<PAGE>
Filed pursuant to Rule 424(b)(5)
Registration File No. 333-59167
PROSPECTUS SUPPLEMENT
(to Prospectus dated March 1, 1999)
$1,109,547,000 (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 eight (8)
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 278 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 $1,239,717,562. 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 Month of
Balance or Certificate Initial Pass- Pass-Through Ratings Assumed Final
Offered Certificates Notional Amount(1) Through Rate(3) Rate Description(4) (Moody's/Fitch IBCA)(7) Distribution Date(8)
- -------------------- ------------------ --------------- ------------------- ----------------------- --------------------
<S> <C> <C> <C> <C> <C>
Class S............. N/A (2) 1.0980% Variable Aaa/AAA April 2023
Class A-1A.......... $ 218,788,000 6.0800% Fixed Aaa/AAA August 2008
Class A-1B.......... $ 686,205,000 6.4600% Fixed Aaa/AAA January 2009
Class A-2........... $ 58,887,000 6.6000% Fixed Aa2/AA February 2009
Class A-3........... $ 65,085,000 6.7700% WAC Cap(5) A2/A February 2009
Class A-4........... $ 18,596,000 6.9200% WAC Cap(5) A3/A- February 2009
Class B-1........... $ 46,489,000 7.4866% WAC(6) Baa2/BBB February 2009
Class B-2........... $ 15,497,000 7.4866% WAC(6) Baa3/BBB- February 2009
</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 107.50% 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 15, 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-3, Class A-4, 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, Class A-1B and Class A-2 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 15, 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 60661; 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 19, 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-90
Assignment of the Mortgage Loans......................................S-91
Representations and Warranties........................................S-92
Cures, Repurchases and Substitutions..................................S-93
Changes in Mortgage Pool Characteristics..............................S-95
SERVICING OF THE MORTGAGE LOANS............................................S-95
General...............................................................S-95
The Master Servicer and
the Special Servicer................................................S-98
Servicing and Other Compensation
and Payment of Expenses.............................................S-98
Modifications, Waivers,
Amendments and Consents............................................S-103
The Controlling Class Representative.................................S-105
Replacement of the Special Servicer..................................S-108
Sale of Defaulted Mortgage Loans.....................................S-108
Inspections; Collection of
Operating Information..............................................S-109
Evidence as to Compliance............................................S-110
Sale of Master Servicing Rights......................................S-110
DESCRIPTION OF THE
OFFERED CERTIFICATES....................................................S-111
General..............................................................S-111
Registration and Denominations.......................................S-113
Seniority............................................................S-114
Certain Relevant Characteristics of
the Mortgage Loans.................................................S-116
Distributions........................................................S-117
Allocation of Realized Losses and
Certain Other Shortfalls and Expenses..............................S-125
P&I Advances.........................................................S-127
Appraisal Reductions.................................................S-128
Reports to Certificateholders;
Certain Available Information......................................S-130
Voting Rights........................................................S-132
Termination..........................................................S-132
The Trustee..........................................................S-132
YIELD AND MATURITY
CONSIDERATIONS..........................................................S-133
Yield Considerations.................................................S-133
Weighted Average Lives of Certain
Classes of Offered Certificates....................................S-137
The Maturity Assumptions.............................................S-137
Yield Sensitivity of the
Class S Certificates...............................................S-138
USE OF PROCEEDS...........................................................S-139
FEDERAL INCOME
TAX CONSEQUENCES........................................................S-139
General..............................................................S-139
Discount and Premium;
Prepayment Consideration...........................................S-140
Constructive Sales of Class S Certificates...........................S-141
Characterization of Investments in
Offered Certificates..............................................S-141
Possible Taxes on Income From
Foreclosure Property and Other Taxes...............................S-141
CERTAIN ERISA CONSIDERATIONS..............................................S-142
LEGAL INVESTMENT..........................................................S-146
METHOD OF DISTRIBUTION....................................................S-146
S-4
<PAGE>
Page
----
LEGAL MATTERS.............................................................S-147
RATINGS...................................................................S-148
INDEX OF PRINCIPAL DEFINITIONS............................................S-150
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 Initial 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 $ 1,239,717,562(5) N/A N/A Variable 1.0980% 9.303 4/99 - 4/23
(Interest Only)
- ------------------------------------------------------------------------------------------------------------------------------------
A-1A Aaa/AAA $ 218,788,000 17.65% 27.00% Fixed 6.0800% 5.700 4/99 - 8/08
- ------------------------------------------------------------------------------------------------------------------------------------
A-1B Aaa/AAA $ 686,205,000 55.35% 27.00% Fixed 6.4600% 9.670 8/08 - 1/09
- ------------------------------------------------------------------------------------------------------------------------------------
A-2 Aa2/AA $ 58,887,000 4.75% 22.25% Fixed 6.6000% 9.844 1/09 - 2/09
- ------------------------------------------------------------------------------------------------------------------------------------
A-3 A2/A $ 65,085,000 5.25% 17.00% WAC Cap(6) 6.7700% 9.864 2/09 - 2/09
- ------------------------------------------------------------------------------------------------------------------------------------
A-4 A3/A- $ 18,596,000 1.50% 15.50% WAC Cap(6) 6.9200% 9.864 2/09 - 2/09
- ------------------------------------------------------------------------------------------------------------------------------------
B-1 Baa2/BBB $ 46,489,000 3.75% 11.75% WAC(7) 7.4866% 9.864 2/09 - 2/09
- ------------------------------------------------------------------------------------------------------------------------------------
B-2 Baa3/BBB- $ 15,497,000 1.25% 10.50% WAC(7) 7.4866% 9.864 2/09 - 2/09
- ------------------------------------------------------------------------------------------------------------------------------------
Private Certificates--Not Offered Hereby (8)
- ------------------------------------------------------------------------------------------------------------------------------------
B-3 (9) $ 37,191,000 3.00% 7.50% Fixed 5.7500% (9) (9)
- ------------------------------------------------------------------------------------------------------------------------------------
B-4 (9) $ 21,695,000 1.75% 5.75% Fixed 5.7500% (9) (9)
- ------------------------------------------------------------------------------------------------------------------------------------
B-5 (9) $ 9,298,000 0.75% 5.00% Fixed 5.7500% (9) (9)
- ------------------------------------------------------------------------------------------------------------------------------------
B-6 (9) $ 12,397,000 1.00% 4.00% Fixed 5.5300% (9) (9)
- ------------------------------------------------------------------------------------------------------------------------------------
B-7 (9) $ 12,398,000 1.00% 3.00% Fixed 5.5300% (9) (9)
- ------------------------------------------------------------------------------------------------------------------------------------
B-8 (9) $ 12,397,000 1.00% 2.00% Fixed 5.5300% (9) (9)
- ------------------------------------------------------------------------------------------------------------------------------------
C (9) $ 24,794,562 2.00% N/A Fixed 5.5300% (9) (9)
- ------------------------------------------------------------------------------------------------------------------------------------
</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................... Banc One Mortgage Capital Markets, LLC,
a Delaware limited liability company.
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 then-existing
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
also "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".
<TABLE>
<CAPTION>
Mortgage Number of % of Initial
Loan Seller Mortgage Loans Pool Balance
----------- -------------- ------------
<S> <C> <C>
GECA 176 69.6%
Column 102 30.4%
</TABLE>
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 Loan (as
defined under "Description of the
Mortgage Pool--Significant Mortgage
Loans" in this Prospectus
Supplement) after underwriting and
S-8
<PAGE>
closing it as origination agent on
behalf of a third party and purchased
the Country Squire Apartments - South
Loan (also 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 26.8%
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 19, 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.
<TABLE>
<CAPTION>
Month of
Assumed Final
Class Distribution Date
----- -----------------
<S> <C>
Class S April 2023
Class A-1A August 2008
Class A-1B January 2009
Class A-2 February 2009
Class A-3 February 2009
Class A-4 February 2009
Class B-1 February 2009
Class B-2 February 2009
</TABLE>
Overview of the Certificates
General............................ The Certificates will consist of twenty
(20) Classes, only eight (8) 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:
<TABLE>
<CAPTION>
Approx. Initial
Aggregate Certificate
Principal Balance
or Certificate Pass-Through
Class Notional Amount(1) Rate
----- ------------------ ----
<S> <C> <C>
Class S N/A(2) 1.0980%(3)
Class A-1A $ 218,788,000 6.0800%(4)
Class A-1B $ 686,205,000 6.4600%(4)
Class A-2 $ 58,887,000 6.6000%(4)
Class A-3 $ 65,085,000 6.7700%(5)
Class A-4 $ 18,596,000 6.9200%(5)
Class B-1 $ 46,489,000 7.4866%(6)
Class B-2 $ 15,497,000 7.4866%(6)
</TABLE>
S-11
<PAGE>
----------
(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) 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-3 and Class A-4
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.
S-12
<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:
<TABLE>
<CAPTION>
Approx. Initial
Aggregate Certificate Pass-Through
Class Principal Balance(1) Rate
----- -------------------- -----
<S> <C> <C> <C>
Class B-3 $37,191,000 5.7500%(2)
Class B-4 $21,695,000 5.7500%(2)
Class B-5 $ 9,298,000 5.7500%(2)
Class B-6 $12,397,000 5.5300%(2)
Class B-7 $12,398,000 5.5300%(2)
Class B-8 $12,397,000 5.5300%(2)
Class C $24,794,562 5.5300%(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)
</TABLE>
----------
(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 be divided
into two groups, each of which will
constitute a grantor trust (together,
the "Grantor Trusts") 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 Trusts.
S-14
<PAGE>
The Class S and Class B-2 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 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.
S-15
<PAGE>
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.
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:
<TABLE>
<CAPTION>
Class Moody's Rating Fitch Rating
----- -------------- ------------
<S> <C> <C> <C>
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 A-4 A3 A-
Class B-1 Baa2 BBB
Class B-2 Baa3 BBB-
</TABLE>
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.
S-16
<PAGE>
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.
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.
S-17
<PAGE>
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.
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 A-4
-------------------
-------------------
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).
S-18
<PAGE>
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).
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.
S-19
<PAGE>
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.
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 A-4, 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 A-4,
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).
S-20
<PAGE>
The aggregate distributions of principal
to be made on the respective Classes of
Principal Balance Certificates on any
Distribution Date will in general be a
function of--
o the amount of scheduled payments of
principal due (or, in some cases,
deemed 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
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.
S-21
<PAGE>
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.
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.
S-22
<PAGE>
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. 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.
S-23
<PAGE>
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 amount 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
amount 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
Loan (which, except where otherwise
specifically indicated, is
presented in this Prospectus
Supplement as consisting of
fourteen (14) separate Mortgage
Loans that represent 5.7% 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 Portfolio.
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:
<TABLE>
<CAPTION>
<S> <C>
Initial Pool Balance(1).........................$1,239,717,562
Number of Mortgage Loans........................ 278
Maximum Cut-off Date Balance(2)................. $30,446,295
Minimum Cut-off Date Balance.................... $515,269
</TABLE>
S-24
<PAGE>
<TABLE>
<S> <C>
Average Cut-off Date Balance.................... $4,459,416
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......... $5,187,103
Maximum Mortgage Rate........................... 8.440%
Minimum Mortgage Rate........................... 5.960%
Weighted Average Mortgage Rate.................. 7.320%
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...................... 1.20x
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
Loan-to-Value Ratio......................... 62.6%
</TABLE>
----------
(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.
S-25
<PAGE>
(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 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:
<TABLE>
<CAPTION>
Number of % of Initial
State Mortgaged Properties Pool Balance
----- -------------------- ------------
<S> <C> <C>
Texas 52 18.9%
California 43 13.6%
Florida 19 10.0%
Michigan 17 4.8%
Tennessee 2 3.7%
</TABLE>
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.
S-26
<PAGE>
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:
<TABLE>
<CAPTION>
Number of % of Initial
Property Type Mortgaged Properties Pool Balance
------------- -------------------- ------------
<S> <C> <C>
Multifamily Rental 106 35.7%
Retail 59 25.0%
Hospitality 26 9.4%
Office 24 8.9%
Mixed Use 18 8.3%
Manufactured Housing
Community 24 6.6%
Self Storage 16 3.2%
Industrial 5 2.8%
</TABLE>
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.
<TABLE>
<CAPTION>
Encumbered Interest
in the Related Number of % of Initial
Mortgaged Property Mortgaged Properties Pool Balance
<S> <C> <C>
Fee 269 96.3%
Fee in Part, Leasehold in
Part 2 2.0%
Leasehold 7 1.7%
</TABLE>
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.
<TABLE>
<CAPTION>
Range of Number of % of Initial
Cut-off Date Balances Mortgage Loans Pool Balance
--------------------- -------------- ------------
<S> <C> <C>
$515,269 - $749,999 4 0.2%
$750,000 - $1,249,999 17 1.4%
$1,250,000 - $1,999,999 63 8.5%
$2,000,000 - $2,999,999 60 12.3%
$3,000,000 - $3,999,999 33 9.4%
$4,000,000 - $4,999,999 22 8.0%
$5,000,000 - $5,999,999 17 7.4%
$6,000,000 - $9,999,999 39 22.8%
$10,000,000 - $14,999,999 12 11.7%
$15,000,000 - $19,999,999 6 8.0%
$20,000,000 - $24,999,999 3 5.4%
$25,000,000 - $30,446,295 2 4.8%
</TABLE>
S-27
<PAGE>
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.
<TABLE>
<CAPTION>
Range of
Loan Group Number of % of Initial
Cut-off Date Balances Mortgage Loans Pool Balance
--------------------- -------------- ------------
<S> <C> <C>
$675,000 - $749,999 2 0.1%
$750,000 - $1,249,999 13 1.1%
$1,250,000 - $1,999,999 54 7.3%
$2,000,000 - $2,999,999 55 11.4%
$3,000,000 - $3,999,999 29 8.2%
$4,000,000 - $4,999,999 17 6.2%
$5,000,000 - $5,999,999 13 5.7%
$6,000,000 - $9,999,999 34 20.5%
$10,000,000 - $14,999,999 10 10.0%
$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 19.6%
</TABLE>
G. Mortgage Rates ................ The table below shows the range of
Mortgage Rates for the Mortgage Loans as
of the Cut-off Date.
<TABLE>
<CAPTION>
Range of Cut-off Number of % of Initial
Mortgage Rates Mortgage Loans Pool Balance
--------------- -------------- ------------
<S> <C> <C>
5.960% - 6.499% 9 1.9%
6.500% - 6.749% 11 4.7%
6.750% - 6.999% 30 12.3%
7.000% - 7.249% 54 19.8%
7.250% - 7.499% 74 29.0%
7.500% - 7.999% 88 24.8%
8.000% - 8.440% 12 7.5%
</TABLE>
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.
<TABLE>
<CAPTION>
Range of Original
Terms to Maturity Number of % of Initial
or ARD (in Months) Mortgage Loans Pool Balance
------------------ -------------- ------------
<S> <C> <C>
60 - 108 6 3.7%
109 - 120 260 91.6%
121 - 204 5 1.1%
205 - 300 7 3.6%
</TABLE>
S-28
<PAGE>
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.
<TABLE>
<CAPTION>
Range of Remaining
Terms to Maturity Number of % of Initial
or ARD (in Months) Mortgage Loans Pool Balance
------------------ -------------- ------------
<S> <C> <C>
58 - 108 7 3.9%
109 - 120 259 91.3%
121 - 204 5 1.1%
205 - 289 7 3.6%
</TABLE>
J. Underwritten Debt Service
Coverage Ratios............. The table below shows the range of
Underwritten Debt Service Coverage
Ratios for the Mortgage Loans.
<TABLE>
<CAPTION>
Range of
Underwritten
Debt Service Number of % of Initial
Coverage Ratios Mortgage Loans Pool Balance
--------------- -------------- ------------
<S> <C> <C>
1.20x - 1.29x 107 49.9%
1.30x - 1.39x 87 27.0%
1.40x - 1.49x 46 12.5%
1.50x - 1.59x 12 2.0%
1.60x - 2.54x 26 8.7%
</TABLE>
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.
<TABLE>
<CAPTION>
Range of
Cut-off Date Number of % of Initial
Loan-to-Value Ratios ortgage Loans Pool Balance
-------------------- ------------- ------------
<S> <C> <C>
16.20% - 50.00% 18 6.2%
50.01% - 60.00% 19 4.5%
60.01% - 70.00% 41 10.1%
70.01% - 75.00% 72 21.5%
75.01% - 80.00% 121 53.5%
80.01% - 82.50% 7 4.2%
</TABLE>
S-29
<PAGE>
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.
<TABLE>
<CAPTION>
Range of
Maturity/ARD Number of % of Initial
Loan-to-Value Ratios(1) Mortgage Loans Pool Balance
----------------------- -------------- ------------
<S> <C> <C>
12.90% - 20.00% 3 0.5%
20.01% - 30.00% 2 1.4%
30.01% - 40.00% 17 6.5%
40.01% - 50.00% 20 4.7%
50.01% - 60.00% 52 11.4%
60.01% - 73.70% 181 74.1%
</TABLE>
----------
(1) Maturity/ARD Loan-to-Value Ratios
have not been calculated and are
not presented for fully amortizing
Mortgage Loans.
The Large Mortgage Loans and Groups
A. The Winston Loan............... Set forth below is certain loan and
property information in respect of the
cross-collateralized group of Mortgage
Loans collectively identified in this
Prospectus Supplement as the "Winston
Loan". See "Description of the Mortgage
Pool--Significant Mortgage Loans--The
Winston Loan" in this Prospectus
Supplement.
<TABLE>
<S> <C>
Cut-off Date Balance....................... $70,750,763
% of Initial Pool Balance.................. 5.7%
No. of Mortgaged Properties................ 14
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%
</TABLE>
S-30
<PAGE>
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.
<TABLE>
<S> <C>
Cut-off Date Balance..................... $63,806,653
% of Initial Pool Balance................ 5.1%
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%
</TABLE>
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.
<TABLE>
<S> <C>
Cut-off Date Balance..................... $48,831,350
% of Initial Pool Balance................ 3.9%
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%
</TABLE>
S-31
<PAGE>
D. The Country Squire
Apartments - South 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 Apartments - South Loan". See
"Description of the Mortgage
Pool--Significant Mortgage Loans--The
Country Squire Apartments - South Loan"
in this Prospectus Supplement.
<TABLE>
<S> <C>
Cut-off Date Balance...................... $30,446,295
% of Initial Pool Balance................. 2.5%
No. of Mortgaged Properties............... 1
Property Type............................. Multifamily
Mortgage Rate............................. 6.650%
Scheduled P&I Payment..................... $195,799.29
Stated Maturity Date...................... January 1, 2009
Appraised Value........................... $39,000,000
Appraisal Date............................ 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%
</TABLE>
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.
<TABLE>
<S> <C>
Cut-off Date Balance..................... $29,312,901
% of Initial Pool Balance................ 2.4%
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%
</TABLE>
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").
S-32
<PAGE>
Each Mortgage Loan identified in this
Prospectus Supplement as a "Balloon
Loan" provides for:
o 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; and
o 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:
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:
<TABLE>
<CAPTION>
Number of % of Initial
Loan Type Mortgage Loans Pool Balance
--------- -------------- ------------
<S> <C> <C>
Balloon Loans 208 73.2%
ARD Loans 67 25.4%
Fully Amortizing Loans 3 1.4%
</TABLE>
S-33
<PAGE>
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:
<TABLE>
<S> <C>
Maximum Remaining Lock-out Period: 232 months
Minimum Remaining Lock-out Period: 21 months
Weighted Average Remaining Lock-out Period: 108 months
</TABLE>
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.
<TABLE>
<CAPTION>
Number of % of Initial
Loan Type Mortgage Loans Pool Balance
--------- -------------- ------------
<S> <C> <C>
Defeasance Loans 253 91.5%
Non-Defeasance Loans 25 8.5%
</TABLE>
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.
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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 the Mortgaged Properties
identified on Exhibit A-1 to this Prospectus Supplement as 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 1.7% 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 to this Prospectus Supplement as All Aboard
Mini-Storage - Alhambra, -
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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
Swerdlow Loans 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,
and it is anticipated that an affiliate of the initial Master Servicer will
acquire some or all of the Class B-3, Class B-4 and Class B-5 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 A-4, 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.
Each of the Trustee and the Special Servicer has advised the Depositor that
it is currently modifying its computer systems and applications and expects that
it will be year 2000 capable prior to December 31, 1999. Each of the Trustee and
the Special Servicer has also advised the Depositor that it 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 or the Special Servicer 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 or the Special
Servicer, as the case may be. The Master Servicer has advised the Depositor
that, with respect to those computer systems identified as being mission
critical for the performance of its servicing function described in this
Prospectus Supplement, it is committed to either (i) modifying its 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 Underwriter 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-six (106) Mortgage Loans, representing 35.7% 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 New Franklin
Apartments Property and the High Point Village I Apartments, respectively),
together representing 0.6% 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 25.0% 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.
S-43
<PAGE>
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 9.4% 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 where the Hospitality Properties are located, 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.
S-44
<PAGE>
See "Risk Factors--Certain Factors Affecting Delinquency, Foreclosure and
Loss of the Mortgage Loans--Risks Particular to Hotel and Motel Properties" in
the Prospectus.
Factors Affecting the Operation of Office Properties. Twenty-four (24)
Mortgage Loans, representing 8.9% 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
$4,459,416. 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 $5,187,103. 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
<TABLE>
<CAPTION>
Individual Mortgage Loan % of Initial
or Group of Mortgage Loans Cut-off Date Balance Pool Balance
- -------------------------- -------------------- ------------
<S> <C> <C>
The Winston Loan $70,750,763 5.7%
The Swerdlow Loans $63,806,653 5.1%
The Alliance Loans $48,831,350 3.9%
The Country Squire
Apartments - South Loan $30,446,295 2.5%
The American Loans $29,312,901 2.4%
</TABLE>
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 $4,459,416.
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 Loan Group Cut-off Date Balance
of the Mortgage Loans is $70,750,763, the minimum Loan Group Cut-off Date
Balance of the Mortgage Loans is $675,000 and the average Loan Group Cut-off
Date Balance of the Mortgage Loans is $5,187,103. In addition, in the case of
some such groups of Mortgage Loans, including the Winston Loan, 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 evidenced
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:
<TABLE>
<CAPTION>
Total Cut-off Date Balance
of Mortgage Loans
(or Allocated Portions thereof) % of Initial
State Secured by Mortgaged Properties in State Pool Balance
- ----- ---------------------------------------- ------------
<S> <C> <C>
Texas $234,315,460 18.9%
California $169,156,706 13.6%
Florida $123,548,452 10.0%
</TABLE>
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 73.2% of the Initial Pool
Balance, are Balloon Loans, and sixty-seven (67) Mortgage Loans, representing
25.4% 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 62.7% of the
Initial Pool Balance) have maturity dates, and thirty-six (36) ARD Loans
(representing 16.8% 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.
S-47
<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 sets forth,
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>
Comfort Inn - Hopewell, VA $5,181,769 0.4% $3,733,102 (1)
Friendship Crossing Apartments $4,603,093 0.4% $900,000 (1)
Centennial Creek Office Park $2,493,826 0.2% $114,000 (1)
South Street Seaport Office Center $2,242,342 0.2% $1,659,674 (1)
Market Plaza $1,563,876 0.1% $582,425 (1)
</TABLE>
- ----------
(1) The subordinate lender has executed a Subordination Agreement and/or 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 subordinate
debt. The existence of any secured subordinated indebtedness increases the
difficulty of refinancing the
S-48
<PAGE>
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 3.1% 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 Borrowers to secure "mezzanine debt". In addition, the owners of the
Borrowers 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 (e.g., 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 5.7%, 5.1%, 3.9%, 2.4%, 1.6%,
0.7%, 0.7%, 0.6%, 0.6%, 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 13.2% 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 8.4% 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 some
exceptions) 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
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 Consideration 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 Loan 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 $1,239,717,562, 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 $515,269 to
$30,446,295, and the average Cut-off Date Balance of the Mortgage Loans is
$4,459,416. 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 $675,000 to $70,750,763 and the average Loan Group Cut-off Date
Balance of the Mortgage Loans is $5,187,103.
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 amount 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 amount 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 Loan (which, except where otherwise specifically indicated, is
presented in this Prospectus Supplement as consisting of fourteen (14)
separate Mortgage Loans that represent 5.7% 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 Portfolio.
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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.
<TABLE>
<CAPTION>
Number of % of Initial
State Mortgaged Properties Pool Balance
----- -------------------- ------------
<S> <C> <C>
Texas 52 18.9%
California 43 13.6%
Florida 19 10.0%
Michigan 17 4.8%
Tennessee 2 3.7%
</TABLE>
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.
<TABLE>
<CAPTION>
Number of % of Initial
Property Type Mortgaged Properties Pool Balance
------------- -------------------- ------------
<S> <C> <C>
Multifamily Rental 106 35.7%
Retail 59 25.0%
Hospitality 26 9.4%
Office 24 8.9%
Mixed Use 18 8.3%
Manufactured Housing Community 24 6.6%
Self Storage 16 3.2%
Industrial 5 2.8%
</TABLE>
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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.
<TABLE>
<CAPTION>
Encumbered Interest
in the Related Number of % of Initial
Mortgaged Property Mortgaged Properties Pool Balance
------------------ -------------------- ------------
<S> <C> <C>
Fee 269 96.3%
Fee in Part, Leasehold in Part 2 2.0%
Leasehold 7 1.7%
</TABLE>
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 Loan 14 9 5.7%
The Swerdlow Loans 3 1 5.1%
The Alliance Loans 5 2 3.9%
The American Loans 4 2 2.4%
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 7.320%.
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.
<TABLE>
<CAPTION>
Number of % of Initial
Interest Accrual Basis Mortgage Loans Pool Balance
---------------------- -------------- ------------
<S> <C> <C>
Actual/360 Basis 256 88.3%
30/360 Basis 22 11.7%
</TABLE>
ARD Loans. Sixty-seven (67) Mortgage Loans, representing 25.4% 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 Loan 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 "Lockbox Account"). The
Borrowers under the Winston Loan, the Swerdlow Loans and the Mortgage Loan
secured by the Tierra Verde Property have already established Lockbox Accounts.
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Balloon Loans. Two hundred-eight (208) Mortgage Loans, representing 73.2%
of the Initial Pool Balance, are Balloon Loans.
A "Balloon Loan" is characterized by--
o 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, and
o 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
Original Term to Maturity
<S> <C> <C> <C> <C>
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 346 343 290 345
Remaining Amortization Term
Maximum 360 359 288 360
Minimum 177 292 237 177
Weighted Average 344 340 280 342
</TABLE>
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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 8.4% 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 GECA Mortgage Loans (except in the case of
one (1) GECA Mortgage Loan, representing 2.5% 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 Column Mortgage Loans (and in the case of
one (1) GECA Mortgage Loan, representing 2.5% 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-three (253) Mortgage Loans,
representing 91.5% 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
Loan 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. However, many of the
Mortgage Loans permit one or more of the following:
o transfers of the related Mortgaged Property if (in the case of each
such transfer) 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 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; or
o a transfer of certain beneficial interests in the Borrower.
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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
are collectively represented by 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 total 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 total 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, a percentage of
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 Property 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 0.6% 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 sets forth, 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>
Comfort Inn - Hopewell, VA $5,181,769 0.4% $3,733,102 (1)
Friendship Crossing Apartments $4,603,093 0.4% $900,000 (1)
Centennial Creek Office Park $2,493,826 0.2% $114,000 (1)
South Street Seaport Office Center $2,242,342 0.2% $1,659,674 (1)
Market Plaza $1,563,876 0.1% $582,425 (1)
</TABLE>
- ----------
(1) The subordinate lender has executed a Subordination Agreement and/or a
Standstill Agreement.
In addition, Borrowers under nine (9) Mortgage Loans, representing 3.1% 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
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.
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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 (as well as 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.
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.
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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 in this Prospectus Supplement 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" in this Prospectus Supplement 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.
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.
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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.
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.
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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).
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.
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<PAGE>
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.
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.
S-78
<PAGE>
Cash Management and Certain Escrows and Reserves
Cash Management. In the case of thirty-three (33) of the Mortgage Loans,
representing approximately 20.0% 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 Loan, tenants are
required to remit rental payments to a Lockbox Account that is under the sole
control of the mortgagee and the Borrower is not authorized to make withdrawals
from such account (any such Lockbox Account, a "Hard Lockbox 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 other
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 (any such Lockbox Account, a
"Soft Lockbox Account"). 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 establish a Hard Lockbox Account under the sole control
of the Master Servicer into which all revenue from the related Mortgaged
Property will be directly deposited.
Central Accounts. In the case of most Mortgage Loans, including all of the
Mortgage Loans as to which a "cash management" system has been implemented,
central accounts have been established 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 (such accounts, the
"Central Accounts"). As of the Closing Date, the Central Accounts will be under
the sole control of the Master Servicer. In the case of most Mortgage Loans as
to which there is a Central Account, such Central Account will be funded out of
monthly escrow and/or reserve payments by the related Borrower or from funds
transferred from the related Lockbox Account. In the case of Mortgage Loans as
to which there are Hard Lockbox Accounts, however, the Central Account may be
the same as such Lockbox Account.
Tax and Insurance Escrows. In the case of 247 Mortgage Loans, representing
85.7% 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 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 and FF&E (such a reserve, a
"Contractual Recurring Replacement Reserve") and/or for leasing commissions and
tenant improvements (such a reserve, a "Contractual Recurring LC&TI Reserve") on
the related Mortgaged Property under the terms of the respective Mortgage Loan.
S-79
<PAGE>
The Contractual Recurring Replacement Reserves and Contractual Recurring
LC&TI Reserves shown in such table are in each case expressed as dollars per
Unit for Multifamily Rental Properties and Manufactured Housing Properties, a
percentage of total departmental revenues for Hospitality Properties and dollars
per Leasable Square Foot for other Commercial Properties. The Contractual
Recurring Replacement Reserves and Contractual Recurring LC&TI Reserves set
forth in such table for most of the Mortgaged Properties are initial amounts and
may vary over time. In such cases, the related Mortgage Note and/or other
related documents may provide for applicable reserve deposits to cease upon
achieving predetermined maximum amounts in the related reserve account. In
addition, in some such cases, reserves for leasing commissions and tenant
improvements 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 or reserves
for leasing commissions and tenant improvements.
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 presented in this Prospectus
Supplement as a Cross-Collateralized Group of fourteen (14) separate Mortgage
Loans with an aggregate Cut-off Date Balance of $70,750,763, representing 5.7%
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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<PAGE>
Each of the Mortgage Loans comprising 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 two (2) percentage points (2%), 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--
o 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,
o delivery of certain legal opinions and documentation, and
o 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
Winston Loan for the twelve (12) full calendar months immediately
preceding the date of origination and (b) the debt service coverage
ratio for the 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
Residence Inn - Phoenix Phoenix, AZ 168 1988/1997 74% $16,300,000 $6,277,885
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
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>
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<PAGE>
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 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 Lockbox Account 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. CapStar has agreed to deposit all rent under the
CapStar Operating Leases directly into such Lockbox 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
(based on appraisals conducted from June 30, 1998 through 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
all or part 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.
Property 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 Mortgages) as of the date immediately preceding
the release and substitution, and
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<PAGE>
(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.
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 Swerdlow 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 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,
(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.
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<PAGE>
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>
o 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 Kmart
(114,000 sq. ft.), Syms (40,000 sq. ft.), Marshall's (27,808 sq. ft.)
and Office Max (23,500 sq. ft.). 109,800 square feet of space at such
property are "dark", but Kmart is responsible for and has been paying
the rent in respect of such space on behalf of the former tenant.
o 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.).
o 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 KOS Pharmaceuticals (23,499 sq. ft.)
and Trader Publishing (16,816 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 Lockbox Account.
Property Management. The Swerdlow Properties are each subject to a long
term management agreement with SREG Operating Limited Partnership. The
management agreement is not terminable by the Swerdlow Borrowers, 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.
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
(based on appraisals conducted during October 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 the Swerdlow REIT, the Swerdlow
Operating Partnership and such 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
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<PAGE>
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.
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 Loans 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%.
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<PAGE>
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,
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 (based on appraisals conducted during January 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 Loans, 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 Apartments - South Loan. The "Country Squire Apartments
- - South Loan" has a Cut-off Date Balance of $30,446,295, representing 2.5% of
the Initial Pool Balance. The Country Squire Apartments - South 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 Apartments South Loan. The
Country Squire Apartments - South 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 Apartments - South Property"). The
Country Squire Apartments - South Loan was made to a special purpose entity (the
"Country Squire
S-86
<PAGE>
Borrower") affiliated with Fogelman Properties ("Fogelman"). Fogelman is in the
business of developing, acquiring and rehabilitating multifamily properties. As
of December 12, 1998, Fogelman Properties had developed over 8,000 multifamily
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 Apartments - South Loan has a maturity date of January
1, 2009. The Country Squire Apartments - South Loan amortizes on a 30-year
schedule. The Country Squire Apartments - South 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
Apartments - South 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 Apartments - South 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 Apartments - South Property. The Country Squire
Apartments - South Property is described in the table below.
<TABLE>
<CAPTION>
No. of Yr. Built/ Occupancy Appraised
Units Renovated at U/W Value
<S> <C> <C> <C>
726 1984/1987 94% $39,000,000
</TABLE>
Property Management. The Country Squire Apartments - South 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 Apartments - South Loan or upon an event of default
under such management agreement.
Appraised Value. The Country Squire Apartments - South Loan has a Cut-off
Date LTV Ratio of 78.1% based upon an Appraised Value of the Country Squire
Apartments - South Property that was (based on an appraisal conducted August 13,
1998) equal to $39,000,000.
Underwritten DSCR. The Underwritten DSCR of the Country Squire Apartments -
South 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 Apartments - South Property with any subordinate
financing.
Transfer of Ownership Interests. The Country Squire Mortgage prohibits the
transfer of interests in the Country Squire Apartments - South Property or in
the Country Squire Borrower without the consent of the lender under the Country
Squire Apartments - South Loan, except in connection with a sale or transfer of
the Country Squire Apartments South Property in accordance with the Country
Squire Apartments - South 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.
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<PAGE>
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 2.4% 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 Borrowers"). 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. Each 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 Borrowers 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,
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 of the American Loans (based on the
American Properties, including those that are being released)
immediately prior to the release and (ii) the debt service coverage
ratio of the American Loans (based on all the American Properties,
including those to be released) at the time of closing, and
o the loan-to-value ratio of the non-defeased American Loans (based on
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
5015 Campuswood Drive East Syracuse, NY 99,476 1992 100% $9,000,000
5010 Campuswood Drive East Syracuse, NY 70,163 1989 94% $5,600,000
5009 Campuswood Drive East Syracuse, NY 6,584 1987 100% $650,000
</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.
S-88
<PAGE>
Property Management. Each American Property is subject to a management
agreement between the applicable American Borrower and American Real Estate
Management, Inc. (the "American Property Manager"), an affiliate of the American
Borrowers. The lender under the American Loans may replace the American Property
Manager only upon--
o default by the American Borrowers 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
Borrowers 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 Borrowers 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 that was
(based upon appraisals conducted from June 17, 1998 to August 31, 1998) equal to
$36,750,000.
Underwritten DSCR. The Underwritten DSCR of the American Loans is 1.40x.
Additional Indebtedness Prohibited. The American Borrowers 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 Borrowers without the consent of the lender under the
American Loans, 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.
Property Substitutions. Prior to May 1, 2008, the American Borrowers may
obtain the release of one or more of the American Properties from the lien of
the American Mortgages upon the substitution of a 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 Mortgages, including those to
be released) 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.
S-89
<PAGE>
The Mortgage Loan Sellers and the Originators
General. GECA acquired all of the GECA Mortgage Loans, representing 69.6%
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 Loan after underwriting and closing it as origination agent for the
originator and purchased the Country Squire Apartments - South Loan 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 26.8% 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.
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.
S-90
<PAGE>
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);
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);
and
o in those cases where applicable, the original or a copy of the related
ground lease.
S-91
<PAGE>
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.
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.
S-92
<PAGE>
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,
(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.
S-93
<PAGE>
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 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).
S-94
<PAGE>
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 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
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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
eothers 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").
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.
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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);
(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.
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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 in this Prospectus Supplement 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. Banc One Mortgage Capital Markets, LLC ("Banc One"),
a Delaware limited liability company, will be the Special Servicer with respect
to the Mortgage Pool. The principal offices of Banc One are located at 1717 Main
Street, Dallas, Texas 75201.
As of December 31, 1998, Banc One and its affiliates were responsible for
servicing approximately 7,058 commercial and multifamily loans with an aggregate
principal balance of approximately $22,287,101,048, the collateral for which is
located in 49 states, Mexico, Puerto Rico, the Virgin Islands and the District
of Columbia. With respect to such loans, approximately 6,180 loans with an
aggregate principal balance of approximately $17,946,030,189 billion pertain to
commercial and multifamily mortgage-backed securities.
The information concerning Banc One 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
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 with respect to Additional Interest
(as described below) 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 either 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.
S-104
<PAGE>
Notwithstanding the provisions described above, in the case of the Winston
Loan 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 (net of such Class' allocable share of any
Appraisal Reduction Amounts then in effect) then outstanding.
S-105
<PAGE>
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-4, Class A-3 and
Class A-2 Certificates, in that order, in each case to the extent of
the lesser of (i) 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-1A and Class
A-1B 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.
S-106
<PAGE>
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 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 earliest 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 must 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 must thereupon send such notice to all
Certificateholders. If the Holders of Certificates representing a majority of
the Voting Rights fail, within ten (10) 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 ten (10)
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
"contributions" 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.
S-107
<PAGE>
Liability to Borrowers. In general, 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. However, 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 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
S-108
<PAGE>
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
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.
S-109
<PAGE>
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 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.
Sale of Master Servicing Rights
If the Master Servicer is terminated as a result of certain Events of
Default, then subject to certain conditions, the Trustee will solicit bids for
the Master Servicer's servicing rights under the Pooling Agreement and will
deliver the net proceeds of any resulting sale to the Master Servicer. Any such
attempted sale is to occur during the 45-day period following such termination,
during which 45-day period the Trustee will act as successor Master Servicer.
See "Description of the Pooling Agreements--Events of Default" and "--Rights
Upon Event of Default" in the Prospectus.
S-110
<PAGE>
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);
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 twenty (20) separate Classes, eight (8) 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 $ 1,239,717,562(2) N/A 1.0980%
Class A-1A $ 218,788,000 17.65% 6.0800%
Class A-1B $ 686,205,000 55.35% 6.4600%
Class A-2 $ 58,887,000 4.75% 6.6000%
Class A-3 $ 65,085,000 5.25% 6.7700%
Class A-4 $ 18,596,000 1.50% 6.9200%
Class B-1 $ 46,489,000 3.75% 7.4866%
Class B-2 $ 15,497,000 1.25% 7.4866%
</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, Class A-1B and Class A-2
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-111
<PAGE>
The Private Certificates
<TABLE>
<CAPTION>
Initial
Aggregate Certificate Approx. % of
Class Designation Principal Balance(1) Initial Pool Balance Pass-Through Rate(3)
- ----------------- -------------------- -------------------- --------------------
<S> <C> <C> <C>
Class B-3 $ 37,191,000 3.00% 5.7500%
Class B-4 $ 21,695,000 1.75% 5.7500%
Class B-5 $ 9,298,000 0.75% 5.7500%
Class B-6 $ 12,397,000 1.00% 5.5300%
Class B-7 $ 12,398,000 1.00% 5.5300%
Class B-8 $ 12,397,000 1.00% 5.5300%
Class C $ 24,794,562 2.00% 5.5300%
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)).
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
S-112
<PAGE>
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 Trusts.
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").
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
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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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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 A-4
--------------------
--------------------
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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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:
Mortgage Pass-Through Rate. 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.
The Mortgage Pass-Through Rate for each Mortgage Loan will be unaffected by
any change in the Mortgage Rate for such Mortgage Loan, including in connection
with any bankruptcy or insolvency of the related Borrower or any modification of
such Mortgage Loan agreed to by the Master Servicer or the Special Servicer.
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).
However, the Stated Principal Balance of a Mortgage Loan will, in all
cases, be zero as of the Distribution Date following the Collection Period in
which it is determined that all amounts ultimately collectible with respect to
such Mortgage Loan or any related REO Property have been received.
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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.
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.
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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.
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, Class A-1B and Class A-2 Certificates will be fixed at 6.08%, 6.46% and
6.60% per annum, respectively. The Pass-Through Rate for the Class A-3
Certificates for any Distribution Date will equal the lesser of 6.77% per annum
and the Weighted Average Mortgage Pass-Through Rate for such Distribution Date.
The Pass-Through Rate for the Class A-4 Certificates for any Distribution Date
will equal the lesser of 6.92% per annum 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.
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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 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 at all times with respect to both such Components be
0% per annum.
The Pass-Through Rates for the Class B-3, Class B-4 and Class B-5
Certificates will, in the case of each such Class, be fixed at 5.75% per annum.
The Pass-Through Rates for the Class B-6, Class B-7, Class B-8 and Class C
Certificates will, in the case of each such Class, be fixed at 5.53% per annum.
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.
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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.
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;
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(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;
(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 A-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;
(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 A-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;
(9) if applicable, to reimburse the Holders of the Class A-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;
(10) 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;
(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-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;
(12) 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;
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(13) 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;
(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-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;
(15) 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;
(16) 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;
(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-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;
(18) 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;
(19) 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;
(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-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;
(21) 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;
(22) 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;
(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-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;
(24) 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
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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;
(25) 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;
(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-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;
(27) 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;
(28) 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;
(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-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;
(30) 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;
(31) 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;
(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 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;
(33) 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;
(34) 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;
(35) 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;
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(36) 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
(37) 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), (32) and (35) 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).
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 2.5% of the Initial Pool Balance), the
weighted average life (calculated in accordance with the related loan documents)
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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 2.5% 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.
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
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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 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
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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 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
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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.
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
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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
(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.
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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
(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 to this Prospectus
Supplement, 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.
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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;
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
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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.
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. Any person or entity effecting such purchase
will be responsible for reimbursing the parties to the Pooling Agreement (other
than itself, if applicable) for all reasonable out-of-pocket costs and expenses
incurred by such parties in connection with such purchase.
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.
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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.
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.
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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-3, Class A-4, 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-3, Class A-4, 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 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.
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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.
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;
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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.
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.
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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 A-4, 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.
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 A-4, 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;
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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;
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 29, 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., 5-12 means 5.375%) 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,
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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,
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
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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 divided
into two parts, each of which will be treated as a grantor trust for
federal income tax purposes.
Discount and Premium; Prepayment Consideration
For federal income tax reporting purposes, it is anticipated that the Class
S and Class B-2 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
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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 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
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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
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. The Special Servicer and the REMIC Administrator will each
be entitled, at the expense of the Trust, to consult with attorneys and tax
accountants in respect of the foregoing.
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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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 conditions set forth above will be satisfied with respect to the Senior
Certificates. A fiduciary of a Plan contemplating
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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 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,
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(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 A-4, 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 A-4, 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 A-4, Class B-1
and Class B-2 Certificates, an insurance company general account seeking to rely
on Section III of PTCE 95-60 should itself confirm that all applicable
conditions and other requirements have been satisfied.
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
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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.
METHOD OF DISTRIBUTION
Subject to the terms and conditions set forth in an Underwriting Agreement
dated March 15, 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 19, 1999, against payment therefor in immediately available funds.
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<TABLE>
<CAPTION>
Underwriter Class S Class A-1A Class A-1B Class A-2 Class A-3 Class A-4 Class B-1 Class B-2
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Donaldson, Lufkin & Jenrette
Securities Corporation 100% 90% 90% 100% 100% 100% 100% 100%
Merrill, Lynch, Pierce,
Fenner & Smith Incorporated 0% 10% 10% 0% 0% 0% 0% 0%
--- --- --- --- --- --- ---
Total ...................... 100% 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 107.50% 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.
S-147
<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:
<TABLE>
<CAPTION>
Class Moody's Fitch
----- ------- -----
<S> <C> <C>
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 A-4 A3 A-
Class B-1 Baa2 BBB
Class B-2 Baa3 BBB-
</TABLE>
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 Trust
Fund Expenses. The ratings of the Class S Certificates do not address the timing
or magnitude of reduction of the
S-148
<PAGE>
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.
S-149
<PAGE>
INDEX OF PRINCIPAL DEFINITIONS
30/360 Basis................................................................S-59
30/360 Mortgage Loans.......................................................S-59
Accelerated Amortization Payments...........................................S-60
Accrued Certificate Interest...............................................S-118
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-126
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-86
American Borrowers..........................................................S-88
American Loans..............................................................S-88
American Mortgages..........................................................S-88
American Properties.........................................................S-88
American Property Manager...................................................S-89
Annual Debt Service.........................................................S-70
Anticipated Repayment Date..................................................S-33
Appraisal Reduction Amount.................................................S-128
Appraisal Trigger Event....................................................S-128
Appraisals..................................................................S-75
Appraised Value.............................................................S-69
Approved Investors..........................................................S-85
ARD.........................................................................S-33
ARD Loan....................................................................S-60
ARD Loans...................................................................S-33
Asset Status Report........................................................S-106
Assumed Final Distribution Date.............................................S-10
Assumed P&I Payment........................................................S-128
Assumed Settlement Date....................................................S-138
Available Distribution Amount..............................................S-117
Balloon Loan................................................................S-61
Balloon Payment.............................................................S-33
Banc One....................................................................S-98
Base Estimated Annual Revenues..............................................S-66
Borrower....................................................................S-23
CapStar.....................................................................S-82
CapStar Operating Lease.....................................................S-82
CBE........................................................................S-138
Central Accounts............................................................S-79
CERCLA......................................................................S-50
Certificate Factor.........................................................S-113
Certificate Notional Amount................................................S-112
Certificate Principal Balance..............................................S-112
Certificate Registrar......................................................S-114
Certificateholders...........................................................S-7
Certificates.................................................................S-7
Class........................................................................S-7
Class D Certificates.......................................................S-113
Class Notional Amount......................................................S-112
Class Principal Balance....................................................S-112
Class S Strip Rate.........................................................S-119
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-99
Component..................................................................S-112
Contractual Recurring LC&TI Reserve.........................................S-79
Contractual Recurring Replacement Reserve...................................S-79
Controlling Class..........................................................S-105
Controlling Class Representative...........................................S-105
Corrected Mortgage Loan.....................................................S-97
Cost Approach...............................................................S-76
Country Squire Apartments - South Loan......................................S-86
Country Squire Apartments - South Property..................................S-86
Country Squire Borrower.....................................................S-86
Country Squire Mortgage.....................................................S-86
CPR........................................................................S-136
Cross-Collateralized Group..................................................S-51
Cross-Collateralized Mortgage Loans.........................................S-51
CSSA.......................................................................S-130
Custodian...................................................................S-92
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-143
Default Interest............................................................S-99
Defeasance Collateral.......................................................S-64
Defeasance Loan.............................................................S-64
Defeasance Loans............................................................S-34
Definitive Certificate.....................................................S-113
Determination Date...........................................................S-9
Discount Rate..............................................................S-124
Distributable Certificate Interest.........................................S-118
Distribution Date............................................................S-9
DLJSC........................................................................S-1
DTC.........................................................................S-13
S-150
<PAGE>
DTC Participants...........................................................S-113
Due Date....................................................................S-32
Engineering Reserves........................................................S-80
ERISA......................................................................S-142
Estimated Annual Operating Expenses.........................................S-67
Estimated Annual Revenues...................................................S-66
Excess Defeasance Payment...................................................S-53
Excluded Plan..............................................................S-144
Exemption..................................................................S-143
Exemption Favored Parties..................................................S-143
Expense Modifications.......................................................S-68
Expenses....................................................................S-72
FF&E........................................................................S-68
FIRREA......................................................................S-76
Fitch........................................................................S-2
Fogelman....................................................................S-87
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-90
GECLS.......................................................................S-98
Grantor Trusts..............................................................S-14
HAP Contract................................................................S-42
Hard Lockbox Account........................................................S-79
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-118
Interest Reserve Amount....................................................S-118
Interstate..................................................................S-82
IRS........................................................................S-140
LC & TI.....................................................................S-71
Leasable Square Footage.....................................................S-70
Liquidation Fee............................................................S-101
Liquidation Fee Rate.......................................................S-101
Loan Group Cut-off Date Balances............................................S-28
Lock-out Period.............................................................S-62
Lockbox Account.............................................................S-60
LUSTs.......................................................................S-51
Major Tenant................................................................S-70
Manufactured Housing Properties.............................................S-66
Master Servicer..............................................................S-7
Master Servicing Fee........................................................S-98
Master Servicing Fee Rate...................................................S-98
Material Breach.............................................................S-93
Maturity Assumptions.......................................................S-137
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-130
Moody's......................................................................S-2
Mortgage....................................................................S-57
Mortgage File...............................................................S-92
Mortgage Loan Sellers........................................................S-8
Mortgage Loans...............................................................S-7
Mortgage Note...............................................................S-57
Mortgage Pass-Through Rate.................................................S-116
Mortgage Pool...............................................................S-23
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-100
NOI.........................................................................S-71
Non-REMIC Assets............................................................S-14
Nonrecoverable P&I Advance.................................................S-127
Nonrecoverable Servicing Advance...........................................S-102
Norwest Bank...............................................................S-132
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-140
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-99
Plan.......................................................................S-142
Plan Assets................................................................S-142
Pooling Agreement............................................................S-7
Prepayment Assumption......................................................S-140
Prepayment Consideration....................................................S-52
Prepayment Consideration Period.............................................S-62
Prepayment Interest Excess..................................................S-99
Prepayment Interest Shortfall...............................................S-99
Prepayment Premium..........................................................S-52
Principal Balance Certificates..............................................S-20
Principal Distribution Amount..............................................S-119
Private Certificates........................................................S-11
S-151
<PAGE>
Prospectus...................................................................S-2
Prospectus Supplement........................................................S-2
PTCE........................................................................S-37
PTCE 95-60.................................................................S-145
PTE........................................................................S-143
Purchase Price..............................................................S-93
Rated Final Distribution Date...............................................S-10
Rating Agencies..............................................................S-2
Realized Losses............................................................S-126
Record Date..................................................................S-9
REIT........................................................................S-37
Related Proceeds...........................................................S-102
REMIC.......................................................................S-14
REMIC Administrator..........................................................S-8
REMIC I.....................................................................S-14
REMIC II....................................................................S-14
REMIC III...................................................................S-14
REMIC Regular Certificates.................................................S-113
REMIC Residual Certificates................................................S-113
REO Property................................................................S-96
REO Tax....................................................................S-142
Replacement Mortgage Loan...................................................S-94
Required Appraisal.........................................................S-128
Required Appraisal Loan....................................................S-128
Responsible Officer........................................................S-105
Restricted Group...........................................................S-143
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-143
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-120
Servicing Advance...........................................................S-22
Servicing Fees.............................................................S-100
Servicing Standard..........................................................S-95
Servicing Transfer Event....................................................S-97
Similar Law................................................................S-146
Single-Tenant Mortgage Loan.................................................S-39
Single-Tenant Mortgaged Property............................................S-39
Soft Lockbox Account........................................................S-79
Special Servicer.............................................................S-7
Special Servicing Fee......................................................S-100
Specially Serviced Assets...................................................S-96
Specially Serviced Mortgage Loan............................................S-96
Sq. Ft......................................................................S-70
Standstill Agreement........................................................S-48
Stated Principal Balance...................................................S-116
Subordinate Available Distribution Amount..................................S-120
Subordinate Certificates...................................................S-120
Subordination Agreement.....................................................S-48
Substitution Shortfall Amount...............................................S-94
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-132
Treasury Rate..............................................................S-124
Trust........................................................................S-7
Trust Fund...................................................................S-7
Trustee......................................................................S-8
Trustee Fee................................................................S-133
Trustee Report.............................................................S-130
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-110
Voting Rights..............................................................S-132
Warranting Party............................................................S-92
Weighted Average Mortgage
Pass-Through Rate........................................................S-119
Winston Borrower............................................................S-80
Winston Loan................................................................S-80
Winston Mortgages...........................................................S-80
Winston Properties..........................................................S-80
Winston REIT................................................................S-80
Workout Fee................................................................S-100
Workout Fee Rate...........................................................S-100
Year Built..................................................................S-71
Year Renovated..............................................................S-71
Yield Maintenance Charge....................................................S-52
S-152
<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>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<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 Edentree Apartments Hall Apartment Management
43 Becker Village Mall Brookhill Management Corp.
44 Tiffany Square TMP Management, Inc.
45 The Mint Apartments Barry S. Nussbaum Company
46 River Park Shopping Center Select Properties
47 Rancho Destino Apartments Juliet Property Company
48 Conestoga Mobile Home Park Thomas J. Horner Real Estate
49 Huntington Chase Apartments Landsouth
50 Parkshore Centre Office Building Durlach Corporation
51 Kenwood Pavilion Jeffrey R. Anderson Real Estate, Inc.
52 Newsome Park Apartments Great Atlantic Company
<CAPTION>
# Property Name Address City
- ------------- ------- ----
<S> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) 200 Tarrytown Road Elmsford
2 Quality Suites - Charleston (1A) 5224 N. Arco Ln Charleston
3 Courtyard by Marriott - Ann Arbor (1A) 3205 Boardwalk Ann Arbor
4 Residence Inn - Phoenix (1A) 8242 N. Black Canyon Phoenix
5 Homewood Suites - Cary (1A) 100 MacAlyson Ct. Cary
6 Hampton Inn & Suites - Gwinnett (1A) 1725 Pineland Rd. Duluth
7 Hampton Inn - Raleigh (1A) 6209 Glenwood Drive Raleigh
8 Comfort Suites - Orlando (1A) 9350 Turkey Ln Orlando
9 Hampton Inn - Perimeter (1A) 769 Hammond Drive Atlanta
10 Hampton Inn - Charlotte, NC (1A) 8419 N. Tyron St Charlotte
11 Courtyard by Marriott - Wilmington (1A) 151 Van Kampen Blvd. Wilmington
12 Hampton Inn - West Springfield (1A) 1011 Riverdale St. West Springfield
13 Homewood Suites - Clear Lake (1A) 401 Bay Area Blvd. Houston
14 Comfort Inn - Charleston (1A) 144 Bee Street Charleston
15 Kendale Lakes Plaza (1B) 14091 North Kendall Drive (Southwest 88th Street) West Kendall
16 Cypress Creek Station (1B) N/W/C Cypress Creek Road & North Andrews Avenue Fort Lauderdale
17 Oakwood Business Center (1B) Various Hollywood
18 Westchase Ranch Apartments (1C) 2101 Hayes Houston
19 Westwood Village Apartments (1C) 4310 W. Northgate Drive Irving
20 Normandy Woods Apartments (1C) 695 Normandy Drive Houston
21 Savoy Manor Apartments (1C) 5915 Flintock Drive Houston
22 San Marin Apartments (1C) 3501 W. Waters Avenue Tampa
23 Country Squire Apartments - South 8056 Country Squire Lane Cordova
24 2294 Molly Pitcher Highway (1D) 2294 Molly Pitcher Highway Chambersburg
25 5015 Campuswood Drive (1D) 5015 Campuswood Drive East Syracuse
26 5010 Campuswood Drive (1D) 5010 Campuswood Drive East Syracuse
27 5009 Campuswood Drive (1D) 5009 Campuswood Drive East Syracuse
28 Fair Lakes Promenade 12169-12249 Fair Lakes Parkway Fair Oaks
29 Keller Oaks Apartments (1E) 2121 Marsh Lane Carrollton
30 Sycamore Hill Apartments (1E) 7500 South Hulen St. Fort Worth
31 Clarendon Apartments (1E) 3800 N. Beltline Rd. Irving
32 Woodchase Condominiums (1E) 4060 N. Beltline Rd. Irving
33 Dallas Design Center Portfolio Various Dallas
34 Assembly Square Office Building 5 Middlesex Avenue Somerville
35 Spicetree Apartments 4854 Washtenaw Avenue Ann Arbor
36 Lamplighter Mobile Home Park 4201 North First Street San Jose
37 White Station Tower 5050 Poplar Avenue Memphis
38 Holiday Inn New Orleans Veterans 6401 Veterans Boulevard Metairie
39 The Links at Bixby 11500 Links Court/11500 Block of South Memorial Bixby
40 Southwood Apartments 5601 Paramount Blvd. Long Beach
41 The Shoppes at Longwood 823-883 E. Baltimore Pike Kennett Square
42 Edentree Apartments 1721 E. Frankford Rd. Carrollton
43 Becker Village Mall Becker Drive & East 10th Street Roanoke Rapids
44 Tiffany Square 6805 Corporate Drive Colorado Springs
45 The Mint Apartments 6700 Dairy Ashford Road Houston
46 River Park Shopping Center 4240 East Judge Perez Rd. Mereaux
47 Rancho Destino Apartments 4355 S. Durango Drive Las Vegas
48 Conestoga Mobile Home Park 1199 East Santa Fe Gardner
49 Huntington Chase Apartments 1010 S. Houston Lake Boulevard Warner Robins
50 Parkshore Centre Office Building 1 Poston Road Charleston
51 Kenwood Pavilion 8115-8133 Montgomery Rd. Cincinnati
52 Newsome Park Apartments 4801 Marshall Avenue Newport News
<CAPTION>
Zip
# Property Name County State Code
- ------------- ------ ----- ----
<S> <C> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) Westchester NY 10523
2 Quality Suites - Charleston (1A) Charleston SC 29418
3 Courtyard by Marriott - Ann Arbor (1A) Washtenaw MI 48108
4 Residence Inn - Phoenix (1A) Maricopa AZ 85051
5 Homewood Suites - Cary (1A) Wake NC 27511
6 Hampton Inn & Suites - Gwinnett (1A) Gwinnett GA 30136
7 Hampton Inn - Raleigh (1A) Wake NC 27612
8 Comfort Suites - Orlando (1A) Orange FL 32819
9 Hampton Inn - Perimeter (1A) Fulton GA 30136
10 Hampton Inn - Charlotte, NC (1A) Mecklenburg NC 28262
11 Courtyard by Marriott - Wilmington (1A) New Hanover NC 28403
12 Hampton Inn - West Springfield (1A) Hampden MA 01089
13 Homewood Suites - Clear Lake (1A) Harris TX 77058
14 Comfort Inn - Charleston (1A) Charleston SC 29401
15 Kendale Lakes Plaza (1B) Miami-Dade FL 33426
16 Cypress Creek Station (1B) Broward FL 33309
17 Oakwood Business Center (1B) Broward FL 33020
18 Westchase Ranch Apartments (1C) Harris TX 77077
19 Westwood Village Apartments (1C) Dallas TX 75062
20 Normandy Woods Apartments (1C) Harris TX 77015
21 Savoy Manor Apartments (1C) Harris TX 77040
22 San Marin Apartments (1C) Hillsborough FL 33614
23 Country Squire Apartments - South Shelby TN 38018
24 2294 Molly Pitcher Highway (1D) Franklin PA 17201
25 5015 Campuswood Drive (1D) Onondaga NY 13057
26 5010 Campuswood Drive (1D) Onondaga NY 13057
27 5009 Campuswood Drive (1D) Onondaga NY 13057
28 Fair Lakes Promenade Fairfax VA 22033
29 Keller Oaks Apartments (1E) Dallas TX 75006
30 Sycamore Hill Apartments (1E) Tarrant TX 76054
31 Clarendon Apartments (1E) Dallas TX 75038
32 Woodchase Condominiums (1E) Dallas TX 75038
33 Dallas Design Center Portfolio Dallas TX 75207
34 Assembly Square Office Building Middlesex MA 02145
35 Spicetree Apartments Washtenaw MI 48108
36 Lamplighter Mobile Home Park Santa Clara CA 95134
37 White Station Tower Shelby TN 38157
38 Holiday Inn New Orleans Veterans Jefferson LA 70003
39 The Links at Bixby Tulsa OK 74008
40 Southwood Apartments Los Angeles CA 90805
41 The Shoppes at Longwood Chester PA 19348
42 Edentree Apartments Denton TX 75007
43 Becker Village Mall Halifax NC 27870
44 Tiffany Square El Paso CO 80919
45 The Mint Apartments Harris TX 77072
46 River Park Shopping Center St. Bernard Parish LA 70075
47 Rancho Destino Apartments Clark NV 89117
48 Conestoga Mobile Home Park Johnson KS 66030
49 Huntington Chase Apartments Houston GA 31088
50 Parkshore Centre Office Building Charleston SC 29407
51 Kenwood Pavilion Hamilton OH 45242
52 Newsome Park Apartments None VA 23607
</TABLE>
<PAGE>
Managers and Locations of the Mortgaged Properties
<TABLE>
<CAPTION>
# Property Name Manager
- ------------- -------
<S> <C> <C>
53 Princeton Court Apartments (1F) Princeton Properties
54 Pinewood Estates Apartments (1F) Princeton Properties
55 Arbor Court Apartments (1F) Princeton Properties
56 U-Store of Brighton Self Storage Facility (1G) North LLC
57 U-Store of South Lyon Self Storage Facility (1G) North LLC
58 U-Store of Saline Self Storage Facility (1G) North LLC
59 U-Store of Davison Self Storage Facility (1G) North LLC
60 U-Store of Holly Self Storage Facility (1G) North LLC
61 U-Store of Jackson Self Storage Facility (1G) North LLC
62 Birches Apartments Sigma Management
63 Hollywood Plaza Westport Realty, Inc.
64 50-60 Worcester Rd. A & C Associates, Inc.
65 Mahwah Business Park Owner Managed
66 Silvernail Shopping Center Marlin Properties, Inc.
67 Tech Center 29 Office/Warehouse Complex Cambridge Asset Advisors Limited Partnership
68 Centre North Shopping Center Centre Properties Management
69 Cranbrook Centre Apartments (1H) Amurcon Corporation
70 Cranbrook Centre Office Buildings (1H) Amurcon Corporation
71 Lubbock Shopping Parkade Richmond Realty LLC
72 Marin Club Apartments PMG Real Estate Management and Consulting
73 Prunedale Center Greg Burch
74 Lamplighter Ontario MHP Morgan Properties, Inc.
75 Marycrest Shopping Center (2) Infinity Property Management, Corp.
76 Elm Plaza Shopping Center Owner Managed
77 Century Plaza East Triple Net Properties, LLC
78 Keller Springs Tech Center Today Management, Inc.
79 Mobile Gardens/Holly View Mobile Home Park (1I) K.D.M. Development Corporation
80 Stony Chase/Rock Creek Mobile Home Park (1I) K.D.M. Development Corporation
81 Briarwood Manor (1I) K.D.M. Development Corporation
82 Tierra Verde Marine Center TPA Resorts, Inc.
83 Aurora Square ACF Property Management, Inc.
84 Merchant's Square (3) Infinity Property Management, Corp.
85 Northwood Hills Shopping Center Sabre Realty Management, Inc.
86 36th Street Office Center Eenhoorn, LLC
87 Fifth Avenue Apartments Anterra Management Corporation
88 The Watermill Apartments BMS Management, Inc.
89 Brooks Corner Brooks, Torrey & Scott, Inc.
90 Hollywood Ardmore Apartments David N. Schultz, Inc.
91 Chasewood Apartments Hall Apartment Management
92 Kingsgate North Graco Real Estate Development, Inc.
93 Fairfield Suites Pittsburgh/Airport Concord Hospitality Enterprises, Inc.
94 Seatree Apartments Hall Apartment Management
95 All Aboard Mini Storage - Alhambra Management Enterprises, Inc.
96 West Century Center PlazaCorp Realty Advisors, Inc.
97 Universal Plaza Rubin Pikus Associates, LP
98 Crestview Market Place Gulf Land, LLC
99 New Franklin Apartments (4) Dube & Cabral Investments
100 Windjammer Apartments JMG Realty, Inc.
101 Woodlake Village Apartments SJS Enterprises
102 Comfort Inn - Hopewell, VA Sky Management, Inc.
103 Linens N Things Clinton International Group
104 The Woods Apartments JRD Management Corporation
<CAPTION>
# Property Name Address
- ------------- -------
<S> <C> <C>
53 Princeton Court Apartments (1F) 31 Andrew Street
54 Pinewood Estates Apartments (1F) 135 English Village Rd.
55 Arbor Court Apartments (1F) 37 Hosmer Street
56 U-Store of Brighton Self Storage Facility (1G) 5850 Whitmore Lake Dr.
57 U-Store of South Lyon Self Storage Facility (1G) 271 Lottie St.
58 U-Store of Saline Self Storage Facility (1G) 1145 Industrial Park Dr.
59 U-Store of Davison Self Storage Facility (1G) 10026 Lapeer Rd.
60 U-Store of Holly Self Storage Facility (1G) 4228 Grange Hall Rd.
61 U-Store of Jackson Self Storage Facility (1G) 155 N. Dettman
62 Birches Apartments 195 Fries Mill Rd.
63 Hollywood Plaza 4627-4641 Santa Monica Blvd. & 1100-1134 N. Vermont Ave.
64 50-60 Worcester Rd. 50-60 Worcester Rd.
65 Mahwah Business Park Ramapo Valley Road
66 Silvernail Shopping Center 1900 Silvernail Rd.
67 Tech Center 29 Office/Warehouse Complex 12120 and 12140 Industrial Parkway
68 Centre North Shopping Center 8600 East 96th Street
69 Cranbrook Centre Apartments (1H) 18333 South Drive
70 Cranbrook Centre Office Buildings (1H) 30161, 30215, 30233 Southfield Road
71 Lubbock Shopping Parkade 7020 Quaker Avenue
72 Marin Club Apartments 2261 West Valley Blvd
73 Prunedale Center 7915-8093 San Miguel Canyon Rd. & 17760-17880 Moro Rd.
74 Lamplighter Ontario MHP 2139 East Fourth Street
75 Marycrest Shopping Center (2) 2126 West Jefferson Street
76 Elm Plaza Shopping Center 338 Main Street
77 Century Plaza East 1790-1884 Avenue J
78 Keller Springs Tech Center 3220 Keller Springs Rd.
79 Mobile Gardens/Holly View Mobile Home Park (1I) 601 N. Dual Highway & 1020 Brickyard Rd. / 1030 Brickyard Rd.
80 Stony Chase/Rock Creek Mobile Home Park (1I) ES Bouchelle Rd.
81 Briarwood Manor (1I) Trussum Pond Rd.
82 Tierra Verde Marine Center 100 Pinellas Bayway
83 Aurora Square 15801-15925 Westminister Way North
84 Merchant's Square (3) 7195 Highway 85
85 Northwood Hills Shopping Center 8010-8152 Spring Valley Rd.
86 36th Street Office Center 5251-3 36th Street
87 Fifth Avenue Apartments 11530 Vance Jackson Rd.
88 The Watermill Apartments 6505 Westheimer Road
89 Brooks Corner 136 Main Street
90 Hollywood Ardmore Apartments 1850 Whitley Avenue
91 Chasewood Apartments 3420 South Coulter
92 Kingsgate North 4010-4230 82nd Street
93 Fairfield Suites Pittsburgh/Airport 239 Summit Park Drive
94 Seatree Apartments 2800 Nasa Rd 1
95 All Aboard Mini Storage - Alhambra 2000 West Mission Rd.
96 West Century Center 5015-5063 West Main Street
97 Universal Plaza 2533-2793 NW 79th Avenue
98 Crestview Market Place 1308-1334 North Ferndon Blvd. (Hwy 85)
99 New Franklin Apartments (4) Various
100 Windjammer Apartments 950 F.M. 1959
101 Woodlake Village Apartments 5080 Westerville Road
102 Comfort Inn - Hopewell, VA 5380 Oaklawn Boulevard (VSH 36)
103 Linens N Things U.S. Highway 441 at Glades Rd.
104 The Woods Apartments 2375 NE 173rd Street
<CAPTION>
Zip
# Property Name City County State Code
- ------------- ---- ------ ----- ----
<S> <C> <C> <C> <C> <C>
53 Princeton Court Apartments (1F) Manchester Hillsborough NH 03104
54 Pinewood Estates Apartments (1F) Manchester Hillsborough NH 03102
55 Arbor Court Apartments (1F) Marlborough Middlesex MA 01752
56 U-Store of Brighton Self Storage Facility (1G) Brighton Livingston MI 48116
57 U-Store of South Lyon Self Storage Facility (1G) South Lyon Oakland MI 48178
58 U-Store of Saline Self Storage Facility (1G) Saline Washtenaw MI 48176
59 U-Store of Davison Self Storage Facility (1G) Davison Genesee MI 48423
60 U-Store of Holly Self Storage Facility (1G) Holly Oakland MI 48442
61 U-Store of Jackson Self Storage Facility (1G) Jackson Jackson MI 49202
62 Birches Apartments Washington Township Gloucester NJ 08012
63 Hollywood Plaza Los Angeles Los Angeles CA 90029
64 50-60 Worcester Rd. Framingham Middlesex MA 01701
65 Mahwah Business Park Mahwah Bergen NJ 07430
66 Silvernail Shopping Center Waukesha Milwaukee WI 53072
67 Tech Center 29 Office/Warehouse Complex Silver Spring Montgomery MD 20904
68 Centre North Shopping Center Fishers Hamilton IN 46038
69 Cranbrook Centre Apartments (1H) Southfield Oakland MI 48076
70 Cranbrook Centre Office Buildings (1H) Southfield Oakland MI 48076
71 Lubbock Shopping Parkade Lubbock Lubbock TX 79424
72 Marin Club Apartments Pomona Los Angeles CA 91768
73 Prunedale Center Prunedale Monterey CA 93901
74 Lamplighter Ontario MHP Ontario Riverside CA 91764
75 Marycrest Shopping Center (2) Joliet Will IL 60435
76 Elm Plaza Shopping Center Waterville Kennebec ME 04901
77 Century Plaza East Lancaster Los Angeles CA 93535
78 Keller Springs Tech Center Carrollton Dallas TX 75006
79 Mobile Gardens/Holly View Mobile Home Park (1I) Seaford Hundred Sussex DE 19973
80 Stony Chase/Rock Creek Mobile Home Park (1I) Elkton Cecil MD 21921
81 Briarwood Manor (1I) Little Creek Hundred Sussex DE 19956
82 Tierra Verde Marine Center Tierra Verde Pinellas FL 33715
83 Aurora Square Seattle King WA 98133
84 Merchant's Square (3) Riverdale Clayton GA 30274
85 Northwood Hills Shopping Center Dallas Dallas TX 75240
86 36th Street Office Center Grand Rapids Kent MI 60521
87 Fifth Avenue Apartments San Antonio Bexar TX 75230
88 The Watermill Apartments Houston Harris TX 77057
89 Brooks Corner Westport Fairfield CT 06880
90 Hollywood Ardmore Apartments Los Angeles Los Angeles CA 90028
91 Chasewood Apartments Amarillo Randall TX 79109
92 Kingsgate North Lubbock Lubbock TX 79423
93 Fairfield Suites Pittsburgh/Airport Pittsburgh Allegheny PA 15275
94 Seatree Apartments Seabrook Harris TX 77586
95 All Aboard Mini Storage - Alhambra Alhambra Los Angeles CA 91803
96 West Century Center Oshtemo Township Kalamazoo MI 49009
97 Universal Plaza Miami Dade FL 33122
98 Crestview Market Place Crestview Okaloosa FL 32536
99 New Franklin Apartments (4) Franklin/Tilton Belknap/Merrimack NH Various
100 Windjammer Apartments Houston Harris TX 77034
101 Woodlake Village Apartments Columbus Franklin OH 43081
102 Comfort Inn - Hopewell, VA Hopewell Prince George VA 23875
103 Linens N Things Boca Raton Palm Beach FL 33428
104 The Woods Apartments North Miami Beach Dade FL 33160
</TABLE>
<PAGE>
Managers and Locations of the Mortgaged Properties
<TABLE>
<CAPTION>
# Property Name Manager
- ------------- -------
<S> <C> <C>
105 Moonlight Garden Apartments Cove Properties
106 Sagamore Court Apartments Forest Properties Management, Inc.
107 Carriage Hill Apartments Capital Investment Group, Inc.
108 Dowling Office Building R. D. Management Corp.
109 Main Street Plaza Shopping Center KMI Real Estate Group, Inc.
110 Friendship Crossing Apartments CIH Uplands, L.P.
111 Spruce Properties (1J) Oak Grove Realty Services, Inc.
112 Oak Grove Apartments (1J) Oak Grove Realty Services, Inc.
113 Aldrich Apartments (1J) Oak Grove Realty Services, Inc.
114 One Bellemead Center U.L. Coleman Companies
115 Denver Tech Center #30 ACF Property Management, Inc.
116 Preston Racquet Club Condominiums and Apartments Leaders Property Management
117 Sand Lake Apartments A & M Properties, Inc.
118 Mobile Estate Mobile Home Park Horizon Management Co.
119 Colonia Shopping Center Rosen Associates Management Corp.
120 Vista Ridge Center III Strode Property Company
121 Parkside East Apartments Realty Management Services Inc.
122 Northpark Village GRACO Real Estate Development, Inc.
123 Breakers Apartments First Lake Properties, Inc.
124 Picnic Lawn Apartments Brandon M. Burress
125 32nd Street and McDowell Road Shopping Center Eagle Property Management, Inc.
126 Triangle Corporate Center American Landmark Properties
127 One West Hills Office Owner Managed
128 Harper Regency Apartments Tri-Center Group, Inc.
129 Heritage Green Shopping Center Tedford Properties
130 Captain's Landing Apartments BH Management
131 All Aboard Mini Storage - Fremont Management Enterprises, Inc.
132 Century Plaza Strip Shopping Center (1K) Owner Managed
133 Albany Square Strip Shopping Center (1K) Owner Managed
134 Larrabee Complex MacBride Management, Inc.
135 Cedar Garden Apartments Sigma Management
136 All Aboard Mini Storage - Stanton Management Enterprises, Inc.
137 Windtree Apartments - Phase I Floyd Properties
138 Lake City Mini-Storage Owner Managed
139 Huntington Mobile Estates Marcare Group
140 Everhart Park Shopping Center LandLord Resources
141 Rafael North Executive Park Williams Development Company
142 Westwind Estates Bessire and Casenhiser, Inc.
143 Hewlett Shopping Center Jonathan Austern
144 Forest Park Village J. Hester Properties
145 2700 Richards Building Scott C. Hannah
146 Lincoln Park Center Milestone Property Management Corp.
147 Cedar Heights Apartments Evans Realty, Inc.
148 The North Oak Apartments Con Am Management
149 Arrowhead Court Apartments Halfpenny Management Company
150 The Citibank Building Gilles Bouchacourt
151 Petco/Starbucks S/C Owner Managed
152 1870 Ogden Drive Insignia Commercial Group of California, Inc.
153 Woodland Park Office Building P & K, Inc.
154 Tree Top Apartments Floyd Properties
155 Costa Mesa Mobile Estates Owner Managed
156 Greenville Village Mobile Home Park Wolff Holdings, Inc.
<CAPTION>
# Property Name Address
- ------------- -------
<S> <C> <C>
105 Moonlight Garden Apartments 12227 Osborne Place
106 Sagamore Court Apartments 555-567 Sagamore Avenue
107 Carriage Hill Apartments 935 - 1385 Carraige Hill Lane
108 Dowling Office Building 6-22 Pleasant Street
109 Main Street Plaza Shopping Center 701-725 East Main Street
110 Friendship Crossing Apartments 17 - 127 Galveston St.
111 Spruce Properties (1J) 116 Oak Grove Street & 1400-1408 Spruce Place
112 Oak Grove Apartments (1J) 225, 227, and 233 Oak Grove St.
113 Aldrich Apartments (1J) 1926, 1928, 1930, 1934, and 1936 Aldrich Ave.
114 One Bellemead Center 6425 Youree Drive
115 Denver Tech Center #30 8301 East Prentice Ave
116 Preston Racquet Club Condominiums and Apartments 5840 Spring Valley Rd.
117 Sand Lake Apartments 1302 Coopers Town Ct.
118 Mobile Estate Mobile Home Park 16745 SE Division Street
119 Colonia Shopping Center 1250 Lincoln Highway
120 Vista Ridge Center III 2417 South Stemmons Freeway
121 Parkside East Apartments 710 Roeder Rd.
122 Northpark Village 401 Slide Rd.
123 Breakers Apartments 1309 Lake Avenue
124 Picnic Lawn Apartments 24137 Stateline Rd.
125 32nd Street and McDowell Road Shopping Center 3205-3297 E. McDowell Rd.
126 Triangle Corporate Center 1400-1538 Elmhurst Rd.
127 One West Hills Office 3901 South Lamar Blvd.
128 Harper Regency Apartments 1428 N. Harper Avenue
129 Heritage Green Shopping Center 8203 South Holly Street
130 Captain's Landing Apartments 3102 69th Street
131 All Aboard Mini Storage - Fremont 3560 Washington Blvd.
132 Century Plaza Strip Shopping Center (1K) 355-385 W. Northwest Highway
133 Albany Square Strip Shopping Center (1K) 4445 N. Pulaski Road
134 Larrabee Complex 100 Main Street
135 Cedar Garden Apartments 1030 Cedar Bridge Rd.
136 All Aboard Mini Storage - Stanton 10741 Dale Ave.
137 Windtree Apartments - Phase I 409 Tradewinds Dr.
138 Lake City Mini-Storage 3116-3136 N.E. 130th Street
139 Huntington Mobile Estates 7652 Garfield Avenue
140 Everhart Park Shopping Center 6601 Everhart Rd.
141 Rafael North Executive Park 165,175, 185 North Redwood Drive
142 Westwind Estates 1399 Sacramento Ave.
143 Hewlett Shopping Center 1296-1318 Broadway
144 Forest Park Village 3423 Forest Lane
145 2700 Richards Building 2700 Richards Rd.
146 Lincoln Park Center 6800 Stirling Rd.
147 Cedar Heights Apartments 2600 N. Denton Rd.
148 The North Oak Apartments 225 Aldine Bender
149 Arrowhead Court Apartments 700 Cherry Tree Rd.
150 The Citibank Building 225-255 East Dania Beach Blvd.
151 Petco/Starbucks S/C 12800-12824 Ventura Boulevard
152 1870 Ogden Drive 1868-1870 Ogden Drive
153 Woodland Park Office Building 21731 Ventura Boulevard
154 Tree Top Apartments 910-C Greenleaf Drive
155 Costa Mesa Mobile Estates 327 West Wilson Street
156 Greenville Village Mobile Home Park 6509 Greenville Loop Road
<CAPTION>
Zip
# Property Name City County State Code
- ------------- ---- ------ ----- ----
<S> <C> <C> <C> <C> <C>
105 Moonlight Garden Apartments Pacoima Los Angeles CA 91331
106 Sagamore Court Apartments Portsmouth Rockingham NH 03801
107 Carriage Hill Apartments Hamilton Butler OH 45013
108 Dowling Office Building Malden Middlesex MA 02148
109 Main Street Plaza Shopping Center Alhambra Los Angeles CA 91801
110 Friendship Crossing Apartments Washington District of Columbia DC 20032
111 Spruce Properties (1J) Minneapolis Hennepin MN 55403
112 Oak Grove Apartments (1J) Minneapolis Hennepin MN 55403
113 Aldrich Apartments (1J) Minneapolis Hennepin MN 55403
114 One Bellemead Center Shreveport Caddo LA 71105
115 Denver Tech Center #30 Englewood (Denver) Arapahoe CO 80111
116 Preston Racquet Club Condominiums and Apartments Dallas Dallas TX 75240
117 Sand Lake Apartments Tampa Hillsborough FL 33613
118 Mobile Estate Mobile Home Park Portland Multnomah OR 97233
119 Colonia Shopping Center Colonia Middlesex NJ 07067
120 Vista Ridge Center III Lewisville Denton TX 75067
121 Parkside East Apartments Silver Spring Montgomery MD 20910
122 Northpark Village Lubbock Lubbock TX 79416
123 Breakers Apartments Metairie Jefferson LA 70005
124 Picnic Lawn Apartments Bright Dearborn IN 47025
125 32nd Street and McDowell Road Shopping Center Phoenix Maricopa AZ 85008
126 Triangle Corporate Center Elk Grove Village Cook IL 60007
127 One West Hills Office Austin Travis TX 78704
128 Harper Regency Apartments West Hollywood Los Angeles CA 90046
129 Heritage Green Shopping Center Littleton Unincorporated Arapahoe CO 80122
130 Captain's Landing Apartments Galveston Galveston TX 77551
131 All Aboard Mini Storage - Fremont Fremont Alameda CA 94539
132 Century Plaza Strip Shopping Center (1K) Palatine Cook IL 60067
133 Albany Square Strip Shopping Center (1K) Chicago Cook IL 60618
134 Larrabee Complex Westbrook Cumberland ME 04092
135 Cedar Garden Apartments Brick Ocean NJ 08723
136 All Aboard Mini Storage - Stanton Stanton Orange CA 90680
137 Windtree Apartments - Phase I Fayetteville Cumberland NC 28314
138 Lake City Mini-Storage Seattle King WA 98125
139 Huntington Mobile Estates Huntington Beach Orange CA 92648
140 Everhart Park Shopping Center Corpus Christi Nueces TX 78413
141 Rafael North Executive Park San Rafael Marin CA 94903
142 Westwind Estates West Sacramento Yolo CA 95605
143 Hewlett Shopping Center Hewlett Nassau NY 11557
144 Forest Park Village Dallas Dallas TX 75234
145 2700 Richards Building Bellevue King WA 98005
146 Lincoln Park Center Davie Broward FL 33024
147 Cedar Heights Apartments Dothan Houston AL 36303
148 The North Oak Apartments Houston Harris TX 77060
149 Arrowhead Court Apartments Upper Chichester Township Delaware PA 19014
150 The Citibank Building Dania Broward FL 33004
151 Petco/Starbucks S/C Studio City Los Angeles CA 91604
152 1870 Ogden Drive Burlingame San Mateo CA 94010
153 Woodland Park Office Building Woodland Hills Los Angeles CA 91364
154 Tree Top Apartments Fayetteville Cumberland NC 28304
155 Costa Mesa Mobile Estates Costa Mesa Orange CA 92627
156 Greenville Village Mobile Home Park Wilmington New Hanover NC 28409
</TABLE>
<PAGE>
Managers and Locations of the Mortgaged Properties
<TABLE>
<CAPTION>
# Property Name Manager
- ------------- -------
<S> <C> <C>
157 Brookwood Village Regency Realty Group, Inc.
158 Rose Grove Mobile Home Park Dorothy E. Royce
159 Little River Shopping Center Rosen Associates Management Corp.
160 The Amberton Apartments A&M Properties, Inc.
161 Best Western Worlds of Fun Pacifica Companies
162 All Aboard Mini Storage - Anaheim Management Enterprises, Inc.
163 Waterway Crossing Apartments Intersouth Management, Inc.
164 The Borders Building Westheimer Properties
165 Ken-Caryl Business Center ACF Property Management, Inc.
166 Alta Vista Mobile Home Park Alta Vista Associates, LLC
167 Palm Springs Self Storage G.T. Kelly General Contractors, Inc.
168 Holiday Inn Express Auburn C & D Management, Inc.
169 Caruth Haven Retail Center Cencor Realty Services, Inc.
170 3456 Ridge Property American Landmark Properties
171 Campus Plaza Shopping Center Kwok Yan Yee
172 All Aboard Mini Storage - San Gabriel Management Enterprises, Inc.
173 Point O' Woods Apartments Evans Realty
174 Williamsburg on the Lake Apartments Gene B. Glick Company
175 Airport Business Center Margolis Company
176 Staples - Wilmington Jeffrey R. Anderson Real Estate, Inc.
177 Felicita Junction James Crone & Associates
178 The Bordeaux Apartments Lanlord Resources, Inc.
179 High Point Village I Apartments Knudson Management Co., Inc.
180 Assured Self Storage Facility NAP
181 Staples - Valparaiso Jeffrey R. Anderson Real Estate, Inc.
182 Fruitland Grove Family Park Community Asset Management
183 Centennial Creek Office Park CC Management LP
184 Park Lane Village Apartments (1L) Craig A. Lane and Leon J. Parr
185 Rynearson Lane Village Apartments (1L) Craig A. Lane and Leon J. Parr
186 Holiday Inn Express Ottawa C & D Management, Inc.
187 Ross Apartments Charles and Holly Clifford
188 339 S. Ardmore Apartments Abra Management, Inc.
189 Edgewater Beach Resort Yvonne Hanna
190 Fondren Hill Apartments Homewood Company, LLC
191 Cottonwood Plaza Partners Management and Consultants Inc.
192 Southport Shops Centre Properties Management
193 Hawthorne Hill Apartments Pache Management Company, Inc.
194 Days Inn Waccamaw Winner Hotels, Inc.
195 Turtle Oaks Apartments Performance Properties, LLC
196 Linden Place Mobile Home Park D.R.S. Realty Company
197 Moore Lake Commons Shopping Center Hexad Management Company
198 Imperial Manor West Apartments Southfield Management Inc.
199 Brown School Station Apts. Baltes Commercial Realty
200 South Street Seaport Office Center Beacon Management Group, LLC
201 Hathaway Commerce Center Walsworth Property Management
202 Corinthian Apartments L'Abri Management Co.
203 Walgreen's Drug Store - Swansea Owner Managed
204 Catalina Apartments J. Hester Properties
205 Devonshire Square Retail Center Westwood Financial
206 1440 N. Vine Street Worchell Properties
207 College Park Apartments Owner Managed
208 Country Brooke Apartments Baltes Commercial Realty
<CAPTION>
# Property Name Address
- ------------- -------
<S> <C> <C>
157 Brookwood Village 1923 - 1943 Peachtree Rd.
158 Rose Grove Mobile Home Park 3839 Pacific Ave.
159 Little River Shopping Center 1699 Highway 17
160 The Amberton Apartments 1550 University Woods Place
161 Best Western Worlds of Fun 7100 NE Parvin Rd.
162 All Aboard Mini Storage - Anaheim 1705 S. State College Blvd.
163 Waterway Crossing Apartments 685 Burcale Rd.
164 The Borders Building 9633 Westheimer Rd.
165 Ken-Caryl Business Center 10499 & 10579 W. Bradford & 10394 W. Chatfield Ave.
166 Alta Vista Mobile Home Park 711 East Lake Mead Drive
167 Palm Springs Self Storage 4200 Forest Hill Blvd.
168 Holiday Inn Express Auburn 404 Touring Drive
169 Caruth Haven Retail Center 6101 Greenville Avenue
170 3456 Ridge Property 3456 Ridge Avenue
171 Campus Plaza Shopping Center 3601-3629 S. Vermont Ave.
172 All Aboard Mini Storage - San Gabriel 405 S. Del Mar Ave.
173 Point O' Woods Apartments 520 N. 38th Avenue
174 Williamsburg on the Lake Apartments 302 Village Drive
175 Airport Business Center 555 West Layton Avenue
176 Staples - Wilmington 1215 Rombach Avenue
177 Felicita Junction 1611-1677 S. Centre City Parkway
178 The Bordeaux Apartments 523 Airline Rd.
179 High Point Village I Apartments 139 South Clark Road
180 Assured Self Storage Facility 3003 Big Town Blvd.
181 Staples - Valparaiso 2106 Morthland Blvd. (U.S. 30)
182 Fruitland Grove Family Park 19850 E. Arrow Highway
183 Centennial Creek Office Park 2955 & 2975 Valmont Rd.
184 Park Lane Village Apartments (1L) 7746 Red Arrow Highway
185 Rynearson Lane Village Apartments (1L) 1386 Leisure Lane
186 Holiday Inn Express Ottawa 120 West Stevenson
187 Ross Apartments 1118 Sir Francis Drake Boulevard
188 339 S. Ardmore Apartments 339 South Ardmore Avenue
189 Edgewater Beach Resort 95 Chase Avenue
190 Fondren Hill Apartments 770 Lakeland
191 Cottonwood Plaza 7250-7356 North Oracle Rd.
192 Southport Shops 7225 US 31 South
193 Hawthorne Hill Apartments 3200-3361 & 3419-3498 Valerie Arms Drive
194 Days Inn Waccamaw 3650 Highway 501
195 Turtle Oaks Apartments 4111-21, 4140 & 4141 Newton Ave
196 Linden Place Mobile Home Park G-4192 South Linden Road
197 Moore Lake Commons Shopping Center 1001 East Moore Lake Drive
198 Imperial Manor West Apartments 19200 Appleton
199 Brown School Station Apts. 402-A Brown School Rd.
200 South Street Seaport Office Center 19 Fulton Street & 133 Beekman Street
201 Hathaway Commerce Center 1004 - 1010 South Hathaway Street
202 Corinthian Apartments 9063 Florence Ave.
203 Walgreen's Drug Store - Swansea 2532 North Illinois Street
204 Catalina Apartments 815 W. Abram Street
205 Devonshire Square Retail Center 16913-16933 Devonshire Street
206 1440 N. Vine Street 1400-1440 Vine Street
207 College Park Apartments 401 College Drive
208 Country Brooke Apartments 2980 Stop Eight Rd.
<CAPTION>
Zip
# Property Name City County State Code
- ------------- ---- ------ ----- ----
<S> <C> <C> <C> <C> <C>
157 Brookwood Village Atlanta Fulton GA 30309
158 Rose Grove Mobile Home Park Forest Grove Washington OR 97116
159 Little River Shopping Center Little River Horry SC 29566
160 The Amberton Apartments Tampa Hillsborough FL 33612
161 Best Western Worlds of Fun Kansas City Clay MO 64117
162 All Aboard Mini Storage - Anaheim Anaheim Orange CA 92806
163 Waterway Crossing Apartments Myrtle Beach Horry SC 29579
164 The Borders Building Houston Harris TX 77063
165 Ken-Caryl Business Center Littleton Jefferson CO 80127
166 Alta Vista Mobile Home Park Henderson Clark NV 89015
167 Palm Springs Self Storage Palm Springs Palm Beach FL 33406
168 Holiday Inn Express Auburn Auburn DeKalb IN 46706
169 Caruth Haven Retail Center Dallas Dallas TX 75206
170 3456 Ridge Property Arlington Heights Cook IL 60004
171 Campus Plaza Shopping Center Los Angeles Los Angeles CA 90007
172 All Aboard Mini Storage - San Gabriel San Gabriel Los Angeles CA 91776
173 Point O' Woods Apartments Hattiesburg Forrest and Lamar MS 39401
174 Williamsburg on the Lake Apartments Mishawaka St. Joseph IN 46545
175 Airport Business Center Milwaukee Milwaukee WI 53207
176 Staples - Wilmington Wilmington Clinton OH 45177
177 Felicita Junction Escondido San Diego CA 92025
178 The Bordeaux Apartments Corpus Christi Nueces TX 78412
179 High Point Village I Apartments Cedar Hill Dallas TX 75014
180 Assured Self Storage Facility Mesquite Dallas TX 75150
181 Staples - Valparaiso Valparaiso Porter IN 46383
182 Fruitland Grove Family Park Covina Los Angeles CA 91724
183 Centennial Creek Office Park Boulder Boulder CO 80301
184 Park Lane Village Apartments (1L) Watervliet Berrien MI 49098
185 Rynearson Lane Village Apartments (1L) Buchanan Berrien MI 49107
186 Holiday Inn Express Ottawa Ottawa LaSalle IL 61350
187 Ross Apartments Kentfield Marin CA 94904
188 339 S. Ardmore Apartments Los Angeles Los Angeles CA 90020
189 Edgewater Beach Resort Dennisport Barnstable MA 02639
190 Fondren Hill Apartments Jackson Hinds MS 39216
191 Cottonwood Plaza Tucson Pima AZ 85704
192 Southport Shops Indianapolis Marion IN 46227
193 Hawthorne Hill Apartments Dayton Montgomery OH 45405
194 Days Inn Waccamaw Myrtle Beach Horry SC 29577
195 Turtle Oaks Apartments Dallas Dallas TX 75219
196 Linden Place Mobile Home Park Flint Genessee MI 48507
197 Moore Lake Commons Shopping Center Fridley Anoka MN 55432
198 Imperial Manor West Apartments Detroit Wayne MI 48219
199 Brown School Station Apts. Vandalia Montgomery OH 45377
200 South Street Seaport Office Center New York New York NY 10038
201 Hathaway Commerce Center Santa Ana Orange CA 92705
202 Corinthian Apartments Downey Los Angeles CA 90240
203 Walgreen's Drug Store - Swansea Swansea St. Clair IL 62226
204 Catalina Apartments Arlington Tarrant TX 76013
205 Devonshire Square Retail Center Granada Hills Los Angeles CA 91344
206 1440 N. Vine Street Los Angeles Los Angeles CA 90028
207 College Park Apartments Hanceville Cullman AL 35055
208 Country Brooke Apartments Dayton Montgomery OH 45414
</TABLE>
<PAGE>
Managers and Locations of the Mortgaged Properties
<TABLE>
<CAPTION>
# Property Name Manager
- ------------- -------
<S> <C> <C>
209 Hillside View Apartments Fox Creek Management
210 Benihana Restaurant GraeGrove One, LLC
211 Crosswinds Apartments National Realty Management, Inc.
212 Imperial Plaza Retail Center Abbas Satrap
213 Twin Lakes Mobile Home Park D.R.S. Realty Company
214 Antietam Village Center Fitzgerald & Matan Property Management, Inc.
215 Gateway Shoppes Morgan Real Estate, Inc.
216 Red Onion Building Owner Managed
217 526 South Ardmore Avenue Abra Management, Inc
218 All Aboard Mini Storage - Santa Ana Management Enterprises, Inc.
219 Villa East I & II Matrix Group, Inc.
220 Courtyard Apartments Christopher Homes, Inc.
221 Sunset View Village Apartments Owner Managed
222 Wilmington Plaza La Caze Development Company
223 The Nations Bank Building The Shear Companies
224 Quail Ridge Apartments Piper Management Co.
225 Best Western KCI Airport Pacifica Companies
226 Laurel Heights Apartments Property Management Professionals, Inc.
227 El Monte Mobile Air Mobile Home Park Community Asset Management
228 Harold Gilstrap Shopping Center Sierra Management Corp.
229 Lakeside Apartments Orphelia Hennes
230 Park Glen Apartments Tricap Management, Inc.
231 St. Lucie Mobile Village Owner Managed
232 Ravenscroft Apartments Owner Managed
233 Coach Country Corral MHP Owner Managed
234 Seaside Village Shopping Center WQ Real Estate Services, Inc.
235 Sherwood Park Apartments Great West Management Group, Inc.
236 Ravenna Plaza Emmco Corporation
237 Holiday Inn Express Oglesby C & D Management, Inc.
238 Central/Magnolia Retail Center H.S. Brown & Associates, Inc.
239 Rolling Hills Estates Team Properties
240 Saticoy-Royale Apartments G.H. Cooper Properties, Inc.
241 Holiday/Park Riviera Mobile Home Park McGlamry Properties
242 Gottschalk's Department Store Jack Baskin, Inc.
243 Justin Apartments Gaska, Inc. and Development
244 Fountain Square Apartments Drumm Real Estate Management, Inc.
245 383 St. Johns Place Certified Servicing Associates, Inc.
246 Days Inn Owner Managed
247 Market Plaza Real Estate Alliance Company Ltd., LLC
248 Michigan Plaza & Bender Plaza (5) Owner Managed
249 Mockingbird Park Retail Building Corrigan Real Estate Services
250 Poolesville Village Center Darnestown Management Corporation, Inc.
251 Citadel Square Shopping Center (6) Infinity Property Management, Corp.
252 Executive Park Offices REMA, Inc.
253 Sherwood Mobile Home Estates D.R.S. Realty Company
254 Ware's Van & Storage Co. Owner Managed
255 Sunrise Terrace Mobile Home Park Owner Managed
256 Best Western Country Inn North Pacifica Companies
257 Woodlake Resort Village Apartments Owner Managed
258 Plantation Pines Apartments Owner Managed
259 Pacific Mini Storage Owner Managed
260 Sunridge Apartments Owner Managed
<CAPTION>
# Property Name Address
- ------------- -------
<S> <C> <C>
209 Hillside View Apartments 243 Pleasant Street
210 Benihana Restaurant 4250 Birch Street
211 Crosswinds Apartments 4355 South Jones Blvd.
212 Imperial Plaza Retail Center 8847 Imperial Highway
213 Twin Lakes Mobile Home Park 7001 Lakes Boulevard
214 Antietam Village Center . 1595 Opposumtown Pike
215 Gateway Shoppes 1001-27 North Federal Highway
216 Red Onion Building 420 and 422 East Cooper Avenue
217 526 South Ardmore Avenue 526 South Ardmore Avenue
218 All Aboard Mini Storage - Santa Ana 1030 E. Fourth Street
219 Villa East I & II 363 and 393 South Harlan St.
220 Courtyard Apartments 1620 Carol Sue Ave.
221 Sunset View Village Apartments 7510 SW 152nd Avenue
222 Wilmington Plaza 311 Pacific Coast Highway
223 The Nations Bank Building 4000 Garth Road
224 Quail Ridge Apartments 1001 North State Road
225 Best Western KCI Airport 11900 NW Plaza Circle
226 Laurel Heights Apartments 483 Laurel Lane
227 El Monte Mobile Air Mobile Home Park 1517-1601 Merced Avenue
228 Harold Gilstrap Shopping Center 601 S. Main Street
229 Lakeside Apartments 1355 West Maple Avenue
230 Park Glen Apartments Parke West Drive
231 St. Lucie Mobile Village 11500 SW Kanner Highway
232 Ravenscroft Apartments 25 Fairview Avenue
233 Coach Country Corral MHP 1921 208th Street East
234 Seaside Village Shopping Center 4908 Seawall Boulevard
235 Sherwood Park Apartments 2300 - 2470 62nd Avenue East
236 Ravenna Plaza 1139-49 East Main Street
237 Holiday Inn Express Oglesby 900 Holiday Street
238 Central/Magnolia Retail Center 4100 Central Avenue
239 Rolling Hills Estates 4457 Popps Ferry Rd.
240 Saticoy-Royale Apartments 14630 Saticoy Street
241 Holiday/Park Riviera Mobile Home Park 319 Brady Drive
242 Gottschalk's Department Store 372 Elm Avenue
243 Justin Apartments 1039 Justin Avenue
244 Fountain Square Apartments 1925 8th Avenue
245 383 St. Johns Place 383 St. Johns Place
246 Days Inn 2117 Aerotech Drive
247 Market Plaza 2015 - 79 West 25th Street
248 Michigan Plaza & Bender Plaza (5) 726-32 E. Michigan / 205-225 E. Bender
249 Mockingbird Park Retail Building 5706 E. Mockingbird Lane
250 Poolesville Village Center 19710 Fisher Avenue
251 Citadel Square Shopping Center (6) 5060 Memorial Drive
252 Executive Park Offices 921-925 East Executive Park Drive
253 Sherwood Mobile Home Estates 314 Tallman Circle
254 Ware's Van & Storage Co. 1344 North West Boulevard
255 Sunrise Terrace Mobile Home Park 7311 Chambers Creek Road West
256 Best Western Country Inn North 2633 N.E. 43rd Street
257 Woodlake Resort Village Apartments 6000 Woodlake Parkway
258 Plantation Pines Apartments 2713 South Broadway
259 Pacific Mini Storage 5120 Pacific Highway
260 Sunridge Apartments 6608 South Freeway
<CAPTION>
Zip
# Property Name City County State Code
- ------------- ---- ------ ----- ----
<S> <C> <C> <C> <C> <C>
209 Hillside View Apartments Concord Merrimack NH 03301
210 Benihana Restaurant Newport Beach Orange CA 92660
211 Crosswinds Apartments Las Vegas Clark NV 89103
212 Imperial Plaza Retail Center Downey Los Angeles CA 90242
213 Twin Lakes Mobile Home Park Fort Mill York SC 29715
214 Antietam Village Center Frederick Frederick MD 21702
215 Gateway Shoppes Fort Lauderdale Broward FL 33304
216 Red Onion Building Aspen Pitkin CO 81611
217 526 South Ardmore Avenue Los Angeles Los Angeles CA 90020
218 All Aboard Mini Storage - Santa Ana Santa Ana Orange CA 92701
219 Villa East I & II Lakewood Jefferson CO 80226
220 Courtyard Apartments Gretna Jefferson LA 70056
221 Sunset View Village Apartments Miami Dade FL 33193
222 Wilmington Plaza Wilmington Los Angeles CA 90744
223 The Nations Bank Building Baytown Harris TX 77521
224 Quail Ridge Apartments Davison Genesee MI 48423
225 Best Western KCI Airport Kansas City Platte MO 64153
226 Laurel Heights Apartments New Braunfels Comal TX 78130
227 El Monte Mobile Air Mobile Home Park South El Monte Los Angeles CA 91733
228 Harold Gilstrap Shopping Center Salem Washington IN 47167
229 Lakeside Apartments Mundelein Lake IL 61941
230 Park Glen Apartments Glen Burnie Anne Arundel MD 21061
231 St. Lucie Mobile Village Indiantown Martin FL 34956
232 Ravenscroft Apartments Phillipsburg Warren NJ 08865
233 Coach Country Corral MHP Spanaway Pierce WA 98387
234 Seaside Village Shopping Center Galveston Galveston TX 77551
235 Sherwood Park Apartments Fife Pierce WA 98424
236 Ravenna Plaza Ravenna Portage OH 44266
237 Holiday Inn Express Oglesby Oglesby LaSalle IL 61348
238 Central/Magnolia Retail Center Riverside Riverside CA 92506
239 Rolling Hills Estates D'Iberville Harrison MS 39532
240 Saticoy-Royale Apartments Van Nuys Los Angeles CA 91405
241 Holiday/Park Riviera Mobile Home Park Warner Robins Houston GA 31088
242 Gottschalk's Department Store Auburn Placer CA 95603
243 Justin Apartments Glendale Los Angeles CA 91201
244 Fountain Square Apartments Tuscaloosa Tuscaloosa AL 35401
245 383 St. Johns Place Brooklyn Kings NY 11238
246 Days Inn Colorado Springs El Paso CO 80916
247 Market Plaza Cleveland Cuyahoga OH 44113
248 Michigan Plaza & Bender Plaza (5) Hobbs Lea NM 88240
249 Mockingbird Park Retail Building Dallas Dallas TX 75206
250 Poolesville Village Center Poolesville Montgomery MD 20837
251 Citadel Square Shopping Center (6) Stone Mountain DeKalb GA 30083
252 Executive Park Offices Murray Salt Lake UT 84117
253 Sherwood Mobile Home Estates Midway Park Onslow NC 28544
254 Ware's Van & Storage Co. Vineland Cumberland NJ 08360
255 Sunrise Terrace Mobile Home Park University Place Pierce WA 98467
256 Best Western Country Inn North Kansas City Clay MO 64117
257 Woodlake Resort Village Apartments San Antonio Bexar TX 78244
258 Plantation Pines Apartments Tyler Smith TX 75701
259 Pacific Mini Storage Ferndale Whatcom WA 98248
260 Sunridge Apartments Fort Worth Tarrant TX 76134
</TABLE>
<PAGE>
Managers and Locations of the Mortgaged Properties
<TABLE>
<CAPTION>
# Property Name Manager
- ------------- -------
<S> <C> <C>
261 Courtyards of Granbury Las Brisas Nuevo, LLC
262 Parkside Place Apartments J & EE Property Management, Inc.
263 University Apartments Polo Club Management
264 Isaqueena Village Apartments P.I.C. Properties
265 Turtle Dove I Apartments Owner Managed
266 Carson Gardens Mobile Home Park Community Asset Management
267 Valerie Apartments J.L. & G.
268 Huddersfield Apartments Huddersfield Properties, LLC
269 1457 & 1519 - 1527 Park Road, NW 1457 Park Road, LLC
270 Winter Garden Village Apartments Affirmative Management Inc.
271 Long Point Plaza Apartments Owner Managed
272 The Place of Tempe Apartments Owner Managed
273 Valley Garden Apartments Valley Garden, LLC
274 Devereaux Apartments Owner Managed
275 Bloomingdale Shopping Center Bloomingdale Plaza Associates, LLC
276 Cottonwood Apartments Invest America
277 Royal North Apartments SSL Investments, LLC
278 Turtle Dove II Apartments G & G Properties
<CAPTION>
# Property Name Address
- ------------- -------
<S> <C> <C>
261 Courtyards of Granbury 905 Paluxy Road
262 Parkside Place Apartments 2833 Community Drive
263 University Apartments 3512 South University Drive
264 Isaqueena Village Apartments 843 Isaqueena Trail
265 Turtle Dove I Apartments 3516 Matilda Street
266 Carson Gardens Mobile Home Park 437 West Carson St.
267 Valerie Apartments 6226 Valerie Street
268 Huddersfield Apartments 197 Pine Street
269 1457 & 1519 - 1527 Park Road, NW 1457 & 1519 - 1527 Park Road, NW
270 Winter Garden Village Apartments 521 South Park Avenue
271 Long Point Plaza Apartments 1742 Woodvine Drive
272 The Place of Tempe Apartments 607-627 West 19th Street
273 Valley Garden Apartments 5236 & 5286 East Tropicana Avenue
274 Devereaux Apartments 3616-3636 Warwick Boulevard
275 Bloomingdale Shopping Center 47 Main Street
276 Cottonwood Apartments 1714 Patton Lane
277 Royal North Apartments 4422 & 4525 Weaver Road
278 Turtle Dove II Apartments 5737 McCommas Street
<CAPTION>
Zip
# Property Name City County State Code
- ------------- ---- ------ ----- ----
<S> <C> <C> <C> <C> <C>
261 Courtyards of Granbury Granbury Hood TX 76048
262 Parkside Place Apartments Dallas Dallas TX 75220
263 University Apartments Fort Worth Tarrant TX 76109
264 Isaqueena Village Apartments Central Pickens SC 29630
265 Turtle Dove I Apartments Dallas Dallas TX 75206
266 Carson Gardens Mobile Home Park Carson Los Angeles CA 90745
267 Valerie Apartments Houston Harris TX 77081
268 Huddersfield Apartments Portland Cumberland ME 04103
269 1457 & 1519 - 1527 Park Road, NW Washington District of Columbia DC 20010
270 Winter Garden Village Apartments Winter Garden Orange FL 34787
271 Long Point Plaza Apartments Houston Harris TX 77055
272 The Place of Tempe Apartments Tempe Maricopa AZ 85281
273 Valley Garden Apartments Las Vegas Clark NV 89122
274 Devereaux Apartments Kansas City Jackson MO 64111
275 Bloomingdale Shopping Center Bloomingdale Passaic NJ 07403
276 Cottonwood Apartments Austin Travis TX 78723
277 Royal North Apartments Houston Harris TX 77016
278 Turtle Dove II Apartments 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 Plaza & 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/ Year Year
# Property Name Property Type Pads Leasehold Built Renovated
- ------------- ------------- ---- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) Hotel 156 Fee 1968 1996
2 Quality Suites - Charleston (1A) Hotel 168 Fee 1989 1997
3 Courtyard by Marriott - Ann Arbor (1A) Hotel 160 Fee 1989 1998
4 Residence Inn - Phoenix (1A) Hotel 168 Fee 1988 1997
5 Homewood Suites - Cary (1A) Hotel 120 Fee 1994 N/A
6 Hampton Inn & Suites - Gwinnett (1A) Hotel 135 Fee 1996 N/A
7 Hampton Inn - Raleigh (1A) Hotel 141 Fee 1986 1996
8 Comfort Suites - Orlando (1A) Hotel 215 Fee 1990 1997
9 Hampton Inn - Perimeter (1A) Hotel 131 Fee 1996 N/A
10 Hampton Inn - Charlotte, NC (1A) Hotel 125 Fee 1991 1997
11 Courtyard by Marriott - Wilmington (1A) Hotel 128 Fee 1996 N/A
12 Hampton Inn - West Springfield (1A) Hotel 126 Fee 1989 1998
13 Homewood Suites - Clear Lake (1A) Hotel 92 Fee 1995 N/A
14 Comfort Inn - Charleston (1A) Hotel 128 Fee 1989 1997
15 Kendale Lakes Plaza (1B) Retail 404,553 Fee 1977 1995
16 Cypress Creek Station (1B) Retail 229,009 Fee 1997 N/A
17 Oakwood Business Center (1B) Office 141,150 Fee 1987 N/A
18 Westchase Ranch Apartments (1C) Multifamily 776 Fee 1977 1994
19 Westwood Village Apartments (1C) Multifamily 320 Fee 1983 1996
20 Normandy Woods Apartments (1C) Multifamily 268 Fee 1981 1997
21 Savoy Manor Apartments (1C) Multifamily 192 Fee 1980 1997
22 San Marin Apartments (1C) Multifamily 193 Fee 1972 1997
23 Country Squire Apartments - South Multifamily 726 Fee 1984 1987
24 2294 Molly Pitcher Highway (1D) Industrial 621,400 Fee 1960 1991
25 5015 Campuswood Drive (1D) Office 99,476 Fee 1992 N/A
26 5010 Campuswood Drive (1D) Office 70,163 Fee 1989 N/A
27 5009 Campuswood Drive (1D) Office 6,584 Fee 1987 N/A
28 Fair Lakes Promenade Retail 143,789 Fee 1996 N/A
29 Keller Oaks Apartments (1E) Multifamily 220 Fee 1985 N/A
30 Sycamore Hill Apartments (1E) Multifamily 264 Fee 1983 1991
31 Clarendon Apartments (1E) Multifamily 192 Fee 1979 N/A
32 Woodchase Condominiums (1E) Multifamily 74 Fee 1983 N/A
33 Dallas Design Center Portfolio Mixed Use 355,826 Fee/Leasehold 1951 1995
34 Assembly Square Office Building Mixed Use 202,616 Fee 1960 1979
35 Spicetree Apartments Multifamily 551 Fee 1971 1977
36 Lamplighter Mobile Home Park Manufactured Housing 265 Fee 1971 N/A
37 White Station Tower Office 247,718 Fee 1967 1996
38 Holiday Inn New Orleans Veterans Hotel 222 Fee 1973 1996
39 The Links at Bixby Multifamily 324 Fee 1997 N/A
40 Southwood Apartments Multifamily 358 Fee 1964 1998
41 The Shoppes at Longwood Retail 136,200 Fee 1991 N/A
42 Edentree Apartments Multifamily 360 Fee 1983 N/A
43 Becker Village Mall Retail 305,629 Fee 1979 N/A
44 Tiffany Square Office 179,910 Fee 1984 1995
45 The Mint Apartments Multifamily 592 Fee 1980 1982
46 River Park Shopping Center Retail 230,659 Fee 1989 1997
47 Rancho Destino Apartments Multifamily 184 Fee 1998 N/A
48 Conestoga Mobile Home Park Manufactured Housing 581 Fee 1972 1998
49 Huntington Chase Apartments Multifamily 200 Fee 1997 N/A
50 Parkshore Centre Office Building Office 117,151 Fee 1985 1986
51 Kenwood Pavilion Retail 57,144 Fee 1998 N/A
52 Newsome Park Apartments Multifamily 650 Fee 1967 N/A
53 Princeton Court Apartments (1F) Multifamily 90 Fee 1973 N/A
54 Pinewood Estates Apartments (1F) Multifamily 144 Fee 1972 N/A
55 Arbor Court Apartments (1F) Multifamily 108 Fee 1963 1995
<CAPTION>
Occupancy
Rate at Appraised Cut-off Date Maturity/ARD Maturity/ARD
# Property Name U/W (7) Value LTV Ratio Balance LTV Ratio (8)
- ------------- ------- ----- --------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) N/A $ 15,300,000 49.7% $ 6,058,068 39.6%
2 Quality Suites - Charleston (1A) N/A 14,000,000 44.8% 5,005,354 35.8%
3 Courtyard by Marriott - Ann Arbor (1A) N/A 13,900,000 45.2% 5,005,354 36.0%
4 Residence Inn - Phoenix (1A) N/A 16,300,000 38.5% 5,005,354 30.7%
5 Homewood Suites - Cary (1A) N/A 11,800,000 50.9% 4,786,866 40.6%
6 Hampton Inn & Suites - Gwinnett (1A) N/A 11,300,000 47.6% 4,290,304 38.0%
7 Hampton Inn - Raleigh (1A) N/A 11,200,000 47.2% 4,210,854 37.6%
8 Comfort Suites - Orlando (1A) N/A 12,500,000 41.3% 4,111,541 32.9%
9 Hampton Inn - Perimeter (1A) N/A 10,300,000 48.4% 3,972,504 38.6%
10 Hampton Inn - Charlotte, NC (1A) N/A 9,600,000 47.5% 3,634,841 37.9%
11 Courtyard by Marriott - Wilmington (1A) N/A 9,300,000 45.8% 3,396,489 36.5%
12 Hampton Inn - West Springfield (1A) N/A 8,220,000 44.9% 2,939,652 35.8%
13 Homewood Suites - Clear Lake (1A) N/A 8,700,000 39.5% 2,741,027 31.5%
14 Comfort Inn - Charleston (1A) N/A 9,700,000 16.2% 1,251,339 12.9%
15 Kendale Lakes Plaza (1B) 98% 36,100,000 81.9% 26,589,367 73.7%
16 Cypress Creek Station (1B) 99% 30,800,000 77.4% 21,420,185 69.5%
17 Oakwood Business Center (1B) 97% 14,000,000 74.3% 9,345,291 66.8%
18 Westchase Ranch Apartments (1C) 96% 29,150,000 77.3% 19,781,228 67.9%
19 Westwood Village Apartments (1C) 92% 13,000,000 79.9% 9,120,616 70.2%
20 Normandy Woods Apartments (1C) 95% 9,000,000 79.0% 6,244,114 69.4%
21 Savoy Manor Apartments (1C) 97% 6,500,000 79.9% 4,560,308 70.2%
22 San Marin Apartments (1C) 86% 4,600,000 78.5% 3,168,810 68.9%
23 Country Squire Apartments - South 94% 39,000,000 78.1% 25,953,264 66.5%
24 2294 Molly Pitcher Highway (1D) 100% 21,500,000 79.8% 15,214,068 70.8%
25 5015 Campuswood Drive (1D) 100% 9,000,000 79.8% 6,368,679 70.8%
26 5010 Campuswood Drive (1D) 94% 5,600,000 79.8% 3,965,565 70.8%
27 5009 Campuswood Drive (1D) 100% 650,000 79.3% 457,130 70.3%
28 Fair Lakes Promenade 100% 26,700,000 78.5% 18,441,364 69.1%
29 Keller Oaks Apartments (1E) 98% 8,800,000 81.2% 6,234,223 70.8%
30 Sycamore Hill Apartments (1E) 96% 7,625,000 81.2% 5,401,812 70.8%
31 Clarendon Apartments (1E) 95% 5,600,000 81.2% 3,967,233 70.8%
32 Woodchase Condominiums (1E) 99% 2,960,000 81.2% 2,096,966 70.8%
33 Dallas Design Center Portfolio 98% 26,400,000 66.2% 15,460,794 58.6%
34 Assembly Square Office Building 100% 22,800,000 73.5% 14,787,835 64.9%
35 Spicetree Apartments 96% 21,300,000 77.9% 15,107,036 70.9%
36 Lamplighter Mobile Home Park 100% 20,030,000 79.7% 14,055,614 70.2%
37 White Station Tower 93% 22,100,000 70.1% 13,669,002 61.9%
38 Holiday Inn New Orleans Veterans N/A 20,100,000 74.5% 12,360,062 61.5%
39 The Links at Bixby 98% 18,400,000 78.7% 790,074 4.3%
40 Southwood Apartments 94% 18,200,000 79.5% 13,387,850 73.6%
41 The Shoppes at Longwood 100% 17,800,000 79.6% 4,994,453 28.1%
42 Edentree Apartments 96% 14,350,000 80.0% 10,092,763 70.3%
43 Becker Village Mall 99% 14,180,000 79.8% 10,043,046 70.8%
44 Tiffany Square 100% 16,200,000 69.3% 9,920,727 61.2%
45 The Mint Apartments 93% 15,100,000 73.8% 9,780,878 64.8%
46 River Park Shopping Center 94% 13,800,000 79.2% 9,694,230 70.2%
47 Rancho Destino Apartments 100% 12,980,000 78.4% 8,953,537 69.0%
48 Conestoga Mobile Home Park 96% 12,700,000 77.5% 8,570,728 67.5%
49 Huntington Chase Apartments 96% 12,150,000 79.6% 8,425,652 69.3%
50 Parkshore Centre Office Building 100% 12,000,000 77.2% 8,056,376 67.1%
51 Kenwood Pavilion 100% 11,100,000 79.9% 7,853,093 70.7%
52 Newsome Park Apartments 97% 10,700,000 79.1% 7,407,263 69.2%
53 Princeton Court Apartments (1F) 97% 6,500,000 59.7% 3,426,132 52.7%
54 Pinewood Estates Apartments (1F) 95% 4,000,000 59.7% 2,108,388 52.7
55 Arbor Court Apartments (1F) 94% 3,500,000 59.7% 1,844,839 52.7%
<CAPTION>
U/W U/W
# Property Name NCF (9) DSCR (10)
- ------------- ------- ---------
<S> <C> <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 Edentree Apartments 1,150,799 1.22
43 Becker Village Mall 1,209,229 1.26
44 Tiffany Square 1,220,026 1.30
45 The Mint Apartments 1,238,164 1.36
46 River Park Shopping Center 1,171,613 1.27
47 Rancho Destino Apartments 1,002,185 1.20
48 Conestoga Mobile Home Park 1,085,388 1.40
49 Huntington Chase Apartments 972,130 1.27
50 Parkshore Centre Office Building 999,241 1.38
51 Kenwood Pavilion 932,783 1.25
52 Newsome Park Apartments 837,903 1.24
53 Princeton Court Apartments (1F) 221,950 1.23
54 Pinewood Estates Apartments (1F) 178,233 1.23
55 Arbor Court Apartments (1F) 455,933 1.23
</TABLE>
<PAGE>
Descriptions of the Mortgaged Properties
<TABLE>
<CAPTION>
Units/
Sq. Ft./
Rooms/ Fee Simple/ Year Year
# Property Name Property Type Pads Leasehold Built Renovated
- ------------- ------------- ---- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
56 U-Store of Brighton Self Storage Facility (1G) Self Storage 91,650 Fee 1988 N/A
57 U-Store of South Lyon Self Storage Facility (1G) Self Storage 51,450 Fee 1988 N/A
58 U-Store of Saline Self Storage Facility (1G) Self Storage 63,900 Fee 1988 N/A
59 U-Store of Davison Self Storage Facility (1G) Self Storage 46,500 Fee 1988 N/A
60 U-Store of Holly Self Storage Facility (1G) Self Storage 46,700 Fee 1988 N/A
61 U-Store of Jackson Self Storage Facility (1G) Self Storage 32,400 Fee 1988 N/A
62 Birches Apartments Multifamily 296 Fee 1968 N/A
63 Hollywood Plaza Retail 59,383 Fee 1970 1977
64 50-60 Worcester Rd. Mixed Use 59,965 Fee 1986 1986
65 Mahwah Business Park Mixed Use 401,074 Fee 1902 1997
66 Silvernail Shopping Center Retail 110,425 Fee 1985 N/A
67 Tech Center 29 Office/Warehouse Complex Industrial 176,914 Fee 1971 N/A
68 Centre North Shopping Center Retail 80,897 Fee 1997 N/A
69 Cranbrook Centre Apartments (1H) Multifamily 132 Fee 1969 1988
70 Cranbrook Centre Office Buildings (1H) Office 74,816 Fee 1969 1973
71 Lubbock Shopping Parkade Retail 160,393 Fee 1985 N/A
72 Marin Club Apartments Multifamily 220 Fee 1971 N/A
73 Prunedale Center Mixed Use 103,852 Fee 1974 1989
74 Lamplighter Ontario MHP Manufactured Housing 246 Fee 1970 N/A
75 Marycrest Shopping Center (2) Retail 172,030 Fee 1955 1998
76 Elm Plaza Shopping Center Retail 292,426 Leasehold 1969 1997
77 Century Plaza East Retail 121,192 Fee 1990 N/A
78 Keller Springs Tech Center Industrial 80,000 Fee 1998 N/A
79 Mobile Gardens/Holly View Mobile Home Park (1I) Manufactured Housing 277 Fee 1950 1989
80 Stony Chase/Rock Creek Mobile Home Park (1I) Manufactured Housing 104 Fee 1970 N/A
81 Briarwood Manor (1I) Manufactured Housing 99 Fee 1960 1984
82 Tierra Verde Marine Center Mixed Use 82,271 Fee/Leasehold 1963 1994
83 Aurora Square Retail 65,348 Fee 1987 N/A
84 Merchant's Square (3) Retail 102,734 Fee 1987 N/A
85 Northwood Hills Shopping Center Retail 117,287 Fee 1963 1992
86 36th Street Office Center Office 158,737 Fee 1986 N/A
87 Fifth Avenue Apartments Multifamily 198 Fee 1982 N/A
88 The Watermill Apartments Multifamily 191 Fee 1970 1987
89 Brooks Corner Mixed Use 23,839 Fee 1960 1996
90 Hollywood Ardmore Apartments Multifamily 161 Fee 1962 N/A
91 Chasewood Apartments Multifamily 224 Fee 1984 N/A
92 Kingsgate North Mixed Use 92,057 Fee 1989 N/A
93 Fairfield Suites Pittsburgh/Airport Hotel 102 Fee 1997 N/A
94 Seatree Apartments Multifamily 220 Fee 1983 N/A
95 All Aboard Mini Storage - Alhambra Self Storage 76,085 Fee 1993 N/A
96 West Century Center Retail 57,176 Fee 1990 N/A
97 Universal Plaza Retail 43,836 Fee 1997 N/A
98 Crestview Market Place Retail 66,882 Fee 1998 N/A
99 New Franklin Apartments (4) Multifamily 171 Fee 1978 1980
100 Windjammer Apartments Multifamily 200 Fee 1982 N/A
101 Woodlake Village Apartments Multifamily 237 Fee 1974 1995
102 Comfort Inn - Hopewell, VA Hotel 126 Fee 1987 1997
103 Linens N Things Retail 41,520 Fee 1997 N/A
104 The Woods Apartments Multifamily 156 Fee 1969 N/A
105 Moonlight Garden Apartments Multifamily 108 Fee 1991 N/A
106 Sagamore Court Apartments Multifamily 123 Fee 1973 1997
107 Carriage Hill Apartments Multifamily 224 Fee 1972 1976
108 Dowling Office Building Mixed Use 90,046 Fee 1900 1993
109 Main Street Plaza Shopping Center Retail 31,377 Fee 1963 1997
110 Friendship Crossing Apartments Multifamily 223 Fee 1947 1992
<CAPTION>
Occupancy
Rate at Appraised Cut-off Date Maturity/ARD Maturity/ARD
# Property Name U/W (7) Value LTV Ratio Balance LTV Ratio (8)
- ------------- ------- ----- --------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
56 U-Store of Brighton Self Storage Facility (1G) 92% 3,860,000 74.3% 2,362,801 61.2%
57 U-Store of South Lyon Self Storage Facility (1G) 94% 2,050,000 74.3% 1,254,855 61.2%
58 U-Store of Saline Self Storage Facility (1G) 88% 1,870,000 74.3% 1,144,674 61.2%
59 U-Store of Davison Self Storage Facility (1G) 94% 1,340,000 74.3% 820,247 61.2%
60 U-Store of Holly Self Storage Facility (1G) 86% 1,240,000 74.3% 759,035 61.2%
61 U-Store of Jackson Self Storage Facility (1G) 86% 770,000 74.3% 471,336 61.2%
62 Birches Apartments 94% 10,250,000 79.7% 7,235,137 70.6%
63 Hollywood Plaza 98% 10,130,000 79.7% 7,091,987 70.0%
64 50-60 Worcester Rd. 100% 10,000,000 79.9% 7,097,668 71.0%
65 Mahwah Business Park 88% 13,850,000 57.3% 6,444,227 46.5%
66 Silvernail Shopping Center 92% 10,400,000 75.0% 6,858,064 65.9%
67 Tech Center 29 Office/Warehouse Complex 86% 13,000,000 58.4% 6,139,889 47.2%
68 Centre North Shopping Center 97% 9,700,000 78.1% 6,671,488 68.8%
69 Cranbrook Centre Apartments (1H) 94% 7,000,000 70.2% 4,348,557 62.1%
70 Cranbrook Centre Office Buildings (1H) 95% 3,700,000 67.5% 2,207,388 59.7%
71 Lubbock Shopping Parkade 100% 9,950,000 74.0% 6,558,223 65.9%
72 Marin Club Apartments 99% 9,200,000 79.9% 6,539,021 71.1%
73 Prunedale Center 99% 9,500,000 76.3% 6,384,439 67.2%
74 Lamplighter Ontario MHP 96% 9,720,000 73.4% 6,798,572 69.9%
75 Marycrest Shopping Center (2) 90% 8,850,000 79.1% 6,433,091 72.7%
76 Elm Plaza Shopping Center 100% 11,400,000 61.2% 6,222,464 54.6%
77 Century Plaza East 93% 9,100,000 76.0% 6,050,509 66.5%
78 Keller Springs Tech Center 96% 8,630,000 79.8% 6,081,631 70.5%
79 Mobile Gardens/Holly View Mobile Home Park (1I) 100% 4,550,000 79.7% 3,147,228 69.2%
80 Stony Chase/Rock Creek Mobile Home Park (1I) 100% 2,400,000 79.7% 1,660,076 69.2%
81 Briarwood Manor (1I) 78% 1,675,000 79.7% 1,158,594 69.2%
82 Tierra Verde Marine Center 100% 9,300,000 73.5% 5,577,855 60.0%
83 Aurora Square 96% 8,500,000 78.9% 5,861,239 69.0%
84 Merchant's Square (3) 100% 8,800,000 75.0% 5,871,653 66.7%
85 Northwood Hills Shopping Center 98% 9,000,000 72.1% 5,751,187 63.9%
86 36th Street Office Center 100% 9,800,000 66.2% 5,749,293 58.7%
87 Fifth Avenue Apartments 98% 8,000,000 79.9% 5,604,821 70.1%
88 The Watermill Apartments 98% 8,000,000 79.7% 5,607,923 70.1%
89 Brooks Corner 96% 9,000,000 70.0% 5,136,870 57.1%
90 Hollywood Ardmore Apartments 100% 8,500,000 73.4% 5,563,329 65.5%
91 Chasewood Apartments 91% 7,700,000 79.9% 5,412,803 70.3%
92 Kingsgate North 93% 8,200,000 71.5% 5,128,004 62.5%
93 Fairfield Suites Pittsburgh/Airport N/A 8,000,000 72.9% 4,764,798 59.6%
94 Seatree Apartments 91% 7,300,000 79.9% 5,131,618 70.3%
95 All Aboard Mini Storage - Alhambra 97% 7,100,000 79.7% 4,979,081 70.1%
96 West Century Center 90% 7,000,000 79.9% 4,980,535 71.2%
97 Universal Plaza 94% 6,950,000 79.9% 4,930,088 70.9%
98 Crestview Market Place 98% 6,900,000 79.4% 4,796,602 69.5%
99 New Franklin Apartments (4) 100% 6,750,000 79.2% 3,201,212 47.4%
100 Windjammer Apartments 97% 6,900,000 75.7% 4,611,242 66.8%
101 Woodlake Village Apartments 95% 6,750,000 77.3% 4,528,735 67.1%
102 Comfort Inn - Hopewell, VA N/A 6,900,000 75.1% 4,208,252 61.0%
103 Linens N Things 100% 7,000,000 73.5% 2,559,142 36.6%
104 The Woods Apartments 94% 6,310,000 79.9% 4,427,691 70.2%
105 Moonlight Garden Apartments 99% 6,250,000 79.7% 4,430,720 70.9%
106 Sagamore Court Apartments 98% 6,870,000 72.2% 4,325,037 63.0%
107 Carriage Hill Apartments 97% 6,600,000 74.7% 4,308,709 65.3%
108 Dowling Office Building 89% 6,500,000 73.9% 4,238,439 65.2%
109 Main Street Plaza Shopping Center 93% 6,300,000 75.5% 4,161,706 66.1%
110 Friendship Crossing Apartments 97% 5,800,000 79.4% 4,066,176 70.1%
<CAPTION>
U/W U/W
# Property Name NCF (9) DSCR (10)
- ------------- ------- ---------
<S> <C> <C> <C>
56 U-Store of Brighton Self Storage Facility (1G) 320,352 1.30
57 U-Store of South Lyon Self Storage Facility (1G) 191,789 1.30
58 U-Store of Saline Self Storage Facility (1G) 180,049 1.30
59 U-Store of Davison Self Storage Facility (1G) 130,795 1.30
60 U-Store of Holly Self Storage Facility (1G) 96,173 1.30
61 U-Store of Jackson Self Storage Facility (1G) 70,634 1.30
62 Birches Apartments 825,589 1.20
63 Hollywood Plaza 858,507 1.31
64 50-60 Worcester Rd. 857,491 1.26
65 Mahwah Business Park 949,154 1.37
66 Silvernail Shopping Center 801,780 1.25
67 Tech Center 29 Office/Warehouse Complex 1,116,490 1.68
68 Centre North Shopping Center 797,131 1.28
69 Cranbrook Centre Apartments (1H) 558,574 1.35
70 Cranbrook Centre Office Buildings (1H) 279,678 1.35
71 Lubbock Shopping Parkade 814,392 1.28
72 Marin Club Apartments 788,055 1.25
73 Prunedale Center 743,912 1.25
74 Lamplighter Ontario MHP 766,229 1.30
75 Marycrest Shopping Center (2) 787,474 1.30
76 Elm Plaza Shopping Center 744,969 1.24
77 Century Plaza East 819,901 1.48
78 Keller Springs Tech Center 729,895 1.27
79 Mobile Gardens/Holly View Mobile Home Park (1I) 400,244 1.35
80 Stony Chase/Rock Creek Mobile Home Park (1I) 181,846 1.35
81 Briarwood Manor (1I) 140,316 1.35
82 Tierra Verde Marine Center 729,130 1.21
83 Aurora Square 672,017 1.25
84 Merchant's Square (3) 757,642 1.39
85 Northwood Hills Shopping Center 746,198 1.36
86 36th Street Office Center 684,578 1.25
87 Fifth Avenue Apartments 652,519 1.26
88 The Watermill Apartments 651,109 1.25
89 Brooks Corner 713,267 1.26
90 Hollywood Ardmore Apartments 658,696 1.22
91 Chasewood Apartments 637,768 1.26
92 Kingsgate North 628,782 1.34
93 Fairfield Suites Pittsburgh/Airport 735,487 1.40
94 Seatree Apartments 602,905 1.26
95 All Aboard Mini Storage - Alhambra 669,076 1.45
96 West Century Center 613,803 1.27
97 Universal Plaza 647,013 1.37
98 Crestview Market Place 567,639 1.29
99 New Franklin Apartments (4) 669,840 1.34
100 Windjammer Apartments 556,029 1.27
101 Woodlake Village Apartments 565,278 1.40
102 Comfort Inn - Hopewell, VA 742,101 1.63
103 Linens N Things 618,984 1.45
104 The Woods Apartments 581,081 1.41
105 Moonlight Garden Apartments 513,492 1.20
106 Sagamore Court Apartments 534,766 1.36
107 Carriage Hill Apartments 548,218 1.39
108 Dowling Office Building 499,635 1.25
109 Main Street Plaza Shopping Center 483,188 1.27
110 Friendship Crossing Apartments 480,828 1.25
</TABLE>
<PAGE>
Descriptions of the Mortgaged Properties
<TABLE>
<CAPTION>
Units/
Sq. Ft./
Rooms/ Fee Simple/ Year Year
# Property Name Property Type Pads Leasehold Built Renovated
- ------------- ------------- ---- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
111 Spruce Properties (1J) Multifamily 90 Fee 1903 1970
112 Oak Grove Apartments (1J) Multifamily 78 Fee 1919 1976
113 Aldrich Apartments (1J) Multifamily 47 Fee 1905 1997
114 One Bellemead Center Office 87,275 Fee 1987 N/A
115 Denver Tech Center #30 Office 55,664 Fee 1974 N/A
116 Preston Racquet Club Condominiums and Apartments Multifamily 111 Fee 1982 N/A
117 Sand Lake Apartments Multifamily 212 Fee 1987 N/A
118 Mobile Estate Mobile Home Park Manufactured Housing 207 Fee 1962 N/A
119 Colonia Shopping Center Retail 59,709 Fee 1965 N/A
120 Vista Ridge Center III Retail 15,444 Fee 1998 N/A
121 Parkside East Apartments Multifamily 104 Fee 1967 1989
122 Northpark Village Retail 70,600 Fee 1990 N/A
123 Breakers Apartments Multifamily 72 Fee 1998 N/A
124 Picnic Lawn Apartments Multifamily 146 Fee 1986 1997
125 32nd Street and McDowell Road Shopping Center Retail 63,987 Fee 1955 1971
126 Triangle Corporate Center Mixed Use 77,404 Fee 1985 N/A
127 One West Hills Office Office 57,967 Fee 1985 N/A
128 Harper Regency Apartments Multifamily 38 Fee 1991 N/A
129 Heritage Green Shopping Center Retail 66,984 Fee 1983 N/A
130 Captain's Landing Apartments Multifamily 174 Fee 1983 1998
131 All Aboard Mini Storage - Fremont Self Storage 62,165 Fee 1997 N/A
132 Century Plaza Strip Shopping Center (1K) Retail 36,622 Fee 1988 N/A
133 Albany Square Strip Shopping Center (1K) Retail 30,479 Fee 1988 N/A
134 Larrabee Complex Mixed Use 100,304 Fee 1970 1975
135 Cedar Garden Apartments Multifamily 90 Fee 1963 N/A
136 All Aboard Mini Storage - Stanton Self Storage 63,705 Fee 1995 N/A
137 Windtree Apartments - Phase I Multifamily 126 Fee 1980 1993
138 Lake City Mini-Storage Self Storage 48,808 Fee 1988 1989
139 Huntington Mobile Estates Manufactured Housing 105 Fee 1961 1995
140 Everhart Park Shopping Center Retail 63,277 Fee 1985 N/A
141 Rafael North Executive Park Office 30,503 Fee 1981 N/A
142 Westwind Estates Manufactured Housing 156 Leasehold 1985 N/A
143 Hewlett Shopping Center Retail 32,800 Fee 1953 N/A
144 Forest Park Village Multifamily 138 Fee 1971 1994
145 2700 Richards Building Office 31,962 Fee 1991 N/A
146 Lincoln Park Center Retail 46,190 Fee 1987 N/A
147 Cedar Heights Apartments Multifamily 256 Fee 1977 N/A
148 The North Oak Apartments Multifamily 256 Fee 1974 1993
149 Arrowhead Court Apartments Multifamily 126 Fee 1968 N/A
150 The Citibank Building Office 62,632 Fee 1955 1985
151 Petco/Starbucks S/C Retail 12,016 Fee 1990 N/A
152 1870 Ogden Drive Office 25,995 Fee 1964 N/A
153 Woodland Park Office Building Office 51,231 Fee 1978 1991
154 Tree Top Apartments Multifamily 146 Fee 1976 N/A
155 Costa Mesa Mobile Estates Manufactured Housing 104 Fee 1950 1985
156 Greenville Village Mobile Home Park Manufactured Housing 223 Fee 1986 1987
157 Brookwood Village Retail 28,774 Fee 1920 1997
158 Rose Grove Mobile Home Park Manufactured Housing 332 Fee 1960 N/A
159 Little River Shopping Center Retail 51,560 Fee 1985 1996
160 The Amberton Apartments Multifamily 112 Fee 1986 N/A
161 Best Western Worlds of Fun Hotel 86 Fee 1986 N/A
162 All Aboard Mini Storage - Anaheim Self Storage 54,130 Fee 1994 N/A
163 Waterway Crossing Apartments Multifamily 102 Fee 1986 N/A
164 The Borders Building Retail 80,000 Fee 1973 1995
165 Ken-Caryl Business Center Office 50,636 Fee 1981 N/A
<CAPTION>
Occupancy
Rate at Appraised Cut-off Date Maturity/ARD Maturity/ARD
# Property Name U/W (7) Value LTV Ratio Balance LTV Ratio (8)
- ------------- ------- ----- --------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
111 Spruce Properties (1J) 99% 2,580,000 76.4% 1,749,373 67.8%
112 Oak Grove Apartments (1J) 100% 1,920,000 76.7% 1,306,495 68.0%
113 Aldrich Apartments (1J) 100% 1,303,000 80.4% 930,048 71.4%
114 One Bellemead Center 95% 5,900,000 76.1% 4,013,609 68.0%
115 Denver Tech Center #30 98% 6,250,000 71.4% 3,903,131 62.5%
116 Preston Racquet Club Condominiums and Apartments 97% 5,560,000 78.9% 3,905,333 70.2%
117 Sand Lake Apartments 97% 5,500,000 79.3% 1,777,726 32.3%
118 Mobile Estate Mobile Home Park 100% 5,374,000 79.8% 3,334,689 62.1%
119 Colonia Shopping Center 97% 5,500,000 77.8% 3,783,854 68.8%
120 Vista Ridge Center III 90% 5,350,000 79.8% 3,800,001 71.0%
121 Parkside East Apartments 96% 5,300,000 79.1% 3,687,321 69.6%
122 Northpark Village 95% 5,150,000 79.7% 3,593,092 69.8%
123 Breakers Apartments 100% 5,120,000 79.7% 3,558,376 69.5%
124 Picnic Lawn Apartments 100% 5,400,000 73.9% 3,530,044 65.4%
125 32nd Street and McDowell Road Shopping Center 98% 5,010,000 79.6% 3,502,216 69.9%
126 Triangle Corporate Center 84% 5,600,000 71.2% 3,444,193 61.5%
127 One West Hills Office 100% 5,300,000 74.4% 3,471,762 65.5%
128 Harper Regency Apartments 97% 4,970,000 79.3% 1,611,618 32.4%
129 Heritage Green Shopping Center 100% 5,400,000 71.2% 3,401,088 63.0%
130 Captain's Landing Apartments 93% 5,350,000 71.1% 3,508,099 65.6%
131 All Aboard Mini Storage - Fremont 92% 5,150,000 73.5% 3,331,076 64.7%
132 Century Plaza Strip Shopping Center (1K) 100% 2,900,000 72.0% 1,649,553 56.9%
133 Albany Square Strip Shopping Center (1K) 100% 2,270,000 74.5% 1,335,352 58.8%
134 Larrabee Complex 100% 5,640,000 65.3% 2,936,804 52.1%
135 Cedar Garden Apartments 96% 4,600,000 79.9% 3,252,542 70.7%
136 All Aboard Mini Storage - Stanton 92% 4,800,000 76.4% 3,225,883 67.2%
137 Windtree Apartments - Phase I 100% 5,200,000 69.1% 3,184,223 61.2%
138 Lake City Mini-Storage 100% 5,150,000 69.6% 2,893,054 56.2%
139 Huntington Mobile Estates 100% 4,600,000 75.8% 3,072,396 66.8%
140 Everhart Park Shopping Center 98% 4,400,000 79.3% 3,003,433 68.3%
141 Rafael North Executive Park 100% 4,590,000 75.9% 2,887,687 62.9%
142 Westwind Estates 99% 4,310,000 79.8% 3,034,125 70.4%
143 Hewlett Shopping Center 100% 5,650,000 60.0% 2,984,975 52.8%
144 Forest Park Village 96% 4,100,000 79.8% 2,916,071 71.1%
145 2700 Richards Building 100% 4,250,000 76.2% 2,861,511 67.3%
146 Lincoln Park Center 100% 4,240,000 75.8% 2,849,839 67.2%
147 Cedar Heights Apartments 100% 4,100,000 75.5% 2,727,724 66.5%
148 The North Oak Apartments 92% 4,400,000 70.4% 2,720,750 61.8%
149 Arrowhead Court Apartments 98% 3,900,000 79.2% 2,703,539 69.3%
150 The Citibank Building 79% 4,350,000 71.0% 2,703,539 62.2%
151 Petco/Starbucks S/C 100% 4,100,000 75.1% 2,731,205 66.6%
152 1870 Ogden Drive 100% 3,850,000 79.9% 2,728,562 70.9%
153 Woodland Park Office Building 100% 5,000,000 60.9% 2,719,851 54.4%
154 Tree Top Apartments 95% 4,500,000 66.6% 2,652,410 58.9%
155 Costa Mesa Mobile Estates 96% 3,890,000 77.0% 2,613,095 67.2%
156 Greenville Village Mobile Home Park 99% 4,300,000 69.6% 2,436,534 56.7%
157 Brookwood Village 100% 4,300,000 69.5% 2,586,734 60.2%
158 Rose Grove Mobile Home Park 97% 9,150,000 32.7% 2,611,136 28.5%
159 Little River Shopping Center 100% 3,700,000 79.9% 2,508,391 67.8%
160 The Amberton Apartments 94% 3,640,000 79.4% 2,545,700 69.9%
161 Best Western Worlds of Fun N/A 4,300,000 67.2% 2,387,655 55.5%
162 All Aboard Mini Storage - Anaheim 92% 4,450,000 64.9% 2,542,136 57.1%
163 Waterway Crossing Apartments 64% 3,800,000 74.3% 2,164,148 57.0%
164 The Borders Building 50% 8,000,000 35.3% 1,341,480 16.8%
165 Ken-Caryl Business Center 100% 4,000,000 70.5% 2,480,775 62.0%
<CAPTION>
U/W U/W
# Property Name NCF (9) DSCR (10)
- ------------- ------- ---------
<S> <C> <C> <C>
111 Spruce Properties (1J) 243,299 1.43
112 Oak Grove Apartments (1J) 180,059 1.43
113 Aldrich Apartments (1J) 123,685 1.43
114 One Bellemead Center 490,702 1.25
115 Denver Tech Center #30 446,359 1.25
116 Preston Racquet Club Condominiums and Apartments 454,730 1.20
117 Sand Lake Apartments 493,672 1.38
118 Mobile Estate Mobile Home Park 471,208 1.33
119 Colonia Shopping Center 474,687 1.32
120 Vista Ridge Center III 442,929 1.21
121 Parkside East Apartments 418,053 1.22
122 Northpark Village 415,499 1.26
123 Breakers Apartments 410,544 1.27
124 Picnic Lawn Apartments 427,029 1.28
125 32nd Street and McDowell Road Shopping Center 426,854 1.32
126 Triangle Corporate Center 430,309 1.41
127 One West Hills Office 404,673 1.25
128 Harper Regency Apartments 420,535 1.30
129 Heritage Green Shopping Center 418,221 1.29
130 Captain's Landing Apartments 379,610 1.20
131 All Aboard Mini Storage - Fremont 419,044 1.36
132 Century Plaza Strip Shopping Center (1K) 233,802 1.47
133 Albany Square Strip Shopping Center (1K) 216,883 1.47
134 Larrabee Complex 470,600 1.53
135 Cedar Garden Apartments 383,413 1.24
136 All Aboard Mini Storage - Stanton 406,330 1.36
137 Windtree Apartments - Phase I 400,132 1.32
138 Lake City Mini-Storage 422,341 1.36
139 Huntington Mobile Estates 386,163 1.35
140 Everhart Park Shopping Center 381,992 1.37
141 Rafael North Executive Park 360,744 1.29
142 Westwind Estates 344,733 1.21
143 Hewlett Shopping Center 421,364 1.51
144 Forest Park Village 343,163 1.22
145 2700 Richards Building 338,887 1.25
146 Lincoln Park Center 354,000 1.30
147 Cedar Heights Apartments 320,314 1.25
148 The North Oak Apartments 319,862 1.26
149 Arrowhead Court Apartments 313,250 1.27
150 The Citibank Building 344,452 1.39
151 Petco/Starbucks S/C 326,170 1.25
152 1870 Ogden Drive 328,356 1.26
153 Woodland Park Office Building 323,640 1.22
154 Tree Top Apartments 323,814 1.28
155 Costa Mesa Mobile Estates 329,715 1.38
156 Greenville Village Mobile Home Park 392,445 1.48
157 Brookwood Village 323,517 1.41
158 Rose Grove Mobile Home Park 598,395 2.52
159 Little River Shopping Center 316,754 1.27
160 The Amberton Apartments 302,350 1.27
161 Best Western Worlds of Fun 375,710 1.40
162 All Aboard Mini Storage - Anaheim 326,011 1.38
163 Waterway Crossing Apartments 348,203 1.56
164 The Borders Building 380,785 1.22
165 Ken-Caryl Business Center 289,277 1.26
</TABLE>
<PAGE>
Descriptions of the Mortgaged Properties
<TABLE>
<CAPTION>
Units/
Sq. Ft./
Rooms/ Fee Simple/ Year Year
# Property Name Property Type Pads Leasehold Built Renovated
- ------------- ------------- ---- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
166 Alta Vista Mobile Home Park Manufactured Housing 140 Fee 1961 N/A
167 Palm Springs Self Storage Self Storage 68,327 Fee 1998 N/A
168 Holiday Inn Express Auburn Hotel 69 Fee 1995 N/A
169 Caruth Haven Retail Center Retail 16,800 Fee 1976 1991
170 3456 Ridge Property Mixed Use 100,207 Fee 1983 N/A
171 Campus Plaza Shopping Center Retail 26,457 Fee 1995 N/A
172 All Aboard Mini Storage - San Gabriel Self Storage 40,059 Fee 1991 N/A
173 Point O' Woods Apartments Multifamily 150 Fee 1979 N/A
174 Williamsburg on the Lake Apartments Multifamily 150 Fee 1977 N/A
175 Airport Business Center Mixed Use 41,660 Fee 1990 1993
176 Staples - Wilmington Retail 29,049 Fee 1998 N/A
177 Felicita Junction Retail 41,682 Leasehold 1997 N/A
178 The Bordeaux Apartments Multifamily 102 Fee 1968 1997
179 High Point Village I Apartments Multifamily 168 Fee 1980 N/A
180 Assured Self Storage Facility Self Storage 87,400 Fee 1996 1998
181 Staples - Valparaiso Retail 24,049 Fee 1998 N/A
182 Fruitland Grove Family Park Manufactured Housing 99 Fee 1956 N/A
183 Centennial Creek Office Park Office 28,540 Fee 1984 N/A
184 Park Lane Village Apartments (1L) Multifamily 75 Fee 1975 N/A
185 Rynearson Lane Village Apartments (1L) Multifamily 78 Fee 1971 1973
186 Holiday Inn Express Ottawa Hotel 70 Fee 1994 1995
187 Ross Apartments Multifamily 31 Fee 1954 1998
188 339 S. Ardmore Apartments Multifamily 84 Fee 1972 N/A
189 Edgewater Beach Resort Hotel 86 Fee 1962 1980
190 Fondren Hill Apartments Multifamily 96 Fee 1974 1996
191 Cottonwood Plaza Mixed Use 45,778 Fee 1980 N/A
192 Southport Shops Retail 17,763 Fee 1997 N/A
193 Hawthorne Hill Apartments Multifamily 168 Fee 1968 N/A
194 Days Inn Waccamaw Hotel 159 Leasehold 1985 1997
195 Turtle Oaks Apartments Multifamily 81 Fee 1962 1998
196 Linden Place Mobile Home Park Manufactured Housing 162 Fee 1970 N/A
197 Moore Lake Commons Shopping Center Retail 64,905 Fee 1965 1988
198 Imperial Manor West Apartments Multifamily 164 Fee 1963 N/A
199 Brown School Station Apts. Multifamily 112 Fee 1971 N/A
200 South Street Seaport Office Center Office 48,177 Leasehold 1750 1997
201 Hathaway Commerce Center Industrial 67,214 Fee 1987 N/A
202 Corinthian Apartments Multifamily 55 Fee 1969 N/A
203 Walgreen's Drug Store - Swansea Retail 13,905 Fee 1997 1997
204 Catalina Apartments Multifamily 120 Fee 1969 N/A
205 Devonshire Square Retail Center Retail 16,725 Fee 1965 1998
206 1440 N. Vine Street Retail 14,401 Fee 1978 N/A
207 College Park Apartments Multifamily 88 Fee 1994 N/A
208 Country Brooke Apartments Multifamily 108 Fee 1968 1995
209 Hillside View Apartments Multifamily 92 Fee 1986 N/A
210 Benihana Restaurant Retail 8,284 Fee 1977 N/A
211 Crosswinds Apartments Multifamily 64 Fee 1977 1978
212 Imperial Plaza Retail Center Retail 26,337 Fee 1989 N/A
213 Twin Lakes Mobile Home Park Manufactured Housing 254 Fee 1970 1976
214 Antietam Village Center Retail 26,789 Fee 1984 N/A
215 Gateway Shoppes Retail 21,920 Fee 1986 N/A
216 Red Onion Building Mixed Use 8,200 Fee 1892 1984
217 526 South Ardmore Avenue Multifamily 63 Fee 1972 N/A
218 All Aboard Mini Storage - Santa Ana Self Storage 44,830 Fee 1995 N/A
219 Villa East I & II Office 49,725 Fee 1981 N/A
220 Courtyard Apartments Multifamily 84 Fee 1985 N/A
<CAPTION>
Occupancy
Rate at Appraised Cut-off Date Maturity/ARD Maturity/ARD
# Property Name U/W (7) Value LTV Ratio Balance LTV Ratio (8)
- ------------- ------- ----- --------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
166 Alta Vista Mobile Home Park 95% 3,700,000 75.6% 2,607,622 70.5%
167 Palm Springs Self Storage 96% 4,640,000 60.1% 2,288,776 49.3%
168 Holiday Inn Express Auburn N/A 4,500,000 62.0% 2,240,017 49.8%
169 Caruth Haven Retail Center 96% 3,750,000 74.4% 2,449,997 65.3%
170 3456 Ridge Property 100% 3,820,000 73.0% 2,373,224 62.1%
171 Campus Plaza Shopping Center 90% 4,000,000 68.5% 2,414,025 60.4%
172 All Aboard Mini Storage - San Gabriel 95% 3,450,000 79.1% 2,401,881 69.6%
173 Point O' Woods Apartments 98% 3,400,000 79.9% 2,393,359 70.4%
174 Williamsburg on the Lake Apartments 96% 4,500,000 59.9% 2,186,749 48.6%
175 Airport Business Center 84% 3,575,000 75.4% 2,385,573 66.7%
176 Staples - Wilmington 100% 3,350,000 79.9% 2,373,027 70.8%
177 Felicita Junction 100% 3,640,000 73.4% 2,355,559 64.7%
178 The Bordeaux Apartments 97% 3,350,000 79.6% 2,240,376 66.9%
179 High Point Village I Apartments 93% 3,450,000 76.8% 2,356,944 68.3%
180 Assured Self Storage Facility 89% 3,550,000 74.5% 2,184,083 61.5%
181 Staples - Valparaiso 100% 3,200,000 79.9% 2,266,772 70.8%
182 Fruitland Grove Family Park 93% 3,150,000 79.5% 2,214,596 70.3%
183 Centennial Creek Office Park 100% 3,300,000 75.6% 2,180,521 66.1%
184 Park Lane Village Apartments (1L) 95% 1,630,000 82.5% 1,100,747 67.5%
185 Rynearson Lane Village Apartments (1L) 95% 1,570,000 73.0% 937,673 59.7%
186 Holiday Inn Express Ottawa N/A 4,000,000 62.3% 2,000,016 50.0%
187 Ross Apartments 97% 4,225,000 58.9% 2,124,170 50.3%
188 339 S. Ardmore Apartments 96% 3,250,000 76.5% 2,143,794 66.0%
189 Edgewater Beach Resort N/A 4,000,000 62.2% 2,041,014 51.0%
190 Fondren Hill Apartments 99% 3,300,000 73.9% 2,091,383 63.4%
191 Cottonwood Plaza 100% 4,980,000 48.1% 2,107,585 42.3%
192 Southport Shops 91% 3,200,000 74.8% 2,106,786 65.8%
193 Hawthorne Hill Apartments 95% 3,920,000 61.0% 2,062,154 52.6%
194 Days Inn Waccamaw N/A 4,100,000 58.2% 1,907,139 46.5%
195 Turtle Oaks Apartments 99% 3,190,000 73.4% 2,065,134 64.7%
196 Linden Place Mobile Home Park 98% 3,100,000 74.6% 1,866,992 60.2%
197 Moore Lake Commons Shopping Center 98% 3,300,000 69.6% 2,048,801 62.1%
198 Imperial Manor West Apartments 92% 2,900,000 78.7% 1,847,590 63.7%
199 Brown School Station Apts. 94% 2,825,000 79.6% 1,973,636 69.9%
200 South Street Seaport Office Center 99% 4,500,000 49.8% 1,831,032 40.7%
201 Hathaway Commerce Center 99% 3,020,000 72.7% 1,943,800 64.4%
202 Corinthian Apartments 95% 3,810,000 57.4% 1,910,779 50.2%
203 Walgreen's Drug Store - Swansea 100% 2,800,000 78.0% 1,927,620 68.8%
204 Catalina Apartments 100% 2,840,000 76.5% 1,925,166 67.8%
205 Devonshire Square Retail Center 100% 2,915,000 72.7% 1,756,799 60.3%
206 1440 N. Vine Street 100% 2,900,000 72.2% 1,831,431 63.2%
207 College Park Apartments 99% 2,750,000 75.9% 1,830,291 66.6%
208 Country Brooke Apartments 94% 2,625,000 78.3% 1,802,967 68.7%
209 Hillside View Apartments 98% 2,900,000 70.3% 66,343 2.3%
210 Benihana Restaurant 100% 2,650,000 75.4% 1,631,299 61.6%
211 Crosswinds Apartments 98% 2,700,000 73.9% 1,756,049 65.0%
212 Imperial Plaza Retail Center 92% 2,710,000 73.6% 1,646,465 60.8%
213 Twin Lakes Mobile Home Park 99% 2,600,000 76.6% 1,606,233 61.8%
214 Antietam Village Center 86% 2,700,000 73.7% 1,612,189 59.7%
215 Gateway Shoppes 100% 2,680,000 74.2% 1,583,731 59.1%
216 Red Onion Building 100% 4,100,000 48.5% 1,578,149 38.5%
217 526 South Ardmore Avenue 97% 2,500,000 79.4% 1,719,863 68.8%
218 All Aboard Mini Storage - Santa Ana 95% 2,680,000 70.4% 1,660,278 62.0%
219 Villa East I & II 100% 2,900,000 64.4% 1,665,161 57.4%
220 Courtyard Apartments 100% 2,365,000 78.1% 1,626,016 68.8%
<CAPTION>
U/W U/W
# Property Name NCF (9) DSCR (10)
- ------------- ------- ---------
<S> <C> <C> <C>
166 Alta Vista Mobile Home Park 325,939 1.36
167 Palm Springs Self Storage 363,027 1.44
168 Holiday Inn Express Auburn 435,968 1.84
169 Caruth Haven Retail Center 289,029 1.28
170 3456 Ridge Property 295,618 1.47
171 Campus Plaza Shopping Center 319,976 1.42
172 All Aboard Mini Storage - San Gabriel 303,478 1.36
173 Point O' Woods Apartments 297,240 1.32
174 Williamsburg on the Lake Apartments 424,033 1.74
175 Airport Business Center 298,101 1.32
176 Staples - Wilmington 277,738 1.22
177 Felicita Junction 276,898 1.25
178 The Bordeaux Apartments 312,189 1.63
179 High Point Village I Apartments 284,086 1.25
180 Assured Self Storage Facility 319,385 1.30
181 Staples - Valparaiso 263,712 1.22
182 Fruitland Grove Family Park 269,093 1.30
183 Centennial Creek Office Park 259,636 1.30
184 Park Lane Village Apartments (1L) 158,897 1.28
185 Rynearson Lane Village Apartments (1L) 128,642 1.28
186 Holiday Inn Express Ottawa 389,479 1.84
187 Ross Apartments 270,732 1.50
188 339 S. Ardmore Apartments 256,182 1.29
189 Edgewater Beach Resort 317,175 1.40
190 Fondren Hill Apartments 239,799 1.33
191 Cottonwood Plaza 377,424 1.92
192 Southport Shops 249,897 1.27
193 Hawthorne Hill Apartments 270,357 1.49
194 Days Inn Waccamaw 294,722 1.48
195 Turtle Oaks Apartments 233,715 1.20
196 Linden Place Mobile Home Park 277,440 1.39
197 Moore Lake Commons Shopping Center 245,905 1.23
198 Imperial Manor West Apartments 284,864 1.44
199 Brown School Station Apts. 219,798 1.21
200 South Street Seaport Office Center 353,923 1.76
201 Hathaway Commerce Center 249,639 1.35
202 Corinthian Apartments 346,996 2.01
203 Walgreen's Drug Store - Swansea 220,044 1.22
204 Catalina Apartments 238,787 1.30
205 Devonshire Square Retail Center 262,983 1.32
206 1440 N. Vine Street 260,240 1.55
207 College Park Apartments 202,138 1.21
208 Country Brooke Apartments 219,014 1.33
209 Hillside View Apartments 239,606 1.26
210 Benihana Restaurant 228,878 1.27
211 Crosswinds Apartments 227,211 1.39
212 Imperial Plaza Retail Center 263,199 1.43
213 Twin Lakes Mobile Home Park 271,848 1.58
214 Antietam Village Center 232,782 1.34
215 Gateway Shoppes 232,300 1.41
216 Red Onion Building 227,410 1.39
217 526 South Ardmore Avenue 222,603 1.38
218 All Aboard Mini Storage - Santa Ana 202,980 1.32
219 Villa East I & II 206,609 1.28
220 Courtyard Apartments 213,784 1.40
</TABLE>
<PAGE>
Descriptions of the Mortgaged Properties
<TABLE>
<CAPTION>
Units/
Sq. Ft./
Rooms/ Fee Simple/ Year Year
# Property Name Property Type Pads Leasehold Built Renovated
- ------------- ------------- ---- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
221 Sunset View Village Apartments Multifamily 48 Fee 1989 N/A
222 Wilmington Plaza Retail 54,401 Leasehold 1990 N/A
223 The Nations Bank Building Office 33,726 Fee 1983 N/A
224 Quail Ridge Apartments Multifamily 104 Fee 1973 1996
225 Best Western KCI Airport Hotel 43 Fee 1987 N/A
226 Laurel Heights Apartments Multifamily 72 Fee 1984 N/A
227 El Monte Mobile Air Mobile Home Park Manufactured Housing 77 Fee 1951 N/A
228 Harold Gilstrap Shopping Center Retail 83,131 Fee 1982 N/A
229 Lakeside Apartments Multifamily 39 Fee 1995 N/A
230 Park Glen Apartments Multifamily 174 Fee 1971 1992
231 St. Lucie Mobile Village Manufactured Housing 226 Fee 1970 N/A
232 Ravenscroft Apartments Multifamily 75 Fee 1965 N/A
233 Coach Country Corral MHP Manufactured Housing 82 Fee 1971 N/A
234 Seaside Village Shopping Center Retail 50,144 Fee 1985 N/A
235 Sherwood Park Apartments Multifamily 72 Fee 1979 N/A
236 Ravenna Plaza Retail 87,644 Fee 1978 1998
237 Holiday Inn Express Oglesby Hotel 68 Fee 1995 N/A
238 Central/Magnolia Retail Center Mixed Use 17,556 Fee 1940 1989
239 Rolling Hills Estates Manufactured Housing 217 Fee 1971 N/A
240 Saticoy-Royale Apartments Multifamily 65 Fee 1972 N/A
241 Holiday/Park Riviera Mobile Home Park Manufactured Housing 263 Fee 1970 N/A
242 Gottschalk's Department Store Retail 40,000 Fee 1979 1994
243 Justin Apartments Multifamily 25 Fee 1993 N/A
244 Fountain Square Apartments Multifamily 120 Fee 1974 N/A
245 383 St. Johns Place Multifamily 16 Fee 1930 1998
246 Days Inn Hotel 44 Fee 1997 N/A
247 Market Plaza Retail 22,534 Fee 1988 1989
248 Michigan Plaza & Bender Plaza (5) Office 63,331 Fee 1978 1992
249 Mockingbird Park Retail Building Mixed Use 46,802 Leasehold 1986 N/A
250 Poolesville Village Center Retail 16,715 Fee 1989 1990
251 Citadel Square Shopping Center (6) Retail 50,173 Fee 1977 N/A
252 Executive Park Offices Office 23,274 Fee 1983 N/A
253 Sherwood Mobile Home Estates Manufactured Housing 206 Fee 1968 1985
254 Ware's Van & Storage Co. Industrial 56,600 Fee 1973 1986
255 Sunrise Terrace Mobile Home Park Manufactured Housing 54 Fee 1962 1965
256 Best Western Country Inn North Hotel 44 Fee 1988 N/A
257 Woodlake Resort Village Apartments Multifamily 50 Fee 1986 1994
258 Plantation Pines Apartments Multifamily 88 Fee 1973 1996
259 Pacific Mini Storage Self Storage 65,763 Fee 1967 1994
260 Sunridge Apartments Multifamily 99 Fee 1971 1996
261 Courtyards of Granbury Mixed Use 47,340 Fee 1985 1992
262 Parkside Place Apartments Multifamily 84 Fee 1971 1997
263 University Apartments Multifamily 62 Fee 1954 1998
264 Isaqueena Village Apartments Multifamily 60 Fee 1972 1994
265 Turtle Dove I Apartments Multifamily 79 Fee 1972 1997
266 Carson Gardens Mobile Home Park Manufactured Housing 98 Fee 1934 1955
267 Valerie Apartments Multifamily 64 Fee 1964 N/A
268 Huddersfield Apartments Multifamily 31 Fee 1940 1998
269 1457 & 1519 - 1527 Park Road, NW Multifamily 78 Fee 1909 1997
270 Winter Garden Village Apartments Multifamily 64 Fee 1972 N/A
271 Long Point Plaza Apartments Multifamily 85 Fee 1960 N/A
272 The Place of Tempe Apartments Multifamily 30 Fee 1964 1998
273 Valley Garden Apartments Multifamily 48 Fee 1962 1998
274 Devereaux Apartments Multifamily 59 Fee 1968 1998
275 Bloomingdale Shopping Center Retail 11,000 Fee 1989 N/A
<CAPTION>
Occupancy
Rate at Appraised Cut-off Date Maturity/ARD Maturity/ARD
# Property Name U/W (7) Value LTV Ratio Balance LTV Ratio (8)
- ------------- ------- ----- --------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
221 Sunset View Village Apartments 92% 2,320,000 79.6% 1,609,123 69.4%
222 Wilmington Plaza 100% 2,800,000 65.8% 1,632,323 58.3%
223 The Nations Bank Building 100% 3,400,000 54.1% 1,293,129 38.0%
224 Quail Ridge Apartments 94% 2,410,000 75.9% 1,601,117 66.4%
225 Best Western KCI Airport N/A 2,750,000 66.2% 1,504,958 54.7%
226 Laurel Heights Apartments 97% 2,250,000 79.6% 1,561,037 69.4%
227 El Monte Mobile Air Mobile Home Park 96% 2,300,000 77.8% 1,581,038 68.7%
228 Harold Gilstrap Shopping Center 97% 2,600,000 68.7% 1,438,079 55.3%
229 Lakeside Apartments 100% 2,775,000 64.2% 488,843 17.6%
230 Park Glen Apartments 99% 2,700,000 64.6% 1,522,134 56.4%
231 St. Lucie Mobile Village 90% 2,800,000 62.3% 1,405,453 50.2%
232 Ravenscroft Apartments 92% 2,350,000 74.1% 1,507,294 64.1%
233 Coach Country Corral MHP 100% 2,375,000 73.0% 1,408,622 59.3%
234 Seaside Village Shopping Center 83% 3,000,000 57.4% 1,416,496 47.2%
235 Sherwood Park Apartments 99% 2,600,000 65.2% 1,315,427 50.6%
236 Ravenna Plaza 100% 2,860,000 59.3% 1,396,966 48.8%
237 Holiday Inn Express Oglesby N/A 2,900,000 58.4% 1,360,010 46.9%
238 Central/Magnolia Retail Center 100% 2,260,000 74.7% 1,476,474 65.3%
239 Rolling Hills Estates 92% 2,340,000 72.1% 1,371,077 58.6%
240 Saticoy-Royale Apartments 100% 2,200,000 75.7% 1,465,973 66.6%
241 Holiday/Park Riviera Mobile Home Park 99% 2,060,000 79.5% 1,336,090 64.9%
242 Gottschalk's Department Store 100% 2,300,000 69.7% 1,307,661 56.9%
243 Justin Apartments 100% 2,425,000 65.9% 1,404,476 57.9%
244 Fountain Square Apartments 83% 2,200,000 72.5% 1,289,701 58.6%
245 383 St. Johns Place 96% 2,000,000 79.7% 1,396,851 69.8%
246 Days Inn N/A 2,750,000 57.9% 1,301,094 47.3%
247 Market Plaza 100% 2,500,000 62.6% 1,118,106 44.7%
248 Michigan Plaza & Bender Plaza (5) 90% 2,625,000 58.9% 1,273,430 48.5%
249 Mockingbird Park Retail Building 96% 3,000,000 51.2% 1,335,877 44.5%
250 Poolesville Village Center 100% 1,910,000 79.6% 1,347,233 70.5%
251 Citadel Square Shopping Center (6) 98% 2,150,000 69.8% 1,344,797 62.5%
252 Executive Park Offices 95% 1,925,000 77.9% 1,333,007 69.2%
253 Sherwood Mobile Home Estates 94% 1,900,000 78.6% 1,204,511 63.4%
254 Ware's Van & Storage Co. 100% 2,000,000 74.5% 1,048,641 52.4%
255 Sunrise Terrace Mobile Home Park 100% 1,850,000 78.1% 1,266,897 68.5%
256 Best Western Country Inn North N/A 2,100,000 68.8% 1,193,416 56.8%
257 Woodlake Resort Village Apartments 94% 1,800,000 77.4% 1,230,897 68.4%
258 Plantation Pines Apartments 95% 2,000,000 67.4% 1,105,986 55.3%
259 Pacific Mini Storage 86% 2,200,000 61.2% 1,112,243 50.6%
260 Sunridge Apartments 95% 1,830,000 73.3% 1,099,857 60.1%
261 Courtyards of Granbury 96% 1,800,000 72.0% 1,155,032 64.2%
262 Parkside Place Apartments 99% 1,800,000 71.7% 892,842 49.6%
263 University Apartments 92% 1,700,000 74.0% 1,019,316 60.0%
264 Isaqueena Village Apartments 90% 1,730,000 71.9% 1,084,349 62.7%
265 Turtle Dove I Apartments 100% 1,730,000 70.8% 1,000,027 57.8%
266 Carson Gardens Mobile Home Park 99% 1,550,000 76.9% 1,056,336 68.2%
267 Valerie Apartments 100% 1,340,000 79.9% 869,969 64.9%
268 Huddersfield Apartments 100% 1,500,000 70.6% 863,822 57.6%
269 1457 & 1519 - 1527 Park Road, NW 96% 1,580,000 66.4% 858,954 54.4%
270 Winter Garden Village Apartments 98% 1,425,000 70.0% 812,179 57.0%
271 Long Point Plaza Apartments 96% 1,240,000 76.7% 665,406 53.7%
272 The Place of Tempe Apartments 100% 1,200,000 74.9% 734,084 61.2%
273 Valley Garden Apartments 96% 1,500,000 59.8% 731,100 48.7%
274 Devereaux Apartments 95% 1,130,000 78.5% 727,067 64.3%
275 Bloomingdale Shopping Center 91% 1,100,000 72.5% 649,743 59.1%
<CAPTION>
U/W U/W
# Property Name NCF (9) DSCR (10)
- ------------- ------- ---------
<S> <C> <C> <C>
221 Sunset View Village Apartments 175,789 1.21
222 Wilmington Plaza 194,476 1.25
223 The Nations Bank Building 273,705 1.50
224 Quail Ridge Apartments 195,528 1.34
225 Best Western KCI Airport 236,864 1.40
226 Laurel Heights Apartments 206,258 1.47
227 El Monte Mobile Air Mobile Home Park 218,879 1.48
228 Harold Gilstrap Shopping Center 259,819 1.71
229 Lakeside Apartments 231,063 1.38
230 Park Glen Apartments 193,547 1.40
231 St. Lucie Mobile Village 214,430 1.43
232 Ravenscroft Apartments 192,877 1.45
233 Coach Country Corral MHP 198,945 1.32
234 Seaside Village Shopping Center 204,940 1.30
235 Sherwood Park Apartments 188,722 1.36
236 Ravenna Plaza 195,219 1.25
237 Holiday Inn Express Oglesby 247,822 1.72
238 Central/Magnolia Retail Center 181,971 1.35
239 Rolling Hills Estates 224,339 1.52
240 Saticoy-Royale Apartments 184,516 1.35
241 Holiday/Park Riviera Mobile Home Park 209,835 1.44
242 Gottschalk's Department Store 195,623 1.37
243 Justin Apartments 158,407 1.21
244 Fountain Square Apartments 190,882 1.38
245 383 St. Johns Place 162,275 1.27
246 Days Inn 201,447 1.41
247 Market Plaza 220,836 1.54
248 Michigan Plaza & Bender Plaza (5) 189,622 1.33
249 Mockingbird Park Retail Building 154,133 1.28
250 Poolesville Village Center 171,998 1.34
251 Citadel Square Shopping Center (6) 193,811 1.37
252 Executive Park Offices 160,925 1.25
253 Sherwood Mobile Home Estates 184,157 1.43
254 Ware's Van & Storage Co. 183,158 1.24
255 Sunrise Terrace Mobile Home Park 157,819 1.35
256 Best Western Country Inn North 187,874 1.40
257 Woodlake Resort Village Apartments 157,372 1.37
258 Plantation Pines Apartments 156,306 1.27
259 Pacific Mini Storage 179,744 1.44
260 Sunridge Apartments 147,157 1.21
261 Courtyards of Granbury 141,596 1.20
262 Parkside Place Apartments 164,658 1.34
263 University Apartments 157,654 1.43
264 Isaqueena Village Apartments 151,341 1.55
265 Turtle Dove I Apartments 146,577 1.33
266 Carson Gardens Mobile Home Park 138,047 1.39
267 Valerie Apartments 146,951 1.55
268 Huddersfield Apartments 132,650 1.40
269 1457 & 1519 - 1527 Park Road, NW 125,535 1.32
270 Winter Garden Village Apartments 111,930 1.26
271 Long Point Plaza Apartments 123,475 1.33
272 The Place of Tempe Apartments 109,070 1.35
273 Valley Garden Apartments 117,741 1.48
274 Devereaux Apartments 110,125 1.36
275 Bloomingdale Shopping Center 91,276 1.29
</TABLE>
<PAGE>
Descriptions of the Mortgaged Properties
<TABLE>
<CAPTION>
Units/
Sq. Ft./
Rooms/ Fee Simple/ Year Year
# Property Name Property Type Pads Leasehold Built Renovated
- ------------- ------------- ---- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
276 Cottonwood Apartments Multifamily 30 Fee 1983 1997
277 Royal North Apartments Multifamily 85 Fee 1973 1997
278 Turtle Dove II Apartments Multifamily 40 Fee 1968 N/A
Total/Weighted Average
Maximum:
Minimum:
<CAPTION>
Occupancy
Rate at Appraised Cut-off Date Maturity/ARD Maturity/ARD
# Property Name U/W (7) Value LTV Ratio Balance LTV Ratio (8)
- ------------- ------- ----- --------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
276 Cottonwood Apartments 93% 1,160,000 68.7% 38,784 3.3%
277 Royal North Apartments 98% 980,000 73.3% 596,384 60.9%
278 Turtle Dove II Apartments 95% 1,000,000 67.5% 551,036 55.1%
------------------------------------------------------------------------------------
Total/Weighted Average 96% $ 1,740,067,000 73.2% $1,043,484,197 62.6%
====================================================================================
$ 26,589,367 73.7%
Maximum: 100% $ 39,000,000 82.5% $ 38,784 12.9%
Minimum: 50% $ 650,000 16.2%
<CAPTION>
U/W U/W
# Property Name NCF (9) DSCR (10)
- ------------- ------- ---------
<S> <C> <C> <C>
276 Cottonwood Apartments 111,566 1.35
277 Royal North Apartments 100,651 1.50
278 Turtle Dove II Apartments 90,279 1.49
--------------------------------------------------------------------------------
Total/Weighted Average 96% $ 1,740,067,000 73.2% $145,267,700 1.39 x
================================================================================
Maximum: 100% $ 39,000,000 82.5% $ 3,241,994 2.54 x
Minimum: 50% $ 650,000 16.2% $ 65,758 1.20 x
</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 Plaza & 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 Percentage of
Mortgage Loan Principal Cut-off Date Initial
# Property Name Seller Balance Balance (7) Pool Balance
- ------------- ------------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) G.E. Capital Access $ 7,625,000 $ 7,598,233 0.6%
2 Quality Suites - Charleston (1A) G.E. Capital Access 6,300,000 6,277,885 0.5%
3 Courtyard by Marriott - Ann Arbor (1A) G.E. Capital Access 6,300,000 6,277,885 0.5%
4 Residence Inn - Phoenix (1A) G.E. Capital Access 6,300,000 6,277,885 0.5%
5 Homewood Suites - Cary (1A) G.E. Capital Access 6,025,000 6,003,850 0.5%
6 Hampton Inn & Suites - Gwinnett (1A) G.E. Capital Access 5,400,000 5,381,044 0.4%
7 Hampton Inn - Raleigh (1A) G.E. Capital Access 5,300,000 5,281,395 0.4%
8 Comfort Suites - Orlando (1A) G.E. Capital Access 5,175,000 5,156,834 0.4%
9 Hampton Inn - Perimeter (1A) G.E. Capital Access 5,000,000 4,982,448 0.4%
10 Hampton Inn - Charlotte, NC (1A) G.E. Capital Access 4,575,000 4,558,940 0.4%
11 Courtyard by Marriott - Wilmington (1A) G.E. Capital Access 4,275,000 4,259,993 0.3%
12 Hampton Inn - West Springfield (1A) G.E. Capital Access 3,700,000 3,687,012 0.3%
13 Homewood Suites - Clear Lake (1A) G.E. Capital Access 3,450,000 3,437,889 0.3%
14 Comfort Inn - Charleston (1A) G.E. Capital Access 1,575,000 1,569,471 0.1%
15 Kendale Lakes Plaza (1B) G.E. Capital Access 29,613,000 29,580,388 2.4%
16 Cypress Creek Station (1B) G.E. Capital Access 23,856,000 23,829,728 1.9%
17 Oakwood Business Center (1B) G.E. Capital Access 10,408,000 10,396,538 0.8%
18 Westchase Ranch Apartments (1C) Column 22,556,014 22,529,265 1.8%
19 Westwood Village Apartments (1C) Column 10,400,000 10,387,667 0.8%
20 Normandy Woods Apartments (1C) Column 7,120,000 7,111,557 0.6%
21 Savoy Manor Apartments (1C) Column 5,200,000 5,193,833 0.4%
22 San Marin Apartments (1C) Column 3,613,312 3,609,027 0.3%
23 Country Squire Apartments - South G.E. Capital Access 30,500,000 30,446,295 2.5%
24 2294 Molly Pitcher Highway (1D) Column 17,200,000 17,149,044 1.4%
25 5015 Campuswood Drive (1D) Column 7,200,000 7,178,670 0.6%
26 5010 Campuswood Drive (1D) Column 4,483,200 4,469,918 0.4%
27 5009 Campuswood Drive (1D) Column 516,800 515,269 0.0%
28 Fair Lakes Promenade G.E. Capital Access 21,000,000 20,950,739 1.7%
29 Keller Oaks Apartments (1E) G.E. Capital Access 7,167,501 7,143,351 0.6%
30 Sycamore Hill Apartments (1E) G.E. Capital Access 6,210,476 6,189,551 0.5%
31 Clarendon Apartments (1E) G.E. Capital Access 4,561,137 4,545,769 0.4%
32 Woodchase Condominiums (1E) G.E. Capital Access 2,410,887 2,402,764 0.2%
33 Dallas Design Center Portfolio G.E. Capital Access 17,500,000 17,479,737 1.4%
34 Assembly Square Office Building G.E. Capital Access 16,782,000 16,753,085 1.4%
35 Spicetree Apartments G.E. Capital Access 16,640,000 16,582,208 1.3%
36 Lamplighter Mobile Home Park G.E. Capital Access 16,000,000 15,971,898 1.3%
37 White Station Tower Column 15,500,000 15,500,000 1.3%
38 Holiday Inn New Orleans Veterans Column 15,000,000 14,977,561 1.2%
39 The Links at Bixby G.E. Capital Access 14,700,000 14,487,822 1.2%
40 Southwood Apartments G.E. Capital Access 14,500,000 14,474,162 1.2%
41 The Shoppes at Longwood Column 14,200,000 14,163,600 1.1%
42 Edentree Apartments G.E. Capital Access 11,480,000 11,480,000 0.9%
43 Becker Village Mall G.E. Capital Access 11,344,000 11,319,037 0.9%
44 Tiffany Square Column 11,250,000 11,230,709 0.9%
45 The Mint Apartments Column 11,150,000 11,136,789 0.9%
46 River Park Shopping Center G.E. Capital Access 10,950,000 10,925,904 0.9%
47 Rancho Destino Apartments G.E. Capital Access 10,200,000 10,181,999 0.8%
48 Conestoga Mobile Home Park G.E. Capital Access 9,875,000 9,841,203 0.8%
49 Huntington Chase Apartments G.E. Capital Access 9,700,000 9,666,997 0.8%
50 Parkshore Centre Office Building Column 9,300,000 9,267,733 0.7%
51 Kenwood Pavilion G.E. Capital Access 8,880,000 8,869,751 0.7%
52 Newsome Park Apartments G.E. Capital Access 8,500,000 8,459,047 0.7%
53 Princeton Court Apartments (1F) G.E. Capital Access 3,884,214 3,877,564 0.3%
54 Pinewood Estates Apartments (1F) G.E. Capital Access 2,390,286 2,386,193 0.2%
55 Arbor Court Apartments (1F) G.E. Capital Access 2,091,500 2,087,919 0.2%
56 U-Store of Brighton Self Storage Facility (1G) G.E. Capital Access 2,871,590 2,867,278 0.2%
57 U-Store of South Lyon Self Storage Facility (1G) G.E. Capital Access 1,525,067 1,522,777 0.1%
58 U-Store of Saline Self Storage Facility (1G) G.E. Capital Access 1,391,159 1,389,070 0.1%
59 U-Store of Davison Self Storage Facility (1G) G.E. Capital Access 996,873 995,376 0.1%
60 U-Store of Holly Self Storage Facility (1G) G.E. Capital Access 922,480 921,094 0.1%
61 U-Store of Jackson Self Storage Facility (1G) G.E. Capital Access 572,830 571,970 0.0%
62 Birches Apartments G.E. Capital Access 8,186,000 8,172,163 0.7%
63 Hollywood Plaza G.E. Capital Access 8,100,000 8,074,019 0.7%
64 50-60 Worcester Rd. G.E. Capital Access 8,000,000 7,990,860 0.6%
65 Mahwah Business Park Column 8,000,000 7,935,363 0.6%
66 Silvernail Shopping Center G.E. Capital Access 7,808,000 7,798,787 0.6%
67 Tech Center 29 Office/Warehouse Complex Column 7,600,000 7,588,003 0.6%
<CAPTION>
Original Remaining Original Remaining
Amortization Amortization Term to Term to
Term Term Maturity Maturity Mortgage
# Property Name (months) (months) (months)(8) (months)(8) Rate
- ------------- ------------ ------------ ----------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) 300 297 120 117 7.375%
2 Quality Suites - Charleston (1A) 300 297 120 117 7.375%
3 Courtyard by Marriott - Ann Arbor (1A) 300 297 120 117 7.375%
4 Residence Inn - Phoenix (1A) 300 297 120 117 7.375%
5 Homewood Suites - Cary (1A) 300 297 120 117 7.375%
6 Hampton Inn & Suites - Gwinnett (1A) 300 297 120 117 7.375%
7 Hampton Inn - Raleigh (1A) 300 297 120 117 7.375%
8 Comfort Suites - Orlando (1A) 300 297 120 117 7.375%
9 Hampton Inn - Perimeter (1A) 300 297 120 117 7.375%
10 Hampton Inn - Charlotte, NC (1A) 300 297 120 117 7.375%
11 Courtyard by Marriott - Wilmington (1A) 300 297 120 117 7.375%
12 Hampton Inn - West Springfield (1A) 300 297 120 117 7.375%
13 Homewood Suites - Clear Lake (1A) 300 297 120 117 7.375%
14 Comfort Inn - Charleston (1A) 300 297 120 117 7.375%
15 Kendale Lakes Plaza (1B) 360 359 120 119 8.180%
16 Cypress Creek Station (1B) 360 359 120 119 8.180%
17 Oakwood Business Center (1B) 360 359 120 119 8.180%
18 Westchase Ranch Apartments (1C) 360 359 120 119 7.220%
19 Westwood Village Apartments (1C) 360 359 120 119 7.220%
20 Normandy Woods Apartments (1C) 360 359 120 119 7.220%
21 Savoy Manor Apartments (1C) 360 359 120 119 7.220%
22 San Marin Apartments (1C) 360 359 120 119 7.220%
23 Country Squire Apartments - South 360 358 120 118 6.650%
24 2294 Molly Pitcher Highway (1D) 360 356 120 116 7.550%
25 5015 Campuswood Drive (1D) 360 356 120 116 7.550%
26 5010 Campuswood Drive (1D) 360 356 120 116 7.550%
27 5009 Campuswood Drive (1D) 360 356 120 116 7.550%
28 Fair Lakes Promenade 360 357 120 117 7.260%
29 Keller Oaks Apartments (1E) 360 356 120 116 6.900%
30 Sycamore Hill Apartments (1E) 360 356 120 116 6.900%
31 Clarendon Apartments (1E) 360 356 120 116 6.900%
32 Woodchase Condominiums (1E) 360 356 120 116 6.900%
33 Dallas Design Center Portfolio 360 359 120 119 7.510%
34 Assembly Square Office Building 360 358 120 118 7.400%
35 Spicetree Apartments 360 356 84 80 6.750%
36 Lamplighter Mobile Home Park 360 358 120 118 7.280%
37 White Station Tower 360 360 120 120 7.410%
38 Holiday Inn New Orleans Veterans 300 299 120 119 8.000%
39 The Links at Bixby 300 288 300 288 6.940%
40 Southwood Apartments 360 358 84 82 7.190%
41 The Shoppes at Longwood 300 298 240 238 6.780%
42 Edentree Apartments 360 360 120 120 7.290%
43 Becker Village Mall 360 357 120 117 7.580%
44 Tiffany Square 360 358 120 118 7.430%
45 The Mint Apartments 360 359 120 119 7.230%
46 River Park Shopping Center 360 357 120 117 7.580%
47 Rancho Destino Apartments 360 358 120 118 7.250%
48 Conestoga Mobile Home Park 360 356 120 116 6.820%
49 Huntington Chase Apartments 360 356 120 116 6.850%
50 Parkshore Centre Office Building 360 356 120 116 6.750%
51 Kenwood Pavilion 360 359 120 119 7.550%
52 Newsome Park Apartments 360 354 120 114 6.970%
53 Princeton Court Apartments (1F) 360 358 120 118 7.440%
54 Pinewood Estates Apartments (1F) 360 358 120 118 7.440%
55 Arbor Court Apartments (1F) 360 358 120 118 7.440%
56 U-Store of Brighton Self Storage Facility (1G) 300 299 120 119 7.950%
57 U-Store of South Lyon Self Storage Facility (1G) 300 299 120 119 7.950%
58 U-Store of Saline Self Storage Facility (1G) 300 299 120 119 7.950%
59 U-Store of Davison Self Storage Facility (1G) 300 299 120 119 7.950%
60 U-Store of Holly Self Storage Facility (1G) 300 299 120 119 7.950%
61 U-Store of Jackson Self Storage Facility (1G) 300 299 120 119 7.950%
62 Birches Apartments 360 358 120 118 7.520%
63 Hollywood Plaza 360 356 120 116 7.150%
64 50-60 Worcester Rd. 360 359 120 119 7.680%
65 Mahwah Business Park 300 293 120 113 7.220%
66 Silvernail Shopping Center 360 359 120 119 7.280%
67 Tech Center 29 Office/Warehouse Complex 300 299 120 119 7.330%
<CAPTION>
First
Monthly Payment Maturity
# Property Name Payment Date Date ARD (9)
- ------------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) $ 55,729.57 1/1/99 12/1/23 12/1/08
2 Quality Suites - Charleston (1A) 46,045.42 1/1/99 12/1/23 12/1/08
3 Courtyard by Marriott - Ann Arbor (1A) 46,045.42 1/1/99 12/1/23 12/1/08
4 Residence Inn - Phoenix (1A) 46,045.42 1/1/99 12/1/23 12/1/08
5 Homewood Suites - Cary (1A) 44,035.50 1/1/99 12/1/23 12/1/08
6 Hampton Inn & Suites - Gwinnett (1A) 39,467.50 1/1/99 12/1/23 12/1/08
7 Hampton Inn - Raleigh (1A) 38,736.62 1/1/99 12/1/23 12/1/08
8 Comfort Suites - Orlando (1A) 37,823.02 1/1/99 12/1/23 12/1/08
9 Hampton Inn - Perimeter (1A) 36,543.98 1/1/99 12/1/23 12/1/08
10 Hampton Inn - Charlotte, NC (1A) 33,437.74 1/1/99 12/1/23 12/1/08
11 Courtyard by Marriott - Wilmington (1A) 31,245.11 1/1/99 12/1/23 12/1/08
12 Hampton Inn - West Springfield (1A) 27,042.55 1/1/99 12/1/23 12/1/08
13 Homewood Suites - Clear Lake (1A) 25,215.35 1/1/99 12/1/23 12/1/08
14 Comfort Inn - Charleston (1A) 11,511.35 1/1/99 12/1/23 12/1/08
15 Kendale Lakes Plaza (1B) 221,016.99 3/1/99 2/1/29 2/1/09
16 Cypress Creek Station (1B) 178,049.55 3/1/99 2/1/29 2/1/09
17 Oakwood Business Center (1B) 77,680.24 3/1/99 2/1/29 2/1/09
18 Westchase Ranch Apartments (1C) 153,413.07 3/1/99 2/1/09
19 Westwood Village Apartments (1C) 70,734.84 3/1/99 2/1/09
20 Normandy Woods Apartments (1C) 48,426.16 3/1/99 2/1/09
21 Savoy Manor Apartments (1C) 35,367.42 3/1/99 2/1/09
22 San Marin Apartments (1C) 24,575.68 3/1/99 2/1/09
23 Country Squire Apartments - South 195,799.29 2/1/99 1/1/09
24 2294 Molly Pitcher Highway (1D) 120,854.33 12/1/98 11/1/08
25 5015 Campuswood Drive (1D) 50,590.19 12/1/98 11/1/08
26 5010 Campuswood Drive (1D) 31,500.82 12/1/98 11/1/08
27 5009 Campuswood Drive (1D) 3,631.25 12/1/98 11/1/08
28 Fair Lakes Promenade 143,399.48 1/1/99 12/1/08
29 Keller Oaks Apartments (1E) 47,205.17 12/1/98 11/1/28 11/1/08
30 Sycamore Hill Apartments (1E) 40,902.21 12/1/98 11/1/28 11/1/08
31 Clarendon Apartments (1E) 30,039.65 12/1/98 11/1/28 11/1/08
32 Woodchase Condominiums (1E) 15,878.10 12/1/98 11/1/28 11/1/08
33 Dallas Design Center Portfolio 122,482.39 3/1/99 2/1/09
34 Assembly Square Office Building 116,195.18 2/1/99 1/1/09
35 Spicetree Apartments 107,926.72 12/1/98 11/1/28 11/1/05
36 Lamplighter Mobile Home Park 109,473.97 2/1/99 1/1/09
37 White Station Tower 107,424.63 4/1/99 3/1/09
38 Holiday Inn New Orleans Veterans 115,772.43 3/1/99 2/1/09
39 The Links at Bixby 103,334.57 4/1/98 3/1/23
40 Southwood Apartments 98,326.15 2/1/99 1/1/06
41 The Shoppes at Longwood 98,378.61 2/1/99 1/1/19
42 Edentree Apartments 78,625.54 4/1/99 3/1/09
43 Becker Village Mall 79,941.24 1/1/99 12/1/08
44 Tiffany Square 78,123.10 2/1/99 1/1/09
45 The Mint Apartments 75,911.46 3/1/99 2/1/09
46 River Park Shopping Center 77,164.72 1/1/99 12/1/08
47 Rancho Destino Apartments 69,581.98 2/1/99 1/1/09
48 Conestoga Mobile Home Park 64,509.22 12/1/98 11/1/08
49 Huntington Chase Apartments 63,560.14 12/1/98 11/1/08
50 Parkshore Centre Office Building 60,319.62 12/1/98 11/1/08
51 Kenwood Pavilion 62,394.56 3/1/99 2/1/09
52 Newsome Park Apartments 56,379.56 10/1/98 9/1/28 9/1/08
53 Princeton Court Apartments (1F) 26,999.58 2/1/99 1/1/09
54 Pinewood Estates Apartments (1F) 16,615.13 2/1/99 1/1/09
55 Arbor Court Apartments (1F) 14,538.24 2/1/99 1/1/09
56 U-Store of Brighton Self Storage Facility (1G) 22,068.37 3/1/99 2/1/09
57 U-Store of South Lyon Self Storage Facility (1G) 11,720.25 3/1/99 2/1/09
58 U-Store of Saline Self Storage Facility (1G) 10,691.15 3/1/99 2/1/09
59 U-Store of Davison Self Storage Facility (1G) 7,661.04 3/1/99 2/1/09
60 U-Store of Holly Self Storage Facility (1G) 7,089.32 3/1/99 2/1/09
61 U-Store of Jackson Self Storage Facility (1G) 4,402.24 3/1/99 2/1/09
62 Birches Apartments 57,349.85 2/1/99 1/1/09
63 Hollywood Plaza 54,707.95 12/1/98 11/1/28 11/1/08
64 50-60 Worcester Rd. 56,926.49 3/1/99 2/1/09
65 Mahwah Business Park 57,670.02 9/1/98 8/1/08
66 Silvernail Shopping Center 53,423.29 3/1/99 2/1/09
67 Tech Center 29 Office/Warehouse Complex 55,325.64 3/1/99 2/1/09
<CAPTION>
Prepayment Provision Defeasance
# Property Name as of Origination(10) Option (11)
- ------------- ---------------------- -----------
<S> <C> <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 Edentree Apartments L (9.75), O (0.25) Yes
43 Becker Village Mall L (9.75), O (0.25) Yes
44 Tiffany Square L (9.5), O (0.5) Yes
45 The Mint Apartments L (9.5), O (0.5) Yes
46 River Park Shopping Center L (9.75), O (0.25) Yes
47 Rancho Destino Apartments L (9.75), O (0.25) Yes
48 Conestoga Mobile Home Park L (9.5), O (0.5) Yes
49 Huntington Chase Apartments L (9.75), O (0.25) Yes
50 Parkshore Centre Office Building L (9.5), O (0.5) Yes
51 Kenwood Pavilion L (9.75), O (0.25) Yes
52 Newsome Park Apartments L (9.75), O (0.25) Yes
53 Princeton Court Apartments (1F) L (9.75), O (0.25) Yes
54 Pinewood Estates Apartments (1F) L (9.75), O (0.25) Yes
55 Arbor Court Apartments (1F) L (9.75), O (0.25) Yes
56 U-Store of Brighton Self Storage Facility (1G) L (9.75), O (0.25) Yes
57 U-Store of South Lyon Self Storage Facility (1G) L (9.75), O (0.25) Yes
58 U-Store of Saline Self Storage Facility (1G) L (9.75), O (0.25) Yes
59 U-Store of Davison Self Storage Facility (1G) L (9.75), O (0.25) Yes
60 U-Store of Holly Self Storage Facility (1G) L (9.75), O (0.25) Yes
61 U-Store of Jackson Self Storage Facility (1G) L (9.75), O (0.25) Yes
62 Birches Apartments L (9.75), O (0.25) Yes
63 Hollywood Plaza L (9.75), O (0.25) Yes
64 50-60 Worcester Rd. L (9.75), O (0.25) Yes
65 Mahwah Business Park L (9.5), O (0.5) Yes
66 Silvernail Shopping Center L (9.67), O (0.33) Yes
67 Tech Center 29 Office/Warehouse Complex L (9.5), O (0.5) Yes
</TABLE>
<PAGE>
Characteristics of the Mortgage Loans
<TABLE>
<CAPTION>
Original Percentage of
Mortgage Loan Principal Cut-off Date Initial
# Property Name Seller Balance Balance (7) Pool Balance
- ------------- ------------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
68 Centre North Shopping Center G.E. Capital Access 7,600,000 7,576,100 0.6%
69 Cranbrook Centre Apartments (1H) Column 4,925,000 4,916,622 0.4%
70 Cranbrook Centre Office Buildings (1H) Column 2,500,000 2,495,747 0.2%
71 Lubbock Shopping Parkade G.E. Capital Access 7,378,000 7,365,975 0.6%
72 Marin Club Apartments G.E. Capital Access 7,360,000 7,347,967 0.6%
73 Prunedale Center G.E. Capital Access 7,273,000 7,250,128 0.6%
74 Lamplighter Ontario MHP G.E. Capital Access 7,150,000 7,137,562 0.6%
75 Marycrest Shopping Center (2) Column 7,000,000 7,000,000 0.6%
76 Elm Plaza Shopping Center Column 7,000,000 6,980,077 0.6%
77 Century Plaza East G.E. Capital Access 6,937,000 6,919,868 0.6%
78 Keller Springs Tech Center G.E. Capital Access 6,900,000 6,888,130 0.6%
79 Mobile Gardens/Holly View Mobile Home Park (1I) G.E. Capital Access 3,640,000 3,627,197 0.3%
80 Stony Chase/Rock Creek Mobile Home Park (1I) G.E. Capital Access 1,920,000 1,913,247 0.2%
81 Briarwood Manor (1I) G.E. Capital Access 1,340,000 1,335,287 0.1%
82 Tierra Verde Marine Center Column 6,900,000 6,838,329 0.6%
83 Aurora Square G.E. Capital Access 6,720,000 6,703,404 0.5%
84 Merchant's Square (3) Column 6,600,000 6,600,000 0.5%
85 Northwood Hills Shopping Center G.E. Capital Access 6,500,000 6,492,510 0.5%
86 36th Street Office Center G.E. Capital Access 6,500,000 6,489,065 0.5%
87 Fifth Avenue Apartments G.E. Capital Access 6,400,000 6,388,541 0.5%
88 The Watermill Apartments Column 6,400,000 6,379,593 0.5%
89 Brooks Corner Column 6,300,000 6,300,000 0.5%
90 Hollywood Ardmore Apartments Column 6,250,000 6,236,842 0.5%
91 Chasewood Apartments G.E. Capital Access 6,160,000 6,149,198 0.5%
92 Kingsgate North G.E. Capital Access 5,880,000 5,860,574 0.5%
93 Fairfield Suites Pittsburgh/Airport G.E. Capital Access 5,840,000 5,831,027 0.5%
94 Seatree Apartments G.E. Capital Access 5,840,000 5,829,759 0.5%
95 All Aboard Mini Storage - Alhambra G.E. Capital Access 5,680,000 5,658,494 0.5%
96 West Century Center G.E. Capital Access 5,600,000 5,593,651 0.5%
97 Universal Plaza G.E. Capital Access 5,560,000 5,550,794 0.4%
98 Crestview Market Place G.E. Capital Access 5,500,000 5,481,829 0.4%
99 New Franklin Apartments (4) Column 5,400,000 5,345,280 0.4%
100 Windjammer Apartments Column 5,226,000 5,219,924 0.4%
101 Woodlake Village Apartments Column 5,240,000 5,217,795 0.4%
102 Comfort Inn - Hopewell, VA Column 5,200,000 5,181,769 0.4%
103 Linens N Things G.E. Capital Access 5,200,000 5,142,114 0.4%
104 The Woods Apartments G.E. Capital Access 5,048,000 5,039,048 0.4%
105 Moonlight Garden Apartments G.E. Capital Access 4,987,000 4,978,846 0.4%
106 Sagamore Court Apartments Column 4,970,000 4,960,750 0.4%
107 Carriage Hill Apartments Column 5,940,000 4,927,800 0.4%
108 Dowling Office Building G.E. Capital Access 4,810,000 4,801,712 0.4%
109 Main Street Plaza Shopping Center G.E. Capital Access 4,772,000 4,756,234 0.4%
110 Friendship Crossing Apartments G.E. Capital Access 4,611,000 4,603,093 0.4%
111 Spruce Properties (1J) Column 1,975,000 1,970,671 0.2%
112 Oak Grove Apartments (1J) Column 1,475,000 1,471,767 0.1%
113 Aldrich Apartments (1J) Column 1,050,000 1,047,699 0.1%
114 One Bellemead Center G.E. Capital Access 4,497,000 4,487,741 0.4%
115 Denver Tech Center #30 G.E. Capital Access 4,475,000 4,463,948 0.4%
116 Preston Racquet Club Condominiums and Apartments G.E. Capital Access 4,390,000 4,385,027 0.4%
117 Sand Lake Apartments G.E. Capital Access 4,400,000 4,364,206 0.4%
118 Mobile Estate Mobile Home Park Column 4,300,000 4,289,993 0.3%
119 Colonia Shopping Center G.E. Capital Access 4,284,000 4,279,036 0.3%
120 Vista Ridge Center III G.E. Capital Access 4,275,000 4,268,033 0.3%
121 Parkside East Apartments G.E. Capital Access 4,200,000 4,190,128 0.3%
122 Northpark Village G.E. Capital Access 4,120,000 4,106,388 0.3%
123 Breakers Apartments G.E. Capital Access 4,096,000 4,079,323 0.3%
124 Picnic Lawn Apartments G.E. Capital Access 4,000,000 3,993,174 0.3%
125 32nd Street and McDowell Road Shopping Center G.E. Capital Access 4,000,000 3,987,170 0.3%
126 Triangle Corporate Center G.E. Capital Access 4,000,000 3,985,516 0.3%
127 One West Hills Office G.E. Capital Access 3,950,000 3,943,084 0.3%
128 Harper Regency Apartments G.E. Capital Access 3,975,000 3,942,885 0.3%
129 Heritage Green Shopping Center G.E. Capital Access 3,850,000 3,843,471 0.3%
130 Captain's Landing Apartments G.E. Capital Access 3,811,000 3,802,289 0.3%
131 All Aboard Mini Storage - Fremont G.E. Capital Access 3,800,000 3,785,612 0.3%
132 Century Plaza Strip Shopping Center (1K) Column 2,100,000 2,088,575 0.2%
133 Albany Square Strip Shopping Center (1K) Column 1,700,000 1,690,752 0.1%
134 Larrabee Complex Column 3,700,000 3,685,680 0.3%
<CAPTION>
Original Remaining Original Remaining
Amortization Amortization Term to Term to
Term Term Maturity Maturity Mortgage
# Property Name (months) (months) (months)(8) (months)(8) Rate
- ------------- ------------ ------------ ----------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
68 Centre North Shopping Center 360 356 120 116 7.250%
69 Cranbrook Centre Apartments (1H) 360 358 120 118 7.480%
70 Cranbrook Centre Office Buildings (1H) 360 358 120 118 7.480%
71 Lubbock Shopping Parkade 360 358 120 118 7.750%
72 Marin Club Apartments 360 358 120 118 7.730%
73 Prunedale Center 360 356 120 116 7.250%
74 Lamplighter Ontario MHP 360 358 60 58 7.340%
75 Marycrest Shopping Center (2) 360 360 120 117 7.780%
76 Elm Plaza Shopping Center 360 356 120 116 7.750%
77 Century Plaza East 360 357 120 117 7.000%
78 Keller Springs Tech Center 360 358 120 118 7.410%
79 Mobile Gardens/Holly View Mobile Home Park (1I) 360 356 120 116 6.680%
80 Stony Chase/Rock Creek Mobile Home Park (1I) 360 356 120 116 6.680%
81 Briarwood Manor (1I) 360 356 120 116 6.680%
82 Tierra Verde Marine Center 300 292 120 112 7.330%
83 Aurora Square 360 357 120 117 7.000%
84 Merchant's Square (3) 336 336 120 118 7.150%
85 Northwood Hills Shopping Center 360 359 120 119 7.570%
86 36th Street Office Center 360 358 120 118 7.550%
87 Fifth Avenue Apartments 360 358 120 118 7.160%
88 The Watermill Apartments 360 356 120 116 7.180%
89 Brooks Corner 300 300 120 120 7.610%
90 Hollywood Ardmore Apartments 360 357 120 117 7.800%
91 Chasewood Apartments 360 358 120 118 7.290%
92 Kingsgate North 360 356 120 116 7.000%
93 Fairfield Suites Pittsburgh/Airport 300 299 120 119 7.660%
94 Seatree Apartments 360 358 120 118 7.290%
95 All Aboard Mini Storage - Alhambra 360 355 120 115 7.190%
96 West Century Center 360 359 120 119 7.780%
97 Universal Plaza 360 358 120 118 7.650%
98 Crestview Market Place 360 356 120 116 7.000%
99 New Franklin Apartments (4) 216 212 120 116 6.250%
100 Windjammer Apartments 360 359 120 119 7.460%
101 Woodlake Village Apartments 360 355 120 115 6.660%
102 Comfort Inn - Hopewell, VA 300 297 120 117 7.375%
103 Linens N Things 324 313 240 229 6.950%
104 The Woods Apartments 360 358 120 118 7.220%
105 Moonlight Garden Apartments 360 358 120 118 7.730%
106 Sagamore Court Apartments 360 358 120 118 6.920%
107 Carriage Hill Apartments 360 357 120 117 7.000%
108 Dowling Office Building 360 358 120 118 7.400%
109 Main Street Plaza Shopping Center 360 356 120 116 7.000%
110 Friendship Crossing Apartments 360 358 120 118 7.430%
111 Spruce Properties (1J) 360 357 120 117 7.600%
112 Oak Grove Apartments (1J) 360 357 120 117 7.600%
113 Aldrich Apartments (1J) 360 357 120 117 7.600%
114 One Bellemead Center 360 357 120 117 7.910%
115 Denver Tech Center #30 360 357 120 117 7.000%
116 Preston Racquet Club Condominiums and Apartments 360 359 120 119 7.790%
117 Sand Lake Apartments 360 349 300 289 7.180%
118 Mobile Estate Mobile Home Park 360 357 180 177 7.300%
119 Colonia Shopping Center 360 359 120 119 7.500%
120 Vista Ridge Center III 360 358 120 118 7.750%
121 Parkside East Apartments 360 357 120 117 7.250%
122 Northpark Village 360 356 120 116 7.000%
123 Breakers Apartments 360 355 120 115 6.850%
124 Picnic Lawn Apartments 360 358 120 118 7.460%
125 32nd Street and McDowell Road Shopping Center 360 356 120 116 7.150%
126 Triangle Corporate Center 360 356 120 116 6.530%
127 One West Hills Office 360 358 120 118 7.300%
128 Harper Regency Apartments 360 349 300 289 7.210%
129 Heritage Green Shopping Center 360 358 120 118 7.500%
130 Captain's Landing Apartments 360 357 89 86 7.390%
131 All Aboard Mini Storage - Fremont 360 355 120 115 7.190%
132 Century Plaza Strip Shopping Center (1K) 300 296 120 116 6.430%
133 Albany Square Strip Shopping Center (1K) 300 296 120 116 6.430%
134 Larrabee Complex 300 297 120 117 6.750%
<CAPTION>
First
Monthly Payment Maturity
# Property Name Payment Date Date ARD (9)
- ------------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
68 Centre North Shopping Center 51,845.40 12/1/98 11/1/08
69 Cranbrook Centre Apartments (1H) 34,368.89 2/1/99 1/1/09
70 Cranbrook Centre Office Buildings (1H) 17,446.14 2/1/99 1/1/09
71 Lubbock Shopping Parkade 52,856.90 2/1/99 1/1/09
72 Marin Club Apartments 52,626.26 2/1/99 1/1/09
73 Prunedale Center 49,614.68 12/1/98 11/1/28 11/1/08
74 Lamplighter Ontario MHP 49,212.83 2/1/99 1/1/04
75 Marycrest Shopping Center (2) 50,294.05 1/1/99 12/1/08
76 Elm Plaza Shopping Center 50,148.86 12/1/98 11/1/08
77 Century Plaza East 46,152.03 1/1/99 12/1/08
78 Keller Springs Tech Center 47,821.29 2/1/99 1/1/09
79 Mobile Gardens/Holly View Mobile Home Park (1I) 23,439.85 12/1/98 11/1/28 11/1/08
80 Stony Chase/Rock Creek Mobile Home Park (1I) 12,363.88 12/1/98 11/1/28 11/1/08
81 Briarwood Manor (1I) 8,628.96 12/1/98 11/1/28 11/1/08
82 Tierra Verde Marine Center 50,229.86 8/1/98 7/1/23 7/1/08
83 Aurora Square 44,708.33 1/1/99 12/1/08
84 Merchant's Square (3) 45,508.18 2/1/99 1/1/09
85 Northwood Hills Shopping Center 45,760.91 3/1/99 2/1/09
86 36th Street Office Center 45,671.69 2/1/99 1/1/09
87 Fifth Avenue Apartments 43,269.28 2/1/99 1/1/09
88 The Watermill Apartments 43,355.83 12/1/98 11/1/08
89 Brooks Corner 47,008.15 4/1/99 3/1/09
90 Hollywood Ardmore Apartments 44,991.91 1/1/99 12/1/08
91 Chasewood Apartments 42,189.31 2/1/99 1/1/09
92 Kingsgate North 39,119.79 12/1/98 11/1/08
93 Fairfield Suites Pittsburgh/Airport 43,766.70 3/1/99 2/1/09
94 Seatree Apartments 39,997.66 2/1/99 1/1/09
95 All Aboard Mini Storage - Alhambra 38,516.73 11/1/98 10/1/28 10/1/08
96 West Century Center 40,235.24 3/1/99 2/1/09
97 Universal Plaza 39,449.00 2/1/99 1/1/09
98 Crestview Market Place 36,591.64 12/1/98 11/1/08
99 New Franklin Apartments (4) 41,703.84 12/1/98 11/1/08
100 Windjammer Apartments 36,397.92 3/1/99 2/1/09
101 Woodlake Village Apartments 33,673.65 11/1/98 10/1/08
102 Comfort Inn - Hopewell, VA 38,005.74 1/1/99 12/1/08
103 Linens N Things 35,597.06 5/1/98 4/1/25 4/1/18
104 The Woods Apartments 34,333.60 2/1/99 1/1/09
105 Moonlight Garden Apartments 35,658.58 2/1/99 1/1/09
106 Sagamore Court Apartments 32,798.94 2/1/99 1/1/09
107 Carriage Hill Apartments 32,865.94 1/1/99 12/1/08
108 Dowling Office Building 33,303.47 2/1/99 1/1/09
109 Main Street Plaza Shopping Center 31,748.24 12/1/98 11/1/28 11/1/08
110 Friendship Crossing Apartments 32,020.05 2/1/99 1/1/09
111 Spruce Properties (1J) 13,944.98 1/1/99 12/1/08
112 Oak Grove Apartments (1J) 10,414.60 1/1/99 12/1/08
113 Aldrich Apartments (1J) 7,413.78 1/1/99 12/1/08
114 One Bellemead Center 32,715.69 1/1/99 12/1/08
115 Denver Tech Center #30 29,772.29 1/1/99 12/1/08
116 Preston Racquet Club Condominiums and Apartments 31,571.93 3/1/99 2/1/09
117 Sand Lake Apartments 29,807.13 5/1/98 4/1/23
118 Mobile Estate Mobile Home Park 29,479.55 1/1/99 12/1/13
119 Colonia Shopping Center 29,954.35 3/1/99 2/1/09
120 Vista Ridge Center III 30,626.62 2/1/99 1/1/09
121 Parkside East Apartments 28,651.40 1/1/99 12/1/08
122 Northpark Village 27,410.46 12/1/98 11/1/08
123 Breakers Apartments 26,839.42 11/1/98 10/1/28 10/1/08
124 Picnic Lawn Apartments 27,859.10 2/1/99 1/1/09
125 32nd Street and McDowell Road Shopping Center 27,016.27 12/1/98 11/1/08
126 Triangle Corporate Center 25,361.69 12/1/98 11/1/28 11/1/08
127 One West Hills Office 27,080.05 2/1/99 1/1/09
128 Harper Regency Apartments 27,008.75 5/1/98 4/1/23
129 Heritage Green Shopping Center 26,919.76 2/1/99 1/1/09
130 Captain's Landing Apartments 26,360.60 1/1/99 5/1/06
131 All Aboard Mini Storage - Fremont 25,768.23 11/1/98 10/1/28 10/1/08
132 Century Plaza Strip Shopping Center (1K) 14,087.63 12/1/98 11/1/08
133 Albany Square Strip Shopping Center (1K) 11,404.27 12/1/98 11/1/08
134 Larrabee Complex 25,563.73 1/1/99 12/1/08
<CAPTION>
Prepayment Provision Defeasance
# Property Name as of Origination(10) Option (11)
- ------------- ---------------------- -----------
<S> <C> <C> <C>
68 Centre North Shopping Center L (9.75), O (0.25) Yes
69 Cranbrook Centre Apartments (1H) L (9.5), O (0.5) Yes
70 Cranbrook Centre Office Buildings (1H) L (9.5), O (0.5) Yes
71 Lubbock Shopping Parkade L (9.75), O (0.25) Yes
72 Marin Club Apartments L (9.75), O (0.25) Yes
73 Prunedale Center L (9.75), O (0.25) Yes
74 Lamplighter Ontario MHP L (4.75), O (0.25) Yes
75 Marycrest Shopping Center (2) L (9.5), O (0.5) Yes
76 Elm Plaza Shopping Center L (9.5), O (0.5) Yes
77 Century Plaza East L (9.75), O (0.25) Yes
78 Keller Springs Tech Center L (9.75), O (0.25) Yes
79 Mobile Gardens/Holly View Mobile Home Park (1I) L (9.75), O (0.25) Yes
80 Stony Chase/Rock Creek Mobile Home Park (1I) L (9.75), O (0.25) Yes
81 Briarwood Manor (1I) L (9.75), O (0.25) Yes
82 Tierra Verde Marine Center L (9.5), O (0.5) Yes
83 Aurora Square L (9.75), O (0.25) Yes
84 Merchant's Square (3) L (9.5), O (0.5) Yes
85 Northwood Hills Shopping Center L (9.5), O (0.5) Yes
86 36th Street Office Center L (9.75), O (0.25) Yes
87 Fifth Avenue Apartments L (9.5), O (0.5) Yes
88 The Watermill Apartments L (9.5), O (0.5) Yes
89 Brooks Corner L (9.5), O (0.5) Yes
90 Hollywood Ardmore Apartments L (9.5), O (0.5) Yes
91 Chasewood Apartments L (9.75), O (0.25) Yes
92 Kingsgate North L (9.75), O (0.25) Yes
93 Fairfield Suites Pittsburgh/Airport L (9.75), O (0.25) Yes
94 Seatree Apartments L (9.75), O (0.25) Yes
95 All Aboard Mini Storage - Alhambra L (9.75), O (0.25) Yes
96 West Century Center L (9.75), O (0.25) Yes
97 Universal Plaza L (9.75), O (0.25) Yes
98 Crestview Market Place L (9.75), O (0.25) Yes
99 New Franklin Apartments (4) L (9.5), O (0.5) Yes
100 Windjammer Apartments L (9.5), O (0.5) Yes
101 Woodlake Village Apartments L (9.5), O (0.5) Yes
102 Comfort Inn - Hopewell, VA L (9.5), O (0.5) Yes
103 Linens N Things L (9.92), YM 1% (9.58), O (0.5) No
104 The Woods Apartments L (9.75), O (0.25) Yes
105 Moonlight Garden Apartments L (9.75), O (0.25) Yes
106 Sagamore Court Apartments L (9.5), O (0.5) Yes
107 Carriage Hill Apartments L (9.5), O (0.5) Yes
108 Dowling Office Building L (9.75), O (0.25) Yes
109 Main Street Plaza Shopping Center L (9.75), O (0.25) Yes
110 Friendship Crossing Apartments L (9.75), O (0.25) Yes
111 Spruce Properties (1J) L (9.5), O (0.5) Yes
112 Oak Grove Apartments (1J) L (9.5), O (0.5) Yes
113 Aldrich Apartments (1J) L (9.5), O (0.5) Yes
114 One Bellemead Center L (9.67), O (0.33) Yes
115 Denver Tech Center #30 L (9.75), O (0.25) Yes
116 Preston Racquet Club Condominiums and Apartments L (9.75), O (0.25) Yes
117 Sand Lake Apartments L (9.92), YM 1% (14.83), O (0.25) No
118 Mobile Estate Mobile Home Park L (14.5), O (0.5) Yes
119 Colonia Shopping Center L (9.67), O (0.33) Yes
120 Vista Ridge Center III L (9.75), O (0.25) Yes
121 Parkside East Apartments L (9.75), O (0.25) Yes
122 Northpark Village L (9.75), O (0.25) Yes
123 Breakers Apartments L (9.5), O (0.5) Yes
124 Picnic Lawn Apartments L (9.75), O (0.25) Yes
125 32nd Street and McDowell Road Shopping Center L (9.75), O (0.25) Yes
126 Triangle Corporate Center L (9.75), O (0.25) Yes
127 One West Hills Office L (9.75), O (0.25) Yes
128 Harper Regency Apartments L (7.92), YM 1% (16.83), O (0.25) No
129 Heritage Green Shopping Center L (9.75), O (0.25) Yes
130 Captain's Landing Apartments L (4), YM 1% (2.92), O (0.5) No
131 All Aboard Mini Storage - Fremont L (9.75), O (0.25) Yes
132 Century Plaza Strip Shopping Center (1K) L (9.5), O (0.5) Yes
133 Albany Square Strip Shopping Center (1K) L (9.5), O (0.5) Yes
134 Larrabee Complex L (9.5), O (0.5) Yes
</TABLE>
<PAGE>
Characteristics of the Mortgage Loans
<TABLE>
<CAPTION>
Original Percentage of
Mortgage Loan Principal Cut-off Date Initial
# Property Name Seller Balance Balance (7) Pool Balance
- ------------- ------------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
135 Cedar Garden Apartments G.E. Capital Access 3,680,000 3,673,780 0.3%
136 All Aboard Mini Storage - Stanton G.E. Capital Access 3,680,000 3,666,066 0.3%
137 Windtree Apartments - Phase I G.E. Capital Access 3,600,000 3,593,944 0.3%
138 Lake City Mini-Storage G.E. Capital Access 3,600,000 3,582,501 0.3%
139 Huntington Mobile Estates G.E. Capital Access 3,500,000 3,488,993 0.3%
140 Everhart Park Shopping Center G.E. Capital Access 3,500,000 3,488,424 0.3%
141 Rafael North Executive Park G.E. Capital Access 3,500,000 3,484,424 0.3%
142 Westwind Estates G.E. Capital Access 3,448,000 3,440,039 0.3%
143 Hewlett Shopping Center G.E. Capital Access 3,400,000 3,392,008 0.3%
144 Forest Park Village G.E. Capital Access 3,280,000 3,273,025 0.3%
145 2700 Richards Building G.E. Capital Access 3,243,000 3,239,230 0.3%
146 Lincoln Park Center G.E. Capital Access 3,219,000 3,211,916 0.3%
147 Cedar Heights Apartments G.E. Capital Access 3,100,000 3,096,364 0.2%
148 The North Oak Apartments G.E. Capital Access 3,100,000 3,096,333 0.2%
149 Arrowhead Court Apartments G.E. Capital Access 3,100,000 3,089,758 0.2%
150 The Citibank Building G.E. Capital Access 3,100,000 3,089,758 0.2%
151 Petco/Starbucks S/C G.E. Capital Access 3,085,000 3,078,211 0.2%
152 1870 Ogden Drive G.E. Capital Access 3,080,000 3,076,465 0.2%
153 Woodland Park Office Building Column 3,050,000 3,043,676 0.2%
154 Tree Top Apartments G.E. Capital Access 3,000,000 2,996,535 0.2%
155 Costa Mesa Mobile Estates Column 3,000,000 2,996,361 0.2%
156 Greenville Village Mobile Home Park Column 3,000,000 2,992,519 0.2%
157 Brookwood Village G.E. Capital Access 3,000,000 2,989,241 0.2%
158 Rose Grove Mobile Home Park G.E. Capital Access 3,000,000 2,987,966 0.2%
159 Little River Shopping Center G.E. Capital Access 2,960,000 2,956,573 0.2%
160 The Amberton Apartments Column 2,900,000 2,890,880 0.2%
161 Best Western Worlds of Fun G.E. Capital Access 2,897,000 2,890,249 0.2%
162 All Aboard Mini Storage - Anaheim G.E. Capital Access 2,900,000 2,889,020 0.2%
163 Waterway Crossing Apartments G.E. Capital Access 2,850,000 2,824,908 0.2%
164 The Borders Building G.E. Capital Access 2,850,000 2,823,462 0.2%
165 Ken-Caryl Business Center G.E. Capital Access 2,830,000 2,819,285 0.2%
166 Alta Vista Mobile Home Park G.E. Capital Access 2,800,000 2,795,415 0.2%
167 Palm Springs Self Storage G.E. Capital Access 2,800,000 2,790,696 0.2%
168 Holiday Inn Express Auburn Column 2,800,000 2,789,581 0.2%
169 Caruth Haven Retail Center G.E. Capital Access 2,800,000 2,789,237 0.2%
170 3456 Ridge Property G.E. Capital Access 2,800,000 2,788,732 0.2%
171 Campus Plaza Shopping Center G.E. Capital Access 2,750,000 2,741,352 0.2%
172 All Aboard Mini Storage - San Gabriel G.E. Capital Access 2,740,000 2,729,626 0.2%
173 Point O' Woods Apartments G.E. Capital Access 2,720,000 2,716,809 0.2%
174 Williamsburg on the Lake Apartments G.E. Capital Access 2,743,468 2,694,425 0.2%
175 Airport Business Center Column 2,700,000 2,693,962 0.2%
176 Staples - Wilmington G.E. Capital Access 2,680,000 2,676,919 0.2%
177 Felicita Junction G.E. Capital Access 2,675,000 2,671,870 0.2%
178 The Bordeaux Apartments G.E. Capital Access 2,680,000 2,666,424 0.2%
179 High Point Village I Apartments Column 2,650,000 2,650,000 0.2%
180 Assured Self Storage Facility G.E. Capital Access 2,650,000 2,643,825 0.2%
181 Staples - Valparaiso G.E. Capital Access 2,560,000 2,557,057 0.2%
182 Fruitland Grove Family Park G.E. Capital Access 2,520,000 2,505,622 0.2%
183 Centennial Creek Office Park G.E. Capital Access 2,500,000 2,493,826 0.2%
184 Park Lane Village Apartments (1L) Column 1,350,000 1,345,453 0.1%
185 Rynearson Lane Village Apartments (1L) Column 1,150,000 1,146,126 0.1%
186 Holiday Inn Express Ottawa Column 2,500,000 2,490,697 0.2%
187 Ross Apartments G.E. Capital Access 2,500,000 2,488,010 0.2%
188 339 S. Ardmore Apartments G.E. Capital Access 2,500,000 2,487,451 0.2%
189 Edgewater Beach Resort G.E. Capital Access 2,493,000 2,487,007 0.2%
190 Fondren Hill Apartments G.E. Capital Access 2,450,000 2,438,627 0.2%
191 Cottonwood Plaza G.E. Capital Access 2,400,000 2,394,370 0.2%
192 Southport Shops G.E. Capital Access 2,400,000 2,392,453 0.2%
193 Hawthorne Hill Apartments G.E. Capital Access 2,400,000 2,389,375 0.2%
194 Days Inn Waccamaw G.E. Capital Access 2,400,000 2,387,655 0.2%
195 Turtle Oaks Apartments G.E. Capital Access 2,344,000 2,341,262 0.2%
196 Linden Place Mobile Home Park Column 2,325,000 2,313,654 0.2%
197 Moore Lake Commons Shopping Center Column 2,300,000 2,295,187 0.2%
198 Imperial Manor West Apartments G.E. Capital Access 2,300,000 2,281,127 0.2%
199 Brown School Station Apts. G.E. Capital Access 2,260,000 2,249,293 0.2%
200 South Street Seaport Office Center Column 2,250,000 2,242,342 0.2%
201 Hathaway Commerce Center Column 2,200,000 2,195,081 0.2%
<CAPTION>
Original Remaining Original Remaining
Amortization Amortization Term to Term to
Term Term Maturity Maturity Mortgage
# Property Name (months) (months) (months)(8) (months)(8) Rate
- ------------- ------------ ------------ ----------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
135 Cedar Garden Apartments 360 358 120 118 7.520%
136 All Aboard Mini Storage - Stanton 360 355 120 115 7.190%
137 Windtree Apartments - Phase I 360 358 120 118 7.550%
138 Lake City Mini-Storage 300 296 120 116 7.150%
139 Huntington Mobile Estates 360 356 120 116 7.250%
140 Everhart Park Shopping Center 360 356 120 116 7.000%
141 Rafael North Executive Park 324 320 120 116 6.680%
142 Westwind Estates 360 357 120 117 7.340%
143 Hewlett Shopping Center 360 357 120 117 7.250%
144 Forest Park Village 360 357 120 117 7.750%
145 2700 Richards Building 360 359 120 119 7.460%
146 Lincoln Park Center 360 357 120 117 7.580%
147 Cedar Heights Apartments 360 359 120 119 7.350%
148 The North Oak Apartments 360 359 120 119 7.250%
149 Arrowhead Court Apartments 360 356 120 116 7.000%
150 The Citibank Building 360 356 120 116 7.000%
151 Petco/Starbucks S/C 360 357 120 117 7.580%
152 1870 Ogden Drive 360 359 120 119 7.620%
153 Woodland Park Office Building 360 357 120 117 7.875%
154 Tree Top Apartments 360 359 120 119 7.540%
155 Costa Mesa Mobile Estates 360 359 120 119 6.960%
156 Greenville Village Mobile Home Park 300 298 120 118 7.500%
157 Brookwood Village 360 356 120 116 6.580%
158 Rose Grove Mobile Home Park 360 355 120 115 6.920%
159 Little River Shopping Center 360 359 144 143 7.510%
160 The Amberton Apartments 360 356 120 116 7.250%
161 Best Western Worlds of Fun 300 298 120 118 8.000%
162 All Aboard Mini Storage - Anaheim 360 355 120 115 7.190%
163 Waterway Crossing Apartments 360 349 180 169 6.830%
164 The Borders Building 180 177 120 117 7.250%
165 Ken-Caryl Business Center 360 355 120 115 7.190%
166 Alta Vista Mobile Home Park 360 358 84 82 7.720%
167 Palm Springs Self Storage 300 297 120 117 7.710%
168 Holiday Inn Express Auburn 300 297 120 117 7.000%
169 Caruth Haven Retail Center 360 355 120 115 7.120%
170 3456 Ridge Property 360 356 120 116 5.980%
171 Campus Plaza Shopping Center 360 356 120 116 7.250%
172 All Aboard Mini Storage - San Gabriel 360 355 120 115 7.190%
173 Point O' Woods Apartments 360 359 120 119 7.350%
174 Williamsburg on the Lake Apartments 300 285 120 105 7.500%
175 Airport Business Center 360 357 120 117 7.500%
176 Staples - Wilmington 360 359 120 119 7.600%
177 Felicita Junction 360 359 120 119 7.380%
178 The Bordeaux Apartments 360 355 120 115 5.960%
179 High Point Village I Apartments 360 360 120 120 7.750%
180 Assured Self Storage Facility 300 298 120 118 8.000%
181 Staples - Valparaiso 360 359 120 119 7.600%
182 Fruitland Grove Family Park 360 352 120 112 7.280%
183 Centennial Creek Office Park 360 357 120 117 7.000%
184 Park Lane Village Apartments (1L) 300 297 120 117 7.625%
185 Rynearson Lane Village Apartments (1L) 300 297 120 117 7.625%
186 Holiday Inn Express Ottawa 300 297 120 117 7.000%
187 Ross Apartments 360 355 120 115 6.060%
188 339 S. Ardmore Apartments 360 354 120 114 6.970%
189 Edgewater Beach Resort 300 298 120 118 7.770%
190 Fondren Hill Apartments 360 355 120 115 6.220%
191 Cottonwood Plaza 360 357 120 117 7.260%
192 Southport Shops 360 356 120 116 7.250%
193 Hawthorne Hill Apartments 360 355 120 115 6.450%
194 Days Inn Waccamaw 300 296 120 116 6.790%
195 Turtle Oaks Apartments 360 359 120 119 7.400%
196 Linden Place Mobile Home Park 300 296 120 116 7.125%
197 Moore Lake Commons Shopping Center 360 357 120 117 7.830%
198 Imperial Manor West Apartments 300 293 120 113 7.130%
199 Brown School Station Apts. 360 354 120 114 7.050%
200 South Street Seaport Office Center 300 297 120 117 7.560%
201 Hathaway Commerce Center 360 357 120 117 7.500%
<CAPTION>
First
Monthly Payment Maturity
# Property Name Payment Date Date ARD (9)
- ------------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
135 Cedar Garden Apartments 25,781.51 2/1/99 1/1/09
136 All Aboard Mini Storage - Stanton 24,954.50 11/1/98 10/1/28 10/1/08
137 Windtree Apartments - Phase I 25,295.09 2/1/99 1/1/09
138 Lake City Mini-Storage 25,789.57 12/1/98 11/1/08
139 Huntington Mobile Estates 23,876.17 12/1/98 11/1/28 11/1/08
140 Everhart Park Shopping Center 23,285.59 12/1/98 11/1/28 11/1/08
141 Rafael North Executive Park 23,348.17 12/1/98 11/1/08
142 Westwind Estates 23,732.29 1/1/99 12/1/28 12/1/08
143 Hewlett Shopping Center 23,193.99 1/1/99 12/1/08
144 Forest Park Village 23,498.32 1/1/99 12/1/08
145 2700 Richards Building 22,586.77 3/1/99 2/1/09
146 Lincoln Park Center 22,684.31 1/1/99 12/1/08
147 Cedar Heights Apartments 21,358.14 3/1/99 2/1/09
148 The North Oak Apartments 21,147.46 3/1/99 2/1/09
149 Arrowhead Court Apartments 20,624.38 12/1/98 11/1/08
150 The Citibank Building 20,624.38 12/1/98 11/1/28 11/1/08
151 Petco/Starbucks S/C 21,740.02 1/1/99 12/1/08
152 1870 Ogden Drive 21,789.45 3/1/99 2/1/09
153 Woodland Park Office Building 22,114.62 1/1/99 12/1/08
154 Tree Top Apartments 21,058.67 3/1/99 2/1/09
155 Costa Mesa Mobile Estates 19,878.55 3/1/99 2/1/09
156 Greenville Village Mobile Home Park 22,169.74 2/1/99 1/1/09
157 Brookwood Village 19,120.15 12/1/98 11/1/08
158 Rose Grove Mobile Home Park 19,798.15 11/1/98 10/1/28 10/1/08
159 Little River Shopping Center 20,717.02 3/1/99 2/1/11
160 The Amberton Apartments 19,783.11 12/1/98 11/1/08
161 Best Western Worlds of Fun 22,359.52 2/1/99 1/1/09
162 All Aboard Mini Storage - Anaheim 19,665.23 11/1/98 10/1/28 10/1/08
163 Waterway Crossing Apartments 18,636.86 5/1/98 4/1/28 4/1/13
164 The Borders Building 26,016.59 1/1/99 12/1/08
165 Ken-Caryl Business Center 19,190.55 11/1/98 10/1/28 10/1/08
166 Alta Vista Mobile Home Park 20,001.53 2/1/99 1/1/06
167 Palm Springs Self Storage 21,075.73 1/1/99 12/1/08
168 Holiday Inn Express Auburn 19,789.82 1/1/99 12/1/08
169 Caruth Haven Retail Center 18,854.67 11/1/98 10/1/28 10/1/08
170 3456 Ridge Property 16,751.43 12/1/98 11/1/28 11/1/08
171 Campus Plaza Shopping Center 18,759.85 12/1/98 11/1/28 11/1/08
172 All Aboard Mini Storage - San Gabriel 18,580.25 11/1/98 10/1/28 10/1/08
173 Point O' Woods Apartments 18,740.04 3/1/99 2/1/09
174 Williamsburg on the Lake Apartments 20,275.53 1/1/98 12/1/07
175 Airport Business Center 18,878.79 1/1/99 12/1/08
176 Staples - Wilmington 18,922.80 3/1/99 2/1/09
177 Felicita Junction 18,484.68 3/1/99 2/1/09
178 The Bordeaux Apartments 15,999.10 11/1/98 10/1/28 10/1/08
179 High Point Village I Apartments 18,984.92 4/1/99 3/1/09
180 Assured Self Storage Facility 20,453.13 2/1/99 1/1/09
181 Staples - Valparaiso 18,075.51 3/1/99 2/1/09
182 Fruitland Grove Family Park 17,242.15 8/1/98 7/1/28 7/1/08
183 Centennial Creek Office Park 16,632.56 1/1/99 12/1/08
184 Park Lane Village Apartments (1L) 10,086.40 1/1/99 12/1/08
185 Rynearson Lane Village Apartments (1L) 8,592.12 1/1/99 12/1/08
186 Holiday Inn Express Ottawa 17,669.48 1/1/99 12/1/08
187 Ross Apartments 15,085.34 11/1/98 10/1/28 10/1/08
188 339 S. Ardmore Apartments 16,582.22 10/1/98 9/1/28 9/1/08
189 Edgewater Beach Resort 18,863.09 2/1/99 1/1/09
190 Fondren Hill Apartments 15,037.30 11/1/98 10/1/28 10/1/08
191 Cottonwood Plaza 16,388.51 1/1/99 12/1/08
192 Southport Shops 16,372.23 12/1/98 11/1/08
193 Hawthorne Hill Apartments 15,090.80 11/1/98 10/1/28 10/1/08
194 Days Inn Waccamaw 16,642.55 12/1/98 11/1/08
195 Turtle Oaks Apartments 16,229.38 3/1/99 2/1/09
196 Linden Place Mobile Home Park 16,618.48 12/1/98 11/1/08
197 Moore Lake Commons Shopping Center 16,604.81 1/1/99 12/1/08
198 Imperial Manor West Apartments 16,447.16 9/1/98 8/1/23 8/1/08
199 Brown School Station Apts. 15,111.80 10/1/98 9/1/28 9/1/08
200 South Street Seaport Office Center 16,715.21 1/1/99 12/1/08
201 Hathaway Commerce Center 15,382.72 1/1/99 12/1/08
<CAPTION>
Prepayment Provision Defeasance
# Property Name as of Origination(10) Option (11)
- ------------- ---------------------- -----------
<S> <C> <C> <C>
135 Cedar Garden Apartments L (9.75), O (0.25) Yes
136 All Aboard Mini Storage - Stanton L (9.75), O (0.25) Yes
137 Windtree Apartments - Phase I L (9.75), O (0.25) Yes
138 Lake City Mini-Storage L (9.75), O (0.25) Yes
139 Huntington Mobile Estates L (9.75), O (0.25) Yes
140 Everhart Park Shopping Center L (9.67), O (0.33) Yes
141 Rafael North Executive Park L (9.75), O (0.25) Yes
142 Westwind Estates L (9.75), O (0.25) Yes
143 Hewlett Shopping Center L (9.75), O (0.25) Yes
144 Forest Park Village L (9.75), O (0.25) Yes
145 2700 Richards Building L (9.75), O (0.25) Yes
146 Lincoln Park Center L (9.5), O (0.5) Yes
147 Cedar Heights Apartments L (9.75), O (0.25) Yes
148 The North Oak Apartments L (9.75), O (0.25) Yes
149 Arrowhead Court Apartments L (9.75), O (0.25) Yes
150 The Citibank Building L (9.75), O (0.25) Yes
151 Petco/Starbucks S/C L (9.75), O (0.25) Yes
152 1870 Ogden Drive L (9.75), O (0.25) Yes
153 Woodland Park Office Building L (9.5), O (0.5) Yes
154 Tree Top Apartments L (9.75), O (0.25) Yes
155 Costa Mesa Mobile Estates L (9.5), O (0.5) Yes
156 Greenville Village Mobile Home Park L (9.5), O (0.5) Yes
157 Brookwood Village L (9.75), O (0.25) Yes
158 Rose Grove Mobile Home Park L (9.5), O (0.5) Yes
159 Little River Shopping Center L (11.67), O (0.33) Yes
160 The Amberton Apartments L (9.5), O (0.5) Yes
161 Best Western Worlds of Fun L (9.75), O (0.25) Yes
162 All Aboard Mini Storage - Anaheim L (9.75), O (0.25) Yes
163 Waterway Crossing Apartments L (4.92), YM 1% (9.83), O (0.25) No
164 The Borders Building L (9.75), O (0.25) Yes
165 Ken-Caryl Business Center L (9.75), O (0.25) Yes
166 Alta Vista Mobile Home Park L (6.75), O (0.25) Yes
167 Palm Springs Self Storage L (9.75), O (0.25) Yes
168 Holiday Inn Express Auburn L (9.5), O (0.5) Yes
169 Caruth Haven Retail Center L (9.75), O (0.25) Yes
170 3456 Ridge Property L (9.75), O (0.25) Yes
171 Campus Plaza Shopping Center L (3), YM 1% (6.5), O (0.5) No
172 All Aboard Mini Storage - San Gabriel L (9.75), O (0.25) Yes
173 Point O' Woods Apartments L (9.75), O (0.25) Yes
174 Williamsburg on the Lake Apartments L (3), YM 1% (7) No
175 Airport Business Center L (9.5), O (0.5) Yes
176 Staples - Wilmington L (9.75), O (0.25) Yes
177 Felicita Junction L (9.75), O (0.25) Yes
178 The Bordeaux Apartments L (9.67), O (0.33) Yes
179 High Point Village I Apartments L (9.5), O (0.5) Yes
180 Assured Self Storage Facility L (9.75), O (0.25) Yes
181 Staples - Valparaiso L (9.75), O (0.25) Yes
182 Fruitland Grove Family Park L (4), YM 1% (5.75), O (0.25) No
183 Centennial Creek Office Park L (9.75), O (0.25) Yes
184 Park Lane Village Apartments (1L) L (9.5), O (0.5) Yes
185 Rynearson Lane Village Apartments (1L) L (9.5), O (0.5) Yes
186 Holiday Inn Express Ottawa L (9.5), O (0.5) Yes
187 Ross Apartments L (9.75), O (0.25) Yes
188 339 S. Ardmore Apartments L (9.75), O (0.25) Yes
189 Edgewater Beach Resort L (9.75), O (0.25) Yes
190 Fondren Hill Apartments L (9.75), O (0.25) Yes
191 Cottonwood Plaza L (9.75), O (0.25) Yes
192 Southport Shops L (9.75), O (0.25) Yes
193 Hawthorne Hill Apartments L (9.75), O (0.25) Yes
194 Days Inn Waccamaw L (9.75), O (0.25) Yes
195 Turtle Oaks Apartments L (9.75), O (0.25) Yes
196 Linden Place Mobile Home Park L (9.5), O (0.5) Yes
197 Moore Lake Commons Shopping Center L (9.5), O (0.5) Yes
198 Imperial Manor West Apartments L (9.75), O (0.25) Yes
199 Brown School Station Apts. L (9.75), O (0.25) Yes
200 South Street Seaport Office Center L (9.5), O (0.5) Yes
201 Hathaway Commerce Center L (9.5), O (0.5) Yes
</TABLE>
<PAGE>
Characteristics of the Mortgage Loans
<TABLE>
<CAPTION>
Original Percentage of
Mortgage Loan Principal Cut-off Date Initial
# Property Name Seller Balance Balance (7) Pool Balance
- ------------- ------------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
202 Corinthian Apartments G.E. Capital Access 2,200,000 2,187,615 0.2%
203 Walgreen's Drug Store - Swansea G.E. Capital Access 2,190,000 2,184,954 0.2%
204 Catalina Apartments G.E. Capital Access 2,176,000 2,172,345 0.2%
205 Devonshire Square Retail Center Column 2,125,000 2,118,371 0.2%
206 1440 N. Vine Street G.E. Capital Access 2,100,000 2,093,062 0.2%
207 College Park Apartments G.E. Capital Access 2,100,000 2,088,510 0.2%
208 Country Brooke Apartments G.E. Capital Access 2,067,000 2,055,765 0.2%
209 Hillside View Apartments Column 2,050,000 2,038,134 0.2%
210 Benihana Restaurant Column 2,000,000 1,996,924 0.2%
211 Crosswinds Apartments Column 2,000,000 1,996,476 0.2%
212 Imperial Plaza Retail Center G.E. Capital Access 2,000,000 1,995,314 0.2%
213 Twin Lakes Mobile Home Park Column 2,000,000 1,992,704 0.2%
214 Antietam Village Center Column 2,000,000 1,990,431 0.2%
215 Gateway Shoppes G.E. Capital Access 2,000,000 1,989,534 0.2%
216 Red Onion Building G.E. Capital Access 2,000,000 1,989,353 0.2%
217 526 South Ardmore Avenue G.E. Capital Access 2,000,000 1,985,158 0.2%
218 All Aboard Mini Storage - Santa Ana G.E. Capital Access 1,894,000 1,886,829 0.2%
219 Villa East I & II G.E. Capital Access 1,870,000 1,867,888 0.2%
220 Courtyard Apartments G.E. Capital Access 1,850,000 1,846,761 0.1%
221 Sunset View Village Apartments G.E. Capital Access 1,852,000 1,845,711 0.1%
222 Wilmington Plaza G.E. Capital Access 1,845,000 1,841,901 0.1%
223 The Nations Bank Building Column 1,850,000 1,840,216 0.1%
224 Quail Ridge Apartments Column 1,840,000 1,829,799 0.1%
225 Best Western KCI Airport G.E. Capital Access 1,826,000 1,821,745 0.1%
226 Laurel Heights Apartments G.E. Capital Access 1,800,000 1,790,996 0.1%
227 El Monte Mobile Air Mobile Home Park G.E. Capital Access 1,800,000 1,789,682 0.1%
228 Harold Gilstrap Shopping Center Column 1,800,000 1,786,750 0.1%
229 Lakeside Apartments Column 1,800,000 1,781,950 0.1%
230 Park Glen Apartments Column 1,750,000 1,744,104 0.1%
231 St. Lucie Mobile Village Column 1,750,000 1,743,616 0.1%
232 Ravenscroft Apartments Column 1,750,000 1,740,783 0.1%
233 Coach Country Corral MHP Column 1,750,000 1,733,966 0.1%
234 Seaside Village Shopping Center Column 1,725,000 1,722,395 0.1%
235 Sherwood Park Apartments Column 1,700,000 1,696,004 0.1%
236 Ravenna Plaza G.E. Capital Access 1,701,000 1,695,492 0.1%
237 Holiday Inn Express Oglesby Column 1,700,000 1,693,674 0.1%
238 Central/Magnolia Retail Center G.E. Capital Access 1,695,000 1,688,244 0.1%
239 Rolling Hills Estates G.E. Capital Access 1,700,000 1,686,359 0.1%
240 Saticoy-Royale Apartments Column 1,670,000 1,664,748 0.1%
241 Holiday/Park Riviera Mobile Home Park Column 1,645,000 1,637,436 0.1%
242 Gottschalk's Department Store Column 1,610,000 1,602,597 0.1%
243 Justin Apartments Column 1,600,000 1,597,176 0.1%
244 Fountain Square Apartments Column 1,600,000 1,595,872 0.1%
245 383 St. Johns Place G.E. Capital Access 1,600,000 1,594,755 0.1%
246 Days Inn G.E. Capital Access 1,600,000 1,592,690 0.1%
247 Market Plaza Column 1,575,000 1,563,876 0.1%
248 Michigan Plaza & Bender Plaza (5) Column 1,550,000 1,546,334 0.1%
249 Mockingbird Park Retail Building Column 1,540,000 1,534,709 0.1%
250 Poolesville Village Center Column 1,525,000 1,520,437 0.1%
251 Citadel Square Shopping Center (6) Column 1,500,000 1,500,000 0.1%
252 Executive Park Offices G.E. Capital Access 1,501,000 1,499,290 0.1%
253 Sherwood Mobile Home Estates Column 1,500,000 1,492,680 0.1%
254 Ware's Van & Storage Co. Column 1,500,000 1,489,399 0.1%
255 Sunrise Terrace Mobile Home Park Column 1,450,000 1,445,275 0.1%
256 Best Western Country Inn North G.E. Capital Access 1,448,000 1,444,626 0.1%
257 Woodlake Resort Village Apartments Column 1,400,000 1,393,722 0.1%
258 Plantation Pines Apartments Column 1,350,000 1,347,949 0.1%
259 Pacific Mini Storage G.E. Capital Access 1,350,000 1,345,706 0.1%
260 Sunridge Apartments Column 1,345,000 1,341,749 0.1%
261 Courtyards of Granbury Column 1,300,000 1,296,871 0.1%
262 Parkside Place Apartments Column 1,300,000 1,290,235 0.1%
263 University Apartments Column 1,260,000 1,258,018 0.1%
264 Isaqueena Village Apartments G.E. Capital Access 1,250,000 1,243,760 0.1%
265 Turtle Dove I Apartments Column 1,225,000 1,225,000 0.1%
266 Carson Gardens Mobile Home Park G.E. Capital Access 1,200,000 1,192,300 0.1%
267 Valerie Apartments Column 1,072,000 1,070,329 0.1%
268 Huddersfield Apartments Column 1,060,000 1,058,366 0.1%
<CAPTION>
Original Remaining Original Remaining
Amortization Amortization Term to Term to
Term Term Maturity Maturity Mortgage
# Property Name (months) (months) (months)(8) (months)(8) Rate
- ------------- ------------ ------------ ----------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
202 Corinthian Apartments 360 353 120 113 6.840%
203 Walgreen's Drug Store - Swansea 360 357 120 117 7.350%
204 Catalina Apartments 360 358 120 118 7.560%
205 Devonshire Square Retail Center 300 297 120 117 8.100%
206 1440 N. Vine Street 360 356 120 116 7.000%
207 College Park Apartments 360 353 120 113 6.970%
208 Country Brooke Apartments 360 353 120 113 7.000%
209 Hillside View Apartments 240 237 240 237 7.000%
210 Benihana Restaurant 300 299 120 119 7.650%
211 Crosswinds Apartments 360 358 120 118 7.260%
212 Imperial Plaza Retail Center 300 298 120 118 7.960%
213 Twin Lakes Mobile Home Park 300 297 120 117 7.125%
214 Antietam Village Center 300 296 120 116 7.250%
215 Gateway Shoppes 300 296 120 116 6.680%
216 Red Onion Building 300 296 120 116 6.570%
217 526 South Ardmore Avenue 360 351 120 111 7.090%
218 All Aboard Mini Storage - Santa Ana 360 355 120 115 7.190%
219 Villa East I & II 360 359 120 119 7.830%
220 Courtyard Apartments 360 358 120 118 7.300%
221 Sunset View Village Apartments 360 356 120 116 6.860%
222 Wilmington Plaza 360 358 120 118 7.560%
223 The Nations Bank Building 240 237 120 117 7.740%
224 Quail Ridge Apartments 360 353 120 113 6.910%
225 Best Western KCI Airport 300 298 120 118 8.000%
226 Laurel Heights Apartments 360 354 120 114 6.790%
227 El Monte Mobile Air Mobile Home Park 360 352 120 112 7.260%
228 Harold Gilstrap Shopping Center 300 294 120 114 6.960%
229 Lakeside Apartments 216 212 180 176 6.350%
230 Park Glen Apartments 360 356 120 116 6.900%
231 St. Lucie Mobile Village 300 297 120 117 7.125%
232 Ravenscroft Apartments 360 354 120 114 6.540%
233 Coach Country Corral MHP 300 292 120 112 7.190%
234 Seaside Village Shopping Center 300 299 120 119 7.880%
235 Sherwood Park Apartments 360 357 180 177 7.250%
236 Ravenna Plaza 300 297 120 117 7.870%
237 Holiday Inn Express Oglesby 300 297 120 117 7.000%
238 Central/Magnolia Retail Center 360 355 120 115 6.950%
239 Rolling Hills Estates 300 293 120 113 7.260%
240 Saticoy-Royale Apartments 360 356 120 116 7.250%
241 Holiday/Park Riviera Mobile Home Park 300 296 120 116 7.500%
242 Gottschalk's Department Store 300 296 120 116 7.500%
243 Justin Apartments 360 358 120 118 7.250%
244 Fountain Square Apartments 300 298 120 118 7.250%
245 383 St. Johns Place 360 356 120 116 7.040%
246 Days Inn 300 296 120 116 7.540%
247 Market Plaza 252 248 120 116 7.000%
248 Michigan Plaza & Bender Plaza (5) 300 298 120 118 7.890%
249 Mockingbird Park Retail Building 360 356 120 116 6.800%
250 Poolesville Village Center 360 356 120 116 7.500%
251 Citadel Square Shopping Center (6) 300 300 120 116 8.250%
252 Executive Park Offices 360 359 120 119 7.720%
253 Sherwood Mobile Home Estates 300 296 120 116 7.125%
254 Ware's Van & Storage Co. 240 236 120 116 7.750%
255 Sunrise Terrace Mobile Home Park 360 356 120 116 7.070%
256 Best Western Country Inn North 300 298 120 118 8.000%
257 Woodlake Resort Village Apartments 360 354 120 114 7.310%
258 Plantation Pines Apartments 300 299 120 119 7.800%
259 Pacific Mini Storage 300 297 120 117 7.980%
260 Sunridge Apartments 300 298 120 118 7.730%
261 Courtyards of Granbury 300 298 84 82 7.760%
262 Parkside Place Apartments 240 236 120 116 7.250%
263 University Apartments 300 299 120 119 7.375%
264 Isaqueena Village Apartments 360 354 120 114 6.800%
265 Turtle Dove I Apartments 300 300 120 120 7.650%
266 Carson Gardens Mobile Home Park 360 351 120 111 7.350%
267 Valerie Apartments 300 299 120 119 7.480%
268 Huddersfield Apartments 300 299 120 119 7.620%
<CAPTION>
First
Monthly Payment Maturity
# Property Name Payment Date Date ARD (9)
- ------------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
202 Corinthian Apartments 14,401.02 9/1/98 8/1/28 8/1/08
203 Walgreen's Drug Store - Swansea 15,088.49 1/1/99 12/1/08
204 Catalina Apartments 15,304.41 2/1/99 1/1/09
205 Devonshire Square Retail Center 16,542.11 1/1/99 12/1/08
206 1440 N. Vine Street 13,971.35 12/1/98 11/1/08
207 College Park Apartments 13,929.07 9/1/98 8/1/28 8/1/08
208 Country Brooke Apartments 13,751.80 9/1/98 8/1/28 8/1/08
209 Hillside View Apartments 15,893.63 1/1/99 12/1/18
210 Benihana Restaurant 14,975.51 3/1/99 2/1/09
211 Crosswinds Apartments 13,657.09 2/1/99 1/1/09
212 Imperial Plaza Retail Center 15,383.37 2/1/99 1/1/09
213 Twin Lakes Mobile Home Park 14,295.46 1/1/99 12/1/08
214 Antietam Village Center 14,456.14 12/1/98 11/1/08
215 Gateway Shoppes 13,729.95 12/1/98 11/1/23 11/1/08
216 Red Onion Building 13,591.75 12/1/98 11/1/23 11/1/08
217 526 South Ardmore Avenue 13,427.16 7/1/98 6/1/08
218 All Aboard Mini Storage - Santa Ana 12,843.43 11/1/98 10/1/28 10/1/08
219 Villa East I & II 13,500.44 3/1/99 2/1/09
220 Courtyard Apartments 12,683.06 2/1/99 1/1/09
221 Sunset View Village Apartments 12,147.77 12/1/98 11/1/08
222 Wilmington Plaza 12,976.39 2/1/99 1/1/09
223 The Nations Bank Building 15,176.14 1/1/99 12/1/08
224 Quail Ridge Apartments 12,130.55 9/1/98 8/1/08
225 Best Western KCI Airport 14,093.36 2/1/99 1/1/09
226 Laurel Heights Apartments 11,722.67 10/1/98 9/1/28 9/1/08
227 El Monte Mobile Air Mobile Home Park 12,291.38 8/1/98 7/1/28 7/1/08
228 Harold Gilstrap Shopping Center 12,676.13 10/1/98 9/1/08
229 Lakeside Apartments 14,003.72 12/1/98 11/1/13
230 Park Glen Apartments 11,525.50 12/1/98 11/1/08
231 St. Lucie Mobile Village 12,508.53 1/1/99 12/1/08
232 Ravenscroft Apartments 11,107.27 10/1/98 9/1/08
233 Coach Country Corral MHP 12,581.55 8/1/98 7/1/08
234 Seaside Village Shopping Center 13,176.99 3/1/99 2/1/09
235 Sherwood Park Apartments 11,597.00 1/1/99 12/1/13
236 Ravenna Plaza 12,982.44 1/1/99 12/1/08
237 Holiday Inn Express Oglesby 12,015.25 1/1/99 12/1/08
238 Central/Magnolia Retail Center 11,220.02 11/1/98 10/1/28 10/1/08
239 Rolling Hills Estates 12,298.67 9/1/98 8/1/08
240 Saticoy-Royale Apartments 11,392.34 12/1/98 11/1/08
241 Holiday/Park Riviera Mobile Home Park 12,156.40 12/1/98 11/1/08
242 Gottschalk's Department Store 11,897.76 12/1/98 11/1/08
243 Justin Apartments 10,914.82 2/1/99 1/1/09
244 Fountain Square Apartments 11,564.91 2/1/99 1/1/09
245 383 St. Johns Place 10,687.86 12/1/98 11/1/08
246 Days Inn 11,865.52 12/1/98 11/1/08
247 Market Plaza 11,945.93 12/1/98 11/1/08
248 Michigan Plaza & Bender Plaza (5) 11,850.42 2/1/99 1/1/09
249 Mockingbird Park Retail Building 10,039.65 12/1/98 11/1/08
250 Poolesville Village Center 10,663.02 12/1/98 11/1/08
251 Citadel Square Shopping Center (6) 11,826.75 12/1/98 11/1/08
252 Executive Park Offices 10,722.25 3/1/99 2/1/09
253 Sherwood Mobile Home Estates 10,721.60 12/1/98 11/1/08
254 Ware's Van & Storage Co. 12,314.23 12/1/98 11/1/08
255 Sunrise Terrace Mobile Home Park 9,715.15 12/1/98 11/1/08
256 Best Western Country Inn North 11,175.90 2/1/99 1/1/09
257 Woodlake Resort Village Apartments 9,607.51 10/1/98 9/1/08
258 Plantation Pines Apartments 10,241.29 3/1/99 2/1/09
259 Pacific Mini Storage 10,401.64 1/1/99 12/1/08
260 Sunridge Apartments 10,141.52 2/1/99 1/1/09
261 Courtyards of Granbury 9,827.81 2/1/99 1/1/06
262 Parkside Place Apartments 10,274.89 12/1/98 11/1/08
263 University Apartments 9,209.08 3/1/99 2/1/09
264 Isaqueena Village Apartments 8,149.06 10/1/98 9/1/28 9/1/08
265 Turtle Dove I Apartments 9,172.50 4/1/99 3/1/09
266 Carson Gardens Mobile Home Park 8,267.67 7/1/98 6/1/28 6/1/08
267 Valerie Apartments 7,908.04 3/1/99 2/1/09
268 Huddersfield Apartments 7,916.23 3/1/99 2/1/09
<CAPTION>
Prepayment Provision Defeasance
# Property Name as of Origination(10) Option (11)
- ------------- ---------------------- -----------
<S> <C> <C> <C>
202 Corinthian Apartments L (9.75), O (0.25) Yes
203 Walgreen's Drug Store - Swansea L (9.75), O (0.25) Yes
204 Catalina Apartments L (9.75), O (0.25) Yes
205 Devonshire Square Retail Center L (9.5), O (0.5) Yes
206 1440 N. Vine Street L (9.75), O (0.25) Yes
207 College Park Apartments L (9.75), O (0.25) Yes
208 Country Brooke Apartments L (9.75), O (0.25) Yes
209 Hillside View Apartments L (9.5), O (10.5) Yes
210 Benihana Restaurant L (9.5), O (0.5) Yes
211 Crosswinds Apartments L (9.5), O (0.5) Yes
212 Imperial Plaza Retail Center L (4), YM 1% (5.75), O (0.25) No
213 Twin Lakes Mobile Home Park L (9.5), O (0.5) Yes
214 Antietam Village Center L (9.5), O (0.5) Yes
215 Gateway Shoppes L (9.75), O (0.25) Yes
216 Red Onion Building L (9.75), O (0.25) Yes
217 526 South Ardmore Avenue L (9.75), O (0.25) Yes
218 All Aboard Mini Storage - Santa Ana L (9.75), O (0.25) Yes
219 Villa East I & II L (9.75), O (0.25) Yes
220 Courtyard Apartments L (9.75), O (0.25) Yes
221 Sunset View Village Apartments L (9.75), O (0.25) Yes
222 Wilmington Plaza L (9.75), O (0.25) Yes
223 The Nations Bank Building L (9.5), O (0.5) Yes
224 Quail Ridge Apartments L (9.5), O (0.5) Yes
225 Best Western KCI Airport L (9.75), O (0.25) Yes
226 Laurel Heights Apartments L (9.75), O (0.25) Yes
227 El Monte Mobile Air Mobile Home Park L (3.92), YM 1% (5.83), O (0.25) No
228 Harold Gilstrap Shopping Center L (9.5), O (0.5) Yes
229 Lakeside Apartments L (14.5), O (0.5) Yes
230 Park Glen Apartments L (9.5), O (0.5) Yes
231 St. Lucie Mobile Village L (9.5), O (0.5) Yes
232 Ravenscroft Apartments L (9.5), O (0.5) Yes
233 Coach Country Corral MHP L (9.5), O (0.5) Yes
234 Seaside Village Shopping Center L (9.5), O (0.5) Yes
235 Sherwood Park Apartments L (14.5), O (0.5) Yes
236 Ravenna Plaza L (9.75), O (0.25) Yes
237 Holiday Inn Express Oglesby L (9.5), O (0.5) Yes
238 Central/Magnolia Retail Center L (9.75), O (0.25) Yes
239 Rolling Hills Estates L (3), YM 1% (6.75), O (0.25) No
240 Saticoy-Royale Apartments L (9.5), O (0.5) Yes
241 Holiday/Park Riviera Mobile Home Park L (9.5), O (0.5) Yes
242 Gottschalk's Department Store L (3), YM 1% (6.58), O (0.42) No
243 Justin Apartments L (9.5), O (0.5) Yes
244 Fountain Square Apartments L (9.5), O (0.5) Yes
245 383 St. Johns Place L (9.75), O (0.25) Yes
246 Days Inn L (9.75), O (0.25) Yes
247 Market Plaza L (9.5), O (0.5) Yes
248 Michigan Plaza & Bender Plaza (5) L (9.5), O (0.5) Yes
249 Mockingbird Park Retail Building L (9.5), O (0.5) Yes
250 Poolesville Village Center L (9.5), O (0.5) Yes
251 Citadel Square Shopping Center (6) L (9.5), O (0.5) Yes
252 Executive Park Offices L (9.75), O (0.25) Yes
253 Sherwood Mobile Home Estates L (9.5), O (0.5) Yes
254 Ware's Van & Storage Co. L (3), YM 1% (6.5), O (0.5) No
255 Sunrise Terrace Mobile Home Park L (2.25), O (7.75) No
256 Best Western Country Inn North L (9.75), O (0.25) Yes
257 Woodlake Resort Village Apartments L (3), YM 1% (6.5), O (0.5) No
258 Plantation Pines Apartments L (9.5), O (0.5) Yes
259 Pacific Mini Storage L (9.75), O (0.25) Yes
260 Sunridge Apartments L (9.5), O (0.5) Yes
261 Courtyards of Granbury L (6.5), O (0.5) Yes
262 Parkside Place Apartments L (3), YM 1% (6.5), O (0.5) No
263 University Apartments L (9.5), O (0.5) Yes
264 Isaqueena Village Apartments L (9.75), O (0.25) Yes
265 Turtle Dove I Apartments L (3), YM 1% (6.5), O (0.5) No
266 Carson Gardens Mobile Home Park L (3.92), YM 1% (5.83), O (0.25) No
267 Valerie Apartments L (9.5), O (0.5) Yes
268 Huddersfield Apartments L (9.5), O (0.5) Yes
</TABLE>
<PAGE>
Characteristics of the Mortgage Loans
<TABLE>
<CAPTION>
Original Percentage of
Mortgage Loan Principal Cut-off Date Initial
# Property Name Seller Balance Balance (7) Pool Balance
- ------------- ------------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
269 1457 & 1519 - 1527 Park Road, NW Column 1,050,000 1,048,398 0.1%
270 Winter Garden Village Apartments Column 1,000,000 997,506 0.1%
271 Long Point Plaza Apartments Column 960,000 951,432 0.1%
272 The Place of Tempe Apartments Column 900,000 898,616 0.1%
273 Valley Garden Apartments Column 900,000 896,907 0.1%
274 Devereaux Apartments Column 888,000 886,649 0.1%
275 Bloomingdale Shopping Center Column 800,000 798,005 0.1%
276 Cottonwood Apartments Column 800,000 797,234 0.1%
277 Royal North Apartments Column 7,225,000 718,072 0.1%
278 Turtle Dove II Apartments Column 675,000 675,000 0.1%
----------------------------------------------------
Total/Weighted Average $1,243,207,294 $ 1,239,717,562 100.0%
====================================================
Maximum: $ 30,500,000 $ 30,446,295 2.5%
Minimum: $ 516,000 $ 515,269 0.0%
<CAPTION>
Original Remaining Original Remaining
Amortization Amortization Term to Term to
Term Term Maturity Maturity Mortgage
# Property Name (months) (months) (months)(8) (months)(8) Rate
- ------------- ------------ ------------ ----------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
269 1457 & 1519 - 1527 Park Road, NW 300 299 120 119 7.750%
270 Winter Garden Village Apartments 300 298 120 118 7.500%
271 Long Point Plaza Apartments 240 235 120 115 7.500%
272 The Place of Tempe Apartments 300 299 120 119 7.650%
273 Valley Garden Apartments 300 297 120 117 7.500%
274 Devereaux Apartments 300 299 120 119 7.780%
275 Bloomingdale Shopping Center 300 298 120 118 7.500%
276 Cottonwood Apartments 240 238 240 238 8.440%
277 Royal North Apartments 300 294 120 114 8.050%
278 Turtle Dove II Apartments 300 300 120 120 7.650%
-----------------------------------------------------------------------------
Total/Weighted Average 345 342 125 122 7.320%
=============================================================================
Maximum: 360 360 300 289 8.440%
Minimum: 180 177 60 58 5.960%
<CAPTION>
First
Monthly Payment Maturity
# Property Name Payment Date Date ARD (9)
- ------------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
269 1457 & 1519 - 1527 Park Road, NW 7,930.95 3/1/99 2/1/09
270 Winter Garden Village Apartments 7,389.91 2/1/99 1/1/09
271 Long Point Plaza Apartments 7,733.69 11/1/98 10/1/08
272 The Place of Tempe Apartments 6,738.98 3/1/99 2/1/09
273 Valley Garden Apartments 6,650.92 1/1/99 12/1/08
274 Devereaux Apartments 6,724.82 3/1/99 2/1/09
275 Bloomingdale Shopping Center 5,911.93 2/1/99 1/1/09
276 Cottonwood Apartments 6,912.24 2/1/99 1/1/19
277 Royal North Apartments 5,600.32 10/1/98 9/1/08
278 Turtle Dove II Apartments 5,054.23 4/1/99 3/1/09
--------------------------------------------
Total/Weighted Average $ 8,680,050 1/2/99 1/11/14
============================================
Maximum: $ 221,017 4/1/99 2/1/29
Minimum: $ 3,631 1/1/98 1/1/04
<CAPTION>
Prepayment Provision Defeasance
# Property Name as of Origination(10) Option (11)
- ------------- ---------------------- -----------
<S> <C> <C> <C>
269 1457 & 1519 - 1527 Park Road, NW L (9.5), O (0.5) Yes
270 Winter Garden Village Apartments L (9.5), O (0.5) Yes
271 Long Point Plaza Apartments L (3), YM 1% (6.58), O (0.42) No
272 The Place of Tempe Apartments L (9.5), O (0.5) Yes
273 Valley Garden Apartments L (3), YM 1% (6.5), O (0.5) No
274 Devereaux Apartments L (9.5), O (0.5) Yes
275 Bloomingdale Shopping Center L (9.5), O (0.5) Yes
276 Cottonwood Apartments L (19.5), O (0.5) Yes
277 Royal North Apartments L (3), YM 1% (6.5), O (0.5) No
278 Turtle Dove II Apartments L (3), YM 1% (6.5), O (0.5) No
Total/Weighted Average
Maximum:
Minimum:
</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 Plaza & 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>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<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 $16,412 5.00% 4.50%
2 Quality Suites - Charleston (1A) Hotel $13,560 5.00% 4.50%
3 Courtyard by Marriott - Ann Arbor (1A) Hotel $13,560 5.00% 4.50%
4 Residence Inn - Phoenix (1A) Hotel $13,560 5.00% 4.50%
5 Homewood Suites - Cary (1A) Hotel $12,968 5.00% 4.50%
6 Hampton Inn & Suites - Gwinnett (1A) Hotel $11,623 5.00% 4.50%
7 Hampton Inn - Raleigh (1A) Hotel $11,408 5.00% 4.50%
8 Comfort Suites - Orlando (1A) Hotel $11,139 5.00% 4.50%
9 Hampton Inn - Perimeter (1A) Hotel $10,762 5.00% 4.50%
10 Hampton Inn - Charlotte, NC (1A) Hotel $9,847 5.00% 4.50%
11 Courtyard by Marriott - Wilmington (1A) Hotel $9,201 5.00% 4.50%
12 Hampton Inn - West Springfield (1A) Hotel $7,964 5.00% 4.50%
13 Homewood Suites - Clear Lake (1A) Hotel $7,426 5.00% 4.50%
14 Comfort Inn - Charleston (1A) Hotel $3,390 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 $2,300,000 $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 $277,191 $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 Edentree Apartments Multifamily $37,000 $229 $229
43 Becker Village Mall Retail N/A $0.13 $0.13
44 Tiffany Square Office $7,026 N/A $0.20
45 The Mint Apartments Multifamily $265,625 $250 $250
46 River Park Shopping Center Retail $25,458 $0.17 $0.17
47 Rancho Destino Apartments Multifamily N/A $200 $200
48 Conestoga Mobile Home Park Manufactured Housing $22,793 $25 $25
49 Huntington Chase Apartments Multifamily $6,875 $200 $200
50 Parkshore Centre Office Building Office $12,822 N/A $0.20
51 Kenwood Pavilion Retail $6,688 $0.15 $0.15
52 Newsome Park Apartments Multifamily $524,000 $378 $378
<CAPTION>
Contractual
Recurring U/W Tax &
LC&TI LC&TI Insurance
# Property Name Per Sq. Ft. Per Sq. Ft. Escrows
- ------------- ----------- ----------- -------
<S> <C> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) N/A N/A Both
2 Quality Suites - Charleston (1A) N/A N/A Both
3 Courtyard by Marriott - Ann Arbor (1A) N/A N/A Both
4 Residence Inn - Phoenix (1A) N/A N/A Both
5 Homewood Suites - Cary (1A) N/A N/A Both
6 Hampton Inn & Suites - Gwinnett (1A) N/A N/A Both
7 Hampton Inn - Raleigh (1A) N/A N/A Both
8 Comfort Suites - Orlando (1A) N/A N/A Both
9 Hampton Inn - Perimeter (1A) N/A N/A Both
10 Hampton Inn - Charlotte, NC (1A) N/A N/A Both
11 Courtyard by Marriott - Wilmington (1A) N/A N/A Both
12 Hampton Inn - West Springfield (1A) N/A N/A Both
13 Homewood Suites - Clear Lake (1A) N/A N/A Both
14 Comfort Inn - Charleston (1A) N/A N/A Both
15 Kendale Lakes Plaza (1B) $0.47 $0.44 Both
16 Cypress Creek Station (1B) $0.35 $0.33 Both
17 Oakwood Business Center (1B) $1.01 $0.95 Both
18 Westchase Ranch Apartments (1C) N/A N/A Both
19 Westwood Village Apartments (1C) N/A N/A Both
20 Normandy Woods Apartments (1C) N/A N/A Both
21 Savoy Manor Apartments (1C) N/A N/A Both
22 San Marin Apartments (1C) N/A N/A Both
23 Country Squire Apartments - South N/A N/A Tax
24 2294 Molly Pitcher Highway (1D) $0.25 $0.25 Both
25 5015 Campuswood Drive (1D) $1.50 $1.55 Both
26 5010 Campuswood Drive (1D) $1.50 $1.50 Both
27 5009 Campuswood Drive (1D) $1.50 $1.54 Both
28 Fair Lakes Promenade N/A $0.42 Both
29 Keller Oaks Apartments (1E) N/A N/A Both
30 Sycamore Hill Apartments (1E) N/A N/A Both
31 Clarendon Apartments (1E) N/A N/A Both
32 Woodchase Condominiums (1E) N/A N/A Both
33 Dallas Design Center Portfolio $0.91 $0.91 Both
34 Assembly Square Office Building $1.00 $0.93 Both
35 Spicetree Apartments N/A N/A Both
36 Lamplighter Mobile Home Park N/A N/A Tax
37 White Station Tower N/A $1.43 Both
38 Holiday Inn New Orleans Veterans N/A N/A Both
39 The Links at Bixby N/A N/A Tax
40 Southwood Apartments N/A N/A Both
41 The Shoppes at Longwood N/A $0.52 Tax
42 Edentree Apartments N/A N/A Both
43 Becker Village Mall $0.14 $0.20 Both
44 Tiffany Square $0.95 $1.38 Both
45 The Mint Apartments N/A N/A Both
46 River Park Shopping Center $0.28 $0.32 Both
47 Rancho Destino Apartments N/A N/A Both
48 Conestoga Mobile Home Park N/A N/A Both
49 Huntington Chase Apartments N/A N/A Both
50 Parkshore Centre Office Building $1.02 $1.10 Both
51 Kenwood Pavilion N/A $0.72 Both
52 Newsome Park Apartments 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>
53 Princeton Court Apartments (1F) Multifamily $20,907 $250 $250
54 Pinewood Estates Apartments (1F) Multifamily $12,866 $250 $250
55 Arbor Court Apartments (1F) Multifamily $11,258 $250 $250
56 U-Store of Brighton Self Storage Facility (1G) Self Storage $12,289 $0.15 $0.15
57 U-Store of South Lyon Self Storage Facility (1G) Self Storage $6,527 $0.15 $0.15
58 U-Store of Saline Self Storage Facility (1G) Self Storage $5,954 $0.15 $0.15
59 U-Store of Davison Self Storage Facility (1G) Self Storage $4,266 $0.15 $0.15
60 U-Store of Holly Self Storage Facility (1G) Self Storage $3,948 $0.15 $0.15
61 U-Store of Jackson Self Storage Facility (1G) Self Storage $2,451 $0.15 $0.15
62 Birches Apartments Multifamily $30,250 $300 $300
63 Hollywood Plaza Retail $12,753 N/A $0.20
64 50-60 Worcester Rd. Mixed Use $3,375 $0.25 $0.25
65 Mahwah Business Park Mixed Use $214,870 N/A $0.21
66 Silvernail Shopping Center Retail $34,013 $0.30 $0.29
67 Tech Center 29 Office/Warehouse Complex Industrial $2,625 N/A $0.15
68 Centre North Shopping Center Retail $6,375 $0.15 $0.15
69 Cranbrook Centre Apartments (1H) Multifamily $6,250 $250 $250
70 Cranbrook Centre Office Buildings (1H) Office $29,188 N/A $0.15
71 Lubbock Shopping Parkade Retail $256,230 $0.17 $0.17
72 Marin Club Apartments Multifamily $1,875 $250 $225
73 Prunedale Center Mixed Use $30,125 $0.19 $0.19
74 Lamplighter Ontario MHP Manufactured Housing $2,500 $26 $26
75 Marycrest Shopping Center (2) Retail $24,500 $0.15 $0.15
76 Elm Plaza Shopping Center Retail $93,438 $0.15 $0.15
77 Century Plaza East Retail $49,350 $0.15 $0.15
78 Keller Springs Tech Center Industrial N/A $0.15 $0.15
79 Mobile Gardens/Holly View Mobile Home Park (1I) Manufactured Housing $39,565 $15 $55
80 Stony Chase/Rock Creek Mobile Home Park (1I) Manufactured Housing $20,870 $15 $50
81 Briarwood Manor (1I) Manufactured Housing $14,565 $15 $50
82 Tierra Verde Marine Center Mixed Use $4,675 $0.15 $0.15
83 Aurora Square Retail N/A $0.20 $0.20
84 Merchant's Square (3) Retail N/A $0.17 $0.15
85 Northwood Hills Shopping Center Retail $3,750 $0.16 $0.16
86 36th Street Office Center Office $81,188 $0.15 $0.15
87 Fifth Avenue Apartments Multifamily $114,375 $237 $237
88 The Watermill Apartments Multifamily $106,488 $251 $251
89 Brooks Corner Mixed Use $188 N/A $0.15
90 Hollywood Ardmore Apartments Multifamily $32,563 $318 $376
91 Chasewood Apartments Multifamily $27,125 $262 $262
92 Kingsgate North Mixed Use $21,155 $0.15 $0.15
93 Fairfield Suites Pittsburgh/Airport Hotel $3,485 5.00% 5.00%
94 Seatree Apartments Multifamily $299,750 $238 $238
95 All Aboard Mini Storage - Alhambra Self Storage N/A N/A $0.15
96 West Century Center Retail $19,580 $0.35 $0.35
97 Universal Plaza Retail $11,844 $0.16 $0.16
98 Crestview Market Place Retail N/A $0.03 $0.03
99 New Franklin Apartments (4) Multifamily $838 $250 $250
100 Windjammer Apartments Multifamily $88,967 $250 $250
101 Woodlake Village Apartments Multifamily $43,923 $250 $250
102 Comfort Inn - Hopewell, VA Hotel N/A 5.00% 5.00%
103 Linens N Things Retail $1,000 $0.10 $0.25
104 The Woods Apartments Multifamily $37,659 $357 $357
<CAPTION>
Contractual
Recurring U/W Tax &
LC&TI LC&TI Insurance
# Property Name Per Sq. Ft. Per Sq. Ft. Escrows
- ------------- ----------- ----------- -------
<S> <C> <C> <C> <C>
53 Princeton Court Apartments (1F) N/A N/A Both
54 Pinewood Estates Apartments (1F) N/A N/A Both
55 Arbor Court Apartments (1F) N/A N/A Both
56 U-Store of Brighton Self Storage Facility (1G) N/A N/A Both
57 U-Store of South Lyon Self Storage Facility (1G) N/A N/A Both
58 U-Store of Saline Self Storage Facility (1G) N/A N/A Both
59 U-Store of Davison Self Storage Facility (1G) N/A N/A Both
60 U-Store of Holly Self Storage Facility (1G) N/A N/A Both
61 U-Store of Jackson Self Storage Facility (1G) N/A N/A Both
62 Birches Apartments N/A N/A Both
63 Hollywood Plaza $0.86 $0.84 Tax
64 50-60 Worcester Rd. $1.10 $0.94 Both
65 Mahwah Business Park $0.26 $0.30 Both
66 Silvernail Shopping Center $0.45 $0.45 Both
67 Tech Center 29 Office/Warehouse Complex $0.20 $0.90 Both
68 Centre North Shopping Center $0.37 $0.38 Both
69 Cranbrook Centre Apartments (1H) N/A N/A Both
70 Cranbrook Centre Office Buildings (1H) $1.04 $1.00 Both
71 Lubbock Shopping Parkade $0.50 $0.42 Both
72 Marin Club Apartments N/A N/A Tax
73 Prunedale Center $0.65 $0.61 Both
74 Lamplighter Ontario MHP N/A N/A Tax
75 Marycrest Shopping Center (2) N/A $0.39 Both
76 Elm Plaza Shopping Center N/A $0.24 Both
77 Century Plaza East $0.10 $0.25 Both
78 Keller Springs Tech Center $0.60 $0.60 Both
79 Mobile Gardens/Holly View Mobile Home Park (1I) N/A N/A Both
80 Stony Chase/Rock Creek Mobile Home Park (1I) N/A N/A Both
81 Briarwood Manor (1I) N/A N/A Both
82 Tierra Verde Marine Center N/A $0.30 Both
83 Aurora Square $0.90 $0.88 Both
84 Merchant's Square (3) N/A $0.39 Both
85 Northwood Hills Shopping Center $0.72 $0.72 Tax
86 36th Street Office Center $0.95 $0.95 Both
87 Fifth Avenue Apartments N/A N/A Both
88 The Watermill Apartments N/A N/A Both
89 Brooks Corner $0.92 $1.40 Both
90 Hollywood Ardmore Apartments N/A N/A Both
91 Chasewood Apartments N/A N/A Both
92 Kingsgate North $0.74 $0.74 Both
93 Fairfield Suites Pittsburgh/Airport N/A N/A Both
94 Seatree Apartments N/A N/A Both
95 All Aboard Mini Storage - Alhambra N/A N/A Tax
96 West Century Center $0.74 $0.74 Both
97 Universal Plaza $0.98 $0.81 Both
98 Crestview Market Place $0.10 $0.10 Both
99 New Franklin Apartments (4) N/A N/A Both
100 Windjammer Apartments N/A N/A Both
101 Woodlake Village Apartments N/A N/A Both
102 Comfort Inn - Hopewell, VA N/A N/A Both
103 Linens N Things N/A N/A Both
104 The Woods Apartments 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>
105 Moonlight Garden Apartments Multifamily $2,500 $250 $250
106 Sagamore Court Apartments Multifamily $20,375 $250 $250
107 Carriage Hill Apartments Multifamily $8,875 $250 $250
108 Dowling Office Building Mixed Use N/A $0.20 $0.20
109 Main Street Plaza Shopping Center Retail N/A $0.15 $0.15
110 Friendship Crossing Apartments Multifamily N/A $199 $200
111 Spruce Properties (1J) Multifamily $24,375 $250 $250
112 Oak Grove Apartments (1J) Multifamily $8,750 $250 $250
113 Aldrich Apartments (1J) Multifamily $178,375 $250 $250
114 One Bellemead Center Office N/A $0.28 $0.28
115 Denver Tech Center #30 Office N/A $0.33 $0.33
116 Preston Racquet Club Condominiums and Apartments Multifamily $163,215 $363 $362
117 Sand Lake Apartments Multifamily $4,265 $260 $260
118 Mobile Estate Mobile Home Park Manufactured Housing N/A N/A $60
119 Colonia Shopping Center Retail N/A $0.10 $0.15
120 Vista Ridge Center III Retail N/A N/A $0.15
121 Parkside East Apartments Multifamily $2,625 $287 $286
122 Northpark Village Retail $19,389 $0.15 $0.15
123 Breakers Apartments Multifamily $4,031 $200 $200
124 Picnic Lawn Apartments Multifamily $4,563 $268 $268
125 32nd Street and McDowell Road Shopping Center Retail $176,250 $0.20 $0.20
126 Triangle Corporate Center Mixed Use $18,156 $0.26 $0.26
127 One West Hills Office Office N/A $0.20 $0.20
128 Harper Regency Apartments Multifamily $17,653 $200 $200
129 Heritage Green Shopping Center Retail $13,475 $0.21 $0.22
130 Captain's Landing Apartments Multifamily $24,063 $200 $200
131 All Aboard Mini Storage - Fremont Self Storage N/A N/A $0.15
132 Century Plaza Strip Shopping Center (1K) Retail $5,625 N/A $0.18
133 Albany Square Strip Shopping Center (1K) Retail $1,875 N/A $0.15
134 Larrabee Complex Mixed Use $73,725 N/A $0.15
135 Cedar Garden Apartments Multifamily $4,063 $300 $300
136 All Aboard Mini Storage - Stanton Self Storage N/A N/A $0.15
137 Windtree Apartments - Phase I Multifamily $34,037 $250 $250
138 Lake City Mini-Storage Self Storage $995 N/A $0.15
139 Huntington Mobile Estates Manufactured Housing $13,031 $25 $25
140 Everhart Park Shopping Center Retail $6,750 $0.24 $0.24
141 Rafael North Executive Park Office $4,450 $0.28 $0.27
142 Westwind Estates Manufactured Housing $19,725 $25 $25
143 Hewlett Shopping Center Retail $375 $0.15 $0.15
144 Forest Park Village Multifamily $208,709 $280 $280
145 2700 Richards Building Office $4,138 $0.20 $0.20
146 Lincoln Park Center Retail $11,100 $0.24 $0.24
147 Cedar Heights Apartments Multifamily $213,781 $274 $274
148 The North Oak Apartments Multifamily $48,563 $250 $250
149 Arrowhead Court Apartments Multifamily $41,225 $93 $250
150 The Citibank Building Office $15,250 $0.24 $0.24
151 Petco/Starbucks S/C Retail $104,706 $0.15 $0.15
152 1870 Ogden Drive Office $5,000 $0.20 $0.20
153 Woodland Park Office Building Office $15,425 N/A $0.23
154 Tree Top Apartments Multifamily $3,750 $250 $250
155 Costa Mesa Mobile Estates Manufactured Housing N/A N/A $50
156 Greenville Village Mobile Home Park Manufactured Housing $750 $50 $50
<CAPTION>
Contractual
Recurring U/W Tax &
LC&TI LC&TI Insurance
# Property Name Per Sq. Ft. Per Sq. Ft. Escrows
- ------------- ----------- ----------- -------
<S> <C> <C> <C> <C>
105 Moonlight Garden Apartments N/A N/A Tax
106 Sagamore Court Apartments N/A N/A Both
107 Carriage Hill Apartments N/A N/A Both
108 Dowling Office Building $0.90 $0.90 Both
109 Main Street Plaza Shopping Center $0.31 $0.30 Both
110 Friendship Crossing Apartments N/A N/A Both
111 Spruce Properties (1J) N/A N/A Both
112 Oak Grove Apartments (1J) N/A N/A Both
113 Aldrich Apartments (1J) N/A N/A Both
114 One Bellemead Center $0.79 $0.79 Both
115 Denver Tech Center #30 $1.02 $1.02 Both
116 Preston Racquet Club Condominiums and Apartments N/A N/A Both
117 Sand Lake Apartments N/A N/A Both
118 Mobile Estate Mobile Home Park N/A N/A Both
119 Colonia Shopping Center $0.34 $0.31 Tax
120 Vista Ridge Center III $0.80 $0.80 None
121 Parkside East Apartments N/A N/A Both
122 Northpark Village $0.21 $0.16 Both
123 Breakers Apartments N/A N/A Tax
124 Picnic Lawn Apartments N/A N/A Both
125 32nd Street and McDowell Road Shopping Center N/A $0.58 Both
126 Triangle Corporate Center $0.72 $0.52 Tax
127 One West Hills Office $0.91 $0.91 Both
128 Harper Regency Apartments N/A N/A Both
129 Heritage Green Shopping Center $1.19 $1.19 Both
130 Captain's Landing Apartments N/A N/A Both
131 All Aboard Mini Storage - Fremont N/A N/A Tax
132 Century Plaza Strip Shopping Center (1K) N/A $0.66 Both
133 Albany Square Strip Shopping Center (1K) N/A $0.64 Both
134 Larrabee Complex $1.00 $0.47 Both
135 Cedar Garden Apartments N/A N/A Both
136 All Aboard Mini Storage - Stanton N/A N/A Tax
137 Windtree Apartments - Phase I N/A N/A Both
138 Lake City Mini-Storage N/A N/A Both
139 Huntington Mobile Estates N/A N/A Tax
140 Everhart Park Shopping Center $0.85 $0.85 Tax
141 Rafael North Executive Park $1.00 $0.79 Both
142 Westwind Estates N/A N/A Both
143 Hewlett Shopping Center $1.83 $0.59 Both
144 Forest Park Village N/A N/A Both
145 2700 Richards Building $1.30 $1.00 Both
146 Lincoln Park Center $0.54 $0.83 Tax
147 Cedar Heights Apartments N/A N/A Both
148 The North Oak Apartments N/A N/A Both
149 Arrowhead Court Apartments N/A N/A Both
150 The Citibank Building $1.22 $1.22 Both
151 Petco/Starbucks S/C $0.93 $0.93 Both
152 1870 Ogden Drive $0.80 $0.80 Both
153 Woodland Park Office Building N/A $1.04 Both
154 Tree Top Apartments N/A N/A Both
155 Costa Mesa Mobile Estates N/A N/A Both
156 Greenville Village Mobile Home Park 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>
157 Brookwood Village Retail $16,638 $0.62 $0.62
158 Rose Grove Mobile Home Park Manufactured Housing $8,438 $50 $53
159 Little River Shopping Center Retail N/A $0.29 $0.29
160 The Amberton Apartments Multifamily $250,000 $250 $250
161 Best Western Worlds of Fun Hotel N/A 5.00% 5.00%
162 All Aboard Mini Storage - Anaheim Self Storage $250 N/A $0.15
163 Waterway Crossing Apartments Multifamily $77,144 $260 $260
164 The Borders Building Retail N/A $0.15 $0.15
165 Ken-Caryl Business Center Office $3,688 $0.17 $0.16
166 Alta Vista Mobile Home Park Manufactured Housing $1,625 $25 $25
167 Palm Springs Self Storage Self Storage $6,063 N/A $0.15
168 Holiday Inn Express Auburn Hotel N/A 4.00% 4.00%
169 Caruth Haven Retail Center Retail $37,063 N/A $0.55
170 3456 Ridge Property Mixed Use $3,000 $0.32 $0.32
171 Campus Plaza Shopping Center Retail $938 $0.20 $0.20
172 All Aboard Mini Storage - San Gabriel Self Storage $15,044 N/A $0.15
173 Point O' Woods Apartments Multifamily $1,875 $350 $350
174 Williamsburg on the Lake Apartments Multifamily N/A N/A $362
175 Airport Business Center Mixed Use $1,250 N/A $0.15
176 Staples - Wilmington Retail N/A $0.15 $0.15
177 Felicita Junction Retail N/A $0.15 $0.15
178 The Bordeaux Apartments Multifamily $79,375 $304 $304
179 High Point Village I Apartments Multifamily N/A $250 $250
180 Assured Self Storage Facility Self Storage $938 $0.15 $0.15
181 Staples - Valparaiso Retail N/A $0.15 $0.15
182 Fruitland Grove Family Park Manufactured Housing $5,419 $83 $83
183 Centennial Creek Office Park Office $8,000 $0.22 $0.22
184 Park Lane Village Apartments (1L) Multifamily $1,125 $250 $250
185 Rynearson Lane Village Apartments (1L) Multifamily $30,000 $250 $260
186 Holiday Inn Express Ottawa Hotel N/A 4.00% 4.00%
187 Ross Apartments Multifamily $17,550 N/A $300
188 339 S. Ardmore Apartments Multifamily $9,375 N/A $229
189 Edgewater Beach Resort Hotel $17,000 5.00% 5.50%
190 Fondren Hill Apartments Multifamily $85,750 $200 $200
191 Cottonwood Plaza Mixed Use $875 N/A $0.22
192 Southport Shops Retail $375 $0.25 $0.25
193 Hawthorne Hill Apartments Multifamily $31,094 $200 $200
194 Days Inn Waccamaw Hotel $150,913 5.00% 5.00%
195 Turtle Oaks Apartments Multifamily $30,544 $250 $249
196 Linden Place Mobile Home Park Manufactured Housing $1,063 $50 $50
197 Moore Lake Commons Shopping Center Retail $111,875 N/A $0.15
198 Imperial Manor West Apartments Multifamily $37,625 $350 $250
199 Brown School Station Apts. Multifamily $11,375 $250 $318
200 South Street Seaport Office Center Office N/A $0.20 $0.25
201 Hathaway Commerce Center Industrial N/A N/A $0.21
202 Corinthian Apartments Multifamily $37,908 $668 $668
203 Walgreen's Drug Store - Swansea Retail $1,000 $0.15 $0.15
204 Catalina Apartments Multifamily $102,035 $300 $270
205 Devonshire Square Retail Center Retail $1,250 $0.15 $0.25
206 1440 N. Vine Street Retail $22,148 $0.15 $0.15
207 College Park Apartments Multifamily $6,800 $351 $350
208 Country Brooke Apartments Multifamily $13,988 $250 $250
<CAPTION>
Contractual
Recurring U/W Tax &
LC&TI LC&TI Insurance
# Property Name Per Sq. Ft. Per Sq. Ft. Escrows
- ------------- ----------- ----------- -------
<S> <C> <C> <C> <C>
157 Brookwood Village N/A $0.61 Both
158 Rose Grove Mobile Home Park N/A N/A Tax
159 Little River Shopping Center $0.24 $0.24 Tax
160 The Amberton Apartments N/A N/A Both
161 Best Western Worlds of Fun N/A N/A Both
162 All Aboard Mini Storage - Anaheim N/A N/A Tax
163 Waterway Crossing Apartments N/A N/A Both
164 The Borders Building N/A N/A Both
165 Ken-Caryl Business Center $0.81 $0.81 Both
166 Alta Vista Mobile Home Park N/A N/A Both
167 Palm Springs Self Storage N/A N/A Both
168 Holiday Inn Express Auburn N/A N/A Both
169 Caruth Haven Retail Center N/A $1.47 Both
170 3456 Ridge Property $0.31 $0.18 Tax
171 Campus Plaza Shopping Center N/A $0.51 Both
172 All Aboard Mini Storage - San Gabriel N/A N/A Tax
173 Point O' Woods Apartments N/A N/A Both
174 Williamsburg on the Lake Apartments N/A N/A Both
175 Airport Business Center $0.15 $1.18 Both
176 Staples - Wilmington $0.09 $0.09 Both
177 Felicita Junction $0.10 $0.10 Both
178 The Bordeaux Apartments N/A N/A Tax
179 High Point Village I Apartments N/A N/A Both
180 Assured Self Storage Facility N/A N/A Both
181 Staples - Valparaiso N/A N/A Both
182 Fruitland Grove Family Park N/A N/A Tax
183 Centennial Creek Office Park $0.95 $0.95 Both
184 Park Lane Village Apartments (1L) N/A N/A Both
185 Rynearson Lane Village Apartments (1L) N/A N/A Both
186 Holiday Inn Express Ottawa N/A N/A Both
187 Ross Apartments N/A N/A Tax
188 339 S. Ardmore Apartments N/A N/A Both
189 Edgewater Beach Resort N/A N/A Both
190 Fondren Hill Apartments N/A N/A Both
191 Cottonwood Plaza N/A $0.93 Both
192 Southport Shops $1.01 $0.79 Both
193 Hawthorne Hill Apartments N/A N/A Both
194 Days Inn Waccamaw N/A N/A Both
195 Turtle Oaks Apartments N/A N/A Both
196 Linden Place Mobile Home Park N/A N/A Both
197 Moore Lake Commons Shopping Center $0.62 $0.81 Both
198 Imperial Manor West Apartments N/A N/A Both
199 Brown School Station Apts. N/A N/A Both
200 South Street Seaport Office Center N/A $1.72 Both
201 Hathaway Commerce Center N/A $0.38 Both
202 Corinthian Apartments N/A N/A Both
203 Walgreen's Drug Store - Swansea N/A N/A Both
204 Catalina Apartments N/A N/A Both
205 Devonshire Square Retail Center N/A $1.01 Both
206 1440 N. Vine Street $0.95 $0.95 Both
207 College Park Apartments N/A N/A Both
208 Country Brooke Apartments 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>
209 Hillside View Apartments Multifamily $240 $250 $275
210 Benihana Restaurant Retail $17,609 N/A $0.18
211 Crosswinds Apartments Multifamily $68,938 $265 $265
212 Imperial Plaza Retail Center Retail $7,250 $0.19 $0.20
213 Twin Lakes Mobile Home Park Manufactured Housing $5,781 $50 $54
214 Antietam Village Center Retail $3,125 N/A $0.17
215 Gateway Shoppes Retail $36,496 $0.22 $0.22
216 Red Onion Building Mixed Use $1,875 $0.45 $0.45
217 526 South Ardmore Avenue Multifamily $24,031 N/A $300
218 All Aboard Mini Storage - Santa Ana Self Storage $781 N/A $0.15
219 Villa East I & II Office $5,750 $0.20 $0.20
220 Courtyard Apartments Multifamily $14,225 $250 $250
221 Sunset View Village Apartments Multifamily $4,409 $304 $304
222 Wilmington Plaza Retail $3,938 $0.24 $0.24
223 The Nations Bank Building Office $1,500 N/A $0.15
224 Quail Ridge Apartments Multifamily $29,525 $250 $250
225 Best Western KCI Airport Hotel N/A 5.00% 5.00%
226 Laurel Heights Apartments Multifamily $4,875 $263 $262
227 El Monte Mobile Air Mobile Home Park Manufactured Housing $21,000 $62 $25
228 Harold Gilstrap Shopping Center Retail $9,761 $0.15 $0.15
229 Lakeside Apartments Multifamily $4,625 $250 $250
230 Park Glen Apartments Multifamily $2,150 $250 $250
231 St. Lucie Mobile Village Manufactured Housing N/A $49 $50
232 Ravenscroft Apartments Multifamily $37,375 $250 $250
233 Coach Country Corral MHP Manufactured Housing N/A N/A $50
234 Seaside Village Shopping Center Retail $20,275 $0.25 $0.21
235 Sherwood Park Apartments Multifamily N/A N/A $250
236 Ravenna Plaza Retail $25,500 $0.27 $0.27
237 Holiday Inn Express Oglesby Hotel N/A 4.00% 4.00%
238 Central/Magnolia Retail Center Mixed Use $4,594 $0.32 $0.32
239 Rolling Hills Estates Manufactured Housing $27,541 $50 $50
240 Saticoy-Royale Apartments Multifamily $17,640 $246 $246
241 Holiday/Park Riviera Mobile Home Park Manufactured Housing $24,750 N/A $50
242 Gottschalk's Department Store Retail N/A $0.18 $0.18
243 Justin Apartments Multifamily N/A $250 $250
244 Fountain Square Apartments Multifamily $95,500 $262 $262
245 383 St. Johns Place Multifamily $563 $251 $250
246 Days Inn Hotel $1,750 5.00% 5.00%
247 Market Plaza Retail $31,166 N/A $0.21
248 Michigan Plaza & Bender Plaza (5) Office N/A $0.15 $0.20
249 Mockingbird Park Retail Building Mixed Use N/A N/A $0.15
250 Poolesville Village Center Retail N/A N/A $0.15
251 Citadel Square Shopping Center (6) Retail $46,988 $0.15 $0.18
252 Executive Park Offices Office $24,688 $0.32 $0.32
253 Sherwood Mobile Home Estates Manufactured Housing $2,750 $75 $50
254 Ware's Van & Storage Co. Industrial $77,064 $0.15 $0.15
255 Sunrise Terrace Mobile Home Park Manufactured Housing $10,006 N/A $47
256 Best Western Country Inn North Hotel N/A 5.00% 5.00%
257 Woodlake Resort Village Apartments Multifamily $7,625 $249 $250
258 Plantation Pines Apartments Multifamily N/A $250 $250
259 Pacific Mini Storage Self Storage $3,125 $0.18 $0.15
260 Sunridge Apartments Multifamily $7,125 $252 $250
<CAPTION>
Contractual
Recurring U/W Tax &
LC&TI LC&TI Insurance
# Property Name Per Sq. Ft. Per Sq. Ft. Escrows
- ------------- ----------- ----------- -------
<S> <C> <C> <C> <C>
209 Hillside View Apartments N/A N/A Both
210 Benihana Restaurant N/A N/A Both
211 Crosswinds Apartments N/A N/A Both
212 Imperial Plaza Retail Center $0.98 $0.98 Both
213 Twin Lakes Mobile Home Park N/A N/A Both
214 Antietam Village Center $0.50 $0.69 Both
215 Gateway Shoppes $0.70 $0.70 Both
216 Red Onion Building $1.87 $1.87 Both
217 526 South Ardmore Avenue N/A N/A Both
218 All Aboard Mini Storage - Santa Ana N/A N/A Tax
219 Villa East I & II $0.81 $0.81 Both
220 Courtyard Apartments N/A N/A Both
221 Sunset View Village Apartments N/A N/A Both
222 Wilmington Plaza $0.45 $0.26 Both
223 The Nations Bank Building N/A $0.99 Both
224 Quail Ridge Apartments N/A N/A Both
225 Best Western KCI Airport N/A N/A Both
226 Laurel Heights Apartments N/A N/A Both
227 El Monte Mobile Air Mobile Home Park N/A N/A Tax
228 Harold Gilstrap Shopping Center N/A $0.04 Both
229 Lakeside Apartments N/A N/A Both
230 Park Glen Apartments N/A N/A Both
231 St. Lucie Mobile Village N/A N/A Both
232 Ravenscroft Apartments N/A N/A Both
233 Coach Country Corral MHP N/A N/A Both
234 Seaside Village Shopping Center $0.48 $1.00 Both
235 Sherwood Park Apartments N/A N/A Both
236 Ravenna Plaza $0.42 $0.55 Both
237 Holiday Inn Express Oglesby N/A N/A Both
238 Central/Magnolia Retail Center $0.89 $0.91 Both
239 Rolling Hills Estates N/A N/A Tax
240 Saticoy-Royale Apartments N/A N/A Both
241 Holiday/Park Riviera Mobile Home Park N/A N/A Both
242 Gottschalk's Department Store N/A N/A Both
243 Justin Apartments N/A N/A Both
244 Fountain Square Apartments N/A N/A Both
245 383 St. Johns Place N/A N/A Both
246 Days Inn N/A N/A Both
247 Market Plaza $0.71 $0.76 Both
248 Michigan Plaza & Bender Plaza (5) N/A $0.93 Both
249 Mockingbird Park Retail Building N/A $0.78 Both
250 Poolesville Village Center N/A $1.21 Both
251 Citadel Square Shopping Center (6) N/A $0.18 Both
252 Executive Park Offices $0.92 $0.92 Both
253 Sherwood Mobile Home Estates N/A N/A Both
254 Ware's Van & Storage Co. N/A $0.30 Both
255 Sunrise Terrace Mobile Home Park N/A N/A Both
256 Best Western Country Inn North N/A N/A Both
257 Woodlake Resort Village Apartments N/A N/A Both
258 Plantation Pines Apartments N/A N/A Both
259 Pacific Mini Storage N/A N/A Both
260 Sunridge Apartments 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>
261 Courtyards of Granbury Mixed Use $5,650 $0.25 $0.25
262 Parkside Place Apartments Multifamily $14,125 $250 $250
263 University Apartments Multifamily $75,185 $175 $250
264 Isaqueena Village Apartments Multifamily N/A $295 $295
265 Turtle Dove I Apartments Multifamily $5,750 $250 $250
266 Carson Gardens Mobile Home Park Manufactured Housing $3,250 $27 $27
267 Valerie Apartments Multifamily N/A $250 $250
268 Huddersfield Apartments Multifamily N/A $250 $250
269 1457 & 1519 - 1527 Park Road, NW Multifamily $1,250 $250 $250
270 Winter Garden Village Apartments Multifamily N/A $250 $250
271 Long Point Plaza Apartments Multifamily $60,000 $250 $287
272 The Place of Tempe Apartments Multifamily $563 $250 $250
273 Valley Garden Apartments Multifamily N/A $250 $250
274 Devereaux Apartments Multifamily $1,875 $254 $250
275 Bloomingdale Shopping Center Retail N/A $0.17 $0.17
276 Cottonwood Apartments Multifamily $4,130 $252 $252
277 Royal North Apartments Multifamily $750 $250 $250
278 Turtle Dove II Apartments Multifamily $625 $242 $250
<CAPTION>
Contractual
Recurring U/W Tax &
LC&TI LC&TI Insurance
# Property Name Per Sq. Ft. Per Sq. Ft. Escrows
- ------------- ----------- ----------- -------
<S> <C> <C> <C> <C>
261 Courtyards of Granbury N/A N/A Both
262 Parkside Place Apartments N/A N/A Both
263 University Apartments N/A N/A Both
264 Isaqueena Village Apartments N/A N/A Both
265 Turtle Dove I Apartments N/A N/A Both
266 Carson Gardens Mobile Home Park N/A N/A Tax
267 Valerie Apartments N/A N/A Both
268 Huddersfield Apartments N/A N/A Both
269 1457 & 1519 - 1527 Park Road, NW N/A N/A Both
270 Winter Garden Village Apartments N/A N/A Both
271 Long Point Plaza Apartments N/A N/A Both
272 The Place of Tempe Apartments N/A N/A Both
273 Valley Garden Apartments N/A N/A Both
274 Devereaux Apartments N/A N/A Both
275 Bloomingdale Shopping Center N/A $1.00 Both
276 Cottonwood Apartments N/A N/A Both
277 Royal North Apartments N/A N/A Both
278 Turtle Dove II Apartments 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 Plaza & 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>
Property Major Tenant #1 Major Tenant #1
# Property Name Type Sq. Ft. Name Sq. Ft.
- ------------- -------- ------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
15 Kendale Lakes Plaza (1B) Retail 404,553 K-Mart Corporation 114,000
16 Cypress Creek Station (1B) Retail 229,009 Regal Cinemas, Inc. 101,415
17 Oakwood Business Center (1B) Office 141,150 KOS Pharmaceuticals Inc. 23,499
24 2294 Molly Pitcher Highway (1D) Industrial 621,400 Franklin Storage 366,400
25 5015 Campuswood Drive (1D) Office 99,476 Time Warner/Intermed 39,444
26 5010 Campuswood Drive (1D) Office 70,163 National Grange 20,000
27 5009 Campuswood Drive (1D) Office 6,584 Apple-a-daycare 6,584
28 Fair Lakes Promenade Retail 143,789 Linens & Things 37,683
33 Dallas Design Center Portfolio Mixed Use 355,826 N/A N/A
34 Assembly Square Office Building Mixed Use 202,616 FiServ Inc. 34,994
37 White Station Tower Office 247,718 N/A N/A
41 The Shoppes at Longwood Retail 136,200 Super Fresh 40,184
43 Becker Village Mall Retail 305,629 Kmart 82,842
44 Tiffany Square Office 179,910 MCI Telecommunications 96,334
46 River Park Shopping Center Retail 230,659 K-Mart 86,479
50 Parkshore Centre Office Building Office 117,151 Medical University of SC 45,907
51 Kenwood Pavilion Retail 57,144 Organized Living 24,251
63 Hollywood Plaza Retail 59,383 Hollytron Electronics 36,400
64 50-60 Worcester Rd. Mixed Use 59,965 Strawberries 12,726
65 Mahwah Business Park Mixed Use 401,074 Mahwah Self Storage 96,838
66 Silvernail Shopping Center Retail 110,425 Pick N Save / Roundy's 53,324
67 Tech Center 29 Office/Warehouse Complex Industrial 176,914 Banc Tec USA Inc. 47,400
68 Centre North Shopping Center Retail 80,897 Staples 23,897
70 Cranbrook Centre Office Buildings (1H) Office 74,816 Orchards Children's Services 22,564
71 Lubbock Shopping Parkade Retail 160,393 Stein Mart 41,922
73 Prunedale Center Mixed Use 103,852 Fairway Stores, Inc. 17,048
75 Marycrest Shopping Center (2) Retail 172,030 Dominick's 67,761
76 Elm Plaza Shopping Center Retail 292,426 K-Mart Corporation 99,502
77 Century Plaza East Retail 121,192 Albertson's 42,630
78 Keller Springs Tech Center Industrial 80,000 Concentra 35,000
82 Tierra Verde Marine Center Mixed Use 82,271 Tierra Verde Marina 61,450
83 Aurora Square Retail 65,348 Marshalls 25,736
84 Merchant's Square (3) Retail 102,734 Kroger 59,134
85 Northwood Hills Shopping Center Retail 117,287 Cullum Companies, Inc. 48,900
86 36th Street Office Center Office 158,737 Amway Corporation 77,452
89 Brooks Corner Mixed Use 23,839 Brooks Brothers 5,190
92 Kingsgate North Mixed Use 92,057 Fox & Hound 10,642
96 West Century Center Retail 57,176 Blockbuster Video 7,094
97 Universal Plaza Retail 43,836 Telan Tech. 4,694
98 Crestview Market Place Retail 66,882 Winn-Dixie 51,282
103 Linens N Things Retail 41,520 Linens N' Things 41,520
108 Dowling Office Building Mixed Use 90,046 Department of Social Services 13,200
109 Main Street Plaza Shopping Center Retail 31,377 Smart & Final 21,057
114 One Bellemead Center Office 87,275 N/A N/A
115 Denver Tech Center #30 Office 55,664 Rocky Mountain Consultants 13,119
119 Colonia Shopping Center Retail 59,709 Town Sports International, Inc. 20,160
120 Vista Ridge Center III Retail 15,444 Hallmark Cards 6,000
122 Northpark Village Retail 70,600 United Supermarket 50,700
125 32nd Street and McDowell Road Shopping Center Retail 63,987 Southwest Supermarkets 15,048
126 Triangle Corporate Center Mixed Use 77,404 ACME-Wiley Corporation 11,895
127 One West Hills Office Office 57,967 Faulkner Group Affiliate 34,952
129 Heritage Green Shopping Center Retail 66,984 Berean 16,000
132 Century Plaza Strip Shopping Center (1K) Retail 36,622 Woman Care 7,208
133 Albany Square Strip Shopping Center (1K) Retail 30,479 Chicago School 7,347
134 Larrabee Complex Mixed Use 100,304 North America Marketing 19,118
140 Everhart Park Shopping Center Retail 63,277 Future Firm, Inc. 15,000
141 Rafael North Executive Park Office 30,503 MCGI, Inc. 3,219
143 Hewlett Shopping Center Retail 32,800 Loehmann 12,500
145 2700 Richards Building Office 31,962 Spectrum Controls 19,289
146 Lincoln Park Center Retail 46,190 Sterling Country 5,360
150 The Citibank Building Office 62,632 Citibank 17,689
151 Petco/Starbucks S/C Retail 12,016 Petco 7,427
152 1870 Ogden Drive Office 25,995 LCI - LEM Construction, Inc. 17,155
153 Woodland Park Office Building Office 51,231 State of California 9,526
157 Brookwood Village Retail 28,774 CVS 8,150
159 Little River Shopping Center Retail 51,560 Food Lion, Inc. 30,280
164 The Borders Building Retail 80,000 Borders, Inc. 40,000
165 Ken-Caryl Business Center Office 50,636 Ana Tech 27,714
169 Caruth Haven Retail Center Retail 16,800 RAJ Enterprises Rick's Futons 4,400
170 3456 Ridge Property Mixed Use 100,207 Signode 30,030
171 Campus Plaza Shopping Center Retail 26,457 Smart and Final 14,800
175 Airport Business Center Mixed Use 41,660 St. Mary's Medical Clinic 12,231
<CAPTION>
Major Tenant #1 Major Tenant #2
# Property Name Lease Expiration Date Name
- ------------- --------------------- ---------------
<S> <C> <C> <C>
15 Kendale Lakes Plaza (1B) 11/30/12 Builders Square #1009
16 Cypress Creek Station (1B) 7/31/17 Office Depot Inc.
17 Oakwood Business Center (1B) 11/30/00 Trader Publishing Company
24 2294 Molly Pitcher Highway (1D) 8/1/02 Staples
25 5015 Campuswood Drive (1D) 10/31/01 Travelers Indemnity
26 5010 Campuswood Drive (1D) 9/30/04 Deutsche Financial
27 5009 Campuswood Drive (1D) 10/1/04 N/A
28 Fair Lakes Promenade 5/2/11 CompUSA - The Computer Super Store
33 Dallas Design Center Portfolio N/A N/A
34 Assembly Square Office Building 12/1/03 Loews Theatres
37 White Station Tower N/A N/A
41 The Shoppes at Longwood 8/31/12 T.J. Maxx
43 Becker Village Mall 8/1/10 Belk's
44 Tiffany Square 12/1/01 Fluke Networks
46 River Park Shopping Center 9/30/14 Sav-A-Center
50 Parkshore Centre Office Building 2/1/02 Triton PCS Property Company LLC
51 Kenwood Pavilion 11/30/13 Cost Plus
63 Hollywood Plaza 7/31/05 Rite Aid Corporation
64 50-60 Worcester Rd. 6/30/08 A & C Associates, Inc.
65 Mahwah Business Park 5/31/26 Acupac Corp.
66 Silvernail Shopping Center 12/31/04 N/A
67 Tech Center 29 Office/Warehouse Complex 6/1/02 Elite Autohaus
68 Centre North Shopping Center 9/30/12 Pep Boys (Ground Lease)
70 Cranbrook Centre Office Buildings (1H) 9/30/99 N/A
71 Lubbock Shopping Parkade 11/8/05 Hobby Lobby
73 Prunedale Center 1/31/09 Long's Drugs
75 Marycrest Shopping Center (2) 1/1/06 N/A
76 Elm Plaza Shopping Center 7/1/00 Guiguere Enterprises, Inc. d/b/a Champions
77 Century Plaza East 8/1/20 Longs Drug Stores
78 Keller Springs Tech Center 10/1/05 Howmedica Leibinger
82 Tierra Verde Marine Center 6/30/18 N/A
83 Aurora Square 1/31/02 Pier 1
84 Merchant's Square (3) 12/31/06 Advanced Career Training
85 Northwood Hills Shopping Center 3/31/09 Calloway's Nursery
86 36th Street Office Center 2/28/02 Old Kent Bank
89 Brooks Corner 3/1/05 Gray & Graham
92 Kingsgate North 11/12/03 N/A
96 West Century Center 9/15/01 United Consumer Club of Kalamazoo
97 Universal Plaza 6/30/02 N/A
98 Crestview Market Place 7/29/18 N/A
103 Linens N Things 1/31/18 N/A
108 Dowling Office Building 2/29/04 N/A
109 Main Street Plaza Shopping Center 11/30/17 Hollywood Video
114 One Bellemead Center N/A N/A
115 Denver Tech Center #30 7/31/02 N/A
119 Colonia Shopping Center 9/30/13 JoAnn's Fabrics & Crafts
120 Vista Ridge Center III 2/29/04 La Madeline French Bakery
122 Northpark Village 3/31/10 N/A
125 32nd Street and McDowell Road Shopping Center 5/1/01 Factory 2 U
126 Triangle Corporate Center 10/1/02 Rowe Marketing Group
127 One West Hills Office 12/31/99 N/A
129 Heritage Green Shopping Center 11/30/99 Holiday Fantasies, Inc.
132 Century Plaza Strip Shopping Center (1K) 3/1/03 Pool & Spa
133 Albany Square Strip Shopping Center (1K) 8/31/99 Nick's Billiards
134 Larrabee Complex 3/1/03 S.D. Warren Company
140 Everhart Park Shopping Center 4/15/03 Saratoga Tire & Service
141 Rafael North Executive Park 3/31/00 N/A
143 Hewlett Shopping Center 1/1/02 Dime Savings
145 2700 Richards Building 6/30/01 Chili. Soft Inc.
146 Lincoln Park Center 12/31/00 N/A
150 The Citibank Building 6/30/00 Maxnet Communication Systems
151 Petco/Starbucks S/C 11/13/05 Cox Communications
152 1870 Ogden Drive 11/30/07 Trendwest Resorts, Inc.
153 Woodland Park Office Building 10/31/01 Dodge, Warren and Peters
157 Brookwood Village 1/31/13 The Bread Market
159 Little River Shopping Center 11/3/16 CVS Pharmacy, Inc.
164 The Borders Building 10/31/09 N/A
165 Ken-Caryl Business Center 12/31/01 Peak 1 Resources, Inc.
169 Caruth Haven Retail Center 4/30/11 Fast Stop Food Store
170 3456 Ridge Property 10/31/02 Rollex
171 Campus Plaza Shopping Center 7/31/14 N/A
175 Airport Business Center 2/1/03 Quest Diagnostics, Inc.
<CAPTION>
Major Tenant #2 Major Tenant #2 Major Tenant #3
# Property Name Sq. Ft. Lease Expiration Date Name
- ------------- --------------- --------------------- ---------------
<S> <C> <C> <C> <C>
15 Kendale Lakes Plaza (1B) 109,800 3/31/21 N/A
16 Cypress Creek Station (1B) 36,929 12/31/11 N/A
17 Oakwood Business Center (1B) 16,816 10/31/02 N/A
24 2294 Molly Pitcher Highway (1D) 255,000 11/1/00 N/A
25 5015 Campuswood Drive (1D) 25,903 11/30/01 Liberty Mutual
26 5010 Campuswood Drive (1D) 11,131 3/14/00 Dun & Bradstreet
27 5009 Campuswood Drive (1D) N/A N/A N/A
28 Fair Lakes Promenade 24,560 11/30/13 Barnes & Noble Booksellers
33 Dallas Design Center Portfolio N/A N/A N/A
34 Assembly Square Office Building 34,153 1/31/07 Unisys Corporation
37 White Station Tower N/A N/A N/A
41 The Shoppes at Longwood 24,300 9/30/02 N/A
43 Becker Village Mall 52,544 2/1/00 JC Penney
44 Tiffany Square 29,913 11/1/02 AMC
46 River Park Shopping Center 44,880 1/31/11 Sears
50 Parkshore Centre Office Building 19,697 7/1/03 N/A
51 Kenwood Pavilion 19,071 7/31/13 Mikasa
63 Hollywood Plaza 18,140 12/31/29 N/A
64 50-60 Worcester Rd. 9,914 1/31/01 Houlihan's Restaurant
65 Mahwah Business Park 78,241 6/30/07 N/A
66 Silvernail Shopping Center N/A N/A N/A
67 Tech Center 29 Office/Warehouse Complex 19,951 8/1/07 N/A
68 Centre North Shopping Center 22,500 5/31/18 Flower City
70 Cranbrook Centre Office Buildings (1H) N/A N/A N/A
71 Lubbock Shopping Parkade 40,000 3/31/02 T.J. Maxx
73 Prunedale Center 12,000 2/28/05 N/A
75 Marycrest Shopping Center (2) N/A N/A N/A
76 Elm Plaza Shopping Center 55,000 8/1/06 J.C. Penney
77 Century Plaza East 25,822 2/28/16 N/A
78 Keller Springs Tech Center 26,236 8/1/03 Technifax
82 Tierra Verde Marine Center N/A N/A N/A
83 Aurora Square 7,500 2/28/08 N/A
84 Merchant's Square (3) 13,500 5/31/04 N/A
85 Northwood Hills Shopping Center 22,000 6/30/02 N/A
86 36th Street Office Center 43,895 6/30/00 Cascade Engineering
89 Brooks Corner 4,180 1/1/00 Connoisseur Communications
92 Kingsgate North N/A N/A N/A
96 West Century Center 5,875 11/30/03 N/A
97 Universal Plaza N/A N/A N/A
98 Crestview Market Place N/A N/A N/A
103 Linens N Things N/A N/A N/A
108 Dowling Office Building N/A N/A N/A
109 Main Street Plaza Shopping Center 6,562 3/30/08 N/A
114 One Bellemead Center N/A N/A N/A
115 Denver Tech Center #30 N/A N/A N/A
119 Colonia Shopping Center 15,700 6/30/06 Bio-Medical Applications of Co.
120 Vista Ridge Center III 4,200 11/30/08 Jos. A. Bank Clothiers
122 Northpark Village N/A N/A N/A
125 32nd Street and McDowell Road Shopping Center 9,728 10/1/99 N/A
126 Triangle Corporate Center 8,581 5/31/08 Sting International
127 One West Hills Office N/A N/A N/A
129 Heritage Green Shopping Center 9,508 2/28/00 N/A
132 Century Plaza Strip Shopping Center (1K) 4,037 10/1/02 N/A
133 Albany Square Strip Shopping Center (1K) 6,240 3/1/99 Bedding Expert
134 Larrabee Complex 21,147 12/1/99 Sherwin Williams Company
140 Everhart Park Shopping Center 9,567 6/30/99 Eckerd's
141 Rafael North Executive Park N/A N/A N/A
143 Hewlett Shopping Center 5,500 8/1/07 Citibank
145 2700 Richards Building 4,377 12/2/00 N/A
146 Lincoln Park Center N/A N/A N/A
150 The Citibank Building 12,685 2/28/02 Superior Bank
151 Petco/Starbucks S/C 1,550 10/6/02 N/A
152 1870 Ogden Drive 8,440 3/31/03 N/A
153 Woodland Park Office Building 8,460 5/31/02 GN Mortgage
157 Brookwood Village 3,511 7/31/99 N/A
159 Little River Shopping Center 8,450 9/30/00 N/A
164 The Borders Building N/A N/A N/A
165 Ken-Caryl Business Center 9,152 9/30/01 N/A
169 Caruth Haven Retail Center 2,600 Month to Month Starbucks
170 3456 Ridge Property 25,100 1/31/99 MEDX
171 Campus Plaza Shopping Center N/A N/A N/A
175 Airport Business Center 6,045 3/1/99 Decision One Corporation
<CAPTION>
Major Tenant #3 Major Tenant #3
# Property Name Sq. Ft. Lease Expiration Date
- ------------- --------------- ----------------------
<S> <C> <C> <C>
15 Kendale Lakes Plaza (1B) N/A N/A
16 Cypress Creek Station (1B) N/A N/A
17 Oakwood Business Center (1B) N/A N/A
24 2294 Molly Pitcher Highway (1D) N/A N/A
25 5015 Campuswood Drive (1D) 21,773 8/27/03
26 5010 Campuswood Drive (1D) 7,257 1/31/99
27 5009 Campuswood Drive (1D) N/A N/A
28 Fair Lakes Promenade 24,000 8/31/11
33 Dallas Design Center Portfolio N/A N/A
34 Assembly Square Office Building 31,223 7/31/00
37 White Station Tower N/A N/A
41 The Shoppes at Longwood N/A N/A
43 Becker Village Mall 52,349 2/1/00
44 Tiffany Square 19,883 10/1/00
46 River Park Shopping Center 46,856 10/31/04
50 Parkshore Centre Office Building N/A N/A
51 Kenwood Pavilion 10,370 7/30/08
63 Hollywood Plaza N/A N/A
64 50-60 Worcester Rd. 9,450 1/31/07
65 Mahwah Business Park N/A N/A
66 Silvernail Shopping Center N/A N/A
67 Tech Center 29 Office/Warehouse Complex N/A N/A
68 Centre North Shopping Center 10,500 11/30/02
70 Cranbrook Centre Office Buildings (1H) N/A N/A
71 Lubbock Shopping Parkade 30,754 3/30/05
73 Prunedale Center N/A N/A
75 Marycrest Shopping Center (2) N/A N/A
76 Elm Plaza Shopping Center 45,000 8/1/99
77 Century Plaza East N/A N/A
78 Keller Springs Tech Center 15,892 11/1/03
82 Tierra Verde Marine Center N/A N/A
83 Aurora Square N/A N/A
84 Merchant's Square (3) N/A N/A
85 Northwood Hills Shopping Center N/A N/A
86 36th Street Office Center 23,141 2/28/05
89 Brooks Corner 3,859 6/1/02
92 Kingsgate North N/A N/A
96 West Century Center N/A N/A
97 Universal Plaza N/A N/A
98 Crestview Market Place N/A N/A
103 Linens N Things N/A N/A
108 Dowling Office Building N/A N/A
109 Main Street Plaza Shopping Center N/A N/A
114 One Bellemead Center N/A N/A
115 Denver Tech Center #30 N/A N/A
119 Colonia Shopping Center 7,087 9/7/04
120 Vista Ridge Center III 3,750 1/31/08
122 Northpark Village N/A N/A
125 32nd Street and McDowell Road Shopping Center N/A N/A
126 Triangle Corporate Center 8,103 6/30/02
127 One West Hills Office N/A N/A
129 Heritage Green Shopping Center N/A N/A
132 Century Plaza Strip Shopping Center (1K) N/A N/A
133 Albany Square Strip Shopping Center (1K) 3,475 3/1/99
134 Larrabee Complex 13,565 7/1/01
140 Everhart Park Shopping Center 8,775 3/18/11
141 Rafael North Executive Park N/A N/A
143 Hewlett Shopping Center 5,500 11/1/03
145 2700 Richards Building N/A N/A
146 Lincoln Park Center N/A N/A
150 The Citibank Building 9,515 2/28/02
151 Petco/Starbucks S/C N/A N/A
152 1870 Ogden Drive N/A N/A
153 Woodland Park Office Building 5,251 4/30/02
157 Brookwood Village N/A N/A
159 Little River Shopping Center N/A N/A
164 The Borders Building N/A N/A
165 Ken-Caryl Business Center N/A N/A
169 Caruth Haven Retail Center 2,000 10/5/08
170 3456 Ridge Property 25,027 2/28/01
171 Campus Plaza Shopping Center N/A N/A
175 Airport Business Center 5,987 7/1/99
</TABLE>
<PAGE>
Major Tenants of the Commercial Mortgaged Properties (6)
<TABLE>
<CAPTION>
Property Major Tenant #1 Major Tenant #1
# Property Name Type Sq. Ft. Name Sq. Ft.
- ------------- -------- ------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
176 Staples - Wilmington Retail 29,049 Staples The Office Superstore 24,049
177 Felicita Junction Retail 41,682 Jimbo's Natural Foods 16,293
181 Staples - Valparaiso Retail 24,049 Staples 24,049
183 Centennial Creek Office Park Office 28,540 Qualix Group 3,277
191 Cottonwood Plaza Mixed Use 45,778 Alphagraphics 9,190
192 Southport Shops Retail 17,763 Experts on Sight 3,892
197 Moore Lake Commons Shopping Center Retail 64,905 Dave's Sport Shop 16,810
200 South Street Seaport Office Center Office 48,177 South Street Seaport Museum 8,339
201 Hathaway Commerce Center Industrial 67,214 Simons Bakery 17,280
203 Walgreen's Drug Store - Swansea Retail 13,905 Walgreens 13,905
205 Devonshire Square Retail Center Retail 16,725 Quality Medical Management, Inc. 2,800
206 1440 N. Vine Street Retail 14,401 Kinko Copies 5,821
210 Benihana Restaurant Retail 8,284 Benihana Restaurant 8,284
212 Imperial Plaza Retail Center Retail 26,337 US Social Security 4,576
214 Antietam Village Center Retail 26,789 Mountainview Liquors, Inc. 3,500
215 Gateway Shoppes Retail 21,920 Wolf Camera 4,550
216 Red Onion Building Mixed Use 8,200 Red Onion Restaurant 2,651
219 Villa East I & II Office 49,725 Lutheran Family 8,624
222 Wilmington Plaza Retail 54,401 Sav-On 22,250
223 The Nations Bank Building Office 33,726 Nations Bank of Texas 13,658
228 Harold Gilstrap Shopping Center Retail 83,131 Pamidia, Inc. 48,506
234 Seaside Village Shopping Center Retail 50,144 L.L. Wings, Inc. 10,000
236 Ravenna Plaza Retail 87,644 Central Tractor 40,000
238 Central/Magnolia Retail Center Mixed Use 17,556 Blockbuster Video 6,424
242 Gottschalk's Department Store Retail 40,000 Gottschalk's, Inc. 40,000
247 Market Plaza Retail 22,534 Key Bank 3,859
248 Michigan Plaza & Bender Plaza (4) Office 63,331 Texaco 18,128
249 Mockingbird Park Retail Building Mixed Use 46,802 Fitness Connection, Inc. 16,719
250 Poolesville Village Center Retail 16,715 CVS Pharmacy 7,642
251 Citadel Square Shopping Center (5) Retail 50,173 A&P/ Office Depot 42,688
252 Executive Park Offices Office 23,274 FWC 5,823
254 Ware's Van & Storage Co. Industrial 56,600 Northwest Operations, LLC 56,600
262 Courtyards of Granbury Mixed Use 47,340 N/A N/A
275 Bloomingdale Shopping Center Retail 11,000 Twinkling Stars Nursery 2,000
<CAPTION>
Major Tenant #1 Major Tenant #2 Major Tenant #2
# Property Name Lease Expiration Date Name Sq. Ft.
- ------------- --------------------- --------------- ---------------
<S> <C> <C> <C> <C>
176 Staples - Wilmington 8/31/13 Shastar 5,000
177 Felicita Junction 12/31/17 Sav-On (Ground Lease) 16,854
181 Staples - Valparaiso 10/31/13 N/A N/A
183 Centennial Creek Office Park 9/30/00 Hulet-Watson 3,125
191 Cottonwood Plaza 2/28/01 Bon Voyage Travel 7,787
192 Southport Shops 7/31/03 Mancino's Pizza and Grinders 3,038
197 Moore Lake Commons Shopping Center 3/31/08 Pawn America 7,625
200 South Street Seaport Office Center 12/1/99 Putnam Lovell 6,968
201 Hathaway Commerce Center 4/30/00 California Mortgage 8,272
203 Walgreen's Drug Store - Swansea 8/30/16 N/A N/A
205 Devonshire Square Retail Center 9/30/99 Murray Goldstein and Marion Goldstein 2,000
206 1440 N. Vine Street 8/30/08 AAA Flag & Banner 3,850
210 Benihana Restaurant 7/1/18 N/A N/A
212 Imperial Plaza Retail Center 6/7/99 St. Francis 3,000
214 Antietam Village Center 12/31/03 Southland Corp. 7-11 2,750
215 Gateway Shoppes 10/31/02 House of Golf 3,000
216 Red Onion Building 6/30/04 Omnibus Gallery 1,835
219 Villa East I & II 5/31/03 Dahlin Dental 6,031
222 Wilmington Plaza 2/28/10 Goodwill 14,250
223 The Nations Bank Building 12/1/04 Prudential Health Care 13,700
228 Harold Gilstrap Shopping Center 5/1/02 J.C. Food Store 21,375
234 Seaside Village Shopping Center 2/28/03 Gold's Gym 9,000
236 Ravenna Plaza 1/31/04 Ravenna IGA 31,575
238 Central/Magnolia Retail Center 1/15/00 Appian Escrow 3,516
242 Gottschalk's Department Store 2/28/05 N/A N/A
247 Market Plaza 3/30/01 Rent-A-Center, Inc. 3,008
248 Michigan Plaza & Bender Plaza (4) 6/30/00 Miller Johnson 10,245
249 Mockingbird Park Retail Building 5/1/06 I Dance 2 6,026
250 Poolesville Village Center 5/1/06 Sax, Leonard, M.D. 2,192
251 Citadel Square Shopping Center (5) 2/28/03 N/A N/A
252 Executive Park Offices 4/3/01 N/A N/A
254 Ware's Van & Storage Co. 10/30/13 N/A N/A
262 Courtyards of Granbury N/A N/A N/A
275 Bloomingdale Shopping Center 6/30/00 N/A N/A
<CAPTION>
Major Tenant #2 Major Tenant #3
# Property Name Lease Expiration Date Name
- ------------- --------------------- ---------------
<S> <C> <C> <C>
176 Staples - Wilmington 3/31/04 N/A
177 Felicita Junction 6/30/17 N/A
181 Staples - Valparaiso N/A N/A
183 Centennial Creek Office Park 9/1/99 N/A
191 Cottonwood Plaza 11/30/01 Coco's
192 Southport Shops 11/30/01 Duron Paints
197 Moore Lake Commons Shopping Center 10/31/00 New Horizon
200 South Street Seaport Office Center 9/1/02 N/A
201 Hathaway Commerce Center 11/30/00 Paul Thibodeau
203 Walgreen's Drug Store - Swansea N/A N/A
205 Devonshire Square Retail Center 12/31/99 Edward Yepremian (Jasmine Cleaners)
206 1440 N. Vine Street 6/6/02 Out of the Closet
210 Benihana Restaurant N/A N/A
212 Imperial Plaza Retail Center 12/18/02 N/A
214 Antietam Village Center 10/6/99 N/A
215 Gateway Shoppes 4/30/03 Neptune Bar & Grill
216 Red Onion Building 5/30/03 N/A
219 Villa East I & II 7/31/03 Complex Skin
222 Wilmington Plaza 5/31/03 Hollywood Video
223 The Nations Bank Building 1/1/02 Rehability Center
228 Harold Gilstrap Shopping Center 9/1/07 Rite Aid
234 Seaside Village Shopping Center 2/28/06 U.S. Government/Gen.Svc.Adm
236 Ravenna Plaza 5/31/08 Gray Drug/Rite-Aid
238 Central/Magnolia Retail Center 3/10/02 N/A
242 Gottschalk's Department Store N/A N/A
247 Market Plaza 1/31/99 Fashion Retail, Inc.
248 Michigan Plaza & Bender Plaza (4) 4/30/02 State of New Mexico: Children Youth & Families
249 Mockingbird Park Retail Building 10/1/99 N/A
250 Poolesville Village Center 2/1/01 B & S Beer and Wine
251 Citadel Square Shopping Center (5) N/A N/A
252 Executive Park Offices N/A N/A
254 Ware's Van & Storage Co. N/A N/A
262 Courtyards of Granbury N/A N/A
275 Bloomingdale Shopping Center N/A N/A
<CAPTION>
Major Tenant #3 Major Tenant #3
# Property Name Sq. Ft. Lease Expiration Date
- ------------- --------------- ----------------------
<S> <C> <C> <C>
176 Staples - Wilmington N/A N/A
177 Felicita Junction N/A N/A
181 Staples - Valparaiso N/A N/A
183 Centennial Creek Office Park N/A N/A
191 Cottonwood Plaza 5,400 6/30/05
192 Southport Shops 3,038 11/30/01
197 Moore Lake Commons Shopping Center 7,532 12/31/07
200 South Street Seaport Office Center N/A N/A
201 Hathaway Commerce Center 6,946 6/30/02
203 Walgreen's Drug Store - Swansea N/A N/A
205 Devonshire Square Retail Center 2,000 2/28/04
206 1440 N. Vine Street 3,780 6/13/00
210 Benihana Restaurant N/A N/A
212 Imperial Plaza Retail Center N/A N/A
214 Antietam Village Center N/A N/A
215 Gateway Shoppes 2,470 11/30/00
216 Red Onion Building N/A N/A
219 Villa East I & II 5,859 3/31/01
222 Wilmington Plaza 6,440 5/31/08
223 The Nations Bank Building 4,543 10/1/03
228 Harold Gilstrap Shopping Center 8,450 9/1/02
234 Seaside Village Shopping Center 8,042 3/9/04
236 Ravenna Plaza 10,069 9/30/00
238 Central/Magnolia Retail Center N/A N/A
242 Gottschalk's Department Store N/A N/A
247 Market Plaza 3,008 4/30/00
248 Michigan Plaza & Bender Plaza (4) 10,910 2/29/08
249 Mockingbird Park Retail Building N/A N/A
250 Poolesville Village Center 1,768 6/1/01
251 Citadel Square Shopping Center (5) N/A N/A
252 Executive Park Offices N/A N/A
254 Ware's Van & Storage Co. N/A N/A
262 Courtyards of Granbury N/A N/A
275 Bloomingdale Shopping Center 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 Plaza & 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.
<PAGE>
Additional Mortgage Loan Information
<TABLE>
<CAPTION>
Property Property Hotel
# Property Name Type Sub-type Franchise
- ------------- ---- -------- ---------
<S> <C> <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 Limited 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 Edentree Apartments Multifamily
43 Becker Village Mall Retail Anchored
44 Tiffany Square Office
45 The Mint Apartments Multifamily
46 River Park Shopping Center Retail Anchored
47 Rancho Destino Apartments Multifamily
48 Conestoga Mobile Home Park Manufactured Housing
49 Huntington Chase Apartments Multifamily
50 Parkshore Centre Office Building Office
51 Kenwood Pavilion Retail Unanchored
52 Newsome Park Apartments Multifamily
53 Princeton Court Apartments (1F) Multifamily
54 Pinewood Estates Apartments (1F) Multifamily
55 Arbor Court Apartments (1F) Multifamily
56 U-Store of Brighton Self Storage Facility (1G) Self Storage
57 U-Store of South Lyon Self Storage Facility (1G) Self Storage
58 U-Store of Saline Self Storage Facility (1G) Self Storage
59 U-Store of Davison Self Storage Facility (1G) Self Storage
60 U-Store of Holly Self Storage Facility (1G) Self Storage
61 U-Store of Jackson Self Storage Facility (1G) Self Storage
62 Birches Apartments Multifamily
63 Hollywood Plaza Retail Anchored
64 50-60 Worcester Rd. Mixed Use Office/Retail
65 Mahwah Business Park Mixed Use Office/Industrial
66 Silvernail Shopping Center Retail Anchored
<CAPTION>
Most Recent
Occupancy Date of Operating Most
Rate at Occupancy Statement Recent
# Property Name Underwriting(7) Rate Date Revenue
- ------------- --------------- --------- ----------- --------
<S> <C> <C> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) N/A 6/1/98 6/30/98 $ 4,527,399
2 Quality Suites - Charleston (1A) N/A 6/1/98 6/30/98 4,035,455
3 Courtyard by Marriott - Ann Arbor (1A) N/A 6/1/98 6/30/98 4,518,538
4 Residence Inn - Phoenix (1A) N/A 6/1/98 6/30/98 4,450,180
5 Homewood Suites - Cary (1A) N/A 6/1/98 6/30/98 3,754,058
6 Hampton Inn & Suites - Gwinnett (1A) N/A 6/1/98 6/30/98 2,948,428
7 Hampton Inn - Raleigh (1A) N/A 6/1/98 6/30/98 3,096,774
8 Comfort Suites - Orlando (1A) N/A 6/1/98 6/30/98 4,616,248
9 Hampton Inn - Perimeter (1A) N/A 6/1/98 6/30/98 2,812,138
10 Hampton Inn - Charlotte, NC (1A) N/A 6/1/98 6/30/98 2,921,820
11 Courtyard by Marriott - Wilmington (1A) N/A 6/1/98 6/30/98 2,813,774
12 Hampton Inn - West Springfield (1A) N/A 6/1/98 6/30/98 2,404,755
13 Homewood Suites - Clear Lake (1A) N/A 6/1/98 6/30/98 2,679,263
14 Comfort Inn - Charleston (1A) N/A 6/1/98 6/30/98 2,529,059
15 Kendale Lakes Plaza (1B) 98% 12/31/98 12/31/98 4,323,975
16 Cypress Creek Station (1B) 99% 12/31/98 12/31/98 3,531,600
17 Oakwood Business Center (1B) 97% 12/31/98 12/31/98 2,081,735
18 Westchase Ranch Apartments (1C) 96% 1/20/99 11/30/98 4,363,700
19 Westwood Village Apartments (1C) 92% 1/20/99 11/30/98 2,102,611
20 Normandy Woods Apartments (1C) 95% 1/21/99 11/30/98 1,558,074
21 Savoy Manor Apartments (1C) 97% 1/20/99 11/30/98 1,097,275
22 San Marin Apartments (1C) 86% 1/20/99 11/30/98 1,031,864
23 Country Squire Apartments - South 94% 9/30/98 7/31/98 5,539,068
24 2294 Molly Pitcher Highway (1D) 100% 9/1/98 6/30/98 1,021,900
25 5015 Campuswood Drive (1D) 100% 9/23/98 6/30/98 1,916,382
26 5010 Campuswood Drive (1D) 94% 9/23/98 6/30/98 1,298,598
27 5009 Campuswood Drive (1D) 100% 7/1/98 6/30/98 116,380
28 Fair Lakes Promenade 100% 8/20/98 7/31/98 2,749,232
29 Keller Oaks Apartments (1E) 98% 3/24/98 2/28/98 1,455,655
30 Sycamore Hill Apartments (1E) 96% 3/24/98 2/28/98 1,281,315
31 Clarendon Apartments (1E) 95% 3/24/98 2/28/98 1,167,429
32 Woodchase Condominiums (1E) 99% 3/24/98 2/28/98 507,456
33 Dallas Design Center Portfolio 98% 12/31/98 9/30/98 3,625,438
34 Assembly Square Office Building 100% 11/4/98 10/31/98 3,111,337
35 Spicetree Apartments 96% 6/25/98 6/30/98 3,564,426
36 Lamplighter Mobile Home Park 100% 9/30/98 10/31/98 2,549,837
37 White Station Tower 93% 1/1/99 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% 11/25/97 11/19/97 2,259,394
40 Southwood Apartments 94% 9/30/98 10/31/98 2,771,592
41 The Shoppes at Longwood 100% 7/31/98 7/31/98 2,217,124
42 Edentree Apartments 96% 8/25/98 7/31/98 2,410,703
43 Becker Village Mall 99% 9/1/98 8/31/98 2,065,029
44 Tiffany Square 100% 9/1/98 8/31/98 2,057,196
45 The Mint Apartments 93% 11/16/98 11/30/98 3,075,010
46 River Park Shopping Center 94% 9/1/98 8/31/98 1,488,679
47 Rancho Destino Apartments 100% 10/30/98 7/27/98 1,668,788
48 Conestoga Mobile Home Park 96% 7/31/98 5/31/98 1,266,178
49 Huntington Chase Apartments 96% 9/22/98 9/17/98 1,662,680
50 Parkshore Centre Office Building 100% 4/1/98 12/31/98 1,870,976
51 Kenwood Pavilion 100% 11/10/98 9/1/98 1,243,208
52 Newsome Park Apartments 97% 6/12/98 6/30/98 2,583,467
53 Princeton Court Apartments (1F) 97% 8/18/98 7/31/98 816,227
54 Pinewood Estates Apartments (1F) 95% 8/18/98 7/31/98 970,823
55 Arbor Court Apartments (1F) 94% 8/18/98 7/31/98 1,123,222
56 U-Store of Brighton Self Storage Facility (1G) 92% 10/15/98 9/30/98 560,026
57 U-Store of South Lyon Self Storage Facility (1G) 94% 10/15/98 9/30/98 363,469
58 U-Store of Saline Self Storage Facility (1G) 88% 10/15/98 9/30/98 376,707
59 U-Store of Davison Self Storage Facility (1G) 94% 10/15/98 9/30/98 248,209
60 U-Store of Holly Self Storage Facility (1G) 86% 10/15/98 9/30/98 220,913
61 U-Store of Jackson Self Storage Facility (1G) 86% 10/15/98 9/30/98 135,727
62 Birches Apartments 94% 11/24/98 10/31/98 1,736,205
63 Hollywood Plaza 98% 7/1/98 5/31/98 1,387,441
64 50-60 Worcester Rd. 100% 9/10/98 8/31/98 1,539,490
65 Mahwah Business Park 88% 12/24/98 12/31/98 1,356,732
66 Silvernail Shopping Center 92% 8/31/98 8/30/98 1,139,018
<CAPTION>
Most Most Most
Recent Recent Recent U/W U/W U/W
# Property Name Expenses NOI DSCR(8) NOI NCF DSCR(8)
- ------------- -------- ------ ------- --- --- -------
<S> <C> <C> <C> <C>
1 Hampton Inn - Elmsford (1A) $ 2,396,594 $ 2,130,805 3.19x $ 1,864,954 $ 1,374,994 2.54x
2 Quality Suites - Charleston (1A) 2,213,839 1,821,616 3.30 1,677,663 1,271,697 2.54
3 Courtyard by Marriott - Ann Arbor (1A) 2,464,313 2,054,225 3.72 1,863,278 1,216,246 2.54
4 Residence Inn - Phoenix (1A) 2,512,651 1,937,529 3.51 1,937,667 1,920,777 2.54
5 Homewood Suites - Cary (1A) 1,754,101 1,999,957 3.78 1,546,338 1,452,430 2.54
6 Hampton Inn & Suites - Gwinnett (1A) 1,473,551 1,474,877 3.11 1,372,668 1,114,219 2.54
7 Hampton Inn - Raleigh (1A) 1,542,413 1,554,361 3.34 1,298,209 1,000,261 2.54
8 Comfort Suites - Orlando (1A) 2,772,827 1,843,421 4.06 1,693,305 1,205,152 2.54
9 Hampton Inn - Perimeter (1A) 1,442,108 1,370,030 3.12 1,357,456 1,067,607 2.54
10 Hampton Inn - Charlotte, NC (1A) 1,427,239 1,494,581 3.72 1,257,125 920,667 2.54
11 Courtyard by Marriott - Wilmington (1A) 1,563,057 1,250,717 3.34 1,230,807 824,922 2.54
12 Hampton Inn - West Springfield (1A) 1,415,059 989,696 3.05 939,245 769,690 2.54
13 Homewood Suites - Clear Lake (1A) 1,637,937 1,041,326 3.44 965,176 755,838 2.54
14 Comfort Inn - Charleston (1A) 1,398,148 1,130,911 8.19 1,093,638 897,540 2.54
15 Kendale Lakes Plaza (1B) 763,912 3,560,063 1.34 3,313,246 3,241,994 1.25
16 Cypress Creek Station (1B) 985,132 2,546,468 1.19 2,806,268 2,700,441 1.25
17 Oakwood Business Center (1B) 626,494 1,455,241 1.56 1,421,743 1,228,249 1.25
18 Westchase Ranch Apartments (1C) 1,975,659 2,388,041 1.30 2,526,825 2,332,825 1.30
19 Westwood Village Apartments (1C) 937,939 1,164,672 1.37 1,172,658 1,092,658 1.30
20 Normandy Woods Apartments (1C) 740,640 817,434 1.41 916,348 849,348 1.30
21 Savoy Manor Apartments (1C) 534,537 562,738 1.33 588,292 540,292 1.30
22 San Marin Apartments (1C) 691,063 340,801 1.16 417,737 369,487 1.30
23 Country Squire Apartments - South 2,481,348 3,057,720 1.30 3,008,930 3,008,930 1.28
24 2294 Molly Pitcher Highway (1D) 476,006 545,894 0.38 2,008,217 1,791,007 1.40
25 5015 Campuswood Drive (1D) 631,694 1,284,688 2.12 1,151,781 972,949 1.40
26 5010 Campuswood Drive (1D) 469,760 828,838 2.19 761,819 639,225 1.40
27 5009 Campuswood Drive (1D) 29,180 87,200 2.00 77,688 65,758 1.40
28 Fair Lakes Promenade 455,844 2,293,388 1.33 2,284,188 2,223,209 1.29
29 Keller Oaks Apartments (1E) 648,950 806,705 1.42 762,660 762,660 1.24
30 Sycamore Hill Apartments (1E) 668,024 613,291 1.25 516,741 516,741 1.24
31 Clarendon Apartments (1E) 642,274 525,155 1.46 471,616 471,616 1.24
32 Woodchase Condominiums (1E) 227,158 280,298 1.47 249,140 249,140 1.24
33 Dallas Design Center Portfolio 1,670,242 1,955,196 1.33 2,241,935 1,917,103 1.30
34 Assembly Square Office Building 1,250,496 1,860,841 1.33 1,945,253 1,757,340 1.26
35 Spicetree Apartments 1,696,697 1,867,729 1.44 1,706,242 1,706,242 1.32
36 Lamplighter Mobile Home Park 790,813 1,759,025 1.34 1,584,956 1,584,956 1.21
37 White Station Tower 1,589,466 2,154,195 1.67 2,052,581 1,656,723 1.29
38 Holiday Inn New Orleans Veterans 2,897,142 2,393,742 1.72 2,194,699 1,975,611 1.42
39 The Links at Bixby 557,063 1,702,331 1.37 1,580,202 1,580,202 1.27
40 Southwood Apartments 1,283,495 1,488,097 1.26 1,486,121 1,486,121 1.26
41 The Shoppes at Longwood 513,557 1,703,567 1.44 1,611,293 1,520,138 1.29
42 Edentree Apartments 1,218,160 1,192,543 1.26 1,150,799 1,150,799 1.22
43 Becker Village Mall 579,693 1,485,336 1.55 1,270,355 1,209,229 1.26
44 Tiffany Square 770,093 1,287,103 1.37 1,505,018 1,220,026 1.30
45 The Mint Apartments 1,768,861 1,306,149 1.43 1,386,164 1,238,164 1.36
46 River Park Shopping Center 249,488 1,239,191 1.34 1,246,521 1,171,613 1.27
47 Rancho Destino Apartments 532,648 1,136,140 1.36 1,002,185 1,002,185 1.20
48 Conestoga Mobile Home Park 352,603 913,575 1.18 1,085,388 1,085,388 1.40
49 Huntington Chase Apartments 569,643 1,093,037 1.43 972,130 972,130 1.27
50 Parkshore Centre Office Building 752,341 1,118,635 1.55 1,151,267 999,241 1.38
51 Kenwood Pavilion 226,116 1,017,092 1.36 974,108 932,783 1.25
52 Newsome Park Apartments 1,774,994 808,473 1.19 837,903 837,903 1.24
53 Princeton Court Apartments (1F) 576,624 239,603 0.74 221,950 221,950 1.23
54 Pinewood Estates Apartments (1F) 756,562 214,261 1.07 178,233 178,233 1.23
55 Arbor Court Apartments (1F) 665,327 457,895 2.62 455,933 455,933 1.23
56 U-Store of Brighton Self Storage Facility (1G) 163,976 396,050 1.50 320,352 320,352 1.30
57 U-Store of South Lyon Self Storage Facility (1G) 88,350 275,119 1.96 191,789 191,789 1.30
58 U-Store of Saline Self Storage Facility (1G) 131,174 245,533 1.91 180,049 180,049 1.30
59 U-Store of Davison Self Storage Facility (1G) 85,611 162,598 1.77 130,795 130,795 1.30
60 U-Store of Holly Self Storage Facility (1G) 77,535 143,378 1.69 96,173 96,173 1.30
61 U-Store of Jackson Self Storage Facility (1G) 41,468 94,259 1.78 70,634 70,634 1.30
62 Birches Apartments 690,705 1,045,500 1.52 825,589 825,589 1.20
63 Hollywood Plaza 360,280 1,027,161 1.56 908,388 858,507 1.31
64 50-60 Worcester Rd. 467,005 1,072,485 1.57 913,595 857,491 1.26
65 Mahwah Business Park 398,060 958,672 1.39 1,153,211 949,154 1.37
66 Silvernail Shopping Center 323,515 815,503 1.27 851,839 801,780 1.25
</TABLE>
<PAGE>
Additional Mortgage Loan Information
<TABLE>
<CAPTION>
Occupancy
Property Property Hotel Rate at
# Property Name Type Sub-type Franchise Underwriting(7)
- ------------- ---- -------- --------- ---------------
<S> <C> <C> <C> <C> <C>
67 Tech Center 29 Office/Warehouse Complex Industrial 86%
68 Centre North Shopping Center Retail Anchored 97%
69 Cranbrook Centre Apartments (1H) Multifamily 94%
70 Cranbrook Centre Office Buildings (1H) Office 95%
71 Lubbock Shopping Parkade Retail Anchored 100%
72 Marin Club Apartments Multifamily 99%
73 Prunedale Center Mixed Use Office/Retail 99%
74 Lamplighter Ontario MHP Manufactured Housing 96%
75 Marycrest Shopping Center (2) Retail Anchored 90%
76 Elm Plaza Shopping Center Retail Anchored 100%
77 Century Plaza East Retail Anchored 93%
78 Keller Springs Tech Center Industrial 96%
79 Mobile Gardens/Holly View Mobile Home Park (1I) Manufactured Housing 100%
80 Stony Chase/Rock Creek Mobile Home Park (1I) Manufactured Housing 100%
81 Briarwood Manor (1I) Manufactured Housing 78%
82 Tierra Verde Marine Center Mixed Use Marina/Retail 100%
83 Aurora Square Retail Anchored 96%
84 Merchant's Square (3) Retail Anchored 100%
85 Northwood Hills Shopping Center Retail Anchored 98%
86 36th Street Office Center Office 100%
87 Fifth Avenue Apartments Multifamily 98%
88 The Watermill Apartments Multifamily 98%
89 Brooks Corner Mixed Use Office/Retail 96%
90 Hollywood Ardmore Apartments Multifamily 100%
91 Chasewood Apartments Multifamily 91%
92 Kingsgate North Mixed Use Office/Retail 93%
93 Fairfield Suites Pittsburgh/Airport Hotel Limited Service Fairfield Suites N/A
94 Seatree Apartments Multifamily 91%
95 All Aboard Mini Storage - Alhambra Self Storage 97%
96 West Century Center Retail Unanchored 90%
97 Universal Plaza Retail Unanchored 94%
98 Crestview Market Place Retail Anchored 98%
99 New Franklin Apartments (4) Multifamily 100%
100 Windjammer Apartments Multifamily 97%
101 Woodlake Village Apartments Multifamily 95%
102 Comfort Inn - Hopewell, VA Hotel Limited Service Comfort Inn N/A
103 Linens N Things Retail Anchored 100%
104 The Woods Apartments Multifamily 94%
105 Moonlight Garden Apartments Multifamily 99%
106 Sagamore Court Apartments Multifamily 98%
107 Carriage Hill Apartments Multifamily 97%
108 Dowling Office Building Mixed Use Office/Retail 89%
109 Main Street Plaza Shopping Center Retail Anchored 93%
110 Friendship Crossing Apartments Multifamily 97%
111 Spruce Properties (1J) Multifamily 99%
112 Oak Grove Apartments (1J) Multifamily 100%
113 Aldrich Apartments (1J) Multifamily 100%
114 One Bellemead Center Office 95%
115 Denver Tech Center #30 Office 98%
116 Preston Racquet Club Condominiums and Apartments Multifamily 97%
117 Sand Lake Apartments Multifamily 97%
118 Mobile Estate Mobile Home Park Manufactured Housing 100%
119 Colonia Shopping Center Retail Unanchored 97%
120 Vista Ridge Center III Retail Unanchored 90%
121 Parkside East Apartments Multifamily 96%
122 Northpark Village Retail Anchored 95%
123 Breakers Apartments Multifamily 100%
124 Picnic Lawn Apartments Multifamily 100%
125 32nd Street and McDowell Road Shopping Center Retail Unanchored 98%
126 Triangle Corporate Center Mixed Use Office/Industrial 84%
127 One West Hills Office Office 100%
128 Harper Regency Apartments Multifamily 97%
129 Heritage Green Shopping Center Retail Unanchored 100%
130 Captain's Landing Apartments Multifamily 93%
131 All Aboard Mini Storage - Fremont Self Storage 92%
132 Century Plaza Strip Shopping Center (1K) Retail Unanchored 100%
<CAPTION>
Most Recent
Date of Operating Most Most
Occupancy Statement Recent Recent
# Property Name Rate Date Revenue Expenses
- ------------- --------- ----------- -------- --------
<S> <C> <C> <C> <C> <C>
67 Tech Center 29 Office/Warehouse Complex 12/1/98 11/30/98 1,638,476 326,282
68 Centre North Shopping Center 7/28/98 8/11/98 1,062,374 194,491
69 Cranbrook Centre Apartments (1H) 6/25/98 6/30/98 1,131,803 552,029
70 Cranbrook Centre Office Buildings (1H) 6/30/98 6/30/98 959,938 511,222
71 Lubbock Shopping Parkade 11/24/98 9/30/98 1,207,485 219,152
72 Marin Club Apartments 8/24/98 8/31/98 1,415,508 503,976
73 Prunedale Center 5/1/98 3/31/98 1,094,489 206,963
74 Lamplighter Ontario MHP 10/1/98 9/30/98 1,387,335 567,827
75 Marycrest Shopping Center (2) 10/1/98 12/31/98 1,293,903 442,070
76 Elm Plaza Shopping Center 9/1/98 8/31/98 1,375,513 517,559
77 Century Plaza East 9/11/98 5/31/98 1,079,483 271,886
78 Keller Springs Tech Center 9/1/98 11/1/98 1,042,840 244,247
79 Mobile Gardens/Holly View Mobile Home Park (1I) 7/9/98 6/30/98 621,643 147,937
80 Stony Chase/Rock Creek Mobile Home Park (1I) 7/9/98 6/30/98 347,419 102,966
81 Briarwood Manor (1I) 7/10/98 6/30/98 190,402 50,568
82 Tierra Verde Marine Center 6/1/98 12/31/98 1,223,175 239,353
83 Aurora Square 9/16/98 9/30/98 971,019 222,912
84 Merchant's Square (3) 10/31/98 10/31/98 990,486 213,562
85 Northwood Hills Shopping Center 10/26/98 8/31/98 1,322,058 386,484
86 36th Street Office Center 10/30/98 9/30/98 1,405,101 619,132
87 Fifth Avenue Apartments 7/29/98 7/31/98 1,320,522 618,333
88 The Watermill Apartments 7/27/98 12/31/98 1,361,545 584,054
89 Brooks Corner 7/1/98 6/30/98 940,016 148,183
90 Hollywood Ardmore Apartments 9/30/98 12/31/98 2,085,224 1,280,811
91 Chasewood Apartments 10/8/98 7/31/98 1,257,469 592,911
92 Kingsgate North 9/1/98 8/31/98 1,069,353 391,786
93 Fairfield Suites Pittsburgh/Airport 10/31/98 9/30/98 2,338,638 1,196,776
94 Seatree Apartments 10/9/98 7/31/98 1,411,082 745,016
95 All Aboard Mini Storage - Alhambra 7/31/98 7/31/98 926,677 227,801
96 West Century Center 8/1/98 8/31/98 854,259 227,557
97 Universal Plaza 9/1/98 8/1/98 762,805 120,718
98 Crestview Market Place 8/13/98 8/19/98 743,438 159,594
99 New Franklin Apartments (4) 8/14/98 6/30/98 1,401,419 564,512
100 Windjammer Apartments 11/25/98 12/31/98 1,162,799 513,360
101 Woodlake Village Apartments 1/4/99 12/31/98 1,231,780 644,118
102 Comfort Inn - Hopewell, VA 5/31/98 5/31/98 2,327,267 1,263,159
103 Linens N Things 2/19/98 2/19/98 790,859 132,192
104 The Woods Apartments 10/1/98 7/31/98 1,105,902 454,162
105 Moonlight Garden Apartments 8/31/98 8/31/98 893,811 278,896
106 Sagamore Court Apartments 12/1/98 9/30/98 1,018,092 444,612
107 Carriage Hill Apartments 8/1/98 12/31/98 1,199,807 593,019
108 Dowling Office Building 11/4/98 10/31/98 983,568 487,055
109 Main Street Plaza Shopping Center 7/20/98 7/31/98 607,725 83,155
110 Friendship Crossing Apartments 9/1/98 7/31/98 1,375,667 813,423
111 Spruce Properties (1J) 11/1/98 10/31/98 530,327 249,115
112 Oak Grove Apartments (1J) 11/1/98 10/31/98 413,368 204,054
113 Aldrich Apartments (1J) 11/7/98 10/31/98 317,154 186,084
114 One Bellemead Center 7/15/98 6/30/98 1,091,179 503,232
115 Denver Tech Center #30 1/1/99 9/30/98 905,537 335,866
116 Preston Racquet Club Condominiums and Apartments 11/30/98 11/30/98 995,418 500,962
117 Sand Lake Apartments 1/15/98 12/31/98 1,130,589 593,244
118 Mobile Estate Mobile Home Park 11/7/98 12/31/98 744,590 265,468
119 Colonia Shopping Center 8/11/98 9/30/98 731,449 197,191
120 Vista Ridge Center III 10/22/98 11/14/98 609,880 148,162
121 Parkside East Apartments 9/1/98 7/31/98 965,791 516,254
122 Northpark Village 9/1/98 8/31/98 629,557 138,666
123 Breakers Apartments 8/20/98 6/30/98 647,752 156,714
124 Picnic Lawn Apartments 10/19/98 10/31/98 749,539 225,644
125 32nd Street and McDowell Road Shopping Center 7/14/98 6/30/98 682,568 183,807
126 Triangle Corporate Center 6/30/98 4/30/98 714,909 248,913
127 One West Hills Office 10/1/98 9/30/98 1,003,911 456,905
128 Harper Regency Apartments 1/30/98 12/31/97 602,880 150,982
129 Heritage Green Shopping Center 9/25/98 10/31/98 835,837 294,774
130 Captain's Landing Apartments 10/8/98 10/11/98 1,081,626 576,779
131 All Aboard Mini Storage - Fremont 7/31/98 7/31/98 611,236 187,980
132 Century Plaza Strip Shopping Center (1K) 7/1/98 12/31/98 524,259 246,313
<CAPTION>
Most Most
Recent Recent U/W U/W U/W
# Property Name NOI DSCR(8) NOI NCF DSCR(8)
- ------------- ------ ------- --- --- -------
<S> <C> <C> <C>
67 Tech Center 29 Office/Warehouse Complex 1,312,194 1.98 1,302,426 1,116,490 1.68
68 Centre North Shopping Center 867,883 1.39 827,978 797,131 1.28
69 Cranbrook Centre Apartments (1H) 579,774 1.41 591,574 558,574 1.35
70 Cranbrook Centre Office Buildings (1H) 448,716 2.14 365,696 279,678 1.35
71 Lubbock Shopping Parkade 988,333 1.56 881,396 814,392 1.28
72 Marin Club Apartments 911,532 1.44 788,055 788,055 1.25
73 Prunedale Center 887,526 1.49 807,722 743,912 1.25
74 Lamplighter Ontario MHP 819,508 1.39 766,229 766,229 1.30
75 Marycrest Shopping Center (2) 851,833 1.41 880,177 787,474 1.30
76 Elm Plaza Shopping Center 857,954 1.43 858,428 744,969 1.24
77 Century Plaza East 807,597 1.46 849,874 819,901 1.48
78 Keller Springs Tech Center 798,593 1.39 778,197 729,895 1.27
79 Mobile Gardens/Holly View Mobile Home Park (1I) 473,706 1.68 400,244 400,244 1.35
80 Stony Chase/Rock Creek Mobile Home Park (1I) 244,453 1.65 181,846 181,846 1.35
81 Briarwood Manor (1I) 139,834 1.35 140,316 140,316 1.35
82 Tierra Verde Marine Center 983,822 1.63 756,040 729,130 1.21
83 Aurora Square 748,107 1.39 729,213 672,017 1.25
84 Merchant's Square (3) 776,924 1.42 812,900 757,642 1.39
85 Northwood Hills Shopping Center 935,574 1.70 830,309 746,198 1.36
86 36th Street Office Center 785,969 1.43 834,772 684,578 1.25
87 Fifth Avenue Apartments 702,189 1.35 652,519 652,519 1.26
88 The Watermill Apartments 777,491 1.49 699,109 651,109 1.25
89 Brooks Corner 791,833 1.40 750,313 713,267 1.26
90 Hollywood Ardmore Apartments 804,413 1.49 719,171 658,696 1.22
91 Chasewood Apartments 664,558 1.31 637,768 637,768 1.26
92 Kingsgate North 677,567 1.44 696,942 628,782 1.34
93 Fairfield Suites Pittsburgh/Airport 1,141,862 2.17 735,487 735,487 1.40
94 Seatree Apartments 666,066 1.39 602,905 602,905 1.26
95 All Aboard Mini Storage - Alhambra 698,876 1.51 669,076 669,076 1.45
96 West Century Center 626,702 1.30 655,894 613,803 1.27
97 Universal Plaza 642,087 1.36 682,719 647,013 1.37
98 Crestview Market Place 583,844 1.33 574,631 567,639 1.29
99 New Franklin Apartments (4) 836,907 1.67 712,590 669,840 1.34
100 Windjammer Apartments 649,439 1.49 606,029 556,029 1.27
101 Woodlake Village Apartments 587,662 1.45 624,528 565,278 1.40
102 Comfort Inn - Hopewell, VA 1,064,108 2.33 846,123 742,101 1.63
103 Linens N Things 658,667 1.54 618,984 618,984 1.45
104 The Woods Apartments 651,740 1.58 581,081 581,081 1.41
105 Moonlight Garden Apartments 614,915 1.44 513,492 513,492 1.20
106 Sagamore Court Apartments 573,480 1.46 565,516 534,766 1.36
107 Carriage Hill Apartments 606,788 1.54 604,218 548,218 1.39
108 Dowling Office Building 496,513 1.24 580,417 499,635 1.25
109 Main Street Plaza Shopping Center 524,570 1.38 492,755 483,188 1.27
110 Friendship Crossing Apartments 562,244 1.46 480,828 480,828 1.25
111 Spruce Properties (1J) 281,212 1.68 265,799 243,299 1.43
112 Oak Grove Apartments (1J) 209,314 1.67 199,559 180,059 1.43
113 Aldrich Apartments (1J) 131,070 1.47 135,435 123,685 1.43
114 One Bellemead Center 587,947 1.50 559,526 490,702 1.25
115 Denver Tech Center #30 569,671 1.59 503,196 446,359 1.25
116 Preston Racquet Club Condominiums and Apartments 494,456 1.31 454,730 454,730 1.20
117 Sand Lake Apartments 537,345 1.50 493,672 493,672 1.38
118 Mobile Estate Mobile Home Park 479,122 1.35 483,713 471,208 1.33
119 Colonia Shopping Center 534,258 1.49 493,164 474,687 1.32
120 Vista Ridge Center III 461,718 1.26 455,289 442,929 1.21
121 Parkside East Apartments 449,537 1.31 418,053 418,053 1.22
122 Northpark Village 490,891 1.49 427,100 415,499 1.26
123 Breakers Apartments 491,038 1.52 410,544 410,544 1.27
124 Picnic Lawn Apartments 523,895 1.57 427,029 427,029 1.28
125 32nd Street and McDowell Road Shopping Center 498,761 1.54 464,106 426,854 1.32
126 Triangle Corporate Center 465,996 1.53 470,231 430,309 1.41
127 One West Hills Office 547,006 1.68 457,319 404,673 1.25
128 Harper Regency Apartments 451,898 1.39 428,135 420,535 1.30
129 Heritage Green Shopping Center 541,062 1.67 497,871 418,221 1.29
130 Captain's Landing Apartments 504,847 1.60 379,610 379,610 1.20
131 All Aboard Mini Storage - Fremont 423,256 1.37 419,044 419,044 1.36
132 Century Plaza Strip Shopping Center (1K) 277,946 1.64 264,318 233,802 1.47
</TABLE>
<PAGE>
Additional Mortgage Loan Information
<TABLE>
<CAPTION>
Occupancy
Property Property Hotel Rate at
# Property Name Type Sub-type Franchise Underwriting(7)
- ------------- ---- -------- --------- ---------------
<S> <C> <C> <C> <C> <C>
133 Albany Square Strip Shopping Center (1K) Retail Unanchored 100%
134 Larrabee Complex Mixed Use Office/Retail 100%
135 Cedar Garden Apartments Multifamily 96%
136 All Aboard Mini Storage - Stanton Self Storage 92%
137 Windtree Apartments - Phase I Multifamily 100%
138 Lake City Mini-Storage Self Storage 100%
139 Huntington Mobile Estates Manufactured Housing 100%
140 Everhart Park Shopping Center Retail Unanchored 98%
141 Rafael North Executive Park Office 100%
142 Westwind Estates Manufactured Housing 99%
143 Hewlett Shopping Center Retail Anchored 100%
144 Forest Park Village Multifamily 96%
145 2700 Richards Building Office 100%
146 Lincoln Park Center Retail Unanchored 100%
147 Cedar Heights Apartments Multifamily 100%
148 The North Oak Apartments Multifamily 92%
149 Arrowhead Court Apartments Multifamily 98%
150 The Citibank Building Office 79%
151 Petco/Starbucks S/C Retail Unanchored 100%
152 1870 Ogden Drive Office 100%
153 Woodland Park Office Building Office 100%
154 Tree Top Apartments Multifamily 95%
155 Costa Mesa Mobile Estates Manufactured Housing 96%
156 Greenville Village Mobile Home Park Manufactured Housing 99%
157 Brookwood Village Retail Anchored 100%
158 Rose Grove Mobile Home Park Manufactured Housing 97%
159 Little River Shopping Center Retail Anchored 100%
160 The Amberton Apartments Multifamily 94%
161 Best Western Worlds of Fun Hotel Limited Service Best Western N/A
162 All Aboard Mini Storage - Anaheim Self Storage 92%
163 Waterway Crossing Apartments Multifamily 64%
164 The Borders Building Retail Anchored 50%
165 Ken-Caryl Business Center Office 100%
166 Alta Vista Mobile Home Park Manufactured Housing 95%
167 Palm Springs Self Storage Self Storage 96%
168 Holiday Inn Express Auburn Hotel Limited Service Holiday Inn N/A
169 Caruth Haven Retail Center Retail Unanchored 96%
170 3456 Ridge Property Mixed Use Office/Industrial 100%
171 Campus Plaza Shopping Center Retail Unanchored 90%
172 All Aboard Mini Storage - San Gabriel Self Storage 95%
173 Point O' Woods Apartments Multifamily 98%
174 Williamsburg on the Lake Apartments Multifamily 96%
175 Airport Business Center Mixed Use Office/Industrial 84%
176 Staples - Wilmington Retail Anchored 100%
177 Felicita Junction Retail Anchored 100%
178 The Bordeaux Apartments Multifamily 97%
179 High Point Village I Apartments Multifamily 93%
180 Assured Self Storage Facility Self Storage 89%
181 Staples - Valparaiso Retail Anchored 100%
182 Fruitland Grove Family Park Manufactured Housing 93%
183 Centennial Creek Office Park Office 100%
184 Park Lane Village Apartments (1L) Multifamily 95%
185 Rynearson Lane Village Apartments (1L) Multifamily 95%
186 Holiday Inn Express Ottawa Hotel Limited Service Holiday Inn N/A
187 Ross Apartments Multifamily 97%
188 339 S. Ardmore Apartments Multifamily 96%
189 Edgewater Beach Resort Hotel Limited Service N/A N/A
190 Fondren Hill Apartments Multifamily 99%
191 Cottonwood Plaza Mixed Use Office/Retail 100%
192 Southport Shops Retail Unanchored 91%
193 Hawthorne Hill Apartments Multifamily 95%
194 Days Inn Waccamaw Hotel Full Service Days Inn N/A
195 Turtle Oaks Apartments Multifamily 99%
196 Linden Place Mobile Home Park Manufactured Housing 98%
197 Moore Lake Commons Shopping Center Retail Unanchored 98%
198 Imperial Manor West Apartments Multifamily 92%
<CAPTION>
Most Recent
Date of Operating Most Most Most
Occupancy Statement Recent Recent Recent
# Property Name Rate Date Revenue Expenses NOI
- ------------- --------- ----------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
133 Albany Square Strip Shopping Center (1K) 7/1/98 12/31/98 455,856 212,153 243,703
134 Larrabee Complex 6/1/98 4/30/98 804,199 271,897 532,302
135 Cedar Garden Apartments 11/24/98 10/31/98 735,879 302,024 433,855
136 All Aboard Mini Storage - Stanton 7/31/98 7/31/98 565,740 208,649 357,091
137 Windtree Apartments - Phase I 10/1/98 9/30/98 741,566 253,290 488,276
138 Lake City Mini-Storage 7/28/98 6/30/98 713,049 182,922 530,127
139 Huntington Mobile Estates 7/1/98 6/30/98 658,382 217,212 441,170
140 Everhart Park Shopping Center 9/4/98 6/30/98 662,103 171,383 490,720
141 Rafael North Executive Park 8/1/98 6/30/98 666,241 215,462 450,779
142 Westwind Estates 7/1/98 7/31/98 751,342 380,423 370,919
143 Hewlett Shopping Center 5/29/98 8/31/98 576,937 67,184 509,753
144 Forest Park Village 11/5/98 8/31/98 852,593 492,087 360,506
145 2700 Richards Building 9/1/98 9/30/98 558,094 151,094 407,000
146 Lincoln Park Center 9/18/98 7/31/98 648,278 211,563 436,715
147 Cedar Heights Apartments 8/5/98 6/30/98 798,354 359,662 438,692
148 The North Oak Apartments 1/4/99 9/30/98 1,082,433 662,555 419,878
149 Arrowhead Court Apartments 7/24/98 6/30/98 819,244 447,009 372,235
150 The Citibank Building 7/13/98 6/30/98 553,793 210,720 343,073
151 Petco/Starbucks S/C 12/1/97 6/16/98 549,692 126,648 423,044
152 1870 Ogden Drive 10/20/98 9/30/98 358,252 141,876 216,376
153 Woodland Park Office Building 8/10/98 7/30/98 899,653 435,254 464,399
154 Tree Top Apartments 10/1/98 9/30/98 654,336 249,179 405,157
155 Costa Mesa Mobile Estates 12/1/98 11/30/98 550,401 205,322 345,079
156 Greenville Village Mobile Home Park 11/13/98 6/30/98 559,536 203,296 356,240
157 Brookwood Village 9/14/98 7/31/98 472,056 139,388 332,668
158 Rose Grove Mobile Home Park 6/1/98 3/31/98 1,304,005 571,077 732,929
159 Little River Shopping Center 8/5/98 9/30/98 446,400 98,117 348,283
160 The Amberton Apartments 10/15/98 12/31/98 687,225 364,802 322,423
161 Best Western Worlds of Fun 8/31/98 9/30/98 1,215,329 742,334 472,995
162 All Aboard Mini Storage - Anaheim 7/31/98 7/31/98 480,843 195,497 285,346
163 Waterway Crossing Apartments 2/9/98 12/31/97 682,582 277,888 404,694
164 The Borders Building 8/28/98 8/31/98 789,472 165,597 623,875
165 Ken-Caryl Business Center 8/12/98 4/30/98 517,639 191,807 325,832
166 Alta Vista Mobile Home Park 11/14/98 8/31/98 503,703 121,615 382,089
167 Palm Springs Self Storage 10/8/98 9/22/98 694,187 244,118 450,069
168 Holiday Inn Express Auburn 8/1/98 6/30/98 1,297,393 732,821 564,572
169 Caruth Haven Retail Center 9/14/98 8/31/98 384,290 79,371 304,919
170 3456 Ridge Property 6/30/98 5/31/98 532,240 231,329 300,911
171 Campus Plaza Shopping Center 1/1/98 12/31/97 396,867 54,541 342,326
172 All Aboard Mini Storage - San Gabriel 7/31/98 7/31/98 450,588 149,404 301,184
173 Point O' Woods Apartments 8/24/98 6/30/98 715,479 327,692 387,787
174 Williamsburg on the Lake Apartments 5/6/98 4/30/98 995,256 541,172 454,084
175 Airport Business Center 12/31/97 12/31/98 527,531 130,238 397,293
176 Staples - Wilmington 1/6/99 9/9/98 311,314 10,131 301,183
177 Felicita Junction 9/30/98 11/30/98 514,385 169,199 345,186
178 The Bordeaux Apartments 7/1/98 6/30/98 737,693 373,501 364,192
179 High Point Village I Apartments 11/27/98 10/31/98 846,654 523,783 322,871
180 Assured Self Storage Facility 7/15/98 9/30/98 460,133 80,138 379,995
181 Staples - Valparaiso 11/10/98 9/9/98 294,601 9,297 285,304
182 Fruitland Grove Family Park 4/1/98 3/31/98 489,562 197,019 292,543
183 Centennial Creek Office Park 8/1/98 8/31/98 423,348 127,003 296,345
184 Park Lane Village Apartments (1L) 7/1/98 12/31/98 322,792 132,905 189,887
185 Rynearson Lane Village Apartments (1L) 8/28/98 12/31/98 262,716 136,504 126,212
186 Holiday Inn Express Ottawa 6/30/98 6/30/98 1,245,320 713,865 531,455
187 Ross Apartments 8/1/98 7/31/98 359,670 77,277 282,393
188 339 S. Ardmore Apartments 5/26/98 6/11/98 528,493 217,642 310,851
189 Edgewater Beach Resort 12/31/97 9/28/98 1,071,377 639,721 431,656
190 Fondren Hill Apartments 6/15/98 5/31/98 519,667 270,173 249,494
191 Cottonwood Plaza 7/20/98 7/31/98 719,751 200,337 519,415
192 Southport Shops 8/11/98 8/11/98 339,308 53,160 286,148
193 Hawthorne Hill Apartments 5/13/98 7/31/98 773,164 450,438 322,726
194 Days Inn Waccamaw 12/31/97 5/31/98 1,791,324 1,282,594 508,730
195 Turtle Oaks Apartments 11/1/98 11/30/98 566,114 317,614 248,500
196 Linden Place Mobile Home Park 8/31/98 6/30/98 459,769 157,669 302,100
197 Moore Lake Commons Shopping Center 11/1/98 7/31/98 421,040 220,378 200,662
198 Imperial Manor West Apartments 3/9/98 3/31/98 739,174 364,213 374,961
<CAPTION>
Most
Recent U/W U/W U/W
# Property Name DSCR(8) NOI NCF DSCR(8)
- ------------- ------- --- --- -------
<S> <C> <C>
133 Albany Square Strip Shopping Center (1K) 1.78 241,102 216,883 1.47
134 Larrabee Complex 1.74 532,363 470,600 1.53
135 Cedar Garden Apartments 1.40 383,413 383,413 1.24
136 All Aboard Mini Storage - Stanton 1.19 406,330 406,330 1.36
137 Windtree Apartments - Phase I 1.61 400,132 400,132 1.32
138 Lake City Mini-Storage 1.71 422,341 422,341 1.36
139 Huntington Mobile Estates 1.54 386,163 386,163 1.35
140 Everhart Park Shopping Center 1.76 435,528 381,992 1.37
141 Rafael North Executive Park 1.61 384,951 360,744 1.29
142 Westwind Estates 1.30 344,733 344,733 1.21
143 Hewlett Shopping Center 1.83 440,664 421,364 1.51
144 Forest Park Village 1.28 343,163 343,163 1.22
145 2700 Richards Building 1.50 370,945 338,887 1.25
146 Lincoln Park Center 1.60 392,384 354,000 1.30
147 Cedar Heights Apartments 1.71 320,314 320,314 1.25
148 The North Oak Apartments 1.65 319,862 319,862 1.26
149 Arrowhead Court Apartments 1.50 313,250 313,250 1.27
150 The Citibank Building 1.39 420,618 344,452 1.39
151 Petco/Starbucks S/C 1.62 337,337 326,170 1.25
152 1870 Ogden Drive 0.83 349,073 328,356 1.26
153 Woodland Park Office Building 1.75 388,703 323,640 1.22
154 Tree Top Apartments 1.60 323,814 323,814 1.28
155 Costa Mesa Mobile Estates 1.45 334,915 329,715 1.38
156 Greenville Village Mobile Home Park 1.34 403,595 392,445 1.48
157 Brookwood Village 1.45 341,131 323,517 1.41
158 Rose Grove Mobile Home Park 3.09 599,403 598,395 2.52
159 Little River Shopping Center 1.40 329,347 316,754 1.27
160 The Amberton Apartments 1.36 330,350 302,350 1.27
161 Best Western Worlds of Fun 1.76 375,710 375,710 1.40
162 All Aboard Mini Storage - Anaheim 1.21 326,281 326,011 1.38
163 Waterway Crossing Apartments 1.81 348,203 348,203 1.56
164 The Borders Building 2.00 380,785 380,785 1.22
165 Ken-Caryl Business Center 1.41 330,080 289,277 1.26
166 Alta Vista Mobile Home Park 1.59 325,939 325,939 1.36
167 Palm Springs Self Storage 1.78 363,027 363,027 1.44
168 Holiday Inn Express Auburn 2.38 483,802 435,968 1.84
169 Caruth Haven Retail Center 1.35 313,649 289,029 1.28
170 3456 Ridge Property 1.50 313,765 295,618 1.47
171 Campus Plaza Shopping Center 1.52 333,415 319,976 1.42
172 All Aboard Mini Storage - San Gabriel 1.35 303,478 303,478 1.36
173 Point O' Woods Apartments 1.72 297,240 297,240 1.32
174 Williamsburg on the Lake Apartments 1.87 424,033 424,033 1.74
175 Airport Business Center 1.75 353,542 298,101 1.32
176 Staples - Wilmington 1.33 280,432 277,738 1.22
177 Felicita Junction 1.56 281,066 276,898 1.25
178 The Bordeaux Apartments 1.90 312,189 312,189 1.63
179 High Point Village I Apartments 1.42 326,086 284,086 1.25
180 Assured Self Storage Facility 1.55 319,385 319,385 1.30
181 Staples - Valparaiso 1.32 263,712 263,712 1.22
182 Fruitland Grove Family Park 1.41 269,093 269,093 1.30
183 Centennial Creek Office Park 1.48 286,769 259,636 1.30
184 Park Lane Village Apartments (1L) 1.57 177,647 158,897 1.28
185 Rynearson Lane Village Apartments (1L) 1.22 148,922 128,642 1.28
186 Holiday Inn Express Ottawa 2.51 432,762 389,479 1.84
187 Ross Apartments 1.56 270,732 270,732 1.50
188 339 S. Ardmore Apartments 1.56 256,182 256,182 1.29
189 Edgewater Beach Resort 1.91 317,175 317,175 1.40
190 Fondren Hill Apartments 1.38 239,799 239,799 1.33
191 Cottonwood Plaza 2.64 420,226 377,424 1.92
192 Southport Shops 1.46 263,970 249,897 1.27
193 Hawthorne Hill Apartments 1.78 270,357 270,357 1.49
194 Days Inn Waccamaw 2.55 294,722 294,722 1.48
195 Turtle Oaks Apartments 1.28 233,715 233,715 1.20
196 Linden Place Mobile Home Park 1.51 285,540 277,440 1.39
197 Moore Lake Commons Shopping Center 1.01 307,844 245,905 1.23
198 Imperial Manor West Apartments 1.90 284,864 284,864 1.44
</TABLE>
<PAGE>
Additional Mortgage Loan Information
<TABLE>
<CAPTION>
Occupancy
Property Property Hotel Rate at
# Property Name Type Sub-type Franchise Underwriting(7)
- ------------- ---- -------- --------- ---------------
<S> <C> <C> <C> <C> <C>
199 Brown School Station Apts. Multifamily 94%
200 South Street Seaport Office Center Office 99%
201 Hathaway Commerce Center Industrial 99%
202 Corinthian Apartments Multifamily 95%
203 Walgreen's Drug Store - Swansea Retail Anchored 100%
204 Catalina Apartments Multifamily 100%
205 Devonshire Square Retail Center Retail Unanchored 100%
206 1440 N. Vine Street Retail Unanchored 100%
207 College Park Apartments Multifamily 99%
208 Country Brooke Apartments Multifamily 94%
209 Hillside View Apartments Multifamily 98%
210 Benihana Restaurant Retail Unanchored 100%
211 Crosswinds Apartments Multifamily 98%
212 Imperial Plaza Retail Center Retail Unanchored 92%
213 Twin Lakes Mobile Home Park Manufactured Housing 99%
214 Antietam Village Center Retail Unanchored 86%
215 Gateway Shoppes Retail Unanchored 100%
216 Red Onion Building Mixed Use Office/Retail 100%
217 526 South Ardmore Avenue Multifamily 97%
218 All Aboard Mini Storage - Santa Ana Self Storage 95%
219 Villa East I & II Office 100%
220 Courtyard Apartments Multifamily 100%
221 Sunset View Village Apartments Multifamily 92%
222 Wilmington Plaza Retail Anchored 100%
223 The Nations Bank Building Office 100%
224 Quail Ridge Apartments Multifamily 94%
225 Best Western KCI Airport Hotel Limited Service Best Western N/A
226 Laurel Heights Apartments Multifamily 97%
227 El Monte Mobile Air Mobile Home Park Manufactured Housing 96%
228 Harold Gilstrap Shopping Center Retail Anchored 97%
229 Lakeside Apartments Multifamily 100%
230 Park Glen Apartments Multifamily 99%
231 St. Lucie Mobile Village Manufactured Housing 90%
232 Ravenscroft Apartments Multifamily 92%
233 Coach Country Corral MHP Manufactured Housing 100%
234 Seaside Village Shopping Center Retail Unanchored 83%
235 Sherwood Park Apartments Multifamily 99%
236 Ravenna Plaza Retail Anchored 100%
237 Holiday Inn Express Oglesby Hotel Limited Service Holiday Inn N/A
238 Central/Magnolia Retail Center Mixed Use Office/Retail 100%
239 Rolling Hills Estates Manufactured Housing 92%
240 Saticoy-Royale Apartments Multifamily 100%
241 Holiday/Park Riviera Mobile Home Park Manufactured Housing 99%
242 Gottschalk's Department Store Retail Unanchored 100%
243 Justin Apartments Multifamily 100%
244 Fountain Square Apartments Multifamily 83%
245 383 St. Johns Place Multifamily 96%
246 Days Inn Hotel Limited Service Days Inn N/A
247 Market Plaza Retail Unanchored 100%
248 Michigan Plaza & Bender Plaza (5) Office 90%
249 Mockingbird Park Retail Building Mixed Use Office/Retail 96%
250 Poolesville Village Center Retail Anchored 100%
251 Citadel Square Shopping Center (6) Retail Anchored 98%
252 Executive Park Offices Office 95%
253 Sherwood Mobile Home Estates Manufactured Housing 94%
254 Ware's Van & Storage Co. Industrial 100%
255 Sunrise Terrace Mobile Home Park Manufactured Housing 100%
256 Best Western Country Inn North Hotel Limited Service Best Western N/A
257 Woodlake Resort Village Apartments Multifamily 94%
258 Plantation Pines Apartments Multifamily 95%
259 Pacific Mini Storage Self Storage 86%
260 Sunridge Apartments Multifamily 95%
261 Courtyards of Granbury Mixed Use Multifamily/Self Storage 96%
262 Parkside Place Apartments Multifamily 99%
263 University Apartments Multifamily 92%
264 Isaqueena Village Apartments Multifamily 90%
<CAPTION>
Most Recent
Date of Operating Most Most Most
Occupancy Statement Recent Recent Recent
# Property Name Rate Date Revenue Expenses NOI
- ------------- --------- ----------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
199 Brown School Station Apts. 6/1/98 6/30/98 471,628 217,189 254,439
200 South Street Seaport Office Center 8/1/98 8/1/98 838,412 351,129 487,283
201 Hathaway Commerce Center 1/31/99 12/31/98 403,352 103,821 299,531
202 Corinthian Apartments 3/27/98 2/28/98 584,833 207,006 377,827
203 Walgreen's Drug Store - Swansea 10/7/98 10/15/98 229,000 4,376 224,624
204 Catalina Apartments 9/1/98 9/30/98 672,765 368,128 304,637
205 Devonshire Square Retail Center 9/4/98 8/31/98 405,904 84,203 321,701
206 1440 N. Vine Street 5/19/98 7/16/98 294,416 18,283 276,133
207 College Park Apartments 4/1/98 3/31/98 342,138 90,143 251,995
208 Country Brooke Apartments 5/14/98 3/31/98 472,312 265,539 206,773
209 Hillside View Apartments 6/30/98 6/30/98 527,955 232,277 295,678
210 Benihana Restaurant 9/9/98 10/31/98 342,803 6,995 335,808
211 Crosswinds Apartments 9/23/98 9/30/98 493,544 245,315 248,229
212 Imperial Plaza Retail Center 7/28/98 7/31/98 439,992 113,381 326,611
213 Twin Lakes Mobile Home Park 8/31/98 6/30/98 593,757 276,955 316,802
214 Antietam Village Center 10/15/98 5/31/98 374,140 109,123 265,017
215 Gateway Shoppes 6/30/98 6/30/98 373,775 122,411 251,364
216 Red Onion Building 6/1/98 6/1/98 516,216 79,040 437,176
217 526 South Ardmore Avenue 4/23/98 3/31/98 395,693 159,681 236,012
218 All Aboard Mini Storage - Santa Ana 7/31/98 7/31/98 419,100 165,936 253,164
219 Villa East I & II 10/13/98 10/31/98 473,410 202,452 270,957
220 Courtyard Apartments 9/30/98 7/31/98 472,114 205,623 266,491
221 Sunset View Village Apartments 9/1/98 6/30/98 348,948 131,967 216,981
222 Wilmington Plaza 6/10/98 9/14/98 756,500 455,433 301,067
223 The Nations Bank Building 9/1/98 8/31/98 533,808 162,987 370,821
224 Quail Ridge Apartments 4/1/98 12/31/97 508,983 284,457 224,526
225 Best Western KCI Airport 8/1/98 9/30/98 752,921 453,231 299,690
226 Laurel Heights Apartments 5/19/98 4/30/98 402,361 173,100 229,261
227 El Monte Mobile Air Mobile Home Park 2/1/98 12/31/97 376,701 142,496 234,205
228 Harold Gilstrap Shopping Center 4/1/98 12/31/98 459,332 153,616 305,716
229 Lakeside Apartments 5/1/98 5/31/98 404,973 115,240 289,733
230 Park Glen Apartments 9/14/98 12/31/98 848,495 572,292 276,203
231 St. Lucie Mobile Village 8/31/98 6/30/98 501,259 289,957 211,302
232 Ravenscroft Apartments 7/1/98 12/31/98 474,451 298,551 175,900
233 Coach Country Corral MHP 12/1/97 12/31/98 314,555 82,524 232,031
234 Seaside Village Shopping Center 1/20/99 9/30/98 457,540 205,016 252,524
235 Sherwood Park Apartments 6/10/98 12/31/98 417,048 206,245 210,803
236 Ravenna Plaza 11/10/98 8/9/98 430,621 133,300 297,321
237 Holiday Inn Express Oglesby 6/30/98 6/30/98 942,666 578,141 364,525
238 Central/Magnolia Retail Center 8/26/98 6/25/98 278,961 61,188 217,773
239 Rolling Hills Estates 4/1/98 4/30/98 353,006 107,825 245,181
240 Saticoy-Royale Apartments 9/11/98 7/31/98 370,355 197,963 172,392
241 Holiday/Park Riviera Mobile Home Park 9/15/98 12/31/98 410,022 185,303 224,719
242 Gottschalk's Department Store 8/12/98 6/30/98 285,177 51,739 233,438
243 Justin Apartments 9/1/98 12/31/98 256,064 84,795 171,269
244 Fountain Square Apartments 6/30/98 8/31/98 463,349 307,761 155,588
245 383 St. Johns Place 8/28/98 8/28/98 245,799 76,174 169,625
246 Days Inn 6/30/98 7/31/98 576,934 263,572 313,362
247 Market Plaza 7/28/98 12/31/98 403,720 116,561 287,159
248 Michigan Plaza & Bender Plaza (5) 9/1/98 11/30/98 462,011 186,595 275,416
249 Mockingbird Park Retail Building 8/1/98 7/31/98 667,000 396,656 270,344
250 Poolesville Village Center 7/1/98 6/30/98 231,698 48,247 183,451
251 Citadel Square Shopping Center (6) 9/30/98 12/31/98 268,596 79,767 188,829
252 Executive Park Offices 12/1/98 11/30/98 259,452 61,786 197,666
253 Sherwood Mobile Home Estates 8/31/98 6/30/98 490,034 284,829 205,205
254 Ware's Van & Storage Co. 10/13/98 9/10/98 268,909 65,385 203,524
255 Sunrise Terrace Mobile Home Park 6/1/98 12/31/98 209,231 39,848 169,383
256 Best Western Country Inn North 9/30/98 9/30/98 640,031 409,673 230,358
257 Woodlake Resort Village Apartments 6/1/98 5/31/98 310,023 154,600 155,423
258 Plantation Pines Apartments 11/5/98 9/30/98 482,560 327,014 155,546
259 Pacific Mini Storage 9/10/98 9/30/98 356,551 146,803 209,748
260 Sunridge Apartments 10/1/98 12/31/98 558,480 376,818 181,662
261 Courtyards of Granbury 9/30/98 9/30/98 340,733 170,546 170,187
262 Parkside Place Apartments 8/29/98 8/29/98 496,494 271,040 225,454
263 University Apartments 10/7/98 8/31/98 304,467 90,174 214,293
264 Isaqueena Village Apartments 5/1/98 5/31/98 344,372 180,799 163,573
<CAPTION>
Most
Recent U/W U/W U/W
# Property Name DSCR(8) NOI NCF DSCR(8)
- ------------- ------- --- --- -------
<S> <C> <C>
199 Brown School Station Apts. 1.40 219,798 219,798 1.21
200 South Street Seaport Office Center 2.43 449,042 353,923 1.76
201 Hathaway Commerce Center 1.62 289,412 249,639 1.35
202 Corinthian Apartments 2.19 338,163 346,996 2.01
203 Walgreen's Drug Store - Swansea 1.24 220,044 220,044 1.22
204 Catalina Apartments 1.66 238,787 238,787 1.30
205 Devonshire Square Retail Center 1.62 284,086 262,983 1.32
206 1440 N. Vine Street 1.65 273,885 260,240 1.55
207 College Park Apartments 1.51 202,138 202,138 1.21
208 Country Brooke Apartments 1.25 219,014 219,014 1.33
209 Hillside View Apartments 1.55 264,906 239,606 1.26
210 Benihana Restaurant 1.87 230,371 228,878 1.27
211 Crosswinds Apartments 1.51 244,171 227,211 1.39
212 Imperial Plaza Retail Center 1.77 289,348 263,199 1.43
213 Twin Lakes Mobile Home Park 1.85 285,564 271,848 1.58
214 Antietam Village Center 1.53 255,641 232,782 1.34
215 Gateway Shoppes 1.53 247,644 232,300 1.41
216 Red Onion Building 2.68 242,747 227,410 1.39
217 526 South Ardmore Avenue 1.46 222,603 222,603 1.38
218 All Aboard Mini Storage - Santa Ana 1.64 202,980 202,980 1.32
219 Villa East I & II 1.67 246,642 206,609 1.28
220 Courtyard Apartments 1.75 213,784 213,784 1.40
221 Sunset View Village Apartments 1.49 175,789 175,789 1.21
222 Wilmington Plaza 1.93 208,554 194,476 1.25
223 The Nations Bank Building 2.04 312,026 273,705 1.50
224 Quail Ridge Apartments 1.54 221,528 195,528 1.34
225 Best Western KCI Airport 1.77 236,864 236,864 1.40
226 Laurel Heights Apartments 1.63 206,258 206,258 1.47
227 El Monte Mobile Air Mobile Home Park 1.59 218,879 218,879 1.48
228 Harold Gilstrap Shopping Center 2.01 275,428 259,819 1.71
229 Lakeside Apartments 1.72 240,813 231,063 1.38
230 Park Glen Apartments 2.00 237,047 193,547 1.40
231 St. Lucie Mobile Village 1.41 225,730 214,430 1.43
232 Ravenscroft Apartments 1.32 211,627 192,877 1.45
233 Coach Country Corral MHP 1.54 203,045 198,945 1.32
234 Seaside Village Shopping Center 1.60 265,601 204,940 1.30
235 Sherwood Park Apartments 1.51 206,722 188,722 1.36
236 Ravenna Plaza 1.91 243,176 195,219 1.25
237 Holiday Inn Express Oglesby 2.53 281,276 247,822 1.72
238 Central/Magnolia Retail Center 1.62 197,869 181,971 1.35
239 Rolling Hills Estates 1.66 224,339 224,339 1.52
240 Saticoy-Royale Apartments 1.26 200,516 184,516 1.35
241 Holiday/Park Riviera Mobile Home Park 1.54 223,085 209,835 1.44
242 Gottschalk's Department Store 1.64 202,823 195,623 1.37
243 Justin Apartments 1.31 164,657 158,407 1.21
244 Fountain Square Apartments 1.12 222,322 190,882 1.38
245 383 St. Johns Place 1.32 162,275 162,275 1.27
246 Days Inn 2.20 201,447 201,447 1.41
247 Market Plaza 2.00 242,598 220,836 1.54
248 Michigan Plaza & Bender Plaza (5) 1.94 261,101 189,622 1.33
249 Mockingbird Park Retail Building 2.24 197,760 154,133 1.28
250 Poolesville Village Center 1.43 194,681 171,998 1.34
251 Citadel Square Shopping Center (6) 1.33 212,096 193,811 1.37
252 Executive Park Offices 1.54 182,318 160,925 1.25
253 Sherwood Mobile Home Estates 1.59 194,457 184,157 1.43
254 Ware's Van & Storage Co. 1.38 208,628 183,158 1.24
255 Sunrise Terrace Mobile Home Park 1.45 160,369 157,819 1.35
256 Best Western Country Inn North 1.72 187,874 187,874 1.40
257 Woodlake Resort Village Apartments 1.35 169,872 157,372 1.37
258 Plantation Pines Apartments 1.27 178,306 156,306 1.27
259 Pacific Mini Storage 1.68 179,744 179,744 1.44
260 Sunridge Apartments 1.49 171,907 147,157 1.21
261 Courtyards of Granbury 1.44 153,596 141,596 1.20
262 Parkside Place Apartments 1.83 185,658 164,658 1.34
263 University Apartments 1.94 173,154 157,654 1.43
264 Isaqueena Village Apartments 1.67 150,275 151,341 1.55
</TABLE>
<PAGE>
Additional Mortgage Loan Information
<TABLE>
<CAPTION>
Occupancy
Property Property Hotel Rate at
# Property Name Type Sub-type Franchise Underwriting(7)
- ------------- ---- -------- --------- ---------------
<S> <C> <C> <C> <C> <C>
265 Turtle Dove I Apartments Multifamily 100%
266 Carson Gardens Mobile Home Park Manufactured Housing 99%
267 Valerie Apartments Multifamily 100%
268 Huddersfield Apartments Multifamily 100%
269 1457 & 1519 - 1527 Park Road, NW Multifamily 96%
270 Winter Garden Village Apartments Multifamily 98%
271 Long Point Plaza Apartments Multifamily 96%
272 The Place of Tempe Apartments Multifamily 100%
273 Valley Garden Apartments Multifamily 96%
274 Devereaux Apartments Multifamily 95%
275 Bloomingdale Shopping Center Retail Unanchored 91%
276 Cottonwood Apartments Multifamily 93%
277 Royal North Apartments Multifamily 98%
278 Turtle Dove II Apartments Multifamily 95%
-----------
===========
Total/Weighted Average 96%
===========
===========
Maximum: 100%
Minimum: 50%
<CAPTION>
Most Recent
Date of Operating Most Most Most
Occupancy Statement Recent Recent Recent
# Property Name Rate Date Revenue Expenses NOI
- ------------- --------- ----------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
265 Turtle Dove I Apartments 11/30/98 12/31/98 443,975 240,730 203,245
266 Carson Gardens Mobile Home Park 2/1/98 12/31/97 271,978 80,650 191,328
267 Valerie Apartments 12/1/98 12/31/98 310,583 137,798 172,785
268 Huddersfield Apartments 12/1/98 9/30/98 236,505 75,793 160,712
269 1457 & 1519 - 1527 Park Road, NW 9/29/98 1/31/99 402,945 241,581 161,364
270 Winter Garden Village Apartments 11/10/98 12/31/98 317,012 200,475 116,537
271 Long Point Plaza Apartments 7/31/98 6/30/98 460,945 256,545 204,400
272 The Place of Tempe Apartments 1/1/99 10/31/98 190,119 59,496 130,623
273 Valley Garden Apartments 9/10/98 7/30/98 287,781 91,000 196,781
274 Devereaux Apartments 12/11/98 11/30/98 266,678 155,985 110,693
275 Bloomingdale Shopping Center 1/10/99 12/31/98 147,825 57,164 90,661
276 Cottonwood Apartments 12/3/98 10/31/98 212,182 83,428 128,754
277 Royal North Apartments 6/15/98 12/31/97 379,388 265,537 113,851
278 Turtle Dove II Apartments 11/30/98 12/31/98 216,664 103,026 113,638
--------- ------------------------------------------------------
Total/Weighted Average 8/31/98 $ 292,254,921 $ 124,864,645 $ 167,390,278
========= ======================================================
Maximum: 1/31/99 $ 5,539,068 $ 2,897,142 $ 3,560,063
Minimum: 11/25/97 $ 116,380 $ 4,376 $ 87,200
<CAPTION>
Most
Recent U/W U/W U/W
# Property Name DSCR(8) NOI NCF DSCR(8)
- ------------- ------- --- --- -------
<S> <C> <C>
265 Turtle Dove I Apartments 1.85 166,327 146,577 1.33
266 Carson Gardens Mobile Home Park 1.93 138,047 138,047 1.39
267 Valerie Apartments 1.82 162,951 146,951 1.55
268 Huddersfield Apartments 1.69 140,400 132,650 1.40
269 1457 & 1519 - 1527 Park Road, NW 1.70 145,035 125,535 1.32
270 Winter Garden Village Apartments 1.31 127,930 111,930 1.26
271 Long Point Plaza Apartments 2.20 147,870 123,475 1.33
272 The Place of Tempe Apartments 1.62 116,570 109,070 1.35
273 Valley Garden Apartments 2.47 129,741 117,741 1.48
274 Devereaux Apartments 1.37 124,875 110,125 1.36
275 Bloomingdale Shopping Center 1.28 104,146 91,276 1.29
276 Cottonwood Apartments 1.55 119,114 111,566 1.35
277 Royal North Apartments 1.69 121,901 100,651 1.50
278 Turtle Dove II Apartments 1.87 100,279 90,279 1.49
------------------------------------------------------------
Total/Weighted Average 1.60x $ 157,943,114 $ 145,267,700 1.39x
============================================================
Maximum: 8.19x $ 3,313,246 $ 3,241,994 2.54x
Minimum: 0.38x $ 70,634 $ 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, 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 Plaza & 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
Cut-off Date Tenant Elevator Studio Studio
# Property Name Balance (3) Pays (Y/N) Units Avg. Rent
- ------------- ----------- ---- ----- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
18 Westchase Ranch Apartments (1C) $ 22,529,265 Electric No N/A N/A
19 Westwood Village Apartments (1C) 10,387,667 Electric No N/A N/A
20 Normandy Woods Apartments (1C) 7,111,557 Electric No N/A N/A
21 Savoy Manor Apartments (1C) 5,193,833 Electric No N/A N/A
22 San Marin Apartments (1C) 3,609,027 Electric No 24 $408
23 Country Squire Apartments - South 30,446,295 Electric No N/A N/A
29 Keller Oaks Apartments (1E) 7,143,351 Electric No 16 $446
30 Sycamore Hill Apartments (1E) 6,189,551 Electric No N/A N/A
31 Clarendon Apartments (1E) 4,545,769 Electric No N/A N/A
32 Woodchase Condominiums (1E) 2,402,764 Electric No N/A N/A
35 Spicetree Apartments 16,582,208 Electric No N/A N/A
39 The Links at Bixby 14,487,822 Electric/Water No N/A N/A
40 Southwood Apartments 14,474,162 Electric/Gas No N/A N/A
42 Edentree Apartments 11,480,000 Electric No N/A N/A
45 The Mint Apartments 11,136,789 Electric No N/A N/A
47 Rancho Destino Apartments 10,181,999 Electric No N/A N/A
49 Huntington Chase Apartments 9,666,997 Electric/Gas No N/A N/A
52 Newsome Park Apartments 8,459,047 Electric/Gas No N/A N/A
53 Princeton Court Apartments (1F) 3,877,564 Electric No 3 $723
54 Pinewood Estates Apartments (1F) 2,386,193 Electric No 12 $501
55 Arbor Court Apartments (1F) 2,087,919 Electric No 1 $600
62 Birches Apartments 8,172,163 Electric No N/A N/A
69 Cranbrook Centre Apartments (1H) 4,916,622 Electric/Gas No N/A N/A
72 Marin Club Apartments 7,347,967 Electric/Gas Yes 28 $490
87 Fifth Avenue Apartments 6,388,541 Electric/Gas No N/A N/A
88 The Watermill Apartments 6,379,593 Electric/Gas Yes 4 $486
90 Hollywood Ardmore Apartments 6,236,842 None Yes 8 $352
91 Chasewood Apartments 6,149,198 Electric No N/A N/A
94 Seatree Apartments 5,829,759 Electric No N/A N/A
99 New Franklin Apartments (4) 5,345,280 None No N/A N/A
100 Windjammer Apartments 5,219,924 Electric No N/A N/A
101 Woodlake Village Apartments 5,217,795 Electric/Water/Sewer No N/A N/A
104 The Woods Apartments 5,039,048 None Yes N/A N/A
105 Moonlight Garden Apartments 4,978,846 Electric/Gas No N/A N/A
106 Sagamore Court Apartments 4,960,750 Electric No 5 $525
107 Carriage Hill Apartments 4,927,800 Electric/Gas No N/A N/A
110 Friendship Crossing Apartments 4,603,093 Electric No N/A N/A
111 Spruce Properties (1J) 1,970,671 Electric No 48 $421
112 Oak Grove Apartments (1J) 1,471,767 Electric No N/A N/A
113 Aldrich Apartments (1J) 1,047,699 Electric No N/A N/A
116 Preston Racquet Club Condominiums and Apartments 4,385,027 Electric No N/A N/A
117 Sand Lake Apartments 4,364,206 Water/Sewer No N/A N/A
121 Parkside East Apartments 4,190,128 None Yes 16 $607
123 Breakers Apartments 4,079,323 Electric/Water No N/A N/A
124 Picnic Lawn Apartments 3,993,174 Electric No 9 $299
128 Harper Regency Apartments 3,942,885 Electric/Gas Yes N/A N/A
130 Captain's Landing Apartments 3,802,289 Electric No N/A N/A
135 Cedar Garden Apartments 3,673,780 Electric No N/A N/A
137 Windtree Apartments - Phase I 3,593,944 Electric No N/A N/A
144 Forest Park Village 3,273,025 Electric No N/A N/A
147 Cedar Heights Apartments 3,096,364 Electric No N/A N/A
148 The North Oak Apartments 3,096,333 Electric No N/A N/A
149 Arrowhead Court Apartments 3,089,758 Electric No N/A N/A
154 Tree Top Apartments 2,996,535 Electric No N/A N/A
160 The Amberton Apartments 2,890,880 Electric No N/A N/A
163 Waterway Crossing Apartments 2,824,908 Electric No N/A N/A
173 Point O' Woods Apartments 2,716,809 Electric No N/A N/A
174 Williamsburg on the Lake Apartments 2,694,425 Electric No N/A N/A
178 The Bordeaux Apartments 2,666,424 None No 8 $342
179 High Point Village I Apartments 2,650,000 Electric No N/A N/A
184 Park Lane Village Apartments (1L) 1,345,453 Electric No 4 $318
185 Rynearson Lane Village Apartments (1L) 1,146,126 Electric/Gas No 3 $217
187 Ross Apartments 2,488,010 Electric/Gas No 1 $900
188 339 S. Ardmore Apartments 2,487,451 Electric/Gas Yes 6 $442
<CAPTION>
Subject Subject Subject Subject Subject Subject Subject
Studio 1 BR 1 BR 1 BR 2 BR 2 BR 2 BR
# Property Name Max. Rent Units Avg. Rent Max. Rent Units Avg. Rent Max. Rent
- ------------- --------- ----- --------- --------- ----- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
18 Westchase Ranch Apartments (1C) N/A 488 $430 $525 232 $573 $695
19 Westwood Village Apartments (1C) N/A 168 $503 $580 128 $601 $675
20 Normandy Woods Apartments (1C) N/A 128 $463 $530 140 $592 $615
21 Savoy Manor Apartments (1C) N/A 120 $447 $580 72 $553 $685
22 San Marin Apartments (1C) $420 57 $471 $525 92 $584 $680
23 Country Squire Apartments - South N/A 216 $625 $820 510 $700 $915
29 Keller Oaks Apartments (1E) $450 128 $532 $620 76 $696 $765
30 Sycamore Hill Apartments (1E) N/A 112 $423 $550 152 $440 $600
31 Clarendon Apartments (1E) N/A 80 $462 $535 96 $564 $644
32 Woodchase Condominiums (1E) N/A 56 $572 $655 18 $619 $775
35 Spicetree Apartments N/A 235 $487 $555 316 $609 $640
39 The Links at Bixby N/A 108 $471 $495 216 $638 $675
40 Southwood Apartments N/A 77 $564 $650 223 $664 $795
42 Edentree Apartments N/A 180 $546 $629 180 $681 $799
45 The Mint Apartments N/A 210 $398 $550 270 $465 $565
47 Rancho Destino Apartments N/A 64 $660 $690 80 $768 $950
49 Huntington Chase Apartments N/A 48 $590 $650 114 $699 $795
52 Newsome Park Apartments N/A 60 $305 $305 338 $330 $330
53 Princeton Court Apartments (1F) $1,100 15 $916 $1,750 66 $886 $2,050
54 Pinewood Estates Apartments (1F) $515 60 $594 $620 72 $651 $715
55 Arbor Court Apartments (1F) $600 20 $775 $1,900 87 $1,147 $3,000
62 Birches Apartments N/A 165 $482 $581 131 $564 $652
69 Cranbrook Centre Apartments (1H) N/A 44 $679 $720 88 $788 $860
72 Marin Club Apartments $490 152 $550 $550 40 $700 $700
87 Fifth Avenue Apartments N/A 130 $534 $640 68 $716 $840
88 The Watermill Apartments $500 153 $574 $660 34 $795 $1,100
90 Hollywood Ardmore Apartments $647 106 $808 $1,104 46 $1,001 $2,111
91 Chasewood Apartments N/A 136 $449 $500 88 $559 $630
94 Seatree Apartments N/A 154 $529 $605 66 $758 $819
99 New Franklin Apartments (4) N/A 166 $676 $764 5 $753 $753
100 Windjammer Apartments N/A 144 $462 $620 56 $584 $705
101 Woodlake Village Apartments N/A 48 $432 $449 141 $482 $519
104 The Woods Apartments N/A 72 $540 $550 84 $687 $756
105 Moonlight Garden Apartments N/A 5 $575 $600 89 $675 $725
106 Sagamore Court Apartments $550 31 $657 $750 87 $784 $900
107 Carriage Hill Apartments N/A 160 $419 $450 64 $515 $545
110 Friendship Crossing Apartments N/A 104 $479 $550 119 $580 $675
111 Spruce Properties (1J) $500 36 $457 $530 6 $713 $750
112 Oak Grove Apartments (1J) N/A 76 $442 $530 2 $635 $650
113 Aldrich Apartments (1J) N/A 32 $459 $550 15 $774 $875
116 Preston Racquet Club Condominiums and Apartments N/A 15 $605 $825 96 $854 $950
117 Sand Lake Apartments N/A 88 $399 $399 124 $514 $559
121 Parkside East Apartments $660 45 $775 $890 43 $922 $1,035
123 Breakers Apartments N/A 48 $690 $715 24 $851 $885
124 Picnic Lawn Apartments $299 54 $409 $409 83 $539 $569
128 Harper Regency Apartments N/A 15 $1,046 $1,600 17 $1,487 $1,700
130 Captain's Landing Apartments N/A 100 $457 $560 74 $582 $615
135 Cedar Garden Apartments N/A 71 $685 $780 19 $800 $850
137 Windtree Apartments - Phase I N/A 28 $458 $465 98 $521 $565
144 Forest Park Village N/A 54 $485 $525 84 $573 $630
147 Cedar Heights Apartments N/A 172 $255 $255 84 $300 $300
148 The North Oak Apartments N/A 148 $357 $390 108 $488 $525
149 Arrowhead Court Apartments N/A 65 $548 $575 61 $624 $665
154 Tree Top Apartments N/A 146 $389 $420 N/A N/A N/A
160 The Amberton Apartments N/A N/A N/A N/A 112 $563 $595
163 Waterway Crossing Apartments N/A 51 $492 $585 51 $614 $703
173 Point O' Woods Apartments N/A 130 $382 $415 20 $525 $525
174 Williamsburg on the Lake Apartments N/A 60 $509 $537 74 $614 $682
178 The Bordeaux Apartments $445 42 $521 $575 40 $682 $795
179 High Point Village I Apartments N/A 48 $377 $400 96 $475 $510
184 Park Lane Village Apartments (1L) $335 16 $388 $410 55 $447 $450
185 Rynearson Lane Village Apartments (1L) $245 22 $295 $300 51 $377 $390
187 Ross Apartments $900 26 $1,065 $1,200 4 $1,169 $1,300
188 339 S. Ardmore Apartments $450 71 $532 $590 7 $713 $750
<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> <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 Edentree Apartments N/A N/A N/A N/A N/A N/A
45 The Mint Apartments 112 $602 $750 N/A N/A N/A
47 Rancho Destino Apartments 40 $947 $970 N/A N/A N/A
49 Huntington Chase Apartments 38 $810 $920 N/A N/A N/A
52 Newsome Park Apartments 222 $390 $390 30 $450 $450
53 Princeton Court Apartments (1F) 6 $955 $1,750 N/A N/A N/A
54 Pinewood Estates Apartments (1F) N/A N/A N/A N/A N/A N/A
55 Arbor Court Apartments (1F) N/A N/A N/A N/A N/A N/A
62 Birches Apartments N/A N/A N/A N/A N/A N/A
69 Cranbrook Centre Apartments (1H) N/A N/A N/A N/A N/A N/A
72 Marin Club Apartments N/A N/A N/A N/A N/A N/A
87 Fifth Avenue Apartments N/A N/A N/A N/A N/A N/A
88 The Watermill Apartments N/A N/A N/A N/A N/A N/A
90 Hollywood Ardmore Apartments 1 $1,500 $1,500 N/A N/A N/A
91 Chasewood Apartments N/A N/A N/A N/A N/A N/A
94 Seatree Apartments N/A N/A N/A N/A N/A N/A
99 New Franklin Apartments (4) N/A N/A N/A N/A N/A N/A
100 Windjammer Apartments N/A N/A N/A N/A N/A N/A
101 Woodlake Village Apartments 48 $567 $599 N/A N/A N/A
104 The Woods Apartments N/A N/A N/A N/A N/A N/A
105 Moonlight Garden Apartments 14 $900 $950 N/A N/A N/A
106 Sagamore Court Apartments N/A N/A N/A N/A N/A N/A
107 Carriage Hill Apartments N/A N/A N/A N/A N/A N/A
110 Friendship Crossing Apartments N/A N/A N/A N/A N/A N/A
111 Spruce Properties (1J) N/A N/A N/A N/A N/A N/A
112 Oak Grove Apartments (1J) N/A N/A N/A N/A N/A N/A
113 Aldrich Apartments (1J) N/A N/A N/A N/A N/A N/A
116 Preston Racquet Club Condominiums and Apartments N/A N/A N/A N/A N/A N/A
117 Sand Lake Apartments N/A N/A N/A N/A N/A N/A
121 Parkside East Apartments N/A N/A N/A N/A N/A N/A
123 Breakers Apartments N/A N/A N/A N/A N/A N/A
124 Picnic Lawn Apartments N/A N/A N/A N/A N/A N/A
128 Harper Regency Apartments 6 $2,075 $2,300 N/A N/A N/A
130 Captain's Landing Apartments N/A N/A N/A N/A N/A N/A
135 Cedar Garden Apartments N/A N/A N/A N/A N/A N/A
137 Windtree Apartments - Phase I N/A N/A N/A N/A N/A N/A
144 Forest Park Village N/A N/A N/A N/A N/A N/A
147 Cedar Heights Apartments N/A N/A N/A N/A N/A N/A
148 The North Oak Apartments N/A N/A N/A N/A N/A N/A
149 Arrowhead Court Apartments N/A N/A N/A N/A N/A N/A
154 Tree Top Apartments N/A N/A N/A N/A N/A N/A
160 The Amberton Apartments N/A N/A N/A N/A N/A N/A
163 Waterway Crossing Apartments N/A N/A N/A N/A N/A N/A
173 Point O' Woods Apartments N/A N/A N/A N/A N/A N/A
174 Williamsburg on the Lake Apartments 16 $798 $825 N/A N/A N/A
178 The Bordeaux Apartments 12 $756 $930 N/A N/A N/A
179 High Point Village I Apartments 24 $547 $590 N/A N/A N/A
184 Park Lane Village Apartments (1L) N/A N/A N/A N/A N/A N/A
185 Rynearson Lane Village Apartments (1L) 2 $390 $390 N/A N/A N/A
187 Ross Apartments N/A N/A N/A N/A N/A N/A
188 339 S. Ardmore Apartments N/A N/A N/A N/A N/A N/A
</TABLE>
<PAGE>
Multifamily Schedule
<TABLE>
<CAPTION>
Utilities Subject Subject Subject Subject
Cut-off Date Tenant Elevator Studio Studio Studio 1 BR
# Property Name Balance (3) Pays (Y/N) Units Avg. Rent Max. Rent Units
- ------------- ----------- ---- ----- ----- --------- --------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
190 Fondren Hill Apartments 2,438,627 Electric No 5 $405 $405 46
193 Hawthorne Hill Apartments 2,389,375 Electric/Gas No N/A N/A N/A 20
195 Turtle Oaks Apartments 2,341,262 Electric No N/A N/A N/A 54
198 Imperial Manor West Apartments 2,281,127 Electric No N/A N/A N/A 132
199 Brown School Station Apts. 2,249,293 Electric/Gas No N/A N/A N/A 21
202 Corinthian Apartments 2,187,615 Electric No 1 $500 $500 1
204 Catalina Apartments 2,172,345 Electric No N/A N/A N/A 61
207 College Park Apartments 2,088,510 Electric/Water No N/A N/A N/A 34
208 Country Brooke Apartments 2,055,765 Electric No N/A N/A N/A 6
209 Hillside View Apartments 2,038,134 Electric No N/A N/A N/A 4
211 Crosswinds Apartments 1,996,476 Electric No N/A N/A N/A N/A
217 526 South Ardmore Avenue 1,985,158 Electric Yes N/A N/A N/A 45
220 Courtyard Apartments 1,846,761 Electric No N/A N/A N/A 48
221 Sunset View Village Apartments 1,845,711 None No N/A N/A N/A N/A
224 Quail Ridge Apartments 1,829,799 Electric/Gas/Water/Sewer No N/A N/A N/A 36
226 Laurel Heights Apartments 1,790,996 Electric No N/A N/A N/A 24
229 Lakeside Apartments 1,781,950 Electric No N/A N/A N/A 11
230 Park Glen Apartments 1,744,104 Electric/Gas No N/A N/A N/A 26
232 Ravenscroft Apartments 1,740,783 Electric No N/A N/A N/A 19
235 Sherwood Park Apartments 1,696,004 Electric No N/A N/A N/A 44
240 Saticoy-Royale Apartments 1,664,748 Electric/Gas No 8 $421 $425 48
243 Justin Apartments 1,597,176 Electric/Gas No N/A N/A N/A N/A
244 Fountain Square Apartments 1,595,872 Electric/Gas No N/A N/A N/A 24
245 383 St. Johns Place 1,594,755 None No N/A N/A N/A N/A
257 Woodlake Resort Village Apartments 1,393,722 Electric/Gas No N/A N/A N/A 12
258 Plantation Pines Apartments 1,347,949 Electric/Gas No N/A N/A N/A 64
260 Sunridge Apartments 1,341,749 None No N/A N/A N/A 34
262 Parkside Place Apartments 1,290,235 Electric/Gas No 2 $373 $375 55
263 University Apartments 1,258,018 Electric/Gas No 2 $355 $425 25
264 Isaqueena Village Apartments 1,243,760 Electric No N/A N/A N/A N/A
265 Turtle Dove I Apartments 1,225,000 Electric No 30 $336 $395 41
267 Valerie Apartments 1,070,329 Electric No N/A N/A N/A 32
268 Huddersfield Apartments 1,058,366 Electric/Gas Yes N/A N/A N/A 12
269 1457 & 1519 - 1527 Park Road, NW 1,048,398 Electric/Gas Yes 27 $334 $400 21
270 Winter Garden Village Apartments 997,506 Electric No N/A N/A N/A N/A
271 Long Point Plaza Apartments 951,432 None No N/A N/A N/A 37
272 The Place of Tempe Apartments 898,616 Electric/Gas No 2 $405 $405 14
273 Valley Garden Apartments 896,907 Electric/Gas No N/A N/A N/A N/A
274 Devereaux Apartments 886,649 Electric/Gas No N/A N/A N/A 11
276 Cottonwood Apartments 797,234 Electric No N/A N/A N/A N/A
277 Royal North Apartments 718,072 None No 1 $310 $310 24
278 Turtle Dove II Apartments 675,000 Electric/Gas No N/A N/A N/A 32
<CAPTION>
Subject Subject Subject Subject Subject Subject Subject Subject
1 BR 1 BR 2 BR 2 BR 2 BR 3 BR 3 BR 3 BR
# Property Name Avg. Rent Max. Rent Units Avg. Rent Max. Rent Units Avg. Rent Max. Rent
- ------------- --------- --------- ----- --------- --------- ----- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
190 Fondren Hill Apartments $465 $465 45 $565 $565 N/A N/A N/A
193 Hawthorne Hill Apartments $340 $365 128 $426 $460 20 $471 $500
195 Turtle Oaks Apartments $523 $585 27 $707 $755 N/A N/A N/A
198 Imperial Manor West Apartments $411 $440 32 $493 $520 N/A N/A N/A
199 Brown School Station Apts. $379 $385 91 $407 $430 N/A N/A N/A
202 Corinthian Apartments $730 $730 47 $904 $980 6 $1,135 $1,200
204 Catalina Apartments $368 $385 59 $467 $505 N/A N/A N/A
207 College Park Apartments $251 $295 44 $402 $425 10 $514 $525
208 Country Brooke Apartments $314 $325 102 $413 $445 N/A N/A N/A
209 Hillside View Apartments $450 $475 88 $510 $570 N/A N/A N/A
211 Crosswinds Apartments N/A N/A 53 $631 $635 11 $795 $810
217 526 South Ardmore Avenue $532 $603 18 $702 $783 N/A N/A N/A
220 Courtyard Apartments $442 $450 36 $539 $590 N/A N/A N/A
221 Sunset View Village Apartments N/A N/A 48 $668 $670 N/A N/A N/A
224 Quail Ridge Apartments $415 $465 68 $476 $540 N/A N/A N/A
226 Laurel Heights Apartments $450 $465 48 $485 $520 N/A N/A N/A
229 Lakeside Apartments $760 $760 28 $838 $875 N/A N/A N/A
230 Park Glen Apartments $338 $364 130 $396 $436 18 $459 $505
232 Ravenscroft Apartments $542 $627 55 $623 $647 1 $752 $752
235 Sherwood Park Apartments $458 $480 28 $527 $560 N/A N/A N/A
240 Saticoy-Royale Apartments $541 $550 9 $688 $725 N/A N/A N/A
243 Justin Apartments N/A N/A 21 $849 $875 4 $1,073 $1,100
244 Fountain Square Apartments $354 $355 96 $390 $405 N/A N/A N/A
245 383 St. Johns Place N/A N/A 13 $1,331 $1,400 3 $1,575 $1,575
257 Woodlake Resort Village Apartments $515 $525 38 $624 $725 N/A N/A N/A
258 Plantation Pines Apartments $410 $410 8 $470 $470 16 $595 $595
260 Sunridge Apartments $456 $510 55 $497 $600 10 $628 $650
262 Parkside Place Apartments $381 $465 27 $496 $515 N/A N/A N/A
263 University Apartments $331 $495 26 $498 $725 9 $609 $800
264 Isaqueena Village Apartments N/A N/A 60 $517 $545 N/A N/A N/A
265 Turtle Dove I Apartments $468 $515 8 $679 $740 N/A N/A N/A
267 Valerie Apartments $363 $370 31 $464 $490 1 $560 $560
268 Huddersfield Apartments $580 $580 19 $671 $720 N/A N/A N/A
269 1457 & 1519 - 1527 Park Road, NW $457 $495 24 $577 $791 6 $753 $766
270 Winter Garden Village Apartments N/A N/A 64 $418 $475 N/A N/A N/A
271 Long Point Plaza Apartments $427 $445 36 $487 $525 12 $556 $565
272 The Place of Tempe Apartments $470 $475 14 $581 $595 N/A N/A N/A
273 Valley Garden Apartments N/A N/A 48 $523 $525 N/A N/A N/A
274 Devereaux Apartments $344 $379 48 $420 $420 N/A N/A N/A
276 Cottonwood Apartments N/A N/A 29 $595 $595 1 $750 $750
277 Royal North Apartments $380 $385 60 $455 $465 N/A N/A N/A
278 Turtle Dove II Apartments $427 $450 8 $527 $550 N/A N/A N/A
<CAPTION>
S Subject Subject Subject
4 BR 4 BR 4 BR
# Property Name Av Units Avg. Rent Max. Rent
- ------------- -- ----- --------- ---------
<S> <C> < <C> <C> <C>
190 Fondren Hill Apartments N/A N/A N/A
193 Hawthorne Hill Apartments N/A N/A N/A
195 Turtle Oaks Apartments N/A N/A N/A
198 Imperial Manor West Apartments N/A N/A N/A
199 Brown School Station Apts. N/A N/A N/A
202 Corinthian Apartments N/A N/A N/A
204 Catalina Apartments N/A N/A N/A
207 College Park Apartments N/A N/A N/A
208 Country Brooke Apartments N/A N/A N/A
209 Hillside View Apartments N/A N/A N/A
211 Crosswinds Apartments N/A N/A N/A
217 526 South Ardmore Avenue N/A N/A N/A
220 Courtyard Apartments N/A N/A N/A
221 Sunset View Village Apartments N/A N/A N/A
224 Quail Ridge Apartments N/A N/A N/A
226 Laurel Heights Apartments N/A N/A N/A
229 Lakeside Apartments N/A N/A N/A
230 Park Glen Apartments N/A N/A N/A
232 Ravenscroft Apartments N/A N/A N/A
235 Sherwood Park Apartments N/A N/A N/A
240 Saticoy-Royale Apartments N/A N/A N/A
243 Justin Apartments N/A N/A N/A
244 Fountain Square Apartments N/A N/A N/A
245 383 St. Johns Place N/A N/A N/A
257 Woodlake Resort Village Apartments N/A N/A N/A
258 Plantation Pines Apartments N/A N/A N/A
260 Sunridge Apartments N/A N/A N/A
262 Parkside Place Apartments N/A N/A N/A
263 University Apartments N/A N/A N/A
264 Isaqueena Village Apartments N/A N/A N/A
265 Turtle Dove I Apartments N/A N/A N/A
267 Valerie Apartments N/A N/A N/A
268 Huddersfield Apartments N/A N/A N/A
269 1457 & 1519 - 1527 Park Road, NW N/A N/A N/A
270 Winter Garden Village Apartments N/A N/A N/A
271 Long Point Plaza Apartments N/A N/A N/A
272 The Place of Tempe Apartments N/A N/A N/A
273 Valley Garden Apartments N/A N/A N/A
274 Devereaux Apartments N/A N/A N/A
276 Cottonwood Apartments N/A N/A N/A
277 Royal North Apartments N/A N/A N/A
278 Turtle Dove II Apartments 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, 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.
(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 are operated 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>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<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
Year Built/Year 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> <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 12.3% 6.858% 1.36 75.9%
7.000% - 7.249% 54 245,898,622 19.8% 7.134% 1.34 75.7%
7.250% - 7.499% 74 359,148,517 29.0% 7.340% 1.54 68.2%
7.500% - 7.999% 88 307,513,241 24.8% 7.644% 1.31 74.1%
8.000% - 8.440% 12 92,718,334 7.5% 8.134% 1.30 76.9%
------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $1,239,717,56 100.0% 7.320% 1.39x 73.2%
================================================================================================
</TABLE>
Maximum Mortgage Rate: 8.440%
Minimum Mortgage Rate: 5.960%
Wtd. Avg. Mortgage Rate: 7.320%
(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 73.2% 7.337% 1.32x 74.5%
ARD 67 315,477,528 25.4% 7.287% 1.60 69.2%
Fully Amortizing 3 17,323,190 1.4% 7.016% 1.27 77.3%
-------------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $1,239,717,562 100.0% 7.320% 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 8.5% 7.313% 1.39 70.0%
2,000,000 - 2,999,999 60 152,593,198 12.3% 7.211% 1.41 69.6%
3,000,000 - 3,999,999 33 116,312,485 9.4% 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 7.4% 7.229% 1.57 71.9%
6,000,000 - 9,999,999 39 282,766,080 22.8% 7.306% 1.44 72.3%
10,000,000 - 14,999,999 12 145,161,787 11.7% 7.375% 1.29 77.3%
15,000,000 - 19,999,999 6 99,435,972 8.0% 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: 278 $1,239,717,562 100.0% 7.320% 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: $4,459,416
(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 1.1% 7.549% 1.39 72.2%
1,250,000 - 1,999,999 54 90,606,908 7.3% 7.316% 1.38 70.0%
2,000,000 - 2,999,999 55 140,756,300 11.4% 7.208% 1.42 69.8%
3,000,000 - 3,999,999 29 101,853,122 8.2% 7.241% 1.32 73.9%
4,000,000 - 4,999,999 17 76,432,397 6.2% 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 20.5% 7.328% 1.30 74.5%
10,000,000 - 14,999,999 10 124,377,582 10.0% 7.321% 1.29 77.3%
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 19.6% 7.485% 1.66 68.5%
----------------------------------------------------------------------------------------------
Total/Weighted Average: 239 $1,239,717,562 100.0% 7.320% 1.39x 73.1%
==============================================================================================
</TABLE>
Maximum Cut-off Date Balance: $70,750,763
Minimum Cut-off Date Balance: $675,000
Average Cut-off Date Balance: $5,187,103
(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 21.3% 7.393% 1.71 63.5%
314 - 360 182 955,699,675 77.1% 7.307% 1.30 76.0%
--------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $1,239,717,562 100.0% 7.320% 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 - 120 260 1,135,143,632 91.6% 7.345% 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: 278 $1,239,717,562 100.0% 7.320% 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 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.
<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 20.6% 7.379% 1.73 63.2%
300 - 313 5 14,842,114 1.2% 7.451% 1.35 71.1%
314 - 360 181 950,557,561 76.7% 7.309% 1.30 76.1%
------------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $1,239,717,562 100.0% 7.320% 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 - 120 259 1,132,449,208 91.3% 7.344% 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: 278 $1,239,717,562 100.0% 7.320% 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 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.
<PAGE>
Year Built/Year 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 13.6% 7.241% 1.33 74.1%
1981 - 1990 83 330,990,240 26.7% 7.236% 1.31 75.4%
1991 - 1998 125 648,092,985 52.3% 7.389% 1.45 71.7%
------------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $1,239,717,562 100.0% 7.320% 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% 14 42,793,947 3.5% 7.363% 1.40 67.2%
90.0% - 94.9% 50 239,045,962 19.3% 7.262% 1.31 76.1%
95.0% - 100.0% 184 831,465,195 67.1% 7.317% 1.31 75.4%
--------------------------------------------------------------------------------------------------
Total/Weighted Average: 252 $1,123,378,518 90.6% 7.304% 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: 96.4%
(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 - 1.29 107 $618,510,184 49.9% 7.387% 1.25x 76.6%
1.30 - 1.39 87 334,357,109 27.0% 7.243% 1.33 74.4%
1.40 - 1.49 46 154,796,906 12.5% 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 8.7% 7.286% 2.29 50.2%
----------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $1,239,717,562 100.0% 7.320% 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 4.5% 7.286% 1.59 57.4%
60.01% - 70.00% 41 125,826,621 10.1% 7.443% 1.36 66.2%
70.01% - 75.00% 72 266,261,177 21.5% 7.372% 1.33 73.1%
75.01% - 80.00% 121 662,639,360 53.5% 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: 278 $1,239,717,562 100.0% 7.320% 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 52 $234,315,460 18.9% 7.309% 1.31x 75.0%
California 43 169,156,706 13.6% 7.287% 1.31 75.7%
Florida 19 123,548,452 10.0% 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 2.6% 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 2.3% 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 0.6% 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: 278 $1,239,717,562 100.0% 7.320% 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 176 $863,255,474 69.6% 7.318% 1.40x 73.2%
Column 102 376,462,087 30.4% 7.324% 1.36 73.2%
------------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $1,239,717,562 100.0% 7.320% 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 106 $442,121,682 35.7% 7.144% 1.30x 76.6%
Retail 59 310,401,887 25.0% 7.483% 1.30 76.2%
Hotel 26 116,339,043 9.4% 7.479% 2.13 54.5%
Office 24 110,681,155 8.9% 7.451% 1.31 71.9%
Mixed Use 18 103,267,224 8.3% 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 3.2% 7.465% 1.36 72.8%
Industrial 5 35,309,656 2.8% 7.481% 1.42 74.5%
------------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $1,239,717,562 100.0% 7.320% 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 33 $232,363,365 18.7% 7.499% 1.29x 76.5%
Unanchored 26 78,038,522 6.3% 7.434% 1.32 75.5%
-------------------------------------------------------------------------------------------
Total/Weighted Average: 59 $310,401,887 25.0% 7.483% 1.30x 76.2%
===========================================================================================
Hotel
Limited Service (2) 24 $98,973,828 8.0% 7.417% 2.26x 51.4%
Full Service 2 17,365,216 1.4% 7.834% 1.43 72.3%
-------------------------------------------------------------------------------------------
Total/Weighted Average: 26 $116,339,043 9.4% 7.479% 2.13x 54.5%
===========================================================================================
</TABLE>
(1) Cut-off balance as of 3/1/99.
(2) The Winston Loan properties, which have a combined 2.54x DSCR and 43.6%
LTV, comprise 71.5% of the limited service hotels.
<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 - 9.9 253 1,094,619,208 88.3% 9.1 9.4 9.8
10.0 - 10.9 6 37,830,000 3.1% 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 0.9% 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: 278 $1,239,717,562 100.0% 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 253 $ 1,134,250,750 91.5% 9.4 9.4 9.7
Lockout / Yield Maintenance 24 104,021,536 8.4% 5.4 13.7 14.7
Lockout 1 1,445,275 0.1% 1.9 1.9 9.7
------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $ 1,239,717,562 100.0% 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 0 278 $1,239.7 100.0% 0.0% 0.0% 100.0%
Mar-00 12 278 $1,227.4 100.0% 0.0% 0.0% 100.0%
Mar-01 24 278 $1,213.9 99.7% 0.2% 0.1% 100.0%
Mar-02 36 278 $1,199.2 96.2% 3.7% 0.1% 100.0%
Mar-03 48 278 $1,183.4 95.2% 4.7% 0.1% 100.0%
Mar-04 60 277 $1,159.9 94.9% 5.0% 0.1% 100.0%
Mar-05 72 277 $1,141.7 94.9% 5.0% 0.1% 100.0%
Mar-06 84 273 $1,090.0 94.8% 4.8% 0.4% 100.0%
Mar-07 96 272 $1,066.1 94.8% 5.1% 0.1% 100.0%
Mar-08 108 271 $1,042.1 92.4% 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. Banc One Mortgage Capital Markets, LLC
Securities Corporation 363 North Sam Houston Parkway, East 1717 Main Street, 14th Floor
277 Park Avenue Suite 1200 Dallas, TX 75201
New York, NY 10172 Houston, TX 77060
Contact: N. Dante LaRocca Contact: Shelly Shrimpton Contact: Paul G. Smyth
Phone Number: (212) 892-3000 Phone Number: (281) 405-7087 Phone Number: (214) 290-2505
============================ ==================================== ======================================
</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
A-4 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%
A-4 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
A-4 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
A-4 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 A-4 0.00
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
A-4
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:
<TABLE>
<CAPTION>
Class A-1A Certificates
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............................. 100% 100% 100% 100% 100%
March 2000.............................. 94% 94% 94% 94% 94%
March 2001.............................. 88% 88% 88% 88% 88%
March 2002.............................. 81% 81% 81% 81% 81%
March 2003.............................. 74% 74% 74% 74% 74%
March 2004.............................. 63% 63% 63% 63% 63%
March 2005.............................. 55% 55% 55% 55% 55%
March 2006.............................. 32% 31% 31% 30% 29%
March 2007.............................. 21% 20% 20% 20% 20%
March 2008.............................. 10% 9% 9% 8% 2%
March 2009 and thereafter................ 0% 0% 0% 0% 0%
Wtd. Avg. Life (yrs):.................. 5.70 5.67 5.65 5.63 5.57
<CAPTION>
Class A-1B Certificates
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............................. 100% 100% 100% 100% 100%
March 2000.............................. 100% 100% 100% 100% 100%
March 2001.............................. 100% 100% 100% 100% 100%
March 2002.............................. 100% 100% 100% 100% 100%
March 2003.............................. 100% 100% 100% 100% 100%
March 2004.............................. 100% 100% 100% 100% 100%
March 2005.............................. 100% 100% 100% 100% 100%
March 2006.............................. 100% 100% 100% 100% 100%
March 2007.............................. 100% 100% 100% 100% 100%
March 2008.............................. 100% 100% 100% 100% 100%
March 2009 and thereafter............... 0% 0% 0% 0% 0%
Wtd. Avg. Life (yrs):.................. 9.67 9.65 9.63 9.60 9.39
</TABLE>
C-1
<PAGE>
Percentage of Initial Class Principal Balance Outstanding For:
<TABLE>
<CAPTION>
Class A-2 Certificates
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............................. 100% 100% 100% 100% 100%
March 2000.............................. 100% 100% 100% 100% 100%
March 2001.............................. 100% 100% 100% 100% 100%
March 2002.............................. 100% 100% 100% 100% 100%
March 2003.............................. 100% 100% 100% 100% 100%
March 2004.............................. 100% 100% 100% 100% 100%
March 2005.............................. 100% 100% 100% 100% 100%
March 2006.............................. 100% 100% 100% 100% 100%
March 2007.............................. 100% 100% 100% 100% 100%
March 2008.............................. 100% 100% 100% 100% 100%
March 2009 and thereafter............... 0% 0% 0% 0% 0%
Wtd. Avg. Life (yrs):.................. 9.84 9.82 9.78 9.78 9.61
<CAPTION>
Class A-3 Certificates
Distribution Date 0.00% CPR 25.00% CPR 50.00% CPR 75.00% CPR 100.00% CPR
--------- ---------- ---------- ---------- -----------
Closing Date............................. 100% 100% 100% 100% 100%
March 2000.............................. 100% 100% 100% 100% 100%
March 2001.............................. 100% 100% 100% 100% 100%
March 2002.............................. 100% 100% 100% 100% 100%
March 2003.............................. 100% 100% 100% 100% 100%
March 2004.............................. 100% 100% 100% 100% 100%
March 2005.............................. 100% 100% 100% 100% 100%
March 2006.............................. 100% 100% 100% 100% 100%
March 2007.............................. 100% 100% 100% 100% 100%
March 2008.............................. 100% 100% 100% 100% 100%
March 2009 and thereafter............... 0% 0% 0% 0% 0%
Wtd. Avg. Life (yrs):.................. 9.86 9.86 9.86 9.82 9.61
</TABLE>
C-2
<PAGE>
Percentage of Initial Class Principal Balance Outstanding For:
<TABLE>
<CAPTION>
Class A-4 Certificates
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............................. 100% 100% 100% 100% 100%
March 2000.............................. 100% 100% 100% 100% 100%
March 2001.............................. 100% 100% 100% 100% 100%
March 2002.............................. 100% 100% 100% 100% 100%
March 2003.............................. 100% 100% 100% 100% 100%
March 2004.............................. 100% 100% 100% 100% 100%
March 2005.............................. 100% 100% 100% 100% 100%
March 2006.............................. 100% 100% 100% 100% 100%
March 2007.............................. 100% 100% 100% 100% 100%
March 2008.............................. 100% 100% 100% 100% 100%
March 2009 and thereafter............... 0% 0% 0% 0% 0%
Wtd. Avg. Life (yrs):.................. 9.86 9.86 9.86 9.86 9.62
<CAPTION>
Class B-1 Certificates
Distribution Date 0.00% CPR 25.00% CPR 50.00% CPR 75.00% CPR 100.00% CPR
--------- ---------- ---------- ---------- -----------
Closing Date............................. 100% 100% 100% 100% 100%
March 2000.............................. 100% 100% 100% 100% 100%
March 2001.............................. 100% 100% 100% 100% 100%
March 2002.............................. 100% 100% 100% 100% 100%
March 2003.............................. 100% 100% 100% 100% 100%
March 2004.............................. 100% 100% 100% 100% 100%
March 2005.............................. 100% 100% 100% 100% 100%
March 2006.............................. 100% 100% 100% 100% 100%
March 2007.............................. 100% 100% 100% 100% 100%
March 2008.............................. 100% 100% 100% 100% 100%
March 2009 and thereafter............... 0% 0% 0% 0% 0%
Wtd. Avg. Life (yrs):.................. 9.86 9.86 9.86 9.86 9.70
</TABLE>
C-3
<PAGE>
Percentage of Initial Class Principal Balance Outstanding For:
<TABLE>
<CAPTION>
Class B-2 Certificates
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............................. 100% 100% 100% 100% 100%
March 2000.............................. 100% 100% 100% 100% 100%
March 2001.............................. 100% 100% 100% 100% 100%
March 2002.............................. 100% 100% 100% 100% 100%
March 2003.............................. 100% 100% 100% 100% 100%
March 2004.............................. 100% 100% 100% 100% 100%
March 2005.............................. 100% 100% 100% 100% 100%
March 2006.............................. 100% 100% 100% 100% 100%
March 2007.............................. 100% 100% 100% 100% 100%
March 2008.............................. 100% 100% 100% 100% 100%
March 2009 and thereafter............... 0% 0% 0% 0% 0%
Wtd. Avg. Life (yrs):.................. 9.86 9.86 9.86 9.86 9.70
</TABLE>
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
1.0980% Initial Pass-Through Rate
Initial Class Notional Amount $1,239,717,562
<TABLE>
<CAPTION>
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 %
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
5-12 11.97% 11.93% 11.90% 11.85% 11.58%
5-16 11.37% 11.33% 11.29% 11.25% 10.96%
5-20 10.79% 10.75% 10.71% 10.66% 10.38%
5-24 10.23% 10.18% 10.15% 10.10% 9.81%
5-28 9.69% 9.64% 9.60% 9.56% 9.26%
6-00 9.16% 9.12% 9.08% 9.03% 8.73%
6-04 8.66% 8.61% 8.57% 8.53% 8.22%
6-08 8.17% 8.12% 8.08% 8.04% 7.73%
6-12 7.70% 7.65% 7.61% 7.56% 7.25%
</TABLE>
- ----------
* Exclusive of accrued interest.
D-1
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<PAGE>
EXHIBIT E
SUMMARY TERM SHEET
E-1
<PAGE>
DLJ Commercial Mortgage Corp.
Commercial Mortgage Pass-Through Certificates,
Series 1999-CG1
$1,109,547,000
(Approximate)
Offered Certificates
[LOGO] [LOGO]
GE Capital COLUMN
Access, Inc. FINANCIAL
Donaldson, Lufkin & Jenrette
Securities Corporation
Merrill Lynch & Co.
The investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 1999
Transaction Offering:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
(%) of Initial
Initial Initial Pass- Wtd.
Certificate Pool Credit Through Avg. Principal Legal
Class Ratings(1) Balance Balance Support Rate Description Life(4) Maturity(4) Window(4) Status ERISA(5)
- ----- ---------- ----------- ------- ------- -------- ----------- ------- ----------- --------- ------ --------
Publicly Offered Certificates:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
S Aaa/AAA $1,239,717,562(2) -- -- 1.0980% Variable 9.3 Apr-23 4/99 - 4/23 Public Yes
A-1A Aaa/AAA 218,788,000 17.65 27.00 6.0800% Fixed 5.7 Aug-08 4/99 - 8/08 Public Yes
A-1B Aaa/AAA 686,205,000 55.35 27.00 6.4600% Fixed 9.7 Jan-09 8/08 - 1/09 Public Yes
A-2 Aa2/AA 58,887,000 4.75 22.25 6.6000% Fixed 9.8 Feb-09 1/09 - 2/09 Public No
A-3 A2/A 65,085,000 5.25 17.00 6.7700% WAC Cap(3) 9.9 Feb-09 2/09 - 2/09 Public No
A-4 A3/A- 18,596,000 1.50 15.50 6.9200% WAC Cap(3) 9.9 Feb-09 2/09 - 2/09 Public No
B-1 Baa2/BBB 46,489,000 3.75 11.75 7.4866% WAC 9.9 Feb-09 2/09 - 2/09 Public No
B-2 Baa3/BBB- 15,497,000 1.25 10.50 7.4866% WAC 9.9 Feb-09 2/09 - 2/09 Public No
Privately Offered Certificates(6):
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 their Anticipated
Repayment Dates. 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 by 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 99% of the mortgage loans were originated between 1998 and 1999
(by balance).
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 totaling $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 investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 2
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 1999
Collateral Overview:
o Total Collateral Balance: $ 1,239,717,562
o Avg. Cut-off Date Balance $ 4,459,416
per Property:
o Loans: 239 loans / 278 properties
o Property Type: Multifamily (35.7%), Retail (25.0%),
Hotel (9.4%), Other (29.9%)
o Geographic Distribution: 36 states and DC. TX (18.9%),
CA (13.6%), FL (10.0%), Other (57.5%)
o Amortization Types: Balloon (73.2%), ARD (25.4%),
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: 5.7%
o Five Largest Loans: 19.6%
o Ten Largest Loans: 27.0%
o Wtd. Avg. RTM: 122 months
o Wtd. Avg. Seasoning: 3 months
o Gross WAC: 7.320%
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
remaining 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: 91.5%
o Credit Tenant Lease: None
o Premium Loans: None
The investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 3
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 1999
<TABLE>
<S> <C>
o Participation Loans: None
o Secured Subordinate Debt: 1.3%
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 Runner-Lead) / Merrill Lynch & Co.
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: Banc One Mortgage Capital Markets, LLC
o Trustee: Norwest Bank Minnesota, National Association
o Cut-off Date: March 1, 1999
o Settlement Date: March 29, 1999
o Distribution: The 10th day of the month, or if such is
not a business day, the following
business day, but no sooner than the 4th
business day after the fourth day of the
month.
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%
</TABLE>
The investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 4
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 1999
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 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 (net of its allocable
share of appraisal reduction amounts) 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 twelve consecutive
months, paid in full, liquidated,
repurchased, or otherwise disposed of.
The investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 5
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 1999
Structure Description:
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Administrative Fee
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 A-4 A3/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]
Based on the "Maturity Assumptions" set forth in the Prospectus Supplement and a
0% CPR (except ARD Loans paid in full on the ARD).
The investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 6
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 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
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, A-4, 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 as a result of
losses and extraordinary expenses, 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-4, A-3 and A-2, in that order). If Classes A-2 through C
have been reduced to $0 by losses, such losses and expenses 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 Yield Maintenance and Prepayment Premiums:
The certificate yield maintenance amount ("CYMA") for the Class A-1A, A-1B, A-2,
A-3, A-4, 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 Trough Rate - Discount Rate)
Allocation % = ----------------------------------
to Non-IO Cerificates (Mortgage Rate - Discount)
- --------------------------------------------------------------------------------
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 investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 7
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 1999
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 rates
rise.
Allocation of Yield Maintenance Premiums Example:
Discount Rate Fraction Methodology:
Mortgage Rate = 8%
Bond Class Rate = 6%
Discount Rate ( Based on a 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 investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 8
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 1999
Stratification :
[THE FOLLOWING TABLE IS REPRESENTED BY A MAP IN THE PRINTED MATERIAL.]
State Percentage
----- ----------
Texas 18.9%
California 13.6%
Florida 10.0%
Michigan 4.8%
Tenessee 3.7%
North Carolina 3.4%
Pennsylvania 3.2%
Massachusetts 3.0%
Louisiana 2.9%
Virginia 2.8%
Georgia 2.6%
Ohio 2.6%
Colorado 2.4%
South Carolina 2.3%
New Jersey 2.3%
New York 2.2%
Illinois 2.1%
Indiana 1.9%
Washington 1.6%
Maryland 1.5%
New Hampshire 1.5%
Nevada 1.3%
Oklahoma 1.2%
Arizona 1.1%
Maine 0.9%
Wisconsin 0.8%
Kansas 0.8%
Oregon 0.6%
Missouri 0.6%
Mississippi 0.6%
Minnesota 0.5%
Alabama 0.5%
Connecticut 0.5%
District fo Columbia 0.5%
Delaware 0.4%
New Mexico 0.1%
Utah 0.1%
<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 52 $234,315,460 18.9% 7.309% 1.31x 75.0%
California 43 169,156,706 13.6% 7.287% 1.31 75.7%
Florida 19 123,548,452 10.0% 7.728% 1.34 75.9%
Michigan 17 59,538,902 4.8% 7.328% 1.44 71.6%
Tenessee 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 2.6% 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 2.3% 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 0.6% 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 fo 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: 278 $1,239,717,562 100.0% 7.320% 1.39% 73.2%
========================================================================================================
(1)Cut-off balance as of 3/1/99.
</TABLE>
The investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 9
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 1999
[THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Multifamily 35.7%
Manufactured Housing 6.6%
Office 8.9%
Retail 25.0%
Hotel 9.4%
Self Storage 3.2%
Industrial 2.8%
Mixed Use 8.3%
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 106 $442,121,682 35.7% 7.144% 1.30x 76.6%
Retail 59 310,401,887 25.0% 7.483% 1.30 76.2%
Hotel 26 116,339,043 9.4% 7.479% 2.13 54.5%
Office 24 110,681,155 8.9% 7.451% 1.31 71.9%
Mixed Use 18 103,267,224 8.3% 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 3.2% 7.465% 1.36 72.8%
Industrial 5 35,309,656 2.8% 7.481% 1.42 74.5%
------------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $1,239,717,562 100.0% 7.320% 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 33 $232,363,365 18.7% 7.499% 1.29x 76.5%
Unanchored 26 78,038,522 6.3% 7.434% 1.32 75.5%
-------------------------------------------------------------------------------------------
Total/Weighted Average: 59 $310,401,887 25.0% 7.483% 1.30x 76.2%
===========================================================================================
Hotel
Limited Service (2) 24 $98,973,828 8.0% 7.417% 2.26x 51.4%
Full Service 2 17,365,216 1.4% 7.834% 1.43 72.3%
-------------------------------------------------------------------------------------------
Total/Weighted Average: 26 $116,339,043 9.4% 7.479% 2.13x 54.5%
===========================================================================================
</TABLE>
(1) Cut-off balance as of 3/1/99.
(2) The Winston Loan properties, which have a combined 2.54x DSCR and 43.6%
LTV, comprise 71.5% of the limited service hotels.
The investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 10
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 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 21.3% 7.393% 1.71 63.5%
314 - 360 182 955,699,675 77.1% 7.307% 1.30 76.0%
--------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $1,239,717,562 100.0% 7.320% 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 - 120 260 1,135,143,632 91.6% 7.345% 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: 278 $1,239,717,562 100.0% 7.320% 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 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.
The investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 11
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 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 20.6% 7.379% 1.73 63.2%
300 - 313 5 14,842,114 1.2% 7.451% 1.35 71.1%
314 - 360 181 950,557,561 76.7% 7.309% 1.30 76.1%
------------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $1,239,717,562 100.0% 7.320% 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 - 120 259 1,132,449,208 91.3% 7.344% 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: 278 $1,239,717,562 100.0% 7.320% 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 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.
The investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 12
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 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 176 $863,255,474 69.6% 7.318% 1.40x 73.2%
Column 102 376,462,087 30.4% 7.324% 1.36 73.2%
------------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $1,239,717,562 100.0% 7.320% 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 73.2% 7.337% 1.32x 74.5%
ARD 67 315,477,528 25.4% 7.287% 1.60 69.2%
Fully Amortizing 3 17,323,190 1.4% 7.016% 1.27 77.3%
-------------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $1,239,717,562 100.0% 7.320% 1.39x 73.2%
=======================================================================================================
</TABLE>
(1) Cut-off balance as of 3/1/99.
The investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 13
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 1999
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 - 1.29 107 $618,510,184 49.9% 7.387% 1.25x 76.6%
1.30 - 1.39 87 334,357,109 27.0% 7.243% 1.33 74.4%
1.40 - 1.49 46 154,796,906 12.5% 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 8.7% 7.286% 2.29 50.2%
----------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $1,239,717,562 100.0% 7.320% 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 4.5% 7.286% 1.59 57.4%
60.01% - 70.00% 41 125,826,621 10.1% 7.443% 1.36 66.2%
70.01% - 75.00% 72 266,261,177 21.5% 7.372% 1.33 73.1%
75.01% - 80.00% 121 662,639,360 53.5% 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: 278 $1,239,717,562 100.0% 7.320% 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.
The investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 14
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 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 8.5% 7.313% 1.39 70.0%
2,000,000 - 2,999,999 60 152,593,198 12.3% 7.211% 1.41 69.6%
3,000,000 - 3,999,999 33 116,312,485 9.4% 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 7.4% 7.229% 1.57 71.9%
6,000,000 - 9,999,999 39 282,766,080 22.8% 7.306% 1.44 72.3%
10,000,000 - 14,999,999 12 145,161,787 11.7% 7.375% 1.29 77.3%
15,000,000 - 19,999,999 6 99,435,972 8.0% 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: 278 $1,239,717,562 100.0% 7.320% 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: $4,459,416
(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 1.1% 7.549% 1.39 72.2%
1,250,000 - 1,999,999 54 90,606,908 7.3% 7.316% 1.38 70.0%
2,000,000 - 2,999,999 55 140,756,300 11.4% 7.208% 1.42 69.8%
3,000,000 - 3,999,999 29 101,853,122 8.2% 7.241% 1.32 73.9%
4,000,000 - 4,999,999 17 76,432,397 6.2% 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 20.5% 7.328% 1.30 74.5%
10,000,000 - 14,999,999 10 124,377,582 10.0% 7.321% 1.29 77.3%
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 19.6% 7.485% 1.66 68.5%
----------------------------------------------------------------------------------------------
Total/Weighted Average: 239 $1,239,717,562 100.0% 7.320% 1.39x 73.1%
==============================================================================================
</TABLE>
Maximum Cut-off Date Balance: $70,750,763
Minimum Cut-off Date Balance: $675,000
Average Cut-off Date Balance: $5,187,103
(1) Cut-off balance as of 3/1/99. Presents each group of cross-collateralized
Mortgage Loans as a single Mortgage Loan.
The investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 15
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 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> <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 12.3% 6.858% 1.36 75.9%
7.000% - 7.249% 54 245,898,622 19.8% 7.134% 1.34 75.7%
7.250% - 7.499% 74 359,148,517 29.0% 7.340% 1.54 68.2%
7.500% - 7.999% 88 307,513,241 24.8% 7.644% 1.31 74.1%
8.000% - 8.440% 12 92,718,334 7.5% 8.134% 1.30 76.9%
------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $1,239,717,56 100.0% 7.320% 1.39x 73.2%
================================================================================================
</TABLE>
Maximum Mortgage Rate: 8.440%
Minimum Mortgage Rate: 5.960%
Wtd. Avg. Mortgage Rate: 7.320%
(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% 14 42,793,947 3.5% 7.363% 1.40 67.2%
90.0% - 94.9% 50 239,045,962 19.3% 7.262% 1.31 76.1%
95.0% - 100.0% 184 831,465,195 67.1% 7.317% 1.31 75.4%
--------------------------------------------------------------------------------------------------
Total/Weighted Average: 252 $1,123,378,518 90.6% 7.304% 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: 96.4%
(1) Does not include any Mortgage Loans secured by hotel properties. (2)
Cut-off balance as of 3/1/99.
The investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 16
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 1999
Year Built/Year 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 13.6% 7.241% 1.33 74.1%
1981 - 1990 83 330,990,240 26.7% 7.236% 1.31 75.4%
1991 - 1998 125 648,092,985 52.3% 7.389% 1.45 71.7%
------------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $1,239,717,562 100.0% 7.320% 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 0 278 $1,239.7 100.0% 0.0% 0.0% 100.0%
Mar-00 12 278 $1,227.4 100.0% 0.0% 0.0% 100.0%
Mar-01 24 278 $1,213.9 99.7% 0.2% 0.1% 100.0%
Mar-02 36 278 $1,199.2 96.2% 3.7% 0.1% 100.0%
Mar-03 48 278 $1,183.4 95.2% 4.7% 0.1% 100.0%
Mar-04 60 277 $1,159.9 94.9% 5.0% 0.1% 100.0%
Mar-05 72 277 $1,141.7 94.9% 5.0% 0.1% 100.0%
Mar-06 84 273 $1,090.0 94.8% 4.8% 0.4% 100.0%
Mar-07 96 272 $1,066.1 94.8% 5.1% 0.1% 100.0%
Mar-08 108 271 $1,042.1 92.4% 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.
The investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 17
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 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 - 9.9 253 1,094,619,208 88.3% 9.1 9.4 9.8
10.0 - 10.9 6 37,830,000 3.1% 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 0.9% 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: 278 $1,239,717,562 100.0% 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 253 $ 1,134,250,750 91.5% 9.4 9.4 9.7
Lockout / Yield Maintenance 24 104,021,536 8.4% 5.4 13.7 14.7
Lockout 1 1,445,275 0.1% 1.9 1.9 9.7
------------------------------------------------------------------------------------------------
Total/Weighted Average: 278 $ 1,239,717,562 100.0% 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 investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 18
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 1999
Top Five Mortgage Loans:
<TABLE>
<CAPTION>
Overview
Percentage of
Property Units/Rooms/ Cut-off Date Initial Pool Appraised Mortgage
# Top Loans Type Square Feet Balance(1) Balance Value Rate
============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
1 The Winston Loan(2) Hotel 1,993 $ 70,750,763 5.7% $162,120,000 7.375%
- ----------------------------------------------------------------------------------------------------------------------------
2 The Swerdlow Loans(3) Retial/Office 774,712 68,806,653 5.1% 80,900,000 8.180%
- ----------------------------------------------------------------------------------------------------------------------------
3 The Alliance Loans(4) Mutifamily 1,749 48,831,350 3.9% 62,250,000 7.220%
- ----------------------------------------------------------------------------------------------------------------------------
4 The Country Squire
Apartments - South Loan Mutifamily 726 30,446,295 2.5% 39,000,000 6.650%
- ----------------------------------------------------------------------------------------------------------------------------
5 The American Loans(5) Industrail/Office 797,623 29,312,901 2.4% 36,750,000 7.550%
- ----------------------------------------------------------------------------------------------------------------------------
Total/Weighted Average: $ 243147,962 19.6% $381,020,000 7.485%
============ ==== ============ =====
<CAPTION>
Cut-off Date
# Top Loans U/W DSCR LTV Ratio
======================================================
<S> <C> <C>
1 The Winston Loan(2) 2.54x 43.6%
- ------------------------------------------------------
2 The Swerdlow Loans(3) 1.25 78.9%
- ------------------------------------------------------
3 The Alliance Loans(4) 1.30 78.4%
- ------------------------------------------------------
4 The Country Squire
Apartments - South Loan 1.28 78.1%
- ------------------------------------------------------
5 The American Loans(5) 1.40 79.8%
- ------------------------------------------------------
Total/Weighted Average: 1.66x 68.5%
==== ====
</TABLE>
(1) Cut-off balance as of 3/1/99.
(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.
(5) A Single Mortgage Note is secured by 2294 Molly Pitcher Highway, 5015
Campuswood Drive, 5010 Campuswood Drive and 5009 Campuswood Drive,
respectively.
The investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 19
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 1999
Top Five Mortgage Loans (Continued):
The Winston Loan
LOAN INFORMATION
- --------------------------------------------------------------------------------
Cut-off Date Balance $70,750,763
% of Initial Pool: 5.7%
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 the
Closing Date.
Cut-off Date LTV: 43.6%
Maturity/ ARD 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 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
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Property Name City State Year Built/Renovated Rooms
==================================================================================================
<S> <C> <C> <C> <C>
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 1998/1997 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
==================================================================================================
</TABLE>
Additional Information:
The borrower is a single-purpose entity affiliated with Winston Hotels, Inc., a
public REIT (WXH: NYSE) 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 investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 20
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 1999
Top Five Mortgage Loans (Continued):
The Swerdlow Loans
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 the
Closing Date.
Cut-off Date LTV: 78.9%
Maturity/ ARD 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 Operator: 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:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Square
Property Name City State Year Built/Renovated Feet
==================================================================================================
<S> <C> <C> <C> <C>
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 141,150
==================================================================================================
</TABLE>
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 roll-over 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 investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 21
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 1999
Top Five Mortgage Loans (Continued):
The Alliance Loans
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 the
Closing Date.
Cut-off Date LTV: 78.4%
Maturity/ ARD LTV: 68.9%
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 Operator: 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 94.4%
at U/W:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
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 94.4% 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 investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 22
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 1999
Top Five Mortgage Loans (Continued):
The Country Squire Apartments - South Loan
LOAN INFORMATION
- --------------------------------------------------------------------------------
Cut-off Date Balance $30,446,295
% of Initial Pool: 2.5%
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%
Maturity/ ARD 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 Operator: 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 investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
Page 23
<PAGE>
DLJCMC Series 1999-CG1 Collateral and Structural Term Sheet March 15, 1999
Top Five Loans Summaries (Continued):
The American Loans
LOAN INFORMATION
- --------------------------------------------------------------------------------
Cut-off Date Balance $29,312,901
% of Initial Pool: 2.4%
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 the
Closing Date.
Cut-off Date LTV: 79.8%
Maturity/ ARD 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 1992
Collateral: 3 adjacent office buildings and 1
warehouse
Property Operator: 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>
<CAPTION>
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 621,4000 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 investment summary is prepared solely for informational purposes and no
offer to sell or solicitation of any offer to purchase securities is being made
hereby. This summary is for use by Donaldson, Lufkin & Jenrette Securities
Corporation personnel to assist them in determining when potential investors
wish to proceed with an in-depth investigation of the proposed of the proposed
offering. While the information contained herein is from sources believed to be
reliable, it has not been independently verified by Donaldson, Lufkin & Jenrette
Securities Corporation or any of its respective affiliates. And such entities
make no representations or warranties with respect to the information contained
herein or as to the appropriateness, usefulness or completeness of these
materials. Any computational information set forth herein (including without
limitation any computations of yields and weighted average life) is hypothetical
and based on certain assumptions (including without limitation assumptions
regarding the absence of voluntary and involuntary prepayments, or the timing of
such occurrences. The actual characteristics and performance of the mortgage
loans will differ from such assumptions and such differences may be material.
This document is subject to errors, omissions and changes in the information and
is subject to modification or withdrawal at any time with or without notice. The
information contained herein supersedes any and all information contained in any
previously furnished summaries or terms sheets and shall be superseded by any
subsequently furnished similar materials. The information contained herein shall
be superseded by a final prospectus and prospectus supplement and by subsequent
summary memoranda. No purchase of any securities may be made unless and until a
final prospectus or private placement memorandum has been received by a
potential investor and such investor has complied with all additional related
offering requirements. The contents herein are not to be reproduced without the
express written consent Donaldson, Lufkin & Jenrette Securities Corporation.
Donaldson, Lufkin & Jenrette Securities Corporation expressly reserves the
right, at its sole discretion, to reject any or all proposals or expressions of
interest in the subject proposed offering and to terminate discussions with any
party at any time with or without notice.
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.
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<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
-3-
<PAGE>
of such reporting requirements will be permanently suspended following the 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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<PAGE>
TABLE OF CONTENTS
<TABLE>
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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
</TABLE>
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<S> <C>
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
</TABLE>
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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
</TABLE>
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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.
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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<PAGE>
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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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<PAGE>
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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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<PAGE>
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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<PAGE>
- --------------------------------------------------------------------------------
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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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, the
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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 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
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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 respect to the Mortgage Loan and any
unreimbursed advances of delinquent payments made with
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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 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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<PAGE>
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.
-120-
<PAGE>
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
-121-
<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.
-123-
<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
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<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
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<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>
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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 A-1 and A-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
Prospectus Supplement
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
Description of the Mortgage Pool............................................S-56
Servicing of the Mortgage Loans.............................................S-95
Description of the Offered Certificates....................................S-111
Yield and Maturity Considerations..........................................S-133
Use of Proceeds............................................................S-139
Federal Income Tax Consequences............................................S-139
Certain ERISA Considerations...............................................S-142
Legal Investment...........................................................S-146
Method of Distribution.....................................................S-146
Legal Matters..............................................................S-147
Ratings....................................................................S-148
Index of Principal Definitions.............................................S-150
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 20, 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.
================================================================================
================================================================================
$1,109,547,000
(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 A-4,
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 15, 1999
================================================================================
