager duly to observe or perform in any material respect
any of its other covenants or obligations under the related Pooling Agreement,
which failure continues unremedied for sixty days after written notice thereof
has been given to the Master Servicer, the Special Servicer or the Manager, as
the case may be, by any other party to the related Pooling Agreement, or to the
Master Servicer, the Special Servicer or the Manager, as the case may be, with
copy to each other party to the related Pooling Agreement, by Certificateholders
entitled to not less than 25% (or such other percentage specified in the related
Prospectus Supplement) of the Voting Rights for such Series; (iv) any failure by
a REMIC Administrator duly to observe or perform in any material respect any of
its covenants or obligations under the related Pooling Agreement, which failure
continues unremedied for sixty days after written notice thereof has been given
to the REMIC Administrator by any other party to the related Pooling Agreement,
or to the REMIC Administrator, with a copy to each other party to the related
Pooling Agreement, by Certificateholders entitled to not less than 25% (or such
other percentage specified in the related Prospectus Supplement) of the Voting
Rights for such Series; and (v) certain events of insolvency, readjustment of
debt, marshalling of assets and liabilities, or similar proceedings in respect
of or relating to a Master Servicer, a Special Servicer, a Manager or a REMIC
Administrator, and certain actions by or on behalf of any such party indicating
its insolvency or inability to pay its obligations. Material variations to the
foregoing Events of Default (other than to add thereto or shorten cure periods
or eliminate notice requirements) will be specified in the related Prospectus
Supplement.
Rights Upon Event of Default
If an Event of Default occurs with respect to a Master Servicer, a
Special Servicer, a Manager or a REMIC Administrator (other than the Trustee)
under a Pooling Agreement, then, in each and every such case, so long as the
Event of Default remains unremedied, and unless otherwise specified in the
related Prospectus Supplement, the Depositor or the Trustee will be authorized,
and at the direction of Certificateholders of the related Series entitled to not
less than 25% (or such other percentage specified in the related Prospectus
Supplement) of the Voting Rights for such Series, the Trustee will be required,
to terminate all of the rights and obligations of the defaulting party as Master
Servicer, Special Servicer, MBS Administrator or REMIC Administrator, as
applicable, under the Pooling Agreement, whereupon the Trustee (except under the
circumstances contemplated in the next paragraph) will succeed to all of the
responsibilities, duties and liabilities of the defaulting party as Master
Servicer, Special Servicer, Manager or REMIC Administrator, as applicable, under
the Pooling Agreement (except that if the defaulting party is required to make
advances thereunder regarding delinquent Mortgage Loans, but the Trustee is
prohibited by law from obligating itself to make such advances, or if the
related Prospectus Supplement so specifies, the Trustee will not be obligated
to make such advances) and will be entitled to similar compensation
arrangements. Unless otherwise specified in the related Prospectus Supplement,
if the Trustee is unwilling or unable so to act, it may (or, at the written
request of Certificateholders of the related Series entitled to not less than
51% (or such other percentage specified in the related Prospectus Supplement) of
the Voting Rights for such Series, it will be required to) appoint, or petition
a court of competent jurisdiction to appoint, a loan servicing institution or
other appropriate entity that (unless otherwise provided in the related
Prospectus Supplement) is acceptable to each applicable Rating Agency to act
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as successor to the Master Servicer, Special Servicer, Manager or REMIC
Administrator, as the case may be, under the Pooling Agreement. Pending such
appointment, the Trustee will be obligated to act in such capacity.
Notwithstanding the foregoing, if the same entity is acting as both
Trustee and REMIC Administrator, it may be removed in both such capacities as
described under "--Resignation and Removal of the Trustee" below.
No Certificateholder will have any right under a Pooling Agreement to
institute any proceeding with respect to such Pooling Agreement unless such
holder previously has given to the Trustee written notice of default and the
continuance thereof and unless the holders of Certificates of the related Series
entitled to not less than 25% of the Voting Rights for such Series have made
written request upon the Trustee to institute such proceeding in its own name as
Trustee thereunder and have offered to the Trustee reasonable indemnity and the
Trustee for sixty days after receipt of such request and indemnity has neglected
or refused to institute any such proceeding. However, the Trustee will be under
no obligation to exercise any of the trusts or powers vested in it by the
Pooling Agreement or to institute, conduct or defend any litigation thereunder
or in relation thereto at the request, order or direction of any of the holders
of Certificates covered by such Pooling Agreement, unless such
Certificateholders have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein or
thereby.
Amendment
Except as otherwise specified in the related Prospectus Supplement,
each Pooling Agreement may be amended by the parties thereto, without the
consent of any of the holders of Certificates covered by such Pooling Agreement:
(i) to cure any ambiguity; (ii) to correct, modify or supplement any provision
therein which may be inconsistent with any other provision therein or to correct
any error; (iii) to add any other provisions with respect to matters or
questions arising thereunder which shall not be inconsistent with the provisions
thereof; (iv) if a REMIC election has been made with respect to any portion of
the related Trust Fund, to relax or eliminate any requirement thereunder imposed
by the provisions of the Code relating to REMICs if such provisions are amended
or clarified such that any such requirement may be relaxed or eliminated; (v) to
relax or eliminate any requirement thereunder imposed by the Securities Act or
the rules thereunder if the Securities Act or such rules are amended or
clarified such that any requirement may be relaxed or eliminated; (vi) if a
REMIC election has been made with respect to any portion of the related Trust
Fund, then, as evidenced by an opinion of counsel delivered to the related
Trustee and REMIC Administrator, to comply with any requirements imposed by the
Code or any successor or amendatory statute or any temporary or final
regulation, revenue ruling, revenue procedure or other written official
announcement or interpretation relating to federal income tax laws or any such
proposed action which, if made effective, would apply retroactively to any REMIC
created under such Pooling Agreement at least from the effective date of such
amendment, or to avoid the occurrence of a prohibited transaction or to reduce
the incidence of any tax that would arise from any actions taken with respect to
the operation of any REMIC created under such Pooling Agreement; (vii) if a
REMIC election has been made with respect to any portion of the related Trust
Fund, to modify, add to or eliminate certain transfer restrictions relating to
REMIC Residual Certificates; or (viii) for any other purpose; provided that such
amendment of a Pooling Agreement (other than any amendment for any of the
specific purposes described in clauses (vi) and (vii) above) may not, as
evidenced by an opinion of counsel obtained by or delivered to the Trustee,
adversely affect in any material respect the interests of any holder of
Certificates of the related Series; and provided further that any amendment
covered solely by clause (viii) above may not adversely affect the then current
rating assigned to any Class of Certificates of the related Series by any Rating
Agency, as evidenced by written confirmation to such effect from each applicable
Rating Agency obtained by or delivered to the Trustee.
Except as otherwise specified in the related Prospectus Supplement,
each Pooling Agreement may also be amended by the parties thereto, with the
consent of the holders of Certificates of the respective Classes affected
thereby evidencing, in the aggregate, not less than 66-2/3% (or such other
percentage specified in the
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related Prospectus Supplement) of the Voting Rights allocated to such Classes,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of such Pooling Agreement or of modifying in
any manner the rights of the holders of Certificates covered by such Pooling
Agreement, except that no such amendment of a Pooling Agreement may (i) reduce
in any manner the amount of, or delay the timing of, payments received on the
related Mortgage Assets which are required to be distributed on a Certificate of
the related Series 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 of the related Series in a manner other than as described
in the immediately preceding clause (i) without the consent of the holders of
all Certificates of such Class or (iii) modify the provisions of such Pooling
Agreement relating to amendments thereof without the consent of the holders of
all Certificates of the related Series then outstanding.
Notwithstanding the foregoing, if a REMIC election has been made with
respect to the related Trust Fund, the Trustee will not be required to consent
to any amendment to a Pooling Agreement without having first received an opinion
of counsel to the effect that such amendment or the exercise of any power
granted to any party to such Pooling Agreement or any other specified person in
accordance with such amendment will not result in the imposition of a tax on the
related Trust Fund or cause such Trust Fund (or any designated portion thereof)
to fail to qualify as a REMIC.
List of Certificateholders
Unless otherwise specified in the related Prospectus Supplement, upon
written request of three or more Certificateholders of record made for purposes
of communicating with other holders of Certificates of the same Series with
respect to their rights under the related Pooling Agreement, the Trustee or
other specified person will afford such Certificateholders access during normal
business hours to the most recent list of Certificateholders of that Series held
by such person. If such list is as of a date more than 90 days prior to the date
of receipt of such Certificateholders' request, then such person, if not the
registrar for the Certificates of such Series, will be required to request from
such registrar a current list and to afford such requesting Certificateholders
access thereto promptly upon receipt.
The Trustee
The Trustee under each Pooling Agreement will be named in the related
Prospectus Supplement. The commercial bank, national banking association,
banking corporation or trust company that serves as Trustee may have typical
banking relationships with the Depositor and its affiliates and with any Master
Servicer, Special Servicer or REMIC Administrator and its affiliates.
Duties of the Trustee
The Trustee for each Series will make no representation as to the
validity or sufficiency of the related Pooling Agreement, the Certificates of
such Series or any underlying Mortgage Asset or related document and will not
be accountable for the use or application by or on behalf of any other party to
the related Pooling Agreement of any funds paid to such party in respect of the
Certificates or the Mortgage Assets. If no Event of Default has occurred and is
continuing, the Trustee for each Series will be required to perform only those
duties specifically required under the related Pooling Agreement. However, upon
receipt of any of the various certificates, reports or other instruments
required to be furnished to it pursuant to the related Pooling Agreement, a
Trustee will be required to examine such documents and to determine whether they
conform to the requirements of such agreement.
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Certain Matters Regarding the Trustee
As and to the extent described in the related Prospectus Supplement,
the fees and normal disbursements of any Trustee may be the expense of the
related Master Servicer or other specified person or may be required to be borne
by the related Trust Fund.
Unless otherwise specified in the related Prospectus Supplement, the
Trustee for each Series will be entitled to indemnification, from amounts held
in the Certificate Account for such Series, for any loss, liability or expense
incurred by the Trustee in connection with the Trustee's acceptance or
administration of its trusts under the related Pooling Agreement; provided,
however, that such indemnification will not extend to any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or gross negligence
on the part of the Trustee in the performance of its obligations and duties
thereunder, or by reason of its reckless disregard of such obligations or
duties.
Unless otherwise specified in the related Prospectus Supplement, the
Trustee for each Series will be entitled to execute any of its trusts or powers
under the related Pooling Agreement or perform any of this duties thereunder
either directly or by or through agents or attorneys, and the Trustee will not
be responsible for any willful misconduct or gross negligence on the part of any
such agent or attorney appointed by it with due care.
Resignation and Removal of the Trustee
The Trustee for any Series may resign at any time, in which event the
Depositor will be obligated to appoint a successor Trustee. The Depositor may
also remove the Trustee for any Series if such Trustee ceases to be eligible to
continue as such under the related Pooling Agreement or if such Trustee becomes
insolvent. Upon becoming aware of such circumstances, the Depositor will be
obligated to appoint a successor Trustee. Unless otherwise specified in the
related Prospectus Supplement, a Trustee may also be removed at any time by the
holders of Certificates of the applicable Series evidencing not less than 51%
(or such other percentage specified in the related Prospectus Supplement) of the
Voting Rights for such Series; provided that if such removal was without cause,
the Certificateholders effecting such removal may be responsible for any costs
and expenses incurred by the terminated Trustee in connection with its removal.
Any resignation or removal of a Trustee and appointment of a successor Trustee
will not become effective until acceptance of the appointment by the successor
Trustee. Notwithstanding anything herein to the contrary, if any entity is
acting as both Trustee and REMIC Administrator for any Series, then any
resignation or removal of such entity as Trustee will also constitute the
resignation or removal of such entity as REMIC Administrator, and the successor
Trustee will also serve as the successor REMIC Administrator as well.
DESCRIPTION OF CREDIT SUPPORT
General
Credit Support may be provided with respect to one or more Classes of
the Certificates of any Series or with respect to the related Mortgage Assets.
Credit Support may be in the form of a letter of credit, the subordination of
one or more other Classes of Certificates, the use of a surety bond, an
insurance policy or a guarantee, the establishment of one or more reserve funds,
or any combination of the foregoing. If and to the extent so provided in the
related Prospectus Supplement, any of the foregoing forms of Credit Support may
provide credit enhancement for more than one Series.
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The Credit Support may not provide protection against all risks of loss
and will not guarantee payment to Certificateholders of all amounts to which
they are entitled under the related Pooling Agreement. If losses or shortfalls
occur that exceed the amount covered by the related Credit Support or that are
of a type not covered by such Credit Support, Certificateholders will bear their
allocable share of deficiencies. Moreover, if a form of Credit Support covers
the Offered Certificates of more than one Series and losses on the related
Mortgage Assets exceed the amount of such Credit Support, it is possible that
the holders of Offered Certificates of one (or more) such Series will be
disproportionately benefited by such Credit Support to the detriment of the
holders of Offered Certificates of one (or more) other such Series.
If Credit Support is provided with respect to one or more Classes of
Certificates of a Series, or with respect to the related Mortgage Assets, the
related Prospectus Supplement will include a description of (i) the nature and
amount of coverage under such Credit Support, (ii) any conditions to payment
thereunder not otherwise described herein, (iii) the conditions (if any) under
which the amount of coverage under such Credit Support may be reduced and under
which such Credit Support may be terminated or replaced and (iv) the material
provisions relating to such Credit Support. Additionally, the related Prospectus
Supplement will set forth certain information with respect to the obligor, if
any, under any instrument of Credit Support. See "Risk Factors--Credit Support
Limitations".
Subordinate Certificates
If so specified in the related Prospectus Supplement, one or more
Classes of Certificates of a Series may be Subordinate Certificates. To the
extent specified in the related Prospectus Supplement, the rights of the holders
of Subordinate Certificates to receive distributions from the Certificate
Account on any Distribution Date will be subordinated to the corresponding
rights of the holders of Senior Certificates. If so provided in the related
Prospectus Supplement, the subordination of a Class of Certificates may apply
only in the event of certain types of losses or shortfalls. The related
Prospectus Supplement will set forth information concerning the method and
amount of subordination provided by a Class or Classes of Subordinate
Certificates in a Series and the circumstances under which such subordination
will be available.
If the Mortgage Assets in any Trust Fund are divided into separate
groups, each supporting a separate Class or Classes of Certificates of the
related Series, Credit Support may be provided by cross-support provisions
requiring that distributions be made on Senior Certificates evidencing interests
in one group of Mortgage Assets prior to distributions on Subordinate
Certificates evidencing interests in a different group of 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 Mortgage Loans
If so provided in the related Prospectus Supplement, Mortgage Loans
included in any Trust Fund will be covered for certain default risks by
insurance policies or guarantees. The related Prospectus Supplement will
describe the nature of such default risks and the extent of such coverage.
Letter of Credit
If so provided in the Prospectus Supplement for a Series, deficiencies
in amounts otherwise payable on such Certificates or certain Classes thereof
will be covered by one or more letters of credit, issued by a bank or other
financial institution specified in such Prospectus Supplement (the "Letter of
Credit Bank"). Under a letter of credit, the Letter of Credit Bank will be
obligated to honor draws thereunder in an aggregate fixed dollar amount, net of
unreimbursed payments thereunder, generally equal to a percentage specified in
the related Prospectus Supplement of the aggregate principal balance of some or
all of the related Mortgage Assets on the
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related Cut-off Date or of the initial aggregate Certificate Principal Balance
of one or more Classes of Certificates. If so specified in the related
Prospectus Supplement, the letter of credit may permit draws only in the event
of certain types of losses and shortfalls. The amount available under the letter
of credit will, in all cases, be reduced to the extent of the unreimbursed
payments thereunder and may otherwise be reduced as described in the related
Prospectus Supplement. The obligations of the Letter of Credit Bank under the
letter of credit for any Series will expire at the earlier of the date specified
in the related Prospectus Supplement or the termination of the related Trust
Fund.
Certificate Insurance and Surety Bonds
If so provided in the Prospectus Supplement for a Series, deficiencies
in amounts otherwise payable on such Certificates or certain Classes thereof
will be covered by insurance policies or surety bonds provided by one or more
insurance companies or sureties. Such instruments may cover, with respect to one
or more Classes of Certificates of the related Series, timely distributions of
interest or distributions of principal on the basis of a schedule of principal
distributions set forth in or determined in the manner specified in the related
Prospectus Supplement. The related Prospectus Supplement will describe any
limitations on the draws that may be made under any such instrument.
Reserve Funds
If so provided in the Prospectus Supplement for a Series, deficiencies
in amounts otherwise payable on such Certificates or certain Classes thereof
will be covered (to the extent of available funds) by one or more reserve funds
in which cash, a letter of credit, Permitted Investments, a demand note or a
combination thereof will be deposited, in the amounts specified in such
Prospectus Supplement. If so specified in the related Prospectus Supplement, the
reserve fund for a Series may also be funded over time by a specified amount of
certain collections received on the related Mortgage Assets.
Amounts on deposit in any reserve fund for a Series will be applied for
the purposes, in the manner, and to the extent specified in the related
Prospectus Supplement. If so specified in the related Prospectus Supplement,
reserve funds may be established to provide protection only against certain
types of losses and shortfalls. Following each Distribution Date, amounts in a
reserve fund in excess of any amount required to be maintained therein may be
released from the reserve fund under the conditions and to the extent specified
in the related Prospectus Supplement.
If so specified in the related Prospectus Supplement, amounts deposited
in any reserve fund will be invested in Permitted Investments. Unless otherwise
specified in the related Prospectus Supplement, any reinvestment income or
other gain from such investments will be credited to the related reserve fund
for such Series, and any loss resulting from such investments will be charged to
such reserve fund. However, such income may be payable to any related Master
Servicer or another service provider as additional compensation for its
services. The reserve fund, if any, for a Series will not be a part of the Trust
Fund unless otherwise specified in the related Prospectus Supplement.
Credit Support with Respect to MBS
If so provided in the Prospectus Supplement for a Series, any MBS
included in the related Trust Fund and/or the related underlying mortgage loans
may be covered by one or more of the types of Credit Support described herein.
The related Prospectus Supplement will specify, as to each such form of Credit
Support, the information indicated above with respect thereto, to the extent
such information is material and available.
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CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS
The following discussion contains general summaries of certain legal
aspects of mortgage loans secured by commercial and multifamily residential
properties in the United States. Because such legal aspects are governed by
applicable state law (which laws may differ substantially), the summaries do not
purport to be complete, to reflect the laws of any particular state, or to
encompass the laws of all jurisdictions in which the security for the Mortgage
Loans (or mortgage loans underlying any MBS) is situated. Accordingly, the
summaries are qualified in their entirety by reference to the applicable laws of
those states. See "Description of the Trust Funds--Mortgage Loans". If a
significant percentage of Mortgage Loans (or mortgage loans underlying MBS), by
balance, are secured by properties in a particular state, relevant state laws,
to the extent they vary materially from this discussion, will be discussed in
the Prospectus Supplement. For purposes of the following discussion, "Mortgage
Loan" includes a mortgage loan underlying an MBS.
General
Each Mortgage Loan will be evidenced by a note or bond and secured by
an instrument granting a security interest in real property, which may be a
mortgage, deed of trust or a deed to secure debt, depending upon the prevailing
practice and law in the state in which the related Mortgaged Property is
located. Mortgages, deeds of trust and deeds to secure debt are herein
collectively referred to as "mortgages". A mortgage creates a lien upon, or
grants a title interest in, the real property covered thereby, and represents
the security for the repayment of the indebtedness customarily evidenced by a
promissory note. The priority of the lien created or interest granted will
depend on the terms of the mortgage and, in some cases, on the terms of separate
subordination agreements or intercreditor agreements with others that hold
interests in the real property, the knowledge of the parties to the mortgage
and, generally, the order of recordation of the mortgage in the appropriate
public recording office. However, the lien of a recorded mortgage will generally
be subordinate to later-arising liens for real estate taxes and assessments and
other charges imposed under governmental police powers.
Types of Mortgage Instruments
There are two parties to a mortgage: a mortgagor (the borrower and
usually the owner of the subject property) and a mortgagee (the lender). In
contrast, a deed of trust is a three-party instrument, among a trustor (the
equivalent of a borrower), a trustee to whom the real property is conveyed, and
a beneficiary (the lender) for whose benefit the conveyance is made. Under a
deed of trust, the trustor grants the property, irrevocably until the debt is
paid, in trust and generally with a power of sale, to the trustee to secure
repayment of the indebtedness evidenced by the related note. A deed to secure
debt typically has two parties, pursuant to which the borrower, or grantor,
conveys title to the real property to the grantee, or lender, generally with a
power of sale, until such time as the debt is repaid. In a case where the
borrower is a land trust, there would be an additional party because legal title
to the property is held by a land trustee under a land trust agreement for the
benefit of the borrower. At origination of a mortgage loan involving a land
trust, the borrower may execute a separate undertaking to make payments on the
mortgage note. In no event is the land trustee personally liable for the
mortgage note obligation. The mortgagee's authority under a mortgage, the
trustee's authority under a deed of trust and the grantee's authority under a
deed to secure debt are governed by the express provisions of the related
instrument, the law of the state in which the real property is located, certain
federal laws and, in some deed of trust transactions, the directions of the
beneficiary.
Leases and Rents
Mortgages that encumber income-producing property often contain an
assignment of rents and leases and/or may be accompanied by a separate
assignment of rents and leases, pursuant to which the borrower assigns to the
lender the borrower's right, title and interest as landlord under each lease and
the income derived therefrom,
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while (unless rents are to be paid directly to the lender) retaining a revocable
license to collect the rents for so long as there is no default. If the borrower
defaults, the license terminates and the lender is entitled to collect the
rents. Local law may require that the lender take possession of the property
and/or obtain a court-appointed receiver before becoming entitled to collect the
rents.
In most states, hotel and motel room rates are considered accounts
receivable under the Uniform Commercial Code ("UCC"); in cases where hotels or
motels constitute loan security, the rates are generally pledged by the borrower
as additional security for the loan. In general, the lender must file financing
statements in order to perfect its security interest in the room rates and must
file continuation statements, generally every five years, to maintain perfection
of such security interest. In certain cases, Mortgage Loans secured by hotels or
motels may be included in a Trust Fund even if the security interest in the room
rates was not perfected or the requisite UCC filings were allowed to lapse. Even
if the lender's security interest in room rates is perfected under applicable
nonbankruptcy law, it will generally be required to commence a foreclosure
action or otherwise take possession of the property in order to enforce its
rights to collect the room rates following a default. In the bankruptcy setting,
however, the lender will be stayed from enforcing its rights to collect room
rates, but those room rates (in light of certain revisions to the Bankruptcy
Code which are effective for all bankruptcy cases commenced on or after October
22, 1994) constitute "cash collateral" and therefore cannot be used by the
bankruptcy debtor without a hearing or lender's consent and unless the lender's
interest in the room rates is given adequate protection (e.g., cash payment for
otherwise encumbered funds or a replacement lien on unencumbered property, in
either case equal in value to the amount of room rates that the debtor proposes
to use, or other similar relief). See "--Bankruptcy Laws".
Personalty
In the case of certain types of mortgaged properties, such as hotels,
motels and nursing homes, personal property (to the extent owned by the borrower
and not previously pledged) may constitute a significant portion of the
property's value as security. The creation and enforcement of liens on personal
property are governed by the UCC. Accordingly, if a borrower pledges personal
property as security for a mortgage loan, the lender generally must file UCC
financing statements in order to perfect its security interest therein, and must
file continuation statements, generally every five years, to maintain that
perfection. In certain cases, Mortgage Loans secured in part by personal
property may be included in a Trust Fund even if the security interest in such
personal property was not perfected or the requisite UCC filings were allowed to
lapse.
Foreclosure
General. Foreclosure is a legal procedure that allows the lender to
recover its mortgage debt by enforcing its rights and available legal remedies
under the mortgage. If the borrower defaults in payment or performance of its
obligations under the note or mortgage, the lender has the right to institute
foreclosure proceedings to sell the real property at public auction to satisfy
the indebtedness.
Foreclosure procedures vary from state to state. Two primary methods of
foreclosing a mortgage are judicial foreclosure, involving court proceedings,
and nonjudicial foreclosure pursuant to a power of sale granted in the mortgage
instrument. Other foreclosure procedures are available in some states, but they
are either infrequently used or available only in limited circumstances.
A foreclosure action is subject to most of the delays and expenses of
other lawsuits if defenses are raised or counterclaims are interposed, and
sometimes requires several years to complete.
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Judicial Foreclosure. A judicial foreclosure proceeding is conducted in
a court having jurisdiction over the mortgaged property. Generally, the action
is initiated by the service of legal pleadings upon all parties having a
subordinate interest of record in the real property and all parties in
possession of the property, under leases or otherwise, whose interests are
subordinate to the mortgage. Delays in completion of the foreclosure may
occasionally result from difficulties in locating defendants. When the lender's
right to foreclose is contested, the legal proceedings can be time-consuming.
Upon successful completion of a judicial foreclosure proceeding, the court
generally issues a judgment of foreclosure and appoints a referee or other
officer to conduct a public sale of the mortgaged property, the proceeds of
which are used to satisfy the judgment. Such sales are made in accordance with
procedures that vary from state to state.
Equitable and Other Limitations on Enforceability of Certain
Provisions. United States courts have traditionally imposed general equitable
principles to limit the remedies available to lenders in foreclosure actions.
These principles are generally designed to relieve borrowers from the effects of
mortgage defaults perceived as harsh or unfair. Relying on such principles, a
court may alter the specific terms of a loan to the extent it considers
necessary to prevent or remedy an injustice, undue oppression or overreaching,
or may require the lender to undertake affirmative actions to determine the
cause of the borrower's default and the likelihood that the borrower will be
able to reinstate the loan. In some cases, courts have substituted their
judgment for the lender's and have required that lenders reinstate loans or
recast payment schedules in order to accommodate borrowers who are suffering
from a temporary financial disability. In other cases, courts have limited the
right of the lender to foreclose in the case of a nonmonetary default, such as a
failure to adequately maintain the mortgaged property or an impermissible
further encumbrance of the mortgaged property. Finally, some courts have
addressed the issue of whether federal or state constitutional provisions
reflecting due process concerns for adequate notice require that a borrower
receive notice in addition to statutorily-prescribed minimum notice. For the
most part, these cases have upheld the reasonableness of the notice provisions
or have found that a public sale under a mortgage providing for a power of sale
does not involve sufficient state action to trigger constitutional protections.
In addition, some states may have statutory protection such as the
right of the borrower to reinstate mortgage loans after commencement of
foreclosure proceedings but prior to a foreclosure sale.
Nonjudicial Foreclosure/Power of Sale. In states permitting nonjudicial
foreclosure proceedings, foreclosure of a deed of trust is generally
accomplished by a nonjudicial trustee's sale pursuant to a power of sale
typically granted in the deed of trust. A power of sale may also be contained in
any other type of mortgage instrument if applicable law so permits. A power of
sale under a deed of trust allows a nonjudicial public sale to be conducted
generally following a request from the beneficiary/lender to the trustee to sell
the property upon default by the borrower and after notice of sale is given in
accordance with the terms of the mortgage and applicable state law. In some
states, prior to such sale, the trustee under the deed of trust must record a
notice of default and notice of sale and send a copy to the borrower and to any
other party who has recorded a request for a copy of a notice of default and
notice of sale. In addition, in some states the trustee must provide notice to
any other party having an interest of record in the real property, including
junior lienholders. A notice of sale must be posted in a public place and, in
most states, published for a specified period of time in one or more newspapers.
The borrower or junior lienholder may then have the right, during a
reinstatement period required in some states, to cure the default by paying the
entire actual amount in arrears (without regard to the acceleration of the
indebtedness), plus the lender's expenses incurred in enforcing the obligation.
In other states, the borrower or the junior lienholder is not provided a period
to reinstate the loan, but has only the right to pay off the entire debt to
prevent the foreclosure sale. Generally, state law governs the procedure for
public sale, the parties entitled to notice, the method of giving notice and the
applicable time periods.
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Public Sale. A third party may be unwilling to purchase a mortgaged
property at a public sale because of the difficulty in determining the exact
status of title to the property (due to, among other things, redemption rights
that may exist) and because of the possibility that physical deterioration of
the property may have occurred during the foreclosure proceedings. Therefore, it
is common for the lender to purchase the mortgaged property for an amount equal
to the secured indebtedness and accrued and unpaid interest plus the expenses of
foreclosure, in which event the borrower's debt will be extinguished, or for a
lesser amount in order to preserve its right to seek a deficiency judgment if
such is available under state law and under the terms of the Mortgage Loan
documents. (The Mortgage Loans, however, may be nonrecourse. See "Risk
Factors--Certain Factors Affecting Delinquency, Foreclosure and Loss of the
Mortgage Loans--Limited Recourse Nature of the Mortgage Loans".) Thereafter,
subject to the borrower's right in some states to remain in possession during a
redemption period, the lender will become the owner of the property and have
both the benefits and burdens of ownership, including the obligation to pay debt
service on any senior mortgages, to pay taxes, to obtain casualty insurance and
to make such repairs as are necessary to render the property suitable for sale.
The costs of operating and maintaining a commercial or multifamily residential
property may be significant and may be greater than the income derived from that
property. The lender also will commonly obtain the services of a real estate
broker and pay the broker's commission in connection with the sale or lease of
the property. Depending upon market conditions, the ultimate proceeds of the
sale of the property may not equal the lender's investment in the property.
Moreover, because of the expenses associated with acquiring, owning and selling
a mortgaged property, a lender could realize an overall loss on a mortgage loan
even if the mortgaged property is sold at foreclosure, or resold after it is
acquired through foreclosure, for an amount equal to the full outstanding
principal amount of the loan plus accrued interest. The holder of a junior
mortgage that forecloses on a mortgaged property does so subject to senior
mortgages and any other prior liens, and may be obliged to keep senior mortgage
loans current in order to avoid foreclosure of its interest in the property. In
addition, if the foreclosure of a junior mortgage triggers the enforcement of a
"due-on-sale" clause contained in a senior mortgage, the junior mortgagee could
be required to pay the full amount of the senior mortgage indebtedness or face
foreclosure.
Rights of Redemption. The purposes of a foreclosure action are to
enable the lender to realize upon its security and to bar the borrower, and all
persons who have interests in the property that are subordinate to that of the
foreclosing lender, from exercise of their "equity of redemption". The doctrine
of equity of redemption provides that, until the property encumbered by a
mortgage has been sold in accordance with a properly conducted foreclosure and
foreclosure sale, those having interests that are subordinate to that of the
foreclosing lender have an equity of redemption and may redeem the property by
paying the entire debt with interest. Those having an equity of redemption must
generally be made parties and joined in the foreclosure proceeding in order for
their equity of redemption to be terminated.
The equity of redemption is a common-law (nonstatutory) right which
should be distinguished from post-sale statutory rights of redemption. In some
states, after sale pursuant to a deed of trust or foreclosure of a mortgage, the
borrower and foreclosed junior lienors are given a statutory period in which to
redeem the property. In some states, statutory redemption may occur only upon
payment of the foreclosure sale price. In other states, redemption may be
permitted if the former borrower pays only a portion of the sums due. The effect
of a statutory right of redemption is to diminish the ability of the lender to
sell the foreclosed property because the exercise of a right of redemption would
defeat the title of any purchaser through a foreclosure. Consequently, the
practical effect of the redemption right is to force the lender to maintain the
property and pay the expenses of ownership until the redemption period has
expired. In some states, a post-sale statutory right of redemption may exist
following a judicial foreclosure, but not following a trustee's sale under a
deed of trust.
Anti-Deficiency Legislation. Some or all of the Mortgage Loans may be
nonrecourse loans, as to which recourse in the case of default will be limited
to the Mortgaged Property and such other assets, if any, that were pledged to
secure the Mortgage Loan. However, even if a mortgage loan by its terms provides
for recourse to the borrower's other assets, a lender's ability to realize upon
those assets may be limited by state law. For
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example, in some states a lender cannot obtain a deficiency judgment against the
borrower following foreclosure or sale under a deed of trust. A deficiency
judgment is a personal judgment against the former borrower equal to the
difference between the net amount realized upon the public sale of the real
property and the amount due to the lender. Other statutes may require the lender
to exhaust the security afforded under a mortgage before bringing a personal
action against the borrower. In certain other states, the lender has the option
of bringing a personal action against the borrower on the debt without first
exhausting such security; however, in some of those states, the lender,
following judgment on such personal action, may be deemed to have elected a
remedy and thus may be precluded from foreclosing upon the security.
Consequently, lenders in those states where such an election of remedy provision
exists will usually proceed first against the security. Finally, other statutory
provisions, designed to protect borrowers from exposure to large deficiency
judgments that might result from bidding at below-market values at the
foreclosure sale, limit any deficiency judgment to the excess of the outstanding
debt over the fair market value of the property at the time of the sale.
Leasehold Considerations. Mortgage Loans may be secured by a mortgage
on the borrower's leasehold interest in a ground lease. Leasehold mortgage loans
are subject to certain risks not associated with mortgage loans secured by a
lien on the fee estate of the borrower. The most significant of these risks is
that if the borrower's leasehold were to be terminated upon a lease default, the
leasehold mortgagee would lose its security. This risk may be lessened if the
ground lease requires the lessor to give the leasehold mortgagee notices of
lessee defaults and an opportunity to cure them, permits the leasehold estate to
be assigned to and by the leasehold mortgagee or the purchaser at a foreclosure
sale, and contains certain other protective provisions typically included in a
"mortgageable" ground lease. Certain Mortgage Loans, however, may be secured by
ground leases which do not contain these provisions.
Cooperative Shares. Mortgage Loans may be secured by a security
interest on the borrower's ownership interest in shares, and the proprietary
leases appurtenant thereto, allocable to cooperative dwelling units that may be
vacant or occupied by nonowner tenants. Such loans are subject to certain risks
not associated with mortgage loans secured by a lien on the fee estate of a
borrower in real property. Such a loan typically is subordinate to the mortgage,
if any, on the Cooperative's building which, if foreclosed, could extinguish the
equity in the building and the proprietary leases of the dwelling units derived
from ownership of the shares of the Cooperative. Further, transfer of shares in
a Cooperative are subject to various regulations as well as to restrictions
under the governing documents of the Cooperative, and the shares may be canceled
in the event that associated maintenance charges due under the related
proprietary leases are not paid. Typically, a recognition agreement between the
lender and the Cooperative provides, among other things, the lender with an
opportunity to cure a default under a proprietary lease.
Under the laws applicable in many states, "foreclosure" on Cooperative
shares is accomplished by a sale in accordance with the provisions of Article 9
of the UCC and the security agreement relating to the shares. Article 9 of the
UCC requires that a sale be conducted in a "commercially reasonable" manner,
which may be dependent upon, among other things, the notice given the debtor and
the method, manner, time, place and terms of the sale. Article 9 of the UCC
provides that the proceeds of the sale will be applied first to pay the costs
and expenses of the sale and then to satisfy the indebtedness secured by the
lender's security interest. A recognition agreement, however, generally provides
that the lender's right to reimbursement is subject to the right of the
Cooperative to receive sums due under the proprietary leases.
Bankruptcy Laws
Operation of the Bankruptcy Code and related state laws may interfere
with or affect the ability of a lender to realize upon collateral and/or to
enforce a deficiency judgment. For example, under the Bankruptcy Code, virtually
all actions (including foreclosure actions and deficiency judgment proceedings)
to collect a debt are automatically stayed upon the filing of the bankruptcy
petition and, often, no interest or principal payments
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are made during the course of the bankruptcy case. The delay and the
consequences thereof caused by such automatic stay can be significant. Also,
under the Bankruptcy Code, the filing of a petition in bankruptcy by or on
behalf of a junior lienor may stay the senior lender from taking action to
foreclose out such junior lien.
Under the Bankruptcy Code, provided certain substantive and procedural
safeguards protective of the lender are met, the amount and terms of a mortgage
loan secured by a lien on property of the debtor may be modified under certain
circumstances. For example, the outstanding amount of the loan may be reduced to
the then-current value of the property (with a corresponding partial reduction
of the amount of lender's security interest) pursuant to a confirmed plan or
lien avoidance proceeding, thus leaving the lender a general unsecured creditor
for the difference between such value and the outstanding balance of the loan.
Other modifications may include the reduction in the amount of each scheduled
payment, by means of a reduction in the rate of interest and/or an alteration of
the repayment schedule (with or without affecting the unpaid principal balance
of the loan), and/or by an extension (or shortening) of the term to maturity.
Some bankruptcy courts have approved plans, based on the particular facts of the
reorganization case, that effected the cure of a mortgage loan default by paying
arrearages over a number of years. Also, a bankruptcy court may permit a debtor,
through its rehabilitative plan, to reinstate a mortgage loan payment schedule
even if the lender has obtained a final judgment of foreclosure prior to the
filing of the debtor's petition.
Federal bankruptcy law may also have the effect of interfering with or
affecting the ability of a secured lender to enforce the borrower's assignment
of rents and leases related to the mortgaged property. Under the Bankruptcy
Code, a lender may be stayed from enforcing the assignment, and the legal
proceedings necessary to resolve the issue could be time-consuming, with
resulting delays in the lender's receipt of the rents. Recent amendments to the
Bankruptcy code, however, may minimize the impairment of the lender's ability to
enforce the borrower's assignment of rents and leases. In addition to the
inclusion of hotel revenues within the definition of "cash collateral" as noted
previously in the section entitled "--Leases and Rents", the amendments provide
that a pre-petition security interest in rents or hotel revenues is designed to
overcome those cases holding that a security interest in rents is unperfected
under the laws of certain states until the lender has taken some further action,
such as commencing foreclosure or obtaining a receiver prior to activation of
the assignment of rents.
If a borrower's ability to make payment on a mortgage loan is dependent
on its receipt of rent payments under a lease of the related property, that
ability may be impaired by the commencement of a bankruptcy case relating to a
lessee under such lease. Under the Bankruptcy Code, the filing of a petition in
bankruptcy by or on behalf of a lessee results in a stay in bankruptcy against
the commencement or continuation of any state court proceeding for past due
rent, for accelerated rent, for damages or for a summary eviction order with
respect to a default under the lease that occurred prior to the filing of the
lessee's petition. In addition, the Bankruptcy Code generally provides that a
trustee or debtor-in-possession may, subject to approval of the court, (i)
assume the lease and retain it or assign it to a third party or (ii) reject the
lease. If the lease is assumed, the trustee or debtor-in-possession (or
assignee, if applicable) must cure any defaults under the lease, compensate the
lessor for its losses and provide the lessor with "adequate assurance" of future
performance. Such remedies may be insufficient, and any assurances provided to
the lessor may, in fact, be inadequate. If the lease is rejected, the lessor
will be treated as an unsecured creditor (except potentially to the extent of
any security deposit) with respect to its claim for damages for termination of
the lease. The Bankruptcy Code also limits a lessor's damages for lease
rejection to (a) the rent reserved by the lease (without regard to acceleration)
for the greater of one year, or 15%, not to exceed three years, of the remaining
term of the lease plus (b) unpaid rent to the earlier of the surrender of the
property or the lessee's bankruptcy filing.
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Environmental Considerations
General. A lender may be subject to environmental risks when taking a
security interest in real property. Of particular concern may be properties that
are or have been used for industrial, manufacturing, military or disposal
activity. Such environmental risks include the possible diminution of the value
of a contaminated property or, as discussed below, potential liability for
clean-up costs or other remedial actions that could exceed the value of the
property or the amount of the lender's loan. In certain circumstances, a lender
may decide to abandon a contaminated mortgaged property as collateral for its
loan rather than foreclose and risk liability for clean-up costs.
Superlien Laws. Under the laws of many states, contamination on a
property may give rise to a lien on the property for clean-up costs. In several
states, such a lien has priority over all existing liens, including those of
existing mortgages. In these states, the lien of a mortgage may lose its
priority to such a "superlien".
CERCLA. The federal Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended ("CERCLA"), imposes strict liability on
present and past "owners" and "operators" of contaminated real property for the
costs of clean-up. A secured lender may be liable as an "owner" or "operator" of
a contaminated mortgaged property if agents or employees of the lender have
participated in the management of such mortgaged property or the operations of
the borrower. Such liability may exist even if the lender did not cause or
contribute to the contamination and regardless of whether the lender has
actually taken possession of a mortgaged property through foreclosure, deed in
lieu of foreclosure or otherwise. Moreover, such liability is not limited to the
original or unamortized principal balance of a loan or to the value of the
property securing a loan. Excluded from CERCLA's definition of "owner" or
"operator", however, is a person who without participating in the management of
the facility, holds indicia of ownership primarily to protect his security
interest. This is the so called "secured creditor exemption".
The Asset Conservation, Lender Liability and Deposit Insurance Act of
1996 (the "Lender Liability Act") amended, among other things, the provisions of
CERCLA with respect to lender liability and the secured creditor exemption. The
Lender Liability Act offers substantial protection to lenders by defining the
activities in which a lender can engage and still have the benefit of the
secured creditor exemption. In order for a lender to be deemed to have
participated in the management of a mortgaged property, the lender must actually
participate in the operational affairs of the property of the borrower. The
Lender Liability Act provides that "merely having the capacity to influence, or
unexercised right to control" operations does not constitute participation in
management. A lender will lose the protection of the secured creditor exemption
only if it exercises decision-making control over the borrower's environmental
compliance and hazardous substance handling and disposal practices, or assumes
day-to-day management of operational functions of the mortgaged property. The
Lender Liability Act also provides that a lender will continue to have the
benefit of the secured creditor exemption even if it forecloses on a mortgaged
property, purchases it at a foreclosure sale or accepts a deed-in-lieu of
foreclosure provided that the lender seeks to sell the mortgaged property at the
earliest practicable commercially reasonable time on commercially reasonable
terms.
Certain Other Federal and State Laws. Many states have statutes similar
to CERCLA, and not all those statutes provide for a secured creditor exemption.
In addition, under federal law, there is potential liability relating to
hazardous wastes and underground storage tanks under the federal Resource
Conservation and Recovery Act.
Certain federal, state and local laws, regulations and ordinances
govern the management, removal, encapsulation or disturbance of
asbestos-containing materials ("ACMs"). Such laws, as well as common law
standards, may impose liability for releases of or exposure to ACMs and may
provide for third parties to seek recovery from owners or operators of real
properties for personal injuries associated with such releases.
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Recent federal legislation will in the future require owners of
residential housing constructed prior to 1978 to disclose to potential residents
or purchasers any known lead-based paint hazards and will impose treble damages
for any failure to so notify. In addition, the ingestion of lead-based paint
chips or dust particles by children can result in lead poisoning, and the owner
of a property where such circumstances exist may be held liable for such
injuries and for the costs of removal or encapsulation of the lead-based paint.
Testing for lead-based paint or lead in the water was conducted with respect to
certain of the Mortgaged Properties, generally based on the age and/or condition
thereof.
In a few states, transfers of some types of properties are conditioned
upon cleanup of contamination prior to transfer. In these cases, a lender that
becomes the owner of a property through foreclosure, deed in lieu of foreclosure
or otherwise, may be required to clean up the contamination before selling or
otherwise transferring the property.
Beyond statute-based environmental liability, there exist common law
causes of action (for example, actions based on nuisance or on toxic tort
resulting in death, personal injury or damage to property) related to hazardous
environmental conditions on a property. While it may be more difficult to hold a
lender liable in such cases, unanticipated or uninsured liabilities of the
borrower may jeopardize the borrower's ability to meet its loan obligations.
Federal, state and local environmental regulatory requirements change
often. It is possible that compliance with a new regulatory requirement could
impose significant compliance costs on a borrower. Such costs may jeopardize the
borrower's ability to meet its loan obligations.
Additional Considerations. The cost of remediating hazardous substance
contamination at a property can be substantial. If a lender becomes liable, it
can bring an action for contribution against the owner or operator who created
the environmental hazard, but that individual or entity may be without
substantial assets. Accordingly, it is possible that such costs could become a
liability of the Trust Fund and occasion a loss to the Certificateholders.
To reduce the likelihood of such a loss, unless otherwise specified in
the related Prospectus Supplement, the Pooling Agreement will provide that
neither the Master Servicer nor the Special Servicer, acting on behalf of the
Trustee, may acquire title to a Mortgaged Property or take over its operation
unless the Special Servicer, based solely (as to environmental matters) on a
report prepared by a person who regularly conducts environmental audits, has
made the determination that certain conditions relating to environmental
matters, as described under "Description of the Pooling Agreements-Realization
Upon Defaulted Mortgage Loans", have been satisfied.
If a lender forecloses on a mortgage secured by a property, the
operations on which are subject to environmental laws and regulations, the
lender will be required to operate the property in accordance with those laws
and regulations. Such compliance may entail substantial expense, especially in
the case of industrial or manufacturing properties.
In addition, a lender may be obligated to disclose environmental
conditions on a property to government entities and/or to prospective buyers
(including prospective buyers at a foreclosure sale or following foreclosure).
Such disclosure may decrease the amount that prospective buyers are willing to
pay for the affected property, sometimes substantially, and thereby decrease the
ability of the lender to recoup its investment in a loan upon foreclosure.
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Environmental Site Assessments. In most cases, an environmental site
assessment of each Mortgaged Property will have been performed in connection
with the origination of the related Mortgage Loan or at some time prior to the
issuance of the related Certificates. Environmental site assessments, however,
vary considerably in their content, quality and cost. Even when adhering to good
professional practices, environmental consultants will sometimes not detect
significant environmental problems because to do an exhaustive environmental
assessment would be far too costly and time-consuming to be practical.
Due-on-Sale and Due-on-Encumbrance Provisions
Certain of the Mortgage Loans may contain "due-on-sale" and
"due-on-encumbrance" clauses that purport to permit the lender to accelerate the
maturity of the loan if the borrower transfers or encumbers the related
Mortgaged Property. In recent years, court decisions and legislative actions
placed substantial restrictions on the right of lenders to enforce such clauses
in many states. However, the Garn-St Germain Depository Institutions Act of 1982
(the "Garn Act") generally preempts state laws that prohibit the enforcement of
due-on-sale clauses and permits lenders to enforce these clauses in accordance
with their terms, subject to certain limitations as set forth in the Garn Act
and the regulations promulgated thereunder. Accordingly, a Master Servicer may
nevertheless have the right to accelerate the maturity of a Mortgage Loan that
contains a "due-on-sale" provision upon transfer of an interest in the property,
without regard to the Master Servicer's ability to demonstrate that a sale
threatens its legitimate security interest.
Junior Liens; Rights of Holders of Senior Liens
If so provided in the related Prospectus Supplement, the Mortgage
Assets for a Series may include Mortgage Loans secured by junior liens, and the
loans secured by the related Senior Liens may not be included in the Mortgage
Asset Pool. The primary risk to holders of Mortgage Loans secured by junior
liens is the possibility that adequate funds will not be received in connection
with a foreclosure of the related Senior Liens to satisfy fully both the Senior
Liens and the Mortgage Loan. In the event that a holder of a Senior Lien
forecloses on a Mortgaged Property, the proceeds of the foreclosure or similar
sale will be applied first to the payment of court costs and fees in connection
with the foreclosure, second to real estate taxes, third in satisfaction of all
principal, interest, prepayment or acceleration penalties, if any, and any other
sums due and owing to the holder of the Senior Liens. The claims of the holders
of the Senior Liens will be applied first to the payment of course costs and
fees in connection with the foreclosure, second to real estate taxes, third in
satisfaction of all principal, interest, prepayment or acceleration penalties,
if any, and any other sums due and owning to the holder of the Senior Liens. The
claims of the holders of the Senior Liens will be satisfied in full out of
proceeds of the liquidation of the related Mortgaged Property, if such proceeds
are sufficient, before the Trust Fund as holder of the junior lien receives any
payments in respect of the Mortgage Loan. In the event that such proceeds from a
foreclosure or similar sale of the related Mortgaged Property are insufficient
to satisfy all Senior Liens and the Mortgage Loan in the aggregate, the Trust
Fund, as the holder of the junior lien, and, accordingly, holders of one or more
Classes of the Certificates of the related Series bear (i) the risk of delay in
distributions while a deficiency judgment against the borrower is obtained and
(ii) the risk of loss if the deficiency judgment is not realized upon. Moreover,
deficiency judgments may not be available in certain jurisdictions or the
Mortgage Loan may be nonrecourse.
Subordinate Financing
The terms of certain of the Mortgage Loans may not restrict the ability of the
borrower to use the Mortgaged Property as security for one or more additional
loans, or such restrictions may be unenforceable. Where a borrower encumbers a
mortgaged property with one or more junior liens, the senior lender is subjected
to additional risk. First, the borrower may have difficulty servicing and
repaying multiple loans. Moreover, if the subordinate financing permits recourse
to the borrower (as is frequently the case) and the senior loan does not, a
borrower may have more incentive to repay sums due on the subordinate loan.
Second, acts of the senior lender that prejudice the junior lender or impair the
junior lender's security may create a superior equity in favor of the junior
lender. For example, if the borrower and the senior lender agree to an increase
in the principal
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amount of or the interest rate payable on the senior loan, the senior lender may
lose its priority to the extent any existing junior lender is harmed or the
borrower is additionally burdened. Third, if the borrower defaults on the senior
loan and/or any junior loan or loans, the existence of junior loans and actions
taken by junior lenders can impair the security available to the senior lender
and can interfere with or delay the taking of action by the senior lender.
Moreover, the bankruptcy of a junior lender may operate to stay foreclosure or
similar proceedings by the senior lender.
Default Interest and Limitations on Prepayments
Notes and mortgages may contain provisions that obligate the borrower
to pay a late charge or additional interest if payments are not timely made, and
in some circumstances, may prohibit prepayments for a specified period and/or
condition prepayments upon the borrower's payment of prepayment fees or yield
maintenance penalties. In certain states, there are or may be specific
limitations upon the late charges which a lender may collect from a borrower for
delinquent payments. Certain states also limit the amounts that a lender may
collect from a borrower as an additional charge if the loan is prepaid. In
addition, the enforceability of provisions that provide for prepayment fees or
penalties upon an involuntary prepayment is unclear under the laws of many
states.
Applicability of Usury Laws
Title V of the Depository Institutions Deregulation and Monetary
Control Act of 1980 ("Title V") provides that state usury limitations shall not
apply to certain types of residential (including multifamily) first mortgage
loans originated by certain lenders after March 31, 1980. Title V authorized any
state to reimpose interest rate limits by adopting, before April 1, 1983, a law
or constitutional provision that expressly rejects application of the federal
law. In addition, even where Title V is not so rejected, any state is authorized
by the law to adopt a provision limiting discount points or other charges on
mortgage loans covered by Title V. Certain states have taken action to reimpose
interest rate limits and/or to limit discount points or other charges.
No Mortgage Loan originated in any state in which application of Title
V has been expressly rejected or a provision limiting discount points or other
charges has been adopted, will (if originated after that rejection or adoption)
be eligible for inclusion in a Trust Fund unless (i) such Mortgage Loan provides
for such interest rate, discount points and charges as are permitted in such
state or (ii) such Mortgage Loan provides that the terms thereof are to be
construed in accordance with the laws of another state under which such interest
rate, discount points and charges would not be usurious and the borrower's
counsel has rendered an opinion that such choice of law provision would be given
effect.
Certain Laws and Regulations
The Mortgaged Properties will be subject to compliance with various
federal, state and local statutes and regulations. Failure to comply (together
with an inability to remedy any such failure) could result in material
diminution in the value of a Mortgaged Property which could, together with the
possibility of limited alternative uses for a particular Mortgaged Property
(i.e., a nursing or convalescent home or hospital), result in a failure to
realize the full principal amount of the related Mortgage Loan.
Americans with Disabilities Act
Under Title III of the Americans with Disabilities Act of 1990 and rules
promulgated thereunder (collectively, the "ADA"), in order to protect
individuals with disabilities, public accommodations (such as hotels,
restaurants, shopping centers, hospitals, schools and social service center
establishments) must remove architectural and communication barriers which are
structural in nature from existing places of public
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accommodation to the extent "readily achievable". In addition, under the ADA,
alterations to a place of public accommodation or a commercial facility are to
be made so that, to the maximum extent feasible, such altered portions are
readily accessible to and usable by disabled individuals. The "readily
achievable" standard takes into account, among other factors, the financial
resources of the affected site, owner, landlord or other applicable person. In
addition to imposing a possible financial burden on the borrower in its capacity
as owner or landlord, the ADA may also impose such requirements on a foreclosing
lender who succeeds to the interest of the borrower as owner or landlord.
Furthermore, since the "readily achievable" standard may vary depending on the
financial condition of the owner or landlord, a foreclosing lender who is
financially more capable than the borrower of complying with the requirements of
the ADA may be subject to more stringent requirements than those to which the
borrower is subject.
Soldiers' and Sailors' Civil Relief Act of 1940
Under the terms of the Soldiers' and Sailors' Civil Relief Act of 1940,
as amended (the "Relief Act"), a borrower who enters military service after the
origination of such borrower's mortgage loan (including a borrower who was in
reserve status and is called to active duty after origination of the Mortgage
Loan), may not be charged interest (including fees and charges) above an annual
rate of 6% during the period of such borrower's active duty status, unless a
court orders otherwise upon application of the lender. The Relief Act applies to
individuals who are members of the Army, Navy, Air Force, Marines, National
Guard, Reserves, Coast Guard and officers of the U.S. Public Health Service
assigned to duty with the military. Because the Relief Act applies to
individuals who enter military service (including reservists who are called to
active duty) after origination of the related mortgage loan, no information can
be provided as to the number of loans with individuals as borrowers that may be
affected by the Relief Act. Application of the Relief Act would adversely
affect, for an indeterminate period of time, the ability of a Master Servicer or
Special Servicer to collect full amounts of interest on certain of the Mortgage
Loans. Any shortfalls in interest collections resulting from the application of
the Relief Act would result in a reduction of the amounts distributable to the
holders of the related Series, and would not be covered by advances or, unless
otherwise specified in the related Prospectus Supplement, any form of Credit
Support provided in connection with such Certificates. In addition, the Relief
Act imposes limitations that would impair the ability of the Master Servicer or
Special Servicer to foreclose on an affected Mortgage Loan during the borrower's
period of active duty status, and, under certain circumstances, during an
additional three month period thereafter.
Forfeitures in Drug and RICO Proceedings
Federal law provides that property owned by persons convicted of
drug-related crimes or of criminal violations of the Racketeer Influenced and
Corrupt Organizations ("RICO") statute can be seized by the government if the
property was used in, or purchased with the proceeds of, such crimes. Under
procedures contained in the comprehensive Crime Control Act of 1984 (the "Crime
Control Act"), the government may seize the property even before conviction. The
government must publish notice of the forfeiture proceeding and may give notice
to all parties "known to have an alleged interest in the property", including
the holders of mortgage loans.
A lender may avoid forfeiture of its interest in the property if it
establishes that: (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
General
The following general discussion of the anticipated material federal
income tax consequences of the purchase, ownership and disposition of Offered
Certificates of any Series, to the extent it relates to matters of law or legal
conclusions with respect thereto, represents the opinion of counsel to the
Depositor with respect to that Series on the material matters associated with
such consequences, subject to any qualifications set forth herein. Unless
otherwise specified in the related Prospectus Supplement, counsel to the
Depositor for each Series will be Sidley & Austin. This discussion is directed
to Certificateholders that hold the Certificates as "capital assets" within the
meaning of Section 1221 of the Code and does not purport to discuss all federal
income tax consequences that may be applicable to the individual circumstances
of particular investors, some of which (such as banks, insurance companies and
foreign investors) may be subject to special treatment under the Code. Further,
the authorities on which this discussion, and the opinion referred to below, are
based are subject to change or differing interpretations, which could apply
retroactively. Prospective investors should note that no rulings have been or
will be sought from the IRS with respect to any of the federal income tax
consequences discussed below, and no assurance can be given the IRS will not
take contrary positions. Taxpayers and preparers of tax returns (including those
filed by any REMIC or other issuer) should be aware that under applicable
Treasury regulations a provider of advice on specific issues of law is not
considered an income tax return preparer unless the advice (i) is given with
respect to events that have occurred at the time the advice is rendered and is
not given with respect to the consequences of contemplated actions, and (ii) is
directly relevant to the determination of an entry on a tax return. Accordingly,
it is recommended that taxpayers consult their tax advisors and tax return
preparers regarding the treatment of any item on their tax returns, even where
the anticipated tax consequences have been discussed herein. In addition to the
federal income tax consequences described herein, it is recommended that
potential investors consult their tax advisors concerning the state, local or
other tax consequences to them of the purchase, ownership and disposition of
Offered Certificates. See "State and Other Tax Consequences".
The following discussion addresses securities of two general types: (i)
certificates ("REMIC Certificates") representing interests in a Trust Fund, or a
portion thereof, that the REMIC Administrator will elect to have treated as a
real estate mortgage investment conduit ("REMIC") under Sections 860A through
860G (the "REMIC Provisions") of the Code, and (ii) Grantor Trust Certificates
representing interests in a Trust Fund ("Grantor Trust Fund") as to which no
such election will be made. The Prospectus Supplement for each Series will
indicate whether a REMIC election (or elections) will be made for the related
Trust Fund and, if such an election is to be made, will identify all "regular
interests" and "residual interests" in the REMIC. For purposes of this tax
discussion, references to a "Certificateholder" or a "holder" are to the
beneficial owner of a Certificate.
The following discussion is limited in applicability to Offered
Certificates. Moreover, this discussion applies only to the extent that Mortgage
Assets held by a Trust Fund consist solely of Mortgage Loans. To the extent that
other Mortgage Assets, including REMIC certificates and mortgage pass-through
certificates, are to be held by a Trust Fund, the tax consequences associated
with the inclusion of such assets will be disclosed in the related Prospectus
Supplement. In addition, if Cash Flow Agreements other than guaranteed
investment contracts are included in a Trust Fund, the anticipated material tax
consequences associated with such Cash Flow Agreements also will be discussed in
the related Prospectus Supplement. See "Description of the Trust Funds--Cash
Flow Agreements".
The following discussion is based in part upon the rules governing
original issue discount that are set forth in Sections 1271-1273 and 1275 of the
Code and in the Treasury regulations issued thereunder (the "OID Regulations"),
and in part upon the REMIC Provisions and the Treasury regulations issued
thereunder (the
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"REMIC Regulations"). The OID Regulations do not adequately address certain
issues relevant to, and in some instances provide that they are not applicable
to, securities such as the Certificates.
REMICs
Classification of REMICs. With respect to each Series of REMIC
Certificates, counsel to the Depositor will deliver its opinion generally to the
effect that, assuming compliance with all provisions of the related Pooling
Agreement and certain other documents (and subject to certain assumptions set
forth therein), the related Trust Fund (or each applicable portion thereof) will
qualify as a REMIC and the REMIC Certificates offered with respect thereto will
be considered to evidence ownership of REMIC Regular Certificates or REMIC
Residual Certificates in that REMIC within the meaning of the REMIC Provisions.
The following general discussion of the anticipated federal income tax
consequences of the purchase, ownership and disposition of REMIC Certificates,
to the extent it relates to matters of law or legal conclusions with respect
thereto, represents the opinion of counsel to the Depositor for the applicable
Series as specified in the related Prospectus Supplement, subject to any
qualifications set forth herein. In addition, counsel to the Depositor have
prepared or reviewed the statements in this Prospectus under the heading
"Federal Income Tax Consequences--REMICs", and are of the opinion that such
statements are correct in all material respects. Such statements are intended as
an explanatory discussion of the possible effects of the classification of any
Trust Fund (or applicable portion thereof) as a REMIC for federal income tax
purposes on investors generally and of related tax matters affecting investors
generally, but do not purport to furnish information in the level of detail or
with the attention to an investor's specific tax circumstances that would be
provided by an investor's own tax advisor. Accordingly, it is recommended that
each investor consult its own tax advisors with regard to the tax consequences
to it of investing in REMIC Certificates.
If an entity electing to be treated as a REMIC fails to comply with one
or more of the ongoing requirements of the Code for such status during any
taxable year, the Code provides that the entity may lose its status as a REMIC
for such year and thereafter. In that event, such entity may be taxable as a
corporation, and the related REMIC Certificates may not be accorded the status
or given the tax treatment described below. Although the Code authorizes the
Treasury Department to issue regulations providing relief in the event of an
inadvertent termination of REMIC status, no such regulations have been issued.
Any such relief, moreover, may be accompanied by sanctions, such as the
imposition of a corporate tax on all or a portion of the Trust Fund's income for
the period in which the requirements for such status are not satisfied. The
Pooling Agreement with respect to each REMIC will include provisions designed to
maintain the Trust Fund's status as a REMIC under the REMIC Provisions. It is
not anticipated that the status of any Trust Fund as a REMIC will be
inadvertently terminated.
Characterization of Investments in REMIC Certificates. In general,
unless otherwise provided in the related Prospectus Supplement, the REMIC
Certificates will be "real estate assets" within the meaning of Section
856(c)(5)(B) of the Code and assets described in Section 7701(a)(19)(C) of the
Code in the same proportion that the assets of the REMIC underlying such
Certificates would be so treated. However, to the extent that the REMIC assets
constitute mortgages on property not used for residential or certain other
prescribed purposes, the REMIC Certificates will not be treated as assets
qualifying under Section 7701(a)(19)(C). Moreover, if 95% or more of the assets
of the REMIC qualify for any of the foregoing characterizations at all times
during a calendar year, the REMIC Certificates will qualify for the
corresponding status in their entirety for that calendar year. Interest
(including original issue discount) on the REMIC Regular Certificates and income
allocated to the REMIC Residual Certificates will be interest described in
Section 856(c)(3)(B) of the Code to the extent that such Certificates are
treated as "real estate assets" within the meaning of Section 856(c)(5)(B) of
the Code. In addition, the REMIC Regular Certificates will be "qualified
mortgages" within the meaning of Section 860G(a)(3) of the Code in the hands of
another REMIC, and will be "permitted assets" under Section 860L(c)(1)(G) for a
"financial asset securitization investment trust" or FASIT. The determination as
to the
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percentage of the REMIC's assets that constitute assets described in the
foregoing sections of the Code will be made with respect to each calendar
quarter based on the average adjusted basis of each category of the assets held
by the REMIC during such calendar quarter. The REMIC Administrator will report
those determinations to Certificateholders in the manner and at the times
required by applicable Treasury regulations.
The assets of the REMIC will include, in addition to Mortgage Loans,
payments on Mortgage Loans held pending distribution on the REMIC Certificates
and any property acquired by foreclosure held pending sale, and may include
amounts in reserve accounts. It is unclear whether property acquired by
foreclosure held pending sale, and amounts in reserve accounts would be
considered to be part of the Mortgage Loans, or whether such assets (to the
extent not invested in assets described in the foregoing sections of the Code)
otherwise would receive the same treatment as the Mortgage Loans for purposes of
all of the foregoing sections of the Code. In addition, in some instances
Mortgage Loans may not be treated entirely as assets described in the foregoing
sections of the Code. If so, the related Prospectus Supplement will describe the
Mortgage Loans that may not be so treated. Treasury regulations do provide,
however, that cash received from payments on Mortgage Loans held pending
distribution is considered part of the Mortgage Loans for purposes of Section
856(c)(4)(A) of the Code.
To the extent an Offered Certificate represents ownership of an
interest in any Mortgage Loan that is secured in part by the related borrower's
interest in an account containing any holdback of loan proceeds, a portion of
such Certificate may not represent ownership of assets described in Section
7701(a)(19)(C) of the Code and "real estate assets" under Section 856(c)(4)(A)
of the Code and the interest thereon may not constitute "interest on obligations
secured by mortgages on real property" within the meaning of Section
856(c)(3)(B) of the Code.
Tiered REMIC Structures. For certain Series of REMIC Certificates, two
or more separate elections may be made to treat designated portions of the
related Trust Fund as separate REMICs ("Tiered REMICs") for federal income tax
purposes. As to each such Series of REMIC Certificates, in the opinion of
counsel to the Depositor, assuming compliance with all provisions of the related
Pooling Agreement, the Tiered REMICs will each qualify as a REMIC and the REMIC
Certificates issued by the Tiered REMICs, will be considered to evidence
ownership of REMIC Regular Certificates or REMIC Residual Certificates in the
related REMIC within the meaning of the REMIC Provisions.
Solely for purposes of determining whether the REMIC Certificates will
be "real estate assets" within the meaning of Section 856(c)(5)(B) of the Code,
and "loans secured by an interest in real property" under Section 7701(a)(19)(C)
of the Code, and whether the income on such Certificates is interest described
in Section 856(c)(3)(B) of the Code, the Tiered REMICs will be treated as one
REMIC.
Taxation of Owners of REMIC Regular Certificates.
General. Except as otherwise stated in this discussion, REMIC Regular
Certificates will be treated for federal income tax purposes as debt instruments
issued by the REMIC and not as ownership interests in the REMIC or its assets.
Moreover, holders of REMIC Regular Certificates that otherwise report income
under the cash method of accounting will be required to report income with
respect to REMIC Regular Certificates under the accrual method.
Original Issue Discount. Certain REMIC Regular Certificates may be
issued with "original issue discount" within the meaning of Section 1273(a) of
the Code. Any holders of REMIC Regular Certificates issued with original issue
discount generally will be required to include original issue discount in income
as it accrues, in accordance with the "constant yield" method described below,
in advance of the receipt of the cash attributable to such income. In addition,
Section 1272(a)(6) of the Code provides special rules applicable to REMIC
Regular
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Certificates and certain other debt instruments issued with original issue
discount. Regulations have not been issued under that section.
The Code requires that a reasonable prepayment assumption be used with
respect to Mortgage Loans held by a REMIC in computing the accrual of original
issue discount on REMIC Regular Certificates issued by that REMIC, and that
adjustments be made in the amount and rate of accrual of such discount to
reflect differences between the actual prepayment rate and the prepayment
assumption. The prepayment assumption is to be determined in a manner prescribed
in Treasury regulations that have not yet been issued. The Conference Committee
Report accompanying the Tax Reform Act of 1986 (the "Committee Report")
indicates that the regulations will provide that the prepayment assumption used
with respect to a REMIC Regular Certificate must be the same as that used in
pricing the initial offering of such REMIC Regular Certificate. The prepayment
assumption (the "Prepayment Assumption") used in reporting original issue
discount for each Series of REMIC Regular Certificates will be consistent with
this standard and will be disclosed in the related Prospectus Supplement.
However, neither the Depositor nor any other person will make any representation
that the Mortgage Loans will in fact prepay at a rate conforming to the
Prepayment Assumption or at any other rate or that such Prepayment Assumption
will not be challenged by the Internal Revenue Service (the "IRS") on audit.
The original issue discount, if any, on a REMIC Regular Certificate
will be the excess of its stated redemption price at maturity over its issue
price. The issue price of a particular Class of REMIC Regular Certificates will
be the first cash price at which a substantial amount of REMIC Regular
Certificates of that Class is sold (excluding sales to bond houses, brokers and
underwriters). If less than a substantial amount of a particular Class of REMIC
Regular Certificates is sold for cash on or prior to the related Closing Date,
the issue price for such Class will be the fair market value of such Class on
such Closing Date. Under the OID Regulations, the stated redemption price of a
REMIC Regular Certificate is equal to the total of all payments to be made on
such Certificate other than "qualified stated interest". "Qualified stated
interest" is interest that is unconditionally payable at least annually (during
the entire term of the instrument) at a single fixed rate, or at a "qualified
floating rate", an "objective rate", a combination of a single fixed rate and
one or more "qualified floating rates" or one "qualified inverse floating rate",
or at a combination of "qualified floating rates" that does not operate in a
manner that accelerates or defers interest payments on such REMIC Regular
Certificate.
In the case of REMIC Regular Certificates bearing adjustable interest
rates, the determination of the total amount of original issue discount and the
timing of the inclusion thereof will vary according to the characteristics of
such REMIC Regular Certificates. If the original issue discount rules apply to
such Certificates, the related Prospectus Supplement will describe the manner in
which such rules will be applied with respect to those Certificates in preparing
information returns to the Certificateholders and the IRS.
Certain Classes of the REMIC Regular Certificates may provide for the
first interest payment with respect to such Certificates to be made more than
one month after the date of issuance, a period which is longer than the
subsequent monthly intervals between interest payments. Assuming the "accrual
period" (as defined below) for original issue discount is each monthly period
that ends on a Distribution Date, in some cases, as a consequence of this "long
first accrual period", some or all interest payments may be required to be
included in the stated redemption price of the REMIC Regular Certificate and
accounted for as original issue discount. Because interest on REMIC Regular
Certificates must in any event be accounted for under an accrual method,
applying this analysis would result in only a slight difference in the timing of
the inclusion in income of the yield on the REMIC Regular Certificates.
In addition, if the accrued interest to be paid on the first
Distribution Date is computed with respect to a period that begins prior to the
Closing Date, a portion of the purchase price paid for a REMIC Regular
Certificate will reflect such accrued interest. In such cases, information
returns provided to the Certificateholders and the IRS will be based on the
position that the portion of the purchase price paid for the interest accrued
with
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respect to periods prior to the Closing Date is treated as part of the overall
cost of such REMIC Regular Certificate (and not as a separate asset the cost of
which is recovered entirely out of interest received on the next Distribution
Date) and that portion of the interest paid on the first Distribution Date in
excess of interest accrued for a number of days corresponding to the number of
days from the Closing Date to the first Distribution Date should be included in
the stated redemption price of such REMIC Regular Certificate. However, the OID
Regulations state that all or some portion of such accrued interest may be
treated as a separate asset the cost of which is recovered entirely out of
interest paid on the first Distribution Date. It is unclear how an election to
do so would be made under the OID Regulations and whether such an election could
be made unilaterally by a Certificateholder.
Notwithstanding the general definition of original issue discount,
original issue discount on a REMIC Regular Certificate will be considered to be
de minimis if it is less than 0.25% of the stated redemption price of the REMIC
Regular Certificate multiplied by its weighted average maturity. For this
purpose, the weighted average maturity of the REMIC Regular Certificate is
computed as the sum of the amounts determined, as to each payment included in
the stated redemption price of such REMIC Regular Certificate, by multiplying
(i) the number of complete years (rounding down for partial years) from the
issue date until such payment is expected to be made (presumably taking into
account the Prepayment Assumption) by (ii) a fraction, the numerator of which is
the amount of the payment, and the denominator of which is the stated redemption
price at maturity of such REMIC Regular Certificate. Under the OID Regulations,
original issue discount of only a de minimis amount (other than de minimis
original issue discount attributable to a so-called "teaser" interest rate or an
initial interest holiday) will be included in income as each payment of stated
principal is made, based on the product of the total amount of such de minimis
original issue discount and a fraction, the numerator of which is the amount of
such principal payment and the denominator of which is the outstanding stated
principal amount of the REMIC Regular Certificate. The OID Regulations also
would permit a Certificateholder to elect to accrue de minimis original issue
discount into income currently based on a constant yield method. See "--Taxation
of Owners of REMIC Regular Certificates--Market Discount" below for a
description of such election under the OID Regulations.
If original issue discount on a REMIC Regular Certificate is in excess
of a de minimis amount, the holder of such Certificate must include in ordinary
gross income the sum of the "daily portions" of original issue discount for each
day during its taxable year on which it held such REMIC Regular Certificate,
including the purchase date but excluding the disposition date. In the case of
an original holder of a REMIC Regular Certificate, the daily portions of
original issue discount will be determined as follows.
As to each "accrual period", that is, unless otherwise stated in the
related Prospectus Supplement, each period that begins on a date that
corresponds to a Distribution Date (or in the case of the first such period,
begins on the Closing Date) and ends on the day preceding the immediately
following Distribution Date, a calculation will be made of the portion of the
original issue discount that accrued during such accrual period. The portion of
original issue discount that accrues in any accrual period will equal the
excess, if any, of (i) the sum of (a) the present value, as of the end of the
accrual period, of all of the distributions remaining to be made on the REMIC
Regular Certificate, if any, in future periods and (b) the distributions made on
such REMIC Regular Certificate during the accrual period of amounts included in
the stated redemption price, over (ii) the adjusted issue price of such REMIC
Regular Certificate at the beginning of the accrual period. The present value of
the remaining distributions referred to in the preceding sentence will be
calculated (i) assuming that distributions on the REMIC Regular Certificate will
be received in future periods based on the Mortgage Loans being prepaid at a
rate equal to the Prepayment Assumption, (ii) using a discount rate equal to the
original yield to maturity of the Certificate and (iii) taking into account
events (including actual prepayments) that have occurred before the close of the
accrual period. For these purposes, the original yield to maturity of the
Certificate will be calculated based on its issue price and assuming that
distributions on the Certificate will be made in all accrual periods based on
the Mortgage Loans being prepaid at a rate equal to the Prepayment Assumption.
The adjusted issue price of a
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REMIC Regular Certificate at the beginning of any accrual period will equal the
issue price of such Certificate, increased by the aggregate amount of original
issue discount that accrued with respect to such Certificate in prior accrual
periods, and reduced by the amount of any distributions made on such REMIC
Regular Certificate in prior accrual periods of amounts included in the stated
redemption price. The original issue discount accruing during any accrual
period, computed as described above, will be allocated ratably to each day
during the accrual period to determine the daily portion of original issue
discount for such day.
A subsequent purchaser of a REMIC Regular Certificate that purchases
such Certificate at a cost (excluding any portion of such cost attributable to
accrued qualified stated interest) less than its remaining stated redemption
price will also be required to include in gross income the daily portions of any
original issue discount with respect to such Certificate. However, each such
daily portion will be reduced, if such cost is in excess of its "adjusted issue
price", in proportion to the ratio such excess bears to the aggregate original
issue discount remaining to be accrued on such REMIC Regular Certificate. The
adjusted issue price of a REMIC Regular Certificate on any given day equals the
sum of (i) the adjusted issue price (or, in the case of the first accrual
period, the issue price) of such Certificate at the beginning of the accrual
period which includes such day and (ii) the daily portions of original issue
discount for all days during such accrual period prior to such day.
If the foregoing method for computing original issue discount results
in a negative amount of original issue discount as to any accrual period with
respect to a REMIC Regular Certificate, the amount of original issue discount
allocable to such accrual period will be zero. That is, no current deduction of
such negative amount will be allowed to the holder of such Certificate. The
holder will instead only be permitted to offset such negative amount against
future positive original issue discount (if any) attributable to such a
Certificate. Although not free from doubt, it is possible that a
Certificateholder may be permitted to deduct a loss to the extent his or her
basis in the Certificate exceeds the maximum amount of payments such
Certificateholder could ever receive with respect to such Certificate. However,
any such loss may be a capital loss, which is limited in its deductibility. The
foregoing considerations are particularly relevant to Stripped Interest
Certificates which can have negative yields under certain circumstances that are
not default related. See "Risk Factors--Effect of Prepayments on Yield of
Certificates" herein.
Market Discount. A Certificateholder that purchases a REMIC Regular
Certificate at a market discount (other than a de minimis amount), that is, in
the case of a REMIC Regular Certificate issued without original issue discount,
at a purchase price less than its remaining stated principal amount, or in the
case of a REMIC Regular Certificate issued with original issue discount, at a
purchase price less than its adjusted issue prices will recognize gain upon
receipt of each distribution representing stated redemption price. In
particular, under Section 1276 of the Code such a Certificateholder generally
will be required to allocate the portion of each such distribution representing
some of all of the stated redemption price first to accrued market discount not
previously included in income, and to recognize ordinary income to that extent.
A Certificateholder may elect to include market discount in income currently as
it accrues rather than including it on a deferred basis in accordance with the
foregoing. If made, such election will apply to all market discount bonds
acquired by such Certificateholder on or after the first day of the first
taxable year to which such election applies.
The OID Regulations also permit a Certificateholder to elect to accrue
all interest and discount (including de minimis market or original issue
discount) in income as interest, and to amortize premium, based on a constant
yield method. If such an election were made with respect to a REMIC Regular
Certificate with market discount, the Certificateholder would be deemed to have
made an election to include currently market discount in income with respect to
all other debt instruments having market discount that such Certificateholder
acquires during the taxable year of the election or thereafter, and possibly
previously acquired instruments. Similarly, a Certificateholder that made this
election for a Certificate that is acquired at a premium would be deemed to have
made an election to amortize bond premium with respect to all debt instruments
having amortizable bond premium that such Certificateholder owns or acquires.
See "--Taxation of Owners of REMIC Regular
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Certificates--Premium" below. Each of the elections in this and the preceding
paragraph to accrue interest, discount and premium with respect to a Certificate
on a constant yield method or as interest would be irrevocable except with the
approval of the IRS.
However, market discount with respect to a REMIC Regular Certificate
will be considered to be de minimis for purposes of Section 1276 of the Code if
such market discount is less than 0.25% of the remaining stated redemption price
of such REMIC Regular Certificate multiplied by the number of complete years to
maturity remaining after the date of its purchase. In interpreting a similar
rule with respect to original issue discount on obligations payable in
installments, the OID Regulations refer to the weighted average maturity of
obligations, and it is likely that the same rule will be applied with respect to
market discount, presumably taking into account the Prepayment Assumption. If
market discount is treated as de minimis under this rule, it appears that the
actual discount would be treated in a manner similar to original issue discount
of a de minimis amount. See "--Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount" above. Such treatment would result in
discount being included in income at a slower rate than discount would be
required to be included in income using the method described above.
Section 1276(b)(3) of the Code specifically authorizes the Treasury
Department to issue regulations providing for the method for accruing market
discount on debt instruments, the principal of which is payable in more than one
installment. Until regulations are issued by the Treasury Department, certain
rules described in the Committee Report apply. The Committee Report indicates
that in each accrual period market discount on REMIC Regular Certificates should
accrue, at the Certificateholder's option: (i) on the basis of a constant yield
method, (ii) in the case of a REMIC Regular Certificate issued without original
issue discount, in an amount that bears the same ratio to the total remaining
market discount as the stated interest paid in the accrual period bears to the
total amount of stated interest remaining to be paid on the REMIC Regular
Certificate as of the beginning of the accrual period, or (iii) in the case of a
REMIC Regular Certificate issued with original issue discount, in an amount that
bears the same ratio to the total remaining market discount as the original
issue discount accrued in the accrual period bears to the total original issue
discount remaining on the REMIC Regular Certificate at the beginning of the
accrual period. Moreover, the Prepayment Assumption used in calculating the
accrual of original issue discount is also used in calculating the accrual of
market discount. Because the regulations referred to in this paragraph have not
been issued, it is not possible to predict what effect such regulations might
have on the tax treatment of a REMIC Regular Certificate purchased at a discount
in the secondary market.
To the extent that REMIC Regular Certificates provide for monthly or
other periodic distributions throughout their term, the effect of these rules
may be to require market discount to be includible in income at a rate that is
not significantly slower than the rate at which such discount would accrue if it
were original issue discount. Moreover, in any event a holder of a REMIC Regular
Certificate generally will be required to treat a portion of any gain on the
sale or exchange of such Certificate as ordinary income to the extent of the
market discount accrued to the date of disposition under one of the foregoing
methods, less any accrued market discount previously reported as ordinary
income.
Further, under Section 1277 of the Code a holder of a REMIC Regular
Certificate may be required to defer a portion of its interest deductions for
the taxable year attributable to any indebtedness incurred or continued to
purchase or carry a REMIC Regular Certificate purchased with market discount.
For these purposes, the de minimis rule referred to above applies. Any such
deferred interest expense would not exceed the market discount that accrues
during such taxable year and is, in general, allowed as a deduction not later
than the year in which such market discount is includible in income. If such
holder, however, has elected to include market discount in income currently as
it accrues, the interest deferral rule described above would not apply.
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Premium. A REMIC Regular Certificate purchased at a cost (excluding any
portion of such cost attributable to accrued qualified stated interest) greater
than its remaining stated redemption price will be considered to be purchased at
a premium. The holder of such a REMIC Regular Certificate may elect under
Section 171 of the Code to amortize such premium under the constant yield method
over the life of the Certificate. If a holder elects to amortize bond premium,
bond premium would be amortized on a constant yield method and would be applied
as an offset against qualified stated interest. If made, such an election will
apply to all debt instruments having amortizable bond premium that the holder
owns or subsequently acquires. The IRS recently finalized new regulations on the
amortization of bond premium. However, the regulations do not specifically apply
to holders of REMIC Regular Certificates. The OID Regulations also permit
Certificateholders to elect to include all interest, discount and premium in
income based on a constant yield method, further treating the Certificateholder
as having made the election to amortize premium generally. See "--Taxation of
Owners of REMIC Regular Certificates--Market Discount" above. The Committee
report states that the same rules that apply to accrual of market discount
(which rules will require use of a Prepayment Assumption in accruing market
discount with respect to REMIC Regular Certificates without regard to whether
such Certificates have original issue discount) will also apply in amortizing
bond premium under Section 171 of the Code.
Realized Losses. Under Section 166 of the Code, both corporate holders
of the REMIC Regular Certificates and noncorporate holders of the REMIC Regular
Certificates that acquire such Certificates in connection with a trade or
business should be allowed to deduct, as ordinary losses, any losses sustained
during a taxable year in which their Certificates become wholly or partially
worthless as the result of one or more realized losses on the Mortgage Loans.
However, it appears that a noncorporate holder that does not acquire a REMIC
Regular Certificate in connection with a trade or business will not be entitled
to deduct a loss under Section 166 of the Code until such holder's Certificate
becomes wholly worthless (i.e., until its Certificate Principal Balance has been
reduced to zero) and that the loss will be characterized as a short-term capital
loss.
Each holder of a REMIC Regular Certificate will be required to accrue
interest and original issue discount with respect to such Certificate, without
giving effect to any reductions in distributions attributable to defaults or
delinquencies on the Mortgage Loans or the Underlying Certificates until it can
be established that any such reduction ultimately will not be recoverable. As a
result, the amount of taxable income reported in any period by the holder of a
REMIC Regular Certificate could exceed the amount of economic income actually
realized by the holder in such period. Although the holder of a REMIC Regular
Certificate eventually will recognize a loss or reduction in income attributable
to previously accrued and included income that, as the result of a realized
loss, ultimately will not be realized, the law is unclear with respect to the
timing and character of such loss or reduction in income.
Taxation of Owners of REMIC Residual Certificates.
General. Although a REMIC is a separate entity for federal income tax
purposes, a REMIC generally is not subject to entity-level taxation, except with
regard to prohibited transactions and certain other transactions. See
"--Prohibited Transactions Tax and Other Taxes" below. Rather, the taxable
income or net loss of a REMIC is generally taken into account by the holder of
the REMIC Residual Certificates. Accordingly, the REMIC Residual Certificates
will be subject to tax rules that differ significantly from those that would
apply if the REMIC Residual Certificates were treated for federal income tax
purposes as direct ownership interests in the Mortgage Loans or as debt
instruments issued by the REMIC.
A holder of a REMIC Residual Certificate generally will be required to
report its daily portion of the taxable income or, subject to the limitations
noted in this discussion, the net loss of the REMIC for each day during a
calendar quarter that such holder owned such REMIC Residual Certificate. For
this purpose, the taxable income or net loss of the REMIC will be allocated to
each day in the calendar quarter ratably using a "30 days per month/90 days per
quarter/360 days per year" convention unless otherwise disclosed in the related
Prospectus
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Supplement. The daily amounts so allocated will then be allocated among the
REMIC Residual Certificateholders in proportion to their respective ownership
interests on such day. Any amount included in the gross income or allowed as a
loss of any REMIC Residual Certificateholder by virtue of this paragraph will be
treated as ordinary income or loss. The taxable income of the REMIC will be
determined under the rules described below in "--Taxable Income of the REMIC"
and will be taxable to the REMIC Residual Certificateholders without regard to
the timing or amount of cash distributions by the REMIC until the REMIC's
termination. Ordinary income derived from REMIC Residual Certificates will be
"portfolio income" for purposes of the taxation of taxpayers subject to
limitations under Section 469 of the Code on the deductibility of "passive
losses".
A holder of a REMIC Residual Certificate that purchased such
Certificate from a prior holder of such Certificate also will be required to
report on its federal income tax return amounts representing its daily share of
the taxable income (or net loss) of the REMIC for each day that it holds such
REMIC Residual Certificate. Those daily amounts generally will equal the amounts
of taxable income or net loss determined as described above. The Committee
Report indicates that certain modifications of the general rules may be made, by
regulations, legislation or otherwise to reduce (or increase) the income of a
REMIC Residual Certificateholder that purchased such REMIC Residual Certificate
from a prior holder of such Certificate at a price greater than (or less than)
the adjusted basis (as defined below) such REMIC Residual Certificate would have
had in the hands of an original holder of such Certificate. The REMIC
Regulations, however, do not provide for any such modifications.
Any payments received by a holder of a REMIC Residual Certificate from
the seller of such Certificate in connection with the acquisition of such REMIC
Residual Certificate will be taken into account in determining the income of
such holder for federal income tax purposes. Although it appears likely that any
such payment would be includible in income immediately upon its receipt, the IRS
might assert that such payment should be included in income over time according
to an amortization schedule or according to some other method. Because of the
uncertainty concerning the treatment of such payments, it is recommended that
holders of REMIC Residual Certificates consult their tax advisors concerning the
treatment of such payments for income tax purposes.
The amount of income REMIC Residual Certificateholders will be required
to report (or the tax liability associated with such income) may exceed the
amount of cash distributions received from the REMIC for the corresponding
period. Consequently, REMIC Residual Certificateholders should have other
sources of funds sufficient to pay any federal income taxes due as a result of
their ownership of REMIC Residual Certificates or unrelated deductions against
which income may be offset, subject to the rules relating to "excess
inclusions", residual interests without "significant value" and "noneconomic"
residual interests discussed below. The fact that the tax liability associated
with the income allocated to REMIC Residual Certificateholders may exceed the
cash distributions received by such REMIC Residual Certificateholders for the
corresponding period may significantly adversely affect such REMIC Residual
Certificateholders' after-tax rate of return. Such disparity between income and
distributions may not be offset by corresponding losses or reductions of income
attributable to the REMIC Residual Certificateholder until subsequent tax years
and, then, may not be completely offset due to changes in the Code, tax rates or
character of the income or loss. REMIC Residual Certificates may in some
instances have negative "value". See "Risk Factors--Federal Tax Considerations
Regarding REMIC Residual Certificates".
Taxable Income of the REMIC. The taxable income of the REMIC will equal
the income from the Mortgage Loans and other assets of the REMIC plus any
cancellation of indebtedness income due to the allocation of realized losses to
REMIC Regular Certificates, less the deductions allowed to the REMIC for
interest (including original issue discount and reduced by any premium on
issuance) on the REMIC Regular Certificates (and any other Class of REMIC
Certificates constituting "regular interests" in the REMIC not offered hereby),
for amortization of any premium on the Mortgage Loans, for bad debt losses with
respect to the Mortgage Loans and, except as described below, for servicing,
administrative and other expenses.
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For purposes of determining its taxable income, the REMIC will have an
initial aggregate basis in its assets equal to the sum of the issue prices of
all REMIC Certificates (or, if a Class of REMIC Certificates is not sold
initially, their fair market values). Such aggregate basis will be allocated
among the Mortgage Loans and the other assets of the REMIC in proportion to
their respective fair market values. The issue price of any REMIC Certificates
offered hereby will be determined in the manner described above under
"--Taxation of Owners of REMIC Regular Certificates--Original Issue Discount".
The issue price of a REMIC Certificate received in exchange for an interest in
the Mortgage Loans or other property will equal the fair market value of such
interests in the Mortgage Loans or other property. Accordingly, if one or more
Classes of REMIC Certificates are retained initially rather than sold, the REMIC
Administrator may be required to estimate the fair market value of such
interests in order to determine the basis of the REMIC in the Mortgage Loans and
other property held by the REMIC.
Subject to possible application of the de minimis rules, the method of
accrual by the REMIC of original issue discount income and market discount
income with respect to Mortgage Loans that it holds will be equivalent to the
method for accruing original issue discount income for holders of REMIC Regular
Certificates (that is, under the constant yield method taking into account the
Prepayment Assumption). However, a REMIC that acquires loans at a market
discount must include such market discount in income currently, as it accrues,
on a constant yield basis. See "--Taxation of Owners of REMIC Regular
Certificates" above, which describes a method for accruing such discount income
that is analogous to that required to be used by a REMIC as to Mortgage Loans
with market discount that it holds.
A Mortgage Loan will be deemed to have been acquired with discount (or
premium) to the extent that the REMIC's basis therein, determined as described
in the preceding paragraph, is less than (or greater than) its stated redemption
price. Any such discount will be includible in the income of the REMIC as it
accrues, in advance of receipt of the cash attributable to such income, under a
method similar to the method described above for accruing original issue
discount on the REMIC Regular Certificates. It is anticipated that each REMIC
will elect under Section 171 of the Code to amortize any premium on the Mortgage
Loans. Premium on any Mortgage Loan to which such election applies may be
amortized under a constant yield method, presumably taking into account a
Prepayment Assumption.
A REMIC will be allowed deductions for interest (including original
issue discount) on the REMIC Regular Certificates (including any other Class of
REMIC Certificates constituting "regular interests" in the REMIC not offered
hereby) equal to the deductions that would be allowed if the REMIC Regular
Certificates (including any other Class of REMIC Certificates constituting
"regular interests" in the REMIC not offered hereby) were indebtedness of the
REMIC. Original issue discount will be considered to accrue for this purpose as
described above under "--Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount", except that the de minimis rule and the
adjustments for subsequent holders of REMIC Regular Certificates (including any
other Class of REMIC Certificates constituting "regular interests" in the REMIC
not offered hereby) described therein will not apply.
If a Class of REMIC Regular Certificates is issued at a price in excess
of the stated redemption price of such Class (such excess "Issue Premium"), the
net amount of interest deductions that are allowed the REMIC in each taxable
year with respect to the REMIC Regular Certificates of such Class will be
reduced by an amount equal to the portion of the Issue Premium that is
considered to be amortized or repaid in that year. Although the matter is not
entirely certain, it is likely that Issue Premium would be amortized under a
constant yield method in a manner analogous to the method of accruing original
issue discount described above under "--Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount".
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As a general rule, the taxable income of a REMIC will be determined in
the same manner as if the REMIC were an individual having the calendar year as
its taxable year and using the accrual method of accounting. However, no item of
income, gain, loss or deduction allocable to a prohibited transaction will be
taken into account. See "--Prohibited Transactions Tax and Other Taxes" below.
Further, the limitation on miscellaneous itemized deductions imposed on
individuals by Section 67 of the Code (which allows such deductions only to the
extent they exceed in the aggregate two percent of the taxpayer's adjusted gross
income) will not be applied at the REMIC level so that the REMIC will be allowed
deductions for servicing, administrative and other noninterest expenses in
determining its taxable income. All such expenses will be allocated as a
separate item to the holders of REMIC Certificates, subject to the limitation of
Section 67 of the Code. See "--Possible Pass-Through of Miscellaneous Itemized
Deductions" below. If the deductions allowed to the REMIC exceed its gross
income for a calendar quarter, such excess will be the net loss for the REMIC
for that calendar quarter.
Basis Rules, Net Losses and Distributions. The adjusted basis of a
REMIC Residual Certificate will be equal to the amount paid for such REMIC
Residual Certificate, increased by amounts included in the income of the REMIC
Residual Certificateholder and decreased (but not below zero) by distributions
made, and by net losses allocated, to such REMIC Residual Certificateholder.
A REMIC Residual Certificateholder is not allowed to take into account
any net loss for any calendar quarter to the extent such net loss exceeds such
REMIC Residual Certificateholder's adjusted basis in its REMIC Residual
Certificate as of the close of such calendar quarter (determined without regard
to such net loss). Any loss that is not currently deductible by reason of this
limitation may be carried forward indefinitely to future calendar quarters and,
subject to the same limitation, may be used only to offset income from the REMIC
Residual Certificate. The ability of REMIC Residual Certificateholders to deduct
net losses may be subject to additional limitations under the Code, as to which
it is recommended that REMIC Residual Certificateholders consult their tax
advisors.
Any distribution on a REMIC Residual Certificate will be treated as a
nontaxable return of capital to the extent it does not exceed the holder's
adjusted basis in such REMIC Residual Certificate. To the extent a distribution
on a REMIC Residual Certificate exceeds such adjusted basis, it will be treated
as gain from the sale of such REMIC Residual Certificate. Holders of certain
REMIC Residual Certificates may be entitled to distributions early in the term
of the related REMIC under circumstances in which their bases in such REMIC
Residual Certificates will not be sufficiently large that such distributions
will be treated as nontaxable returns of capital. Their bases in such REMIC
Residual Certificates will initially equal the amount paid for such REMIC
Residual Certificates and will be increased by their allocable shares of taxable
income of the REMIC. However, such bases increases may not occur until the end
of the calendar quarter, or perhaps the end of the calendar year, with respect
to which such REMIC taxable income is allocated to the REMIC Residual
Certificateholders. To the extent such REMIC Residual Certificateholders'
initial bases are less than the distributions to such REMIC Residual
Certificateholders, and increases in such initial bases either occur after such
distributions or (together with their initial bases) are less than the amount of
such distributions, gain will be recognized to such REMIC Residual
Certificateholders on such distributions and will be treated as gain from the
sale of their REMIC Residual Certificates.
The effect of these rules is that a REMIC Residual Certificateholder
may not amortize its basis in a REMIC Residual Certificate, but may only recover
its basis through distributions, through the deduction of any net losses of the
REMIC or upon the sale of its REMIC Residual Certificate. See "--Sales of REMIC
Certificates" below. For a discussion of possible modifications of these rules
that may require adjustments to income of a holder of a REMIC Residual
Certificate other than an original holder in order to reflect any difference
between the cost of such REMIC Residual Certificate to such REMIC Residual
Certificateholder and the adjusted
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basis such REMIC Residual Certificate would have in the hands of an original
holder see "--Taxation of Owners of REMIC Residual Certificates--General" above.
Excess Inclusions. Any "excess inclusions" with respect to a REMIC
Residual Certificate will be subject to federal income tax in all events.
In general, the "excess inclusions" with respect to a REMIC Residual
Certificate for any calendar quarter will be the excess, if any, of (i) the
daily portions of REMIC taxable income allocable to such REMIC Residual
Certificate over (ii) the sum of the "daily accruals" (as defined below) for
each day during such quarter that such REMIC Residual Certificate was held by
such REMIC Residual Certificateholder. The daily accruals of a REMIC Residual
Certificateholder will be determined by allocating to each day during a calendar
quarter its ratable portion of the product of the "adjusted issue price" of the
REMIC Residual Certificate at the beginning of the calendar quarter and 120% of
the "long-term Federal rate" in effect on the Closing Date. For this purpose,
the adjusted issue price of a REMIC Residual Certificate as of the beginning of
any calendar quarter will be equal to the issue price of the REMIC Residual
Certificate, increased by the sum of the daily accruals for all prior quarters
and decreased (but not below zero) by any distributions made with respect to
such REMIC Residual Certificate before the beginning of such quarter. The issue
price of a REMIC Residual Certificate is the initial offering price to the
public (excluding bond houses and brokers) at which a substantial amount of the
REMIC Residual Certificates were sold. The "long-term Federal rate" is an
average of current yields on Treasury securities with a remaining term of
greater than nine years, computed and published monthly by the IRS.
Although it has not done so, the Treasury also has authority to issue
regulations that would treat the entire amount of income accruing on a REMIC
Residual Certificate as an excess inclusion if the REMIC Residual Certificates
are considered not to have "significant value". The REMIC Regulations provide
that in order to be treated as having significant value, the REMIC Residual
Certificates must have an aggregate issue price at least equal to two percent of
the aggregate issue prices of all of the related REMIC's regular and residual
interests. In addition, based on the Prepayment Assumption, the anticipated
weighted average life of the REMIC Residual Certificates must equal or exceed 20
percent of the anticipated weighted average life of the REMIC, based on the
Prepayment Assumption and on any required or permitted clean up calls or
required liquidation provided for in the REMIC's organizational documents. The
related Prospectus Supplement will disclose whether offered REMIC Residual
Certificates may be considered to have "significant value" under the REMIC
Regulations; provided, however, that any disclosure that a REMIC Residual
Certificate will have "significant value" will be based upon certain
assumptions, and the Depositor will make no representation that a REMIC Residual
Certificate will have "significant value" for purposes of the above-described
rules.
For REMIC Residual Certificateholders, an excess inclusion (i) will not
be permitted to be offset by deductions, losses or loss carryovers from other
activities, (ii) will be treated as "unrelated business taxable income" to an
otherwise tax-exempt organization and (iii) will not be eligible for any rate
reduction or exemption under any applicable tax treaty with respect to the 30%
United States withholding tax imposed on distributions to REMIC Residual
Certificateholders that are foreign investors. See, however "--Foreign Investors
in REMIC Certificates" below. Furthermore, for purposes of the alternative
minimum tax, (i) excess inclusions will not be permitted to be offset by the
alternative tax net operating loss deduction and (ii) alternative minimum
taxable income may not be less than the taxpayer's excess inclusions. This last
rule has the effect of preventing non-refundable tax credits from reducing the
taxpayer's income tax to an amount lower than the alternative minimum tax on
excess inclusions.
In the case of any REMIC Residual Certificates held by a real estate
investment trust, the aggregate excess inclusions with respect to such REMIC
Residual Certificates, reduced (but not below zero) by the real estate
investment trust taxable income (within the meaning of Section 857(b)(2) of the
Code, excluding any net capital gain), will be allocated among the shareholders
of such trust in proportion to the dividends received by
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such shareholders from such trust, and any amount so allocated will be treated
as an excess inclusion with respect to a REMIC Residual Certificate as if held
directly by such shareholder. Treasury regulations yet to be issued could apply
a similar rule to regulated investment companies, common trust funds and certain
cooperatives; the REMIC Regulations currently do not address this subject.
Noneconomic REMIC Residual Certificates. Under the REMIC Regulations,
transfers of "noneconomic" REMIC Residual Certificates will be disregarded for
all federal income tax purposes if "a significant purpose of the transfer was to
enable the transferor to impede the assessment or collection of tax". If such
transfer is disregarded, the purported transferor will continue to remain liable
for any taxes due with respect to the income on such "noneconomic" REMIC
Residual Certificate. The REMIC Regulations provide that a REMIC Residual
Certificate is noneconomic unless, based on the Prepayment Assumption and on any
required or permitted clean up calls, or required liquidation provided for in
the REMIC's organizational documents, (1) the present value of the expected
future distributions (discounted using the "applicable Federal rate" for
obligations whose term ends on the close of the last quarter in which excess
inclusions are expected to accrue with respect to the REMIC Residual
Certificate, which rate is computed and published monthly by the IRS) on the
REMIC Residual Certificate equals at least the present value of the expected tax
on the anticipated excess inclusions, and (2) the transferor reasonably expects
that the transferee will receive distributions with respect to the REMIC
Residual Certificate at or after the time the taxes accrue on the anticipated
excess inclusions in an amount sufficient to satisfy the accrued taxes.
Accordingly, all transfers of REMIC Residual Certificates that may constitute
noneconomic residual interests will be subject to certain restrictions under the
terms of the related Pooling Agreement that are intended to reduce the
possibility of any such transfer being disregarded. Such restrictions will
require each party to a transfer to provide an affidavit that no purpose of such
transfer is to impede the assessment or collection of tax, including certain
representations as to the financial condition of the prospective transferee, as
to which the transferor is also required to make a reasonable investigation to
determine such transferee's historic payment of its debts and ability to
continue to pay its debts as they come due in the future. Prior to purchasing a
REMIC Residual Certificate, prospective purchasers should consider the
possibility that a purported transfer of such REMIC Residual Certificate by such
a purchaser to another purchaser at some future date may be disregarded in
accordance with the above-described rules which would result in the retention of
tax liability by such purchaser.
The related Prospectus Supplement will disclose whether offered REMIC
Residual Certificates may be considered "noneconomic" residual interests under
the REMIC Regulations; provided, however, that any disclosure that a REMIC
Residual Certificate will not be considered "noneconomic" will be based upon
certain assumptions, and the Depositor will make no representation that a REMIC
Residual Certificate will not be considered "noneconomic" for purposes of the
above-described rules. See "--Foreign Investors in REMIC Certificates" below for
additional restrictions applicable to transfers of certain REMIC Residual
Certificates to foreign persons.
Mark-to-Market Rules. The IRS recently released regulations under
Section 475 of the Code (the "Mark-to-Market Regulations") relating to the
requirement that a securities dealer mark to market securities held for sale to
customers. This mark-to-market requirement applies to all securities owned by a
dealer, except to the extent that the dealer has specifically identified a
security as held for investment. The Mark-to-Market Regulations provide that for
purposes of this mark-to-market requirement, a REMIC Residual Certificate is not
treated as a security for purposes of Section 475 of the Code, and thus is not
subject to the mark-to-market rules. It is recommended that prospective
purchasers of a REMIC Residual Certificate consult their tax advisors regarding
the Mark-to-Market Regulations.
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Unless otherwise stated in the related Prospectus Supplement, transfers
of REMIC Residual Certificates to investors that are not United States Persons
(as defined below in "--Foreign Investors in REMIC Certificates") will be
prohibited under the related Pooling Agreement. If transfers of REMIC Residual
Certificates to investors that are not United States Persons are permitted
pursuant to the related Pooling Agreement, the related Prospectus Supplement
will describe additional restrictions applicable to transfers of certain REMIC
Residual Certificates to such persons.
Possible Pass-Through of Miscellaneous Itemized Deductions. Fees and
expenses of a REMIC generally will be allocated to the holders of the related
REMIC Residual Certificates. The applicable Treasury regulations indicate,
however, that in the case of a REMIC that is similar to a single class grantor
trust, all or a portion of such fees and expenses should be allocated to the
holders of the related REMIC Regular Certificates. Unless otherwise stated in
the related Prospectus Supplement, such fees and expenses will be allocated to
holders of the related REMIC Residual Certificates in their entirety and not to
the holders of the related REMIC Regular Certificates.
With respect to REMIC Residual Certificates or REMIC Regular
Certificates the holders of which receive an allocation of fees and expenses in
accordance with the preceding discussion, if any holder thereof is an
individual, estate or trust, or a "pass-through entity" beneficially owned by
one or more individuals, estates or trusts, (i) an amount equal to such
individual's, estate's or trust's share of such fees and expenses will be added
to the gross income of such holder and (ii) such individual's, estate's or
trust's share of such fees and expenses will be treated as a miscellaneous
itemized deduction allowable subject to the limitation of Section 67 of the
Code, which permits such deductions only to the extent they exceed in the
aggregate 2% of a taxpayer's adjusted gross income. In addition, Section 68 of
the Code provides that the amount of itemized deductions otherwise allowable for
an individual whose adjusted gross income exceeds a specified amount will be
reduced by the lesser of (i) 3% of the excess of the individual's adjusted gross
income over such amount or (ii) 80% of the amount of itemized deductions
otherwise allowable for the taxable year. The amount of additional taxable
income reportable by REMIC Certificateholders that are subject to the
limitations of either Section 67 or Section 68 of the Code may be substantial.
Furthermore, in determining the alternative minimum taxable income of such a
holder of a REMIC Certificate that is an individual, estate or trust, or a
"pass-through entity" beneficially owned by one or more individuals, estates or
trusts, no deduction will be allowed for such holder's allocable portion of
servicing fees and other miscellaneous itemized deductions of the REMIC, even
though an amount equal to the amount of such fees and other deductions will be
included in such holder's gross income. Accordingly, REMIC Residual Certificates
will generally not be appropriate investments for individuals, estates, or
trusts, or pass-through entities beneficially owned by one or more individuals,
estates or trusts. It is recommended that such prospective investors consult
with their tax advisors prior to making an investment in such Certificates.
Sales of REMIC Certificates. If a REMIC Certificate is sold, the
selling Certificateholder will recognize gain or loss equal to the difference
between the amount realized on the sale and its adjusted basis in the REMIC
Certificate. The adjusted basis of a REMIC Regular Certificate generally will
equal the cost of such REMIC Regular Certificate to such Certificateholder,
increased by income reported by such Certificateholder with respect to such
REMIC Regular Certificate (including original issue discount and market discount
income) and reduced (but not below zero) by distributions on such REMIC Regular
Certificate received by such Certificateholder and by any amortized premium. The
adjusted basis of a REMIC Residual Certificate will be determined as described
above under "--Taxation of Owners of REMIC Residual Certificates--Basis Rules,
Net Losses and Distributions". Except as described below, any such gain or loss
will be capital gain or loss, provided such REMIC Certificate is held as a
capital asset (generally, property held for investment) within the meaning of
Section 1221 of the Code. The Code as of the date of this Prospectus provides
for lower rates as to mid-term capital gains, and still lower rates as to
long-term capital gains, than those applicable to the short-term capital
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gains and ordinary income realized or received by individuals. No such rate
differential exists for corporations. In addition, the distinction between a
capital gain or loss and ordinary income or loss remains relevant for other
purposes.
Gain from the sale of a REMIC Regular Certificate that might otherwise
be a capital gain will be treated as ordinary income to the extent such gain
does not exceed the excess, if any, of (i) the amount that would have been
includible in the seller's income with respect to such REMIC Regular Certificate
assuming that income had accrued thereon at a rate equal to 110% of the
"applicable Federal rate" (generally, a rate based on an average of current
yields on Treasury securities having a maturity comparable to that of the
Certificate based on the application of the Prepayment Assumption to such
Certificate), determined as of the date of purchase of such REMIC Regular
Certificate, over (ii) the amount of ordinary income actually includible in the
seller's income prior to such sale. In addition, gain recognized on the sale of
a REMIC Regular Certificate by a seller who purchased such REMIC Regular
Certificate at a market discount will be taxable as ordinary income in an amount
not exceeding the portion of such discount that accrued during the period such
REMIC Certificate was held by such holder, reduced by any market discount
included in income under the rules described above under "--Taxation of Owners
of REMIC Regular Certificates--Market Discount" and "--Premium".
REMIC Certificates will be "evidences of indebtedness" within the
meaning of Section 582(c)(1) of the Code, so that gain or loss recognized from
the sale of a REMIC Certificate by a bank or thrift institution to which such
Section applies will be ordinary income or loss.
A portion of any gain from the sale of a REMIC Regular Certificate that
might otherwise be capital gain may be treated as ordinary income to the extent
that such Certificate is held as part of a "conversion transaction" within the
meaning of Section 1258 of the Code. A conversion transaction generally is one
in which the taxpayer has taken two or more positions in the same or similar
property that reduce or eliminate market risk, if substantially all of the
taxpayer's return is attributable to the time value of the taxpayer's net
investment in such transaction. The amount of gain so realized in a conversion
transaction that is recharacterized as ordinary income generally will not exceed
the amount of interest that would have accrued on the taxpayer's net investment
at 120% of the appropriate "applicable Federal rate" at the time the taxpayer
enters into the conversion transaction, subject to appropriate reduction for
prior inclusion of interest and other ordinary income items from the
transaction.
Finally, a taxpayer may elect to have net capital gain taxed at
ordinary income rates rather than capital gains rates in order to include such
net capital gain in total net investment income for the taxable year, for
purposes of the rule that limits the deduction of interest on indebtedness
incurred to purchase or carry property held for investment to a taxpayer's net
investment income.
Except as may be provided in Treasury regulations yet to be issued, if
the seller of a REMIC Residual Certificate reacquires such REMIC Residual
Certificate, or acquires any other residual interest in a REMIC or any similar
interest in a "taxable mortgage pool" (as defined in Section 7701(i) of the
Code) during the period beginning six months before, and ending six months
after, the date of such sale, such sale will be subject to the "wash sale" rules
of Section 1091 of the Code. In that event, any loss realized by the REMIC
Residual Certificateholder on the sale will not be deductible, but instead will
be added to such REMIC Residual Certificateholder's adjusted basis in the
newly-acquired asset.
Prohibited Transactions Tax and Other Taxes. The Code imposes a tax on
REMICs equal to 100% of the net income derived from "prohibited transactions" (a
"Prohibited Transactions Tax"). In general, subject to certain specified
exceptions a prohibited transaction means the disposition of a Mortgage Loan,
the receipt of income from a source other than a Mortgage Loan or certain other
permitted investments, the receipt of compensation for services, or gain from
the disposition of an asset purchased with the payments on the Mortgage
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Loans for temporary investment pending distribution on the REMIC Certificates.
It is not anticipated that any REMIC will engage in any prohibited transactions
as to which it would be subject to a material Prohibited Transaction Tax.
In addition, certain contributions to a REMIC made after the day on
which the REMIC issues all of its interests could result in the imposition of a
tax on the REMIC equal to 100% of the value of the contributed property (a
"Contributions Tax"). Each Pooling Agreement will include provisions designed to
prevent the acceptance of any contributions that would be subject to such tax.
REMICs also are subject to federal income tax at the highest corporate
rate on "net income from foreclosure property", determined by reference to the
rules applicable to real estate investment trusts. "Net income from foreclosure
property" generally means income from foreclosure property other than qualifying
rents and other qualifying income for a real estate investment trust. Under
certain circumstances, the Special Servicer may be authorized to conduct
activities with respect to a Mortgaged Property acquired by a Trust Fund that
causes the Trust Fund to incur this tax if doing so would, in the reasonable
discretion of the Special Servicer, maximize the net after-tax proceeds to
Certificateholders. However, under no circumstance will the Special Servicer
cause the acquired Mortgage Property to cease to be a "permitted investment"
under Section 860G(a)(5) of the Code.
Unless otherwise disclosed in the related Prospectus Supplement, it is
not anticipated that any material state or local income or franchise tax will be
imposed on any REMIC.
Unless otherwise stated in the related Prospectus Supplement, and to
the extent permitted by then applicable laws, any Prohibited Transactions Tax,
Contributions Tax, tax on "net income from foreclosure property" or state or
local income or franchise tax that may be imposed on the REMIC will be borne by
the related REMIC Administrator, Master Servicer, Special Servicer, Manager or
Trustee, in any case out of its own funds, provided that such person has
sufficient assets to do so, and provided further that such tax arises out of a
breach of such person's obligations under the related Pooling Agreement. Any
such tax not borne by a REMIC Administrator, Master Servicer, Special Servicer,
Manager or Trustee would be charged against the related Trust Fund resulting in
a reduction in amounts payable to holders of the related REMIC Certificates.
Tax and Restrictions on Transfers of REMIC Residual Certificates to
Certain Organizations. If a REMIC Residual Certificate is transferred to a
"disqualified organization" (as defined below), a tax would be imposed in an
amount (determined under the REMIC Regulations) equal to the product of (i) the
present value (discounted using the "applicable Federal rate" for obligations
whose term ends on the close of the last quarter in which excess inclusions are
expected to accrue with respect to the REMIC Residual Certificate) of the total
anticipated excess inclusions with respect to such REMIC Residual Certificate
for periods after the transfer and (ii) the highest marginal federal income tax
rate applicable to corporations. The anticipated excess inclusions must be
determined as of the date that the REMIC Residual Certificate is transferred and
must be based on events that have occurred up to the time of such transfer, the
Prepayment Assumption and any required or permitted clean up calls or required
liquidation provided for in the REMIC's organizational documents. Such a tax
generally would be imposed on the transferor of the REMIC Residual Certificate,
except that where such transfer is through an agent for a disqualified
organization, the tax would instead be imposed on such agent. However, a
transferor of a REMIC Residual Certificate would in no event be liable for such
tax with respect to a transfer if the transferee furnishes to the transferor an
affidavit that the transferee is not a disqualified organization and, as of the
time of the transfer, the transferor does not have actual knowledge that such
affidavit is false. Moreover, an entity will not qualify as a REMIC unless there
are reasonable arrangements designed to ensure that (i) residual interests in
such entity are not held by disqualified organizations and (ii) information
necessary for the application of the tax described herein will be made
available. Restrictions on the transfer of REMIC Residual Certificates and
certain other provisions that are intended to meet this requirement will be
included in each Pooling
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Agreement, and will be discussed in any Prospectus Supplement relating to the
offering of any REMIC Residual Certificate.
In addition, if a "pass-through entity" (as defined below) includes in
income excess inclusions with respect to a REMIC Residual Certificate, and a
disqualified organization is the record holder of an interest in such entity,
then a tax will be imposed on such entity equal to the product of (i) the amount
of excess inclusions on the REMIC Residual Certificate that are allocable to the
interest in the pass-through entity held by such disqualified organization and
(ii) the highest marginal federal income tax rate imposed on corporations. A
pass-through entity will not be subject to this tax for any period, however, if
each record holder of an interest in such pass-through entity furnishes to such
pass-through entity (i) such holder's social security number and a statement
under penalties of perjury that such social security number is that of the
record holder or (ii) a statement under penalties of perjury that such record
holder is not a disqualified organization.
For taxable years beginning on or after January 1, 1998, if an
"electing large partnership" holds a Residual Certificate, all interests in the
electing large partnership are treated as held by disqualified organizations for
purposes of the tax imposed upon a pass-through entity by Section 860E(c) of the
Code. An exception to this tax, otherwise available to a pass-through entity
that is furnished certain affidavits by record holders of interests in the
entity and that does not know such affidavits are false, is not available to an
electing large partnership.
For these purposes, a "disqualified organization" means (i) the United
States, any State or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of the foregoing
(but would not include instrumentalities described in Section 168(h)(2)(D) of
the Code or the Federal Home Loan Mortgage Corporation), (ii) any organization
(other than a cooperative described in Section 521 of the Code) that is exempt
from federal income tax, unless it is subject to the tax imposed by Section 511
of the Code or (iii) any organization described in Section 1381(a)(2)(C) of the
Code. For these purposes, a "pass-through entity" means any regulated investment
company, real estate investment trust, trust, partnership or certain other
entities described in Section 860E(e)(6) of the Code. An "electing large
partnership" means any partnership having more than 100 members during the
preceding tax year (other than certain service partnerships and commodity
pools), which elect to apply simplified reporting provisions under the Code. In
addition, a person holding an interest in a pass-through entity as a nominee for
another person will, with respect to such interest, be treated as a pass-through
entity.
Termination. A REMIC will terminate immediately after the Distribution
Date following receipt by the REMIC of the final payment in respect of the
Mortgage Loans or upon a sale of the REMIC's assets following the adoption by
the REMIC of a plan of complete liquidation. The last distribution on a REMIC
Regular Certificate will be treated as a payment in retirement of a debt
instrument. In the case of a REMIC Residual Certificate, if the last
distribution on such REMIC Residual Certificate is less than the REMIC Residual
Certificateholder's adjusted basis in such Certificate, such REMIC Residual
Certificateholder should (but may not) be treated as realizing a capital loss
equal to the amount of such difference.
Reporting and Other Administrative Matters. Solely for purposes of the
administrative provisions of the Code, the REMIC will be treated as a
partnership and REMIC Residual Certificateholders will be treated as partners.
Unless otherwise stated in the related Prospectus Supplement, the REMIC
Administrator, which generally will hold at least a nominal amount of REMIC
Residual Certificates, will file REMIC federal income tax returns on behalf of
the related REMIC, and will be designated as and will act as the "tax matters
person" with respect to the REMIC in all respects.
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As the tax matters person, the REMIC Administrator, subject to certain
notice requirements and various restrictions and limitations, generally will
have the authority to act on behalf of the REMIC and the REMIC Residual
Certificateholders in connection with the administrative and judicial review of
items of income, deduction, gain or loss of the REMIC, as well as the REMIC's
classification. REMIC Residual Certificateholders generally will be required to
report such REMIC items consistently with their treatment on the related REMIC's
tax return and may in some circumstances be bound by a settlement agreement
between the REMIC Administrator, as tax matters person, and the IRS concerning
any such REMIC item. Adjustments made to the REMIC's tax return may require a
REMIC Residual Certificateholder to make corresponding adjustments on its
return, and an audit of the REMIC's tax return, or the adjustments resulting
from such an audit, could result in an audit of a REMIC Residual
Certificateholder's return. No REMIC will be registered as a tax shelter
pursuant to Section 6111 of the Code because it is not anticipated that any
REMIC will have a net loss for any of the first five taxable years of its
existence. Any person that holds a REMIC Residual Certificate as a nominee for
another person may be required to furnish to the related REMIC, in a manner to
be provided in Treasury regulations, the name and address of such person and
other information.
Reporting of interest income, including any original issue discount,
with respect to REMIC Regular Certificates is required annually, and may be
required more frequently under Treasury regulations. These information reports
generally are required to be sent to individual holders of REMIC Regular
Interests and the IRS; holders of REMIC Regular Certificates that are
corporations, trusts, securities dealers and certain other non-individuals will
be provided interest and original issue discount income information and the
information set forth in the following paragraph upon request in accordance with
the requirements of the applicable regulations. The information must be provided
by the later of 30 days after the end of the quarter for which the information
was requested, or two weeks after the receipt of the request. The REMIC must
also comply with rules requiring a REMIC Regular Certificate issued with
original issue discount to disclose on its face the amount of original issue
discount and the issue date, and requiring such information to be reported to
the IRS. Reporting with respect to REMIC Residual Certificates, including
income, excess inclusions, investment expenses and relevant information
regarding qualification of the REMIC's assets will be made as required under the
Treasury regulations, generally on a quarterly basis.
As applicable, the REMIC Regular Certificate information reports will
include a statement of the adjusted issue price of the REMIC Regular Certificate
at the beginning of each accrual period. In addition, the reports will include
information required by regulations with respect to computing the accrual of any
market discount. Because exact computation of the accrual of market discount on
a constant yield method would require information relating to the holder's
purchase price that the REMIC may not have, such regulations only require that
information pertaining to the appropriate proportionate method of accruing
market discount be provided. See "--Taxation of Owners of REMIC Regular
Certificates--Market Discount".
Unless otherwise specified in the related Prospectus Supplement, the
responsibility for complying with the foregoing reporting rules will be borne by
the REMIC Administrator.
Backup Withholding with Respect to REMIC Certificates. Payments of
interest and principal, as well as payments of proceeds from the sale of REMIC
Certificates, may be subject to the "backup withholding tax" under Section 3406
of the Code at a rate of 31% if recipients of such payments fail to furnish to
the payor certain information, including their taxpayer identification numbers,
or otherwise fail to establish an exemption from such tax. Any amounts deducted
and withheld from a distribution to a recipient would be allowed as a credit
against such recipient's federal income tax. Furthermore, certain penalties may
be imposed by the IRS on a recipient of payments that is required to supply
information but that does not do so in the proper manner.
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Foreign Investors in REMIC Certificates. A REMIC Regular
Certificateholder that is not a "United States Person" (as defined below) and is
not subject to federal income tax as a result of any direct or indirect
connection to the United States in addition to its ownership of a REMIC Regular
Certificate will, in general, not, unless otherwise disclosed in the related
Prospectus Supplement, be subject to United States federal income or withholding
tax in respect of a distribution on a REMIC Regular Certificate, provided that
the holder complies to the extent necessary with certain identification
requirements (including delivery of a statement, signed by the Certificateholder
under penalties of perjury, certifying that such Certificateholder is not a
United States Person and providing the name and address of such
Certificateholder). For these purposes, "United States Person" means a citizen
or resident of the United States, a corporation, partnership or other entity
created or organized in, or under the laws of, the United States or any
political subdivision thereof, an estate whose income from sources without the
United States is includible in gross income for United States federal income tax
purposes regardless of its connection with the conduct of a trade or business
within the United States or a trust as to which (i) a court in the United States
is able to exercise primary supervision over the administration of the trust and
(ii) one or more United States fiduciaries have the right to control all
substantial decisions of the trust. It is possible that the IRS may assert that
the foregoing tax exemption should not apply with respect to a REMIC Regular
Certificate held by a REMIC Residual Certificateholder that owns directly or
indirectly a 10% or greater interest in the REMIC Residual Certificates. If the
holder does not qualify for exemption, distributions of interest, including
distributions in respect of accrued original issue discount, to such holder may
be subject to a tax rate of 30%, subject to reduction under any applicable tax
treaty.
It is possible, under regulations promulgated under Section 881 of the
Code concerning conduit financing transactions, that the exemption from
withholding taxes described above may not be available to a holder who is not a
United States person and owns 10% or more of one or more underlying Mortgagors
or, if the holder is a controlled foreign corporation, is related to one or more
Mortgagors.
Further, it appears that a REMIC Regular Certificate would not be
included in the estate of a nonresident alien individual and would not be
subject to United States estate taxes. However, it is recommended that
Certificateholders who are nonresident alien individuals consult their tax
advisors concerning this question.
Unless otherwise stated in the related Prospectus Supplement, transfers
of REMIC Residual Certificates to investors that are not United States Persons
will be prohibited under the related Pooling Agreement.
Grantor Trust Funds
Classification of Grantor Trust Funds. With respect to each Series of
Grantor Trust Certificates, counsel to the Depositor will deliver its opinion to
the effect that, assuming compliance with all provisions of the related Pooling
Agreement, the related Grantor Trust Fund will be classified as a grantor trust
under subpart E, part I of subchapter J of the Code and not as a partnership or
an association taxable as a corporation. The following general discussion of the
anticipated federal income tax consequences of the purchase, ownership and
disposition of Grantor Trust Certificates, to the extent it relates to matters
of law or legal conclusions with respect thereto, represents the opinion of
counsel to the Depositor for the applicable Series as specified in the related
Prospectus Supplement, subject to any qualifications set forth herein. In
addition, counsel to the Depositor have prepared or reviewed the statements in
this Prospectus under the heading "Federal Income Tax Consequences--Grantor
Trust Funds", and are of the opinion that such statements are correct in all
material respects. Such statements are intended as an explanatory discussion of
the possible effects of the classification of any Grantor Trust Fund as a
grantor trust for federal income tax purposes on investors generally and of
related tax matters affecting investors generally, but do not purport to furnish
information in the level of detail or with the attention to an investor's
specific tax circumstances that would be provided by an investor's own tax
advisor. Accordingly, it is recommended that each investor consult its own tax
advisors with regard to the tax consequences to it of investing in Grantor Trust
Certificates.
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For purposes of the following discussion, a Grantor Trust Certificate
representing an undivided equitable ownership interest in the principal of the
Mortgage Loans constituting the related Grantor Trust Fund, together with
interest thereon at a pass-through rate, will be referred to as a "Grantor Trust
Fractional Interest Certificate". A Grantor Trust Certificate representing
ownership of all or a portion of the difference between interest paid on the
Mortgage Loans constituting the related Grantor Trust Fund (net of normal
administration fees) and interest paid to the holders of Grantor Trust
Fractional Interest Certificates issued with respect to such Grantor Trust Fund
will be referred to as a "Grantor Trust Strip Certificate". A Grantor Trust
Strip Certificate may also evidence a nominal ownership interest in the
principal of the Mortgage Loans constituting the related Grantor Trust Fund.
Characterization of Investments in Grantor Trust Certificates.
Grantor Trust Fractional Interest Certificates. In the case of Grantor
Trust Fractional Interest Certificates, unless otherwise disclosed in the
related Prospectus Supplement, counsel to the Depositor will deliver an opinion
that, in general, Grantor Trust Fractional Interest Certificates will represent
interests in (i) "loans . . . secured by an interest in real property" within
the meaning of Section 7701(a)(19)(C)(v) of the Code (but generally only to the
extent that the underlying Mortgage Loans have been made with respect to
property that is used for residential or certain other prescribed purposes);
(ii) "obligation[s] (including any participation or Certificate of beneficial
ownership therein) which . . . [are] principally secured by an interest in real
property" within the meaning of Section 860G(a)(3) of the Code; (iii) "permitted
assets" within the meaning of Section 860L(a)(1)(C) of the Code; and (iv) "real
estate assets" within the meaning of Section 856(c)(5)(B) of the Code. In
addition, counsel to the Depositor will deliver an opinion that interest on
Grantor Trust Fractional Interest Certificates will to the same extent be
considered "interest on obligations secured by mortgages on real property or on
interests in real property" within the meaning of Section 856(c)(3)(B) of the
Code.
Grantor Trust Strip Certificates. Even if Grantor Trust Strip
Certificates evidence an interest in a Grantor Trust Fund consisting of Mortgage
Loans that are "loans . . . secured by an interest in real property" within the
meaning of Section 7701(a)(19)(C)(v) of the Code and "real estate assets" within
the meaning of Section 856(c)(5)(B) of the Code, and the interest on which is
"interest on obligations secured by mortgages on real property" within the
meaning of Section 856(c)(3)(A) of the Code, it is unclear whether the Grantor
Trust Strip Certificates, and the income therefrom, will be so characterized.
Counsel to the Depositor will not deliver any opinion on these questions. It is
recommended that prospective purchasers to which such characterization of an
investment in Grantor Trust Strip Certificates is material consult their tax
advisors regarding whether the Grantor Trust Strip Certificates, and the income
therefrom, will be so characterized.
The Grantor Trust Strip Certificates will be "obligation[s] (including
any participation or Certificate of beneficial ownership therein) which . . .
[are] principally secured by an interest in real property" within the meaning of
Section 860G(a)(3)(A) of the Code and, in general, "permitted assets" within the
meaning of Section 860L(a)(1)(C) of the Code.
Taxation of Owners of Grantor Trust Fractional Interest Certificates
General. Holders of a particular Series of Grantor Trust Fractional
Interest Certificates generally will be required to report on their federal
income tax returns their shares of the entire income from the Mortgage Loans
(including amounts used to pay reasonable servicing fees and other expenses) and
will be entitled to deduct their shares of any such reasonable servicing fees
and other expenses. Because of stripped interests, market or original issue
discount, or premium, the amount includible in income on account of a Grantor
Trust Fractional Interest Certificate may differ significantly from the amount
distributable thereon representing interest on the Mortgage Loans.
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Under Section 67 of the Code, an individual, estate or trust holding a
Grantor Trust Fractional Interest Certificate directly or through certain
pass-through entities will be allowed a deduction for such reasonable servicing
fees and expenses only to the extent that the aggregate of such holder's
miscellaneous itemized deductions exceeds two percent of such holder's adjusted
gross income. In addition, Section 68 of the Code provides that the amount of
itemized deductions otherwise allowable for an individual whose adjusted gross
income exceeds a specified amount will be reduced by the lesser of (i) 3% of the
excess of the individual's adjusted gross income over such amount or (ii) 80% of
the amount of itemized deductions otherwise allowable for the taxable year. The
amount of additional taxable income reportable by holders of Grantor Trust
Fractional Interest Certificates who are subject to the limitations of either
Section 67 or Section 68 of the Code may be substantial. Further,
Certificateholders (other than corporations) subject to the alternative minimum
tax may not deduct miscellaneous itemized deductions in determining such
holder's alternative minimum taxable income. Although it is not entirely clear,
it appears that in transactions in which multiple Classes of Grantor Trust
Certificates (including Grantor Trust Strip Certificates) are issued, such fees
and expenses should be allocated among the Classes of Grantor Trust Certificates
using a method that recognizes that each such Class benefits from the related
services. In the absence of statutory or administrative clarification as to the
method to be used, it currently is intended to base information returns or
reports to the IRS and Certificateholders on a method that allocates such
expenses among Classes of Grantor Trust Certificates with respect to each period
based on the distributions made to each such Class during that period.
The federal income tax treatment of Grantor Trust Fractional Interest
Certificates of any Series will depend on whether they are subject to the
"stripped bond" rules of Section 1286 of the Code. Grantor Trust Fractional
Interest Certificates may be subject to those rules if (i) a Class of Grantor
Trust Strip Certificates is issued as part of the same Series or (ii) the
Depositor or any of its affiliates retains (for its own account or for purposes
of resale) a right to receive a specified portion of the interest payable on a
Mortgage Asset. Further, the IRS has ruled that an unreasonably high servicing
fee retained by a seller or servicer will be treated as a retained ownership
interest in mortgages that constitutes a stripped coupon. The related Prospectus
Supplement will include information regarding servicing fees paid to a Master
Servicer, a Special Servicer, any Sub-Servicer or their respective affiliates.
If Stripped Bond Rules Apply. If the stripped bond rules apply, each
Grantor Trust Fractional Interest Certificate will be treated as having been
issued with "original issue discount" within the meaning of Section 1273(a) of
the Code, subject, however, to the discussion below regarding the treatment of
certain stripped bonds as market discount bonds and the discussion regarding de
minimis market discount. See "--Taxation of Owners of Grantor Trust Fractional
Interest Certificates--Market Discount" below. Under the stripped bond rules,
the holder of a Grantor Trust Fractional Interest Certificate (whether a cash or
accrual method taxpayer) will be required to report interest income from its
Grantor Trust Fractional Interest Certificate for each month in an amount equal
to the income that accrues on such Certificate in that month calculated under a
constant yield method, in accordance with the rules of the Code relating to
original issue discount.
The original issue discount on a Grantor Trust Fractional Interest
Certificate will be the excess of such Certificate's stated redemption price
over its issue price. The issue price of a Grantor Trust Fractional Interest
Certificate as to any purchaser will be equal to the price paid by such
purchaser of the Grantor Trust Fractional Interest Certificate. The stated
redemption price of a Grantor Trust Fractional Interest Certificate will be the
sum of all payments to be made on such Certificate, other than "qualified stated
interest", if any, as well as such Certificate's share of reasonable servicing
fees and other expenses. See "--Taxation of Owners of Grantor Trust Fractional
Interest Certificates--If Stripped Bond Rules Do Not Apply" for a definition of
"qualified stated interest". In general, the amount of such income that accrues
in any month would equal the product of such holder's adjusted basis in such
Grantor Trust Fractional Interest Certificate at the beginning of such month
(see "--Sales of Grantor Trust Certificates" below) and the yield of such
Grantor Trust Fractional Interest Certificate to such holder. Such yield would
be computed as the rate (compounded based on the regular interval between
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payment dates) that, if used to discount the holder's share of future payments
on the Mortgage Loans, would cause the present value of those future payments to
equal the price at which the holder purchased such Certificate. In computing
yield under the stripped bond rules, a Certificateholder's share of future
payments on the Mortgage Loans will not include any payments made in respect of
any ownership interest in the Mortgage Loans retained by the Depositor, the
Master Servicer, the Special Servicer, any Sub-Servicer or their respective
affiliates, but will include such Certificateholder's share of any reasonable
servicing fees and other expenses.
Section 1272(a)(6) of the Code requires (i) the use of a reasonable
prepayment assumption in accruing original issue discount and (ii) adjustments
in the accrual of original issue discount when prepayments do not conform to the
prepayment assumption, with respect to certain categories of debt instruments.
Recent legislation extends the scope of that section to any pool of debt
instruments the yield on which may be affected by reason of prepayments,
effective for taxable years beginning after enactment. The precise application
of the new legislation is unclear in certain respects. For example, it is
uncertain whether a prepayment assumption will be applied collectively to all a
taxpayer's investments in pools of debt instruments or will be applied on an
investment-by-investment basis. Similarly, as to investments in Grantor Trust
Fractional Interest Certificates, it is not clear whether the assumed prepayment
rate is to be determined based on conditions at the time of the first sale of
the Grantor Trust Fractional Interest Certificate or, with respect to any
holder, at the time of purchase of the Grantor Trust Fractional Interest
Certificate by that holder. It is recommended that Certificateholders consult
their tax advisors concerning reporting original issue discount with respect to
Grantor Trust Fractional Interest Certificates.
In the case of a Grantor Trust Fractional Interest Certificate acquired
at a price equal to the principal amount of the Mortgage Loans allocable to such
Certificate, the use of a prepayment assumption generally would not have any
significant effect on the yield used in calculating accruals of interest income.
In the case, however, of a Grantor Trust Fractional Interest Certificate
acquired at a discount or premium (that is, at a price less than or greater than
such principal amount, respectively), the use of a reasonable prepayment
assumption would increase or decrease such yield, and thus accelerate or
decelerate, respectively, the reporting of income.
In the absence of statutory or administrative clarification, it is
currently intended that information reports or returns to the IRS and
Certificateholders will be based on a prepayment assumption (the "Prepayment
Assumption") determined when Certificates are offered and sold hereunder and
disclosed in the related Prospectus Supplement, and on a constant yield computed
using a representative initial offering price for each Class of Certificates.
However, neither the Depositor nor any other person will make any representation
that the Mortgage Loans will in fact prepay at a rate conforming to such
Prepayment Assumption or any other rate or that the Prepayment Assumption will
not be challenged by the IRS on audit. Certificateholders also should bear in
mind that the use of a representative initial offering price will mean that such
information returns or reports, even if otherwise accepted as accurate by the
IRS, will in any event be accurate only as to the initial Certificateholders of
each Series who bought at that price.
Under Treasury Regulation Section 1.1286-1, certain stripped bonds are
to be treated as market discount bonds and, accordingly, any purchaser of such a
bond is to account for any discount on the bond as market discount rather than
original issue discount. This treatment only applies, however, if immediately
after the most recent disposition of the bond by a person stripping one or more
coupons from the bond and disposing of the bond or coupon (i) there is no
original issue discount (or only a de minimis amount of original issue discount)
or (ii) the annual stated rate of interest payable on the original bond is no
more than one percentage point lower than the gross interest rate payable on the
original mortgage loan (before subtracting any servicing fee or any stripped
coupon). If interest payable on a Grantor Trust Fractional Interest Certificate
is more than one percentage point lower than the gross interest rate payable on
the Mortgage Loans, the related Prospectus Supplement will disclose that fact.
If the original issue discount or market discount on a Grantor Trust Fractional
Interest Certificate determined under the stripped bond rules is less than 0.25%
of the stated redemption price
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multiplied by the weighted average maturity of the Mortgage Loans, then such
original issue discount or market discount will be considered to be de minimis.
Original issue discount or market discount of only a de minimis amount will be
included in income in the same manner as de minimis original issue discount and
market discount described in "--Taxation of Owners of Grantor Trust Fractional
Interest Certificates--If Stripped Bond Rules Do Not Apply" and "--Market
Discount" below.
If Stripped Bond Rules Do Not Apply. Subject to the discussion below on
original issue discount, if the stripped bond rules do not apply to a Grantor
Trust Fractional Interest Certificate, the Certificateholder will be required to
report its share of the interest income on the Mortgage Loans in accordance with
such Certificateholder's normal method of accounting. In that case, the original
issue discount rules will apply, even if the stripped bond rules do not apply,
to a Grantor Trust Fractional Interest Certificate to the extent it evidences an
interest in Mortgage Loans issued with original issue discount.
The original issue discount, if any, on the Mortgage Loans will equal
the difference between the stated redemption price of such Mortgage Loans and
their issue price. For a definition of "stated redemption price," see
"--Taxation of Owners of REMIC Regular Certificates--Original Issue Discount"
above. In general, the issue price of a Mortgage Loan will be the amount
received by the borrower from the lender under the terms of the Mortgage Loan,
less any "points" paid by the borrower, and the stated redemption price of a
Mortgage Loan will equal its principal amount, unless the Mortgage Loan provides
for an initial "teaser," or below-market interest rate. The determination as to
whether original issue discount will be considered to be de minimis will be
calculated using the same test as in the REMIC discussion. See "--Taxation of
Owners of REMIC Regular Certificates--Original Issue Discount" above.
In the case of Mortgage Loans bearing adjustable or variable interest
rates, the related Prospectus Supplement will describe the manner in which such
rules will be applied with respect to those Mortgage Loans by the Trustee or
Master Servicer, as applicable, in preparing information returns to the
Certificateholders and the IRS.
If original issue discount is in excess of a de minimis amount, all
original issue discount with respect to a Mortgage Loan will be required to be
accrued and reported in income each month, based on a constant yield. Under
recent legislation, Section 1272(a)(6) of the Code requires that a prepayment
assumption be used in computing yield with respect to any pool of debt
instruments, the yield on which may be affected by prepayments. The precise
application of the new legislation is unclear in certain respects. For example,
it is uncertain whether a prepayment assumption will be applied collectively to
all a taxpayer's investments in pools of debt instruments or will be applied on
an investment-by-investment basis. Similarly, as to investments in Grantor Trust
Fractional Interest Certificates, it is not clear whether the assumed prepayment
rate is to be determined at the time of the first sale of the Grantor Trust
Fractional Interest Certificate or, with respect to any holder, at the time of
that holder's purchase of the Grantor Trust Fractional Interest Certificate. It
is recommended that Certificateholders consult their own tax advisors concerning
reporting original issue discount with respect to Grantor Trust Fractional
Interest Certificates and refer to the related Prospectus Supplement with
respect to each Series to determine whether and in what manner the original
issue discount rules will apply to Mortgage Loans in such Series.
A purchaser of a Grantor Trust Fractional Interest Certificate that
purchases such Grantor Trust Fractional Interest Certificate at a cost less than
such Certificate's allocable portion of the aggregate remaining stated
redemption price of the Mortgage Loans held in the related Trust Fund will also
be required to include in gross income such Certificate's daily portions of any
original issue discount with respect to such Mortgage Loans. However, each such
daily portion will be reduced, if the cost of such Grantor Trust Fractional
Interest Certificate to such purchaser is in excess of such Certificate's
allocable portion of the aggregate "adjusted issue prices" of the Mortgage Loans
held in the related Trust Fund, approximately in proportion to the ratio such
excess bears to such Certificate's allocable portion of the aggregate original
issue discount remaining to be accrued on such
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Mortgage Loans. The adjusted issue price of a Mortgage Loan on any given day
equals the sum of (i) the adjusted issue price (or, in the case of the first
accrual period, the issue price) of such Mortgage Loan at the beginning of the
accrual period that includes such day and (ii) the daily portions of original
issue discount for all days during such accrual period prior to such day. The
adjusted issue price of a Mortgage Loan at the beginning of any accrual period
will equal the issue price of such Mortgage Loan, increased by the aggregate
amount of original issue discount with respect to such Mortgage Loan that
accrued in prior accrual periods, and reduced by the amount of any payments made
on such Mortgage Loan in prior accrual periods of amounts included in its stated
redemption price.
In the absence of statutory or administrative clarification, it is
currently intended that information reports or returns to the IRS and
Certificateholders will be based on a prepayment assumption (the "Prepayment
Assumption") determined when Certificates are offered and sold hereunder and
disclosed in the related Prospectus Supplement, and on a constant yield computed
using a representative initial offering price for each Class of Certificates.
However, neither the Depositor nor any other person will make any representation
that the Mortgage Loans will in fact prepay at a rate conforming to such
Prepayment Assumption or any other rate or that the Prepayment Assumption will
not be challenged by the IRS on audit. Certificateholders also should bear in
mind that the use of a representative initial offering price will mean that such
information returns or reports, even if otherwise accepted as accurate by the
IRS, will in any event be accurate only as to the initial Certificateholders of
each Series who bought at that price.
Market Discount. If the stripped bond rules do not apply to a Grantor
Trust Fractional Interest Certificate, a Certificateholder may be subject to the
market discount rules of Sections 1276 through 1278 of the Code to the extent an
interest in a Mortgage Loan is considered to have been purchased at a "market
discount", that is, in the case of a Mortgage Loan issued without original issue
discount, at a purchase price less than its remaining stated redemption price
(as defined above), or in the case of a Mortgage Loan issued with original issue
discount, at a purchase price less than its adjusted issue price (as defined
above). If market discount is in excess of a de minimis amount (as described
below), the holder generally will be required to include in income in each month
the amount of such discount that has accrued (under the rules described in the
next paragraph) through such month that has not previously been included in
income, but limited, in the case of the portion of such discount that is
allocable to any Mortgage Loan, to the payment of stated redemption price on
such Mortgage Loan that is received by (or, in the case of accrual basis
Certificateholders, due to) the Trust Fund in that month. A Certificateholder
may elect to include market discount in income currently as it accrues (under a
constant yield method based on the yield of the Certificate to such holder)
rather than including it on a deferred basis in accordance with the foregoing
under rules similar to those described in "--Taxation of Owners of REMIC Regular
Interests--Market Discount" above.
Section 1276(b)(3) of the Code authorizes the Treasury Department to
issue regulations providing for the method for accruing market discount on debt
instruments, the principal of which is payable in more than one installment.
Until such time as regulations are issued by the Treasury Department, certain
rules described in the Committee Report apply. Under those rules, in each
accrual period market discount on the Mortgage Loans should accrue, at the
holder's option: (i) on the basis of a constant yield method, (ii) in the case
of a Mortgage Loan issued without original issue discount, in an amount that
bears the same ratio to the total remaining market discount as the stated
interest paid in the accrual period bears to the total stated interest remaining
to be paid on the Mortgage Loan as of the beginning of the accrual period, or
(iii) in the case of a Mortgage Loan issued with original issue discount, in an
amount that bears the same ratio to the total remaining market discount as the
original issue discount accrued in the accrual period bears to the total
original issue discount remaining at the beginning of the accrual period.
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Under recent legislation, Section 1272(a)(6) of the Code requires that
a prepayment assumption be used in computing the accrual of original issue
discount with respect to any pool of debt instruments, the yield on which may be
affected by prepayments. Because the Mortgage Loans will be such a pool, it
appears that the prepayment assumption used (or that would be used) in
calculating the accrual of original issue discount, if any, is also to be used
in calculating the accrual of market discount. However, the precise application
of the new legislation is unclear in certain respects. For example, it is
uncertain whether a prepayment assumption will be applied collectively to all of
a taxpayer's investments in pools of debt instruments or will be applied on an
investment-by-investment basis. Similarly, it is not clear whether the assumed
prepayment rate is to be determined at the time of the first sale of the Grantor
Trust Fractional Interest Certificate or, with respect to any holder, at the
time of that holder's purchase of the Grantor Trust Fractional Interest
Certificate. Moreover, because the regulations under 1276(b)(3) referred to in
the preceding paragraph have not been issued, it is not possible to predict what
effect such regulations might have on the tax treatment of a Mortgage Loan
purchased at a discount in the secondary market. It is recommended that
Certificateholders consult their own tax advisors concerning accrual of market
discount with respect to Grantor Trust Fractional Interest Certificates and
should refer to the related Prospectus Supplement with respect to each Series to
determine whether and in what manner the market discount will apply to Mortgage
Loans purchased at a market discount in such Series.
To the extent that the Mortgage Loans provide for periodic payments of
stated redemption price, market discount may be required to be included in
income at a rate that is not significantly slower than the rate at which such
discount would be included in income if it were original issue discount.
Market discount with respect to Mortgage Loans may be considered to be
de minimis and, if so, will be includible in income under de minimis rules
similar to those described above in "--REMICs--Taxation of Owners of REMIC
Regular Certificates--Original Issue Discount" above.
Further, under the rules described above in "--REMICs--Taxation of
Owners of REMIC Regular Certificates--Market Discount", any discount that is not
original issue discount and exceeds a de minimis amount may require the deferral
of interest expense deductions attributable to accrued market discount not yet
includible in income, unless an election has been made to report market discount
currently as it accrues. This rule applies without regard to the origination
dates of the Mortgage Loans.
Premium. If a Certificateholder is treated as acquiring the underlying
Mortgage Loans at a premium, that is, at a price in excess of their remaining
stated redemption price, such Certificateholder may elect under Section 171 of
the Code to amortize using a constant yield method the portion of such premium
allocable to Mortgage Loans originated after September 27, 1985. Amortizable
premium is treated as an offset to interest income on the related debt
instrument, rather than as a separate interest deduction. However, premium
allocable to Mortgage Loans originated before September 28, 1985 or to Mortgage
Loans for which an amortization election is not made, should be allocated among
the payments of stated redemption price on the Mortgage Loan and be allowed as a
deduction as such payments are made (or, for a Certificateholder using the
accrual method of accounting, when such payments of stated redemption price are
due).
It appears that a prepayment assumption should be used in computing
amortization of premium allowable under Section 171 of the Code similar to that
described for calculating the accrual of market discount of Grantor Trust
Fractional Interest Certificates. See "--Taxation of Owners of Grantor Trust
Fractional Interest Certificates -- Market Discount", above.
Taxation of Owners of Grantor Trust Strip Certificates. The "stripped
coupon" rules of Section 1286 of the Code will apply to the Grantor Trust Strip
Certificates. Except as described above in "--Taxation of Owners of Grantor
Trust Fractional Interest Certificates-If Stripped Bond Rules Apply", no
regulations or published rulings under Section 1286 of the Code have been issued
and some uncertainty exists as to how it will
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be applied to securities such as the Grantor Trust Strip Certificates.
Accordingly, it is recommended that holders of Grantor Trust Strip Certificates
consult their tax advisors concerning the method to be used in reporting income
or loss with respect to such Certificates.
The OID Regulations do not apply to "stripped coupons", although they
provide general guidance as to how the original issue discount sections of the
Code will be applied.
Under the stripped coupon rules, it appears that original issue
discount will be required to be accrued in each month on the Grantor Trust Strip
Certificates based on a constant yield method. In effect, each holder of Grantor
Trust Strip Certificates would include as interest income in each month an
amount equal to the product of such holder's adjusted basis in such Grantor
Trust Strip Certificate at the beginning of such month and the yield of such
Grantor Trust Strip Certificate to such holder. Such yield would be calculated
based on the price paid for that Grantor Trust Strip Certificate by its holder
and the payments remaining to be made thereon at the time of the purchase, plus
an allocable portion of the servicing fees and expenses to be paid with respect
to the Mortgage Loans. See "--Taxation of Owners of Grantor Trust Fractional
Interest Certificates--If Stripped Bond Rules Apply" above.
As noted above, Section 1272(a)(6) of the Code requires that a
prepayment assumption be used in computing the accrual of original issue
discount with respect to certain categories of debt instruments, and that
adjustments be made in the amount and rate of accrual of such discount when
prepayments do not conform to such prepayment assumption. It appears that those
provisions would apply to Grantor Trust Strip Certificates. It is uncertain
whether the assumed prepayment rate would be determined based on conditions at
the time of the first sale of the Grantor Trust Strip Certificate or, with
respect to any subsequent holder, at the time of purchase of the Grantor Trust
Strip Certificate by that holder.
If the method for computing original issue discount under Section
1272(a)(6) results in a negative amount of original issue discount as to any
accrual period with respect to a REMIC Regular Certificate, the amount of
original issue discount allocable to such accrual period will be zero. That is,
no current deduction of such negative amount will be allowed to the holder of
such Certificate. The holder will instead only be permitted to offset such
negative amount against future positive original issue discount (if any)
attributable to such a Certificate. Although not free from doubt, it is possible
that a Certificateholder may be permitted to deduct a loss to the extent his or
her basis in the Certificate exceeds the maximum amount of payments such
Certificateholder could ever receive with respect to such Certificate. However,
any such loss may be a capital loss, which is limited in its deductibility. The
foregoing considerations are particularly relevant to Stripped Interest
Certificates, which can have negative yields under circumstances that are not
default related. See "Risk Factors--Effect of Prepayments on Yield of
Certificates" herein.
The accrual of income on the Grantor Trust Strip Certificates will be
significantly slower using a prepayment assumption than if yield is computed
assuming no prepayments. In the absence of statutory or administrative
clarification, it currently is intended to base information returns or reports
to the IRS and Certificateholders on the Prepayment Assumption disclosed in the
related Prospectus Supplement and on a constant yield computed using a
representative initial offering price for each Class of Certificates. However,
neither the Depositor nor any other person will make any representation that the
Mortgage Loans will in fact prepay at a rate conforming to the Prepayment
Assumption or at any other rate or that the Prepayment Assumption will not be
challenged by the IRS on audit. Certificateholders also should bear in mind that
the use of a representative initial offering price will mean that such
information returns or reports, even if otherwise accepted as accurate by the
IRS, will in any event be accurate only as to the initial Certificateholders of
each Series who bought at that price. It is recommended that prospective
purchasers of the Grantor Trust Strip Certificates consult their tax advisors
regarding the use of the Prepayment Assumption.
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Sales of Grantor Trust Certificates. Any gain or loss, equal to the
difference between the amount realized on the sale or exchange of a Grantor
Trust Certificate and its adjusted basis, recognized on such sale or exchange of
a Grantor Trust Certificate by an investor who holds such Grantor Trust
Certificate as a capital asset, will be capital gain or loss, except to the
extent of accrued and unrecognized market discount, which will be treated as
ordinary income, and (in the case of banks and other financial institutions)
except as provided under Section 582(c) of the Code. The adjusted basis of a
Grantor Trust Certificate generally will equal its cost, increased by any income
reported by the seller (including original issue discount and market discount
income) and reduced (but not below zero) by any previously reported losses, any
amortized premium and by any distributions with respect to such Grantor Trust
Certificate. The Code as of the date of this Prospectus provides for lower rates
as to long-term capital gains, than those applicable to the short-term capital
gains and ordinary income realized or received by individuals. No such rate
differential exists for corporations. In addition, the distinction between a
capital gain or loss and ordinary income or loss remains relevant for other
purposes.
Gain or loss from the sale of a Grantor Trust Certificate may be
partially or wholly ordinary and not capital in certain circumstances. Gain
attributable to accrued and unrecognized market discount will be treated as
ordinary income, as will gain or loss recognized by banks and other financial
institutions subject to Section 582(c) of the Code. Furthermore, a portion of
any gain that might otherwise be capital gain may be treated as ordinary income
to the extent that the Grantor Trust Certificate is held as part of a
"conversion transaction" within the meaning of Section 1258 of the Code. A
conversion transaction generally is one in which the taxpayer has taken two or
more positions in the same or similar property that reduce or eliminate market
risk, if substantially all of the taxpayer's return is attributable to the time
value of the taxpayer's net investment in such transaction. The amount of gain
realized in a conversion transaction that is recharacterized as ordinary income
generally will not exceed the amount of interest that would have accrued on the
taxpayer's net investment at 120% of the appropriate "applicable Federal rate"
(which rate is computed and published monthly by the IRS) at the time the
taxpayer enters into the conversion transaction, subject to appropriate
reduction for prior inclusion of interest and other ordinary income items from
the transaction.
Finally, a taxpayer may elect to have net capital gain taxed at
ordinary income rates rather than capital gains rates in order to include such
net capital gain in total net investment income for that taxable year, for
purposes of the rule that limits the deduction of interest on indebtedness
incurred to purchase or carry property held for investment to a taxpayer's net
investment income.
Grantor Trust Reporting. Unless otherwise provided in the related
Prospectus Supplement, the Trustee or Master Servicer, as applicable, will
furnish to each holder of a Grantor Trust Certificate with each distribution a
statement setting forth the amount of such distribution allocable to principal
on the underlying Mortgage Loans and to interest thereon at the related
Pass-Through Rate. In addition, the Trustee or Master Servicer, as applicable,
will furnish, within a reasonable time after the end of each calendar year, to
each holder of a Grantor Trust Certificate who was such a holder at any time
during such year, information regarding the amount of servicing compensation
received by the Master Servicer, the Special Servicer or any Sub-Servicer, and
such other customary factual information as the Depositor or the reporting party
deems necessary or desirable to enable holders of Grantor Trust Certificates to
prepare their tax returns and will furnish comparable information to the IRS as
and when required by law to do so. Because the rules for accruing discount and
amortizing premium with respect to the Grantor Trust Certificates are uncertain
in various respects, there is no assurance the IRS will agree with the Trustee's
or Master Servicer's, as the case may be, information reports of such items of
income and expense. Moreover, such information reports, even if otherwise
accepted as accurate by the IRS, will in any event be accurate only as to the
initial Certificateholders that bought their Certificates at the representative
initial offering price used in preparing such reports.
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On August 13, 1998, the Service published proposed regulations, which
will, when effective, establish a reporting framework for interests in "widely
held fixed investment trusts" similar to that for regular interests in REMICs. A
widely-held fixed investment trust is defined as any entity classified as a
"trust" under Treasury Regulation Section 301.7701-4(c) in which any interest is
held by a middleman (which includes, but is not limited to, a custodian of a
person's account, a nominee, and a broker holding an interest for a customer in
street name). These regulations are proposed to be effective for calendar years
beginning on or after the date that the final regulations are published in the
Federal Register.
Backup Withholding. In general, the rules described above in
"--REMICs--Backup Withholding with Respect to REMIC Certificates" will also
apply to Grantor Trust Certificates.
Foreign Investors. In general, the discussion with respect to REMIC
Regular Certificates in "--REMICs--Foreign Investors in REMIC Certificates"
above applies to Grantor Trust Certificates except that Grantor Trust
Certificates will, unless otherwise disclosed in the related Prospectus
Supplement, be eligible for exemption from U.S. withholding tax, subject to the
conditions described in such discussion, only to the extent the related Mortgage
Loans were originated after July 18, 1984.
To the extent that interest on a Grantor Trust Certificate would be
exempt under Sections 871(h)(1) and 881(c) of the Code from United States
withholding tax, and the Grantor Trust Certificate is not held in connection
with a Certificateholder's trade or business in the United States, such Grantor
Trust Certificate will not be subject to United States estate taxes in the
estate of a nonresident alien individual.
STATE AND OTHER TAX CONSEQUENCES
In addition to the federal income tax consequences described in
"Federal Income Tax Consequences", potential investors should consider the state
and local tax consequences of the acquisition, ownership, and disposition of the
Offered Certificates. State tax law may differ substantially from the
corresponding federal law, and the discussion above does not purport to describe
any aspect of the tax laws of any state or other jurisdiction. Therefore, it is
recommended that prospective investors consult their tax advisors with respect
to the various tax consequences of investments in the Offered Certificates.
ERISA CONSIDERATIONS
General
ERISA and the Code impose certain requirements on employee benefit
plans, and on certain other retirement plans and arrangements, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts (and as applicable, insurance company
general accounts) in which such plans, accounts or arrangements are invested
that are subject to the fiduciary responsibility provisions of ERISA and Section
4975 of the Code ("Plans"), and on persons who are fiduciaries with respect to
such Plans, in connection with the investment of Plan assets. Certain employee
benefit plans, such as governmental plans (as defined in ERISA Section 3(32)),
and, if no election has been made under Section 410(d) of the Code, church plans
(as defined in Section 3(33) of ERISA) are not subject to ERISA requirements.
Accordingly, assets of such plans may be invested in Offered Certificates
without regard to the ERISA considerations described below, subject to the
provisions of other applicable federal and state law. Any such plan which is
qualified and exempt from taxation under Sections 401(a) and 501(a) of the Code,
however, is subject to the prohibited transaction rules set forth in Section 503
of the Code.
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ERISA generally imposes on Plan fiduciaries certain general fiduciary
requirements, including those of investment prudence and diversification and the
requirement that a Plan's investments be made in accordance with the documents
governing the Plan. In addition, Section 406 of ERISA and Section 4975 of the
Code prohibit a broad range of transactions involving assets of a Plan and
persons ("parties in interest" within the meaning of ERISA and "disqualified
persons" within the meaning of the Code; collectively, "Parties in Interest")
who have certain specified relationships to the Plan, unless a statutory or
administrative exemption is available. The types of transactions between Plans
and Parties in Interest that are prohibited include: (a) sales, exchanges or
leases of property, (b) loans or other extensions of credit and (c) the
furnishing of goods and services. Certain Parties in Interest that participate
in a prohibited transaction may be subject to an excise tax imposed pursuant to
Section 4975 of the Code or a penalty imposed pursuant to Section 502(i) of
ERISA, unless a statutory or administrative exemption is available. In addition,
the persons involved in the prohibited transaction may have to rescind the
transaction and pay an amount to the Plan for any losses realized by the Plan or
profits realized by such persons, individual retirement accounts involved in the
transaction may be disqualified resulting in adverse tax consequences to the
owner of such account and certain other liabilities could result that would have
a significant adverse effect on such person.
Plan Asset Regulations
A Plan's investment in Offered Certificates may cause the underlying
Mortgage Assets and other assets included in a related Trust Fund to be deemed
assets of such Plan. Section 2510.3-101 of the regulations (the "Plan Asset
Regulations") of the United States Department of Labor (the "DOL") provides that
when a Plan acquires an equity interest in an entity, the Plan's assets include
both such equity interest and an undivided interest in each of the underlying
assets of the entity, unless certain exceptions apply, including that the equity
participation in the entity by "benefit plan investors" (i.e., Plans and certain
employee benefit plans not subject to ERISA) is not "significant", both as
defined therein. For this purpose, in general, equity participation by benefit
plan investors will be "significant" on any date if 25% or more of the value of
any class of equity interests in the entity is held by benefit plan investors
(determined by not including the investments of persons with discretionary
authority or control over the assets of such entity, of any person who provides
investment advice for a fee (direct or indirect) with respect to such assets,
and "affiliates" (as defined in the DOL regulations relating to Plan assets) of
such persons). Equity participation in a Trust Fund will be significant on any
date if immediately after the most recent acquisition of any Certificate, 25% or
more of any Class of Certificates is held by benefit plan investors (determined
by not including the investments of the Depositor, the Trustee, the Master
Servicer, the Special Servicer, any other parties with discretionary authority
over the assets of a Trust Fund and their respective affiliates).
Any person who has discretionary authority or control respecting the
management or disposition of Plan assets, and any person who provides investment
advice with respect to such assets for a fee, is a fiduciary of the investing
Plan. If the Mortgage Assets and other assets included in a Trust Fund
constitute Plan assets, then any party exercising management or discretionary
control regarding those assets, such as a Master Servicer, a Special Servicer,
any Sub-Servicer, a Trustee, the obligor under any related credit enhancement
mechanism, or certain affiliates thereof may be deemed to be a Plan "fiduciary"
with respect to the investing Plan and thus subject to the fiduciary
responsibility provisions of ERISA. In addition, if the underlying assets of a
Trust Fund constitute Plan assets, the Depositor, any related REMIC
Administrator, any related Manager, any mortgagor with respect to a related
Mortgage Loan or a mortgage loan underlying a related MBS, as well as each of
the parties described in the preceding sentence, may become Parties in Interest
with respect to an investing Plan (or of a Plan holding an interest in an
investing entity). Thus, if the Mortgage Assets and other assets included in a
Trust Fund constitute Plan assets, the operation of the Trust Fund, may involve
a prohibited transaction under ERISA or the Code. For example, if a person who
is a Party in Interest with respect to an investing Plan is a mortgagor with
respect to a Mortgage Loan included in a Trust Fund, the purchase of
Certificates by the Plan could constitute a prohibited loan between a Plan and a
Party in Interest.
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The Plan Asset Regulations provide that where a Plan acquires a
"guaranteed governmental mortgage pool certificate", the Plan's assets include
such certificate but do not solely by reason of the Plan's holdings of such
certificate include any of the mortgages underlying such certificate. The Plan
Asset Regulations include in the definition of a "guaranteed governmental
mortgage pool certificate" certain FHLMC Certificates, GNMA Certificates and
FNMA Certificates, but do not include FAMC Certificates. Accordingly, even if
such types of MBS (other than FAMC Certificates) included in a Trust Fund were
deemed to be assets of Plan investors, the mortgages underlying such MBS (other
than FAMC Certificates) would not be treated as assets of such Plans. Thus, the
prohibited transaction described in the preceding paragraph (regarding a
prohibited loan) would not occur with respect to such types of MBS (other than
FAMC Certificates) held in a Trust Fund, even if such MBS were treated as assets
of Plans. Private label mortgage participations, mortgage pass-through
certificates, FAMC Certificates or other mortgage-backed securities are not
"guaranteed governmental mortgage pool certificates" within the meaning of the
Plan Asset Regulations.
In addition, and without regard to whether the Mortgage Assets and
other assets included in a Trust Fund constitute Plan assets, the acquisition or
holding of Offered Certificates by or on behalf of a Plan could give rise to a
prohibited transaction if the Depositor, the related Trustee or any related
Underwriter, Master Servicer, Special Servicer, Sub-Servicer, REMIC
Administrator, Manager, mortgagor or obligor under any credit enhancement
mechanism, or any of certain affiliates thereof, is or becomes a Party in
Interest with respect to an investing Plan. Accordingly, potential Plan
investors should consult their counsel and review the ERISA discussion in the
related Prospectus Supplement before purchasing any such Certificates.
Prohibited Transaction Exemptions
In considering an investment in the Offered Certificates, a Plan
fiduciary should consider the availability of prohibited transaction exemptions
promulgated by the DOL including, among others, Prohibited Transaction Class
Exemption ("PTCE") 75-1, which exempts certain transactions involving Plans and
certain broker-dealers, reporting dealers and banks; PTCE 90-1, which exempts
certain transactions between insurance company separate accounts and Parties in
Interest; PTCE 91-38, which exempts certain transactions between bank collective
investment funds and Parties in Interest; PTCE 84-14, which exempts certain
transactions effected on behalf of a Plan by a "qualified professional asset
manager"; PTCE 95-60, which exempts certain transactions between insurance
company general accounts and Parties in Interest; and PTCE 96-23, which exempts
certain transactions effected on behalf of a Plan by an "in-house asset
manager". There can be no assurance that any of these class exemptions will
apply with respect to any particular Plan investment in the Certificates or,
even if it were deemed to apply, that any exemption would apply to all
transactions that may occur in connection with such investment. The Prospectus
Supplement with respect to the Offered Certificates of any Series may contain
additional information regarding the availability of other exemptions with
respect to such Offered Certificates.
Insurance Company General Accounts
In addition to any exemption that may be available under PTCE 95-60 for
the purchase and holding of Offered Certificates by an insurance company general
account, the Small Business Job Protection Act of 1996 added a new Section
401(c) to ERISA, which provides certain exemptive relief from the provisions of
Part 4 of Title I of ERISA and Section 4975 of the Code, including the
prohibited transaction restrictions imposed by ERISA and the related excise
taxes imposed by the Code, for transactions involving an insurance company
general account. Pursuant to Section 401(c) of ERISA, the DOL is required to
issue final regulations ("401(c) Regulations") no later than December 31, 1997,
which are to provide guidance for the purpose of determining, in cases where
insurance policies supported by an insurer's general account are issued to or
for the benefit of a Plan on or before December 31, 1998, which general account
assets constitute Plan assets. Section 401(c) of ERISA generally provides that,
until the date which is 18 months after the 401(c) Regulations become final, no
person shall be subject to liability under Part 4 of Title I of ERISA and
Section 4975 of the Code on the basis
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of a claim that the assets of an insurance company general account constitute
Plan assets, unless (i) as otherwise provided by the Secretary of Labor in the
401(c) Regulations to prevent avoidance of the regulations or (ii) an action is
brought by the Secretary of Labor for certain breaches of fiduciary duty which
would also constitute a violation of federal or state criminal law. Any assets
of an insurance company general account which support insurance policies issued
to a Plan after December 31, 1998 or issued to Plans on or before December 31,
1998 for which the insurance company does not comply with the 401(c) Regulations
may be treated as Plan assets. In addition, because Section 401(c) does not
relate to insurance company separate accounts, separate account assets are still
treated as Plan assets of any Plan invested in such separate account. Insurance
companies contemplating the investment of general account assets in Offered
Certificates should consult with their legal counsel with respect to the
applicability of Section 401(c) of ERISA, including the general account's
ability to continue to hold such Certificates after the date which is 18 months
after the date the 401(c) Regulations become final.
Consultation With Counsel
Any Plan fiduciary which proposes to purchase Offered Certificates on
behalf of or with assets of a Plan should consider its general fiduciary
obligations under ERISA and should consult with its counsel with respect to the
potential applicability of ERISA and the Code to such investment and the
availability of any prohibited transaction exemption in connection therewith.
Tax Exempt Investors
A Plan that is exempt from federal income taxation pursuant to Section
501 of the Code (a "Tax Exempt Investor") nonetheless will be subject to federal
income taxation to the extent that its income is "unrelated business taxable
income" ("UBTI") within the meaning of Section 512 of the Code. All "excess
inclusions" of a REMIC allocated to a REMIC Residual Certificate held by a
Tax-Exempt Investor will be considered UBTI and thus will be subject to federal
income tax. See "Federal Income Tax Consequences--REMICs--Taxation of Owners of
REMIC Residual Certificates-Excess Inclusions".
LEGAL INVESTMENT
If and to the extent so specified in the related Prospectus Supplement,
the Offered Certificates of any Series will constitute "mortgage related
securities" for purposes of SMMEA. "Mortgage related securities" are legal
investments 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 persons, trusts,
corporations, partnerships, associations, business trusts and business entities
(including depository institutions, insurance companies and pension funds
created pursuant to or existing under the laws of the United States or of any
state), the authorized investments of which are subject to state regulation.
Prior to December 31, 1996, only Classes of Offered Certificates that
(i) were rated in one of the two highest rating categories by one or more Rating
Agencies and (ii) were part of a Series evidencing interests in a Trust Fund
consisting of loans directly secured by a first lien on a single parcel of real
estate upon which is located a dwelling or mixed residential and commercial
structure, and originated by the types of originators specified in SMMEA, would
be "mortgage related securities" for purposes of SMMEA. Furthermore, under SMMEA
as originally enacted, if a state enacted legislation prior to October 3, 1991
that specifically limited the legal investment authority of any the entities
referred to in the preceding paragraph with respect to "mortgage related
securities" under such definition, Offered Certificates would constitute legal
investments for entities subject to such legislation only to the extent provided
in such legislation.
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Effective December 31, 1996, the definition of "mortgage related
securities" was modified to include among the types of loans to which such
securities may relate, loans secured by "one or more parcels of real estate upon
which is located one or more commercial structures". In addition, the related
legislative history states that this expanded definition includes multifamily
loans secured by more than one parcel of real estate upon which is located more
than one structure. Until September 23, 2001, any state may enact legislation
limiting the extent to which "mortgage related securities" under this expanded
definition would constitute legal investments under that state's laws.
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. In
this connection, effective December 31, 1996, the Office of the Comptroller of
the Currency (the "OCC") amended 12 C.F.R. Part 1 to authorize national banks to
purchase and sell for their own account, without limitation as to a percentage
of the bank's capital and surplus (but subject to compliance with certain
general standards concerning "safety and soundness" and retention of credit
information in 12 C.F.R. Section 1.5), certain "Type IV securities", defined in
12 C.F.R. Section 1.2(1) to include certain "commercial mortgage-related
securities" and "residential mortgage-related securities". As so defined,
"commercial mortgage-related security" and "residential mortgage-related
security" mean, in relevant part, "mortgage related security" within the meaning
of SMMEA, provided that, in the case of a "commercial mortgage-related
security," it "represents ownership of a promissory note or certificate of
interest or participation that is directly secured by a first lien on one or
more parcels of real estate upon which one or more commercial structures are
located and that is fully secured by interests in a pool of loans to numerous
obligors." In the absence of any rule or administrative interpretation by the
OCC defining the term "numerous obligors," no representation is made as to
whether any Class of Offered Certificates will qualify as "commercial
mortgage-related securities", and thus as "Type IV securities", for investment
by national banks. Federal credit unions should review NCUA Letter to Credit
Unions No. 96, as modified by Letter to Credit Unions No. 108, which includes
guidelines to assist federal credit unions in making investment decisions for
mortgage related securities. The NCUA has adopted rules, codified as 12 C.F.R.
Section 703.5(f)- (k), which prohibit federal credit unions from investing in
certain mortgage related securities (including securities such as certain
Classes of Offered Certificates), except under limited circumstances.
The Federal Financial Institutions Examination Council has issued a
supervisory policy statement (the "Policy Statement") applicable to all
depository institutions, setting forth guidelines for and significant
restrictions on investments in "high-risk mortgage securities". The Policy
Statement has been adopted by the Federal Reserve Board, the Office of the
Comptroller of the Currency, the FDIC and the OTS (as defined herein). The
Policy Statement generally indicates that a mortgage derivative product will be
deemed to be high risk if it exhibits greater price volatility than a standard
fixed rate thirty-year mortgage security. According to the Policy Statement,
prior to purchase, a depository institution will be required to determine
whether a mortgage derivative product that it is considering acquiring is
high-risk, and if so that the proposed acquisition would reduce the
institution's overall interest rate risk. Reliance on analysis and documentation
obtained from a securities dealer or other outside party without internal
analysis by the institution would be unacceptable. There can be no assurance as
to which Classes of Certificates, including Offered Certificates, will be
treated as high-risk under the Policy Statement.
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The predecessor to the Office of Thrift Supervision (the "OTS") issued
a bulletin, entitled "Mortgage Derivative Products and Mortgage Swaps", which is
applicable to thrift institutions regulated by the OTS. The bulletin established
guidelines for the investment by savings institutions in certain "high-risk"
mortgage derivative securities and limitations on the use of such securities by
insolvent, undercapitalized or otherwise "troubled" institutions. According to
the bulletin, such "high-risk" mortgage derivative securities include securities
having certain specified characteristics, which may include certain Classes of
Offered Certificates. In addition, the National Credit Union Administration has
issued regulations governing federal credit union investments which prohibit
investment in certain specified types of securities, which may include certain
Classes of Offered Certificates. Similar policy statements have been issued by
regulators having jurisdiction over other types of depository institutions.
There may be other restrictions on the ability of certain investors
either to purchase certain Classes of Offered Certificates or to purchase any
Class of Offered Certificates representing more than a specified percentage of
the investor's assets. The Depositor makes no representations as to the proper
characterization of any Class of Offered Certificates for legal investment or
other purposes, or as to the ability of particular investors to purchase any
Class of Offered Certificates under applicable legal investment restrictions.
These uncertainties may adversely affect the liquidity of any Class of Offered
Certificates. Accordingly, all investors whose investment activities are subject
to legal investment laws and regulations, regulatory capital requirements or
review by regulatory authorities should consult with their legal advisors in
determining whether and to what extent the Offered Certificates of any Class and
Series constitute legal investments or are subject to investment, capital or
other restrictions.
USE OF PROCEEDS
Unless otherwise specified in the related Prospectus Supplement, the
net proceeds to be received from the sale of the Certificates of any Series will
be applied by the Depositor to the purchase of Trust Assets or will be used by
the Depositor to cover expenses related thereto. The Depositor expects to sell
the Certificates from time to time, but the timing and amount of offerings of
Certificates will depend on a number of factors, including the volume of
Mortgage Assets acquired by the Depositor, prevailing interest rates,
availability of funds and general market conditions.
METHOD OF DISTRIBUTION
The Certificates offered hereby and by the related Prospectus
Supplements will be offered in Series through one or more of the methods
described below. The Prospectus Supplement prepared for the Offered Certificates
of each Series will describe the method of offering being utilized for such
Offered Certificates and will state the net proceeds to the Depositor from the
sale of such Offered Certificates.
The Depositor intends that Offered Certificates will be offered through
the following methods from time to time and that offerings may be made
concurrently through more than one of these methods or that an offering of the
Offered Certificates of a particular Series may be made through a combination of
two or more of these methods. Such methods are as follows:
1. By negotiated firm commitment or best efforts underwriting and
public offering by one or more underwriters specified in the related Prospectus
Supplement;
2. By placements by the Depositor with institutional investors through
dealers; and
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<PAGE>
3. By direct placements by the Depositor with institutional investors.
In addition, if specified in the related Prospectus Supplement, the Offered
Certificates of a Series may be offered in whole or in part to the seller of the
related Mortgage Assets that would comprise the Trust Fund for such
Certificates. Furthermore, the Trust Fund for one Series of Offered Certificates
may include Offered Certificates from other Series.
If underwriters are used in a sale of any Offered Certificates (other
than in connection with an underwriting on a best efforts basis), such
Certificates will be acquired by the underwriters for their own account and may
be resold from time to time in one or more transactions, including negotiated
transactions, at fixed public offering prices or at varying prices to be
determined at the time of sale or at the time of commitment therefor. The
managing underwriter or underwriters with respect to the offer and sale of
Offered Certificates of a particular Series will be set forth on the cover of
the Prospectus Supplement relating to such Series and the members of the
underwriting syndicate, if any, will be named in such Prospectus Supplement.
In connection with the sale of Offered Certificates, underwriters may
receive compensation from the Depositor or from purchasers of the Offered
Certificates in the form of discounts, concessions or commissions. Underwriters
and dealers participating in the distribution of the Offered Certificates may be
deemed to be underwriters in connection with such Certificates, and any
discounts or commissions received by them from the Depositor and any profit on
the resale of Offered Certificates by them may be deemed to be underwriting
discounts and commissions under the Securities Act.
It is anticipated that the underwriting agreement pertaining to the
sale of the Offered Certificates of any Series will provide that the obligations
of the underwriters will be subject to certain conditions precedent, that the
underwriters will be obligated to purchase all such Certificates if any are
purchased (other than in connection with an underwriting on a best efforts
basis) and that, in limited circumstances, the Depositor will indemnify the
several underwriters and the underwriters will indemnify the Depositor against
certain civil liabilities, including liabilities under the Securities Act, or
will contribute to payments required to be made in respect thereof.
The Prospectus Supplement with respect to any Series offered by
placements through dealers will contain information regarding the nature of such
offering and any agreements to be entered into between the Depositor and
purchasers of Offered Certificates of such Series.
The Depositor anticipates that the Offered Certificates will be sold
primarily to institutional investors. Purchasers of Offered Certificates,
including dealers, may, depending on the facts and circumstances of such
purchases, be deemed to be "underwriters" within the meaning of the Securities
Act in connection with reoffers and sales by them of Offered Certificates.
Holders of Offered Certificates should consult with their legal advisors in this
regard prior to any such reoffer or sale.
As to any Series, only those Classes rated in an investment grade
rating category by any Rating Agency will be offered hereby. Any unrated Class
may be initially retained by the Depositor, and may be sold by the Depositor at
any time to one or more institutional investors.
-122-
<PAGE>
LEGAL MATTERS
Unless otherwise specified in the related Prospectus Supplement,
certain legal matters in connection with the Certificates of each Series,
including certain federal income tax consequences, will be passed upon for the
Depositor by Sidley & Austin.
FINANCIAL INFORMATION
A new Trust Fund will be formed with respect to each Series, and no
Trust Fund will engage in any business activities or have any assets or
obligations prior to the issuance of the related Series. Accordingly, no
financial statements with respect to any Trust Fund will be included in this
Prospectus or in the related Prospectus Supplement. The Depositor has determined
that its financial statements will not be material to the offering of any
Offered Certificates.
RATING
It is a condition to the issuance of any Class of Offered Certificates
that they shall have been rated not lower than investment grade, that is, in one
of the four highest rating categories, by at least one Rating Agency.
Ratings on mortgage pass-through certificates address the likelihood of
receipt by the holders thereof of all collections on the underlying mortgage
assets to which such holders are entitled. These ratings address the structural,
legal and issuer-related aspects associated with such certificates, the nature
of the underlying mortgage assets and the credit quality of the guarantor, if
any. Ratings on mortgage pass-through certificates do not represent any
assessment of the likelihood of principal prepayments by borrowers or of the
degree by which such prepayments might differ from those originally anticipated.
As a result, Certificateholders might suffer a lower than anticipated yield,
and, in addition, holders of Stripped Interest Certificates might, in certain
cases fail to recoup their initial investments. Furthermore, ratings on mortgage
pass-through certificates do not address the price of such certificates or the
suitability of such certificates to the investor.
A security rating is not a recommendation to buy, sell or hold
securities and may be subject to revision or withdrawal at any time by the
assigning rating organization. Each security rating should be evaluated
independently of any other security rating.
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<PAGE>
INDEX OF PRINCIPAL DEFINITIONS
Page
----
401(c) Regulations.........................................................118
ACMs........................................................................84
ADA.........................................................................87
Call Risk...................................................................19
Cash Flow Agreement.........................................................14
CERCLA......................................................................84
Certificate Account.........................................................63
Certificate Notional Amount.................................................12
Certificate Owner...........................................................56
Certificate Principal Balance...............................................12
Certificateholders..........................................................51
Certificates.................................................................1
Class........................................................................1
Closing Date................................................................10
Commercial Properties.......................................................30
Commission...................................................................3
Committee Report............................................................92
Companion Class.............................................................53
Contributions Tax..........................................................104
Controlled Amortization Class...............................................53
Controlled Amortization Classes.............................................11
Cooperatives................................................................31
CPR.........................................................................47
Credit Support..............................................................14
Crime Control Act...........................................................88
Cut-off Date................................................................10
Definitive Certificates.....................................................50
Depositor....................................................................1
Determination Date..........................................................51
Disqualified Organization..................................................105
Distribution Date...........................................................13
Distribution Date Statement.................................................54
DOL........................................................................117
DTC..........................................................................3
DTC Participants............................................................29
Due Dates...................................................................40
Due Period..................................................................44
Equity Participation........................................................41
ERISA.......................................................................16
Exchange Act.................................................................3
Extension Risk..............................................................19
FAMC........................................................................42
FAMC Certificates...........................................................42
FHLMC.......................................................................42
FHLMC Certificates..........................................................42
Financial Intermediary......................................................56
FN\MA.......................................................................42
FNMA Certificates...........................................................42
-124-
<PAGE>
Page
----
Garn Act....................................................................86
GNMA........................................................................42
GNMA Certificates...........................................................42
Grantor Trust Certificates..................................................15
Grantor Trust Fractional Interest Certificate..............................108
Grantor Trust Fund..........................................................89
Grantor Trust Strip Certificate............................................108
IRS.........................................................................92
Issue Premium...............................................................98
Lender Liability Act........................................................84
Letter of Credit Bank.......................................................76
Liquidation Proceeds........................................................63
Lock-out Date...............................................................40
Lock-out Period.............................................................40
Mark-to-Market Regulations.................................................101
Master Servicer..............................................................8
MBS..................................................................1, 10, 30
MBS Administrator............................................................8
MBS Agreement...............................................................42
MBS Issuer..................................................................42
MBS Servicer................................................................42
MBS Trustee.................................................................42
Mortgage Asset Pool..........................................................1
Mortgage Asset Seller.......................................................30
Mortgage Assets..........................................................1, 30
Mortgage Loans........................................................1, 8, 30
Mortgage Notes..............................................................30
Mortgage Rate................................................................9
Mortgaged Properties........................................................30
Mortgages...................................................................30
Multifamily Properties......................................................30
Net Leases..................................................................39
Net Operating Income........................................................39
Nonrecoverable Advance......................................................54
OCC........................................................................120
Offered Certificates.........................................................1
OID Regulations.............................................................89
Originator..................................................................31
OTS........................................................................121
Parties in Interest........................................................117
Pass-Through Rate...........................................................12
Percentage Interest.........................................................51
Permitted Investments.......................................................63
Plan Asset Regulations.....................................................117
Plans......................................................................116
Policy Statement...........................................................120
Pooling Agreement...........................................................11
Prepayment Assumption.............................................92, 110, 112
Prepayment Interest Shortfall...............................................45
Prepayment Premium..........................................................40
-125-
<PAGE>
Page
----
Prohibited Transactions Tax................................................103
Prospectus Supplement........................................................1
PTCE.......................................................................118
Purchase Price..............................................................59
Qualified Stated Interest...................................................92
Rating Agency...............................................................16
Record Date.................................................................51
Related Proceeds............................................................53
Relief Act..................................................................88
Religious Facilities........................................................38
REMIC.......................................................................89
REMIC Administrator..........................................................8
REMIC Certificates..........................................................89
REMIC Provisions............................................................89
REMIC Regular Certificates..................................................15
REMIC Regulations...........................................................90
REMIC Residual Certificates.................................................15
REO Property................................................................60
Restaurants.................................................................37
Retail Sales and Service Properties.........................................33
RICO........................................................................88
Securities Act...............................................................3
Senior Certificates.........................................................11
Senior Liens................................................................31
Series.......................................................................1
SMMEA.......................................................................16
SPA.........................................................................47
Special Servicer.............................................................8
Storage Properties..........................................................37
Stripped Interest Certificates..............................................11
Stripped Principal Certificates.............................................11
Sub-Servicer................................................................62
Sub-Servicing Agreement.....................................................62
Subordinate Certificates....................................................11
Tax Exempt Investor........................................................119
Tiered REMICs...............................................................91
Title V.....................................................................87
Trust Fund...................................................................1
Trustee......................................................................8
UBTI.......................................................................119
UCC.........................................................................79
Undelivered Mortgage Assets.................................................10
United States Person.......................................................107
Voting Rights...............................................................55
Warranting Party............................................................59
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<PAGE>
The attached diskette contains one spreadsheet file (the "Spreadsheet File")
that can be put on a user-specified hard drive or network drive. This file is
"DLJ99CG1.XLS". The file "DLJ99CG1.XLS" is a Microsoft Excel(1), Version 5.0
spreadsheet. The file provides, in electronic format, certain statistical
information that appears under the caption "Description of the Mortgage Pool" in
and on Exhibits B-1 and B-2 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 the Prospectus Supplement. Prospective Investors are
strongly urged to read the Prospectus Supplement and accompanying Prospectus in
its entirety prior to accessing the Spreadsheet File.
- --------------------------
(1) Microsoft Excel is a registered trademark of Microsoft Corporation.
<PAGE>
================================================================================
TABLE OF CONTENTS
Page
----
Prospectus Supplement
Important Notice about the Information Contained in
this Prospectus Supplement and the Accompanying Prospectus.................S-2
Executive Summary............................................................S-6
Summary of Prospectus Supplement.............................................S-7
Risk Factors................................................................S-35
Description of the Mortgage Pool............................................S-56
Servicing of the Mortgage Loans.............................................S-94
Description of the Offered Certificates....................................S-109
Yield and Maturity Considerations..........................................S-132
Use of Proceeds............................................................S-138
Federal Income Tax Consequences............................................S-138
Certain ERISA Considerations...............................................S-141
Legal Investment...........................................................S-145
Method of Distribution.....................................................S-146
Legal Matters..............................................................S-146
Ratings....................................................................S-147
Index of Principal Definitions.............................................S-149
Exhibit A-1 -- Certain Characteristics of
Mortgage Loans and Mortgaged Properties..................................A-1-1
Exhibit A-2 -- Mortgage Pool Information..................................A-2-1
Exhibit B -- Form of Trustee Report..........................................B-1
Exhibit C -- Decrement Tables for Certain Classes
of Offered Certificates ...................................................C-1
Exhibit D -- Price/Yield Tables for the Class S Certificates ...............D-1
Exhibit E -- Summary Term Sheet..............................................E-1
Prospectus
Available Information..........................................................3
Incorporation of Certain Information by Reference..............................4
Summary of Prospectus..........................................................8
Risk Factors..................................................................17
Description of the Trust Funds................................................30
Yield and Maturity Considerations.............................................44
The Depositor.................................................................49
Description of the Certificates...............................................50
Description of the Pooling Agreements.........................................57
Description of Credit Support.................................................75
Certain Legal Aspects of Mortgage Loans.......................................78
Federal Income Tax Consequences...............................................89
State and Other Tax Consequences............................................116
ERISA Considerations.........................................................116
Legal Investment.............................................................119
Use of Proceeds..............................................................121
Method of Distribution.......................................................121
Legal Matters................................................................123
Financial Information........................................................123
Rating.......................................................................123
Index of Principal Definitions...............................................124
Until June , 1999, all dealers that effect transactions in the
Offered Certificates, whether or not participating in this
offering, may be required to deliver a Prospectus Supplement
and the accompanying Prospectus. This delivery requirement
is in addition to the obligation of dealers to deliver a Prospectus
Supplement and the accompanying Prospectus when acting as
underwriters and with respect to their unsold allotments or
subscriptions.
$1,121,153,000
(Approximate)
DLJ Commercial Mortgage Corp.
(Depositor)
GE Capital Access, Inc.
and
Column Financial, Inc.
(Mortgage Loan Sellers)
Class S, Class A-1A, Class A-1B,
Class A-2, Class A-3, Class B-1
and Class B-2
DLJ Commercial Mortgage Trust 1999-CG1
Commercial Mortgage
Pass-Through Certificates
Series 1999-CG1
--------------------------
PROSPECTUS SUPPLEMENT
--------------------------
Donaldson, Lufkin & Jenrette
Securities Corporation
Merrill Lynch & Co.
March , 1999
================================================================================
</TABLE>
