PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED OCTOBER 17, 2000)
DLJ COMMERCIAL MORTGAGE TRUST 2000-CKP1
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2000-CKP1,
CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS A-3,
CLASS A-4, CLASS B-1, CLASS B-2 AND CLASS B-3
APPROXIMATE TOTAL PRINCIPAL BALANCE AT ISSUANCE: $1,180,275,000
We, DLJ Commercial Mortgage Corp., have prepared this prospectus
supplement in order to offer the classes of commercial mortgage pass-through
certificates identified above. These certificates are the only securities
offered by this prospectus supplement. This prospectus supplement specifically
relates to, and is accompanied by, our prospectus dated October 17, 2000. We
will not list the offered certificates on any national securities exchange or
any automated quotation system of any registered securities association, such as
NASDAQ.
The offered certificates will represent beneficial ownership interests
in the commercial mortgage trust identified above. They will not represent
interests in or obligations of any other party. The assets of the trust will
include a pool of multifamily and commercial mortgage loans. The initial
mortgage pool balance that we expect to transfer to the trust will be
approximately $1,289,918,771. No governmental agency or instrumentality or
private insurer has insured or guaranteed the offered certificates or any of the
mortgage loans that will back them.
Each class of offered certificates will receive monthly distributions
of interest, principal or both, commencing in December 2000. The table on page
S-4 of this prospectus supplement sets forth the principal balance, pass-through
rate and other selective characteristics of each class of offered certificates.
Credit enhancement is being provided through the subordination of multiple
non-offered classes of the series 2000-CKP1 certificates. That same table on
page S-4 of this prospectus supplement also contains a list of the non-offered
classes of the series 2000-CKP1 certificates.
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YOU SHOULD FULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE S-33 IN
THIS PROSPECTUS SUPPLEMENT AND ON PAGE 13 IN THE ACCOMPANYING PROSPECTUS 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, Prudential
Securities Incorporated, Credit Suisse First Boston Corporation, McDonald
Investments Inc. and Salomon Smith Barney Inc. are the underwriters for this
offering. They will purchase the offered certificates from us. Our proceeds from
the sale of the offered certificates will be an amount equal to approximately
100.4% of the total initial principal balance of the offered certificates, plus
accrued interest, before deducting expenses payable by us. Each underwriter
currently intends to sell its allocation of the offered certificates in one or
more negotiated transactions or otherwise at varying prices to be determined at
the time of sale. Each underwriter's commission will be the difference between
the price it pays to us for its allocation of the offered certificates and the
amount it receives from the sale of those certificates. See "Method of
Distribution" in this prospectus supplement.
DONALDSON, LUFKIN & JENRETTE PRUDENTIAL SECURITIES
CREDIT SUISSE FIRST BOSTON MCDONALD INVESTMENTS SALOMON SMITH BARNEY
A KEYCORP COMPANY
The date of this prospectus supplement is October 27, 2000.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
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Important Notice About the Information Contained in This Prospectus Supplement,
the Accompanying Prospectus and the Related Registration Statement............................................3
Summary of Prospectus Supplement...................................................................................4
Risk Factors......................................................................................................33
Capitalized Terms Used in This Prospectus Supplement..............................................................44
Forward-Looking Statements........................................................................................44
Description of the Mortgage Pool..................................................................................45
Servicing of the Underlying Mortgage Loans........................................................................97
Description of the Offered Certificates..........................................................................123
Yield and Maturity Considerations................................................................................145
Use of Proceeds..................................................................................................150
Federal Income Tax Consequences..................................................................................150
ERISA Considerations.............................................................................................152
Legal Investment.................................................................................................157
Method of Distribution...........................................................................................158
Legal Matters....................................................................................................159
Ratings..........................................................................................................159
Glossary.........................................................................................................162
Exhibit A-1--Characteristics of the Underlying Mortgage Loans and the Mortgaged Real 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 the Offered Certificates.........................................................C-1
Exhibit D--Global Clearance, Settlement and Tax Documentation Procedures.........................................D-1
PROSPECTUS
Important Notice About the Information Presented in this Prospectus................................................3
Available Information; Incorporation by Reference..................................................................3
Summary of Prospectus..............................................................................................4
Risk Factors......................................................................................................13
Description of the Trust Assets...................................................................................34
Yield and Maturity Considerations.................................................................................60
DLJ Commercial Mortgage Corp......................................................................................66
Description of the Certificates...................................................................................67
Description of the Governing Documents............................................................................77
Description of Credit Support.....................................................................................87
Certain Legal Aspects of Mortgage Loans...........................................................................90
Federal Income Tax Consequences..................................................................................103
State and Other Tax Consequences.................................................................................143
ERISA Considerations.............................................................................................143
Legal Investment.................................................................................................148
Use of Proceeds..................................................................................................150
Method of Distribution...........................................................................................151
Legal Matters....................................................................................................152
Financial Information............................................................................................152
Rating...........................................................................................................152
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IMPORTANT NOTICE ABOUT THE INFORMATION CONTAINED IN THIS PROSPECTUS
SUPPLEMENT, THE ACCOMPANYING PROSPECTUS AND THE RELATED REGISTRATION STATEMENT
Information about the offered certificates is contained in two separate
documents:
o this prospectus supplement, which describes the specific terms of
the offered certificates; and
o the accompanying prospectus, which provides general information,
some of which may not apply to the offered certificates.
You should read both this prospectus supplement and the accompanying
prospectus in full to obtain material information concerning the offered
certificates.
In addition, we have filed with the Securities and Exchange Commission
a registration statement under the Securities Act of 1933, as amended, with
respect to the offered certificates. This prospectus supplement and the
accompanying prospectus form a part of that registration statement. However,
this prospectus supplement and the accompanying prospectus do not contain all of
the information contained in our registration statement. For further information
regarding the documents referred to in this prospectus supplement and the
accompanying prospectus, you should refer to our registration statement and the
exhibits to it. Our registration statement and the exhibits to it 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 these materials can also be obtained electronically through the SEC's
internet web site (http:\\www.sec.gov).
You should only rely on the information contained in this prospectus
supplement, the accompanying prospectus and our registration statement. We have
not authorized any person to give any other information or to make any
representation that is different from the information contained in this
prospectus supplement, the accompanying prospectus or our registration
statement.
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SUMMARY OF PROSPECTUS SUPPLEMENT
This summary contains selected information regarding the offering being
made by 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 ACCOMPANYING PROSPECTUS IN FULL.
INTRODUCTION TO THE TRANSACTION
The offered certificates will be part of a series of commercial
mortgage pass-through certificates designated as the Series 2000-CKP1 Commercial
Mortgage Pass-Through Certificates and consisting of multiple classes. The table
below identifies the respective classes of that series, specifies various
characteristics of each of those classes and indicates which of those classes
are offered by this prospectus supplement and which are not.
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SERIES 2000-CKP1 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
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TOTAL APPROX.
PRINCIPAL % OF TOTAL
BALANCE OR INITIAL CREDIT WEIGHTED
NOTIONAL MORTGAGE SUPPORT AT PASS-THROUGH INITIAL AVERAGE MOODY'S/
AMOUNT AT INITIAL POOL INITIAL RATE PASS-THROUGH LIFE PRINCIPAL FITCH
CLASS ISSUANCE BALANCE ISSUANCE DESCRIPTION RATE (YEARS) WINDOW RATINGS
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Offered Certificates
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
A-1A $ 210,310,000 16.30% 22.50% Fixed 6.9300% 5.7 12/00-8/09 Aaa/AAA
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A-1B $ 789,377,000 61.20% 22.50% Fixed 7.1800% 9.6 8/09-8/10 Aaa/AAA
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A-2 $ 51,596,000 4.00% 18.50% Fixed 7.3500% 9.8 8/10-9/10 Aa2/AA
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A-3 $ 58,047,000 4.50% 14.00% WAC Cap 7.5000% 9.8 9/10-9/10 A2/A
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A-4 $ 16,124,000 1.25% 12.75% WAC Cap 7.6000% 9.8 9/10-9/10 A3/A-
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B-1 $ 16,124,000 1.25% 11.50% WAC Cap 7.9500% 9.9 9/10-10/10 Baa1/BBB+
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B-2 $ 25,798,000 2.00% 9.50% WAC Cap 8.0000% 9.9 10/10-10/10 Baa2/BBB
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B-3 $ 12,899,000 1.00% 8.50% WAC 8.2380% 9.9 10/10-10/10 Baa3/BBB-
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Non-Offered Certificates
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S $ 1,289,918,771 N/A N/A Variable 1.0912% N/A N/A N/A
(Notional Amount)
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B-4 $ 33,861,000 2.63% N/A Fixed 6.5270% N/A N/A N/A
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B-5 $ 17,736,000 1.37% N/A Fixed 6.5270% N/A N/A N/A
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B-6 $ 9,674,000 0.75% N/A Fixed 6.5270% N/A N/A N/A
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B-7 $ 9,675,000 0.75% N/A Fixed 6.5270% N/A N/A N/A
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B-8 $ 16,124,000 1.25% N/A Fixed 6.5270% N/A N/A N/A
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B-9 $ 6,449,000 0.50% N/A Fixed 6.5270% N/A N/A N/A
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C $ 16,124,771 1.25% N/A Fixed 6.5270% N/A N/A N/A
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D N/A N/A N/A N/A N/A N/A N/A N/A
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E N/A N/A N/A N/A N/A N/A N/A N/A
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R N/A N/A N/A N/A N/A N/A N/A N/A
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The offered certificates will evidence beneficial ownership interests
in a common law trust designated as the DLJ Commercial Mortgage Trust 2000-CKP1.
We will form the trust at or prior to the
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time of initial issuance of the offered certificates. The assets of the trust
will include a pool of multifamily and commercial mortgage loans having the
characteristics described in this prospectus supplement.
The governing document for purposes of issuing the offered certificates
and forming the trust will be a pooling and servicing agreement to be dated as
of a date in November 2000. The pooling and servicing agreement will also govern
the servicing and administration of the mortgage loans and the other assets that
back the offered certificates. The parties to the pooling and servicing
agreement will include us, a trustee, a master servicer, a special servicer and
a special sub-servicer. We intend to file a copy of the pooling and servicing
agreement with the SEC as an exhibit to a Current Report on Form 8-K, within 15
days after the initial issuance of the offered certificates. The SEC will make
that Current Report on Form 8-K and its exhibits available to the public for
inspection.
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KEY CERTIFICATE FEATURES SHOWN IN THE TABLE ABOVE
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A. TOTAL PRINCIPAL BALANCE
OR NOTIONAL AMOUNT AT
INITIAL ISSUANCE......................... The table above sets forth for each class of the series 2000-CKP1 certificates,
other than the class D, E and R certificates, the approximate total principal
balance or notional amount, as applicable, of that class at initial issuance. The
actual total principal balance or notional amount, as applicable, of any class of
series 2000-CKP1 certificates at initial issuance may be larger or smaller than
the amount shown above, depending on the actual size of the initial mortgage pool
balance or for other reasons. The actual size of the initial mortgage pool
balance may be as much as 5% larger or smaller than the amount presented in this
prospectus supplement.
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, B-9
and C certificates are the only series 2000-CKP1 certificates with principal
balances. The principal balance of any of those certificates at any time
represents the maximum amount that the holder may receive as principal out of
cashflow received on or with respect to the underlying mortgage loans.
The class S certificates do not have principal balances. They are interest-only
certificates. For purposes of calculating the amount of accrued interest with
respect to the class S certificates, however, they will have a total notional
amount equal to the total principal balance of 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, B-9 and C certificates outstanding
from time to time.
The class D certificates do not have principal balances or notional amounts. They
represent the right to receive any collections of additional interest on 37
mortgage loans, representing 23.8% of the initial mortgage pool balance, that
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have anticipated repayment dates, as described under "--The Underlying Mortgage
Loans and the Mortgaged Real Properties" below. That additional interest results
from an increase in the applicable accrual rate if any of those mortgage loans
remains outstanding past its anticipated repayment date.
The class E certificates do not have principal balances or notional amounts. They
represent the right to receive the closing fee payable on the earlier of maturity
or repayment of the mortgage loan secured by the mortgaged real property
identified on Exhibit A-1 to this prospectus supplement as Holiday Inn Orlando.
The class R certificates also do not have principal balances or notional amounts.
They are residual interest certificates. The holders of the class R certificates
are not expected to receive any material payments.
B. TOTAL CREDIT SUPPORT AT
INITIAL ISSUANCE........................ The respective classes of the series 2000-CKP1 certificates, other than the class
D, E and R certificates, entitle their holders to varying degrees of seniority
for purposes of--
o receiving payments of interest and, except in the case of the class S
certificates, payments of principal, and
o bearing the effects of losses on the underlying mortgage loans, as well as
default-related and other unanticipated expenses of the trust.
The class A-1A, A-1B and S certificates are the most senior. The table above
lists the remaining classes of series 2000-CKP1 certificates, exclusive of the
class D, E and R certificates, from top to bottom in descending order of
seniority.
The class D, E and R certificates do not provide credit support for, or receive
credit support from, any other class of series 2000-CKP1 certificates.
The table above shows the approximate total credit support provided to each class
of the offered certificates through the subordination of other classes of the
series 2000-CKP1 certificates. In the case of each of the classes of offered
certificates, the credit support shown in the table above represents the total
initial principal balance, expressed as a percentage of the initial mortgage pool
balance, of all classes of the series 2000-CKP1 certificates that are subordinate
to the indicated class.
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C. PASS-THROUGH RATE........................... Each class of the series 2000-CKP1 certificates, other than the class D, E and R
certificates, will bear interest. The table above provides the indicated
information regarding the pass-through rate at which each of those classes of the
series 2000-CKP1 certificates will accrue interest.
Each class of series 2000-CKP1 certificates identified in the table above as
having a Fixed pass-through rate, has a fixed pass-through rate that will remain
constant at the initial pass-through rate for that class.
Each class of series 2000-CKP1 certificates identified in the table above as
having a WAC Cap pass-through rate, has a variable pass-through rate equal to the
lesser of--
o the initial pass-through rate for that class, and
o a weighted average coupon derived from net interest rates on the pooled
mortgage loans.
Each class of series 2000-CKP1 certificates identified in the table above as
having a WAC pass-through rate, has a variable pass-through rate equal to a
weighted average coupon derived from net interest rates on the pooled mortgage
loans.
The pass-through rate for the class S certificates will be variable and will
equal the excess, if any, of--
o a weighted average coupon derived from net interest rates on the pooled
mortgage loans, over
o a weighted average of the pass-through rates from time to time on the other
interest-bearing classes of series 2000-CKP1 certificates.
D. WEIGHTED AVERAGE LIFE
AND PRINCIPAL WINDOW..................... The table above shows the weighted average life of and principal window for each
class of offered certificates. The weighted average life of any class of offered
certificates refers to the average amount of time that will elapse from the
assumed settlement date of November 10, 2000 until each dollar to be applied in
reduction of the total principal balance of those certificates is paid to the
investor. The principal window for any class of offered certificates is the
period during which the holders of that class of offered certificates will
receive payments of principal. The weighted average lives and principal windows
shown in the table above for the offered certificates, were calculated based on
the following assumptions with respect to each underlying mortgage loan--
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o the related borrower timely makes all payments on the mortgage loan,
o if the mortgage loan has an anticipated repayment date, as described under
"--The Underlying Mortgage Loans and the Mortgaged Real Properties" below,
the mortgage loan will be paid in full on that date, and
o the mortgage loan will not otherwise be prepaid prior to stated maturity.
The weighted average lives and principal windows shown in the table above for the
offered certificates, were further calculated based on the other maturity
assumptions described under "Yield and Maturity Considerations" in, and in the
glossary to, this prospectus supplement.
E. RATINGS..................................... The ratings shown in the table above for the offered certificates are those of
Moody's Investors Service, Inc. and Fitch, Inc., respectively. It is a condition
to their issuance that the respective classes of the offered certificates receive
credit ratings no lower than those shown in the table above.
The ratings of the offered certificates address the timely payment of interest
and the ultimate payment of principal on or before November 2033, which is the
rated final payment date. A security rating is not a recommendation to buy, sell
or hold securities and the assigning rating agency may revise or withdraw its
rating at any time.
For a description of the limitations of the ratings of the offered certificates,
see "Ratings" in this prospectus supplement and "Rating" in the accompanying
prospectus.
RELEVANT PARTIES
WHO WE ARE....................................... Our name is DLJ Commercial Mortgage Corp., and we are a Delaware corporation. Our
address is 277 Park Avenue, 9th Floor, New York, New York 10172, and our
telephone number is (212) 892-3000. We are a wholly-owned subsidiary of
Donaldson, Lufkin & Jenrette, Inc. A proposed acquisition by Credit Suisse First
Boston, Inc. of Donaldson, Lufkin & Jenrette, Inc. is currently pending. See "DLJ
Commercial Mortgage Corp." in the accompanying prospectus.
INITIAL TRUSTEE................................... Wells Fargo Bank Minnesota, N.A., a national banking association, will act as the
initial trustee on behalf of all the series 2000-CKP1 certificateholders. See
"Description of the Offered Certificates--The Trustee" in this prospectus
supplement. The trustee will also have, or be responsible for
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appointing an agent to perform, additional duties with respect to tax
administration.
INITIAL MASTER SERVICER AND
INITIAL SPECIAL SUB-SERVICER.................. Key Corporate Capital Inc. d/b/a Key Commercial Mortgage, a Michigan corporation,
will act as the initial master servicer with respect to the pooled mortgage
loans.
As special sub-servicer, it will perform, on behalf of the special servicer,
substantially all of the special servicing duties with respect to the mortgage
pool. Any discussion in this prospectus supplement of the rights, duties and
obligations of the special servicer will, in general, be equally applicable to
the special sub-servicer. The pooling and servicing agreement and a separate
sub-servicing agreement will govern the special sub-servicing arrangement.
See "Servicing of the Underlying Mortgage Loans--The Initial Master Servicer, the
Initial Special Servicer and the Initial Special Sub-Servicer" in this prospectus
supplement.
INITIAL SPECIAL SERVICER......................... Midland Loan Services, Inc., a Delaware corporation, will act as the initial
special servicer with respect to the pooled mortgage loans.
It is anticipated that the initial master servicer will act as a sub-servicer on
behalf of the initial special servicer and, in that capacity, will perform
substantially all of the special servicing duties with respect to the mortgage
pool.
See "Servicing of the Underlying Mortgage Loans--The Initial Master Servicer, the
Initial Special Servicer and the Initial Special Sub-Servicer" in this prospectus
supplement.
CONTROLLING CLASS
OF CERTIFICATEHOLDERS......................... The holders of certificates representing a majority interest in a designated
controlling class of the series 2000-CKP1 certificates will be entitled to select
a representative that, subject to the conditions described under "Servicing of
the Underlying Mortgage Loans--The Series 2000-CKP1 Controlling Class
Representative" and "--Replacement of the Special Servicer" in this prospectus
supplement, may--
o replace the special servicer, and
o direct the special servicer with respect to various special servicing
matters.
Unless there are significant losses on the underlying mortgage loans, the
controlling class of the series 2000-
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CKP1 certificateholders will be the holders of a non-offered class of series
2000-CKP1 certificates.
MORTGAGE LOAN SELLERS............................ We will acquire the mortgage loans that are to back the offered certificates,
from:
o Column Financial, Inc., which is a Delaware corporation and an affiliate of
both us and Donaldson, Lufkin & Jenrette Securities Corporation;
o Prudential Mortgage Capital Funding, LLC, which is a Delaware limited
liability company and an affiliate of Prudential Securities Incorporated; and
o KeyBank National Association, which is a national banking association and an
affiliate of both Key Corporate Capital Inc. d/b/a Key Commercial Mortgage
and McDonald Investments Inc.
See "Description of the Mortgage Pool--The Mortgage Loan Sellers" in this
prospectus supplement.
UNDERWRITERS..................................... Donaldson, Lufkin & Jenrette Securities Corporation, Prudential Securities
Incorporated, Credit Suisse First Boston Corporation, McDonald Investments Inc.
and Salomon Smith Barney Inc. are the underwriters with respect to this offering.
Donaldson, Lufkin & Jenrette Securities Corporation and Prudential Securities
Incorporated will be co-lead managers and joint bookrunners for the offering.
Credit Suisse First Boston Corporation, McDonald Investments Inc. and Salomon
Smith Barney Inc. will be co-managers for the offering.
In connection with the announced acquisition of Donaldson, Lufkin & Jenrette,
Inc. by Credit Suisse First Boston, Inc., to the extent required or permitted
under applicable law or regulation, Donaldson, Lufkin & Jenrette Securities
Corporation may act through or in conjunction with Credit Suisse First Boston
Corporation in performing certain of its duties as underwriter with respect to
this offering.
RELEVANT DATES AND PERIODS
CUT-OFF DATE..................................... The pooled mortgage loans will be considered part of the trust as of their
respective due dates in November 2000. All payments and collections received on
each of the underlying mortgage loans after its due date in November 2000,
excluding any payments or collections that represent amounts due on or before
that date, will belong to the trust. The respective due dates for the underlying
mortgage loans in
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November 2000 are individually and collectively considered the cut-off date for
the trust.
ISSUE DATE....................................... The date of initial issuance for the offered certificates will be on or about
November 7, 2000.
PAYMENT DATE..................................... Payments on the offered certificates are scheduled to occur monthly, commencing
in December 2000. During any given month, the payment date will be the later of--
o the tenth calendar day of that month, or, if the tenth calendar day of that
month is not a business day, then the next succeeding business day, and
o the fourth business day following the fourth calendar day of that month.
RECORD DATE...................................... The record date for each monthly payment on an offered certificate will be the
last business day of the prior calendar month. The registered holders of the
offered certificates at the close of business on each record date will be
entitled to receive any payments on those certificates on the following payment
date.
COLLECTION PERIOD................................ Amounts available for payment on the offered certificates on any payment date
will depend on the payments and other collections received, and any advances of
payments due, on or with respect to the underlying mortgage loans during the
related collection period. Each collection period--
o will relate to a particular payment date,
o will be approximately one month long,
o will begin when the prior collection period ends or, in the case of the first
collection period, with respect to any underlying mortgage loan, will begin
immediately following its due date in November 2000, and
o will end during the month of, but prior to, the related payment date.
INTEREST ACCRUAL PERIOD.......................... The amount of interest payable with respect to the offered certificates on any
payment date will be a function of the interest accrued during the related
interest accrual period. The interest accrual period for any payment date will be
the calendar month immediately preceding the month in which that payment date
occurs.
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DESCRIPTION OF THE OFFERED CERTIFICATES
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REGISTRATION AND DENOMINATIONS................... We intend to deliver the offered certificates in book-entry form in original
denominations of $10,000 initial principal balance and in any whole dollar
denomination in excess of $10,000.
You will initially hold your offered certificates through The Depository Trust
Company, in the United States, or Clearstream Banking, societe anonyme or The
Euroclear System, in Europe. As a result, you will not receive a fully registered
physical certificate representing your interest in any offered certificate,
except under the limited circumstances described under "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 accompanying prospectus. We may elect to
terminate the book-entry system through DTC with respect to all or any portion of
any class of offered certificates.
PAYMENTS
A. GENERAL...................................... The trustee will make payments of interest and, if and when applicable, principal
to the following classes of series 2000-CKP1 certificateholders, in the following
order:
PAYMENT ORDER CLASS
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1st S, A-1A and A-1B
2nd A-2
3rd A-3
4th A-4
5th B-1
6th B-2
7th B-3
8th B-4
9th B-5
10th B-6
11th B-7
12th B-8
13th B-9
14th C
Allocation of interest payments among the class S, A-1A and A-1B certificates is
pro rata based on the respective amounts of interest payable on each. Allocation
of principal payments between the class A-1A and A-1B certificates is described
under "--Payments--Payments of Principal" below. The class S certificates do not
have principal balances and do not entitle their holders to payments of
principal.
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See "Description of the Offered Certificates--Payments--Priority of Payments" in
this prospectus supplement.
B. PAYMENTS OF INTEREST......................... Each class of series 2000-CKP1 certificates, other than the class D, E and R
certificates, will bear interest. With respect to each interest-bearing class,
that interest will accrue during each interest accrual period based upon:
o the pass-through rate for that class and the related payment date;
o the total principal balance or notional amount, as the case may be, of that
class outstanding immediately prior to the related payment date; and
o the assumption that each year consists of twelve 30-day months.
A whole or partial prepayment on an underlying mortgage loan may not be
accompanied by the amount of one full month's interest on the prepayment. As and
to the extent described under "Description of the Offered
Certificates--Payments--Payments of Interest" in this prospectus supplement,
these shortfalls may be allocated to reduce the amount of accrued interest
otherwise payable to the holders of all of the interest-bearing classes of the
series 2000-CKP1 certificates, including the offered certificates, on a pro rata
basis in accordance with the respective amounts of interest otherwise payable on
those classes for the corresponding interest accrual period.
On each payment date, subject to available funds and the payment priorities
described under "--Payments--General" above, you will be entitled to receive your
proportionate share of all unpaid distributable interest accrued with respect to
your class of offered certificates through the end of the related interest
accrual period.
See "Description of the Offered Certificates--Payments--Payments of Interest" and
"--Payments--Priority of Payments" in this prospectus supplement.
C. PAYMENTS OF PRINCIPAL........................ Subject to available funds and the payment priorities described under
"--Payments--General" above, the holders of each class of offered certificates
will be entitled to receive a total amount of principal over time equal to the
total principal balance of their particular class. The trustee must make payments
of principal in a specified sequential order to ensure that:
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o no payments of principal will be made to the holders of any non-offered
certificates until the total principal balance of the offered certificates is
reduced to zero;
o no payments of principal will be made to the holders of the class A-2, A-3,
A-4, B-1, B-2 or B-3 certificates until, in the case of each of those
classes, the total principal balance of all more senior classes of offered
certificates is reduced to zero; and
o except as described in the following paragraph, no payments of principal will
be made to the holders of the class A-1B certificates until the total
principal balance of the class A-1A certificates is reduced to zero.
Because of losses on the underlying mortgage loans and/or default-related or
other unanticipated expenses of the trust, the total principal balance of the
class A-2, A-3, A-4, B-1, B-2, B-3, B-4, B-5, B-6, B-7, B-8, B-9 and C
certificates could be reduced to zero at a time when the class A-1A and A-1B
certificates remain outstanding. Under those circumstances, any payments of
principal on the class A-1A and A-1B certificates will be made on a pro rata
basis in accordance with the relative sizes of their respective principal
balances at the time of the payment.
The total payments of principal to be made on the series 2000-CKP1 certificates
on any payment date will be a function of--
o the amount of scheduled payments of principal due or, in some cases, deemed
due, on the underlying mortgage loans during the related collection period,
which payments are either received as of the end of that collection period or
advanced by the master servicer, and
o the amount of any prepayments and other unscheduled collections of previously
unadvanced principal with respect to the underlying mortgage loans that are
received during the related collection period.
The class S, D, E and R certificates do not have principal balances. They do not
entitle holders to any payments of principal.
See "Description of the Offered Certificates--Payments--Payments of Principal"
and "--Payments--Priority of Payments" in this prospectus supplement.
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D. DISTRIBUTIONS OF
PREPAYMENT PREMIUMS AND
YIELD MAINTENANCE CHARGES................... Any prepayment premium or yield maintenance charge collected in respect of a
pooled 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 any class or classes of offered certificates then entitled to receive
distributions of principal. See "Description of the Offered
Certificates--Payments-- Payments of Prepayment Premiums and Yield Maintenance
Charges" in this Prospectus supplement.
REDUCTIONS OF CERTIFICATE PRINCIPAL
BALANCES IN CONNECTION WITH
LOSSES AND EXPENSES........................... Because of losses on the pooled mortgage loans and/or default-related and other
unanticipated expenses of the trust, the total principal balance of the mortgage
pool, net of advances of principal, may fall below the total principal balance of
the series 2000-CKP1 certificates. If and to the extent that those losses and
expenses cause a deficit to exist following the payments made on the series
2000-CKP1 certificates on any payment date, then the principal balances of the
following classes of series 2000-CKP1 certificates, will be sequentially reduced
in the following order, until that deficit is eliminated:
REDUCTION ORDER CLASS
--------------- -----
1st C
2nd B-9
3rd B-8
4th B-7
5th B-6
6th B-5
7th B-4
8th B-3
9th B-2
10th B-1
11th A-4
12th A-3
13th A-2
14th A-1A and A-1B
Any reduction of the principal balances of the class A-1A and A-1B certificates
will be made on a pro rata basis in accordance with the relative sizes of those
principal balances at the time of the reduction.
See "Description of the Offered Certificates--Reductions of Certificate Principal
Balances in Connection with Realized Losses and Additional Trust Fund Expenses"
in this prospectus supplement.
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ADVANCES OF DELINQUENT MONTHLY
DEBT SERVICE PAYMENTS........................ Except as described in the next two paragraphs, the master servicer will be
required to make advances with respect to any delinquent scheduled monthly
payments, other than balloon payments, of principal and/or interest due on the
pooled mortgage loans. The master servicer will be required to make advances for
those balloon loans that become defaulted upon their maturity dates, on the same
amortization schedule as if the maturity date had not occurred. In addition, the
trustee must make any of those advances that the master servicer fails to make.
As described under "Description of the Offered Certificates--Advances of
Delinquent Monthly Debt Service Payments" in this prospectus supplement, any
party that makes an advance will be entitled to be reimbursed for the advance,
together with interest at the prime rate described in that section of this
prospectus supplement.
Notwithstanding the foregoing, neither the master servicer nor the trustee 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.
In addition, if any of the adverse events or circumstances that we refer to under
"Servicing of the Underlying Mortgage Loans--Required Appraisals" in this
prospectus supplement, occur or exist with respect to any pooled mortgage loan or
the mortgaged real property for that loan, the special servicer will be obligated
to obtain a new appraisal or, in cases involving relatively small principal
balances, and unless the controlling class certificateholder objects, conduct a
valuation of that property. If, based on that appraisal or other valuation, it is
determined that--
o the principal balance of, and other delinquent amounts due under, the
mortgage loan, exceed
o the sum of--
1. 90% of the new estimated value of that real property, plus
2. the amount of certain related escrow payments, reserve funds and letters
of credit,
then the amount otherwise required to be advanced with respect to interest on
that mortgage loan will be reduced. The reduction will be in the same proportion
that the excess bears to the principal balance of the mortgage loan, net of
related advances of principal. Due to the payment priorities,
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any reduction in advances will reduce the funds available to pay interest on the
most subordinate interest-bearing class of series 2000-CKP1 certificates then
outstanding.
See "Description of the Offered Certificates--Advances of Delinquent Monthly Debt
Service Payments" and "Servicing of the Underlying Mortgage Loans--Required
Appraisals" in this prospectus supplement. See also "Description of the
Certificates--Advances" in the accompanying prospectus.
REPORTS TO CERTIFICATEHOLDERS.................... On each payment date, the trustee will provide to the registered holders of the
offered certificates a monthly report substantially in the form of Exhibit B to
this prospectus supplement. The trustee's report will detail, among other things,
the payments made to the series 2000-CKP1 certificateholders on that payment date
and the performance of the underlying mortgage loans and the mortgaged real
properties.
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
pooled mortgage loans and the mortgaged real properties for those loans. We
expect that the available information and documents will include loan documents,
borrower operating statements, rent rolls and property inspection reports, to the
extent received by the trustee.
See "Description of the Offered Certificates--Reports to Certificateholders;
Available Information" in this prospectus supplement.
OPTIONAL TERMINATION............................. Specified parties to the transaction may terminate the trust when the total
principal balance of the mortgage pool, net of advances of principal, is less
than 1.0% of the initial mortgage pool balance. See "Description of the Offered
Certificates--Termination" in this prospectus supplement.
THE UNDERLYING MORTGAGE LOANS AND THE MORTGAGED REAL PROPERTIES
GENERAL.......................................... In this section, "--The Underlying Mortgage Loans and the Mortgaged Real
Properties", we provide summary information with respect to the mortgage loans
that we intend to include in the trust. For more detailed information regarding
those mortgage loans, you should review the following sections in this prospectus
supplement:
o "Description of the Mortgage Pool"
o "Risk Factors--Risks Related to the Underlying Mortgage Loans"
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o Exhibit A-1 - Characteristics of the Underlying Mortgage Loans and the
Mortgaged Real Properties
o Exhibit A-2 - Mortgage Pool Information
When reviewing the information that we have included in this prospectus
supplement with respect to the mortgage loans that are to back the offered
certificates, please note 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
or any sub-group of mortgage loans reflects a weighting based on their
respective cut-off date principal balances. We will transfer the cut-off date
principal balance for each of the mortgage loans to the trust. We show the
cut-off date principal balance for each of the mortgage loans on Exhibit A-1
to this prospectus supplement.
o In presenting the cut-off date principal balances of the mortgage loans, we
have assumed that--
1. all scheduled payments of principal and/or interest due on the mortgage
loans on or before their respective due dates in November 2000, are
timely made, and
2. there are no prepayments or other unscheduled collections of principal
with respect to any of the mortgage loans during the period from their
respective due dates in October 2000 up to and including their respective
due dates in November 2000.
o When information with respect to the mortgaged real properties is expressed
as a percentage of the initial mortgage pool balance, the percentages are
based upon the cut-off date principal balances of the related mortgage loans.
o Some of the pooled mortgage loans are cross-collateralized and
cross-defaulted with one or more other mortgage loans in the trust. Except as
otherwise indicated, when a pooled mortgage loan is cross-collateralized and
cross-defaulted with another mortgage loan, we present the information
regarding those mortgage loans as if each of them was secured only by a
mortgage lien on the corresponding
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mortgaged real property identified on Exhibit A-1 to this prospectus
supplement. One exception is that each and every mortgage loan in any
particular group of cross-collateralized and cross-defaulted mortgage loans
is treated as having the same loan-to-value ratio and the same debt service
coverage ratio. None of the mortgage loans in the trust will be
cross-collateralized with any loan that is not in the trust.
o In some cases, an individual mortgage loan is secured by multiple mortgaged
real properties. For purposes of providing property-specific information, we
have allocated each of those mortgage loans among the related mortgaged real
properties based upon--
1. relative appraised values,
2. relative underwritten net cash flow, or
3. prior allocations reflected in the related loan documents.
o If a mortgage loan is secured by multiple parcels of real property and the
operation or management of those parcels so warranted, we treated those
parcels as a single parcel of real property.
o Whenever we refer to a particular mortgaged real property by name, we mean
the 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 initial issuance of the offered certificates due to changes in the
composition of the mortgage pool prior to that date.
SOURCE OF THE
UNDERLYING MORTGAGE LOANS.................... We are not the originator of the mortgage loans that we intend to include in the
trust. We will acquire those mortgage loans from three separate sellers. Each of
those mortgage loans was originated by--
o the related mortgage loan seller from whom we directly or indirectly acquired
the mortgage loan,
o an affiliate of the related mortgage loan seller,
o a correspondent in the related mortgage loan seller's or its affiliate's
conduit lending program, or
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o in 14 cases, representing 11.1% of the initial mortgage pool balance, an
unaffiliated lender from whom the related mortgage loan seller acquired the
particular loan other than in connection with a conduit lending program.
PAYMENT AND OTHER TERMS.......................... Each of the mortgage loans that we intend to include in the trust is the
obligation of a borrower to repay a specified sum with interest.
Repayment of each of the mortgage loans is secured by a mortgage lien on the
ownership and/or leasehold interest of the related borrower or another party in
one or more commercial or multifamily real properties. That mortgage lien will be
a first priority lien, except for limited permitted encumbrances, which we refer
to under "Description of the Mortgage Pool--General" in, and describe in the
glossary to, this prospectus supplement.
All of the mortgage loans are or should be considered to be nonrecourse. None of
the mortgage loans are insured or guaranteed by any governmental agency or
instrumentality or by any private mortgage insurer.
Each of the mortgage loans currently accrues interest at the annual rate
specified with respect to that mortgage loan on Exhibit A-1 to this prospectus
supplement. Except as otherwise described below with respect to mortgage loans
that have anticipated repayment dates, the mortgage interest rate for each
mortgage loan is, in the absence of default, fixed for the entire term of the
loan.
Two hundred twenty-nine of the mortgage loans that we intend to include in the
trust representing 99.3% of the initial mortgage pool balance, provide for
scheduled payments of principal and/or interest to be due on the first day of
each month. One mortgage loan that we intend to include in the trust,
representing 0.7% of the initial mortgage pool balance, provides for scheduled
payments of principal and/or interest to be due on the tenth day of each month.
For purposes of determining payments and advances on the series 2000-CKP1
certificates, the mortgage loan that provides for a tenth of the month due date
will be deemed to have a due date on the first day of the same month.
One hundred ninety-one of the mortgage loans, representing 72.0% of the initial
mortgage pool balance, are balloon loans that provide for:
o an amortization schedule that is significantly longer than its remaining term
to stated maturity; and
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o a substantial payment of principal on its maturity date.
Thirty-seven of the mortgage loans, representing 23.8% of the initial mortgage
pool balance, provide material incentives to, but do not require, the related
borrower to pay the mortgage loan in full by a specified date prior to stated
maturity. We consider that date to be the anticipated repayment date for the
mortgage loan. There can be no assurance, however, that these incentives will
result in any of these mortgage loans being paid in full on or before its
anticipated repayment date. The incentive provisions, which in each case will
become effective as of the related anticipated repayment date, include:
o The accrual of interest in excess of the initial mortgage interest rate. The
additional interest will--
1. be deferred,
2. in some cases, compound,
3. be payable only after the outstanding principal balance of the mortgage
loan is paid in full, and
4. be payable only to the holders of the class D certificates, which are
not offered by this prospectus supplement.
o The application of excess cash flow from the mortgaged real property to pay
the principal amount of the mortgage loan. The payment of principal will be
in addition to the principal portion of the normal monthly debt service
payment.
The remaining two mortgage loans, representing 4.1% of the initial mortgage pool
balance, have payment schedules that provide for the payment of these mortgage
loans in full or substantially in full by their respective maturity dates. These
two mortgage loans do not, however, have any of the repayment incentives referred
to in the prior paragraph.
Nine mortgage loans, representing 6.0% of the initial mortgage pool balance,
provide for an initial interest only period of between 12 and 36 months.
The mortgage loan secured by the mortgaged real property identified on Exhibit
A-1 to this prospectus supplement as the Hercules Plaza, representing 3.9% of the
initial mortgage pool balance, provides for a change in the amortization schedule
subsequent to the first due date, thereby resulting in a change to the monthly
debt service payment. That
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mortgage loan provides for a 239-month amortization schedule for payments one
through 92 and a 60-month amortization schedule for the remaining 60 payments.
The mortgage loan secured by the mortgaged real property identified on Exhibit
A-1 to this prospectus supplement as the Wekiva Executive Center, representing
0.2% of the initial mortgage pool balance, provides for a change in the
amortization schedule subsequent to the first due date, thereby resulting in a
change to the monthly debt service payment. That mortgage loan provides for a
276-month amortization schedule for payments one through 59 and a 350-month
amortization schedule for the remaining 61 payments.
Some of the pooled mortgage loans will, in each case, provide for a recast of the
amortization schedule and an adjustment of the monthly debt service payments on
the mortgage loan upon application of specified amounts of condemnation proceeds
or insurance proceeds to pay the related unpaid principal balance.
DELINQUENCY STATUS............................... None of the mortgage loans that we intend to include in the trust was 30 days or
more delinquent in respect of any monthly debt service payment--
o as of the related due date in November 2000, or
o at any time during the 12-month period preceding the related due date in
November 2000.
PREPAYMENT LOCK-OUT PERIODS...................... A prepayment lock-out period is currently in effect for 224 of the mortgage
loans, representing 94.6% of the initial mortgage pool balance. Set forth below
is information regarding the remaining terms of the lock-out periods, including
any contemporaneous defeasance periods, for those 224 mortgage loans:
Maximum remaining lock-out/defeasance period: 231 months
Minimum remaining lock-out/defeasance period: 18 months
Weighted average remaining lock-out/defeasance period: 105 months
DEFEASANCE....................................... One hundred ninety-one of the mortgage loans, representing 86.9% of the initial
mortgage pool balance, will permit the related borrower to obtain a full or
partial release of the mortgaged real property from the related mortgage lien by
delivering U.S. Treasury obligations as substitute collateral. None of these
mortgage loans will permit defeasance prior to the second anniversary of the date
of initial issuance of the series 2000-CKP1 certificates.
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PREPAYMENT PREMIUMS AND
YIELD MAINTENANCE CHARGES...................... Six of the mortgage loans, representing 5.4% of the initial mortgage pool
balance, currently provide that any voluntary prepayment must be accompanied by a
prepayment premium or a yield maintenance charge.
Following initial lock-out/defeasance periods, 35 other mortgage loans,
representing 9.1% of the initial mortgage pool balance, will provide that any
voluntary prepayment must be accompanied by a prepayment premium or a yield
maintenance charge.
ADDITIONAL STATISTICAL INFORMATION
A. GENERAL CHARACTERISTICS...................... The mortgage pool will have the following general characteristics as of the
respective due dates for the mortgage loans in November 2000:
Initial mortgage pool balance........................... $1,289,918,771
Number of mortgage loans................................ 230
Number of mortgaged real properties..................... 242
Maximum cut-off date principal
balance............................................ $87,301,842
Minimum cut-off date principal
balance............................................ $293,528
Average cut-off date principal
balance............................................ $5,608,342
Maximum mortgage interest rate.......................... 9.590%
Minimum mortgage interest rate.......................... 6.810%
Weighted average mortgage interest rate................. 8.297%
Maximum original term to maturity
or anticipated repayment date...................... 240 months
Minimum original term to maturity
or anticipated repayment date...................... 60 months
Weighted average original term to maturity
or anticipated repayment date...................... 122 months
Maximum remaining term to maturity
or anticipated repayment date...................... 239 months
Minimum remaining term to maturity
or anticipated repayment date...................... 40 months
Weighted average remaining term to
maturity or anticipated repayment date............. 117 months
Maximum debt
service coverage ratio, based on
underwritten net cash flow......................... 2.77x
Minimum debt
service coverage ratio, based on
underwritten net cash flow......................... 1.16x
Weighted average
debt service coverage ratio, based on
underwritten net cash flow......................... 1.38x
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Maximum cut-off date loan-to-appraised
value ratio........................................ 80.8%
Minimum cut-off date loan-to-appraised
value ratio........................................ 40.1%
Weighted average cut-off date loan-to-
appraised value ratio.............................. 68.5%
B. GEOGRAPHIC CONCENTRATION..................... The table below shows the number of, and percentage of the initial mortgage
pool balance secured by, mortgaged real properties located in the indicated
states:
% OF
NUMBER OF INITIAL MORTGAGE
STATE PROPERTIES POOL BALANCE
----- ---------- ----------------
California 18 14.6%
Southern California 13 10.3%
Northern California 5 4.3%
Texas 40 12.4%
New York 14 9.5%
Florida 16 5.2%
New Jersey 6 5.1%
The remaining mortgaged real properties with respect to the mortgage pool, are
located throughout 35 other states, as well as the District of Columbia. No more
than 4.1% of the initial mortgage pool balance is secured by mortgaged real
properties located in any of these other jurisdictions.
C. PROPERTY TYPES............................... The table below shows the number of, and percentage of the initial mortgage pool
balance secured by, mortgaged real properties operated for each indicated
purpose:
% OF
NUMBER OF INITIAL MORTGAGE
PROPERTY TYPE PROPERTIES POOL BALANCE
------------- ---------- ----------------
Retail 76 30.8%
Multifamily 89 30.3%
Office 31 25.2%
Hotel 8 4.3%
Industrial 10 3.9%
Mixed Use 9 1.6%
Manufactured Housing 7 1.3%
Self Storage 8 1.0%
Independent/Assisted Living 1 0.9%
Health Care 3 0.7%
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D. ENCUMBERED INTERESTS......................... The table below shows the number of, and percentage of the initial mortgage pool
balance secured by, mortgaged real properties for which the encumbered interest
is as indicated:
% OF
ENCUMBERED INTEREST IN THE NUMBER OF INITIAL MORTGAGE
MORTGAGED REAL PROPERTY PROPERTIES POOL BALANCE
-------------------------- ---------- ----------------
Ownership 234 84.7%
Leasehold 5 13.1%
Ownership in Part/
Leasehold in Part 3 2.3%
In circumstances where both the ownership and leasehold interest in the mortgaged
real property are encumbered, we have treated that as simply an encumbered
ownership interest.
E. SIGNIFICANT MORTGAGE LOANS................... The ten largest mortgage loans that we intend to include in the trust have--
o cut-off date principal balances that range from $25,476,217 to $87,301,842,
and
o a total cut-off date principal balance of $405,884,266, which represents 31.4%
of the initial mortgage pool balance.
The ten largest mortgage loans that we intend to include in the trust have the
following general characteristics:
1. Property name....................... 437 Madison Avenue
Property type....................... Office
Property location................... New York, New York
Borrower's interest................. Leasehold
Appraised value..................... $198,000,000
Appraisal date...................... November 1, 1999
Underwritten net cash flow.......... $14,279,554
Cut-off date principal balance...... $87,301,842
Mortgage interest rate.............. 8.630%
Maturity date....................... June 1, 2010
Debt service coverage ratio,
based on underwritten
net cash flow.................. 1.75x
Cut-off date loan-to-appraised
value ratio.................... 44.1%
2. Property name....................... Valencia Marketplace
Property type....................... Retail
Property location................... Valencia, California
Borrower's interest................. Ownership
Appraised value..................... $71,000,000
Appraisal date...................... April 18, 1998
Underwritten net cash flow.......... $5,447,558
Cut-off date principal
balance........................ $51,787,099
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Mortgage interest rate.............. 7.240%
Maturity date....................... July 1, 2028
Anticipated Repayment Date.......... July 1, 2013
Debt service coverage ratio,
based on underwritten
net cash flow.................. 1.26x
Cut-off date loan-to
appraised value ratio.......... 72.9%
3. Property name..................... Hercules Plaza
Property type..................... Office
Property location................. Wilmington, Delaware
Borrower's interest............... Leasehold
Appraised value................... $125,000,000
Appraisal date.................... July 10, 2000
Underwritten net cash flow........ $11,284,500
Cut-off date principal balance.... $50,909,381
Mortgage interest rate............ 6.810%
Maturity date..................... June 1, 2013
Debt service coverage ratio,
based on underwritten net
cash flow...................... 2.41x
Cut-off date loan-to appraised
value ratio.................... 40.7%
4. Property name....................... Alliance GD FH F1 Portfolio
Property type....................... Multifamily
Property location................... Virginia/Texas
Borrower's interest................. Ownership
Appraised value..................... $51,100,000
Appraisal date...................... April 1, 2000 &
March 6, 2000
Underwritten net cash flow.......... $4,529,191
Cut-off date principal balance...... $39,491,001
Mortgage interest rate.............. 8.640%
Maturity date....................... April 1, 2010
Debt service coverage ratio,
based on underwritten
net cash flow.................. 1.22x
Cut-off date loan-to-
appraised value ratio.......... 77.3%
5. Property name....................... McCandless Towers II
Property type....................... Office
Property location................... Santa Clara, California
Borrower's interest................. Ownership
Appraised value..................... $63,500,000
Appraisal date...................... May 17, 2000
Underwritten net cash flow.......... $4,613,844
Cut-off date principal
balance........................ $36,936,969
Mortgage interest rate.............. 8.550%
Maturity date....................... July 1, 2025
Anticipated repayment date.......... July 1, 2010
Debt service coverage ratio,
based on underwritten
net cash flow.................. 1.35x
Cut-off date loan-to
appraised value ratio.......... 58.2%
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6. Property name....................... Alliance GD FH F2 Portfolio
Property type....................... Multifamily
Property location................... Texas/Virginia
Borrower's interest................. Ownership
Appraised value..................... $39,200,000
Appraisal date...................... March 6, 2000 &
April 1, 2000
Underwritten net cash flow.......... $3,425,592
Cut-off date principal
balance........................ $30,282,599
Mortgage interest rate.............. 8.640%
Maturity date....................... April 1, 2010
Debt service coverage ratio,
based on underwritten
net cash flow.................. 1.21x
Cut-off date loan-to
appraised value ratio.......... 77.3%
7. Property name....................... The Commons at Sugarhouse
Property type....................... Retail
Property location................... Salt Lake City, Utah
Borrower's interest................. Ownership
Appraised value..................... $36,000,000
Appraisal date...................... February 21, 2000
Underwritten net cash flow.......... $3,110,655
Cut-off date principal
balance........................ $28,387,855
Mortgage interest rate.............. 8.130%
Maturity date....................... October 1, 2010
Debt service coverage ratio,
based on underwritten
net cash flow.................. 1.23x
Cut-off date loan-to
appraised value ratio.......... 77.3%
8. Property name....................... Gateway at Randolph
Apartments
Property type....................... Multifamily
Property location................... Randolph Township,
New Jersey
Borrower's interest................. Ownership
Appraised value..................... $58,500,000
Appraisal date...................... April 14, 2000
Underwritten net cash flow.......... $4,242,923
Cut-off date principal
balance........................ $27,870,175
Mortgage interest rate.............. 8.020%
Maturity date....................... June 1, 2010
Debt service coverage ratio,
based on underwritten
net cash flow.................. 1.63x
Cut-off date loan-to
appraised value ratio.......... 47.6%
9. Property name....................... Metroplex
Property type....................... Office
Property location................... Los Angeles, California
Borrower's interest................. Ownership
Appraised value..................... $36,400,000
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Appraisal date...................... January 5, 2000
Underwritten net cash flow.......... $3,495,697
Cut-off date principal
balance........................ $27,441,129
Mortgage interest rate.............. 8.810%
Maturity date....................... June 1, 2010
Debt service coverage ratio,
based on underwritten
net cash flow.................. 1.34x
Cut-off date loan-to
appraised value ratio.......... 75.4%
10. Property name....................... Palm Plaza Shopping Center
Property type....................... Retail
Property location................... Temecula, California
Borrower's interest................. Ownership
Appraised value..................... $34,750,000
Appraisal date...................... March 15, 1999
Underwritten net cash flow.......... $2,842,851
Cut-off date principal
balance........................ $25,476,217
Mortgage interest rate.............. 7.570%
Maturity date....................... June 1, 2029
Anticipated Repayment Date.......... June 1, 2009
Debt service coverage ratio,
based on underwritten
net cash flow.................. 1.31x
Cut-off date loan-to
appraised value ratio.......... 73.3%
LEGAL AND INVESTMENT CONSIDERATIONS
FEDERAL INCOME
TAX CONSEQUENCES.............................. The trustee or its agent will make elections to treat designated portions of the
assets of the trust as three separate real estate mortgage investment conduits
under Sections 860A through 860G of the Internal Revenue Code of 1986. Those
three REMICs are as follows:
o REMIC I, the lowest tier REMIC, which will consist of, among other things--
1. the pooled mortgage loans, and
2. any mortgaged real properties that may be acquired by the trust
following a borrower default, but will exclude collections of
additional interest accrued and deferred as to payment with
respect to each mortgage loan with an anticipated repayment
date that remains outstanding past that date;
o REMIC II, which will hold the regular interests in REMIC I; and
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o REMIC III, which will hold the regular interests in REMIC II.
Any assets not included in a REMIC will constitute a grantor trust for federal
income tax purposes.
The offered certificates will be treated as 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 offered certificates
in accordance with the accrual method of accounting even if you are otherwise a
cash method taxpayer. The offered certificates will not represent any interest in
the grantor trust referred to above.
The class B-3 certificates will be issued with a de minimis amount of original
issue discount. None of the other offered certificates will be issued with any
original issue discount. When determining the rate of accrual of market discount
and premium, if any, for federal income tax purposes, the prepayment assumption
will be that, subsequent to the date of any determination--
o the mortgage loans in the trust with anticipated repayment dates will,
in each case, be paid in full on that date,
o no mortgage loan in the trust will otherwise be prepaid prior to maturity,
and
o there will be no extension of maturity for any mortgage loan in the trust.
However, no representation is made as to the actual rate at which the pooled
mortgage loans will prepay, if at all.
If you own an offered certificate issued with original issue discount, you may
have to report original issue discount income and be subject to a tax on this
income before you receive a corresponding cash payment.
For a more detailed discussion of the federal income tax aspects of investing in
the offered certificates, see "Federal Income Tax Consequences" in this
prospectus supplement and in the accompanying prospectus.
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ERISA............................................ We anticipate that, subject to satisfaction of the conditions referred to under
"ERISA Considerations" in this prospectus supplement, retirement plans and other
employee benefit plans and arrangements subject to--
o Title I of the Employee Retirement Income Security Act of 1974, as amended,
or
o Section 4975 of the Internal Revenue Code,
will be able to invest in the class A-1A and A-1B certificates without giving
rise to a prohibited transaction. This is based upon an individual prohibited
transaction exemption granted to each of Donaldson, Lufkin & Jenrette Securities
Corporation, Prudential Securities Incorporated, Credit Suisse First Boston
Corporation and Salomon Smith Barney Inc. by the U.S. Department of Labor.
The characteristics of the class A-2, A-3, A-4, B-1, B-2 and B-3 certificates do
not currently meet the requirements of the individual prohibited transaction
exemptions of Donaldson, Lufkin & Jenrette Securities Corporation, Prudential
Securities Incorporated, Credit Suisse First Boston Corporation and Salomon Smith
Barney Inc. Accordingly, under current law, those offered certificates may not be
acquired by, on behalf of or with the assets of a retirement plan or other
employee benefit plan subject to Title I of ERISA or Section 4975 of the Internal
Revenue Code, except in the case of an insurance company using funds in its
general account, which may be able to rely on specified provisions of prohibited
transaction class exemption 95-60, which we discuss under "ERISA Considerations"
in this prospectus supplement.
However, the Department of Labor has proposed amendments to the individual
prohibited transaction exemptions of Donaldson, Lufkin & Jenrette Securities
Corporation, Prudential Securities Incorporated, Credit Suisse First Boston
Corporation and Salomon Smith Barney Inc., among others, that, if finalized in
current form, will generally be retroactively effective as of August 23, 2000.
Among other changes, it is anticipated that the proposed amendments would permit
retirement plans or other employee benefit plans of the kind discussed above to
purchase the class A-2, A-3, A-4, B-1, B-2 and B-3 certificates, in addition to
the class A-1A and A-1B certificates, so long as--
o they are rated in any of the four highest ratings categories of Moody's
and/or Fitch, and
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o all other requirements of the individual prohibited transaction exemptions
of Donaldson, Lufkin & Jenrette Securities Corporation, Prudential Securities
Incorporated, Credit Suisse First Boston Corporation and Salomon Smith Barney
Inc. are met.
It is not certain if and when the proposed amendments will be issued in final
form, and it is not certain that, if finalized, the proposed amendments will
contain the same relief as is currently proposed.
If you are a fiduciary of any retirement plan or other employee benefit plan or
arrangement subject to Title I of ERISA or Section 4975 of the Internal Revenue
Code of, 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 Internal Revenue Code of.
See "ERISA Considerations" in this prospectus supplement and in the accompanying
prospectus.
LEGAL INVESTMENT................................. The offered certificates will not be 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 will be legal investments for you. See "Legal
Investment" in this prospectus supplement and in the accompanying prospectus.
INVESTMENT CONSIDERATIONS........................ The rate and timing of payments and other collections of principal on or with
respect to the underlying 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 on the underlying mortgage loans could result in a lower than
anticipated yield. In the case of offered certificates purchased at a premium, a
faster than anticipated rate of payments and other collections of principal on
the underlying mortgage loans could result in a lower than anticipated yield.
The yield on the offered certificates with variable or capped pass-through rates
could also be adversely affected if the underlying mortgage loans with higher
mortgage interest rates pay principal faster than the mortgage loans with lower
mortgage interest rates. This is because those classes bear interest at
pass-through rates equal to, based upon or limited by, as applicable, a weighted
average of net interest rates derived from the mortgage loans in the trust.
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See "Yield and Maturity Considerations" in this prospectus supplement and in the
accompanying prospectus.
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RISK FACTORS
The offered certificates are not suitable investments for all investors. In
particular, you should not purchase any class of offered certificates unless you
understand and are able to bear the risks associated with that class.
The offered certificates are complex securities and it is important that
you possess, either alone or together with an investment advisor, the expertise
necessary to evaluate the information contained in this prospectus supplement
and the accompanying prospectus in the context of your financial situation.
You should consider the following factors, as well as those set forth under
"Risk Factors" in the accompanying prospectus, in deciding whether to purchase
any offered certificates. The "Risk Factors" section in the accompanying
prospectus includes a number of general risks associated with making an
investment in the offered certificates.
RISKS RELATED TO THE OFFERED CERTIFICATES
The Class A-2, A-3, A-4, B-1, B-2 and B-3 Certificates are Subordinate to,
and are Therefore Riskier than, the Class A-1A and A-1B Certificates. If you
purchase class A-2, A-3, A-4, B-1, B-2 or B-3 certificates, then your offered
certificates will provide credit support to other classes of offered
certificates. As a result, you will receive payments after, and must bear the
effects of losses on the underlying mortgage loans before, the holders of those
other classes of offered certificates.
When making an investment decision, you should consider, among other
things--
o the payment priorities of the respective classes of the series
2000-CKP1 certificates,
o the order in which the principal balances of the respective classes of
the series 2000-CKP1 certificates with balances will be reduced in
connection with losses and default-related shortfalls, and
o the characteristics and quality of the mortgage loans in the trust.
See "Description of the Mortgage Pool" and "Description of the Offered
Certificates--Payments" and "--Reductions to Certificate Principal Balances in
Connection with Realized Losses and Additional Trust Fund Expenses" in this
prospectus supplement. See also "Risk Factors--The Investment Performance of
Your Certificates Will Depend Upon Payments, Defaults and Losses on the
Underlying Mortgage Loans", "--Any Credit Support for Your Certificates may be
Insufficient to Protect you Against all Potential Losses" and "--Payments on the
Offered Certificates Will be Made Solely from the Limited Assets of the Related
Trust" in the accompanying prospectus.
The Offered Certificates Have Uncertain Yields to Maturity. The yield on
your offered certificates will depend on, among other things--
o the price you paid for your offered certificates, and
o the rate, timing and amount of payments on your offered certificates.
The rate, timing and amount of payments on your offered certificates will
depend on--
o the pass-through rate for, and the other payment terms of, your
offered certificates,
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o the rate and timing of payments and other collections of principal on
the underlying mortgage loans,
o the rate and timing of defaults, and the severity of losses, if any,
on the underlying mortgage loans,
o the rate, timing, severity and allocation of other shortfalls and
expenses that reduce amounts available for payment on the series
2000-CKP1 certificates, and
o servicing decisions with respect to the underlying mortgage loans.
These factors cannot be predicted with any certainty. Accordingly, you may find
it difficult to analyze the effect that these factors might have on the yield to
maturity of your offered certificates.
See "Description of the Mortgage Pool", "Servicing of the Underlying
Mortgage Loans", "Description of the Offered Certificates--Payments" and
"--Reductions to Certificate Principal Balances in Connection with Realized
Losses and Additional Trust Fund Expenses" and "Yield and Maturity
Considerations" in this prospectus supplement. See also "Risk Factors--The
Investment Performance of Your Certificates Will Depend Upon Payments, Defaults
and Losses on the Underlying Mortgage Loans" and "Yield and Maturity
Considerations" in the accompanying prospectus.
The Investment Performance of Your Offered Certificates May Vary Materially
and Adversely From Your Expectations Because the Rate of Prepayments and Other
Unscheduled Collections of Principal on the Underlying Mortgage Loans is Faster
or Slower than You Anticipated. If you purchase your offered certificates at a
premium, and if payments and other collections of principal on the mortgage
loans in the trust 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 offered
certificates at a discount, and if payments and other collections of principal
on the mortgage loans in the trust 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.
The yield on the offered certificates with variable or capped pass-through
rates could also be adversely affected if the underlying mortgage loans with
higher mortgage interest rates pay principal faster than the mortgage loans with
lower mortgage interest rates. This is because those classes bear interest at
pass-through rates equal to, based upon or limited by, as applicable, a weighted
average of net interest rates derived from the mortgage loans in the trust.
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 Internal Revenue Code of 1986,
are complex. Accordingly, if you are using the assets of such a plan or
arrangement to acquire offered certificates, you are urged to consult legal
counsel regarding consequences under ERISA and the Internal Revenue Code of the
acquisition, ownership and disposition of those certificates. In particular,
under current law, the purchase or holding of class A-2, A-3, A-4, B-1, B-2 and
B-3 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,
those offered 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 the certificate or an interest in the certificate is exempt from the
prohibited transaction provisions of Section 406 of ERISA and Section 4975 of
the Internal Revenue Code under Sections I and III of Prohibited Transaction
Class Exemption 95-60. Sections I and III of Prohibited Transaction Class
Exemption 95-60 provide an exemption from the prohibited transaction rules for
some transactions involving an insurance company general account. See "ERISA
Considerations" in this prospectus supplement and in the accompanying
prospectus.
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RISKS RELATED TO THE UNDERLYING MORTGAGE LOANS
Repayment of the Underlying Mortgage Loans Depends on the Operation of the
Mortgaged Real Properties. The mortgage loans are secured by mortgage liens on
ownership and/or leasehold interests in the following types of real property--
o Retail
o Multifamily
o Office
o Hotel
o Industrial
o Mixed Use
o Manufactured Housing
o Self Storage
o Independent/Assisted Living
o Health Care
The risks associated with lending on these types of real properties are
inherently different from those associated with lending on the security of
single-family residential properties. This is because, among other reasons,
repayment of each of the underlying mortgage loans is dependent on--
o the successful operation and value of the related mortgaged real
property, and
o the related borrower's ability to sell or refinance the related
mortgaged real property.
See "Risk Factors--Repayment of a Commercial or Multifamily Mortgage Loan
Depends upon the Performance and Value of the Underlying Real Property and the
Related Borrower's Ability to Refinance the Property" and "Description of the
Trust Assets--Mortgage Loans--A Discussion of the Various Types of Multifamily
and Commercial Properties that May Secure Mortgage Loans Underlying a Series of
Offered Certificates" in the accompanying prospectus.
The Underlying Mortgage Loans Have a Variety of Characteristics Which May
Expose Investors to Greater Risk of Default and Loss. When making an investment
decision, you should consider, among other things, the following characteristics
of the underlying mortgage loans and/or the mortgaged real properties for those
loans. Any or all of these characteristics can affect, perhaps materially and
adversely, the investment performance of your offered certificates. Each of the
respective items below includes a cross-reference to where the associated risks
are further discussed in this prospectus supplement or in the accompanying
prospectus. In addition, each of those items may include a cross reference to
where further information about the particular characteristic may be found in
this prospectus supplement.
The Mortgaged Real Property Will Be the Sole Asset Available to Satisfy the
Amounts Owing under an Underlying Mortgage Loan in the Event of Default. All of
the mortgage loans that we intend to include in the trust are or should be
considered nonrecourse loans. You should assume that, in the event of a default
under any of the underlying mortgage loans, only the mortgaged real property,
and none of the other assets of the borrower, is available to satisfy the debt.
Even if the related loan documents permit recourse to the borrower or a
guarantor, the trust may not be able to ultimately collect the amount due under
a defaulted mortgage loan. None of the underlying mortgage loans are insured or
guaranteed by any governmental agency or instrumentality or by any private
mortgage insurer. See "Risk Factors--Repayment of a Commercial or Multifamily
Mortgage Loan Depends Upon the Performance and Value of the Underlying Real
Property and the Related Borrower's Ability to Refinance the Property--Most of
the Mortgage Loans Underlying Your Certificates Will Be Nonrecourse" in the
accompanying prospectus.
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In Some Cases, a Mortgaged Real Property is Dependent on a Single Tenant or One
or a Few Major Tenants. In the case of 98 mortgaged real properties, securing
50.8% of the initial mortgage pool balance, the related borrower has leased the
property to at least one tenant that occupies 25% or more of the particular
property. In the case of 24 of those properties, securing 10.5% of the initial
mortgage pool balance, the related borrower has leased the particular real
property to a single tenant that occupies all or substantially all of it.
Accordingly, the full and timely payment of each of the related mortgage loans
is highly dependent on the continued operation of the major tenant or tenants,
which, in some cases, is the sole tenant, at the mortgaged real property. See
"Risk Factors--Repayment of a Commercial or Multifamily Mortgage Loan Depends
upon the Performance and Value of the Underlying Real Property and the Related
Borrower's Ability to Refinance the Property--The Successful Operation of a
Multifamily or Commercial Property Depends on Tenants", "--Repayment of a
Commercial or Multifamily Mortgage Loan Depends upon the Performance and Value
of the Underlying Real Property and the Related Borrower's Ability to Refinance
the Property--Dependence on a Single Tenant or a Small Number of Tenants Makes a
Property Riskier Collateral" and "--Repayment of a Commercial or Multifamily
Mortgage Loan Depends upon the Performance and Value of the Underlying Real
Property and the Related Borrower's Ability to Refinance the Property--Tenant
Bankruptcy Adversely Affects Property Performance" in the accompanying
prospectus.
10% or More of the Initial Mortgage Pool Balance Will be Secured by Mortgage
Liens on Each of the Following Property Types--Retail, Multifamily and Office.
o Seventy-six of the mortgage loans that we intend to include in the
trust, representing 30.8% of the initial mortgage pool balance, will
be secured by mortgage liens on the respective borrowers' interests in
mortgaged real properties used for retail purposes. We consider 48 of
those retail properties, securing 27.1% of the initial mortgage pool
balance, to be anchored or shadow anchored. A shadow anchor is a store
or business that materially affects the draw of customers to a retail
property, but which may be located at a nearby property or on a
portion of the subject retail property that is not collateral for the
related mortgage loan.
o Eighty-nine of the mortgage loans that we intend to include in the
trust, representing 30.3% of the initial mortgage pool balance, will
be secured by mortgage liens on the respective borrowers' interests in
mortgaged real properties used for multifamily rental purposes. Some
of those multifamily rental properties are subject to land use
restrictive covenants or contractual covenants in favor of federal or
state housing agencies. These covenants normally 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
applicable area or region. These covenants may limit the potential
rental rates that may govern rentals at any of those properties, the
potential tenant base for any of those properties or both.
Furthermore, some of those multifamily rental properties are eligible
for low-income rent subsidies from the United States Department of
Housing and Urban Development under its Section 8 program. The payment
of these rental subsidies to a particular project owner is made under
a housing assistance payment contract between the Department of
Housing and Urban Development and the owner of the project or a local
public housing authority. Upon expiration of the contract, the rental
subsidies will terminate, thereby eliminating a source of funds for
the related borrower to make payments under its mortgage loan. Also,
five of those multifamily rental properties, securing 3.3% of the
initial mortgage pool balance, are predominantly occupied by student
tenants. Students tend to be a less stable tenant population and
properties with material concentrations of student tenants tend to
experience higher property maintenance costs than those that do not.
Two of those multifamily rental properties, securing 1.6% of the
initial mortgage pool balance, have material concentrations of
military personnel as tenants.
o Thirty-one of the mortgage loans that we intend to include in the
trust, representing 25.2% of the initial mortgage pool balance, will
be secured by mortgage liens on the respective borrowers'
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interests in mortgaged real properties used for office purposes. Some
of the office properties underlying these mortgage loans are heavily
dependent on a sole tenant that leases the entire property or on a few
major tenants.
The inclusion in the trust of a significant concentration of mortgage loans that
are secured by mortgage liens on ownership and/or leasehold interests in a
particular type of income-producing property makes the overall performance of
the mortgage pool materially more dependent on the factors that affect the
operations at and value of that property type. See "Description of the Trust
Assets--Mortgage Loans--A Discussion of the Various Types of Multifamily and
Commercial Properties that May Secure Mortgage Loans Underlying a Series of
Offered Certificates" in the accompanying prospectus.
5% or More of the Initial Mortgage Pool Balance Will be Secured by Mortgage
Liens on Real Property Located in Each of the Following States--California,
Texas, New York, Florida and New Jersey. The mortgaged real properties located
in each of the following states secure mortgage loans or allocated portions of
mortgage loans that represent 5% or more of the initial mortgage pool balance:
% OF
NUMBER OF INITIAL MORTGAGE
STATE PROPERTIES POOL BALANCE
California 18 14.6%
Southern California 13 10.3%
Northern California 5 4.3%
Texas 40 12.4%
New York 14 9.5%
Florida 16 5.2%
New Jersey 6 5.1%
The inclusion in the trust of a significant concentration of mortgage loans that
are secured by mortgage liens on ownership and/or leasehold interests in real
properties located in a particular state makes the overall performance of the
mortgage pool materially more dependent on economic and other conditions or
events in that state. See "Risk Factors--Geographic Concentration Within a Trust
Exposes Investors to Greater Risk of Default and Loss" in the accompanying
prospectus.
The Mortgage Pool Will Include Material Concentrations of Balloon Loans and
Loans with Anticipated Repayment Dates. One hundred ninety-one mortgage loans,
representing 72.0% of the initial mortgage pool balance, are balloon loans. In
addition, 37 mortgage loans, representing the remaining 23.8% of the initial
mortgage pool balance, provide material incentives for the related borrower to
repay the loan by an anticipated repayment date prior to maturity. The ability
of a borrower to make the required balloon payment on a balloon loan at
maturity, and the ability of a borrower to repay a mortgage loan on or before
any related anticipated repayment date, in each case, depends upon its ability
either to refinance the loan or to sell the mortgaged real property. One hundred
seventy balloon loans, representing 65.6% of the initial mortgage pool balance,
have balloon payments that are scheduled to be due, and 32 mortgage loans,
representing 17.2% of the initial mortgage pool balance, have anticipated
repayment dates that are to occur, in each case, during the 10-month period from
January 1, 2010 to October 1, 2010. Although a mortgage loan may provide the
related borrower with incentives to repay the loan by an anticipated repayment
date prior to maturity, the failure of that borrower to do so will not be a
default under that loan. See "Description of the Mortgage Pool--Terms and
Conditions of the Underlying Mortgage Loans" in this prospectus supplement and
"Risk Factors--The Investment Performance of Your Certificates Will Depend upon
Payments, Defaults and Losses on the Underlying Mortgage Loans--There is an
Increased Risk of Default Associated with Balloon Payments" in the accompanying
prospectus.
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The Mortgage Pool Will Include Some Disproportionately Large Mortgage Loans and
Groups of Cross-Collateralized Mortgage Loans. The inclusion in the mortgage
pool of one or more loans that have outstanding principal balances that are
substantially larger than the other mortgage loans can result in losses that are
more severe, relative to the size of the mortgage pool, than would be the case
if the total balance of the mortgage pool were distributed more evenly. Several
of the individual mortgage loans and/or groups of cross-collateralized mortgage
loans have cut-off date principal balances that are substantially higher than
the average cut-off date principal balance. The average cut-off date principal
balance is--
1. $5,608,342 without regard to any cross-collateralization of mortgage
loans, and
2. $5,732,972 when each group of cross-collateralized mortgage loans is
treated as a single loan.
The ten largest mortgage loans and/or groups of cross-collateralized mortgage
loans to be included in the trust represent 31.4% of the initial mortgage pool
balance. See "Description of the Mortgage Pool--General",
"--Cross-Collateralized Mortgage Loans, Multi-Property Mortgage Loans and
Mortgage Loans with Affiliated Borrowers" and "--Significant Mortgage Loans" in
this prospectus supplement and "Risk Factors--Loan Concentration Within a Trust
Exposes Investors to Greater Risk of Default and Loss" in the accompanying
prospectus.
The Mortgage Pool Will Include Leasehold Mortgage Loans. Five mortgage loans,
representing 13.1% of the initial mortgage pool balance, are secured by mortgage
liens on the related borrower's leasehold interest in all or a material portion
of the related mortgaged real property, but not by the corresponding ownership
interest in the property that is subject to the ground lease. Because of
possible termination of the related ground lease, lending on a leasehold
interest in a real property is riskier than lending on an actual ownership
interest in that property. See "Description of the Mortgage Pool--Additional
Loan and Property Information--Leaseholds" in this prospectus supplement. See
also "Risk Factors--Ground Leases Create Risks for Lenders that are not Present
When Lending on an Actual Ownership Interest in a Real Property" and "Certain
Legal Aspects of Mortgage Loans--Foreclosure--Leasehold Considerations" in the
accompanying prospectus.
Some of the Mortgaged Real Properties are Legal Nonconforming Uses or Legal
Nonconforming Structures. Many of the mortgage loans that we intend to include
in the trust are secured by mortgage liens on the respective borrowers'
interests in real properties that are, in each case--
1. a legal nonconforming use or a legal nonconforming structure, or
2. subject to a de minimus zoning violation.
Changes in zoning ordinances could result in the legal nonconformity of other
mortgaged real properties securing mortgage loans in the trust. This may impair
the ability of the borrower to restore the improvements on an mortgaged real
property to its current form or use following a major casualty. See "Description
of the Mortgage Pool--Underwriting Matters--Zoning and Building Code Compliance"
in this prospectus supplement and "Risk Factors--Changes in Zoning Laws May
Adversely Affect the Use or Value of a Real Property" in the accompanying
prospectus.
Some of the Underlying Borrowers Have Incurred Other Debt. Three mortgaged real
properties, securing 5.5% of the initial mortgage pool balance, are in each case
encumbered by financing that is subordinate to the related mortgage loan that we
intend to include in the trust. In addition, two of the mortgage loans,
representing 1.2% of the initial mortgage pool balance, permit the related
mortgaged real property to be encumbered by subordinate financing in the future,
subject to various conditions.
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Some of the mortgage loans that we intend to include in the trust do not
provide for acceleration of the payment of the unpaid balance of the mortgage
loan if the related borrower further encumbers the related mortgaged real
property.
We are aware that the borrowers under five mortgage loans, representing
1.8% of the initial mortgage pool balance, have incurred unsecured subordinate
debt other than trade debt. Many of the underlying borrowers are likely to incur
trade debt from time to time. In addition, many of the pooled mortgage loans
will permit the related borrower to incur unsecured subordinated debt in the
future, subject to conditions such as--
1. limiting the use of proceeds to refurbishing or renovating the
mortgaged real property,
2. acquiring furniture, fixtures and equipment for the mortgaged real
property, and/or
3. not exceeding a specified dollar amount of unsecured debt.
Many of the mortgage loans that we intend to include in the trust do not
have any limitations on the related borrower's ability to incur unsecured debt.
The existence of additional indebtedness may adversely affect the
borrower's financial viability and/or may cause a diversion of funds from
property maintenance.
In the case of some of the mortgage loans that we intend to include in the
trust, one or more of the principals of the related borrower have incurred or
are permitted to incur mezzanine debt. Mezzanine debt is debt that is secured by
the principal's ownership interest in the borrower. This type of financing
effectively reduces the indirect equity interest of any principal in the
corresponding mortgaged real property. While the mezzanine lender has no
security interest in or rights to the related mortgaged real properties, a
default under the mezzanine loan could cause a change in control of the related
borrower.
Except as disclosed under this "--Some of the Underlying Borrowers Have
Incurred Other Debt" subsection, we have not been able to confirm whether the
respective borrowers under the mortgage loans that we intend to include in the
trust, have any other debt outstanding.
Some of the Mortgaged Real Properties Do Not Comply with the Americans with
Disabilities Act of 1990. Not all of the mortgaged real properties securing
mortgage loans that we intend to include in the trust, comply with the Americans
with Disabilities Act of 1990. Compliance may be expensive. See "Risk
Factors--Compliance with the Americans with Disabilities Act of 1990 May be
Expensive" in the accompanying prospectus.
Multiple Mortgaged Real Properties are Owned by the Same Borrower or Affiliated
Borrowers or are Occupied, in Whole or in Part, by the Same Tenant or Affiliated
Tenants. Six separate groups of mortgage loans that we intend to include in the
trust, each with a total cut-off date principal balance equal to at least 1.0%
of the initial mortgage pool balance, have, in the case of each of those groups,
the same managing entity and/or borrowers that are the same or under common
control. For example, the borrowers under the mortgage loans secured by the
mortgaged real properties identified on Exhibit A-1 to this prospectus
supplement as Seven Gables Apartments, High Ridge Apartments, Timbercreek
Apartments, Deering Manor Apartments and Clearbrook Village Apartments, and
representing 5.8% of the initial mortgage pool balance, are owned by affiliated
entities. See "Description of the Mortgage Pool--Cross-Collateralized Mortgage
Loans, Multi-Property Mortgage Loans and Mortgage Loans with Affiliated
Borrowers" in this prospectus supplement.
In addition, there may be tenants which lease space at more than one
mortgaged real property securing mortgage loans that we intend to include in the
trust. Furthermore, there may be tenants that are related to or affiliated with
an underlying borrower. See Exhibit A-1 to this prospectus supplement for a list
of the three
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<PAGE>
most significant tenants at each of the mortgaged real properties used for
retail purposes, office purposes and industrial purposes.
The bankruptcy or insolvency of, or other financial problems with respect
to, any borrower or tenant that is, directly or through affiliation, associated
with two or more mortgaged real properties securing mortgage loans in the trust,
could have an adverse effect on all of those properties and on the ability of
those properties to produce sufficient cash flow to make required payments on
the related mortgage loans. See "Risk Factors--Repayment of a Commercial or
Multifamily Mortgage Loan Depends upon the Performance and Value of the
Underlying Real Property and the Related Borrower's Ability to Refinance the
Property--Tenant Bankruptcy Adversely Affects Property Performance", "--Borrower
Concentration Within a Trust Exposes Investors to Greater Risk of Default and
Loss" and "--Borrower Bankruptcy Proceedings Can Delay and Impair Recovery on a
Mortgage Loan Underlying Your Certificates" in the accompanying prospectus.
Some Borrowers Under the Underlying Mortgage Loans Will Not Be Special Purpose
Entities. The business activities of the borrowers under pooled mortgage loans
with cut-off date principal balances below $5,000,000, are generally not limited
to owning their respective mortgaged real properties. In addition, even in the
case of pooled mortgage loans with cut-off date principal balances of $5,000,000
or more, there are several borrowers that are similarly not limited in their
business activities. For example, KeyBank National Association generally does
not require the borrowers under mortgage loans of less than $10,000,000 to be
special purpose entities, and the borrowers under the mortgage loans secured by
the respective mortgaged real properties identified on Exhibit A-1 to this
prospectus supplement as Holiday Inn Universal Studios and Pembroke Office Park,
are not special purpose entities. Accordingly, the financial success of each of
the borrowers referred to in the prior four sentences may be affected by the
performance of its other business activities, including other real estate
interests. Those other business activities increase the possibility that the
borrower may become bankrupt or insolvent.
Changes in Mortgage Pool Composition can Change the Nature of Your
Investment. If you purchase any class A-1B, A-2, A-3, A-4, B-1, B-2 and/or B-3
certificates, you will be more exposed to risks associated with changes in
concentrations of borrower, loan or property characteristics than are persons
who own class A-1A certificates. See "Risk Factors--Changes in Pool Composition
Will Change the Nature of Your Investment" in the accompanying prospectus.
Lending on Income-Producing Real Properties Entails Environmental Risks.
The trust could become liable for a material adverse environmental condition at
any of the mortgaged real properties securing the mortgage loans in the trust.
Any potential environmental liability could reduce or delay payments on the
offered certificates.
A third-party consultant conducted some form of environmental investigation
with respect to all of the mortgaged real properties securing the underlying
mortgage loans that we intend to include in the trust. Except in the case of one
mortgaged real property, securing 4.0% of the initial mortgage pool balance and
as to which the environmental investigation was conducted during the 31-month
period ending on November 1, 2000, all of the environmental investigations were
conducted during the 22-month period ending on November 1, 2000. In the case of
187 of those mortgaged real properties, securing 95.9% of the initial mortgage
pool balance, that environmental investigation included a Phase I environmental
site assessment or an update of a previously conducted assessment. In the case
of 14 mortgaged real properties, securing 0.7% of the initial mortgage pool
balance, the environmental investigation included a transaction screen. In the
case of 41 mortgaged real properties, securing 3.4% of the initial mortgage pool
balance and covered by environmental insurance, that environmental investigation
was limited to testing for asbestos-containing materials, lead-based paint
and/or radon. In some cases, a third-party consultant also conducted a Phase II
environmental site assessment of the mortgaged real property.
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If the environmental investigations described above identified material
adverse or potentially material adverse environmental conditions at any of the
respective mortgaged real properties securing a mortgage loan that we intend to
include in the trust, then:
o a qualified environmental consultant investigated those conditions and
recommended no further investigations or remediation;
o an operation and maintenance plan was obtained or an escrow reserve
was established to cover the estimated costs of obtaining that plan;
o when soil or groundwater contamination was suspected or identified,
either--
1. those conditions were remediated or abated prior to the closing
date,
2. a letter was obtained from the applicable regulatory authority
stating that no further action was required, or
3. an environmental insurance policy was obtained, a letter of
credit was provided, an escrow reserve account was established,
or an indemnity from the responsible party was obtained to cover
the estimated costs of any required investigation, testing,
monitoring or remediation, which in some cases has been estimated
to be in excess of $50,000;
o in those cases in which an offsite property is the location of a
leaking underground storage tank or groundwater contamination, a
responsible party has been identified under applicable law, and
either--
1. that condition is not known to have affected the mortgaged real
property,
2. the responsible party has either received a letter from the
applicable regulatory agency stating no further action is
required, established a remediation fund, or provided an
indemnity or guaranty to the borrower, or
3. an environmental insurance policy was obtained; or
o in those cases involving mortgage loans with an original principal
balance of less than $1,000,000, the borrower acknowledged in the
related mortgage loan documents the existence of that factor and
expressly agreed to comply with all federal, state and local statutes
or regulations respecting the factor.
In many cases, the environmental investigation described above identified
the presence of asbestos-containing materials, lead-based paint and/or radon.
Where these substances were present, the environmental consultant generally
recommended, and the related loan documents generally required, the
establishment of an operation and maintenance plan to address the issue or, in
some cases involving asbestos-containing materials and lead-based paint, an
abatement or removal program. In a few cases, the particular asbestos-containing
materials or lead-based paint was in poor condition. This could result in a
claim for damages by any party injured by that condition.
In several cases, the environmental testing for a mortgaged real property
identified potential and, in some cases, serious problems at nearby properties.
In some cases, the environmental consultant did not recommend that any
action be taken with respect to a potential adverse environmental condition at a
mortgaged real property securing a mortgage loan that we
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<PAGE>
intend to include in the trust because a responsible party with respect to that
condition had already been identified. There can be no assurance, however, that
such a responsible party will be financially able to address the subject
condition.
Furthermore, any particular environmental testing may not have covered all
potential adverse conditions. For example, testing for lead-based paint, lead in
water and radon was done only if the use, age and condition of the subject
property warranted that testing.
There can be no assurance that--
o the environmental testing referred to above identified all material
adverse environmental conditions and circumstances at the subject
properties,
o the recommendation of the environmental consultant was, in the case of
all identified problems, the appropriate action to take,
o any of the environmental escrows established with respect to any of
the mortgage loans that we intend to include in the trust will be
sufficient to cover the recommended remediation or other action, or
o an environmental insurance policy will cover all or part of a claim
asserted against it because such policies are subject to various
deductibles, terms, exclusions, conditions and limitations, and have
not been extensively interpreted by the courts.
In the case of 41 mortgaged real properties, securing 3.4% of the initial
mortgage pool balance, the environmental investigation which was conducted in
connection with the origination of the related underlying mortgage loan was
limited to testing for asbestos-containing materials, lead-based paint and/or
radon. Furthermore, in the case of three mortgage loans, representing 0.7% of
the initial mortgage pool balance, the environmental consultant recommended that
a Phase II environmental assessment be performed, but further environmental
testing was not conducted. In general, the related originator's election to
limit the environmental testing with respect to those 44 mortgaged real
properties was based upon the delivery of a secured creditor impaired property
policy covering specific environmental matters with respect to the particular
property. Three of those 44 mortgaged real properties are covered by an
individual secured creditor impaired property policy, and the remaining 41 of
those 44 mortgaged real properties are covered by a blanket secured creditor
impaired property policy. However, those policies have coverage limits. In
addition, those policies do not provide coverage for adverse environmental
conditions at levels below legal limits or for conditions involving asbestos and
lead-based paint.
In some cases, the originator of the related mortgage loan--
o agreed to release a principal of the related borrower from its
obligations under an environmental or hazardous substances indemnity
with respect to the particular mortgaged real property in connection
with the delivery of a secured creditor impaired property policy
covering that property, or
o required a secured creditor impaired property policy because of a
specific environmental issue with respect to the particular mortgaged
real property.
For example, the mortgaged real property identified on Exhibit A-1 to this
prospectus supplement as Harbor Technology Center is located in a Superfund
Site. Although Shell Oil is identified as a party responsible for the
contamination, the borrower under the mortgage loan secured by Harbor Technology
Center was required to obtain coverage under the blanket secured creditor
impaired property policy referenced above for environmental
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matters with respect to that property. Neither the identification of Shell Oil
as a responsible party nor the related environmental policy are absolute
guarantees that the trust will not suffer a loss as a result of environmental
matters at the Harbor Technology Center property.
See "Description of the Mortgage Pool--Underwriting Matters--Environmental
Insurance" in this prospectus supplement. See "Risk Factors--Environmental
Liabilities Will Adversely Affect the Value and Operation of the Contaminated
Property and May Deter a Lender from Foreclosing" and "Certain Legal Aspects of
Mortgage Loans--Environmental Considerations" in the accompanying prospectus.
Lending on Income-Producing Properties Entails Risks Related to Property
Condition. Except in the case of 16 mortgaged real properties, securing 1.1% of
the initial mortgage pool balance, licensed engineers inspected all of the
mortgaged real properties securing the mortgage loans that we intend to include
in the trust, during the 36-month period preceding November 1, 2000, to assess--
o the structure, exterior walls, roofing, interior construction,
mechanical and electrical systems, and
o the general condition of the site, buildings and other improvements
located at each property.
At 15 of those properties, the inspections identified conditions requiring
escrows to be established for repairs or replacements estimated to cost in
excess of $100,000. In all of these cases, the originator required the related
borrower to fund reserves, or deliver letters of credit or other instruments, to
cover these costs. There can be no assurance that the reserves or letters of
credit or other instruments will be sufficient to cover the repairs or
replacements.
Limitations on Enforceability of Cross-Collateralization Reduce its
Benefits. The mortgage pool will include 18 mortgage loans that are secured,
including through cross-collateralization with other mortgage loans, by multiple
mortgaged real properties. These mortgage loans are identified in the tables
contained in Exhibit A-1. The purpose of securing any particular mortgage loan
or group of cross-collateralized mortgage loans with multiple real properties is
to reduce the risk of default or ultimate loss as a result of an inability of
any particular property to generate sufficient net operating income to pay debt
service. However, two of these mortgage loans, representing 0.2% of the initial
mortgage pool balance, permit--
o the release of one of the mortgaged real properties from the related
mortgage lien, and/or
o a full or partial termination of the applicable
cross-collateralization,
in each case, upon the satisfaction of the conditions described under
"Description of the Mortgage Pool-- Terms and Conditions of the Underlying
Mortgage Loans" in this prospectus supplement.
In addition, when multiple real properties secure a mortgage loan or group
of cross-collateralized mortgage loans, the amount of the mortgage encumbering
any particular one of those properties may be less than the full amount of the
related mortgage loan or group of cross-collateralized mortgage loans,
generally, to minimize recording tax. This mortgage amount may equal the
appraised value or allocated loan amount for the mortgaged real property and
will limit the extent to which proceeds from the property will be available to
offset declines in value of the other properties securing the same mortgage loan
or group of cross-collateralized mortgage loans.
Four cross-collateralized and cross-defaulted mortgage loans that we intend
to include in the trust, representing 6.4% of the initial mortgage pool balance,
are secured by mortgaged real properties located in two different states.
Foreclosure actions are brought in state court and the courts of one state
cannot exercise
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jurisdiction over property in another state. Upon a default under any of these
mortgage loans, it may not be possible to foreclose on the related mortgaged
real properties simultaneously.
Limited Information Causes Uncertainty. Some of the mortgage loans that we
intend to include in the trust are acquisition financing. Accordingly, limited
or no operating information is available with respect to the mortgaged real
properties for those mortgage loans. As a result, you may find it difficult to
analyze the performance of those properties.
Tax Considerations Related to Foreclosure. If the trust were to acquire an
underlying real property through foreclosure or similar action, the special
servicer may be required to retain an independent contractor to operate and
manage the property. Any net income from that operation and management, other
than qualifying rents from real property within the meaning of section 856(d) of
the Internal Revenue Code of 1986, or any rental income based on the net profits
of a tenant or sub-tenant or allocable to a service that is non-customary in the
area and for the type of building involved, will subject the trust to federal,
and possibly state or local, tax as described under "Federal Income Tax
Consequences--Prohibited Transactions Tax and Other Taxes" in the accompanying
prospectus. Those taxes, and the cost of retaining an independent contractor,
would reduce net proceeds available for distribution with respect to the series
2000-CKP1 certificates.
Prior Bankruptcies May Reflect Future Performance. We are aware that, in
the case of eight mortgage loans that we intend to include in the trust,
representing 3.3% of the initial mortgage pool balance, the related borrower, or
a principal in the related borrower, has been a debtor in prior bankruptcy
proceedings within the 10-year period preceding November 1, 2000.
Litigation May Adversely Affect Property Performance. There may be pending
or threatened legal proceedings against the borrowers under the pooled mortgage
loans, the managers of the related mortgaged real properties and their
respective affiliates, arising out of the ordinary business of those borrowers,
managers and affiliates. We cannot assure you that litigation will not have a
material adverse effect on your investment.
CAPITALIZED TERMS USED IN THIS PROSPECTUS SUPPLEMENT
From time to time we use capitalized terms in this prospectus supplement.
Each of those capitalized terms will have the meaning assigned to it in the
"Glossary" attached to this prospectus supplement.
FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying prospectus includes the
words "expects", "intends", "anticipates", "estimates" and similar words and
expressions. These words and expressions are intended to identify
forward-looking statements. Any forward-looking statements are made subject to
risks and uncertainties that could cause actual results to differ materially
from those stated. These 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 our
control and the control of any other person or entity related to this offering.
The forward-looking statements made in this prospectus supplement are accurate
as of the date stated on the cover of this prospectus supplement. We have no
obligation to update or revise any forward-looking statement.
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DESCRIPTION OF THE MORTGAGE POOL
GENERAL
We intend to include the 230 mortgage loans identified on Exhibit A-1 to
this prospectus supplement in the trust. The mortgage pool consisting of those
loans will have an initial mortgage pool balance of $1,289,918,771. However, the
actual initial mortgage pool balance may be as much as 5% smaller or larger than
that amount if any of those mortgage loans are removed from the mortgage pool or
any other mortgage loans are added to the mortgage pool. See "--Changes in
Mortgage Pool Characteristics" below.
The initial mortgage pool balance will equal the total cut-off date
principal balance of all the pooled mortgage loans. The cut-off date principal
balance of any mortgage loan included in the trust is equal to its unpaid
principal balance as of its due date in November 2000, after application of all
monthly debt service payments due with respect to the mortgage loan on or before
that date, whether or not those payments were received. The cut-off date
principal balance of each mortgage loan that we intend to include in the trust
is shown on Exhibit A-1 to this prospectus supplement. Those cut-off date
principal balances range from $293,528 to $87,301,842 and the average of those
cut-off date principal balances is $5,608,342.
Each of the mortgage loans that we intend to include in the trust is an
obligation of the related borrower to repay a specified sum with interest. Each
of those mortgage loans is evidenced by one or more promissory notes and secured
by a mortgage, deed of trust or other similar security instrument that creates a
mortgage lien on the ownership and/or leasehold interest of the related borrower
or another party in one or more commercial or multifamily real properties. That
mortgage lien will, in all cases, be a first priority lien, subject only to
Permitted Encumbrances.
You should consider each of the pooled mortgage loans to be a nonrecourse
obligation of the related borrower. You should assume that, in the event of a
payment default by the related borrower, recourse will be limited to the
corresponding mortgaged real property or properties for satisfaction of that
borrower's obligations. Even in those cases where recourse to a borrower or
guarantor is permitted under the related loan documents, we have not undertaken
an evaluation of the financial condition of any of these persons. None of the
pooled mortgage loans will be insured or guaranteed by any governmental entity
or by any other person.
We provide in this prospectus supplement a variety of information regarding
the mortgage loans that we intend to include in the trust. When reviewing this
information, please note 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 or any sub-group of mortgage loans reflects a weighting by their
respective cut-off date principal balances.
o In presenting the cut-off date principal balances of the mortgage
loans, we have assumed that--
1. all scheduled payments of principal and/or interest due on the
mortgage loans on or before their respective due dates in
November 2000, are timely made, and
2. there are no prepayments or other unscheduled collections of
principal with respect to any of the mortgage loans during the
period from their respective due dates in October 2000 up to and
including their respective due dates in November 2000.
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o When information with respect to the mortgaged real properties is
expressed as a percentage of the initial mortgage pool balance, the
percentages are based upon the cut-off date principal balances of the
related mortgage loans.
o If a mortgage loan that we intend to include in the trust is
cross-collateralized and cross-defaulted with another mortgage loan,
we have presented the information regarding those mortgage loans as if
each of them was secured only by a mortgage lien on the corresponding
mortgaged real property identified on Exhibit A-1 to this prospectus
supplement. One exception is that each and every mortgage loan in any
particular group of cross-collateralized and cross-defaulted mortgage
loans is treated as having the same loan-to-value ratio and the same
debt service coverage ratio. None of the mortgage loans that we intend
to include in the trust, is cross-collateralized with any loan outside
of the trust.
o In some cases, multiple mortgaged real properties secure a single
mortgage loan. For purposes of providing property-specific
information, we have allocated that mortgage loan among those
properties based upon--
1. relative appraised values,
2. relative underwritten net cash flow, or
3. prior allocations reflected in the related loan documents.
o If multiple parcels of real property secure a single mortgage loan and
the operation or management of those parcels so warrant, we treat
those parcels as a single real property.
o Whenever we refer to a particular mortgaged real property by name, we
mean the property identified by that name on Exhibit A-1 to this
prospectus supplement.
o Statistical information regarding the mortgage loans that we intend to
include in the trust may change prior to the date of initial issuance
of the offered certificates due to changes in the composition of the
mortgage pool prior to that date.
CROSS-COLLATERALIZED MORTGAGE LOANS, MULTI-PROPERTY MORTGAGE LOANS AND MORTGAGE
LOANS WITH AFFILIATED BORROWERS
The mortgage pool will include 18 mortgage loans that are, in each case,
individually or through cross-collateralization with other mortgage loans,
secured by two or more real properties. However, the amount of the mortgage lien
encumbering any particular one of those properties may be less than the full
amount of the related mortgage loan or group of cross-collateralized mortgage
loans, generally to minimize recording tax. The mortgage amount may equal the
appraised value or allocated loan amount for the particular real property. This
would limit the extent to which proceeds from that property would be available
to offset declines in value of the other mortgaged real properties securing the
same mortgage loan or group of cross-collateralized mortgage loans in the trust.
Two of the mortgage loans referred to in the prior paragraph entitle the
related borrower(s) to obtain a release of one or more of the corresponding
mortgaged real properties and/or a termination of any applicable
cross-collateralization, subject, in each case, to the fulfillment of one or
more of the following conditions:
o the pay down of the mortgage loan(s) in an amount equal to a specified
percentage, which is usually 125%, of the portion of the total loan
amount allocated to the property or properties to be released;
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o the satisfaction of debt service coverage and loan-to-value tests for
the property or properties that will remain as collateral; and/or
o receipt by the lender of confirmation from each applicable rating
agency that the action will not result in a qualification, downgrade
or withdrawal of any of the then-current ratings of the offered
certificates.
The mortgage loans secured by the mortgaged real properties identified on
Exhibit A-1 to the prospectus supplement as Russell Village MHP and Winder
Village MHP entitle the related borrower, in connection with an approved sale of
one but not both of the mortgaged real properties, to request a release of the
mortgaged real property to be sold from the lien of the related mortgage
instrument, provided that the related borrower is not in default under the
related mortgage loan documents and provided that the mortgaged real properties
satisfy certain debt service coverage tests.
In addition, nine of the mortgage loans referred to in the first paragraph
of this section, "--Cross-Collateralized Mortgage Loans, Multi-Property Mortgage
Loans and Mortgage Loans with Affiliated Borrowers", entitle the related
borrower to a release of one or more of the corresponding mortgaged real
properties through defeasance. See "--Terms and Conditions of the Underlying
Mortgage Loans--Defeasance Loans" below.
The table below identifies each group of mortgaged real properties that
secure an individual multi-property mortgage loan or a group of
cross-collateralized mortgage loans with a total cut-off date principal balance
equal to at least 1% of the initial mortgage pool balance.
<TABLE>
<CAPTION>
NUMBER OF STATES % OF
WHERE THE INITIAL MORTGAGE
PROPERTY NAMES PROPERTIES ARE LOCATED POOL BALANCE
-------------- ---------------------- ------------
<S> <C> <C>
1. High Ridge Apartments, Seven Gables Apartments 2 3.1%
2. Deering Manor Apartments, Timbercreek Apartments 2 2.3%
3. Poly-Foam International, Inc., Poly Foam 1 1.4%
4. Autumn Ridge Apartments, Summer Glen Apartments 1 1.3%
</TABLE>
The table below shows each group of mortgaged real properties that--
o have the same managing entity and/or have the same or affiliated
borrowers, and
o secure two or more non-cross-collateralized mortgage loans with a
total cut-off date principal balance equal to at least 1.0% of the
initial mortgage pool balance.
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<PAGE>
<TABLE>
<CAPTION>
NUMBER OF STATES % OF
WHERE THE INITIAL MORTGAGE
PROPERTY NAMES PROPERTIES ARE LOCATED POOL BALANCE
-------------- ---------------------- ----------------
<S> <C> <C>
1. Seven Gables Apartments, High Ridge Apartments, Timbercreek Apartments,
Deering Manor Apartments, Clearbrook Village Apartments 3 5.8%
2. Palm Plaza Shopping Center, Big Kmart - Midwest City, Big Kmart -
Edmond, Big Kmart - Chicago 3 4.2%
3. Gateway at Randolph Apartments, Saddle Brook Apartments 1 3.2%
4. Cheyenne Crest Apartments, Windmill Apartments, Glenridge Apartments 1 2.4%
5. The Genesis Loan, Applecreek Apartments 1 1.7%
6. Sterling University Crescent, Sterling University Peaks 2 1.7%
</TABLE>
TERMS AND CONDITIONS OF THE UNDERLYING MORTGAGE LOANS
Due Dates. Two hundred twenty-nine of the mortgage loans that we intend to
include in the trust, representing 99.3% of the initial mortgage pool balance,
provide for monthly debt service payments to be due on the first day of each
month. One mortgage loan that we intend to include in the trust, representing
0.7% of the initial mortgage pool balance, provides for monthly debt service
payments to be due on the tenth day of each month. For purposes of determining
payments and advances on the series 2000-CKP1 certificates, the mortgage loan
that provides for a tenth of the month due date will be deemed to have a due
date on the first day of the same month.
Mortgage Rates; Calculations of Interest. In general, each of the mortgage
loans that we intend to include in the trust bears interest at a mortgage
interest rate that, in the absence of default, is fixed until maturity. However,
as described below under "--ARD Loans" below, each of the ARD Loans will accrue
interest after its anticipated repayment date at a rate that is in excess of its
mortgage interest rate prior to that date.
The current mortgage interest rate for each of the mortgage loans that we
intend to include in the trust is shown on Exhibit A-1 to this prospectus
supplement. As of the cut-off date, those mortgage interest rates ranged from
6.810% per annum to 9.590% per annum, and the weighted average of those mortgage
interest rates was 8.297% per annum.
Except for ARD Loans that remain outstanding past their respective
anticipated repayment dates, none of the mortgage loans that we intend to
include in the trust provides for negative amortization or for the deferral of
interest.
Generally, each of the mortgage loans that we intend to include in the
trust accrues interest on either an Actual/360 Basis or a 30/360 Basis. One
mortgage loan that we intend to include in the trust, representing 0.7% of the
initial mortgage pool balance, accrues interest on an Actual/365 Basis.
Balloon Loans. One hundred ninety-one of the mortgage loans that we intend
to include in the trust, representing 72.0% of the initial mortgage pool
balance, are characterized by--
o an amortization schedule that is significantly longer than the actual
term of the mortgage loan, and
o a substantial payment being due with respect to the mortgage loan on
its stated maturity date.
ARD Loans. Thirty-seven of the mortgage loans that we intend to include in
the trust, representing 23.8% of the initial mortgage pool balance, are
characterized by the following features:
o A maturity date that is generally 24 years following origination.
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o The designation of an anticipated repayment date that is generally ten
years following origination. The anticipated repayment date for each
of the ARD Loans is listed on Exhibit A-1 to this prospectus
supplement.
o The ability of the related borrower to prepay the 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 to six months prior to the
related anticipated repayment date.
o Until its anticipated repayment date, the calculation of interest at
its initial mortgage interest rate.
o From and after its anticipated repayment date, the accrual of interest
at a revised annual rate that is equal to--
1. in the case of two ARD Loans, representing 3.0% of the initial
mortgage pool balance, two percentage points over its initial
mortgage interest rate, and
2. in the case of 34 ARD Loans, representing 20.5% of the initial
mortgage pool balance, the greater of--
(x) a specified margin, generally two percentage points, over
the initial mortgage interest rate, and
(y) a specified margin, generally two percentage points or less,
over the value of a particular U.S. Treasury or other
benchmark floating rate at or about the related anticipated
repayment date, and
3. in the case of one ARD Loan, representing 0.3% of the initial
mortgage pool balance, five percentage points over a benchmark
floating rate at or about the related anticipated repayment date.
o The deferral of any additional interest accrued with respect to the
mortgage loan from and after the related anticipated repayment date at
the difference between its revised mortgage interest rate and its
initial mortgage interest rate. This Post-ARD Additional Interest may,
in some cases, compound at the new revised mortgage interest rate. Any
Post-ARD Additional Interest accrued with respect to the mortgage loan
following its anticipated repayment date will not be payable until the
entire principal balance of the mortgage loan has been paid in full.
o From and after its anticipated repayment date, the accelerated
amortization of the mortgage loan out of any and all monthly cash flow
from the corresponding mortgaged real property which remains after
payment of the applicable monthly debt service payments and permitted
operating expenses and capital expenditures and the funding of any
required reserves. These accelerated amortization payments and the
post-anticipated repayment date additional interest are considered
separate from the monthly debt service payments due with respect to
the mortgage loan.
In the case of each of the ARD Loans that we intend to include in the
trust, the related borrower has agreed to enter into a cash management agreement
not less than six months prior to the related anticipated repayment date if it
has not already done so. The related borrower or the manager of the
corresponding mortgaged real property will be required under the terms of that
cash management agreement to deposit or cause the deposit of all revenue from
that property received after the related anticipated repayment date into a
designated account controlled by the lender under the ARD Loan.
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Fully Amortizing Loans. Two mortgage loans that we intend to include in the
trust, representing 4.1% of the initial mortgage pool balance, are each
characterized by:
o a payment schedule that provides for the payment of the subject
mortgage loan in full or substantially in full by its maturity date,
but
o none of the incentives to repayment on a date prior to maturity
associated with an ARD Loan.
Amortization of Principal. The table below shows, in months, the original
and, as of their respective due dates in November 2000, the remaining
amortization schedules and terms to maturity for the mortgage loans that we
expect to back the offered certificates or the specified sub-groups of those
mortgage loans. For purposes of the following table, ARD Loans are assumed to
mature on their respective anticipated repayment dates.
<TABLE>
<CAPTION>
FULLY AMORTIZING
BALLOON LOANS ARD LOANS LOANS ALL MORTGAGE LOANS
------------- --------- ----------------- ------------------
<S> <C> <C> <C> <C>
Original Term to Maturity (mos.)
Maximum 240 156 240 240
Minimum 60 120 152 60
Weighted Average 119 126 156 122
------------------------------------------------------------------------------------------------------------------------------------
Remaining Term to Maturity (mos.)
Maximum 235 152 239 239
Minimum 40 100 151 40
Weighted Average 114 120 155 117
------------------------------------------------------------------------------------------------------------------------------------
Original Amortization Term (mos.)
Maximum 360 360 240 360
Minimum 240 240 152 152
Weighted Average 345 350 156 338
------------------------------------------------------------------------------------------------------------------------------------
Remaining Amortization Term (mos.)
Maximum 360 360 239 360
Minimum 225 227 151 151
Weighted Average 340 344 155 333
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Nine mortgage loans, representing 6.0% of the initial mortgage pool
balance, provide for an initial interest only period of between 12 and 36
months.
The mortgage loan secured by the mortgaged real property identified on
Exhibit A-1 to this prospectus supplement as the Hercules Plaza, representing
3.9% of the initial mortgage pool balance, provides for a change in the
amortization schedule subsequent to the first due date, thereby resulting in a
change to the monthly debt service payment. That mortgage loan provides for a
239-month amortization schedule for payments one through 92 and a 60-month
amortization schedule for the remaining 60 payments.
The mortgage loan secured by the mortgaged real property identified on
Exhibit A-1 to this prospectus supplement as Wekiva Executive Center,
representing 0.2% of the initial mortgage pool balance, provides for a change in
the amortization schedule subsequent to the first due date, thereby resulting in
a change to the monthly debt service payment. That mortgage loan provides for a
276-month amortization schedule for payments one through 59 and a 350-month
amortization schedule for the remaining 61 payments.
Some of the pooled mortgage loans will, in each case, provide for a recast
of the amortization schedule and an adjustment of the monthly debt service
payments on the mortgage loan upon application of specified amounts of
condemnation proceeds or insurance proceeds to pay the related unpaid principal
balance.
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Voluntary Prepayment Provisions. As of origination:
o one hundred eighty-nine of the mortgage loans that we intend to
include in the trust, representing 85.5% of the initial mortgage pool
balance, provided for--
1. a prepayment lock-out period and/or a defeasance period, during
which voluntary principal prepayments are prohibited although the
mortgage loan may be defeased, followed by
2. an open prepayment period during which voluntary principal
prepayments may be made without any restriction or prepayment
consideration;
o thirty-five of the mortgage loans that we intend to include in the
trust, representing 9.1% of the initial mortgage pool balance,
provided for--
1. a prepayment lock-out period and/or a defeasance period during
which voluntary principal prepayments are prohibited although the
mortgage loan may be defeased, followed by
2. a prepayment consideration period during which voluntary
principal prepayments must be accompanied by a prepayment premium
or a yield maintenance charge, followed by
3. an open prepayment period during which voluntary principal
prepayments may be made without any restriction or prepayment
consideration; and
o six of the mortgage loans that we intend to include in the trust,
representing 5.4% of the initial mortgage pool balance, provided for--
1. a prepayment consideration period during which voluntary
principal prepayments must be accompanied by a prepayment premium
or a yield maintenance charge, followed by
2. an open prepayment period during which voluntary principal
prepayments may be made without any restriction or prepayment
consideration.
Two of the mortgage loans described in the second bullet of the prior
paragraph, representing 1.4% of the initial mortgage pool balance and secured by
the mortgaged real properties identified on Exhibit A-1 to this prospectus
supplement as Poly Foam and Poly-Foam International, Inc., also grant the
related borrower a defeasance option during the applicable prepayment
consideration period.
The open prepayment period for any pooled mortgage loan will generally
begin two to twelve months prior to stated maturity or, in the case of an ARD
Loan, prior to the related anticipated repayment date.
Notwithstanding otherwise applicable prepayment lock-out periods, partial
prepayments of some of the pooled mortgage loans will be required under the
circumstances described under "--Other Prepayment Provisions" below.
The prepayment terms of the mortgage loans that we intend to include in the
trust are more particularly described in Exhibit A-2 to this prospectus
supplement.
As described below under "--Defeasance Loans", 191 of the pooled mortgage
loans, representing 86.9% of the initial mortgage pool balance, will permit the
related borrower to obtain a full or partial release of the corresponding
mortgaged real property or properties from the related mortgage lien by
delivering U.S. government securities as substitute collateral. None of these
mortgage loans permit defeasance prior to the second anniversary of the date of
initial issuance of the offered certificates.
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Prepayment Lock-Out Periods. Two hundred twenty-four of the mortgage loans
that we intend to include in the trust, representing 94.6% of the initial
mortgage pool balance, provide for prepayment lock-out periods as of their
respective due dates in November 2000. With respect to those mortgage loans, and
taking into account periods during which defeasance can occur so long as the
mortgage loan cannot be voluntarily prepaid:
o the maximum remaining prepayment lock-out/defeasance period as of the
related due date in November 2000 is 231 months;
o the minimum remaining prepayment lock-out/defeasance period as of the
related due date in November 2000 is 18 months; and
o the weighted average remaining prepayment lock-out/defeasance period
as of the related due dates in November 2000 is 105 months.
Notwithstanding otherwise applicable lock-out periods, partial prepayments
of some of the pooled mortgage loans will be required under the circumstances
described under "--Other Prepayment Provisions" below.
Prepayment Consideration Periods. Forty-one of the mortgage loans that we
intend to include in the trust, representing 14.5% of the initial mortgage pool
balance, provide for a prepayment consideration period during some portion of
their respective loan terms and, in some cases, following an initial prepayment
lock-out and/or defeasance period. The relevant prepayment consideration will
generally consist of the following:
o In the case of 19 of those mortgage loans, representing 7.3% of the
initial mortgage pool balance, all of which were originated or
acquired by KeyBank, and none of which are KeyBank Small Balance
Loans, an amount equal to the greater of (1) a specified percentage of
the prepaid amount, and (2) the present value, as of the date of the
prepayment, of the remaining scheduled payments of principal and
interest on the portion of the mortgage loan being prepaid, including
any balloon payment or, in the case of an ARD Loan, the principal
balance scheduled to be due on the related anticipated repayment date,
determined by discounting those payments at the relevant discount
rate, less the amount being prepaid. For purposes of the foregoing,
the relevant discount rate will be the rate that, when compounded
monthly, is equivalent to the relevant U.S. Treasury rate when
compounded semi-annually. Also for purposes of the foregoing, the
relevant U.S. Treasury rate will be 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 prepayment date, of U.S. Treasury constant
maturities with maturity dates, one longer and one shorter, most
nearly approximating the related maturity date or, in the case of an
ARD Loan, the related anticipated repayment date.
o In the case of 17 of those mortgage loans, representing 1.8% of the
initial mortgage pool balance and including the KeyBank Small Balance
Loans and the mortgage loan secured by the mortgaged real property
identified on Exhibit A-1 to this prospectus supplement as Pembroke
Office Park, an amount equal to the greater of (1) a specified
percentage of the principal balance of the mortgage loan being
prepaid, and (2) the product of (a) the ratio of the amount of the
principal balance of the mortgage loan being prepaid over the
outstanding principal balance of that mortgage loan on the date of the
prepayment, after subtracting the scheduled principal payment on the
prepayment date, multiplied by (b) the present value as of the
prepayment date of the remaining scheduled payments of principal and
interest from the prepayment date through the maturity date, including
any balloon payment, or in the case of an ARD Loan, through the
related anticipated repayment date, including
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the principal balance scheduled to be due on the related anticipated
repayment date, determined by discounting those payments at the
relevant discount rate, less the amount of the outstanding principal
balance of the mortgage loan on the prepayment date, after subtracting
the scheduled principal payment on the prepayment date. For purposes
of the foregoing, the relevant discount rate will be the rate that,
when compounded monthly, is equivalent to the relevant U.S. Treasury
rate, when compounded semi-annually. Also for purposes of the
foregoing, the relevant U.S. Treasury rate will be the yield
calculated by the linear interpolation of the yields, as reported in
Federal Reserve Statistical Release H.15-Selected Interest Rate under
the heading U.S. Government Securities/Treasury Constant Maturities,
of U.S. Treasury constant maturities with maturity dates, one longer
and one shorter, most nearly approximating the maturity date or, the
case of an ARD Loan, the related anticipated repayment date.
o In the case of two of those mortgage loans, representing 0.4% of the
initial mortgage pool balance and secured by the mortgaged real
properties identified on Exhibit A-1 to this prospectus supplement as
Bryn Mawr Suites Apartments and Colony Square Apartments, an amount
equal to the greater of (1) one percent (1%) of the principal amount
being prepaid and (2) the present value of a series of payments each
equal to the interest payment differential and payable on each due
date over the remaining original term of this loan until the related
maturity date or, in the case of an ARD Loan, the related anticipated
repayment date and on the related maturity date or, in the case of an
ARD Loan, the related anticipated repayment date, discounted at the
reinvestment yield for the number of months remaining as of the date
of that prepayment to each of those due dates and the related maturity
date or, in the case of an ARD Loan, the related anticipated repayment
date. For purposes of the foregoing, the interest payment differential
will equal (1) the mortgage interest rate less the reinvestment yield,
divided by (2) 12, and multiplied by (3) the principal sum outstanding
under the mortgage loan after application of the constant monthly
payment due on the date of the prepayment, except that the payment
differential will in no event be less than zero. Also for purposes of
the foregoing, the reinvestment yield will equal the lesser of (1) the
yield on the U.S. Treasury issue, primary issue, with a maturity date
closest to the related maturity date or, in the case of an ARD Loan,
the related anticipated repayment date, or (2) the yield on the U.S.
Treasury issue, primary issue, with a term equal to the remaining
average life, to the related maturity date or, in the case of an ARD
Loan, the related anticipated repayment date, of the mortgage loan,
with each such yield being based on the bid price for that issue as
published in the Wall Street Journal on the date that is 14 days prior
to the date of the prepayment set forth in the notice of prepayment,
or if that bid price is not published on that date, the next preceding
date on which that bid price is so published, and converted to a
monthly compounded nominal yield.
o In the case of one of those mortgage loans, representing 0.2% of the
initial mortgage pool balance and secured by the mortgaged real
property identified on Exhibit A-1 to this prospectus supplement as
Best Western Siesta Beach Resort, an amount equal to the product of
(1) the excess, if any, of the then applicable interest rate payable
under the mortgage loan over the yield rate on publicly traded current
coupon United States Treasury bonds, notes or bills having the closest
matching maturity date to the maturity date of the mortgage loan, as
that yield rate is reported in the Wall Street Journal, or a similar
business publication of general circulation selected by the lender, on
the fifth business day preceding the date of prepayment or, if no
yield rate on publicly traded current coupon United States Treasury
bonds, notes or bills is obtainable, at the yield rate of the issue
most closely equivalent to those United States Treasury bonds, notes
or bills, as determined by the lender, multiplied by (2) the number of
years and fraction thereof remaining between the acceleration date and
the maturity date for the mortgage loan, and multiplied by (3) the
then current principal amount of the mortgage loan, after applying the
scheduled monthly payment on the prepayment date.
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o In the case of one of those mortgage loans, representing 3.9% of the
initial mortgage pool balance and secured by the mortgaged real
property identified on Exhibit A-1 to this prospectus supplement as
Hercules Plaza, an amount equal to (1) the greater of 1% of the
prepaid proceeds of the related mortgage note and (2) the positive
difference between (a) the present value, as of the date of
prepayment, of the payments to be made in accordance with the related
mortgage note, including all installment payments and any remaining
payment due on the maturity date, discounted at the reinvestment yield
for the number of months remaining from the date of prepayment to the
maturity date, less (b) the prepaid proceeds. In the event of a
partial prepayment, the present value calculated in accordance with
clause (2)(a) of the preceding sentence will be multiplied by the
fraction which results from dividing the amount of the prepaid
proceeds by the principal balance of the related mortgage note
immediately prior to prepayment. For purposes of the foregoing, the
reinvestment yield will be equal to the yield on a U.S. Treasury issue
selected by the lender, published one week prior to the date of
prepayment, most equal in maturity to the remaining weighted average
life to maturity of the mortgage loan as of the date of the
prepayment, converted to an equivalent monthly compounded nominal
yield. Also for purposes of the foregoing, the weighted average life
to maturity of the mortgage loan at the date of prepayment will equal
the number of years obtained by dividing the remaining dollar-years of
the related mortgage note by the outstanding principal amount of the
related mortgage note. Also for purposes of the foregoing, the
remaining dollar-years means the sum of the product obtained by
multiplying (a) the amount of each then remaining required principal
repayment, including repayment of any principal at the due date of the
related mortgage note, by (b) the number of years, rounded to the
nearest one-twelfth, which will elapse between the date of prepayment
and the date that required payment is due.
o In the case of one of those mortgage loans, representing 0.9% of the
initial mortgage pool balance and secured by the mortgaged real
property identified on Exhibit A-1 to this prospectus supplement as
Holiday Inn-Orlando, a specified percentage of the amount prepaid,
which percentage declines over time.
Other Prepayment Provisions. With respect to some of the mortgage loans
that we intend to include in the trust, the related borrower has established
reserves or delivered a letter of credit that will be applied to a partial
prepayment of the subject mortgage loan if one or more property performance
conditions do not occur, notwithstanding any prepayment lock-out period that may
otherwise be in effect. Furthermore, many of the mortgage loans that we intend
to include in the trust provide that insurance or condemnation proceeds may be
applied, without penalty, to reduce the amount of the mortgage loan at any time
during the term of the loan.
Investors should not expect any prepayment consideration to be paid in
connection with any mandatory partial prepayment described in the prior
paragraph.
Defeasance Loans. One hundred ninety-one of the mortgage loans that we
intend to include in the trust, representing 86.9% of the initial mortgage pool
balance, permit the borrower to deliver U.S. government securities as substitute
collateral. Each of these mortgage loans permits the related borrower, during
specified periods and subject to specified conditions, to pledge to the holder
of the mortgage loan the requisite amount of direct, non-callable U.S.
government securities and obtain a release of the related mortgaged real
property or, in the case of a mortgage loan secured by multiple real properties,
of one or more of the related mortgaged real properties. In general, the U.S.
government securities that are to be delivered in connection with the defeasance
of any mortgage 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
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o will, in the case of each due date, be in a total amount equal to or
greater than the monthly debt service payment, including any
applicable balloon payment, scheduled to be due on that date.
For purposes of determining the defeasance collateral for an ARD Loan, however,
that mortgage loan will be treated as if a balloon payment is due on its
anticipated repayment date.
If fewer than all of the real properties securing any particular mortgage
loan or group of cross-collateralized mortgage loans are to be released in
connection with any defeasance, the requisite defeasance collateral will be
calculated based on the allocated loan amount for, or the principal balance of
the specific cross-collateralized mortgage loans corresponding to, the
properties to be released and the portion of the monthly debt service payments
attributable to that allocated loan amount or those mortgage loans.
In connection with any delivery of defeasance collateral, the related
borrower will be required to deliver a security agreement granting the trust a
first priority security interest in the collateral.
None of the mortgage loans that we intend to include in the trust may be
defeased prior to the second anniversary of the date of initial issuance of the
certificates.
Due-on-Sale and Due-on-Encumbrance Provisions. Most of the mortgage loans
that we intend to include in the trust contain both a due-on-sale clause and a
due-on-encumbrance clause. In general, except for the permitted transfers
discussed in the next paragraph, these clauses either--
o permit the holder of the related mortgage to accelerate the maturity
of the mortgage loan if the borrower sells or otherwise transfers or
encumbers the corresponding mortgaged real property, or
o prohibit the borrower from doing so without the consent of the holder
of the mortgage.
See, however, "Risk Factors--The Investment Performance of Your Certificates
Will Depend upon Payments, Defaults and Losses on the Underlying Mortgage
Loans--Delinquencies, Defaults and Losses on the Underlying Mortgage Loans May
Affect the Amount and Timing of Payments on Your Certificates" and "--Some
Provisions in the Mortgage Loans Underlying Your Certificates May Be Challenged
as Being Unenforceable--Due-on-Sale and Debt Acceleration Clauses" and "Certain
Legal Aspects of Mortgage Loans--Due-on-Sale and Due-on-Encumbrance Provisions"
in the accompanying prospectus.
Some of the mortgage loans that we intend to include in the trust permit
one or more of the following types of transfers:
o transfers of the corresponding mortgaged real property if specified
conditions are satisfied, which conditions normally include--
1. confirmation in writing by each applicable rating agency that the
transfer will not result in a qualification, downgrade or
withdrawal of any of its then current ratings of the series
2000-CKP1 certificates, or
2. the reasonable acceptability of the transferee to the lender;
o a transfer of the corresponding mortgaged real property to a person
that is affiliated with or otherwise related to the borrower;
o involuntary transfers caused by the death of any owner, general
partner or manager of the borrower;
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o transfers of the corresponding mortgaged real property or ownership
interests in the related borrower to specified entities or types of
entities;
o issuance by the borrower of new partnership or membership interests;
o a transfer of ownership interests for estate planning purposes;
o changes in ownership between existing partners and members of the
related borrower;
o a transfer of non-controlling ownership interests in the related
borrower; or
o other transfers similar in nature to the foregoing.
MORTGAGE POOL CHARACTERISTICS
A detailed presentation of various characteristics of the mortgage loans
that we intend to include in the trust, and of the corresponding mortgaged real
properties, on an individual basis and in tabular format, is shown on Exhibits
A-1 and A-2 to this prospectus supplement. The statistics in the tables and
schedules on Exhibit A-1 and Exhibit A-2 to this prospectus supplement were
derived, in many cases, from information and operating statements furnished by
or on behalf of the respective borrowers. The information and the operating
statements were generally unaudited and have not been independently verified by
us or any of the underwriters.
ADDITIONAL LOAN AND PROPERTY INFORMATION
Delinquencies. None of the mortgage loans that we intend to include in the
trust was as of its due date in November 2000, or has been at any time during
the 12-month period preceding that date, 30 days or more delinquent with respect
to any monthly debt service payment.
Tenant Matters. Described and listed below are special considerations
regarding tenants at the mortgaged real properties that will secure the pooled
mortgage loans--
o Ninety-eight of the mortgaged real properties, securing 50.8% of the
initial mortgage pool balance, are, in each case, a retail property,
an office property, an industrial property or a mixed-use property
that is leased to one or more significant tenants that each occupy at
least 25% or more of the net rentable area of the particular property.
o Twenty-four of the mortgaged real properties referred to in the prior
bullet point, representing 10.5% of the initial mortgage pool balance,
are either wholly owner-occupied or leased to a single tenant.
Thirty-two of the mortgaged real properties referred to in the prior
bullet point, securing 14.0% of the initial mortgage pool balance, are
more than 50%, but less than 100%, owner occupied or leased to a
single tenant.
o A number of companies are Major Tenants at more than one of the
mortgaged real properties.
o There are several cases in which a particular entity is a tenant at
more than one of the mortgaged real properties, and although it may
not be a Major Tenant at any of those properties, it is significant to
the success of the properties in the aggregate.
o Five of the mortgaged real properties, securing 3.3% of the initial
mortgage pool balance, are secured by multifamily rental properties
that have material concentrations of student tenants.
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o Two of the mortgaged real properties, securing 1.6% of the initial
mortgage pool balance, are secured by multifamily rental properties
that have material concentrations of military personnel as tenants.
Ground Leases. Eight of the mortgage loans that we intend to include in the
trust, representing 15.3% of the initial mortgage pool balance, are secured, in
whole or in material part, by a mortgage lien on the borrower's leasehold
interest in the corresponding mortgaged real property. In each of those cases--
o the related ground lease, after giving effect to all extension
options, expires more than 20 years after the stated maturity or, in
the case of an ARD Loan, the anticipated repayment date, of the
related mortgage loan,
o the related ground lessor has agreed, in the related ground lease or
under a separate estoppel or other agreement, to give the holder of
the related mortgage loan notice of, and the right to cure, any
default or breach by the lessee, and
o in general, the related ground lease or a separate estoppel or other
agreement otherwise contains standard provisions that are intended to
protect the interests of the holder of the related mortgage loan.
The ground lessors with respect to the ground leases for the 437 Madison
Avenue Property and the Holiday Inn-Orlando property are, in each case, an
affiliate of the related borrower.
Three of the mortgage loans that we intend to include in the trust,
representing 2.3% of the initial mortgage pool balance, are secured by the
borrower's leasehold and ownership interest in the corresponding mortgaged real
property. In circumstances where both the ownership and leasehold interest in
the mortgaged real property are encumbered, we have treated that simply as an
encumbered ownership interest. In those cases, the related ground lease is
unlikely to include standard mortgagee protection provisions.
See "Risk Factors--Ground Leases Create Risks for Lenders That Are Not
Present When Lending on an Actual Ownership Interest in a Real Property" and
"Certain Legal Aspects of Mortgage Loans--Foreclosure--Leasehold Considerations"
in the accompanying prospectus.
Additional and Other Financing. Three mortgaged real properties, securing
5.5% of the initial mortgage pool balance, are in each case encumbered by
financing that is subordinate to the related mortgage loan that we intend to
include in the trust. In addition, two of the mortgage loans, representing 1.2%
of the initial mortgage pool balance, permit the related mortgaged real property
to be encumbered by subordinate financing in the future, subject to various
conditions.
Some of the mortgage loans that we intend to include in the trust do not
provide for acceleration of the payment of the unpaid balance of the mortgage
loan if the related borrower further encumbers the related mortgaged real
property.
We are aware that the borrowers under five of the mortgage loans that we
intend to include in the trust, representing 1.8% of the initial mortgage pool
balance, have unsecured debt in addition to trade debt. In two of those cases,
the lender on the debt is an affiliate of the borrower. Many of the underlying
borrowers are likely to incur trade debt from time to time. In addition, many of
the pooled mortgage loans will permit the related borrower to incur unsecured
subordinated debt in the future, subject to conditions such as--
o limiting the use of proceeds to refurbishing or renovating the
mortgaged real property,
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o acquiring furniture, fixtures and equipment for the mortgaged real
property; and/or
o not exceeding a specified dollar amount of unsecured debt.
Borrowers that do not meet special purpose entity, bankruptcy-remote
criteria, generally do not have any restriction on incurring unsecured debt.
Many of the borrowers on the pooled mortgage loans will not be special purpose
entities.
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. See "Risk Factors--Subordinate Debt
Increases the Likelihood that a Borrower Will Default on a Mortgage Loan Backing
Your Certificates" and "Certain Legal Aspects of Mortgage Loans--Subordinate
Financing" in the accompanying prospectus.
Except as described above, we do not know whether the respective borrowers
under the mortgage loans have any other debt outstanding.
In the case of some of the mortgage loans that we intend to include in the
trust, one or more of the principals of the related borrower have incurred or
are permitted to incur mezzanine debt. Mezzanine debt is debt that is secured by
the principal's ownership interest in the borrower. This type of financing
effectively reduces the indirect equity interest of any principal in the
corresponding mortgaged real property. While the mezzanine lender has no
security interest in or rights to the related mortgaged real properties, a
default under the mezzanine loan could cause a change in control of the related
borrower.
Title Issues. In the case of a few of the mortgaged real properties
securing mortgage loans that we intend to include in the trust, the improvements
on that property encroach over an easement or onto another property. In each of
those cases, however, the related lender's title policy insures against loss if
a court orders the removal of the improvements causing the encroachment.
UNDERWRITING MATTERS
General. In connection with the origination or acquisition of each of the
mortgage loans that we intend to include in the trust, the related originator or
acquiror of the mortgage loan evaluated the corresponding mortgaged real
property or properties in a manner generally consistent with the standards
described in this "--Underwriting Matters" section. See also "Description of the
Trust Assets--Mortgage Loans--Default and Loss Considerations with Respect to
Commercial and Multifamily Mortgage Loans" in the accompanying prospectus.
Environmental Assessments. A third-party environmental consultant conducted
some form of environmental investigation with respect to all of the mortgaged
real properties securing the mortgage loans that we intend to include in the
trust. Except in the case of one mortgaged real property, securing 4.0% of the
initial mortgage pool balance and as to which the environmental investigation
was conducted during the 31-month period ending on November 1, 2000, all of the
environmental investigations were conducted during the 22-month period ending on
November 1, 2000. In the case of 187 of those mortgaged real properties,
securing 95.9% of the initial mortgage pool balance, that environmental
investigation included a Phase I environmental site assessment or an update of a
previously conducted assessment. In the case of 14 mortgaged real properties,
securing 0.7% of the initial mortgage pool balance, the environmental
investigation included a transaction screen. In the case of 41 mortgaged real
properties securing 3.4% of the initial mortgage pool balance and covered by
environmental insurance, the environmental investigation was limited to testing
for asbestos-containing materials, lead-based paint and/or radon. In some cases,
a third-party consultant also conducted a Phase II environmental site assessment
of the mortgaged real property. All of the environmental testing
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materially complied with ASTM standards. The environmental testing at any
particular mortgaged real property did not necessarily cover all potential
environmental issues. For example, tests for radon, lead-based paint and lead in
water were generally performed only at multifamily rental properties and only
when the originator of the related mortgage loan believed this testing was
warranted under the circumstances.
If the environmental investigations described above identified material
adverse or potentially material adverse environmental conditions at any of the
respective mortgaged real properties securing a mortgage loan that we intend to
include in the trust, then:
o a qualified environmental consultant investigated those conditions and
recommended no further investigations or remediation;
o an operation and maintenance plan was obtained or an escrow reserve
was established to cover the estimated costs of obtaining that plan;
o when soil or groundwater contamination was suspected or identified,
either--
1. those conditions were remediated or abated prior to the closing
date,
2. a letter was obtained from the applicable regulatory authority
stating that no further action was required, or
3. an environmental insurance policy was obtained, a letter of
credit was provided, an escrow reserve account was established,
or an indemnity from the responsible party was obtained to cover
the estimated costs of any required investigation, testing,
monitoring or remediation;
o in those cases in which an offsite property is the location of a
leaking underground storage tank or groundwater contamination, a
responsible party has been identified under applicable law, and
either--
1. that condition is not known to have affected the mortgaged real
property, or
2. the responsible party has either received a letter from the
applicable regulatory agency stating no further action is
required, established a remediation fund, or provided an
indemnity or guaranty to the borrower; or
o in those cases involving mortgage loans with an original principal
balance of less than $1,000,000, the borrower acknowledged in the
related mortgage loan documents the existence of that factor and
expressly agreed to comply with all federal, state and local statutes
or regulations respecting the factor.
In many cases, the identified condition related to the presence of
asbestos-containing materials, lead-based paint and/or radon. Where these
substances were present, the environmental consultant generally recommended, and
the related loan documents required--
o the establishment of an operation and maintenance plan to address the
issue, or
o in some cases involving asbestos-containing materials and lead-based
paint, an abatement or removal program.
In a few cases, the particular asbestos-containing materials or lead-based paint
was in poor condition. This could result in a claim for damages by any party
injured by the condition.
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In several cases, the environmental testing for a mortgaged real property
identified potential and, in some cases, serious problems at nearby properties.
In some cases, the environmental consultant did not recommend that any
action be taken with respect to a potential adverse environmental condition at a
mortgaged real property securing a mortgage loan that we intend to include in
the trust, because a responsible party with respect to that condition had
already been identified. There can be no assurance, however, that such a
responsible party will be financially able to address the subject condition.
In cases where the environmental consultant recommended specific
remediation of an adverse environmental condition, the related originator of the
mortgage loan generally required the related borrower either:
1. to carry out the specific remedial measures prior to closing;
2. to carry out the specific remedial measures post-closing and deposit
with the lender a cash reserve in an amount equal to 100% to 125% of
the estimated cost to complete the remedial measures; or
3. to monitor the environmental condition and/or to carry out additional
testing, in the manner and within the time frame specified in the
related loan documents.
Some borrowers under the mortgage loans have not satisfied all post-closing
obligations required by the related loan documents with respect to environmental
matters. There can be no assurance that recommended operations and maintenance
plans have been or will continue to be implemented.
In some cases, the environmental consultant did not recommend that any
action be taken with respect to a potential adverse environmental condition at a
mortgaged real property because a responsible party with respect to that
condition had already been identified.
In several cases, the environmental testing for a mortgaged real property
identified potential and, in some cases, serious environmental problems at
nearby properties. The resulting environmental report indicated, however, that--
o the mortgaged real property had not been affected or had been
minimally affected,
o the potential for the problem to affect the mortgaged real property
was limited, or
o a person responsible for remediation had been identified.
The information provided by us in this prospectus supplement regarding
environmental conditions at the respective mortgaged real properties is based on
the environmental site assessments referred to in this "--Underwriting
Matters--Environmental Assessments" subsection and has not been independently
verified by--
o us,
o any of the other parties to the pooling and servicing agreement,
o any of the mortgage loan sellers,
o any of the underwriters, or
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o the affiliates of any of these parties.
There can be no assurance that the environmental assessments or studies, as
applicable, identified all environmental conditions and risks at, or that any
environmental conditions will not have a material adverse effect on the value of
or cash flow from, one or more of the mortgaged real properties.
In the case of 41 mortgaged real properties, securing 3.4% of the initial
mortgage pool balance, the environmental investigation which was conducted in
connection with the origination of the related mortgage loan was limited to
testing for asbestos-containing materials, lead-based paint and/or radon.
Furthermore, in the case of three mortgage loans secured by the mortgaged real
properties identified on Exhibit A-1 to this prospectus supplement as BIG K
Store, Star Wholesale Florist, Inc. and Augusta Plaza Shopping Center,
respectively, and representing 0.7% of the initial mortgage pool balance, the
environmental consultant recommended that a Phase II environmental assessment be
performed, but that further environmental testing was never conducted. In
general, the related originator's election to limit the environmental testing
with respect to any of these 44 properties was based upon the delivery of a
secured creditor impaired property policy covering environmental matters with
respect to that property. Three of those 44 mortgaged real properties are
covered by an individual secured creditor impaired property policy, and the
remaining 41 of those 44 mortgaged real properties are covered by a blanket
secured creditor impaired property policy. However, those policies have coverage
limits. In addition, those policies do not provide coverage for adverse
environmental conditions at levels below legal limits or for conditions
involving asbestos and lead-based paint.
In some cases, the originator of the related mortgage loan--
o agreed to release a principal of the related borrower from its
obligations under an environmental or hazardous substances indemnity
with respect to the particular mortgaged real property in connection
with the delivery of a secured creditor impaired property policy
covering that property, or
o required a secured creditor impaired property policy because of a
specific environmental issue with respect to the particular mortgaged
real property.
For example, the mortgaged real property identified on Exhibit A-1 to this
prospectus supplement as Harbor Technology Center is located in a Superfund
Site, also known as CERCLA Site. Although Shell Oil is identified as a party
responsible for the contamination, the borrower under the Harbor Technology
Center mortgage loan was required to obtain coverage under the blanket secured
creditor impaired property policy referenced above for environmental matters
with respect to that property. Neither the identification of Shell Oil as a
responsible party nor the related environmental policy are absolute guarantees
that the trust will not suffer a loss as a result of environmental matters at
the Harbor Technology Center property.
See--Underwriting Matters--Environmental Insurance" below.
The pooling and servicing agreement requires that the special servicer
obtain an environmental site assessment of a mortgaged real property within 12
months prior to acquiring title to the property or assuming its operation. This
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. There can be no assurance that the
requirements of the pooling and servicing agreement will effectively insulate
the trust from potential liability for a materially adverse environmental
condition at any mortgaged real property. See "Servicing of the Underlying
Mortgage Loans" in this prospectus supplement and "Risk Factors--Environmental
Liabilities Will Adversely Affect the Value and Operation of the Contaminated
Property and May Deter a Lender from Foreclosing" and "Certain Legal Aspects of
Mortgage Loans--Environmental Considerations" in the accompanying prospectus.
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Environmental Insurance. As discussed above, some of the mortgaged real
properties securing pooled mortgage loans will, in each case, be covered by an
individual or a blanket secured creditor impaired property policy. In general,
those policies provide coverage for the following losses, subject to the
applicable deductibles, policy terms and exclusions, and, further, subject to
the various conditions and limitations discussed below:
1. if during the term of the policy, a borrower defaults under its
mortgage loan and adverse environmental conditions exist at levels
above legal limits on the related mortgaged real property, the insurer
will indemnify the trust for the outstanding principal balance of the
subject mortgage loan on the date of the default, which is defined by
the policy as principal and accrued interest, from the date of notice
to the insurer until the date that the outstanding principal balance
is paid;
2. if the trust becomes legally obligated to pay as a result of a claim
first made against the trust and reported to the insurer during the
term of the policy, for bodily injury, property damage or clean-up
costs resulting from adverse environmental conditions on, under or
emanating from a mortgaged real property, the insurer will defend
against and pay that claim; and
3. if the trust enforces the related mortgage, the insurer will
thereafter pay legally required clean-up costs for adverse
environmental conditions at levels above legal limits which exist on
or under the acquired mortgaged real property, if such costs were
incurred because the insured first became aware of the conditions
during the policy period, provided that those conditions were reported
to the government in accordance with applicable law.
Each of the secured creditor impaired property policies described above
requires that the appropriate party associated with the trust report a claim as
soon as possible during the term of the policy. None of those policies pays for
unreimbursed servicing advances. In addition to other excluded matters, the
policies do not cover claims arising out of conditions involving lead-based
paint or asbestos.
The premium for each of the secured creditor impaired property policies
described above, has been or, as of the date of initial issuance of the offered
certificates, will have been paid in full. The insurer under each of those
policies is American International Group, Inc. or one of its member companies.
American International Group, Inc. currently has a "AAA" rating by S&P, "Aaa" by
Moody's Investors Service, Inc. and "A++" by A. M. Best.
In the case of the mortgaged real property identified on Exhibit A-1 to
this prospectus supplement as Star Wholesale Florist, the mortgaged real
property's groundwater was impacted by TCE, which the environmental consultant
reported as having migrated onto the mortgaged real property from an off-site
source. The borrower enrolled the mortgaged real property in the Texas Voluntary
Cleanup Program and on the closing date of the mortgage loan, the related
borrower had been requested by the Texas Natural Resources Conservation
Commission to perform an additional investigation of the mortgaged real property
in order to confirm that the groundwater contamination originated off-site. To
ensure that it does not incur any significant costs in connection with either
the voluntary investigation or any future cleanup, the borrower obtained a
borrower's environmental insurance policy. The insurer under this policy is
American International Group, Inc. The policy provides coverage up to $1,000,000
for investigation or remediation of pre-existing contamination.
Property Condition Assessments. Except in the case of 16 mortgaged real
properties, securing 1.1% of the initial mortgage pool balance, third-party
engineering firms inspected all of the mortgaged real properties securing the
mortgage loans we intend to include in the trust, or updated previously
conducted inspections, during the 36-month period ending on November 1, 2000, to
assess exterior walls, roofing, interior construction,
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mechanical and electrical systems and general condition of the site, buildings
and other improvements located at each of the mortgaged real properties.
The inspections identified various deferred maintenance items and necessary
capital improvements at some of the mortgaged real properties. The resulting
inspection reports generally included an estimate of cost for any recommended
repairs or replacements at a mortgaged real property. When repairs or
replacements were recommended, the related borrower was required to carry out
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 all of the mortgaged real properties securing the mortgage loans we
intend to include in the trust during the 31-month period ending on November 1,
2000, in order to establish the approximate value of the mortgaged real
property. Those appraisals are the basis for the Most Recent Appraised Values
for the respective mortgaged real properties set forth on Exhibit A-1 to this
prospectus supplement.
Each of the appraisals referred to above represents the analysis and
opinions of the appraiser at or before the origination of the related underlying
mortgage loan. The appraisals are not guarantees of, and may not be indicative
of, the present or future value of the subject mortgaged real property. There
can be no assurance that another appraiser would not have arrived at a different
valuation of any particular mortgaged real property, even if the appraiser used
the same general approach to, and the same method of, appraising that property.
Neither we nor any of the underwriters has confirmed the values of the
respective mortgaged real properties in the appraisals referred to above.
In general, appraisals seek to establish the amount a typically motivated
buyer would pay a typically motivated seller. However, this amount could be
significantly higher than the amount obtained from the sale of a particular
mortgaged real property under a distress or liquidation sale. Implied in the
Most Recent Appraised Values shown on Exhibit A-1 to this prospectus supplement,
is the contemplation of a sale at a specific date and the passing of ownership
from seller to buyer under the following conditions:
o buyer and seller are 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 to show the property in the open market;
o payment is made in terms of cash in U.S. dollars or in comparable
financial arrangements; and
o the price paid for the property is not adjusted by special or creative
financing or sales concessions granted by anyone associated with the
sale.
Each appraisal of a mortgaged real property referred to above involved a
physical inspection of the property and reflects a correlation of the values
established through the Sales Comparison Approach, the Income Approach and/or
the Cost Approach.
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Either the appraisal upon which is based the Most Recent Appraised Value
for each mortgaged real property shown on Exhibit A-1 to this prospectus
supplement, or a separate letter, contains a statement to the effect that the
appraisal guidelines set forth in Title XI of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989 were followed in preparing that appraisal.
However, neither we nor any of the underwriters or mortgage loan sellers has
independently verified the accuracy of this statement.
In the case of those pooled mortgage loans that are acquisition financing,
the related borrower may have acquired the mortgaged real property at a price
less than the appraised value on which the mortgage loan was underwritten.
Zoning and Building Code Compliance. In connection with the origination of
each mortgage loan that we intend to include in the trust, the related
originator examined whether the use and operation of the related mortgaged real
property were in material compliance with zoning, land-use, building, fire and
health ordinances, rules, regulations and orders then-applicable to the
mortgaged real property. Evidence of this 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. Where the property as currently operated is a permitted
nonconforming use and/or structure, an analysis was generally conducted as to--
o the likelihood that a material casualty would occur that would prevent
the property from being rebuilt in its current form, and
o whether existing replacement cost hazard insurance or, if necessary,
supplemental law or ordinance coverage would, in the event of a
material casualty, be sufficient--
1. to satisfy the entire mortgage loan, or
2. taking into account the cost of repair, be sufficient to pay down
that mortgage loan to a level that the remaining collateral would
be adequate security for the remaining loan amount.
Hazard, Liability and Other Insurance. The loan documents for each of the
mortgage loans that we intend to include in the trust generally require the
related borrower to maintain with respect to the corresponding mortgaged real
property the following insurance coverage:
o hazard insurance in an amount that is, subject to a customary
deductible, at least equal to the lesser of--
1. the outstanding principal balance of the mortgage loan, and
2. the full insurable replacement cost of the improvements located
on the insured property;
o if any portion of the 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, in an amount that is
equal to the least of--
1. the outstanding principal balance of the related mortgage loan,
2. the full insurable value of the insured property, and
3. the maximum amount of insurance available under the National
Flood Insurance Act of 1968;
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o comprehensive general liability insurance against claims for personal
and bodily injury, death or property damage occurring on, in or about
the insured property, in an amount at least equal to $1,000,000 per
occurrence; and
o business interruption or rent loss insurance either in an amount not
less than 100% of the projected rental income or revenue from the
insured property for at least six months or, alternatively, in a
specified dollar amount.
In general, the mortgaged real properties for the mortgage loans that we
intend to include in the trust, including those properties located in
California, are not insured against earthquake risks. In the case of those
properties located in California, other than those that are manufactured housing
communities, a third party consultant conducted seismic studies to assess the
probable maximum loss for the property. In general, when the resulting reports
concluded that a mortgaged real property was likely to experience a probable
maximum loss in excess of 20% of the estimated replacement cost of the
improvements, the related originator required the borrower to--
o obtain earthquake insurance, or
o establish reserves to cover the estimated costs of completing seismic
retrofitting recommended by the consultant,
o unless, in any case, the original loan-to-value ratio was relatively
low.
With respect to each of the mortgaged real properties for the pooled
mortgage loans, the master servicer will use reasonable efforts, consistent with
the Servicing Standard, to cause the related borrower to maintain all insurance
coverage as is required under the related mortgage loan documents. If the
related borrower fails to do so, the master servicer must maintain that
insurance coverage, to the extent--
o the trust has an insurable interest,
o the insurance coverage is available at commercially reasonable rates,
and
o any related servicing advance is deemed by the master servicer to be
recoverable from collections on the related mortgage loan.
Where insurance coverage at the mortgaged real property for any pooled
mortgage loan is left to the lender's discretion, the master servicer will be
required to exercise that discretion in a manner consistent with the Servicing
Standard, with a view towards requiring insurance comparable to that required
under other pooled mortgage loans with express provisions governing such
matters.
Various forms of insurance maintained with respect to one or more of the
mortgaged real properties securing the pooled mortgage loans, including casualty
insurance, environmental insurance and earthquake insurance, may be provided
under a blanket insurance policy. That blanket insurance policy will also cover
other real properties, some of which may not secure loans in the trust. As a
result of total limits under any of those blanket policies, losses at other
properties covered by the blanket insurance policy may reduce the amount of
insurance coverage with respect to a property securing one of the loans in the
trust. See "Risk Factors--Lack of Insurance Coverage Exposes a Trust to Risk for
Certain Special Hazard Losses" in the accompanying prospectus.
The mortgage loans that we intend to include in the trust generally provide
that insurance and condemnation proceeds are to be applied either--
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o to restore the mortgaged real property, or
o towards payment of the mortgage loan.
If any mortgaged real property is acquired by the trust through
foreclosure, deed-in-lieu of foreclosure or otherwise following a default on the
related mortgage loan, the special servicer will be required to maintain for
that property generally the same insurance coverage, to the extent available at
commercially reasonable rates, as was previously required under the mortgage
instrument that had covered the 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 insurance policy or
master force placed policy insuring against hazard losses on all of the pooled
mortgage loans and/or REO Properties for which it is responsible. If any blanket
insurance policy or master force placed policy maintained by the master servicer
or special servicer contains a deductible clause, however, the master servicer
or the special servicer, as the case may be, will be required, in the event of a
casualty that would have been covered by an individual policy, to pay out of its
own funds all sums that--
o are not paid because of the deductible clause, and
o exceed the deductible limitation that pertains to the related mortgage
loan or, in the absence of any such deductible limitation, an assumed
deductible limitation for an individual policy which is consistent
with the Servicing Standard.
The applicable originator and its successors and assigns are the
beneficiaries under separate title insurance policies with respect to each
mortgage loan that we intend to include in the trust. Subject to such exceptions
as may be specified in such policy, including those regarding claims made in the
context of insolvency proceedings, each title insurance policy will provide
coverage to the trustee for the benefit of the series 2000-CKP1
certificateholders for claims made against the trustee regarding the priority
and validity of the mortgage lien on the subject mortgaged real property.
Small Balance Loans. When originating mortgage loans under its "small
balance loan" program, each of Column Financial, Inc. and KeyBank National
Association generally follows its standard underwriting procedures, subject to
some or all of the following exceptions:
o all third party reports made on the related mortgaged real property
are abbreviated and contain less information than the third party
reports on which Column or KeyBank, as the case may be, relies for its
standard conduit loans;
o other than an appraisal of the related mortgaged real property, no
site inspection or independent market study is conducted prior to
origination;
o review and analysis of environmental conditions of the mortgaged real
property are based on transaction screen assessments or other reduced
environmental testing, rather than Phase I environmental site
assessments, performed on the mortgaged real property; and
o the loan committee write-up for each mortgage loan is abbreviated and
contains less information than those for standard conduit loans.
In addition, in the case of each loan originated by KeyBank under its
"small balance loan" program:
o the related mortgage loan documents--
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1. in most cases, provide for full recourse against the related
borrower and, in certain cases, against a principal of such
borrower, and
2. do not require unsolicited annual operating statements with
respect to the related mortgaged real property but require the
related borrower, upon request of the mortgagee, to provide those
operating statements on a quarterly basis; and
o the loan is secured by a mortgage that does not provide for
acceleration of the payment of the unpaid balance of the mortgage loan
if the related borrower further encumbers the related mortgaged real
property.
CASH MANAGEMENT AND ESCROWS AND RESERVES
Cash Management. In the case of 56 of the mortgage loans that we intend to
include in the trust, representing approximately 48.4% of the initial mortgage
pool balance, a cash management system has been implemented for the deposit of
property revenues into a separate account.
In some cases, tenants are required to remit rental payments to an account
that is under the sole control of the lender, and the borrower is not authorized
to make withdrawals from the account. In 50 cases, the related borrower or the
manager of the mortgaged real 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 these 50 cases, the borrower is authorized to make
withdrawals from the account from time to time until the occurrence of an event
of default under the related mortgage loan, at which time the lender would be
entitled, under pre-existing instructions furnished to the depository
institution at which the account is maintained, to direct the depository
institution to no longer honor payment requests made by the borrower. In
general, no later than the related anticipated repayment date, the borrower
under each ARD Loan in the trust will be required, if it has not previously done
so, to establish an account which is under the sole control of the master
servicer and into which all revenue from the mortgaged real property will be
directly deposited.
Central Accounts. In the case of most of the mortgage loans that we intend
to include in the trust, including all of those 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--
o taxes and insurance,
o capital improvements,
o furniture, fixtures and equipment, and
o various other purposes.
As of the date of initial issuance of the offered certificates, these accounts
will be under the sole control of the master servicer. In the case of most of
the mortgage loans as to which there is this type of account, the account will
be funded out of monthly escrow and/or reserve payments by the related borrower
or from funds transferred from another account.
Tax and Insurance Escrows. In the case of 204 of the mortgage loans that we
intend to include in the trust, representing 76.6% of the initial mortgage pool
balance, escrows were established for taxes and/or insurance, either as separate
accounts or, if applicable, as sub-accounts of another account. In those cases,
the related borrower is generally required to deposit on a monthly basis an
amount equal to--
o one-twelfth of the annual real estate taxes and assessments, and
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o one-twelfth of the annual premiums payable on insurance policies that
the borrower is required to maintain.
If an escrow was established, the funds will be applied by the master servicer
to pay for items such as taxes, assessments and insurance premiums at the
mortgaged real property.
Under some of the other mortgage loans, the insurance carried by the
related borrower is in the form of a blanket policy. In these cases, the amount
of the escrow is an estimate of the proportional share of the premium allocable
to the mortgaged real property, or the related borrower pays the premium
directly.
In still other cases, no escrow was required because the lender did not
deem it necessary for various reasons, including because a tenant at the
mortgaged real property is responsible for paying all or a portion of the real
estate taxes and assessments and/or insurance premiums directly.
Recurring Replacement Reserves. The table titled "Engineering Reserves and
Recurring Replacement Reserves" on Exhibit A-1 to this prospectus supplement
shows for each applicable mortgage loan the reserve deposits that the underlying
borrowers have been or are, in each case, required to make into a separate
account or, if applicable, a sub-account of another account for--
o capital replacements, repairs and furniture, fixtures and equipment,
or
o leasing commissions and tenant improvements.
In the case of most of the mortgaged real properties that will secure a
pooled mortgage loan, those reserve deposits are initial amounts and may vary
over time. In these cases, the related mortgage and/or other related loan
documents may provide for applicable reserve deposits to cease upon achieving
predetermined maximum amounts in the related reserve account. In addition, in
some cases, reserves for leasing commissions and tenant improvements were
determined for specific tenant spaces, in which cases, the execution of a lease
covering the space could result in the termination and/or release of the
corresponding reserve. Under some of the mortgage loans that we intend to
include in the trust, the related borrowers are permitted to deliver letters of
credit from third parties in lieu of establishing and funding the reserve
accounts.
Engineering Reserves. The table titled "Engineering Reserves and Recurring
Replacement Reserves" on Exhibit A-1 to this prospectus supplement shows the
engineering reserves established at the origination of the corresponding
mortgage loans. In some cases, the engineering reserve for a mortgaged real
property is less than the cost estimate in the related inspection report
because--
o the related originator may not have considered various items
identified in the related inspection report significant enough to
require a reserve, and/or
o various items identified in the related inspection report may have
been corrected.
In the case of several mortgaged real properties securing mortgage loans
that we intend to include in the trust, the engineering reserve 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. We cannot
provide any assurance that the work for which reserves were required will be
completed in a timely manner or that the reserved amounts will be sufficient to
cover the entire cost of the required work.
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SIGNIFICANT MORTGAGE LOANS
Set forth below are summary discussions of the ten largest mortgage loans
that we intend to include in the trust. Among other things, the following
discussion includes various financial information. That information was
primarily derived from financial statements supplied by the related borrowers.
In most cases, those financial statements were unaudited and may not have been
prepared in accordance with generally accepted accounting principles. The
"effective gross income", "net cash flow" and "net operating income" specified
below with respect to any mortgaged real property for any specified period does
not necessarily represent the gross income, net cash flow and net operating
income, respectively, reflected on the related borrower's financial statements.
The differences generally represent the adjustments made by the related mortgage
loan seller to increase the level of consistency between the financial
statements provided by a particular borrower. However, those adjustments were
subjective in nature and were not necessarily made in a uniform manner or in
accordance with generally accepted accounting principles. Neither we nor any of
the underwriters has made any attempt to verify the accuracy of the financial
statements supplied by the related borrowers or the accuracy or appropriateness
of any adjustments made by the related mortgage loan seller in order to arrive
at the information presented below.
1. The 437 Madison Avenue Loan.
General Characteristics of the 437 Madison Avenue Loan.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cut-Off Date Principal Balance: $87,301,842 Property Type: Office
Loan Per Sq. Ft.: $111.51 Sq. Ft.: 782,921
% of Initial Mortgage Pool Balance: 6.8% Location: New York, NY
Mortgage Loan Seller/Originator: Column/Column Year Built/Renovated: 1967/1996
Mortgage Interest Rate: 8.630% Appraised Value: $198,000,000
Maturity Date: June 1, 2010 Appraisal Date: November 1, 1999
ARD Loan: No Encumbered Interest: Leasehold
Anticipated Repayment Date: N/A Cut-Off Date LTV Ratio: 44.1%
Amortization Term: 360 Maturity/ARD LTV Ratio: 37.0%
Interest Calculation: Actual/360 Occupancy Rate at U/W: 99%
Call Protection: L (9.75), O (0.25) Occupancy Date: July 1, 2000
Cross Collateralization/Default: No Property Manager: Sage Realty Corporation
Single Asset/Portfolio: Single Asset U/W DSCR: 1.75x
</TABLE>
Major Tenants at the 437 Madison Avenue Property.
<TABLE>
<CAPTION>
IN-PLACE
% OF IN-PLACE ANNUALIZED
LEASE TOTAL ANNUALIZED BASE RENT
TENANT NAME EXPIRATION TENANT SF TENANT SF BASE RENT PER SQ. FT.
----------- ---------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
Omnicom Group, Inc. Various 316,995 40.5% $5,702,232 $17.98
</TABLE>
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<PAGE>
Lease Expiration Schedule.
SQ. FT. OF % OF CUMULATIVE
YEAR OF NUMBER OF LEASES LEASES TOTAL % OF
EXPIRATION EXPIRING EXPIRING. SQ. FT. TOTAL SQ. FT.
---------- ---------------- ---------- ------- -------------
2000 2 1,495 0.19% 0.19%
2001 4 13,728 1.75% 1.94%
2002 12 40,459 5.16% 7.10%
2003 6 43,540 5.55% 12.65%
2004 11 54,837 6.99% 19.65%
2005 9 48,417 6.17% 25.82%
2006 3 34,725 4.43% 30.25%
2007 2 20,390 2.60% 32.82%
2008 2 30,624 3.91% 36.76%
2009 4 67,141 8.56% 45.32%
2010 17 349,598 44.58% 89.90%
2012 3 27,571 3.52% 93.42%
2014 1 1,005 0.13% 93.54%
2022 1 3,651 0.47% 94.01%
2024 1 37,980 4.84% 98.85%
Escrow Schedule.
<TABLE>
<CAPTION>
RESERVE TYPE INITIAL RESERVE DEPOSIT MONTHLY RESERVE DEPOSIT
------------ ----------------------- -----------------------
<S> <C> <C>
Engineering Escrow $49,783 $0
Real Estate Tax Escrow $2,923,501 $487,250
Insurance Escrow $50,418 $12,605
TI/LC Reserve $0 $27,807
Contractual Replacement Reserve $0 $15,606
Ground Lease Reserve $84,983 $83,333
</TABLE>
Operating History.
<TABLE>
<CAPTION>
1997 1998 1999 UNDERWRITTEN
---- ---- ---- ------------
<S> <C> <C> <C> <C>
Effective Gross Income $26,951,612 $27,504,405 $29,391,870 $31,056,753
Net Operating Income $12,592,493 $13,009,017 $14,712,219 $15,593,901
Net Cash Flow $11,278,146 $11,694,670 $13,397,872 $14,279,554
</TABLE>
437 Madison Avenue Borrower. Madison Avenue Leasehold LLC is the borrower
under the 437 Madison Avenue Loan. It is--
o a single purpose limited liability company formed under the laws of
the State of New York,
o owned 50% by K-Madison Lease LLC, the managing member, and 50% by St.
Paul Fire and Marine Insurance Company, an insurance company currently
rated A+ by S&P and A1 by Moody's, and
o controlled, through the managing member and the property manager, by
the William Kaufman Organization, a major family owned real estate
development concern that was formed in 1924.
The 437 Madison Avenue Property. The 437 Madison Avenue Property is a 0.89
acre property located in Midtown Manhattan in New York, New York. It is improved
by a 40-story office building that was originally built in 1967 and was subject
to renovations in 1996. The improvements are comprised of 782,921 rentable
square feet of office space with some ground floor retail space and a 116 space
parking garage. Based
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<PAGE>
on the July 1, 2000 rent roll, the 437 Madison Avenue Property is 99% occupied
by a total of 44 tenants, with the ten largest tenants accounting for 655,935
square feet or approximately 83.78% of the property's rentable area.
Property Management. The 437 Madison Avenue Property is subject to a
management agreement between the related borrower and Sage Realty Corporation,
an affiliate of the related borrower. Sage Realty Corporation is controlled by
Melvyn and Robert Kaufman, who actively control the related borrower through the
William Kaufman Organization and Sage Realty Corporation. Sage Realty
Corporation manages over 2.7 million square feet of office space in the borough
of Manhattan in New York, New York.
Cash Management/Lockbox. The borrower under the 437 Madison Avenue Loan
must cause all rents from the 437 Madison Avenue Property to be deposited into a
rent account within one business day of receipt. Unless and until an event of
default occurs under the 437 Madison Avenue Loan, the related borrower will have
access to those funds. During the one year period immediately preceding the
maturity date, all excess cash flow will be trapped in a reserve unless, on or
before the beginning of that period, Omnicom has renewed its lease or the
borrower has relet the Omnicom space on terms acceptable to the lender.
Ground Lease. The related borrower holds its leasehold interest in the 437
Madison Avenue Property under a ground lease with an affiliate. The ground lease
provides for fixed monthly ground lease payments of $83,333.33 or $1,000,000
annually. The ground lease expires on December 31, 2040, with two successive
renewal options of 15 years each.
2. Valencia Marketplace--Power Center Loan.
General Characteristics of the Valencia Marketplace--Power Center Loan.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cut-Off Date Principal Balance: $51,787,099 Property Type: Retail
Loan Per Sq. Ft.: $98.08 Sq. Ft.: 528,019
% of Initial Mortgage Pool Balance: 4.0% Location: Valencia, CA
Mortgage Loan Seller/Originator: PMCF/PMCC Year Built/Renovated: 1998/N/A
Mortgage Interest Rate: 7.240% Appraised Value: $71,000,000
Maturity Date: July 1, 2028 Appraisal Date: April 18, 1998
ARD Loan: Yes Encumbered Interest: Fee
Anticipated Repayment Date: July 1, 2013 Cut-Off Date LTV Ratio: 72.9%
Amortization Term: 336 Maturity/ARD LTV Ratio: 55.8%
Interest Calculation: 30/360 Occupancy Rate at U/W: 99%
Call Protection: L (12.42), O (0.58) Occupancy Date: July 1, 2000
Cross Collateralization/Default: No Property Manager: DSB Properties, Inc.
Single Asset/Portfolio: Single Asset U/W DSCR: 1.26x
</TABLE>
Major Tenants at the Valencia Marketplace--Power Center Property.
<TABLE>
<CAPTION>
IN-PLACE
% OF IN-PLACE ANNUALIZED
LEASE TOTAL ANNUALIZED BASE RENT
TENANT NAME EXPIRATION TENANT SF TENANT SF BASE RENT PER SQ. FT.
----------- ---------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
Wal-Mart 10/25/16 149,429 28.3% $1,193,938 $7.99
Toys-R-Us 01/31/22 45,000 8.5% $250,000 $5.56
Bed, Bath & Beyond 01/31/09 41,500 7.9% $507,130 $12.22
</TABLE>
S-71
<PAGE>
Lease Expiration Schedule.
SQ. FT. OF % OF CUMULATIVE
YEAR OF NUMBER OF LEASES LEASES TOTAL % OF
EXPIRATION EXPIRING EXPIRING. SQ. FT. TOTAL SQ. FT.
---------- ---------------- ---------- ------- -------------
2002 2 8,743 1.66% 1.66%
2003 3 14,400 2.73% 4.38%
2004 3 23,660 4.48% 8.86%
2005 3 6,700 1.27% 10.13%
2006 2 9,200 1.74% 11.88%
2007 3 17,800 3.37% 15.25%
2008 2 37,681 7.14% 22.38%
2009 3 75,900 14.37% 36.76%
2010 1 8,800 1.67% 38.42%
2011 1 24,435 4.63% 43.05%
2012 1 40,000 7.58% 50.63%
2013 1 20,680 3.92% 54.54%
2015 2 42,591 8.07% 62.61%
2016 1 149,429 28.30% 90.91%
2022 1 45,000 8.52% 99.43%
Operating History.
<TABLE>
<CAPTION>
6 MONTHS ANNUALIZED
(ENDING
1997 1998 1999 JUNE 30, 2000) UNDERWRITTEN
---- ---- ---- -------------- ------------
<S> <C> <C> <C> <C> <C>
Effective Gross Income N/A $4,252,320 $7,616,684 $7,705,490 $7,496,080
Net Operating Income N/A $3,468,626 $6,096,238 $5,572,762 $5,670,040
Net Cash Flow N/A $3,468,626 $6,096,238 $5,572,762 $5,447,558
</TABLE>
Valencia Marketplace--Power Center Borrower. Valencia Marketplace I, LLC is
the borrower under the Valencia Marketplace--Power Center Loan. It is--
o a single purpose limited liability company formed under the laws of
the State of California,
o owned 49.5% by Samuel S. Mevorach and 49.5% by Samuel S. Mevorach,
Trustee of the Samuel S. Mevorach Trust as of April 13, 1990, and 1%
by Five Five I, Inc., the Managing Member, and
o controlled, through the managing member, Five Five I, Inc., a
California corporation.
The Valencia Marketplace--Power Center Property. The Valencia
Marketplace--Power Center Property is a 44.25 acre property located in Valencia,
California. It is improved by seven single-story buildings that were originally
built in 1998. The improvements are comprised of 528,019 square feet of retail
space and 2,720 parking spaces.
Based on the July 1, 2000 rent roll, the Valencia Marketplace--Power Center
Property is 99% leased by a total of 29 tenants, with the ten largest tenants
accounting for 429,316 square feet or approximately 81.31% of the property's
rentable area.
Escrow Information. The Valencia Marketplace--Power Center Loan requires
monthly deposits into an escrow account in an amount estimated to be sufficient
to pay real estate taxes and insurance premiums when
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<PAGE>
due, subject to a right in favor of the related borrower to deposit an
irrevocable letter of credit with lender in lieu of making monthly tax and
insurance reserve payments. As real estate taxes in California are payable in
equal semi-annual installments, the initial amount of the letter of credit is
equal to one-half the amount estimated by the lender to be payable by the
related borrower for annual tax and insurance premiums. On each anniversary of
the Valencia Marketplace--Power Center Loan, the letter of credit will be
increased by an amount equal to one-half of the annual dollar increase of tax
and insurance premiums. Following an event of default under the Valencia
Marketplace--Power Center Loan documents or the related anticipated repayment
date, the related borrower has no further right to deposit the letter of credit
and is required to escrow monthly with lender a tax escrow and insurance escrow.
On or before each of January 10, 2007 and January 10, 2008, the borrower
under the Valencia Marketplace--Power Center Loan is required to deliver to
lender irrevocable letters of credit in the amount of $300,000 each as
additional collateral to secure against the effects of potential tenant rollover
exposure on the Valencia Marketplace--Power Center Property's debt service
coverage ratio. These letters of credit shall remain in effect until the later
to occur of--
1. January 10, 2009, or
2. the date upon which the Valencia Marketplace--Power Center Property
attains a debt service coverage ratio of at least 1.22x.
Property Management. The Valencia Marketplace--Power Center Property is
subject to a management agreement between the borrower and DSB Properties, Inc.
DSB Properties, Inc. has provided brokerage, property management and leasing
services to owners of commercial shopping centers throughout Los Angeles, Orange
and Ventura Counties since 1983.
Cash Management/Lockbox. The Valencia Marketplace--Power Center borrower
has agreed that from and after the earlier to occur of--
o an event of default under the Valencia Marketplace--Power Center Loan
documents, or
o the anticipated repayment date,
and continuing until the Valencia Marketplace--Power Center Loan is repaid in
full, all rents will be deposited into an account controlled by the lender with
a bank approved by the lender. Upon the occurrence of a cash sweep event and at
the lender's request, all funds deposited in the account will be transferred by
the bank to an account under the sole dominion and control of the lender and
will be applied by the lender in accordance with the terms of the Valencia
Marketplace--Power Center Loan documents.
Modifications to the Valencia Marketplace--Power Center Loan. The Valencia
Marketplace--Power Center Loan was originated on June 4, 1998, in the original
principal amount of $53,250,000.00 together with a second loan to an affiliated
borrower on the adjacent property, which loan was cross-collateralized with the
Valencia Marketplace--Power Center Loan. On June 30, 1999, in connection with
the release of the cross-collateralization, certain terms and conditions of the
Valencia Marketplace--Power Center Loan were modified, including a rebalancing
of the two loans which resulted in a decrease in the principal amount of the
Valencia Marketplace--Power Center Loan of $200,000. In connection with this
initial loan modification, the Valencia Marketplace--Power Center borrower
entered into additional mortgage loan documentation. On July 21, 2000, the
promissory note in connection with the Valencia Marketplace--Power Center Loan
was split into two amended and restated promissory notes, each in the principal
amount of $26,266,807.41. The two amended and restated promissory notes are
equal in priority with one another, and the holder of each has a 50% interest in
all obligations, rights and benefits under the Valencia Marketplace--Power
Center Loan. In connection with this
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<PAGE>
second modification of the Valencia Marketplace--Power Center Loan, the related
borrower entered into additional mortgage loan documentation, including an
agreement modifying the related mortgage to reflect the splitting of the
original promissory note. Both notes are being transferred to us in connection
with the transaction described in this prospectus supplement.
3. Hercules Plaza Loan.
General Characteristics of the Hercules Plaza Loan.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cut-Off Date Principal Balance: $50,909,381 Property Type: Office
Loan Per Sq. Ft.: $95.52 Sq. Ft. 532,974
% of Initial Mortgage Pool Balance: 3.9% Location: Wilmington, DE
Mortgage Loan Seller PMCF Year Built/Renovated: 1984/N/A
Mortgage Interest Rate: 6.810% Appraised Value: $125,000,000
Maturity Date: June 1, 2013 Appraisal Date: July 10, 2000
ARD Loan: No Encumbered Interest: Leasehold
Anticipated Repayment Date: N/A Cut-Off Date LTV Ratio: 40.7%
Amortization Term: 152 Maturity/ARD LTV Ratio: 0.0%
Interest Calculation: 30/360 Occupancy Rate at U/W: 100%
Call Protection: L (12.58), O (0.08) Occupancy Date: July 1, 2000
Cross Collateralization/Default: No Property Manager: Binswanger Management Corp.
Single Asset/Portfolio: Single Asset U/W DSCR: 2.41x
</TABLE>
Major Tenants at the Hercules Plaza Property.
<TABLE>
<CAPTION>
IN-PLACE
% OF IN-PLACE ANNUALIZED
LEASE TOTAL ANNUALIZED BASE RENT
TENANT NAME EXPIRATION TENANT SF TENANT SF BASE RENT PER SQ. FT.
----------- ---------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
Hercules, Inc. 5/31/13 532,974 100% $14,239,461 $26.72
</TABLE>
Lease Expiration Schedule.
SQ. FT. OF % OF CUMULATIVE
YEAR OF NUMBER OF LEASES LEASES TOTAL % OF
EXPIRATION EXPIRING EXPIRING. SQ. FT. TOTAL SQ. FT.
---------- ---------------- ---------- ------- -------------
2013 1 532,974 100% 100%
Operating History.
1997 1998 1999 UNDERWRITTEN
---- ---- ---- ------------
Effective Gross Income N/A N/A N/A $12,000,000
Net Operating Income N/A N/A N/A $11,284,500
Net Cash Flow N/A N/A N/A $11,284,500
Originator of the Hercules Plaza Loan. The State of California Public
Employees' Retirement System originated the Hercules Plaza Loan on June 1, 1984.
The Hercules Plaza Loan was subsequently restructured by Capital Lease Funding,
L.P. and on October 5, 2000 was purchased by Prudential Mortgage Capital
Company, LLC.
Hercules Plaza Borrower. D.C.L. Leasing Partners Limited Partnership, Ltd.
- VI is the borrower under the Hercules Plaza Loan. It is--
o a single-purpose limited partnership formed under the laws of the
State of Delaware, and
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<PAGE>
o owned indirectly 49.9% by Dana Corporation and 49.9% by Cilcorp, Inc.
Encumbered Interest. The Hercules Plaza Loan is secured by a mortgage lien
on--
o the leasehold interest of the related borrower in the Hercules Plaza
Property, and
o the fee interest of the fee owner in the Hercules Plaza Property.
Notwithstanding such subordination of the fee interest, upon a foreclosure by
the lender, the fee interest must be deeded back to the ground lessor, Hercules
Incorporated.
The Hercules Plaza Property. The Hercules Plaza Property is a 2.00 acre
property located in Wilmington, Delaware. It is improved by a 12-story office
building that was built in 1984. The improvements are comprised of 532,974
rentable square feet of office space and an underground parking garage with 135
parking spaces.
The entire Hercules Plaza Property is subleased by the related borrower to
Hercules Incorporated pursuant to a triple net lease.
Property Management. Due to the triple net nature of the sublease, the
related borrower does not directly manage the Hercules Plaza Property; however,
Investment Management Advisors, Inc., which has a 0.2% indirect ownership
interest in the borrower, does provide administrative services on behalf of the
related borrower and its affiliates.
Cash Management/Lockbox. The borrower under the Hercules Plaza Loan has
directed Hercules Incorporated, as subtenant, to deposit all rent payable under
its sublease directly into an account with the lender's servicer. The lender has
the right to apply such rent payments first to payments due and owing on the
Hercules Plaza Loan, then to payment of rent under the ground lease and then to
payment of amounts due under the subordinate loan, with the balance of such rent
payments being remitted to the related borrower. Following the occurrence of an
event of default, the lender may apply such rent payments in such order and in
such manner as the lender may, in its sole discretion, determine.
Subordinate Debt. The Hercules Plaza Property is subject to a subordinate
mortgage in favor of Brandywine Gateway Corporation which secures an
interest-only note in the original principal amount of $12,160,000. Other than
this subordinate loan, the related borrower may not encumber the Hercules Plaza
Property with subordinate financing without the consent of the holder of the
Hercules Plaza Loan.
Ground Lease. The related borrower holds its leasehold interest in the
Hercules Plaza Property under a ground lease with Hercules Incorporated. The
ground lease provides for quarterly ground lease payments of $88,875 or $355,500
annually for the initial term and each of the first five optional renewal terms,
and monthly ground lease payments based upon the fair market value of the leased
premises for each of the four remaining optional renewal terms. The ground lease
expires on June 2, 2015, with nine successive renewal options of three years for
the first option term and five years for each of the remaining eight option
terms.
S-75
<PAGE>
4. The Alliance GD FH F1 Portfolio Loan.
General Characteristics of the Alliance GD FH F1 Portfolio Loan.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cut-Off Date Principal Balance: $39,491,001 Property Type: Multifamily
Loan Per Unit: $25,577 Units: 1,544
% of Initial Mortgage Pool Balance: 3.1% Location: Richmond, VA/
Dallas, TX
Mortgage Loan Seller/Originator: Column/Column Year Built/Renovated: 1965/1998 & 1979/1999
Mortgage Interest Rate: 8.640% Appraised Value: $51,100,000
Maturity Date: April 1, 2010 Appraisal Date: April 1, 2000 and
March 6, 2000
ARD Loan: No Encumbered Interest: Fee
Anticipated Repayment Date: N/A Cut-Off Date LTV Ratio: 77.3%
Amortization Term: 360 Maturity/ARD LTV Ratio: 70.4%
Interest Calculation: Actual/360 Occupancy Rate at U/W: 95%/94%
Call Protection: L (9.5), O (0.5) Occupancy Date: August 25, 2000
Cross Collateralization/Default: Yes Property Manager: Alliance Residential
Management, LLC
Single Asset/Portfolio: Portfolio U/W DSCR: 1.22x
</TABLE>
Portfolio Schedule.
<TABLE>
<CAPTION>
YEAR
BUILT/ APPRAISED
PROPERTY NAME CITY STATE UNITS OCCUPANCY RENOVATED VALUE U/W NCF
------------- ---- ----- ----- --------- --------- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Seven Gables Apts. Richmond Virginia 1,184 95% 1965/1998 $38,500,000 $3,447,078
High Ridge Apts. Dallas Texas 360 94% 1979/1999 $12,600,000 $1,082,113
</TABLE>
Unit Mix Schedule: Seven Gables Apartments.
UNIT TYPE # UNITS AVERAGE RENT MAXIMUM RENT
--------- ------- ------------ ------------
2 BR Units 1,184 $426 $515
Unit Mix Schedule: High Ridge Apartments.
UNIT TYPE # UNITS AVERAGE RENT MAXIMUM RENT
--------- ------- ------------ ------------
1 BR Units 312 $469 $610
2 BR Units 48 $716 $760
Escrow Schedule.
<TABLE>
<CAPTION>
RESERVE TYPE INITIAL RESERVE DEPOSIT MONTHLY RESERVE DEPOSIT
------------ ----------------------- -----------------------
<S> <C> <C>
Engineering Escrow $302,563 $0
Real Estate Tax Escrow $153,374 $38,343
Insurance Escrow $69,651 $11,597
Contractual Replacement Reserve $0 $32,167
</TABLE>
S-76
<PAGE>
Operating History.
<TABLE>
<CAPTION>
TRAILING 12 MONTHS
1998 1999 (AS OF JUNE 30, 2000) UNDERWRITTEN
---- ---- --------------------- ------------
<S> <C> <C> <C> <C>
Effective Gross Income $ 6,512,005 $ 7,294,178 $ 7,662,199 $ 7,973,728
Net Operating Income $ 3,727,667 $ 4,279,593 $ 4,578,498 $ 4,915,191
Net Cash Flow $ 3,341,667 $ 3,893,593 $ 4,193,398 $ 4,529,191
</TABLE>
Alliance GD FH F1 Portfolio Borrower. Alliance GD FH F1 Limited Partnership
is the borrower under the Alliance GD FH F1 Portfolio Loan. It is a
single-purpose limited partnership formed under the laws of the State of
Delaware.
The Alliance GD FH F1 Properties. The Alliance GD FH F1 Properties are
comprised of:
o a 85.720 acre property located in Richmond, Virginia, which is
improved by a 1,184-unit garden-style apartment complex known as the
Seven Gables Apartments; and
o a 10.206 acre property located in Dallas, Texas, which is improved by
a 360-unit garden-style apartment complex known as the High Ridge
Apartments.
The Seven Gables property was constructed in phases between 1965 and 1975.
The property was substantially renovated between 1998 and 1999. Based on the May
24, 2000 rent roll, the Seven Gables property is 95% occupied. Amenities at the
property include two swimming pools, open parking, an on-site management office
and extensive landscaping.
The High Ridge Apartments property was built in 1979. The property consists
of 19 three-story buildings. The property was substantially renovated between
1998 and 1999. Based on the August 25, 2000 rent roll, the High Ridge Apartments
property is 94% occupied. Amenities at the High Ridge Apartments property
include a fitness center, two laundry areas, a swimming pool, 544 parking spaces
and limited access security gates.
Property Management. The Alliance GD FH F1 Properties are each subject to a
property management agreement between the related borrower and Alliance
Residential Management, LLC, an affiliate of the related borrower. Alliance
Residential Management, LLC manages 160 properties comprising over 45,000 units.
Cash Management/Lockbox. The borrower under the Alliance GD FH F1 Portfolio
Loan must cause all rents from the Alliance GD FH F1 Properties to be deposited
into a rent account controlled by the lender within one day of receipt. Unless
and until an event of default occurs under the Alliance GD FH F1 Portfolio Loan,
the related borrower will have access to those funds.
S-77
<PAGE>
5. The McCandless Towers II Loan.
General Characteristics of the McCandless Towers II Loan.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cut-Off Date Principal Balance: $36,936,969 Property Type: Office
Loan Per Sq. Ft.: $172.54 Sq. Ft.: 214,080
% of Initial Mortgage Pool Balance: 2.9% Location: Santa Clara, CA
Mortgage Loan Seller/Originator: Column/Column Year Built/Renovated: 1998/N/A
Mortgage Interest Rate: 8.550% Appraised Value: $63,500,000
Maturity Date: July 1, 2025 Appraisal Date: May 17, 2000
ARD Loan: Yes Encumbered Interest: Fee
Anticipated Repayment Date: July 1, 2010 Cut-Off Date LTV Ratio: 58.2%
Amortization Term: 360 Maturity/ARD LTV Ratio: 52.8%
Interest Calculation: Actual/360 Occupancy Rate at U/W: 100%
Call Protection: L (9.5), O (0.5) Occupancy Date: May 17, 2000
Cross Collateralization/Default: No Property Manager: McCandless Management Corp.
Single Asset/Portfolio: Single Asset U/W DSCR: 1.35x
</TABLE>
Major Tenants at the McCandless Towers II Property.
<TABLE>
<CAPTION>
IN-PLACE
IN-PLACE ANNUALIZED
LEASE % OF TOTAL ANNUALIZED BASE RENT
TENANT NAME EXPIRATION TENANT SF TENANT SF BASE RENT PER SQ. FT.
----------- ---------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
Network Associates, Inc. 3/31/13 208,368 97.3% $4,687,390 $22.50
(Nasdaq)
Birk's Cafe 3/31/09 5,712 2.7% $150,532 $26.35
</TABLE>
Lease Expiration Schedule.
NUMBER OF SQ. FT. OF CUMULATIVE
YEAR LEASES LEASES % OF TOTAL % OF
EXPIRATION EXPIRING EXPIRING SQ. FT. TOTAL SQ. FT.
---------- --------- ---------- ---------- -------------
2009 1 5,712 2.67% 2.67%
2013 1 208,368 97.33% 100%
Escrow Schedule.
<TABLE>
<CAPTION>
RESERVE TYPE INITIAL RESERVE DEPOSIT MONTHLY RESERVE DEPOSIT
------------ ----------------------- -----------------------
<S> <C> <C>
Real Estate Tax Escrow $163,755 $40,939
</TABLE>
Operating History.
<TABLE>
<CAPTION>
TRAILING 12 MONTHS
1997 1998 1999 (AS OF MAY 17, 2000) UNDERWRITTEN
---- ---- ---- -------------------- ------------
<S> <C> <C> <C> <C> <C>
Effective Gross Income N/A N/A N/A $5,845,249 $5,571,055
Net Operating Income N/A N/A N/A $4,746,756 $4,656,658
Net Cash Flow N/A N/A N/A $4,703,942 $4,613,844
</TABLE>
McCandless Towers II Borrower. Birk S. McCandless, LLC is the borrower
under the McCandless Towers II Loan. It is--
o a single purpose limited liability company formed under the laws of
the State of California,
S-78
<PAGE>
o owned 1% by 3965 Freedom Circle Corp., the managing member,
o controlled, through the managing member and the property manager, by
Birk S. McCandless, a Silicon Valley office and R&D real estate
developer.
The McCandless Towers II Property. The McCandless Towers II Property is
located in the 4.63 acre Marriott Business Park in Santa Clara, California. It
is improved by a 11-story steel frame class A office building that was built in
1998. The improvements are comprised of 214,080 rentable square feet. The
improvements at the McCandless Towers II Property also include a one-level,
below grade parking garage with 370 parking spaces and 377 surface parking
spaces.
The McCandless Towers II Property is 100% leased to Informix Corporation
and subleased to Network Associates Inc. Under the sublease agreement both
Informix and Network Associates are responsible to perform under the original
lease. The lease commenced on April 1, 1998 and expires on March 31, 2013. The
tenant is responsible for all operating expenses, including management expenses,
at the McCandless Towers II Property.
Property Management. The McCandless Towers II Property is subject to a
management agreement between the related borrower and McCandless Management
Corp, an affiliate of the related borrower. McCandless Management Corp. is
controlled by Birk S. McCandless, who actively controls the related borrower.
Mr. McCandless has built and leased more than four million square feet of office
and R&D space in the Silicon Valley.
Cash Management/Lockbox. The borrower under the McCandless Towers II Loan
must cause all rents from the McCandless Towers II Property to be deposited
directly into a lender controlled rent account. During the six-month period
immediately preceding the anticipated repayment date, all excess cash flow will
be trapped in a TI/LC reserve unless on or before the beginning of that period
an executed refinance commitment is delivered to the lender.
Mezzanine Debt. Principals of the related borrower are expressly permitted
to incur mezzanine debt provided that the certain conditions in the mortgage
instrument are satisfied.
6. The Alliance GD FH F2 Portfolio Loan.
General Characteristics of the Alliance GD FH F2 Portfolio Loan.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cut-Off Date Principal Balance: $30,282,599 Property Type: Multifamily
Loan Per Unit: $24,206.71 Units: 1,251
% of Initial Mortgage Pool Balance: 2.4% Location: Dallas, TX/
Richmond VA
Mortgage Loan Seller/Originator: Column/Column Year Built/Renovated: 1974/1999 & 1969/1999
Mortgage Interest Rate: 8.640% Appraised Value: $39,200,000
Maturity Date: April 1, 2010 Appraisal Date: March 6, 2000 and
March 1, 2000
ARD Loan: No Encumbered Interest: Fee
Anticipated Repayment Date: N/A Cut-Off Date LTV Ratio: 77.3%
Amortization Term: 360 Maturity/ARD LTV Ratio: 65.0%
Interest Calculation: Actual/360 Occupancy Rate at U/W: 96%/95%
Call Protection: L (9.5), O (0.5) Occupancy Date: May 24, 2000 &
July 18, 2000
Cross Collateralization/Default: Yes Property Manager: Alliance Residential
Management, LLC
Single Asset/Portfolio: Portfolio U/W DSCR: 1.21x
</TABLE>
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<PAGE>
Portfolio Schedule.
<TABLE>
<CAPTION>
YEAR
BUILT/ APPRAISED
PROPERTY NAME CITY STATE UNITS OCCUPANCY RENOVATED VALUE U/W NCF
------------- ---- ----- ----- --------- --------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Timbercreek Apartments Dallas Texas 1,083 96% 1974/1999 $35,000,000 $3,060,316
Deering Manor Apartments Richmond Virginia 168 95% 1969/1999 $4,200,000 $365,276
</TABLE>
Unit Mix Schedule: Timbercreek Apartments.
UNIT TYPE # UNITS AVERAGE RENT MAXIMUM RENT
--------- ------- ------------ ------------
Studio Units 125 $385 $460
1 BR Units 763 $489 $655
2 BR Units 195 $653 $850
Unit Mix Schedule: Deering Manor.
UNIT TYPE # UNITS AVERAGE RENT MAXIMUM RENT
--------- ------- ------------ ------------
2 BR Units 168 $417 $475
Escrow Schedule.
<TABLE>
<CAPTION>
RESERVE TYPE INITIAL RESERVE DEPOSIT MONTHLY RESERVE DEPOSIT
------------ ----------------------- -----------------------
<S> <C> <C>
Engineering Escrow $135,688 $0
Real Estate Tax Escrow $277,293 $69,323
Insurance Escrow $47,939 $8,794
Contractual Replacement Reserve $0 $26,063
</TABLE>
Operating History.
<TABLE>
<CAPTION>
TRAILING 12 MONTHS
1998 1999 (AS OF JUNE 30, 2000) UNDERWRITTEN
---- ---- --------------------- ------------
<S> <C> <C> <C> <C>
Effective Gross Income $ 6,385,985 $ 6,855,198 $ 6,979,903 $ 7,170,688
Net Operating Income $ 3,307,488 $ 3,382,391 $ 3,503,988 $ 3,738,342
Net Cash Flow $ 2,994,738 $ 3,069,641 $ 3,191,238 $ 3,425,592
</TABLE>
Alliance GD FH F2 Portfolio Borrower. Alliance GD FH F2 Limited Partnership
is the borrower under the Alliance GD FH F2 Portfolio Loan. It is a
single-purpose limited partnership formed under the laws of the State of
Delaware.
The Alliance GD FH F2 Properties. The Alliance GD FH F2 Properties are
comprised of:
o a 44.46 acre property located in Dallas, Texas, which is improved by a
1,083-unit garden-style apartment complex known as the Timbercreek
Apartments; and
o a 14.70 acre property located in Richmond, Virginia, which is improved
by a 168-unit garden-style apartment complex known as the Deering
Manor Apartments.
The Timbercreek Apartments property was constructed in phases between 1974
and 1977. The property consists of 77 two-story and three-story buildings. The
property was substantially renovated between 1998 and
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<PAGE>
1999. Based on the May 24, 2000 rent roll, the Timbercreek Apartments property
is 96% occupied. Amenities at the property include an exercise room, business
center, four laundry areas, four swimming pools and 1,400 parking spaces.
The Deering Manor property was built in 1969. The property consists of 23
two-story buildings. The property was substantially renovated between 1998 and
1999. Based on the July 18, 2000 rent roll, the Deering Manor property is 95%
occupied. Amenities at the Deering Manor property include a swimming pool, open
parking, landscaping and an on-site management office.
Property Management. The Alliance GD FH F2 Properties are each subject to a
property management agreement between the related borrower and Alliance
Residential Management, L.L.C., an affiliate of the related borrower. Alliance
Residential Management, L.L.C. manages 160 properties comprising over 45,000
units.
Cash Management/Lockbox. The borrower under the Alliance GD FH F2 Portfolio
Loan must cause all rents from the Alliance GD FH F2 Properties to be deposited
into a rent account controlled by the lender within one day of receipt. Unless
and until an event of default occurs under the Alliance GD FH F2 Portfolio Loan,
the related borrower will have access to those funds.
7. The Commons at Sugarhouse Loan.
General Characteristics of the Commons at Sugarhouse Loan.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cut-Off Date Principal Balance: $28,387,855 Property Type: Retail
Loan Per Sq. Ft.: $146.79 Sq. Ft.: 193,397
% of Initial Mortgage Pool Balance: 2.2% Location: Salt Lake City, UT
Mortgage Loan Seller/Originator: Column/Column Year Built/Renovated: 1999/N/A
Mortgage Interest Rate: 8.130% Appraised Value: $36,000,000
Maturity Date: October 1, 2010 Appraisal Date: February 21, 2000
ARD Loan: No Encumbered Interest: Fee
Anticipated Repayment Date: N/A Cut-Off Date LTV Ratio: 77.3%
Amortization Term: 360 Maturity/ARD LTV Ratio: 65.0%
Interest Calculation: Actual/360 Occupancy Rate at U/W: 97%
Call Protection: L (9.5), O (0.5) Occupancy Date: August 1, 2000
Cross Collateralization/Default: No Property Manager: Johansen-Thackeray
Commercial Real Estate
Services, LC and The Boyer
Company
Single Asset/Portfolio: Single Asset U/W DSCR: 1.23x
</TABLE>
Major Tenants at The Commons at Sugarhouse Property.
<TABLE>
<CAPTION>
IN-PLACE
IN-PLACE ANNUALIZED
LEASE % OF TOTAL ANNUALIZED BASE RENT
TENANT NAME EXPIRATION TENANT SF TENANT SF BASE RENT PER SQ. FT.
----------- ---------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
Barnes & Noble
Booksellers, Inc. 11/01/13 26,702 13.8% $499,861 $18.72
Wild Oats Markets, Inc. 04/01/19 23,570 12.2% $353,550 $15.00
Bed, Bath & Beyond, Inc. 12/01/09 21,127 10.9% $445,216 $21.07
</TABLE>
Other tenants at The Commons at Sugarhouse Property include Old Navy Inc.
and Petco Animal Supplies, Inc.
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<PAGE>
Lease Expiration Schedule.
NUMBER OF SQ. FT. CUMULATIVE
YEAR LEASES OF LEASES % OF TOTAL % OF
EXPIRATION EXPIRING EXPIRING SQ. FT. TOTAL SQ. FT.
---------- --------- --------- ---------- -------------
2002 1 9,000 4.65% 4.65%
2004 7 15,759 8.15% 12.80%
2005 1 2,343 1.21% 14.01%
2007 1 6,000 3.10% 17.12%
2009 10 76,640 39.63% 56.74%
2010 2 13,079 6.76% 63.51%
2013 1 26,702 13.81% 77.31%
2015 1 14,820 7.66% 84.98%
2019 1 23,570 12.19% 97.16%
Escrow Schedule.
RESERVE TYPE INITIAL RESERVE DEPOSIT MONTHLY RESERVE DEPOSIT
------------ ----------------------- -----------------------
Real Estate Tax Escrow $390,000 $32,500
Insurance Escrow $22,917 $2,083
TI/LC Reserve $1,137,500 $2,000
Operating History.
<TABLE>
<CAPTION>
TRAILING 12 MONTHS
1997 1998 1999 (AS OF FEBRUARY 21, 2000) UNDERWRITTEN
---- ---- ---- ------------------------- ------------
<S> <C> <C> <C> <C> <C>
Effective Gross Income N/A N/A N/A $4,473,159 $4,141,665
Net Operating Income N/A N/A N/A $3,522,259 $3,265,478
Net Cash Flow N/A N/A N/A $3,367,436 $3,110,655
</TABLE>
The Commons at Sugarhouse Borrower. The Commons at Sugarhouse, L.C. is the
borrower under The Commons at Sugarhouse Loan. It is--
o a single purpose limited liability company formed under the laws of
the State of Utah, and
o controlled, through its managers, by The Boyer Company and
Johansen-Thackeray Commercial Real Estate Services, LC.
The Boyer Company has developed over 11 million square feet of retail, office
and medical office space. Johansen-Thackeray has developed and/or managed 12
multifamily and 18 commercial projects.
The Commons at Sugarhouse Property. The Commons at Sugarhouse Property is a
9.61 acre property located in Salt Lake City, Utah. It is improved by a
16-building retail project. Fifteen of the buildings were built during 1998 and
1999. One building, Guild Hall, was originally built in 1920 and was subject to
major renovations in 1994. The improvements are comprised of 43,246 square feet
of office space, 158,128 square feet of retail, a 177-space parking garage and
471 spaces of surface parking. Based on the August 1, 2000 rent roll, The
Commons at Sugarhouse Property is 97% occupied by a total of 23 tenants.
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<PAGE>
Property Management. The Commons at Sugarhouse Property is subject to a
management agreement between the related borrower and Johansen-Thackeray
Commercial Real Estate Services, LC and The Boyer Company, affiliates of the
related borrower.
8. Gateway at Randolph Apartments Loan.
General Characteristics of the Gateway at Randolph Apartments Loan.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cut-Off Date Principal Balance: $27,870,175 Property Type: Multifamily
Loan per Unit: 30,863.98 Units: 903
% of Initial Mortgage Pool Balance: 2.2% Location: Randolph Township, NJ
Mortgage Loan Seller/Originator: PMCF/PMCC Year Built/Renovated: 1975/1999
Mortgage Interest Rate: 8.020% Appraised Value: $58,500,000
Maturity Date: June 1, 2010 Appraisal Date: April 14, 2000
ARD Loan: No Encumbered Interest: Fee
Anticipated Repayment Date: N/A Cut-Off Date LTV Ratio: 47.6%
Amortization Term: 300 Maturity/ARD LTV Ratio: 39.5%
Interest Calculation: Actual/360 Occupancy Rate at U/W: 100%
Call Protection: L (9.58), O (0.42) Occupancy Date: May 17, 2000
Cross Collateralization/Default: No Property Manager: Value Realty, Inc.
Single Asset/Portfolio: Single Asset U/W DSCR: 1.63x
</TABLE>
Unit Mix Schedule.
UNIT TYPE # UNITS AVERAGE RENT MAXIMUM RENT
--------- ------- ------------ ------------
1 BR Units 787 $807 $995
2 BR Units 116 $997 $1,410
Operating History.
<TABLE>
<CAPTION>
1997 1998 1999 UNDERWRITTEN
---- ---- ---- ------------
<S> <C> <C> <C> <C>
Effective Gross Income $ 8,673,217 $ 8,673,645 $ 8,999,044 $ 8,643,278
Net Operating Income $ 4,927,912 $ 4,930,810 $ 5,125,526 $ 4,536,398
Net Cash Flow $ 4,858,673 $ 4,480,901 $ 4,621,466 $ 4,242,923
</TABLE>
Gateway at Randolph Apartments Borrower. Center Grove Associates, LLC is
the borrower under the Gateway at Randolph Apartments Loan. It is--
o a single purpose limited liability company formed under the laws of
the State of New Jersey, and
o owned 100% by Center Grove Holdings, LLC, a New Jersey limited
liability company.
The Gateway at Randolph Apartments Property. The Gateway at Randolph
Apartments Property is a 63.90 acre property located in Randolph Township,
Morris County, New Jersey. It is improved by a 903 unit garden apartment
project. Based on the May 17, 2000 rent roll, the Gateway at Randolph Apartments
Property is 100% occupied.
Escrow Information. The Gateway at Randolph Apartments Loan does not
require monthly payments into any real estate tax, insurance, or replacement
reserves provided that--
1. no event of default has occurred, and
2. the debt service coverage ratio is at least 1.40x.
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<PAGE>
In the event the related borrower fails to provide proof of payment of the real
estate taxes or insurance premiums in a timely manner or upon the occurrence of
an event of default or in the event the debt service coverage ratio falls below
1.40x, the lender may require the borrower to commence monthly deposits to an
impound account in the amounts of $91,756.67 for real estate taxes and $6,772.50
for insurance premiums. Upon the occurrence of an event of default or in the
event the debt service coverage ratio falls below 1.40x, the lender may require
the related borrower to commence monthly deposits in the amount of $22,575 for
the future repair or replacement of those items identified in the engineering
report.
Property Management. The management arrangement between the related
borrower and Value Realty, Inc. is under an oral agreement. Value Realty, Inc.
has confirmed in a letter to the lender that the management fees are 5-1/2% of
gross revenue.
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<PAGE>
9. The Metroplex Loan.
General Characteristics of the Metroplex Loan.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cut-Off Date Principal Balance: $27,441,129 Property Type: Office
Loan Per Sq. Ft.: $70.61 Sq. Ft.: 388,608
% of Initial Mortgage Pool Balance: 2.1% Location: Los Angeles, CA
Mortgage Loan Seller/Originator: Column/Column Year Built/Renovated: 1985/N/A
Mortgage Interest Rate: 8.810% Appraised Value: $36,400,000
Maturity Date: June 1, 2010 Appraisal Date: January 5, 2000
ARD Loan: No Encumbered Interest: Fee
Anticipated Repayment Date: N/A Cut-Off Date LTV Ratio: 75.4%
Amortization Term: 360 Maturity/ARD LTV Ratio: 68.8%
Interest Calculation: Actual/360 Occupancy Rate at U/W: 83%
Call Protection: L (9.5), O (0.5) Occupancy Date: August 1, 2000
Cross Collateralization/Default: No Property Manager: Jamison Properties, Inc.
Single Asset/Portfolio: Single Asset U/W DSCR: 1.34x
</TABLE>
Major Tenants at the Metroplex Property.
<TABLE>
<CAPTION>
IN-PLACE
IN-PLACE ANNUALIZED
LEASE % OF TOTAL ANNUALIZED BASE RENT
TENANT NAME EXPIRATION TENANT SF TENANT SF BASE RENT PER SQ. FT.
----------- ---------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
L.A. Care 4/1/01 100,966 26.0% $140,018.55 $1.39
</TABLE>
Lease Expiration Schedule.
NUMBER OF SQ. FT. CUMULATIVE
YEAR LEASES OF LEASES % OF TOTAL % OF
EXPIRATION EXPIRING EXPIRING SQ. FT. TOTAL SQ. FT.
---------- --------- --------- ---------- -------------
2000 1 2,971 0.77% 0.77%
2001 9 161,442 41.82% 42.58%
2002 8 26,449 6.85% 49.44%
2003 9 26,957 6.98% 56.42%
2004 5 24,957 6.46% 62.88%
2005 10 73,361 19.00% 81.88%
2007 3 21,982 5.69% 87.58%
2008 2 23,524 6.09% 93.67%
2010 1 2,550 0.66% 94.33%
2011 1 - 0.00% 94.33%
Escrow Schedule.
<TABLE>
<CAPTION>
RESERVE TYPE INITIAL RESERVE DEPOSIT MONTHLY RESERVE DEPOSIT
------------ ----------------------- -----------------------
<S> <C> <C>
Real Estate Taxes Reserve $146,533 $29,307
Insurance Escrow $0 $3,862
L.A Care Reserve $0 $40,000
Environmental Escrow $625 $0
TI & LC Reserve $0 $20,000
</TABLE>
S-85
<PAGE>
Operating History.
<TABLE>
<CAPTION>
TRAILING 12 MONTHS
1997 1998 (AS OF APRIL 30, 2000) UNDERWRITTEN
---- ---- ---------------------- ------------
<S> <C> <C> <C> <C>
Effective Gross Income $6,833,978 $5,538,478 $5,913,894 $6,244,993
Net Operating Income $3,987,238 $3,073,724 $4,029,734 $4,036,626
Net Cash Flow $3,446,309 $2,532,795 $3,488,805 $3,495,697
</TABLE>
Metroplex Borrower. Metroplex, LLC is the borrower under the Metroplex
Loan. It is--
o a single purpose limited liability company formed under the laws of
the State of California, and
o owned 21% by Dr. David Lee, the managing member.
Dr. David Lee owns and operates over seven million square feet of office space
in the Los Angeles market.
The Metroplex Property. The Metroplex Property is an 18-story office
building that was built in 1985 and is located in Los Angeles, California. The
improvements are comprised of approximately 388,608 rentable square feet of
offices, with some ground level retail space. The improvements at the Metroplex
Property also include a seven-level parking garage with 850 parking spaces.
Based on the August 1, 2000 rent roll, the Metroplex Property is 94% occupied by
a total of 42 tenants.
Property Management. The Metroplex Property is subject to a management
agreement between the related borrower and Jamison Properties, Inc., an
affiliate of the related borrower. Jamison Properties Inc. is controlled by Dr.
David Lee and currently manages over seven million square feet of office space
in the Mid-Wilshire District of Los Angeles, California.
Cash Management/Lockbox. The borrower under the Metroplex Loan must cause
all rents from the Metroplex Property to be deposited into a rent account within
one business day of receipt. Unless and until an event of default occurs under
the Metroplex Loan, the related borrower will have access to those funds.
10. Palm Plaza Shopping Center Loan.
General Characteristics of the Palm Plaza Shopping Center Loan.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cut-Off Date Principal Balance: $25,476,217 Property Type: Retail
Loan Per Sq. Ft.: $74.42 Sq. Ft.: 342,338
% of Initial Mortgage Pool Balance: 2.0% Location: Temecula, CA
Mortgage Loan Seller/Originator: PMCF/PMCC Year Built/Renovated: 1990/N/A
Mortgage Interest Rate: 7.570% Appraised Value: $34,750,000
Maturity Date: June 1, 2029 Appraisal Date: March 15, 1999
ARD Loan: Yes Encumbered Interest: Fee
Anticipated Repayment Date: June 1, 2009 Cut-Off Date LTV Ratio: 73.3%
Amortization Term: 360 Maturity/ARD LTV Ratio: 65.6%
Interest Calculation: Actual/360 Occupancy Rate at U/W: 94%
Call Protection: L (9.42), O (0.58) Occupancy Date: August 8, 2000
Cross Collateralization/Default: No Property Manager: Kimco Realty Corporation
Single Asset/Portfolio: Single Asset U/W DSCR: 1.31x
</TABLE>
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<PAGE>
Major Tenants at the Palm Plaza Shopping Center Property.
<TABLE>
<CAPTION>
IN-PLACE
% OF IN-PLACE ANNUALIZED
LEASE TOTAL ANNUALIZED BASE RENT
TENANT NAME EXPIRATION TENANT SF TENANT SF BASE RENT PER SQ. FT.
----------- ---------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
Kmart 11/30/17 86,479 25.3% $207,000 $2.39
Food 4 Less 12/31/10 52,640 15.4% $425,000 $8.07
</TABLE>
Lease Expiration Schedule.
SQ. FT. OF % OF CUMULATIVE
YEAR OF NUMBER OF LEASES LEASES TOTAL % OF
EXPIRATION EXPIRING EXPIRING. SQ. FT. TOTAL SQ. FT.
---------- ---------------- ---------- ------- -------------
2000 5 6,676 1.95% 1.95%
2001 8 18,242 5.33% 7.28%
2002 12 34,267 10.01% 17.29%
2003 5 7,652 2.24% 19.52%
2004 3 11,637 3.40% 22.92%
2005 5 16,415 4.79% 27.72%
2006 2 34,355 10.04% 37.75%
2007 1 14,200 4.15% 41.90%
2010 1 52,640 15.38% 57.28%
2011 1 4,500 1.31% 58.59%
2013 1 6,000 1.75% 60.35%
2017 1 86,479 25.26% 85.61%
2025 2 - 0.00% 85.61%
2029 1 29,650 8.66% 94.27%
Escrow Schedule.
RESERVE TYPE INITIAL RESERVE MONTHLY RESERVE DEPOSIT
------------ --------------- -----------------------
Real Estate Taxes Reserve $130,832 $45,466
TI & LC Reserve $200,000 $0
Replacement Reserve $0 $2,500
Operating History.
<TABLE>
<CAPTION>
TRAILING 12 MONTHS
1997 1998 1999 (AS OF JUNE 30, 2000) UNDERWRITTEN
---- ---- ---- --------------------- ------------
<S> <C> <C> <C> <C> <C>
Effective Gross Income $4,201,102 $4,425,442 $4,518,541 $4,404,197 $4,398,085
Net Operating Income $3,024,088 $3,085,810 $3,334,407 $3,234,180 $3,051,642
Net Cash Flow $2,887,534 $2,872,486 $3,307,501 $2,726,492 $2,842,851
</TABLE>
Palm Plaza Shopping Center Borrower. KIR Temecula L.P. is the borrower
under the Palm Plaza Shopping Center Loan. It is--
o a single purpose limited partnership formed under the laws of the
State of California,
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<PAGE>
o owned 0.5% by KIR Temecula 762 L.L.C., a Delaware limited liability
company and its general partner, and 99.5% by Kimco Income Operating
Partnership, L.P., a Delaware limited partnership, and
o controlled by Kimco Income REIT, a Maryland real estate investment
trust.
The Palm Plaza Shopping Center Property. The Palm Plaza Shopping Center
Property is a 37.78 acre property located in Temecula, California. It is
improved by a single story anchored community shopping center that was built in
1990. The improvements are comprised of 342,338 rentable square feet.
Based on a rent roll provided by the related borrower dated August 8, 2000,
the Palm Plaza Shopping Center Property is 94% occupied. The Palm Plaza Shopping
Center Property is occupied by 48 tenants, with the ten largest tenants
accounting for 255,838 square feet or approximately 74.7% of the property's
rentable area.
Escrow Information. The Palm Plaza Shopping Center Loan requires monthly
deposits into an escrow account in an amount estimated to be sufficient to pay
real estate taxes when due, except that prior to its anticipated repayment date
and if no event of default is continuing under the Palm Plaza Shopping Center
Loan documents, no deposits will be required for the proportionate share of
taxes payable by either Kmart or Union Bank, but only so long as the applicable
tenant is not in default under its lease and is both required to pay, and is
actually paying, its share of the taxes directly to the taxing authority.
The Palm Plaza Shopping Center Loan requires monthly deposits into an
escrow account in an amount estimated to be sufficient to pay insurance premiums
when due, but provides that, prior to the occurrence of a cash sweep event, if
the related borrower prepays the insurance premiums, and provides evidence of
payment to the lender, no such deposits will be collected.
The borrower under the Palm Plaza Shopping Center Loan is obligated to make
monthly payments of $10,000 during each ten month period prior to the expiration
of the TJ Maxx lease. The borrower has deposited $200,000 into a second leasing
reserve for the payment of leasing costs associated with the re-leasing of that
portion of the Palm Plaza Shopping Center Property not occupied by TJ Maxx. The
borrower may apply for disbursements of funds from this reserve in an amount
equal to the lesser of the actual leasing costs incurred in connection with a
new lease or $5.00 per rentable square foot of space leased under the new lease.
All funds in the reserve shall be disbursed to the related borrower upon request
at the time that both the TJ Maxx space and the portion of the space currently
leased to Pier One Imports have been leased at specified minimum rents for a
term ending on or after May 1, 2006.
Property Management. The Palm Plaza Shopping Center Property is subject to
a management agreement between the related borrower and Kimco Realty
Corporation, an affiliate of the related borrower. Kimco Realty Corporation,
together with its affiliates, is one of the nation's largest owners of
neighborhood and community shopping centers. As of March 1, 2000, Kimco's
portfolio included over 400 shopping centers with approximately 62 million
square feet of leasable area in 41 states throughout the Unites States.
Cash Management/Lockbox. The borrower under the Palm Plaza Shopping Center
Loan has agreed that from and after the earliest to occur of:
1. an event of default under the Palm Plaza Shopping Center Loan
documents,
2. three months prior to the anticipated repayment date, unless, by that
date, the Palm Plaza Shopping Center Borrower has a commitment for a
loan to refinance the Palm Plaza Shopping Center Loan,
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<PAGE>
3. the termination or expiration of the commitment letter referenced in
clause 2. above, or
4. the anticipated repayment date, and
continuing until the Palm Plaza Shopping Center Loan is repaid in full, all
rents from the Palm Plaza Shopping Center Property will be deposited into an
account controlled by lender with a bank approved by lender. After the
occurrence of a cash sweep event, and at the lender's request, all funds
deposited in the account will be transferred by the bank to an account under the
sole dominion and control of lender, to be applied by the lender in accordance
with the terms of the Palm Plaza Shopping Center Loan documents.
THE MORTGAGE LOAN SELLERS
We did not originate any of the mortgage loans that we intend to include in
the trust. We will acquire those mortgage loans from the following entities:
o Column Financial Inc.--94 mortgage loans, representing 40.2% of the
initial mortgage pool balance;
o Prudential Mortgage Capital Funding, LLC--52 mortgage loans,
representing 31.4% of the initial mortgage pool balance; and
o KeyBank National Association--84 mortgage loans, representing 28.4% of
the initial mortgage pool balance.
Column acquired four of the mortgage loans that it intends to sell to us,
representing 1.5% of the initial mortgage pool balance, from Union Capital
Investments, LLC, which originated each of those four mortgage loans. Column
acquired three of the mortgage loans that it intends to sell to us, representing
1.8% of the initial mortgage pool balance, from Allied Capital Corporation,
which originated each of those three mortgage loans. Column originated each of
the other mortgage loans that it intends to sell to us.
PMCF acquired 52 of the mortgage loans that it intends to sell to us,
representing 31.4% of the initial mortgage pool balance, from Prudential
Mortgage Capital Company, LLC, which originated 51 of those mortgage loans. PMCC
acquired one mortgage loan, representing 3.9% of the initial mortgage pool
balance, from Capital Lease Funding, L.P. The State of California Public
Employees' Retirement System originated that one mortgage loan. The mortgage
loan was subsequently restructured by Capital Lease Funding, L.P. and sold to
PMCC on October 5, 2000.
KeyBank acquired six of the mortgage loans that it intends to sell to us,
representing 1.6% of the initial mortgage pool balance, from National Realty
Finance L.C. in connection with KeyBank's purchase of that company from National
Realty Funding L.C. in January 2000. In addition, KeyBank acquired four of the
mortgage loans that it intends to sell to us, representing 3.7% of the initial
mortgage pool balance, from First Union Bank, which originated those loans.
KeyBank originated each of the other mortgage loans that it intends to sell to
us.
Column Financial, Inc. Column is a corporation organized under the laws of
Delaware. Its principal offices are in Atlanta, Georgia. Column underwrites and
closes multifamily rental 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 regional offices located in Bethesda, Maryland; Chicago,
Illinois; Cleveland, Ohio; Dallas, Texas; Denver, Colorado; Hollywood, Florida;
Houston, Texas; Los Angeles, California; Nashville, Tennessee; New York, New
York; Newport Beach, California; Norwalk, Connecticut; Philadelphia,
Pennsylvania; San Francisco, California; Seattle, Washington and Tampa, Florida.
Column has originated approximately 2,000 commercial and multifamily rental
mortgage loans
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<PAGE>
totaling $9.74 billion since beginning operations in 1993. Column is a
wholly-owned subsidiary of DLJ Mortgage Capital, Inc., which in turn is
wholly-owned subsidiary of Donaldson, Lufkin & Jenrette, Inc. Donaldson, Lufkin
& Jenrette, Inc. is our parent and the parent of Donaldson, Lufkin & Jenrette
Securities Corporation, one of the underwriters. A proposed acquisition by
Credit Suisse First Boston, Inc. of Donaldson, Lufkin & Jenrette, Inc. is
currently pending.
Prudential Mortgage Capital Funding, LLC/Prudential Mortgage Capital
Company, LLC. PMCF is a limited liability company organized under the laws of
the State of Delaware. PMCF is a wholly owned, limited purpose, subsidiary of
PMCC. PMCC is a real estate financial services company which originates
commercial and multifamily real estate loans throughout the United States. PMCF
was organized for the purpose of acquiring loans originated by PMCC and holding
them pending securitization or other disposition. PMCC has offices in Atlanta,
Chicago, San Francisco and Newark. The principal offices of PMCC are located at
4 Gateway Center, 8th Floor, 100 Mulberry Street, Newark, New Jersey 07102. PMCF
and PMCC are affiliates of Prudential Securities Incorporated, one of the
underwriters.
KeyBank National Association. KeyBank is a national banking association.
KeyBank provides financial services, including commercial and multifamily real
estate financing, throughout the United States. As of June 30, 2000, KeyBank had
total assets of approximately $75.9 billion, total liabilities of approximately
$69.7 billion and approximately $6.2 billion in stockholder's equity. The
principal executive offices of KeyBank are located at Key Tower, 127 Public
Square, Cleveland, Ohio 44114. Its telephone number is (216) 689-6300. KeyBank
is a wholly-owned subsidiary of KeyCorp. KeyCorp is also the parent of McDonald
Investments Inc., one of the underwriters, and Key Corporate Capital Inc. d/b/a
Key Commercial Mortgage, the initial master servicer and the initial special
sub-servicer with respect to the pooled mortgage loans.
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. It originates, underwrites and closes
first mortgage loans secured by all types of multifamily rental 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 regarding the
mortgage loan sellers and the originators has, in each case, been provided by
the party. Neither we nor any of the underwriters makes any representation or
warranty as to the accuracy or completeness of that information.
ASSIGNMENT OF THE UNDERLYING MORTGAGE LOANS
On or before the date of initial issuance of the offered certificates, each
of the mortgage loan sellers will transfer to us those mortgage loans that it is
including in the securitization, and we will transfer to the trust all of those
mortgage loans. In each case, the transferor will assign the subject mortgage
loans, without recourse, to the transferee.
In connection with the foregoing transfers, each related mortgage loan
seller will be required to deliver or cause the delivery of the following
documents, among others, to the trustee with respect to each of the mortgage
loans that it is selling to us for inclusion in the trust:
o either--
1. the original promissory note, endorsed without recourse to the
order of the trustee, or
2. if the original promissory note has been lost, a copy of that
note, together with a lost note affidavit;
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o the original or a copy of the mortgage instrument, together with
originals or copies of any intervening assignments of that document,
in each case, unless the particular document has not been returned
from the applicable recording office, with evidence of recording on
the document;
o the original or a copy of any separate assignment of leases and rents,
together with originals or copies of any intervening assignments of
that document, in each case, unless the particular document has not
been returned from the applicable recording office, with evidence of
recording on the document;
o an executed assignment of the related mortgage instrument in favor of
the trustee, in recordable form except for missing recording
information relating to that mortgage instrument;
o an executed assignment of any separate related assignment of leases
and rents in favor of the trustee, in recordable form except for
missing recording information relating to that assignment of leases
and rents;
o originals or copies of all written assumption, modification and
substitution agreements, if any, in those instances where the terms or
provisions of the mortgage instrument or promissory note have been
modified or the mortgage loan has been assumed;
o an original or copy of the lender's title insurance policy or, if a
title insurance policy has not yet been issued, a pro forma title
policy or a commitment for title insurance marked-up at the closing of
the mortgage loan; and
o in those cases where applicable, the original or a copy of the related
ground lease.
The trustee, either directly or through a custodian, is required to hold
all of the documents delivered to it with respect to the pooled mortgage loans
in trust for the benefit of the series 2000-CKP1 certificateholders. Within a
specified period of time following that delivery, the trustee directly or
through a custodian, will be further required to conduct a review of those
documents. The scope of the trustee's review of those documents will, in
general, be limited solely to confirming that they have been received. None of
the trustee, the master servicer, the special servicer or any custodian is under
any duty or obligation to inspect, review or examine any of the documents
relating to the pooled mortgage loans to determine whether the document is
valid, effective, enforceable, in recordable form or otherwise appropriate for
the represented purpose.
If--
o any of the above-described documents required to be delivered by a
mortgage loan seller to the trustee is not delivered or is otherwise
defective, and
o that omission or defect materially and adversely affects the interests
of the series 2000-CKP1 certificateholders, or any of them, in the
subject loan, including, but not limited to, a material and adverse
effect on any of the payments payable with respect to any of the
series 2000-CKP1 certificates or on the value of those certificates,
then the omission or defect will constitute a material document defect as to
which the series 2000-CKP1 certificateholders will have the rights against the
applicable mortgage loan seller described under "--Cures, Repurchases and
Substitutions" below.
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Within a specified period of time following the later of--
o the date on which the offered certificates are initially issued, and
o the date on which all recording information necessary to complete the
subject document is received by the trustee,
the trustee must submit for recording in the real property records of the
applicable jurisdiction each of the assignments of recorded loan documents in
its favor described above. Because most of the mortgage loans that we intend to
include in the trust are newly originated, many of those 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
As of the date of initial issuance of the offered certificates--
o Union Capital will make with respect to each mortgage loan that was
originated by it, sold to Column, and resold to us for inclusion in
the trust,
o Column will make with respect to each other mortgage loan that it is
selling to us for inclusion in the trust,
o PMCF will make with respect to each mortgage loan that it is selling
to us for inclusion in the trust, and
o KeyBank will make with respect to each mortgage loan that it is
selling to us for inclusion in the trust,
specific representations and warranties generally to the effect listed below,
together with any other representations and warranties as may be required by the
rating agencies. The respective representations and warranties to be made by
Column, PMCF, KeyBank and Union Capital may not be identical. However, the
representations and warranties to be made by each warranting party will, to the
extent applicable, include--
o The information relating to the mortgage loan set forth in the loan
schedule attached to the related mortgage loan purchase agreement,
will be true and correct in all material respects as of the related
due date in November 2000. That information will include select items
of information included on Exhibit A-1 to this prospectus supplement,
including--
1. the street address, including city, state and zip code, of the
related mortgaged real property,
2. the original principal balance and cut-off date principal balance
of the mortgage loan,
3. the amount of the monthly debt service payment due on the related
due date in December 2000,
4. the mortgage interest rate as of the related due date in November
2000, and
5. the original and remaining term to stated maturity and the
maturity date for the mortgage loan.
o Immediately prior to its transfer and assignment of the mortgage loan,
it had good title to, and was the sole owner of, the mortgage loan.
o The related mortgage instrument is a valid and, subject to the
exceptions in the next bullet point, enforceable first priority lien
upon the corresponding mortgaged real property and all buildings and
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fixtures on the property, free and clear of all liens and encumbrances
other than Permitted Encumbrances.
o The promissory note, the mortgage instrument and each other agreement
executed by or on behalf of the related borrower in connection with
the mortgage loan is the legal, valid and binding obligation of the
related maker, 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. In addition, each of the
foregoing agreements is enforceable against the maker in accordance
with its terms, except as enforcement may be limited by (1)
bankruptcy, insolvency, reorganization or other similar laws affecting
the enforcement of creditors' rights generally and (2) general
principles of equity, and except that certain provisions in those
agreements may be further limited or rendered unenforceable by
applicable law, but, subject to the limitations set forth in the
foregoing clauses (1) and (2), those limitations or unenforceability
will not render those loan documents invalid as a whole or
substantially interfere with the mortgagee's realization of the
principal benefits and/or security provided thereby.
o To its knowledge, there is no proceeding pending for the condemnation
of all or any material portion of the mortgaged real property for the
mortgage loan.
o There exists an American Land Title Association or equivalent form of
lender's title insurance policy or, if the title policy has yet to be
issued, a pro forma policy or marked up title insurance commitment 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 instrument in the original principal amount of
the mortgage loan after all advances of principal, subject only to--
1. the lien of current real property taxes, ground rents, water
charges, sewer rents and assessments not yet due and payable, and
2. the other exceptions set forth in the policy.
o The proceeds of the mortgage loan have been fully disbursed, except in
those cases where the full amount of the mortgage loan has been made,
but a portion of the proceeds is being held in escrow or reserve
accounts pending satisfaction of specific leasing criteria, repairs
and other matters with respect to the related mortgaged real property,
and there is no requirement for future advances under the mortgage
loan.
o If the related mortgage instrument is a deed of trust, a trustee, duly
qualified under applicable law, has been properly designated and
currently serves.
o Except as identified in the engineering report obtained in connection
with the origination of the mortgage loan, to its knowledge, the
related mortgaged real property is free and clear of any damage that
would materially and adversely affect its value as security for the
mortgage loan.
o If the mortgaged real property is covered by a secured creditor
impaired property policy, then the Seller has:
1. disclosed in the application for that policy or otherwise to the
insurer under that policy all "pollution conditions", as defined
in that policy, identified in any environmental reports related
to the particular mortgaged real property which are in the
warranting party's possession or are otherwise known to the
warranting party; and
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2. delivered or caused to be delivered to the insurer under that
policy copies of all environmental reports in its possession
related to the mortgaged real property;
in each case to the extent that the failure to make any such
disclosure or deliver any such report would materially and adversely
affect the trust's ability to recover under that policy.
The representations and warranties made by each of Column, PMCF, KeyBank
and Union Capital as listed and described above will be assigned by us to the
trustee under the pooling and servicing agreement. If--
o there exists a breach of any of the above-described representations
and warranties made by any of Column, PMCF, KeyBank or Union Capital,
and
o that breach materially and adversely affects the interests of the
series 2000-CKP1 certificateholders, or any of them, in the subject
loan, including, but not limited to, a material and adverse effect on
any of the payments payable with respect to any of the series
2000-CKP1 certificates or on the value of those certificates,
then that breach will be a material breach of the representation and warranty.
The rights of the trust against the applicable warranting party with respect to
any 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 by Column, PMCF, KeyBank or Union Capital with respect to any of
the mortgage loans included in the trust, as discussed under "--Representations
and Warranties" above, or a material document defect with respect to any of the
mortgage loans included in the trust, as discussed under "--Assignment of the
Underlying Mortgage Loans" above, then the warranting party, in the case of a
material breach of a representation or warranty, or the related mortgage loan
seller, in the case of a material document defect, will be required to take one
of the following courses of action:
o cure the material breach or the material document defect in all
material respects; or
o repurchase the affected mortgage loan at a price generally equal to
the sum of--
1. the Stated Principal Balance of the mortgage loan at the time of
purchase, plus
2. all unpaid and unadvanced interest, other than Post-ARD
Additional Interest and Default Interest, due with respect to
that mortgage loan through the due date in the collection period
of purchase, plus
3. all unreimbursed advances relating to that mortgage loan,
together with any unpaid interest on those advances owing to the
party or parties that made them, plus
4. all unpaid special servicing fees and other unpaid Additional
Trust Fund Expenses related to that mortgage loan, plus
5. any costs incurred in enforcing the repurchase obligation; or
o prior to the second anniversary of the date of initial issuance of the
offered certificates, so long as it does not result in a
qualification, downgrade or withdrawal of any rating assigned by
Moody's or
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Fitch to the series 2000-CKP1 certificates, as confirmed in writing by
each of those rating agencies, replace the affected mortgage loan with
a substitute mortgage loan that--
1. has comparable payment terms to those of the mortgage loan that
is being replaced, and
2. is acceptable to the series 2000-CKP1 controlling class
representative.
If any of Column, PMCF, KeyBank or Union Capital replaces one mortgage loan
with another, as described in the third bullet of the preceding paragraph, then
it will be required to pay to the trust the amount, if any, by which--
o the price at which it would have had to purchase the removed mortgage
loan, as described in the second bullet point of the preceding
paragraph, exceeds
o the Stated Principal Balance of the substitute mortgage loan as of the
date it is added to the trust.
The time period within which Column, PMCF, KeyBank or Union Capital, as
applicable, must complete the remedy, repurchase or substitution described in
the second preceding paragraph, will generally be limited to 90 days following
the earlier of its discovery or receipt of notice of the material breach or
material document defect, as the case may be. However, if Column, PMCF, KeyBank
or Union Capital, as applicable, is diligently attempting to correct the
problem, then it will be entitled to an additional 90 days to complete that
remedy, repurchase or substitution.
In addition to the foregoing, Column will--
o make the same representations and warranties, including those
discussed under "--Representations and Warranties" above, with respect
to each pooled mortgage loan originated by Union Capital as it does
with respect to each other mortgage loan sold by it to us for
inclusion in the trust, and
o have similar cure, repurchase or replacement obligations in the event
of material breaches of those representations and warranties.
In general, however, if--
o there exists a breach of any of those representations or warranties by
Column and a breach of any representation or warranty made by Union
Capital with respect to the same mortgage loan,
o those breaches otherwise give rise to a cure, repurchase or
replacement obligation on the part of both Column and Union Capital,
and
o Union Capital fails to satisfy its cure, repurchase or replacement
obligation within the time period provided,
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 commence only upon expiration of the cure,
repurchase or replacement period for Union Capital.
PMCC will be jointly and severally liable with PMCF for purposes of timely
completing any cure, repurchase or substitution of a PMCF mortgage loan as
contemplated above by this "--Cures, Repurchases and Substitutions" section.
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The cure/repurchase/substitution obligations of each of Column, PMCF, PMCC,
KeyBank and Union Capital described above, will constitute the sole remedy
available to the series 2000-CKP1 certificateholders in connection with a
material breach of any of the representations and warranties made by Column,
PMCF, KeyBank or Union Capital, as applicable, or a material document defect, in
any event with respect to a mortgage loan in the trust. No other person will be
obligated to perform those obligations in the event of a default on the part of
Column, PMCF, PMCC, KeyBank and/or Union Capital, as applicable.
Each of Column, PMCF, PMCC, KeyBank and Union Capital has only limited
assets with which to fulfill any repurchase/substitution obligations on its part
that may arise as a result of a material document defect or a material breach of
any of its representations or warranties. There can be no assurance that any of
Column, PMCF, PMCC, KeyBank or Union Capital, as the case may be, has or will
have sufficient assets with which to fulfill any repurchase/substitution
obligations on its part that may arise. Expenses incurred by the master servicer
and the trustee with respect to enforcing any repurchase/substitution obligation
will be borne by Column, PMCF, PMCC, KeyBank or Union Capital, as applicable,
or, if not, will be reimbursable out of the collection account to be maintained
by the master servicer.
If a material breach or a material document defect exists with respect to
any pooled mortgage loan that is cross-collateralized with one or more other
mortgage loans in the trust, and if the cross-collateralization can be
terminated without any adverse tax consequence for the trust, then the related
mortgage loan seller will be permitted to repurchase or replace only the
affected mortgage loan. Otherwise, the entire cross-collateralized group will be
treated as a single mortgage loan for purposes of--
o determining the materiality of the subject breach or document defect,
and
o the repurchase and substitution remedies.
CHANGES IN MORTGAGE POOL CHARACTERISTICS
The description in this prospectus supplement of the mortgage pool 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 monthly debt service
payments due on the mortgage loans on or before their respective due dates in
November 2000. Prior to the issuance of the offered certificates, one or more
mortgage loans may be removed from the mortgage pool if we consider the 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 those mortgage loans would materially alter the characteristics
of the mortgage pool as described in this prospectus supplement. We believe that
the information 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
interest rates and maturities, as well as the other characteristics of the
pooled mortgage loans described in this prospectus supplement, may vary, and the
actual initial mortgage pool balance may be as much as 5% larger or smaller than
the initial mortgage pool balance specified 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 date of initial issuance of the offered
certificates. That current report on Form 8-K will be filed, together with the
pooling and servicing agreement, with the SEC within 15 days after the initial
issuance of the offered certificates. If mortgage loans are removed from or
added to the mortgage pool, that removal or addition will be noted in that
current report on Form 8-K.
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SERVICING OF THE UNDERLYING MORTGAGE LOANS
GENERAL
The servicing of the mortgage loans in the trust will be governed by the
pooling and servicing agreement. The following summaries describe some of the
provisions of the pooling and servicing agreement relating to the servicing and
administration of the pooled mortgage loans and any REO Properties owned by the
trust. You should also refer to the accompanying prospectus, in particular the
section captioned "Description of the Governing Documents", for additional
important information regarding provisions of the pooling and servicing
agreement that relate to the rights and obligations of the master servicer and
the special servicer.
The master servicer and the special servicer must each service and
administer the pooled mortgage loans and any REO Properties owned by the trust
for which it is responsible, directly or through sub-servicers, in accordance
with--
o any and all applicable laws,
o the express terms of the pooling and servicing agreement,
o the express terms of the respective pooled mortgage loans, and
o to the extent consistent with the foregoing, the Servicing Standard.
In general, the master servicer will be responsible for the servicing and
administration of--
o all mortgage loans in the trust as to which no Servicing Transfer
Event has occurred, and
o all worked-out mortgage loans in the trust as to which no new
Servicing Transfer Event has occurred.
The special servicer, on the other hand, will be responsible for the
servicing and administration of each mortgage loan in the trust as to which a
Servicing Transfer Event has occurred and is continuing. The special servicer
will also be responsible for the administration of each REO Property in the
trust.
Despite the foregoing, the pooling and servicing agreement will require the
master servicer:
o to continue to collect information and, subject to the master
servicer's timely receipt of information from the special servicer,
prepare all reports to the trustee required to be collected or
prepared with respect to any specially serviced assets; and
o otherwise, to render other incidental services with respect to any
specially serviced assets.
Neither the master servicer nor the special servicer will have
responsibility for the performance by the other of its respective obligations
and duties under the pooling and servicing agreement, unless the same party acts
in both capacities.
The master servicer will transfer servicing of a pooled mortgage loan to
the special servicer upon the occurrence of a Servicing Transfer Event with
respect to that mortgage loan. The special servicer will return the servicing of
that mortgage loan to the master servicer, and that mortgage loan will be
considered to have been worked-out, if and when all Servicing Transfer Events
with respect to that mortgage loan cease to exist.
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In the case of a number of mortgage loans, it is expected that the master
servicer will perform some or all of its servicing duties through sub-servicers
that cannot be terminated, including by a successor master servicer, except for
cause.
THE INITIAL MASTER SERVICER, THE INITIAL SPECIAL SERVICER AND THE INITIAL
SPECIAL SUB-SERVICER
The Initial Master Servicer and Initial Special Sub-Servicer. Key Corporate
Capital Inc. d/b/a Key Commercial Mortgage will be the initial master servicer
and the initial special sub-servicer with respect to the mortgage pool. As
special sub-servicer, it will perform, on behalf of the special servicer,
substantially all of the special servicing duties with respect to the mortgage
pool. Any discussion in this prospectus supplement of the rights, duties and
obligations of the special servicer will, in general, be equally applicable to
the special sub-servicer. The pooling and servicing agreement and a separate
sub-servicing agreement will govern the special sub-servicing arrangement.
KCCI is a Michigan corporation. KCCI is a wholly owned subsidiary of
KeyBank National Association, which is a wholly owned subsidiary of KeyCorp.
KCCI's primary servicing location is 911 Main Street, Suite 1500, Kansas City,
Missouri 64105.
As of October 1, 2000, KCCI was responsible for the servicing of
approximately 3,567 commercial and multifamily loans with an aggregate principal
balance of approximately $7.2 billion, the collateral for which is located
throughout the United States, the District of Columbia, and the Virgin Islands.
Approximately 978 of the loans, with a principal balance of approximately $3.9
billion, pertain to commercial and multifamily mortgage-backed securities. The
portfolio includes multifamily, office, retail, hospitality and other types of
income producing properties. KCCI also services newly-originated loans and loans
acquired in the secondary market for issuers of commercial and multifamily
mortgage-backed securities, financial institutions and private investors. Fitch
and Moody's have approved KCCI as a master servicer for investment grade-rated
commercial and multifamily mortgage-backed securities.
The information set forth in this prospectus supplement concerning KCCI has
been provided by it. Neither we nor any of the underwriters makes any
representation or warranty as to the accuracy or completeness of this
information.
The Initial Special Servicer. Midland Loan Services, Inc. will be acting as
the initial special servicer under the pooling and servicing agreement. It is
anticipated that the initial master servicer will act as a sub-servicer on
behalf of the initial special servicer and, in that capacity, will perform
substantially all of the special servicing duties with respect to the mortgage
pool.
Midland, a wholly-owned subsidiary of PNC Bank, National Association, is a
real estate financial services company that provides loan servicing and asset
management for large pools of commercial and multifamily real estate assets.
Midland's address is 210 West 10th Street, 6th Floor, Kansas City, Missouri
64105.
As of August 31, 2000, Midland was servicing approximately 13,900
commercial and multifamily loans with a total principal balance of approximately
$48.8 billion. The collateral for these loans is located in all 50 states, the
District of Columbia, Puerto Rico and Canada. Approximately 9,950 of the loans,
with a total principal balance of approximately $39.3 billion, pertain to
commercial and multifamily mortgage-backed securities. The portfolio includes
multifamily, office, retail, hospitality and other types of income producing
properties. Midland also services newly-originated loans and loans acquired in
the secondary market for issuers of commercial and multifamily mortgage-backed
securities, financial institutions and private investors.
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Midland is approved as a master servicer, special servicer and primary
servicer for investment-grade rated commercial and multifamily mortgage-backed
securities by S&P, Moody's and Fitch. Midland has received the highest rankings
as a master, primary, and special servicer from both S&P and Fitch. S&P ranks
Midland as "Strong" and Fitch ranks Midland as "1" for each category. Midland is
also a HUD/FHA-approved mortgagee and a Fannie Mae-approved multifamily loan
servicer.
The information set forth in this prospectus supplement concerning Midland
has been provided by it. Neither we nor any of the underwriters makes any
representation or warranty as to the accuracy or completeness of this
information.
SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES
The Master Servicing Fee. The principal compensation to be paid to the
master servicer with respect to its master servicing activities will be the
master servicing fee.
The master servicing fee:
o will be earned with respect to each and every mortgage loan,
including--
1. each specially serviced mortgage loan, if any,
2. each mortgage loan, if any, as to which the corresponding
mortgaged real property has become an REO Property, and
3. each mortgage loan as to which defeasance has occurred; and
o in the case of each mortgage loan, will--
1. be calculated on the same interest accrual basis as that mortgage
loan, which will be a 30/360 Basis, an Actual/360 Basis or an
Actual/365 Basis, as applicable,
2. accrue at a master servicing fee rate that, on a loan-by-loan
basis, ranges from 0.05% per annum to 0.15% per annum,
3. accrue on the same principal amount as interest accrues or is
deemed to accrue from time to time with respect to that mortgage
loan, and
4. be payable monthly from amounts received with respect to interest
on that mortgage loan.
As of the date of initial issuance of the series 2000-CKP1 certificates,
the weighted average master servicing fee for the mortgage pool will be 0.0565%
per annum. In the case of four mortgage loans, representing 0.8% of the initial
mortgage pool balance, the master servicer will be obligated to remit the entire
master servicing fee to a sub-servicer that cannot be terminated, including by a
successor master servicer, except for cause.
Prepayment Interest Shortfalls. The pooling and servicing agreement
provides 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 with respect to the related payment date in an amount
equal to the lesser of:
o the excess, if any, of --
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1. the total amount of those Prepayment Interest Shortfalls, over
2. the total amount of Prepayment Interest Excesses collected with
respect to the mortgage pool during that collection period; and
o with respect to each and every mortgage loan for which the master
servicer receives master servicing fees during that collection period,
the portion of those fees calculated at an annual rate of 0.02% per
annum.
No other master servicing compensation will be available to cover
Prepayment Interest Shortfalls.
Any payments made by the master servicer with respect to any payment date
to cover Prepayment Interest Shortfalls will be included in the Available P&I
Funds for that payment date, as described under "Description of the Offered
Certificates--Payments" in this prospectus supplement. If the amount of
Prepayment Interest Shortfalls incurred with respect to the mortgage pool during
any collection period exceeds the sum of--
o any Prepayment Interest Excesses collected with respect to the
mortgage pool during that collection period, and
o any payments made by the master servicer with respect to the related
payment date to cover those Prepayment Interest Shortfalls,
then the resulting Net Aggregate Prepayment Interest Shortfall will be allocated
among the respective interest-bearing classes of the series 2000-CKP1
certificates, in reduction of the interest payable on those certificates, as and
to the extent described under "Description of the Offered
Certificates--Payments--Payments of Interest" in this prospectus supplement.
Principal Special Servicing Compensation. The principal compensation to be
paid to the special servicer with respect to its special servicing activities
will be--
o the special servicing fee,
o the workout fee, and
o the liquidation fee.
Special Servicing Fee. The special servicing fee:
o will be earned with respect to--
1. each specially serviced mortgage loan, if any, and
2. each mortgage loan, if any, as to which the corresponding
mortgaged real property has become an REO Property;
o in the case of each mortgage loan described in the foregoing bullet
point, will--
1. be calculated on the same interest accrual basis as that mortgage
loan, which will be a 30/360 Basis, an Actual/360 Basis or an
Actual/365 Basis, as applicable,
2. accrue at a special servicing fee rate of 0.25% per annum, and
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3. accrue on the same principal amount as interest accrues or is
deemed to accrue from time to time with respect to that mortgage
loan, and
o will be payable monthly from general collections on all the mortgage
loans and any REO Properties in the trust, that are on deposit in the
master servicer's collection account from time to time.
Workout Fee. The special servicer will, in general, be entitled to receive
a workout fee with respect to each worked-out mortgage loan in the trust. The
workout fee will be payable out of, and will be calculated by application of a
workout fee rate of 1.0% to, each payment of interest, other than Default
Interest and Post-ARD Additional Interest, and principal received on the
mortgage loan for so long as it remains a worked-out mortgage loan. The workout
fee with respect to any worked-out mortgage loan will cease to be payable if a
new Servicing Transfer Event occurs with respect to that loan. However, a new
workout fee would become payable if the mortgage loan again became a worked-out
mortgage loan with respect to that new Servicing Transfer Event.
If the special servicer is terminated or resigns, it will retain the right
to receive any and all workout fees payable with respect to mortgage loans that
were worked-out during the period that it acted as special servicer and as to
which no new Servicing Transfer Event had occurred as of the time of its
termination or resignation. The successor special servicer will not be entitled
to any portion of those 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 payable to the series 2000-CKP1 certificateholders.
Liquidation Fee. The special servicer will be entitled to receive a
liquidation fee with respect to each specially serviced mortgage loan in the
trust for which it obtains a full or discounted payoff from the related
borrower. The special servicer will also be entitled to receive a liquidation
fee with respect to any specially serviced mortgage loan or REO Property in the
trust as to which it receives any liquidation proceeds or condemnation proceeds,
except as described in the next paragraph. As to each specially serviced
mortgage loan and REO Property in the trust, 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, exclusive of any portion of that payment or
proceeds that represents a recovery of Default Interest, late payment charges,
Post-ARD Additional Interest, prepayment premiums and yield maintenance charges.
Despite anything to the contrary described in the prior paragraph, no
liquidation fee will be payable based on, or out of, proceeds received in
connection with:
o the repurchase or replacement of any mortgage loan in the trust for a
material breach of representation or warranty or a material document
defect, as described under "Description of the Mortgage Pool--Cures,
Repurchases and Substitutions" in this prospectus supplement;
o the purchase of any defaulted mortgage loan or REO Property in the
trust by the master servicer, the special servicer or any single
certificateholder or group of certificateholders of the series
2000-CKP1 controlling class, as described under "--Sale of Defaulted
Mortgage Loans" below; or
o the purchase of all of the mortgage loans and REO Properties in the
trust by the master servicer, the special servicer or any single
certificateholder or group of certificateholders of the series
2000-CKP1 controlling class in connection with the termination of the
trust, as described under "Description of the Offered
Certificates--Termination" in this prospectus supplement.
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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 payable to the series 2000-CKP1 certificateholders.
Additional Servicing Compensation. As additional master servicing
compensation, the master servicer will be entitled to receive the excess, if
any, of--
o the amount of any Prepayment Interest Excesses collected with respect
to the mortgage pool during any collection period, over
o the amount of any Prepayment Interest Shortfalls incurred with respect
the mortgage pool during that collection period.
In addition, the following items collected on the pooled mortgage loans
will be allocated between the master servicer and the special servicer as
additional compensation in accordance with the pooling and servicing agreement:
o any late payment charges and Default Interest collected during any
collection period and not otherwise applied--
1. to pay the master servicer, the special servicer or the trustee,
as applicable, any unpaid interest on advances made by that party
with respect to the related mortgage loan, and
2. to reimburse the trust for any interest on advances that were
made with respect to the related mortgage loan, which interest
was paid to the master servicer, the special servicer or the
trustee, as applicable, from a source of funds other than late
payment charges and Default Interest collected on the related
mortgage loan; and
o any modification fees, assumption fees, assumption application fees,
earnout fees, consent/waiver fees and other comparable transaction
fees and charges.
The master servicer will be authorized to invest or direct the investment
of funds held in its collection account, or in any escrow and/or reserve account
maintained by it, in Permitted Investments. See "--Collection Account" below.
The master servicer--
o will generally be entitled to retain any interest or other income
earned on those funds, and
o will be required to cover any losses of principal from its own funds,
to the extent those losses are incurred with respect to investments
made for the master servicer's benefit.
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 of those accounts.
The special servicer will be authorized to invest or direct the investment
of funds held in its REO account in Permitted Investments. See "--REO
Properties" below. The special servicer--
o will be entitled to retain any interest or other income earned on
those funds, and
o will be required to cover any losses of principal from its own funds.
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 the special servicer's REO account.
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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 and servicing agreement. The master servicer and
the special servicer will not be entitled to reimbursement for these expenses
except as expressly provided in the pooling and servicing 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 pooled mortgage loan after a default, delinquency or
other unanticipated event, or in connection with the administration of any REO
Property in the trust, will be servicing advances. Servicing advances will be
reimbursable from future payments and other collections, including insurance
proceeds, condemnation proceeds and liquidation proceeds, received in connection
with the related mortgage loan or REO Property. In addition, the special
servicer may periodically require the master servicer to reimburse the special
servicer for any servicing advances made by it. Upon reimbursing the special
servicer for any servicing advance, the master servicer will be deemed to have
made the advance.
The special servicer may request the master servicer to make servicing
advances with respect to a specially serviced mortgage loan or REO Property, in
lieu of the special servicer's making that advance itself. The special servicer
must make the request in writing, in a timely manner that does not adversely
affect the interests of any series 2000-CKP1 certificateholders. The master
servicer must make the requested servicing advance within a specified number of
days following the master servicer's receipt of the request, accompanied by an
adequate description of the subject advance and back-up information. If the
request is timely and properly made, the special servicer will be relieved of
any obligations with respect to a servicing advance that it requests the master
servicer to make, regardless of whether or not the master servicer actually
makes that advance.
If the master servicer or the special servicer is required under the
pooling and servicing agreement to make a servicing advance, but neither does so
within ten days after the servicing advance is required to be made, then the
trustee will be required:
o if it has actual knowledge of the failure, to give the defaulting
party notice of its failure; and
o if the failure continues for three more business days, to make the
servicing advance.
Despite 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 its reasonable and
good faith judgment, would not be ultimately recoverable from expected
collections on the related mortgage loan or REO Property. If the master
servicer, the special servicer or the trustee makes any servicing advance that
it subsequently determines, in its judgment, is not recoverable from expected
collections on the related mortgage loan or REO Property, it may obtain
reimbursement for that advance, together with interest on that advance, out of
general collections on the mortgage loans and any REO Properties on deposit in
the master servicer's collection account from time to time.
The master servicer will be permitted to pay, and the special servicer may
direct the payment of, some servicing expenses directly out of the master
servicer's collection account without regard to the relationship between the
expense and the funds from which it is being paid. The most significant of those
servicing expenses relate to the remediation of any adverse environmental
circumstance or condition at any of the mortgaged real properties. In addition,
the pooling and servicing 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 master servicer's collection account any servicing
expense that, if advanced by the master servicer or the special servicer, would
not be recoverable from expected collections on the related mortgage loan or REO
Property.
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This is only to be done, however, when the master servicer, or the special
servicer if a specially serviced asset is involved, has determined in accordance
with the Servicing Standard that making the payment is in the best interests of
the series 2000-CKP1 certificateholders, as a collective whole.
The master servicer, the special servicer and the trustee will be entitled
to receive interest on servicing advances made by them. The interest will accrue
on the amount of each servicing advance for so long as the 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 that prime rate may change
from time to time. Interest accrued with respect to any servicing advance will
be payable at the time that advance is reimbursed--
o first, out of any Default Interest and late payment charges collected
on the related mortgage loan subsequent to the accrual of that advance
interest, and
o then, after the advance has been reimbursed, but only if and to the
extent that the Default Interest and late payment charges referred to
in the prior bullet point are insufficient to cover the advance
interest, out of any amounts on deposit in the master servicer's
collection account.
THE SERIES 2000-CKP1 CONTROLLING CLASS REPRESENTATIVE
Controlling Class. As of any date of determination, the controlling class
of series 2000-CKP1 certificateholders will be the holders of the most
subordinate class of series 2000-CKP1 certificates then outstanding, other than
the class S, D, E and R certificates, that has a total principal balance that is
not less than 25% of that class's original total principal balance. However, if
no class of series 2000-CKP1 certificates, exclusive of the class S, D, E and R
certificates, has a total principal balance that satisfies this requirement,
then the controlling class of series 2000-CKP1 certificateholders will be the
holders of the most subordinate class of series 2000-CKP1 certificates then
outstanding, other than the class S, D, E and R certificates, that has a total
principal balance greater than zero. For purposes of determining the series
2000-CKP1 controlling class, the class A-1A and A-1B certificates will represent
a single class.
Election of the Series 2000-CKP1 Controlling Class Representative. The
holders of certificates representing more than 50% of the total principal
balance of the series 2000-CKP1 controlling class, will be entitled to--
o select a representative having the rights and powers described under
"--The Series 2000-CKP1 Controlling Class Representative--Rights and
Powers of the Series 2000-CKP1 Controlling Class Representative"
below, or
o replace an existing series 2000-CKP1 controlling class representative.
The trustee will be required to notify promptly all the certificateholders
of the series 2000-CKP1 controlling class that they may select a series
2000-CKP1 controlling class representative upon:
o the receipt by the trustee of written requests for the selection of a
series 2000-CKP1 controlling class representative from the holders of
certificates representing more than 50% of the total principal balance
of the series 2000-CKP1 controlling class;
o the resignation or removal of the person acting as series 2000-CKP1
controlling class representative; or
o a determination by the trustee that the controlling class of series
2000-CKP1 certificateholders has changed.
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The notice will explain the process for selecting a series 2000-CKP1
controlling class representative. The appointment of any person as a series
2000-CKP1 controlling class representative will not be effective until:
o the trustee has received confirmation, in any form acceptable to the
trustee, that the appointment of that person as the series 2000-CKP1
controlling class representative is acceptable to the holders of
certificates representing more than 50% of the total principal balance
of the series 2000-CKP1 controlling class; and
o that person provides the trustee with--
1. written confirmation of its acceptance of its appointment,
2. written confirmation of its agreement to keep confidential all
information received by it with respect to the trust,
3. an address and telecopy number for the delivery of notices and
other correspondence, and
4. a list of officers or employees of the person with whom the
parties to the pooling and servicing agreement may deal,
including their names, titles, work addresses and telecopy
numbers.
Resignation and Removal of the Series 2000-CKP1 Controlling Class
Representative. The series 2000-CKP1 controlling class representative may at any
time resign by giving written notice to the trustee, the special servicer and
each certificateholder of the series 2000-CKP1 controlling class. The holders of
certificates representing more than 50% of the total principal balance of the
series 2000-CKP1 controlling class will be entitled to remove any existing
series 2000-CKP1 controlling class representative by giving written notice to
the trustee, the special servicer and to the existing series 2000-CKP1
controlling class representative.
Rights and Powers of the Series 2000-CKP1 Controlling Class Representative.
The series 2000-CKP1 controlling class representative will be entitled to advise
the special servicer with respect to the actions identified in clauses 1.
through 7. of the following sentence. In addition, except as otherwise indicated
below in this "--Rights and Powers of the Series 2000-CKP1 Controlling Class
Representative" subsection, the special servicer will not be permitted to take
any of the following actions as to which the series 2000-CKP1 controlling class
representative has objected in writing within ten business days of having been
notified in writing of the particular action and having been provided with all
reasonably requested information with respect to the particular action:
1. any foreclosure upon or comparable conversion of, which may include
acquisitions of an REO Property, the ownership of properties securing
those specially serviced mortgage loans in the trust as come into and
continue in default;
2. any modification, amendment or waiver of a monetary term, including
the timing of payments, or any material non-monetary term of a
specially serviced mortgage loan in the trust;
3. any proposed sale of a defaulted mortgage loan or REO Property out of
the trust for less than par, other than in connection with the
termination of the trust as described under "Description of the
Offered Certificates--Termination" in this prospectus supplement;
4. any acceptance of a discounted payoff with respect to a specially
serviced mortgage loan in the trust;
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5. any determination to bring an REO Property held by the trust into
compliance with applicable environmental laws or to otherwise address
hazardous material located at the REO Property;
6. any release of collateral for a specially serviced mortgage loan in
the trust, other than in accordance with the terms of, or upon
satisfaction of, that mortgage loan; and
7. any acceptance of substitute or additional collateral for a specially
serviced mortgage loan in the trust, other than in accordance with the
terms of that mortgage loan.
Notwithstanding the foregoing, no advice, direction or objection given or
made by the series 2000-CKP1 controlling class representative, as contemplated
by the preceding paragraph, may:
o require or cause the special servicer to violate applicable law, the
terms of any pooled mortgage loan or any other provision of the
pooling and servicing agreement, including the special servicer's
obligation to act in accordance with the Servicing Standard;
o result in an adverse tax consequence for the trust;
o expose the trust, us, the master servicer, the special servicer, the
trustee or any of our or their respective affiliates, directors,
officers, employees or agents, to any material claim, suit or
liability; or
o expand the scope of the master servicer's or special servicer's
responsibilities under the pooling and servicing agreement.
The special servicer is to disregard any advice, direction or objection given or
made by the series 2000-CKP1 controlling class representative that would have
any of the effects described in the immediately preceding four bullet points.
Furthermore, the special servicer will not be obligated to seek approval from
the series 2000-CKP1 controlling class representative for any actions to be
taken by the special servicer with respect to any particular specially serviced
mortgage loan if--
o the special servicer has, as described in the first paragraph under
this "--Rights and Powers of the Series 2000-CKP1 Controlling Class
Representative" subsection, notified the series 2000-CKP1 controlling
class representative in writing of various actions that the special
servicer proposes to take with respect to the work-out or liquidation
of that mortgage loan and has provided the series 2000-CK1 controlling
class representative with all information reasonably requested under
the terms of the pooling and servicing agreement by the series
2000-CKP1 controlling class representative with respect to those
actions, and
o for 10 business days following its receipt of that notice and
information, the series 2000-CKP1 controlling class representative has
objected to all of those proposed actions and has failed to suggest
any alternative actions that the special servicer considers to be
consistent with the Servicing Standard.
When reviewing the rest of this "Servicing of the Underlying Mortgage
Loans" section, it is important that you consider the effects that the rights
and powers of the series 2000-CKP1 controlling class representative discussed
above could have on the actions of the special servicer.
Liability to Borrowers. In general, any and all expenses of the series
2000-CKP1 controlling class representative are to be borne by the holders of the
controlling class, in proportion to their respective percentage interests in
that class, and not by the trust. However, if a claim is made against the series
2000-CKP1
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controlling class representative by a borrower with respect to the pooling and
servicing agreement or any particular mortgage loan, the series 2000-CKP1
controlling class representative is to notify immediately the trustee, the
master servicer and the special servicer. Subject to the discussion under
"Description of the Governing Documents--Certain Matters Regarding the Master
Servicer, the Special Servicer, the Manager and Us" in the accompanying
prospectus, the special servicer will assume the defense of the claim at the
expense of the trust fund against the series 2000-CKP1 controlling class
representative, but only if--
o the special servicer, the master servicer or the trust are also named
parties to the same action, and
o in the judgment of the special servicer,
1. the series 2000-CKP1 controlling class representative acted in
good faith, without negligence or willful misfeasance, with
regard to the particular matter at issue, and
2. there is no potential for the special servicer, the master
servicer or the trust to be an adverse party in the action as
regards the series 2000-CKP1 controlling class representative.
Liability to the Trust and Certificateholders. The series 2000-CKP1
controlling class representative may have special relationships and interests
that conflict with those of the holders of one or more classes of the offered
certificates. In addition, the series 2000-CKP1 controlling class representative
does not have any duties to the holders of any class of series 2000-CKP1
certificates other than the controlling class. It may act solely in the
interests of the certificateholders of the series 2000-CKP1 controlling class
and will have no liability to any other series 2000-CKP1 certificateholders for
having done so. No series 2000-CKP1 certificateholder may take any action
against the series 2000-CKP1 controlling class representative for its having
acted solely in the interests of the certificateholders of the series 2000-CKP1
controlling class.
BENEFICIAL OWNERS OF THE CONTROLLING CLASS
If the controlling class of series 2000-CKP1 certificates is held in
book-entry form, then any beneficial owner of those certificates whose identity
and beneficial ownership interest has been proven to the satisfaction of the
trustee, will be entitled--
o to receive all notices described under "--The Series 2000-CKP1
Controlling Class Representative" above, and
o to exercise directly all rights described under "--The Series
2000-CKP1 Controlling Class Representative" above,
that it otherwise would if it were the registered holder of certificates of the
series 2000-CKP1 controlling class.
REPLACEMENT OF THE SPECIAL SERVICER
The series 2000-CKP1 controlling class representative may, upon not less
than 30 days' prior written notice to the respective parties to the pooling and
servicing agreement, remove any existing special servicer, with or without
cause, and appoint a successor special servicer, except that, if the removal is
without cause, the cost of transferring the special servicing responsibilities
to a successor special servicer will be the responsibility of the series
2000-CKP1 controlling class certificateholders. In addition, for so long as Key
Corporate Capital Inc. d/b/a Key Commercial Mortgage acts as both master
servicer and special sub-servicer under the pooling and servicing agreement, it
may remove Midland as special servicer under the pooling and servicing
agreement, with or without cause, and appoint a successor special servicer. In
either of the foregoing cases, any appointment of a successor special servicer
will be subject to, among other things, receipt by the trustee of--
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1. written confirmation from each of Moody's and Fitch that the
appointment will not result in a qualification, downgrade or
withdrawal of any of the ratings then assigned thereby to the series
2000-CKP1 certificates, and
2. the written agreement of the proposed special servicer to be bound by
the terms and conditions of the pooling and servicing agreement,
together with an opinion of counsel regarding, among other things, the
enforceability of the pooling and servicing agreement against the
proposed special servicer.
In connection with any termination as described in the preceding paragraph,
the terminated special servicer will be entitled to:
o payment out of the master servicer's collection account for all
accrued and unpaid special servicing fees and additional special
servicing compensation; and
o reimbursement by the successor special servicer for any outstanding
servicing advances made by the terminated special servicer, together
with interest.
Upon reimbursement, any advance will be treated as if it were made by the
successor special servicer.
ENFORCEMENT OF DUE-ON-SALE AND DUE-ON-ENCUMBRANCE PROVISIONS
The master servicer or the special servicer, as applicable, will be
required to determine, in a manner consistent with the Servicing Standard,
whether to exercise any right the lender under any pooled mortgage loan may have
under either a due-on-sale or due-on-encumbrance clause to accelerate payment of
that mortgage loan. However, except as described in the next sentence and
subject to the related loan documents, 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 of Moody's and Fitch that this action would not result in the
qualification, downgrade or withdrawal of any of the ratings then assigned by
the rating agency to the series 2000-CKP1 certificates. With respect to
due-on-sale clauses, this requirement will apply only if the subject mortgage
loan, together with all other pooled mortgage loans that are
cross-collateralized with the subject mortgage loan or that have been made to
the same borrower or affiliated borrowers, has a total cut-off date principal
balance in excess of $20,000,000. In the case of due-on-encumbrance provisions,
this requirement will always apply.
MODIFICATIONS, WAIVERS, AMENDMENTS AND CONSENTS
The special servicer, with respect to the specially serviced mortgage loans
in the trust, and the master servicer, with respect to the other pooled mortgage
loans, each may, consistent with the Servicing Standard, agree to:
o modify, waive or amend any term of any mortgage loan;
o extend the maturity of any mortgage loan;
o defer or forgive the payment of interest on and principal of any
mortgage loan;
o defer or forgive the payment of late payment charges on any mortgage
loan;
o permit the release, addition or substitution of collateral securing
any mortgage loan; or
o permit the release, addition or substitution of the borrower or any
guarantor of any mortgage loan.
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The ability of the special servicer or the master servicer to agree to any
of the foregoing, however, is subject to the discussion under "--The Series
2000-CKP1 Controlling Class Representative" and "--Enforcement of Due-on-Sale
and Due-on-Encumbrance Provisions" above, and further, to each of the following
limitations, conditions and restrictions:
o With limited exception, neither the special servicer nor the master
servicer may agree to modify, waive or amend any term of, or take or
consent to the master servicer's taking any of the other
above-referenced actions with respect to any mortgage loan in the
trust, if doing so would--
1. affect the amount or timing of any related payment of principal,
interest or other amount payable under the mortgage loan, or
2. in the judgment of the master servicer or special servicer, as
applicable, materially impair the security for the mortgage loan
or reduce the likelihood of timely payment of amounts due on the
mortgage loan,
unless a material default on the mortgage loan has occurred or, in the special
servicer's judgment, a default with respect to payment on the mortgage loan is
reasonably foreseeable, and the modification, waiver, amendment or other action
is reasonably likely to produce a greater recovery to the series 2000-CKP1
certificateholders, as a collective whole, on a present value basis than would
liquidation.
o Neither the master servicer nor the special servicer may extend the
date on which any balloon payment is scheduled to be due on any
mortgage loan in the trust to a date beyond the earliest of--
1. the fifth anniversary of the mortgage loan's original stated
maturity date,
2. two years prior to the rated final payment date,
3. if the mortgage loan is secured by a lien solely or primarily on
the related borrower's leasehold interest in the corresponding
mortgaged real property, 20 years or, to the extent consistent
with the Servicing Standard, giving due consideration to the
remaining term of the ground lease, ten years, prior to the end
of the then current term of the related ground lease, plus any
unilateral options to extend, and
4. if the mortgage loan is secured by a mortgaged real property that
is covered by an environmental insurance policy, two years prior
to the expiration of the term of that policy, unless the master
servicer or special servicer has obtained a Phase I and/or Phase
II environmental assessment that supports that there are no
circumstances or conditions present with respect to that property
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 or regulations.
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 in the trust, that would--
1. cause any of REMIC I, REMIC II or REMIC III to fail to qualify as
a REMIC under the Internal Revenue Code of 1986,
2. result in the imposition of any tax on prohibited transactions or
contributions after the startup date of any of REMIC I, REMIC II
or REMIC III under the Internal Revenue Code, or
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3. adversely affect the status of any portion of the trust that is
intended to be a grantor trust under the Internal Revenue Code.
o Neither the master servicer nor the special servicer may permit any
borrower to add or substitute any real estate collateral for any
mortgage loan in the trust, unless the master servicer or special
servicer, as applicable, has first--
1. determined, based upon an environmental assessment prepared by an
independent person who regularly conducts environmental
assessments, at the expense of the borrower, that--
(a) the additional or substitute collateral is in compliance
with applicable environmental laws and regulations, and
(b) that there are no circumstances or conditions present with
respect to the 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 or regulations; and
2. received confirmation from each of Moody's and Fitch that the
addition or substitution of collateral will not result in a
qualification, downgrade or withdrawal of any rating then
assigned by the rating agency to a class of series 2000-CKP1
certificates.
o Subject to limited exceptions, neither the master servicer nor the
special servicer may release or consent to the master servicer's
releasing any material collateral securing an outstanding mortgage
loan in the trust other than in accordance with the terms of, or upon
satisfaction of, the mortgage loan.
The foregoing limitations, conditions and restrictions will not apply to
any of the acts referenced in this "--Modifications, Waivers, Amendments and
Consents" section that occurs automatically, or that results from the exercise
of a unilateral option by the related borrower within the meaning of Treasury
Regulation Section 1.1001-3(c)(2)(iii), in any event, under the terms of the
subject mortgage loan in effect on the date of initial issuance of the offered
certificates or, in the case of a replacement mortgage loan, on the date it is
added to the trust. Also, 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 judgment, opposition would
not ultimately prevent the confirmation of the plan or one substantially
similar, despite the discussion above.
Notwithstanding the foregoing, the master servicer will be permitted, in
the case of an ARD Loan that is not a specially serviced mortgage loan, after
the related anticipated repayment date, to waive any or all of the Post-ARD
Additional Interest accrued on that mortgage loan, if:
o the related borrower is ready and willing to pay all other amounts due
under the mortgage loan in full, including the entire principal
balance; and
o the master servicer determines that waiving the trust's right to
receive that Post-ARD Additional Interest is in accordance with the
Servicing Standard.
The master servicer will not have any liability to the trust, the series
2000-CKP1 certificateholders or any other person for any such determination that
is made in accordance with the Servicing Standard. The pooling and servicing
agreement will also limit the master servicer's and the special servicer's
ability to institute an enforcement action solely for the collection of Post-ARD
Additional Interest.
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All material modifications, waivers and amendments entered into with
respect to the pooled mortgage loans are to be in writing. Each of the master
servicer and the special servicer, as applicable, must deliver to the trustee
for deposit in the related mortgage file, an original counterpart of the
agreement relating to each modification, waiver or amendment agreed to by it,
promptly following its execution.
REQUIRED APPRAISALS
Promptly following the occurrence of any Appraisal Trigger Event with
respect to any of the pooled mortgage loans, the special servicer must obtain,
and deliver to the trustee and master servicer a copy of, an appraisal of the
related mortgaged real property from an independent appraiser meeting the
qualifications imposed in the pooling and servicing agreement, unless--
o an appraisal had previously been obtained within the prior twelve
months, and
o there has been no material change in the circumstances surrounding the
related mortgaged real property subsequent to that appraisal that
would, in the judgment of the special servicer, materially affect the
value set forth in that earlier appraisal.
Notwithstanding the foregoing, if the Stated Principal Balance of the
subject mortgage loan is less than $1,000,000, then, unless the series 2000-CKP1
controlling class representative objects, the special servicer may perform an
internal valuation of the related mortgaged real property.
As a result of any appraisal or other valuation, it may be determined that
an Appraisal Reduction Amount exists with respect to the subject mortgage loan.
An Appraisal Reduction Amount is relevant to the determination of the amount of
any advances of delinquent interest required to be made with respect to the
affected mortgage loan. See "Description of the Offered Certificates--Advances
of Delinquent Monthly Debt Service Payments" in this prospectus supplement.
If an Appraisal Trigger Event occurs with respect to any mortgage loan in
the trust, then the special servicer will have an ongoing obligation to obtain
or perform, as the case may be, within 30 days of each anniversary of the
occurrence of that Appraisal Trigger Event, an update of the prior required
appraisal or other valuation. Based upon that 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 the mortgage loan. This ongoing
obligation will cease if and when--
o the subject mortgage loan has become a worked-out mortgage loan as
contemplated under "--General" above, and
o no other Servicing Transfer Event or Appraisal Trigger Event has
occurred with respect to the subject mortgage loan during the
preceding three months.
The cost of each required appraisal, and any update of that appraisal, will
be advanced by the master servicer, at the direction of the special servicer,
and will be reimbursable to the master servicer as a servicing advance.
Notwithstanding the foregoing, the series 2000-CKP1 controlling class
representative will have the right at any time within six months of the date of
any appraisal to require that the special servicer obtain a new appraisal with
respect to the subject mortgage loan, at the expense of the series 2000-CKP1
controlling class certificateholders. Upon receipt of the new appraisal, the
special servicer will redetermine any Appraisal Reduction Amount.
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COLLECTION ACCOUNT
General. The master servicer will be required to establish and maintain a
collection account for purposes of holding payments and other collections that
it receives with respect to the pooled mortgage loans. That collection account
must be maintained in a manner and with a depository institution that satisfies
rating agency standards for securitizations similar to the one involving the
offered certificates.
The funds held in the master servicer's collection account may be held as
cash or invested in Permitted Investments. Subject to the limitations in the
pooling and servicing agreement, any interest or other income earned on funds in
the master servicer's collection account will be paid to the master servicer as
additional compensation.
Deposits. The master servicer must deposit or cause to be deposited in its
collection account, within one business day following receipt, in the case of
payments from borrowers and other collections on the pooled mortgage loans, or
as otherwise required under the pooling and servicing agreement, the following
payments and collections received or made by or on behalf of the master servicer
with respect to the pooled mortgage loans subsequent to the date of initial
issuance of the offered certificates:
o all principal payments collected, including principal prepayments;
o all interest payments collected, including Default Interest and
Post-ARD Additional Interest;
o any prepayment premiums, yield maintenance charges and late payment
charges collected;
o any proceeds received under any hazard, flood, title or other
insurance policy that provides coverage with respect to a mortgaged
real property or the related mortgage loan, and all proceeds received
in connection with the condemnation or the taking by right of eminent
domain of a mortgaged real property, in each case to the extent not
required to be applied to the restoration of the related mortgaged
real property or released to the related borrower;
o any amounts received and retained in connection with the liquidation
of defaulted mortgage loans by foreclosure, deed-in-lieu of
foreclosure or as otherwise contemplated under "--Realization Upon
Defaulted Mortgage Loans" below, in each case to the extent not
required to be returned to the related borrower;
o any amounts paid by any of Column, PMCF, PMCC, KeyBank or Union
Capital in connection with the repurchase or replacement of a mortgage
loan by that party as described under "Description of the Mortgage
Pool--Cures, Repurchases and Substitutions" in this prospectus
supplement;
o any amounts paid to purchase all the mortgage loans and any REO
Properties in connection with the termination of the trust as
contemplated under "Description of the Offered
Certificates--Termination" in this prospectus supplement;
o any amounts required to be deposited by the master servicer in
connection with losses incurred with respect to Permitted Investments
of funds held in the collection account;
o all payments required to be paid by the master servicer or received
from the special servicer with respect to any deductible clause in any
blanket insurance policy or master force placed insurance policy, as
described under "Description of the Mortgage Pool--Underwriting
Matters--Hazard, Liability and Other Insurance" in this prospectus
supplement;
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o any amount transferred by the special servicer from its REO account;
and
o any amounts transferred from any debt service reserve accounts.
Upon receipt of any of the amounts described in the first five bullet
points of the prior paragraph with respect to any specially serviced mortgage
loan in the trust, the special servicer is required to promptly remit those
amounts to the master servicer for deposit in the master servicer's collection
account.
Withdrawals. The master servicer may make withdrawals from its collection
account for any of the following purposes, which are not listed in any order of
priority:
1. to remit to the trustee for deposit in the trustee's payment account
described under "Description of the Offered Certificates--Payment
Account" in this prospectus supplement, on the business day preceding
each payment date, all payments and other collections on the mortgage
loans and any REO Properties in the trust that are then on deposit in
the collection account, exclusive of any portion of those payments and
other collections that represents one or more of the following--
o monthly debt service payments due on a due date subsequent to the
end of the related collection period,
o payments and other collections received after the end of the
related collection period, and
o amounts that are payable or reimbursable from the collection
account to any person other than the series 2000-CKP1
certificateholders in accordance with any of clauses 2. through
17. below;
2. to reimburse itself, the special servicer or the trustee, as
applicable, for any unreimbursed advances made by that party, as
described under "--Servicing and Other Compensation and Payment of
Expenses" above and "Description of the Offered Certificates--Advances
of Delinquent Monthly Debt Service Payments" in this prospectus
supplement, with that reimbursement to be made out of collections on
the mortgage loan or REO Property as to which the advance was made;
3. to pay itself earned and unpaid master servicing fees with respect to
each mortgage loan in the trust, with that payment to be made out of
collections on that mortgage loan that are allocable as interest;
4. to pay the special servicer, out of general collections on the
mortgage loans and any REO Properties in the trust, earned and unpaid
special servicing fees with respect to each mortgage loan in the trust
that is either--
o a specially serviced mortgage loan, or
o a mortgage loan as to which the related mortgaged real property
has become an REO Property;
5. to pay the special servicer or, if applicable, any predecessor special
servicer, earned and unpaid workout fees and liquidation fees to which
it is entitled, with that payment to be made from the sources
described under "--Servicing and Other Compensation and Payment of
Expenses" above;
6. to reimburse itself, the special servicer or the trustee, as
applicable, out of general collections on the mortgage loans and any
REO Properties in the trust, for any unreimbursed advance made by that
party as described under "--Servicing and Other Compensation and
Payment of Expenses" above and "Description of the Offered
Certificates--Advances of Delinquent Monthly Debt Service Payments" in
this prospectus supplement, which advance has been determined not to
be ultimately recoverable under clause 2. above;
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7. to pay itself, the special servicer or the trustee, as applicable,
unpaid interest accrued on any advance made by that party under the
pooling and servicing agreement, with that payment to be made out of
Default Interest and late payment charges received with respect to the
mortgage loan as to which the advance was made;
8. in connection with the reimbursement of advances as described in
clause 2. or 6. above, to pay itself, the special servicer or the
trustee, as the case may be, out of general collections on the
mortgage loans and any REO Properties in the trust, any interest
accrued and payable on that advance and not otherwise payable under
clause 7. above;
9. to pay itself or the special servicer, as applicable, any items of
additional servicing compensation on deposit in the collection account
as discussed under "--Servicing and Other Compensation and Payment of
Expenses--Additional Servicing Compensation" above;
10. to pay any unpaid liquidation expenses incurred with respect to any
liquidated mortgage loan or REO Property in the trust;
11. to pay, out of general collections on the mortgage loans and any REO
Properties in the trust, any servicing expenses that would, if
advanced, be nonrecoverable under clause 2. above;
12. to pay, out of general collections on the mortgage loans and any REO
Properties in the trust, for costs and expenses incurred by the trust
in connection with the remediation of adverse environmental conditions
at any mortgaged real property that secures a defaulted mortgage loan
in the trust;
13. to pay itself, the special servicer, the trustee, us or any of their
or our respective directors, officers, employees and agents, as the
case may be, out of general collections on the mortgage loans and any
REO Properties in the trust, any of the reimbursements or indemnities
to which we or any of those other persons or entities are entitled as
described under "Description of the Governing Documents--Certain
Matters Regarding the Master Servicer, the Special Servicer, the
Manager and Us" and "--Certain Matters Regarding the Trustee" in the
accompanying prospectus;
14. to pay, out of general collections on the mortgage loans and any REO
Properties in the trust, for the costs of opinions of counsel, the
cost of recording the pooling and servicing agreement and expenses
properly incurred by the trustee in connection with providing advice
to the special servicer;
15. to pay any other items described in this prospectus supplement as
being payable from the collection account;
16. to pay to the respective mortgage loan sellers any amounts that
represent monthly debt service payments due on the pooled mortgage
loans on or before their respective due dates in November 2000 or, in
the case of a replacement mortgage loan, on or before the date on
which that loan was added to the trust;
17. to withdraw amounts deposited in the collection account in error,
including amounts received on any mortgage loan or REO Property that
has been purchased or otherwise removed from the trust; and
18. to clear and terminate the collection account upon the termination of
the pooling and servicing agreement.
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REALIZATION UPON DEFAULTED MORTGAGE LOANS
The pooling and servicing agreement grants to the master servicer, the
special servicer and any single certificateholder or group of certificateholders
of the series 2000-CKP1 controlling class, a right to purchase from the trust
defaulted mortgage loans in the priority described in the next paragraph.
If the special servicer has determined that any defaulted mortgage loan has
or will become subject to foreclosure or similar proceedings and that the sale
of that mortgage loan by the trust under the circumstances described below in
this paragraph is in accordance with the Servicing Standard, the special
servicer must give prompt written notice of its determination to the trustee and
the master servicer. The trustee will then be required, within five days after
receipt of that notice, to provide a similar notice to all certificateholders of
the series 2000-CKP1 controlling class. Any single certificateholder or group of
certificateholders of the series 2000-CKP1 controlling class may, at its or
their option, within 15 days after receiving the notice from the trustee,
purchase that defaulted mortgage loan from the trust, at a cash price generally
equal to--
o the Stated Principal Balance of the mortgage loan,
o all unpaid and unadvanced interest on the mortgage loan through the
due date in the collection period of purchase, other than Default
Interest and Post-ARD Interest, and
o all unreimbursed advances with respect to the mortgage loan, together
with any unpaid interest on those advances owing to the party or
parties that made them.
If two or more separate certificateholders or groups of certificateholders of
the series 2000-CKP1 controlling class want to purchase the defaulted mortgage
loan, preference will be given to the certificateholder or group of
certificateholders with the largest interest in the series 2000-CKP1 controlling
class. If certificateholders of the series 2000-CKP1 controlling class have not
purchased that defaulted mortgage loan within 15 days of their having received
the relevant notice, then for a limited period, either the master servicer or
the special servicer, in that order of priority, may at its option purchase the
defaulted mortgage loan from the trust at the same cash price as was applicable
for the certificateholders of the series 2000-CKP1 controlling class. Each of
the master servicer and the special servicer may designate an affiliate to
complete the purchase.
The special servicer may offer to sell on behalf of the trust, any
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 a sale would be in the best economic interests of the
series 2000-CKP1 certificateholders, as a collective whole. Any 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 and under "--The Series
2000-CKP1 Controlling Class Representative" above, the special servicer will be
required to accept the highest cash bid received from any person that is a fair
price, determined in accordance with the pooling and servicing agreement, for
the mortgage loan.
The special servicer will not be obligated to accept the highest cash bid
if the special servicer determines, consistent with the Servicing Standard, that
rejection of the highest cash bid would be in the best interests of the series
2000-CKP1 certificateholders, as a collective whole. Furthermore, subject to the
discussion under "--The Series 2000-CKP1 Controlling Class Representative"
above, 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 the bid would be in the best
interests of the series 2000-CKP1 certificateholders, as a collective whole. For
example, the prospective buyer making the lower bid may be more likely to
perform its obligations.
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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 on behalf of the
trust, 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 the sales or evaluating bids without
obligation to deposit the amounts into its collection account.
If a default on a pooled mortgage loan has occurred or, in the special
servicer's judgment, a payment default is imminent, then, subject to the
discussion under "--The Series 2000-CKP1 Controlling Class Representative"
above, the special servicer may, on behalf of the trust, take any of the
following actions:
o institute foreclosure proceedings;
o exercise any power of sale contained in the related mortgage;
o obtain a deed-in-lieu of foreclosure; or
o otherwise acquire title to the corresponding mortgaged real property,
by operation of law or otherwise.
The special servicer may not, however, acquire title to any mortgaged real
property, have a receiver of rents appointed with respect to any mortgaged real
property or take any other action with respect to any mortgaged real property
that would cause the trustee, for the benefit of the series 2000-CKP1
certificateholders, to be a "mortgagee-in-possession" of, or to be an "owner" or
an "operator" of the mortgaged real property, within the meaning of federal
environmental laws, unless--
o the special servicer has previously received, at the expense of the
trust, a report prepared by a person who regularly conducts
environmental audits, and
o either:
1. the report indicates that--
o the mortgaged real property is in compliance with applicable
environmental laws and regulations, and
o there are no circumstances or conditions present at the
mortgaged real property that have resulted in any
contamination for which investigation, testing, monitoring,
containment, clean-up or remediation could be required under
any applicable environmental laws and regulations; or
2. the special servicer determines in accordance with the Servicing
Standard that taking the actions necessary to bring the mortgaged
real property into compliance with applicable environmental laws
and regulations and/or taking any of the other actions
contemplated by clause 1. above, is reasonably likely to produce
a greater recovery for the series 2000-CKP1 certificateholders,
on a present value basis, than not taking those actions.
If neither of the conditions in clauses 1. and 2. of the prior paragraph
are satisfied, the special servicer may take those actions as are in accordance
with the Servicing Standard, other than proceeding against the contaminated
mortgaged real property. In addition, when the special servicer determines it to
be appropriate, it may, on behalf of the trust, release all or a portion of the
related mortgaged real property from the lien of the related mortgage
instrument.
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If the trust acquires title to any mortgaged real property, the special
servicer, on behalf of the trust, has to sell the particular real property not
later than the end of the third calendar year following the year of acquisition
of the property, subject to limited exceptions as described under "--REO
Properties" below.
If liquidation proceeds collected with respect to a defaulted mortgage loan
in the trust are less than the outstanding principal balance of the defaulted
mortgage loan, together with accrued interest on, and reimbursable expenses
incurred by the special servicer and/or the master servicer in connection with,
the defaulted mortgage loan, then the trust will realize a loss in the amount of
the shortfall. Prior to the payment of any liquidation proceeds to series
2000-CKP1 certificateholders, the special servicer and/or the master servicer
will be entitled to reimbursement out of those proceeds, for--
o any unpaid servicing compensation with respect to the mortgage loan,
o unreimbursed servicing expenses incurred with respect to the mortgage
loan,
o any unreimbursed advances of delinquent payments made with respect to
the mortgage loan, and
o any interest payable on the unreimbursed servicing expenses and
advances.
REO PROPERTIES
If title to any mortgaged real property is acquired by the special servicer
on behalf of the trust, the special servicer will be required to sell that
property not later than the end of the third calendar year following the year of
acquisition, unless--
o the IRS grants an extension of time to sell the property, or
o the special servicer obtains an opinion of independent counsel
generally to the effect that the holding of the property subsequent to
the end of the third calendar year following the year in which the
acquisition occurred will not result in the imposition of a tax on the
trust assets or cause any of REMIC I, REMIC II or REMIC III to fail to
qualify as a REMIC under the Internal Revenue Code of 1986.
The special servicer will generally be required to solicit cash offers for
any REO Property held in the trust in a manner that will be reasonably likely to
realize a fair price for the property. The special servicer may retain an
independent contractor to operate and manage the REO Property. The retention of
an independent contractor will not relieve the special servicer of its
obligations with respect to the REO Property. Regardless of whether the special
servicer applies for or is granted an extension of time to sell the property,
the special servicer will be required to act in accordance with the Servicing
Standard to liquidate the property on a timely basis. If an extension is granted
or opinion given, the special servicer must sell the REO Property within the
period specified in the extension or opinion.
In general, the special servicer or an independent contractor employed by
the special servicer at the expense of the trust will be obligated to operate
and manage any REO Property held by the trust--
1. in accordance with the Servicing Standard, and
2. in a manner that maintains its status as foreclosure property under
the REMIC provisions of the Internal Revenue Code.
The special servicer must review the operation of each REO Property held by
the trust and, in connection with that review, may consult with the trustee to
determine the trust's federal income tax reporting
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position with respect to the income it is anticipated that the trust would
derive from the property. The special servicer could determine that it would not
be consistent with the Servicing Standard to manage and operate the property in
a manner that would avoid the imposition of--
o a tax on net income from foreclosure property, within the meaning of
Section 857(b)(4)(B) of the Internal Revenue Code, or
o a tax on prohibited transactions under Section 860F of the Internal
Revenue Code.
This determination is most likely to occur in the case of an REO property that
is a hospitality property or a health care facility. To the extent that income
the trust receives from an REO property is subject to--
o a tax on net income from foreclosure property, that income would be
subject to federal tax at the highest marginal corporate tax rate,
which is currently 35%,
o a tax on prohibited transactions, that income would be subject to
federal tax at a 100% rate.
The determination as to whether income from an REO Property held by the
trust would be subject to a 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 the income could be subject to federal tax either at the
highest marginal corporate tax rate or at the 100% prohibited transactions rate.
The non-service portion of the income could be subject to federal tax at the
highest marginal corporate tax rate or, although it appears unlikely, at the
100% prohibited transactions rate. Any tax imposed on the trust's income from an
REO Property would reduce the amount available for payment to the series
2000-CKP1 certificateholders. See "Federal Income Tax Consequences" in this
prospectus supplement and in the accompanying prospectus. The reasonable
out-of-pocket costs and expenses of obtaining professional tax advice in
connection with the foregoing will be payable out of the master servicer's
collection account.
The special servicer will be required to segregate and hold all funds
collected and received in connection with any REO Property held by the trust
separate and apart from its own funds and general assets. If an REO Property is
acquired by the trust, the special servicer will be required to establish and
maintain an account for the retention of revenues and other proceeds derived
from the REO Property. That REO account must be maintained in a manner and with
a depository institution that satisfies rating agency standards for
securitizations similar to the one involving the offered certificates. The
special servicer will be required to deposit, or cause to be deposited, in its
REO account, within two business days following receipt, all net income,
insurance proceeds, condemnation proceeds and liquidation proceeds received with
respect to each REO Property held by the trust. The funds held in this REO
account may be held as cash or invested in Permitted Investments. Any interest
or other income earned on funds in the special servicer's REO account will be
payable to the special servicer, subject to the limitations described in the
pooling and servicing agreement.
The special servicer will be required to withdraw from its REO account
funds necessary for the proper operation, management, leasing, maintenance and
disposition of any REO Property held by the trust, but only to the extent of
amounts on deposit in the account relating to that particular REO Property.
Promptly following the end of each collection period, the special servicer will
be required to withdraw from the REO account and deposit, or deliver to the
master servicer for deposit, into the master servicer's collection account the
total of all amounts received in respect of each REO Property held by the trust
during that collection period, net of--
o any withdrawals made out of those amounts, as described in the
preceding sentence, and
o any portion of those amounts that may be retained as reserves, as
described in the next sentence.
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The special servicer may, subject to the limitations described in the pooling
and servicing agreement, retain in its REO account the portion of the proceeds
and collections on any REO Property held by the trust, as may be necessary to
maintain a reserve of sufficient funds for the proper operation, management,
leasing, maintenance and disposition of that property, including the creation of
a reasonable reserve for repairs, replacements, necessary capital improvements
and other related expenses.
The special servicer shall keep and maintain separate records, on a
property-by-property basis, for the purpose of accounting for all deposits to,
and withdrawals from, its REO account.
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 corresponding mortgaged real
property as soon as practicable after any mortgage loan becomes a specially
serviced mortgage loan and annually thereafter for so long as that mortgage loan
remains a specially serviced mortgage loan. Beginning in 2001, the master
servicer will be required, at its own expense, to inspect or cause an inspection
of each mortgaged real property at least once per calendar year or, in the case
of each pooled 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 contemplated by the preceding sentence. The master servicer
and the special servicer will each be required to prepare or cause the
preparation of a written report of each inspection performed by it that
generally describes the condition of the particular real property and that
specifies--
o any sale, transfer or abandonment of the property of which the master
servicer or the special servicer, as applicable, is aware,
o any change in the property's condition or occupancy that the master
servicer or the special servicer, as applicable, in accordance with
the Servicing Standard, is aware of and considers to be material, or
o any waste committed on the property that the master servicer or the
special servicer, as applicable, in accordance with the Servicing
Standard, is aware of and considers to be material.
At the request of the trustee, the master servicer and the special servicer will
each be required to deliver to the trustee a copy of the inspection reports
prepared or caused to be prepared by it, in each case within 30 days following
the request or, if later, within 30 days following the later of completion of
the related inspection if the inspection is performed by the master servicer or
the special servicer, as applicable, or receipt of the related inspection report
if the inspection is prepared by a third party.
Commencing with respect to the calendar quarter ended December 31, 2000,
the special servicer, in the case of each specially serviced mortgage loan in
the trust, and the master servicer, in the case of each other mortgage loan in
the trust, will each be required to use reasonable efforts to collect from the
related borrower and review the following items, to the extent that those items
are required to be delivered under the related loan documents:
o the quarterly and annual operating statements, budgets and rent rolls
of the corresponding mortgaged real property; and
o the quarterly and annual financial statements of the borrower.
The special servicer will be required to forward to the master servicer copies,
in hard copy or electronic format, of any items of information described in the
two bullets of the immediately preceding sentence that it collects or
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obtains from the related borrower, within 30 days of its receipt of such
information. The master servicer will be required to forward to the trustee,
upon request, copies, in hard copy or electronic format, of any items of
information described in the two bullets of the second preceding sentence that
it collects from the related borrower or receives from the special servicer.
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 in the trust. However, there can be no assurance that any operating
statements required to be delivered by a borrower will in fact be delivered, and
neither the master servicer nor the special servicer is likely to have any
practical means of compelling delivery.
Within 30 days of its receipt from the special servicer, in the case of
each specially serviced mortgage loan in the trust, and within 60 days of its
receipt from the related borrowers, in the case of each other mortgage loan in
the trust, of any annual or quarterly operating statements or rent rolls as
contemplated above, the master servicer will be required, based upon those
operating statements or rent rolls, to prepare or, if previously prepared, to
update a written report setting forth an analysis of the operations of the
subject property based on the methodology employed during the original
underwriting as, and to the extent, provided to the master servicer or the
special servicer, as applicable, by the respective mortgage loan sellers.
The master servicer will maintain an operating statement analysis report
with respect to each mortgaged real property and REO Property relating to a
mortgage loan in the trust. The master servicer will, promptly following initial
preparation and each update of any of those reports, forward to the trustee and
the special servicer an electronic copy of the subject report, and upon request,
the trustee will forward the subject report to--
o the series 2000-CKP1 controlling class representative,
o any series 2000-CKP1 certificateholder, or
o any beneficial owner of an offered certificate, if the trustee has
confirmed to its satisfaction the ownership interest of that
beneficial owner in an offered certificate.
EVIDENCE AS TO COMPLIANCE
On or before April 30 of each year, beginning in 2002, 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--
1. the firm has examined the servicing operations of the master
servicer or the special servicer, as the case may be, for the
previous year, and
2. on the basis of that examination, conducted substantially in
compliance with USAP, the firm confirms that the master servicer
or the special servicer, as applicable, has complied during the
previous year with the minimum servicing standards, to the extent
applicable to multifamily and commercial mortgage loans,
identified in USAP, in all material respects, except for the
significant exceptions or errors in records that, in the opinion
of the firm, USAP requires it to report.
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In rendering its report the 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,
within one year of the report, with respect to those
sub-servicers.
o deliver to the trustee, among others, a statement signed by an officer
of the master servicer or the special servicer, as the case may be, to
the effect that, to the knowledge of that officer, the master servicer
or special servicer, as the case may be, has fulfilled its obligations
under the pooling and servicing agreement in all material respects
throughout the preceding calendar year.
EVENTS OF DEFAULT
Each of the following events, circumstances and conditions will be
considered events of default under the pooling and servicing agreement:
o the master servicer or the special servicer fails to deposit, or to
remit to the appropriate party for deposit, into the master servicer's
collection account or the special servicer's REO account, as
applicable, any amount required to be so deposited, and that failure
continues unremedied for three business days following the date on
which the deposit or remittance was required to be made;
o the master servicer fails to remit to the trustee for deposit in the
trustee's payment account any amount required to be so remitted, and
that failure continues unremedied for three business days following
the date on which the remittance was required to be made;
o the master servicer or the special servicer fails to timely make any
servicing advance required to be made by it under the pooling and
servicing agreement, and that failure continues unremedied for three
business days following the date on which notice has been given to the
master servicer or the special servicer, as the case may be, by the
trustee;
o the master servicer or the special servicer fails to observe or
perform in any material respect any of its other covenants or
agreements under the pooling and servicing agreement, and that failure
continues unremedied for 60 days after written notice of it has been
given to the master servicer or the special servicer, as the case may
be, by any other party to the pooling and servicing agreement or by
certificateholders entitled to not less than 25% of the series
2000-CKP1 voting rights;
o it is determined that there is a breach by the master servicer or the
special servicer of any of its representations or warranties contained
in the pooling and servicing agreement that materially and adversely
affects the interests of any class of series 2000-CKP1
certificateholders, and that breach continues unremedied for 60 days
after written notice of it has been given to the master servicer or
the special servicer, as the case may be, by any other party to the
pooling and servicing agreement or by certificateholders entitled to
not less than 25% of the series 2000-CKP1 voting rights;
o a decree or order of a court having jurisdiction in an involuntary
case for the appointment of a receiver, liquidator, trustee or similar
official in any bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings is
entered against the master servicer or the special servicer and the
decree or order remains in force for a period of 60 days;
o the master servicer or special servicer consents to the appointment of
a receiver, liquidator, trustee or similar official relating to it or
of or relating to all or substantially all of its property;
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o the master servicer or special servicer admits in writing its
inability to pay its debts or takes other actions indicating its
insolvency or inability to pay its obligations;
o the trustee receives written notice from Moody's or Fitch to the
effect that the continuation of the master servicer or the special
servicer in that capacity would result:
(1) in a qualification, downgrade or withdrawal of any rating then
assigned by that rating agency to any class of the series
2000-CKP1 certificates, or
(2) in any rating assigned by that rating agency to any class of the
series 2000-CKP1 certificates becoming the subject of a
"negative" credit watch,
and that notice is not rescinded within 30 days following the delivery
of that notice, or within such longer period as would not, as
confirmed by that rating agency, result in a qualification, downgrade
or withdrawal of any rating then assigned by that rating agency to any
class of series 2000-CKP1 certificates;
o the trustee receives written notice from Moody's or Fitch to the
effect that the master servicer's or special servicer's acting in that
capacity has resulted in a qualification, downgrade or withdrawal of
any rating then assigned by that rating agency to any class of the
series 2000-CKP1 certificates; and
o the trustee receives notice from Fitch that the master servicer no
longer possesses at least the minimum Fitch rating for a commercial
mortgage loan master servicer, or the special servicer no longer
possesses at least the minimum Fitch rating for a commercial mortgage
loan special servicer.
The pooling and servicing agreement may provide for additional events of
default. When a single entity acts as master servicer and special servicer, an
event of default in one capacity, other than an event of default described in
one of the last three bullet points of the prior paragraph, will automatically
be an event of default in the other capacity.
RIGHTS UPON EVENT OF DEFAULT
If an event of default described above under "--Events of Default" occurs
with respect to the master servicer or the special servicer and remains
unremedied, the trustee will be authorized, and at the direction of
certificateholders entitled to not less than 25% of the series 2000-CKP1 voting
rights, the trustee will be required, to terminate all of the obligations and,
with limited exception, all of the rights of the defaulting party under the
pooling and servicing agreement and in and to the trust assets, other than any
rights the defaulting party may have as a series 2000-CKP1 certificateholder.
Upon any termination, the trustee must either:
o succeed to all of the responsibilities, duties and liabilities of the
master servicer or special servicer, as the case may be, under the
pooling and servicing agreement; or
o appoint an established mortgage loan servicing institution to act as
successor master servicer or special servicer, as the case may be.
Certificateholders entitled to a majority of the series 2000-CKP1 voting
rights may require the trustee to appoint an established mortgage loan servicing
institution to act as successor master servicer or special servicer, as the case
may be, rather than have the trustee act as that successor. In the case of a
number of mortgage loans, it is expected that the master servicer will perform
some or all of its servicing duties through sub-servicers that cannot be
terminated, including by a successor master servicer, except for cause.
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In general, certificateholders entitled to at least 66-2/3% of the voting
rights allocated to each class of series 2000-CKP1 certificates affected by any
event of default may waive the event of default. However, the events of default
described in the first two and last three bullet points under "--Events of
Default" above may only be waived by all of the holders of the affected classes
of series 2000-CKP1 certificates. Furthermore, if the trustee is required to
spend any monies in connection with any event of default, then that event of
default may not be waived unless and until the trustee has been reimbursed, with
interest, by the party requesting the waiver. Upon any waiver of an event of
default, the event of default will cease to exist and will be deemed to have
been remedied for every purpose under the pooling and servicing agreement.
DESCRIPTION OF THE OFFERED CERTIFICATES
GENERAL
The series 2000-CKP1 certificates will be issued, on or about November 7,
2000, under the pooling and servicing agreement. They will represent the entire
beneficial ownership interest of the trust. The assets of the trust will
include:
o the pooled mortgage loans;
o any and all payments under and proceeds of the pooled mortgage loans
received after their respective due dates in November 2000, in each
case exclusive of payments of principal, interest and other amounts
due on or before that date;
o the loan documents for the pooled mortgage loans;
o our rights under each of the mortgage loan purchase agreements;
o any REO Properties acquired by the trust with respect to defaulted
mortgage loans; and
o those funds or assets as from time to time are deposited in the master
servicer's collection account, the special servicer's REO account, the
trustee's payment account described under "--Payment Account" below or
the trustee's interest reserve account described under
"--Payments--Interest Reserve Account" below.
The series 2000-CKP1 certificates will include the following classes:
o the A-1A, A-1B, A-2, A-3, A-4, B-1, B-2 and B-3 classes, which are the
classes of series 2000-CKP1 certificates that are offered by this
prospectus supplement; and
o the S, B-4, B-5, B-6, B-7, B-8, B-9, C, D, E and R classes, which are
the classes of series 2000-CKP1 certificates that--
1. will be retained or privately placed by us, and
2. are not offered by this prospectus supplement.
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, B-9 and C certificates are the only series 2000-CKP1 certificates that will
have principal balances. The principal balance of any of these certificates will
represent the total payments of principal to which the holder of the certificate
is entitled over time out of payments, or advances in lieu of payments, and
other collections on the assets of the trust. Accordingly, on each payment date,
the principal balance of each of these certificates will be permanently
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reduced by any payments of principal actually made with respect to the
certificate on that payment date. See "--Payments" below. On any particular
payment date, the principal balance of each of these certificates may also be
permanently reduced, without any corresponding payment, in connection with
losses on the underlying mortgage loans and default-related and otherwise
unanticipated expenses of the trust. See "--Reductions to Certificate Principal
Balances in Connection with Realized Losses and Additional Trust Fund Expenses"
below.
The class S certificates will not have principal balances, and the holders
of the class S certificates will not be entitled to receive payments of
principal. However, each class S certificate will have a notional amount for
purposes of calculating the accrual of interest with respect to that
certificate. The total notional amount of the class S certificates will equal
the total principal balance of all 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, B-9 and C certificates outstanding from time
to time.
In general, principal balances and notional amounts will be reported on a
class-by-class basis. In order to determine the principal balance of any of your
offered certificates from time to time, you may multiply the original principal
balance of that certificate as of the date of initial issuance of the series
2000-CKP1 certificates, as specified on the face of that certificate, 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 equal a fraction, expressed as a percentage, the numerator of which will be
the then outstanding total principal balance of that class, and the denominator
of which will be the original total principal balance of that class. Certificate
factors will be reported monthly in the trustee's report.
REGISTRATION AND DENOMINATIONS
General. The offered certificates will be issued in book-entry form in
original denominations of $10,000 initial principal balance and any whole dollar
denomination in excess of $10,000.
Each class of offered certificates will initially be represented by one or
more certificates registered in the name of Cede & Co., as nominee of The
Depository Trust Company. You will not be entitled to receive an offered
certificate issued in fully registered, certificated form, except under the
limited circumstances described under "Description of the
Certificates--Book-Entry Registration" in the accompanying prospectus. For so
long as any class of offered certificates is held in book-entry form--
o all references in this prospectus supplement to actions by holders of
those certificates will refer to actions taken by DTC upon
instructions received from beneficial owners of those certificates
through its participating organizations, and
o all references in this prospectus supplement to payments, notices,
reports and statements made or sent to holders of those certificates
will refer to payments, notices, reports and statements made or sent
to DTC or Cede & Co., as the registered holder of those certificates,
for payment or transmittal, as applicable, to the beneficial owners of
those certificates through its participating organizations in
accordance with DTC's procedures.
The trustee will initially serve as registrar for purposes of providing for
the registration of the offered certificates and, if and to the extent physical
certificates are issued to the actual beneficial owners of any of the offered
certificates, the registration of transfers and exchanges of those certificates.
DTC, Clearstream and Euroclear. You will hold your certificates through
DTC, in the United States, or Clearstream Banking societe anonyme or the
Euroclear System, in Europe, if you are a participating organization of the
applicable system, or indirectly through organizations that are participants in
the applicable system. Clearstream and Euroclear will hold omnibus positions on
behalf of organizations that are participants in either of these systems,
through customers' securities accounts in Clearstream's or Euroclear's names on
the
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books of their respective depositaries. Those depositaries will, in turn, hold
those positions in customers' securities accounts in the depositaries' names on
the books of DTC. For a discussion of DTC, see "Description of the
Certificates--Book-Entry Registration" in the accompanying prospectus.
DTC is--
o a limited-purpose trust company organized under the New York Banking
Law,
o a "banking corporation" within the meaning of the New York Banking
Law,
o a member of the Federal Reserve System,
o a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and
o a "clearing agency" registered under the provisions of Section 17A of
the Securities Exchange Act of 1934, as amended.
DTC was created to hold securities for participants in the DTC system and
to facilitate the clearance and settlement of securities transactions between
those participants through electronic computerized book-entry changes in their
accounts, thereby eliminating the need for physical movement of securities
certificates. Organizations 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 its participating
organizations 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 one of the organizations that maintains an account
with DTC. The rules applicable to DTC and its participating organizations are on
file with the SEC.
It is our understanding that Clearstream was incorporated in 1970 as "Cedel
S.A.", a company with limited liability under the laws of Luxembourg. Cedel S.A.
subsequently changed its name to Cedelbank. On January 10, 2000, Cedelbank's
parent company, Cedel International, societe anonyme merged its clearing,
settlement and custody business with that of Deutsche Borse Clearing AG. The
merger involved the transfer by Cedel International of substantially all of its
assets and liabilities, including its shares in Cedelbank, to a new Luxembourg
company, New Cedel International, societe anonyme. New Cedel International is
50% owned by Cedel International and 50% by Deutsche Borse AG, the parent of
Deutsche Borse Clearing AG. The shareholders of these two entities are
recognized financial institutions around the world, including underwriters,
securities brokers and dealers, banks, trust companies and clearing
corporations. On January 18, 2000, Cedelbank was renamed Clearstream Banking,
societe anonyme. Clearstream holds securities for its member organizations and
facilitates the clearance and settlement of securities transactions between its
member organizations through electronic book-entry changes in accounts of those
organizations, thereby eliminating the need for physical movement of
certificates. Transactions may be settled in Clearstream in any of 40
currencies, including United States dollars. Clearstream provides to its member
organizations, among other things, services for safekeeping, administration,
clearance and settlement of internationally traded securities and securities
lending and borrowing. Clearstream interfaces with domestic securities markets
in over 30 countries through established depository and custodial relationships.
Clearstream is registered as a bank in Luxembourg. It is subject to regulation
by the Commission de Surveillance du Secteur Financier, which supervises
Luxembourg banks. Clearstream's customers are world-wide financial institutions
including underwriters, securities brokers and dealers, banks, trust companies
and clearing corporations. Clearstream's U.S. customers are limited to
securities brokers and dealers, and banks. Currently, Clearstream has
approximately 2,000 customers located in over 80 countries, including all major
European countries, Canada and the United States. Indirect access to Clearstream
is available to other institutions that clear through or maintain a custodial
relationship with an
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account holder of Clearstream. Clearstream and Euroclear have established an
electronic bridge between their two systems across which their respective
participants may settle trades with each other.
It is our understanding that Euroclear was founded in December 1968 to hold
securities for its member organizations and to clear and settle transactions
between its member organizations through simultaneous electronic book-entry
delivery against payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of securities and
cash. Over 100,000 different securities are accepted for settlement through
Euroclear, the majority of which are domestic securities from over 30 markets.
Transactions may be settled in Euroclear in any of over 40 currencies, including
United States dollars. The Euroclear system includes various other services,
including securities lending and borrowing and interfaces with domestic markets
in several countries generally similar to the arrangements for cross-market
transfers with DTC described below in this "--DTC, Clearstream and Euroclear"
section. Euroclear is operated by Morgan Guaranty Trust Company of New York,
Brussels, Belgium office, under contract with Euroclear Clearance System, S.C.,
a Belgian cooperative corporation. All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator, not ECS. ECS establishes
policy for the Euroclear system on behalf of the more than 120 member
organizations of Euroclear. Those member organizations include banks, including
central banks, securities brokers and dealers and other professional financial
intermediaries. Indirect access to the Euroclear system is also available to
other firms that clear through or maintain a custodial relationship with a
member organization of Euroclear, either directly or indirectly. Euroclear and
Clearstream have established an electronic bridge between their two systems
across which their respective participants may settle trades with each other.
The Euroclear Operator is the Belgian branch of a New York banking corporation
which is a member bank of the Federal Reserve System. It is regulated and
examined by the Board of Governors of the Federal Reserve System and the New
York State Banking Department, as well as the Belgian Banking Commission.
The information in this prospectus supplement concerning DTC, Euroclear and
Clearstream, and their book-entry systems, has been obtained from sources
believed to be reliable, but we do not take any responsibility for the accuracy
or completeness of that information.
Transfers between participants in DTC will occur in accordance with DTC's
rules. Transfers between participants in Clearstream and Euroclear will occur in
accordance with their applicable rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly through participants in Clearstream
or Euroclear, on the other, will be accomplished through DTC in accordance with
DTC rules on behalf of the relevant European international clearing system by
its depositary. However, these cross-market transactions will require delivery
of instructions to the relevant European international clearing system by the
counterparty in that system in accordance with its rules and procedures and
within its established deadlines (European time). The relevant European
international clearing system will, if the transaction meets it settlement
requirements, deliver instructions to its depositary to take action to effect
final settlement on its behalf by delivering or receiving securities through
DTC, and making or receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Participants in Clearstream and
Euroclear may not deliver instructions directly to the depositaries.
Because of time-zone differences--
o credits of securities in Clearstream or Euroclear as a result of a
transaction with a DTC participant will be made during the subsequent
securities settlement processing, dated the business day following the
DTC settlement date, and
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o those credits or any transactions in those securities settled during
that processing will be reported to the relevant Clearstream or
Euroclear participant on that business day.
Cash received in Clearstream or Euroclear as a result of sales of
securities by or through a Clearstream or Euroclear participant to a DTC
participant will be received with value on the DTC settlement date but will be
available in the relevant Clearstream or Euroclear cash account only as of the
business day following settlement in DTC. For additional information regarding
clearance and settlement procedures for the offered certificates and for
information with respect to tax documentation procedures relating to the offered
certificates, see Exhibit D hereto.
Beneficial owners of offered certificates that are not participating
organizations in DTC, Clearstream or Euroclear, but desire to purchase, sell or
otherwise transfer ownership or other interests in those certificates, may do so
only through participating organizations in DTC, Clearstream or Euroclear. In
addition, those beneficial owners will receive all payments of principal and
interest from the trustee through DTC and its participating organizations.
Similarly, reports distributed to holders of the offered certificates pursuant
to the pooling and servicing agreement and requests for the consent of those
holders will be delivered to the beneficial owners of those certificates only
through DTC, Clearstream, Euroclear and their participating organizations. Under
a book-entry format, beneficial owners of offered certificates may experience
some delay in their receipt of payments, reports and notices, since these
payments, reports and notices will be forwarded by the trustee to Cede & Co., as
nominee for DTC. DTC will forward the payments, reports and notices to its
participating organizations, which thereafter will forward them to indirect DTC
participants, Clearstream, Euroclear or beneficial owners of the offered
certificates, as applicable.
Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers of offered
certificates among participating organizations on whose behalf it acts with
respect to the offered certificates and to receive and transmit payments of
principal of, and interest on, the offered certificates. Direct and indirect DTC
participants with which beneficial owners of the offered certificates have
accounts with respect to those certificates similarly are required to make
book-entry transfers and receive and transmit the payments on behalf of those
beneficial owners. Accordingly, although the beneficial owners of offered
certificates will not possess the offered certificates, the DTC rules provide a
mechanism that will allow them to receive payments on their certificates and
will be able to transfer their interests.
Because DTC can only act on behalf of direct DTC participants, who in turn
act on behalf of indirect DTC participants and certain banks, the ability of a
beneficial owner of offered certificates to pledge those certificates to persons
or entities that do not participate in the DTC system, or to otherwise act with
respect to those certificates, may be limited due to the lack of a physical
certificate for those certificates.
DTC has advised us that it will take any action permitted to be taken by
holders of the offered certificates under the pooling and servicing agreement
only at the direction of one or more participating organizations to whose
accounts with DTC those certificates are credited. DTC may take conflicting
actions with respect to other undivided interests to the extent that those
actions are taken on behalf of participating organizations in DTC whose holdings
include those undivided interests.
PAYMENT ACCOUNT
General. The trustee must establish and maintain an account in which it
will hold funds pending their payment on the series 2000-CKP1 certificates and
from which it will make those payments. That payment account must be maintained
in a manner and with a depository institution that satisfies rating agency
standards for securitizations similar to the one involving the offered
certificates. Funds held in the trustee's payment account will remain
uninvested.
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Deposits. On the business day prior to each payment date, the master
servicer will be required to remit to the trustee for deposit in the payment
account the following funds:
o All payments and other collections on the pooled mortgage loans and
any REO Properties in the trust that are then on deposit in the master
servicer's collection account, exclusive of any portion of those
payments and other collections that represents one or more of the
following:
1. monthly debt service payments due on a due date subsequent to the
end of the related collection period;
2. payments and other collections received after the end of the
related collection period;
3. amounts that are payable or reimbursable from the master
servicer's collection account to any person other than the series
2000-CKP1 certificateholders, including--
(a) amounts payable to the master servicer or the special
servicer as compensation, including master servicing fees,
special servicing fees, workout fees, liquidation fees,
assumption fees, modification fees and, to the extent not
otherwise applied to cover interest on advances or
Additional Trust Fund Expenses with respect to the related
pooled mortgage loan, Default Interest and late payment
charges,
(b) amounts payable in reimbursement of outstanding advances,
together with interest on those advances, and
(c) amounts payable with respect to other expenses of the trust;
and
4. amounts deposited in the master servicer's collection account in
error.
o Any advances of delinquent monthly debt service payments made with
respect to that payment date.
o Any payments to cover Prepayment Interest Shortfalls incurred with
respect to the mortgage pool during the related collection period.
See "--Advances of Delinquent Monthly Debt Service Payments" below and
"Servicing of the Underlying Mortgage Loans--Collection Account" and
"--Servicing and Other Compensation and Payment of Expenses" in this prospectus
supplement.
With respect to each payment date that occurs during March, commencing in
March 2001, the trustee will be required to transfer from its interest reserve
account, which we describe under "--Interest Reserve Account" below, to its
payment account the interest reserve amounts that are then being held in that
interest reserve account with respect to the pooled mortgage loans that accrue
interest on an Actual/360 Basis.
Withdrawals. The trustee may from time to time make withdrawals from its
payment account for any of the following purposes:
o to pay itself a monthly fee which is described under "--The Trustee"
below;
o to indemnify itself and various related persons as described under
"Description of the Governing Documents--Certain Matters Regarding the
Trustee" in the accompanying prospectus;
o to pay for any opinions of counsel required to be obtained in
connection with any amendments to the pooling and servicing agreement;
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o to pay any federal, state and local taxes imposed on the trust, its
assets and/or transactions, together with all incidental costs and
expenses, that are required to be borne by the trust as described
under "Federal Income Tax Consequences--REMICs--Prohibited
Transactions Tax and Other Taxes" in the accompanying prospectus and
"Servicing of the Underlying Mortgage Loans--REO Properties" in this
prospectus supplement;
o with respect to each payment date during February of any year and each
payment date during January of any year that is not a leap year,
commencing in 2001, to transfer to the trustee's interest reserve
account the interest reserve amounts required to be so transferred in
that month with respect to the pooled mortgage loans that accrue
interest on an Actual/360 Basis; and
o to pay to the person entitled thereto any amounts deposited in the
payment account in error.
On each payment date, all amounts on deposit in the trustee's payment
account, exclusive of any portion of those amounts that are to be withdrawn for
the purposes contemplated in the foregoing paragraph, will represent the Total
Available Funds for that date. On each payment date, the trustee will apply the
Total Available Funds to make payments on the series 2000-CKP1 certificates.
For any payment date, the Total Available Funds will consist of four
separate components:
o the portion of those funds that represent prepayment consideration
collected on the pooled mortgage loans as a result of prepayments that
occurred during the related collection period, which will be paid to
the holders of the class S certificates and/or the offered
certificates as described under "--Payments--Payments of Prepayment
Premiums and Yield Maintenance Charges" below;
o the portion of those funds that represent Post-ARD Additional Interest
collected on the ARD Loans in the trust during the related collection
period, which will be paid to the holders of the class D certificates
as described under "--Payments--Payments of Post-ARD Additional
Interest" below;
o the portion of those funds that represent payment of the closing fee
payable on the pooled mortgage loan secured by the mortgaged real
property identified on Exhibit A-1 to this prospectus supplement as
Holiday Inn-Orlando, to the extent that such fee was collected during
the related collection period, which will be paid to the holders of
the class E certificates as described under "--Payments--Payment of
Holiday Inn-Orlando Closing Fee" below; and
o the remaining portion of those funds, referred to in this prospectus
supplement as the Available P&I Funds, which will be paid to the
holders of all the series 2000-CKP1 certificates, other than the class
D and E certificates, as described under "--Payments--Priority of
Payments" below.
INTEREST RESERVE ACCOUNT
The trustee must maintain an account in which it will hold the interest
reserve amounts described in the next paragraph with respect to the pooled
mortgage loans that accrue interest on an Actual/360 Basis. That interest
reserve account must be maintained in a manner and with a depository that
satisfies rating agency standards for securitizations similar to the one
involving the offered certificates. Funds held in the trustee's interest reserve
account will remain uninvested.
During January, except in a leap year, and February of each calendar year,
beginning in 2001, the trustee will, on or before the payment date in that
month, withdraw from its payment account and deposit in its interest reserve
account the interest reserve amount with respect to each of the pooled mortgage
loans that accrue interest on an Actual/360 Basis and for which the monthly debt
service payment due in that month was either
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received or advanced. In general, that interest reserve amount for each of those
mortgage loans will equal one day's interest accrued at the related mortgage
interest rate, net of the related master servicing fee rate and the trustee fee
rate, on the Stated Principal Balance of that loan as of the end of the related
collection period. In the case of an ARD Loan, however, the interest reserve
amount will not include Post-ARD Additional Interest.
During March of each calendar year, beginning in 2001, the trustee will, on
or before the payment date in that month, withdraw from its interest reserve
account and deposit in its payment account any and all interest reserve amounts
then on deposit in the interest reserve account with respect to the pooled
mortgage loans that accrue interest on an Actual/360 Basis. All interest reserve
amounts that are so transferred from the interest reserve account to the payment
account will be included in the Available P&I Funds for the payment date during
the month of transfer.
PAYMENTS
General. On each payment date, the trustee will, subject to the Total
Available Funds and the exception described in the next sentence, make all
payments required to be made on the series 2000-CKP1 certificates on that date
to the holders of record as of the close of business on the last business day of
the calendar month preceding the month in which those payments are to occur. The
final payment of principal and/or interest on any offered certificate, however,
will be made only upon presentation and surrender of that certificate at the
location to be specified in a notice of the pendency of that final payment.
In order for a series 2000-CKP1 certificateholder to receive payments by
wire transfer on and after any particular payment date, that certificateholder
must provide the trustee with written wiring instructions no later than the last
day of the calendar month preceding the month in which that payment date occurs.
Otherwise, that certificateholder will receive its payments by check mailed to
it.
Cede & Co. will be the registered holder of your offered certificates, and
you will receive payments on your offered certificates through DTC and its
participating organizations, until physical certificates are issued, if ever.
See "--Registration and Denominations" above.
Payments made to a class of series 2000-CKP1 certificateholders will be
allocated among those certificateholders in proportion to their respective
percentage interests in that class.
Payments of Interest. All of the classes of the series 2000-CKP1
certificates will bear interest, except for the D, E and R classes.
With respect to each interest-bearing class of the series 2000-CKP1
certificates, that interest will accrue during each interest accrual period
based upon:
o the pass-through rate for that class and the related payment date;
o the total principal balance or notional amount, as the case may be, of
that class outstanding immediately prior to the related payment date;
and
o the assumption that each year consists of twelve 30-day months.
On each payment date, subject to the Available P&I Funds for that date and
the priorities of payment described under "--Payments--Priority of Payments"
below, the holders of each interest-bearing class of the series 2000-CKP1
certificates will be entitled to receive--
o the total amount of interest accrued during the related interest
accrual period with respect to that class certificates, reduced by
S-130
<PAGE>
o the portion of any Net Aggregate Prepayment Interest Shortfall for
that payment date that is allocable to that class of certificates.
If the holders of any interest-bearing class of the series 2000-CKP1
certificates do not receive all of the interest to which they are entitled on
any payment date, as described in the prior paragraph, then they will continue
to be entitled to receive the unpaid portion of that interest on future payment
dates, subject to the Available P&I Funds for those future payment dates and the
priorities of payment described under "--Payments--Priority of Payments" below.
The portion of any Net Aggregate Prepayment Interest Shortfall for any
payment date that is allocable to any particular interest-bearing class of the
series 2000-CKP1 certificates will equal the product of--
o the amount of that Net Aggregate Prepayment Interest Shortfall,
multiplied by
o a fraction--
1. the numerator of which is the total amount of interest accrued
during the related interest accrual period with respect to that
class of certificates, and
2. the denominator of which is the total amount of interest accrued
during the related interest accrual period with respect to all of
the interest-bearing classes of the series 2000-CKP1
certificates.
Calculation of Pass-Through Rates. The pass-through rate applicable to each
interest-bearing class of series 2000-CKP1 certificates for the initial payment
date is shown on page S-4.
The pass-through rates applicable to the class A-1A, A-1B and A-2 for each
subsequent payment date will, in the case of each of those classes, remain fixed
at the pass-through rate applicable to the particular class of series 2000-CKP1
certificates for the initial payment date.
The pass-through rates applicable to the class A-3, A-4, B-1 and B-2
certificates for each subsequent payment date will, in the case of each of those
classes, equal the lesser of--
o the pass-through rate applicable to the particular class of series
2000-CKP1 certificates for the initial payment date, and
o the Weighted Average Pool Pass-Through Rate for that subsequent
payment date.
The pass-through rate applicable to the class B-3 certificates for each
subsequent payment date will equal the Weighted Average Pool Pass-Through Rate
for that subsequent payment date.
The pass-through rate applicable to the class S certificates for each
payment date will equal the excess, if any, of--
o the Weighted Average Pool Pass-Through Rate for that payment date,
over
o the weighted average of the respective pass-through rates 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, B-9 and C certificates for that payment date, weighted on the
basis of the relative total principal balances of those other classes
of series 2000-CKP1 certificates outstanding immediately prior to that
payment date.
S-131
<PAGE>
The pass-through rates applicable to the other interest-bearing non-offered
classes of series 2000-CKP1 certificates for each subsequent payment date will,
in the case of each of those classes, remain fixed at the pass-through rate
applicable to the particular class of series 2000-CKP1 certificates for the
initial payment date.
The calculation of the Weighted Average Pool Pass-Through Rate will be
unaffected by any change in the mortgage interest rate for any mortgage loan,
including in connection with any bankruptcy or insolvency of the related
borrower or any modification of that mortgage loan agreed to by the master
servicer or the special servicer.
The class D, E and R certificates will not be interest-bearing and,
therefore, will not have pass-through rates.
Payments of Principal. Subject to the relevant Available P&I Funds and the
priority of payments described under "--Payments--Priority of Payments" below,
the total amount of principal payable with respect to each class of the series
2000-CKP1 certificates, other than the class S, D, E and R certificates, on each
payment date, will equal that class's allocable share of the Total Principal
Payment Amount for that payment date.
In general, the portion of the Total Principal Payment Amount that will be
allocated to the class A-1A and A-1B certificates on each payment date will
equal:
o in the case of the class A-1A certificates, the lesser of--
1. the entire Total Principal Payment Amount for that payment date,
and
2. the total principal balance of the class A-1A certificates
immediately prior to that payment date; and
o in the case of the class A-1B certificates, the lesser of--
1. the entire Total Principal Payment Amount for that payment date,
reduced by any portion of that amount that is allocable to the
class A-1A certificates as described in the preceding bullet
point, and
2. the total principal balance of the class A-1B certificates
immediately prior to that payment date.
However, if both of those classes are outstanding as of any Senior
Principal Payment Cross-Over Date or, in any event, as of the final payment date
for the series 2000-CKP1 certificates, then the Total Principal Payment Amount
for that payment date and any payment date thereafter will be allocable between
those two classes on a pro rata basis in accordance with their respective total
principal balances immediately prior to that payment date, in each case up to
that total principal balance.
While the class A-1A and A-1B certificates are outstanding, no portion of
the Total Principal Payment Amount for any payment date will be allocated to any
other class of series 2000-CKP1 certificates.
Following the retirement of the class A-1A and A-1B certificates, the Total
Principal Payment Amount for each payment date will be allocated to the
respective classes of series 2000-CKP1 certificates identified in the table
below in the order of priority set forth in that table, in each case up to the
lesser of--
o the portion of that Total Principal Payment Amount that remains
unallocated, and
o the total principal balance of the particular class immediately prior
to that payment date.
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<PAGE>
ORDER OF ALLOCATION CLASS
------------------- -----
1st A-2
2nd A-3
3rd A-4
4th B-1
5th B-2
6th B-3
7th B-4
8th B-5
9th B-6
10th B-7
11th B-8
12th B-9
13th C
In no event will the holders of any class of series 2000-CKP1 certificates
listed in the foregoing table be entitled to receive any payments of principal
until the total principal balance of the class A-1A and A-1B certificates is
reduced to zero. Furthermore, in no event will the holders of any class of
series 2000-CKP1 certificates listed in the foregoing table be entitled to
receive any payments of principal until the total principal balance of all other
classes of series 2000-CKP1 certificates, if any, listed above it in the
foregoing table is reduced to zero.
Loss Reimbursement Amounts. As discussed under "--Reductions of Certificate
Principal Balances in Connection with Realized Losses and Additional Trust Fund
Expenses" below, the total principal balance of any class of series 2000-CKP1
certificates, other than the class S, D, E and R certificates, may be reduced
without a corresponding payment of principal. If that occurs with respect to any
class of series 2000-CKP1 certificates, then, subject to the relevant Available
P&I Funds and the priority of payment described under "--Payments--Priority of
Payments" below, the holders of that class will be entitled to be reimbursed for
the amount of that reduction, without interest.
Priority of Payments. On each payment date, the trustee will apply the
Available P&I Funds for that date to make the following payments in the
following order of priority, in each case to the extent of the remaining portion
of the Available P&I Funds:
<TABLE>
<CAPTION>
ORDER OF RECIPIENT
PAYMENT CLASS OR CLASSES TYPE AND AMOUNT OF PAYMENT
-------- ---------------- --------------------------
<S> <C> <C>
1st A-1A, A-1B and S Interest up to the total interest payable on those classes, pro rata based on the total
interest payable on each class
2nd A-1A and A-1B Principal up to the total principal payable on those classes, allocable as between
those classes as described immediately following this table
3rd A-1A and A-1B Reimbursement up to the loss reimbursement amounts for those classes, pro rata based on
the loss reimbursement amount for each class
------------------------------------------------------------------------------------------------------------------------------------
4th A-2 Interest up to the total interest payable on that class
5th A-2 Principal up to the total principal payable on that class
6th A-2 Reimbursement up to the loss reimbursement amount for that class
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
S-133
<PAGE>
<TABLE>
<CAPTION>
ORDER OF RECIPIENT
PAYMENT CLASS OR CLASSES TYPE AND AMOUNT OF PAYMENT
-------- ---------------- --------------------------
<S> <C> <C>
7th A-3 Interest up to the total interest payable on that class
8th A-3 Principal up to the total principal payable on that class
9th A-3 Reimbursement up to the loss reimbursement amount for that class
------------------------------------------------------------------------------------------------------------------------------------
10th A-4 Interest up to the total interest payable on that class
11th A-4 Principal up to the total principal payable on that class
12th A-4 Reimbursement up to the loss reimbursement amount for that class
------------------------------------------------------------------------------------------------------------------------------------
13th B-1 Interest up to the total interest payable on that class
14th B-1 Principal up to the total principal payable on that class
15th B-1 Reimbursement up to the loss reimbursement amount for that class
------------------------------------------------------------------------------------------------------------------------------------
16th B-2 Interest up to the total interest payable on that class
17th B-2 Principal up to the total principal payable on that class
18th B-2 Reimbursement up to the loss reimbursement amount for that class
------------------------------------------------------------------------------------------------------------------------------------
19th B-3 Interest up to the total interest payable on that class
20th B-3 Principal up to the total principal payable on that class
21st B-3 Reimbursement up to the loss reimbursement amount for that class
------------------------------------------------------------------------------------------------------------------------------------
22nd B-4 Interest up to the total interest payable on that class
23rd B-4 Principal up to the total principal payable on that class
24th B-4 Reimbursement up to the loss reimbursement amount for that class
------------------------------------------------------------------------------------------------------------------------------------
25th B-5 Interest up to the total interest payable on that class
26th B-5 Principal up to the total principal payable on that class
27th B-5 Reimbursement up to the loss reimbursement amount for that class
------------------------------------------------------------------------------------------------------------------------------------
28th B-6 Interest up to the total interest payable on that class
29th B-6 Principal up to the total principal payable on that class
30th B-6 Reimbursement up to the loss reimbursement amount for that class
------------------------------------------------------------------------------------------------------------------------------------
31st B-7 Interest up to the total interest payable on that class
32nd B-7 Principal up to the total principal payable on that class
33rd B-7 Reimbursement up to the loss reimbursement amount for that class
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
S-134
<PAGE>
<TABLE>
<CAPTION>
ORDER OF RECIPIENT
PAYMENT CLASS OR CLASSES TYPE AND AMOUNT OF PAYMENT
-------- ---------------- --------------------------
<S> <C> <C>
34th B-8 Interest up to the total interest payable on that class
35th B-8 Principal up to the total principal payable on that class
36th B-8 Reimbursement up to the loss reimbursement amount for that class
------------------------------------------------------------------------------------------------------------------------------------
37th B-9 Interest up to the total interest payable on that class
38th B-9 Principal up to the total principal payable on that class
39th B-9 Reimbursement up to the loss reimbursement amount for that class
-----------------------------------------------------------------------------------------------------------------------------------
40th C Interest up to the total interest payable on that class
41st C Principal up to the total principal payable on that class
42nd C Reimbursement up to the loss reimbursement amount for that class
-----------------------------------------------------------------------------------------------------------------------------------
43rd R Any remaining portion of the Available P&I Funds
</TABLE>
In general, no payments of principal will be made with respect to the class
A-1B certificates until the total principal balance of the class A-1A
certificates is reduced to zero. However, on and after the Senior Principal
Payment Cross-Over Date, and in any event on the final payment date for the
series 2000-CKP1 certificates, the trustee will make payments of principal on
the class A-1A certificates and the class A-1B certificates on a pro rata basis
in accordance with the respective total principal balances of those classes then
outstanding.
References to "loss reimbursement amount" in the foregoing table mean, in
the case of any class of series 2000-CKP1 certificates, other than the class S,
D, E and R certificates, for any payment date, the total amount to which the
holders of that class are entitled as reimbursement for all previously
unreimbursed reductions, if any, made in the total principal balance of that
class on all prior payment dates as discussed under "--Reductions of Certificate
Principal Balances in Connection with Realized Losses and Additional Trust Fund
Expenses" below.
Payments of Prepayment Premiums and Yield Maintenance Charges. If any
prepayment consideration is collected during any particular collection period in
connection with the prepayment of any mortgage loan in the trust, and if that
prepayment consideration is calculated in accordance with a yield maintenance
formula and exceeds any minimum percentage of the amount prepaid, then the
trustee will distribute that prepayment consideration as additional interest, on
the payment date corresponding to that collection period, as follows:
o the holders of each class of offered certificates, if any, then
entitled to payments of principal on that payment date will be
entitled to an amount equal to the product of--
1. the amount of that prepayment consideration, 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 that class of offered certificates for that payment
date, over the relevant discount rate, and the denominator of
which is equal to the excess, if any, of the mortgage interest
rate for the prepaid mortgage loan, over the relevant discount
rate, multiplied by
S-135
<PAGE>
3. a fraction, not greater than one or less than zero, the numerator
of which is equal to the total payments of principal to be made
with respect to that class of offered certificates on that
payment date, and the denominator of which is equal to the Total
Principal Payment Amount for that payment date; and
o any portion of the prepayment consideration that may remain after the
payment(s) on the offered certificates as contemplated by the prior
bullet point, will be payable to the holders of the class S
certificates.
For purposes of the foregoing, the relevant discount rate will, in general,
be the same discount rate that was used to calculate the subject yield
maintenance charge. However, in the case of the one pooled mortgage loan that
provides for a discount rate that is equal to a U.S. Treasury rate that has not
been converted to a monthly equivalent rate, the relevant discount rate for
purposes of the foregoing will be so converted.
If any prepayment consideration is collected during any particular
collection period in connection with the prepayment of any mortgage loan in the
trust, and if that prepayment consideration is calculated in accordance with a
yield maintenance formula, but equals any minimum percentage of the amount
prepaid, then the trustee will distribute that prepayment consideration as
additional interest, on the payment date corresponding to that collection
period, entirely to the holders of the class S certificates.
If any prepayment consideration is collected during any particular
collection period in connection with the prepayment of any mortgage loan in the
trust, and if that prepayment consideration otherwise is calculated as a
specified percentage of the amount prepaid, then the trustee will distribute
that prepayment consideration as additional interest, on the payment date
corresponding to that collection period, as follows:
o the holders of each class of offered certificates, if any, then
entitled to payments of principal on that payment date will be
entitled to an amount equal to the product of--
1. 25% of the amount of that prepayment consideration, multiplied by
2. a fraction, not greater than one or less than zero, the numerator
of which is equal to the total payments of principal made with
respect to that class of offered certificates on that payment
date, and the denominator of which is equal to the Total
Principal Payment Amount for that payment date; and
o any portion of the prepayment consideration that may remain after the
payment(s) on the offered certificates as contemplated by the prior
bullet point, will be payable to the holders of the class S
certificates.
After the payment date on which the last of the offered certificates is
retired, 100% of all prepayment consideration collected on the pooled mortgage
loans will be paid on the class S certificates.
Neither we nor any of the underwriters makes any representation as to--
o the enforceability of any provision of the pooled mortgage loans
requiring the payment of any prepayment consideration, or
o the collectability of that prepayment consideration.
See "Description of the Mortgage Pool--Terms and Conditions of the
Underlying Mortgage Loans--Prepayment Provisions" in this prospectus supplement.
S-136
<PAGE>
Payments of Post-ARD Additional Interest. The holders of the class D
certificates will be entitled to all amounts, if any, collected on the ARD Loans
in the trust and applied as Post-ARD Additional Interest.
Payment of Holiday Inn-Orlando Closing Fee. The holders of the class E
certificates will be entitled to receive the closing fee payable on the earlier
of maturity or repayment of the pooled mortgage loan secured by the mortgaged
real property identified on Exhibit A-1 as Holiday Inn-Orlando.
Treatment of REO Properties. Notwithstanding that any mortgaged real
property may be acquired as part of the trust assets through foreclosure,
deed-in-lieu of foreclosure or otherwise, the related mortgage loan will be
treated as having remained outstanding, until the REO Property is liquidated,
for purposes of determining--
o payments on the series 2000-CKP1 certificates,
o allocations of Realized Losses and Additional Trust Fund Expenses to
the series 2000-CKP1 certificates, and
o the amount of all fees payable to the master servicer, the special
servicer and the trustee under the pooling and servicing agreement.
In connection with the foregoing, that mortgage loan will be taken into
account when determining the Weighted Average Pool Pass-Through Rate and the
Total Principal Payment Amount for each payment date.
Operating revenues and other proceeds derived from an REO Property will be
applied--
o first, to pay, or to reimburse the master servicer, the special
servicer and/or the trustee for the payment of, any costs and expenses
incurred in connection with the operation and disposition of the REO
Property, and
o thereafter, as collections of principal, interest and other amounts
due on the related mortgage loan.
To the extent described under "--Advances of Delinquent Monthly Debt
Service Payments" below, the master servicer and the trustee will be required to
advance delinquent monthly debt service payments with respect to each pooled
mortgage loan as to which the corresponding mortgaged real property has become
an REO Property, in all cases as if the mortgage loan had remained outstanding.
REDUCTIONS TO CERTIFICATE PRINCIPAL BALANCES IN CONNECTION WITH REALIZED LOSSES
AND ADDITIONAL TRUST FUND EXPENSES
As a result of Realized Losses and Additional Trust Fund Expenses, the
total Stated Principal Balance of the mortgage pool may decline below the total
principal balance of the series 2000-CKP1 certificates. If this occurs following
the payments made to the 2000-CKP1 certificateholders on any payment date, then
the respective total principal balances of the following classes of the series
2000-CKP1 certificates are to be sequentially reduced in the following order,
until the total principal balance of those classes of series 2000-CKP1
certificates equals the total Stated Principal Balance of the mortgage pool that
will be outstanding immediately following that payment date.
S-137
<PAGE>
ORDER OF ALLOCATION CLASS
------------------- -----
1st C
2nd B-9
3rd B-8
4th B-7
5th B-6
6th B-5
7th B-4
8th B-3
9th B-2
10th B-1
11th A-4
12th A-3
13th A-2
14th A-1A and A-1B, pro
rata based on total
principal balances
The above-described reductions in the total principal balances of the
respective classes of the series 2000-CKP1 certificates identified in the
foregoing table, will represent an allocation of the Realized Losses and/or
Additional Trust Fund Expenses that caused the particular mismatch in balances
between the pooled mortgage loans and those classes of series 2000-CKP1
certificates. A reduction of this type in the total principal balance of any of
the classes of series 2000-CKP1 certificates identified in the foregoing table,
will result in a corresponding reduction in the total notional amount of the
class S certificates.
The Realized Loss, if any, in connection with the liquidation of a
defaulted mortgage loan, or related REO property, held by the trust, will be an
amount generally equal to the excess, if any, of:
o the outstanding principal balance of the mortgage loan as of the date
of liquidation, together with--
1. all accrued and unpaid interest on the mortgage loan to but not
including the due date in the collection period in which the
liquidation occurred, exclusive, however, of any portion of that
interest that represents Default Interest or Post-ARD Additional
Interest, and
2. all related unreimbursed servicing advances and unpaid
liquidation expenses, over
o the total amount of liquidation proceeds, if any, recovered in
connection with the liquidation.
If any portion of the debt due under a pooled 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, insolvency or similar proceeding involving the related borrower, the
amount forgiven, other than Default Interest and Post-ARD Additional Interest,
also will be treated as a Realized Loss.
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 with respect to unreimbursed advances, which interest
payment is not covered out of late payment charges and Default
Interest actually collected on the related pooled mortgage loan;
o the cost of various opinions of counsel required or permitted to be
obtained in connection with the servicing of the pooled mortgage loans
and the administration of the other trust assets;
S-138
<PAGE>
o any unanticipated, non-mortgage loan specific expenses of the trust,
including--
1. any reimbursements and indemnifications to the trustee, as
described under "Description of the Governing Documents--Certain
Matters Regarding the Trustee" in the accompanying prospectus,
2. any reimbursements and indemnification to the master servicer,
the special servicer and us, as described under "Description of
the Governing Documents--Certain Matters Regarding the Master
Servicer, the Special Servicer, the Manager and Us" in the
accompanying prospectus, and
3. any federal, state and local taxes, and tax-related expenses,
payable out of the trust assets, as described under "Federal
Income Tax Consequences--REMICs--Prohibited Transactions Tax and
Other Taxes" in the accompanying prospectus;
o rating agency fees, other than on-going surveillance fees, that cannot
be recovered from the borrower and that are not paid by any party to
the pooling and servicing agreement; and
o any amounts expended on behalf of the trust to remediate an adverse
environmental condition at any mortgaged real property securing a
defaulted mortgage loan in the trust, as described under "Servicing of
the Underlying Mortgage Loans--Sale of Defaulted Mortgage Loans" in
this prospectus supplement.
ADVANCES OF DELINQUENT MONTHLY DEBT SERVICE PAYMENTS
The master servicer will be required to make, for each payment date, a
total amount of advances of principal and/or interest generally equal to all
scheduled monthly debt service payments, other than balloon payments and Default
Interest, and assumed monthly debt service payments, in each case net of master
servicing fees, that--
o were due or deemed due, as the case may be, with respect to the pooled
mortgage loans during the related collection period, and
o were not paid by or on behalf of the respective underlying 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 exists with respect to any mortgage loan in the trust, then the
master servicer will reduce the interest portion, but not the principal portion,
of each monthly debt service advance that it must make with respect to that
mortgage loan during the period that the Appraisal Reduction Amount exists. The
interest portion of any monthly debt service advance required to be made with
respect to any mortgage loan as to which there exists an Appraisal Reduction
Amount, will equal the product of--
o the amount of the interest portion of that monthly debt service
advance that would otherwise be required to be made for the subject
payment date without regard to this sentence and the prior sentence,
multiplied by
o a fraction--
1. the numerator of which is equal to the Stated Principal Balance
of the mortgage loan, net of the Appraisal Reduction Amount, and
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<PAGE>
2. the denominator of which is equal to the Stated Principal Balance
of the mortgage loan.
With respect to any payment date, the master servicer will be required to
make monthly debt service advances either out of its own funds or, subject to
replacement as and to the extent provided in the pooling and servicing
agreement, funds held in the master servicer's collection account that are not
required to be paid on the series 2000-CKP1 certificates on that payment date.
If the master servicer fails to make a required monthly debt service
advance and the trustee is aware of that failure, the trustee will be obligated
to make that advance. See "--The Trustee" below.
The master servicer and the trustee will each be entitled to recover any
monthly debt service advance made by it out of its own funds, from collections
on the mortgage loan as to which the advance was made. Neither the master
servicer nor the trustee will be obligated to make any monthly debt service
advance that, in its judgment, would not ultimately be recoverable out of
collections on the related mortgage loan. If the master servicer or the trustee
makes any monthly debt service advance that it subsequently determines, in its
judgment, will not be recoverable out of collections on the related mortgage
loan, it may obtain reimbursement for that advance, together with interest
accrued on the advance as described in the next paragraph, out of general
collections on the mortgage loans and any REO Properties in the trust on deposit
in the master servicer's collection account from time to time. See "Description
of the Certificates--Advances in Respect of Delinquencies" in the accompanying
prospectus and "Servicing of the Underlying Mortgage Loans--Collection Account"
in this prospectus supplement.
The master servicer and the trustee will each be entitled to receive
interest on monthly debt service advances made by that party out of its own
funds. That interest will accrue on the amount of each monthly debt service
advance for so long as that advance is outstanding, at an annual rate equal to
the prime rate as published in the "Money Rates" section of The Wall Street
Journal, as that prime rate may change from time to time. Interest accrued with
respect to any monthly debt service advance will be payable at the time that
advance is reimbursed--
o first, out of any Default Interest and late payment charges collected
on the related mortgage loan subsequent to the accrual of that advance
interest, and
o then, if and to the extent that the Default Interest and late payment
charges referred to in the prior bullet point are insufficient to
cover the advance interest, out of any amounts then on deposit in the
master servicer's collection account.
Any delay between a sub-servicer's receipt of a late collection of a
monthly debt service payment as to which a monthly debt service advance was made
and the forwarding of that 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 that monthly debt service advance. To the extent
not offset by Default Interest and/or late payment charges accrued and actually
collected on the related mortgage loan, interest accrued on outstanding monthly
debt service advances will result in a reduction in amounts payable on the
series 2000-CKP1 certificates.
A monthly debt service payment will be assumed to be due with respect to:
o each pooled mortgage loan that is delinquent with respect to its
balloon payment beyond the end of the collection period in which its
maturity date occurs and as to which no arrangements have been agreed
to for the collection of the delinquent amounts, including an
extension of maturity; and
S-140
<PAGE>
o each pooled mortgage loan as to which the corresponding mortgaged real
property has become an REO Property.
The assumed monthly debt service payment deemed due on any mortgage loan
described in the prior sentence that is delinquent as to its balloon payment,
will equal, for its maturity date and for each successive due date that it
remains outstanding and part of the trust, the monthly debt service payment that
would have been due on the mortgage loan on the relevant date if the related
balloon payment had not come due and the mortgage loan had, instead, continued
to amortize and accrue interest according to its terms in effect prior to that
maturity date. The assumed monthly debt service payment deemed due on any
mortgage loan described in the second preceding sentence as to which the related
mortgaged real property has become an REO Property, will equal, for each due
date that the REO Property remains part of the trust, the monthly debt service
payment or, in the case of a mortgage loan delinquent with respect to its
balloon payment, the assumed monthly debt service payment due or deemed due on
the last due date prior to the acquisition of that REO Property. Assumed monthly
debt service payments for ARD Loans do not include Post-ARD Additional Interest
or accelerated amortization payments.
REPORTS TO CERTIFICATEHOLDERS; AVAILABLE INFORMATION
Trustee Reports. Based solely on information provided on a one-time basis
by the respective mortgage loan sellers, and in monthly reports prepared by the
master servicer and the special servicer, and in any event delivered to the
trustee, the trustee will be required to prepare and make available
electronically or, upon request, provide by first class mail, on each payment
date to each registered holder of a series 2000-CKP1 certificate, a reporting
statement substantially in the form of, and containing the information set forth
in, Exhibit B to this prospectus supplement. The trustee's reporting statement
will detail the payments on the series 2000-CKP1 certificates on that payment
date and the performance, both in total and individually to the extent
available, of the pooled mortgage loans and the mortgaged real properties.
Due to the time required to collect all the necessary data and enter it
onto the master servicer's computer system, the master servicer is not required
to provide monthly reports, other than the loan periodic update file of the
standard Commercial Mortgage Securities Association investor reporting package,
before the payment date in December 2000.
Book-Entry Certificates. If you hold your offered certificates in
book-entry form through DTC, you may obtain direct access to the monthly reports
of the trustee as if you were a registered certificateholder, provided that you
deliver a written certification to the trustee confirming your beneficial
ownership in the offered certificates. Otherwise, until definitive certificates
are issued with respect to your offered certificates, the information contained
in the trustee's monthly 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 website. 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. We, the master servicer, the special servicer, the
trustee and the certificate registrar are required to recognize as series
2000-CKP1 certificateholders only those persons in whose names the series
2000-CKP1 certificates are registered on the books and records of the
certificate registrar.
Information Available Electronically. The trustee will make the trustee's
reports available each month via the trustee's internet website. In addition,
the trustee will also make mortgage loan information as presented in the
standard Commercial Mortgage Securities Association investor reporting package
formats available to any holder or beneficial owner of an offered certificate
via the trustee's internet website. The trustee's internet website will
initially be located at "www.ctslink.com/cmbs".
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The trustee will make no representations or warranties as to the accuracy
or completeness of, and may disclaim responsibility for, any information made
available by it for which it is not the original source.
The trustee may require registration and the acceptance of a disclaimer in
connection with providing access to its internet website. The trustee will not
be liable for the dissemination of information made by it in accordance with the
pooling and servicing agreement.
Other Information. The pooling and servicing 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 as a
prospective transferee of an offered certificate or any interest in that offered
certificates, originals or copies, in paper or electronic form, of, among other
things, the following items:
o the pooling and servicing agreement, including exhibits, and any
amendments to the pooling and servicing agreement;
o all monthly reports of the trustee delivered, or otherwise
electronically made available, to series 2000-CKP1 certificateholders
since the date of initial issuance of the offered certificates;
o all officer's certificates delivered to the trustee by the master
servicer and/or the special servicer since the date of initial
issuance of the offered certificates, as described under "Servicing of
the Underlying Mortgage Loans--Evidence as to Compliance" in this
prospectus supplement;
o all accountant's reports delivered to the trustee with respect to the
master servicer and/or the special servicer since the date of initial
issuance of the offered certificates, as described under "Servicing of
the Underlying Mortgage Loans--Evidence as to Compliance" in this
prospectus supplement;
o the most recent inspection report with respect to each mortgaged real
property for a pooled mortgage loan prepared by the master servicer or
the special servicer and delivered to the trustee as described under
"Servicing of the Underlying Mortgage Loans--Inspections; Collection
of Operating Information" in this prospectus supplement;
o the most recent appraisal, if any, with respect to each mortgaged real
property for a pooled mortgage loan obtained by the master servicer or
the special servicer and delivered to the trustee;
o the most recent quarterly and annual operating statement and rent roll
for each mortgaged real property for a pooled mortgage loan 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 Underlying Mortgage
Loans--Inspections; Collection of Operating Information" in this
prospectus supplement; and
o the mortgage files for the pooled mortgage loans, including all
documents, such as modifications, waivers and amendments, that are to
be added to those mortgage files 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 the
copies.
In connection with providing access to or copies of the items described
above, the trustee may require:
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o in the case of a beneficial owner of an offered 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 the person or entity is a beneficial
owner of offered certificates and will keep the information
confidential; and
o in the case of a prospective purchaser of an offered certificate or
any interest in that offered certificate, confirmation executed by the
requesting person or entity, in a form reasonably acceptable to the
trustee, generally to the effect that the person or entity is a
prospective purchaser of offered certificates or an interest in
offered certificates, is requesting the information for use in
evaluating a possible investment in the offered certificates and will
otherwise keep the information confidential.
Registered holders of the offered certificates will be deemed to have
agreed to keep the information described above confidential by the acceptance of
their certificates.
VOTING RIGHTS
The voting rights for the series 2000-CKP1 certificates will be allocated
as follows:
o 99.0% of the voting rights will be allocated to the holders of 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, B-9 and C certificates, in proportion to the respective total
principal balances of those classes;
o 1.0% of the voting rights will be allocated to the holders of the
class S certificates; and
o 0% of the voting rights will be allocated to the holders of the class
D, E and R certificates.
Voting rights allocated to a class of series 2000-CKP1 certificateholders
will be allocated among those certificateholders in proportion to their
respective percentage interests in that class.
TERMINATION
The obligations created by the pooling and servicing agreement will
terminate following the earlier of--
1. the final payment or advance on, or other liquidation of, the last
mortgage loan or related REO Property remaining in the trust, and
2. the purchase of all of the mortgage loans and REO Properties remaining
in the trust by the master servicer, the special servicer or any
single certificateholder or group of certificateholders of the series
2000-CKP1 controlling class, in that order of preference.
Written notice of termination of the pooling and servicing agreement will
be given to each series 2000-CKP1 certificateholder. The final payment with
respect to each series 2000-CKP1 certificate will be made only upon surrender
and cancellation of that certificate at the office of the series 2000-CKP1
certificate registrar or at any other location specified in the notice of
termination.
Any purchase by the master servicer, the special servicer or any single
holder or group of holders of the series 2000-CKP1 controlling class of all the
mortgage loans and REO Properties remaining in the trust is required to be made
at a price equal to:
o the sum of--
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1. the total Stated Principal Balance of all the mortgage loans then
included in the trust, other than any mortgage loans as to which
the mortgaged real properties have become REO Properties,
together with--
o all unpaid and unadvanced interest, other than Default
Interest and Post-ARD Additional Interest, on those mortgage
loans through their respective due dates in the related
collection period, and
o all unreimbursed advances for those mortgage loans, together
with any interest on those advances owing to the parties
that made them, and
2. the appraised value of all REO properties then included in the
trust, as determined by an appraiser mutually agreed upon by the
master servicer, the special servicer and the trustee; minus
o solely in the case of a purchase by the master servicer or the special
servicer, the total of all amounts payable or reimbursable to the
purchaser under the pooling and servicing agreement.
The purchase will result in early retirement of the then outstanding series
2000-CKP1 certificates. However, the right of the master servicer, the special
servicer or any single holder or group of holders of the series 2000-CKP1
controlling class to make the purchase is subject to the requirement that the
total Stated Principal Balance of the mortgage pool be less than 1% of the
initial mortgage pool balance. The termination price, exclusive of any portion
of the termination price payable or reimbursable to any person other than the
series 2000-CKP1 certificateholders, will constitute part of the Available P&I
Funds for the final payment date. Any person or entity making the purchase will
be responsible for reimbursing the parties to the pooling and servicing
agreement for all reasonable out-of-pocket costs and expenses incurred by the
parties in connection with the purchase.
THE TRUSTEE
Wells Fargo Bank Minnesota, N.A. will act as initial trustee under the
pooling and servicing agreement. Wells Fargo is a direct wholly owned subsidiary
of Wells Fargo & Company. It is a national banking association originally
chartered in 1872 and is engaged in a wide range of activities typical of a
national bank. Wells Fargo maintains an office at 11000 Broken Land Parkway,
Columbia, Maryland 21044. Its CMBS customer service help desk can be contacted
at (301) 815-6600.
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 U.S.
or any State of the U.S. or the District of Columbia. Furthermore, the trustee
must at all times--
o be authorized under those laws to exercise trust powers,
o have a combined capital and surplus of at least $50,000,000, and
o be subject to supervision or examination by federal or state
authority.
If the corporation, bank, trust company or association publishes reports of
condition at least annually, in accordance with law or the requirements of the
supervising or examining authority, then the combined capital and surplus of
that corporation, bank, trust company or association will be deemed to be its
combined capital and surplus as described in its most recent published report of
condition.
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We, the master servicer, the special servicer and our 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 series 2000-CKP1 certificates in their own names.
In addition, for purposes of meeting the legal requirements of some 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 assets. All rights, powers, duties and obligations conferred or imposed
upon the trustee will be conferred or imposed upon the trustee and the separate
trustee or co-trustee jointly or, in any jurisdiction in which the trustee shall
be incompetent or unqualified to perform some acts, singly upon the separate
trustee or co-trustee, who shall exercise and perform its rights, powers, duties
and obligations solely at the direction of the trustee.
The trustee will be entitled to a monthly fee for its services. That fee
will accrue with respect to each and every mortgage loan in the mortgage pool.
In each case, that fee will accrue at .0017% per annum on the Stated Principal
Balance of the subject mortgage loan outstanding from time to time and will be
calculated based on the same interest accrue basis, which is either an
Actual/360 Basis, an Actual/365 Basis or a 30/360 Basis, as the subject mortgage
loan. The trustee fee is payable out of general collections on the mortgage
loans and any REO Properties in the trust.
See also "Description of the Governing Documents--The Trustee", "--Duties
of the Trustee", "--Certain Matters Regarding the Trustee" and "--Resignation
and Removal of the Trustee" in the accompanying prospectus.
YIELD AND MATURITY CONSIDERATIONS
YIELD CONSIDERATIONS
General. The yield on any offered certificate will depend on--
o the price at which the certificate is purchased by an investor, and
o the rate, timing and amount of payments on the certificate.
The rate, timing and amount of payments on any offered certificate will in
turn depend on, among other things--
o the pass-through rate for the certificate,
o the rate and timing of principal payments, including principal
prepayments, and other principal collections on the underlying
mortgage loans and the extent to which those amounts are to be applied
in reduction of the principal balance of the certificate,
o the rate, timing and severity of Realized Losses and Additional Trust
Fund Expenses and the extent to which those losses and expenses result
in the reduction of the principal balance of the certificate, and
o the timing and severity of any Net Aggregate Prepayment Interest
Shortfalls and the extent to which those shortfalls result in the
reduction of the interest payments on the certificate.
Pass-Through Rates. The pass-through rates applicable to the class A-3,
A-4, B-1, B-2 and B-3 certificates will be variable and will be equal to, based
upon or limited by, as applicable, the Weighted Average Pool Pass-Through Rate
from time to time. Accordingly, the yield on the class A-3, A-4, B-1, B-2 and
B-3 certificates will be sensitive to changes in the relative composition of the
mortgage pool as a result of scheduled
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amortization, voluntary prepayments and liquidations of underlying mortgage
loans following default. The Weighted Average Pool Pass-Through Rate and,
accordingly, the pass-through rates for the class A-3, A-4, B-1, B-2 and B-3
certificates will not be affected by modifications, waivers or amendments with
respect to the underlying mortgage loans.
See "Description of the Offered Certificates--Payments--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 offered
certificates purchased at a discount or a premium will be affected by the rate
and timing of principal payments made in reduction of the principal balances of
those certificates. In turn, the rate and timing of principal payments that are
paid in reduction of the total principal balance of any offered certificate will
be directly related to the rate and timing of principal payments on or with
respect to the underlying mortgage loans. Finally, the rate and timing of
principal payments on or with respect to the underlying mortgage loans will be
affected by their amortization schedules, the dates on which balloon payments
are due and the rate and timing of principal prepayments and other unscheduled
collections on them, including for this purpose, collections made in connection
with liquidations of mortgage loans due to defaults, casualties or condemnations
affecting the mortgaged real properties, or purchases or other removals of
underlying mortgage loans from the trust.
Prepayments and other early liquidations of the mortgage loans will result
in payments on the offered certificates of amounts that would otherwise be paid
over the remaining terms of the mortgage loans. This will tend to shorten the
weighted average lives of the offered certificates with principal balances.
Defaults on the underlying 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 offered certificates, while work-outs
are negotiated or foreclosures are completed. These delays will tend to lengthen
the weighted average lives of the offered certificates. See "Servicing of the
Underlying Mortgage Loans--Modifications, Waivers, Amendments and Consents" in
this prospectus supplement. In addition, the ability of a borrower under an ARD
Loan to repay that loan on the related anticipated repayment date will generally
depend on its ability to either refinance the mortgage loan or sell the
corresponding mortgaged real property. Also, a borrower under an ARD Loan 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 in the trust will be
paid in full on its anticipated repayment date.
The extent to which the yield to maturity on any offered certificate may
vary from the anticipated yield will depend upon the degree to which the
certificate is purchased at a discount or premium and when, and to what degree,
payments of principal on the underlying mortgage loans are in turn paid in
reduction of the principal balance of the 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 underlying mortgage loans
could result in an actual yield to you that is lower than your anticipated
yield. If you purchase your offered certificates at a premium, you should
consider the risk that a faster than anticipated rate of principal payments on
the underlying mortgage loans could result in an actual yield to you that is
lower than your anticipated yield.
Because the rate of principal payments on or with respect to the underlying
mortgage loans will depend on future events and a variety of factors, no
assurance can be given as to that rate or the rate of principal prepayments in
particular.
Delinquencies and Defaults on the Mortgage Loans. The rate and timing of
delinquencies and defaults on the underlying mortgage loans will affect--
o the amount of payments on your offered certificates,
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o the yield to maturity of your offered certificates,
o the rate of principal payments on your offered certificates, and
o the weighted average life of your offered certificates.
Delinquencies on the underlying mortgage loans, unless covered by advances,
may result in shortfalls in payments of interest and/or principal on your
offered certificates for the current month. Although any shortfalls in payments
of interest may be made up on future payment dates, no interest would accrue on
those shortfalls. Thus, any shortfalls in payments of interest would adversely
affect the yield to maturity of your offered certificates.
If--
o you calculate the anticipated yield to maturity for your offered
certificates based on an assumed rate of default and amount of losses
on the underlying mortgage loans that is lower than the default rate
and amount of losses actually experienced, and
o the additional losses result in a reduction of the total payments on
or the total principal balance of your offered certificates,
then your actual yield to maturity may be lower than you calculated and could,
under some scenarios, be negative.
The timing of any loss on a liquidated mortgage loan that results in a
reduction of the total payments on or the total principal balance of your
offered 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 underlying mortgage loans do not result in a
reduction of the total payments on or the total principal balance of your
offered certificates, the losses may still affect the timing of payments on, and
the weighted average life and yield to maturity of, your offered certificates.
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
with respect to the mortgage loans in the trust:
o prevailing interest rates;
o the terms of the mortgage loans, including--
1. provisions that impose prepayment lock-out periods, and
2. amortization terms that require balloon payments;
o the demographics and relative economic vitality of the areas in which
the mortgaged real properties are located;
o the general supply and demand for commercial and multifamily rental
space of the type available at the mortgaged real properties in the
areas in which those properties are located;
o the quality of management of the mortgaged real properties;
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o the servicing of the mortgage loans;
o possible changes in tax laws; and
o other opportunities for investment.
See "Risk Factors--Risks Related to the Mortgage Loans", "Description of
the Mortgage Pool" and "Servicing of the Underlying Mortgage Loans" in this
prospectus supplement and "Description of the Governing Documents" and "Yield
and Maturity Considerations--Yield and Prepayment Considerations" in the
accompanying prospectus.
The rate of prepayment on the mortgage loans in the trust 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
annual rate at which a mortgage loan accrues interest, the related borrower may
have an increased incentive to refinance the mortgage loan. Conversely, to the
extent prevailing market interest rates exceed the annual rate at which a
mortgage loan accrues interest, the related borrower may be less likely to
voluntarily prepay the mortgage loan. Assuming prevailing market interest rates
exceed the revised mortgage interest rate at which an ARD Loan accrues interest
following its anticipated repayment date, the primary incentive for the related
borrower to prepay the mortgage 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 otherwise be applied to pay down principal of the mortgage loan.
Accordingly, there can be no assurance that any ARD Loan in the trust 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 underlying borrowers may
sell their mortgaged real properties in order to realize their equity in those
properties, to meet cash flow needs or to make other investments. In addition,
some underlying borrowers may be motivated by federal and state tax laws, which
are subject to change, to sell their mortgaged real properties.
A number of the underlying borrowers are partnerships. The bankruptcy of
the general partner in a partnership may result in the dissolution of the
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.
We make no representation or warranty regarding:
o the particular factors that will affect the rate and timing of
prepayments and defaults on the underlying mortgage loans;
o the relative importance of those factors;
o the percentage of the total principal balance of the underlying
mortgage loans that will be prepaid or as to which a default will have
occurred as of any particular date; or
o the overall rate of prepayment or default on the underlying mortgage
loans.
Unpaid Interest. If the portion of the Available P&I Funds payable with
respect to interest on any class of offered certificates on any payment date is
less than the total amount of interest then payable for the class, the shortfall
will be payable to the holders of those certificates on subsequent payment
dates, subject to the Available P&I Funds on those subsequent payment dates and
the priority of payments described under
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"Description of the Offered Certificates--Payments--Priority of Payments" in
this prospectus supplement. That shortfall will not bear interest, however, and
will therefore negatively affect the yield to maturity of that class of offered
certificates for so long as it is outstanding.
Delay in Payments. Because monthly payments will not be made on the offered
certificates until several days after the due dates for the underlying mortgage
loans during the related collection period, your effective yield will be lower
than the yield that would otherwise be produced by your pass-through rate and
purchase price, assuming that purchase price did not account for a delay.
WEIGHTED AVERAGE LIVES OF THE OFFERED CERTIFICATES
For purposes of this prospectus supplement, the weighted average life of
any offered certificate refers to the average amount of time that will elapse
from the assumed settlement date of November 10, 2000 until each dollar to be
applied in reduction of the total principal balance of those certificates is
paid to the investor. For purposes of this "Yield and Maturity Considerations"
section, the weighted average life of any offered certificate is determined by:
o multiplying the amount of each principal payment on the certificate by
the number of years from the assumed settlement date to the related
payment date;
o summing the results; and
o dividing the sum by the total amount of the reductions in the
principal balance of the certificate.
Accordingly, the weighted average life of any offered certificate will be
influenced by, among other things, the rate at which principal of the pooled
mortgage loans is paid or otherwise collected or advanced and the extent to
which those payments, collections and/or advances of principal are in turn
applied in reduction of the principal balance of that certificate.
As described in this prospectus supplement, the Total Principal Payment
Amount for each payment date will be payable first with respect to the class
A-1A and/or class A-1B certificates until the total principal balances of those
classes are reduced to zero, and will thereafter be distributable entirely with
respect to the other classes of series 2000-CKP1 certificates with principal
balances, sequentially based upon their relative seniority, in each case until
the related total principal balance is reduced to zero. As a consequence of the
foregoing, the weighted average lives of the class A-1A and class A-1B
certificates may be shorter, and the weighted average lives of the other classes
of offered certificates may be longer, than would otherwise be the case if the
principal payment amount for each payment date was being paid on a pro rata
basis among the respective classes of series 2000-CKP1 certificates with
principal balances.
The tables set forth in Exhibit C show with respect to each class of
offered certificates--
o the weighted average life of that class, and
o the percentage of the initial total principal balance of that class
that would be outstanding after each of the specified dates,
based upon each of the indicated levels of CPR and the Modeling Assumptions.
The actual characteristics and performance of the pooled mortgage loans
will differ from the assumptions used in calculating the tables on Exhibit C to
this prospectus supplement. Those tables 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
the assumptions used in
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calculating the tables on Exhibit C to this prospectus supplement and the actual
characteristics and performance of the pooled mortgage loans, or actual
prepayment or loss experience, will affect the percentages of initial total
principal balances outstanding over time and the weighted average lives of the
offered 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.
We make no representation that--
o the mortgage loans in the trust will prepay in accordance with the
assumptions set forth in this prospectus supplement at any of the
indicated levels of CPR or at any other particular prepayment rate,
o all the mortgage loans in the trust will prepay in accordance with the
assumptions set forth in this prospectus supplement at the same rate,
or
o mortgage loans in the trust that are in a prepayment lock-out period,
including any part of that period when defeasance is allowed, will not
prepay as a result of involuntary liquidations upon default or
otherwise.
USE OF PROCEEDS
Substantially all of the proceeds from the sale of the offered certificates
will be used by us to purchase the mortgage loans that we will include in the
trust and to pay expenses in connection with the issuance of the series
2000-CKP1 certificates.
FEDERAL INCOME TAX CONSEQUENCES
GENERAL
Upon the initial issuance of the offered certificates, Sidley & Austin, our
counsel, will deliver its opinion generally to the effect that, assuming
compliance with the pooling and servicing agreement, and subject to any other
assumptions set forth in the opinion, REMIC I, REMIC II and REMIC III,
respectively, will each qualify as a REMIC under the Internal Revenue Code of
1986 and the arrangement under which the right to Post-ARD Additional Interest
is held will be classified as a grantor trust for federal income tax purposes.
The assets of REMIC I will generally include--
o the pooled mortgage loans,
o any REO Properties acquired on behalf of the series 2000-CKP1
certificateholders,
o the master servicer's collection account,
o the special servicer's REO account, and
o the trustee's payment account and interest reserve account,
but will exclude any collections of Post-ARD Additional Interest on the ARD
Loans.
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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 be the assets of REMIC II,
o the separate non-certificated regular interests in REMIC II will be
the regular interests in REMIC II and will be the assets of REMIC III,
o the class 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, B-9 and C certificates will evidence the regular interests
in, and will generally be treated as debt obligations of, REMIC III,
o the class R certificates will evidence the sole class of residual
interests in each of REMIC I, REMIC II and REMIC III,
o the class D certificates will evidence interests in a grantor trust
and will generally be treated as representing beneficial ownership of
Post-ARD Additional Interest, if any, accrued and received with
respect to the ARD Loans, and
o the class E certificates will evidence interests in a grantor trust
and will generally be treated as representing beneficial ownership of
the closing fee payable upon the earlier of maturity or repayment of
the pooled mortgage loan secured by the mortgaged real property
identified on Exhibit A-1 to this prospectus supplement as Holiday Inn
Orlando.
DISCOUNT AND PREMIUM; PREPAYMENT CONSIDERATION
For federal income tax reporting purposes, the class B-3 certificates will
be issued with a de minimis amount of original issue discount. None of the other
classes of offered certificates will be issued with original issue discount.
When determining the rate of accrual of market discount and premium, if any, for
federal income tax purposes, the prepayment assumption will be that, subsequent
to the date of any determination--
o the ARD Loans in the trust will be paid in full on their respective
anticipated repayment dates,
o no mortgage loan in the trust will otherwise be prepaid prior to
maturity, and
o there will be no extension of maturity for any mortgage loan in the
trust.
However, no representation is made as to the actual rate at which the
pooled mortgage loans will prepay, if at all. See "Federal Income Tax
Consequences--REMICs--Taxation of Owners of REMIC Regular Certificates" in the
accompanying prospectus.
The IRS has issued regulations under Sections 1271 to 1275 of the Internal
Revenue Code generally addressing the treatment of debt instruments issued with
original issue discount. You should be aware, however, that those regulations
and Section 1272(a)(6) of the Internal Revenue Code do not adequately address
all issues relevant to, or are not applicable to, prepayable securities such as
the offered certificates. We recommend that you consult with your own tax
advisor concerning the tax treatment of your offered certificates.
If the method for computing original issue discount described in the
accompanying prospectus results in a negative amount for any period with respect
to any holder of offered certificates, the amount of original issue discount
allocable to that period would be zero. The holder would be permitted to offset
the negative amount only against future original issue discount, if any,
attributable to his or her certificates.
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Some classes of the offered certificates may be treated for federal income
tax purposes as having been issued at a premium. Whether any holder of these
classes of offered certificates will be treated as holding a certificate with
amortizable bond premium will depend on the certificateholder's purchase price
and the payments remaining to be made on the certificate at the time of its
acquisition by the certificateholder. If you acquire an interest in any class of
offered certificates issued at a premium, you should consider consulting your
own tax advisor regarding the possibility of making an election to amortize the
premium. See "Federal Income Tax Consequences--REMICs--Taxation of Owners of
REMIC Regular Certificates--Premium" in the accompanying prospectus.
CHARACTERIZATION OF INVESTMENTS IN OFFERED CERTIFICATES
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 Internal
Revenue 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 Internal Revenue Code to the extent that those certificates are treated as
"real estate assets" within the meaning of Section 856(c)(5)(B) of the Internal
Revenue Code.
Most of the mortgage loans to be included in the trust are not secured by
real estate used for residential or other purposes prescribed in Section
7701(a)(19)(C) of the Internal Revenue Code. 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 a thrift institution seeking to be treated as a "domestic building
and loan association" under Section 7701(a)(19)(C) of the Internal Revenue Code.
The offered certificates will be treated as--
o "qualified mortgages" for another REMIC under Section 860G(a)(3)(C) of
the Internal Revenue Code, and
o "permitted assets" for a "financial asset securitization investment
trust" under Section 860L(c) of the Internal Revenue Code.
To the extent an offered certificate represents ownership of an interest in
a mortgage loan that is secured in part by the related borrower's interest in a
bank account, that mortgage loan is not secured solely by real estate.
Therefore:
o a portion of that certificate may not represent ownership of "loans
secured by an interest in real property" or other assets described in
Section 7701(a)(19)(C) of the Internal Revenue Code;
o a portion of that certificate may not represent ownership of "real
estate assets" under Section 856(c)(5)(B) of the Internal Revenue
Code; and
o the interest on that certificate may not constitute "interest on
obligations secured by mortgages on real property" within the meaning
of Section 856(c)(3)(B) of the Internal Revenue 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 accompanying prospectus.
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended, and the
Internal Revenue Code of 1986 impose various requirements on--
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o ERISA Plans, and
o persons that are fiduciaries with respect to ERISA Plans,
in connection with the investment of the assets of an ERISA Plan. For purposes
of this discussion, ERISA Plans may include individual retirement accounts and
annuities, Keogh plans and collective investment funds and separate accounts,
including as applicable, insurance company general accounts, in which other
ERISA Plans are invested.
A fiduciary of any ERISA Plan should carefully review with its legal
advisors whether the purchase or holding of offered certificates could be, or
give rise, to a transaction that is prohibited or is not otherwise permitted
either under ERISA or Section 4975 of the Internal Revenue Code or whether there
exists any statutory or administrative exemption applicable thereto. Some
fiduciary and prohibited transaction issues arise only if the assets of the
trust are "plan assets" for purposes of Part 4 of Title I of ERISA and Section
4975 of the Internal Revenue Code. Whether the assets of the trust will be plan
assets at any time will depend on a number of factors, including the portion of
any class of series 2000-CKP1 certificates that is held by benefit plan
investors, within the meaning of U.S. Department of Labor Regulation Section
2510.3-101.
The U.S. Department of Labor has issued an individual prohibited
transaction exemption to Donaldson, Lufkin & Jenrette Securities Corporation
identified as PTE 90-83, to Prudential Securities Incorporated as PTE 90-32, to
Credit Suisse First Boston Corporation identified as PTE 89-90 and to Smith
Barney Inc., a predecessor in interest to Salomon Smith Barney Inc., identified
as PTE 91-23. Subject to the satisfaction of conditions set forth in them, the
Underwriter Exemptions generally exempt 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 these prohibited transactions under Sections 4975(a) and
(b) of the Internal Revenue Code, specified transactions relating to, among
other things--
o the servicing and operation of pools of real estate loans, such as the
mortgage pool, and
o the purchase, sale and holding of mortgage pass-through certificates,
such as the class A-1A and A-1B certificates, that are underwritten by
an Exemption-Favored Party.
Each of the Underwriter Exemptions sets forth six general conditions which
must be satisfied for a transaction involving the purchase, sale and holding of
a class A-1A or A-1B certificate to be eligible for exemptive relief under that
exemption. The conditions are as follows:
o first, the acquisition of the certificate by a Plan must be on terms
that are at least as favorable to the ERISA Plan as they would be in
an arm's-length transaction with an unrelated party;
o second, the rights and interests evidenced by that 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, that certificate
must be rated in one of the three highest generic rating categories by
S&P, Fitch or Moody's;
o fourth, the trustee cannot be an affiliate of any other member of the
Restricted Group;
o fifth, the following must be true--
1. the sum of all payments made to and retained by Exemption-Favored
Parties must represent not more than reasonable compensation for
underwriting the relevant class of certificates,
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2. the sum of all payments made to and retained by us in connection
with the assignment of the underlying mortgage loans to the trust
must represent not more than the fair market value of the
obligations, and
3. 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 that person's
services under the pooling and servicing agreement and
reimbursement of that person's reasonable expenses in connection
therewith; and
o sixth, the investing ERISA Plan must be an accredited investor as
defined in Rule 501(a)(1) of Regulation D under the Securities Act of
1933, as amended.
Because the class A-1A and A-1B certificates are not subordinated to any
other class of series 2000-CKP1 certificates, the second general condition set
forth above is satisfied with respect to the class A-1A and A-1B certificates.
It is a condition of their issuance that the class A-1A and A-1B 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 date of initial issuance of the certificates, the third
and fourth general conditions set forth above will be satisfied with respect to
the class A-1A and A-1B certificates. A fiduciary of an ERISA Plan contemplating
the purchase of a class A-1A or A-1B certificate in the secondary market must
make its own determination that, at the time of the purchase, the certificate
continues to satisfy the third and fourth general conditions set forth above. A
fiduciary of an ERISA Plan contemplating a purchase of a class A-1A or A-1B
certificate, whether in the initial issuance of the 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 the
certificate as of the date of the purchase. An ERISA 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
class A-1A or A-1B certificate.
Each of the Underwriter Exemptions also requires that the trust meet the
following requirements:
o the trust assets must consist solely of assets of the type that have
been included in other investment pools;
o certificates evidencing interests in those other investment pools must
have been rated in one of the three highest generic categories of S&P,
Fitch, Moody's or Duff & Phelps Credit Rating Co. for at least one
year prior to the ERISA Plan's acquisition of a class A-1A or A-1B
certificate; and
o certificates evidencing interests in those other investment pools must
have been purchased by investors other than ERISA Plans for at least
one year prior to any ERISA Plan's acquisition of a class A-1A or A-1B
certificate.
We believe that these requirements have been satisfied as of the date of
this prospectus supplement.
If the general conditions of the Underwriter Exemptions are satisfied, they
may each 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 Internal Revenue Code by reason of Sections 4975(c)(1)(A) through (D)
of that Code, in connection with--
o the direct or indirect sale, exchange or transfer of class A-1A or
A-1B certificates acquired by an ERISA Plan upon initial issuance from
us or an Exemption-Favored Party when we are, or a mortgage loan
seller, PMCC, the trustee, the master servicer, the special servicer
or any sub-
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servicer, provider of credit support, Exemption-Favored Party or
borrower is, a Party in Interest with respect to the investing ERISA
Plan,
o the direct or indirect acquisition or disposition in the secondary
market of class A-1A or A-1B certificates by an ERISA Plan, and
o the continued holding of class A-1A or A-1B certificates by an ERISA
Plan.
However, no exemption is provided from the restrictions of Sections
406(a)(1)(E), 406(a)(2) and 407 of ERISA if the acquisition or holding of a
class A-1A or A-1B certificate is--
o on behalf of an ERISA Plan sponsored by any member of the Restricted
Group, and
o by any person who has discretionary authority or renders investment
advice with respect to the assets of that ERISA Plan.
Moreover, if the general conditions of the Underwriter Exemptions, as well
as other conditions set forth in those exemptions, are satisfied, the
Underwriter Exemptions may each 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 Internal Revenue Code in connection with--
o the direct or indirect sale, exchange or transfer of class A-1A or
A-1B certificates in the initial issuance of those certificates
between us or an Exemption-Favored Party and an ERISA Plan, when the
person who has discretionary authority or renders investment advice
with respect to the investment of the assets of the ERISA Plan in
those certificates is--
1. a borrower with respect to 5.0% or less of the fair market value
of the underlying mortgage loans, or
2. an affiliate of that borrower,
o the direct or indirect acquisition or disposition in the secondary
market of class A-1A or A-1B certificates by an ERISA Plan, and
o the continued holding of class A-1A or A-1B certificates by an ERISA
Plan.
Further, if the general conditions of the Underwriter Exemptions, as well
as other conditions set forth in those exemptions, are satisfied, the
Underwriter Exemptions 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 Internal Revenue Code by reason of Section 4975(c) of
that Code, for transactions in connection with the servicing, management and
operation of the trust assets.
Lastly, if the general conditions of the Underwriter Exemptions are
satisfied, they may each also 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 Internal Revenue Code by reason of Sections 4975(c)(1)(A) through
(D) of that Code, if the 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--
o providing services to the ERISA Plan, or
o having a specified relationship to this person,
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solely as a result of the ERISA Plan's ownership of class A-1A or A-1B
certificates.
Before purchasing a class A-1A or A-1B certificate, a fiduciary of an ERISA
Plan should itself confirm that--
o the class A-1A and A-1B certificates are certificates for purposes of
the Underwriter Exemptions, and
o the general and other conditions set forth in the Underwriter
Exemptions, and the other requirements set forth in those exemptions,
would be satisfied at the time of the purchase.
In addition to determining the availability of the exemptive relief
provided in the Underwriter Exemptions, a fiduciary of an ERISA Plan considering
an investment in class A-1A or A-1B certificates should consider the
availability of any other prohibited transaction class exemptions. See "ERISA
Considerations" in the accompanying prospectus. There can be no assurance that
any exemption described in the accompanying prospectus will apply with respect
to any particular investment by an ERISA Plan in class A-1A or A-1B certificates
or, even if it were deemed to apply, that it would apply to all prohibited
transactions that may occur in connection with the investment. A purchaser of
class A-1A or A-1B certificates should be aware, however, that even if the
conditions specified in one or more class exemptions are satisfied, the scope of
relief provided by a class exemption may not cover all acts which might be
construed as prohibited transactions.
As of the date of this prospectus supplement, the characteristics of the
class A-2, A-3, A-4, B-1, B-2 and B-3 certificates do not meet the requirements
of the Underwriter Exemptions. Accordingly, under current law, those offered
certificates may not be acquired by, on behalf of or with the assets of an ERISA
Plan, except in the case of an insurance company using funds in its general
account, which may be able to rely on Section III of Prohibited Transaction
Class Exemption, which we discuss below.
So long as the applicable conditions are satisfied, Section III of 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 Internal
Revenue Code transactions in connection with the servicing, management and
operation of the trust under circumstances where an insurance company general
account has an interest in the trust as a result of its acquisition of series
2000-CKP1 certificates. If these conditions are met, insurance company general
accounts would be allowed to purchase those classes of the offered certificates,
such as the class A-2, A-3, A-4, B-1, B-2 and B-3 certificates, that do not meet
the requirements of the Underwriter Exemptions solely because they--
o are subordinated to other classes of the series 2000-CKP1
certificates, or
o have not received a rating at the time of the purchase in one of the
three highest rating categories from S&P, Fitch or Moody's.
All other conditions of the Underwriter Exemptions would have to be satisfied in
order for PTCE 95-60 to be available. Before purchasing any class A-2, A-3, A-4,
B-1, B-2 or B-3 certificate, an insurance company general account seeking to
rely on Section III of PTCE 95-60 should itself confirm that all applicable
conditions and other requirements have been satisfied.
The Department of Labor has proposed amendments to the Underwriter
Exemptions that, if finalized in current form, generally will be retroactively
effective as of August 23, 2000. Among other changes, it is anticipated that the
Underwriter Exemptions, as so amended, would permit ERISA Plans to purchase
offered certificates such as the class A-2, A-3, A-4, B-1, B-2 and B-3
certificates, provided that--
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o they are rated in any of the four highest ratings categories of
Moody's, Fitch or S&P, and
o all other requirements of the Underwriter Exemptions are met. It is
not certain if and when the proposed amendments will be issued in
final form, and it is not certain that, if finalized, the proposed
amendments will contain the same relief as is currently proposed.
Fiduciaries of ERISA Plans should, and other potential investors who
may be analyzing the potential liquidity of their investment may wish
to, consult with their advisors regarding the proposed amendments.
A governmental plan as defined in Section 3(32) of ERISA is not subject to
Title I of ERISA or Section 4975 of the Internal Revenue Code. However, a
governmental plan may be subject to a federal, state or local law which is, to a
material extent, similar to the foregoing provisions of ERISA or the Internal
Revenue Code. A fiduciary of a governmental plan should make its own
determination as to the need for and the availability of any exemptive relief
under any similar law.
Any fiduciary of an ERISA Plan considering whether to purchase an offered
certificate on behalf of that ERISA Plan should consult with its counsel
regarding the applicability of the fiduciary responsibility and prohibited
transaction provisions of ERISA and the Internal Revenue Code to the investment.
The sale of offered certificates to an ERISA Plan is in no way a
representation or warranty by us or any of the underwriters that--
o the investment meets all relevant legal requirements with respect to
investments by ERISA Plans generally or by any particular ERISA Plan,
or
o the investment is appropriate for ERISA Plans generally or for any
particular ERISA Plan.
LEGAL INVESTMENT
The offered certificates will not be mortgage related securities for
purposes of SMMEA. As a result, 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 we nor any of the underwriters 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--
o are legal investments for them, or
o are subject to investment, capital or other restrictions.
In addition, investors should consider the applicability of statutes,
rules, regulations, orders, guidelines or agreements generally governing
investments made by a particular investor, including--
o prudent investor provisions,
o percentage-of-assets limits, and
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o 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 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 are legal
investments for the investors.
See "Legal Investment" in the accompanying prospectus.
METHOD OF DISTRIBUTION
Subject to the terms and conditions of an underwriting agreement dated
October 27, 2000 between us and the underwriters, each underwriter has agreed to
purchase from us and we have agreed to sell to each underwriter its allocable
share, specified in the following table as a percentage, 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 November 7, 2000, against payment in
immediately available funds. Proceeds to us from the sale of the offered
certificates, before deducting expenses payable by us, will be approximately
100.4% of the total principal balance of the offered certificates, plus accrued
interest on all the offered certificates from November 1, 2000.
<TABLE>
<CAPTION>
UNDERWRITER CLASS A-1A CLASS A-1B CLASS A-2 CLASS A-3 CLASS A-4 CLASS B-1 CLASS B-2 CLASS B-3
----------- ---------- ---------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Donaldson, Lufkin
& Jenrette 36.92% 48.73% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00%
Prudential Securities 36.92% 48.73% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00%
Credit Suisse First
Boston 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
McDonald Investments 19.02% 1.27% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Salomon Smith Barney 7.14% 1.27% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
------- ------- ------- ------- ------- ------- ------- -------
100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
With respect to this offering--
o Donaldson, Lufkin & Jenrette Securities Corporation and Prudential
Securities Incorporated will act as co-lead managers and joint
bookrunners, and
o Credit Suisse First Boston Corporation, McDonald Investments Inc. and
Salomon Smith Barney Inc. will act as co-managers.
The underwriters are offering the offered certificates subject to prior
sale, when, as and if delivered to and accepted by each of them, and subject to
various other conditions. Each underwriter currently intends to sell its
allocation of the offered certificates from time to time in one or more
negotiated transactions or otherwise at varying prices to be determined at the
time of sale. The underwriters may sell the offered certificates to or through
dealers, and the dealers may receive compensation in the form of underwriting
discounts, concessions or commissions from the underwriters. The underwriters
may be deemed to have received compensation from us, in connection with the sale
of the offered certificates, 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 statutory
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 of 1933, as amended.
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The underwriting agreement provides that we will indemnify each
underwriter, and that under limited circumstances each underwriter will
indemnify us, against various civil liabilities under the Securities Act,
relating to the disclosure in this prospectus supplement, the accompanying
prospectus or our registration statement. Each mortgage loan seller and/or one
of its affiliates has agreed to indemnify us, our officers and directors, the
underwriters, and each person, if any, who controls us or any underwriter within
the meaning of Section 15 of the Securities Act, with respect to liabilities,
including specific liabilities under the Securities Act, relating to the
mortgage loans being sold by it for inclusion in the trust.
We have been advised by each of Donaldson, Lufkin & Jenrette Securities
Corporation, Credit Suisse First Boston Corporation, McDonald Investments Inc.
and Salomon Smith Barney Inc. that it presently intends to make a market in the
offered certificates. None of the underwriters has any obligation to do so,
however, and any market making may be discontinued at any time. It has been
announced that Prudential Securities Incorporated is exiting the institutional
fixed income business, and accordingly, that underwriter is unlikely to
participate in any market-making activities with respect to the offered
certificates. There can be no assurance that an active public market for the
offered certificates will develop. See "Risk Factors--Lack of Liquidity Will
Impair Your Ability to Sell Your Certificates and May Have an Adverse Effect on
the Market Value of Your Certificates" in the accompanying prospectus.
This prospectus supplement may only be issued or passed on in the United
Kingdom to a person who is of a kind described in article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995 or is a
person to whom this prospectus supplement may otherwise lawfully be issued or
passed on.
The trust described in this prospectus supplement may only be promoted,
whether by the issuing or passing on of documents as referred to in the
foregoing restriction or otherwise, by an authorized person under Chapter III of
the Financial Services Act 1986 of the United Kingdom to a person in the United
Kingdom if that person is of a kind described in section 76(2) of that Act or as
permitted by the Financial Services (Promotion of Unregulated Schemes)
Regulations 1991, as amended.
Donaldson, Lufkin & Jenrette Securities Corporation, one of the
underwriters, is one of our affiliates. In connection with the announced
acquisition of Donaldson, Lufkin & Jenrette, Inc. by Credit Suisse First Boston,
Inc., to the extent required or permitted under applicable law or regulation,
Donaldson, Lufkin & Jenrette Securities Corporation may act through or in
conjunction with Credit Suisse First Boston Corporation in performing certain of
its duties as underwriter with respect to this offering.
LEGAL MATTERS
Particular legal matters relating to the series 2000-CKP1 certificates will
be passed upon for us and the underwriters by Sidley & Austin, New York, New
York.
RATINGS
It is a condition to their issuance that the respective classes of offered
certificates be rated as follows:
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CLASS MOODY'S FITCH
----- ------- -----
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 Baa1 BBB+
Class B-2 Baa2 BBB
Class B-3 Baa3 BBB-
The ratings on the offered certificates address the likelihood of--
o the timely receipt by their holders of all payments of interest to
which they are entitled on each payment date, and
o the ultimate receipt by their holders of all payments of principal to
which they are entitled on or before the rated final payment date.
The ratings on the offered certificates take into consideration--
o the credit quality of the mortgage pool,
o structural and legal aspects associated with the offered certificates,
and
o 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 underlying mortgage loans,
o the likelihood or frequency of prepayments of principal on the
underlying mortgage loans,
o the degree to which the amount or frequency of prepayments of
principal on the underlying mortgage loans might differ from those
originally anticipated,
o whether or to what extent the interest payable on any class of offered
certificates may be reduced in connection with Net Aggregate
Prepayment Interest Shortfalls, and
o whether and to what extent Default Interest or Post-ARD Additional
Interest will be received.
Also, a security rating does not represent any assessment of the yield to
maturity that investors may experience in the event of rapid prepayments and/or
other liquidations of the underlying mortgage loans.
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 of
offered certificates and, if so, what the rating would be. A rating
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assigned to any class of offered certificates by a rating agency that has not
been requested by us to do so may be lower than the rating assigned thereto by
Moody's or Fitch.
The ratings on the offered certificates should be evaluated independently
from similar ratings on other types of securities. A security rating is not a
recommendation to buy, sell or hold securities and may be subject to revision or
withdrawal at any time by the assigning rating organization. Each security
rating should be evaluated independently of any other security rating. See
"Rating" in the accompanying prospectus.
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GLOSSARY
The following capitalized terms will have the respective meanings assigned
to them in this "Glossary" section whenever they are used in this prospectus
supplement, including in any of the exhibits to this prospectus supplement or on
the accompanying diskette.
"30/360 Basis" means the accrual of interest based on a 360-day year
consisting of twelve 30-day months.
"437 Madison Avenue Loan" means the pooled mortgage loan secured by the 437
Madison Avenue Property.
"437 Madison Avenue Property" means the mortgaged real property identified
on Exhibit A-1 to the prospectus supplement as 437 Madison Avenue.
"Actual/360 Basis" means the accrual of interest based on the actual number
of days elapsed during each one-month accrual period in a year assumed to
consist of 360 days.
"Actual/365 Basis" means the accrual of interest based on the actual number
of days elapsed during each one-month accrual period in a year consisting of 365
days.
"Additional Trust Fund Expense" means an expense of the trust that--
o arises out of a default on a mortgage loan or an otherwise
unanticipated event,
o is not included in the calculation of a Realized Loss, and
o is not covered by a servicing advance or a corresponding collection
from the related borrower.
We provide some examples of Additional Trust Fund Expenses under
"Description of the Offered Certificates--Reductions to Certificate Principal
Balances in Connection with Realized Losses and Additional Trust Fund Expenses"
in this prospectus supplement.
"Alliance GD FH F1 Portfolio Loan" means the pooled mortgage loan secured
by the Alliance GD FH F1 Properties.
"Alliance GD FH F1 Properties" means the mortgaged real properties
identified on Exhibit A-1 to this prospectus supplement as Seven Gables
Apartments and Highridge Apartments.
"Alliance GD FH F2 Portfolio Loan" means the pooled mortgage loan secured
by the Alliance GD FH F2 Properties.
"Alliance GD FH F2 Properties" means the mortgaged real properties
identified on Exhibit A-1 to this prospectus supplement as Timbercreek
Apartments and Deering Manor.
"Appraisal Reduction Amount" means, for any mortgage loan in the trust as
to which an Appraisal Trigger Event has occurred, an amount that:
o will be determined shortly following the later of--
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1. the date on which the relevant appraisal or other valuation is
obtained or performed, as described under "Servicing of the
Underlying Mortgage Loans--Required Appraisals" in this
prospectus supplement, and
2. the date on which the relevant Appraisal Trigger Event occurred;
and
o will equal the excess, if any, of "x" over "y" where--
1. "x" is equal to the sum of:
o the Stated Principal Balance of the mortgage loan;
o to the extent not previously advanced by or on behalf of the
master servicer or the trustee, all unpaid interest, other than
any Default Interest and Post-ARD Additional Interest, accrued on
the mortgage loan through the most recent due date prior to the
date of determination;
o all accrued but unpaid special servicing fees with respect to the
mortgage loan;
o all related unreimbursed advances made by or on behalf of the
master servicer, the special servicer or the trustee with respect
to the required appraisal loan, together with interest on those
advances; and
o all currently due and unpaid real estate taxes and assessments,
insurance premiums and, if applicable, ground rents with respect
to the related mortgaged real property; and
2. "y" is equal to the sum of:
o the excess, if any, of 90% of the resulting appraised or
estimated value of the related mortgaged real property or
REO Property, over the amount of any obligations secured by
liens on the property that are prior to the lien of the
mortgage loan; and
o various escrow payments, other reserves and letters of
credit held by the master servicer or the special servicer
with respect to the mortgage loan.
If, however--
o the appraisal or other valuation referred to in the first bullet point
of this definition is not obtained or performed within 60 days of the
Appraisal Trigger Event referred to in the first bullet point of this
definition, and
o either--
1. no comparable appraisal or other valuation had been obtained or
performed during the 12-month period prior to that Appraisal
Trigger Event, or
2. there has been a material change in the circumstances surrounding
the related mortgaged real property subsequent to the earlier
appraisal or other valuation that, in the special servicer's
judgment, materially affects the property's value,
then until the required appraisal or other valuation is obtained or performed,
the Appraisal Reduction Amount for the subject mortgage loan will equal 25% of
the Stated Principal Balance that mortgage loan. After receipt
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of the required appraisal or other valuation, the special servicer will
determine the Appraisal Reduction Amount, if any, for the subject mortgage loan
as described in the first sentence of this definition.
"Appraisal Trigger Event" means, with respect to any mortgage loan in the
trust, any of the following events:
o the related borrower fails to make any monthly debt service payment
with respect to the mortgage loan and the failure continues uncured
for 120 days;
o sixty days after the special servicer receives notice that a receiver
or similar official is appointed and continues in that capacity with
respect to the mortgaged real property securing the mortgage loan;
o sixty days after the special servicer receives notice that the related
borrower becomes the subject of bankruptcy, insolvency or similar
proceedings;
o the mortgaged real property securing the mortgage loan becomes an REO
Property; and
o any other events that may be required by the applicable rating
agencies, which may include events involving loan modifications.
"ARD Loan" means any mortgage loan in the trust having the characteristics
described in the first paragraph under "Description of the Mortgage Pool--Terms
and Conditions of the Underlying Mortgage Loans--ARD Loans" in this prospectus
supplement.
"ASTM" means the American Society for Testing and Materials.
"Available P&I Funds" means, with respect to any payment date, the Total
Available Funds for that payment date, exclusive of any portion of those funds
that represents--
o prepayment premiums,
o yield maintenance charges,
o Post-ARD Additional Interest, or
o the closing fee payable on the pooled mortgage loan secured by the
mortgaged real property identified on Exhibit A-1 as Holiday
Inn-Orlando.
The trustee will apply the Available P&I Funds as described under "Description
of the Offered Certificates--Payments" in this prospectus supplement to pay
principal and accrued interest on the series 2000-CKP1 certificates on that
date.
"CERCLA" means the federal Comprehensive Environmental Response,
Compensation & Liability Act of 1980, as amended.
"Column" means Column Financial, Inc.
"Cost Approach" means the determination of the value of a mortgaged real
property arrived at by adding the estimated value of the land to an estimate of
the current replacement cost of the improvements, and then subtracting
depreciation from all sources.
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"CPR" means an assumed constant rate of prepayment each month, which is
expressed on a per annum basis, relative to the then-outstanding principal
balance of a pool of mortgage loans for the life of those loans. The CPR model
is the prepayment model that we use in this prospectus supplement.
"Cut-off Date Loan-to-Value Ratio" or "Cut-off Date LTV Ratio" means:
o with respect to any underlying mortgage loan, other than a mortgage
loan secured, including through cross-collateralization with other
mortgage loans, by multiple real properties, the ratio of--
1. the cut-off-date principal balance of the mortgage loan, to
2. the Most Recent Appraised Value of the related mortgaged real
property; and
o with respect to any underlying mortgage loan that is secured,
including through cross-collateralization, by multiple real
properties, the ratio of--
1. the total cut-off date principal balance of the mortgage loan,
and all other mortgage loans with which it is
cross-collateralized, to
2. the total Most Recent Appraised Value for all of the related
mortgaged real properties.
"Default Interest" means any interest that--
o accrues on a defaulted mortgage loan solely by reason of the subject
default, and
o is in excess of all interest at the related mortgage interest rate,
including any Post-ARD Additional Interest accrued on the mortgage
loan.
"ECS" means Euroclear Clearance System, S.C., a Belgian cooperative
corporation.
"Effective Gross Income" means the revenue derived from the use and
operation of any mortgaged real property securing a pooled mortgage loan,
primarily consisting of rental income, together with other income such as
parking fees, percentage rents and expense reimbursements, among other items,
less vacancies and/or collection losses and rent concessions.
"ERISA Plan" means any employee benefit plan, or other retirement plan,
arrangement or account, that is subject to the fiduciary responsibility
provisions of ERISA and Section 4975 of the Internal Revenue Code of 1986.
"Estimated Annual Operating Expenses" means, for each of the mortgaged real
properties securing a mortgage loan in the trust, the historical annual
operating expenses for the property, adjusted upward or downward, as
appropriate, to reflect any expense modifications made as discussed below.
For purposes of calculating the Estimated Annual Operating Expenses for any
mortgaged real property securing a mortgage loan in the trust:
o the "historical annual operating expenses" for that property normally
consist of historical expenses that were generally
obtained/estimated--
1. from operating statements relating to a complete fiscal year of
the borrower ended in 1997, 1998 or 1999 or a trailing 12-month
period ended in 1998, 1999 or 2000,
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2. by annualizing the amount of expenses for partial 1998, 1999 or
2000 periods for which operating statements were available, with
adjustments for some items deemed inappropriate for
annualization,
3. by calculating a stabilized estimate of operating expenses which
takes into consideration historical financial statements and
material changes in the operating position of the property, such
as newly signed leases and market data, or
4. if the property was recently constructed, by calculating an
estimate of operating expenses based upon the appraisal of the
property or market data; and
o the "expense modifications" made to the historical annual operating
expenses for that property include--
1. assuming, in most cases, that a management fee, equal to
approximately 3% to 5% of total revenues, was payable to the
property manager,
2. adjusting historical expense items upwards or downwards to
reflect inflation and/or industry norms for the particular type
of property,
3. including the underwritten recurring replacement reserve amounts,
4. adjusting historical expenses downwards by eliminating various
items which are considered non-recurring in nature or which are
considered capital improvements, including recurring capital
improvements,
5. in the case of hospitality properties, adjusting historical
expenses to reflect reserves for furniture, fixtures and
equipment of between 4% and 5% of total revenues,
6. in the case of hospitality properties and some multifamily rental
properties, retail properties and industrial properties,
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
7. in the case of mortgaged real properties used primarily for
office, retail and industrial purposes, adjusting historical
expenses to account for stabilized tenant improvements and
leasing commissions at costs consistent with historical trends or
prevailing market conditions.
The amount of any underwritten recurring replacement reserve amounts and/or
underwritten leasing commissions and tenant improvements for each of the
mortgaged real properties securing a mortgage loan in the trust is shown in the
table titled "Engineering Reserves and Recurring Replacement Reserves" on
Exhibit A-1 to this prospectus supplement. The underwritten recurring
replacement reserve amounts shown on Exhibit A-1 to this prospectus supplement
are expressed as dollars per unit in the case of multifamily rental properties
and manufactured housing communities, a percentage of total departmental
revenues in the case of hospitality properties and dollars per leasable square
foot in the case of other commercial properties.
By way of example, Estimated Annual Operating Expenses generally include--
o salaries and wages,
o the costs or fees of--
1. utilities,
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2. repairs and maintenance,
3. replacement reserves,
4. marketing,
5. insurance,
6. management,
7. landscaping,
8. security, if provided at the property, and
o the amount of taxes, general and administrative expenses, ground lease
payments and other costs.
Estimated Annual Operating Expenses do not reflect, however, any deductions
for debt service, depreciation and amortization or capital expenditures or
reserves for any of those items, except as described above. In the case of those
mortgaged real 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 not. In the case of some
mortgaged real 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. However, for some tenants with
than average lease terms or which were considered not to require these
improvements, adjustments were not made to reflect tenant improvements and
leasing commissions. In the case of hospitality properties Estimated Annual
Operating Expenses include departmental expenses, reserves for furniture,
fixtures and equipment, management fees and, where applicable, franchise fees.
"Estimated Annual Revenues" means, for each of the mortgaged real
properties securing a mortgage loan in the trust, the base estimated annual
revenues for the property, adjusted upward or downward, as appropriate, to
reflect any revenue modifications made as discussed below.
For purposes of calculating the Estimated Annual Revenues for any mortgaged
real property securing a mortgage loan in the trust:
o the "base estimated annual revenues" for that property were generally
assumed to equal--
1. in the case of a multifamily rental property or a manufactured
housing community, the annualized amounts of gross potential
rents,
2. in the case of a hospitality property, the estimated average room
sales, and
3. in the case of any other commercial property, the monthly
contractual base rents as reflected in the rent roll or leases,
plus tenant reimbursements; and
o the "revenue modifications" made to the base estimated annual revenues
for that property include--
1. adjusting the 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,
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2. adjusting the revenues upwards to reflect, in the case of some
tenants, increases in base rents scheduled to occur during the
following 12 months,
3. adjusting the 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,
4. adjusting the revenues downwards in some 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
5. in the case of hospitality properties, adjusting the 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
communities, 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 property for which no leases exist, the
estimated annual revenues were--
o determined on the assumption that the property was net leased to a
single tenant at market rents, and
o derived from rental rate and vacancy information for the surrounding
real estate market.
"Euroclear Operator" means Morgan Guaranty Trust Company of New York,
Brussels, Belgium office, as operator of the Euroclear System.
"Exemption-Favored Party" means any of the following--
o Donaldson, Lufkin & Jenrette Securities Corporation,
o Prudential Securities Incorporated,
o Credit Suisse First Boston Corporation,
o Salomon Smith Barney Inc.,
o any person directly or indirectly, through one or more intermediaries,
controlling, controlled by or under common control with Donaldson,
Lufkin & Jenrette Securities Corporation, Prudential Securities
Incorporated, Credit Suisse First Boston Corporation and Salomon Smith
Barney Inc., and
o any member of the underwriting syndicate or selling group of which a
person described in the prior five bullet points is a manager or
co-manager with respect to the class A-1A and A-1B certificates.
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"Fitch" means Fitch, Inc.
"GAAP" means generally accepted accounting principles.
"Gateway at Randolph Apartments Loan" means the pooled mortgage loan
secured by the Gateway at Randolph Apartments Property.
"Gateway at Randolph Apartments Property" means the mortgaged real property
identified on Exhibit A-1 to this prospectus supplement as the Gateway at
Randolph Apartments.
"Hercules Plaza Loan" means the pooled mortgage loan secured by the
Hercules Plaza Property.
"Hercules Plaza Property" means the mortgaged real property identified on
Exhibit A-1 to this prospectus supplement as the Hercules Plaza.
"Income Approach" means the determination of the value of a mortgaged real
property 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 mortgaged real
property. The future income of the mortgaged real 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
year's 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 for the subject property may vary from the method of
determining Underwritten Net Cash Flow for that property, resulting in variances
in the related net operating income values.
"IRS" means the Internal Revenue Service.
"KCCI" means Key Corporate Capital Inc. d/b/a Key Commercial Mortgage.
"KeyBank" means KeyBank National Association.
"KeyBank Small Balance Loans" means the 16 pooled mortgage loans originated
or acquired by KeyBank and secured by the mortgaged real properties identified
on Exhibit A-1 as 1137 North 13th Street Apartments, 1-9 Flatbush Avenue, 4425
South 87th Street, 949-969 North 27th Street, Arctic Office Building, Centre
Square Apartments, Continental Terrace Apartments, Cosmos Apartments, CVS
#0742-01, Goodwill Retail Center, North Gate Apartments, Summit Plaza, Sunnyvale
Trailer Park, The Majestic Building, Town & Country Shopping Center and
Woodhaven Village Square, respectively.
"L" means the prepayment lock-out period and/or defeasance period during
which voluntary principal prepayments are prohibited, although the mortgage may
be defeased.
"Leasable Square Footage", "S.F." or "Sq. Ft." means, in the case of any
mortgaged real property that is a commercial property, other than a hospitality
property, the estimated square footage of the gross leasable area at the
property, as reflected in information provided by the related borrower or in the
appraisal on which the Most Recent Appraised Value of the property is based.
"Major Tenant" means any one of the top three tenants, based on the net
rentable area of its space, of a commercial property that leases at least 10% or
more of the net rentable area of the property.
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"Maturity/ARD Balance" means, for any underlying mortgage loan, the unpaid
principal balance of the mortgage loan immediately prior to its maturity or, in
the case of an ARD Loan, the related anticipated repayment date, according to
the payment schedule for the mortgage loan and otherwise assuming no
prepayments, defaults or extensions.
"Maturity/ARD Loan-to-Value Ratio" or "Maturity/ARD LTV Ratio" means:
o with respect to any underlying balloon mortgage loan or ARD Loan,
other than a mortgage loan secured, including through
cross-collateralization with other mortgage loans, by multiple real
properties, the ratio of--
1. the Maturity/ARD Balance of the mortgage loan, to
2. the Most Recent Appraised Value of the related mortgaged real
property;
o with respect to any underlying balloon mortgage loan or ARD Loan that
is secured, including through cross-collateralization with other
mortgage loans, by multiple real properties, the ratio of--
1. the total Maturity/ARD Balance of the mortgage loan, and all
other mortgage loans with which it is cross-collateralized, to
2. the total Most Recent Appraised Value of all of the related
mortgaged real properties.
"McCandless Towers II Loan" means the pooled mortgage loan secured by the
McCandless Towers II Property.
"McCandless Towers II Property" means the mortgaged real property
identified on Exhibit A-1 to this prospectus supplement as McCandless Towers II.
"Metroplex Loan" means the pooled mortgage loan secured by the Metroplex
Property.
"Metroplex Property" means the mortgaged real property identified on
Exhibit A-1 to this prospectus supplement as Metroplex.
"Midland" means Midland Loan Services, Inc.
"Modeling Assumptions" means, collectively, the following assumptions
regarding the series 2000-CKP1 certificates and the mortgage loans in the trust:
o the mortgage loans have the characteristics set forth on Exhibit A-1
to this prospectus supplement and the initial mortgage pool balance is
approximately $1,289,918,771;
o the initial total principal balance or notional amount, as the case
may be, of each class of series 2000-CKP1 certificates is as described
in this prospectus supplement;
o the pass-through rate for each interest-bearing class of series
2000-CKP1 certificates is as described in this prospectus supplement;
o there are no delinquencies or losses with respect to the mortgage
loans;
o there are no modifications, extensions, waivers or amendments
affecting the monthly debt service payments by borrowers on the
mortgage loans;
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o there are no Appraisal Reduction Amounts with respect to the mortgage
loans;
o there are no casualties or condemnations affecting the corresponding
mortgaged real properties;
o each of the mortgage loans provides monthly debt service payments to
be due on the first day of each month;
o monthly debt service payments on the mortgage loans are timely
received on the first day of each month;
o neither of the borrowers under the mortgage loans identified on
Exhibit A-1 to this prospectus supplement as Poly Foam and Poly-Foam
International, Inc. has the option to defease during the respective
yield maintenance period of its mortgage loan;
o no voluntary or involuntary prepayments are received as to any
mortgage loan during that mortgage loan's prepayment lock-out period,
including any contemporaneous defeasance period, or yield maintenance
period;
o each ARD Loan is paid in full on its anticipated repayment date;
o except as otherwise assumed in the immediately preceding two bullet
points, prepayments are made on each of the mortgage loans at the
indicated CPRs set forth in the subject tables or other relevant part
of this prospectus supplement, without regard to any limitations in
those mortgage loans on partial voluntary principal prepayments;
o all prepayments on the mortgage loans are assumed to be--
(1) accompanied by a full month's interest,
(2) received on the first day of the relevant month, and
(3) in the case of the mortgage loan secured by the mortgaged real
property identified on Exhibit A-1 to this prospectus supplement
as Holiday Inn-Orlando, accompanied by the applicable prepayment
consideration;
o no person or entity entitled thereto exercises its right of optional
termination as described in this prospectus supplement under
"Description of the Offered Certificates--Termination";
o no mortgage loan is required to be repurchased by Column, PMCF, PMCC,
KeyBank or Union Capital, as described under "Description of the
Mortgage Pool--Cures, Repurchases and Substitutions" in this
prospectus supplement;
o the only expenses of the trust are the trustee fee and the master
serving fee;
o there are no Additional Trust Fund Expenses;
o payments on the offered certificates are made on the tenth day of each
month, commencing in December 2000;
o the offered certificates are settled on November 10, 2000; and
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o for purposes of calculating the yield maintenance charge for the
Hercules Plaza Loan, the weighted average life to maturity of the
related mortgage note at the date of prepayment will equal the number
of years obtained by dividing the remaining dollar-years of the
related mortgage note by the outstanding principal balance of such
note on the date of the prepayment, after subtracting the scheduled
principal payment on the prepayment date, and the remaining
dollar-years will equal the sum of the product obtained by multiplying
(1) the amount of each then remaining required principal repayment, by
(2) the number of years which will elapse between the date of
prepayment and the date that required payment is due.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage Pass-Through Rate" means, with respect to any mortgage loan in
the trust or any payment date, an annual rate generally equal to:
o in the case of a mortgage loan that accrues interest on a 30/360
Basis, a rate per annum equal to the mortgage interest rate in effect
for that mortgage loan as of its due date in November 2000, minus the
sum of the master servicing fee rate for that mortgage loan and
.0017%;
o in the case of a mortgage loan that accrues interest on an Actual/365
Basis, a rate per annum equal to the product of--
1. the mortgage interest rate in effect for that mortgage loan as of
its due date in November 2000, minus the sum of the master
servicing fee rate for that mortgage loan and 0.0017%, multiplied
by
2. a fraction, the numerator of which is 12 times the number of days
in the related interest accrual period, and the denominator of
which is 365; and
o in the case of a mortgage loan that accrues interest on an Actual/360
Basis, twelve times a fraction, expressed as a percentage--
1. the numerator of which fraction is, subject to adjustment as
described below in this definition, an amount of interest equal
to the product of (a) the number of days in the related interest
accrual period, multiplied by (b) the Stated Principal Balance of
that mortgage loan immediately preceding that payment date,
multiplied by (c) 1/360, multiplied by (d) a rate per annum equal
to the mortgage interest rate in effect for that mortgage loan as
of its due date in November 2000, minus the sum of the master
servicing fee rate for that mortgage loan and .0017% and
2. the denominator of which is the Stated Principal Balance of that
mortgage loan immediately preceding that payment date.
Notwithstanding the foregoing, if the subject payment date occurs during
January, except during a leap year, or February, then the amount of interest
referred to in the numerator of the fraction described in clause 1. of the third
bullet point of the prior sentence will be decreased to reflect any interest
reserve amount with respect to the subject mortgage loan that is transferred
from the trustee's payment account to the trustee's interest reserve account
during that month. Furthermore, if the subject payment date occurs during March,
then the amount of interest referred to in the numerator of the fraction
described in clause 1. of the third bullet point of the second preceding
sentence will be increased to reflect any interest reserve amounts with respect
to the subject mortgage loan that are transferred from the trustee's interest
reserve account to the trustee's payment account during that month.
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"Most Recent Appraised Value" means, for any mortgaged real property
securing a mortgage loan in the trust, the "as is" or, if provided, the "as
cured" value estimate reflected in the most recent appraisal obtained by or
otherwise in the possession of the related mortgage loan seller. The appraiser's
"as cured" value, as stated in the appraisal, is generally calculated as the sum
of--
o the "as is" value set forth in the related appraisal, plus
o the estimated costs, as of the date of the appraisal, of implementing
any deferred maintenance required to be undertaken immediately or in
the short term under the terms of the related mortgage loan.
In general, the amount of costs assumed by the appraiser for these purposes
is based on--
o an estimate by the individual appraiser,
o an estimate by the related borrower,
o the estimate set forth in the property condition assessment conducted
in connection with the origination of the related mortgage loan, or
o a combination of these estimates.
"Most Recent Debt Service Coverage Ratio" means:
o with respect to any underlying mortgage loan, other than a mortgage
loan secured, including through cross-collateralization with other
mortgage loans, by multiple mortgaged real properties, the ratio of--
1. the Most Recent Net Operating Income for the related mortgaged
real property, to
2. twelve times the monthly debt service payment for that mortgage
loan due on its due date in November 2000 or, in the case of any
mortgage loan that is currently in an interest-only period, on
the first due date after amortization begins; and
o with respect to any underlying mortgage loan that is secured,
including through cross-collateralization with other mortgage loans,
by multiple mortgaged real properties, the ratio of--
1. the total Most Recent Net Operating Income for those properties,
to
2. twelve times the monthly debt service payment(s) for that
underlying mortgage loan, and any and all other mortgage loans
with which it is cross-collateralized, due on the related due
date in November 2000 or, in the case of any underlying mortgage
loan that is currently in an interest-only period, on the first
due date after amortization begins.
"Most Recent Expenses" means, for any mortgaged real property that secures
a mortgage loan in the trust, the expenses incurred, or annualized or estimated
in some cases, for the property for the 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.
Expenses generally consist of all expenses incurred for the property,
including--
o salaries and wages,
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o the costs or fees of--
1. utilities,
2. repairs and maintenance,
3. marketing,
4. insurance,
5. management,
6. landscaping,
7. security, if provided at the property, and
o the amount of--
1. real estate taxes,
2. general and administrative expenses,
3. ground lease payments, and
4. other costs.
For purposes of the foregoing, expenses do not reflect, however, any
deductions for debt service, depreciation, amortization, capital expenditures,
leasing commissions and tenant improvements or furniture, fixtures and
equipment. In the case of a hospitality property, expenses also include expenses
relating to guest rooms, food and beverage costs, telephone bills and rental and
other expenses, and operating expenses as general administrative expenses,
marketing expenses and franchise fees.
In determining the Most Recent Expenses for any property, the related
mortgage loan seller may have made adjustments to the financial information
provided by the related borrower similar to those used in calculating the
Estimated Expenses for that property.
"Most Recent Net Operating Income" means, with respect to each of the
mortgaged real properties that secures a mortgage loan in the trust, the total
cash flow derived from the property that was available for annual debt service
on the related mortgage loan, calculated as the Most Recent Revenues less Most
Recent Expenses for that property.
"Most Recent Operating Statement Date" means, with respect to each of the
pooled mortgage loans, the date indicated on Exhibit A-1 as the Most Recent
Operating Statement Date with respect to the mortgage loan. In general, this
date is the end date of the period covered by the latest available annual or, in
some cases, partial-year operating statement for the related mortgaged real
property.
"Most Recent Revenues" means, for any mortgaged real property that secures
a mortgage loan in the trust, the revenues received, or annualized or estimated
in some cases, in respect of the property for the 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. For purposes of the foregoing, revenues
generally consist of all revenues received in respect of the property,
including--
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o for a multifamily rental property or a manufactured housing community,
rental and other revenues;
o for a hospitality property, guest room rates, food and beverage
charges, telephone charges and other revenues; and
o for any other commercial property, base rent, percentage rent, expense
reimbursements and other revenues.
In determining the Most Recent Revenues for any property, the related
mortgage loan seller may have made adjustments to the financial information
provided by the related borrower similar to those used in calculating the
Estimated Revenues for that property.
"Net Aggregate Prepayment Interest Shortfall" means, with respect to any
payment date, the excess, if any, of:
o the total Prepayment Interest Shortfalls incurred with respect to the
mortgage pool during the related collection period; over
o the sum of--
1. the total payments made by the master servicer to cover those
Prepayment Interest Shortfalls, and
2. the total Prepayment Interest Excesses collected with respect to
the mortgage pool during the related collection period.
"O" means the open prepayment period during which voluntary principal
prepayments may be made without any restriction or prepayment consideration.
"Occupancy Rate at Underwriting" or "Occupancy Rate at U/W" means the
percentage of leasable square footage, in the case of mortgaged real properties
that are commercial properties, other than hospitality properties, or units, in
the case of mortgaged real properties that are multifamily rental properties
and/or manufactured housing communities, of the subject property that were
occupied or leased as of the approximate date of the original underwriting of
the related mortgage loan in the trust or any later date as we considered
appropriate, in any event as reflected in information provided by the related
borrower or in the appraisal on which the Most Recent Appraised Value of the
property is based. Information shown in this prospectus supplement with respect
to any weighted average of Occupancy Rates at Underwriting excludes hospitality
properties from the relevant calculations.
"Palm Plaza Shopping Center Loan" means the pooled mortgage loan secured by
the Palm Plaza Shopping Center Property.
"Palm Plaza Shopping Center Property" means the mortgaged real property
identified on Exhibit A-1 to this prospectus supplement as Palm Plaza Shopping
Center.
"Party in Interest" means any person that is a "party in interest" within
the meaning of ERISA or a "disqualified person" within the meaning of the
Internal Revenue Code of 1986.
"Permitted Encumbrances" means, with respect to any mortgaged real property
securing a mortgage loan in the trust, any and all of the following--
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o the lien of current real property taxes, ground rents, water charges,
sewer rents and assessments not yet due and payable,
o covenants, conditions and restrictions, rights of way, easements and
other matters that are of public record and/or are referred to in the
related lender's title insurance policy or, if that policy has not yet
been issued, referred to in a pro forma title policy or a marked-up
commitment, none of which materially interferes with the security
intended to be provided by the related mortgage instrument, the
current use of the property or the current ability of the property to
generate income sufficient to service the related mortgage loan,
o exceptions and exclusions specifically referred to in the related
lender's title insurance policy or, if that policy has not yet been
issued, referred to in a pro forma title policy or marked-up
commitment, none of which materially interferes with the security
intended to be provided by the related mortgage instrument, the
current use of the property or the current ability of the property to
generate income sufficient to service the related mortgage loan,
o other matters to which like properties are commonly subject, none of
which materially interferes with the security intended to be provided
by the related mortgage instrument, the current use of the property or
the current ability of the property to generate income sufficient to
service the related mortgage loan,
o the rights of tenants, as tenants only, under leases, including
subleases, pertaining to the related mortgaged real property which the
related mortgage loan seller did not require to be subordinated to the
lien of the related mortgage instrument and which do not materially
interfere with the security intended to be provided by the related
mortgage instrument, the current principal use of the related
mortgaged real property or the current ability of the related
mortgaged real property to generate income sufficient to service the
related mortgage loan, and
o if the related mortgage loan is cross-collateralized with any other
mortgage loan in the trust, the lien of the mortgage instrument for
that other mortgage loan.
"Permitted Investments" means the U.S. government securities and other
investment grade obligations specified in the pooling and servicing agreement.
"PMCC" means Prudential Mortgage Capital Company, LLC.
"PMCF" means Prudential Mortgage Capital Funding, LLC.
"Post-ARD Additional Interest" means, with respect to any ARD Loan, the
additional interest accrued with respect to that mortgage loan as a result of
the marginal increase in the related mortgage interest rate upon passage of the
related anticipated repayment date, as that additional interest may compound in
accordance with the terms of that mortgage loan.
"Prepayment Interest Excess" means, with respect to any full or partial
prepayment of a pooled mortgage loan made by the related borrower during any
collection period after the due date for that loan, the amount of any interest
collected on that prepayment for the period following that due date, less the
amount of master servicing fees payable from that interest collection, and
exclusive of any Default Interest and Post-ARD Additional Interest included in
that interest collection.
"Prepayment Interest Shortfall" means, with respect to any full or partial
prepayment of a pooled mortgage loan made by the related borrower during any
collection period prior to the due date for that loan, the
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amount of any uncollected interest that would have accrued on that prepayment
through that due date, less the amount of master servicing fees that would have
been payable from that uncollected interest, and exclusive of any portion of
that uncollected interest that would have been Default Interest or Post-ARD
Additional Interest.
"PTCE" means prohibited transaction class exemption.
"PTE" means prohibited transaction exemption.
"Realized Losses" means losses on or with respect to the pooled mortgage
loans arising from the inability of the master servicer and/or the special
servicer to collect all amounts due and owing under the mortgage loans,
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 real property.
We discuss the calculation of Realized Losses under "Description of the Offered
Certificates--Reductions to Certificate Principal Balances in Connection with
Realized Losses and Additional Trust Fund Expenses" in this prospectus
supplement.
"REMIC" means a "real estate mortgage investment conduit" as defined in
Section 860D of the Internal Revenue Code of 1986.
"REO Property" means any mortgaged real property that is acquired by the
trust through foreclosure, deed-in-lieu of foreclosure or otherwise following a
default on the corresponding pooled mortgage loan.
"Restricted Group" means, collectively, the following persons and
entities--
o the trustee,
o the Exemption-Favored Parties,
o us,
o the master servicer,
o the special servicer,
o the special sub-servicer,
o any other sub-servicers,
o each of the mortgage loan sellers,
o PMCC,
o each borrower, if any, with respect to mortgage loans constituting
more than 5.0% of the total unamortized principal balance of the
mortgage pool as of the date of initial issuance of the offered
certificates, and
o any and all affiliates of any of the aforementioned persons.
"Rooms" means, in the case of any mortgaged real property that is a
hospitality property, the estimated number of rooms and/or suites, without
regard to the size of the rooms or the number or size of the rooms in the
suites, as reflected in information provided by the related borrower or in the
appraisal on which the Most Recent Appraised Value of the property is based.
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"S&P" means Standard & Poor's Rating Services, a division of The
McGraw-Hill Companies, Inc.
"Sales Comparison Approach" means a determination of the value of a
mortgaged real property based upon a comparison of that property to similar
properties that have been sold recently or for which listing prices or offering
figures are known. In connection with that determination, data for generally
comparable properties are used and comparisons are made to demonstrate a
probable price at which the subject mortgaged real property would sell if
offered on the market.
"SEC" means the Securities and Exchange Commission.
"Senior Principal Payment Cross-Over Date" means the first payment date, if
any, as of which the total principal balance of the class A-1A and A-1B
certificates outstanding immediately prior to that payment date, equals or
exceeds the sum of:
o the total Stated Principal Balance of the mortgage pool that will be
outstanding immediately following that payment date; plus
o the lesser of--
1. the Total Principal Payment Amount for that payment date, and
2. the portion of the Available P&I Funds for that payment date that
will remain after all required payments of interest on the class
S, A-1A and A-1B certificates have been made on that payment
date.
"Servicing Standard" means, with respect to either the master servicer or
the special servicer, to service and administer the pooled mortgage loans and
any REO Properties owned by the trust for which that party is responsible:
o with the same care, skill and diligence as is normal and usual in its
general mortgage servicing and REO property management activities on
behalf of third parties or on behalf of itself, whichever servicing
procedures are of a higher standard, with respect to mortgage loans
and REO Properties that are comparable to those pooled mortgage loans
for which it is responsible under the pooling and servicing agreement;
o with a view to--
1. the timely collection of all scheduled payments of principal and
interest under those mortgage loans,
2. the full collection of all prepayment premiums and yield
maintenance charges that may become payable under those mortgage
loans, and
3. in the case of the special servicer, if a mortgage loan comes
into and continues in default and, in the good faith and
reasonable judgment of the special servicer, 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 that
defaulted mortgage loan to the series 2000-CKP1
certificateholders, as a collective whole, on a present value
basis; and
o without regard to--
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1. any known relationship that the master servicer or the special
servicer, as the case may be, or any of its affiliates may have
with any of the underlying borrowers or any other party to the
pooling and servicing agreement,
2. the ownership of any series 2000-CKP1 certificate by the master
servicer or the special servicer, as the case may be, or by any
of its affiliates,
3. the obligation of the master servicer to make advances,
4. the obligation of the special servicer to make, or to direct the
master servicer to make, servicing advances,
5. the right of the master servicer or the special servicer, as the
case may be, or any of its affiliates to receive reimbursement of
costs, or the sufficiency of any compensation payable to it,
under the pooling and servicing agreement or with respect to any
particular transaction, and
6. the ownership, servicing and/or management 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.
"Servicing Transfer Event" means, with respect to any mortgage loan in the
trust, any of the following events:
1. the related borrower fails to make when due any scheduled payment of
principal and interest, including a balloon payment, or any other
payment required under the related promissory note or the related
mortgage instrument and either the failure actually continues, or the
master servicer believes it will continue, unremedied--
o for 60 days beyond the date on which the subject payment was due,
or
o in the case of a defaulted balloon mortgage loan that is
delinquent with respect to its balloon payment, but as to which
the borrower has delivered a refinancing commitment, for such
longer period, not to exceed 90 days beyond the related maturity
date, during which the refinancing would occur;
2. the master servicer determines that a default in the making of any
scheduled payment of principal and interest, including a balloon
payment, or any other material payment required to be made under the
related promissory note or the related mortgage instrument, is likely
to occur within 30 days and either--
o the default is likely to remain unremedied for at least the time
period contemplated by clause 1. of this definition, or
o the related borrower has requested a material modification of the
payment terms of related mortgage loan;
3. the master servicer determines that a non-payment default has occurred
under the mortgage loan that may materially impair the value of the
corresponding mortgaged real property as security for the mortgage
loan and the default continues unremedied for the applicable cure
period under the terms of the mortgage loan or, if no cure period is
specified, for 60 days;
4. various events of bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities, or similar proceedings occur
with respect to the related borrower or the
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corresponding mortgaged real property, or the related borrower takes
various actions indicating its bankruptcy, insolvency or inability to
pay its obligations; or
5. the master servicer receives notice of the commencement of foreclosure
or similar proceedings with respect to the corresponding mortgaged
real property.
A Servicing Transfer Event will cease to exist, if and when:
o with respect to the circumstances described in clause 1. of this
definition, the related borrower makes three consecutive full and
timely monthly debt service payments under the terms of the mortgage
loan, as those 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;
o with respect to the circumstances described in clauses 2. and 4. of
this definition, those circumstances cease to exist in the good faith,
reasonable judgment of the special servicer;
o with respect to the circumstances described in clause 3. of this
definition, the default is cured in the judgment of the special
servicer; and
o with respect to the circumstances described in clause 5. of this
definition, the proceedings are terminated.
"SMMEA" means the Secondary Mortgage Market Enhancement Act of 1984 as
amended.
"Stated Principal Balance" means, for each mortgage loan in the trust, an
amount that:
o will initially equal its unpaid principal balance as of its due date
in November 2000 or, in the case of a replacement mortgage loan, as of
the date it is added to the trust, after application of all payments
of principal due on or before that date, whether or not those payments
have been received; and
o will be permanently reduced on each subsequent payment date, to not
less than zero, by--
1. that portion, if any, of the Total Principal Payment Amount for
that payment date that is attributable to that mortgage loan, and
2. the principal portion of any Realized Loss incurred with respect
to that mortgage loan during the related collection period.
However, the "Stated Principal Balance" of any mortgage loan in the trust
will, in all cases, be zero as of the payment date following the collection
period in which it is determined that all amounts ultimately collectible with
respect to that mortgage loan or any related REO Property have been received.
"The Commons at Sugarhouse Loan" means the pooled mortgage loan secured by
The Commons at Sugarhouse Property.
"The Commons at Sugarhouse Property" means the mortgaged real property
identified on Exhibit A-1 to this prospectus supplement as The Commons at
Sugarhouse.
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"Total Available Funds" means, with respect to any payment date, the total
amount of funds available to make payments on the series 2000-CKP1 certificates
on that date as described under "Description of the Offered
Certificates--Payment Account--Withdrawals" in this prospectus supplement.
"Total Principal Payment Amount" means:
o for any payment date prior to the final payment date, an amount equal
to the total, without duplication, of the following--
1. all payments of principal, including voluntary principal
prepayments, received on the pooled mortgage loans during the
related collection period, exclusive of any of those payments
that represents a late collection of principal for which an
advance was previously made for a prior payment date or that
represents a monthly payment of principal due on or before the
due date for the related mortgage loan in November 2000 or on a
due date for the related mortgage loan subsequent to the end of
the related collection period,
2. all monthly payments of principal received on the pooled mortgage
loans prior to, but that are due during, the related collection
period,
3. all other collections, including liquidation proceeds,
condemnation proceeds, insurance proceeds and repurchase
proceeds, that were received on or with respect to any of the
pooled mortgage loans or any related REO Properties during the
related collection period and that were identified and applied by
the master servicer as recoveries of principal of the subject
mortgage loan or, in the case of an REO Property, of the related
mortgage loan, in each case net of any portion of the particular
collection that represents a late collection of principal for
which an advance of principal was previously made for a prior
payment date or that represents a monthly payment of principal
due on or before the due date for the related mortgage in
November 2000, and
4. all advances of principal made with respect to the pooled
mortgage loans for that payment date; and
o for the final payment date, an amount equal to the total Stated
Principal Balance of the mortgage pool outstanding immediately prior
to that final payment date.
"Underwriter Exemptions" means, collectively, PTE 90-83, PTE 89-90, PTE
90-32 and PTE 91-23, in each case as subsequently amended by PTE 97-34.
"Underwritten Debt Service Coverage Ratio" or "U/W DSCR" means:
o with respect to any underlying mortgage loan, other than a mortgage
loan secured, including through cross-collateralization with other
mortgage loans, by multiple mortgaged real properties, the ratio of--
1. the Underwritten Net Cash Flow for the related mortgaged real
property, to
2. twelve times the monthly debt service payment for that mortgage
loan due on the related due date in November 2000 or, in the case
of any mortgage loan that is currently in an interest-only
period, on the first due date after amortization begins; and
o with respect to any underlying mortgage loan that is secured,
including through cross-collateralization, by multiple mortgaged real
properties, the ratio of--
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1. the total Underwritten Net Cash Flow for those properties, to
2. twelve times the monthly debt service payment(s) for that
mortgage loan, and all other mortgage loans with which it is
cross-collateralized, due on the related due date in November
2000 or, in the case of any mortgage loan that is currently in an
interest-only period, on the first due date after amortization
begins.
"Underwritten Effective Gross Income" means, with respect to any mortgaged
real property securing a mortgage loan in the trust, the Estimated Revenues for
that property.
"Underwritten Net Cash Flow" or "U/W NCF" means, with respect to each of
the mortgaged real properties securing a mortgage loan in the trust, the
estimated total cash flow from that property expected to be available for annual
debt service on the related underlying mortgage loan. In general, that estimate:
o was made at the time of origination of the related underlying mortgage
loan or in connection with the transactions described in this
prospectus supplement; and
o is equal to the excess of--
1. the Estimated Annual Revenues for the property, over
2. the Estimated Annual Operating Expenses for the property.
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 real properties will differ, and may differ
substantially, from the conditions assumed in calculating Underwritten Net Cash
Flow. In particular, in the case of those mortgaged real 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 each of the mortgaged real properties does not
reflect the effects of future competition or economic cycles. Accordingly, there
can be no assurance that the Underwritten Net Cash Flow for any of the mortgaged
real properties shown on Exhibit A-1 to this prospectus supplement will be
representative of the actual future net cash flow for the particular property.
Underwritten Net Cash Flow and the revenues and expenditures used to
determine Underwritten Net Cash Flow for each of the mortgaged real properties
are derived from generally unaudited information furnished by the related
borrower. However, in some 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 the information. These 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 any of the underlying
real properties as determined under GAAP would not be the same as the
Underwritten Net Cash Flow for the 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 the property's operations nor a
substitute for cash flows from operating activities determined in accordance
with GAAP as a measure of liquidity.
"Underwritten Net Operating Income" means, with respect to each of the
mortgaged real properties securing a mortgage loan in the trust, the
Underwritten Net Cash Flow for the property, increased by any and all
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of the following items that were included in the estimated annual operating
expenses for the property for purposes of calculating that Underwritten Net Cash
Flow:
o underwritten recurring replacement reserve amounts;
o capital improvements, including recurring capital improvements;
o in the case of hospitality properties, expenses for furniture,
fixtures and equipment; and
o in the case of mortgaged real properties used primarily for office,
retail and industrial purposes, underwritten leasing commissions and
tenant improvements.
"Union Capital" means Union Capital Investments, LLC.
"United States Person" means--
o a citizen or resident of the United States,
o a domestic partnership,
o a domestic corporation,
o any estate, other than a foreign estate within the meaning of
paragraph (31) of Section 7701(a) of the Internal Revenue Code of
1986, and
o any trust if--
1. a court within the United States is able to exercise primary
supervision over the administration of the trust, and
2. one or more United States Persons have the authority to control
all substantial decisions of the trust.
"Units" means--
o in the case of any mortgaged real property that is a multifamily
rental property, the estimated number of apartments at the particular
property, regardless of the number or size of rooms in the apartments,
and
o in the case of any mortgaged real property that is a manufactured
housing community, the estimated number of pads at the particular
property to which a mobile home can be hooked up,
in each case, as reflected in information provided by the related borrower or in
the appraisal on which the Most Recent Appraised Value is based.
"USAP" means the Uniform Single Attestation Program for Mortgage Bankers
established by the Mortgage Bankers of America.
"Valencia Marketplace--Power Center Loan" means the pooled mortgage loan
secured by the Valencia Marketplace Property.
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"Valencia Marketplace--Power Center Property" means the mortgaged real
property identified on Exhibit A-1 to the prospectus supplement as Valencia
Marketplace.
"Weighted Average Pool Pass-Through Rate" means, for each payment date, the
weighted average of the respective Mortgage Pass-Through Rates with respect to
all of the mortgage loans in the trust for that payment date, weighted on the
basis of their respective Stated Principal Balances immediately prior to that
payment date.
"Wells Fargo" means Wells Fargo Bank Minnesota, N.A.
"Year Built" means, with respect to any mortgaged real property securing a
mortgage loan in the trust, the year when construction of the property was
principally completed, as reflected in information provided by the related
borrower or in the appraisal on which the Most Recent Appraised Value of the
property is based.
"Year Renovated" means, with respect to any mortgaged real property
securing a mortgage loan in the trust, the year when the most recent substantial
renovation of the property, if any, was principally completed, as reflected in
information provided by the related borrower or in the appraisal on which the
Most Recent Appraised Value of the property is based.
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EXHIBIT A
CHARACTERISTICS OF THE UNDERLYING
MORTGAGE LOANS AND THE MORTGAGED REAL PROPERTIES
SEE THIS EXHIBIT FOR TABLES TITLED:
MANAGERS AND LOCATIONS OF THE MORTGAGED REAL PROPERTIES
DESCRIPTIONS OF THE MORTGAGED REAL PROPERTIES
CHARACTERISTICS OF THE UNDERLYING MORTGAGE LOANS
ADDITIONAL MORTGAGE LOAN INFORMATION
ENGINEERING RESERVES AND RECURRING REPLACEMENT RESERVES
MAJOR TENANTS OF THE COMMERCIAL PROPERTIES
MULTIFAMILY SCHEDULE
A-1
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<CAPTION>
Managers and Locations of the Mortgaged Real Properties
# PROPERTY NAME MANAGER ADDRESS
- ------------- ------- -------
<S> <C> <C> <C>
1 437 Madison Avenue Sage Realty Corporation 437 Madison Avenue
2 Valencia Marketplace, Power Center DSB Properties, Inc. 25420-25710 The Old Road
3 Hercules Plaza Binswanger Management Corp. 1313 North Market Street
4a Seven Gables Apartments Alliance Residential Management, L.L.C. 11 Laburnam Avenue
4b High Ridge Apartments Alliance Residential Management, L.L.C. 8111 Manderville Lane
5 McCandless Towers II McCandless Management Corporation 3965 Freedom Circle
6a Timbercreek Apartments Alliance Residential Management, L.L.C. 6001 Skillman Street
6b Deering Manor Apartments Alliance Residential Management, L.L.C 2720 Hopkins Road
7 Commons at Sugarhouse Johansen-Thackeray Commercial Real Estate
Services, LC and The Boyer Company 2100 South Highland Drive
8 Gateway at Randolph Apartments Value Realty, Inc. 44 Center Grove Road
9 Metroplex Jamison Properties, Inc. 3530 Wilshire Boulevard
10 Palm Plaza Shopping Center Kimco Realty Corporation 26479 Ynez Road
11 Page Field Commons Starwood Wasserman Management 5043 South Cleveland Avenue
12 Poly Foam (2A) Owner Managed 1311 Majestic Drive
13 Poly-Foam International, Inc. (2A) Owner Managed 1411 Majestic Drive
14a Autumn Ridge Apartments Genesis Realty Management, Inc. 9607 Wickersham Road
14b Summer Glen Apartments Genesis Realty Management, Inc. 9624 Rolling Rock Lane
15 Sterling University Crescent Owner Managed 4500 Burbank Drive
16 Oakbrook Apartments R.W. Day & Associates, Inc. 5055 Nicholson Drive
17 One Bulfinch Place Intercontinental Management One Bulfinch Place
18 Sandhurst Apartments Scott Management Company 30582 Sandhurst Drive
19 Chandler Sunset Plaza Mileski Development LLC Northeast Corner of Ray
and Rural Roads
20 Saddle Brook Apartments Value Realty, Inc. 49 Finnigan Avenue
21 Railway Express Building Potomac Development Corp 900 Second Street, N.E.
22 Hillcroft Apartments Ceebraid-Signal Management Group 10 Clapboard Ridge Road
23 Radisson Inn Harbourwalk (2B) Graves Hospitality Corporation 223 Gaslight Circle
24 Radisson Suite Hotel (2B) St. Cloud Suite Hotel, Inc. 404 W. St. Germain
25 Highland Cove Retirement Community American Lifestyles, Inc. 3750 South Highland Drive
26 Regency Warehouse Levco Development Corp. 100 Adams Street
27 Silverado Ranch Center Silverado Ranch Centre Mgmt. Co. 9715, 9725, 9775, 9785
S. Maryland Parkway
28 Holiday Inn Orlando Dimension Development Company, Inc. 5905 South Kirkman Road
29 Carlton Village Apartments Owner Managed 3331 Route 94 South
30 Glenridge Apartments Bridge Property Management 4770 Nightingale Drive
31 2200 First Avenue South Owner Managed 2200 First Avenue South
32 Windmill Apartments Bridge Property Management 4165 Lacy Lane
33 Kent Hill Plaza Gramor Development Washington 25610-26004 104th Avenue, SE
34 Cheyenne Crest Apartments Bridge Property Management 4008 Westmeadow Drive
35 Big Kmart - Midwest City Kimco Realty Corporation 5701 East Reno Avenue
36 Westgate Crossing Shopping Center CBL & Associates Management Inc. 660 Spartan Boulevard
37 Big Kmart - Edmond Kimco Realty Corporation 2501 South Broadway
38 One Cameron Place Powers Companies, Inc., d/b/a Madison
Commercial Group 7901 Cameron Road
39 Roseland Shopping Center The Widewaters Group 3225 Route 364
40 Big Kmart - Chicago Kimco Realty Corporation 1710 North Kostner Avenue
41 Crystal Mountain Office Park (2C) Libitzky Management Corporation 9433 Bee Caves Road
42 Lake Pointe Center II (2C) Richard Berns Investments and Libitzky
Manangement Corporation 11612 Bee Caves Road
43 DoubleTree Hotel Erin Inc. 1230 Congress Street
44 Twelve Oaks Shopping Center A.J.&C Garfunkel Company 5500 Abercorn Street
45 Streetsboro Market Square The Coral Company 9240-9298 Market Square Drive
& 9424 State Route 14
46 Ravenswood Apartments Fore Property Company 401 West Pine Avenue
47 Pembroke Office Park Owner Managed 281 Independence Boulevard
48 Candlewood Hotel - Sacramento Larkspur Hospitality 555 Howe Avenue
49 Royal Jetstar Tech Center Trinity Interests 4040 Royal Lane
50 North Reading Plaza Spaulding & Slye 72 Main Street
51 Cypress Springs Apartments Elkor Properties, Inc. 210 Welcome Way
52 Sterling University Peaks Owner Managed 2985 E. Aurora Avenue
53 Kmart - Allen Owner Managed 111 North Central Expressway
54 Hartville Center Owner Managed 839-907 West Maple
55 Pony Express Building Owner Managed 2236 Lower Lake Road &
2307 Alabama Street
56 Willow Pond Apartments Homes for America Holdings, Inc. 6003 Abrams Road
57 Standard Dairy Apartments WCR 2808 Northeast Martin Luther
King Jr. Boulevard
58a 200 Newport Center Drive Newport Center Management Co. 200 Newport Center Drive
58b 359 San Miguel Drive Newport Center Management Co. 359 San Miguel Drive
58c 363 San Miguel Drive Newport Center Management Co. 363 San Miguel Drive
59 Garfield Suites Hotel Owner Managed 2 Garfield Place
60 Larry's Market Owner Managed 12323 120th Place NE
61 Big-K Plaza Torrington Associates, LLC 681 Main Street
62a Campbell Park Shopping Center Cedar Creek Realty, L.C. 3443 W. Campbell Road
(Big Spring Road)
62b Frankford Crest Shopping Center Cedar Creek Realty, L.C. 6911 Frankford Road
62c Midway Village Shopping Center Cedar Creek Realty, L.C. 19021 Midway Road
62d Campbell Square Shopping Center Cedar Creek Realty, L.C. 955 East Campbell Road
63 Walnut Creek Apartments Betz Realty Management, L.C. 11411 Green Plaza Drive
64 Royal Freeport Tech Center Holt Companies 4343 Royal Lane
65 100 Demarest Drive Owner Managed 100 Demarest Drive
66 Indian Run Village Continental Communities Mgmt. 1 Lenape Way
67 210 Main Street Owner Managed 210 Main Street
68 Clearbrook Village Apartments Alliance Residential Management, L.L.C. 3516 Tall Oaks Circle
69 Brookdale Shopping Center Owner Managed 2500 8th Street South
70 Courtyard by Marriott Hotel SREE Incorporated 16700 Northcross Drive
71 Hamilton Park Apartments Owner Managed 6300 Ranchester Drive
72 Brookwood Shopping Center Precor Realty Advisors, Inc. 9000 South Western Avenue
73 6329 Glenwood Office Building Triple Net Properties, LLC 6329 Glenwood Avenue
74 Landmark Garden Apartments Landmark Redevelopment, Inc. 1551 West Airport Freeway
75 Applecreek Apartments Genesis Realty Management, Inc. 9874 Dalecrest Drive
76 Plaza At The Pointe Shopping Center Equitable Realty, Inc. 35248-35324 23 Mile Road
77 Ramblewood Apartments Gold Crown Management Company 155 Briarwood Road
78 Scottsdale Airpark II Owner Managed 16001 North Greenway-Hayden
Loop and 16000 North 80th
Street
79 New Market Square Shopping Center Plaza Associates, Inc. 1040 Henderson Drive
80 Maple Leaf Apartments Westco Equities, Inc. 7150, 7170 & 7190 North Maple
Avenue
81 The Shops at Fair Lakes Peterson Retail Management LC 12701-12735 Shoppes Lane
82 Sunpark Apartments Barron & Builders Management 2205 North Frazier
83 Carol Oaks Apartments Price Realty Corporation 7412 Ederville Road
84 Florida Computer Center Ross Realty Investments, Inc. 7841-7919 Pines Boulevard
85 Tonawanda Manor Braunview Associates 111 Ensminger Road
86 Woodridge Apartments CNC Investments, Inc. 301 North FM 1417
87 Dunwoody Plaza The Simpson Organization, Inc. 1410 Dunwoody Village Parkway
88 Schaumburg Plaza Centrum Properties, Inc. 1443 West Schaumburg Road
89 Whispering Oaks Mobile Home Park Buckner Finance Company 315 Barricks Road
90 Harbor Technology Center Essex Realty Management, Inc. 20280-20300 Del Amo Boulevard
91 Stove Works Office Building Owner Managed 112 Krog Street
92 Holy Cross Professional Center Rollins Real Estate Management, Co. 2415 Musgrove Road
93 Augusta Plaza Shopping Center Dirigo Housing Associates 48-54 Western Avenue
94 Banana Republic Walnut Capital Management 5542 Walnut Street
95 Forest Hills Apartments Owner Managed 5003-5017 & 5049 West 159th
Street
96 West Marietta Retail Center Coro Realty Advisors, LLC Dallas Highway & Villa Rica
Road
97 Regency Centre Office Complex Polacorp, Inc. 8202 Clearvista Parkway
98 Southtowne Center Owner Managed 10331 and 10317 South State
Street
99 Pinetree Village Apartments Owner Managed 7500 Broadway
100 Weston Shoppes Olympia Partners 4000 West 106th Street
101 Pine Trails Apartments Kirkland Management Company, Inc 552 Spring Ridge Road
102 Old County Road Owner Managed 1725 Old County Road
103 Cambridge Court Retirement Community Leisure Care 1109 Sixth Avenue North
104 Bryn Mawr Suites Apartments Woodward Properties Inc. 5100 Lebanon Avenue
105 Bruno's Shopping Center Owner Managed 8020 & 8050 Highway 72 West
106 Laddins Rock Owner Managed 497-501 West Main Street
107 Christine Place Apartments Owned Managed 248 North MacDonald Street and
239 North Robson Street
108 Best Western Siesta Beach Resort Owner Managed 5311 Ocean Boulevard
109 Richland Hills Apartments S&S Property Management Co., Inc. 5800 Maudina Drive
110 Star Wholesale Florist, Inc. International Capital, Inc. 8223 Stemmous Freeway
111 Office Depot Ari-El Enterprises, Inc. 41690 Ford Road
112 CVS Plaza - East Hartford Berkshire Development Main Street & Burnside Avenue
113 CVS Plaza - Queensbury Owner Managed 216 Quaker Road
114 Warehouse X/Lock-It Lockers Equity Management Corporation 1560 Frazee Road
115 Lazy Acres Estates Continental Communities Mgmt. 5510 Stettin Drive
116 214 Main Street Owner Managed 214 Main Street
117 Office Depot at Woodhaven Village Square Rosen & Associates 23420 Allen Road
118 Winder Village Manufactured Housing
Community (2D) Follett Investment Properties, Inc. 398 Fairview Avenue
119 Russell Village Manufactured Housing
Community (2D) Follett Investment Properties, Inc. 1025 Midland Avenue
120 Northway Plaza Shopping Center Selective Development Company 5300 - 5348 Dixie Highway
121 Phoenix Park Apartments Owner Managed 369 Long Hill Road
122 Eckerd's Drug Store - S. Main Owner Managed 209 Mount Zoar a/k/a 400-404
South Main Street
123 Chabot Office Plaza ADG Development & Investments, Inc. 4780 Chabot Drive
124 Middlefield Market Square Shopping Center Owner Managed 15401-15439 West High Street
125 Eckerd's Drug Store - N. Main Owner Managed 119 Second Street a/k/a
350 - 368 North Main Street
126 Gentry Plaza Columbus Pacific Properties 980-1018 Morse Road
127 The Meadows Apartments Julian Investment Group II 341 Stelton Road
128 Miggy's Mall Shopping Center Owner Managed 9 Fox Run Center
129 Colony Square Apartments White Property Management, Inc 3020 Colquitt Road
130 Eckerd's Drug Store - Kingston Owner Managed 479 Broadway
131 Pueblo Point Ace Hardware Owner Managed 13811 North Tatum Boulevard
132 Five Star Business Park Birkeland Cooper & Associates, LLC 13914-13932 Valley Boulevard
133 Eckerd's Drug Store - Half Moon Owner Managed 1483 U.S. Route 9
134 Oaks Apartments Brothers Management Company 1912 South 5th Street
135 New England Place Apartments BDB Properties 707-829 West Maple
136 1025 East Maple Office Building Dietz Management 1025 East Maple Road
137 Jaffe Eye Office Building Ross Realty Investments, Inc. 18999 Biscayne Boulevard
138 Calder Square, Phase II Apartments Barron Builders & Management 1111 West Main Street
139 North Mall County East Management Corp. 68-100 Old Riverhead Road
140 Wekiva Executive Center Robson Daniels Inc. 1706 East Semoran Boulevard
141a Lakeview Arms Apartments Kirkland Management Company, Inc. 800 Magee Drive
141b Jackson Square Apartments Kirkland Management Company, Inc. 730 North Jackson Street
142 Office Max - Northwood Carnegie Management & Development Corp. 2802 Curtice Road
143 Office Max - Alexandria Carnegie Management & Development Corp. 4525 Highway 29 South
144 Foxpoint Commons VN Property Management, LLC 13701-13795 West Jewell Avenue
145 Continental Terrace Apartments Midwest Property Services, Inc. 3315 East Longview Avenue
146 Cheyenne Mountain Center Griffiths-Blessing, Inc. 1650 and 1660 East Cheyenne
Mountain Boulevard
147 Circle K Plaza Sperry Van Ness Mullin 4355 East University Drive
148 Flamingo West Apartments Owner Managed 3707 West Idlewild Avenue
149 Big K Store EIG Realty 431 N.E. 19th Avenue
150 St. Agnes Apartments Stallard & Associates 1350 North Meridian Street
151 Richfield Court Apartments Princeton Enterprises, L.L.C. 3281 Richfield Road
152 Peconic Mini Storage Mini-Storage Companies 345 Flanders Road
153 Heritage Estates Manufactured Housing
Community Great Lakes Community Management Group, L.L.C. 600 South Maplewood Drive
154 Academy Apartments Owner Managed 9115 Academy Road
155 North By Northeast II Shoppes Olympia Partners 8200 Block East 96th Street
156 Warehouse II/Lock-It Lockers Equity Management Corporation 3636 East Washington Street
157 Mission Hill Apartments Owner Managed 256 Parker Hill Avenue & 197
Calumet Street
158 Boston Square Shopping Center Terry Properties, Ltd. 19600-19654 West 130th Street
159 Gaithersburg Shopping Center Pinnacle Realty Management Co. 841-861 Russell Avenue
160 Iteq Building Owner Managed 4422 FM-1960
161 Coliseum Self Storage Turtle Creek Management, Inc 1121 North Coliseum Boulevard
162 Centre Square Apartments R Squared Enterprises, LLC 2135 Payne Street
163 Emerald Lake Apartments Trizel Commercial Real Estate Services, Inc. 1700 Northeast 133rd Street
164 The Sun Prairie Apartments Tarentino Properties 911 Sun Prairie Drive
165 7th Street Grocery Jahansen-Thackeray, Inc. 7645 South 700 East
166 Eagle's Nest Office Building Owner Managed 4420 Hotel Circle Court
167 New Augusta Shoppes Olympia Partners 7111 Georgetown Road
168 Lakedale Apartments (2E) Owner Managed 2921 Kendale Drive
169 Liberty Apartments (2E) Owner Managed 2530 Community Drive
170 Sunshine Care Homes JMS Properties 12725-12750 Monte Vista Road
171 1-9 Flatbush Avenue Bullard Puchsing and Sales 1-9 Flatbush Avenue
172 Pathmark Store No. 550 Mosbacher Properties Group 176-182 West Chelten Avenue
173 Kmart Plaza - Minot Coldwell Banker 1st Minot Realty & Management One 20th Avenue Southeast
174 Villa Del Rio Apartments Owner Managed 5817 Boca Raton Boulevard
175 Winchester Arms & Fox Chase Apartments Owner Managed 1706 and 3408 Rhawn Street,
417-19 Chandler Street,
304-6 Loney Street and
7312-14 Rockwell Street
176 Old Orchard II Apartments Garfield Investment 4330 Keller Road
177 55-65 Merrick Road Owner Managed 55-65 Merrick Road
178 5055 California Avenue Owner Managed 5055 California Avenue
179 Castle Store & Lock Owner Managed 1861 Dixie Highway
180a Monterey Apartments Owner Managed 748-768 New Britain Avenue
180b Sherbrooke Apartments Owner Managed 90-118 Sherbrooke Avenue
181 Arctic Office Building Owner Managed 3940 Arctic Boulevard
182 Lockheed Martin Building FINSA Development Corporation 2717 Airport Drive
183 Renton Highlands Center Owner Managed 1190 Sunset Boulevard NE
184 Lansing Square Apartments Owner Managed 11152 East 16th Street
185 CVS #0742-01 Owner Managed 90 Garth Road
186 Pinewood Village Apartments Styles Holdings II, Inc. 1258 Sunset Boulevard
187 Midway Commercial Building Progressive Management Investments, Inc. 2470-2512 University Avenue
West
188 Jersey Street Apartments Owner Managed 136 Jersey Street
189 Preston Office Park Owner Managed 9741 Preston Road
190 Fairmont Oaks Apartments Owner Managed 4210 Young Street
191 Premier Plaza Shopping Center Owner Managed 601 West Parker Road
192 4404-4418 Walnut Street Owner Managed 4404-4418 Walnut Street
193 Cumberland Technical Center Cumberland Property Management 4311 West Waters Avenue
194 Orchard Park Apartments Owner Managed 1327 East 64th Street
195 Quarry Ridge Apartments Owner Managed 1031 South Brookside
196 Stoney Creek Apartments William Penn Realty Group 410 East Hinckley Avenue
197 Plaza Apartments Owner Managed 130, 140 & 150 Southwest 8th
Street and 840 Southwest 3rd
Avenue
198a Mulberry Court Apartments Owner Managed 4015 Devereaux Street
198b 6919 Walker Street Owner Managed 6919 Walker Street
198c 5711 Erdrick Street Owner Managed 5711 Erdrick Street
199 Warehouse I/Lock-It Lockers Equity Management Corporation 1135 West Broadway Road
200 Park City Plaza Owner Managed 8600 State Road 84
201 Sunny Townhomes Owner Managed 8731 North 30th Street
202 Town & Country Shopping Center Zamagias Properties 106 East Parker Street
203 The Majestic Building Owner Managed 7 East Bijou Street
204 Royal Park Apartments Owner Managed 75 and 100 Southwest 10th
Street and 100 Southwest
9th Street
205 Greensburg Plaza Owner Managed 1807 North Broadway Street
206 Wilson Heights Apartments Owner Managed 4908 36th Avenue
207 Northway Court Shopping Center Graves Hospitality Corporation 1501 Northway Drive
208 Goodwill Retail Center Owner Managed 17450 Meinig Avenue
209 Warehouse IV/Lock-It Lockers Equity Management Corporation 2825 North 1st Avenue
210 Warehouse IX/Lock-It Lockers Equity Management Corporation 4115 East Speedway Boulevard
211 Morello Building Owner Managed 2565 Northwest 1st Avenue
212 Town North Villa Apartments Owner Managed 1805 North Frances Street
213 1137 North 13th Street Apartments (2F) Owner Managed 1137 North 13th Street
214 949-969 North 27th Street (2F) Owner Managed 949-969 North 27th Street
215 Summit Plaza Owner Managed 894-896 Summit Street
216 Turney Square Apartments Owner Managed 301 West Turney Avenue
217 Lake Street Apartments Owner Managed 2199-2207 South Lake Street
218 Atwood & Barker Apartments Owner Managed 22 Atwood Street and 185 Barker
Street
219 162 Myrtle Avenue Owner Managed 162 Myrtle Avenue
220 Summit Heights Apartments Owner Managed 3727-3735 Summit Street and
712-722 West 38th Street
221 40 Scitico Road Owner Managed 40 Scitico Road
222 Sunnyvale Trailer Park Sunnydale Management 1360 New Louden Road
223 Woodhaven Village Square Noral Inc. 23200 Allen Road
224 St. John's Office Building Owner Managed 1811 St. Johns Avenue
225 Southlake Center Owner Managed 2303-2339 Kirkwood Drive
226 Country Villa Apartments Owner Managed 1099 Lago Vista Boulevard
227 Coach Light Apartments Owner Managed 2405 East Park Row Drive
228 4425 South 87th Street Owner Managed 4425 South 87th Street
229 Cosmos Apartments Owner Managed 1510 Avenue L
230 North Gate Apartments Courtney's Real Estate & Auction Sales 1323 North Fourth Street
</TABLE>
<PAGE>
# CITY COUNTY STATE ZIP CODE
- ---- ------ ----- --------
1 New York New York NY 10022
2 Valencia Los Angeles CA 91381
3 Wilmington New Castle DE 19801
4a Richmond Henrico VA 23223
4b Dallas Dallas TX 75231
5 Santa Clara Santa Clara CA 95054
6a Dallas Dallas TX 75231
6b Richmond Chesterfield VA 23234
7 Salt Lake City Salt Lake City UT 84106
8 Randolph Township Morris NJ 07869
9 Los Angeles Los Angeles CA 90010
10 Temecula Riverside CA 92591
11 Fort Myers Lee FL 33907
12 Fremont Sandusky OH 43420
13 Fremont Sandusky OH 43420
14a Dallas Dallas TX 75238
14b Dallas Dallas TX 75238
15 Baton Rouge East Baton Rouge LA 70820
16 Baton Rouge East Baton Rouge LA 70820
17 Boston Suffolk MA 02114
18 Roseville Macomb MI 48066
19 Chandler Maricopa AZ 85226
20 Saddle Brook Township Bergen NJ 07663
21 Washington N/A DC 20002
22 Danbury Fairfield CT 06811
23 Racine Racine WI 53403
24 St. Cloud Stearns MN 56301
25 Salt Lake City Salt Lake UT 84106
26 Clinton Worcester MA 01510
27 Las Vegas Clark NV 89123
28 Orlando Orange FL 32819
29 Hardyston Township Sussex NJ 07419
30 Colorado Springs El Paso CO 80918
31 Seattle King WA 98134
32 Colorado Springs El Paso CO 80916
33 Kent King WA 98031
34 Colorado Springs El Paso CO 80906
35 Midwest City Oklahoma OK 73110
36 Spartanburg Spartanburg SC 29301
37 Edmond Oklahoma OK 73013
38 Austin Travis TX 78752
39 Canandaigua Ontario NY 14424
40 Chicago Cook IL 60639
41 Austin Travis TX 78733
42 Austin Travis TX 78733
43 Portland Cumberland ME 04102
44 Savannah Chatham GA 31405
45 Streetsboro Portage OH 44241
46 Lompoc Santa Barbara CA 93436
47 Virginia Beach Virginia Beach City VA 23462
48 Sacramento Sacramento CA 95825
49 Irving Dallas TX 75063
50 North Reading Middlesex MA 01867
51 Fern Park Seminole FL 32730
52 Boulder Boulder CO 80303
53 Allen Collin TX 75002
54 Hartville Stark OH 44632
55 St. Joseph Buchanan MO 64504
56 Dallas Dallas TX 75231
57 Portland Multnomah OR 97212
58a Newport Beach Orange CA 92660
58b Newport Beach Orange CA 92660
58c Newport Beach Orange CA 92660
59 Cincinnati Hamilton OH 45202
60 Kirkland King WA 98034
61 Torrington Litchfield CT 06790
62a Garland Dallas TX 75042
62b Dallas Collin TX 75225
62c Dallas Denton TX 75287
62d Richardson Dallas TX 75081
63 Houston Harris TX 77038
64 Irving Dallas TX 75038
65 Wayne Township Passaic NJ 07470
66 Honey Brook Chester PA 19344
67 Hackensack Bergen NJ 07601
68 Memphis Shelby TN 38118
69 Moorhead Clay MN 56560
70 Huntersville Mecklenburg NC 28078
71 Houston Harris TX 77036
72 Oklahoma City Cleveland OK 73139
73 Overland Park Johnson KS 66202
74 Irving Dallas TX 75062
75 Dallas Dallas TX 75220
76 New Baltimore Macomb MI 48047
77 Fort Collins Larimer CO 80521
78 Scottsdale Maricopa AZ 85260
79 Jacksonville Onslow NC 27540
80 Fresno Fresno CA 93720
81 Fairfax Fairfax VA 22033
82 Conroe Montgomery TX 77301
83 Fort Worth Tarrant TX 76112
84 Pembroke Pines Broward FL 33024
85 Tonawanda Erie NY 14150
86 Sherman Grayson TX 75092
87 Atlanta Dekalb GA 30338
88 Schaumburg Cook IL 60194
89 Brooks Bullitt KY 40229
90 Torrance Los Angeles CA 90502
91 Atlanta Fulton GA 30307
92 Silver Spring Montgomery MD 20904
93 Augusta Kennebec ME 04330
94 Pittsburgh Allegheny PA 15232
95 Oak Forest Cook IL 60452
96 Marietta Cobb GA 30064
97 Indianapolis Marion IN 46256
98 Sandy Salt Lake UT 84070
99 Denver Adams CO 80221
100 Carmel Hamilton IN 46032
101 Clinton Hinds MS 39056
102 San Carlos San Mateo CA 94070
103 Great Falls Cascade MT 59401
104 Philadelphia Philadelphia PA 19131
105 Madison Madison AL 35758
106 Stamford Fairfield CT 06902
107 Mesa Maricopa AZ 85201
108 Sarasota Sarasota FL 34242
109 Nashville Davidson TN 37209
110 Dallas Dallas TX 75247
111 Canton Wayne MI 48187
112 East Hartford Hartford CT 06108
113 Queensbury Warren NY 14203
114 San Diego San Diego CA 92108
115 Wausau Marathon WI 54401
116 Hackensack Bergen NJ 07601
117 Woodhaven Wayne MI 48183
118 Winder Barrow GA 30680
119 Winder Barrow GA 30680
120 Waterford Township Oakland MI 48329
121 Groton New London CT 06340
122 Elmira Chemung NY 14904
123 Pleasanton Alameda CA 94588
124 Middlefield Geauga OH 44062
125 Elmira Chemung NY 14901
126 Columbus Franklin OH 43229
127 Xenia Greene OH 45385
128 East Stroudsburg Monroe PA 18301
129 Shreveport Caddo LA 71118
130 Kingston Ulster NY 12401
131 Phoenix Maricopa AZ 85254
132 La Puente Los Angeles CA 91744
133 Halfmoon Saratoga NY 12065
134 Waco McLennan TX 76706
135 Clawson Oakland MI 48017
136 Birmingham Oakland MI 48009
137 Aventura Miami-Dade FL 33180
138 League City Galveston TX 77573
139 Westhampton Beach Suffolk NY 11978
140 Apopka Orange FL 32703
141a Brookhaven Lincoln MS 39601
141b Brookhaven Lincoln MS 39601
142 Northwood Wood OH 43619
143 Alexandria Douglas MN 56308
144 Lakewood Jefferson CO 80228
145 Bloomington Monroe IN 47401
146 Colorado Springs El Paso CO 80906
147 Mesa Maricopa AZ 85205
148 Tampa Hillsborough FL 33614
149 Ruskin Hillsborough FL 33570
150 Indianapolis Marion IN 46202
151 Flint Genesee MI 48506
152 Flanders Suffolk NY 11901
153 Rantoul Champaign IL 61866
154 Philadelphia Philadelphia PA 19136
155 Fishers Hamilton IN 46038
156 Phoenix Maricopa AZ 85034
157 Roxbury Suffolk MA 02120
158 Strongsville Cuyahoga OH 44136
159 Gaithersburg Montgomery MD 20879
160 Houston Harris TX 77068
161 Fort Wayne Allen IN 46805
162 Las Cruces Dona Ana NM 88001
163 North Miami Dade FL 33181
164 Houston Harris TX 77090
165 Sandy Salt Lake UT 84047
166 San Diego San Diego CA 92108
167 Indianapolis Marion IN 46268
168 Dallas Dallas TX 75220
169 Dallas Dallas TX 75220
170 Poway San Diego CA 92064
171 Brooklyn Kings NY 11217
172 Philadelphia Philadelphia PA 19144
173 Minot Ward ND 58701
174 Fort Worth Tarrant TX 76112
175 Philadelphia Philadelphia PA 19136
176 Holt Ingham MI 48842
177 Amityville Suffolk NY 11701
178 Bakersfield Kern CA 93309
179 Hamilton Butler OH 45011
180a Hartford Hartford CT 06106
180b Hartford Hartford CT 06106
181 Anchorage Anchorage AK 99503
182 Harlingen Cameron TX 78550
183 Renton King WA 98056
184 Aurora Adams CO 80010
185 Scarsdale Westchester NY 10583
186 Jesup Wayne GA 31545
187 St. Paul Ramsey MN 55114
188 Waterbury New Haven CT 06706
189 Frisco Collin TX 75034
190 Pasadena Harris TX 77504
191 Plano Collin TX 75023
192 Philadelphia Philadelphia PA 19104
193 Tampa Hillsborough FL 33614
194 Tulsa Tulsa OK 74136
195 Independence Jackson MO 64053
196 Ridley Park Borough Delaware PA 19078
197 Pompano Beach Broward FL 33060
198a Philadelphia Philadelphia PA 19135
198b Philadelphia Philadelphia PA 19035
198c Philadelphia Philadelphia PA 19135
199 Tempe Maricopa AZ 85282
200 Davie Broward FL 33324
201 Tampa Hillsborough FL 33604
202 Baxley Appling GA 31513
203 Colorado Springs El Paso CO 80903
204 Fort Lauderdale Boward FL 33301
205 Greensburg Decatur IN 47240
206 Kenosha Kenosha WI 53140
207 St. Cloud Stearns MN 56303
208 Sandy Clackamas OR 97055
209 Tucson Pima AZ 85719
210 Tucson Pima AZ 85712
211 Boca Raton Palm Beach FL 33431
212 Terrell Kaufman TX 75160
213 Milwaukee Milwaukee WI 53208
214 Milwaukee Milwaukee WI 53208
215 Round Rock Williamson TX 78664
216 Phoenix Maricopa AZ 85013
217 Salt Lake City Salt Lake UT 84106
218 Hartford Hartford CT 06105
219 Stamford Fairfield CT 06902
220 Kansas City Jackson MO 64111
221 Somers Tolland CT 06071
222 Latham Albany NY 12110
223 Woodhaven Wayne MI 48183
224 Highland Park Lake IL 60035
225 Houston Harris TX 77077
226 Eastland Eastland TX 76448
227 Arlington Tarrant TX 76010
228 Omaha Douglas NE 68127
229 Plano Collin TX 75074
230 Toronto Jefferson OH 43964
(2A) The Underlying Mortgage Loans secured by Poly Foam and Poly-Foam
International, Inc. are cross-collateralized and cross-defaulted,
respectively.
(2B) The Underlying Mortgage Loans secured by Radisson Inn Harbourwalk and
Radisson Suite Hotel are cross-collateralized and cross-defaulted,
respectively.
(2C) The Underlying Mortgage Loans secured by Crystal Mountain Office Park
and Lake Pointe Center II are cross-collateralized and cross-defaulted,
respectively.
(2D) The Underlying Mortgage Loans secured by Winder Village Manufactured
Housing Community and Russell Village Manufactured Housing Community
are cross-collateralized and cross-defaulted, respectively.
(2E) The Underlying Mortgage Loans secured by Lakedale Apartments and
Liberty Apartments are cross-collateralized and cross-defaulted,
respectively.
(2F) The Underlying Mortgage Loans secured by 1137 North 13th Street
Apartments and 949-969 North 27th Street are cross-defaulted.
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTIONS OF THE MORTGAGED REAL PROPERTIES
Property
# Property Name Property Type Sub-Type
- ------------- ------------- --------
<S> <C> <C> <C>
1 437 Madison Avenue Office
2 Valencia Marketplace, Power Center Retail Anchored
3 Hercules Plaza Office
4a Seven Gables Apartments Multifamily
4b High Ridge Apartments Multifamily
5 McCandless Towers II Office
6a Timbercreek Apartments Multifamily
6b Deering Manor Apartments Multifamily
7 Commons at Sugarhouse Retail Anchored
8 Gateway at Randolph Apartments Multifamily
9 Metroplex Office
10 Palm Plaza Shopping Center Retail Anchored
11 Page Field Commons Retail Anchored
12 Poly Foam (2A) Industrial
13 Poly-Foam International, Inc. (2A) Industrial
14a Autumn Ridge Apartments Multifamily
14b Summer Glen Apartments Multifamily
15 Sterling University Crescent Multifamily
16 Oakbrook Apartments Multifamily
17 One Bulfinch Place Office
18 Sandhurst Apartments Multifamily
19 Chandler Sunset Plaza Retail Shadow Anchored
20 Saddle Brook Apartments Multifamily
21 Railway Express Building Office
22 Hillcroft Apartments Multifamily
23 Radisson Inn Harbourwalk (2B) Hotel Limited Service
24 Radisson Suite Hotel (2B) Hotel Full Service
25 Highland Cove Retirement Community Independent/
Assisted Living
26 Regency Warehouse Industrial
27 Silverado Ranch Center Retail Anchored
28 Holiday Inn Orlando Hotel Full Service
29 Carlton Village Apartments Multifamily
30 Glenridge Apartments Multifamily
31 2200 First Avenue South Office
32 Windmill Apartments Multifamily
33 Kent Hill Plaza Retail Anchored
34 Cheyenne Crest Apartments Multifamily
35 Big Kmart - Midwest City Retail Anchored
36 Westgate Crossing Shopping Center Retail Anchored
37 Big Kmart - Edmond Retail Anchored
38 One Cameron Place Office
39 Roseland Shopping Center Retail Anchored
40 Big Kmart - Chicago Retail Anchored
41 Crystal Mountain Office Park (2C) Office
42 Lake Pointe Center II (2C) Office
43 DoubleTree Hotel Hotel Full Service
44 Twelve Oaks Shopping Center Retail Anchored
45 Streetsboro Market Square Retail Anchored
46 Ravenswood Apartments Multifamily
47 Pembroke Office Park Office
48 Candlewood Hotel - Sacramento Hotel Limited Service
49 Royal Jetstar Tech Center Office
50 North Reading Plaza Retail Anchored
51 Cypress Springs Apartments Multifamily
52 Sterling University Peaks Multifamily
53 Kmart - Allen Retail Anchored
54 Hartville Center Retail Anchored
55 Pony Express Building Industrial
56 Willow Pond Apartments Multifamily
57 Standard Dairy Apartments Multifamily
58a 200 Newport Center Drive Office
58b 359 San Miguel Drive Office
58c 363 San Miguel Drive Office
59 Garfield Suites Hotel Hotel Limited Service
60 Larry's Market Retail Anchored
61 Big-K Plaza Retail Anchored
62a Campbell Park Shopping Center Retail Unanchored
62b Frankford Crest Shopping Center Retail Unanchored
62c Midway Village Shopping Center Retail Unanchored
62d Campbell Square Shopping Center Retail Unanchored
63 Walnut Creek Apartments Multifamily
64 Royal Freeport Tech Center Mixed Use Office/Industrial
65 100 Demarest Drive Industrial
66 Indian Run Village Manufactured Housing
67 210 Main Street Office
68 Clearbrook Village Apartments Multifamily
69 Brookdale Shopping Center Retail Anchored
70 Courtyard by Marriott Hotel Hotel Full Service
71 Hamilton Park Apartments Multifamily
72 Brookwood Shopping Center Retail Anchored
73 6329 Glenwood Office Building Office
74 Landmark Garden Apartments Multifamily
75 Applecreek Apartments Multifamily
76 Plaza At The Pointe Shopping Center Retail Anchored
77 Ramblewood Apartments Multifamily
78 Scottsdale Airpark II Mixed Use Office/Warehouse
79 New Market Square Shopping Center Retail Anchored
80 Maple Leaf Apartments Multifamily
81 The Shops at Fair Lakes Retail Shadow Anchored
82 Sunpark Apartments Multifamily
83 Carol Oaks Apartments Multifamily
84 Florida Computer Center Retail Shadow Anchored
85 Tonawanda Manor Health Care
86 Woodridge Apartments Multifamily
87 Dunwoody Plaza Retail Anchored
88 Schaumburg Plaza Mixed Use Office/Retail
89 Whispering Oaks Mobile Home Park Manufactured Housing
90 Harbor Technology Center Office
91 Stove Works Office Building Office
92 Holy Cross Professional Center Office
93 Augusta Plaza Shopping Center Retail Anchored
94 Banana Republic Retail Unanchored
95 Forest Hills Apartments Multifamily
96 West Marietta Retail Center Retail Shadow Anchored
97 Regency Centre Office Complex Office
98 Southtowne Center Retail Shadow Anchored
99 Pinetree Village Apartments Multifamily
100 Weston Shoppes Retail Shadow Anchored
101 Pine Trails Apartments Multifamily
102 Old County Road Industrial
103 Cambridge Court Retirement Community Health Care
104 Bryn Mawr Suites Apartments Multifamily
105 Bruno's Shopping Center Retail Anchored
106 Laddins Rock Multifamily
107 Christine Place Apartments Multifamily
108 Best Western Siesta Beach Resort Hotel Limited Service
109 Richland Hills Apartments Multifamily
110 Star Wholesale Florist, Inc. Retail Unanchored
111 Office Depot Retail Anchored
112 CVS Plaza - East Hartford Retail Anchored
113 CVS Plaza - Queensbury Retail Anchored
114 Warehouse X/Lock-It Lockers Self Storage
115 Lazy Acres Estates Manufactured Housing
116 214 Main Street Office
117 Office Depot at Woodhaven Village Square Retail Anchored
118 Winder Village Manufactured Housing Community (2D) Manufactured Housing
119 Russell Village Manufactured Housing Community (2D) Manufactured Housing
120 Northway Plaza Shopping Center Retail Unanchored
121 Phoenix Park Apartments Multifamily
122 Eckerd's Drug Store - S. Main Retail Unanchored
123 Chabot Office Plaza Office
124 Middlefield Market Square Shopping Center Retail Shadow Anchored
125 Eckerd's Drug Store - N. Main Retail Anchored
126 Gentry Plaza Retail Anchored
127 The Meadows Apartments Multifamily
128 Miggy's Mall Shopping Center Retail Anchored
129 Colony Square Apartments Multifamily
130 Eckerd's Drug Store - Kingston Retail Unanchored
131 Pueblo Point Ace Hardware Retail Unanchored
132 Five Star Business Park Industrial
133 Eckerd's Drug Store - Half Moon Retail Unanchored
134 Oaks Apartments Multifamily
135 New England Place Apartments Multifamily
136 1025 East Maple Office Building Office
137 Jaffe Eye Office Building Office
138 Calder Square, Phase II Apartments Multifamily
139 North Mall Retail Unanchored
140 Wekiva Executive Center Office
141a Lakeview Arms Apartments Multifamily
141b Jackson Square Apartments Multifamily
142 Office Max - Northwood Retail Unanchored
143 Office Max - Alexandria Retail Unanchored
144 Foxpoint Commons Mixed Use Office/Retail
145 Continental Terrace Apartments Multifamily
146 Cheyenne Mountain Center Retail Shadow Anchored
147 Circle K Plaza Retail Unanchored
148 Flamingo West Apartments Multifamily
149 Big K Store Retail Anchored
150 St. Agnes Apartments Multifamily
151 Richfield Court Apartments Multifamily
152 Peconic Mini Storage Self Storage
153 Heritage Estates Manufactured Housing Community Manufactured Housing
154 Academy Apartments Multifamily
155 North By Northeast II Shoppes Retail Shadow Anchored
156 Warehouse II/Lock-It Lockers Self Storage
157 Mission Hill Apartments Multifamily
158 Boston Square Shopping Center Retail Anchored
159 Gaithersburg Shopping Center Retail Shadow Anchored
160 Iteq Building Office
161 Coliseum Self Storage Self Storage
162 Centre Square Apartments Multifamily
163 Emerald Lake Apartments Multifamily
164 The Sun Prairie Apartments Multifamily
165 7th Street Grocery Retail Shadow Anchored
166 Eagle's Nest Office Building Office
167 New Augusta Shoppes Retail Unanchored
168 Lakedale Apartments (2E) Multifamily
169 Liberty Apartments (2E) Multifamily
170 Sunshine Care Homes Health Care
171 1-9 Flatbush Avenue Retail Unanchored
172 Pathmark Store No. 550 Retail Unanchored
173 Kmart Plaza - Minot Retail Anchored
174 Villa Del Rio Apartments Multifamily
175 Winchester Arms & Fox Chase Apartments Multifamily
176 Old Orchard II Apartments Multifamily
177 55-65 Merrick Road Retail Unanchored
178 5055 California Avenue Office
179 Castle Store & Lock Self Storage
180a Monterey Apartments Multifamily
180b Sherbrooke Apartments Multifamily
181 Arctic Office Building Office
182 Lockheed Martin Building Industrial
183 Renton Highlands Center Retail Unanchored
184 Lansing Square Apartments Multifamily
185 CVS #0742-01 Retail Unanchored
186 Pinewood Village Apartments Multifamily
187 Midway Commercial Building Mixed Use Retail/Office
188 Jersey Street Apartments Multifamily
189 Preston Office Park Mixed Use Office/Retail
190 Fairmont Oaks Apartments Multifamily
191 Premier Plaza Shopping Center Retail Unanchored
192 4404-4418 Walnut Street Multifamily
193 Cumberland Technical Center Retail Unanchored
194 Orchard Park Apartments Multifamily
195 Quarry Ridge Apartments Multifamily
196 Stoney Creek Apartments Multifamily
197 Plaza Apartments Multifamily
198a Mulberry Court Apartments Multifamily
198b 6919 Walker Street Multifamily
198c 5711 Erdrick Street Multifamily
199 Warehouse I/Lock-It Lockers Self Storage
200 Park City Plaza Retail Unanchored
201 Sunny Townhomes Multifamily
202 Town & Country Shopping Center Retail Anchored
203 The Majestic Building Mixed Use Retail/Office
204 Royal Park Apartments Multifamily
205 Greensburg Plaza Retail Shadow Anchored
206 Wilson Heights Apartments Multifamily
207 Northway Court Shopping Center Retail Unanchored
208 Goodwill Retail Center Retail Unanchored
209 Warehouse IV/Lock-It Lockers Self Storage
210 Warehouse IX/Lock-It Lockers Self Storage
211 Morello Building Industrial
212 Town North Villa Apartments Multifamily
213 1137 North 13th Street Apartments (2F) Multifamily
214 949-969 North 27th Street (2F) Multifamily
215 Summit Plaza Office
216 Turney Square Apartments Multifamily
217 Lake Street Apartments Multifamily
218 Atwood & Barker Apartments Multifamily
219 162 Myrtle Avenue Multifamily
220 Summit Heights Apartments Multifamily
221 40 Scitico Road Industrial
222 Sunnyvale Trailer Park Manufactured Housing
223 Woodhaven Village Square Retail Unanchored
224 St. John's Office Building Mixed Use Office/Retail
225 Southlake Center Retail Unanchored
226 Country Villa Apartments Multifamily
227 Coach Light Apartments Multifamily
228 4425 South 87th Street Mixed Use Office/Industrial
229 Cosmos Apartments Multifamily
230 North Gate Apartments Multifamily
Total/Weighted Average:
Maximum:
Minimum:
(2A) The Underlying Mortgage Loans secured by Poly Foam and Poly-Foam International, Inc. are cross-collateralized and
cross-defaulted, respectively.
(2B) The Underlying Mortgage Loans secured by Radisson Inn Harbourwalk and Radisson Suite Hotel are cross-collateralized and
cross-defaulted, respectively.
(2C) The Underlying Mortgage Loans secured by Crystal Mountain Office Park and Lake Pointe Center II are cross-collateralized and
cross-defaulted, respectively.
(2D) The Underlying Mortgage Loans secured by Winder Village Manufactured Housing Community and Russell Village Manufactured Housing
Community are cross-collateralized and cross-defaulted, respectively.
(2E) The Underlying Mortgage Loans secured by Lakedale Apartments and Liberty Apartments are cross-collateralized and
cross-defaulted, respectively.
(2F) The Underlying Mortgage Loans secured by 1137 North 13th Street Apartments and 949-969 North 27th Street are cross-defaulted.
(3) Does not include the hotel properties.
(4) Underwritten NCF reflects the Net Cash Flow after U/W Replacement Reserves, U/W LC's and TI's and U/W FF&E.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Units/
Sq. Ft./
Hotel Rooms/ Fee Simple/ Year Occupancy Date of
# Franchise Pads Leasehold Year Built Renovated Rate at U/W (3) Occupancy Rate (3)
- --------- ---- --------- ---------- --------- --------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 782,921 Leasehold 1967 1996 99% 7/1/00
2 528,019 Fee 1998 N/A 99% 7/1/00
3 532,974 Leasehold 1984 N/A 100% 7/1/00
4a 1,184 Fee 1965 1998 95% 5/24/00
4b 360 Fee 1979 1999 94% 8/25/00
5 214,080 Fee 1998 N/A 100% 6/7/00
6a 1,083 Fee 1974 1999 96% 5/24/00
6b 168 Fee 1969 1999 95% 7/18/00
7 193,397 Fee 1999 N/A 97% 8/1/00
8 903 Fee 1975 1999 100% 5/17/00
9 388,608 Fee 1985 N/A 94% 8/1/00
10 342,338 Fee 1990 N/A 94% 8/8/00
11 264,399 Leasehold 1999 N/A 96% 9/15/00
12 431,852 Fee 1993 N/A 100% 6/30/00
13 407,872 Fee 1995 N/A 100% 6/30/00
14a 288 Fee 1974 1993 94% 9/18/00
14b 206 Fee 1974 1992 96% 6/25/00
15 196 Fee 1999 N/A 90% 6/19/00
16 240 Fee 1975 1999 99% 8/31/00
17 82,726 Fee 1973 1998 96% 4/1/00
18 328 Fee 1990 N/A 99% 6/16/00
19 126,218 Fee 1999 N/A 96% 7/1/00
20 368 Fee 1966 N/A 100% 5/17/00
21 108,606 Fee 1905 1989 100% 7/1/00
22 192 Fee 1972 1999 95% 6/30/00
23 Radisson Hotels Worldwide 121 Fee 1994 1997 N/A N/A
24 Radisson Hotels Worldwide 103 Fee 1990 N/A N/A N/A
25 270 Fee/Leasehold 1986 N/A 96% 5/31/00
26 344,000 Fee 2000 N/A 100% 6/26/00
27 92,163 Fee 2000 N/A 96% 8/1/00
28 Holiday Inn 390 Fee/Leasehold 1972 1998 N/A N/A
29 240 Fee 1968 N/A 99% 8/3/00
30 220 Fee 1984 N/A 98% 6/22/00
31 93,119 Fee 1909 1999 100% 6/8/00
32 304 Fee 1984 N/A 97% 6/22/00
33 108,045 Fee 1987 2000 99% 5/31/00
34 208 Fee 1985 N/A 97% 7/5/00
35 99,433 Fee 1983 N/A 100% 6/28/00
36 157,247 Fee 1987 2000 89% 6/30/00
37 97,527 Fee 1994 N/A 100% 3/14/00
38 112,225 Fee 1986 1999 100% 5/1/00
39 199,193 Fee 1988 N/A 99% 6/1/00
40 109,441 Fee 1978 1998 100% 6/9/00
41 56,507 Fee 1997 N/A 100% 6/1/00
42 41,112 Fee 1998 N/A 100% 5/31/00
43 DoubleTree Hotel 149 Fee 1973 1998 N/A N/A
44 105,529 Fee 1984 1994 100% 7/31/00
45 135,410 Fee 1997 N/A 93% 6/30/00
46 204 Fee 1985 N/A 97% 7/27/00
47 294,896 Fee 1978 1995 98% 4/1/00
48 Candlewood Suites 126 Fee 1998 N/A N/A N/A
49 92,630 Fee 1999 N/A 93% 6/30/00
50 153,935 Fee 1971 1997 100% 2/29/00
51 272 Fee 1973 1999 95% 4/10/00
52 192 Fee 1965 1998 96% 6/30/00
53 119,000 Fee 1999 N/A 100% 8/9/00
54 109,396 Fee 1988 N/A 87% 6/20/00
55 410,000 Fee 1999 N/A 100% 4/30/00
56 386 Fee 1974 1998 97% 7/31/00
57 64 Fee 2000 N/A 100% 8/21/00
58a 25,608 Fee 1974 N/A 100% 6/9/00
58b 19,010 Fee 1970 N/A 88% 8/21/00
58c 6,849 Fee 1971 N/A 100% 9/10/00
59 None 153 Fee/Leasehold 1982 1994 N/A N/A
60 60,939 Fee 1989 N/A 100% 6/13/00
61 162,343 Fee 1980 1992 97% 7/1/00
62a 33,740 Fee 1987 N/A 89% 8/2/00
62b 13,334 Fee 1997 N/A 100% 8/2/00
62c 16,499 Fee 1985 N/A 88% 8/2/00
62d 12,540 Fee 1995 N/A 100% 8/2/00
63 280 Fee 1980 1998 96% 8/25/00
64 80,500 Fee 1998 N/A 100% 6/30/00
65 117,340 Fee 1990 N/A 100% 7/3/00
66 236 Fee 1973 N/A 95% 5/31/00
67 87,597 Fee 1926 1985 100% 1/1/00
68 176 Fee 1974 1999 92% 9/25/00
69 80,707 Fee 1999 N/A 94% 9/1/00
70 Marriott Courtyard 90 Fee 1998 N/A N/A N/A
71 326 Fee 1978 1994 99% 5/12/00
72 130,072 Fee 1970 1984 98% 5/1/00
73 64,134 Fee 1998 N/A 100% 3/31/00
74 168 Fee 1969 1998 91% 8/31/00
75 216 Fee 1972 2000 97% 7/25/00
76 84,344 Fee 1989 N/A 97% 8/30/00
77 281 Fee 1970 1998 76% 6/25/00
78 52,271 Fee 2000 N/A 100% 4/24/00
79 197,058 Fee 1971 1989 99% 4/1/00
80 120 Fee 1986 N/A 100% 3/8/00
81 22,015 Fee 1989 N/A 100% 7/31/00
82 168 Fee 1982 1999 98% 6/25/00
83 224 Fee 1978 N/A 92% 6/30/00
84 92,139 Fee 1990 N/A 99% 5/9/00
85 120 Fee 1993 N/A 96% 7/31/00
86 200 Fee 1979 1996 96% 6/24/00
87 51,473 Fee 1977 1998 85% 4/1/00
88 66,526 Fee 1972 1993 90% 9/1/99
89 372 Fee 1970 N/A 97% 6/13/00
90 61,400 Fee 1985 1992 97% 5/15/00
91 55,146 Fee 1915 2000 95% 4/1/00
92 36,194 Fee 1987 N/A 93% 6/30/00
93 150,456 Fee 1970 1999 99% 6/1/00
94 14,853 Fee 2000 N/A 100% 8/16/00
95 160 Fee 1965 1999 100% 3/1/00
96 25,713 Fee 1999 N/A 100% 2/21/00
97 53,600 Fee 1998 N/A 92% 7/14/00
98 50,239 Leasehold 1999 N/A 100% 6/30/00
99 116 Fee 1972 1995 100% 6/30/00
100 32,600 Fee 1998 N/A 100% 6/30/00
101 120 Fee 1974 2000 100% 9/30/00
102 36,928 Fee 1955 N/A 100% 8/1/00
103 106 Fee 1929 1984 83% 7/24/00
104 105 Fee 1959 2000 96% 4/18/00
105 68,331 Fee 1993 N/A 100% 8/31/99
106 24 Fee 2000 N/A 100% 7/1/00
107 94 Fee 1987 N/A 96% 6/1/00
108 Best Western 53 Fee 1948 1997 N/A N/A
109 200 Fee 1971 N/A 94% 7/1/00
110 69,917 Fee 1997 N/A 100% 6/30/00
111 30,177 Fee 1999 N/A 100% 7/1/00
112 19,125 Fee 1999 N/A 100% 6/1/00
113 25,008 Fee 1997 N/A 100% 6/1/00
114 737 Fee 1978 N/A 99% 6/7/00
115 182 Fee 1994 N/A 97% 6/26/00
116 36,184 Fee 1912 1985 100% 1/1/00
117 30,000 Fee 1999 N/A 100% 8/1/00
118 109 Fee 1975 N/A 100% 4/15/00
119 73 Fee 1988 N/A 100% 7/27/00
120 42,670 Fee 1988 N/A 97% 4/30/00
121 96 Fee 1973 N/A 93% 5/3/00
122 10,908 Fee 1999 N/A 100% 5/31/00
123 23,322 Fee 1999 N/A 100% 5/1/00
124 35,650 Fee 1998 N/A 96% 4/7/00
125 10,908 Fee 1999 N/A 100% 5/31/00
126 41,309 Fee 1966 1999 100% 7/21/00
127 88 Fee 1969 N/A 98% 6/21/00
128 55,908 Fee 1988 1995 100% 5/31/00
129 184 Fee 1973 N/A 94% 7/10/00
130 10,908 Fee 1999 N/A 100% 7/19/00
131 25,500 Fee 1980 1999 100% 8/17/00
132 57,902 Fee 1978 1988 92% 8/24/00
133 11,397 Fee 1998 N/A 100% 6/30/00
134 137 Fee 1976 N/A 95% 6/1/00
135 68 Fee 1964 N/A 96% 7/31/00
136 18,544 Fee 1968 2000 100% 8/7/00
137 19,332 Fee 1982 N/A 100% 5/4/00
138 80 Fee 1984 N/A 98% 7/31/00
139 25,560 Fee 1990 N/A 100% 4/1/00
140 44,400 Fee 1986 N/A 89% 6/27/00
141a 64 Fee 1970 1997 97% 7/31/00
141b 32 Fee 1970 1998 100% 8/31/00
142 23,500 Fee 1999 N/A 100% 6/30/00
143 23,500 Fee 1999 N/A 100% 6/30/00
144 55,018 Fee 1985 N/A 94% 2/1/00
145 78 Fee 1964 N/A 94% 9/6/00
146 20,002 Fee 1999 N/A 100% 6/25/00
147 20,566 Fee 1988 N/A 86% 6/30/00
148 72 Fee 1972 1995 99% 7/19/00
149 68,337 Fee 1981 1994 100% 6/30/00
150 79 Fee 1925 1999 96% 6/30/00
151 136 Fee 1969 1999 96% 7/30/00
152 405 Fee 1996 N/A 92% 7/17/00
153 208 Fee 1960 1985 88% 6/30/00
154 80 Fee 1962 N/A 100% 5/22/00
155 12,240 Fee 1999 N/A 100% 6/30/00
156 595 Fee 1974 N/A 77% 6/7/00
157 33 Fee 1965 1995 94% 5/17/00
158 38,525 Fee 1986 N/A 100% 1/1/00
159 13,692 Fee 1999 N/A 100% 5/31/00
160 37,438 Fee 1982 N/A 98% 3/15/00
161 599 Fee 1996 N/A 99% 6/30/00
162 52 Fee 1997 N/A 100% 8/17/00
163 54 Fee 1968 2000 98% 5/1/00
164 80 Fee 1984 1999 95% 6/30/00
165 14,133 Fee 1998 N/A 100% 8/8/00
166 29,463 Fee 1979 N/A 97% 4/18/00
167 15,600 Fee 1999 N/A 100% 6/30/00
168 80 Fee 1974 N/A 100% 5/31/00
169 50 Fee 1970 1996 92% 5/31/00
170 24 Fee 1989 N/A 100% 6/30/00
171 11,200 Fee 1920 N/A 89% 5/31/00
172 30,000 Fee 1968 2000 100% 7/14/00
173 113,550 Fee 1970 1995 97% 1/1/99
174 108 Fee 1974 1997 90% 5/31/00
175 60 Fee 1965 1985 98% 5/2/00
176 72 Fee 1967 1999 96% 5/31/00
177 14,319 Fee 1987 N/A 94% 1/24/00
178 26,639 Fee 1982 N/A 94% 3/23/00
179 473 Fee 1989 1996 91% 8/2/00
180a 52 Fee 1958 1997 92% 6/30/00
180b 38 Fee 1960 1997 97% 6/30/00
181 25,825 Fee 1984 N/A 89% 9/1/00
182 62,419 Leasehold 1999 N/A 100% 8/31/00
183 13,095 Fee 1964 1999 100% 8/23/00
184 55 Fee 1972 N/A 98% 8/24/00
185 9,400 Fee 1928 1984 100% 6/30/00
186 64 Fee 1983 N/A 95% 8/1/00
187 65,573 Fee 1915 1992 93% 7/17/00
188 42 Fee 1966 2000 98% 7/1/00
189 21,915 Fee 1983 N/A 97% 7/1/00
190 60 Fee 1984 N/A 100% 3/1/00
191 17,292 Fee 1984 N/A 91% 1/1/00
192 52 Fee 1920 1986 100% 9/1/99
193 22,885 Fee 1987 N/A 92% 6/30/00
194 58 Fee 1965 1995 95% 4/30/00
195 48 Fee 1973 N/A 100% 7/1/00
196 35 Fee 1965 N/A 100% 8/10/00
197 40 Fee 1969 1999 98% 3/1/00
198a 27 Fee 1973 1999 100% 11/1/99
198b 11 Fee 1960 1997 100% 11/1/99
198c 11 Fee 1960 1997 91% 11/1/99
199 478 Fee 1973 N/A 78% 6/7/00
200 20,335 Fee 1983 1998 100% 5/11/00
201 40 Fee 1984 N/A 100% 4/6/00
202 62,586 Fee 1966 N/A 100% 6/30/00
203 17,289 Fee 1900 1986 100% 4/26/00
204 32 Fee 1974 N/A 100% 6/6/00
205 17,600 Fee 1993 N/A 100% 6/1/00
206 36 Fee 1962 1998 100% 2/7/00
207 17,052 Fee 1983 N/A 100% 6/30/00
208 19,900 Fee 1965 2000 100% 8/31/00
209 503 Fee 1974 N/A 99% 6/7/00
210 463 Fee 1977 N/A 91% 6/7/00
211 16,030 Fee 1974 2000 100% 7/31/00
212 32 Fee 1983 1997 97% 5/8/00
213 27 Fee 1927 2000 100% 6/24/00
214 15 Fee 1920 N/A 100% 6/30/00
215 14,753 Fee 1985 N/A 100% 7/31/00
216 32 Fee 1950 1990 100% 3/13/00
217 22 Fee 1972 1987 100% 7/1/00
218 35 Fee 1959 1999 100% 8/10/00
219 8 Fee 1920 1989 100% 1/20/00
220 36 Fee 1920 1998 97% 2/29/00
221 48,000 Fee 1974 1997 100% 4/5/00
222 39 Fee 1957 N/A 100% 6/1/00
223 5,000 Fee 1999 N/A 100% 8/1/00
224 8,275 Fee 1910 1996 100% 6/30/00
225 13,059 Fee 1980 1997 91% 4/1/00
226 40 Fee 1985 N/A 88% 6/1/00
227 40 Fee 1966 N/A 100% 4/1/00
228 20,000 Fee 1969 N/A 100% 5/1/00
229 12 Fee 1967 N/A 92% 8/10/00
230 15 Fee 1976 N/A 100% 3/31/00
=============================
Total/Weighted Average: 1981 1997 97%
=============================
Maximum: 2000 2000 100%
Minimum: 1900 1984 76%
<CAPTION>
Most Recent Most Most Most
Appraised Operating Statement Recent Recent Recent
# Value Date Revenue Expenses NOI U/W NOI U/W NCF (4)
- ----- ---- ------- -------- --- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 198,000,000 10/31/99 $ 29,391,870 $ 14,679,651 $ 14,712,219 $ 15,593,901 $ 14,279,554
2 71,000,000 6/30/00 7,705,490 2,132,728 5,572,762 5,670,040 5,447,558
3 125,000,000 N/A N/A N/A N/A 11,284,500 11,284,500
4a 38,500,000 6/30/00 5,618,275 2,150,254 3,468,021 3,743,078 3,447,078
4b 12,600,000 6/30/00 2,043,924 933,447 1,110,477 1,172,113 1,082,113
5 63,500,000 5/17/00 5,845,249 1,098,493 4,746,756 4,656,658 4,613,844
6a 35,000,000 6/30/00 6,228,296 3,042,759 3,185,537 3,331,066 3,060,316
6b 4,200,000 6/30/00 751,607 433,156 318,451 407,276 365,276
7 36,000,000 2/21/00 4,473,159 950,900 3,522,259 3,265,478 3,110,655
8 58,500,000 12/31/99 8,999,044 3,873,518 5,125,526 4,536,398 4,242,923
9 36,400,000 4/30/00 5,913,894 1,884,160 4,029,734 4,036,626 3,495,697
10 34,750,000 6/30/00 4,404,197 1,170,017 3,234,180 3,051,642 2,842,851
11 32,500,000 6/30/00 3,745,188 789,117 2,956,071 3,022,063 2,867,711
12 11,900,000 5/31/00 1,391,388 119,427 1,271,961 1,142,548 1,053,909
13 11,300,000 5/31/00 1,146,720 13,801 1,132,919 1,037,473 957,603
14a 14,100,000 7/31/00 2,467,350 1,125,707 1,341,643 1,333,593 1,261,593
14b 8,200,000 2/29/00 1,328,551 646,733 681,818 794,290 742,790
15 18,300,000 6/30/00 2,099,004 689,453 1,409,551 1,651,845 1,588,894
16 20,050,000 7/31/00 2,599,347 897,625 1,701,722 1,655,685 1,612,965
17 18,700,000 N/A N/A N/A N/A 1,619,481 1,575,803
18 18,500,000 3/31/00 2,610,188 1,005,630 1,604,558 1,590,710 1,508,710
19 18,000,000 N/A N/A N/A N/A 1,711,547 1,617,497
20 26,000,000 12/31/99 3,654,199 1,385,802 2,268,397 2,149,505 2,029,905
21 20,400,000 6/30/00 2,286,869 480,652 1,806,217 1,716,455 1,539,227
22 15,600,000 6/30/00 2,214,535 704,540 1,509,995 1,389,391 1,341,391
23 10,600,000 3/31/00 2,726,425 1,578,501 1,147,924 1,071,022 952,380
24 8,300,000 3/31/00 3,391,648 2,288,230 1,103,418 884,474 737,244
25 16,250,000 3/31/00 4,276,499 2,654,637 1,621,862 1,812,162 1,744,662
26 15,500,000 5/25/00 2,035,160 525,455 1,509,705 1,487,846 1,350,470
27 14,750,000 N/A N/A N/A N/A 1,397,768 1,362,485
28 28,300,000 5/24/00 10,718,954 6,944,458 3,774,496 2,559,060 2,085,139
29 15,000,000 7/31/00 2,018,458 467,995 1,550,463 1,326,267 1,266,267
30 13,750,000 5/31/00 1,728,266 552,360 1,175,906 1,250,942 1,184,722
31 15,300,000 N/A N/A N/A N/A 1,392,571 1,228,385
32 13,250,000 5/31/00 1,915,491 728,257 1,187,234 1,231,959 1,165,991
33 14,600,000 5/31/00 1,765,553 464,992 1,300,561 1,296,820 1,196,488
34 13,150,000 5/31/00 1,735,770 537,008 1,198,762 1,194,152 1,135,288
35 12,700,000 3/31/00 1,302,621 36,946 1,265,675 1,254,631 1,219,895
36 13,200,000 6/30/00 1,113,446 199,087 914,359 1,163,078 1,086,335
37 12,500,000 3/31/00 1,235,277 N/A 1,235,277 1,212,581 1,197,952
38 12,300,000 7/1/00 1,898,847 566,465 1,332,382 1,328,842 1,193,506
39 13,000,000 6/30/00 1,594,824 383,866 1,210,958 1,233,676 1,120,864
40 12,200,000 3/31/00 1,525,112 323,288 1,201,824 1,189,435 1,162,075
41 7,450,000 3/31/00 1,015,743 394,051 621,692 700,511 625,329
42 5,300,000 3/30/00 751,486 354,281 397,205 469,011 423,060
43 13,200,000 6/30/00 4,700,433 3,264,747 1,435,686 1,432,091 1,244,073
44 11,400,000 7/31/00 1,497,453 353,640 1,143,813 1,054,305 1,000,456
45 11,500,000 7/31/00 1,370,165 331,645 1,038,520 1,034,530 977,569
46 11,000,000 6/30/00 1,485,834 366,441 1,119,393 1,005,465 941,817
47 18,500,000 6/30/00 3,280,264 1,444,266 1,835,998 1,805,376 1,442,607
48 11,900,000 4/30/00 2,757,741 1,271,299 1,486,442 1,297,510 1,182,528
49 11,000,000 N/A N/A N/A N/A 1,022,413 926,832
50 9,435,000 12/31/99 1,064,508 278,146 786,362 845,329 815,690
51 9,300,000 3/31/00 1,596,252 787,721 808,531 883,010 815,010
52 8,700,000 6/30/00 1,286,268 505,007 781,261 790,399 756,799
53 9,650,000 7/13/00 1,256,193 388,175 868,018 860,941 843,023
54 9,200,000 5/31/00 1,063,411 262,546 800,865 796,259 750,606
55 8,650,000 3/31/00 961,968 - 961,968 846,501 786,062
56 9,650,000 6/30/00 2,477,512 1,320,424 1,157,088 846,807 703,215
57 8,800,000 N/A N/A N/A N/A 731,329 703,763
58a 4,270,000 N/A N/A N/A N/A 423,030 381,388
58b 3,520,000 N/A N/A N/A N/A 328,440 292,908
58c 1,300,000 N/A N/A N/A N/A 77,825 61,901
59 10,100,000 12/31/99 3,684,838 2,479,592 1,205,246 1,052,305 868,085
60 8,950,000 5/31/00 810,307 - 810,307 765,037 724,727
61 7,200,000 7/31/00 1,186,905 357,639 829,266 695,695 644,288
62a 3,550,000 4/30/00 401,622 117,175 284,447 306,668 270,071
62b 2,150,000 4/30/00 283,619 67,169 216,450 181,538 167,232
62c 2,000,000 4/30/00 241,184 76,190 164,994 169,851 154,766
62d 1,850,000 4/30/00 251,362 70,963 180,399 162,874 149,055
63 7,000,000 6/30/00 1,394,765 696,827 697,938 694,215 624,215
64 8,100,000 6/30/00 791,938 139,147 652,791 747,075 675,179
65 7,400,000 N/A N/A N/A N/A 659,689 622,906
66 7,200,000 12/31/99 916,385 364,306 552,079 629,446 607,734
67 7,500,000 3/8/00 1,345,996 644,807 701,189 724,110 688,050
68 6,700,000 12/31/99 1,052,381 384,886 667,495 689,139 645,139
69 6,900,000 4/7/00 1,002,859 361,794 641,065 617,675 588,545
70 7,100,000 6/30/00 2,206,080 1,321,781 884,299 811,949 726,389
71 6,750,000 4/30/00 1,500,471 794,104 706,367 659,184 577,684
72 7,000,000 3/31/00 743,562 166,918 576,644 647,434 584,694
73 9,100,000 2/29/00 1,240,277 365,171 875,106 725,205 608,749
74 6,250,000 6/30/00 1,161,600 548,529 613,071 694,424 652,424
75 6,500,000 2/29/00 1,412,118 797,904 614,214 700,778 646,778
76 7,150,000 12/31/99 921,220 297,812 623,408 656,145 588,248
77 9,800,000 6/30/00 1,850,166 901,388 948,778 825,391 755,141
78 6,050,000 4/7/00 696,859 124,200 572,659 548,490 514,660
79 6,700,000 2/29/00 836,992 165,987 671,005 688,007 559,121
80 6,000,000 2/29/00 798,481 332,428 466,053 489,210 459,090
81 6,000,000 12/31/99 730,744 178,464 552,280 512,209 485,223
82 5,200,000 6/30/00 982,590 447,747 534,843 491,652 453,852
83 5,150,000 6/30/00 1,224,748 644,079 580,669 520,920 459,672
84 7,000,000 5/31/00 829,653 343,769 485,884 652,328 578,116
85 5,430,000 6/30/00 2,177,176 1,267,760 909,416 655,483 607,483
86 5,160,000 5/31/00 955,027 450,937 504,090 530,156 480,156
87 5,000,000 2/29/00 652,408 144,775 507,633 500,185 464,523
88 6,200,000 6/30/00 1,101,834 573,373 528,461 528,245 462,245
89 5,100,000 5/31/00 940,438 355,642 584,796 544,659 526,059
90 5,600,000 4/7/00 910,681 388,755 521,926 513,802 436,457
91 6,000,000 4/17/00 769,846 191,592 578,254 574,126 509,901
92 5,450,000 6/30/00 851,718 272,577 579,141 534,363 472,973
93 5,700,000 6/30/00 693,282 256,494 436,788 560,475 475,644
94 4,775,000 6/30/00 469,874 100,033 369,841 417,542 415,650
95 4,700,000 2/25/00 906,888 427,588 479,300 460,794 420,794
96 4,885,000 N/A N/A N/A N/A 442,383 437,167
97 4,700,000 4/1/00 573,650 208,320 365,330 467,163 393,245
98 5,400,000 6/30/00 728,473 267,598 460,875 418,960 392,074
99 4,700,000 6/30/00 772,158 257,490 514,668 419,622 388,882
100 4,500,000 6/30/00 592,937 119,636 473,301 429,292 396,223
101 4,500,000 7/31/00 779,647 390,465 389,182 391,530 361,530
102 4,650,000 7/31/00 523,730 62,895 460,834 490,964 462,740
103 4,650,000 6/30/00 1,786,572 1,277,282 509,290 477,660 451,160
104 3,960,000 2/29/00 702,982 312,815 390,167 382,896 351,396
105 5,650,000 12/31/99 397,000 1,081 395,919 397,000 379,847
106 3,900,000 6/24/00 479,261 102,633 376,628 366,562 360,562
107 4,175,000 3/31/00 969,170 624,881 344,289 370,014 346,514
108 5,900,000 12/31/99 1,255,765 729,042 526,723 468,728 405,940
109 4,000,000 6/30/00 930,748 517,666 413,082 392,244 342,244
110 5,100,000 6/30/00 578,569 134,901 443,668 416,761 385,531
111 3,600,000 N/A N/A N/A N/A 312,067 307,540
112 3,600,000 N/A N/A N/A N/A 333,453 326,348
113 3,650,000 6/30/00 409,211 89,204 320,007 322,452 310,273
114 5,200,000 4/30/00 707,817 246,414 461,403 456,852 442,875
115 3,700,000 12/31/99 449,086 82,892 366,194 312,765 303,665
116 3,650,000 3/8/00 580,221 235,961 344,260 347,846 338,800
117 3,600,000 N/A N/A N/A N/A 309,003 305,991
118 1,950,000 12/31/99 276,146 72,715 203,431 198,534 193,020
119 1,420,000 12/31/99 182,930 52,931 129,999 141,723 138,073
120 4,300,000 12/31/99 542,625 135,597 407,028 407,197 358,585
121 3,400,000 12/31/99 499,145 130,121 369,024 320,415 296,665
122 3,190,000 N/A N/A N/A N/A 280,667 279,031
123 4,800,000 3/8/00 599,904 197,243 402,661 402,473 342,534
124 3,385,000 12/31/99 321,399 65,061 256,338 309,668 296,757
125 3,140,000 N/A N/A N/A N/A 276,307 274,671
126 3,400,000 4/30/00 460,623 101,609 359,014 298,850 268,215
127 3,100,000 5/31/00 478,117 149,097 329,020 310,140 279,516
128 3,570,000 12/31/99 554,736 165,459 389,277 350,861 297,913
129 3,550,000 5/31/00 750,652 348,875 401,777 426,407 371,207
130 3,100,000 N/A N/A N/A N/A 267,993 266,902
131 3,700,000 N/A N/A N/A N/A 359,613 337,902
132 3,250,000 9/30/99 393,540 84,254 309,286 300,330 264,011
133 2,915,000 3/23/00 262,422 500 261,922 254,549 252,913
134 3,625,000 4/6/00 705,014 307,229 397,785 389,309 341,359
135 2,960,000 7/31/00 516,116 230,517 285,600 277,462 257,062
136 3,150,000 6/30/00 409,644 82,330 327,314 298,931 269,058
137 3,160,000 2/28/00 441,716 130,842 310,874 263,777 242,975
138 2,750,000 7/31/00 529,181 259,034 270,147 260,547 240,547
139 3,800,000 12/31/99 500,490 110,392 390,098 356,920 320,729
140 2,915,000 6/30/00 403,597 110,636 292,961 337,862 267,789
141a 2,100,000 7/31/00 348,088 138,981 209,107 211,389 195,389
141b 750,000 7/31/00 138,430 59,241 79,189 83,377 75,377
142 2,700,000 6/30/00 344,634 96,475 248,159 258,627 255,102
143 3,070,000 6/30/00 378,926 91,616 287,310 261,439 257,914
144 3,400,000 6/30/00 544,468 286,513 257,955 292,679 233,426
145 2,440,000 6/30/00 362,726 138,186 224,540 246,503 227,003
146 2,700,000 6/30/00 304,283 34,272 270,010 250,458 233,406
147 2,575,000 5/31/00 301,639 66,580 235,059 259,298 241,731
148 2,400,000 3/31/00 425,852 208,460 217,392 254,648 236,648
149 3,240,000 6/30/00 347,961 16,783 331,177 280,407 245,058
150 2,400,000 6/30/00 480,527 194,134 286,393 248,341 232,541
151 2,560,000 7/31/00 601,942 344,804 257,138 251,310 216,766
152 2,450,000 6/30/00 450,433 181,254 269,179 259,734 253,659
153 2,450,000 4/30/00 352,047 135,629 216,418 218,177 207,777
154 2,350,000 5/31/00 442,454 166,761 275,693 252,489 232,489
155 2,500,000 6/30/00 323,144 63,802 259,342 237,451 222,574
156 2,500,000 4/30/00 422,612 163,636 258,976 249,980 239,266
157 2,540,000 3/31/00 325,400 59,855 265,545 210,465 200,570
158 3,000,000 12/31/99 413,076 167,027 246,049 240,136 208,189
159 3,000,000 N/A N/A N/A N/A 282,614 273,760
160 2,300,000 6/30/00 391,062 154,169 236,893 233,454 209,133
161 2,755,000 6/30/00 533,071 209,337 323,735 281,257 251,307
162 2,150,000 6/30/00 335,926 93,289 242,637 236,482 223,482
163 2,140,000 12/31/99 342,720 101,341 241,379 207,452 193,952
164 2,350,000 6/30/00 473,256 241,067 232,189 228,780 205,130
165 2,500,000 6/30/00 303,640 45,768 257,873 220,156 209,252
166 2,700,000 6/30/00 415,828 164,104 251,724 256,037 219,208
167 2,300,000 7/31/00 263,186 73,847 189,339 204,153 188,447
168 1,575,000 6/30/00 403,243 289,412 113,831 155,252 135,252
169 800,000 6/30/00 192,471 125,504 66,967 79,528 67,028
170 2,335,000 6/30/00 723,217 491,541 231,676 205,127 199,127
171 3,732,000 5/31/00 597,207 50,059 547,148 412,760 398,470
172 2,000,000 6/30/00 260,730 66,310 194,420 198,618 181,910
173 3,340,000 7/31/00 352,762 112,833 239,929 202,439 179,197
174 2,250,000 4/30/00 506,299 296,535 209,764 203,517 176,517
175 2,000,000 5/31/00 339,327 140,064 199,263 177,037 162,037
176 1,950,000 5/31/00 365,630 131,254 234,377 189,693 170,829
177 1,900,000 3/31/00 316,366 88,374 227,992 192,167 175,413
178 1,900,000 6/30/00 440,444 155,546 284,898 204,659 173,185
179 2,000,000 6/30/00 255,603 40,048 215,555 188,496 178,554
180a 1,150,000 6/30/00 328,238 218,654 109,584 108,959 95,959
180b 900,000 6/30/00 254,882 160,946 93,936 96,996 87,496
181 2,075,000 6/30/00 318,894 143,045 175,849 196,722 167,881
182 1,900,000 5/31/00 203,364 10,908 192,456 171,501 156,524
183 2,200,000 5/31/00 171,984 5,410 166,574 187,849 178,570
184 1,850,000 7/31/00 349,666 115,473 234,193 192,198 178,448
185 1,700,000 6/30/00 251,124 84,346 166,778 154,350 153,390
186 1,850,000 6/30/00 276,838 109,108 167,730 165,805 148,205
187 1,800,000 6/30/00 368,934 165,870 203,064 200,252 156,874
188 1,550,000 7/31/00 292,684 132,799 159,885 155,594 143,319
189 1,900,000 6/30/00 295,030 114,235 180,795 165,371 142,907
190 1,600,000 3/31/00 326,968 178,276 148,692 165,059 150,059
191 1,560,000 12/31/99 214,868 64,853 150,015 158,213 144,379
192 1,550,000 6/30/00 355,578 124,279 231,299 184,968 169,368
193 1,570,000 6/30/00 241,680 76,741 164,939 170,607 149,398
194 1,460,000 4/30/00 271,131 125,226 145,905 139,427 124,927
195 1,450,000 5/31/00 250,536 107,588 142,948 138,945 126,945
196 1,500,000 6/30/00 267,310 87,865 179,445 143,730 133,230
197 1,435,000 3/31/00 232,998 76,115 156,883 130,560 120,560
198a 685,000 12/31/99 138,520 45,651 92,869 78,409 71,659
198b 350,000 12/31/99 49,260 11,616 37,644 34,967 31,198
198c 315,000 12/31/99 48,291 12,973 35,318 34,412 30,628
199 2,025,000 4/30/00 333,776 133,440 200,336 173,176 164,975
200 1,500,000 4/30/00 250,878 116,739 134,139 142,087 123,427
201 1,275,000 5/31/00 240,300 56,941 183,359 140,987 128,837
202 2,200,000 6/30/00 263,216 85,962 177,254 186,204 144,182
203 1,325,000 3/31/00 171,252 34,442 136,810 140,484 120,463
204 1,185,000 6/30/00 207,600 66,104 141,496 118,506 107,287
205 1,300,000 12/31/99 151,290 20,935 130,355 126,095 109,375
206 1,150,000 4/30/00 208,464 92,741 115,723 119,414 110,414
207 1,420,000 5/31/00 226,423 78,183 148,240 124,587 108,963
208 1,400,000 6/30/00 155,468 24,045 131,423 127,884 110,179
209 1,425,000 4/30/00 325,782 155,567 170,215 147,029 136,701
210 1,450,000 4/30/00 290,190 150,403 139,787 140,803 132,177
211 1,045,000 6/16/00 137,759 30,968 106,791 105,708 98,573
212 915,000 5/31/00 186,492 79,984 106,508 96,654 88,654
213 460,000 N/A N/A N/A N/A 64,196 57,446
214 440,000 5/31/00 75,709 24,945 50,764 47,393 40,718
215 1,000,000 5/31/00 228,648 80,101 148,548 111,529 95,289
216 857,000 4/30/00 151,348 71,194 80,154 83,757 75,757
217 835,000 6/30/00 118,754 27,134 91,620 82,090 76,590
218 850,000 7/31/00 211,885 80,156 131,729 95,291 86,541
219 760,000 12/31/99 103,301 27,850 75,451 74,516 71,401
220 900,000 12/31/99 153,673 33,800 119,873 92,916 83,916
221 815,000 3/29/00 219,207 124,727 94,480 101,319 82,065
222 800,000 5/31/00 136,440 50,188 86,252 75,208 72,205
223 840,000 N/A N/A N/A N/A 73,720 73,720
224 750,000 12/31/99 105,765 28,100 77,665 71,752 61,822
225 750,000 3/31/00 102,503 51,427 51,076 72,421 63,903
226 780,000 6/30/00 143,959 65,557 78,402 68,621 58,621
227 650,000 12/31/99 212,118 89,593 122,525 72,255 62,255
228 540,000 6/30/00 88,704 22,789 65,915 67,905 56,737
229 500,000 7/31/00 97,846 31,992 65,854 54,263 51,263
230 405,000 N/A N/A N/A N/A 41,651 37,901
Total/
Weighted ======================================================================================================================
Average: $ 1,966,039,000 $ 263,367,974 $ 105,589,818 $ 157,778,156 $ 177,998,856 $ 165,175,202
======================================================================================================================
Maximum: $ 198,000,000 $ 29,391,870 $ 14,679,651 $ 14,712,219 $ 15,593,901 $ 14,279,554
Minimum: $ 315,000 $ 48,291 $ $ 35,318 $ 34,412 $ 30,628
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CHARACTERISTICS OF THE UNDERLYING MORTGAGE LOANS
Origination
Original Cut-off Date Percentage of Amortization
Principal Principal Mortgage Term
# Loan Name Balance Balance Pool Balance (months)
- --------- ------- ------- ------------ --------
<S> <C> <C> <C> <C> <C>
1 437 Madison Avenue $ 87,500,000 $ 87,301,842 6.8% 360
2 Valencia Marketplace, Power Center 51,980,517 51,787,099 4.0% 336
3 Hercules Plaza (1) 51,010,324 50,909,381 3.9% 152
4 Alliance GD FH F1 39,619,141 39,491,001 3.1% 360
5 McCandless Towers II 37,000,000 36,936,969 2.9% 360
6 Alliance GD FH F2 30,380,859 30,282,599 2.3% 360
7 Commons at Sugarhouse 28,400,000 28,387,855 2.2% 360
8 Gateway at Randolph Apartments 28,000,000 27,870,175 2.2% 300
9 Metroplex 27,500,000 27,441,129 2.1% 360
10 Palm Plaza Shopping Center 25,762,500 25,476,217 2.0% 360
11 Page Field Commons 25,400,000 25,325,706 2.0% 360
12 Poly Foam (2A) 9,350,000 9,332,630 0.7% 360
13 Poly-Foam International, Inc. (2A) 8,550,000 8,533,752 0.7% 360
14 The Genesis Loan 17,100,000 17,094,039 1.3% 360
15 Sterling University Crescent 14,640,000 14,640,000 1.1% 360
16 Oakbrook Apartments 14,385,000 14,385,000 1.1% 360
17 One Bulfinch Place 14,500,000 14,383,000 1.1% 334
18 Sandhurst Apartments 14,000,000 13,971,656 1.1% 360
19 Chandler Sunset Plaza 14,000,000 13,960,297 1.1% 360
20 Saddle Brook Apartments 13,000,000 12,939,724 1.0% 300
21 Railway Express Building 12,600,000 12,534,362 1.0% 300
22 Hillcroft Apartments 12,400,000 12,356,185 1.0% 360
23 Radisson Inn Harbourwalk (2B) 6,900,000 6,888,821 0.5% 300
24 Radisson Suite Hotel (2B) 5,350,000 5,341,332 0.4% 300
25 Highland Cove Retirement Community 12,187,500 12,151,936 0.9% 300
26 Regency Warehouse 11,625,000 11,609,943 0.9% 360
27 Silverado Ranch Center 11,600,000 11,587,542 0.9% 360
28 Holiday Inn Orlando 12,000,000 11,555,033 0.9% 264
29 Carlton Village Apartments 11,500,000 11,487,650 0.9% 360
30 Glenridge Apartments 10,500,000 10,488,631 0.8% 360
31 2200 First Avenue South 10,500,000 10,482,959 0.8% 360
32 Windmill Apartments 10,453,000 10,437,167 0.8% 360
33 Kent Hill Plaza 10,300,000 10,287,425 0.8% 360
34 Cheyenne Crest Apartments 10,237,000 10,221,494 0.8% 360
35 Big Kmart - Midwest City 10,000,000 9,984,394 0.8% 360
36 Westgate Crossing Shopping Center 9,900,000 9,882,379 0.8% 360
37 Big Kmart - Edmond 9,790,000 9,770,974 0.8% 360
38 One Cameron Place 9,750,000 9,736,383 0.8% 360
39 Roseland Shopping Center 9,676,000 9,644,137 0.7% 360
40 Big Kmart - Chicago 9,540,000 9,521,460 0.7% 360
41 Crystal Mountain Office Park (2C) 5,550,000 5,547,872 0.4% 360
42 Lake Pointe Center II (2C) 3,800,000 3,798,543 0.3% 360
43 DoubleTree Hotel 9,200,000 9,154,171 0.7% 300
44 Twelve Oaks Shopping Center 9,100,000 9,100,000 0.7% 360
45 Streetsboro Market Square 8,951,000 8,856,454 0.7% 344
46 Ravenswood Apartments 8,800,000 8,790,158 0.7% 360
47 Pembroke Office Park 8,600,000 8,409,024 0.7% 360
48 Candlewood Hotel - Sacramento 8,415,000 8,401,451 0.7% 300
49 Royal Jetstar Tech Center 8,083,000 8,061,206 0.6% 360
50 North Reading Plaza 7,400,000 7,380,723 0.6% 360
51 Cypress Springs Apartments 7,300,000 7,300,000 0.6% 336
52 Sterling University Peaks 6,960,000 6,960,000 0.5% 360
53 Kmart - Allen 6,750,000 6,743,159 0.5% 360
54 Hartville Center 6,500,000 6,478,527 0.5% 300
55 Pony Express Building 6,485,000 6,451,145 0.5% 300
56 Willow Pond Apartments 6,450,000 6,447,095 0.5% 360
57 Standard Dairy Apartments 6,260,000 6,250,949 0.5% 324
58 Edward's Office Portfolio 6,000,000 5,991,636 0.5% 360
59 Garfield Suites Hotel 5,750,000 5,734,657 0.4% 300
60 Larry's Market 5,700,000 5,692,227 0.4% 360
61 Big-K Plaza 5,700,000 5,679,332 0.4% 360
62 Granite Retail Portfolio 5,640,000 5,633,625 0.4% 360
63 Walnut Creek Apartments 5,600,000 5,591,998 0.4% 330
64 Royal Freeport Tech Center 5,600,000 5,584,901 0.4% 360
65 100 Demarest Drive 5,550,000 5,541,644 0.4% 360
66 Indian Run Village 5,500,000 5,500,000 0.4% 360
67 210 Main Street 5,500,000 5,486,446 0.4% 360
68 Clearbrook Village Apartments 5,238,272 5,223,417 0.4% 360
69 Brookdale Shopping Center 5,200,000 5,186,918 0.4% 360
70 Courtyard by Marriott Hotel 5,150,000 5,146,556 0.4% 300
71 Hamilton Park Apartments 5,125,000 5,117,675 0.4% 360
72 Brookwood Shopping Center 5,025,000 5,015,079 0.4% 360
73 6329 Glenwood Office Building 5,000,000 4,988,040 0.4% 360
74 Landmark Garden Apartments 5,000,000 4,966,737 0.4% 360
75 Applecreek Apartments 4,925,000 4,915,179 0.4% 360
76 Plaza At The Pointe Shopping Center 4,920,000 4,909,199 0.4% 360
77 Ramblewood Apartments 4,600,000 4,495,042 0.3% 300
78 Scottsdale Airpark II 4,500,000 4,493,668 0.3% 360
79 New Market Square Shopping Center 4,500,000 4,488,844 0.3% 360
80 Maple Leaf Apartments 4,205,000 4,194,729 0.3% 360
81 The Shops at Fair Lakes 4,200,000 4,187,640 0.3% 360
82 Sunpark Apartments 4,150,000 4,145,664 0.3% 360
83 Carol Oaks Apartments 4,120,000 4,106,698 0.3% 360
84 Florida Computer Center 4,100,000 4,089,866 0.3% 360
85 Tonawanda Manor 4,072,000 4,061,927 0.3% 300
86 Woodridge Apartments 4,000,000 3,994,580 0.3% 360
87 Dunwoody Plaza 4,000,000 3,993,801 0.3% 360
88 Schaumburg Plaza 3,894,691 3,893,397 0.3% 360
89 Whispering Oaks Mobile Home Park 3,825,000 3,814,844 0.3% 300
90 Harbor Technology Center 3,804,000 3,795,831 0.3% 360
91 Stove Works Office Building 3,800,000 3,795,609 0.3% 360
92 Holy Cross Professional Center 3,800,000 3,793,962 0.3% 360
93 Augusta Plaza Shopping Center 3,790,000 3,769,547 0.3% 360
94 Banana Republic 3,706,000 3,697,607 0.3% 360
95 Forest Hills Apartments 3,700,000 3,689,211 0.3% 360
96 West Marietta Retail Center 3,650,000 3,631,507 0.3% 300
97 Regency Centre Office Complex 3,500,000 3,495,482 0.3% 360
98 Southtowne Center 3,460,000 3,452,236 0.3% 360
99 Pinetree Village Apartments 3,450,000 3,444,402 0.3% 312
100 Weston Shoppes 3,288,000 3,274,601 0.3% 360
101 Pine Trails Apartments 3,200,000 3,198,642 0.2% 360
102 Old County Road 3,200,000 3,194,576 0.2% 300
103 Cambridge Court Retirement Community 3,300,000 3,169,044 0.2% 300
104 Bryn Mawr Suites Apartments 3,150,000 3,141,216 0.2% 360
105 Bruno's Shopping Center 3,300,000 3,123,994 0.2% 264
106 Laddins Rock 3,120,000 3,118,605 0.2% 360
107 Christine Place Apartments 3,115,000 3,110,793 0.2% 360
108 Best Western Siesta Beach Resort 3,200,000 3,108,838 0.2% 300
109 Richland Hills Apartments 3,100,000 3,098,709 0.2% 360
110 Star Wholesale Florist, Inc. 2,985,000 2,908,942 0.2% 240
111 Office Depot 2,912,000 2,907,902 0.2% 360
112 CVS Plaza - East Hartford 2,859,900 2,852,871 0.2% 346
113 CVS Plaza - Queensbury 2,860,000 2,851,609 0.2% 360
114 Warehouse X/Lock-It Lockers 2,800,000 2,793,488 0.2% 300
115 Lazy Acres Estates 2,755,000 2,755,000 0.2% 360
116 214 Main Street 2,725,000 2,718,284 0.2% 360
117 Office Depot at Woodhaven Village Square 2,700,000 2,695,000 0.2% 360
118 Winder Village Manufactured Housing Community (2D) 1,560,000 1,556,390 0.1% 360
119 Russell Village Manufactured Housing Community (2D) 1,120,000 1,117,409 0.1% 360
120 Northway Plaza Shopping Center 2,675,000 2,659,332 0.2% 240
121 Phoenix Park Apartments 2,611,000 2,606,244 0.2% 360
122 Eckerd's Drug Store - S. Main 2,552,000 2,545,673 0.2% 360
123 Chabot Office Plaza 2,550,000 2,543,376 0.2% 360
124 Middlefield Market Square Shopping Center 2,550,000 2,543,014 0.2% 360
125 Eckerd's Drug Store - N. Main 2,512,000 2,505,773 0.2% 360
126 Gentry Plaza 2,470,000 2,466,426 0.2% 360
127 The Meadows Apartments 2,450,000 2,447,454 0.2% 360
128 Miggy's Mall Shopping Center 2,438,000 2,435,280 0.2% 360
129 Colony Square Apartments 2,400,000 2,396,728 0.2% 240
130 Eckerd's Drug Store - Kingston 2,400,000 2,395,898 0.2% 360
131 Pueblo Point Ace Hardware 2,312,000 2,308,168 0.2% 300
132 Five Star Business Park 2,300,000 2,291,190 0.2% 360
133 Eckerd's Drug Store - Half Moon 2,273,000 2,265,448 0.2% 360
134 Oaks Apartments 2,268,000 2,261,675 0.2% 360
135 New England Place Apartments 2,250,000 2,238,943 0.2% 300
136 1025 East Maple Office Building 2,175,000 2,166,473 0.2% 300
137 Jaffe Eye Office Building 2,150,000 2,150,000 0.2% 324
138 Calder Square, Phase II Apartments 2,145,000 2,142,752 0.2% 360
139 North Mall 2,150,000 2,140,954 0.2% 300
140 Wekiva Executive Center (3) 2,150,000 2,138,636 0.2% 276
141 The Kirkland Loan 2,100,000 2,099,109 0.2% 360
142 Office Max - Northwood 2,025,000 1,982,013 0.2% 240
143 Office Max - Alexandria 1,997,000 1,971,098 0.2% 240
144 Foxpoint Commons 1,965,000 1,962,338 0.2% 360
145 Continental Terrace Apartments 1,950,000 1,943,149 0.2% 360
146 Cheyenne Mountain Center 1,946,000 1,922,979 0.1% 300
147 Circle K Plaza 1,921,000 1,917,257 0.1% 360
148 Flamingo West Apartments 1,920,000 1,916,763 0.1% 360
149 Big K Store 1,916,000 1,903,501 0.1% 300
150 St. Agnes Apartments 1,885,000 1,878,870 0.1% 300
151 Richfield Court Apartments 1,845,000 1,833,914 0.1% 360
152 Peconic Mini Storage 1,837,500 1,833,004 0.1% 300
153 Heritage Estates Manufactured Housing Community 1,830,000 1,827,417 0.1% 360
154 Academy Apartments 1,827,500 1,824,450 0.1% 360
155 North By Northeast II Shoppes 1,810,000 1,805,197 0.1% 360
156 Warehouse II/Lock-It Lockers 1,809,000 1,805,034 0.1% 300
157 Mission Hill Apartments 1,800,000 1,797,623 0.1% 360
158 Boston Square Shopping Center 1,800,000 1,797,584 0.1% 360
159 Gaithersburg Shopping Center 1,800,000 1,795,202 0.1% 360
160 Iteq Building 1,790,000 1,786,253 0.1% 360
161 Coliseum Self Storage 1,780,000 1,768,566 0.1% 240
162 Centre Square Apartments 1,720,000 1,716,093 0.1% 360
163 Emerald Lake Apartments 1,700,000 1,697,327 0.1% 360
164 The Sun Prairie Apartments 1,700,000 1,695,028 0.1% 360
165 7th Street Grocery 1,660,000 1,652,195 0.1% 360
166 Eagle's Nest Office Building 1,615,000 1,612,388 0.1% 360
167 New Augusta Shoppes 1,590,000 1,585,956 0.1% 360
168 Lakedale Apartments (2E) 1,035,000 1,034,268 0.1% 300
169 Liberty Apartments (2E) 525,000 524,629 0.0% 300
170 Sunshine Care Homes 1,579,000 1,553,012 0.1% 300
171 1-9 Flatbush Avenue 1,500,000 1,495,078 0.1% 300
172 Pathmark Store No. 550 1,486,000 1,479,970 0.1% 300
173 Kmart Plaza - Minot 1,500,000 1,477,856 0.1% 300
174 Villa Del Rio Apartments 1,480,000 1,477,748 0.1% 360
175 Winchester Arms & Fox Chase Apartments 1,450,000 1,447,605 0.1% 360
176 Old Orchard II Apartments 1,430,000 1,425,202 0.1% 300
177 55-65 Merrick Road 1,400,000 1,398,250 0.1% 360
178 5055 California Avenue 1,400,000 1,396,974 0.1% 360
179 Castle Store & Lock 1,400,000 1,392,907 0.1% 300
180 The Monterey/Sherbrooke Lean 1,402,000 1,386,387 0.1% 300
181 Arctic Office Building 1,400,000 1,386,265 0.1% 300
182 Lockheed Martin Building 1,370,000 1,368,517 0.1% 360
183 Renton Highlands Center 1,360,000 1,357,940 0.1% 300
184 Lansing Square Apartments 1,360,000 1,357,566 0.1% 300
185 CVS #0742-01 1,340,000 1,337,725 0.1% 360
186 Pinewood Village Apartments 1,257,500 1,252,888 0.1% 360
187 Midway Commercial Building 1,250,000 1,248,833 0.1% 360
188 Jersey Street Apartments 1,240,000 1,238,715 0.1% 360
189 Preston Office Park 1,200,000 1,198,928 0.1% 360
190 Fairmont Oaks Apartments 1,194,000 1,191,735 0.1% 360
191 Premier Plaza Shopping Center 1,170,000 1,167,848 0.1% 360
192 4404-4418 Walnut Street 1,150,000 1,149,012 0.1% 360
193 Cumberland Technical Center 1,150,000 1,141,935 0.1% 300
194 Orchard Park Apartments 1,110,000 1,109,611 0.1% 360
195 Quarry Ridge Apartments 1,100,000 1,099,578 0.1% 360
196 Stoney Creek Apartments 1,100,000 1,098,780 0.1% 360
197 Plaza Apartments 1,050,000 1,048,302 0.1% 360
198 Gordon Portfolio 1,050,000 1,045,877 0.1% 360
199 Warehouse I/Lock-It Lockers 1,045,000 1,042,570 0.1% 300
200 Park City Plaza 1,023,000 1,022,042 0.1% 360
201 Sunny Townhomes 1,020,000 1,018,666 0.1% 360
202 Town & Country Shopping Center 1,000,000 996,963 0.1% 300
203 The Majestic Building 989,000 984,234 0.1% 300
204 Royal Park Apartments 948,000 946,728 0.1% 360
205 Greensburg Plaza 925,000 923,837 0.1% 360
206 Wilson Heights Apartments 920,000 919,178 0.1% 360
207 Northway Court Shopping Center 875,000 874,174 0.1% 360
208 Goodwill Retail Center 872,000 869,437 0.1% 300
209 Warehouse IV/Lock-It Lockers 855,000 853,012 0.1% 300
210 Warehouse IX/Lock-It Lockers 820,000 818,093 0.1% 300
211 Morello Building 783,750 783,239 0.1% 300
212 Town North Villa Apartments 732,000 731,246 0.1% 360
213 1137 North 13th Street Apartments (2F) 370,000 369,132 0.0% 300
214 949-969 North 27th Street (2F) 330,000 329,226 0.0% 300
215 Summit Plaza 665,000 657,670 0.1% 300
216 Turney Square Apartments 650,000 649,039 0.1% 360
217 Lake Street Apartments 610,000 609,300 0.0% 360
218 Atwood & Barker Apartments 600,000 599,405 0.0% 360
219 162 Myrtle Avenue 600,000 599,255 0.0% 360
220 Summit Heights Apartments 600,000 599,140 0.0% 360
221 40 Scitico Road 595,000 594,052 0.0% 300
222 Sunnyvale Trailer Park 574,000 572,289 0.0% 300
223 Woodhaven Village Square 556,000 554,393 0.0% 300
224 St. John's Office Building 520,000 519,815 0.0% 360
225 Southlake Center 510,000 509,125 0.0% 360
226 Country Villa Apartments 500,000 499,208 0.0% 360
227 Coach Light Apartments 500,000 499,042 0.0% 360
228 4425 South 87th Street 405,000 403,665 0.0% 300
229 Cosmos Apartments 332,000 330,365 0.0% 300
230 North Gate Apartments 295,000 293,528 0.0% 300
==============================================================================
Total/Weighted Average: $ 1,294,468,953 $ 1,289,918,771 100.0% 338
==============================================================================
Maximum: $ 87,500,000 $ 87,301,842 6.8% 360
Minimum: $ 295,000 $ 293,528 0.0% 152
(1) The Underlying Mortgage Loan secured by Hercules Plaza follows the following amortization schedule: Payments 1-92 are based
on a 239-month amortization of principal Payments 93-152 are based on a 60-month amortization of principal
(2A) The Underlying Mortgage Loans secured by Poly Foam and Poly-Foam International, Inc. are cross-collateralized and
cross-defaulted, respectively.
(2B) The Underlying Mortgage Loans secured by Radisson Inn Harbourwalk and Radisson Suite Hotel are cross-collateralized and
cross-defaulted, respectively.
(2C) The Underlying Mortgage Loans secured by Crystal Mountain Office Park and Lake Pointe Center II are cross-collateralized
and cross-defaulted, respectively.
(2D) The Underlying Mortgage Loans secured by Winder Village Manufactured Housing Community and Russell Village Manufactured
Housing Community are cross-collateralized and cross-defaulted, respectively.
(2E) The Underlying Mortgage Loans secured by Lakedale Apartments and Liberty Apartments are cross-collateralized and
cross-defaulted, respectively.
(2F) The Underlying Mortgage Loans secured by 1137 North 13th Street Apartments and 949-969 North 27th Street are
cross-defaulted.
(3) The Underlying Mortgage Loan secured by Wekiva Executive Center follows the following amortization schedule: Payments 1-59
are based on a 276-month amortization of principal Payments 60-120 are based on a 350-month amortization of principal
(4) In the case of the ARD Loans, the anticipated repayment date is assumed to be the maturity date for the purposes of the
indicated column.
(5) Anticipated Repayment Date.
(6) 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
A% (x) = A% Prepayment Penalty of Unpaid Principal Balance for x years
O (x) = Prepayable at par for x years
(7) "Yes" means that defeasance is permitted notwithstanding the Lockout Period.
<CAPTION>
Initial
Remaining Original Remaining Interest
Amortization Term to Term to Only Mortgage First
Term Maturity Maturity Period Interest Monthly Payment
# (months) (months) (4) (months) (4) (months) Rate Payment Date
- -------- ------------ ------------ -------- ---- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C>
1 355 120 115 8.630% $ 680,877.32 7/1/00
2 332 156 152 7.240% 361,534.76 8/1/00
3 151 152 151 6.810% 390,426.55 11/1/00
4 353 120 113 8.640% 308,576.54 5/1/00
5 356 120 116 8.550% 285,810.13 8/1/00
6 353 120 113 8.640% 236,623.51 5/1/00
7 359 120 119 8.130% 210,968.62 11/1/00
8 295 120 115 8.020% 216,479.64 7/1/00
9 355 120 115 8.810% 217,522.13 7/1/00
10 343 120 103 7.570% 181,371.61 7/1/99
11 354 120 114 8.290% 191,536.45 6/1/00
12 356 120 116 8.290% 70,506.33 8/1/00
13 356 120 116 8.220% 64,053.06 8/1/00
14 359 120 119 8.640% 133,184.58 11/1/00
15 360 120 113 24 8.180% 109,265.82 5/1/00
16 360 120 112 24 8.625% 111,885.05 4/1/00
17 334 120 116 30 8.380% 112,212.51 8/1/00
18 356 120 116 8.020% 102,922.30 8/1/00
19 354 123 117 8.390% 106,558.38 6/1/00
20 295 120 115 8.020% 100,508.41 7/1/00
21 294 120 114 8.270% 99,513.17 6/1/00
22 353 120 113 8.340% 93,942.78 5/1/00
23 298 120 118 8.760% 56,774.80 10/1/00
24 298 120 118 8.760% 44,021.04 10/1/00
25 296 120 116 8.900% 101,443.77 8/1/00
26 357 120 117 8.640% 90,542.15 9/1/00
27 358 120 118 8.170% 86,495.40 10/1/00
28 244 60 40 7.410% 91,991.97 4/1/99
29 358 84 82 8.170% 85,749.75 10/1/00
30 358 120 118 8.140% 78,072.50 10/1/00
31 356 120 116 8.690% 82,153.99 8/1/00
32 357 120 117 8.140% 77,723.03 9/1/00
33 358 120 118 8.480% 79,052.14 10/1/00
34 357 120 117 8.140% 76,116.97 9/1/00
35 357 120 117 8.040% 73,655.50 9/1/00
36 356 120 116 8.420% 75,561.85 8/1/00
37 356 120 116 8.150% 72,861.89 8/1/00
38 356 120 116 9.100% 79,153.26 8/1/00
39 353 120 113 8.580% 74,949.35 5/1/00
40 356 120 116 8.150% 71,001.27 8/1/00
41 359 120 119 8.410% 42,321.20 11/1/00
42 359 120 119 8.410% 28,976.68 11/1/00
43 295 120 115 8.416% 73,560.83 7/1/00
44 360 120 118 12 8.190% 67,981.80 10/1/00
45 328 120 104 8.030% 66,634.46 8/1/99
46 358 120 118 8.020% 64,694.02 10/1/00
47 330 90 60 8.000% 63,103.75 6/10/98
48 298 120 118 8.790% 69,412.22 10/1/00
49 354 120 114 8.550% 62,437.93 6/1/00
50 355 120 115 8.160% 55,126.22 7/1/00
51 336 120 114 24 8.430% 56,676.05 6/1/00
52 360 120 113 24 8.180% 51,946.05 5/1/00
53 358 120 118 8.380% 51,328.70 10/1/00
54 296 120 116 8.360% 51,727.95 8/1/00
55 294 120 114 8.260% 51,174.33 6/1/00
56 359 144 143 7.990% 47,282.86 11/1/00
57 322 120 118 8.270% 48,367.53 10/1/00
58 357 120 117 8.410% 45,752.65 9/1/00
59 296 120 116 9.270% 49,321.33 8/1/00
60 357 120 117 8.480% 43,747.30 9/1/00
61 353 120 113 8.250% 42,822.20 5/1/00
62 358 120 118 7.980% 41,305.71 10/1/00
63 328 120 118 8.090% 42,367.32 10/1/00
64 354 120 114 8.550% 43,257.75 6/1/00
65 357 120 117 8.160% 41,344.67 9/1/00
66 360 120 116 12 8.510% 42,329.23 8/1/00
67 355 120 115 8.350% 41,706.95 7/1/00
68 354 120 114 8.390% 39,870.13 6/1/00
69 355 120 115 8.280% 39,175.59 7/1/00
70 299 120 119 8.850% 42,690.85 11/1/00
71 357 120 117 8.330% 38,791.03 9/1/00
72 355 120 115 9.060% 40,649.41 7/1/00
73 355 120 115 8.450% 38,268.64 7/1/00
74 347 120 107 8.420% 38,162.55 11/1/99
75 355 120 115 9.030% 39,734.02 7/1/00
76 355 120 115 8.730% 38,635.40 7/1/00
77 280 120 100 7.250% 33,249.12 4/1/99
78 357 120 117 8.380% 34,219.13 9/1/00
79 355 120 115 8.330% 34,060.41 7/1/00
80 355 120 115 8.380% 31,975.88 7/1/00
81 354 120 114 8.270% 31,612.27 6/1/00
82 358 120 118 8.270% 31,235.93 10/1/00
83 354 120 114 7.960% 30,116.29 6/1/00
84 355 120 115 8.340% 31,061.72 7/1/00
85 297 120 117 8.460% 32,679.16 9/1/00
86 357 120 117 8.500% 30,756.54 9/1/00
87 356 120 116 8.820% 31,668.21 8/1/00
88 359 111 110 8.750% 30,639.55 11/1/00
89 297 120 117 8.130% 29,852.13 9/1/00
90 355 120 115 8.800% 30,062.03 7/1/00
91 357 120 117 8.980% 30,520.99 9/1/00
92 356 120 116 8.750% 29,894.62 8/1/00
93 350 120 110 8.190% 28,322.18 2/1/00
94 355 120 115 8.630% 28,838.08 7/1/00
95 354 120 114 8.300% 27,927.03 6/1/00
96 294 120 114 8.400% 29,145.23 6/1/00
97 357 120 117 8.650% 27,284.92 9/1/00
98 355 120 115 8.660% 26,997.75 7/1/00
99 310 120 118 8.230% 26,843.28 10/1/00
100 351 144 135 8.980% 26,408.69 3/1/00
101 359 120 119 8.150% 23,815.94 11/1/00
102 298 120 118 8.540% 25,853.58 10/1/00
103 266 120 86 7.500% 24,386.71 2/1/98
104 355 120 115 7.920% 22,938.15 7/1/00
105 229 180 145 7.680% 25,932.88 1/1/98
106 359 120 119 8.010% 22,915.21 11/1/00
107 357 120 117 8.510% 23,973.73 9/1/00
108 274 120 94 7.690% 24,044.61 10/1/98
109 359 120 119 8.200% 23,180.39 11/1/00
110 225 144 129 8.390% 25,697.08 9/1/99
111 357 120 117 8.380% 22,143.59 9/1/00
112 341 120 115 8.830% 22,848.79 7/1/00
113 354 120 114 8.280% 21,546.57 6/1/00
114 297 120 117 8.740% 23,001.00 9/1/00
115 360 120 116 12 8.430% 21,047.04 8/1/00
116 355 120 115 8.350% 20,663.90 7/1/00
117 356 120 116 8.300% 20,379.17 8/1/00
118 355 120 115 8.560% 12,061.45 7/1/00
119 355 120 115 8.560% 8,659.50 7/1/00
120 236 120 116 8.360% 22,977.79 8/1/00
121 356 120 116 8.350% 19,799.43 8/1/00
122 355 120 115 8.330% 19,316.04 7/1/00
123 355 120 115 8.170% 19,014.07 7/1/00
124 354 120 114 8.500% 19,607.29 6/1/00
125 355 120 115 8.330% 19,013.28 7/1/00
126 357 120 117 8.290% 18,625.79 9/1/00
127 358 120 118 8.290% 18,474.97 10/1/00
128 357 120 117 9.080% 19,757.30 9/1/00
129 239 240 239 8.480% 20,797.39 11/1/00
130 356 120 116 8.540% 18,522.00 8/1/00
131 298 120 118 8.650% 18,851.13 10/1/00
132 352 120 112 8.440% 17,587.30 4/1/00
133 353 120 113 8.550% 17,558.01 5/1/00
134 355 120 115 7.920% 16,515.47 7/1/00
135 295 120 115 7.730% 16,965.36 7/1/00
136 295 240 235 8.820% 17,985.18 7/1/00
137 324 120 115 36 8.300% 16,655.95 7/1/00
138 358 120 118 8.260% 16,129.75 10/1/00
139 295 120 115 8.490% 17,297.90 7/1/00
140 271 120 115 8.470% 17,718.43 7/1/00
141 359 120 119 8.150% 15,629.21 11/1/00
142 227 120 107 8.050% 17,000.98 11/1/99
143 231 120 111 8.950% 17,903.36 3/1/00
144 357 120 117 8.500% 15,109.15 9/1/00
145 353 120 113 8.360% 14,800.77 5/1/00
146 287 120 107 8.330% 15,447.41 11/1/99
147 355 120 115 9.100% 15,595.22 7/1/00
148 356 120 116 8.580% 14,872.13 8/1/00
149 291 120 111 9.520% 16,766.67 3/1/00
150 296 120 116 8.430% 15,089.71 8/1/00
151 349 120 109 8.150% 13,731.38 1/1/00
152 297 120 117 8.510% 14,808.43 9/1/00
153 357 120 117 8.370% 13,902.86 9/1/00
154 356 120 116 8.610% 14,194.61 8/1/00
155 354 144 138 8.600% 14,045.81 6/1/00
156 297 120 117 9.000% 15,181.06 9/1/00
157 357 120 117 8.580% 13,942.63 9/1/00
158 357 120 117 8.530% 13,878.73 9/1/00
159 355 120 115 8.080% 13,308.29 7/1/00
160 355 120 115 8.880% 14,248.46 7/1/00
161 236 120 116 8.530% 15,481.07 8/1/00
162 355 120 115 8.620% 13,371.87 7/1/00
163 356 120 116 8.780% 13,410.35 8/1/00
164 354 120 114 8.290% 12,819.37 6/1/00
165 350 120 110 8.750% 13,059.23 2/1/00
166 356 120 116 8.700% 12,647.58 8/1/00
167 354 144 138 8.730% 12,485.83 6/1/00
168 299 120 119 8.640% 8,431.97 11/1/00
169 299 120 119 8.640% 4,277.09 11/1/00
170 284 120 104 8.460% 12,672.00 8/1/99
171 296 120 116 8.390% 11,967.42 8/1/00
172 295 120 115 8.660% 12,126.32 7/1/00
173 284 120 104 8.280% 11,856.84 8/1/99
174 356 120 116 8.870% 11,770.24 8/1/00
175 356 120 116 8.640% 11,293.43 8/1/00
176 296 120 116 8.290% 11,313.09 8/1/00
177 356 120 116 9.380% 11,649.58 8/1/00
178 355 120 115 8.780% 11,043.82 7/1/00
179 294 120 114 8.400% 11,178.99 6/1/00
180 286 120 106 9.070% 11,832.81 10/1/99
181 288 120 108 8.900% 11,653.06 12/1/99
182 358 120 118 8.140% 10,186.60 10/1/00
183 298 120 118 9.080% 11,487.67 10/1/00
184 298 120 118 8.270% 10,741.10 10/1/00
185 356 84 80 8.560% 10,360.47 8/1/00
186 353 120 113 8.210% 9,411.84 5/1/00
187 358 120 118 8.670% 9,762.42 10/1/00
188 358 120 118 8.300% 9,359.33 10/1/00
189 358 120 118 8.820% 9,500.46 10/1/00
190 355 120 115 9.180% 9,762.24 7/1/00
191 355 120 115 9.270% 9,642.26 7/1/00
192 358 120 118 8.950% 9,211.82 10/1/00
193 291 120 111 9.170% 9,784.85 3/1/00
194 359 120 119 8.630% 8,637.42 11/1/00
195 359 120 119 8.410% 8,387.99 11/1/00
196 358 120 118 8.050% 8,109.79 10/1/00
197 356 120 116 8.700% 8,222.89 8/1/00
198 351 120 111 9.110% 8,531.78 3/1/00
199 297 120 117 8.740% 8,584.30 9/1/00
200 358 120 118 8.660% 7,982.28 10/1/00
201 357 120 117 8.610% 7,922.57 9/1/00
202 296 120 116 8.730% 8,207.85 8/1/00
203 294 120 114 8.630% 8,050.52 6/1/00
204 357 120 117 8.530% 7,309.47 9/1/00
205 357 120 117 8.730% 7,263.77 9/1/00
206 358 120 118 8.820% 7,283.69 10/1/00
207 358 120 118 8.630% 6,808.77 10/1/00
208 296 120 116 8.870% 7,240.32 8/1/00
209 297 120 117 8.740% 7,023.52 9/1/00
210 297 120 117 8.740% 6,736.01 9/1/00
211 299 120 119 8.940% 6,545.03 11/1/00
212 357 120 117 9.300% 6,048.53 9/1/00
213 297 120 117 8.700% 3,029.37 9/1/00
214 297 120 117 8.700% 2,701.87 9/1/00
215 287 120 107 8.680% 5,435.70 11/1/99
216 356 120 116 8.950% 5,206.68 8/1/00
217 357 120 117 9.000% 4,908.20 9/1/00
218 358 120 118 8.460% 4,596.48 10/1/00
219 357 120 117 8.770% 4,728.78 9/1/00
220 357 120 117 8.320% 4,537.16 9/1/00
221 298 120 118 8.840% 4,928.19 10/1/00
222 296 120 116 8.810% 4,742.53 8/1/00
223 296 120 116 8.940% 4,643.11 8/1/00
224 359 120 119 8.590% 4,031.56 11/1/00
225 355 120 115 9.470% 4,277.20 7/1/00
226 356 120 116 8.760% 3,937.07 8/1/00
227 355 120 115 9.150% 4,077.19 7/1/00
228 295 120 115 9.590% 3,563.84 7/1/00
229 294 120 114 8.530% 2,680.07 6/1/00
230 294 120 114 8.470% 2,369.46 6/1/00
TOTAL/
WEIGHTED ---------------------------------------------------------------------------------------------------------------------
AVERAGE 333 122 117 8.297% $ 9,940,216.70 6/25/00
=====================================================================================================================
Maximum 360 240 239 9.590% $ 680,877.32 11/1/00
Minimum 151 60 40 6.810% $ 2,369.46 1/1/98
<CAPTION>
Maturity Prepayment Provision Defeasance
# Date ARD (5) as of Origination (6) Option (7)
- ---- ------- --------------------- ----------
<S> <C> <C> <C> <C>
1 6/1/10 L (9.75), O (0.25) Yes
2 7/1/28 7/1/13 L (12.42), O (0.58) Yes
3 6/1/13 YM 1% (12.58), O (0.08) No
4 4/1/10 L (9.5), O (0.5) Yes
5 7/1/25 7/1/10 L (9.5), O (0.5) Yes
6 4/1/10 L (9.5), O (0.5) Yes
7 10/1/10 L (9.5), O (0.5) Yes
8 6/1/10 L (9.58), O (0.42) Yes
9 6/1/10 L (9.5), O (0.5) Yes
10 6/1/29 6/1/09 L (9.42), O (0.58) Yes
11 5/1/30 4/30/10 L (2.42), YM 1% (7.25), O (0.33) No
12 7/1/10 L (7.92), YM 1% (1.75), O (0.33) Yes
13 7/1/10 L (7.92), YM 1% (1.75), O (0.33) Yes
14 10/1/10 L (9.5), O (0.5) Yes
15 4/1/10 L (9.67), O (0.33) Yes
16 3/1/10 L (9.42), O (0.58) Yes
17 7/1/30 7/1/10 L (9.67), O (0.33) Yes
18 7/1/10 L (9.42), O (0.58) Yes
19 8/31/10 L (10), O (0.25) Yes
20 6/1/10 L (9.58), O (0.42) Yes
21 5/1/10 L (9.67), O (0.33) Yes
22 4/1/10 L (9.67), O (0.33) Yes
23 9/1/10 L (9.67), O (0.33) Yes
24 9/1/10 L (9.67), O (0.33) Yes
25 7/1/10 L (9.5), O (0.5) Yes
26 8/1/10 L (9.5), O (0.5) Yes
27 9/1/10 L (9.75), O (0.25) Yes
28 3/1/04 3% (1.0), 2% (1.0), 1% (1.0), O (2.0) No
29 9/1/07 L (6.75), O (0.25) Yes
30 9/1/10 L (9.67), O (0.33) Yes
31 7/1/30 7/1/10 L (9.67), O (0.33) Yes
32 8/1/10 L (9.67), O (0.33) Yes
33 9/1/10 L (9.67), O (0.33) Yes
34 8/1/10 L (9.67), O (0.33) Yes
35 8/1/30 8/1/10 L (9.42), O (0.58) Yes
36 7/1/30 7/1/10 L (9.67), O (0.33) Yes
37 7/1/30 7/1/10 L (9.42), O (0.58) Yes
38 7/1/10 L (9.5), O (0.5) Yes
39 4/1/30 4/1/10 L (2.92), YM 1% (6.5), O (0.58) No
40 7/1/30 7/1/10 L (9.42), O (0.58) Yes
41 10/1/10 L (9.5), O (0.5) Yes
42 10/1/10 L (9.5), O (0.5) Yes
43 6/1/10 L (9.67), O (0.33) Yes
44 9/1/30 9/1/10 L (9.75), O (0.25) Yes
45 7/1/09 L (9.75), O (0.25) Yes
46 9/1/10 L (9.67), O (0.33) Yes
47 11/10/05 L (4.0), YM 1% (3.17), O (0.33) No
48 9/1/10 L (9.42), O (0.58) Yes
49 5/1/10 L (9.67), O (0.33) Yes
50 6/1/30 6/1/10 L (9.67), O (0.33) Yes
51 5/1/30 5/1/10 L (9.67), O (0.33) Yes
52 4/1/10 L (9.67), O (0.33) Yes
53 9/1/10 L (9.5), O (0.5) Yes
54 7/1/10 L (9.67), O (0.33) Yes
55 5/1/10 L (9.67), O (0.33) Yes
56 10/1/12 L (11.67), O (0.33) Yes
57 9/1/10 L (9.67), O (0.33) Yes
58 8/1/30 8/1/10 L (9.67), O (0.33) Yes
59 7/1/10 L (9.5), O (0.5) Yes
60 8/1/30 8/1/10 L (9.75), O (0.25) Yes
61 4/1/10 L (9.5), O (0.5) Yes
62 9/1/10 L (9.67), O (0.33) Yes
63 9/1/10 L (9.42), O (0.58) Yes
64 5/1/10 L (9.67), O (0.33) Yes
65 8/1/10 L (2.92), YM 1% (6.75), O (0.33) No
66 7/1/10 L (9.67), O (0.33) Yes
67 6/1/10 L (9.5), O (0.5) Yes
68 5/1/10 L (9.5), O (0.5) Yes
69 6/1/10 L (9.5), O (0.5) Yes
70 10/1/10 L (9.5), O (0.5) Yes
71 8/1/10 L (9.5), O (0.5) Yes
72 6/1/10 L (9.5), O (0.5) Yes
73 6/1/30 6/1/10 L (9.58), O (0.42) Yes
74 10/1/09 L (9.5), O (0.5) Yes
75 6/1/10 L (9.5), O (0.5) Yes
76 6/1/10 L (9.5), O (0.5) Yes
77 3/1/11 2/28/09 L (4.92), YM 1% (4.75), O (0.33) No
78 8/1/10 L (9.5), O (0.5) Yes
79 6/1/10 L (9.5), O (0.5) Yes
80 6/1/10 L (9.5), O (0.5) Yes
81 5/1/30 5/1/10 L (9.67), O (0.33) Yes
82 9/1/10 L (9.75), O (0.25) Yes
83 5/1/10 L (2.92), YM 1% (6.75), O (0.33) No
84 6/1/30 6/1/10 L (9.67), O (0.33) Yes
85 8/1/10 L (9.67), O (0.33) Yes
86 8/1/10 L (9.5), O (0.5) Yes
87 7/1/10 L (9.5), O (0.5) Yes
88 1/1/10 L (8.75), O (0.5) Yes
89 8/1/10 L (9.75), O (0.25) Yes
90 6/1/10 L (9.5), O (0.5) Yes
91 8/1/10 L (9.5), O (0.5) Yes
92 7/1/10 L (9.75), O (0.25) Yes
93 1/1/30 1/1/10 L (9.67), O (0.33) Yes
94 6/1/10 L (9.67), O (0.33) Yes
95 5/1/10 L (9.5), O (0.5) Yes
96 5/1/25 5/1/10 L (9.67), O (0.33) Yes
97 8/1/10 L (9.67), O (0.33) Yes
98 6/1/10 L (9.67), O (0.33) Yes
99 9/1/10 L (2.92), YM 1% (6.75), O (0.33) No
100 2/1/12 L (11.75), O (0.25) Yes
101 10/1/10 L (9.5), O (0.5) Yes
102 9/1/25 9/1/10 L (9.75), O (0.25) Yes
103 1/1/08 L (4.92), YM 1% (4.5), O (0.58) No
104 6/1/30 6/1/10 L (4), YM 1% (5.42), O (0.58) No
105 12/1/12 L (14.5), O (0.5) Yes
106 10/1/10 L (9.5), O (0.5) Yes
107 8/1/10 L (9.5), O (0.5) Yes
108 9/1/08 L (4.92), YM (4.75), O (0.33) No
109 10/1/10 L (9.5), O (0.5) Yes
110 8/1/11 L (11.75), O (0.25) Yes
111 8/1/30 8/1/10 L (9.67), O (0.33) Yes
112 6/1/10 L (5), YM 1% (4.42), O (0.58) No
113 5/1/10 L (4.92), YM 1% (4.75), O (0.33) No
114 8/1/10 L (9.67), O (0.33) Yes
115 7/1/10 L (9.67), O (0.33) Yes
116 6/1/10 L (9.5), O (0.5) Yes
117 7/1/10 L (9.67), O (0.33) Yes
118 6/1/10 L (9.5), O (0.5) Yes
119 6/1/10 L (9.5), O (0.5) Yes
120 7/1/10 L (9.67), O (0.33) Yes
121 7/1/10 L (9.5), O (0.5) Yes
122 6/1/30 6/1/10 L (9.67), O (0.33) Yes
123 6/1/10 L (9.5), O (0.5) Yes
124 5/1/10 L (9.67), O (0.33) Yes
125 6/1/30 6/1/10 L (9.67), O (0.33) Yes
126 8/1/30 8/1/10 L (9.67), O (0.33) Yes
127 9/1/10 L (9.67), O (0.33) Yes
128 8/1/10 L (9.5), O (0.5) Yes
129 10/1/20 L (4.08), YM 1% (15.33), O (0.58) No
130 7/1/30 7/1/10 L(9.67), O (0.33) Yes
131 9/1/10 L (9.75), O (0.25) Yes
132 3/1/10 L (9.5), O (0.5) Yes
133 4/1/10 L(9.67), O (0.33) Yes
134 6/1/10 L (9.5), O (0.5) Yes
135 6/1/10 L (9.75), O (0.25) Yes
136 6/1/20 L (19.67), O (0.33) Yes
137 6/1/30 6/1/10 L (9.42), O (0.58) Yes
138 9/1/10 L (9.75), O (0.25) Yes
139 6/1/10 L (9.42), O (0.58) Yes
140 6/1/10 YM 5% (9.67), O (0.33) No
141 10/1/10 L (9.5), O (0.5) Yes
142 10/1/19 10/1/09 L (3.92), YM 3% (5), YM 1% (0.75), O (0.No)
143 2/1/20 2/1/10 L (3.92), YM 3% (5), YM 1% (0.75), O (0.No)
144 8/1/10 L (9.5), O (0.5) Yes
145 4/1/10 L (5.0), YM 1% (4.67), O (0.33) No
146 10/1/09 L (9.67), O (0.33) Yes
147 6/1/10 L (9.75), O (0.25) Yes
148 7/1/10 L (9.5), O (0.5) Yes
149 2/1/25 2/1/10 L (2.92), YM 1% (6.75), O (0.33) No
150 7/1/10 YM 5% (9.67), O (0.33) No
151 12/1/29 12/1/09 L (9.67), O (0.33) Yes
152 8/1/10 L(9.67), O (0.33) Yes
153 8/1/10 L (9.5), O (0.5) Yes
154 7/1/10 L (9.5), O (0.5) Yes
155 5/1/12 L (11.67), O (0.33) Yes
156 8/1/10 L (9.67), O (0.33) Yes
157 8/1/10 L (9.5), O (0.5) Yes
158 8/1/10 L (9.5), O (0.5) Yes
159 6/1/30 6/1/10 L (9.67), O (0.33) Yes
160 6/1/10 L (9.5), O (0.5) Yes
161 7/1/10 YM 5% (9.67), O (0.33) No
162 6/1/10 L (5), YM 1% (4.67), O (0.33) No
163 7/1/10 L (9.5), O (0.5) Yes
164 5/1/10 L (9.67), O (0.33) Yes
165 1/1/10 L (9.67), O (0.33) Yes
166 7/1/10 L (9.5), O (0.5) Yes
167 5/1/12 L (11.67), O (0.33) Yes
168 10/1/10 L (9.5), O (0.5) Yes
169 10/1/10 L (9.5), O (0.5) Yes
170 7/1/09 L (9.75), O (0.25) Yes
171 7/1/10 L (5), YM 1% (4.67), O (0.33) No
172 6/1/25 6/1/10 L (9.75), O (0.25) Yes
173 7/1/09 L (9.5), O (0.5) Yes
174 7/1/10 L (9.5), O (0.5) Yes
175 7/1/10 L (9.5), O (0.5) Yes
176 7/1/10 YM 5% (9.67), O (0.33) No
177 7/1/10 L (9.5), O (0.5) Yes
178 6/1/10 L (9.5), O (0.5) Yes
179 5/1/10 L (9.67), O (0.33) Yes
180 9/1/09 L (9.5), O (0.5) Yes
181 11/1/09 L (5), YM 1% (4.67), O (0.33) No
182 9/1/10 L (9.42), O (0.58) Yes
183 9/1/10 L (9.67), O (0.33) Yes
184 9/1/10 L (2.92), YM 1% (6.75), O (0.33) No
185 7/1/07 L (5), YM 1% (1.67), O (0.33) No
186 4/1/30 L (9.42), O (0.58) Yes
187 9/1/10 L (9.5), O (0.5) Yes
188 9/1/10 L (9.5), O (0.5) Yes
189 9/1/10 L (9.5), O (0.5) Yes
190 6/1/10 L (9.5), O (0.5) Yes
191 6/1/10 L (9.5), O (0.5) Yes
192 9/1/10 L (9.5), O (0.5) Yes
193 2/1/10 L (9.67), O (0.33) Yes
194 10/1/10 L (9.5), O (0.5) Yes
195 10/1/10 L (9.5), O (0.5) Yes
196 9/1/10 L (9.42), O (0.58) Yes
197 7/1/10 L (9.5), O (0.5) Yes
198 2/1/10 L (9.5), O (0.5) Yes
199 8/1/10 L (9.67), O (0.33) Yes
200 9/1/10 L (9.5), O (0.5) Yes
201 8/1/10 L (9.5), O (0.5) Yes
202 7/1/10 L (5), YM 1% (4.67), O (0.33) No
203 5/1/10 L (5), YM 1% (4.67), O (0.33) No
204 8/1/10 L (9.5), O (0.5) Yes
205 8/1/10 L (9.5), O (0.5) Yes
206 9/1/10 L (9.5), O (0.5) Yes
207 9/1/10 L (9.67), O (0.33) Yes
208 7/1/10 L (5), YM 1% (4.67), O (0.33) No
209 8/1/10 L (9.67), O (0.33) Yes
210 8/1/10 L (9.67), O (0.33) Yes
211 10/1/10 L (9.5), O (0.5) Yes
212 8/1/10 L (9.5), O (0.5) Yes
213 8/1/10 L (5), YM 1% (4.67), O (0.33) No
214 8/1/10 L (5), YM 1% (4.67), O (0.33) No
215 10/1/09 L (5), YM 1% (4.67), O (0.33) No
216 7/1/10 L (9.5), O (0.5) Yes
217 8/1/10 L (9.5), O (0.5) Yes
218 9/1/10 L (9.5), O (0.5) Yes
219 8/1/10 L (9.5), O (0.5) Yes
220 8/1/10 L (9.5), O (0.5) Yes
221 9/1/10 L (9.5), O (0.5) Yes
222 7/1/10 L (5), YM 1% (4.67), O (0.33) No
223 7/1/10 L (5), YM 1% (4.67), O (0.33) No
224 10/1/10 L (9.5), O (0.5) Yes
225 6/1/10 L (9.5), O (0.5) Yes
226 7/1/10 L (9.5), O (0.5) Yes
227 6/1/10 L (9.5), O (0.5) Yes
228 6/1/10 L (5.0), YM 1% (4.67), O (0.33) No
229 5/1/10 L (5), YM 1% (4.67), O (0.33) No
230 5/1/10 L (5), YM 1% (4.67), O (0.33) No
TOTAL/
WEIGHTED ========
AVERAGE 11/23/14
========
MAXIMUM: 9/1/30
MINIMUM: 3/1/04
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Additional Mortgage Loan Information
Cut-off Date
Principal Appraised Cut-off Date Maturity/ARD
# Loan Name Balance Value LTV Ratio (4) Balance
- --------- ------- ----- ------------- -------
<S> <C> <C> <C> <C> <C>
1 437 Madison Avenue $ 87,301,842 $ 198,000,000 44.4% $ 79,388,956
2 Valencia Marketplace, Power Center 51,787,099 71,000,000 72.9% 39,623,638
3 Hercules Plaza (1) 50,909,381 125,000,000 40.7% -
4 Alliance GD FH F1 39,491,001 51,100,000 77.3% 35,956,346
5 McCandless Towers II 36,936,969 63,500,000 58.2% 33,515,681
6 Alliance GD FH F2 30,282,599 39,200,000 77.3% 27,572,145
7 Commons at Sugarhouse 28,387,855 36,000,000 78.9% 25,471,681
8 Gateway at Randolph Apartments 27,870,175 58,500,000 47.6% 23,089,618
9 Metroplex 27,441,129 36,400,000 75.4% 25,050,268
10 Palm Plaza Shopping Center 25,476,217 34,750,000 73.3% 22,806,772
11 Page Field Commons 25,325,706 32,500,000 77.9% 22,872,878
12 Poly Foam (2A) 9,332,630 11,900,000 77.0% 8,419,389
13 Poly-Foam International, Inc. (2A) 8,533,752 11,300,000 77.0% 7,686,467
14 The Genesis Loan 17,094,039 22,300,000 76.7% 15,516,706
15 Sterling University Crescent 14,640,000 18,300,000 80.0% 13,554,570
16 Oakbrook Apartments 14,385,000 20,050,000 71.7% 13,422,486
17 One Bulfinch Place 14,383,000 18,700,000 76.9% 13,085,427
18 Sandhurst Apartments 13,971,656 18,500,000 75.5% 12,526,842
19 Chandler Sunset Plaza 13,960,297 18,000,000 77.6% 12,587,094
20 Saddle Brook Apartments 12,939,724 26,000,000 49.8% 10,720,179
21 Railway Express Building 12,534,362 20,400,000 61.4% 10,466,904
22 Hillcroft Apartments 12,356,185 15,600,000 79.2% 11,177,416
23 Radisson Inn Harbourwalk (2B) 6,888,821 10,600,000 64.7% 5,806,843
24 Radisson Suite Hotel (2B) 5,341,332 8,300,000 64.7% 4,502,407
25 Highland Cove Retirement Community 12,151,936 16,250,000 74.8% 10,300,820
26 Regency Warehouse 11,609,943 15,500,000 74.9% 10,549,209
27 Silverado Ranch Center 11,587,542 14,750,000 78.6% 10,412,115
28 Holiday Inn Orlando 11,555,033 28,300,000 40.8% 10,663,115
29 Carlton Village Apartments 11,487,650 15,000,000 76.6% 10,780,960
30 Glenridge Apartments 10,488,631 13,750,000 76.3% 9,418,150
31 2200 First Avenue South 10,482,959 15,300,000 68.5% 9,541,045
32 Windmill Apartments 10,437,167 13,250,000 78.8% 9,377,841
33 Kent Hill Plaza 10,287,425 14,600,000 70.5% 9,122,547
34 Cheyenne Crest Apartments 10,221,494 13,150,000 77.7% 9,184,058
35 Big Kmart - Midwest City 9,984,394 12,700,000 78.6% 8,950,293
36 Westgate Crossing Shopping Center 9,882,379 13,200,000 74.9% 8,941,299
37 Big Kmart - Edmond 9,770,974 12,500,000 78.2% 8,786,821
38 One Cameron Place 9,736,383 12,300,000 79.2% 8,938,892
39 Roseland Shopping Center 9,644,137 13,000,000 74.2% 8,769,678
40 Big Kmart - Chicago 9,521,460 12,200,000 78.0% 8,562,438
41 Crystal Mountain Office Park (2C) 5,547,872 7,450,000 73.3% 5,010,097
42 Lake Pointe Center II (2C) 3,798,543 5,300,000 73.3% 3,430,336
43 DoubleTree Hotel 9,154,171 13,200,000 69.3% 7,507,573
44 Twelve Oaks Shopping Center 9,100,000 11,400,000 79.8% 8,303,767
45 Streetsboro Market Square 8,856,454 11,500,000 77.0% 7,873,166
46 Ravenswood Apartments 8,790,158 11,000,000 79.9% 7,871,013
47 Pembroke Office Park 8,409,024 18,500,000 45.5% 7,892,871
48 Candlewood Hotel - Sacramento 8,401,451 11,900,000 70.6% 7,087,563
49 Royal Jetstar Tech Center 8,061,206 11,000,000 73.3% 7,322,176
50 North Reading Plaza 7,380,723 9,435,000 78.2% 6,642,275
51 Cypress Springs Apartments 7,300,000 9,300,000 78.5% 6,664,532
52 Sterling University Peaks 6,960,000 8,700,000 80.0% 6,443,976
53 Kmart - Allen 6,743,159 9,650,000 69.9% 6,088,222
54 Hartville Center 6,478,527 9,200,000 70.4% 5,412,991
55 Pony Express Building 6,451,145 8,650,000 74.6% 5,385,613
56 Willow Pond Apartments 6,447,095 9,650,000 66.8% 5,550,123
57 Standard Dairy Apartments 6,250,949 8,800,000 71.0% 5,398,230
58 Edward's Office Portfolio 5,991,636 9,090,000 65.9% 5,416,598
59 Garfield Suites Hotel 5,734,657 10,100,000 56.8% 4,907,712
60 Larry's Market 5,692,227 8,950,000 63.6% 5,153,962
61 Big-K Plaza 5,679,332 7,200,000 78.9% 5,127,329
62 Granite Retail Portfolio 5,633,625 9,550,000 59.0% 5,039,811
63 Walnut Creek Apartments 5,591,998 7,000,000 79.9% 4,845,977
64 Royal Freeport Tech Center 5,584,901 8,100,000 68.9% 5,072,893
65 100 Demarest Drive 5,541,644 7,400,000 74.9% 4,981,481
66 Indian Run Village 5,500,000 7,200,000 76.4% 5,052,749
67 210 Main Street 5,486,446 7,500,000 73.2% 4,958,635
68 Clearbrook Village Apartments 5,223,417 6,700,000 78.0% 4,727,983
69 Brookdale Shopping Center 5,186,918 6,900,000 75.2% 4,680,604
70 Courtyard by Marriott Hotel 5,146,556 7,100,000 72.5% 4,345,484
71 Hamilton Park Apartments 5,117,675 6,750,000 75.8% 4,618,204
72 Brookwood Shopping Center 5,015,079 7,000,000 71.6% 4,602,169
73 6329 Glenwood Office Building 4,988,040 9,100,000 54.8% 4,518,161
74 Landmark Garden Apartments 4,966,737 6,250,000 79.5% 4,516,962
75 Applecreek Apartments 4,915,179 6,500,000 75.6% 4,507,692
76 Plaza At The Pointe Shopping Center 4,909,199 7,150,000 68.7% 4,473,845
77 Ramblewood Apartments 4,495,042 9,800,000 45.9% 3,710,100
78 Scottsdale Airpark II 4,493,668 6,050,000 74.3% 4,059,665
79 New Market Square Shopping Center 4,488,844 6,700,000 67.0% 4,055,200
80 Maple Leaf Apartments 4,194,729 6,000,000 69.9% 3,793,711
81 The Shops at Fair Lakes 4,187,640 6,000,000 69.8% 3,780,376
82 Sunpark Apartments 4,145,664 5,200,000 79.7% 3,733,685
83 Carol Oaks Apartments 4,106,698 5,150,000 79.7% 3,681,347
84 Florida Computer Center 4,089,866 7,000,000 58.4% 3,695,588
85 Tonawanda Manor 4,061,927 5,430,000 74.8% 3,399,690
86 Woodridge Apartments 3,994,580 5,160,000 77.4% 3,618,452
87 Dunwoody Plaza 3,993,801 5,000,000 79.9% 3,645,122
88 Schaumburg Plaza 3,893,397 6,200,000 62.8% 3,581,954
89 Whispering Oaks Mobile Home Park 3,814,844 5,100,000 74.8% 3,163,988
90 Harbor Technology Center 3,795,831 5,600,000 67.8% 3,464,376
91 Stove Works Office Building 3,795,609 6,000,000 63.3% 3,474,096
92 Holy Cross Professional Center 3,793,962 5,450,000 69.6% 3,457,538
93 Augusta Plaza Shopping Center 3,769,547 5,700,000 66.1% 3,404,204
94 Banana Republic 3,697,607 4,775,000 77.4% 3,362,461
95 Forest Hills Apartments 3,689,211 4,700,000 78.5% 3,332,647
96 West Marietta Retail Center 3,631,507 4,885,000 74.3% 3,043,169
97 Regency Centre Office Complex 3,495,482 4,700,000 74.4% 3,176,813
98 Southtowne Center 3,452,236 5,400,000 63.9% 3,141,361
99 Pinetree Village Apartments 3,444,402 4,700,000 73.3% 2,919,483
100 Weston Shoppes 3,274,601 4,500,000 72.8% 2,911,306
101 Pine Trails Apartments 3,198,642 4,500,000 71.1% 2,871,395
102 Old County Road 3,194,576 4,650,000 68.7% 2,676,920
103 Cambridge Court Retirement Community 3,169,044 4,650,000 68.2% 2,679,377
104 Bryn Mawr Suites Apartments 3,141,216 3,960,000 79.3% 2,811,399
105 Bruno's Shopping Center 3,123,994 5,650,000 55.3% 1,769,106
106 Laddins Rock 3,118,605 3,900,000 80.0% 2,790,373
107 Christine Place Apartments 3,110,793 4,175,000 74.5% 2,818,507
108 Best Western Siesta Beach Resort 3,108,838 5,900,000 52.7% 2,613,734
109 Richland Hills Apartments 3,098,709 4,000,000 77.5% 2,784,916
110 Star Wholesale Florist, Inc. 2,908,942 5,100,000 57.0% 1,792,524
111 Office Depot 2,907,902 3,600,000 80.8% 2,627,052
112 CVS Plaza - East Hartford 2,852,871 3,600,000 79.2% 2,570,304
113 CVS Plaza - Queensbury 2,851,609 3,650,000 78.1% 2,574,854
114 Warehouse X/Lock-It Lockers 2,793,488 5,200,000 53.7% 2,355,733
115 Lazy Acres Estates 2,755,000 3,700,000 74.5% 2,526,967
116 214 Main Street 2,718,284 3,650,000 74.5% 2,456,778
117 Office Depot at Woodhaven Village
Square 2,695,000 3,600,000 74.9% 2,431,822
118 Winder Village Manufactured Housing
Community (2D) 1,556,390 1,950,000 79.3% 1,413,175
119 Russell Village Manufactured Housing
Community (2D) 1,117,409 1,420,000 79.3% 1,014,588
120 Northway Plaza Shopping Center 2,659,332 4,300,000 61.8% 1,910,132
121 Phoenix Park Apartments 2,606,244 3,400,000 76.7% 2,354,373
122 Eckerd's Drug Store - S. Main 2,545,673 3,190,000 79.8% 2,299,749
123 Chabot Office Plaza 2,543,376 4,800,000 53.0% 2,289,429
124 Middlefield Market Square Shopping
Center 2,543,014 3,385,000 75.1% 2,307,369
125 Eckerd's Drug Store - N. Main 2,505,773 3,140,000 79.8% 2,263,702
126 Gentry Plaza 2,466,426 3,400,000 72.5% 2,223,698
127 The Meadows Apartments 2,447,454 3,100,000 79.0% 2,205,241
128 Miggy's Mall Shopping Center 2,435,280 3,570,000 68.2% 2,233,660
129 Colony Square Apartments 2,396,728 3,550,000 67.5% 118,311
130 Eckerd's Drug Store - Kingston 2,395,898 3,100,000 77.3% 2,173,500
131 Pueblo Point Ace Hardware 2,308,168 3,700,000 62.4% 1,939,911
132 Five Star Business Park 2,291,190 3,250,000 70.5% 2,078,417
133 Eckerd's Drug Store - Half Moon 2,265,448 2,915,000 77.7% 2,058,707
134 Oaks Apartments 2,261,675 3,625,000 62.4% 2,024,207
135 New England Place Apartments 2,238,943 2,960,000 75.6% 1,839,841
136 1025 East Maple Office Building 2,166,473 3,150,000 68.8% 1,002,955
137 Jaffe Eye Office Building 2,150,000 3,160,000 68.0% 1,971,757
138 Calder Square, Phase II Apartments 2,142,752 2,750,000 77.9% 1,929,374
139 North Mall 2,140,954 3,800,000 56.3% 1,796,615
140 Wekiva Executive Center (3) 2,138,636 2,915,000 73.4% 1,896,452
141 The Kirkland Loan 2,099,109 2,850,000 73.7% 1,884,353
142 Office Max - Northwood 1,982,013 2,700,000 73.4% 1,431,094
143 Office Max - Alexandria 1,971,098 3,070,000 64.2% 1,453,719
144 Foxpoint Commons 1,962,338 3,400,000 57.7% 1,777,564
145 Continental Terrace Apartments 1,943,149 2,440,000 79.6% 1,758,546
146 Cheyenne Mountain Center 1,922,979 2,700,000 71.2% 1,619,618
147 Circle K Plaza 1,917,257 2,575,000 74.5% 1,760,856
148 Flamingo West Apartments 1,916,763 2,400,000 79.9% 1,740,367
149 Big K Store 1,903,501 3,240,000 58.8% 1,645,320
150 St. Agnes Apartments 1,878,870 2,400,000 78.3% 1,572,841
151 Richfield Court Apartments 1,833,914 2,560,000 71.6% 1,656,283
152 Peconic Mini Storage 1,833,004 2,450,000 74.8% 1,536,244
153 Heritage Estates Manufactured Housing
Community 1,827,417 2,450,000 74.6% 1,650,553
154 Academy Apartments 1,824,450 2,350,000 77.6% 1,657,635
155 North By Northeast II Shoppes 1,805,197 2,500,000 72.2% 1,586,610
156 Warehouse II/Lock-It Lockers 1,805,034 2,500,000 72.2% 1,532,639
157 Mission Hill Apartments 1,797,623 2,540,000 70.8% 1,631,237
158 Boston Square Shopping Center 1,797,584 3,000,000 59.9% 1,629,406
159 Gaithersburg Shopping Center 1,795,202 3,000,000 59.8% 1,612,649
160 Iteq Building 1,786,253 2,300,000 77.7% 1,633,037
161 Coliseum Self Storage 1,768,566 2,755,000 64.2% 1,247,003
162 Centre Square Apartments 1,716,093 2,150,000 79.8% 1,560,211
163 Emerald Lake Apartments 1,697,327 2,140,000 79.3% 1,547,817
164 The Sun Prairie Apartments 1,695,028 2,350,000 72.1% 1,530,862
165 7th Street Grocery 1,652,195 2,500,000 66.1% 1,510,388
166 Eagle's Nest Office Building 1,612,388 2,700,000 59.7% 1,467,830
167 New Augusta Shoppes 1,585,956 2,300,000 69.0% 1,398,988
168 Lakedale Apartments (2E) 1,034,268 1,575,000 65.6% 868,358
169 Liberty Apartments (2E) 524,629 800,000 65.6% 440,471
170 Sunshine Care Homes 1,553,012 2,335,000 66.5% 1,289,907
171 1-9 Flatbush Avenue 1,495,078 3,732,000 40.1% 1,250,200
172 Pathmark Store No. 550 1,479,970 2,000,000 74.0% 1,247,574
173 Kmart Plaza - Minot 1,477,856 3,340,000 44.2% 1,247,004
174 Villa Del Rio Apartments 1,477,748 2,250,000 65.7% 1,350,170
175 Winchester Arms & Fox Chase Apartments 1,447,605 2,000,000 72.4% 1,316,106
176 Old Orchard II Apartments 1,425,202 1,950,000 73.1% 1,188,518
177 55-65 Merrick Road 1,398,250 1,900,000 73.6% 1,291,101
178 5055 California Avenue 1,396,974 1,900,000 73.5% 1,274,447
179 Castle Store & Lock 1,392,907 2,000,000 69.6% 1,167,243
180 The Monterey/Sherbrooke Lean 1,386,387 2,050,000 67.6% 1,190,428
181 Arctic Office Building 1,386,265 2,075,000 66.8% 1,183,282
182 Lockheed Martin Building 1,368,517 1,900,000 72.0% 1,228,845
183 Renton Highlands Center 1,357,940 2,200,000 61.7% 1,154,356
184 Lansing Square Apartments 1,357,566 1,850,000 73.4% 1,129,182
185 CVS #0742-01 1,337,725 1,700,000 78.7% 1,263,660
186 Pinewood Village Apartments 1,252,888 1,850,000 67.7% 1,130,108
187 Midway Commercial Building 1,248,833 1,800,000 69.4% 1,134,826
188 Jersey Street Apartments 1,238,715 1,550,000 79.9% 1,116,379
189 Preston Office Park 1,198,928 1,900,000 63.1% 1,093,030
190 Fairmont Oaks Apartments 1,191,735 1,600,000 74.5% 1,096,316
191 Premier Plaza Shopping Center 1,167,848 1,560,000 74.9% 1,076,311
192 4404-4418 Walnut Street 1,149,012 1,550,000 74.1% 1,050,439
193 Cumberland Technical Center 1,141,935 1,570,000 72.7% 978,671
194 Orchard Park Apartments 1,109,611 1,460,000 76.0% 1,007,000
195 Quarry Ridge Apartments 1,099,578 1,450,000 75.8% 992,991
196 Stoney Creek Apartments 1,098,780 1,500,000 73.3% 984,575
197 Plaza Apartments 1,048,302 1,435,000 73.1% 954,315
198 Gordon Portfolio 1,045,877 1,350,000 77.5% 962,598
199 Warehouse I/Lock-It Lockers 1,042,570 2,025,000 51.5% 879,194
200 Park City Plaza 1,022,042 1,500,000 68.1% 928,535
201 Sunny Townhomes 1,018,666 1,275,000 79.9% 924,989
202 Town & Country Shopping Center 996,963 2,200,000 45.3% 841,320
203 The Majestic Building 984,234 1,325,000 74.3% 829,843
204 Royal Park Apartments 946,728 1,185,000 79.9% 858,153
205 Greensburg Plaza 923,837 1,300,000 71.1% 841,076
206 Wilson Heights Apartments 919,178 1,150,000 79.9% 837,989
207 Northway Court Shopping Center 874,174 1,420,000 61.6% 793,674
208 Goodwill Retail Center 869,437 1,400,000 62.1% 736,417
209 Warehouse IV/Lock-It Lockers 853,012 1,425,000 59.9% 719,340
210 Warehouse IX/Lock-It Lockers 818,093 1,450,000 56.4% 689,893
211 Morello Building 783,239 1,045,000 75.0% 662,912
212 Town North Villa Apartments 731,246 915,000 79.9% 673,764
213 1137 North 13th Street Apartments (2F) 369,132 460,000 77.6% 310,956
214 949-969 North 27th Street (2F) 329,226 440,000 77.6% 277,339
215 Summit Plaza 657,670 1,000,000 65.8% 558,858
216 Turney Square Apartments 649,039 857,000 75.7% 594,011
217 Lake Street Apartments 609,300 835,000 73.0% 557,923
218 Atwood & Barker Apartments 599,405 850,000 70.5% 542,161
219 162 Myrtle Avenue 599,255 760,000 78.8% 546,043
220 Summit Heights Apartments 599,140 900,000 66.6% 540,543
221 40 Scitico Road 594,052 815,000 72.9% 501,816
222 Sunnyvale Trailer Park 572,289 800,000 71.5% 483,966
223 Woodhaven Village Square 554,393 840,000 66.0% 470,433
224 St. John's Office Building 519,815 750,000 69.3% 471,328
225 Southlake Center 509,125 750,000 67.9% 471,104
226 Country Villa Apartments 499,208 780,000 64.0% 455,040
227 Coach Light Apartments 499,042 650,000 76.8% 458,804
228 4425 South 87th Street 403,665 540,000 74.8% 348,454
229 Cosmos Apartments 330,365 500,000 66.1% 277,805
230 North Gate Apartments 293,528 405,000 72.5% 246,435
-------------------------------------------------------------------------------
Total/Weighted Average: $1,289,918,771 $ 1,966,039,000 68.5% $1,095,678,226
===============================================================================
Maximum: $ 87,301,842 $ 198,000,000 80.8% $ 79,388,956
Minimum: $ 293,528 $ 405,000 40.1% $ -
<CAPTION>
Maturity/ARD Most Recent Most Recent U/W
# LTV Ratio (4) (5) NOI DSCR (6) NOI
- ----------------- --- -------- ---
<S> <C> <C> <C> <C>
1 40.1% $ 14,712,219 1.80x $ 15,593,901
2 55.8% 5,572,762 1.28 5,670,040
3 0.0% N/A N/A 11,284,500
4 70.4% 4,578,498 1.24 4,915,191
5 52.8% 4,746,756 1.38 4,656,658
6 70.3% 3,503,988 1.23 3,738,342
7 70.8% 3,522,259 1.39 3,265,478
8 39.5% 5,125,526 1.97 4,536,398
9 68.8% 4,029,734 1.54 4,036,626
10 65.6% 3,234,180 1.49 3,051,642
11 70.4% 2,956,071 1.29 3,022,063
12 69.4% 1,271,961 1.50 1,142,548
13 69.4% 1,132,919 1.47 1,037,473
14 69.6% 2,023,461 1.27 2,127,883
15 74.1% 1,409,551 1.08 1,651,845
16 66.9% 1,701,722 1.27 1,655,685
17 70.0% N/A N/A 1,619,481
18 67.7% 1,604,558 1.30 1,590,710
19 69.9% N/A N/A 1,711,547
20 41.2% 2,268,397 1.88 2,149,505
21 51.3% 1,806,217 1.51 1,716,455
22 71.7% 1,509,994 1.34 1,389,391
23 54.5% 1,147,924 1.68 1,071,022
24 54.5% 1,103,418 2.09 884,474
25 63.4% 1,621,862 1.33 1,812,162
26 68.1% 1,509,705 1.39 1,487,846
27 70.6% N/A N/A 1,397,768
28 37.7% 3,774,496 3.42 2,559,060
29 71.9% 1,550,463 1.51 1,326,267
30 68.5% 1,175,906 1.26 1,250,942
31 62.4% N/A N/A 1,392,571
32 70.8% 1,187,234 1.27 1,231,959
33 62.5% 1,300,561 1.37 1,296,820
34 69.8% 1,198,762 1.31 1,194,152
35 70.5% 1,265,675 1.43 1,254,631
36 67.7% 914,359 1.01 1,163,078
37 70.3% 1,235,277 1.41 1,212,581
38 72.7% 1,332,382 1.40 1,328,842
39 67.5% 1,210,958 1.35 1,233,676
40 70.2% 1,201,824 1.41 1,189,435
41 66.2% 621,692 1.22 700,511
42 66.2% 397,205 1.14 469,011
43 56.9% 1,435,686 1.63 1,432,091
44 72.8% 1,143,813 1.40 1,054,305
45 68.5% 1,038,520 1.30 1,034,530
46 71.6% 1,119,393 1.44 1,005,465
47 42.7% 1,835,998 2.42 1,805,376
48 59.6% 1,486,442 1.78 1,297,510
49 66.6% N/A N/A 1,022,413
50 70.4% 786,362 1.19 845,329
51 71.7% 808,531 1.19 883,010
52 74.1% 781,261 1.25 790,399
53 63.1% 868,018 1.41 860,941
54 58.8% 800,865 1.29 796,259
55 62.3% 961,968 1.57 846,501
56 57.5% 1,157,088 2.04 846,807
57 61.3% N/A N/A 731,329
58 59.6% N/A N/A 829,295
59 48.6% 1,205,246 2.04 1,052,305
60 57.6% 810,307 1.54 765,037
61 71.2% 829,266 1.61 695,695
62 52.8% 846,290 1.71 820,931
63 69.2% 697,938 1.37 694,215
64 62.6% 652,791 1.26 747,075
65 67.3% N/A N/A 659,689
66 70.2% 552,079 1.09 629,446
67 66.1% 701,189 1.40 724,110
68 70.6% 667,495 1.40 689,139
69 67.8% 641,065 1.36 617,675
70 61.2% 884,299 1.73 811,949
71 68.4% 706,367 1.52 659,184
72 65.7% 576,644 1.18 647,434
73 49.7% 875,106 1.91 725,205
74 72.3% 613,071 1.34 694,424
75 69.3% 614,214 1.29 700,778
76 62.6% 623,408 1.34 656,145
77 37.9% 948,778 2.38 825,391
78 67.1% 572,659 1.39 548,490
79 60.5% 671,005 1.64 688,007
80 63.2% 466,053 1.21 489,210
81 63.0% 552,280 1.46 512,209
82 71.8% 534,843 1.43 491,652
83 71.5% 580,669 1.61 520,920
84 52.8% 485,884 1.30 652,328
85 62.6% 909,416 2.32 655,483
86 70.1% 504,090 1.37 530,156
87 72.9% 507,633 1.34 500,185
88 57.8% 528,461 1.44 528,245
89 62.0% 584,796 1.63 544,659
90 61.9% 521,926 1.45 513,802
91 57.9% 578,254 1.58 574,126
92 63.4% 579,141 1.61 534,363
93 59.7% 436,788 1.29 560,475
94 70.4% 369,841 1.07 417,542
95 70.9% 479,300 1.43 460,794
96 62.3% N/A N/A 442,383
97 67.6% 365,330 1.12 467,163
98 58.2% 460,875 1.42 418,960
99 62.1% 514,668 1.60 419,622
100 64.7% 473,301 1.49 429,292
101 63.8% 389,182 1.36 391,530
102 57.6% 460,834 1.49 490,964
103 57.6% 509,290 1.74 477,660
104 71.0% 390,167 1.42 382,896
105 31.3% 395,919 1.27 397,000
106 71.5% 376,628 1.37 366,562
107 67.5% 344,289 1.20 370,014
108 44.3% 526,723 1.83 468,728
109 69.6% 413,082 1.49 392,244
110 35.1% 443,668 1.44 416,761
111 73.0% N/A N/A 312,067
112 71.4% N/A N/A 333,453
113 70.5% 320,007 1.24 322,452
114 45.3% 461,403 1.67 456,852
115 68.3% 366,194 1.45 312,765
116 67.3% 344,260 1.39 347,846
117 67.6% N/A N/A 309,003
118 72.0% 203,431 1.41 198,534
119 72.0% 129,999 1.25 141,723
120 44.4% 407,028 1.48 407,197
121 69.2% 369,024 1.55 320,415
122 72.1% N/A N/A 280,667
123 47.7% 402,661 1.76 402,473
124 68.2% 256,338 1.09 309,668
125 72.1% N/A N/A 276,307
126 65.4% 359,014 1.61 298,850
127 71.1% 329,020 1.48 310,140
128 62.6% 389,277 1.64 350,861
129 3.3% 401,777 1.61 426,407
130 70.1% N/A N/A 267,993
131 52.4% N/A N/A 359,613
132 64.0% 309,286 1.47 300,330
133 70.6% 261,922 1.24 254,549
134 55.8% 397,785 2.01 389,309
135 62.2% 285,600 1.40 277,462
136 31.8% 327,314 1.52 298,931
137 62.4% 310,874 1.56 263,777
138 70.2% 270,147 1.40 260,547
139 47.3% 390,098 1.88 356,920
140 65.1% 292,961 1.38 337,862
141 66.1% 288,296 1.54 294,766
142 53.0% 248,159 1.22 258,627
143 47.4% 287,310 1.34 261,439
144 52.3% 257,955 1.42 292,679
145 72.1% 224,540 1.26 246,503
146 60.0% 270,010 1.46 250,458
147 68.4% 235,059 1.26 259,298
148 72.5% 217,392 1.22 254,648
149 50.8% 331,177 1.65 280,407
150 65.5% 286,393 1.58 248,341
151 64.7% 257,138 1.56 251,310
152 62.7% 269,179 1.51 259,734
153 67.4% 216,418 1.30 218,177
154 70.5% 275,693 1.62 252,489
155 63.5% 259,342 1.54 237,451
156 61.3% 258,976 1.42 249,980
157 64.2% 265,545 1.59 210,465
158 54.3% 246,049 1.48 240,136
159 53.8% N/A N/A 282,614
160 71.0% 236,893 1.39 233,454
161 45.3% 323,735 1.74 281,257
162 72.6% 242,637 1.51 236,482
163 72.3% 241,379 1.50 207,452
164 65.1% 232,189 1.51 228,780
165 60.4% 257,873 1.65 220,156
166 54.4% 251,724 1.66 256,037
167 60.8% 189,339 1.26 204,153
168 55.1% 113,831 1.12 155,252
169 55.1% 66,967 1.30 79,528
170 55.2% 231,676 1.52 205,127
171 33.5% 547,148 3.81 412,760
172 62.4% 194,420 1.34 198,618
173 37.3% 239,929 1.69 202,439
174 60.0% 209,764 1.49 203,517
175 65.8% 199,263 1.47 177,037
176 60.9% 234,377 1.73 189,693
177 68.0% 227,992 1.63 192,167
178 67.1% 284,898 2.15 204,659
179 58.4% 215,555 1.61 188,496
180 58.1% 203,520 1.43 205,955
181 57.0% 175,849 1.26 196,722
182 64.7% 192,456 1.57 171,501
183 52.5% 166,574 1.21 187,849
184 61.0% 234,193 1.82 192,198
185 74.3% 166,778 1.34 154,350
186 61.1% 167,730 1.49 165,805
187 63.0% 203,064 1.73 200,252
188 72.0% 159,885 1.42 155,594
189 57.5% 180,795 1.59 165,371
190 68.5% 148,692 1.27 165,059
191 69.0% 150,015 1.30 158,213
192 67.8% 231,299 2.09 184,968
193 62.3% 164,939 1.40 170,607
194 69.0% 145,905 1.41 139,427
195 68.5% 142,948 1.42 138,945
196 65.6% 179,445 1.84 143,730
197 66.5% 156,883 1.59 130,560
198 71.3% 165,831 1.62 147,788
199 43.4% 200,336 1.94 173,176
200 61.9% 134,139 1.40 142,087
201 72.5% 183,359 1.93 140,987
202 38.2% 177,254 1.80 186,204
203 62.6% 136,810 1.42 140,484
204 72.4% 141,496 1.61 118,506
205 64.7% 130,355 1.50 126,095
206 72.9% 115,723 1.32 119,414
207 55.9% 148,240 1.81 124,587
208 52.6% 131,423 1.51 127,884
209 50.5% 170,215 2.02 147,029
210 47.6% 139,787 1.73 140,803
211 63.4% 106,791 1.36 105,708
212 73.6% 106,508 1.47 96,654
213 65.4% N/A N/A 64,196
214 65.4% 50,764 1.57 47,393
215 55.9% 148,548 2.28 111,529
216 69.3% 80,154 1.28 83,757
217 66.8% 91,620 1.56 82,090
218 63.8% 131,729 2.39 95,291
219 71.8% 75,451 1.33 74,516
220 60.1% 119,873 2.20 92,916
221 61.6% 94,480 1.60 101,319
222 60.5% 86,252 1.52 75,208
223 56.0% N/A N/A 73,720
224 62.8% 77,665 1.61 71,752
225 62.8% 51,076 1.00 72,421
226 58.3% 78,402 1.66 68,621
227 70.6% 122,525 2.50 72,255
228 64.5% 65,915 1.54 67,905
229 55.6% 65,854 2.05 54,263
230 60.8% N/A N/A 41,651
------------------------------------------------------------------------------------------------------
Total/Weighted
Average: 61.7% $157,778,156 1.50x $177,998,856
=======================================================================================================
74.3% $ 14,712,219 3.81x $ 15,593,901
31.3% $ 50,764 1.00x $ 41,651
<CAPTION>
Servicing
And
U/W U/W Trustee
# NCF (7) DSCR (6) Fees
- ------- -------- ----
<S> <C> <C> <C>
1 $ 14,279,554 1.75x 0.051700%
2 5,447,558 1.26 0.059212%
3 11,284,500 2.41 0.051700%
4 4,529,191 1.22 0.051700%
5 4,613,844 1.35 0.051700%
6 3,425,592 1.21 0.051700%
7 3,110,655 1.23 0.051700%
8 4,242,923 1.63 0.071700%
9 3,495,697 1.34 0.051700%
10 2,842,851 1.31 0.051700%
11 2,867,711 1.25 0.051700%
12 1,053,909 1.25 0.051700%
13 957,603 1.25 0.051700%
14 2,004,383 1.25 0.051700%
15 1,588,894 1.21 0.051700%
16 1,612,965 1.20 0.051700%
17 1,575,803 1.17 0.051700%
18 1,508,710 1.22 0.101700%
19 1,617,497 1.26 0.051700%
20 2,029,905 1.68 0.071700%
21 1,539,227 1.29 0.101700%
22 1,341,391 1.19 0.051700%
23 952,380 1.40 0.051700%
24 737,244 1.40 0.051700%
25 1,744,662 1.43 0.051700%
26 1,350,470 1.24 0.151700%
27 1,362,485 1.31 0.051700%
28 2,085,139 1.89 0.051700%
29 1,266,267 1.23 0.051700%
30 1,184,722 1.26 0.051700%
31 1,228,385 1.25 0.051700%
32 1,165,991 1.25 0.051700%
33 1,196,488 1.26 0.076700%
34 1,135,288 1.24 0.051700%
35 1,219,895 1.38 0.051700%
36 1,086,335 1.20 0.051700%
37 1,197,952 1.37 0.051700%
38 1,193,506 1.26 0.051700%
39 1,120,864 1.25 0.051700%
40 1,162,075 1.36 0.051700%
41 625,329 1.23 0.051700%
42 423,060 1.23 0.051700%
43 1,244,073 1.41 0.051700%
44 1,000,456 1.23 0.051700%
45 977,569 1.22 0.051700%
46 941,817 1.21 0.051700%
47 1,442,607 1.91 0.051700%
48 1,182,528 1.42 0.101700%
49 926,832 1.24 0.051700%
50 815,690 1.23 0.101700%
51 815,010 1.20 0.101700%
52 756,799 1.21 0.051700%
53 843,023 1.37 0.051700%
54 750,606 1.21 0.051700%
55 786,062 1.28 0.101700%
56 703,215 1.24 0.051700%
57 703,763 1.21 0.101700%
58 736,197 1.34 0.101700%
59 868,085 1.47 0.051700%
60 724,727 1.38 0.101700%
61 644,288 1.25 0.051700%
62 741,124 1.50 0.051700%
63 624,215 1.23 0.051700%
64 675,179 1.30 0.051700%
65 622,906 1.26 0.051700%
66 607,734 1.20 0.051700%
67 688,050 1.37 0.051700%
68 645,139 1.35 0.051700%
69 588,545 1.25 0.121700%
70 726,389 1.42 0.051700%
71 577,684 1.24 0.051700%
72 584,694 1.20 0.051700%
73 608,749 1.33 0.051700%
74 652,424 1.42 0.051700%
75 646,778 1.36 0.051700%
76 588,248 1.27 0.051700%
77 755,141 1.89 0.051700%
78 514,660 1.25 0.051700%
79 559,121 1.37 0.051700%
80 459,090 1.20 0.051700%
81 485,223 1.28 0.051700%
82 453,852 1.21 0.051700%
83 459,672 1.27 0.051700%
84 578,116 1.55 0.101700%
85 607,483 1.55 0.051700%
86 480,156 1.30 0.051700%
87 464,523 1.22 0.051700%
88 462,245 1.26 0.051700%
89 526,059 1.47 0.051700%
90 436,457 1.21 0.051700%
91 509,901 1.39 0.051700%
92 472,973 1.32 0.071700%
93 475,644 1.40 0.051700%
94 415,650 1.20 0.051700%
95 420,794 1.26 0.051700%
96 437,167 1.25 0.051700%
97 393,245 1.20 0.101700%
98 392,074 1.21 0.051700%
99 388,882 1.21 0.051700%
100 396,223 1.25 0.051700%
101 361,530 1.27 0.051700%
102 462,740 1.49 0.051700%
103 451,160 1.54 0.051700%
104 351,396 1.28 0.101700%
105 379,847 1.22 0.051700%
106 360,562 1.31 0.051700%
107 346,514 1.20 0.051700%
108 405,940 1.41 0.051700%
109 342,244 1.23 0.051700%
110 385,531 1.25 0.051700%
111 307,540 1.16 0.051700%
112 326,348 1.19 0.051700%
113 310,273 1.20 0.051700%
114 442,875 1.60 0.051700%
115 303,665 1.20 0.051700%
116 338,800 1.37 0.051700%
117 305,991 1.25 0.051700%
118 193,020 1.33 0.051700%
119 138,073 1.33 0.051700%
120 358,585 1.30 0.101700%
121 296,665 1.25 0.051700%
122 279,031 1.20 0.051700%
123 342,534 1.50 0.051700%
124 296,757 1.26 0.101700%
125 274,671 1.20 0.051700%
126 268,215 1.20 0.051700%
127 279,516 1.26 0.101700%
128 297,913 1.26 0.051700%
129 371,207 1.49 0.051700%
130 266,902 1.20 0.051700%
131 337,902 1.49 0.051700%
132 264,011 1.25 0.051700%
133 252,913 1.20 0.051700%
134 341,359 1.72 0.051700%
135 257,062 1.26 0.051700%
136 269,058 1.25 0.101700%
137 242,975 1.22 0.051700%
138 240,547 1.24 0.051700%
139 320,729 1.55 0.051700%
140 267,789 1.26 0.051700%
141 270,766 1.44 0.051700%
142 255,102 1.25 0.101700%
143 257,914 1.20 0.101700%
144 233,426 1.29 0.051700%
145 227,003 1.28 0.051700%
146 233,406 1.26 0.051700%
147 241,731 1.29 0.101700%
148 236,648 1.33 0.051700%
149 245,058 1.22 0.051700%
150 232,541 1.28 0.051700%
151 216,766 1.32 0.101700%
152 253,659 1.43 0.051700%
153 207,777 1.25 0.051700%
154 232,489 1.36 0.051700%
155 222,574 1.32 0.051700%
156 239,266 1.31 0.051700%
157 200,570 1.20 0.051700%
158 208,189 1.25 0.051700%
159 273,760 1.71 0.101700%
160 209,133 1.22 0.051700%
161 251,307 1.35 0.051700%
162 223,482 1.39 0.051700%
163 193,952 1.21 0.051700%
164 205,130 1.33 0.051700%
165 209,252 1.34 0.051700%
166 219,208 1.44 0.051700%
167 188,447 1.26 0.051700%
168 135,252 1.33 0.051700%
169 67,028 1.33 0.051700%
170 199,127 1.31 0.051700%
171 398,470 2.77 0.051700%
172 181,910 1.25 0.051700%
173 179,197 1.26 0.051700%
174 176,517 1.25 0.051700%
175 162,037 1.20 0.051700%
176 170,829 1.26 0.051700%
177 175,413 1.25 0.051700%
178 173,185 1.31 0.051700%
179 178,554 1.33 0.051700%
180 183,455 1.29 0.051700%
181 167,881 1.20 0.051700%
182 156,524 1.28 0.051700%
183 178,570 1.30 0.101700%
184 178,448 1.38 0.051700%
185 153,390 1.23 0.051700%
186 148,205 1.31 0.051700%
187 156,874 1.34 0.051700%
188 143,319 1.28 0.051700%
189 142,907 1.25 0.051700%
190 150,059 1.28 0.051700%
191 144,379 1.25 0.051700%
192 169,368 1.53 0.051700%
193 149,398 1.27 0.051700%
194 124,927 1.21 0.051700%
195 126,945 1.26 0.051700%
196 133,230 1.37 0.101700%
197 120,560 1.22 0.051700%
198 133,485 1.30 0.051700%
199 164,975 1.60 0.051700%
200 123,427 1.29 0.051700%
201 128,837 1.36 0.051700%
202 144,182 1.46 0.051700%
203 120,463 1.25 0.051700%
204 107,287 1.22 0.051700%
205 109,375 1.25 0.051700%
206 110,414 1.26 0.051700%
207 108,963 1.33 0.051700%
208 110,179 1.27 0.051700%
209 136,701 1.62 0.051700%
210 132,177 1.64 0.051700%
211 98,573 1.26 0.051700%
212 88,654 1.22 0.051700%
213 57,446 1.43 0.051700%
214 40,718 1.43 0.051700%
215 95,289 1.46 0.051700%
216 75,757 1.21 0.051700%
217 76,590 1.30 0.051700%
218 86,541 1.57 0.051700%
219 71,401 1.26 0.051700%
220 83,916 1.54 0.051700%
221 82,065 1.39 0.051700%
222 72,205 1.27 0.051700%
223 73,720 1.32 0.051700%
224 61,822 1.28 0.051700%
225 63,903 1.25 0.051700%
226 58,621 1.24 0.051700%
227 62,255 1.27 0.051700%
228 56,737 1.33 0.051700%
229 51,263 1.59 0.051700%
230 37,901 1.33 0.051700%
----------------------------------------------
$165,175,202 1.38x
==============================================
$ 14,279,554 2.77x
$ 37,901 1.16x
(1) The Underlying Mortgage Loan secured by Hercules Plaza follows the following amortization schedule:
Payments 1-92 are based on a 239-month amortization of principal
Payments 93-152 are based on a 60-month amortization of principal
(2A) The Underlying Mortgage Loans secured by Poly Foam and Poly-Foam International, Inc. are cross-collateralized and
cross-defaulted, respectively.
(2B) The Underlying Mortgage Loans secured by Radisson Inn Harbourwalk and Radisson Suite Hotel are cross-collateralized and
cross-defaulted, respectively.
(2C) The Underlying Mortgage Loans secured by Crystal Mountain Office Park and Lake Pointe Center II are cross-collateralized and
cross-defaulted, respectively.
(2D) The Underlying Mortgage Loans secured by Winder Village Manufactured Housing Community and Russell Village Manufactured
Housing Community are cross-collateralized and cross-defaulted, respectively.
(2E) The Underlying Mortgage Loans secured by Lakedale Apartments and Liberty Apartments are cross-collateralized and
cross-defaulted, respectively.
(2F) The Underlying Mortgage Loans secured by 1137 North 13th Street Apartments and 949-969 North 27th Street are cross-defaulted.
(3) The Underlying Mortgage Loan secured by Wekiva Executive Center follows the following amortization schedule: Payments 1-59 are
based on a 276-month amortization of principal Payments 60-120 are based on a 350-month amortization of principal
(4) In the case of cross-collateralized and/or cross-defaulted Underlying Mortgage Loans, the combined LTV is presented for each
and every related Underlying Mortgage Loan.
(5) At maturity with respect to Balloon Loans or at the ARD in the case of ARD Loans. There can be no assurance that the value of
any particular Mortgaged Real Property will not have declined from the original appraisal value.
(6) U/W DSCR is based on the amount of the monthly payments presented. In the case of cross-collateralized and/or cross-defaulted
Underlying Mortgage Loans, the combined U/W DSCR is presented for each and every related Underlying Mortgage Loan.
(7) Underwritten NCF reflects the Net Cash Flow after U/W Replacement Reserves, U/W LC's and TI's and U/W FF&E.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENGINEERING RESERVES AND RECURRING REPLACEMENT RESERVES
CONTRACTUAL U/W
ENGINEERING RECURRING RECURRING CONTRACTUAL
RESERVE AT REPLACEMENT REPLACEMENT RECURRING
# LOAN NAME ORIGINATION RESERVE RESERVE LC & TI
- --------- ----------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
1 437 Madison Avenue $49,783 $187,271 $187,271 $333,679
2 Valencia Marketplace, Power Center N/A N/A $72,452 N/A
3 Hercules Plaza N/A N/A N/A N/A
4 Alliance GD FH F1 $302,563 $386,000 $386,000 N/A
5 McCandless Towers II N/A N/A $42,814 N/A
6 Alliance GD FH F2 $135,688 $312,750 $312,750 N/A
7 Commons at Sugarhouse N/A N/A $29,010 $24,000
8 Gateway at Randolph Apartments N/A N/A $293,475 N/A
9 Metroplex N/A N/A $58,557 $240,000
10 Palm Plaza Shopping Center N/A $30,000 $52,476 N/A
11 Page Field Commons N/A $39,127 $39,127 N/A
12 POLY FOAM (2A) $17,750 N/A $43,185 N/A
13 POLY-FOAM INTERNATIONAL, INC. (2A) $10,000 N/A $40,787 N/A
14 The Genesis Loan $67,250 $123,500 $123,500 N/A
15 Sterling University Crescent N/A $49,000 $62,951 N/A
16 Oakbrook Apartments $4,563 $60,000 $42,720 N/A
17 One Bulfinch Place $151,788 $16,632 $16,633 N/A
18 Sandhurst Apartments N/A N/A $82,000 N/A
19 Chandler Sunset Plaza N/A $18,933 $18,933 N/A
20 Saddle Brook Apartments $15,063 N/A $119,600 N/A
21 Railway Express Building $42,469 N/A $27,586 N/A
22 Hillcroft Apartments $21,562 $47,808 $48,000 N/A
23 RADISSON INN HARBOURWALK (2B) N/A 4.0% 5.0% N/A
24 RADISSON SUITE HOTEL (2B) N/A 4.0% 5.0% N/A
25 Highland Cove Retirement Community $6,250 N/A $67,500 N/A
26 Regency Warehouse N/A N/A $51,600 $51,600
27 Silverado Ranch Center N/A $2,778 $13,816 N/A
28 Holiday Inn Orlando N/A 4.0% 5.0% N/A
29 Carlton Village Apartments N/A $60,000 $60,000 N/A
30 Glenridge Apartments $265,937 $62,040 $66,220 N/A
31 2200 First Avenue South N/A $3,336 $18,624 $77,040
32 Windmill Apartments $201,500 $65,968 $65,968 N/A
33 Kent Hill Plaza N/A $16,212 $16,207 N/A
34 Cheyenne Crest Apartments $320,000 $58,864 $58,864 N/A
35 Big Kmart - Midwest City N/A N/A $34,736 N/A
36 Westgate Crossing Shopping Center N/A N/A $15,764 N/A
37 Big Kmart - Edmond N/A N/A $14,629 N/A
38 One Cameron Place $29,763 $24,457 $24,457 $232,345
39 Roseland Shopping Center N/A $33,863 $33,863 $31,200
40 Big Kmart - Chicago N/A N/A $27,360 N/A
41 CRYSTAL MOUNTAIN OFFICE PARK (2C) N/A N/A $11,301 N/A
42 LAKE POINTE CENTER II (2C) N/A N/A $8,222 N/A
43 DoubleTree Hotel N/A 3.0% 4.0% N/A
44 Twelve Oaks Shopping Center N/A $16,713 $16,713 N/A
45 Streetsboro Market Square $143,540 N/A $13,541 N/A
46 Ravenswood Apartments $12,500 $63,654 $63,648 N/A
47 Pembroke Office Park N/A $240,000 $67,692 N/A
48 Candlewood Hotel - Sacramento N/A 4.5% 5.0% N/A
49 Royal Jetstar Tech Center N/A N/A $13,895 $18,000
50 North Reading Plaza $5,000 $23,136 $23,138 $26,400
51 Cypress Springs Apartments $6,500 $68,000 $68,000 N/A
52 Sterling University Peaks $1,475 $48,000 $33,600 N/A
53 Kmart - Allen N/A N/A $17,918 N/A
54 Hartville Center N/A N/A $16,409 N/A
55 Pony Express Building N/A N/A $26,600 N/A
56 Willow Pond Apartments $150,000 $108,080 $143,592 N/A
57 Standard Dairy Apartments N/A $22,748 $18,073 N/A
58 Edward's Office Portfolio $76,762 $12,867 $12,867 $36,000
59 Garfield Suites Hotel $2,250 5.0% 5.0% N/A
60 Larry's Market N/A $9,141 $9,141 N/A
61 Big-K Plaza $11,875 N/A $24,351 N/A
62 Granite Retail Portfolio $1,150 $12,456 $12,455 N/A
63 Walnut Creek Apartments $23,463 $69,996 $70,000 N/A
64 Royal Freeport Tech Center N/A N/A $12,075 N/A
65 100 Demarest Drive N/A $11,734 $11,734 N/A
66 Indian Run Village $30,250 N/A $21,712 N/A
67 210 Main Street $1,813 N/A $36,060 N/A
68 Clearbrook Village Apartments $85,394 $44,000 $44,000 N/A
69 Brookdale Shopping Center N/A N/A $12,106 $5,200
70 Courtyard by Marriott Hotel N/A 4.0% 4.0% N/A
71 Hamilton Park Apartments $112,375 $81,500 $81,500 N/A
72 Brookwood Shopping Center $7,938 N/A $19,511 $52,176
73 6329 Glenwood Office Building N/A N/A $12,827 $74,988
74 Landmark Garden Apartments N/A $42,000 $42,000 N/A
75 Applecreek Apartments $291,250 $54,000 $54,000 N/A
76 Plaza At The Pointe Shopping Center $12,875 N/A $12,610 N/A
77 Ramblewood Apartments N/A $53,483 $70,250 N/A
78 Scottsdale Airpark II N/A N/A $5,227 N/A
79 New Market Square Shopping Center $146,875 N/A $49,333 $24,000
80 Maple Leaf Apartments $4,375 $30,120 $30,120 N/A
81 The Shops at Fair Lakes N/A $6,605 $6,605 $24,000
82 Sunpark Apartments N/A $37,800 $37,800 N/A
83 Carol Oaks Apartments $300,000 N/A $61,248 N/A
84 Florida Computer Center N/A $18,420 $18,428 N/A
85 Tonawanda Manor N/A $16,044 $48,000 N/A
86 Woodridge Apartments N/A $50,000 $50,000 N/A
87 Dunwoody Plaza $4,500 N/A $7,721 $22,800
88 Schaumburg Plaza $144,188 N/A $11,000 N/A
89 Whispering Oaks Mobile Home Park N/A N/A $18,600 N/A
90 Harbor Technology Center N/A N/A $13,508 $60,000
91 Stove Works Office Building N/A N/A $8,272 $28,080
92 Holy Cross Professional Center N/A $9,048 $9,049 N/A
93 Augusta Plaza Shopping Center $1,563 $37,596 $37,591 N/A
94 Banana Republic N/A N/A $1,485 N/A
95 Forest Hills Apartments $19,713 $40,000 $40,000 N/A
96 West Marietta Retail Center N/A $3,852 $3,857 N/A
97 Regency Centre Office Complex $1,000 $11,796 $11,792 $45,000
98 Southtowne Center N/A $2,526 $7,536 N/A
99 Pinetree Village Apartments N/A $30,740 $30,740 N/A
100 Weston Shoppes N/A $4,896 $4,890 $27,000
101 Pine Trails Apartments $4,500 $30,000 $30,000 N/A
102 Old County Road N/A $5,479 $5,539 N/A
103 Cambridge Court Retirement Community N/A $13,583 $26,500 N/A
104 Bryn Mawr Suites Apartments $6,250 N/A $31,500 N/A
105 Bruno's Shopping Center N/A N/A $10,260 N/A
106 Laddins Rock N/A $6,000 $6,000 N/A
107 Christine Place Apartments N/A $23,500 $23,500 N/A
108 Best Western Siesta Beach Resort N/A 4.0% 5.0% N/A
109 Richland Hills Apartments N/A $14,070 $50,000 N/A
110 Star Wholesale Florist, Inc. N/A N/A $6,992 N/A
111 Office Depot N/A N/A $4,527 N/A
112 CVS Plaza - East Hartford N/A $1,427 $1,913 N/A
113 CVS Plaza - Queensbury N/A $1,900 $2,501 N/A
114 Warehouse X/Lock-It Lockers $57,138 $13,977 $13,977 N/A
115 Lazy Acres Estates $16,812 $9,096 $9,100 N/A
116 214 Main Street N/A N/A $9,046 N/A
117 Office Depot at Woodhaven Village
Square N/A $2,052 $3,012 N/A
118 WINDER VILLAGE MANUFACTURED HOUSING
COMMUNITY (2D) $23,373 N/A $5,514 N/A
119 RUSSELL VILLAGE MANUFACTURED $5,571 N/A $3,650 N/A
HOUSING COMMUNITY (2D)
120 Northway Plaza Shopping Center $13,175 $14,928 $14,935 N/A
121 Phoenix Park Apartments $31,063 $23,750 $23,750 N/A
122 Eckerd's Drug Store - S. Main N/A $663 $1,636 N/A
123 Chabot Office Plaza N/A N/A $4,709 $38,150
124 Middlefield Market Square Shopping
Center N/A N/A $3,565 N/A
125 Eckerd's Drug Store - N. Main N/A $647 $1,636 N/A
126 Gentry Plaza N/A $4,542 $6,196 N/A
127 The Meadows Apartments $875 $30,636 $30,624 N/A
128 Miggy's Mall Shopping Center N/A N/A $11,016 N/A
129 Colony Square Apartments $41,094 $49,140 $55,200 N/A
130 Eckerd's Drug Store - Kingston $3,125 $550 $1,091 N/A
131 Pueblo Point Ace Hardware N/A N/A $3,825 N/A
132 Five Star Business Park $17,750 N/A $9,021 N/A
133 Eckerd's Drug Store - Half Moon N/A $581 $1,636 N/A
134 Oaks Apartments $15,880 $41,100 $47,950 N/A
135 New England Place Apartments N/A N/A $20,400 N/A
136 1025 East Maple Office Building N/A $4,080 $4,080 $21,000
137 Jaffe Eye Office Building N/A $4,836 $4,833 N/A
138 Calder Square, Phase II Apartments N/A $18,837 $20,000 N/A
139 North Mall $2,250 N/A $5,112 N/A
140 Wekiva Executive Center N/A N/A $15,300 $18,000
141 The Kirkland Loan N/A $24,000 $24,000 N/A
142 Office Max - Northwood N/A N/A $3,525 N/A
143 Office Max - Alexandria N/A N/A $3,525 N/A
144 Foxpoint Commons $8,375 N/A $8,253 N/A
145 Continental Terrace Apartments $1,875 N/A $19,500 N/A
146 Cheyenne Mountain Center $2,500 $1,005 $3,000 N/A
147 Circle K Plaza N/A $3,084 $3,085 N/A
148 Flamingo West Apartments $625 N/A $18,000 N/A
149 Big K Store $14,000 $18,073 $17,768 $33,996
150 St. Agnes Apartments N/A N/A $15,800 N/A
151 Richfield Court Apartments N/A $27,360 $34,544 N/A
152 Peconic Mini Storage N/A $744 $6,075 N/A
153 Heritage Estates Manufactured
Housing Community N/A $10,400 $10,400 N/A
154 Academy Apartments $13,375 $20,000 $20,000 N/A
155 North By Northeast II Shoppes N/A $1,836 $1,836 $13,044
156 Warehouse II/Lock-It Lockers $39,544 $10,714 $10,714 N/A
157 Mission Hill Apartments $24,125 $9,895 $9,895 N/A
158 Boston Square Shopping Center $6,250 N/A $5,779 $19,260
159 Gaithersburg Shopping Center N/A $2,052 $2,054 N/A
160 Iteq Building N/A N/A $5,602 $50,012
161 Coliseum Self Storage N/A N/A $29,950 N/A
162 Centre Square Apartments N/A N/A $13,000 N/A
163 Emerald Lake Apartments $176,643 $13,500 $13,500 N/A
164 The Sun Prairie Apartments N/A $23,652 $23,650 N/A
165 7th Street Grocery N/A $1,555 $2,120 N/A
166 Eagle's Nest Office Building N/A N/A $7,366 N/A
167 New Augusta Shoppes N/A $2,340 $2,340 $12,276
168 LAKEDALE APARTMENTS (2E) $108,850 $20,000 $20,000 N/A
169 LIBERTY APARTMENTS (2E) $13,038 $12,500 $12,500 N/A
170 Sunshine Care Homes N/A N/A $6,000 N/A
171 1-9 Flatbush Avenue $6,563 N/A $2,240 N/A
172 Pathmark Store No. 550 N/A N/A $4,500 N/A
173 Kmart Plaza - Minot $13,750 $35,087 $20,792 N/A
174 Villa Del Rio Apartments $5,250 $27,000 $27,000 N/A
175 Winchester Arms & Fox Chase
Apartments N/A $15,000 $15,000 N/A
176 Old Orchard II Apartments N/A N/A $18,864 N/A
177 55-65 Merrick Road N/A N/A $2,434 N/A
178 5055 California Avenue N/A N/A $4,836 $33,299
179 Castle Store & Lock $16,250 $913 $9,942 N/A
180 The Monterey/Sherbrooke Lean $15,909 $22,500 $22,500 N/A
181 Arctic Office Building N/A N/A $4,912 N/A
182 Lockheed Martin Building N/A $9,372 $9,363 N/A
183 Renton Highlands Center N/A $1,968 $1,964 N/A
184 Lansing Square Apartments N/A $13,750 $13,750 N/A
185 CVS #0742-01 $625 N/A $960 N/A
186 Pinewood Village Apartments N/A $17,604 $17,600 N/A
187 Midway Commercial Building N/A N/A $9,836 N/A
188 Jersey Street Apartments $82,875 $10,500 $12,275 N/A
189 Preston Office Park $2,188 N/A $4,713 N/A
190 Fairmont Oaks Apartments $15,281 $15,000 $15,000 N/A
191 Premier Plaza Shopping Center N/A N/A $2,594 N/A
192 4404-4418 Walnut Street $23,750 $13,000 $15,600 N/A
193 Cumberland Technical Center N/A $8,605 $8,467 $15,360
194 Orchard Park Apartments $6,888 $14,500 $14,500 N/A
195 Quarry Ridge Apartments $8,000 $12,000 $12,000 N/A
196 Stoney Creek Apartments N/A $7,464 $10,500 N/A
197 Plaza Apartments N/A $10,000 $10,000 N/A
198 Gordon Portfolio N/A $13,517 $14,303 N/A
199 Warehouse I/Lock-It Lockers $54,294 $8,201 $8,201 N/A
200 Park City Plaza $3,500 N/A $5,442 N/A
201 Sunny Townhomes $31,250 N/A $12,150 N/A
202 Town & Country Shopping Center $5,888 N/A $15,647 N/A
203 The Majestic Building N/A N/A $3,458 N/A
204 Royal Park Apartments $41,738 $11,219 $11,219 N/A
205 Greensburg Plaza $1,000 N/A $3,520 $18,000
206 Wilson Heights Apartments $5,938 $9,000 $9,000 N/A
207 Northway Court Shopping Center $36,300 $3,792 $3,782 $11,844
208 Goodwill Retail Center $250 N/A $2,985 N/A
209 Warehouse IV/Lock-It Lockers N/A $10,328 $10,328 N/A
210 Warehouse IX/Lock-It Lockers N/A $8,626 $8,626 N/A
211 Morello Building $3,775 N/A $2,325 N/A
212 Town North Villa Apartments N/A $8,000 $8,000 N/A
213 1137 NORTH 13TH STREET APARTMENTS
(2F) N/A N/A $6,750 N/A
214 949-969 NORTH 27TH STREET (2F) $1,265 N/A $3,750 N/A
215 Summit Plaza N/A N/A $2,949 N/A
216 Turney Square Apartments $8,200 $8,000 $8,000 N/A
217 Lake Street Apartments N/A $5,500 $5,500 N/A
218 Atwood & Barker Apartments $313 $8,750 $8,750 N/A
219 162 Myrtle Avenue $12,681 $2,395 $3,115 N/A
220 Summit Heights Apartments $24,375 $9,000 $9,000 N/A
221 40 Scitico Road N/A N/A $7,254 $15,652
222 Sunnyvale Trailer Park N/A N/A $3,003 N/A
223 Woodhaven Village Square N/A N/A N/A N/A
224 St. John's Office Building $11,625 N/A $1,655 N/A
225 Southlake Center N/A N/A $1,988 N/A
226 Country Villa Apartments $1,250 $10,000 $10,000 N/A
227 Coach Light Apartments $29,375 $10,000 $10,000 N/A
228 4425 South 87th Street $625 N/A $4,000 N/A
229 Cosmos Apartments N/A N/A $3,000 N/A
230 North Gate Apartments N/A N/A $3,750 N/A
<CAPTION>
Tax &
U/W Insurance
# LC & TI Escrows
- ------- -------
<S> <C> <C>
1 $1,127,076 Both
2 $150,030 None
3 N/A None
4 N/A Both
5 N/A Tax
6 N/A Both
7 $125,813 Both
8 N/A None
9 $482,372 Both
10 $156,315 Tax
11 $115,225 None
12 $45,454 Tax
13 $39,083 None
14 N/A Both
15 N/A Tax
16 N/A None
17 $27,045 Both
18 N/A None
19 $75,117 Both
20 N/A None
21 $149,642 Both
22 N/A Both
23 N/A Both
24 N/A Both
25 N/A None
26 $85,776 Both
27 $21,467 Both
28 N/A Both
29 N/A None
30 N/A Both
31 $145,562 Both
32 N/A Both
33 $84,125 Both
34 N/A Both
35 N/A None
36 $60,979 Both
37 N/A None
38 $110,879 Both
39 $78,949 Tax
40 N/A None
41 $63,881 Tax
42 $37,729 Tax
43 N/A Both
44 $47,277 Both
45 $43,420 Tax
46 N/A Both
47 $295,077 Both
48 N/A Both
49 $81,686 Both
50 $6,501 Both
51 N/A Both
52 N/A Tax
53 N/A None
54 $29,244 Both
55 $33,839 Both
56 N/A Both
57 $9,493 Both
58 $80,231 Both
59 N/A Both
60 $31,169 None
61 $27,056 Both
62 $67,352 Both
63 N/A Both
64 $59,821 Both
65 $25,049 Tax
66 N/A Both
67 N/A None
68 N/A Both
69 $17,024 Both
70 N/A Both
71 N/A Both
72 $43,229 Both
73 $103,629 Both
74 N/A Both
75 N/A Both
76 $55,287 Both
77 N/A Both
78 $28,603 Both
79 $79,553 Both
80 N/A Both
81 $20,381 Tax
82 N/A Both
83 N/A Both
84 $55,784 Both
85 N/A Both
86 N/A Both
87 $27,941 Both
88 $55,000 Both
89 N/A Tax
90 $63,837 Both
91 $55,953 Both
92 $52,341 Both
93 $47,240 Both
94 $407 Both
95 N/A Both
96 $1,359 Both
97 $62,126 Both
98 $19,350 Tax
99 N/A None
100 $28,179 Both
101 N/A Both
102 $22,685 Both
103 N/A Both
104 N/A Both
105 $6,893 None
106 N/A Both
107 N/A Both
108 N/A Both
109 N/A Both
110 $24,238 Both
111 N/A None
112 $5,192 Tax
113 $9,678 Both
114 N/A Both
115 N/A Both
116 N/A None
117 N/A Both
118 N/A Both
119 N/A Both
120 $33,677 Both
121 N/A Both
122 N/A None
123 $55,230 Both
124 $9,346 Both
125 N/A None
126 $24,439 Both
127 N/A Both
128 $41,932 Both
129 N/A Both
130 N/A None
131 $17,886 Tax
132 $27,298 Both
133 N/A None
134 N/A Both
135 N/A Both
136 $25,793 Both
137 $15,969 Both
138 N/A Both
139 $31,079 Tax
140 $54,773 Both
141 N/A Both
142 N/A Both
143 N/A Both
144 $51,000 Both
145 N/A Both
146 $14,052 Both
147 $14,482 Both
148 N/A Both
149 $17,581 None
150 N/A Both
151 N/A Both
152 N/A Both
153 N/A Both
154 N/A Both
155 $13,041 Both
156 N/A Both
157 N/A Both
158 $26,168 Both
159 $6,800 Both
160 $18,719 Both
161 N/A Both
162 N/A Both
163 N/A Both
164 N/A Both
165 $8,784 Both
166 $29,463 Both
167 $13,366 Both
168 N/A Both
169 N/A Both
170 N/A Both
171 $12,050 Both
172 $12,208 Tax
173 $2,450 Both
174 N/A Both
175 N/A Both
176 N/A Both
177 $14,320 Both
178 $26,638 Both
179 N/A Both
180 N/A Both
181 $23,929 Both
182 $5,614 None
183 $7,315 Both
184 N/A Both
185 N/A Both
186 N/A Both
187 $33,542 Both
188 N/A Both
189 $17,751 Both
190 N/A Both
191 $11,240 Both
192 N/A Both
193 $12,742 Both
194 N/A Both
195 N/A Both
196 N/A Both
197 N/A Both
198 N/A Both
199 N/A Both
200 $13,218 Both
201 N/A Both
202 $26,375 Both
203 $16,563 Both
204 N/A Both
205 $13,200 Both
206 N/A Both
207 $11,842 Both
208 $14,720 Both
209 N/A Both
210 N/A Both
211 $4,810 Both
212 N/A Both
213 N/A Both
214 N/A Both
215 $13,291 Both
216 N/A Both
217 N/A Both
218 N/A Both
219 N/A Both
220 N/A Both
221 $12,000 Both
222 N/A Both
223 N/A Both
224 $8,275 Both
225 $6,530 Both
226 N/A Both
227 N/A Both
228 $7,168 Both
229 N/A Both
230 N/A Both
(2A) The Underlying Mortgage Loans secured by Poly Foam and Poly-Foam International, Inc. are cross-collateralized and
cross-defaulted, respectively.
(2B) The Underlying Mortgage Loans secured by Radisson Inn Harbourwalk and Radisson Suite Hotel are cross-collateralized and
cross-defaulted, respectively.
(2C) The Underlying Mortgage Loans secured by Crystal Mountain Office Park and Lake Pointe Center II are cross-collateralized and
cross-defaulted, respectively.
(2D) The Underlying Mortgage Loans secured by Winder Village Manufactured Housing Community and Russell Village Manufactured
Housing Community are cross-collateralized and cross-defaulted, respectively.
(2E) The Underlying Mortgage Loans secured by Lakedale Apartments and Liberty Apartments are cross-collateralized and
cross-defaulted, respectively.
(2F) The Underlying Mortgage Loans secured by 1137 North 13th Street Apartments and 949-969 North 27th Street are cross-defaulted.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MAJOR TENANTS OF THE COMMERCIAL PROPERTIES (1)
# PROPERTY NAME PROPERTY TYPE SQ.FT.
- ------------- ------------- ------
<S> <C> <C> <C>
1 437 Madison Avenue Office 782,921
2 Valencia Marketplace, Power Center Retail 528,019
3 Hercules Plaza Office 532,974
5 McCandless Towers II Office 214,080
7 Commons at Sugarhouse Retail 193,397
9 Metroplex Office 388,608
10 Palm Plaza Shopping Center Retail 342,338
11 Page Field Commons Retail 264,399
12 Poly Foam (2A) Industrial 431,852
13 Poly-Foam International, Inc.
(2A) Industrial 407,872
17 One Bulfinch Place Office 82,726
19 Chandler Sunset Plaza Retail 126,218
21 Railway Express Building Office 108,606
26 Regency Warehouse Industrial 344,000
27 Silverado Ranch Center Retail 92,163
31 2200 First Avenue South Office 93,119
33 Kent Hill Plaza Retail 108,045
35 Big Kmart - Midwest City Retail 99,433
36 Westgate Crossing Shopping Center Retail 157,247
37 Big Kmart - Edmond Retail 97,527
38 One Cameron Place Office 112,225
39 Roseland Shopping Center Retail 199,193
40 Big Kmart - Chicago Retail 109,441
41 Crystal Mountain Office Park (2C) Office 56,507
42 Lake Pointe Center II (2C) Office 41,112
44 Twelve Oaks Shopping Center Retail 105,529
45 Streetsboro Market Square Retail 135,410
47 Pembroke Office Park Office 294,896
49 Royal Jetstar Tech Center Office 92,630
50 North Reading Plaza Retail 153,935
53 Kmart - Allen Retail 119,000
54 Hartville Center Retail 109,396
55 Pony Express Building Industrial 410,000
58a 200 Newport Center Drive Office 25,608
58b 359 San Miguel Drive Office 19,010
58c 363 San Miguel Drive Office 6,849
60 Larry's Market Retail 60,939
61 Big-K Plaza Retail 162,343
62a Campbell Park Shopping Center Retail 33,740
62b Frankford Crest Shopping Center Retail 13,334
62c Midway Village Shopping Center Retail 16,499
62d Campbell Square Shopping Center Retail 12,540
64 Royal Freeport Tech Center Mixed Use 80,500
65 100 Demarest Drive Industrial 117,340
67 210 Main Street Office 87,597
69 Brookdale Shopping Center Retail 80,707
72 Brookwood Shopping Center Retail 130,072
73 6329 Glenwood Office Building Office 64,134
76 Plaza At The Pointe Shopping
Center Retail 84,344
78 Scottsdale Airpark II Mixed Use 52,271
79 New Market Square Shopping Center Retail 197,058
81 The Shops at Fair Lakes Retail 22,015
84 Florida Computer Center Retail 92,139
87 Dunwoody Plaza Retail 51,473
88 Schaumburg Plaza Mixed Use 66,526
90 Harbor Technology Center Office 61,400
91 Stove Works Office Building Office 55,146
92 Holy Cross Professional Center Office 36,194
93 Augusta Plaza Shopping Center Retail 150,456
94 Banana Republic Retail 14,853
96 West Marietta Retail Center Retail 25,713
97 Regency Centre Office Complex Office 53,600
98 Southtowne Center Retail 50,239
100 Weston Shoppes Retail 32,600
102 Old County Road Industrial 36,928
105 Bruno's Shopping Center Retail 68,331
110 Star Wholesale Florist, Inc. Retail 69,917
111 Office Depot Retail 30,177
112 CVS Plaza - East Hartford Retail 19,125
113 CVS Plaza - Queensbury Retail 25,008
116 214 Main Street Office 36,184
117 Office Depot at Woodhaven Village
Square Retail 30,000
120 Northway Plaza Shopping Center Retail 42,670
122 Eckerd's Drug Store - S. Main Retail 10,908
123 Chabot Office Plaza Office 23,322
124 Middlefield Market Square
Shopping Center Retail 35,650
125 Eckerd's Drug Store - N. Main Retail 10,908
126 Gentry Plaza Retail 41,309
128 Miggy's Mall Shopping Center Retail 55,908
130 Eckerd's Drug Store - Kingston Retail 10,908
131 Pueblo Point Ace Hardware Retail 25,500
132 Five Star Business Park Industrial 57,902
133 Eckerd's Drug Store - Half Moon Retail 11,397
136 1025 East Maple Office Building Office 18,544
137 Jaffe Eye Office Building Office 19,332
139 North Mall Retail 25,560
140 Wekiva Executive Center Office 44,400
142 Office Max - Northwood Retail 23,500
143 Office Max - Alexandria Retail 23,500
144 Foxpoint Commons Mixed Use 55,018
146 Cheyenne Mountain Center Retail 20,002
147 Circle K Plaza Retail 20,566
149 Big K Store Retail 68,337
155 North By Northeast II Shoppes Retail 12,240
158 Boston Square Shopping Center Retail 38,525
159 Gaithersburg Shopping Center Retail 13,692
160 Iteq Building Office 37,438
165 7th Street Grocery Retail 14,133
166 Eagle's Nest Office Building Office 29,463
167 New Augusta Shoppes Retail 15,600
171 1-9 Flatbush Avenue Retail 11,200
172 Pathmark Store No. 550 Retail 30,000
173 Kmart Plaza - Minot Retail 113,550
177 55-65 Merrick Road Retail 14,319
178 5055 California Avenue Office 26,639
181 Arctic Office Building Office 25,825
182 Lockheed Martin Building Industrial 62,419
183 Renton Highlands Center Retail 13,095
185 CVS #0742-01 Retail 9,400
187 Midway Commercial Building Mixed Use 65,573
189 Preston Office Park Mixed Use 21,915
191 Premier Plaza Shopping Center Retail 17,292
193 Cumberland Technical Center Retail 22,885
200 Park City Plaza Retail 20,335
202 Town & Country Shopping Center Retail 62,586
203 The Majestic Building Mixed Use 17,289
205 Greensburg Plaza Retail 17,600
207 Northway Court Shopping Center Retail 17,052
208 Goodwill Retail Center Retail 19,900
211 Morello Building Industrial 16,030
215 Summit Plaza Office 14,753
221 40 Scitico Road Industrial 48,000
223 Woodhaven Village Square Retail 5,000
224 St. John's Office Building Mixed Use 8,275
225 Southlake Center Retail 13,059
228 4425 South 87th Street Mixed Use 20,000
<CAPTION>
Major Tenant # 1 Major Tenant # 1 Major Tenant # 1
# Name Sq. Ft. Lease Expiration Date
- ---- ------- ---------------------
<S> <C> <C> <C>
1 Omnicom Group, Inc. 316,995 12/31/10
2 Wal-Mart 149,429 10/25/16
3 Hercules, Inc. 532,974 5/31/13
5 Network Associates, Inc. 208,368 3/31/13
7 Barnes & Noble 26,702 11/1/13
9 L.A. Care 100,966 4/1/01
10 Kmart (Ground Lease) 86,479 11/30/17
11 Best Buy 45,745 1/31/15
12 Poly-Foam International 143,400 3/31/09
13 GMH Enterprises 181,350 4/30/11
17 Suffolk County Dist. Attorney 54,091 12/6/13
19 Cort Furniture 37,052 1/15/15
21 Amtrak 22,704 12/31/06
26 Regency Warehousing & Distribution, Inc. 258,096 12/8/14
27 Albertson's 57,949 4/24/20
31 Cobalt Group 76,073 12/31/05
33 Fabri-Centers of America, Inc. 18,067 10/31/02
35 Kmart 99,433 1/31/24
36 Toys R Us 48,770 1/31/11
37 Kmart 97,527 1/31/24
38 Department of Protective Services - State of Texas 68,883 8/31/03
39 AMES-#2217 78,823 10/31/08
40 Kmart 109,441 6/28/20
41 Collective Technologies/PSA 30,295 6/13/05
42 EVSX, Inc. 26,428 8/31/03
44 Publix Super Market #05 47,955 4/30/15
45 Giant Eagle, Inc. 49,109 9/30/15
47 N/A N/A N/A
49 e-talk corporation 45,000 2/28/05
50 Wal-Mart 105,855 9/30/07
53 Kmart of Texas L.P. 119,000 9/1/25
54 GE 64,745 2/28/20
55 Pony Express 230,000 12/30/14
58a Edwards Theatres Management 8,812 6/30/05
58b Vintage Senior Housing, LLC 2,526 12/31/01
58c Gerald Phillips 3,732 8/31/05
60 Larry's Market 60,939 8/30/15
61 Kmart Corp. 87,407 3/31/05
62a Firestone Tire 5,729 1/31/03
62b Fit Health Club 6,903 6/30/04
62c Firestone Tire 5,729 2/28/08
62d Smokin Tom's Bar-B-Q 3,700 6/30/01
64 Flowserve Corporation 24,188 12/17/08
65 Zanders 64,000 5/31/05
67 Summit Bank 87,597 12/31/11
69 Nash Finch 60,000 5/25/19
72 Hobby Lobby 66,416 5/31/05
73 Employers Reinsurance Corp. 28,737 12/31/03
76 VG Supermarket 33,413 11/1/09
78 N/A N/A N/A
79 Kmart 89,815 1/1/07
81 The Blue Iguana 3,977 9/9/05
84 Florida Computer School 30,000 7/1/09
87 Harry's Farmers Market 20,281 5/1/09
88 N/A N/A N/A
90 MGC Communications 9,784 11/30/02
91 Xceed, Inc. 15,200 1/1/05
92 Sports & Orthopedic Therapy 3,689 7/31/07
93 Kmart 85,808 8/31/17
94 Banana Republic 14,853 7/31/14
96 Staples 24,049 9/24/14
97 N/A N/A N/A
98 Petsmart 25,239 2/28/15
100 Health Clubs of America 7,200 7/31/06
102 B&H Eng. 13,564 12/31/15
105 Bruno's, Inc. 60,000 12/21/14
110 Michaels Stores, Inc. 69,917 10/31/11
111 Office Depot 30,177 3/31/15
112 CVS #1089 10,125 1/31/20
113 CVS #419 10,125 1/13/18
116 Summit Bank 36,184 12/31/11
117 Office Depot, Inc. 30,000 12/31/14
120 Murray's Discount Auto Stores 8,000 6/30/08
122 Eckerds 10,908 5/13/19
123 Purple Tie.com, Inc. 17,277 9/30/02
124 Tractor Supply Company 19,050 4/12/13
125 Eckerds 10,908 3/31/19
126 Office Depot 25,434 6/30/14
128 Great Valu 25,000 12/31/17
130 Eckerd 10,908 6/14/20
131 ACE Hardware 25,500 12/31/15
132 Morris Hall Mailing Service 7,091 MTM
133 Eckerds 11,397 3/31/09
136 Coomes Dudek, Inc. 7,089 1/31/10
137 Jaffe Eye Institute 7,473 4/30/12
139 Stevens Appliance 5,448 3/31/01
140 State of Florida 17,600 3/31/02
142 Office Max #1053 23,500 1/31/20
143 Office Max #1152 23,500 1/31/21
144 N/A N/A N/A
146 PetCo Animal Supplies Inc #9 15,000 4/30/14
147 Smile Dental Center 3,312 1/31/05
149 K-Mart #7517 68,337 3/31/07
155 Knead Bread, LLC 3,960 10/31/04
158 Rego's Hunt Road Market 15,000 2/28/10
159 Merchant's Tire 6,264 8/23/19
160 Iteq Storage Systems, Inc. 10,514 4/30/01
165 Hollywood Video 6,000 3/31/14
166 Best MSO 11,657 9/30/02
167 Hollywood Entertainment Corp 4,800 11/17/09
171 Fulton Food Court 2,400 5/7/09
172 Pathmark 30,000 2/28/12
173 Kmart Corporation 108,000 7/1/02
177 Gymbore 3,143 8/1/08
178 KAISER Foundation Health Plan 13,955 3/31/02
181 Schlumberger Technology Corporation 14,162 1/1/04
182 Lockheed Martin 62,419 3/31/06
183 Food Mart 3,240 5/8/07
185 CVS #742 Scarsdale 9,400 1/1/20
187 N/A N/A N/A
189 N/A N/A N/A
191 Rama Llama Comic 3,142 9/30/04
193 Cumberland Casualty 8,775 5/31/09
200 Southland Corp. (7-Eleven) 2,738 5/31/02
202 Winn Dixie #133 29,371 10/28/07
203 Partners in Housing 2,125 10/30/01
205 Fashion Bug 9,600 1/1/04
207 HealthEast Med Home, Ltd. 5,834 7/14/01
208 Goodwill Industries 10,000 5/31/04
211 Gator Fire 8,000 9/30/04
215 Dr. Brown 5,255 9/30/00
221 Carbon Products 18,000 10/31/02
223 Applebee's of Michigan, Inc. 5,000 11/30/19
224 HPI Printing 2,675 3/31/05
225 Liberty Cleaners 2,379 6/8/06
228 Intestate Electric 12,800 6/30/02
<CAPTION>
Major Tenant # 3 Major Tenant # 3 Major Tenant # 3
# Name Sq. Ft. Lease Expiration Date
- ---- ------- ---------------------
<S> <C> <C> <C>
1 N/A N/A N/A
2 N/A N/A N/A
3 N/A N/A N/A
5 N/A N/A N/A
7 Bed, Bath & Beyond, Inc. 21,127 12/1/09
9 N/A N/A N/A
10 N/A N/A N/A
11 Petsmart, Inc. 26,040 1/31/15
12 Poly-Foam International, Inc. (Style Crest) 76,464 4/30/14
13 Poly-Foam International, Inc. (Style Crest) 100,272 4/30/09
17 N/A N/A N/A
19 Chandler Library 21,475 1/31/20
21 Cambrian Communications 6,769 5/7/10
26 N/A N/A N/A
27 Blockbuster 4,800 7/31/10
31 N/A N/A N/A
33 N/A N/A N/A
35 N/A N/A N/A
36 The Gap Inc. 25,000 5/31/05
37 N/A N/A N/A
38 N/A N/A N/A
39 J.C. Penney Company 34,471 9/1/04
40 N/A N/A N/A
41 N/A N/A N/A
42 N/A N/A N/A
44 Pier 1 Imports Store #31 9,550 12/31/04
45 CVS 8,450 10/31/05
47 N/A N/A N/A
49 Rockwell Collins, Inc. 13,000 2/28/05
50 N/A N/A N/A
53 N/A N/A N/A
54 United States Postal Service 6,463 2/13/19
55 N/A N/A N/A
58a N/A N/A N/A
58b N/A N/A N/A
58c Gary Hamilton 1,067 6/30/05
60 N/A N/A N/A
61 N/A N/A N/A
62a Desperado's Mexican Restaurant 4,200 MTM
62b Hill Park Cleaners 2,200 6/8/02
62c Uncle Chow's 1,820 6/30/01
62d Quizno's 2,080 6/30/06
64 Electronic Data Systems 15,525 1/12/04
65 N/A N/A N/A
67 N/A N/A N/A
69 N/A N/A N/A
72 N/A N/A N/A
73 Bates Turner, LLC 12,819 10/31/03
76 Blockbuster Video 8,640 1/1/06
78 N/A N/A N/A
79 N/A N/A N/A
81 Tosco Corp. (dba Mobil) 2,273 9/30/03
84 New Life Assembly Church 10,594 9/30/04
87 N/A N/A N/A
88 N/A N/A N/A
90 N/A N/A N/A
91 Restore Therapeutics 6,270 4/1/03
92 Friedland & Singh, M.D. 2,707 10/31/09
93 N/A N/A N/A
94 N/A N/A N/A
96 N/A N/A N/A
97 N/A N/A N/A
98 N/A N/A N/A
100 Blockbuster Video 5,000 1/31/06
102 SamTrans/Peninsula Corridor 9,800 5/23/01
105 N/A N/A N/A
110 N/A N/A N/A
111 N/A N/A N/A
112 Soap Box 1210 C 3,150 2/27/10
113 Rentway 3,135 9/27/04
116 N/A N/A N/A
117 N/A N/A N/A
120 World of Floors 6,150 10/31/04
122 N/A N/A N/A
123 Corporate America Family Credit Union 2,445 7/31/04
124 Sherwin Williams 4,500 7/26/03
125 N/A N/A N/A
126 Arhaus Furniture 7,500 11/30/03
128 N/A N/A N/A
130 N/A N/A N/A
131 N/A N/A N/A
132 N/A N/A N/A
133 N/A N/A N/A
136 N/A N/A N/A
137 Jewish Family Services 2,896 2/28/01
139 Southampton Hospital (Primary) 3,804 3/31/01
140 Secret Products 3,000 7/31/01
142 N/A N/A N/A
143 N/A N/A N/A
144 N/A N/A N/A
146 N/A N/A N/A
147 Orthodonic Center 2,270 12/31/02
149 N/A N/A N/A
155 Omnipoint Communication 1,800 10/31/04
158 N/A N/A N/A
159 CitiFinancial 1,555 9/30/04
160 N/A N/A N/A
165 Country Wide 2,416 7/31/04
166 N/A N/A N/A
167 Neighborhood Dry Cleaning Co 3,000 9/30/04
171 Dr. Niderman 1,100 3/19/01
172 N/A N/A N/A
173 N/A N/A N/A
177 N/A N/A N/A
178 Washington Mutual Bank 2,978 9/23/03
181 Meridian Management, Inc. 1,721 12/1/04
182 N/A N/A N/A
183 No Bull Saloon (Flight's Pub) 2,343 2/21/06
185 N/A N/A N/A
187 N/A N/A N/A
189 N/A N/A N/A
191 Accident & Injury 1,900 6/30/01
193 Cumberland Mgt 1,575 5/31/09
200 American TKA Martial Arts, Inc. 2,182 9/30/04
202 CVS #7294-01 (REVCO) 8,450 8/31/04
203 Zeeso's 1,750 7/31/03
205 Cellular One 2,800 7/1/04
207 Prometheus Communications, Inc 2,392 3/31/01
208 Mt. Moka 1,200 5/31/05
211 Extreme Hummer, LLC 2,745 8/8/02
215 Dr. Nelson 1,710 6/30/04
221 Star Steel 12,000 8/30/02
223 N/A N/A N/A
224 Midwest Diversified 1,225 4/30/02
225 Chateau Le Pat 2,049 10/31/00
228 J10 2,400 3/31/03
(1) Only those tenants which occupy 10% or more of the property area.
(2a) The Underlying Mortgage Loans secured by Poly Foam and Poly-Foam International, Inc. are cross-collateralized and
cross-defaulted, respectively.
(2C) The Underlying Mortgage Loans secured by Crystal Mountain Office Park and Lake Pointe Center II are cross-collateralized and
cross-defaulted, respectively.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MULTIFAMILY SCHEDULE
Utilities Subject Subject Subject
Tenant # Studio Studio Studio
# Property Name Pays Elevators Units Avg. Rent Max. Rent
- ------------- ---- --------- ----- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
4a Seven Gables Apartments Electric 0 N/A N/A N/A
4b High Ridge Apartments Electric 0 N/A N/A N/A
6a Timbercreek Apartments Electric 0 125 $385 $460
6b Deering Manor Apartments Electric 0 N/A N/A N/A
8 Gateway at Randolph Apartments Electric 0 N/A N/A N/A
14a Autumn Ridge Apartments Electric/Gas/Water/Sewer 0 N/A N/A N/A
14b Summer Glen Apartments Electric 0 40 $414 $415
15 Sterling University Crescent Electric 0 N/A N/A N/A
16 Oakbrook Apartments Electric 0 30 $552 $610
18 Sandhurst Apartments Electric/Gas 0 N/A N/A N/A
20 Saddle Brook Apartments Electric 0 N/A N/A N/A
22 Hillcroft Apartments Electric 0 4 $735 $745
29 Carlton Village Apartments Electric/Water/Sewer 0 64 $594 $665
30 Glenridge Apartments Electric/Gas 0 N/A N/A N/A
32 Windmill Apartments Electric/Gas 0 N/A N/A N/A
34 Cheyenne Crest Apartments Electric/Gas 0 N/A N/A N/A
46 Ravenswood Apartments Electric/Sewer 0 N/A N/A N/A
51 Cypress Springs Apartments Electric/Gas 0 92 $474 $535
52 Sterling University Peaks Electric 0 N/A N/A N/A
56 Willow Pond Apartments None 0 72 $394 $675
57 Standard Dairy Apartments Electric 1 9 $739 $1,250
63 Walnut Creek Apartments Electric/Gas 0 N/A N/A N/A
68 Clearbrook Village Apartments Electric 0 N/A N/A N/A
71 Hamilton Park Apartments Electric 0 N/A N/A N/A
74 Landmark Garden Apartments Electric 0 N/A N/A N/A
75 Applecreek Apartments None 0 N/A N/A N/A
77 Ramblewood Apartments None 0 N/A N/A N/A
80 Maple Leaf Apartments Electric/Gas 0 N/A N/A N/A
82 Sunpark Apartments Electric 0 N/A N/A N/A
83 Carol Oaks Apartments Electric 0 36 $365 $365
86 Woodridge Apartments Electric 0 N/A N/A N/A
95 Forest Hills Apartments Electric 0 80 $432 $465
99 Pinetree Village Apartments Electric 0 N/A N/A N/A
101 Pine Trails Apartments Electric 0 N/A N/A N/A
104 Bryn Mawr Suites Apartments Electric 2 22 $414 $440
106 Laddins Rock Electric, Gas 1 N/A N/A N/A
107 Christine Place Apartments Electric/Gas/ Water/Sewer 2 N/A N/A N/A
109 Richland Hills Apartments Electric 0 N/A N/A N/A
121 Phoenix Park Apartments Electric 0 N/A N/A N/A
127 The Meadows Apartments Electric 0 N/A N/A N/A
129 Colony Square Apartments Electric/Gas 0 N/A N/A N/A
134 Oaks Apartments Electric 0 N/A N/A N/A
135 New England Place Apartments Electric 0 N/A N/A N/A
138 Calder Square, Phase II Apartments Electric 0 N/A N/A N/A
141a Lakeview Arms Apartments Electric 0 N/A N/A N/A
141b Jackson Square Apartments Electric 0 N/A N/A N/A
145 Continental Terrace Apartments Electric 0 N/A N/A N/A
148 Flamingo West Apartments None 0 N/A N/A N/A
150 St. Agnes Apartments Electric 1 22 $414 $520
151 Richfield Court Apartments Electric/Gas 0 8 $298 $320
154 Academy Apartments Electric 0 16 $373 $400
157 Mission Hill Apartments Electric 0 3 $550 $625
162 Centre Square Apartments Electric/Water/Sewer 0 N/A N/A N/A
163 Emerald Lake Apartments Electric 1 2 $375 $400
164 The Sun Prairie Apartments Electric/Water/Sewer 0 N/A N/A N/A
168 Lakedale Apartments (2E) Electric 0 8 $365 $370
169 Liberty Apartments (2E) Electric 0 10 $331 $350
174 Villa Del Rio Apartments Electric 0 N/A N/A N/A
175 Winchester Arms & Fox Chase Apartments Electric 1 2 $455 $515
176 Old Orchard II Apartments Electric/Water/Sewer 0 N/A N/A N/A
180a Monterey Apartments Electric 0 N/A N/A N/A
180b Sherbrooke Apartments Electric 0 N/A N/A N/A
184 Lansing Square Apartments Electric 0 N/A N/A N/A
186 Pinewood Village Apartments Electric/Gas 0 5 $349 $399
188 Jersey Street Apartments Electric 0 N/A N/A N/A
190 Fairmont Oaks Apartments Electric 0 N/A N/A N/A
192 4404-4418 Walnut Street Electric/Gas 0 N/A N/A N/A
194 Orchard Park Apartments Electric 0 N/A N/A N/A
195 Quarry Ridge Apartments Electric/Gas 0 N/A N/A N/A
196 Stoney Creek Apartments (3) Electric 0 1 $450 $450
197 Plaza Apartments Electric 0 3 $476 $519
198a Mulberry Court Apartments Electric/Gas/Sewer 0 N/A N/A N/A
198b 6919 Walker Street Electric/Gas/Water/Sewer 0 N/A N/A N/A
198c 5711 Erdrick Street Electric/Gas/Water/Sewer 0 N/A N/A N/A
201 Sunny Townhomes Electric 0 N/A N/A N/A
204 Royal Park Apartments Electric 0 N/A N/A N/A
206 Wilson Heights Apartments Electric 0 N/A N/A N/A
212 Town North Villa Apartments Electric 0 N/A N/A N/A
213 1137 North 13th Street Apartments (2F) Electric 0 18 $292 $315
214 949-969 North 27th Street (2F) Electric 0 2 $275 $280
216 Turney Square Apartments Electric 0 N/A N/A N/A
217 Lake Street Apartments Electric/Gas 0 N/A N/A N/A
218 Atwood & Barker Apartments Electric 0 7 $417 $450
219 162 Myrtle Avenue Electric/Gas 0 N/A N/A N/A
220 Summit Heights Apartments Electric 0 N/A N/A N/A
226 Country Villa Apartments Electric 0 N/A N/A N/A
227 Coach Light Apartments None 0 N/A N/A N/A
229 Cosmos Apartments Electric/Water/Sewer 0 N/A N/A N/A
230 North Gate Apartments Electric 0 N/A N/A N/A
<CAPTION>
Subject Subject Subject Subject Subject Subject
1 BR 1 BR 1 BR 2 BR 2 BR 2 BR
# Units Avg. Rent Max. Rent Units Avg. Rent Max. Rent
- ----- --------- --------- ----- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
4a N/A N/A N/A 1184 $426 $515
4b 312 $469 $610 48 $716 $760
6a 763 $489 $655 195 $653 $850
6b N/A N/A N/A 168 $417 $475
8 787 $807 $995 116 $997 $1,410
14a 80 $596 $600 144 $688 $720
14b 72 $545 $573 74 $643 $691
15 N/A N/A N/A 53 $761 $1,080
16 60 $636 $725 96 $948 $1,180
18 128 $683 $715 200 $823 $850
20 294 $806 $930 74 $974 $980
22 94 $851 $875 82 $971 $1,100
29 115 $655 $670 61 $783 $810
30 93 $636 $702 127 $751 $801
32 240 $473 $575 64 $637 $715
34 88 $573 $650 120 $734 $795
46 120 $594 $633 84 $687 $725
51 96 $515 $590 84 $644 $720
52 N/A N/A N/A 192 $558 $620
56 174 $481 $650 95 $671 $800
57 3 $867 $1,100 40 $851 $2,100
63 224 $390 $500 56 $519 $555
68 48 $462 $469 128 $567 $694
71 266 $370 $530 60 $505 $565
74 100 $567 $639 52 $673 $739
75 90 $499 $565 116 $654 $685
77 66 $424 $475 66 $583 $630
80 12 $515 $530 108 $582 $630
82 N/A N/A N/A 168 $540 $540
83 128 $436 $525 48 $589 $630
86 120 $386 $410 80 $490 $545
95 80 $526 $550 N/A N/A N/A
99 116 $512 $530 N/A N/A N/A
101 16 $479 $479 72 $539 $539
104 40 $531 $550 37 $629 $650
106 2 $1,400 $1,400 22 $1,749 $1,800
107 86 $729 $825 8 $928 $935
109 40 $386 $410 128 $414 $445
121 96 $538 $695 N/A N/A N/A
127 8 $375 $375 32 $463 $485
129 96 $377 $435 80 $418 $535
134 66 $388 $510 71 $498 $600
135 N/A N/A N/A 65 $654 $700
138 38 $553 $575 42 $672 $700
141a 8 $425 $425 48 $475 $475
141b 16 $375 $375 16 $425 $425
145 N/A N/A N/A 78 $463 $575
148 7 $403 $450 58 $541 $600
150 56 $539 $695 1 $695 $695
151 16 $357 $380 112 $401 $440
154 40 $459 $470 24 $548 $600
157 N/A N/A N/A 30 $888 $1,000
162 N/A N/A N/A 52 $520 $560
163 39 $508 $560 13 $657 $695
164 N/A N/A N/A 80 $544 $560
168 48 $431 $490 24 $506 $600
169 38 $366 $400 2 $400 $420
174 68 $387 $495 40 $493 $550
175 43 $480 $570 15 $640 $695
176 6 $393 $400 66 $485 $500
180a N/A N/A N/A 52 $603 $650
180b 17 $462 $500 15 $656 $745
184 37 $494 $535 18 $633 $675
186 47 $347 $449 12 $452 $469
188 N/A N/A N/A 42 $647 $675
190 29 $445 $475 31 $541 $575
192 2 $518 $550 46 $544 $625
194 29 $347 $375 29 $439 $500
195 N/A N/A N/A 48 $432 $450
196 11 $585 $605 17 $703 $785
197 27 $477 $525 10 $595 $600
198a 17 $405 $465 10 $474 $490
198b 11 $373 $390 N/A N/A N/A
198c 11 $385 $425 N/A N/A N/A
201 N/A N/A N/A 40 $490 $525
204 8 $471 $480 24 $565 $580
206 N/A N/A N/A 28 $474 $485
212 N/A N/A N/A 32 $500 $550
213 9 $359 $395 N/A N/A N/A
214 9 $324 $350 4 $431 $450
216 16 $379 $381 16 $456 $456
217 22 $499 $508 N/A N/A N/A
218 25 $509 $550 3 $663 $675
219 N/A N/A N/A N/A N/A N/A
220 36 $405 $450 N/A N/A N/A
226 16 $291 $300 24 $380 $515
227 12 $376 $380 28 $479 $480
229 N/A N/A N/A 12 $604 $640
230 15 $334 $350 N/A N/A N/A
<CAPTION>
Subject Subject Subject Subject Subject Subject
3 BR 3 BR 3 BR 4 BR 4 BR 4 BR
# Units Avg. Rent Max. Rent Units Avg. Rent Max. Rent
- ----- --------- --------- ----- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
4a N/A N/A N/A N/A N/A N/A
4b N/A N/A N/A N/A N/A N/A
6a N/A N/A N/A N/A N/A N/A
6b N/A N/A N/A N/A N/A N/A
8 N/A N/A N/A N/A N/A N/A
14a 64 $800 $875 N/A N/A N/A
14b 20 $754 $770 N/A N/A N/A
15 80 $1,056 $1,185 60 $1,177 $1,350
16 36 $1,520 $1,650 18 $1,861 $2,080
18 N/A N/A N/A N/A N/A N/A
20 N/A N/A N/A N/A N/A N/A
22 12 $1,137 $1,165 N/A N/A N/A
29 N/A N/A N/A N/A N/A N/A
30 N/A N/A N/A N/A N/A N/A
32 N/A N/A N/A N/A N/A N/A
34 N/A N/A N/A N/A N/A N/A
46 N/A N/A N/A N/A N/A N/A
51 N/A N/A N/A N/A N/A N/A
52 N/A N/A N/A N/A N/A N/A
56 45 $830 $950 N/A N/A N/A
57 10 $1,074 $1,150 2 $963 $975
63 N/A N/A N/A N/A N/A N/A
68 N/A N/A N/A N/A N/A N/A
71 N/A N/A N/A N/A N/A N/A
74 16 $830 $875 N/A N/A N/A
75 10 $803 $815 N/A N/A N/A
77 149 $631 $693 N/A N/A N/A
80 N/A N/A N/A N/A N/A N/A
82 N/A N/A N/A N/A N/A N/A
83 12 $755 $755 N/A N/A N/A
86 N/A N/A N/A N/A N/A N/A
95 N/A N/A N/A N/A N/A N/A
99 N/A N/A N/A N/A N/A N/A
101 32 $598 $598 N/A N/A N/A
104 6 $862 $1,050 N/A N/A N/A
106 N/A N/A N/A N/A N/A N/A
107 N/A N/A N/A N/A N/A N/A
109 32 $445 $490 N/A N/A N/A
121 N/A N/A N/A N/A N/A N/A
127 48 $519 $553 N/A N/A N/A
129 8 $454 $535 N/A N/A N/A
134 N/A N/A N/A N/A N/A N/A
135 3 $755 $775 N/A N/A N/A
138 N/A N/A N/A N/A N/A N/A
141a 8 $550 $550 N/A N/A N/A
141b N/A N/A N/A N/A N/A N/A
145 N/A N/A N/A N/A N/A N/A
148 7 $646 $685 N/A N/A N/A
150 N/A N/A N/A N/A N/A N/A
151 N/A N/A N/A N/A N/A N/A
154 N/A N/A N/A N/A N/A N/A
157 N/A N/A N/A N/A N/A N/A
162 N/A N/A N/A N/A N/A N/A
163 N/A N/A N/A N/A N/A N/A
164 N/A N/A N/A N/A N/A N/A
168 N/A N/A N/A N/A N/A N/A
169 N/A N/A N/A N/A N/A N/A
174 N/A N/A N/A N/A N/A N/A
175 N/A N/A N/A N/A N/A N/A
176 N/A N/A N/A N/A N/A N/A
180a N/A N/A N/A N/A N/A N/A
180b 6 $749 $827 N/A N/A N/A
184 N/A N/A N/A N/A N/A N/A
186 N/A N/A N/A N/A N/A N/A
188 N/A N/A N/A N/A N/A N/A
190 N/A N/A N/A N/A N/A N/A
192 4 $625 $625 N/A N/A N/A
194 N/A N/A N/A N/A N/A N/A
195 N/A N/A N/A N/A N/A N/A
196 5 $787 $830 N/A N/A N/A
197 N/A N/A N/A N/A N/A N/A
198a N/A N/A N/A N/A N/A N/A
198b N/A N/A N/A N/A N/A N/A
198c N/A N/A N/A N/A N/A N/A
201 N/A N/A N/A N/A N/A N/A
204 N/A N/A N/A N/A N/A N/A
206 8 $595 $610 N/A N/A N/A
212 N/A N/A N/A N/A N/A N/A
213 N/A N/A N/A N/A N/A N/A
214 N/A N/A N/A N/A N/A N/A
216 N/A N/A N/A N/A N/A N/A
217 N/A N/A N/A N/A N/A N/A
218 N/A N/A N/A N/A N/A N/A
219 8 $1,158 $1,200 N/A N/A N/A
220 N/A N/A N/A N/A N/A N/A
226 N/A N/A N/A N/A N/A N/A
227 N/A N/A N/A N/A N/A N/A
229 N/A N/A N/A N/A N/A N/A
230 N/A N/A N/A N/A N/A N/A
(2E) The Underlying Mortgage Loans secured by Lakedale Apartments and Liberty Apartments are cross-collateralized and
cross-defaulted, respectively.
(2F) The Underlying Mortgage Loans secured by 1137 North 13th Street Apartments and 949-969 North 27th Street are cross-defaulted.
(3) Stoney Creek Apartments includes one 6BR unit with monthly rent equal to $1,095.
</TABLE>
<PAGE>
EXHIBIT A-2
MORTGAGE POOL INFORMATION
See this Exhibit for tables titled:
Mortgage Interest Rates
Cut-off Date Principal Balances
Original Amortization Terms
Original Terms to Stated Maturity
Remaining Amortization Terms
Remaining Terms to Stated Maturity
Years Built/Year Renovated
Occupancy Rates at Underwriting
Underwritten Debt Service Coverage Ratios
Cut-off Date Loan-to-Value Ratios
Mortgaged Real Properties by State
Underlying Mortgage Loans by Amortization Type
Mortgaged Real Properties by Property Type
Mortgaged Real Properties by Property Sub-Type
Prepayment Provision as of Cut-off Date
Prepayment Option
Mortgage Pool Prepayment Profile
A-2
<PAGE>
<TABLE>
<CAPTION>
MORTGAGE INTEREST RATES
WEIGHTED
NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED
UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE
RANGE OF MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE
MORTGAGE INTEREST RATES LOANS BALANCE BALANCE RATES U/W DSCR LTV RATIO
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6.810% - 7.750% 9 $ 155,863,591 12.1% 7.197% 1.72x 58.5%
7.751% - 8.000% 6 29,919,333 2.3% 7.974% 1.52 62.1%
8.001% - 8.250% 36 282,161,329 21.9% 8.118% 1.32 73.0%
8.251% - 8.500% 70 315,049,759 24.4% 8.364% 1.28 72.7%
8.501% - 8.750% 60 358,585,936 27.8% 8.622% 1.39 64.6%
8.751% - 9.000% 31 105,768,440 8.2% 8.841% 1.34 72.1%
9.001% - 9.590% 18 42,490,383 3.3% 9.158% 1.30 71.3%
-------------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE: 230 $1,289,918,771 100.0% 8.297% 1.38x 68.5%
===========================================================================================
</TABLE>
MAXIMUM MORTGAGE INTEREST RATE: 9.590%
MINIMUM MORTGAGE INTEREST RATE: 6.810%
WTD. AVG. MORTGAGE INTEREST RATE: 8.297%
<TABLE>
<CAPTION>
CUT-OFF DATE PRINCIPAL BALANCES
WEIGHTED
NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED
UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE
RANGE OF CUT-OFF DATE MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE
PRINCIPAL BALANCES LOANS BALANCE BALANCE RATES U/W DSCR LTV RATIO
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 230,842 - 500,000 8 $ 2,724,165 0.2% 8.880% 1.36x 72.6%
500,001 - 750,000 13 7,719,358 0.6% 8.833% 1.34 71.3%
750,001 - 1,000,000 10 8,968,894 0.7% 8.731% 1.35 66.6%
1,000,001 - 1,250,000 17 18,974,109 1.5% 8.736% 1.32 72.4%
1,250,001 - 1,500,000 16 22,438,876 1.7% 8.621% 1.37 66.9%
1,500,001 - 1,750,000 8 13,068,391 1.0% 8.612% 1.33 71.6%
1,750,001 - 2,000,000 20 37,272,210 2.9% 8.583% 1.30 70.7%
2,000,001 - 3,000,000 30 74,231,642 5.8% 8.411% 1.30 71.0%
3,000,001 - 4,000,000 25 87,599,577 6.8% 8.396% 1.29 71.2%
4,000,001 - 5,000,000 13 58,043,231 4.5% 8.340% 1.38 69.0%
5,000,001 - 6,000,000 17 93,015,314 7.2% 8.475% 1.32 71.0%
6,000,001 - 8,500,000 12 85,772,101 6.6% 8.351% 1.34 70.0%
8,500,001 - 9,500,000 6 53,767,165 4.2% 8.196% 1.26 76.6%
9,500,001 - 10,000,000 6 58,539,725 4.5% 8.406% 1.30 77.2%
10,000,001 - 11,250,000 5 51,917,676 4.0% 8.318% 1.25 74.4%
11,250,001 - 12,000,000 4 46,240,167 3.6% 8.098% 1.42 67.7%
12,000,001 - 19,500,000 10 138,416,199 10.7% 8.380% 1.28 72.7%
19,500,001 - 34,500,000 6 164,783,680 12.8% 8.256% 1.33 71.7%
34,500,001 - $87,301,842 5 266,426,293 20.7% 8.002% 1.65 55.9%
----------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE: 230 $1,289,918,771 100.0% 8.297% 1.38x 68.5%
========================================================================================
</TABLE>
MAXIMUM CUT-OFF DATE PRINCIPAL BALANCE: $87,301,843
MINIMUM CUT-OFF DATE PRINCIPAL BALANCE: $ 293,528
WTD. AVG. CUT-OFF DATE PRINCIPAL BALANCE: $ 5,608,342
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL AMORTIZATION TERMS
WEIGHTED
NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED
RANGE OF UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE
ORIGINAL AMORTIZATION MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE
TERMS (MONTHS) LOANS BALANCE BALANCE RATES U/W DSCR LTV RATIO
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
152 - 290 10 $ 81,413,722 6.3% 7.248% 2.07x 46.1%
291 - 300 59 193,024,928 15.0% 8.424% 1.46 62.9%
301 - 360 162 1,015,480,121 78.7% 8.357% 1.31 71.3%
------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE: 230 $1,289,918,771 100.0% 8.297% 1.38X 68.5%
====================================================================================
</TABLE>
MAXIMUM ORIGINAL AMORTIZATION TERM (MONTHS): 360
MINIMUM ORIGINAL AMORTIZATION TERM (MONTHS): 152
WTD. AVG. ORIGINAL AMORTIZATION TERM (MONTHS): 338
<TABLE>
<CAPTION>
ORIGINAL TERMS TO STATED MATURITY (1)
WEIGHTED
NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED
RANGE OF UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE
ORIGINAL TERMS MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE
TO STATED MATURITY (MONTHS) LOANS BALANCE BALANCE RATES U/W DSCR LTV RATIO
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
60 - 100 4 $ 32,789,432 2.5% 7.874% 1.64x 56.1%
101 - 120 217 1,116,763,576 86.6% 8.424% 1.34 69.8%
121 - 240 11 140,365,764 10.9% 7.387% 1.68 60.5%
----------------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE: 230 $1,289,918,771 100.0% 8.297% 1.38X 68.5%
==============================================================================================
</TABLE>
MAXIMUM ORIGINAL TERM TO STATED MATURITY (MONTHS): 240
MINIMUM ORIGINAL TERM TO STATED MATURITY (MONTHS): 60
WTD. AVG. ORIGINAL TERM TO STATED MATURITY (MONTHS): 122
(1) IN THE CASE OF ARD LOANS, THE ANTICIPATED REPAYMENT DATE IS ASSUMED TO BE
THE MATURITY DATE FOR THE PURPOSES OF THE FOREGOING TABLE.
<PAGE>
<TABLE>
<CAPTION>
REMAINING AMORTIZATION TERMS
WEIGHTED
NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED
RANGE OF UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE
REMAINING AMORTIZATION MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE
TERMS (MONTHS) LOANS BALANCE BALANCE RATES U/W DSCR LTV RATIO
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
151 - 290 19 $ 100,570,815 7.8% 7.381% 1.96x 48.4%
291 - 350 64 322,592,243 25.0% 8.160% 1.38 67.6%
351 - 360 147 866,755,713 67.2% 8.454% 1.32 71.1%
--------------------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE: 230 $1,289,918,771 100.0% 8.297% 1.38X 68.5%
==================================================================================================
</TABLE>
MAXIMUM REMAINING AMORTIZATION TERM (MONTHS): 360
MINIMUM REMAINING AMORTIZATION TERM (MONTHS): 151
WTD. AVG. REMAINING AMORTIZATION TERM (MONTHS): 333
<TABLE>
<CAPTION>
REMAINING TERMS TO STATED MATURITY (1)
WEIGHTED
NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED
RANGE OF UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE
REMAINING TERMS MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE
TO STATED MATURITY (MONTHS) LOANS BALANCE BALANCE RATES U/W DSCR LTV RATIO
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
40 - 99 6 $ 39,067,314 3.0% 7.829% 1.61x 56.8%
100 - 120 214 1,124,445,991 87.2% 8.428% 1.34 70.0%
121 - 239 10 126,405,467 9.8% 7.276% 1.73 58.6%
-------------------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE: 230 $1,289,918,771 100.0% 8.297% 1.38x 68.5%
=================================================================================================
</TABLE>
MAXIMUM REMAINING TERM TO STATED MATURITY (MONTHS): 239
MINIMUM REMAINING TERM TO STATED MATURITY (MONTHS): 40
WTD. AVG. REMAINING TERM TO STATED MATURITY (MONTHS): 117
(1) IN THE CASE OF ARD LOANS, THE ANTICIPATED REPAYMENT DATE IS ASSUMED TO BE
THE MATURITY DATE FOR THE PURPOSES OF THE FOREGOING TABLE.
<PAGE>
<TABLE>
<CAPTION>
YEARS BUILT/YEARS RENOVATED (1)
WEIGHTED
NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED
MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE
RANGE OF YEARS REAL PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE
BUILT/RENOVATED PROPERTIES BALANCE BALANCE RATES U/W DSCR LTV RATIO
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1920 - 1970 17 $ 47,936,391 3.7% 8.224% 1.46x 66.4%
1971 - 1980 20 38,854,139 3.0% 8.428% 1.37 70.3%
1981 - 1990 61 318,987,112 24.8% 8.112% 1.48 67.3%
1991 - 2000 144 884,141,129 68.5% 8.362% 1.35 68.9%
-----------------------------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE: 242 $1,289,918,771 100.0% 8.297% 1.38x 68.5%
===========================================================================================================
MOST RECENT YEAR BUILT/RENOVATED: 2000
OLDEST YEAR BUILT/RENOVATED: 1920
WTD. AVG. YEAR BUILT/RENOVATED: 1993
(1) YEAR BUILT/RENOVATED REFLECTS THE LATER OF THE YEAR BUILT OR THE YEAR RENOVATED.
</TABLE>
<TABLE>
<CAPTION>
OCCUPANCY RATES AT UNDERWRITING (1)
WEIGHTED
NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED
MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE
RANGE OF REAL PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE
OCCUPANCY RATES AT U/W PROPERTIES BALANCE BALANCE RATES U/W DSCR LTV RATIO
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
76.0% - 84.9% 4 $ 10,511,689 0.8% 7.774% 1.66x 57.7%
85.0% - 89.9% 12 35,212,753 2.7% 8.473% 1.32 70.5%
90.0% - 94.9% 35 165,746,028 12.8% 8.385% 1.29 74.7%
95.0% - 97.4% 47 316,675,639 24.6% 8.395% 1.26 76.3%
97.5% - 100.0% 136 706,441,802 54.8% 8.221% 1.45 64.1%
----------------------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE: 234 $1,234,587,912 95.7% 8.291% 1.38x 68.8%
====================================================================================================
</TABLE>
MAXIMUM OCCUPANCY RATE AT U/W: 100.0%
MINIMUM OCCUPANCY RATE AT U/W: 76.0%
WTD. AVG. OCCUPANCY RATE AT U/W: 97.3%
(1) DOES NOT INCLUDE THE HOTEL PROPERTIES.
<PAGE>
<TABLE>
<CAPTION>
UNDERWRITTEN DEBT SERVICE COVERAGE RATIOS
WEIGHTED
NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED
UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE
RANGE OF MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE
U/W DSCRS LOANS BALANCE BALANCE RATES U/W DSCR LTV RATIO
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1.16x - 1.19 4 $ 32,499,958 2.5% 8.404% 1.18x 78.3%
1.20 - 1.22 44 250,668,765 19.4% 8.466% 1.21 75.4%
1.23 - 1.25 44 260,361,664 20.2% 8.356% 1.24 75.6%
1.26 - 1.29 42 187,041,085 14.5% 8.108% 1.27 72.7%
1.30 - 1.39 51 236,215,394 18.3% 8.392% 1.34 70.7%
1.40 - 1.49 21 84,275,854 6.5% 8.630% 1.43 68.5%
1.50 - 1.70 16 70,633,774 5.5% 8.137% 1.60 53.9%
1.71 - 2.77x 8 168,222,277 13.0% 7.909% 1.98 43.3%
------------------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE: 230 $1,289,918,771 100.0% 8.297% 1.38x 68.5%
================================================================================================
</TABLE>
MAXIMUM U/W DSCR: 2.77x
MINIMUM U/W DSCR: 1.16x
WTD. AVG. U/W DSCR: 1.38x
<TABLE>
<CAPTION>
CUT-OFF DATE LOAN-TO-VALUE RATIOS
WEIGHTED
NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED
UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE
RANGE OF CUT-OFF DATE MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE
LOAN-TO-VALUE RATIOS LOANS BALANCE BALANCE RATES U/W DSCR LTV RATIO
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
40.10% - 55.00% 15 $ 221,926,430 17.2% 7.961% 1.88x 44.6%
55.10% - 65.00% 31 128,677,636 10.0% 8.551% 1.37 60.3%
65.10% - 67.50% 15 32,863,535 2.5% 8.382% 1.34 66.4%
67.60% - 70.00% 21 74,879,874 5.9% 8.535% 1.31 68.9%
70.10% - 72.50% 21 79,986,200 6.2% 8.556% 1.27 71.3%
72.60% - 75.00% 45 221,961,570 17.2% 8.117% 1.29 73.8%
75.10% - 77.50% 27 237,060,456 18.4% 8.482% 1.24 76.6%
77.60% - 78.50% 17 105,841,020 8.2% 8.294% 1.27 78.0%
78.60% - 79.50% 16 107,885,241 8.4% 8.304% 1.27 79.0%
79.60% - 80.00% 19 75,928,908 5.9% 8.241% 1.23 79.9%
80.10% - 80.80% 1 2,907,902 0.2% 8.380% 1.16 80.8%
--------------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE: 230 $1,289,918,771 100.0% 8.297% 1.38x 68.5%
============================================================================================
</TABLE>
MAXIMUM CUT-OFF DATE LTV RATIO: 80.8%
MINIMUM CUT-OFF DATE LTV RATIO: 40.1%
WTD. AVG. CUT-OFF DATE LTV RATIO: 68.5%
<PAGE>
MORTGAGED REAL PROPERTIES BY STATE
<TABLE>
<CAPTION>
WEIGHTED
NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED
MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE
REAL PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE
STATE PROPERTIES BALANCE BALANCE RATES U/W DSCR LTV RATIO
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
California 18 $ 188,200,224 14.6% 8.076% 1.32x 69.4%
Texas 40 159,932,981 12.4% 8.526% 1.27 74.3%
New York 14 122,349,606 9.5% 8.599% 1.64 52.5%
Florida 16 67,146,580 5.2% 8.233% 1.38 68.0%
New Jersey 6 66,043,922 5.1% 8.099% 1.51 58.6%
Colorado 10 52,273,853 4.1% 8.108% 1.30 73.8%
Ohio 12 51,858,945 4.0% 8.365% 1.27 72.8%
Delaware 1 50,909,381 3.9% 6.810% 2.41 40.7%
Utah 5 46,253,523 3.6% 8.405% 1.29 76.2%
Virginia 4 45,907,613 3.6% 8.489% 1.35 70.8%
Michigan 10 35,362,012 2.7% 8.258% 1.24 73.1%
Massachusetts 4 35,171,289 2.7% 8.430% 1.21 76.2%
Louisiana 3 31,421,728 2.4% 8.407% 1.23 75.2%
Connecticut 11 31,031,050 2.4% 8.387% 1.24 78.2%
Arizona 10 30,957,930 2.4% 8.542% 1.30 73.2%
Washington 4 27,820,551 2.2% 8.588% 1.28 67.9%
Oklahoma 4 25,880,057 2.0% 8.304% 1.33 77.0%
Georgia 8 25,444,568 2.0% 8.498% 1.28 74.6%
Pennsylvania 12 22,819,796 1.8% 8.563% 1.26 75.6%
Illinois 5 19,451,298 1.5% 8.331% 1.31 74.5%
Indiana 8 16,675,658 1.3% 8.650% 1.27 73.1%
Minnesota 5 14,622,356 1.1% 8.600% 1.31 68.6%
Maine 2 12,923,718 1.0% 8.350% 1.41 68.4%
District of Columbia 1 12,534,362 1.0% 8.270% 1.29 61.4%
Nevada 1 11,587,542 0.9% 8.170% 1.31 78.6%
Wisconsin 5 11,261,357 0.9% 8.680% 1.34 69.1%
South Carolina 1 9,882,379 0.8% 8.420% 1.20 74.9%
North Carolina 2 9,635,401 0.7% 8.608% 1.40 69.9%
Tennessee 2 8,322,126 0.6% 8.319% 1.31 77.8%
Missouri 3 8,149,863 0.6% 8.285% 1.30 74.2%
Oregon 2 7,120,387 0.6% 8.343% 1.22 69.9%
Maryland 2 5,589,164 0.4% 8.535% 1.45 66.5%
Mississippi 3 5,297,751 0.4% 8.150% 1.34 72.1%
Kansas 1 4,988,040 0.4% 8.450% 1.33 54.8%
Kentucky 1 3,814,844 0.3% 8.130% 1.47 74.8%
Montana 1 3,169,044 0.2% 7.500% 1.54 68.2%
Alabama 1 3,123,994 0.2% 7.680% 1.22 55.3%
New Mexico 1 1,716,093 0.1% 8.620% 1.39 79.8%
North Dakota 1 1,477,856 0.1% 8.280% 1.26 44.2%
Alaska 1 1,386,265 0.1% 8.900% 1.20 66.8%
Nebraska 1 403,665 0.0% 9.590% 1.33 74.8%
-----------------------------------------------------------------------------------------------------------------
TOTAL/WEIGHTED AV 244 $1,289,918,771 100.0% 8.297% 1.38X 68.5%
=================================================================================================================
</TABLE>
<TABLE>
UNDERLYING MORTGAGE LOANS BY AMORTIZATION TYPE
<CAPTION>
WEIGHTED
NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED
UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE
MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE
LOAN TYPE LOANS BALANCE BALANCE RATES U/W DSCR LTV RATIO
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balloon 191 $ 929,265,095 72.0% 8.442% 1.36x 69.0%
ARD 37 307,347,568 23.8% 8.102% 1.30 71.4%
Fully Amortizing 2 53,306,109 4.1% 6.885% 2.37 41.9%
----------------------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE: 230 $ 1,289,918,771 100.0% 8.297% 1.38x 68.5%
====================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MORTGAGED REAL PROPERTIES BY PROPERTY TYPE
WEIGHTED
NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED
MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE
REAL PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE
PROPERTY TYPE PROPERTIES BALANCE BALANCE RATES U/W DSCR LTV RATIO
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Retail 76 $ 397,422,214 30.8% 8.174% 1.28x 73.3%
Multifamily 89 391,343,301 30.3% 8.335% 1.30 73.1%
Office 31 325,445,992 25.2% 8.310% 1.61 56.9%
Hotel 8 55,330,859 4.3% 8.427% 1.52 60.6%
Industrial 10 49,700,687 3.9% 8.377% 1.27 74.9%
Mixed Use 9 20,289,777 1.6% 8.595% 1.28 67.9%
Manufactured Housing 7 17,143,349 1.3% 8.415% 1.29 75.8%
Self Storage 8 12,306,673 1.0% 8.675% 1.47 63.3%
Independent/Assisted Living 1 12,151,936 0.9% 8.900% 1.43 74.8%
Health Care 3 8,783,983 0.7% 8.114% 1.50 71.0%
-------------------------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE: 242 $1,289,918,771 100.0% 8.297% 1.38X 68.5%
=========================================================================================================
MORTGAGED REAL PROPERTIES BY PROPERTY SUB-TYPE
<CAPTION> Weighted
Number of Percentage of Average Weighted
Mortgaged Cut-off Date Initial Mortgage Weighted Average
Real Principal Mortgage Pool Interest Average Cut-off Date
Property Type Property Sub-Type Properties Balance Balance Rates U/W DSCR LTV Ratio
------------------------------------------------------------------------------------------------------------------------------------
Retail
<S> <C> <C> <C> <C> <C> <C> <C>
Anchored (1) 48 $ 350,202,326 27.1% 8.120% 1.27x 74.1%
Unanchored 28 47,219,888 3.7% 8.577% 1.35 67.4%
---------------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE: 76 $ 397,422,214 30.8% 8.174% 1.28x 73.3%
=============================================================================================
(1) Includes shadow anchored properties.
</TABLE>
<PAGE>
<TABLE>
PREPAYMENT PROVISION AS OF CUT-OFF DATE
<CAPTION>
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
PERCENTAGE OF REMAINING REMAINING REMAINING WEIGHTED
RANGE OF NUMBER OF CUT-OFF DATE INITIAL LOCKOUT LOCKOUT LOCKOUT PLUS AVERAGE
REMAINING TERMS TO MORTGAGE PRINCIPAL MORTGAGE POOL PERIOD PLUS YM PERIOD PREMIUM PERIOD MATURITY
STATED MATURITY (YEARS) LOANS BALANCE BALANCE (YEARS) (YEARS) (YEARS) (YEARS) (1)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
3.00 - 3.99 1 $ 11,555,033 0.9% 0.0 0.0 1.3 3.3
5.00 - 5.99 1 8,409,024 0.7% 1.5 4.7 4.7 5.0
6.00 - 6.99 2 12,825,375 1.0% 6.4 6.6 6.6 6.8
7.00 - 7.99 2 6,277,882 0.5% 2.4 7.0 7.0 7.5
8.00 - 8.99 10 52,774,365 4.1% 7.5 8.2 8.2 8.6
9.00 - 9.49 21 159,788,658 12.4% 8.3 8.9 8.9 9.4
9.50 - 9.99 183 911,882,968 70.7% 8.8 9.3 9.3 9.7
10.00 - 10.99 1 2,908,942 0.2% 10.5 10.5 10.5 10.8
11.00 - 14.99 7 118,933,324 9.2% 6.8 12.2 12.2 12.5
15.00 - 30.00 2 4,563,201 0.4% 11.2 19.3 19.3 19.8
---------------------------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE: 230 $1,289,918,771 100.0% 8.3 9.3 9.4 9.8
=========================================================================================================
</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 INDICATED COLUMN.
<TABLE>
<CAPTION>
PREPAYMENT OPTION
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
PERCENTAGE OF REMAINING REMAINING REMAINING WEIGHTED
NUMBER OF CUT-OFF DATE INITIAL LOCKOUT LOCKOUT LOCKOUT PLUS AVERAGE
MORTGAGE PRINCIPAL MORTGAGE POOL PERIOD PLUS YM PERIOD PREMIUM PERIOD MATURITY
PREPAYMENT OPTION LOANS BALANCE BALANCE (YEARS) (YEARS) (YEARS) (YEARS)(1)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lockout / Defeasance 189 $ 1,102,436,356 85.5% 9.3 9.3 9.3 9.8
Lockout / Yield Maintenance 33 99,940,348 7.7% 2.8 8.8 8.8 9.2
Yield Maintenance 5 58,120,654 4.5% 0.0 12.1 12.1 12.2
Lockout / Defeasance /
Yield Maintenance 2 17,866,382 1.4% 7.6 9.3 9.3 9.7
Prepayment Premium 1 11,555,033 0.9% 0.0 0.0 1.3 3.3
------------------------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE: 230 $1,289,918,771 100.0% 8.3 9.3 9.4 9.8
======================================================================================================
</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 INDICATED COLUMN.
<PAGE>
<TABLE>
<CAPTION>
MORTGAGE POOL PREPAYMENT PROFILE (1)
NUMBER OF
MONTHS SINCE MORTGAGE OUTSTANDING % OF POOL YIELD PREPAYMENT % OF POOL
DATE CUT-OFF DATE LOANS BALANCE (MM) LOCKOUT MAINTENANCE PREMIUM OPEN TOTAL
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NOV-00 0 230 $1,289.9 94.60% 4.51% 0.90% 0.00% 100.0%
NOV-01 12 230 $1,279.1 94.68% 4.44% 0.88% 0.00% 100.0%
NOV-02 24 230 $1,267.1 92.15% 6.98% 0.00% 0.87% 100.0%
NOV-03 36 230 $1,253.9 89.59% 9.55% 0.00% 0.86% 100.0%
NOV-04 48 229 $1,229.3 89.68% 10.32% 0.00% 0.00% 100.0%
NOV-05 60 228 $1,206.1 88.67% 11.33% 0.00% 0.00% 100.0%
NOV-06 72 228 $1,189.7 88.79% 11.21% 0.00% 0.00% 100.0%
NOV-07 84 226 $1,159.7 88.90% 10.86% 0.00% 0.23% 100.0%
NOV-08 96 224 $1,133.6 89.15% 10.85% 0.00% 0.00% 100.0%
NOV-09 108 213 $1,061.1 79.58% 10.06% 0.00% 10.36% 100.0%
NOV-10 120 10 $ 84.2 72.18% 27.82% 0.00% 0.00% 100.0%
NOV-11 132 9 $ 72.6 78.83% 21.17% 0.00% 0.00% 100.0%
NOV-12 144 5 $ 50.8 83.23% 13.25% 0.00% 3.51% 100.0%
NOV-13 156 2 $ 3.0 54.44% 45.56% 0.00% 0.00% 100.0%
NOV-14 168 2 $ 2.8 55.94% 44.06% 0.00% 0.00% 100.0%
NOV-15 180 2 $ 2.6 57.85% 42.15% 0.00% 0.00% 100.0%
NOV-16 192 2 $ 2.3 60.35% 39.65% 0.00% 0.00% 100.0%
NOV-17 204 2 $ 2.0 63.79% 36.21% 0.00% 0.00% 100.0%
NOV-18 216 2 $ 1.7 68.76% 31.24% 0.00% 0.00% 100.0%
NOV-19 228 2 $ 1.4 76.58% 23.42% 0.00% 0.00% 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>
DLJ COMMERCIAL MORTGAGE CORP.
MORTGAGE PASS THROUGH CERTIFICATES
SERIES 2000-CKP1
------------------------------------------
[LOGO OF WELLS FARGO BANK] For Additional Information, please contact
WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service
CORPORATE TRUST SERVICES (301) 815-6600
11000 BROKEN LAND PARKWAY Reports Available on the World Wide Web
COLUMBIA, MD 21044 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 12/11/2000
RECORD DATE: 11/30/2000
================================================================================
DISTRIBUTION DATE STATEMENT
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
--------------------------------------------------------------------------------
DEPOSITOR
--------------------------------------------------------------------------------
DLJ Commercial Mortgage Corp.
277 Park Avenue
New York, NY 10172
Contact: N. Dante LaRocca
Phone Number: (212) 892-3000
--------------------------------------------------------------------------------
MASTER SERVICER
--------------------------------------------------------------------------------
Key Corporate Capital Inc.
911 Main Street
Suite 1500
Kansas City, MO 64105
Contact: Marty O'Connor
Phone Number: (816) 221-8800
--------------------------------------------------------------------------------
SPECIAL SERVICER
--------------------------------------------------------------------------------
Key Corporate Capital Inc.
911 Main Street
Suite 1500
Kansas City, MO 64105
Contact: Marty O'Connor
Phone Number: (816) 221-8800
--------------------------------------------------------------------------------
SPECIAL SERVICER
--------------------------------------------------------------------------------
Midland Loan Services, Inc.
210 West 10th Street
Kansas City, MO 64105
Contact: Brad Hauger
Phone Number: (816) 292-8629
--------------------------------------------------------------------------------
This report has been compiled from information provided to Wells Fargo Bank MN,
N.A. by various third parties, which may include the Servicer, Master Servicer,
Special Servicer and others. Wells Fargo Bank MN, N.A. has not independently
confirmed the accuracy of information received from these third parties and
assumes no duty to do so. Wells Fargo Bank MN, N.A. expressly disclaims any
responsibility for the accuracy or completeness of information furnished by
third parties.
================================================================================
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 1 of 17
<PAGE>
DLJ COMMERCIAL MORTGAGE CORP.
MORTGAGE PASS THROUGH CERTIFICATES
SERIES 2000-CKP1
------------------------------------------
[LOGO OF WELLS FARGO BANK] For Additional Information please contact
WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service
CORPORATE TRUST SERVICES (301) 815-6600
11000 BROKEN LAND PARKWAY Reports Available on the World Wide Web
COLUMBIA, MD 21044 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 12/11/2000
RECORD DATE: 11/30/2000
================================================================================
CERTIFICATE DISTRIBUTION DETAIL
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Interest
Pass-Through Original Beginning Principal Distri- Prepayment Realized Loss/ Total Ending Current
Class/ CUSIP Rate Balance Balance Distribution bution Penalties Additional Trust Distribution Balance Subordination
Component Fund Expenses Level (1)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A-1A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-1B 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-2 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-3 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-4 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B-1 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B-2 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B-3 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B-4 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B-5 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B-6 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B-7 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B-8 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B-9 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
C 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
D 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
E 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
R 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
------------------------------------------------------------------------------------------------------------------------------------
Totals 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
Original Beginning Interest Ending
Pass-Through Notional Notional Distri- Prepayment Total Notional
Class CUSIP Rate Amount Amount bution 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 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 deviding the result by (A).
================================================================================
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 2 of 17
<PAGE>
DLJ COMMERCIAL MORTGAGE CORP.
MORTGAGE PASS THROUGH CERTIFICATES
SERIES 2000-CKP1
------------------------------------------
[LOGO OF WELLS FARGO BANK] For Additional Information please contact
WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service
CORPORATE TRUST SERVICES (301) 815-6600
11000 BROKEN LAND PARKWAY Reports Available on the World Wide Web
COLUMBIA, MD 21044 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 12/11/2000
RECORD DATE: 11/30/2000
================================================================================
CERTIFICATE FACTOR DETAIL
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
Beginning Principal Interest Prepayment Realized Loss / Ending
Class/ CUSIP Balance Distribution Distribution Penalties Additional Trust Balance
Component Fund Expenses
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
A-1A 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
A-1B 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
A-2 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
A-3 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
A-4 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
B-1 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
B-2 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
B-3 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
B-4 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
B-5 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
B-6 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
B-7 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
B-8 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
B-9 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
C 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
D 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
E 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
R 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
Beginning Interest Prepayment Ending
Class CUSIP Notional Distribution Penalties Notional
Amount Amount
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
S 0.00000000 0.00000000 0.00000000 0.00000000
----------------------------------------------------------------------------------------------------
</TABLE>
================================================================================
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 3 of 17
<PAGE>
DLJ COMMERCIAL MORTGAGE CORP.
MORTGAGE PASS THROUGH CERTIFICATES
SERIES 2000-CKP1
------------------------------------------
[LOGO OF WELLS FARGO BANK] For Additional Information please contact
WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service
CORPORATE TRUST SERVICES (301) 815-6600
11000 BROKEN LAND PARKWAY Reports Available on the World Wide Web
COLUMBIA, MD 21044 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 12/11/2000
RECORD DATE: 10/30/2000
================================================================================
RECONCILIATION DETAIL
ADVANCE SUMMARY
P&I Advances Outstanding 0.00
Servicing Advances Outstanding 0.00
Reimbursements for Interest on P&I 0.00
Advances paid from general collections
Reimbursements for Interest on Servicing 0.00
Advances paid from general collections
MASTER SERVICING FEE SUMMARY
Current Period Accrued Master Servicing Fees 0.00
Less Master Servicing Fees on Delinquent Payments 0.00
Less Reductions to Master Servicing Fees 0.00
Plus Master Servicing Fees on Delinquent Payments Received 0.00
Plus Adjustments for Prior Master Servicing Calculation 0.00
Total Master Servicing Fees Collected 0.00
CERTIFICATE INTEREST RECONCILIATION
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
Distributable
Accrued Net Aggregate Distributable Certificate Additional Remaining Unpaid
Certificate Prepayment Certificate Interest Trust Fund Interest Distributable
Class Interest Interest Shortfall Interest Adjustment Expenses Distribution Certificate Interest
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
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
S 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
B-9 0.00 0.00 0.00 0.00 0.00 0.00 0.00
C 0.00 0.00 0.00 0.00 0.00 0.00 0.00
D 0.00 0.00 0.00 0.00 0.00 0.00 0.00
E 0.00 0.00 0.00 0.00 0.00 0.00 0.00
R 0.00 0.00 0.00 0.00 0.00 0.00 0.00
-----------------------------------------------------------------------------------------------------------------------------------
Totals 0.00 0.00 0.00 0.00 0.00 0.00 0.00
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
================================================================================
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 4 of 17
<PAGE>
DLJ COMMERCIAL MORTGAGE CORP.
MORTGAGE PASS THROUGH CERTIFICATES
SERIES 2000-CKP1
------------------------------------------
[LOGO OF WELLS FARGO BANK] For Additional Information, please contact
WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service
CORPORATE TRUST SERVICES (301) 815-6600
11000 BROKEN LAND PARKWAY Reports Available on the World Wide Web
COLUMBIA, MD 21044 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 12/11/2000
RECORD DATE: 11/30/2000
================================================================================
OTHER REQUIRED INFORMATION
--------------------------------------------------------------------------------
Available Distribution Amount 0.00
Aggregate Number of Outstanding Loans 0
Aggregate Unpaid Principal Balance of Loans 0.00
Aggregate Stated Principal Balance of Loans 0.00
Aggregate Amount of Servicing Fee 0.00
Aggregate Amount of Special Servicing Fee 0.00
Aggregate Amount of Trustee Fee 0.00
Aggregate Stand-by Fee 0.00
Aggregate Trust Fund Expenses 0.00
Specially Serviced Loans not Delinquent
Number of Outstanding Loans 0
Aggregate Unpaid Principal Balance 0.00
--------------------------------------------------------------------------------
Appraisal Reduction Amount
--------------------------------------------------------------------------------
Appraisal Cumulative Most Recent
Loan Reduction ASER App. Red.
Number Amount Amount Date
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL
================================================================================
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 5 of 17
<PAGE>
DLJ COMMERCIAL MORTGAGE CORP.
MORTGAGE PASS THROUGH CERTIFICATES
SERIES 2000-CKP1
------------------------------------------
[LOGO OF WELLS FARGO BANK] For Additional Information, please contact
WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service
CORPORATE TRUST SERVICES (301) 815-6600
11000 BROKEN LAND PARKWAY Reports Available on the World Wide Web
COLUMBIA, MD 21044 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 12/11/2000
RECORD DATE: 11/30/2000
================================================================================
RATINGS DETAIL
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
Original Ratings Current Ratings (1)
Class CUSIP ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Fitch Moody's S & P Fitch Moody's S & P
----------------------------------------------------------------------------------------------
A-1A
A-1B
A-2
A-3
A-4
S
B-1
B-2
B-3
B-4
B-5
B-6
B-7
B-8
B-9
C
-----------------------------------------------------------------------------------------------------------------
</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.
Fitch, Inc.
One State Street Plaza
New York, New York 10004
(212) 908-0500
Moody's Investors Service
99 Church Street
New York, New York 10007
(212) 553-0300
Standard & Poor's Rating Services
55 Water Street
New York, New York 10041
(212) 438-2430
================================================================================
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 6 of 17
<PAGE>
DLJ COMMERCIAL MORTGAGE CORP.
MORTGAGE PASS THROUGH CERTIFICATES
SERIES 2000-CKP1
------------------------------------------
[LOGO OF WELLS FARGO BANK] For Additional Information, please contact
WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service
CORPORATE TRUST SERVICES (301) 815-6600
11000 BROKEN LAND PARKWAY Reports Available on the World Wide Web
COLUMBIA, MD 21044 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 12/11/2000
RECORD DATE: 11/30/2000
================================================================================
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
SCHEDULED BALANCE
--------------------------------------------------------------------------------
% of
Scheduled # of Scheduled Agg. WAM Weighted
Balance Loans Balance Bal. (2) WAC Avg DSCR (1)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Totals
--------------------------------------------------------------------------------
STATE (3)
--------------------------------------------------------------------------------
% of
# of Scheduled Agg. WAM Weighted
State Props. Balance Bal. (2) WAC Avg DSCR (1)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Totals
--------------------------------------------------------------------------------
See footnotes on last page of this section.
================================================================================
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 7 of 17
<PAGE>
DLJ COMMERCIAL MORTGAGE CORP.
MORTGAGE PASS THROUGH CERTIFICATES
SERIES 2000-CKP1
------------------------------------------
[LOGO OF WELLS FARGO BANK] For Additional Information, please contact
WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service
CORPORATE TRUST SERVICES (301) 815-6600
11000 BROKEN LAND PARKWAY Reports Available on the World Wide Web
COLUMBIA, MD 21044 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 12/11/2000
RECORD DATE: 11/30/2000
================================================================================
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
DEBT SERVICE COVERAGE RATIO
--------------------------------------------------------------------------------
Debt Service % of
Coverage # of Scheduled Agg. WAM Weighted
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, Wells Fargo Bank Minnesota, N.A. Page 8 of 17
<PAGE>
DLJ COMMERCIAL MORTGAGE CORP.
MORTGAGE PASS THROUGH CERTIFICATES
SERIES 2000-CKP1
------------------------------------------
[LOGO OF WELLS FARGO BANK] For Additional Information, please contact
WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service
CORPORATE TRUST SERVICES (301) 815-6600
11000 BROKEN LAND PARKWAY Reports Available on the World Wide Web
COLUMBIA, MD 21044 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 12/11/2000
RECORD DATE: 11/30/2000
================================================================================
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
ANTICIPATED REMAINING TERM (ARD AND BALLOON LOANS)
--------------------------------------------------------------------------------
Anticipated % of
Remaining # of Scheduled Agg. WAM Weighted
Term (2) Loans Balance Bal. (2) WAC Avg DSCR (1)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Totals
--------------------------------------------------------------------------------
REMAINING STATED TERM (FULLY AMORTIZING LOANS)
--------------------------------------------------------------------------------
Remaining % of
Stated # of Scheduled Agg. WAM Weighted
Term Loans Balance Bal. (2) WAC Avg DSCR (1)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Totals
--------------------------------------------------------------------------------
REMAINING AMORTIZATION TERM (ARD AND BALLOON LOANS)
--------------------------------------------------------------------------------
Remaining % of
Amortization # of Scheduled Agg. WAM Weighted
Term Loans Balance Bal. (2) WAC Avg DSCR (1)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Totals
--------------------------------------------------------------------------------
AGE OF MOST RECENT NOI
--------------------------------------------------------------------------------
Age of Most % of
Recent # of Scheduled Agg. WAM Weighted
NOI Loans Balance Bal. (2) WAC Avg DSCR (1)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Totals
--------------------------------------------------------------------------------
(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 each
property as disclosed in the offering document.
================================================================================
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 9 of 17
<PAGE>
DLJ COMMERCIAL MORTGAGE CORP.
MORTGAGE PASS THROUGH CERTIFICATES
SERIES 2000-CKP1
------------------------------------------
[LOGO OF WELLS FARGO BANK] For Additional Information, please contact
WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service
CORPORATE TRUST SERVICES (301) 815-6600
11000 BROKEN LAND PARKWAY Reports Available on the World Wide Web
COLUMBIA, MD 21044 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 12/11/2000
RECORD DATE: 11/30/2000
================================================================================
MORTGAGE LOAN DETAIL
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
Anticipated Neg. Beginning
Loan Property Interest Principal Gross Repayment Maturity Amort Scheduled
Number ODCR Type (1) City State Payment Payment Coupon Date Date (Y/N) Balance
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------------
Totals
------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
----------------------------------------------------------------------
Ending Paid Appraisal Appraisal Res. Mod.
Loan Scheduled Thru Reduction Reduction Strat. Code
Number Balance Date Date Amount (2) (3)
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------
Totals
----------------------------------------------------------------------
</TABLE>
(1) Property Type Code
MF - Multi-Family OF - Office
RT - Retail MU - Mixed Use
HC - Health Care LO - Lodging
IN - Industrial SS - Self Storage
WH - Warehouse OT - Other
MH - Mobile Home Park
(2) Resolution Strategy Code
1 - Modification 6 - DPO 10 - Deed In Lieu Of
2 - Foreclosure 7 - REO Foreclosure
3 - Bankruptcy 8 - Resolved 11 - Full Payoff
4 - Extension 9 - Pending Return 12 - Reps and Warranties
5 - Note Sale to Master Servicer 13 - Other or TBD
(3) Modification Code
1 - Maturity Date Extension
2 - Amortization Change
3 - Principal Write-Off
4 - Combination
================================================================================
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 10 of 17
<PAGE>
DLJ COMMERCIAL MORTGAGE CORP.
MORTGAGE PASS THROUGH CERTIFICATES
SERIES 2000-CKP1
------------------------------------------
[LOGO OF WELLS FARGO BANK] For Additional Information, please contact
WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service
CORPORATE TRUST SERVICES (301) 815-6600
11000 BROKEN LAND PARKWAY Reports Available on the World Wide Web
COLUMBIA, MD 21044 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 12/11/2000
RECORD DATE: 11/30/2000
================================================================================
PRINCIPAL PREPAYMENT DETAIL
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
Principal Prepayment Amount Prepayment Penalties
Offering Document -------------------------------------------------------------------------------------------
Loan Number Cross-Reference Payoff Amount Curtailment Amount Percentage Premium Yield Maintenance Charge
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------------
Totals
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
================================================================================
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 11 of 17
<PAGE>
DLJ COMMERCIAL MORTGAGE CORP.
MORTGAGE PASS THROUGH CERTIFICATES
SERIES 2000-CKP1
------------------------------------------
[LOGO OF WELLS FARGO BANK] For Additional Information, please contact
WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service
CORPORATE TRUST SERVICES (301) 815-6600
11000 BROKEN LAND PARKWAY Reports Available on the World Wide Web
COLUMBIA, MD 21044 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 12/11/2000
RECORD DATE: 11/30/2000
================================================================================
HISTORICAL DETAIL
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
Delinquencies Prepayments
-------------------------------------------------------------------------------------------------------------------------
Distribution 30-59 Days 60-89 Days 90 Days or More Foreclosure REO Modifications Curtailments Payoff
Date # Balance # Balance # Balance # Balance # Balance # Balance # Balance # Balance
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------------------
<CAPTION>
--------------------------------------
Rate and Maturities
--------------------------------------
Distribution Next Weighted Avg.
Date Coupon Remit WAM
--------------------------------------
<S> <C> <C> <C>
--------------------------------------
</TABLE>
Note: Foreclosure and REO Totals are excluded from the delinquencies aging
categories.
================================================================================
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 12 of 17
<PAGE>
DLJ COMMERCIAL MORTGAGE CORP.
MORTGAGE PASS THROUGH CERTIFICATES
SERIES 2000-CKP1
------------------------------------------
[LOGO OF WELLS FARGO BANK] For Additional Information, please contact
WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service
CORPORATE TRUST SERVICES (301) 815-6600
11000 BROKEN LAND PARKWAY Reports Available on the World Wide Web
COLUMBIA, MD 21044 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 12/11/2000
RECORD DATE: 11/30/2000
================================================================================
DELINQUENCY LOAN DETAIL
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
Offering # of Current Outstanding Status of Resolution
Document Months Paid Through P & I P & I Mortgage Strategy Servicing
Loan Number Cross-Reference Delinq. Date Advances Advances ** Loan (1) Code (2) Transfer Date
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------
Totals
-----------------------------------------------------------------------------------------------------------------------
<CAPTION>
-----------------------------------------------------------------------------------------
Current Outstanding
Foreclosure Servicing Servicing Bankruptcy Date REO
Loan Number Date Advances Advances Date
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------
Totals
-----------------------------------------------------------------------------------------
</TABLE>
(1) Status of Mortgage Loan
A - Payment Not Received 2 - Two Months Delinquent
But Still in Grace Period 3 - Three Or More Months Delinquent
B - Late Payment But Less 4 - Assumed Scheduled Payment
Than 1 Month Delinquent (Performing Matured Loan)
0 - Current 7 - Foreclosure
1 - One Month Delinquent 9 - REO
(2) Resolution Strategy Code
1 - Modification 9 - Pending Return
2 - Foreclosure to Master Servicer
3 - Bankruptcy 10 - Deed In Lieu Of
4 - Extension Master Servicer
5 - Note Sale 11 - Full Payoff
6 - DPO 12 - Reps and Warranties
7 - REO 13 - Other or TBD
8 - Resolved
** Outstanding P & I Advances include the current period advance
================================================================================
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 13 of 17
<PAGE>
DLJ COMMERCIAL MORTGAGE CORP.
MORTGAGE PASS THROUGH CERTIFICATES
SERIES 2000-CKP1
------------------------------------------
[LOGO OF WELLS FARGO BANK] For Additional Information, please contact
WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service
CORPORATE TRUST SERVICES (301) 815-6600
11000 BROKEN LAND PARKWAY Reports Available on the World Wide Web
COLUMBIA, MD 21044 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 12/11/2000
RECORD DATE: 11/30/2000
================================================================================
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>
(1) Resolution Strategy Code
1 - Modification 8 - Resolved
2 - Foreclosure 9 - Pending Return
3 - Bankruptcy to Master Servicer
4 - Extension 10 - Deed In Lieu Of
5 - Note Sale Foreclosure
6 - DPO 11 - Full Payoff
7 - REO 12 - Reps and Warranties
13 - Other or TBD
(2) Property Type Code
MF - Multi-Family OF - Office
RT - Retail MU - Mixed Use
HC - Health Care LO - Lodging
IN - Industrial SS - Self Storage
WH - Warehouse OT - Other
MH - Mobile Home Park
================================================================================
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 14 of 17
<PAGE>
DLJ COMMERCIAL MORTGAGE CORP.
MORTGAGE PASS THROUGH CERTIFICATES
SERIES 2000-CKP1
------------------------------------------
[LOGO OF WELLS FARGO BANK] For Additional Information, please contact
WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service
CORPORATE TRUST SERVICES (301) 815-6600
11000 BROKEN LAND PARKWAY Reports Available on the World Wide Web
COLUMBIA, MD 21044 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 12/11/2000
RECORD DATE: 11/30/2000
================================================================================
SPECIALLY SERVICED LOAN DETAIL - PART 2
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Offering Resolution Site
Distribution Loan Document Strategy Inspection Phase 1 Appraisal Appraisal Other REO
Date Number Cross-Reference Code (1) Date Date Date Value Property Revenue Comment
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Resolution Strategy Code
1 - Modification 6 - DPO 10 - Deed In Lieu Of
2 - Foreclosure 7 - REO Foreclosure
3 - Bankruptcy 8 - Resolved 11 - Full Payoff
4 - Extension 9 - Pending Return 12 - Reps and Warranties
5 - Note Sale to Master Servicer 13 - Other or TBD
================================================================================
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 15 of 17
<PAGE>
DLJ COMMERCIAL MORTGAGE CORP.
MORTGAGE PASS THROUGH CERTIFICATES
SERIES 2000-CKP1
------------------------------------------
[LOGO OF WELLS FARGO BANK] For Additional Information, please contact
WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service
CORPORATE TRUST SERVICES (301) 815-6600
11000 BROKEN LAND PARKWAY Reports Available on the World Wide Web
COLUMBIA, MD 21044 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 12/11/2000
RECORD DATE: 11/30/2000
================================================================================
MODIFIED LOAN DETAIL
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
Offering
Loan Document Pre-Modification
Number Cross-Reference Balance Modification Date Modification Description
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
Totals
-----------------------------------------------------------------------------------------------------------
</TABLE>
================================================================================
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 16 of 17
<PAGE>
DLJ COMMERCIAL MORTGAGE CORP.
MORTGAGE PASS THROUGH CERTIFICATES
SERIES 2000-CKP1
------------------------------------------
[LOGO OF WELLS FARGO BANK] For Additional Information, please contact
WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service
CORPORATE TRUST SERVICES (301) 815-6600
11000 BROKEN LAND PARKWAY Reports Available on the World Wide Web
COLUMBIA, MD 21044 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 12/11/2000
RECORD DATE: 11/30/2000
================================================================================
LIQUIDATED LOAN DETAIL
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
Final
Recovery Offering Gross Proceeds Aggregate
Loan Determination Document Appraisal Appraisal Actual Gross as a % of Liquidation
Number Date Cross-Reference Date Value Balance Proceeds Actual Balance Expenses *
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------------------------
Current Total
-------------------------------------------------------------------------------------------------------------------------------
Cumulative Total
-------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
--------------------------------------------------------------------------------
Net Net Proceeds Repurchased
Loan Liquidation as a % of Realized by Seller
Number Proceeds Actual Balance Loss (Y/N)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------
Current Total
--------------------------------------------------------------------------------
Cumulative Total
--------------------------------------------------------------------------------
</TABLE>
* Aggregate liquidation expenses also include outstanding P & I advances and
unpaid fees (servicing, trustee, etc.).
================================================================================
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 17 of 17
<PAGE>
Exhibit C
Decrement Tables for the Offered Certificates
Percentage of Initial Total Principal Balance Outstanding For:
Class A-1A Certificates
Following Payment 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
Date in-- ------ ------- ------- ------- ---------
Closing Date ......... 100% 100% 100% 100% 100%
November 2001 ........ 95% 94% 92% 91% 89%
November 2002 ........ 89% 87% 85% 84% 84%
November 2003 ........ 83% 80% 78% 78% 78%
November 2004 ........ 71% 71% 71% 71% 71%
November 2005 ........ 60% 60% 60% 60% 60%
November 2006 ........ 52% 52% 52% 52% 52%
November 2007 ........ 38% 38% 38% 38% 37%
November 2008 ........ 26% 26% 26% 26% 26%
November 2009
and thereafter ...... 0% 0% 0% 0% 0%
Avg Life ............. 5.7 5.6 5.6 5.5 5.4
Class A-1B Certificates
Following Payment 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
Date in-- ------ ------- ------- ------- --------
Closing Date ......... 100% 100% 100% 100% 100%
November 2001 ........ 100% 100% 100% 100% 100%
November 2002 ........ 100% 100% 100% 100% 100%
November 2003 ........ 100% 100% 100% 100% 100%
November 2004 ........ 100% 100% 100% 100% 100%
November 2005 ........ 100% 100% 100% 100% 100%
November 2006 ........ 100% 100% 100% 100% 100%
November 2007 ........ 100% 100% 100% 100% 100%
November 2008 ........ 100% 100% 100% 100% 100%
November 2009 ........ 98% 97% 96% 95% 84%
November 2010
and thereafter ...... 0% 0% 0% 0% 0%
Avg Life ............. 9.6 9.5 9.5 9.5 9.2
C-1
<PAGE>
Percentage of Initial Total Principal Balance Outstanding For:
Class A-2 Certificates
Following Payment 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
Date in-- ------ ------- ------- ------- --------
Closing Date ......... 100% 100% 100% 100% 100%
November 2001 ........ 100% 100% 100% 100% 100%
November 2002 ........ 100% 100% 100% 100% 100%
November 2003 ........ 100% 100% 100% 100% 100%
November 2004 ........ 100% 100% 100% 100% 100%
November 2005 ........ 100% 100% 100% 100% 100%
November 2006 ........ 100% 100% 100% 100% 100%
November 2007 ........ 100% 100% 100% 100% 100%
November 2008 ........ 100% 100% 100% 100% 100%
November 2009 ........ 100% 100% 100% 100% 100%
November 2010
and thereafter ...... 0% 0% 0% 0% 0%
Avg Life ............. 9.8 9.8 9.8 9.8 9.5
Class A-3 Certificates
Following Payment 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
Date in-- ------ ------- ------- ------- --------
Closing Date ......... 100% 100% 100% 100% 100%
November 2001 ........ 100% 100% 100% 100% 100%
November 2002 ........ 100% 100% 100% 100% 100%
November 2003 ........ 100% 100% 100% 100% 100%
November 2004 ........ 100% 100% 100% 100% 100%
November 2005 ........ 100% 100% 100% 100% 100%
November 2006 ........ 100% 100% 100% 100% 100%
November 2007 ........ 100% 100% 100% 100% 100%
November 2008 ........ 100% 100% 100% 100% 100%
November 2009 ........ 100% 100% 100% 100% 100%
November 2010
and thereafter ...... 0% 0% 0% 0% 0%
Avg Life ............. 9.8 9.8 9.8 9.8 9.5
C-2
<PAGE>
Percentage of Initial Total Principal Balance Outstanding For:
Class A-4 Certificates
Following Payment 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
Date in-- ------ ------- ------- ------- --------
Closing Date ......... 100% 100% 100% 100% 100%
November 2001 ........ 100% 100% 100% 100% 100%
November 2002 ........ 100% 100% 100% 100% 100%
November 2003 ........ 100% 100% 100% 100% 100%
November 2004 ........ 100% 100% 100% 100% 100%
November 2005 ........ 100% 100% 100% 100% 100%
November 2006 ........ 100% 100% 100% 100% 100%
November 2007 ........ 100% 100% 100% 100% 100%
November 2008 ........ 100% 100% 100% 100% 100%
November 2009 ........ 100% 100% 100% 100% 100%
November 2010
and thereafter ...... 0% 0% 0% 0% 0%
Avg Life ............. 9.8 9.8 9.8 9.8 9.6
Class B-1 Certificates
Following Payment 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
Date in-- ------ ------- ------- ------- --------
Closing Date ......... 100% 100% 100% 100% 100%
November 2001 ........ 100% 100% 100% 100% 100%
November 2002 ........ 100% 100% 100% 100% 100%
November 2003 ........ 100% 100% 100% 100% 100%
November 2004 ........ 100% 100% 100% 100% 100%
November 2005 ........ 100% 100% 100% 100% 100%
November 2006 ........ 100% 100% 100% 100% 100%
November 2007 ........ 100% 100% 100% 100% 100%
November 2008 ........ 100% 100% 100% 100% 100%
November 2009 ........ 100% 100% 100% 100% 100%
November 2010
and thereafter ...... 0% 0% 0% 0% 0%
Avg Life ............. 9.9 9.8 9.8 9.8 9.6
C-3
<PAGE>
Percentage of Initial Total Principal Balance Outstanding For:
Class B-2 Certificates
Following Payment 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
Date in-- ------ ------- ------- ------- --------
Closing Date ......... 100% 100% 100% 100% 100%
November 2001 ........ 100% 100% 100% 100% 100%
November 2002 ........ 100% 100% 100% 100% 100%
November 2003 ........ 100% 100% 100% 100% 100%
November 2004 ........ 100% 100% 100% 100% 100%
November 2005 ........ 100% 100% 100% 100% 100%
November 2006 ........ 100% 100% 100% 100% 100%
November 2007 ........ 100% 100% 100% 100% 100%
November 2008 ........ 100% 100% 100% 100% 100%
November 2009 ........ 100% 100% 100% 100% 100%
November 2010
and thereafter ...... 0% 0% 0% 0% 0%
Avg Life ............. 9.9 9.9 9.9 9.8 9.6
Percentage of Initial Total Principal Balance Outstanding For:
Class B-3 Certificates
Following Payment 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
Date in-- ------ ------- ------- ------- --------
Closing Date ......... 100% 100% 100% 100% 100%
November 2001 ........ 100% 100% 100% 100% 100%
November 2002 ........ 100% 100% 100% 100% 100%
November 2003 ........ 100% 100% 100% 100% 100%
November 2004 ........ 100% 100% 100% 100% 100%
November 2005 ........ 100% 100% 100% 100% 100%
November 2006 ........ 100% 100% 100% 100% 100%
November 2007 ........ 100% 100% 100% 100% 100%
November 2008 ........ 100% 100% 100% 100% 100%
November 2009 ........ 100% 100% 100% 100% 100%
November 2010
and thereafter ...... 0% 0% 0% 0% 0%
Avg Life ............. 9.9 9.9 9.9 9.9 9.6
C-4
<PAGE>
Exhibit D
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in limited circumstances, the globally offered DLJ Commercial
Mortgage Corp., Commercial Mortgage Pass-Through Certificates, Series 2000-CKP1,
Class A-1A, Class A-1B, Class A-2, Class A-3, Class A-4, Class B-1, Class B-2
and Class B-3, will be available only in book-entry form.
The book-entry certificates will be tradable as home market instruments in
both the European and U.S. domestic markets. Initial settlement and all
secondary trades will settle in same-day funds.
Secondary market trading between investors holding book-entry certificates
through Clearstream and Euroclear will be conducted in the ordinary way in
accordance with their normal rules and operating procedures and in accordance
with conventional Eurobond practice, which is seven calendar days' settlement.
Secondary market trading between investors holding book-entry certificates
through DTC will be conducted according to the rules and procedures applicable
to U.S. corporate debt obligations.
Secondary cross-market trading between Clearstream or Euroclear and DTC
participants holding book-entry certificates will be accomplished on a delivery
against payment basis through the respective depositaries of Clearstream and
Euroclear, in that capacity, as DTC participants.
As described under "U.S. Federal Income Tax Documentation Requirements"
below, non-U.S. holders of book-entry certificates will be subject to U.S.
withholding taxes unless those holders meet specific requirements and deliver
appropriate U.S. tax documents to the securities clearing organizations of their
participants.
INITIAL SETTLEMENT
All certificates of each class of offered certificates will be held in
book-entry form by DTC in the name of Cede & Co. as nominee of DTC. Investors'
interests in the book-entry certificates will be represented through financial
institutions acting on their behalf as direct and indirect DTC participants. As
a result, Clearstream and Euroclear will hold positions on behalf of their
member organizations through their respective depositaries, which in turn will
hold positions in accounts as DTC participants.
Investors' securities custody accounts will be credited with their holdings
against payment in same-day funds on the settlement date.
Investors electing to hold their book-entry certificates through
Clearstream or Euroclear accounts will follow the settlement procedures
applicable to conventional Eurobonds, except that there will be no temporary
global security and no "lock up" or restricted period. Global securities will be
credited to the securities custody accounts on the settlement date against
payment in same-day funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading between DTC Participants. Secondary market trading between DTC
participants will be settled in same-day funds.
D-1
<PAGE>
TRADING BETWEEN CLEARSTREAM AND/OR EUROCLEAR PARTICIPANTS. Secondary market
trading between member organizations of Clearstream or Euroclear will be settled
using the procedures applicable to conventional Eurobonds in same-day funds.
TRADING BETWEEN DTC SELLER AND CLEARSTREAM OR EUROCLEAR PURCHASER. When
book-entry certificates are to be transferred from the account of a DTC
participant to the account of a member organization of Clearstream or Euroclear,
the purchaser will send instructions to Clearstream or Euroclear through that
member organization at least one business day prior to settlement. Clearstream
or Euroclear, as the case may be, will instruct the respective depositary to
receive the book-entry certificates against payment. Payment will include
interest accrued on the book-entry certificates from and including the last
coupon payment date to and excluding the settlement date, calculated on the
basis of a year of 360 days consisting of twelve 30-day months. Payment will
then be made by the respective depositary to the DTC participant's account
against delivery of the book-entry certificates. After settlement has been
completed, the book-entry certificates will be credited to the respective
clearing system and by the clearing system, in accordance with its usual
procedures, to the account of the member organization of Clearstream or
Euroclear, as the case may be. The securities credit will appear the next day
(European time) and the cash debit will be back-valued to, and the interest on
the book-entry certificates will accrue from, the value date, which would be the
preceding day when settlement occurred in New York. If settlement is not
completed on the intended value date, the Clearstream or Euroclear cash debit
will be valued instead as of the actual settlement date.
Member organizations of Clearstream and Euroclear will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. The most direct means of doing so is to pre-position
funds for settlement, either from cash on hand or existing lines of credit, as
they would for any settlement occurring within Clearstream or Euroclear. Under
this approach, they may take on credit exposure to Clearstream or Euroclear
until the book-entry certificates are credited to their accounts one day later.
As an alternative, if Clearstream or Euroclear has extended a line of
credit to them, member organizations of Clearstream or Euroclear can elect not
to pre-position funds and allow that credit line to be drawn upon to finance
settlement. Under this procedure, the member organizations purchasing book-entry
certificates would incur overdraft charges for one day, assuming they cleared
the overdraft when the book-entry certificates were credited to their accounts.
However, interest on the book-entry certificates would accrue from the value
date. Therefore, in many cases the investment income on the book-entry
certificates earned during that one-day period may substantially reduce or
offset the amount of those overdraft charges, although this result will depend
on the cost of funds of the respective member organization of Clearstream or
Euroclear.
Since the settlement is taking place during New York business hours, DTC
participants can employ their usual procedures for sending book-entry
certificates to the respective depositary for the benefit of member
organizations of Clearstream or Euroclear. The sale proceeds will be available
to the DTC seller on the settlement date. Thus, to the DTC participant a
cross-market transaction will settle no differently than a trade between two DTC
participants.
TRADING BETWEEN CLEARSTREAM OR EUROCLEAR SELLER AND DTC PURCHASER. Due to
time zone differences in their favor, member organizations of Clearstream or
Euroclear may employ their customary procedures for transactions in which
book-entry certificates are to be transferred by the respective clearing system,
through the respective depositary, to a DTC participant. The seller will send
instructions to Clearstream or Euroclear through a member organization of
Clearstream or Euroclear at least one business day prior to settlement. In these
cases, Clearstream or Euroclear, as appropriate, will instruct the respective
depositary to deliver the book-entry certificates to the DTC participant's
account against payment. Payment will include interest accrued on the book-entry
certificates from and including the last coupon payment date to and excluding
the settlement date, calculated on the basis of a year of 360 days consisting of
twelve 30-day months. The payment will then be reflected in the account of the
member organization of Clearstream or Euroclear the following day, and
D-2
<PAGE>
receipt of the cash proceeds in the account of that member organization of
Clearstream or Euroclear would be back-valued to the value date, which would be
the preceding day, when settlement occurred in New York. Should the member
organization of Clearstream or Euroclear have a line of credit with its
respective clearing system and elect to be in debit in anticipation of receipt
of the sale proceeds in its account, the back-valuation will extinguish any
overdraft charges incurred over the one-day period. If settlement is not
completed on the intended value date, which means the trade fails, receipt of
the cash proceeds in the account of the member organization of Clearstream or
Euroclear would instead be valued as of the actual settlement date.
Finally, day traders that use Clearstream or Euroclear and that purchase
book-entry certificates from DTC participants for delivery to member
organizations of Clearstream or Euroclear should note that these trades would
automatically fail on the sale side unless affirmative action were taken. At
least three techniques should be readily available to eliminate this potential
problem:
o borrowing through Clearstream or Euroclear for one day, until the
purchase side of the day trade is reflected in their Clearstream or
Euroclear accounts, in accordance with the clearing system's customary
procedures;
o borrowing the book-entry certificates in the United States from a DTC
participant no later than one day prior to settlement, which would
allow sufficient time for the book-entry certificates to be reflected
in their Clearstream or Euroclear accounts in order to settle the sale
side of the trade; or
o staggering the value dates for the buy and sell sides of the trade so
that the value date for the purchase from the DTC participant is at
least one day prior to the value date for the sale to the member
organization of Clearstream or Euroclear.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A holder that is not a "United States person" within the meaning of Section
7701(a)(30) of the Internal Revenue Code of 1986 ("United States person")
holding a Class X, Class H or Class J Certificate through Clearstream, Euroclear
or DTC may be subject to U.S. withholding tax at a rate of 30% unless such
holder provides certain documentation to the Trustee or to the U.S. entity
required to withhold tax (the "U.S. withholding agent") establishing an
exemption from withholding. Before January 1, 2001, a holder that is not a
United States person may be subject to 30% withholding unless:
o the Trustee or the U.S. withholding agent receives a statement--
1. from the holder on Internal Revenue Service ("IRS") Form W-8 (or
any successor or substitute form) that--
(a) is signed by the certificateholder under penalty of perjury,
(b) certifies that such owner is not a United States person, and
(c) provides the name and address of the certificateholder, or
2. from a securities clearing organization, a bank or another
financial institution that holds customers' securities in the
ordinary course of its trade or business that--
(a) is signed under penalties of perjury by an authorized
representative of the financial institution,
D-3
<PAGE>
(b) states that the financial institution has received an IRS
Form W-8 (or any successor or substitute form) from the
certificateholder or that another financial institution
acting on behalf of the certificateholder has received such
IRS Form W-8 (or any successor or substitute form),
(c) provides the name and address of the certificateholder, and
(d) attaches the IRS Form W-8 (or any successor or substitute
form) provided by the certificateholder;
o the holder provides a properly executed IRS Form 1001 (or any
successor or substitute form) to the Trustee or the U.S. withholding
agent;
o the holder provides a properly executed IRS Form 4224 (or any
successor or substitute form) to the Trustee or the U.S. withholding
agent;
o interest is paid or collected on behalf of the holder at an address
inside the United States and the holder is a U.S. person, that is
exempt from withholding and complies with the appropriate
certification requirements, if any; or
o interest is paid at an address inside the United States and backup
withholding is required.
A holder holding book-entry certificates through Clearstream or Euroclear,
or in the case of an IRS Form 1001 or an IRS Form 4224, the holder's agent,
provides the forms and statements referred to above by submitting them to the
person through which he holds an interest in the book-entry certificates, which
is the clearing agency, in the case of persons holding directly on the books of
the clearing agency. Existing forms and statements will remain valid only for
the following periods:
1. a withholding agent holding an existing form or statement that is
valid on or after January 1, 1999, may treat that form or statement as
valid until the earlier of its expiration or December 31, 2000;
2. no existing forms or statements will be effective after December 31,
2000; and
3. existing forms and statements that expire in 2000 will not be
effective after expiration.
The Treasury has promulgated new regulations governing withholding that are
generally effective for payments after December 31, 2000. The new regulations
affect the documentation required from certificateholders that are not United
States persons. The new regulations replace a number of current tax
certification forms (including IRS Forms W-8, 1001 and 4224, as discussed above)
with a new series of IRS Forms W-8 and generally standardize the period of time
for which withholding agents can rely on those forms, although certain of the
new forms may remain valid indefinitely if the certificateholder provides a
United States taxpayer identification number and the information on the form
does not change.
Holders that are not United States persons will be required to provide
updated documentation valid under the new regulations (i.e., an IRS Form W-8BEN
or Form W-8ECI) to the Trustee or the U.S. withholding agent prior to December
31, 2000 to maintain such withholding exemption. Alternatively, holders that are
not United States persons may establish such exemption from withholding at the
time of purchase by providing the Trustee or the U.S. withholding agent with
documentation valid under the new regulations that will remain valid after
December 31, 2000 (i.e., an IRS Form W-8BEN or Form W-8ECI). Prospective
investors are urged to consult their tax advisors with respect to the effect of
the new regulations.
D-4
<PAGE>
In addition, all holders holding book-entry certificates through
Clearstream, Euroclear or DTC may be subject to backup withholding at a rate of
31% unless the holder:
1. provides a properly executed IRS Form W-8 (or any successor or
substitute form, subject to the same updating requirements before
December 31, 2000 listed above in the discussion regarding 30%
withholding) if that person is a not a United States person;
2. provides a properly executed IRS Form W-9 (or any substitute form) if
that person is a United States person; or
3. is a corporation, within the meaning of Section 7701(a) of the
Internal Revenue Code of 1986, or otherwise establishes that it is a
recipient exempt from United States backup withholding.
This summary does not deal with all aspects of federal income tax withholding or
backup withholding that may be relevant to investors that are not "U.S. persons"
within the meaning of Section 7701(a)(30) of the Internal Revenue Code. Such
investors are advised to consult their own tax advisors for specific tax advice
concerning their holding and disposing of the book-entry certificates.
D-5
<PAGE>
PROSPECTUS
DLJ COMMERCIAL MORTGAGE CORP., THE DEPOSITOR
MORTGAGE PASS-THROUGH CERTIFICATES (ISSUABLE IN SERIES)
Our name is DLJ Commercial Mortgage Corp. We intend to offer commercial
mortgage pass-through certificates from time to time. These offers may be made
through one or more different methods, including offerings through underwriters.
We do not currently intend to list the offered certificates of any series on any
national securities exchange or the NASDAQ stock market. See "Method of
Distribution".
================================================================================
THE OFFERED CERTIFICATES:
The offered certificates will be issuable in series. Each series of offered
certificates will--
o have its own series designation,
o consist of one or more classes with various payment characteristics,
o evidence beneficial ownership interests in a trust established by us, and
o be payable solely out of the related trust assets.
No governmental agency or instrumentality will insure or guarantee payment on
the offered certificates. Neither we nor any of our affiliates are responsible
for making payments on the offered certificates if collections on the related
trust assets are insufficient.
--------------------------------------------------------------------------------
THE TRUST ASSETS:
The assets of each of our trusts will include--
o mortgage loans secured by first and junior liens on, or security interests
in, various interests in commercial and multifamily real properties,
o mortgage-backed securities that directly or indirectly evidence interests
in, or are directly or indirectly secured by, such types of mortgage loans,
or
o some combination of such types of mortgage loans and mortgage-backed
securities.
Trust assets 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
similar instruments and agreements.
================================================================================
In connection with each offering, we will prepare a supplement to this
prospectus in order to describe in more detail the particular certificates being
offered and the related trust assets. In that document, we will also state the
price to the public for each class of offered certificates or explain the method
for determining that price. In addition, in that document, we will identify the
applicable lead or managing underwriter(s), if any, and the relevant
underwriting arrangements. You may not purchase the offered certificates of any
series unless you have also received the prospectus supplement for that series.
================================================================================
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 13 IN THIS
PROSPECTUS, AS WELL AS THOSE SET FORTH IN THE RELATED PROSPECTUS SUPPLEMENT,
PRIOR TO INVESTING.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE OFFERED CERTIFICATES OR PASSED
UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
================================================================================
The date of this prospectus is October 17, 2000.
<PAGE>
TABLE OF CONTENTS
Page
----
Important Notice About the Information Presented in this Prospectus........ 3
Available Information; Incorporation by Reference.......................... 3
Summary of Prospectus...................................................... 4
Risk Factors............................................................... 13
Description of the Trust Assets............................................ 34
Yield and Maturity Considerations.......................................... 60
DLJ Commercial Mortgage Corp............................................... 66
Description of the Certificates............................................ 67
Description of the Governing Documents..................................... 77
Description of Credit Support.............................................. 87
Certain Legal Aspects of Mortgage Loans.................................... 90
Federal Income Tax Consequences............................................ 103
State and Other Tax Consequences........................................... 143
ERISA Considerations....................................................... 143
Legal Investment........................................................... 148
Use of Proceeds............................................................ 150
Method of Distribution..................................................... 151
Legal Matters.............................................................. 152
Financial Information...................................................... 152
Rating..................................................................... 152
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<PAGE>
================================================================================
IMPORTANT NOTICE ABOUT THE INFORMATION PRESENTED IN THIS PROSPECTUS
When deciding whether to invest in any of the offered certificates, you
should only rely on the information contained in this prospectus and the related
prospectus supplement. We have not authorized any dealer, salesman or other
person to give any information or to make any representation that is different.
In addition, information in this prospectus or any related prospectus supplement
is current only as of the date on its cover. By delivery of this prospectus and
any related prospectus supplement, we are not offering to sell any securities,
and are not soliciting an offer to buy any securities, in any state where the
offer and sale is not permitted.
AVAILABLE INFORMATION; INCORPORATION BY REFERENCE
We have filed with the SEC a registration statement under the Securities
Act of 1933, as amended, with respect to the certificates offered by this
prospectus. This prospectus forms a part of the registration statement. This
prospectus and the related prospectus supplement do not contain all of the
information with respect to an offering that is contained in the registration
statement. For further information regarding the documents referred to in this
prospectus and the related prospectus supplement, you should refer to the
registration statement and its exhibits. You can inspect the registration
statement and its exhibits, and make copies of these documents 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 as follows: Chicago Regional Office, 500 West Madison,
14th Floor, Chicago, Illinois 60661; and New York Regional Office, Seven World
Trade Center, New York, New York 10048. You can also obtain copies of such
materials electronically through the SEC's Web site (http://www.sec.gov).
In connection with each series of offered certificates, we will file or
arrange to have filed with the SEC with respect to the related trust any
periodic reports that are required under the Securities Exchange Act of 1934, as
amended. All documents and reports that are so filed for the related trust prior
to the termination of an offering of certificates are incorporated by reference
into, and should be considered a part of, this prospectus. Upon request, we will
provide without charge to each person receiving this prospectus in connection
with an offering, a copy of any or all documents or reports that are so
incorporated by reference. All requests should be directed to us in writing at
277 Park Avenue, 9th Floor, New York, New York 10172, attention: N. Dante
LaRocca, or by telephone at (212) 892-3000.
-3-
<PAGE>
================================================================================
SUMMARY OF PROSPECTUS
This summary contains selected information from this prospectus. It
does not contain all of the information you need to consider in making your
investment decision. TO UNDERSTAND ALL OF THE TERMS OF A PARTICULAR OFFERING OF
CERTIFICATES, YOU SHOULD READ CAREFULLY THIS PROSPECTUS AND THE RELATED
PROSPECTUS SUPPLEMENT IN FULL.
WHO WE ARE......................... Our name is DLJ Commercial Mortgage Corp.
We are a Delaware corporation. Our
principal offices are located at 277 Park
Avenue, New York, New York 10172. Our main
telephone number is (212) 892-3000. See
"DLJ Commercial Mortgage Corp".
THE SECURITIES BEING OFFERED....... The securities that will be offered
pursuant to this prospectus and the related
prospectus supplements consist of mortgage
pass-through certificates. These
certificates will be issued in series, and
each series will, in turn, consist of one
or more classes. Each class of offered
certificates must, at the time of issuance,
be assigned an investment grade rating by
at least one nationally recognized
statistical rating organization. Typically,
the four highest rating categories, within
which there may be sub-categories or
gradations to indicate relative standing,
signify investment grade. See "Rating".
Each series of offered certificates will
evidence beneficial ownership interests in
a trust established by us and containing
the assets described in this prospectus and
the related prospectus supplement.
THE OFFERED CERTIFICATES MAY BE
ISSUED WITH OTHER CERTIFICATES... We may not publicly offer all the mortgage
pass-through certificates evidencing
interests in one of our trusts. We may
elect to retain some of those certificates,
to place some privately with institutional
investors or to deliver some to the
applicable seller as partial consideration
for the related mortgage assets. In
addition, some of those certificates may
not satisfy the rating requirement
described above for offered certificates.
THE GOVERNING DOCUMENTS............ In general, a pooling and servicing
agreement or other similar agreement or
collection of agreements will govern, among
other things--
o the issuance of the related series of
offered certificates,
o the creation of and transfer of assets
to the related trust, and
================================================================================
-4-
<PAGE>
================================================================================
o the servicing and administration of
those assets.
The parties to the governing document(s)
for a series of offered certificates will
always include us and a trustee. We will be
responsible for establishing the trust
relating to each series of offered
certificates. In addition, we will transfer
or arrange for the transfer of the initial
trust assets to that trust. In general, the
trustee for a series of offered
certificates will be responsible for, among
other things, making payments and preparing
and disseminating certain reports to the
holders of those offered certificates.
If the trust assets for a series of offered
certificates include mortgage loans, the
parties to the governing document(s) will
also include--
o a master servicer that will generally be
responsible for performing customary
servicing duties with respect to those
mortgage loans that are not defaulted,
nonperforming or otherwise problematic
in any material respect, and
o a special servicer that will generally
be responsible for servicing and
administering such of those mortgage
loans that are defaulted, nonperforming
or otherwise problematic in any material
respect and real estate assets acquired
as part of the related trust in respect
of defaulted mortgage loans.
The same person or entity, or affiliated
entities, may act as both master servicer
and special servicer for any trust.
If the trust assets for a series of offered
certificates include mortgage-backed
securities, the parties to the governing
document(s) may also include a manager that
will be responsible for performing various
administrative duties with respect to those
mortgage-backed securities. If the related
trustee assumes those duties, however,
there will be no manager.
In the related prospectus supplement, we
will identify the trustee and any master
servicer, special servicer or manager for
each series of offered certificates and
will describe their respective duties in
further detail. See "Description of the
Governing Documents".
CERTAIN CHARACTERISTICS OF
THE MORTGAGE ASSETS.............. The trust assets with respect to any series
of offered certificates will, in general,
include mortgage loans. Each of those
mortgage loans will constitute the
obligation of
================================================================================
-5-
<PAGE>
================================================================================
one or more persons to repay a debt, and
the performance of that obligation will be
secured by a first or junior lien on, or
security interest in, the ownership,
leasehold or other interest(s) of the
related borrower or another person in or
with respect to one or more commercial or
multifamily real properties. In particular,
the those properties may include:
o rental or cooperatively-owned
buildings with multiple dwelling units;
o retail properties related to the sale
of consumer goods and other products,
or related to providing entertainment,
recreational or personal services, to
the general public;
o office buildings;
o hospitality properties;
o casino properties;
o health care-related facilities;
o industrial facilities;
o warehouse facilities, mini-warehouse
facilities and self-storage facilities;
o restaurants, taverns and other
establishments involved in the food and
beverage industry;
o manufactured housing communities,
mobile home parks and recreational
vehicle parks;
o recreational and resort properties;
o arenas and stadiums;
o churches and other religious
facilities;
o parking lots and garages;
o mixed use properties;
o other income-producing properties;
and
o unimproved land that is zoned for
multifamily residential or commercial
use.
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The mortgage loans underlying a series
of offered certificates may have a
variety of payment terms. For example,
any of those mortgage loans:
o may provide for the accrual of
interest at a mortgage interest rate
that is fixed over its term, that
resets on one or more specified dates
or that otherwise adjusts from time to
time;
o may provide for the accrual of
interest at a mortgage interest rate
that may be converted at the borrower's
election from an adjustable to a fixed
interest rate or from a fixed to an
adjustable interest rate;
o may provide for no accrual of
interest;
o may provide for level payments to
stated maturity, for payments that
reset in amount on one or more
specified dates or for payments that
otherwise adjust from time to time to
accommodate changes in the mortgage
interest rate or to reflect the
occurrence of certain events;
o may be fully amortizing or,
alternatively, may be partially
amortizing or nonamortizing, with a
substantial payment of principal due on
its stated maturity date;
o may permit the negative amortization
or deferral of accrued interest;
o may prohibit some or all voluntary
prepayments or require payment of a
premium, fee or charge in connection
with those prepayments;
o may provide for payments of principal,
interest or both, on due dates that
occur monthly, bi-monthly, quarterly,
semi-annually, annually or at some other
interval; and/or
o may have two or more component parts,
each having characteristics that are
otherwise described in this prospectus
as being attributable to separate and
distinct mortgage loans.
We do not originate mortgage loans.
However, some or all of the mortgage
loans included in one of our trusts may
be originated by our affiliates.
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Neither we nor any of our affiliates
will guarantee or insure repayment of
any of the mortgage loans underlying a
series of offered certificates. Unless
we expressly state otherwise in the
related prospectus supplement, no
governmental agency or instrumentality
will guarantee or insure repayment of
any of the mortgage loans underlying a
series of offered certificates. See
"Description of the Trust Assets--Mortgage
Loans".
The trust assets with respect to any
series of offered certificates may also
include mortgage participations,
mortgage pass-through certificates,
collateralized mortgage obligations and
other mortgage-backed securities, that
evidence an interest in, or are secured
by a pledge of, one or more mortgage
loans of the type described above. We
will not include a mortgage-backed
security among the trust assets with
respect to any series of offered
certificates unless--
o the security has been registered
under the Securities Act of 1933, as
amended, or
o we would be free to publicly resell
the security without registration.
See "Description of the Trust Assets--
Mortgage-Backed Securities".
We will describe the specific
characteristics of the mortgage assets
underlying a series of offered
certificates in the related prospectus
supplement.
In general, the aggregate outstanding
principal balance of the mortgage
assets transferred by us to any
particular trust will equal or exceed
the initial aggregate outstanding
principal balance of the related series
of certificates. In the event that the
aggregate outstanding principal balance
of the related mortgage assets
initially delivered by us to the
related trustee is less than the
initial aggregate outstanding principal
balance of any series of certificates,
we may deposit or arrange for the
deposit of cash or liquid investments
on an interim basis with the related
trustee to cover the shortfall. For 90
days following the date of initial
issuance of that series of
certificates, we will be entitled to
obtain a release of the deposited cash
or investments if we deliver or arrange
for delivery of a corresponding amount
of mortgage assets. If we fail,
however, to deliver mortgage assets
sufficient to make up the entire
shortfall, any of the cash or,
following liquidation, investments
remaining on deposit with the related
trustee will be used
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<PAGE>
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by the related trustee to pay down the
aggregate principal balance of the related
series of certificates, as described in the
related prospectus supplement.
CERTAIN CHARACTERISTICS OF
THE OFFERED CERTIFICATES......... An offered certificate may entitle the
holder to receive:
o a stated principal amount;
o interest on a principal balance or
notional amount, at a fixed, variable
or adjustable pass-through rate;
o specified, fixed or variable portions
of the interest, principal or other
amounts received on the related
mortgage assets;
o payments of principal, with
disproportionate, nominal or no
payments of interest;
o payments of interest, with
disproportionate, nominal or no
payments of principal;
o payments of interest or principal
that commence only as of a specified
date or only after the occurrence of
certain events, such as the payment in
full of the interest and principal
outstanding on one or more other
classes of certificates of the same
series;
o payments of principal to be made,
from time to time or for designated
periods, at a rate that is--
1. faster and, in some cases,
substantially faster, or
2. slower and, in some cases,
substantially slower,
than the rate at which payments or
other collections of principal are
received on the related mortgage
assets;
o payments of principal to be made,
subject to available funds, based on a
specified principal payment schedule or
other methodology; or
o payments of all or part of the
prepayment or repayment premiums, fees
and charges, equity participations
payments or other similar items
received on the related mortgage
assets.
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Any class of offered certificates may
be senior or subordinate to one or more
other classes of certificates of the
same series, including a non-offered
class of certificates of that series,
for purposes of some or all payments
and/or allocations of losses.
A class of offered certificates may
have two or more component parts, each
having characteristics that are
otherwise described in this prospectus
as being attributable to separate and
distinct classes.
We will describe the specific
characteristics of each class of
offered certificates in the related
prospectus supplement. See "Description
of the Certificates".
CREDIT SUPPORT AND
INTEREST RATE PROTECTION FOR
THE OFFERED CERTIFICATES......... Some classes of offered certificates may be
protected in full or in part against
certain defaults and losses on the
related mortgage assets through the
subordination of one or more other
classes of certificates of the same
series or by other types of credit
support. The other types of credit
support may include a letter of credit,
a surety bond, an insurance policy, a
guarantee or a reserve fund. We will
describe the credit support, if any,
for each class of offered certificates
in the related prospectus supplement.
The trust assets with respect to any
series of offered certificates may also
include any of the following
agreements:
o guaranteed investment contracts
pursuant to which moneys held in the
funds and accounts established with
respect to those offered certificates
will be invested at a specified rate;
or
o interest rate exchange agreements,
interest rate cap or floor agreements,
or other agreements and arrangements
designed to reduce the effects of
interest rate fluctuations on the
related mortgage assets or on one or
more classes of those offered
certificates.
We will describe the types of
reinvestment and interest rate
protection, if any, for each class of
offered certificates in the related
prospectus supplement.
See "Risk Factors", "Description of the
Trust Assets" and "Description of
Credit Support".
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<PAGE>
================================================================================
ADVANCES TO COVER DELINQUENT
PAYMENTS OF PRINCIPAL AND
INTEREST ON THE MORTGAGE ASSETS.. If the trust assets for a series of offered
certificates include mortgage loans, then,
as and to the extent described in the
related prospectus supplement, the related
master servicer, the related special
servicer, the related trustee, any related
provider of credit support and/or any other
specified person may be obligated to make,
or may have the option of making, certain
advances with respect to delinquent
scheduled payments of principal and/or
interest on those mortgage loans.
Any party making advances will be entitled
to reimbursement from subsequent recoveries
on the related mortgage loan and as
otherwise described in this prospectus or
the related prospectus supplement. That
party may also be entitled to receive
interest on its advances for a specified
period. See "Description of the
Certificates--Advances in Respect of
Delinquencies".
If the trust assets for a series of offered
certificates include mortgage-backed
securities, we will describe in the related
prospectus supplement any comparable
advancing obligations in respect of those
mortgage-backed securities or the
underlying mortgage loans.
OPTIONAL TERMINATION............... We will describe in the related prospectus
supplement any circumstances in which a
specified party is permitted or
obligated to purchase or sell any of
the mortgage assets underlying a series
of offered certificates. In particular,
a master servicer, special servicer or
other designated party may be permitted
or obligated to purchase or sell--
o all the mortgage assets in any
particular trust, thereby resulting in
a termination of the trust, or
o that portion of the mortgage assets
in any particular trust as is necessary
or sufficient to retire one or more
classes of offered certificates of the
related series.
See "Description of the Certificates--
Termination".
FEDERAL INCOME TAX CONSEQUENCES.... Any class of offered certificates will
constitute or evidence ownership of
either--
o "regular interests" or "residual
interests" in a "real estate mortgage
investment conduit" under Sections 860A
through 860G of the Internal Revenue
Code of 1986, or
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o interests in a grantor trust under
Subpart E of Part I of Subchapter J of
the Internal Revenue Code of 1986.
See "Federal Income Tax Consequences".
ERISA CONSIDERATIONS.............. If you are a fiduciary of an employee
benefit plan or other retirement plan
or arrangement, you should review with
your legal advisor whether the purchase
or holding of offered certificates
could give rise to a transaction that
is prohibited or is not otherwise
permissible under applicable law. See
"ERISA Considerations".
LEGAL INVESTMENT.................. If your investment authority is subject to
legal restrictions, you should consult
your legal advisor to determine whether
and to what extent the offered
certificates constitute a legal
investment for you. We will specify in
the related prospectus supplement which
classes of the offered certificates
will constitute "mortgage related
securities" for purposes of the
Secondary Mortgage Market Enhancement
Act of 1984, as amended. See "Legal
Investment".
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<PAGE>
RISK FACTORS
You should consider the following factors, as well as the factors set forth
under "Risk Factors" in the related prospectus supplement, in deciding whether
to purchase offered certificates.
LACK OF LIQUIDITY WILL IMPAIR YOUR ABILITY TO SELL YOUR CERTIFICATES AND MAY
HAVE AN ADVERSE EFFECT ON THE MARKET VALUE OF YOUR CERTIFICATES
The offered certificates may have limited or no liquidity. We cannot assure
you that a secondary market for your certificates will develop. There will be no
obligation on the part of anyone to establish a secondary market. Even if a
secondary market does develop for your certificates, it may provide you with
less liquidity than you anticipated and it may not continue for the life of your
certificates.
We will describe in the related prospectus supplement the information that
will be available to you with respect to your certificates. The limited nature
of such information may adversely affect the liquidity of your certificates.
We do not currently intend to list the offered certificates on any national
securities exchange or the NASDAQ stock market.
Lack of liquidity will impair your ability to sell your certificates and
may prevent you from doing so at a time when you may want or need to. Lack of
liquidity could adversely affect the market value of your certificates. We do
not expect that you will have any redemption rights with respect to your
certificates.
If you decide to sell your certificates, you may have to sell them at a
discount from the price you paid for reasons unrelated to the performance of
your certificates or the related mortgage assets. Pricing information regarding
your certificates may not be generally available on an ongoing basis.
THE MARKET VALUE OF YOUR CERTIFICATES WILL BE SENSITIVE TO FACTORS UNRELATED TO
THE PERFORMANCE OF YOUR CERTIFICATES AND THE UNDERLYING MORTGAGE ASSETS
The market value of your certificates can decline even if those
certificates and the underlying mortgage assets are performing at or above your
expectations.
The market value of your certificates will be sensitive to fluctuations in
current interest rates. However, a change in the market value of your
certificates as a result of an upward or downward movement in current interest
rates may not equal the change in the market value of your certificates as a
result of an equal but opposite movement in interest rates.
The market value of your certificates will also be influenced by the supply
of and demand for commercial mortgage-backed securities generally. The supply of
commercial mortgage-backed securities will depend on, among other things, the
amount of commercial and multifamily mortgage loans, whether newly originated or
held in portfolio, that are available for securitization. A number of factors
will affect investors' demand for commercial mortgage-backed securities,
including--
o the availability of alternative investments that offer higher
yields or are perceived as being a better credit risk, having a
less volatile market value or being more liquid,
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<PAGE>
o legal and other restrictions that prohibit a particular entity
from investing in commercial mortgage-backed securities or limit
the amount or types of commercial mortgage-backed securities that
it may acquire,
o investors' perceptions regarding the commercial and multifamily
real estate markets, which may be adversely affected by, among
other things, a decline in real estate values or an increase in
defaults and foreclosures on mortgage loans secured by
income-producing properties, and
o investors' perceptions regarding the capital markets in general,
which may be adversely affected by political, social and economic
events completely unrelated to the commercial and multifamily
real estate markets.
If you decide to sell your certificates, you may have to sell at discount
from the price you paid for reasons unrelated to the performance of your
certificates or the related mortgage assets. Pricing information regarding your
certificates may not be generally available on an ongoing basis.
PAYMENTS ON THE OFFERED CERTIFICATES WILL BE MADE SOLELY FROM THE LIMITED
ASSETS OF THE RELATED TRUST
The offered certificates do not represent obligations of any person or
entity and do not represent a claim against any assets other than those of the
related trust. No governmental agency or instrumentality will guarantee or
insure payment on the offered certificates. In addition, neither we nor our
affiliates are responsible for making payments on the offered certificates if
collections on the related trust assets are insufficient. If the related trust
assets are insufficient to make payments on your certificates, no other assets
will be available to you for payment of the deficiency, and you will bear the
resulting loss. Any advances made by a master servicer or other party with
respect to the mortgage assets underlying your certificates are intended solely
to provide liquidity and not credit support. The party making those advances
will have a right to reimbursement, probably with interest, which is senior to
your right to receive payment on your certificates.
ANY CREDIT SUPPORT FOR YOUR CERTIFICATES MAY BE INSUFFICIENT TO PROTECT YOU
AGAINST ALL POTENTIAL LOSSES
THE AMOUNT OF CREDIT SUPPORT WILL BE LIMITED. The rating agencies that
assign ratings to your certificates will establish the amount of credit support,
if any, for your certificates based on, among other things, an assumed level of
defaults, delinquencies and losses with respect to the related mortgage assets.
Actual losses may, however, exceed the assumed levels. See "Description of the
Certificates--Allocation of Losses and Shortfalls" and "Description of Credit
Support". If actual losses on the underlying mortgage assets exceed the assumed
levels, you may be required to bear the additional losses.
CREDIT SUPPORT MAY NOT COVER ALL TYPES OF LOSSES. The credit support, if
any, for your certificates may not cover all of your potential losses. For
example, certain forms of credit support may not cover or may provide limited
protection against losses that you may suffer by reason of fraud or negligence
or as a result of certain uninsured casualties at the real properties securing
the related mortgage loans. You may be required to bear any losses which are not
covered by the credit support.
DISPROPORTIONATE BENEFITS TO CERTAIN CLASSES AND SERIES. If a form of
credit support covers multiple classes or series and losses exceed the amount of
such credit support, it is possible that the
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<PAGE>
holders of offered certificates of another series or class will be
disproportionately benefited by such credit support to your detriment.
THE INVESTMENT PERFORMANCE OF YOUR CERTIFICATES WILL DEPEND UPON PAYMENTS,
DEFAULTS AND LOSSES ON THE UNDERLYING MORTGAGE LOANS
THE TERMS OF THE UNDERLYING MORTGAGE LOANS WILL AFFECT PAYMENTS ON YOUR
CERTIFICATES. Each of the mortgage loans underlying the offered certificates
will specify the terms on which the related borrower must repay the outstanding
principal amount of the loan. The rate, timing and amount of scheduled payments
of principal may vary, and may vary significantly, from mortgage loan to
mortgage loan. The rate at which the underlying mortgage loans amortize will
directly affect the rate at which the principal balance or notional amount of
your certificates is paid down or otherwise reduced.
In addition, any mortgage loan underlying the offered certificates may
permit the related borrower during some or all of the loan term to prepay the
loan. In general, a borrower will be more likely to prepay its mortgage loan
when it has an economic incentive to do so, such as obtaining a larger loan on
the same underlying real property or a lower or otherwise more advantageous
interest rate through refinancing. If a mortgage loan includes some form of
prepayment restriction, the likelihood of prepayment should decline. These
restrictions may include--
o an absolute or partial prohibition against voluntary prepayments
during some or all of the loan term, or
o a requirement that voluntary prepayments be accompanied by some form
of prepayment premium, fee or charge during some or all of the loan
term.
In many cases, there will be no restriction associated with the application
of insurance proceeds or condemnation proceeds as a prepayment of principal.
Notwithstanding the terms of the mortgage loans backing your certificates,
the amount, rate and timing of payments and other collections thereon will, to
some degree, be unpredictable because of borrower defaults and because of
casualties and condemnations with respect to the underlying real properties.
The investment performance of your certificates may vary materially and
adversely from your expectations due to--
o the rate of prepayments and other unscheduled collections of principal
on the underlying mortgage loans being faster or slower than you
anticipated, or
o the rate of defaults on the underlying mortgage loans being faster, or
the severity of losses on the underlying mortgage loans being greater,
than you anticipated.
The actual yield to you, as a holder of an offered certificate, may not
equal 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, default and loss assumptions to be used. If the
trust assets underlying your certificates include mortgage-backed securities,
the terms of those securities may soften or enhance the effects to you that may
result from prepayments, defaults and losses on the mortgage loans that
ultimately back those securities.
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PREPAYMENTS ON THE UNDERLYING MORTGAGE LOANS WILL AFFECT THE AVERAGE LIFE
OF YOUR Certificates. Payments of principal and/or interest on your certificates
will depend upon, among other things, the rate and timing of payments on the
related mortgage assets. Prepayments on the underlying mortgage loans may result
in a faster rate of principal payments on your certificates, thereby resulting
in a shorter average life for your certificates than if those prepayments had
not occurred. The rate and timing of principal prepayments on pools of mortgage
loans varies among pools and is influenced by a variety of economic,
demographic, geographic, social, tax and legal factors. Accordingly, neither you
nor we can predict the rate and timing of principal prepayments on the mortgage
loans underlying your certificates. As a result, repayment of your certificates
could occur significantly earlier or later, and the average life of your
certificates could be significantly shorter or longer, than you expected.
The extent to which prepayments on the underlying mortgage loans ultimately
affect the average life of your certificates depends on the terms and provisions
of your certificates. A class of offered certificates may entitle the holders to
a PRO RATA share of any prepayments on the underlying mortgage loans, to all or
a disproportionately large share of those prepayments, or to none or a
disproportionately small share of those prepayments. If you are entitled to a
disproportionately large share of any prepayments on the underlying mortgage
loans, your certificates may be retired at an earlier date. If, however, you are
only entitled to a small share of the prepayments on the underlying mortgage
loans, the average life of your certificates may be extended. Your entitlement
to receive payments, including prepayments, of principal of the underlying
mortgage loans may--
o vary based on the occurrence of certain events, such as the retirement
of one or more other classes of certificates of the same series, or
o be subject to certain contingencies, such as prepayment and default
rates with respect to the underlying mortgage loans.
We will describe the terms and provisions of your certificates more fully
in the related prospectus supplement.
PREPAYMENTS ON THE UNDERLYING MORTGAGE LOANS WILL AFFECT THE YIELD ON YOUR
CERTIFICATES. If you purchase your certificates at a discount or premium, the
yield on your certificates will be sensitive to prepayments on the underlying
mortgage loans. If you purchase your certificates at a discount, you should
consider the risk that a slower than anticipated rate of principal payments on
the underlying mortgage loans could result in your actual yield being lower than
your anticipated yield. Alternatively, if you purchase your certificates at a
premium, you should consider the risk that a faster than anticipated rate of
principal payments on the underlying mortgage loans could result in your actual
yield being lower than your anticipated yield. The potential effect that
prepayments may have on the yield of your certificates will increase as the
discount deepens or the premium increases. If the amount of interest payable on
your certificates is disproportionately large, as compared to the amount of
principal payable on your certificates, you may fail to recover your original
investment under some prepayment scenarios.
DELINQUENCIES, DEFAULTS AND LOSSES ON THE UNDERLYING MORTGAGE LOANS MAY
AFFECT THE AMOUNT AND TIMING OF PAYMENTS ON YOUR CERTIFICATES. The rate and
timing of delinquencies and defaults, and the severity of losses, on the
underlying mortgage loans will impact the amount and timing of payments on a
series of offered certificates to the extent that their effects are not offset
by delinquency advances or some form of credit support.
Unless otherwise covered by delinquency advances or some form of credit
support, defaults on the underlying mortgage loans may delay payments on a
series of offered certificates while the defaulted
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<PAGE>
mortgage loans are worked-out or liquidated. However, liquidations of defaulted
mortgage loans prior to maturity could affect the yield and average life of an
offered certificate in a manner similar to a voluntary prepayment.
If you calculate your anticipated yield to maturity based on an assumed
rate of default and amount of losses on the underlying mortgage loans that is
lower than the default rate and amount of losses actually experienced, then, to
the extent that you are required to bear the additional losses, your actual
yield to maturity will be lower than you calculated and could, under certain
scenarios, be negative. Furthermore, the timing of losses on the underlying
mortgage loans can affect your yield. In general, the earlier you bear any loss
on an underlying mortgage loan, the greater the negative effect on your yield.
See "--Repayment of a Commercial or Multifamily Mortgage Loan Depends Upon
the Performance and Value of the Underlying Real Property and the Related
Borrower's Ability to Refinance the Property" below.
THERE IS AN INCREASED RISK OF DEFAULT ASSOCIATED WITH BALLOON PAYMENTS. Any
of the mortgage loans underlying your certificates may be nonamortizing or only
partially amortizing. The borrower under a mortgage loan of that type is
required to make substantial payments of principal and interest (that is,
balloon payments) on the maturity date of the loan. The ability of the borrower
to make a balloon payment depends upon the borrower's ability to refinance or
sell the real property securing the loan. The ability of the borrower to
refinance or sell the property will be affected by a number of factors,
including:
o the fair market value and condition of the underlying real property;
o the level of interest rates;
o the borrower's equity in the underlying real property;
o the borrower's financial condition;
o the operating history of the underlying real property;
o changes in zoning and tax laws;
o changes in competition in the relevant area;
o changes in rental rates in the relevant area;
o changes in governmental regulation and fiscal policy;
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 rental or commercial
properties.
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See "--Repayment of a Commercial or Multifamily Mortgage Loan Depends upon
the Performance and Value of the Underlying Real Property and the Related
Borrower's Ability to Refinance the Property" below.
Neither we nor any of our affiliates will be obligated to refinance any
mortgage loan underlying your certificates.
The related master servicer or special servicer may (within prescribed
limits) extend and modify mortgage loans underlying your certificates that are
in default or as to which a payment default is imminent in order to maximize
recoveries on the defaulted loans. The related master servicer or special
servicer is only required to determine that any such extension or modification
is reasonably likely to produce a greater recovery than a liquidation of the
real property securing the defaulted loan. There is a risk that the decision of
the master servicer or special servicer to extend or modify a mortgage loan may
not in fact produce a greater recovery.
REPAYMENT OF A COMMERCIAL OR MULTIFAMILY MORTGAGE LOAN DEPENDS UPON THE
PERFORMANCE AND VALUE OF THE UNDERLYING REAL PROPERTY AND THE RELATED BORROWER'S
ABILITY TO REFINANCE THE PROPERTY
MOST OF THE MORTGAGE LOANS UNDERLYING YOUR CERTIFICATES WILL BE
NONRECOURSE. You should consider all of the mortgage loans underlying your
certificates to be nonrecourse loans. This means that, in the event of a
default, recourse will be limited to the related real property or properties
securing the defaulted mortgage loan. In those cases where recourse to a
borrower or guarantor is permitted by the loan documents, we generally will not
undertake any evaluation of the financial condition of such borrower or
guarantor. Consequently, full and timely payment on each mortgage loan
underlying your certificates will depend on one or more of the following:
o the sufficiency of the net operating income of the applicable real
property;
o the market value of the applicable real property at or prior to
maturity; and
o the ability of the related borrower to refinance or sell the
applicable real property.
In general, the value of a multifamily or commercial property will depend
on its ability to generate net operating income. The ability of an owner to
finance a multifamily or commercial property will depend, in large part, on the
property's value and ability to generate net operating income.
Unless we state otherwise in the related prospectus supplement, none of the
mortgage loans underlying your certificates will be insured or guaranteed by any
governmental entity or private mortgage insurer.
The risks associated with lending on multifamily and commercial properties
are inherently different from those associated with lending on the security of
single-family residential properties. This is because multifamily rental and
commercial real estate lending involves larger loans and, as described above,
repayment is dependent upon the successful operation and value of the related
real estate project.
MANY RISK FACTORS ARE COMMON TO MOST OR ALL MULTIFAMILY AND COMMERCIAL
PROPERTIES. The following factors, among others, will affect the ability of a
multifamily or commercial property to generate net operating income and,
accordingly, its value:
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o the age, design and construction quality of the property;
o perceptions regarding the safety, convenience and attractiveness of
the property;
o the characteristics of the neighborhood where the property is located;
o the proximity and attractiveness of competing properties;
o the existence and 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;
o retroactive changes in building codes; and
o changes in governmental rules, regulations and fiscal policies,
including environmental legislation.
Particular factors that may adversely affect the ability of a multifamily
or commercial property to generate net operating income include:
o an increase in interest rates, real estate taxes and other 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 and, in
particular, a sole tenant or anchor tenant;
o an increase in vacancy rates;
o a decline in rental rates as leases are renewed or replaced; and
o natural disasters and civil disturbances such as earthquakes,
hurricanes, floods, eruptions or riots.
The volatility of net operating income generated by a multifamily or
commercial property over time will be influenced by many of the foregoing
factors, as well as by:
o the length of tenant leases;
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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, commercial and multifamily 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 commercial and multifamily 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 commercial and multifamily
properties with short-term revenue sources and may lead to higher rates of
delinquency or defaults on the mortgage loans secured by those properties.
THE SUCCESSFUL OPERATION OF A MULTIFAMILY OR COMMERCIAL PROPERTY DEPENDS ON
TENANTS. Generally, multifamily and commercial properties are subject to leases.
The owner of a multifamily or commercial property typically uses lease or rental
payments for the following purposes:
o to pay for maintenance and other operating expenses associated with
the property;
o to fund repairs, replacements and capital improvements at the
property; and
o to service mortgage loans secured by, and any other debt obligations
associated with operating, the property.
Factors that may adversely affect the ability of a multifamily or
commercial property to generate net operating income from lease and rental
payments include:
o an increase in vacancy rates, which may result from tenants deciding
not to renew an existing lease or discontinuing operations;
o an increase in tenant payment defaults;
o a decline in rental rates as leases are entered into, renewed or
extended at lower rates;
o an increase in the capital expenditures needed to maintain the
property or to make improvements; and
o a decline in the financial condition of a major or sole tenant.
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Various factors that will affect the operation and value of a commercial
property include:
o the business operated by the tenants;
o the creditworthiness of the tenants; and
o the number of tenants.
DEPENDENCE ON A SINGLE TENANT OR A SMALL NUMBER OF TENANTS MAKES A PROPERTY
RISKIER Collateral. In those cases where an income-producing 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 operating income generated by the property. If any such tenant defaults
under or fails to renew its lease, the resulting adverse financial effect on the
operation of the 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.
An income-producing 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 ADVERSELY AFFECTS PROPERTY PERFORMANCE. The bankruptcy or
insolvency of a major tenant, or a number of smaller tenants, at a commercial
property may adversely affect the income produced by the property. Under the
U.S. 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 unless
there is collateral securing the claim. The claim would be limited to--
o the unpaid rent reserved under the lease for the periods prior to the
bankruptcy petition or any earlier surrender of the leased premises,
plus
o an amount, not to exceed three years' rent, equal to the greater of
one year's rent and 15% of the remaining reserved rent.
THE SUCCESS OF AN INCOME-PRODUCING PROPERTY DEPENDS ON RELETTING VACANT
SPACES. The operations at an income-producing property will be adversely
affected if the owner or property manager is unable to renew leases or relet
space on comparable terms when existing leases expire and/or become defaulted.
Even if vacated space is successfully relet, the costs associated with
reletting, including tenant improvements and leasing commissions in the case of
income-producing properties operated for retail, office or industrial purposes,
can be substantial and could reduce cash flow from the income-producing
properties. Moreover, if a tenant at a income-producing property defaults in its
lease obligations, the landlord 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.
If an income-producing property has multiple tenants, re-leasing
expenditures may be more frequent than in the case of a property with fewer
tenants, thereby reducing the cash flow generated by the multi-tenanted
property. Multi-tenanted properties may also experience higher continuing
vacancy rates and greater volatility in rental income and expenses.
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PROPERTY VALUE MAY BE ADVERSELY AFFECTED EVEN WHEN CURRENT OPERATING INCOME
IS NOT. Various factors may affect the value of multifamily and commercial
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, licensing or fiscal policy;
o changes in zoning or tax laws; and
o potential environmental or other legal liabilities.
PROPERTY MANAGEMENT MAY AFFECT PROPERTY OPERATIONS AND VALUE. The operation
of an income-producing property will depend upon the property manager's
performance and viability. The property manager generally is responsible for:
o responding to changes in the local market;
o planning and implementing the rental structure, including staggering
durations of leases and establishing levels of rent payments;
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.
Income-producing 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 an income-producing
property.
MAINTAINING A PROPERTY IN GOOD CONDITION IS EXPENSIVE. The owner may be
required to expend a substantial amount to maintain, renovate or refurbish a
commercial or multifamily property. Failure to do so may materially impair the
property's ability to generate cash flow. The effects of poor construction
quality will increase over time in the form of increased maintenance and capital
improvements. Even superior construction will deteriorate over time if
management does not schedule and perform adequate maintenance in a timely
fashion. There can be no assurance that an income-producing property will
generate sufficient cash flow to cover the increased costs of maintenance and
capital improvements in addition to paying debt service on the mortgage loan(s)
that may encumber that property.
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COMPETITION WILL ADVERSELY AFFECT THE PROFITABILITY AND VALUE OF AN
INCOME-PRODUCING PROPERTY. Some income-producing properties are located in
highly competitive areas. Comparable income-producing properties located in the
same area compete on the basis of a number of factors including:
o rental rates;
o location;
o type of business or services and amenities offered; and
o nature and condition of the particular property.
The profitability and value of an income-producing property may be
adversely affected by a comparable property that:
o offers lower rents;
o has lower operating costs;
o offers a more favorable location; or
o offers better facilities.
Costs of renovating, refurbishing or expanding an income-producing property
in order to remain competitive can be substantial.
VARIOUS TYPES OF INCOME-PRODUCING PROPERTIES MAY PRESENT SPECIAL RISKS. The
relative importance of any factor affecting the value or operation of an
income-producing property will depend on the type and use of the property. In
addition, the type and use of a particular income-producing property may present
special risks. For example--
o Health care-related facilities and casinos are subject to significant
governmental regulation of the ownership, operation, maintenance
and/or financing of such properties.
o Multifamily rental properties, manufactured housing communities and
mobile home parks may be subject to rent control or rent stabilization
laws and laws governing landlord/tenant relationships.
o Hospitality 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 is subject to local law
requirements.
o Recreational and resort properties, properties that provide
entertainment services, hospitality properties, restaurants and
taverns, mini-warehouses and self-storage facilities tend to be
adversely affected more quickly by a general economic downturn than
other types of commercial properties.
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o Marinas will be affected by various statutes and government
regulations that govern the use of, and construction on, rivers, lakes
and other waterways.
o Certain recreational and hospitality properties may have seasonal
fluctuations and/or may be adversely affected by prolonged unfavorable
weather conditions.
o Churches and other religious facilities may be highly dependent on
donations which are likely to decline as economic conditions decline.
o Properties used as gas stations, automotive sales and service centers,
dry cleaners, warehouses and industrial facilities may be more likely
to have environmental issues.
Additionally, many types of commercial properties are not readily
convertible to alternative uses if the original use is not successful or may
require significant capital expenditures to effect any conversion to an
alternative use. As a result, the liquidation value of any of those types of
property would be substantially less than would otherwise be the case. See
"Description of the Trust Assets--Mortgage Loans--A Discussion of the Various
Types of Multifamily and Commercial Properties that May Secure Mortgage Loans
Underlying a Series of Offered Certificates".
BORROWER CONCENTRATION WITHIN A TRUST EXPOSES INVESTORS TO GREATER RISK OF
DEFAULT AND LOSS
A particular borrower or group of related borrowers may be associated with
multiple real properties securing the mortgage loans underlying a series of
offered certificates. The bankruptcy or insolvency of, or other financial
problems with respect to, that borrower or group of borrowers could have an
adverse effect on the operation of all of the related real properties and on the
ability of those properties to produce sufficient cash flow to make required
payments on the related mortgage loans. For example, if a borrower or group of
related borrowers that owns or controls several real properties experiences
financial difficulty at one of those properties, it could defer maintenance at
another of those properties in order to satisfy current expenses with respect to
the first property. That borrower or group of related borrowers could also
attempt to avert foreclosure by filing a bankruptcy petition that might have the
effect of interrupting debt service payments on all the related mortgage loans
for an indefinite period. In addition, multiple real properties owned by the
same borrower or related borrowers are likely to have common management. This
would increase the risk that financial or other difficulties experienced by the
property manager could have a greater impact on the owner of the related loans.
LOAN CONCENTRATION WITHIN A TRUST EXPOSES INVESTORS TO GREATER RISK OF DEFAULT
AND LOSS
Any of the mortgage assets in one of our trusts may be substantially larger
than the other assets in that trust. In general, the inclusion in a trust of one
or more mortgage assets that have outstanding principal balances that are
substantially larger than the other mortgage assets in the trust can result in
losses that are more severe, relative to the size of the related mortgage asset
pool, than would be the case if the aggregate balance of that pool were
distributed more evenly.
GEOGRAPHIC CONCENTRATION WITHIN A TRUST EXPOSES INVESTORS TO GREATER RISK OF
DEFAULT AND LOSS
If a material concentration of mortgage loans underlying a series of
offered certificates is secured by real properties in a particular locale, state
or region, then the holders of those certificates will have a greater exposure
to:
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o any adverse economic developments that occur in the locale, state or
region where the properties are located;
o changes in the real estate market where the properties are located;
o changes in governmental rules and fiscal policies in the governmental
jurisdiction where the properties are located; and
o acts of nature, including floods, tornadoes and earthquakes, in the
areas where properties are located.
CHANGES IN POOL COMPOSITION WILL CHANGE THE NATURE OF YOUR INVESTMENT
The mortgage loans underlying any series of offered certificates will
amortize at different rates and mature on different dates. In addition, some of
those mortgage loans may be prepaid or liquidated. As a result, the relative
composition of the related mortgage asset 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 underlying
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 underlying mortgage loans, the remaining mortgage pool
backing your certificates may exhibit an increased concentration with respect to
property type, number and affiliation of borrowers and geographic location.
ADJUSTABLE RATE MORTGAGE LOANS MAY ENTAIL GREATER RISKS OF DEFAULT TO LENDERS
THAN FIXED RATE MORTGAGE LOANS
Some or all of the mortgage loans underlying a series of offered
certificates may provide for adjustments to their respective mortgage interest
rates and corresponding adjustments to their respective periodic debt service
payments. As the periodic debt service payment for any of those mortgage loans
increases, the likelihood that cash flow from the underlying real property will
be insufficient to make that periodic debt service payment and pay operating
expenses also increases.
SUBORDINATE DEBT INCREASES THE LIKELIHOOD THAT A BORROWER WILL DEFAULT ON A
MORTGAGE LOAN BACKING YOUR CERTIFICATES
Certain mortgage loans included in one of our trusts may either--
o prohibit the related borrower from encumbering the related real
property with additional secured debt, or
o require the consent of the holder of the mortgage loan prior to so
encumbering such property.
However, a violation of this prohibition may not become evident until the
affected mortgage loan otherwise defaults, and a lender, such as one of our
trusts, may not realistically be able to prevent a borrower from incurring
subordinate debt.
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The existence of any secured subordinated indebtedness increases the
difficulty of refinancing a mortgage loan at the loan's maturity. In addition,
the related borrower may have difficulty repaying multiple loans. Moreover, the
filing of a petition in bankruptcy by, or on behalf of, a junior lienholder may
stay the senior lienholder from taking action to foreclose out the junior lien.
See "Certain Legal Aspects of Mortgage Loans--Subordinate Financing".
BORROWER BANKRUPTCY PROCEEDINGS CAN DELAY AND IMPAIR RECOVERY ON A MORTGAGE LOAN
UNDERLYING YOUR CERTIFICATES
Under the U.S. Bankruptcy Code, the filing of a petition in bankruptcy by
or against a borrower will stay the sale of a real property owned by that
borrower, as well as the commencement or continuation of a foreclosure action.
In addition, if a court determines that the value of a real property is less
than the principal balance of the mortgage loan it secures, the court may reduce
the amount of secured indebtedness to the then-value of the property. Such an
action would make the lender a general unsecured creditor for the difference
between the then-value of the property and the amount of its outstanding
mortgage indebtedness. A bankruptcy court also may:
o grant a debtor a reasonable time to cure a payment default on a
mortgage loan;
o reduce monthly payments due under a mortgage loan;
o change the rate of interest due on a mortgage loan; or
o otherwise alter a mortgage loan's repayment schedule.
Additionally, the borrower, as debtor-in-possession, or its bankruptcy
trustee has certain special powers to avoid, subordinate or disallow debts. In
certain circumstances, the claims of a secured lender, such as one of our
trusts, may be subordinated to financing obtained by a debtor-in-possession
subsequent to its bankruptcy.
Under the U.S. Bankruptcy Code, a lender will be stayed from enforcing a
borrower's assignment of rents and leases. The U.S. Bankruptcy Code also may
interfere with a lender's ability to enforce lockbox requirements. The legal
proceedings necessary to resolve these issues can be time consuming and may
significantly delay the receipt of rents. Rents also may escape an assignment to
the extent they are used by borrower to maintain its property or for other court
authorized expenses.
As a result of the foregoing, the related trust's recovery with respect to
borrowers in bankruptcy proceedings may be significantly delayed, and the
aggregate amount ultimately collected may be substantially less than the amount
owed.
TAXES ON FORECLOSURE PROPERTY WILL REDUCE AMOUNTS AVAILABLE TO MAKE PAYMENTS ON
THE OFFERED CERTIFICATES
If one of our trusts is designated, in whole or in part, as a "real estate
mortgage investment conduit", and if that trust acquires a real property
pursuant to a foreclosure or deed in lieu of foreclosure, then the related
special servicer may be required to retain an independent contractor to operate
and manage the property. Any net income from that operation and management,
other than qualifying "rents from real property" within the meaning of Section
856(d) of the Internal Revenue Code of 1986, as well as any rental income based
on the net profits of a tenant or sub-tenant or allocable to a service that is
non-customary in the area and for the type of building involved, will subject
the trust to federal, and
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possibly state or local, tax on that income at the highest marginal corporate
tax rate. This would reduce the net proceeds available for payment with respect
to the related offered certificates.
ENVIRONMENTAL LIABILITIES WILL ADVERSELY AFFECT THE VALUE AND OPERATION OF THE
CONTAMINATED PROPERTY AND MAY DETER A LENDER FROM FORECLOSING
There can be no assurance:
o as to the degree of environmental testing conducted at any of the real
properties securing the mortgage loans that back your certificates;
o that the environmental testing conducted by or on behalf of the
applicable originators or any other parties in connection with the
origination of those mortgage loans or otherwise identified all
adverse environmental conditions and risks at the related real
properties;
o that the results of the environmental testing were accurately
evaluated in all cases;
o that the related borrowers have implemented or will implement all
operations and maintenance plans and other remedial actions
recommended by any environmental consultant that may have conducted
testing at the related real properties; or
o that the recommended action will fully remediate or otherwise address
all the identified adverse environmental conditions and risks.
Environmental site assessments 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.
In addition, the current environmental condition of a real property
securing a mortgage loan underlying your certificates could be adversely
affected by tenants, such as gasoline stations or dry cleaners, or by the
conditions or operations in the vicinity of the properties, such as leaking
underground storage tanks at another property nearby.
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 the property. Those laws often impose
liability whether or not the owner or operator knew of, or was responsible for,
the presence of the hazardous or toxic substances. For example, certain laws
impose liability for release of asbestos containing materials into the air or
require the removal or containment of the materials. The owner's liability for
any required remediation generally is unlimited and could exceed the value of
the property and/or the aggregate assets of the owner. In addition, the presence
of hazardous or toxic substances, or the failure to remediate the adverse
environmental condition, may adversely affect the owner's or operator's ability
to use the affected 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 of
those states, this lien has priority over the lien of an existing mortgage, deed
of trust or other security instrument. In addition, third parties may seek
recovery from owners or operators of real property for personal injury
associated with exposure to hazardous substances, including asbestos and
lead-based paint. Persons who arrange for the disposal or treatment of hazardous
or toxic substances may be liable for the costs of removal or remediation of the
substances at the disposal or treatment facility.
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The federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, commonly referred to as "CERCLA", together
with certain other federal and state laws, provide that a secured lender, such
as one of our trusts, 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--
o agents or employees of the lender are deemed to have participated in
the management of the borrower, or
o under certain conditions, the lender actually takes possession of a
borrower's property or control of its day-to-day operations, including
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, that legislation has no applicability to state environmental laws.
Moreover, future laws, ordinances or regulations could impose material
environmental liability.
Federal law requires owners of residential housing constructed prior to
1978 to disclose to potential residents or purchasers--
o any condition on the property that causes exposure to lead-based
paint, and
o 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 may be 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.
SOME PROVISIONS IN THE MORTGAGE LOANS UNDERLYING YOUR CERTIFICATES MAY BE
CHALLENGED AS BEING UNENFORCEABLE
CROSS-COLLATERALIZATION ARRANGEMENTS. It may be possible to challenge
cross-collateralization arrangements involving more than one borrower as a
fraudulent conveyance, even if the borrowers are related. If one of those
borrowers were to become a debtor in a bankruptcy case, creditors of the
bankrupt party or the representative of the bankruptcy estate of the bankrupt
party could seek to have the bankruptcy court avoid any lien granted by the
bankrupt party to secure repayment of another borrower's loan. In order to do
so, the court would have to determine that:
o the bankrupt party 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
o the bankrupt party did not, when it allowed its property to be
encumbered by a lien securing the other borrower's loan, receive fair
consideration or reasonably equivalent value for pledging its property
for the equal benefit of the other borrower.
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If the court were to conclude that the granting of the lien was an
avoidable fraudulent conveyance, it could nullify the lien or security
instrument effecting the cross-collateralization. The court could also allow the
bankrupt party to recover payments it made pursuant to the avoided
cross-collateralization.
PREPAYMENT PREMIUMS, FEES AND CHARGES. Under the laws of a number of
states, the enforceability of any mortgage loan provisions that require payment
of a prepayment premium, fee or charge upon an involuntary prepayment, is
unclear. If those provisions were unenforceable, borrowers would have an
incentive to default in order to prepay their loans.
DUE-ON-SALE AND DEBT ACCELERATION CLAUSES. Some or all of the mortgage
loans included in one of our trusts may contain a due-on-sale clause, which
permits the lender, with some exceptions, to accelerate the maturity of the
mortgage loan upon the sale, transfer or conveyance of--
o the related real property, or
o a majority ownership interest in the related borrower.
All of the mortgage loans included in one of our trusts will contain some form
of debt-acceleration clause, 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, deed of trust or other security instrument
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.
ASSIGNMENTS OF LEASES. Some or all of the mortgage loans included in one of
our trusts may be secured by, among other things, an assignment of leases and
rents. Pursuant to that document, the related borrower will assign its right,
title and interest as landlord under the leases on the related real 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, those assignments may
not be perfected as security interests prior to actual possession of the cash
flow. Accordingly, state law may require that the lender take possession of the
property and obtain a judicial appointment of a receiver before becoming
entitled to collect the rents. In addition, 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".
DEFEASANCE. A mortgage loan underlying a series of offered certificates may
permit the related borrower, during specified periods and subject to certain
conditions, to pledge to the holder of the mortgage loan a specified amount of
direct, non-callable United States government securities and thereby obtain a
release of the related mortgaged property. The cash amount which a borrower must
expend to purchase, or must deliver to a master servicer in order for the master
servicer to purchase, the required United States government securities may be in
excess of the principal balance of the mortgage loan. There can be no assurance
that a court would not interpret that excess amount as a form of prepayment
premium or would not take it into account for usury purposes. In some states,
some forms of
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prepayment premiums are unenforceable. If the payment of that excess amount were
held to be unenforceable, the remaining portion of the cash amount to be
delivered may be insufficient to purchase the requisite amount of United States
government securities.
LACK OF INSURANCE COVERAGE EXPOSES A TRUST TO RISK FOR CERTAIN SPECIAL HAZARD
LOSSES
In general, the standard form of fire and extended coverage policy covers
physical damage to or destruction of the improvements of a property by fire,
lightning, explosion, smoke, windstorm and hail, and riot, strike and civil
commotion, subject to the conditions and exclusions specified in the related
policy. Most insurance policies typically do not cover any physical damage
resulting from--
o war,
o revolution,
o governmental actions,
o floods and other water-related causes,
o earth movement, including earthquakes, landslides and mudflows,
o wet or dry rot,
o vermin,
o domestic animals, and
o certain other kinds of risks.
Unless the related mortgage loan documents specifically require the
borrower to insure against physical damage arising from such causes, then the
resulting losses may be borne by you as a holder of offered certificates.
GROUND LEASES CREATE RISKS FOR LENDERS THAT ARE NOT PRESENT WHEN LENDING ON AN
ACTUAL OWNERSHIP INTEREST IN A REAL PROPERTY
In order to secure a mortgage loan, a borrower may grant a lien on its
leasehold interest in a real property as tenant under a ground lease. If the
ground lease does not provide for notice to a lender of a default thereunder on
the part of the borrower, together with a reasonable opportunity for the lender
to cure the default, the lender may be unable to prevent termination of the
lease and may lose its collateral.
In addition, upon the bankruptcy of a landlord or a tenant under a ground
lease, the debtor entity has the right to assume or reject the ground lease. If
a debtor landlord rejects the lease, the tenant has the right to remain in
possession of its leased premises at the rent reserved in the lease for the
term, including renewals. If a debtor tenant rejects any or all of its leases,
the tenant's lender may not be able to succeed to the tenant's position under
the lease unless the landlord has specifically granted the lender that right. If
both the landlord and the tenant are involved in bankruptcy proceedings, the
trustee for your certificates may be unable to enforce the bankrupt tenant's
obligation to refuse to treat as terminated a ground lease rejected by a
bankrupt landlord. In those 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 loan documents.
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CHANGES IN ZONING LAWS MAY ADVERSELY AFFECT THE USE OR VALUE OF A REAL PROPERTY
Due to changes in zoning requirements since the construction thereof, an
income-producing property may not comply with current zoning laws, including
density, use, parking and set back requirements. Accordingly, the property may
be a "permitted non-conforming structure" or the operation of the property may
be a "permitted non-conforming use". This means that the owner is not required
to alter the property's structure or use to comply with the new law, but the
owner 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 the casualty. If a substantial casualty were to occur,
insurance proceeds may not be sufficient to pay a mortgage loan secured by the
property in full. In addition, if the property were repaired or restored in
conformity with the current law, its value or revenue-producing potential may be
less than that which existed before the casualty.
COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT OF 1990 MAY BE EXPENSIVE
Under the Americans with Disabilities Act of 1990, all public
accommodations are required to meet certain federal requirements related to
access and use by disabled persons. If a property does not currently comply with
that Act, the owner thereof may be required to incur significant costs in order
to effect such compliance. This will reduce the amount of cash flow available to
cover other required maintenance and capital improvements and to pay debt
service on the mortgage loan(s) that may encumber that property. There can be no
assurance that the owner will have sufficient funds to cover the costs necessary
to comply with that Act. In addition, noncompliance could result in the
imposition of fines by the federal government or an award or damages to private
litigants.
LITIGATION MAY ADVERSELY AFFECT A BORROWER'S ABILITY TO REPAY ITS MORTGAGE LOAN
The owner of a multifamily or commercial property may be a defendant in a
litigation arising out of, among other things, the following--
o breach of contract involving a tenant, a supplier or other party,
o negligence resulting in a personal injury, or
o responsibility for an environmental problem.
Litigation will divert the owner's attention from operating its property.
If the litigation were decided adversely to the owner, the award to the
plaintiff may adversely affect the owner's ability to repay a mortgage loan
secured by the property.
RESIDUAL INTERESTS IN A REAL ESTATE MORTGAGE INVESTMENT CONDUIT HAVE ADVERSE TAX
CONSEQUENCES
INCLUSION OF TAXABLE INCOME IN EXCESS OF CASH RECEIVED. If you own a
certificate that is a residual interest in a real estate mortgage investment
conduit, or REMIC, you will have to report on your income tax return as ordinary
income your PRO RATA share of the taxable income of the REMIC, regardless of the
amount or timing of your possible receipt of any cash on the certificate.
Moreover, your certificate may produce phantom income early in the term of the
REMIC. That is, the taxable income from the certificate may exceed the amount of
economic income, if any, attributable to it. While you will have a corresponding
amount of tax losses later in the term of the REMIC, the present value of the
early phantom income may significantly exceed the present value of the later tax
losses. Therefore,
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the after-tax yield on any residual interest certificate may be significantly
less than that of a corporate bond or other instrument having similar cash flow
characteristics. In fact, certain offered certificates which are residual
interests may have a negative value.
You have to report your share of the taxable income and net loss of the
REMIC until all the certificates in the related series have a principal balance
of zero. See "Federal Income Tax Consequences--REMICs".
SOME TAXABLE INCOME FROM A RESIDUAL INTEREST IS ALWAYS TAXED UNDER THE
INTERNAL REVENUE CODE OF 1986. A portion of the taxable income from a residual
interest certificate may be treated as excess inclusions under the Internal
Revenue Code of 1986. You will have to pay tax on the excess inclusions
regardless of whether you have other credits, deductions or losses. In
particular, the tax on excess inclusions--
o generally will not be reduced by losses from other activities,
o for a tax-exempt holder, will be treated as unrelated business taxable
income, and
o for a foreign holder, will not qualify for any exemption from
withholding tax.
INDIVIDUALS AND CERTAIN ENTITIES SHOULD NOT INVEST IN CERTIFICATES THAT ARE
RESIDUAL Interests. Gross income in an amount equal to the fees and non-interest
expenses of a REMIC will be allocated PRO RATA to certificates that are residual
interests in the REMIC. While those expenses are in theory deductible and, if
so, offset that gross income, individuals will only be able to claim these
expenses as miscellaneous itemized deductions, which are subject to numerous
restrictions and limitations under the Internal Revenue Code of 1986. Therefore,
the certificates that are residual interests generally are not appropriate
investments for--
o individuals,
o estates,
o trusts beneficially owned by any individual or estate, and
o pass-through entities having any individual, estate or trust as a
shareholder, member or partner.
TRANSFER LIMITATIONS. In addition, the residual interest certificates are
subject to numerous transfer restrictions. These restrictions reduce your
ability to liquidate a residual interest certificate. For example, unless we
indicate otherwise in the related prospectus supplement, you will not be able to
transfer a residual interest certificate to a foreign person as defined in
Section 7701 of the Internal Revenue Code of 1986, or to a United States
partnership that includes foreign persons as partners.
See "Federal Income Tax Consequences--REMICs--Taxation of Owners of REMIC
Residual Certificates".
PROBLEMS WITH BOOK-ENTRY REGISTRATION
Your certificates may be issued in book-entry form through the facilities
of the Depository Trust Company. As a result:
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o you will be able to exercise your rights as a certificateholder only
indirectly through the Depository Trust Company and its participating
organizations;
o you may have only limited access to information regarding your
certificates;
o you may suffer delays in the receipt of payments on your certificates;
and
o your ability to pledge or otherwise take action with respect to your
certificates may be limited due to the lack of a physical certificate
evidencing your ownership of those certificates.
See "Description of the Certificates--Book-Entry Registration--Issuance of
Definitive Certificates".
POTENTIAL CONFLICTS OF INTEREST CAN AFFECT A PERSON'S PERFORMANCE
The master servicer or special servicer for one of our trusts, or any of
their respective affiliates, may purchase certificates evidencing interests in
that trust.
In addition, the master servicer or special servicer for one of our trusts,
or any of their respective affiliates, may have interests in, or other financial
relationships with, borrowers under the related mortgage loans.
In servicing the mortgage loans in any of our trusts, the related master
servicer and special servicer will each be required to observe the terms of the
governing document(s) for the related series of offered certificates and, in
particular, to act in accordance with the servicing standard described in the
related prospectus supplement. You should consider, however, that either of
these parties, if it or an affiliate owns certificates, or has financial
interests in or other financial dealings with any of the related borrowers, may
have interests when dealing with the mortgage loans underlying your certificates
that are in conflict with your interests. For example, if the related special
servicer owns any certificates, it could seek to mitigate the potential loss on
its certificates from a troubled mortgage loan by delaying enforcement in the
hope of realizing greater proceeds in the future. However, this action by a
special servicer could result a lower recovery to the related trust than would
have been the case if the special servicer had not delayed in taking enforcement
action.
Furthermore, the master servicer or special servicer for any of our trusts
may service existing and new loans for third parties, including portfolios of
loans similar to the mortgage loans included in that trust. The properties
securing these other loans may be in the same markets as and compete with the
properties securing mortgage loans in our trust. Accordingly, that master
servicer or special servicer may be acting on behalf of parties with conflicting
interests.
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 assets backing your
certificates, the servicing and administration of those mortgage assets and the
payments on your certificates are highly dependent upon computer systems of the
related master servicer, special servicer, trustee, manager, borrowers and other
third parties.
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DESCRIPTION OF THE TRUST ASSETS
GENERAL
We will be responsible for establishing the trust underlying each series of
offered certificates. The assets of the trust will primarily consist of:
o various types of multifamily and/or commercial mortgage loans;
o mortgage participations, pass-through certificates, collateralized
mortgage obligations or other mortgage-backed securities that directly
or indirectly evidence interests in, or are secured by pledges of, one
or more of various types of multifamily and/or commercial mortgage
loans; or
o a combination of mortgage loans and mortgage-backed securities of the
types described above.
We do not originate mortgage loans. Accordingly, we must acquire each of
the mortgage loans to be included in one of our trusts from the originator or a
subsequent assignee. In some cases, that originator or subsequent assignee will
be one of our affiliates.
We will acquire, directly or through one of our affiliates, in the
secondary market, any mortgage-backed security to be included in one of our
trusts.
Neither we nor any of our affiliates will guarantee any of the mortgage
assets included in one of our trusts. Furthermore, unless we indicate otherwise
in the related prospectus supplement, no governmental agency or instrumentality
will guarantee or insure any of those mortgage assets.
MORTGAGE LOANS
GENERAL. Each mortgage loan underlying the offered certificates will
constitute the obligation of one or more persons to repay a debt. That
obligation will be evidenced by a promissory note or bond. In addition, that
obligation will be secured by a mortgage, deed of trust or other security
instrument that creates a first or junior lien on, or security interest in, an
interest in one or more of the following types of real property:
o rental or cooperatively-owned buildings with multiple dwelling units;
o retail properties related to the sale of consumer goods and other
products to the general public, such as shopping centers, malls,
factory outlet centers, automotive sales centers, department stores
and other retail stores, grocery stores, specialty shops, convenience
stores and gas stations;
o retail properties related to providing entertainment, recreational and
personal services to the general public, such as movie theaters,
fitness centers, bowling alleys, salons, dry cleaners and automotive
service centers;
o office properties;
o hospitality properties, such as hotels, motels and other lodging
facilities;
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o casino properties;
o health care-related properties, such as hospitals, skilled nursing
facilities, nursing homes, congregate care facilities and, in some
cases, assisted living centers and senior housing;
o industrial properties;
o warehouse facilities, mini-warehouse facilities and self-storage
facilities;
o restaurants, taverns and other establishments involved in the food and
beverage industry;
o manufactured housing communities, mobile home parks and recreational
vehicle parks;
o recreational and resort properties, such as golf courses, marinas, ski
resorts and amusement parks;
o arenas and stadiums;
o churches and other religious facilities;
o parking lots and garages;
o mixed use properties;
o other income-producing properties; and
o unimproved land zoned for multifamily residential or commercial use.
The real property interests that may be encumbered in order to secure a
mortgage loan underlying your certificates, include--
o a fee interest or estate, which consists of ownership of the property
for an indefinite period,
o an estate for years, which consists of ownership of the property for a
specified period of years,
o a leasehold interest or estate, which consists of a right to occupy
and use the property for a specified period of years, subject to the
terms and conditions of a lease,
o shares in a cooperative corporation which owns the property, or
o any other real estate interest under applicable local law.
Any of these real property interests may be subject to deed restrictions,
easements, rights of way and other matters of public record with respect to the
related property. In addition, the use of, and improvements that may be
constructed on, any particular real property will, in most cases, be subject to
zoning laws and other legal restrictions.
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If we so indicate in the related prospectus supplement, one or more of the
mortgage loans underlying a series of offered certificates may be secured by a
junior lien on the related real property. However, the loan or loans secured by
the more senior liens on that property may not be included in the related trust.
The primary risk to the holder of a mortgage loan secured by a junior lien on a
real property is the possibility that the foreclosure proceeds remaining after
payment of the loans secured by more senior liens on that property will be
insufficient to pay the junior loan in full. In a foreclosure proceeding, the
sale proceeds are applied first to the payment of court costs and fees in
connection with the foreclosure, second to the payment of real estate taxes, and
third to the payment of all principal, interest, prepayment or acceleration
penalties, if any, and all other amounts owing to the holder of the senior
loans. The claims of the holders of the senior loans must be satisfied in full
before the holder of the junior loan receives any payments in respect of the
junior loan. If a lender forecloses on a junior loan, it does so subject to any
related senior loans.
If we so indicate in the related prospectus supplement, the mortgage loans
underlying a series of offered certificates may be delinquent as of the date the
certificates are initially issued. In those cases, we will describe in the
related prospectus supplement the period of the delinquency, any forbearance
arrangement then in effect, the condition of the related real property and the
ability of the related real property to generate income to service the mortgage
debt. We will not, however, transfer any mortgage loan to a trust if we know
that the mortgage loan is, at the time of transfer, more than 90 days delinquent
in respect of any scheduled payment of principal or interest or in foreclosure.
A DISCUSSION OF THE VARIOUS TYPES OF MULTIFAMILY AND COMMERCIAL PROPERTIES
THAT MAY SECURE MORTGAGE LOANS UNDERLYING A SERIES OF OFFERED CERTIFICATES. The
mortgage loans underlying a series of offered certificates may be secured by
numerous types of multifamily and commercial properties. As we discuss below
under "--Mortgage Loans--Default and Loss Considerations with Respect to
Commercial and Multifamily Mortgage Loans", the adequacy of an income-producing
property as security for a mortgage loan depends in large part on its value and
ability to generate net operating income. Set forth below is a discussion of
some of the various factors that may affect the value and operations of the
indicated types of multifamily and commercial properties.
Multifamily Rental Properties. Factors affecting the value and operation of
a multifamily rental property include:
o the physical attributes of the property, such as its age, appearance,
amenities and construction quality;
o the types of services offered at the property;
o the location of the property;
o the characteristics of the surrounding neighborhood, which may change
over time;
o the rents charged for dwelling units at the property relative to the
rents charged for comparable units at competing properties;
o the ability of management to provide adequate maintenance and
insurance;
o the property's reputation;
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o the level of mortgage interest rates, which may encourage tenants to
purchase rather than lease housing;
o the existence or construction of competing or alternative residential
properties, including other apartment buildings and complexes,
manufactured housing communities, mobile home parks and single-family
housing;
o the ability of management to respond to competition;
o the tenant mix and whether the property is primarily occupied by
workers from a particular company or type of business, personnel from
a local military base or students;
o adverse local, regional or national economic conditions, which may
limit the amount that may be charged for rents 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 property owner's
ability to increase rent to the market rent for an equivalent
apartment;
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;
o the extent to which the cost of operating the property, including the
cost of utilities and the cost of required capital expenditures, may
increase; and
o the extent to which increases in operating costs may be passed through
to tenants.
Because units in a multifamily rental property are leased to individuals,
usually for no more than a year, the property is likely to respond relatively
quickly to a downturn in the local economy or to the closing of a major employer
in the area.
Certain states regulate the relationship of an owner and its tenants at a
multifamily rental property. Among other things, these states may:
o require written leases;
o require good cause for eviction;
o require disclosure of fees;
o prohibit unreasonable rules;
o prohibit retaliatory evictions;
o prohibit restrictions on a resident's choice of unit vendors;
o limit the bases on which a landlord may increase rent; or
o prohibit a landlord from terminating a tenancy solely by reason of the
sale of the owner's building.
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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.
Some counties and municipalities also impose rent control regulations on
apartment buildings. These regulations may limit rent increases to--
o fixed percentages,
o percentages of increases in the consumer price index,
o increases set or approved by a governmental agency, or
o 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 landlord's ability
to raise rents at a multifamily rental property may impair the landlord's
ability to repay a mortgage loan secured by the property or to meet operating
costs.
Some 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. These covenants may limit the potential
rental rates that may be charged at a multifamily rental property, the potential
tenant base for the property or both. An owner may subject a multifamily rental
property to these covenants in exchange for tax credits or rent subsidies. When
the credits or subsidies cease, net operating income will decline.
Some mortgage loans underlying the offered certificates will be secured by
the related borrower's interest in multiple units in a residential condominium
project and the related voting rights in the owners' association for such
project. Due to the nature of condominiums, a default on any of those mortgage
loans will not allow the same flexibility in realizing on the real property
collateral 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 for those mortgage loans could
subject the related trust to greater delay, expense and risk than a loan secured
by a multifamily rental property that is not a condominium.
Cooperatively-Owned Apartment Buildings. Some multifamily properties are
owned or leased by cooperative corporations. In general, each shareholder in the
corporation is entitled to occupy a particular apartment unit pursuant to a
long-term proprietary lease or occupancy agreement.
A tenant/shareholder of a cooperative corporation must make a monthly
maintenance payment to the corporation. The monthly maintenance payment
represents a tenant/shareholder's PRO RATA share of the corporation's mortgage
loan payments, real property taxes, maintenance expenses and other capital and
ordinary expenses of the property. These monthly maintenance payments 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 maintenance
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, and to pay all other operating expenses of, the cooperatively
owned property depends primarily upon the receipt of--
o maintenance payments from the tenant/shareholders, and
o any rental income from units or commercial space that the cooperative
corporation might control.
A cooperative corporation may have to impose special assessments on the
tenant/shareholders in order to pay unanticipated expenditures. Accordingly, a
cooperative corporation is highly dependent on the financial well being of its
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
cooperatively owned property depends primarily on its ability to refinance the
property.
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. In general the sponsor controls
the corporation's board of directors and management for a limited period of
time. If the sponsor holds the shares allocated to a large number of apartment
units, the lender on a mortgage loan secured by a cooperatively owned property
may be adversely affected by a decline in the creditworthiness of the sponsor.
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. In
addition, the subtenant may be entitled to renew its lease for an indefinite
number of years with continued protection from rent increases above those
permitted by any applicable rent control and rent stabilization laws. The
owner/shareholder is responsible for the maintenance payments to the cooperative
corporation without regard to whether it receives rent from the subtenant or
whether the rent payments are lower than maintenance payments on the unit.
Newly-formed cooperative corporations typically have the greatest concentration
of non-tenant/shareholders.
Retail Properties. The term "retail property" encompasses a broad range of
properties at which businesses sell consumer goods and other products and
provide various entertainment, recreational or personal services to the general
public. Some examples of retail properties include--
o shopping centers,
o factory outlet centers,
o malls,
o automotive sales and service centers,
o consumer oriented businesses,
o department stores,
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o grocery stores,
o convenience stores,
o specialty shops,
o gas stations,
o movie theaters,
o fitness centers,
o bowling alleys,
o salons, and
o dry cleaners.
Unless owner occupied, retail properties generally derive all or a
substantial percentage of their income from lease payments from commercial
tenants. Therefore, it is important for the owner of a retail property to
attract and keep tenants, particularly significant tenants, that are able to
meet their lease obligations. In order to attract tenants, the owner of a retail
property may be required:
o to lower rents;
o to grant a potential tenant free rent or a reduced rent period;
o to improve the condition of the property generally; or
o to make at its own expense, or grant a rent abatement to cover, tenant
improvements for a potential tenant.
A prospective tenant will also be interested in the number and type of
customers that it will be able to attract at a particular retail property. The
ability of a tenant at a particular retail property to attract customers will be
affected by a number of factors related to the property and the surrounding
area, including:
o competition from other retail properties;
o perceptions regarding the safety, convenience and attractiveness of
the property;
o perceptions regarding the safety of the surrounding area;
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 the visibility of the property;
o availability of parking;
o the particular mixture of the goods and services offered at the
property;
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o customer tastes, preferences and spending patterns; and
o the drawing power of other tenants.
The success of a retail property is often dependent on the success of its
tenants' businesses. A significant component of the total rent paid by tenants
of retail properties is often tied to a percentage of gross sales or revenues.
Declines in sales or revenues of the tenants will likely cause a corresponding
decline in percentage rents and/or impair the tenants' ability to pay their rent
or other occupancy costs. A default by a tenant under its lease could result in
delays and costs in enforcing the landlord's rights. Retail properties would be
directly and adversely affected by a decline in the local economy and reduced
consumer spending.
Repayment of a mortgage loan secured by a retail property will be affected
by the expiration of space leases at the property and the ability of the
borrower to renew or relet the space on comparable terms. Even if vacant space
is successfully relet, the costs associated with reletting, including tenant
improvements, leasing commissions and free rent, may be substantial and could
reduce cash flow from a retail property.
The presence or absence of an anchor tenant in a multi-tenanted retail
property can be important. 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 property and whose operation is vital
in attracting customers to the property. At some retail properties, the anchor
tenant owns the space it occupies. In those cases where the property owner does
not control the space occupied by the anchor tenant, the property owner may not
be able to take actions with respect to the space that it otherwise typically
would, such as granting concessions to retain an anchor tenant or removing an
ineffective anchor tenant. In some cases, an anchor tenant may cease to operate
at the property, thereby leaving its space unoccupied even though it continues
to own or pay rent on the vacant space. If an anchor tenant ceases operations at
a retail property, other tenants at the property may be entitled to terminate
their leases prior to the scheduled termination date or to pay rent at a reduced
rate for the remaining term of the lease.
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 ownership of the previously
occupied space or its continued payment of rent, as the case may be;
or
o a loss of an anchor tenant's ability to attract shoppers.
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:
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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.
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 properties.
Gas stations, automotive sales and service centers and dry cleaners also
pose unique environmental risks because of the nature of their businesses.
Office Properties. Factors affecting the value and operation of an office
property include:
o the number and quality of the tenants, particularly significant
tenants, at the property;
o the physical attributes of the building in relation to competing
buildings;
o the location of the property with respect to the central business
district or population centers;
o demographic trends within the metropolitan area to move away from or
towards the central business district;
o social trends combined with space management trends, which may change
towards options such as telecommuting or hoteling to satisfy space
needs;
o tax incentives offered to businesses or property owners by cities or
suburbs adjacent to or near where the building is located;
o local competitive conditions, such as the supply of office space or
the existence or construction of new competitive office buildings;
o the quality and philosophy of building management;
o access to mass transportation; and
o changes in zoning laws.
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.
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Office properties are also subject to competition with other office
properties in the same market. Competitive factors affecting an office property
include:
o rental rates;
o the building's age, condition and design, including floor sizes and
layout;
o access to public transportation and availability of parking; and
o amenities offered to its tenants, including sophisticated building
systems, such as fiber optic cables, satellite communications or other
base building technological features.
The cost of refitting office space for a new tenant is often higher than
for other property types.
The success of an office property also depends on the local economy.
Factors influencing a company's decision to locate in a given area include:
o the cost and quality of labor;
o tax incentives; and
o quality of life matters, such as schools and cultural amenities.
The strength and stability of the local or regional economy will affect an
office property's ability to attract stable tenants on a consistent basis. A
central business district may have a substantially different economy from that
of a suburb.
Hospitality Properties. Hospitality properties may involve different types
of hotels and motels, including:
o full service hotels;
o resort hotels with many amenities;
o limited service hotels;
o hotels and motels associated with national or regional franchise
chains;
o hotels that are not affiliated with any franchise chain but may have
their own brand identity; and
o other lodging facilities.
Factors affecting the economic performance of a hospitality property
include:
o the location of the property and its proximity to major population
centers or attractions;
o the seasonal nature of business at the property;
o the level of room rates relative to those charged by competitors;
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o quality and perception of the franchise affiliation;
o economic conditions, either local, regional or national, which may
limit the amount that can be charged for a room and may result in a
reduction in occupancy levels;
o the existence or construction of competing hospitality properties;
o nature and quality of the services and facilities;
o financial strength and capabilities of the owner and operator;
o the need for continuing expenditures for modernizing, refurbishing and
maintaining existing facilities;
o increases in operating costs, which may not be offset by increased
room rates;
o the property's dependence on business and commercial travelers and
tourism; and
o changes in travel patterns caused by changes in access, energy prices,
labor strikes, relocation of highways, the reconstruction of
additional highways or other factors.
Because limited service hotels and motels are relatively quick and
inexpensive to construct and may quickly reflect a positive value, an
over-building of these 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,
hospitality 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.
Hospitality properties may be operated pursuant to franchise agreements.
The continuation of a franchise 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 those standards or adhere to
those 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 owner of the hospitality
property determines are too expensive or are otherwise unwarranted in light of
the operating results or prospects of the property. In that event, the owner of
the hospitality property may elect to allow the franchise license to lapse. In
any case, if the franchise is terminated, the owner of the hospitality property
may seek to obtain a suitable replacement franchise or to operate property
independently of a franchise license. The loss of a franchise license could have
a material adverse effect upon the operations or value of the hospitality
property because of the loss of associated name recognition, marketing support
and centralized reservation systems provided by the franchisor.
The viability of any hospitality property that is a franchise of a national
or a regional hotel or motel chain is dependent upon:
o the continued existence and financial strength of the franchisor;
o the public perception of the franchise service mark; and
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o the duration of the franchise licensing agreement.
The transferability of franchise license agreements may be restricted. The
consent of the franchisor would be required for the continued use of the
franchise license by the hospitality property following a foreclosure.
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, the lender or other purchaser of the hospitality property
may not be entitled to the rights under any associated liquor license. That
party would be required to apply in its own right for a new liquor license.
There can be no assurance that a new license could be obtained or that it could
be obtained promptly.
Casino Properties. Factors affecting the economic performance of a casino
property include:
o location, including proximity to or easy access from major population
centers;
o appearance;
o economic conditions, either local, regional or national, which may
limit the amount of disposable income that potential patrons may have
for gambling;
o the existence or construction of competing casinos;
o dependence on tourism; and
o local or state governmental regulation.
Competition among major casinos may involve attracting patrons by providing
alternate forms of entertainment, such as performers and sporting events, and
offering low-priced or free food and lodging. In addition, casino owners may
expend substantial sums to modernize, refurbish and maintain existing
facilities.
Because of their dependence on disposable income of patrons, casino
properties are likely to respond quickly to a downturn in the economy.
To avoid criminal influence, the ownership and operation of casino
properties is often subject to local or state governmental regulation. A
government agency or authority may have jurisdiction over or influence with
respect to the foreclosure of a casino property and/or the bankruptcy of its
owner or operator. In some jurisdictions, it may be necessary to receive
governmental approval before foreclosing, thereby resulting in substantial
delays to a lender. Gaming licenses are not transferable, including in
connection with a foreclosure. There can be no assurance that a lender or
another purchaser in foreclosure or otherwise will be able to obtain the
requisite approvals to continue operating the foreclosed property as a casino.
Any given state or municipality that currently allows legalized gambling
could pass legislation banning it.
The loss of a gaming license for any reason would have a material adverse
effect on the value of a casino property.
Health Care-Related Properties. Health-care related properties include:
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o hospitals;
o skilled nursing facilities;
o nursing homes;
o congregate care facilities; and
o in some cases, assisted living centers and housing for seniors.
Health care-related facilities, particularly nursing homes, may receive a
substantial portion of their revenues from government reimbursement programs,
primarily Medicaid and Medicare. Medicaid and Medicare are subject to:
o statutory and regulatory changes;
o retroactive rate adjustments;
o administrative rulings;
o policy interpretations;
o delays by fiscal intermediaries; and
o government funding restrictions.
All of the foregoing can adversely affect revenues from the operation a
health care-related facility. Moreover, governmental payors have employed
cost-containment measures that limit payments to health care providers. In
addition, there are currently under consideration various proposals for national
health care relief that could further limit these payments.
Providers of long-term nursing care and other medical services are highly
regulated by federal, state and local law. They are subject to numerous factors
which can increase the cost of operation, limit growth and, in extreme cases,
require or result in suspension or cessation of operations, including:
o federal and state licensing requirements;
o facility inspections;
o rate setting;
o reimbursement policies; and
o laws relating to the adequacy of medical care, distribution of
pharmaceuticals, use of equipment, personnel operating policies and
maintenance of and additions to facilities and services.
Under applicable federal and state laws and regulations, Medicare and
Medicaid reimbursements generally may not be made to any person other than the
provider who actually furnished the related material goods and services.
Accordingly, in the event of foreclosure on a health care-related facility,
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neither a lender nor other subsequent lessee or operator of the property would
generally be entitled to obtain from federal or state governments any
outstanding reimbursement payments relating to services furnished at the
property prior to such foreclosure. Furthermore, in the event of foreclosure,
there can be no assurance that a lender or other purchaser in a foreclosure sale
would be entitled to the rights under any required licenses and regulatory
approvals. The lender or other purchaser 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.
Health care-related facilities are generally special purpose properties
that could not be readily converted to general residential, retail or office
use. This will adversely affect their liquidation value. Furthermore, transfers
of health care-related facilities are subject to regulatory approvals under
state, and in some cases federal, law not required for transfers of most other
types of commercial properties.
Industrial Properties. 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 slowdown in the economy. In addition, an
industrial property that suited the particular needs of its original tenant may
be difficult to relet to another tenant or may become functionally obsolete
relative to newer properties.
The value and operation of an industrial property depends on:
o location of the property, the desirability of which in a particular
instance may depend on--
1. availability of labor services,
2. proximity to supply sources and customers, and
3. accessibility to various modes of transportation and shipping,
including railways, roadways, airline terminals and ports;
o building design of the property, the desirability of which in a
particular instance may depend on--
1. ceiling heights,
2. column spacing,
3. number and depth of loading bays,
4. divisibility,
5. floor loading capacities,
6. truck turning radius,
7. overall functionality, and
8. adaptability of the property, because industrial tenants often
need space that is acceptable for highly specialized activities;
and
o the quality and creditworthiness of individual tenants, because
industrial properties frequently have higher tenant concentrations.
Industrial properties are generally special purpose properties that could
not be readily converted to general residential, retail or office use. This will
adversely affect their liquidation value.
Warehouse, Mini-Warehouse and Self-Storage Facilities. Warehouse,
mini-warehouse and self-storage properties are considered vulnerable to
competition because both acquisition costs and break-even
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occupancy are relatively low. In addition, it would require substantial capital
expenditures to convert a warehouse, mini-warehouse or self-storage property to
an alternative use. This will materially impair the liquidation value of the
property if its operation for storage purposes becomes unprofitable due to
decreased demand, competition, age of improvements or other factors.
Successful operation of a warehouse, mini-warehouse or self-store property
depends on:
o building design;
o location and visibility;
o tenant privacy;
o efficient access to the property;
o proximity to potential users, including apartment complexes or
commercial users;
o services provided at the property, such as security;
o age and appearance of the improvements; and
o quality of management.
Restaurants and Taverns. Factors affecting the economic viability of
individual restaurants, taverns and other establishments that are part of the
food and beverage service industry include:
o competition from facilities having businesses similar to a particular
restaurant or tavern;
o perceptions by prospective customers of safety, convenience, services
and attractiveness;
o the cost, quality and availability of food and beverage products;
o negative publicity, resulting from instances of food contamination,
food-borne illness and similar events;
o changes in demographics, consumer habits and traffic patterns;
o the ability to provide or contract for capable management; and
o 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
potential customers dine out. Because of the nature of the business, restaurants
and taverns 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 bar or
restaurant, either through purchase or foreclosure, is subject to local law
requirements.
The food and beverage service industry is highly competitive. The principal
means of competition are--
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o segment,
o product,
o price,
o value,
o quality,
o service,
o convenience,
o location, and
o the nature and condition of the restaurant facility.
A restaurant or tavern operator competes with the operators of comparable
establishments in the area in which its restaurant or tavern is located. Other
restaurants could have--
o lower operating costs,
o more favorable locations,
o more effective marketing,
o more efficient operations, or
o better facilities.
The location and condition of a particular restaurant or tavern will affect
the number of customers and, to a certain extent, the prices that may be
charged. The characteristics of an area or neighborhood in which a restaurant or
tavern is located may change over time or in relation to competing facilities.
Also, the cleanliness and maintenance at a restaurant or tavern will affect its
appeal to customers. In the case of a regionally- or nationally-known chain
restaurant, there may be costly expenditures for renovation, refurbishment or
expansion, regardless of its condition.
Factors affecting the success of a regionally- or nationally-known chain
restaurant include:
o 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;
o the degree of support provided or arranged by the franchisor,
including its franchisee organizations and third-party providers of
products or services; and
o the bankruptcy or business discontinuation of the franchisor or any of
its franchisee organizations or third-party providers.
Chain restaurants may be operated under franchise agreements, and such
agreements typically do not contain provisions protective of lenders. A
borrower's rights as franchisee typically may be terminated without informing
the lender, and the borrower may be precluded from competing with the franchisor
upon such termination. In addition, a lender that acquires title to a restaurant
site through
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foreclosure or similar proceedings may be restricted in the use of such site or
may be unable to succeed to the rights of the franchisee under the related
franchise agreement. The transferability of a franchise may be subject to other
restrictions. Also, federal and state franchise regulations may impose
additional risk, including the risk that the transfer of a franchise acquired
through foreclosure or similar proceedings may require registration with
governmental authorities or disclosure to prospective transferees.
Manufactured Housing Communities, Mobile Home Parks and Recreational
Vehicle Parks. Manufactured housing communities and mobile home parks consist of
land that is divided into "spaces" or "home sites" that are primarily leased to
owners of the individual mobile homes or other housing units. The home owner
often invests in site-specific improvements such as carports, steps, fencing,
skirts around the base of the home, and landscaping. The land owner typically
provides private roads within the park, common facilities and, in many cases,
utilities. Due to relocation costs and, in some cases, demand for homesites, the
value of a mobile home or other housing unit in place in a manufactured housing
community or mobile home park is generally higher, and can be significantly
higher, than the value of the same unit not placed in a manufactured housing
community or mobile home park. As a result, a well-operated manufactured housing
community or mobile home park that has achieved stabilized occupancy is
typically able to maintain occupancy at or near that level. For the same reason,
a lender that provided financing for the home of a tenant who defaulted in his
or her space rent generally has an incentive to keep rental payments current
until the home can be resold in place, rather than to allow the unit to be
removed from the park. In general, the individual mobile homes and other housing
units will not constitute collateral for a mortgage loan underlying a series of
offered certificates.
Recreational vehicle parks lease spaces primarily or exclusively for motor
homes, travel trailers and portable truck campers, primarily designed for
recreational, camping or travel use. In general, parks that lease recreational
vehicle spaces can be viewed as having a less stable tenant population than
parks occupied predominantly by mobile homes. However, it is not unusual for the
owner of a recreational vehicle to leave the vehicle at the park on a year-round
basis or to use the vehicle as low cost housing and reside in the park
indefinitely.
Factors affecting the successful operation of a manufactured housing
community, mobile home park or recreational vehicle park include:
o the number of comparable competing properties in the local market;
o the age, appearance and reputation of the property;
o the quality of management; and
o 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, such as staying
at a hotel at the beach.
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. This will adversely affect the
liquidation value of the property if its operation as a manufactured housing
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community, mobile home park or recreational vehicle park, as the case may be,
becomes unprofitable due to competition, age of the improvements or other
factors.
Certain states regulate the relationship of an owner of a manufactured
housing community or mobile home park and its tenants in a manner similar to the
way they regulate the relationship between a landlord and tenant at a
multifamily rental property. In addition, some states also regulate changes in
the use of a manufactured housing community or mobile home park and require that
the owner give written notice to its tenants a substantial period of time prior
to the projected change.
In addition to state regulation of the landlord-tenant relationship,
numerous counties and municipalities impose rent control on manufactured housing
communities and mobile home parks. These ordinances may limit rent increases
to--
o fixed percentages,
o percentages of increases in the consumer price index,
o increases set or approved by a governmental agency, or
o increases determined through mediation or binding arbitration.
In many cases, the rent control laws either do not permit vacancy decontrol
or permit vacancy decontrol only in the relatively rare event that the mobile
home or manufactured housing unit is removed from the homesite. Local authority
to impose rent control on manufactured housing communities and mobile home parks
is pre-empted by state law in certain states and rent control is not imposed at
the state level in those states. In some states, however, local rent control
ordinances are not pre-empted for tenants having short-term or month-to-month
leases, and properties there may be subject to various forms of rent control
with respect to those tenants.
Recreational and Resort Properties. Any mortgage loan underlying a series
of offered certificates may be secured by a golf course, marina, ski resort,
amusement park or other property used for recreational purposes or as a resort.
Factors affecting the economic performance of a property of this type include:
o the location and appearance of the property;
o the appeal of the recreational activities offered;
o the existence or construction of competing properties, whether are not
they offer the same activities;
o the need to make capital expenditures to maintain, refurbish, improve
and/or expand facilities in order to attract potential patrons;
o geographic location and dependence on tourism;
o changes in travel patterns caused by changes in energy prices,
strikes, location of highways, construction of additional highways and
similar factors;
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o seasonality of the business, which may cause periodic fluctuations in
operating revenues and expenses;
o sensitivity to weather and climate changes; and
o local, regional and national economic conditions.
A marina or other recreational or resort property located next to water
will also be affected by various statutes and government regulations that govern
the use of, and construction on, rivers, lakes and other waterways.
Because of the nature of the business, recreational and resort properties
tend to respond to adverse economic conditions more quickly than do many other
types of commercial properties.
Recreational and resort properties are generally special purpose properties
that are not readily convertible to alternative uses. This will adversely affect
their liquidation value.
Arenas and Stadiums. The success of an arena or stadium generally depends
on its ability to attract patrons to a variety of events, including:
o sporting events;
o musical events;
o theatrical events;
o animal shows; and/or
o circuses.
The ability to attract patrons is dependent on such factors as:
o the appeal of the particular event;
o the cost of admission;
o perceptions by prospective patrons of the safety, convenience,
services and attractiveness of the arena or stadium;
o perceptions by prospective patrons of the safety of the surrounding
area; and
o the alternative forms of entertainment available in the particular
locale.
In some cases, an arena's or stadium's success will depend on its ability
to attract and keep a sporting team as a tenant. An arena or stadium 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 and stadiums are special purpose properties which cannot be readily
convertible to alternative uses. This will adversely affect their liquidation
value.
Churches and Other Religious Facilities. Churches and other religious
facilities generally depend on charitable donations to meet expenses and pay for
maintenance and capital expenditures. The
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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, which is influenced by a variety of social, political and economic
factors. Donations may be adversely affected by economic conditions, whether
local, regional or national. Religious facilities are special purpose properties
that are not readily convertible to alternative uses. This will adversely affect
their liquidation value.
Parking Lots and Garages. The primary source of income for parking lots and
garages is the rental fees charged for parking spaces. Factors affecting the
success of a parking lot or garage include:
o the number of rentable parking spaces and rates charged;
o the location of the lot or garage and, in particular, its proximity to
places where large numbers of people work, shop or live;
o the amount of alternative parking spaces in the area;
o the availability of mass transit; and
o the perceptions of the safety, convenience and services of the lot or
garage.
Unimproved Land. The value of unimproved land is largely a function of its
potential use. This may depend on--
o its location,
o its size,
o the surrounding neighborhood, and
o local zoning laws.
DEFAULT AND LOSS CONSIDERATIONS WITH RESPECT TO COMMERCIAL AND MULTIFAMILY
MORTGAGE LOANS. Mortgage loans secured by liens on income-producing properties
are substantially different from mortgage 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 the property and its ability to generate income sufficient to make
payments on the loan. This is particularly true because most or all of the
mortgage loans underlying the offered certificates will be nonrecourse loans.
The debt service coverage ratio of a multifamily or commercial mortgage
loan is an important measure of the likelihood of default on the loan. In
general, the "debt service coverage ratio" of a multifamily or commercial
mortgage loan at any given time is the ratio of--
o the amount of income derived or expected to be derived from the
related real property for a twelve-month period that is available to
pay debt service, to
o the annualized scheduled payments of principal and/or interest on the
mortgage loan and any other senior loans that are secured by the
related real property.
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The amount described in the first bullet point of the preceding sentence is
often a highly subjective number based on a variety of assumptions regarding,
and adjustments to revenues and expenses in respect of the related real
property. We will provide a more detailed discussion of its calculation in the
related prospectus supplement.
The cash flow generated by a multifamily or commercial property will
generally fluctuate over time and may or may not be sufficient to make the loan
payments on the related mortgage loan, cover operating expenses and fund capital
improvements at any given time. Operating revenues of a nonowner occupied,
income- producing property may be affected by the condition of the applicable
real estate market and/or area economy. Properties 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.
Some commercial properties may be owner-occupied or leased to a small
number of tenants. Accordingly, the operating revenues may depend substantially
on the financial condition of the borrower or one or a few tenants. Mortgage
loans secured by liens on owner-occupied and single tenant 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 property operating expenses can increase the likelihood of a
borrower default on a multifamily or commercial mortgage loan secured by the
property. Increases in property operating expenses may result from:
o increases in energy costs and labor costs;
o increases in interest rates and real estate tax rates; and
o changes in governmental rules, regulations and fiscal policies.
Some net leases of commercial properties may provide that the lessee,
rather than the borrower/landlord, is responsible for payment of operating
expenses. However, a net lease will result in stable net operating income to the
borrower/landlord only if the lessee is able to pay the increased operating
expense while also 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 is liquidated following a
default. In general, the loan-to-value ratio of a multifamily or commercial
mortgage loan at any given time is the ratio, expressed as a percentage, of--
o the then outstanding principal balance of the mortgage loan and any
other senior loans that are secured by the related real property, to
o the estimated value of the related real property based on an
appraisal, a cash flow analysis, a recent sales price or another
method or benchmark of valuation.
A low loan-to-value ratio means the borrower has a large amount of its own
equity in the multifamily or commercial property that secures its loan. In these
circumstances--
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o the borrower has a greater incentive to perform under the terms of the
related mortgage loan in order to protect that equity, and
o the lender has greater protection against loss on liquidation
following a borrower default.
Loan-to-value ratios are not necessarily an accurate measure of the
likelihood of liquidation loss in a pool of multifamily and commercial mortgage
loans. For example, the value of a multifamily or commercial property as of the
date of initial issuance of a series of offered certificates may be less than
the estimated value determined at loan origination. The value of any real
property, in particular a multifamily or commercial property, will likely
fluctuate from time to time. Moreover, even a current appraisal is not
necessarily a reliable estimate of value. Appraised values of income-producing
properties are generally based on:
o the market comparison method, which takes into account the recent
resale value of comparable properties at the date of the appraisal;
o the cost replacement method, which takes into account the cost of
replacing the property at such date;
o the income capitalization method, which takes into account the
property's projected net cash flow; or
o a selection from the values derived from the foregoing methods.
Each of these appraisal methods presents analytical difficulties. For
example,
o it is often difficult to find truly comparable properties that have
recently been sold;
o the replacement cost of a property may have little to do with its
current market value; and
o income capitalization is inherently based on inexact projections of
income and expense and the selection of an appropriate capitalization
rate and discount rate.
If more than one appraisal method is used and significantly different
results are produced, an accurate determination of value and, correspondingly, a
reliable analysis of the likelihood of default and loss, is even more difficult.
The value of a multifamily or commercial property will be affected by
property performance. As a result, if a multifamily or commercial mortgage loan
defaults because the income generated by the related property is insufficient to
pay operating costs and expenses as well as debt service, then the value of the
property will decline and a liquidation loss may occur.
We believe that the foregoing considerations are important factors that
generally distinguish mortgage loans secured by liens on income-producing real
estate from single-family mortgage loans. However, the originators of the
mortgage loans underlying your certificates may not have considered all of those
factors for all or any of those loans.
See "Risk Factors--Repayment of a Commercial or Multifamily Mortgage Loan
Depends Upon the Performance and Value of the Underlying Real Property and the
Related Borrower's Ability to Refinance the Property".
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PAYMENT PROVISIONS OF THE MORTGAGE LOANS. Each of the mortgage loans
included in one of our trusts will have the following features:
o an original term to maturity of not more than approximately 40 years;
and
o scheduled payments of principal, interest or both, to be made on
specified dates, that occur monthly, bi-monthly, quarterly,
semi-annually, annually or at some other interval.
A mortgage loan included in one of our trusts may also include terms that:
o provide for the accrual of interest at a mortgage interest rate that
is fixed over its term, that resets on one or more specified dates or
that otherwise adjusts from time to time;
o provide for the accrual of interest at a mortgage interest rate that
may be converted at the borrower's election from an adjustable to a
fixed interest rate or from a fixed to an adjustable interest rate;
o provide for no accrual of interest;
o provide for level payments to stated maturity, for payments that reset
in amount on one or more specified dates or for payments that
otherwise adjust from time to time to accommodate changes in the
coupon rate or to reflect the occurrence of certain events;
o be fully amortizing or, alternatively, may be partially amortizing or
nonamortizing, with a substantial payment of principal due on its
stated maturity date;
o permit the negative amortization or deferral of accrued interest;
and/or
o prohibit some or all voluntary prepayments or require payment of a
premium, fee or charge in connection with those prepayments.
MORTGAGE LOAN INFORMATION IN PROSPECTUS SUPPLEMENTS. We will describe in
the related prospectus supplement the characteristics of the mortgage loans that
we will include in any of our trusts. In general, we will provide in the related
prospectus supplement, among other items, the following information on the
particular mortgage loans in one of our trusts:
o the aggregate outstanding principal balance and the largest, smallest
and average outstanding principal balance of the mortgage loans;
o the type or types of property that provide security for repayment of
the mortgage loans;
o the earliest and latest origination date and maturity date of the
mortgage loans;
o the original and remaining terms to maturity of the mortgage loans, or
the range thereof, and the weighted average original and remaining
terms to maturity of the mortgage loans;
o 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 those loan-to-value ratios;
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o the mortgage interest rates of the mortgage loans, or the range
thereof, and the weighted average mortgage interest rate of the
mortgage loans;
o if any mortgage loans have adjustable mortgage interest rates, the
index or indices upon which the adjustments are based, the adjustment
dates, the range of gross margins and the weighted average gross
margin, and any limits on mortgage interest rate adjustments at the
time of any adjustment and over the life of the loan;
o information on the payment characteristics of the mortgage loans,
including applicable prepayment restrictions;
o 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 those debt service coverage ratios; and
o the geographic distribution of the properties securing the mortgage
loans on a state-by-state basis.
If we are unable to provide the specific information described above at the
time a series of offered certificates is initially offered, we will provide--
o more general information in the related prospectus supplement, and
o specific information in a report which will be filed with the SEC as
part of a Current Report on Form 8-K within 15 days following the
issuance of the certificates.
If any mortgage loan, or group of related mortgage loans, included in one
of our trusts represents a material concentration of credit risk, we will
include in the related prospectus supplement financial statements or other
financial information on the related real property or properties.
If and to the extent available and relevant to an investment decision in a
series of offered certificates, we will include in the related prospectus
supplement information regarding the prepayment experience of a master
servicer's multifamily and/or commercial mortgage loan servicing portfolio.
However, many servicers do not maintain records regarding prepayment experience
or, at least, do not maintain those records in a format that can be readily
aggregated. In addition, if the relevant characteristics of a master servicer's
servicing portfolio are materially different from those of the mortgage loans
included in one of our trusts, the master servicer's prepayment experience would
not be meaningful to an investor. For example, differences in geographic
dispersion, property type and/or loan terms, such as mortgage interest rates,
terms to maturity and/or prepayment restrictions, between the two pools of loans
may render the master servicer's prepayment experience irrelevant. Because of
the nature of the assets to be serviced and administered by a special servicer,
we will not include comparable prepayment information in the related prospectus
supplement with respect to the special servicer's multifamily and/or commercial
mortgage loan servicing portfolio.
MORTGAGE-BACKED SECURITIES
The mortgage backed-securities underlying a series of offered certificates
may include--
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o mortgage participations, mortgage pass-through certificates,
collateralized mortgage obligations or other mortgage-backed
securities that are not insured or guaranteed by any governmental
agency or instrumentality, or
o certificates issued and/or insured or guaranteed by the Federal Home
Loan Mortgage Corporation ("FHLMC"), the Federal National Mortgage
Association ("FNMA"), the Governmental National Mortgage Association
("GNMA"), the Federal Agricultural Mortgage Corporation ("FAMC") or
another federal or state governmental agency or instrumentality.
In addition, each of those mortgage-backed securities will directly or
indirectly evidence an interest in, or be secured by a pledge of, multifamily
and/or commercial mortgage loans.
We will acquire each mortgage-backed security included in one of our
trusts, directly or through an affiliate, in a bona fide secondary market
transaction. In addition, each security --
o will have been registered under the Securities Act of 1933, as amended
(the "Securities Act"), or
o will be exempt from the registration requirements of the Securities
Act, or
o will have been held for at least the holding period specified in Rule
144(k) under the Securities Act.
We will describe in the related prospectus supplement the characteristics
of the mortgage-backed securities that we will include in any of our trusts. In
general, we will provide in the related prospectus supplement, among other
items, the following information on the particular mortgage-backed securities
included in one of our trusts:
o the initial and outstanding principal amount(s) and type of the
securities;
o the original and remaining term(s) to stated maturity of the
securities;
o the pass-through or bond rate(s) of the securities or the formula for
determining such rate(s);
o the payment characteristics of the securities;
o the identity of the issuer(s), servicer(s) and trustee(s) for the
securities;
o a description of the related credit support, if any;
o the type of mortgage loans underlying the securities;
o the circumstances under which the related underlying mortgage loans,
or the securities themselves, may be purchased prior to maturity;
o the terms and conditions for substituting mortgage loans backing the
securities; and
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o the characteristics of any agreements or instruments providing
interest rate protection to the securities.
With respect to any mortgage-backed security included in one of our trusts,
we will provide in our reports filed under the Exchange Act of 1934, as amended
(the "Exchange Act") the same information regarding the security as is provided
by the issuer of the security in its own reports filed under the Exchange Act,
if the security was publicly offered, or in the reports the issuer of the
security provides to the related trustee, if the security was privately issued.
UNDELIVERED MORTGAGE ASSETS
In general, the aggregate outstanding principal balance of the mortgage
assets transferred by us to any particular trust will equal or exceed the
initial aggregate outstanding principal balance of the related series of
certificates. In the event that the aggregate outstanding principal balance of
the related mortgage assets initially delivered by us to the related trustee is
less than the initial aggregate outstanding principal balance of any series of
certificates, we may deposit or arrange for the deposit of cash or liquid
investments on an interim basis with the related trustee to cover the shortfall.
For 90 days following the date of initial issuance of that series of
certificates, we will be entitled to obtain a release of the deposited cash or
investments if we deliver or arrange for delivery of a corresponding amount of
mortgage assets. If we fail, however, to deliver mortgage assets sufficient to
make up the entire shortfall, any of the cash or, following liquidation,
investments remaining on deposit with the related trustee will be used by the
related trustee to pay down the aggregate principal balance of the related
series of certificates, as described in the related prospectus supplement.
ACCOUNTS
The trust assets underlying a series of offered certificates will include
one or more accounts established and maintained on behalf of the holders. All
payments and collections received or advanced on the mortgage assets and other
trust assets will be deposited and held in those accounts. We will identify and
describe those accounts, and will further describe the deposits to and
withdrawals from those accounts, in the related prospectus supplement.
CREDIT SUPPORT
The holders of any class of offered certificates may be the beneficiaries
of credit support designed to protect them partially or fully against all or
particular defaults and losses on the related mortgage assets. The types of
credit support that may benefit the holders of a class of offered certificates
include:
o the subordination or one or more other classes of certificates of the
same series;
o a letter of credit;
o a surety bond;
o an insurance policy;
o a guarantee; and/or
o a reserve fund.
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In the related prospectus supplement, we will describe the amount and types
of any credit support benefiting the holders of a class of offered certificates.
ARRANGEMENTS PROVIDING INTEREST RATE PROTECTION
The trust assets for a series of offered certificates may include
guaranteed investment contracts pursuant to which moneys held in the funds and
accounts established for that series will be invested at a specified rate. Those
trust assets may also include:
o interest rate exchange agreements;
o interest rate cap agreements;
o interest rate floor agreements; or
o other agreements or arrangements designed to reduce the effects of
interest rate fluctuations with respect to the related mortgage assets
on one or more classes of offered certificates.
In the related prospectus supplement, we will describe any agreements or
other arrangements designed to protect the holders of a class of offered
certificates against shortfalls resulting from movements or fluctuations in
interest rates. If applicable, we will also identify any obligor under the
agreement or other arrangement.
YIELD AND MATURITY CONSIDERATIONS
GENERAL
The yield on your certificates will depend on--
o the price you paid for your certificates,
o the pass-through rate on your certificates, and
o the amount and timing of payments on your certificates.
The following discussion contemplates a trust established by us that
consists only of mortgage loans. If one of our trusts also includes a
mortgage-backed security, the payment terms of that security will soften or
enhance the effects that the characteristics and behavior of mortgage loans
backing that security can have on the yield to maturity and/or weighted average
life of a class of offered certificates. If one of our trusts includes a
mortgage-backed security, we will discuss in the related prospectus supplement
the effect, if any, that the security may have on the yield to maturity and
weighted average lives of the related offered certificates.
PASS-THROUGH RATE
A class of interest-bearing offered certificates may have a fixed, variable
or adjustable pass-through rate. We will specify in the related prospectus
supplement the pass-through rate for each class of interest-bearing offered
certificates or, if the pass-through rate is variable or adjustable, the method
of determining the pass-through rate.
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PAYMENT DELAYS
There will be a delay between the date on which payments on the underlying
mortgage loans are due and the date on which those payments are passed through
to you and other investors. That delay will reduce the yield that would
otherwise be produced if those payments were passed through on your certificates
on the same date that they were due.
YIELD AND PREPAYMENT CONSIDERATIONS
The yield to maturity on your certificates will be affected by the rate of
principal payments on the underlying mortgage loans and the allocation of those
principal payments to reduce the principal balance or notional amount of your
certificates. The rate of principal payments on those mortgage loans will be
affected by the following:
o the amortization schedules of the mortgage loans, which may change
from time to time to reflect, among other things, changes in mortgage
interest rates or partial prepayments of principal;
o the dates on which any balloon payments are due; and
o the rate of principal prepayments on the mortgage loans, including
voluntary prepayments by borrowers and involuntary prepayments
resulting from liquidations, casualties or purchases of mortgage
loans.
Because the rate of principal prepayments on the mortgage loans underlying
your certificates will depend on future events and a variety of factors, we
cannot give you any assurance as to that rate.
The extent to which the yield to maturity of your certificates may vary
from your anticipated yield will depend upon--
o whether you purchased your certificates at a discount or premium and,
if so, the extent of that discount or premium, and
o when, and to what degree, payments of principal on the underlying
mortgage loans are applied or otherwise result in the reduction of the
principal balance or notional amount of your certificates.
If you purchase your certificates at a discount, you should consider the
risk that a slower than anticipated rate of principal payments on the underlying
mortgage loans could result in an actual yield to you that is lower than your
anticipated yield. If you purchase your certificates at a premium, you should
consider the risk that a faster than anticipated rate of principal payments on
the underlying mortgage loans could result in an actual yield to you that is
lower than your anticipated yield.
If your certificates entitle you to payments of interest, with
disproportionate, nominal or no payments of principal, you should consider that
your yield will be extremely sensitive to prepayments on the underlying mortgage
loans and, under some prepayment scenarios, may be negative.
If a class of offered certificates accrues interest on a notional amount,
that notional amount will, in general, either--
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o be based on the principal balances of some or all of the mortgage
assets in the related trust, or
o equal the aggregate principal balance of one or more of the other
classes of certificates of the same series.
Accordingly, the yield on that class of certificates will be inversely related
to, as applicable, the rate at which payments and other collections of principal
are received on the mortgage assets or referred to in the first bullet point of
the prior sentence or payments are made in reduction of the aggregate principal
balance of the class or classes of certificates referred to in the second bullet
point of the prior sentence.
The extent of prepayments of principal of the mortgage loans underlying
your certificates may be affected by a number of factors, including:
o the availability of mortgage credit;
o the relative economic vitality of the area in which the related real
properties are located;
o the quality of management of the related real properties;
o the servicing of the mortgage loans;
o possible changes in tax laws; and
o other opportunities for investment.
In general, those factors that increase the attractiveness of selling or
refinancing a commercial or multifamily property, as well as those factors that
increase the likelihood of default under a commercial or multifamily mortgage
loan, would be expected to cause the rate of prepayment to accelerate. In
contrast, those factors having an opposite effect would be expected to cause the
rate of prepayment to slow.
The rate of principal payments on the mortgage loans underlying your
certificates may also be affected by the existence and enforceability of
prepayment restrictions, such as prepayment lock-out periods and requirements
that voluntary principal prepayments be accompanied by prepayment premiums, fees
or charges. If enforceable, those provisions could constitute either an absolute
prohibition, in the case of a prepayment lock-out period, or a disincentive, in
the case of a prepayment premium, fee or charge, 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. As prevailing market interest rates decline, a borrower may
have an increased incentive to refinance its mortgage loan. Even in the case of
adjustable rate mortgage loans, as prevailing market interest rates decline, the
related borrowers may have an increased incentive to refinance for the following
purposes--
o to convert to a fixed rate loan and thereby "lock in" that rate, or
o to take advantage of a different index, margin or rate cap or floor on
another adjustable rate mortgage loan.
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Subject to prevailing market interest rates and economic conditions
generally, a borrower may sell a real property in order to--
o realize its equity in the property,
o meet cash flow needs, or
o make other investments.
Additionally, some borrowers may be motivated by federal and state tax
laws, which are subject to change, to sell their properties prior to the
exhaustion of tax depreciation benefits. We make no representation as to--
o the particular factors that will affect the prepayment of the mortgage
loans underlying any series of offered certificates,
o the relative importance of those factors,
o the percentage of the principal balance of those mortgage loans that
will be paid as of any date, or
o the overall rate of prepayment on those mortgage loans.
WEIGHTED AVERAGE LIFE AND MATURITY
The rate at which principal payments are received on the mortgage loans
underlying any series of offered certificates will affect the ultimate maturity
and the weighted average life of one or more classes of those certificates. In
general, 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 offered certificates
will be influenced by the rate at which principal on the underlying mortgage
loans is paid to that class, whether in the form of scheduled amortization or
prepayments, including voluntary prepayments by borrowers and involuntary
prepayments resulting from liquidations, casualties or condemnations and
purchases of mortgage loans out of the related trust.
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 those loans in the first
month of the life of the loans and an additional 0.2% per annum in each month
thereafter until the 30th month. Beginning in the 30th 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.
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Neither CPR nor SPA nor any other prepayment model or assumption is 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. It is unlikely that the prepayment
experience of the mortgage loans underlying your certificates will conform to
any particular level of CPR or SPA.
In the prospectus supplement for a series of offered certificates, we will
include tables, if applicable, setting forth the projected weighted average life
of each class of those offered certificates with an aggregate principal balance,
and the percentage of the initial aggregate principal balance of each such class
that would be outstanding on specified dates, based on the assumptions stated in
that prospectus supplement, including assumptions regarding prepayments on the
underlying mortgage loans. Those tables and assumptions illustrate the
sensitivity of the weighted average lives of the certificates to various assumed
prepayment rates and are not intended to predict, or to provide information that
will enable you to predict, the actual weighted average lives of your
certificates.
OTHER FACTORS AFFECTING YIELD, WEIGHTED AVERAGE LIFE AND MATURITY
BALLOON PAYMENTS; EXTENSIONS OF MATURITY. Some or all of the mortgage loans
underlying a series of offered certificates may require that balloon payments be
made at maturity. The ability of a borrower to make a balloon payment typically
will depend upon its ability either--
o to refinance the loan, or
o to sell the related real property.
If a borrower is unable to refinance or sell the related real property, there is
a possibility that the borrower may default on the mortgage loan or that the
maturity of the mortgage loan may be extended in connection with a workout. If a
borrower defaults, recovery of proceeds may be delayed by--
o the bankruptcy of the borrower, or
o adverse economic conditions in the market where the related real
property is located.
In order to minimize losses on defaulted mortgage loans, the related master
servicer or special servicer may be authorized within prescribed limits to
modify mortgage loans that are in default or as to which a payment default is
reasonably foreseeable. Any defaulted balloon payment or modification that
extends the maturity of a mortgage loan may delay payments of principal on your
certificates and extend the weighted average life of your certificates.
NEGATIVE AMORTIZATION. The weighted average life of a class of offered
certificates can be affected by mortgage loans that permit negative amortization
to occur. Those are the mortgage loans that provide for the current payment of
interest calculated at a rate lower than the rate at which interest accrues on
the mortgage loan, with the unpaid portion of that interest being added to the
related principal balance. Negative amortization most commonly occurs in respect
of an adjustable rate mortgage loan that:
o limits the amount by which its scheduled payment may adjust in
response to a change in its mortgage interest rate;
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o provides that its scheduled payment will adjust less frequently than
its mortgage interest rate; or
o provides for constant scheduled payments regardless of adjustments to
its mortgage interest rate.
Negative amortization on one or more mortgage loans in any of our trusts
may result in negative amortization on a related class of offered certificates.
We will describe in the related prospectus supplement, if applicable, the manner
in which negative amortization in respect of the underlying mortgage loans is
allocated among the respective classes of a series of offered certificates.
The portion of any mortgage loan negative amortization allocated to a class
of offered certificates may result in a deferral of some or all of the interest
payable on those certificates. Deferred interest may be added to the aggregate
principal balance of a class of offered certificates. In addition, an adjustable
rate mortgage loan that permits negative amortization would be expected during a
period of increasing interest rates to amortize, if at all, at a slower rate
than if interest rates were declining or were remaining constant. This slower
rate of mortgage loan amortization would be reflected in a slower rate of
amortization for one or more classes of certificates of the related series.
Accordingly, there may be an increase in the weighted average lives of those
classes of certificates to which any mortgage loan negative amortization would
be allocated or that would bear the effects of a slower rate of amortization of
the underlying mortgage loans.
The extent to which the yield on your certificates may be affected by any
negative amortization on the underlying mortgage loans will depend, in part,
upon whether you purchase your certificates at a premium or a discount.
During a period of declining interest rates, the scheduled payment on an
adjustable rate 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 interest rate. The result is the accelerated amortization of
the mortgage loan. The acceleration in amortization of a mortgage loan will
shorten the weighted average lives of those classes of certificates that entitle
their holders to a portion of the principal payments on the mortgage loan.
FORECLOSURES AND PAYMENT PLANS. The weighted average life of and yield on
your certificates will be affected by:
o the number of foreclosures with respect to the underlying mortgage
loans; and
o the principal amount of the foreclosed mortgage loans in relation to
the principal amount of those mortgage loans that are repaid in
accordance with their terms.
Servicing decisions made with respect to the underlying 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
affect the payment patterns of particular mortgage loans and, as a result, the
weighted average life of and yield on your certificates.
LOSSES AND SHORTFALLS ON THE MORTGAGE ASSETS. The yield on your
certificates will directly depend on the extent to which you are required to
bear the effects of any losses or shortfalls in collections on the underlying
mortgage loans and the timing of those losses and shortfalls. In general, the
earlier that you bear any loss or shortfall, the greater will be the negative
effect on the yield of your certificates.
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The amount of any losses or shortfalls in collections on the mortgage
assets in any of our trusts will to the extent not covered or offset by draws on
any reserve fund or under any instrument of credit support, be allocated among
the various classes of certificates of the related series in the priority and
manner, and subject to the limitations, that we specify in the related
prospectus supplement. As described in the related prospectus supplement, those
allocations may be effected by the following:
o a reduction in the entitlements to interest and/or the aggregate
principal balances of one or more classes of certificates; and/or
o the establishment of a priority of payments among classes of
certificates.
If you purchase subordinated certificates, the yield to maturity on those
certificates may be extremely sensitive to losses and shortfalls in collections
on the underlying mortgage loans.
ADDITIONAL CERTIFICATE AMORTIZATION. If your certificates have a principal
balance, then they entitle you to a specified portion of the principal payments
received on the underlying mortgage loans. They may also entitle you to payments
of principal from the following sources:
o amounts attributable to interest accrued but not currently payable on
one or more other classes of certificates of the applicable series;
o interest received or advanced on the underlying mortgage assets that
is in excess of the interest currently accrued on the certificates of
the applicable series;
o prepayment premiums, fees and charges, payments from equity
participations or any other amounts received on the underlying
mortgage assets that do not constitute interest or principal; or
o any other amounts described in the related prospectus supplement.
The amortization of your certificates out of the sources described in the
prior paragraph would shorten their weighted average life and, if your
certificates were purchased at a premium, reduce their yield to maturity.
DLJ COMMERCIAL MORTGAGE CORP.
We were incorporated in Delaware on July 10, 1997. We were organized, among
other things, for the purposes of:
o acquiring mortgage loans secured by first or junior liens on
commercial and multifamily real properties;
o acquiring mortgage-backed securities that evidence interests in
mortgage loans that are secured by commercial and multifamily real
properties;
o forming pools of mortgage loans and mortgage-backed securities; and
o acting as settler or depositor of trusts formed to issue bonds, notes
or other evidences of indebtedness or to issue shares, participation
certificates or like instruments, that are
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secured by or represent interests in, pools of mortgage loans and
mortgage-backed securities.
We are a wholly-owned subsidiary of Donaldson, Lufkin & Jenrette, Inc., a
Delaware corporation. Our principal executive offices are located at 277 Park
Avenue, 9th Floor, New York, New York 10172. Our telephone number is (212)
892-3000. We do not have, and we do not expect to have, any significant assets.
DESCRIPTION OF THE CERTIFICATES
GENERAL
Each series of offered certificates, together with any non-offered
certificates of the same series, will represent the entire beneficial ownership
interest in a trust established by us. Each series of offered certificates will
consist of one or more classes. Any non-offered certificates of that series will
likewise consist of one or more classes.
A "series" of certificates are all those certificates that:
o have the same series designation;
o were issued pursuant to the same governing documents; and
o represent beneficial ownership interests in the same trust.
A "class" of certificates are all those certificates of a particular series
that:
o have the same class designation; and
o have the same payment terms.
The respective classes of offered and non-offered certificates of any
series may have a variety of payment terms. An offered certificate may entitle
the holder to receive:
o a stated principal amount, which will be represented by its principal
balance;
o interest on a principal balance or notional amount, at a fixed,
variable or adjustable pass-through rate;
o specified, fixed or variable portions of the interest, principal or
other amounts received on the related mortgage assets;
o payments of principal, with disproportionate, nominal or no payments
of interest;
o payments of interest, with disproportionate, nominal or no payments of
principal;
o payments of interest or principal that commence only as of a specified
date or only after the occurrence of certain events, such as the
payment in full of the interest and principal outstanding on one or
more other classes of certificates of the same series;
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o payments of principal to be made, from time to time or for designated
periods, at a rate that is--
1. faster and, in some cases, substantially faster, or
2. slower and, in some cases, substantially slower,
than the rate at which payments or other collections of principal are
received on the related mortgage assets;
o payments of principal to be made, subject to available funds, based on
a specified principal payment schedule or other methodology; or
o payments of all or part of the prepayment or repayment premiums, fees
and charges, equity participations payments or other similar items
received on the related mortgage assets.
Any class of offered certificates may be senior or subordinate to one or
more other classes of certificates of the same series, including a non-offered
class of certificates of that series, for purposes of some or all payments
and/or allocations of losses or other shortfalls.
A class of offered certificates may have two or more component parts, each
having characteristics that are described in this prospectus as being
attributable to separate and distinct classes. For example, a class of offered
certificates may have an aggregate principal balance on which it accrues
interest at a fixed, variable or adjustable rate. That class of offered
certificates may also accrue interest on an aggregate notional amount at a
different fixed, variable or adjustable rate. In addition, a class of offered
certificates may accrue interest on one portion of its aggregate principal
balance or notional amount at one fixed, variable or adjustable rate and on
another portion of its aggregate principal balance or notional amount at a
different fixed, variable or adjustable rate.
Each class of offered certificates will be issued in minimum denominations
corresponding to specified principal balances, notional amounts or percentage
interests, as described in the related prospectus supplement. A class of offered
certificates may be issued in fully registered, definitive form and evidenced by
physical certificates or may be issued in book-entry form through the facilities
of The Depository Trust Company ("DTC"). Offered certificates held in fully
registered, definitive form 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, except for any tax or other governmental charge payable in
connection with the transfer or exchange. Interests in offered certificates held
in book-entry form will be transferred on the book-entry records of DTC and its
participating organizations. If we so specify in the related prospectus
supplement, we will arrange for clearance and settlement through Clearstream
Banking, societe anonyme or the Euroclear System, for so long as they are
participants in DTC.
PAYMENTS ON THE CERTIFICATES
GENERAL. Payments on a series of offered certificates may occur monthly,
bi-monthly, quarterly, semi-annually, annually or at any other specified
interval. In the prospectus supplement for each series of offered certificates,
we will identify--
o the periodic payment date for that series, and
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o the record date as of which certificateholders entitled to payments on
any particular payment date will be established.
All payments with respect to a class of offered certificates on any payment
date will be allocated PRO RATA among the outstanding certificates of that class
in proportion to the respective principal balances, notional amounts or
percentage interests, as the case may be, of those certificates. Payments on an
offered certificate will be made to the holder entitled thereto either--
o by wire transfer of immediately available funds to the account of that
holder at a bank or similar entity, provided that the holder has
furnished the party making the payments with wiring instructions no
later than the applicable record date and has satisfied any other
conditions specified in the related prospectus supplement, or
o by check mailed to the address of that holder as it appears in the
certificate register, in all other cases.
In general, the final payment on any offered certificate will be made only
upon presentation and surrender of that certificate at the location specified to
the holder in notice of final payment.
PAYMENTS OF INTEREST. In the case of each class of interest-bearing offered
certificates, interest will accrue from time to time, at the applicable
pass-through rate and in accordance with the applicable interest accrual method,
on the aggregate outstanding principal balance or notional amount of that class.
The pass-through rate for a class of interest-bearing offered certificates
may be fixed, variable or adjustable. We will specify in the related prospectus
supplement the pass-through rate for each class of interest-bearing offered
certificates or, in the case of a variable or adjustable pass-through rate, the
method for determining that pass-through rate.
Interest may accrue with respect to any offered certificate on the basis
of--
o a 360-day year consisting of twelve 30-day months,
o the actual number of days elapsed during each relevant period in a
year assumed to consist of 360 days,
o the actual number of days elapsed during each relevant period in a
normal calendar year, or
o such other method identified in the related prospectus supplement.
We will identify the interest accrual method for each class of offered
certificates in the related prospectus supplement.
Subject to available funds and any adjustments to interest entitlements
described in the related prospectus supplement, accrued interest in respect of
each class of interest-bearing offered certificates will normally be payable on
each payment date. However, in the case of some classes of interest-bearing
offered certificates, which we will refer to as "compound interest
certificates", payments of accrued interest will only begin on a particular
payment date or under the circumstances described in the related prospectus
supplement. Prior to that time, the amount of accrued interest otherwise payable
on
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that class will be added to its aggregate principal balance on each date or
otherwise deferred as described in the related prospectus supplement.
If a class of offered certificates accrues interest on an aggregate
notional amount, that aggregate notional amount, in general, will be either:
o based on the principal balances of some or all of the related mortgage
assets; or
o equal to the aggregate principal balances of one or more other classes
of certificates of the same series.
Reference to the notional amount of any certificate is solely for
convenience in making certain calculations of interest and does not represent
the right to receive any payments of principal.
We will describe in the related prospectus supplement the extent to which
the amount of accrued interest that is payable on, or that may be added to the
aggregate principal balance of, a class of interest-bearing offered certificates
may be reduced as a result of any contingencies, including shortfalls in
interest collections due to prepayments, delinquencies, losses and deferred
interest on the related mortgage assets.
PAYMENTS OF PRINCIPAL. A class of offered certificates may or may not have
an aggregate principal balance. If it does, that aggregate principal balance
outstanding from time to time will represent the maximum amount that the holders
of that class will be entitled to receive as principal out of the future cash
flow on the related mortgage assets and the other related trust assets. The
aggregate outstanding principal balance of any class of offered certificates
will be reduced by--
o payments of principal actually made to the holders of that class, and
o if and to the extent that we so specify in the related prospectus
supplement, losses of principal on the related mortgage assets that
are allocated to or are required to be borne by that class.
If a class of offered certificates are compound interest certificates, then
the aggregate outstanding principal balance of that class may be increased by
the amount of any interest accrued, but not currently payable, on that class. We
will describe in the related prospectus supplement any other adjustments to the
aggregate outstanding principal balance of a class of offered certificates.
Unless we so state in the related prospectus supplement, the initial
aggregate principal balance of all classes of a series will not be greater than
the aggregate outstanding principal balance of the related mortgage assets
transferred by us to the related trust. We will specify the expected initial
aggregate principal balance of each class of offered certificates in the related
prospectus supplement.
The payments of principal to be made on a series of offered certificates
from time to time will, in general, be a function of the payments, other
collections and advances received or made with respect to the related prospectus
supplement. Payments of principal on a series of offered certificates may also
be made from the following sources:
o amounts attributable to interest accrued but not currently payable on
one or more other classes of certificates of the applicable series;
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o interest received or advanced on the underlying mortgage assets that
is in excess of the interest currently accrued on the certificates of
the applicable series;
o prepayment premiums, fees and charges, payments from equity
participations or any other amounts received on the underlying
mortgage assets that do not constitute interest or principal; or
o any other amounts described in the related prospectus supplement.
We will describe in the related prospectus supplement the principal
entitlement of each class of offered certificates on each payment date.
ALLOCATION OF LOSSES AND SHORTFALLS
If and to the extent that any losses or shortfalls in collections on the
mortgage assets in any of our trusts are not covered or offset by delinquency
advances or draws on any reserve fund or under any instrument of credit support,
they will be allocated among the various 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, the allocations may be effected as follows:
o by reducing the entitlements to interest and/or the aggregate
principal balances of one or more of those classes; and/or
o by establishing a priority of payments among those classes.
See "Description of Credit Support".
ADVANCES IN RESPECT OF DELINQUENCIES
If any trust established by us includes mortgage loans, then, as and to the
extent described in the related prospectus supplement, the related master
servicer, the related special servicer, the related trustee, any related
provider of credit support and/or any other specified person may be obligated to
advance, or may have the option of advancing, delinquent payments of principal
and interest due on those mortgage loans, other than balloon payments.
If there are any limitations with respect to a party's advancing
obligations, we will discuss those limitations in the related prospectus
supplement.
Advances are intended to maintain a regular flow of scheduled interest and
principal payments to certificateholders. Advances are not a guarantee against
losses. The advancing party will be entitled to recover all of its advances out
of subsequent recoveries on the related mortgage loans, including amounts drawn
under any fund or instrument constituting credit support, and out of any other
specific sources identified in the related prospectus supplement.
If and to the extent that we so specify in the related prospectus
supplement, any entity making advances will be entitled to receive interest on
some or all of those advances for a specified period during which they are
outstanding at the rate specified in that prospectus supplement. That entity may
be entitled to payment of interest on its outstanding advances periodically from
general collections on
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the mortgage assets in the related trust, prior to any payment to the related
series of certificateholders, or at such other times and from such sources as we
may describe in the related prospectus supplement.
If any trust established by us includes mortgage-backed securities, we will
discuss in the related prospectus supplement any comparable advancing
obligations in respect of those securities or the mortgage loans that back them.
REPORTS TO CERTIFICATEHOLDERS
On or about each payment date, the related master servicer, manager or
trustee will forward to each offered certificateholder a statement substantially
in the form, or specifying the information, set forth in the related prospectus
supplement. In general, that statement will include information regarding--
o the payments made on that payment date with respect to the applicable
class of offered certificates, and
o the recent performance of the mortgage assets.
Within a reasonable period of time after the end of each calendar year, the
related master servicer, manager or trustee, as the case may be, will be
required to furnish to each person who at any time during the calendar year was
a holder of an offered certificate a statement containing information regarding
the principal, interest and other amounts paid on the applicable class of
offered certificates, aggregated for that calendar year or the applicable
portion thereof during which the person was a certificateholder. The obligation
to provide that annual statement will be deemed to have been satisfied by the
related master servicer, manager or trustee, as the case may be, to the extent
that substantially comparable information is provided pursuant to any
requirements of the Internal Revenue Code of 1986.
If one of our trusts includes mortgage-backed securities, the ability of
the related master servicer, manager or trustee, as the case may be, to include
in any payment date statement information regarding the mortgage loans that back
those securities will depend on comparable reports being received with respect
to them.
VOTING RIGHTS
Voting rights will be allocated among the respective classes of offered and
non-offered certificates of each 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 governing documents or as
otherwise specified in this prospectus or in the related prospectus supplement.
See "Description of the Governing Documents--Amendment".
As and to the extent described in the related prospectus supplement, the
certificateholders entitled to a specified amount of the voting rights for a
particular series will have the right to act as a group to remove or replace the
related trustee, master servicer, special servicer or manager. In general, any
such removal or replacement must be for cause. We will identify exceptions in
the related prospectus supplement.
TERMINATION
The trust for each series of offered certificates will terminate and cease
to exist following:
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o the final payment or other liquidation of the last mortgage asset in
that trust; and
o the payment, or provision for payment, to the certificateholders of
that series of all amounts required to be paid to them.
Written notice of termination of a trust will be given to each affected
certificateholder, and the final payment will be made only upon presentation and
surrender of the certificates of the related series at the location to be
specified in the notice of termination.
If we so specify in the related prospectus supplement, one or more
designated parties will be entitled to purchase all of the mortgage assets
underlying a series of offered certificates, thereby effecting early retirement
of the certificates and early termination of the related trust. We will describe
in the related prospectus supplement the circumstances under which that purchase
may occur.
In addition, if we so specify in the related prospectus supplement, on a
specified date or upon the reduction of the aggregate principal balance of a
specified class or classes of certificates by a specified percentage or amount,
a party designated in the related prospectus supplement may be authorized or
required to solicit bids for the purchase of all the mortgage assets of the
related trust or of a sufficient portion of the mortgage assets to retire that
class or those classes of certificates. The solicitation of bids must be
conducted in a commercially reasonable manner, and assets will, in general, be
sold at their fair market value. If the fair market value of the mortgage assets
being sold is less than their unpaid balance, then the certificateholders of one
or more classes of certificates may receive an amount less than the aggregate
certificate principal balance of, and accrued and unpaid interest on, their
certificates.
BOOK-ENTRY REGISTRATION
GENERAL. Any class of offered certificates may be issued in book-entry form
through the facilities of DTC. If so, that class will be represented by one or
more global certificates registered in the name of DTC or its nominee. If we so
specify in the related prospectus supplement, we will arrange for clearance and
settlement through the Euroclear System or Clearstream Banking, societe anonyme,
for so long as they are participants in DTC.
DTC, EUROCLEAR AND CLEARSTREAM. DTC is--
o a limited-purpose trust company organized under the New York Banking
Law,
o a "banking corporation" within the meaning of the New York Banking
Law,
o a member of the Federal Reserve System,
o a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and
o a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act.
DTC was created to hold securities for participants in the DTC system and
to facilitate the clearance and settlement of securities transactions between
those participants through electronic computerized book entry changes in their
accounts, thereby eliminating the need for physical movement of securities
certificates. Organizations that maintain accounts with DTC include securities
brokers and
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dealers, banks, trust companies and clearing corporations and may include other
organizations. DTC is owned by a number of its participating organizations 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 one of the organizations that maintains an account with DTC. The rules
applicable to DTC and its participating organizations are on file with the SEC.
It is our understanding that Clearstream was incorporated in 1970 as "Cedel
S.A.", a company with limited liability under the laws of Luxembourg. Cedel S.A.
subsequently changed its name to Cedelbank. On January 10, 2000, Cedelbank's
parent company, Cedel International, societe anonyme merged its clearing,
settlement and custody business with that of Deutsche Borse Clearing AG. The
merger involved the transfer by Cedel International of substantially all of its
assets and liabilities, including its shares in Cedelbank, to a new Luxembourg
company, New Cedel International, societe anonyme. New Cedel International is
50% owned by Cedel International and 50% by Deutsche Borse AG, the parent of
Deutsche Borse Clearing AG. The shareholders of these two entities are
recognized financial institutions around the world, including underwriters,
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. On January 18, 2000, Cedelbank was renamed
Clearstream Banking, societe anonyme. Clearstream holds securities for its
member organizations and facilitates the clearance and settlement of securities
transactions between its member organizations through electronic book-entry
changes in accounts of those organizations, thereby eliminating the need for
physical movement of certificates. Transactions may be settled in Clearstream in
any of 36 currencies, including United States dollars. Clearstream provides to
its member organizations, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Clearstream interfaces with domestic
securities markets in over 30 countries through established depository and
custodial relationships. Clearstream is registered as a bank in Luxembourg, and
as such is subject to regulation by the Commission de Surveillance du Secteur
Financier, which supervises Luxembourg banks. Clearstream's customers are
world-wide financial institutions including underwriters, securities brokers and
dealers, banks, trust companies and clearing corporations. Clearstream's U.S.
customers are limited to securities brokers and dealers, and banks. Currently,
Clearstream has approximately 2,000 customers located in over 80 countries,
including all major European countries, Canada and the United States. Indirect
access to Clearstream is available to other institutions that clear through or
maintain a custodial relationship with an account holder of Clearstream.
Clearstream and Euroclear have established an electronic bridge between their
two systems across which their respective participants may settle trades with
each other.
It is our understanding that Euroclear was founded in December 1968 to hold
securities for its member organizations and to clear and settle transactions
between its member organizations through simultaneous electronic book-entry
delivery against payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of securities and
cash. Over 100,000 different securities are accepted for settlement through
Euroclear, the majority of which are domestic securities from over 30 markets.
Transactions may be settled in Euroclear in any of over 35 currencies, including
United States dollars. The Euroclear system includes various other services,
including securities lending and borrowing and interfaces with domestic markets
in several countries generally similar to the arrangements for cross-market
transfers with DTC described below. Euroclear is operated by Morgan Guaranty
Trust Company of New York, Brussels, Belgium office (the "Euroclear Operator"),
under contract with Euroclear Clearance System, S.C., a Belgian cooperative
corporation ("ECS"). All operations are conducted by the Euroclear Operator, and
all Euroclear securities clearance
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accounts and Euroclear cash accounts are accounts with the Euroclear Operator,
not ECS. ECS establishes policy for the Euroclear system on behalf of the more
than 120 member organizations of Euroclear. Those member organizations include
banks including central banks, securities brokers and dealers and other
professional financial intermediaries. Indirect access to the Euroclear system
is also available to other firms that clear through or maintain a custodial
relationship with a member organization of Euroclear, either directly or
indirectly. Euroclear and Clearstream have established an electronic bridge
between their two systems across which their respective participants may settle
trades with each other.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian law
(collectively, the "Euroclear Terms and Conditions"). The Euroclear Terms and
Conditions govern transfers of securities and cash within the Euroclear system,
withdrawal of securities and cash from the Euroclear system, and receipts of
payments with respect to securities in the Euroclear system. All securities in
the Euroclear system are held on a fungible basis without attribution of
specific securities to specific securities clearance accounts. The Euroclear
Operator acts under the Euroclear Terms and Conditions only on behalf of member
organizations of Euroclear and has no record of or relationship with persons
holding through those member organizations.
The information in this prospectus concerning DTC, Euroclear and
Clearstream, and their book-entry systems, has been obtained from sources
believed to be reliable, but we do not take any responsibility for the accuracy
or completeness thereof.
HOLDING AND TRANSFERRING BOOK-ENTRY CERTIFICATES. 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 that purpose. In turn, the Financial
Intermediary's ownership of those certificates will be recorded on the records
of DTC or, alternatively, if the Financial Intermediary does not maintain an
account with DTC, on the records of a participating firm that acts as agent for
the Financial Intermediary, whose interest will in turn be recorded on the
records of DTC. A beneficial owner of book-entry certificates must rely on the
foregoing procedures to evidence its beneficial ownership of those certificates.
DTC has no knowledge of the actual beneficial owners of the book-entry
certificates. DTC's records reflect only the identity of the direct participants
to whose accounts those certificates are credited, which may or may not be the
actual beneficial owners. The participants in the DTC system will remain
responsible for keeping account of their holdings on behalf of their customers.
Transfers between participants in the DTC system will be effected in the
ordinary manner in accordance with DTC's rules and will be settled in same-day
funds. Transfers between direct account holders at Euroclear and Clearstream, or
between persons or entities participating indirectly in Euroclear or
Clearstream, will be effected in the ordinary manner in accordance with their
respective procedures and in accordance with DTC's rules.
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Cross-market transfers between direct participants in DTC, on the one hand,
and member organizations at Euroclear or Clearstream, on the other, will be
effected through DTC in accordance with DTC's rules and the rules of Euroclear
or Clearstream, as applicable. Such cross-market transactions will require,
among other things, delivery of instructions by the applicable member
organization to Euroclear or Clearstream, as the case may be, in accordance with
the rules and procedures and within deadlines, Brussels time, established in
Euroclear or Clearstream, as the case may be. If the transaction complies with
all relevant requirements, Euroclear or Clearstream, as the case may be, will
then deliver instructions to its depositary to take action to effect final
settlement on its behalf.
Because of time-zone differences, the securities account of a member
organization of Euroclear or Clearstream purchasing an interest in a global
certificate from a DTC participant that is not such a member organization, will
be credited during the securities settlement processing day, which must be a
business day for Euroclear or Clearstream, as the case may be, immediately
following the DTC settlement date. Transactions in interests in a book-entry
certificate settled during any securities settlement processing day will be
reported to the relevant member organization of Euroclear or Clearstream on the
same day. Cash received in Euroclear or Clearstream as a result of sales of
interests in a book-entry certificate by or through a member organization
thereof to a DTC participant that is not such a member organization will be
received with value on the DTC settlement date, but will not be available in the
relevant Euroclear or Clearstream cash account until the business day following
settlement in DTC. The related prospectus supplement will contain additional
information regarding clearance and settlement procedures for the book-entry
certificates and with respect to tax documentation procedures relating to the
book-entry certificates.
Conveyance of notices and other communications by DTC to DTC participants,
and by DTC participants to Financial Intermediaries and beneficial owners, will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Payments on the book-entry certificates will be made to DTC. DTC's practice
is to credit DTC participants' accounts on the related payment 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 that date. Disbursement of
such payments by DTC participants to Financial Intermediaries and beneficial
owners will be--
o 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
o the sole responsibility of each such DTC participant, subject to any
statutory or regulatory requirements in effect from time to time.
Under a book-entry system, beneficial owners may receive payments after the
related payment date.
The only certificateholder of book-entry certificates will be DTC or its
nominee. Parties to the governing documents for any series of offered
certificates need not recognize beneficial owners of book-entry certificates as
certificateholders. The beneficial owners of book-entry certificates will be
permitted to exercise the rights of certificateholders only indirectly through
the DTC participants, who in turn will exercise their rights through DTC. We
have been informed that DTC will take action permitted to be taken by a
certificateholder only at the direction of one or more DTC participants. DTC may
take conflicting actions with respect to the book-entry certificates to the
extent that those actions are taken on behalf of Financial Intermediaries whose
holdings include those certificates.
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Because DTC can act only on behalf of DTC participants, who in turn act on
behalf of Financial Intermediaries and certain beneficial owners, the ability of
a beneficial owner to pledge its interest in a class of book-entry certificates
to persons or entities that do not participate in the DTC system, or otherwise
to take actions in respect of its interest in a class of book-entry
certificates, may be limited due to the lack of a physical certificate
evidencing that interest.
ISSUANCE OF DEFINITIVE CERTIFICATES. Unless we specify otherwise in the
related prospectus supplement, beneficial owners of affected offered
certificates initially issued in book-entry form will not be able to obtain
physical certificates that represent those offered certificates, unless:
o we advise the related trustee in writing that DTC is no longer willing
or able to discharge properly its responsibilities as depository with
respect to those offered certificates, and we are unable to locate a
qualified successor; or
o we elect, at our option, to terminate the book-entry system through
DTC with respect to those offered certificates.
Upon the occurrence of either of the two events described above, DTC will
be required to notify all DTC participants of the availability through DTC of
physical certificates with respect to the affected offered certificates. Upon
surrender by DTC of the certificate or certificates representing a class of
book-entry offered certificates, together with instructions for registration,
the related trustee or other designated party will be required to issue to the
beneficial owners identified in those instructions physical certificates
representing those offered certificates.
DESCRIPTION OF THE GOVERNING DOCUMENTS
GENERAL
The offered certificates of each series will be issued pursuant to a
pooling and servicing agreement or other similar agreement or collection of
agreements (individually and collectively, as to that series, the "Governing
Document"). In general, the parties to the Governing Document for a series of
offered certificates will include us, a trustee, a master servicer and a special
servicer. However, if the related trust assets include mortgage-backed
securities, the Governing Document may include a manager as a party, but may not
include a master servicer, special servicer or other servicer as a party. We
will identify in the related prospectus supplement the parties to the Governing
Document for a series of offered certificates.
If we so specify in the related prospectus supplement, a party from whom we
acquire mortgage assets or one of its affiliates may perform the functions of
master servicer, special servicer or manager for the trust to which we transfer
those assets. If we so specify in the related prospectus supplement, the same
person or entity may act as both master servicer and special servicer for one of
our trusts.
Any party to the Governing Document for a series of offered certificates,
or any of its affiliate, may own certificates issued thereunder. However, except
in limited circumstances, including with respect to required consents to certain
amendments to the Governing Document for a series of offered certificates,
certificates that are held by the related master servicer, special servicer or
manager 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 the Governing Document for each series of offered certificates
will vary depending upon the nature of the certificates to be issued thereunder
and the nature of the related trust assets. The following summaries describe
certain provisions that may appear in the Governing Document for each series of
offered certificates. The prospectus supplement for each series of offered
certificates will provide material additional information regarding the
Governing Document for that series. The summaries in this prospectus do not
purport to be complete, and you should refer to the provisions of the Governing
Document for your certificates and, further, to the description of those
provisions in the related prospectus supplement. We will provide a copy of the
Governing Document, exclusive of exhibits, that relates to your certificates,
without charge, upon written request addressed to our principal executive
offices specified under "DLJ Commercial Mortgage Corp".
ASSIGNMENT OF MORTGAGE ASSETS
At the time of initial issuance of any series of offered certificates, we
will assign or cause to be assigned to the designated trustee the mortgage
assets to be included in the related trust, together with certain related
assets. We will specify in the related prospectus all material documents to be
delivered, and all other material actions to be taken, by us or any prior holder
of the related mortgage assets, in connection with that assignment. We will also
specify in the related prospectus supplement any remedies available to the
related certificateholders, or the related trustee on their behalf, in the event
that any of those material documents are not delivered or any of those other
material actions are not taken as required. Concurrently with that assignment,
the related trustee will deliver to us or our designee the certificates of that
series in exchange for the mortgage assets and the other assets to be included
in the related trust.
Each mortgage asset included in one of our trusts will be identified in a
schedule appearing as an exhibit to the related Governing Document. That
schedule generally will include detailed information about each mortgage asset
transferred to the related trust, including:
o in the case of a mortgage loan--
1. the address of the related real property,
2. the mortgage interest rate and, if applicable, the applicable
index, gross margin, adjustment date and any rate cap
information,
3. the remaining term to maturity,
4. in the case of a balloon loan, the remaining amortization term,
and
5. the outstanding principal balance; and
o in the case of a mortgage-backed security--
1. the outstanding principal balance, and
2. the pass-through rate or coupon rate.
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REPRESENTATIONS AND WARRANTIES WITH RESPECT TO MORTGAGE ASSETS
Unless we state otherwise in the prospectus supplement for any series of
offered certificates, we will, with respect to each mortgage asset in the
related trust, make or assign, or cause to be made or assigned, certain
representations and warranties, covering, by way of example:
o the accuracy of the information set forth for each mortgage asset on
the schedule of mortgage assets appearing as an exhibit to the
Governing Document for that series;
o the warranting party's title to each mortgage asset and the authority
of the warranting party to sell that mortgage asset; and
o 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 and the payment status of
the mortgage loan.
We will identify the warranting party, and give a more complete sampling of
the representations and warranties made thereby, in the related prospectus
supplement. We will also specify in the related prospectus supplement any
remedies against the warranting party available to the related
certificateholders, or the related trustee on their behalf, in the event of a
breach of any of those representations and warranties. In most cases, the
warranting party will be a prior holder of the particular mortgage assets.
COLLECTION AND OTHER SERVICING PROCEDURES WITH RESPECT TO MORTGAGE LOANS
The Governing Document for each series of offered certificates will govern
the servicing and administration of any mortgage loans included in the related
trust.
In general, the related master servicer and special servicer, directly or
through sub-servicers, will be obligated to service and administer for the
benefit of the related certificateholders the mortgage loans in any of our
trusts. The master servicer and the special servicer will be required to service
and administer those mortgage loans in accordance with applicable law and,
further, in accordance with the terms of the related Governing Document, the
mortgage loans themselves and any instrument of credit support included in that
trust. 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 that 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 for one of our trusts will be required to make reasonable
efforts to collect all payments called for under the terms and provisions of the
related mortgage loans that it services and, in general, will be obligated to
follow the same collection procedures as are consistent with the general
servicing standard provided for under the related Governing Document and
described in the related prospectus supplement. Consistent with the foregoing,
the master servicer and the special servicer will each be permitted, in its
discretion, to waive any default interest or late payment charge in connection
with collecting a late payment on any defaulted mortgage loan.
The master servicer and/or the special servicer for one or our trusts,
directly or through sub-servicers, will also be required to perform various
other customary functions of a servicer of comparable loans, including:
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o maintaining escrow or impound accounts for the payment of taxes,
insurance premiums, ground rents and similar items, or otherwise
monitoring the timely payment of those items;
o ensuring that the related properties are properly insured;
o attempting to collect delinquent payments;
o supervising foreclosures;
o negotiating modifications;
o responding to borrower requests for partial releases of the encumbered
property, easements, consents to alteration or demolition and similar
matters;
o protecting the interests of certificateholders with respect to senior
lienholders;
o conducting inspections of the related real properties on a periodic or
other basis;
o collecting and evaluating financial statements for the related real
properties;
o managing or overseeing the management of real properties acquired on
behalf of the trust through foreclosure, deed-in-lieu of foreclosure
or otherwise; and
o maintaining servicing records relating to mortgage loans in the trust.
We will specify in the related prospectus supplement when, and the extent
to which, servicing of a mortgage loan is to be transferred from a master
servicer to a special servicer. In general, a special servicer for any of our
trusts will be responsible for the servicing and administration of:
o mortgage loans that are delinquent in respect of a specified number of
scheduled payments;
o mortgage loans as to which there is a material non-monetary default;
o mortgage loans as to which the related borrower has entered into or
consented to bankruptcy, appointment of a receiver or conservator or
similar insolvency proceeding, or the related borrower has become the
subject of a decree or order for such a proceeding which shall have
remained in force undischarged or unstayed for a specified number of
days; and
o real properties acquired as part of the trust in respect of defaulted
mortgage loans.
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The related Governing Document may also may provide that if a default on a
mortgage loan in the related trust 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 of that mortgage
loan, in whole or in part, to the related special servicer. When the
circumstances no longer warrant a special servicer's continuing to service a
particular mortgage loan, such as when the related borrower is paying in
accordance with the forbearance arrangement entered into between the special
servicer and that borrower, the master servicer will generally resume the
servicing duties with respect to the particular mortgage loan.
A borrower's failure to make required mortgage loan payments may mean that
operating income from the related real property 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 borrower 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 real property. In general, with respect to each
series of offered certificates, the related special servicer will be required to
monitor any mortgage loan in the related trust 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 real property,
initiate corrective action in cooperation with the mortgagor if cure is likely,
inspect the related real property and take such other actions as it deems
necessary and appropriate. A significant period of time may elapse before a
special servicer is able to assess the success of any such corrective action or
the need for additional initiatives. The time within which a 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 real property in lieu
of foreclosure, on behalf of the certificateholders of the related series may
vary considerably depending on the particular mortgage loan, the related real
property, the borrower, the presence of an acceptable party to assume the
mortgage loan and the laws of the jurisdiction in which the related real
property is located. If a borrower files a bankruptcy petition, the special
servicer may not be permitted to accelerate the maturity of the defaulted loan
or to foreclose on the related real property for a considerable period of time.
See "Certain Legal Aspects of Mortgage Loans--Bankruptcy Laws".
A special servicer for one of our trusts may also perform certain limited
duties in respect of mortgage loans in that trust for which the related master
servicer is primarily responsible, such as performing property inspections and
collecting and evaluating financial statements. A master servicer for one of our
trusts may perform certain limited duties in respect of any mortgage loan in
that trust for which the related special servicer is primarily responsible, such
as continuing to receive payments on the mortgage loan, making certain
calculations with respect to the mortgage loan and making remittances and
preparing certain reports to the related trustee and/or certificateholders with
respect to the mortgage loan. The duties of the master servicer and special
servicer for your series will be more fully described in the related prospectus
supplement.
Unless we state otherwise in the related prospectus supplement, the master
servicer for your series will be responsible for filing and settling claims in
respect of particular mortgage loans for your series under any applicable
instrument of credit support. See "Description of Credit Support" in this
prospectus.
SUB-SERVICERS
A master servicer or special servicer may delegate its servicing
obligations to one or more third-party servicers or sub-servicers. However,
unless we specify otherwise in the related prospectus supplement, the master
servicer or special servicer will remain obligated under the related Governing
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Document. Each sub-servicing agreement between a master servicer or special
servicer, as applicable, and a sub-servicer must provide for servicing of the
applicable mortgage loans consistent with the related Governing Document. Any
master servicer and special servicer for one of our trusts will each be required
to monitor the performance of sub-servicers retained by it.
Unless we specify otherwise in the related prospectus supplement, any
master servicer or special servicer for one of our trusts will be solely liable
for all fees owed by it to any sub-servicer, regardless of whether the master
servicer's or special servicer's compensation pursuant to the related Governing
Document is sufficient to pay those fees. Each sub-servicer will be entitled to
reimbursement from 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 the master servicer or special servicer would be reimbursed under the
related Governing Document.
COLLECTION OF PAYMENTS ON MORTGAGE-BACKED SECURITIES
Unless we specify otherwise in the related prospectus supplement, if a
mortgage-backed security is included among the trust assets underlying any
series of offered certificates, then:
o that mortgage-backed security will be registered in the name of the
related trustee or its designee;
o the related trustee will receive payments on that mortgage-backed
security; and
o subject to any conditions described in the related prospectus
supplement, the related trustee or a designated manager will, on
behalf and at the expense of the trust, exercise all rights and
remedies in respect of that mortgaged-backed security, including the
prosecution of any legal action necessary in connection with any
payment default.
CERTAIN MATTERS REGARDING THE MASTER SERVICER, THE SPECIAL SERVICER, THE MANAGER
AND US
Unless we specify otherwise in the related prospectus supplement, no master
servicer, special servicer or manager for any of our trusts may resign from its
obligations in that capacity, except upon--
o the appointment of, and the acceptance of that appointment by, a
successor to the resigning party and receipt by the related trustee of
written confirmation from each applicable rating agency that the
resignation and appointment will not result in a withdrawal or
downgrade of any rating assigned by that rating agency to any class of
certificates of the related series, or
o a determination that those 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 the resigning party.
In general, no resignation will become effective until the related trustee
or other successor has assumed the obligations and duties of the resigning
master servicer, special servicer or manager, as the case may be.
Each master servicer, special servicer and, if it receives distributions on
mortgage-backed securities, manager for one of our trusts 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
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result of an officer's or employee's misappropriation of funds or errors and
omissions, subject to such limitations as to amount of coverage, deductible
amounts, conditions, exclusions and exceptions as may be permitted by the rating
agencies assigning ratings to the related series of certificates.
With respect to each series of offered certificates, we and the related
master servicer, special servicer and/or manager, if any, will, in each case, be
obligated to perform only those duties specifically required under the related
Governing Document.
In no event will we, any master servicer, special servicer or manager for
one of our trusts, or any of our or their respective members, managers,
directors, officers, employees or agents be under any liability to that trust or
the related certificateholders for any action taken, or not taken, in good faith
pursuant to the related Governing Document or for errors in judgment. Neither we
nor any of those other persons or entities will be protected, however, 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 under
the Governing Document for any series of offered certificates or by reason of
reckless disregard of those obligations and duties.
Furthermore, the Governing Document for each series of offered certificates
will entitle us, the master servicer, special servicer and/or manager for the
related trust, and our and their respective members, managers, directors,
officers, employees and agents, to indemnification out of the related trust
assets for any loss, liability or expense incurred in connection with any legal
action that relates to that Governing Document or series of offered certificates
or to the related trust. The indemnification will not extend, however, to any
loss, liability or expense--
o specifically required to be borne by the relevant party, without right
of reimbursement, pursuant to the terms of that Governing Document,
o incurred in connection with any legal action against the relevant
party resulting from any breach of a representation or warranty made
in that Governing Document, or
o incurred in connection with any legal action against the relevant
party resulting from any willful misfeasance, bad faith or gross
negligence in the performance of obligations or duties under that
Governing Document.
Neither we nor any master servicer, special servicer or manager for the
related trust will be under any obligation to appear in, prosecute or defend any
legal action unless:
o the action is related to the respective responsibilities of that party
under the Governing Document for the affected series of offered
certificates; and
o either--
1. that party is specifically required to bear the expense of the
action, or
2. the action will not, in its opinion, involve that party in any
ultimate expense or liability for which it would not be
reimbursed under the Governing Document for the affected series
of offered certificates.
However, we and each of those other parties may undertake any legal action
that may be necessary or desirable with respect to the enforcement or protection
of the rights and duties of the parties
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to the Governing Document for any series of offered certificates and the
interests of the certificateholders of that series under that Government
Document. In that event, the legal expenses and costs of the action, and any
liability resulting therefrom, will be expenses, costs and liabilities of the
related trust and payable out of related trust assets.
With limited exception, any person or entity--
o into which we or any related master servicer, special servicer or
manager may be merged or consolidated, or
o resulting from any merger or consolidation to which we or any related
master servicer, special servicer or manager is a party, or
o succeeding to our business or the business of any related master
servicer, special servicer or manager,
will be the successor of us or that master servicer, special servicer or
manager, as the case may be, under the Governing Document for a series of
offered certificates.
We will describe in the related prospectus supplement the compensation
arrangements with respect to any master servicer, special servicer or manager
for any of our trusts. In general, that compensation will be payable out of the
related trust assets.
EVENTS OF DEFAULT
We will identify in related prospectus supplement the various events of
default under the Governing Document for each series of offered certificates for
which any related master servicer, special servicer or manager may be terminated
in that capacity.
AMENDMENT
The Governing Document for each series of offered certificates may be
amended by the parties thereto, without the consent of any of the holders of
those certificates, or of any non-offered certificates of the same series, for
the following reasons:
1. to cure any ambiguity;
2. to correct, modify or supplement any provision in the Governing
Document which may be inconsistent with any other provision in that
document or to correct any error;
3. to add any other provisions with respect to matters or questions
arising under the Governing Document that are not inconsistent with
then existing provisions of that document;
4. to the extent applicable, to relax or eliminate any requirement under
the Governing Document imposed by the provisions of the Internal
Revenue Code of 1986 relating to REMICs, if the provisions of that
Code are amended or clarified so as to allow for the relaxation or
elimination of that requirement;
5. to relax or eliminate any requirement under the Governing Document
imposed by the Securities Act of 1933, as amended, or the rules under
that Act, if that Act or those rules
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are amended or clarified so as to allow for the relaxation or
elimination of that requirement;
6. to comply with any requirements imposed by the Internal Revenue Code
of 1986 or any final, temporary or, in some cases, proposed
regulation, revenue ruling, revenue procedure or other written
official announcement or interpretation relating to federal income tax
laws, or to avoid a prohibited transaction or reduce the incidence of
any tax that would arise from any actions taken with respect to the
operation of any REMIC or grantor trust created under the Governing
Document;
7. to the extent applicable, to modify, add to or eliminate certain
transfer restrictions relating to the certificates which are residual
interests in a REMIC; or
8. to otherwise modify or delete existing provisions of the Governing
Document.
However, no amendment of the Governing Document for any series of offered
certificates, other than an amendment for any of the specific purposes described
in clauses 6. and 7. above, may adversely affect in any material respect the
interests of any holders of offered or non-offered certificates of that series.
In addition, no amendment of the Governing Document for any series of offered
certificates covered solely by clause 8. above may result in a downgrade or
withdrawal of any then current rating assigned to any class of certificates of
the related series, as evidenced by written confirmation to that effect from
each applicable rating agency obtained by or delivered to the related trustee.
In general, the Governing Document for a series of offered certificates may
also be amended by the parties to that document, with the consent of the holders
of offered and non-offered certificates of that series representing, in the
aggregate, not less than 66-2/3%, or such other percentage specified in the
related prospectus supplement, of all the voting rights allocated to those
classes of that series that are affected by the amendment. However, the
Governing Document for a series of offered certificates may not be amended to:
o 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 any offered or non-offered certificate of that series,
without the consent of the holder of that certificate; or
o adversely affect in any material respect the interests of the holders
of any class of offered or non-offered certificates of that series in
any other manner, without the consent of the holders of all
certificates of that class; or
o modify the provisions of the Governing Document relating to amendments
thereof, without the consent of the holders of all offered and
non-offered certificates of that series then outstanding.
LIST OF CERTIFICATEHOLDERS
Upon written request of three or more certificateholders of record of any
series made for purposes of communicating with other holders of certificates of
the same series with respect to their rights under the related Governing
Document, the related trustee or other certificate registrar of that series will
afford the requesting certificateholders access during normal business hours to
the most recent list of certificateholders of that series. However, the trustee
may first require a copy of the communication that the requesting
certificateholders propose to send.
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THE TRUSTEE
The trustee for each series of offered certificates will be named in the
related prospectus supplement. The commercial bank, national banking
association, banking corporation or trust company that serves as trustee for any
series of offered certificates may have typical banking relationships with us
and our affiliates and with any of the other parties to the related Governing
Document and its affiliates.
DUTIES OF THE TRUSTEE
The trustee for each series of offered certificates--
o will make no representation as to the validity or sufficiency of those
certificates, the related Governing Document or any underlying
mortgage asset or related document, and
o will not be accountable for the use or application by or on behalf of
any other party to the related Governing Document of any funds paid to
that party with respect to those certificates or the underlying
mortgage assets.
If no event of default has occurred and is continuing under the related
Governing Document, the trustee for each series of offered certificates will be
required to perform only those duties specifically required under the related
Governing Document. However, upon receipt of any of the various certificates,
reports or other instruments required to be furnished to it pursuant to the
related Governing Document, the trustee must examine those documents and
determine whether they conform to the requirements of that Governing Document.
CERTAIN MATTERS REGARDING THE TRUSTEE
As and to the extent described in the related prospectus supplement, the
fees and normal disbursements of the trustee for any series of offered
certificates may be the expense of the related master servicer or other
specified person or may be required to be paid by the related trust assets.
The trustee for each series of offered certificates and each of its
directors, officers, employees and agents will be entitled to indemnification,
out of related trust assets, for any loss, liability or expense incurred by that
trustee or any of those other persons in connection with that trustee's
acceptance or administration of its trusts, the exercise of its powers or the
performance of its duties, under the related Governing Document. However, the
indemnification of a trustee or any of its directors, officers, employees and
agents 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 under the related Governing
Document.
No trustee for any series of offered certificates will be liable for any
action reasonably taken, suffered or omitted by it in good faith and believed by
it to be authorized by the related Governing Document.
No trustee for any series of offered certificates will be required to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties under the related Governing Document, or in the
exercise of any of its rights or powers, if it has reasonable grounds believing
that repayment of those funds or adequate indemnity against that risk or
liability is not reasonably assured to it.
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The trustee for each series of offered certificates will be entitled to
execute any of its trusts or powers and perform any of its duties under the
related Governing Document, either directly or by or through agents or
attorneys. 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 of offered certificates may resign at any time.
We will be obligated to appoint a successor to a resigning trustee. We may also
remove the trustee for any series of offered certificates if--
o that trustee ceases to be eligible to continue as such under the
related Governing Document, or
o that trustee becomes incapable of acting or is adjudged bankrupt or
insolvent.
Unless we indicate otherwise in the related prospectus supplement, the
trustee for any series of offered certificates may also be removed at any time
by the holders of the offered and non-offered certificates of that series
evidencing greater than 50%, or such other percentage specified in the related
prospectus supplement, of the voting rights for that series. However, if the
removal was without cause, the certificateholders effecting the 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.
DESCRIPTION OF CREDIT SUPPORT
GENERAL
Credit support may be provided with respect to one or more classes of the
offered certificates of any series or with respect to the related mortgage
assets. That credit support may be in the form of any of the following:
o the subordination of one or more other classes of certificates of the
same series;
o the use of a letter of credit, a surety bond, an insurance policy or a
guarantee;
o the establishment of one or more reserve funds; or
o any combination of the foregoing.
If and to the extent described in the related prospectus supplement, any of
the above forms of credit support may provide credit enhancement for non-offered
certificates, as well as offered certificates, or for more than one series of
certificates.
If you are the beneficiary of any particular form of credit support, that
credit support may not protect you against all risks of loss and will not
guarantee payment to you of all amounts to which you are entitled under your
certificates. If losses or shortfalls occur that exceed the amount covered by
that credit support or that are of a type not covered by that credit support,
you will bear your allocable share
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of deficiencies. Moreover, if that credit support covers the offered
certificates of more than one class or series and total losses on the related
mortgage assets exceed the amount of that credit support, it is possible that
the holders of offered certificates of other classes and/or series will be
disproportionately benefited by that credit support to your detriment.
If you are the beneficiary of any particular form of credit support, we
will include in the related prospectus supplement a description of the
following:
o the nature and amount of coverage under that credit support;
o any conditions to payment not otherwise described in this prospectus;
o any conditions under which the amount of coverage under that credit
support may be reduced and under which that credit support may be
terminated or replaced; and
o the material provisions relating to that credit support.
Additionally, we will set forth in the related prospectus supplement
certain information with respect to the obligor, if any, under any instrument of
credit support.
SUBORDINATE CERTIFICATES
If and to the extent described in the related prospectus supplement, one or
more classes of certificates of any series may be subordinate to one or more
other classes of certificates of that series. If you purchase subordinate
certificates, your right to receive payments out of collections and advances on
the related trust assets on any payment date will be subordinated to the
corresponding rights of the holders of the more senior classes of certificates.
If and to the extent described 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. In the related prospectus supplement, we 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 that subordination will be available.
If the mortgage assets in any trust established us 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 payments be made on senior certificates evidencing interests in
one group of those mortgage assets prior to payments on subordinate certificates
evidencing interests in a different group of those mortgage assets. We will
describe in the related prospectus supplement the manner and conditions for
applying any cross-support provisions.
INSURANCE OR GUARANTEES WITH RESPECT TO MORTGAGE LOANS
The mortgage loans included in any trust established by us may be covered
for certain default risks by insurance policies or guarantees. If so, we will
describe in the related prospectus supplement the nature of such default risks
and the extent of such coverage.
LETTER OF CREDIT
If and to the extent described in the related prospectus supplement,
deficiencies in amounts otherwise payable on a series of offered certificates or
certain classes of those certificates will be covered by one or more letters of
credit, issued by a bank or other financial institution specified in the
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related prospectus supplement (the "Letter of Credit Bank"). Under a letter of
credit, the Letter of Credit Bank will be obligated to honor draws under the
letter of credit in an aggregate fixed dollar amount, net of unreimbursed
payments under the letter of credit, 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 as of the date the related trust was
formed or of the initial aggregate principal balance of one or more classes of
certificates of the applicable series. 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 of offered certificates
will expire at the earlier of the date specified in the related prospectus
supplement or the termination of the related trust.
CERTIFICATE INSURANCE AND SURETY BONDS
If and to the extent described in the related prospectus supplement,
deficiencies in amounts otherwise payable on a series of offered certificates or
certain classes of those certificates will be covered by insurance policies or
surety bonds provided by one or more insurance companies or sureties. Those
instruments may cover, with respect to one or more classes of the offered
certificates of the related series, timely payments of interest and principal or
timely payments of interest and payments of principal on the basis of a schedule
of principal payments set forth in or determined in the manner specified in the
related prospectus supplement. We will describe in the related prospectus
supplement any limitations on the draws that may be made under any such
instrument.
RESERVE FUNDS
If and to the extent described in the related prospectus supplement,
deficiencies in amounts otherwise payable on a series of offered certificates or
certain classes of those certificates 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 of the foregoing, will be
deposited, in the amounts specified in the related prospectus supplement. If and
to the extent described in the related prospectus supplement, the reserve fund
for the related series of offered certificates may also be funded over time.
Amounts on deposit in any reserve fund for a series of offered certificates
will be applied for the purposes, in the manner, and to the extent specified in
the related prospectus supplement. If and to the extent described in the related
prospectus supplement, reserve funds may be established to provide protection
only against certain types of losses and shortfalls. Following each payment date
for the related series of offered certificates, amounts in a reserve fund in
excess of any required balance may be released from the reserve fund under the
conditions and to the extent specified in the related prospectus supplement.
CREDIT SUPPORT WITH RESPECT TO MBS
If and to the extent described in the related prospectus supplement, any
mortgage-backed security included in one of our trusts and/or the mortgage loans
that back that security may be covered by one or more of the types of credit
support described in this prospectus. We will specify in the related prospectus
supplement, as to each such form of credit support, the information indicated
above with respect to that mortgage-backed security, to the extent that the
information is material and available.
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CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS
Most, if not all, of the mortgage loans underlying a series of offered
certificates will be secured by multifamily and commercial properties in the
United States, its territories and possessions. However, some of those mortgage
loans may be secured by multifamily and commercial properties outside the United
States, its territories and possessions.
The following discussion contains general summaries of certain legal
aspects of mortgage loans secured by multifamily and commercial properties in
the United States. Because these legal aspects are governed by applicable state
law, which may differ substantially from state to state, 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 underlying the offered certificates is situated. Accordingly, you should
be aware that the summaries are qualified in their entirety by reference to the
applicable laws of those states. See "Description of the Trust Assets--Mortgage
Loans".
If a significant percentage of mortgage loans underlying a series of
offered certificates, are secured by properties in a particular state, we will
discuss the relevant state laws, to the extent they vary materially from this
discussion, in the related prospectus supplement.
GENERAL
Each mortgage loan underlying a series of offered certificates will be
evidenced by a note or bond and secured by an instrument granting a security
interest in real property. The instrument granting a security interest in real
property 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 that real property is
located. Mortgages, deeds of trust and deeds to secure debt are often
collectively referred to in this prospectus as "mortgages". A mortgage creates a
lien upon, or grants a title interest in, the real property covered by the
mortgage, 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--
o the terms of the mortgage,
o the terms of separate subordination agreements or intercreditor
agreements with others that hold interests in the real property,
o the knowledge of the parties to the mortgage, and
o in general, 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--
o a mortgagor, who is the owner of the encumbered interest in the real
property, and
o a mortgagee, who is the lender.
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In general, the mortgagor is also the borrower.
In contrast, a deed of trust is a three-party instrument. The parties to a
deed of trust are--
o the trustor, who is the equivalent of a mortgagor,
o the trustee to whom the real property is conveyed, and
o the beneficiary for whose benefit the conveyance is made, who is the
lender.
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 a deed to
secure debt, the grantor, who is the equivalent of a mortgagor, conveys title to
the real property to the grantee, who is the lender, generally with a power of
sale, until the debt is repaid.
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--
o the express provisions of the related instrument,
o the law of the state in which the real property is located,
o certain federal laws, and
o in some deed of trust transactions, the directions of the beneficiary.
LEASES AND RENTS
A mortgage that encumbers an income-producing property often contains an
assignment of rents and leases and/or may be accompanied by a separate
assignment of rents and leases. Under an assignment of rents and leases, the
borrower assigns to the lender the borrower's right, title and interest as
landlord under each lease and the income derived from each lease. However, the
borrower retains a revocable license to collect the rents, provided there is no
default and the rents are not directly paid to the lender. 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 (the "UCC"). Room rates are
generally pledged by the borrower as additional security for the loan when a
mortgage loan is secured by a hotel or motel. In general, the lender must file
financing statements in order to perfect its security interest in the room rates
and must file
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continuation statements, generally every five years, to maintain that
perfection. Mortgage loans secured by hotels or motels may be included in one of
our trusts even if the security interest in the room rates was not perfected or
the requisite UCC filings were allowed to lapse. A lender 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, even if the lender's security interest in room rates is perfected under
applicable nonbankruptcy law.
In the bankruptcy setting, the lender will be stayed from enforcing its
rights to collect hotel and motel room rates. However, the room rates will
constitute "cash collateral" and cannot be used by the bankrupt borrower--
o without a hearing or the lender's consent, or
o unless the lender's interest in the room rates is given adequate
protection.
Such adequate protection may include a 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 bankrupt borrower proposes
to use. See "--Bankruptcy Laws" below.
PERSONALTY
Certain types of income-producing real properties, such as hotels, motels
and nursing homes, may include personal property, which may, to the extent it is
owned by the borrower and not previously pledged, 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 in
the personal property 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 one of our trusts even
if the security interest in the 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 security at public auction to satisfy the
indebtedness.
FORECLOSURE PROCEDURES VARY FROM STATE TO STATE. The two primary methods of
foreclosing a mortgage are--
o judicial foreclosure, involving court proceedings, and
o 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.
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A foreclosure action is subject to most of the delays and expenses of other
lawsuits if defenses are raised or counterclaims are interposed. A foreclosure
action sometimes requires several years to complete.
JUDICIAL FORECLOSURE. A judicial foreclosure proceeding is conducted in a
court having jurisdiction over the mortgaged property. Generally, a lender
initiates the action by the service of legal pleadings upon--
o all parties having a subordinate interest of record in the real
property, and
o 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. The court generally
issues a judgment of foreclosure and appoints a referee or other officer to
conduct a public sale of the mortgaged property upon successful completion of a
judicial foreclosure proceeding. The proceeds of that public sale are used to
satisfy the judgment. The procedures that govern these public sales 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:
o alter the specific terms of a loan to the extent it considers
necessary to prevent or remedy an injustice, undue oppression or
overreaching;
o 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;
o require the lender to reinstate a loan or recast a payment schedule in
order to accommodate a borrower that is suffering from a temporary
financial disability; or
o limit 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.
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--
o upheld the reasonableness of the notice provisions, or
o 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 its mortgage loan after commencement of foreclosure
proceedings but prior to a foreclosure sale.
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NONJUDICIAL FORECLOSURE/POWER OF SALE. In states permitting nonjudicial
foreclosure proceedings, foreclosure of a deed of trust is generally
accomplished by a nonjudicial trustee's sale pursuant to a power of sale
typically granted in the deed of trust. A power of sale may also be contained in
any other type of mortgage instrument if applicable law so permits. A power of
sale under a deed of trust allows a nonjudicial public sale to be conducted
generally following--
o a request from the beneficiary/lender to the trustee to sell the
property upon default by the borrower, and
o notice of sale is given in accordance with the terms of the deed of
trust and applicable state law.
In some states, prior to a nonjudicial public sale, the trustee under the
deed of trust must--
o record a notice of default and notice of sale, and
o send a copy of those notices to the borrower and to any other party
who has recorded a request for a copy of them.
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. Some
states require a reinstatement period during which the borrower or junior
lienholder may have the right 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 has only the right to pay off the entire debt
to prevent the foreclosure sale. Generally, state law governs the procedure for
public sale, the parties entitled to notice, the method of giving notice and the
applicable time periods.
PUBLIC SALE. A third party may be unwilling to purchase a mortgaged
property at a public sale because of--
o the difficulty in determining the exact status of title to the
property due to, among other things, redemption rights that may exist,
and
o the possibility that physical deterioration of the property may have
occurred during the foreclosure proceedings.
As a result of the foregoing, it is common for the lender to purchase the
mortgaged property and become the owner thereof, subject to the borrower's right
in some states to remain in possession during a redemption period. In that case,
the lender will 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 repairs 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. Whether, the ultimate proceeds of the sale of the
property equal the lender's investment in the property depends upon market
conditions. Moreover, because of the expenses associated with acquiring, owning
and selling a mortgaged property, a lender could realize an overall loss on the
related mortgage loan
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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. In addition, it
may be obliged to keep senior mortgage loans current in order to avoid
foreclosure of its interest in the property. Furthermore, 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--
o to enable the lender to realize upon its security, and
o to bar the borrower, and all persons who have interests in the
property that are subordinate to that of the foreclosing lender, from
exercising 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 to 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,
the borrower and foreclosed junior lienors are given a statutory period in which
to redeem the property after sale pursuant to a deed of trust or foreclosure of
a mortgage. 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. A statutory right of
redemption will 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 underlying a
series of offered certificates may be nonrecourse loans. Therefore, recourse in
the case of default on such a mortgage loan will be limited to the mortgaged
property and such other assets, if any, that were pledged to secure the mortgage
loan. However, even if a mortgage loan by its terms provides for recourse to the
borrower's other assets, a lender's ability to realize upon those assets may be
limited by state law. For example, in some states, a lender cannot obtain a
deficiency judgment against the borrower following foreclosure or sale under a
deed of trust. A deficiency judgment is a personal judgment against the former
borrower equal to the difference between the net amount realized upon the public
sale of the real property and the amount due to the lender. Other statutes may
require the lender to exhaust the security afforded under a mortgage before
bringing a personal action against the borrower. In certain other states, the
lender has the option of bringing a personal action against the borrower on the
debt without first exhausting the security, but in doing so, the lender may be
deemed to have elected a remedy and thus may be precluded from foreclosing upon
the security. Consequently, lenders will usually proceed first against the
security in states where an election of remedy provision exists. Finally, other
statutory
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provisions 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. These other
statutory provisions are intended to protect borrowers from exposure to large
deficiency judgments that might result from bidding at below-market values at
the foreclosure sale.
LEASEHOLD CONSIDERATIONS. Some or all of the mortgage loans underlying a
series of offered certificates may be secured by a mortgage on the borrower's
leasehold interest under 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--
o requires the lessor to give the leasehold mortgagee notices of lessee
defaults and an opportunity to cure them,
o permits the leasehold estate to be assigned to and by the leasehold
mortgagee or the purchaser at a foreclosure sale, and
o contains certain other protective provisions typically included in a
mortgageable ground lease.
Certain mortgage loans underlying a series of offered certificates,
however, may be secured by ground leases which do not contain these provisions.
COOPERATIVE SHARES. Some or all of the mortgage loans underlying a series
of offered certificates may be secured by a security interest on the borrower's
ownership interest in shares, and the proprietary leases belonging to those
shares, allocable to cooperative dwelling units that may be vacant or occupied
by nonowner tenants. Loans secured in this manner are subject to certain risks
not associated with mortgage loans secured by a lien on the fee estate of a
borrower in real property. Loans secured in this manner typically are
subordinate to the mortgage, if any, on the cooperative's building. That
mortgage, 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 is subject to
various regulations as well as to restrictions under the governing documents of
the cooperative. 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, that the lender may 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 corporation to receive sums due under the proprietary leases.
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BANKRUPTCY LAWS
Operation of the U.S. Bankruptcy Code and related state laws may interfere
with or affect the ability of a lender to realize upon collateral or to enforce
a deficiency judgment. For example, under the U.S. 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. Often, no interest or principal payments are made during the course of
the bankruptcy case. The delay caused by an automatic stay and its consequences
can be significant. Also, under the U.S. 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 the junior lien.
Under the U.S. Bankruptcy Code, the amount and terms of a mortgage loan
secured by a lien on property of the debtor may be modified provided that
substantive and procedural safeguards protective of the lender are met. A
bankruptcy court may, among other things:
o reduce the secured portion of the outstanding amount of the loan to
the then-current value of the property, thereby leaving the lender a
general unsecured creditor for the difference between the then-current
value of the property and the outstanding balance of the loan;
o reduce 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;
o extend or shorten the term to maturity of the loan;
o permit the bankrupt borrower to cure the subject loan default by
paying the arrearage over a number of years; or
o permit the bankrupt borrower, through its rehabilitative plan, to
reinstate the 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 interfere with or affect the ability of a
secured lender to enforce the borrower's assignment of rents and leases related
to the mortgaged property. A lender may be stayed from enforcing the assignment
under the U.S. Bankruptcy Code. In addition, the legal proceedings necessary to
resolve the issue could be time-consuming, and result in delays in the lender's
receipt of the rents. However, recent amendments to the U.S. Bankruptcy Code 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 above, 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.
A borrower's ability to make payment on a mortgage loan may be impaired by
the commencement of a bankruptcy case relating to the tenant under a lease of
the related property. Under the U.S. Bankruptcy Code, the filing of a petition
in bankruptcy by or on behalf of a tenant results in a stay in bankruptcy
against the commencement or continuation of any state court proceeding for--
o past due rent,
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o accelerated rent,
o damages, or
o a summary eviction order with respect to a default under the lease
that occurred prior to the filing of the tenant's bankruptcy petition.
In addition, the U.S. Bankruptcy Code generally provides that a trustee or
debtor-in-possession may, subject to approval of the court--
o assume the lease and either retain it or assign it to a third party,
or
o reject the lease.
If the lease is assumed, the trustee, 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.
These remedies may be insufficient, and any assurances provided to the lessor
may be inadequate. If the lease is rejected, the lessor will be treated, except
potentially to the extent of any security deposit, as an unsecured creditor with
respect to its claim for damages for termination of the lease. The U.S.
Bankruptcy Code also limits a lessor's damages for lease rejection to--
o 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
o unpaid rent to the earlier of the surrender of the property or the
lessee's bankruptcy filing.
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. Those 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 real 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,
that 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 the property or the operations of the
borrower. 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 the contaminated mortgaged property through foreclosure, deed in
lieu of foreclosure or otherwise. Moreover, liability is not limited to the
original or unamortized principal balance of a loan or
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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--
o it exercises decision-making control over a borrower's environmental
compliance and hazardous substance handling and disposal practices, or
o assumes day-to-day management of operational functions of a 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 that 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. These laws, as well as common law standards, may impose liability for
releases of or exposure to asbestos-containing materials and may provide for
third parties to seek recovery from owners or operators of real properties for
personal injuries associated with such releases.
Federal legislation requires 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
disclose. In addition, the ingestion of lead-based paint chips or dust particles
by children can result in lead poisoning. If lead-based paint hazards exist at a
property, then the owner of that property may be held liable for injuries and
for the costs of removal or encapsulation of the lead-based paint.
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 related to hazardous environmental conditions on a property, such as
actions based on nuisance or on toxic tort resulting in death, personal injury
or damage to property. While it may be more difficult to hold a
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lender liable under common law causes of action, 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. These 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. However, that individual or entity may be without
substantial assets. Accordingly, it is possible that the costs could become a
liability of the related trust and occasion a loss to the related
certificateholders.
If the operations on a foreclosed property are subject to environmental
laws and regulations, the lender will be required to operate the property in
accordance with those laws and regulations. This 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. This
disclosure may decrease the amount that prospective buyers are willing to pay
for the affected property, sometimes substantially.
DUE-ON-SALE AND DUE-ON-ENCUMBRANCE PROVISIONS
Certain of the mortgage loans underlying a series of offered certificates
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 a mortgaged property. In recent years, court
decisions and legislative actions placed substantial restrictions on the right
of lenders to enforce these clauses in many states. However, the Garn-St Germain
Depository Institutions Act of 1982 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 the limitations prescribed in
that Act and the regulations promulgated thereunder.
JUNIOR LIENS; RIGHTS OF HOLDERS OF SENIOR LIENS
Any of our trusts may include mortgage loans secured by junior liens, while
the loans secured by the related senior liens may not be included in that trust.
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 loans
and the junior 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 as
follows:
o FIRST, to the payment of court costs and fees in connection with the
foreclosure;
o SECOND, to real estate taxes;
o 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; and
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o LAST, in satisfaction of all principal, interest, prepayment and
acceleration penalties, if any, and any other sums due and owing to
the holder of the junior mortgage loan.
SUBORDINATE FINANCING
The terms of certain mortgage loans underlying a series of offered
certificates may not restrict the ability of the borrower to use the mortgaged
property as security for one or more additional loans, or the restrictions may
be unenforceable. Where a borrower encumbers a mortgaged property with one or
more junior liens, the senior lender is subjected to the following additional
risks:
o the borrower may have difficulty servicing and repaying multiple
loans;
o 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;
o acts of the senior lender that prejudice the junior lender or impair
the junior lender's security, such as the senior lender's agreeing to
an increase in the principal amount of or the interest rate payable on
the senior loan, may create a superior equity in favor of the junior
lender;
o 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; and
o 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. They
may also contain provisions that prohibit prepayments for a specified period
and/or condition prepayments upon the borrower's payment of prepayment premium,
fee or charge. In certain states, there are or may be specific limitations upon
the late charges that 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 premiums, fees and
charges 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 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.
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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, owners of public accommodations, such as hotels,
restaurants, shopping centers, hospitals, schools and social service center
establishments, must remove architectural and communication barriers which are
structural in nature from existing places of public accommodation to the extent
readily achievable. In addition, under the ADA, alterations to a place of public
accommodation or a commercial facility are to be made so that, to the maximum
extent feasible, the 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 property 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
requirements on a foreclosing lender who succeeds to the interest of the
borrower as owner or landlord. Furthermore, because the readily achievable
standard may vary depending on the financial condition of the owner or landlord,
a foreclosing lender that 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 the 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 the 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 an affected mortgage loan. Any shortfalls in
interest collections resulting from the application of the Relief Act would
result in a reduction of the amounts payable to the holders of certificates 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 the certificates. In addition, the Relief Act
imposes limitations that would impair the ability of a 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 after the active duty status ceases.
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, those 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
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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--
o its mortgage was executed and recorded before commission of the crime
upon which the forfeiture is based, or
o 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.
FEDERAL INCOME TAX CONSEQUENCES
GENERAL
This is a general discussion of the material federal income tax
consequences of owning the offered certificates. To the extent it relates to
matters of law or legal conclusions, it represents the opinion of our counsel,
subject to any qualifications as may be expressed in this discussion. Unless we
otherwise specify in the related prospectus supplement, our counsel for each
series will be Sidley & Austin.
This discussion is directed to certificateholders that hold the offered
certificates as "capital assets" within the meaning of Section 1221 of the
Internal Revenue Code of 1986, which we will refer to throughout this "Federal
Income Tax Consequences" section as the "Code". It does not discuss all federal
income tax consequences that may be relevant to owners of offered certificates,
particularly as to investors subject to special treatment under the Code,
including--
o banks,
o insurance companies, and
o foreign investors.
Further, this discussion and any legal opinions referred to in this
discussion are based on authorities that can change, or be differently
interpreted, with possible retroactive effect. No rulings have been or will be
sought from the IRS with respect to any of the federal income tax consequences
discussed below. Accordingly, the IRS may take contrary positions.
Investors and preparers of tax returns 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 is--
o given with respect to events that have occurred at the time the advice
is rendered, and
o is directly relevant to the determination of an entry on a tax return.
Accordingly, even if this discussion addresses an issue regarding the tax
treatment of the owner of the offered certificates, investors should consult
their own tax advisors regarding that issue. Investors should do so not only as
to federal taxes, but also state and local taxes. See "State and Other Tax
Consequences".
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The following discussion addresses securities of two general types:
o "REMIC certificates" representing interests in a trust, or a portion
thereof, as to which a specified person or entity will make a "real
estate mortgage investment conduit", or "REMIC", election under
Sections 860A through 860G of the Code; and
o "grantor trust certificates" representing interests in a trust or a
portion thereof, as to which no REMIC election will be made.
We will indicate in the prospectus supplement for each series whether the
related trustee, another party to the related Governing Document or an agent
appointed by that trustee or other party, in any event, a tax administrator,
will make a REMIC election for the related trust. If the related tax
administrator is required to make a REMIC election, we also will identify in the
related prospectus supplement all regular interests and residual interests in
the resulting REMIC.
The following discussion is limited to certificates offered under this
prospectus. In addition, this discussion applies only to the extent that the
related trust or a portion thereof holds only mortgage loans. If a trust holds
assets other than mortgage loans, such as mortgage-backed securities, we will
disclose in the related prospectus supplement the tax consequences associated
with those other assets being included. In addition, if agreements other than
guaranteed investment contracts are included in a trust to provide interest rate
protection for the related offered certificates, the anticipated material tax
consequences associated with those agreements also will be discussed in the
related prospectus supplement. See "Description of the Trust
Assets--Arrangements Providing Interest Rate Protection".
The following discussion is based in part on the rules governing original
issue discount in Sections 1271-1273 and 1275 of the Code and in the Treasury
regulations issued under those sections. It is also based in part on the rules
governing REMICs in Sections 860A-860G of the Code and in the Treasury
regulations issued under those sections. The regulations relating to original
issue discount do not adequately address certain issues relevant to, and in some
instances provide that they are not applicable to, securities such as the
offered certificates.
REMICS
GENERAL. With respect to each series of offered certificates as to which
the related tax administrator will make a REMIC election, our counsel will
deliver its opinion generally to the effect that, assuming compliance with all
provisions of the related Governing Document, and subject to certain assumptions
set forth in the opinion--
o the related trust, or the relevant designated portion of the trust,
will qualify as a REMIC, and
o those offered certificates of that series will be considered to
evidence ownership of--
1. REMIC "regular interests", or
2. REMIC "residual interests".
We refer in this discussion to--
o certificates that evidence REMIC "regular interests" as the "REMIC
regular certificates", and
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o certificates that represent REMIC "residual interests" as the "REMIC
residual certificates".
If an entity electing to be treated as a REMIC fails to comply with the
ongoing requirements of the Code for REMIC status, it may lose its REMIC status.
If so, the entity may become taxable as a corporation. Therefore, the related
certificates may not be given the tax treatment summarized below. Although the
Code authorizes the Treasury Department to issue regulations providing relief in
the event of an inadvertent termination of REMIC status, the Treasury Department
has not done so. Any relief mentioned above, moreover, may be accompanied by
sanctions. These sanctions could include the imposition of a corporate tax on
all or a portion of a trust's income for the period in which the requirements
for REMIC status are not satisfied. The Governing Document with respect to each
REMIC will include provisions designed to maintain its status as a REMIC under
the Code.
CHARACTERIZATION OF INVESTMENTS IN REMIC CERTIFICATES. Unless we state
otherwise in the related prospectus supplement, the offered certificates that
are REMIC certificates will be treated as--
o "real estate assets" within the meaning of Section 856(c)(5)(B) of the
Code in the hands of a real estate investment trust, and
o "loans secured by an interest in real property" or other assets
described in Section 7701(a)(19)(C) of the Code in the hands of a
thrift institution,
in the same proportion that the assets of the related REMIC are so treated.
However, to the extent that the REMIC assets constitute mortgage loans on
property not used for residential or certain other prescribed purposes, the
related offered certificates will not be treated as assets qualifying under
Section 7701(a)(19)(C). 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
related offered certificates will qualify for the corresponding status in their
entirety for that calendar year.
In addition, offered certificates that are REMIC regular certificates will
be:
o "qualified mortgages" within the meaning of Section 860G(a)(3) of the
Code in the hands of another REMIC; and
o "permitted assets" under Section 860L(c)(1)(G) for a financial asset
securitization investment trust or "FASIT".
Finally, interest, including original issue discount, on offered
certificates that are REMIC regular certificates, and income allocated to
offered certificates that are REMIC residual certificates, will be interest
described in Section 856(c)(3)(B) of the Code if received by a real estate
investment trust, to the extent that these certificates are treated as "real
estate assets" within the meaning of Section 856(c)(5)(B) of the Code.
The related tax administrator will determine the percentage of the REMIC's
assets that constitute assets described in the above-referenced sections of the
Code with respect to each calendar quarter based on the average adjusted basis
of each category of the assets held by the REMIC during that calendar quarter.
The related tax administrator will report those determinations to
certificateholders in the manner and at the times required by applicable
Treasury regulations.
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The assets of the REMIC will include, in addition to mortgage loans,
collections on mortgage loans held pending payment on the related offered
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 these assets otherwise
would receive the same treatment as the mortgage loans for purposes of the
above-referenced sections of the Code. In addition, in some instances, the
mortgage loans may not be treated entirely as assets described in those sections
of the Code. If so, we will describe in the related prospectus supplement those
mortgage loans that are characterized differently. The Treasury regulations do
provide, however, that cash received from collections on mortgage loans held
pending payment is considered part of the mortgage loans for purposes of Section
856(c)(5)(B) of the Code, relating to real estate investment trusts.
To the extent a REMIC certificate represents ownership of an interest in a
mortgage loan that is secured in part by the related borrower's interest in a
bank account, that mortgage loan is not secured solely by real estate and
therefore:
o a portion of that certificate may not represent ownership of "loans
secured by an interest in real property" or other assets described in
Section 7701(a)(19)(C) of the Code;
o a portion of that certificate may not represent ownership of "real
estate assets" under Section 856(c)(5)(B) of the Code; and
o the interest on that certificate 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, the
related tax administrator may make two or more REMIC elections as to the related
trust for federal income tax purposes. As to each of these series of REMIC
certificates, our counsel will opine that each portion of the related trust as
to which a REMIC election is to be made will qualify as a REMIC. Each of these
series will be treated as one REMIC solely for purposes of determining:
o whether the related REMIC certificates will be "real estate assets"
within the meaning of Section 856(c)(5)(B) of the Code;
o whether the related REMIC certificates will be "loans secured by an
interest in real property" under Section 7701(a)(19)(C) of the Code;
and
o whether the interest/income on the related REMIC certificates is
interest described in Section 856(c)(3)(B) of the Code.
TAXATION OF OWNERS OF REMIC REGULAR CERTIFICATES.
General. Except as otherwise stated in this discussion, the Code treats
REMIC regular certificates as debt instruments issued by the REMIC and not as
ownership interests in the REMIC or its assets. Holders of REMIC regular
certificates that otherwise report income under the cash method of accounting
must nevertheless 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
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certificates issued with original issue discount generally will have to include
original issue discount in income as it accrues, in accordance with the constant
yield method described below, prior to the receipt of the cash attributable to
that income. The IRS has issued regulations under Section 1271 to 1275 of the
Code generally addressing the treatment of debt instruments issued with original
issue discount. Section 1272(a)(6) of the Code provides special rules applicable
to the accrual of original issue discount on, among other things, REMIC regular
certificates. The Treasury Department has not issued regulations under that
section. You should be aware, however, that Section 1272(a)(6) and the
regulations under Sections 1271 to 1275 of the Code do not adequately address
certain issues relevant to, or are not applicable to, prepayable securities such
as the offered certificates. We recommend that you consult with your own tax
advisor concerning the tax treatment of your certificates.
The Code requires, in computing the accrual of original issue discount on
REMIC regular certificates, that a reasonable assumption be used concerning the
rate at which borrowers will prepay the mortgage loans held by the related
REMIC. Further, adjustments must be made in the accrual of that original issue
discount to reflect differences between the prepayment rate actually experienced
and the assumed prepayment rate. The prepayment assumption is to be determined
in a manner prescribed in Treasury regulations that the Treasury Department has
not yet issued. The Conference Committee Report accompanying the Tax Reform Act
of 1986 (the "Committee Report") indicates that the regulations should provide
that the prepayment assumption used with respect to a REMIC regular certificate
is determined once, at initial issuance, and must be the same as that used in
pricing. 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 we
nor any other person will make any representation that the mortgage loans
underlying any series of REMIC regular certificates will in fact prepay at a
rate conforming to the prepayment assumption or at any other rate or that the
IRS will not challenge on audit the prepayment assumption used.
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 those certificates are
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 date of initial issuance of those
certificates, the issue price for that class will be the fair market value of
that class on the date of initial issuance.
Under the Treasury regulations, the stated redemption price of a REMIC
regular certificate is equal to the total of all payments to be made on that
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--
o a single fixed rate,
o a qualified floating rate,
o an objective rate,
o a combination of a single fixed rate and one or more qualified
floating rates,
o a combination of a single fixed rate and one qualified inverse
floating rate, or
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o a combination of qualified floating rates that does not operate in a
manner that accelerates or defers interest payments on the 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
those certificates. If the original issue discount rules apply to those
certificates, we will describe in the related prospectus supplement the manner
in which those rules will be applied with respect to those certificates in
preparing information returns to the certificateholders and the IRS.
Certain classes of REMIC regular certificates may provide that the first
interest payment with respect to those certificates be made more than one month
after the date of initial issuance, a period that is longer than the subsequent
monthly intervals between interest payments. Assuming the accrual period for
original issue discount is the monthly period that ends on each payment date,
then, as a result 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 payment date
is computed with respect to a period that begins prior to the date of initial
issuance, a portion of the purchase price paid for a REMIC regular certificate
will reflect that accrued interest. In those 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 prior to the date of
initial issuance is treated as part of the overall cost of the REMIC regular
certificate. Therefore, the portion of the interest paid on the first payment
date in excess of interest accrued from the date of initial issuance to the
first payment date is included in the stated redemption price of the REMIC
regular certificate. However, the Treasury regulations state that all or some
portion of this accrued interest may be treated as a separate asset, the cost of
which is recovered entirely out of interest paid on the first payment date. It
is unclear how an election to do so would be made under these regulations and
whether this 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
certificate multiplied by its weighted average maturity. For this purpose, the
weighted average maturity of a REMIC regular certificate is computed as the sum
of the amounts determined, as to each payment included in the stated redemption
price of the certificate, by multiplying:
o the number of complete years, rounding down for partial years, from
the date of initial issuance, until that payment is expected to be
made, presumably taking into account the prepayment assumption, by
o a fraction--
1. the numerator of which is the amount of the payment, and
2. the denominator of which is the stated redemption price at
maturity of the certificate.
Under the Treasury 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:
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o the total amount of the DE MINIMIS original issue discount, and
o a fraction--
1. the numerator of which is the amount of the principal payment,
and
2. the denominator of which is the outstanding stated principal
amount of the subject REMIC regular certificate.
The Treasury regulations also would permit you to elect to accrue DE
MINIMIS original issue discount into income currently based on a constant yield
method. See "--REMICs--Taxation of Owners of REMIC Regular Certificates--Market
Discount" below for a description of that election under the applicable Treasury
regulations.
If original issue discount on a REMIC regular certificate is in excess of a
DE MINIMIS amount, the holder of the 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 the 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 described below.
As to each accrual period, the related tax administrator will calculate the
original issue discount that accrued during that accrual period. For these
purposes, an accrual period is, unless we otherwise state in the related
prospectus supplement, the period that begins on a date that corresponds to a
payment date, or in the case of the first accrual period, begins on the date of
initial issuance, and ends on the day preceding the immediately following
payment date. The portion of original issue discount that accrues in any accrual
period will equal the excess, if any, of:
o the sum of--
1. the present value, as of the end of the accrual period, of all of
the payments remaining to be made on the subject REMIC regular
certificate, if any, in future periods, presumably taking into
account the prepayment assumption, and
2. the payments made on that certificate during the accrual period
of amounts included in the stated redemption price, over
o the adjusted issue price of the subject REMIC regular certificate at
the beginning of the accrual period.
The adjusted issue price of a REMIC regular certificate is--
o the issue price of the certificate, increased by
o the aggregate amount of original issue discount previously accrued on
the certificate, reduced by
o the amount of all prior payments of amounts included in its stated
redemption price.
The present value of the remaining payments referred to in item 1 of the second
preceding sentence, will be calculated:
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o assuming that payments on the REMIC regular certificate will be
received in future periods based on the related mortgage loans being
prepaid at a rate equal to the prepayment assumption;
o using a discount rate equal to the original yield to maturity of the
certificate, based on its issue price and the assumption that the
related mortgage loans will be prepaid at a rate equal to the
prepayment assumption; and
o taking into account events, including actual prepayments, that have
occurred before the close of the accrual period.
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 that day.
A subsequent purchaser of a REMIC regular certificate that purchases the
certificate at a cost, excluding any portion of that cost attributable to
accrued qualified stated interest, that is 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 the certificate.
However, the daily portion will be reduced, if the cost is in excess of its
adjusted issue price, in proportion to the ratio that such excess bears to the
aggregate original issue discount remaining to be accrued on the certificate.
The adjusted issue price of a REMIC regular certificate, as of any date of
determination, equals the sum of:
o the adjusted issue price or, in the case of the first accrual period,
the issue price, of the certificate at the beginning of the accrual
period which includes that date of determination, and
o the daily portions of original issue discount for all days during such
accrual period prior to that date of determination.
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 held by you, the amount of original issue
discount accrued for that accrual period will be zero. You may not deduct the
negative amount currently. Instead, you will only be permitted to offset the
negative amount against future positive original issue discount, if any,
attributable to the certificate. Although not free from doubt, it is possible
that you may be permitted to recognize a loss to the extent your basis in the
certificate exceeds the maximum amount of payments that you could ever receive
with respect to the certificate. However, any such loss may be a capital loss,
which is limited in its deductibility. The foregoing considerations are
particularly relevant to certificates that have no, or a disproportionately
small, amount of principal because they can have negative yields if the mortgage
loans held by the related REMIC prepay more quickly than anticipated. See "Risk
Factors--The Investment Performance of Your Certificate Will Depend Upon
Payments, Defaults and Losses on the Underlying Mortgage Loans".
The Treasury regulations in some circumstances permit the holder of a debt
instrument to recognize original issue discount under a method that differs from
that used by the issuer. Accordingly, it is possible that you may be able to
select a method for recognizing original issue discount that differs from that
used by the trust in preparing reports to you and the IRS. Prospective
purchasers of the REMIC regular certificates should consult their tax advisors
concerning the tax treatment of these certificates in this regard.
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Market Discount. You will be considered to have purchased a REMIC regular
certificate at a market discount if--
o in the case of a certificate issued without original issue discount,
you purchased the certificate at a price less than its remaining
stated principal amount, or
o in the case of a certificate issued with original issue discount, you
purchased the certificate at a price less than its adjusted issue
price.
If you purchase a REMIC regular certificate with more than a DE MINIMIS
amount of market discount, you will recognize gain upon receipt of each payment
representing stated redemption price. Under Section 1276 of the Code, you
generally will be required to allocate the portion of each payment representing
some or all of the stated redemption price first to accrued market discount not
previously included in income. You must recognize ordinary income to that
extent. You 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, this election will apply to all market discount bonds
acquired by you on or after the first day of the first taxable year to which
this election applies.
The Treasury regulations also permit you 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. Your
making this election with respect to a REMIC regular certificate with market
discount would be deemed to be an election to include currently market discount
in income with respect to all other debt instruments with market discount that
you acquire during the taxable year of the election or thereafter, and possibly
previously acquired instruments. Similarly, your making this election as to a
certificate acquired at a premium would be deemed to be an election to amortize
bond premium with respect to all debt instruments having amortizable bond
premium that you own or acquire. See "--REMICs --Taxation of Owners of REMIC
Regular Certificates--Premium" below.
Each of the elections described above to accrue interest and discount and
to amortize 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 the
market discount is less than 0.25% of the remaining stated redemption price of
the 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 Treasury
regulations refer to the weighted average maturity of obligations. 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
"--REMICs--Taxation of Owners of REMIC Regular Certificates--Original Issue
Discount" above. This 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
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accrual period, you may accrue market discount on a REMIC regular certificate
held by you, at your option--
o on the basis of a constant yield method,
o in the case of a 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
certificate as of the beginning of the accrual period, or
o in the case of a 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 amount of original issue discount remaining on the
certificate at the beginning of the accrual period.
The prepayment assumption used in calculating the accrual of original issue
discount is also used in calculating the accrual of market discount.
To the extent that REMIC regular certificates provide for monthly or other
periodic payments 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 the 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 the 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, Section 1277 of the Code may require you to defer a portion of
your 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 deferred interest expense would not exceed the market discount that
accrues during the related taxable year and is, in general, allowed as a
deduction not later than the year in which the related market discount is
includible in income. If you have elected, however, to include market discount
in income currently as it accrues, the interest deferral rule described above
would not apply.
Premium. A REMIC regular certificate purchased at a cost, excluding any
portion of the cost attributable to accrued qualified stated interest, that is
greater than its remaining stated redemption price will be considered to be
purchased at a premium. You may elect under Section 171 of the Code to amortize
the premium under the constant yield method over the life of the certificate. If
you elect 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, this election will apply to all debt instruments having
amortizable bond premium that you own or subsequently acquire. The IRS has
issued regulations on the amortization of bond premium, but they specifically do
not apply to holders of REMIC regular certificates.
The Treasury regulations also permit you to elect to include all interest,
discount and premium in income based on a constant yield method, further
treating you 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 and require the use of a prepayment assumption in accruing market
discount with respect to REMIC regular
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certificates without regard to whether those certificates have original issue
discount, will also apply in amortizing bond premium under Section 171 of the
Code.
Whether you will be treated as holding a REMIC regular certificate with
amortizable bond premium will depend on--
o the purchase price paid for your certificate, and
o the payments remaining to be made on your certificate at the time of
its acquisition by you.
If you acquire an interest in any class of REMIC regular certificates
issued at a premium, you should consider consulting your own tax advisor
regarding the possibility of making an election to amortize the premium.
Realized Losses. Under Section 166 of the Code, if you are either a
corporate holder of a REMIC regular certificate and or a noncorporate holder of
a REMIC regular certificate that acquires the certificate in connection with a
trade or business, you should be allowed to deduct, as ordinary losses, any
losses sustained during a taxable year in which your certificate becomes wholly
or partially worthless as the result of one or more realized losses on the
related mortgage loans. However, if you are a noncorporate holder that does not
acquire a REMIC regular certificate in connection with a trade or business, it
appears that--
o you will not be entitled to deduct a loss under Section 166 of the
Code until your certificate becomes wholly worthless, which is when
its principal balance has been reduced to zero, and
o the loss will be characterized as a short-term capital loss.
You will also have to accrue interest and original issue discount with
respect to your REMIC regular certificate, without giving effect to any
reductions in payments attributable to defaults or delinquencies on the related
mortgage loans, until it can be established that those payment reductions are
not recoverable. As a result, your taxable income in a period could exceed your
economic income in that period. If any such amounts previously included in
taxable income are not ultimately received due to a loss on the related mortgage
loans, you should be able to recognize a loss or reduction in income. However,
the law is unclear with respect to the timing and character of this 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, the Code does not subject a REMIC to entity-level taxation, except
with regard to prohibited transactions and certain other transactions. See
"--REMICs--Prohibited Transactions Tax and Other Taxes" below. Rather, a holder
of REMIC residual certificates must generally take in income the taxable income
or net loss of the related REMIC. Accordingly, the Code treats the REMIC
residual certificates much differently than it would if they were direct
ownership interests in the related mortgage loans or as debt instruments issued
by the related REMIC.
Holders of REMIC residual certificates generally will be required to report
their daily portion of the taxable income or, subject to the limitations noted
in this discussion, the net loss of the related REMIC for each day during a
calendar quarter that they own those certificates. For this purpose, the
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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 we otherwise disclose in the related prospectus
supplement. These daily amounts then will be allocated among the holders of the
REMIC residual certificates in proportion to their respective ownership
interests on that day. Any amount included in the certificateholders' gross
income or allowed as a loss to them 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 "--REMICs--Taxation of Owners of REMIC
Residual Certificates--Taxable Income of the REMIC". Holders of REMIC residual
certificates must report the taxable income of the related REMIC without regard
to the timing or amount of cash payments by the REMIC until the REMIC's
termination. Income derived from the REMIC residual certificates will be
"portfolio income" for the purposes of the limitations under Section 469 of the
Code on the deductibility of "passive losses".
A holder of a REMIC residual certificate that purchased the certificate
from a prior holder 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 related REMIC for each day that it holds the REMIC residual certificate.
These 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 holder of a REMIC residual
certificate. These modifications would occur when a holder purchases the REMIC
residual certificate from a prior holder at a price other than the adjusted
basis that the REMIC residual certificate would have had in the hands of an
original holder of that certificate. The Treasury regulations, however, do not
provide for these modifications.
Any payments that you receive from the seller of a REMIC residual
certificate in connection with the acquisition of that certificate will be
income to you. Although it is possible that these payments would be includible
in income immediately upon receipt, the IRS might assert that you should include
these payments in income over time according to an amortization schedule or
according to some other method. Because of the uncertainty concerning the
treatment of these payments, we recommend that you consult your tax advisor
concerning the treatment of these payments for income tax purposes.
Tax liability with respect to the amount of income that holders of REMIC
residual certificates will be required to report, will often exceed the amount
of cash payments received from the related REMIC for the corresponding period.
Consequently, you should have
o other sources of funds sufficient to pay any federal income taxes due
as a result of your ownership of REMIC residual certificates, or
o unrelated deductions against which income may be offset.
See, however, the rules discussed below relating to:
o "excess inclusions",
o residual interests without "significant value", and
o "noneconomic" residual interests.
The fact that the tax liability associated with this income allocated to
you may exceed the cash payments received by you for the corresponding period
may significantly and adversely affect their
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after-tax rate of return. This disparity between income and payments may not be
offset by corresponding losses or reductions of income attributable to your
certificates until subsequent tax years. Even then, the extra income may not be
completely offset due to changes in the Code, tax rates or character of the
income or loss. Therefore, the REMIC residual certificates will ordinarily have
a negative value at the time of issuance. See "Risk Factors--Residual Interests
in a Real Estate Mortgage Investment Conduit Have Adverse Tax Consequences".
Taxable Income of the REMIC. The taxable income of a REMIC will equal:
o the income from the mortgage loans and other assets of the REMIC; plus
o any cancellation of indebtedness income due to the allocation of
realized losses to those REMIC certificates, constituting "regular
interests" in the REMIC; less
o the following items--
1. the deductions allowed to the REMIC for interest, including
original issue discount but reduced by any premium on issuance,
on any class of REMIC certificates constituting "regular
interests" in the REMIC, whether offered or not,
2. amortization of any premium on the mortgage loans held by the
REMIC,
3. bad debt losses with respect to the mortgage loans held by the
REMIC, and
4. except as described below, servicing, administrative and other
expenses.
For purposes of determining its taxable income, a REMIC will have an
initial aggregate basis in its assets equal to the sum of the issue prices of
all REMIC certificates, or in the case of REMIC certificates not sold initially,
their fair market values. The 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
"--REMICs--Taxation of Owners of REMIC Regular Certificates--Original Issue
Discount". The issue price of a REMIC certificate received in exchange for an
interest in mortgage loans or other property will equal the fair market value of
the interests in the mortgage loans or other property. Accordingly, if one or
more classes of REMIC certificates are retained initially rather than sold, the
related tax administrator may be required to estimate the fair market value of
these 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 a 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 method is a constant yield method taking into account the
prepayment assumption. However, a REMIC that acquires loans at a market discount
must include that market discount in income currently, as it accrues, on a
constant yield basis. See "--REMICs--Taxation of Owners of REMIC Regular
Certificates" above, which describes a method for accruing the 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 REMIC will acquire a mortgage loan with discount, or premium, to the
extent that the REMIC's basis, determined as described in the preceding
paragraph, is different from its stated redemption price. Discount will be
includible in the income of the REMIC as it accrues, in advance of receipt of
the cash attributable to that income, under a method similar to the method
described above for
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accruing original issue discount on the REMIC regular certificates. A REMIC
probably will elect under Section 171 of the Code to amortize any premium on the
mortgage loans that it holds. Premium on any mortgage loan to which this
election applies may be amortized under a constant yield method, presumably
taking into account the prepayment assumption.
A REMIC will be allowed deductions for interest, including original issue
discount, on all of the certificates that constitute "regular interests" in the
REMIC, whether or not offered hereby, as if those certificates were indebtedness
of the REMIC. Original issue discount will be considered to accrue for this
purpose as described above under "--REMICs--Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount". However, the DE MINIMIS rule described
in that section will not apply in determining deductions.
If a class of REMIC regular certificates is issued at a price in excess of
the stated redemption price of that class, the net amount of interest deductions
that are allowed to the REMIC in each taxable year with respect to those
certificates will be reduced by an amount equal to the portion of that excess
that is considered to be amortized in that year. It appears that this excess
should be amortized under a constant yield method in a manner analogous to the
method of accruing original issue discount described above under
"--REMICs--Taxation of Owners of REMIC Regular Certificates--Original Issue
Discount".
As a general rule, the taxable income of a REMIC will be determined 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 "--REMICs--Prohibited Transactions Tax and Other Taxes" below. Further, the
limitation on miscellaneous itemized deductions imposed on individuals by
Section 67 of the Code will not be applied at the REMIC level so that the REMIC
will be allowed full deductions for servicing, administrative and other
noninterest expenses in determining its taxable income. All those expenses will
be allocated as a separate item to the holders of the related REMIC
certificates, subject to the limitation of Section 67 of the Code. See
"--REMICs--Taxation of Owners of REMIC Residual Certificates--Possible
Pass-Through of Miscellaneous Itemized Deductions" below. If the deductions
allowed to the REMIC exceed its gross income for a calendar quarter, the excess
will be the net loss for the REMIC for that calendar quarter.
Basis Rules, Net Losses and Payments. The adjusted basis of a REMIC
residual certificate will be equal to--
o the amount paid for that REMIC residual certificate,
o increased by, amounts included in the income of the holder of
that REMIC residual certificate, and
o decreased, but not below zero, by distributions made, and by net
losses allocated, to the holder of that REMIC residual
certificate.
A holder of a REMIC residual certificate is not allowed to take into
account any net loss for any calendar quarter to the extent that the net loss
exceeds the adjusted basis to that holder as of the close of that calendar
quarter, determined without regard to that 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.
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Any payment 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 the REMIC residual certificate. To the extent a payment on a REMIC residual
certificate exceeds the holder's adjusted basis, it will be treated as gain from
the sale of that REMIC residual certificate.
A holder's basis in a REMIC residual certificate will initially equal the
amount paid for the certificate and will be increased by that holder's allocable
share of taxable income of the related REMIC. However, these increases in basis
may not occur until the end of the calendar quarter, or perhaps the end of the
calendar year, with respect to which the related REMIC's taxable income is
allocated to that holder. To the extent the initial basis of the holder of a
REMIC residual certificate is less than the payments to that holder, and
increases in the initial basis either occur after these payments or, together
with the initial basis, are less than the amount of these payments, gain will be
recognized to that holder on these payments. This gain will be treated as gain
from the sale of its REMIC residual certificate.
The effect of these rules is that a holder of a REMIC residual certificate
may not amortize its basis in a REMIC residual certificate, but may only recover
its basis--
o through distributions,
o through the deduction of any net losses of the REMIC, or
o upon the sale of its REMIC residual certificate. See "--REMICs--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 see "--REMICs--Taxation of Owners of REMIC Residual
Certificates--General" above. These adjustments could require a holder of a
REMIC residual certificate to account for any difference between the cost of the
certificate to the holder and the adjusted basis of the certificate would have
been in the hands of an original holder.
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--
o the daily portions of REMIC taxable income allocable to that
certificate, over
o the sum of the daily accruals for each day during the quarter that the
certificate was held by that holder.
The daily accruals of a holder of a REMIC residual certificate will be
determined by allocating to each day during a calendar quarter its ratable
portion of a numerical calculation. That calculation is 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 date of
initial issuance. For this purpose, the adjusted issue price of a REMIC residual
certificate as of the beginning of any calendar quarter will be equal to--
o the issue price of the certificate, increased by
o the sum of the daily accruals for all prior quarters, and decreased,
but not below zero, by
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o any payments made with respect to the certificate before the beginning
of that quarter.
The issue price of a REMIC residual certificate is the initial offering
price to the public at which a substantial amount of the REMIC residual
certificates were sold, but excluding sales to bond houses, brokers and
underwriters or, if no sales have been made, their initial value. 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 Department has authority to issue
regulations that would treat the entire amount of income accruing on a REMIC
residual certificate as excess inclusions if the REMIC residual interest
evidenced by that certificate is considered not to have significant value.
For holders of REMIC residual certificates, excess inclusions--
o will not be permitted to be offset by deductions, losses or loss
carryovers from other activities,
o will be treated as unrelated business taxable income to an otherwise
tax-exempt organization, and
o 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 payments to holders of REMIC residual
certificates that are foreign investors. See, however,
"--REMICs--Foreign Investors in REMIC Certificates" below.
Furthermore, for purposes of the alternative minimum tax--
o excess inclusions will not be permitted to be offset by the
alternative tax net operating loss deduction, and
o 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, or REIT, the aggregate excess inclusions with respect to these
REMIC residual certificates will be allocated among the shareholders of the REIT
in proportion to the dividends received by the shareholders from the REIT. Any
amount so allocated will be treated as an excess inclusion with respect to a
REMIC residual certificate as if held directly by the shareholder. The aggregate
excess inclusions referred to in the previous sentence will be reduced, but not
below zero, by any REIT taxable income, within the meaning of Section 857(b)(2)
of the Code, other than any net capital gain. Treasury regulations yet to be
issued could apply a similar rule to--
o regulated investment companies,
o common trust funds, and
o certain cooperatives.
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The Treasury regulations, however, currently do not address this subject.
NONECONOMIC REMIC RESIDUAL CERTIFICATES. Under the Treasury 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 a
transfer is disregarded, the purported transferor will continue to remain liable
for any taxes due with respect to the income on the "noneconomic" REMIC residual
certificate. The Treasury 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 related
Governing Document--
o the present value of the expected future payments on the REMIC
residual certificate equals at least the present value of the expected
tax on the anticipated excess inclusions, and
o the transferor reasonably expects that the transferee will receive
payments 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.
The present value calculation referred to above is calculated 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. This rate is computed and published monthly by the
IRS.
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 Governing Document that are intended
to reduce the possibility of any transfer being disregarded. These restrictions
will require an affidavit--
o from each party to the transfer, stating that no purpose of the
transfer is to impede the assessment or collection of tax,
o from the prospective transferee, providing certain representations as
to its financial condition, and
o from the prospective transferor, stating that it has made a reasonable
investigation to determine the transferee's historic payment of its
debts and ability to continue to pay its debts as they come due in the
future.
The Treasury recently issued proposed regulations that would revise this
safe harbor. The proposed regulation would make the safe harbor unavailable
unless the present value of the anticipated tax liabilities associated with
holding the residual interest was less than or equal to the sum of--
o the present value of any consideration given to the transferee to
acquire the interest,
o the present value of the expected future distributions on the
interest, and
o the present value of the anticipated tax savings associated with the
holding of the interest as the REMIC generates losses.
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Present values would be computed using a discount rate equal to an
applicable Federal rate, except that if a transferee could demonstrate that it
borrowed regularly in the course of its trade or business substantial funds at a
lower rate from unrelated third parties, that lower rate could be used as the
discount rate.
It is not clear when those regulations would be effective. Although the
text of the proposed regulations states that they would be effective on February
4, 2000, the preamble to the proposed regulations says that these regulations
will apply to transfers of REMIC residual interests made after the date the
final regulations are published in the Federal Register. The Treasury Department
is anticipated to issue clarification with regard to these conflicting
statements regarding the effective date of the proposed regulations.
Prior to purchasing a REMIC residual certificate, prospective purchasers
should consider the possibility that a purported transfer of a REMIC residual
certificate to another party at some future date may be disregarded in
accordance with the above-described rules. This would result in the retention of
tax liability by the transferor in respect of that purported transfer.
We will disclose in the related prospectus supplement whether the offered
REMIC residual certificates may be considered "noneconomic" residual interests
under the Treasury regulations. However, we will base any disclosure that a
REMIC residual certificate will not be considered "noneconomic" upon certain
assumptions. Further, we will make no representation that a REMIC residual
certificate will not be considered "noneconomic" for purposes of the
above-described rules.
See "--REMICs--Foreign Investors in REMIC Certificates" below for
additional restrictions applicable to transfers of certain REMIC residual
certificates to foreign persons and to United States partnerships that include
foreign persons as partners.
MARK-TO-MARKET RULES. Regulations under Section 475 of the Code require
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. These 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. Thus, a REMIC residual
certificate is not subject to the mark-to-market rules. We recommend that
prospective purchasers of a REMIC residual certificate consult their tax
advisors regarding these regulations.
FOREIGNERS MAY NOT HOLD REMIC RESIDUAL CERTIFICATES. Unless we otherwise
state in the related prospectus supplement, transfers of REMIC residual
certificates to investors that are foreign persons under the Code and to United
States partnerships that include foreign persons as partners will be prohibited
under the related Governing Document. If transfers of REMIC residual
certificates to investors that are foreign persons are permitted pursuant to the
related Governing Document, we will describe in the related prospectus
supplement additional restrictions applicable to transfers of certain REMIC
residual certificates to these persons.
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 these fees and expenses should be allocated to the holders of the
related REMIC regular certificates. Unless we state otherwise in the related
prospectus supplement, however, these 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.
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If the holder of a REMIC certificate receives an allocation of fees and
expenses in accordance with the preceding discussion, and if that holder is--
o an individual,
o an estate or trust, or
o a pass-through entity beneficially owned by one or more individuals,
estates or trusts,
then--
o an amount equal to this individual's, estate's or trust's share of
these fees and expenses will be added to the gross income of this
holder, and
o the individual's, estate's or trust's share of these fees and expenses
will be treated as a miscellaneous itemized deduction allowable
subject to the limitation of Section 67 of the Code, which permits the
deduction of these fees and expenses 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--
o 3% of the excess of the individual's adjusted gross income over the
specified amount, or
o 80% of the amount of itemized deductions otherwise allowable for the
taxable year.
Furthermore, in determining the alternative minimum taxable income of a
holder of a REMIC certificate that is--
o an individual,
o an estate or trust, or
o a pass-through entity beneficially owned by one or more individuals,
estates or trusts,
no deduction will be allowed for the holder's allocable portion of
servicing fees and other miscellaneous itemized deductions of the REMIC, even
though an amount equal to the amount of these fees and other deductions will be
included in the holder's gross income.
The amount of additional taxable income reportable by holders of REMIC
certificates that are subject to the limitations of either Section 67 or Section
68 of the Code, or the complete disallowance of the related expenses for
alternative minimum tax purposes, may be substantial.
Accordingly, REMIC certificates to which these expenses are allocated will
generally not be appropriate investments for--
o an individual,
o an estate or trust, or
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o a pass-through entity beneficially owned by one or more individuals,
estates or trusts.
We recommend that such prospective investors consult with their tax
advisors prior to making an investment in a REMIC certificate to which these
expenses are allocated.
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--
o the cost of the certificate to that certificateholder, increased by
o income reported by that certificateholder with respect to the
certificate, including original issue discount and market discount
income, and reduced, but not below zero, by
o payments on the certificate received by that certificateholder and by
any amortized premium.
The adjusted basis of a REMIC residual certificate will be determined as
described above under "--REMICs--Taxation of Owners of REMIC Residual
Certificates--Basis Rules, Net Losses and Distributions". Except as described
below, any gain or loss from your sale of a REMIC certificate will be capital
gain or loss, provided that you hold the certificate as a capital asset within
the meaning of Section 1221 of the Code, which is generally property held for
investment.
In addition to the recognition of gain or loss on actual sales, the Code
requires the recognition of gain, but not loss, upon the "constructive sale of
an appreciated financial position". A constructive sale of an appreciated
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--
o entitle the holder to a specified principal amount,
o pay interest at a fixed or variable rate, and
o are not convertible into the stock of the issuer or a related party,
cannot be the subject of a constructive sale for this purpose. Because most
REMIC regular certificates meet this exception, Section 1259 will not apply to
most REMIC regular certificates. However, REMIC regular certificates that have
no, or a disproportionately small amount of, principal, can be the subject of a
constructive sale.
Finally, a taxpayer may elect to have net capital gain taxed at ordinary
income rates rather than capital gains rates in order to include the net capital
gain in total net investment income for the taxable year. A taxpayer would do so
because 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.
As of the date of this prospectus, the Code provides for lower rates as to
long-term capital gains than those applicable to the short-term capital gains
and ordinary income recognized or received by individuals. No such rate
differential exists for corporations. In addition, the distinction between a
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capital gain or loss and ordinary income or loss is relevant for other purposes
to both individuals and corporations.
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 that the gain does
not exceed the excess, if any, of--
o the amount that would have been includible in the seller's income with
respect to that REMIC regular certificate assuming that income had
accrued thereon at a rate equal to 110% of the applicable Federal rate
determined as of the date of purchase of the certificate, which is 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 the certificate, over
o the amount of ordinary income actually includible in the seller's
income prior to that sale.
In addition, gain recognized on the sale of a REMIC regular certificate by
a seller who purchased the certificate at a market discount will be taxable as
ordinary income in an amount not exceeding the portion of that discount that
accrued during the period the certificate was held by the seller, reduced by any
market discount included in income under the rules described above under
"--REMICs--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 that section of
the Code 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 a holder holds the certificate 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 that 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.
Except as may be provided in Treasury regulations yet to be issued, a loss
realized on the sale of a REMIC residual certificate will be subject to the
"wash sale" rules of Section 1091 of the Code, if during the period beginning
six months before, and ending six months after, the date of that sale the seller
of that certificate--
o reacquires that same REMIC residual certificate,
o acquires any other residual interest in a REMIC, or
o acquires any similar interest in a "taxable mortgage pool", as defined
in Section 7701(i) of the Code.
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In that event, any loss realized by the holder of a REMIC residual
certificate on the sale will not be recognized or deductible currently, but
instead will be added to that holder'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. In
general, subject to certain specified exceptions, a prohibited transaction
includes--
o the disposition of a non-defaulted mortgage loan,
o the receipt of income from a source other than a mortgage loan or
certain other permitted investments,
o the receipt of compensation for services, or
o the gain from the disposition of an asset purchased with collections
on the mortgage loans for temporary investment pending payment 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 this 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. The related
Governing Document will include provisions designed to prevent the acceptance of
any contributions that would be subject to this 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 REITs. Net income from foreclosure property generally means income
from foreclosure property other than qualifying rents and other qualifying
income for a REIT. Under certain circumstances, the special servicer may be
authorized to conduct activities with respect to a mortgaged property acquired
by a trust that causes the trust 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 mortgaged property to cease to be a "permitted
investment" under Section 860G(a)(5) of the Code.
Unless we otherwise disclose 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 we state otherwise in the related prospectus supplement, and to the
extent permitted by then applicable laws, any tax on prohibited transactions,
certain contributions or net income from foreclosure property, and any state or
local income or franchise tax, that may be imposed on the REMIC will be borne by
the related trustee, tax administrator, master servicer, special servicer or
manager, in any case out of its own funds, provided that--
o the person has sufficient assets to do so, and
o the tax arises out of a breach of that person's obligations under
select provisions of the related Governing Document.
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Any tax not borne by one of these persons would be charged against the
related trust 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, a tax will be imposed in an amount equal to the product of--
o the present value of the total anticipated excess inclusions with
respect to the REMIC residual certificate for periods after the
transfer, and
o the highest marginal federal income tax rate applicable to
corporations.
The value of the anticipated excess inclusions is 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.
The anticipated excess inclusions must be determined as of the date that
the REMIC residual certificate is transferred and must be based on--
o events that have occurred up to the time of the transfer,
o the prepayment assumption, and
o any required or permitted clean up calls or required liquidation
provided for in the related Governing Document.
The tax on transfers to disqualified organizations generally would be
imposed on the transferor of the REMIC residual certificate, except when the
transfer is through an agent for a disqualified organization. In that case, the
tax would instead be imposed on the agent. However, a transferor of a REMIC
residual certificate would in no event be liable for the tax with respect to a
transfer if--
o the transferee furnishes to the transferor an affidavit that the
transferee is not a disqualified organization, and
o as of the time of the transfer, the transferor does not have actual
knowledge that the
affidavit is false.
In addition, if a pass-through entity includes in income excess inclusions
with respect to a REMIC residual certificate, and a disqualified organization is
the record holder of an interest in that entity, then a tax will be imposed on
that entity equal to the product of--
o the amount of excess inclusions on the certificate that are allocable
to the interest in the pass-through entity held by the disqualified
organization, and
o 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 that pass-through entity
furnishes to that pass-through entity--
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o the holder's social security number and a statement under penalties of
perjury that the social security number is that of the record holder,
or
o a statement under penalties of perjury that the record holder is not a
disqualified organization.
For taxable years beginning on or after January 1, 1998, if an electing
large partnership holds a REMIC residual certificate, all interests in the
electing large partnership are treated as held by disqualified organizations for
purposes of the tax imposed on pass-through entities described in the second
preceding paragraph. This tax on electing large partnerships must be paid even
if each record holder of an interest in that partnership provides a statement
mentioned in the prior paragraph.
For these purposes, a "disqualified organization" means--
o the United States,
o any State or political subdivision thereof,
o any foreign government,
o any international organization,
o any agency or instrumentality of the foregoing, except for
instrumentalities described in Section 168(h)(2)(D) of the Code or the
FHLMC,
o any organization, other than a cooperative described in Section 521 of
the Code, that is exempt from federal income tax, except if it is
subject to the tax imposed by Section 511 of the Code, or
o any organization described in Section 1381(a)(2)(C) of the Code.
For these purposes, a "pass-through entity" means any--
o regulated investment company,
o real estate investment trust,
o trust,
o partnership, or
o certain other entities described in Section 860E(e)(6) of the Code.
For these purposes, an "electing large partnership" means any partnership
having more than 100 members during the preceding tax year which elects to apply
simplified reporting provisions under the Code, except for certain service
partnerships and commodity pools.
In addition, a person holding an interest in a pass-through entity as a
nominee for another person will, with respect to that interest, be treated as a
pass-through entity.
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Moreover, an entity will not qualify as a REMIC unless there are reasonable
arrangements designed to ensure that--
o the residual interests in the entity are not held by disqualified
organizations, and
o the information necessary for the application of the tax described
herein will be made available.
We will include in the related Governing Document restrictions on the
transfer of REMIC residual certificates and certain other provisions that are
intended to meet this requirement, and we will discuss those restrictions and
provisions in any prospectus supplement relating to the offering of any REMIC
residual certificate.
TERMINATION. A REMIC will terminate immediately after the payment date
following receipt by the REMIC of the final payment in respect of the related
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 payment 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 payment on that
certificate is less than the REMIC residual certificateholder's adjusted basis
in the certificate, that holder should, but may not, be treated as realizing a
capital loss equal to the amount of that difference.
REPORTING AND OTHER ADMINISTRATIVE MATTERS. Solely for purposes of the
administrative provisions of the Code, a REMIC will be treated as a partnership
and holders of the related REMIC residual certificates will be treated as
partners. Unless we otherwise state in the related prospectus supplement, the
related tax administrator will file REMIC federal income tax returns on behalf
of the REMIC, and will be designated as and will act as or on behalf of the tax
matters person with respect to the REMIC in all respects. The related tax
administrator may hold at least a nominal amount of REMIC residual certificates.
As, or as agent for, the tax matters person, the related tax 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 holders
of the REMIC residual certificates in connection with the administrative and
judicial review of the REMIC's--
o income,
o deductions,
o gains,
o losses, and
o classification as a REMIC.
Holders of REMIC residual certificates generally will be required to report
these REMIC items consistently with their treatment on the related REMIC's tax
return. In addition, these holders may in some circumstances be bound by a
settlement agreement between the related tax administrator, as, or as agent for,
the tax matters person, and the IRS concerning any REMIC item. Adjustments made
to the REMIC's tax return may require these holders to make corresponding
adjustments on their returns. An audit of the REMIC's tax return, or the
adjustments resulting from that audit, could result in an audit of a holder's
return.
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No REMIC will be registered as a tax shelter pursuant to Section 6111 of
the Code. 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 that other person,
as well as 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 or made readily available through electronic means to
individual holders of REMIC regular certificates and the IRS. Holders of REMIC
regular certificates that are--
o corporations,
o trusts,
o securities dealers, and
o certain other non-individuals,
will be provided interest and original issue discount income information and the
information set forth in the following paragraphs. This information will be
provided upon request in accordance with the requirements of the applicable
regulations. The information must be provided by the later of--
o 30 days after the end of the quarter for which the information was
requested, or
o 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 that information to be
reported to the IRS. Reporting with respect to REMIC residual certificates,
including--
o income,
o excess inclusions,
o investment expenses, and
o 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, the regulations only require that
information pertaining to the appropriate proportionate method of accruing
market discount be provided. See "--REMICs--Taxation of Owners of REMIC Regular
Certificates--Market Discount".
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Unless we otherwise specify in the related prospectus supplement, the
responsibility for complying with the foregoing reporting rules will be borne by
the tax administrator for the subject REMIC.
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 these payments--
o fail to furnish to the payor certain information, including their
taxpayer identification numbers, or
o otherwise fail to establish an exemption from this tax.
Any amounts deducted and withheld from a payment to a recipient would be
allowed as a credit against the 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.
FOREIGN INVESTORS IN REMIC CERTIFICATES. A holder of an offered certificate
that is--
o a foreign person, and
o 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 that certificate,
will normally not be subject to United States federal income or withholding tax
in respect of a payment on an offered certificate. To avoid withholding or tax,
that holder must comply with certain identification requirements. These
requirements include delivery of a statement, signed by the certificateholder
under penalties of perjury, certifying that the certificateholder is a foreign
person and providing the name and address of the certificateholder.
On October 6, 1997, the Treasury Department issued new regulations that
modify the withholding, backup withholding and information reporting rules
described above. These regulations, as modified, will generally be effective for
payments made after December 31, 2000, subject to certain transition rules.
Prospective investors are urged to consult their own tax advisors regarding
these regulations.
For these purposes, a "foreign person" is anyone other than a United States
person. A "United States person" is--
o a citizen or resident of the United States,
o a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision
thereof,
o 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
o a trust as to which--
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1. a court in the United States is able to exercise primary
supervision over the administration of the trust, and
2. one or more United States persons have the authority to control
all substantial decisions of the trust.
In addition, to the extent provided in the Treasury Regulations, a trust
will be a United States person if it was in existence on August 20, 1996 and it
elected to be treated as a United States person.
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 person or
entity that owns directly or indirectly a 10% or greater interest in the related
REMIC residual certificates. If the holder does not qualify for exemption,
payments of interest, including payments in respect of accrued original issue
discount, to that 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 also not be available to a holder who is a foreign
person and either--
o owns 10% or more of one or more underlying mortgagors, or
o if the holder is a controlled foreign corporation, is related to one
or more mortgagors in the applicable trust.
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 we otherwise state in the related prospectus supplement, the related
Governing Document will prohibit transfers of REMIC residual certificates to
investors that are--
o foreign persons, or
o United States persons, if classified as a partnership under the Code,
unless all of their beneficial owners are United States persons.
GRANTOR TRUSTS
CLASSIFICATION OF GRANTOR TRUSTS. With respect to each series of grantor
trust certificates, our counsel will deliver its opinion to the effect that,
assuming compliance with all provisions of the related Governing Document, the
related trust, or relevant portion thereof, 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.
For purposes of the following discussion--
o A grantor trust certificate representing an undivided equitable
ownership interest in the principal of the mortgage loans constituting
the related grantor trust, together with interest thereon at a
pass-through rate, will be referred to as a "grantor trust fractional
interest certificate".
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o A grantor trust certificate representing ownership of all or a portion
of the difference between--
1. interest paid on the mortgage loans constituting the related
grantor trust, minus
2. the sum of--
o normal administration fees, and
o interest paid to the holders of grantor trust fractional interest
certificates issued with respect to that grantor trust,
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.
CHARACTERIZATION OF INVESTMENTS IN GRANTOR TRUST CERTIFICATES.
Grantor Trust Fractional Interest Certificates. Unless we otherwise
disclose in the related prospectus supplement, any offered certificates that are
grantor trust fractional interest certificates will generally represent
interests in:
o "loans . . . secured by an interest in real property" within the
meaning of Section 7701(a)(19)(C)(v) of the Code, but 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;
o "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;
o "permitted assets" within the meaning of Section 860L(a)(1)(C) of the
Code; and
o "real estate assets" within the meaning of Section 856(c)(5)(B) of the
Code.
In addition, interest on offered certificates that are 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--
o 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,
o consisting of mortgage loans that are "real estate assets" within the
meaning of Section 856(c)(5)(B) of the Code, and
o 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,
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it is unclear whether the grantor trust strip certificates, and the income
therefrom, will be so characterized. We recommend that prospective purchasers to
which the 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:
o "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
o 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--
o 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
o will be entitled to deduct their shares of any 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 interest paid or
accrued on the underlying mortgage loans.
Section 67 of the Code allows an individual, estate or trust holding a
grantor trust fractional interest certificate directly or through certain
pass-through entities a deduction for any reasonable servicing fees and expenses
only to the extent that the aggregate of the holder's miscellaneous itemized
deductions exceeds two percent of the holder's adjusted gross income.
Section 68 of the Code reduces the amount of itemized deductions otherwise
allowable for an individual whose adjusted gross income exceeds a specified
amount by the lesser of--
o 3% of the excess of the individual's adjusted gross income over that
amount, and
o 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 their
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, any fees and expenses should be allocated among those
classes of grantor trust certificates. The method of this allocation should
recognize that each class benefits from the related services. In the absence of
statutory or administrative clarification as to the method to be used, we
currently expect that information returns or
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reports to the IRS and certificateholders will be based on a method that
allocates these fees and expenses among classes of grantor trust certificates
with respect to each period based on the payments made to each 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--
o a class of grantor trust strip certificates is issued as part of the
same series, or
o we or any of our affiliates retain, for our or its own account or for
purposes of resale, a right to receive a specified portion of the
interest payable on an underlying mortgage loan.
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
mortgage loans that constitutes a stripped coupon. We will include in the
related prospectus supplement information regarding servicing fees paid out of
the assets of the related trust to--
o a master servicer,
o a special servicer,
o any sub-servicer, or
o 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. This is subject, however, to the discussion below regarding--
o the treatment of certain stripped bonds as market discount bonds, and
o DE MINIMIS market discount.
See "--Grantor Trust Funds--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. The amount of reportable interest income must equal
the income that accrues on the 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 the 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 that
purchaser of the grantor trust fractional interest certificate. The stated
redemption price of a grantor trust fractional interest certificate will be--
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o the sum of all payments to be made on that certificate,
o other than qualified stated interest, if any, and
o the certificate's share of reasonable servicing fees and other
expenses.
See "--Grantor Trust Funds--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--
o the holder's adjusted basis in the grantor trust fractional interest
certificate at the beginning of the related month, as defined in
"--Grantor Trust Funds--Sales of Grantor Trust Certificates", and
o the yield of that grantor trust fractional interest certificate to the
holder.
The yield would be computed as the rate, that, if used to discount the
holder's share of future payments on the related mortgage loans, would cause the
present value of those future payments to equal the price at which the holder
purchased the certificate. This rate is compounded based on the regular interval
between payment dates. In computing yield under the stripped bond rules, a
certificateholder's share of future payments on the related mortgage loans will
not include any payments made in respect of any ownership interest in those
mortgage loans retained by us, a master servicer, a special servicer, a
sub-servicer, or our or their respective affiliates, but will include the
certificateholder's share of any reasonable servicing fees and other expenses.
With respect to certain categories of debt instruments, Section 1272(a)(6)
of the Code requires the use of a reasonable prepayment assumption in accruing
original issue discount, and adjustments in the accrual of original issue
discount when prepayments do not conform to the prepayment assumption.
Legislation enacted in 1997 extended the section to cover investments in
any pool of debt instruments the yield on which may be affected by reason of
prepayments. The precise application of Section 1272(a)(6) of the Code to pools
of debt instruments, 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 these pools of debt instruments, or on an
investment-by-investment basis. Similarly, it is not clear whether the assumed
prepayment rate as to investments in grantor trust fractional interest
certificates is to be determined based on conditions at the time of the first
sale of the certificate or, with respect to any holder, at the time of purchase
of the certificate by that holder.
We recommend 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 related mortgage loans allocable to
that 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 price less than or greater than the principal amount,
respectively, the use of a reasonable prepayment assumption would increase or
decrease the yield. Therefore, the use of this prepayment assumption would
accelerate or decelerate, respectively, the reporting of income.
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In the absence of statutory or administrative clarification, we currently
expect that information reports or returns to the IRS and certificateholders
will be based on--
o a prepayment assumption determined when certificates are offered and
sold hereunder, which we will disclose in the related prospectus
supplement, and
o a constant yield computed using a representative initial offering
price for each class of certificates.
However, neither we nor any other person will make any representation
that--
o the mortgage loans in any of our trusts will in fact prepay at a rate
conforming to the prepayment assumption used or any other rate, or
o 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 the information returns or
reports that we send, 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. 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--
o there is no original issue discount or only a DE MINIMIS amount of
original issue discount, or
o 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 related mortgage loans, 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
related mortgage loans, we will disclose that fact in the related prospectus
supplement. If the original issue discount or market discount on a grantor trust
fractional interest certificate determined under the stripped bond rules is less
than the product of--
o 0.25% of the stated redemption price, and
o the weighted average maturity of the related mortgage loans,
then the 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 "--Grantor Trust Funds--Taxation of
Owners of Grantor Trust Fractional Interest Certificates--If Stripped Bond Rules
Do Not Apply" and "--Market Discount" below.
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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 related mortgage loans in
accordance with the 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 mortgage loans will equal the
difference between--
o the stated redemption price of the mortgage loans, and
o their issue price.
For a definition of "stated redemption price", see "--REMICs--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. If the borrower
separately pays points to the lender that are not paid for services provided by
the lender, such as commitment fees or loan processing costs, the amount of
points paid reduces the issue price.
The stated redemption price of a mortgage loan will generally equal its
principal amount. 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 "--REMICs--Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount" above.
In the case of mortgage loans bearing adjustable or variable interest
rates, we will describe in the related prospectus supplement the manner in which
these rules will be applied with respect to the mortgage loans by the related
trustee or master servicer, as applicable, in preparing information returns to
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
legislation enacted in 1997, 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 this 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, it is not clear whether the assumed
prepayment rate as to investments in grantor trust fractional interest
certificates is to be determined based on conditions at the time of the first
sale of the certificate or, with respect to any holder, at the time of purchase
of the certificate by that holder. We recommend that certificateholders consult
their own tax advisors concerning reporting original issue discount with respect
to grantor trust fractional interest certificates.
A purchaser of a grantor trust fractional interest certificate may purchase
the grantor trust fractional interest certificate at a cost less than the
certificate's allocable portion of the aggregate remaining stated redemption
price of the underlying mortgage loans. In that case, the purchaser will also be
required to include in gross income the certificate's daily portions of any
original issue discount with respect to those mortgage loans. However, each
daily portion will be reduced, if the cost of the grantor trust fractional
interest certificate to the purchaser is in excess of the certificate's
allocable portion of the aggregate adjusted issue prices of the underlying
mortgage loans. The reduction will be
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approximately in proportion to the ratio that such excess bears to the
certificate's allocable portion of the aggregate original issue discount
remaining to be accrued on those mortgage loans.
The adjusted issue price of a mortgage loan on any given day equals the sum
of--
o the adjusted issue price or the issue price, in the case of the first
accrual period, of the mortgage loan at the beginning of the accrual
period that includes that day, and
o the daily portions of original issue discount for all days during the
accrual period prior to that day.
The adjusted issue price of a mortgage loan at the beginning of any accrual
period will equal--
o the issue price of the mortgage loan, increased by
o the aggregate amount of original issue discount with respect to the
mortgage loan that accrued in prior accrual periods, and reduced by
o the amount of any payments made on the mortgage loan in prior accrual
periods of amounts included in its stated redemption price.
In the absence of statutory or administrative clarification, we currently
expect that information reports or returns to the IRS and certificateholders
will be based on--
o a prepayment assumption determined when the certificates are offered
and sold hereunder and disclosed in the related prospectus supplement,
and
o a constant yield computed using a representative initial offering
price for each class of certificates.
However, neither we nor any other person will make any representation
that--
o the mortgage loans will in fact prepay at a rate conforming to the
prepayment assumption or any other rate, or
o 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 the 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. A mortgage loan is considered to have been purchased at a market
discount if--
o in the case of a mortgage loan issued without original issue discount,
it is purchased at a price less than its remaining stated redemption
price, or
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o in the case of a mortgage loan issued with original issue discount, it
is purchased at a price less than its adjusted issue price.
If market discount is in excess of a DE MINIMIS amount, the holder
generally must include in income in each month the amount of the discount that
has accrued, under the rules described below, through that month that has not
previously been included in income. The inclusion will be limited, in the case
of the portion of the discount that is allocable to any mortgage loan, to the
payment of stated redemption price on the mortgage loan that is received by or,
for accrual method certificateholders, due to, the trust 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
the holder, rather than including it on a deferred basis in accordance with the
foregoing under rules similar to those described in "--REMICs--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 the time that regulations are issued by the Treasury Department, certain
rules described in the Committee Report apply. Under those rules, in each
accrual period, you may accrue market discount on the underlying mortgage loans,
at your option--
o on the basis of a constant yield method,
o 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
o 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.
Under legislation enacted in 1997, 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 a pool of debt
instruments described in that section, 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 to pools of debt instruments 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
those pools of debt instruments, or 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.
We recommend that certificateholders consult their own tax advisors
concerning accrual of market discount with respect to grantor trust fractional
interest certificates. Certificateholders should also refer to the related
prospectus supplement to determine whether and in what manner the market
discount will apply to the underlying mortgage loans purchased at a market
discount.
To the extent that the underlying mortgage loans provide for periodic
payments of stated redemption price, you may be required to include market
discount in income at a rate that is not
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significantly slower than the rate at which that 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 under "--REMICs--Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount" above.
Further, under the rules described under "--REMICs--Taxation of Owners of
REMIC Regular Certificates--Market Discount" above, 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 underlying mortgage loans.
PREMIUM. If a certificateholder is treated as acquiring the underlying
mortgage loans at a premium, which is a price in excess of their remaining
stated redemption price, the certificateholder may elect under Section 171 of
the Code to amortize the portion of that premium allocable to mortgage loans
originated after September 27, 1985 using a constant yield method. 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--
o be allocated among the payments of stated redemption price on the
mortgage loan, and
o be allowed as a deduction as those payments are made or, for an
accrual method certificateholder, 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 "--Grantor Trust Funds--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 under "--Grantor Trust Funds--Taxation
of Owners of Grantor Trust Fractional Interest Certificates--If Stripped Bond
Rules Apply", no regulations or published rulings under Section 1286 of the Code
have been issued and some uncertainty exists as to how it will be applied to
securities, such as the grantor trust strip certificates. Accordingly, we
recommend that you consult your tax advisors concerning the method to be used in
reporting income or loss with respect to those certificates.
The Treasury regulations promulgated under the original discount rules 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, you would include as
interest income in each month an amount equal to the product of your adjusted
basis in the grantor trust strip certificate at the beginning of that month and
the yield of the grantor trust strip certificate to you. This yield would be
calculated based on--
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o the price paid for that grantor trust strip certificate by you, and
o the projected payments remaining to be made thereon at the time of the
purchase, plus
o an allocable portion of the projected servicing fees and expenses to
be paid with respect to the underlying mortgage loans.
See "--Grantor Trust Funds--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. The Code also requires
adjustments be made in the amount and rate of accrual of that discount when
prepayments do not conform to the 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--
o conditions at the time of the first sale of the grantor trust strip
certificate or,
o 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 grantor trust strip certificate, the amount of
original issue discount allocable to that accrual period will be zero. That is,
no current deduction of the negative amount will be allowed to you. You will
instead only be permitted to offset that negative amount against future positive
original issue discount, if any, attributable to that certificate. Although not
free from doubt, it is possible that you may be permitted to deduct a loss to
the extent his or her basis in the certificate exceeds the maximum amount of
payments you could ever receive with respect to that certificate. However, any
such loss may be a capital loss, which is limited in its deductibility. The
foregoing considerations are particularly relevant to grantor trust certificates
with no, or disproportionately small, amounts of principal, which can have
negative yields under circumstances that are not default related. See "Risk
Factors--The Investment Performance of Your Certificates Depend Upon Payments,
Defaults and Losses on the Underlying Mortgage Loans" above.
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, we currently expect that information returns or reports to the
IRS and certificateholders will be based on--
o the prepayment assumption we will disclose in the related prospectus
supplement, and
o a constant yield computed using a representative initial offering
price for each class of certificates.
However, neither we nor any other person will make any representation
that--
o the mortgage loans in any of our trusts will in fact prepay at a rate
conforming to the prepayment assumption or at any other rate, or
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o the prepayment assumption will not be challenged by the IRS on audit.
We recommend that prospective purchasers of the grantor trust strip
certificates consult their tax advisors regarding the use of the prepayment
assumption.
Certificateholders also should bear in mind that the use of a
representative initial offering price will mean that the 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.
SALES OF GRANTOR TRUST CERTIFICATES. Any gain or loss recognized on the
sale or exchange of a grantor trust certificate by an investor who holds that
certificate as a capital asset, will be capital gain or loss, except as
described below. The amount recognized equals the difference between--
o the amount realized on the sale or exchange of a grantor trust
certificate, and
o its adjusted basis.
The adjusted basis of a grantor trust certificate generally will equal--
o its cost, increased by
o any income reported by the seller, including original issue discount
and market discount income, and reduced, but not below zero, by
o any and all--
1. previously reported losses,
2. amortized premium, and
3. payments with respect to that grantor trust certificate.
As of the date of this prospectus, the Code 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.
Gain or loss recognized by banks and other financial institutions subject to
Section 582(c) of the Code will be treated as ordinary income.
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 the
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, 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.
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The Code requires the recognition of gain upon the constructive sale of an
appreciated financial position. A constructive sale of an appreciated 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--
o entitle the holder to a specified principal amount,
o pay interest at a fixed or variable rate, and
o are not convertible into the stock of the issuer or a related party,
cannot be the subject of a constructive sale for this purpose. Because most
grantor trust certificates meet this exception, this Section will not apply to
most grantor trust certificates. However, certain grantor trust certificates
have no, or a disproportionately small, amount of principal and these
certificates can be the subject of a constructive sale.
Finally, a taxpayer may elect to have net capital gain taxed at ordinary
income rates rather than capital gains rates in order to include the net capital
gain in total net investment income for the relevant taxable year. This election
would be done 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 related tax administrator will furnish or make
readily available through electronic means to each holder of a grantor trust
certificate with each payment a statement setting forth the amount of the
payment allocable to principal on the underlying mortgage loans and to interest
thereon at the related pass-through rate. In addition, the related tax
administrator will furnish, within a reasonable time after the end of each
calendar year, to each person or entity that was the holder of a grantor trust
certificate at any time during that year, information regarding--
o the amount of servicing compensation received by a master servicer or
special servicer, and
o all other customary factual information the reporting party deems
necessary or desirable to enable holders of the related grantor trust
certificates to prepare their tax returns.
The reporting party 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 grantor trust certificates are uncertain in various respects, there is no
assurance the IRS will agree with the information reports of those items of
income and expense. Moreover, those 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 the reports.
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
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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--
o a custodian of a person's account,
o a nominee, and
o 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 under "--REMICs--Backup
Withholding with Respect to REMIC Certificates" above will also apply to grantor
trust certificates.
FOREIGN INVESTORS. In general, the discussion with respect to REMIC regular
certificates under "--REMICs--Foreign Investors in REMIC Certificates" above
applies to grantor trust certificates. However, unless we otherwise specify in
the related prospectus supplement, grantor trust certificates will be eligible
for exemption from U.S. withholding tax, subject to the conditions described in
the discussion above, 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 certificate is not held in connection with a certificateholder's
trade or business in the United States, the 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 concerning 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, we recommend that prospective investors consult
their tax advisors with respect to the various tax consequences of investments
in the offered certificates.
ERISA CONSIDERATIONS
GENERAL
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and the Internal Revenue Code of 1986 impose various requirements on--
o employee benefit plans, and on certain other retirement plans,
arrangements and accounts, that are subject to the fiduciary
responsibility provisions of ERISA and Section 4975 of the Internal
Revenue Code of 1986 ("ERISA Plans"), and
o persons that are fiduciaries with respect to ERISA Plans ("Plan
Fiduciaries"),
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in connection with the investment of the assets of an ERISA Plan ("Plan
Assets"). For purposes of this discussion, ERISA Plans may include individual
retirement accounts and annuities, Keogh plans and collective investment funds
and separate accounts, including as applicable, insurance company general
accounts, in which other ERISA Plans are invested.
Governmental plans and, if they have not made an election under Section
410(d) of the Internal Revenue Code of 1986, church plans are not subject to
ERISA requirements. Accordingly, assets of those plans may be invested in the
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 Internal Revenue Code of 1986, however, is subject to the
prohibited transaction rules in Section 503 of that Code.
ERISA imposes certain general fiduciary requirements on Plan Fiduciaries
that are investing Plan Assets, including--
o investment prudence and diversification, and
o compliance with the investing ERISA Plan's governing the documents.
Section 406 of ERISA and Section 4975 of the Internal Revenue Code of 1986
also prohibit a broad range of transactions involving Plan Assets and a Party in
Interest, unless a statutory or administrative exemption exists. A "Party in
Interest" is any person that is a "party in interest" within the meaning of
ERISA or a "disqualified person" within the meaning of the Internal Revenue Code
of 1986.
The types of transactions between ERISA Plans and Parties in Interest that
are prohibited include:
o sales, exchanges or leases of property;
o loans or other extensions of credit; and
o the furnishing of goods and services.
Certain Parties in Interest that participate in a prohibited transaction
may be subject to an excise tax imposed under Section 4975 of the Internal
Revenue Code of 1986 or a penalty imposed under 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 cancel the transaction and
pay an amount to the affected ERISA Plan for any losses realized by that ERISA
Plan or profits realized by those persons. In addition, individual retirement
accounts involved in the prohibited transaction may be disqualified which would
result in adverse tax consequences to the owner of the account.
PLAN ASSET REGULATIONS
An ERISA Plan's investment in offered certificates may cause the underlying
mortgage assets and other assets of the related trust to be deemed assets of
that ERISA Plan. Section 2510.3-101 of the regulations of the U.S. Department of
Labor (those regulations, the "Plan Asset Regulations") provides that when an
ERISA Plan acquires an equity interest in an entity, the assets that ERISA Plan
or arrangement include both that equity interest and an undivided interest in
each of the underlying assets of the entity, unless an exception applies. One
such exemption is that the equity participation in the
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entity by benefit plan investors, which include both ERISA Plans and certain
employee benefit plans not subject to ERISA, is not significant. The 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. The percentage owned by benefit plan investors is
determined by excluding the investments of the following persons--
(1) those with discretionary authority or control over the assets of the
entity,
(2) those who provide investment advice directly or indirectly for a fee
with respect to the assets of the entity, and
(3) those who are affiliates of the persons described in the preceding
paragraph (1) and (2).
In the case of one of our trusts, investments by us, by the related
trustee, the related master servicer, the related special servicer or any other
party with discretionary authority over the related trust assets or by the
affiliates of these persons, will be excluded.
A fiduciary of an investing ERISA Plan is any person who--
o has discretionary authority or control over the management or
disposition of the assets of that ERISA Plan, or
o provides investment advice with respect to the assets of that ERISA
Plan for a fee.
If the mortgage and other assets included in one of our trusts are Plan
Assets, then any party exercising management or discretionary control regarding
those assets, such as the related trustee, master servicer or special servicer,
or affiliates of any of these parties, may be deemed to be a fiduciary with
respect to the investing ERISA Plan and, therefore, subject to the fiduciary
responsibility provisions of ERISA. In addition, if the mortgage and other
assets included in one of our trusts are Plan Assets, then the operation of that
trust may involve prohibited transactions under ERISA or the Internal Revenue
Code of 1986. For example, if a borrower with respect to a mortgage loan in that
trust is a Party in Interest to an investing ERISA Plan, then the purchase by
that ERISA Plan of offered certificates evidencing interests in that trust,
could be a prohibited loan between that ERISA Plan and the Party in Interest.
The Plan Asset Regulations provide that where an ERISA Plan purchases a
guaranteed governmental mortgage pool certificate, the assets of that ERISA Plan
include the certificate but do not include any of the mortgages underlying the
certificate. The Plan Asset Regulations include in the definition of a
guaranteed governmental mortgage pool certificate certain certificates issued
and/or guaranteed by FHLMC, GNMA and FNMA, but do not include certificates
issued or guaranteed by FAMC. Accordingly, even if these types of
mortgaged-backed securities, other than the FAMC certificates, were deemed to be
Plan Assets, the underlying mortgages would not be treated as Plan Assets.
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, the acquisition or holding of offered certificates by or on
behalf of an ERISA Plan could give rise to a prohibited transaction if we or the
related trustee, master servicer or special servicer or any related underwriter,
sub-servicer, tax administrator, manager, borrower or obligor under any
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credit enhancement mechanism, or certain of their affiliates, is or becomes a
Party in Interest with respect to an investing ERISA Plan.
If you are a Plan Fiduciary, you should consult your counsel and review the
ERISA discussion in the related prospectus supplement before purchasing any
offered certificates.
PROHIBITED TRANSACTION EXEMPTIONS
If you are a Plan Fiduciary, then, in connection with your deciding whether
to purchase any of the offered certificates on behalf of an ERISA Plan, you
should consider the availability of one of the following prohibited transaction
class exemptions issued by the U.S. Department of Labor:
o Prohibited Transaction Class Exemption ("PTCE") 75-1, which exempts
certain transactions involving ERISA Plans and certain broker-dealers,
reporting dealers and banks;
o PTCE 90-1, which exempts certain transactions between insurance
company separate accounts and Parties in Interest;
o PTCE 91-38, which exempts certain transactions between bank collective
investment funds and Parties in Interest;
o PTCE 84-14, which exempts certain transactions effected on behalf of
an ERISA Plan by a qualified professional asset manager;
o PTCE 95-60, which exempts certain transactions between insurance
company general accounts and Parties in Interest; and
o PTCE 96-23, which exempts certain transactions effected on behalf of
an ERISA Plan by an in-house asset manager.
We cannot provide any assurance that any of these class exemptions will
apply with respect to any particular investment by or on behalf of an ERISA Plan
in any class of offered certificates. Furthermore, even if any of them were
deemed to apply, that particular class exemption may not apply to all
transactions that could occur in connection with the 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 those certificates.
UNDERWRITER'S EXEMPTION
It is expected that Donaldson, Lufkin & Jenrette Securities Corporation
("DLJSC") will be the sole underwriter or the lead or co-lead managing
underwriter in each underwritten offering of certificates made pursuant to this
prospectus. The U.S. Department of Labor has issued an individual prohibited
transaction exemption to DLJSC which generally exempts from the application of
the prohibited transaction provisions of ERISA and the Internal Revenue Code of
1986 certain transactions relating to, among other things, the servicing and
operation of certain mortgage assets pools, such as the types of mortgage asset
pools that will be included in our trusts, and the purchase, sale and holding of
certain certificates evidencing interests in those pools that are underwritten
by DLJSC or any person affiliated with DLJSC, such as certain of the offered
certificates.
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In order for DLJSC's individual prohibited transaction exemption to apply
to an offered certificate, certain requirements must be satisfied, including:
o the acquisition of the certificate by an ERISA Plan must be on terms
that are at least as favorable to the ERISA Plan as they would be in
an arm's-length transaction with an unrelated party;
o the rights and interests evidenced by the certificate must not be
subordinated to the rights and interests evidenced by the other
certificates evidencing interests in the same mortgage asset pool;
o at the time of its acquisition by an ERISA Plan, the certificate must
be rated in one of the three highest generic rating categories by
Moody's Investors Services, Inc., Standard & Poor's Ratings Service, a
Division of the McGraw-Hill Companies, Inc., Fitch IBCA, Inc. or Duff
& Phelps Credit Rating Co.;
o the related trustee cannot be an affiliate of us, the related master
servicer, the related special servicer and certain other persons
o the sum of all payments made to and retained by the related trustee,
the related master servicer, the related special servicer and certain
other persons must represent not more than reasonable compensation for
underwriting the certificates; the sum of all payments made to and
retained by us must represent not more than the fair market value of
obligations deposited in the trust; and the sum of all payments made
to and retained by the related master servicer, the related special
servicer and any related sub-servicer must represent not more than
reasonable compensation for that person's services and reimbursement
of that person's reasonable expenses in connection therewith; and
o the ERISA Plan must be an accredited investor.
The prospectus supplement with respect to any offered certificates
underwritten by DLJSC may contain additional information regarding the
availability of this exemption.
INSURANCE COMPANY GENERAL ACCOUNTS
The Small Business Job Protection Act of 1996 added a new Section 401(c) to
ERISA, which provides relief from the fiduciary and prohibited transaction
provisions of ERISA and the Internal Revenue Code of 1986 for transactions
involving an insurance company general account. This exemption is in addition to
any exemption that may be available under prohibited transaction class exemption
95-60 for the purchase and holding of offered certificates by an insurance
company general account.
Pursuant to Section 401(c) of ERISA, the U.S. Department of Labor issued a
final regulation on January 5, 2000, providing guidance for determining, in
cases where insurance policies supported by an insurer's general account are
issued to or for the benefit of an ERISA Plan on or before December 31, 1998,
which general account assets are Plan Assets. That regulation generally provides
that if certain specified requirements are satisfied with respect to insurance
policies issued on or before December 31, 1998, the assets of an insurance
company general account will not be Plan Assets.
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Any assets of an insurance company general account which support insurance
policies issued to an ERISA Plan after December 31, 1998, or issued to an ERISA
Plan on or before December 31, 1998 for which the insurance company does not
comply with the requirements set forth in the final regulation under Section
401(c) of ERISA, may be treated as Plan Assets. In addition, because Section
401(c) of ERISA and the regulation issued under Section 401(c) of ERISA do not
relate to insurance company separate accounts, separate account assets are still
treated as Plan Assets, invested in the separate account. If you are an
insurance company are contemplating the investment of general account assets in
offered certificates, you should consult your legal counsel as to the
applicability of Section 401(c) of ERISA.
CONSULTATION WITH COUNSEL
If you are a Plan Fiduciary which proposes to purchase offered certificates
on behalf of or with assets of an ERISA Plan, account or arrangement, you should
consider your general fiduciary obligations under ERISA and you should consult
with your legal counsel as to the potential applicability of ERISA and the
Internal Revenue Code of 1986 to that investment and the availability of any
prohibited transaction exemption in connection with that investment.
TAX EXEMPT INVESTORS
An ERISA Plan that is exempt from federal income taxation pursuant to
Section 501 of the Internal Revenue Code of 1986 will be subject to federal
income taxation to the extent that its income is unrelated business taxable
income within the meaning of Section 512 of the Internal Revenue Code of 1986.
All excess inclusions of a REMIC allocated to a REMIC residual certificate held
by a tax-exempt ERISA Plan will be considered unrelated business taxable income
and will be subject to federal income tax.
See "Federal Income Tax Consequences--REMICs--Taxation of Owners of REMIC
Residual Certificates-Excess Inclusions" in this prospectus.
LEGAL INVESTMENT
If and to the extent specified in the related prospectus supplement, the
offered certificates of any series may constitute mortgage related securities
for purposes of the Secondary Mortgage Market Enhancement Act of 1984 ("SMMEA").
Mortgage related securities are legal investments for entities--
o that are created or existing under the laws of the United States or
any state, including the District of Columbia and Puerto Rico, and
o whose authorized investments are subject to state regulations,
to the same extent that, under applicable law, obligations issued by or
guaranteed as to principal and interest by the United States or any of its
agencies or instrumentalities are legal investments for those entities.
Prior to December 31, 1996, classes of offered certificates would be
mortgage related securities for purposes of SMMEA only if they:
o were rated in one of the two highest rating categories by at least one
nationally recognized statistical rating organization; and
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o evidenced interests in a trust 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, which loans
had been originated by the types of originators specified in SMMEA.
Further, under SMMEA as originally enacted, if a state enacted legislation
on or before October 3, 1991 that specifically limited the legal investment
authority of any entities referred to in the preceding paragraph with respect to
mortgage related securities under that definition, offered certificates would
constitute legal investments for entities subject to the legislation only to the
extent provided in that legislation.
Effective December 31, 1996, the definition of "mortgage related
securities" was modified to include among the types of loans to which the
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:
o 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 by
those securities; and
o federal credit unions may invest in mortgage related securities and
national banks may purchase mortgage related securities for their own
account without regard to the limitations generally applicable to
investment securities prescribed in 12 U.S.C. 24 (Seventh),
subject in each case to the regulations that the applicable federal regulatory
authority may prescribe.
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.
ss. 1.5, certain "Type IV securities", which are defined in 12 C.F.R. ss. 1.2(1)
to include certain commercial mortgage-related securities and residential
mortgage-related securities. As defined, "commercial mortgage-related security"
and "residential mortgage-related security" mean, in relevant part, a 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",
we make no representation 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.
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The National Credit Union Administration (the "NCUA") has adopted rules,
codified at 12 C.F.R. Part 703, which permit federal credit unions to invest in
mortgage related securities under certain limited circumstances, other than
stripped mortgage related securities, residual interests in mortgage related
securities and commercial mortgage related securities, unless the credit union
has obtained written approval from the NCUA to participate in the investment
pilot program described in 12 C.F.R. ss. 703.140.
The Office of Thrift Supervision (the "OTS") has issued Thrift Bulletin 13a
(December 1, 1998), "Management of Interest Rate Risk, Investment Securities,
and Derivatives Activities", which thrift institutions subject to the
jurisdiction of the OTS should consider before investing in any of the offered
certificates.
All depository institutions considering an investment in the offered
certificates should review the "Supervisory Policy Statement on Investment
Securities and End-User Derivatives Activities" (the "1998 Policy Statement") of
the Federal Financial Institutions Examination Council, which has been adopted
by the Board of Governors of the Federal Reserve System, the Federal Deposit
Insurance Corporation (the "FDIC"), the OCC and the OTS effective May 26, 1998,
and by the NCUA effective October 1, 1998. The 1998 Policy Statement sets forth
general guidelines which depository institutions must follow in managing risks,
including market, credit, liquidity, operational (transaction), and legal risks,
applicable to all securities, including mortgage pass-through securities and
mortgage-derivative products used for investment purposes.
There may be other restrictions on your ability either to purchase certain
classes of offered certificates or to purchase offered certificates representing
more than a specified percentage of your assets. We make no representations as
to the proper characterization of any class of offered certificates for legal
investment or other purposes. Also, we make no representations 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, if your
investment activities are subject to legal investment laws and regulations,
regulatory capital requirements or review by regulatory authorities, you should
consult with your legal advisor in determining whether and to what extent:
o the offered certificates of any class and series constitute legal
investments or are subject to investment, capital or other
restrictions; and
o if applicable, SMMEA has been overridden in your State.
USE OF PROCEEDS
Unless otherwise specified in the related prospectus supplement, the net
proceeds to be received from the sale of the offered certificates of any series
will be applied by us to the purchase of assets for the related trust or will be
used by us to cover expenses related to that purchase and the issuance of those
certificates. We expect to sell the offered certificates from time to time, but
the timing and amount of offerings of those certificates will depend on a number
of factors, including the volume of mortgage assets acquired by us, prevailing
interest rates, availability of funds and general market conditions.
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METHOD OF DISTRIBUTION
The certificates offered by this prospectus and 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 those
certificates and will state the net proceeds to us from the sale of those
certificates.
We intend that offered certificates will be offered through the following
methods from time to time. We further intend 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. The methods are as follows:
o by negotiated firm commitment or best efforts underwriting and public
offering by one or more underwriters specified in the related
prospectus supplement;
o by placements by us with institutional investors through dealers; and
o by direct placements by us 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
mortgage assets that would back those certificates. Furthermore, the related
trust assets 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, the offered
certificates will be acquired by the underwriters for their own account. These
certificates 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 described on the
cover of the prospectus supplement relating to the series and the members of the
underwriting syndicate, if any, will be named in the relevant prospectus
supplement.
Underwriters may receive compensation from us or from purchasers of the
offered certificates in the form of discounts, concessions or commissions.
Underwriters and dealers participating in the payment of the offered
certificates may be deemed to be underwriters in connection with those
certificates. In addition, any discounts or commissions received by them from us
and any profit on the resale of those offered certificates by them may be deemed
to be underwriting discounts and commissions under the Securities Act of 1933,
as amended.
It is anticipated that the underwriting agreement pertaining to the sale of
the offered certificates of any series will provide that--
o the obligations of the underwriters will be subject to certain
conditions precedent,
o the underwriters will be obligated to purchase all the certificates if
any are purchased, other than in connection with an underwriting on a
best efforts basis, and
o in limited circumstances, we will indemnify the several underwriters
and the underwriters will indemnify us against certain civil
liabilities, including liabilities under the Securities
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Act of 1933, as amended, or will contribute to payments required to be
made in respect of any liabilities.
The prospectus supplement with respect to any series offered by placements
through dealers will contain information regarding the nature of the offering
and any agreements to be entered into between us and purchasers of offered
certificates of that series.
We anticipate 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 the purchases, be deemed to be
underwriters within the meaning of the Securities Act of 1933, as amended, in
connection with reoffers and sales by them of offered certificates. Holders of
offered certificates should consult with their legal advisors in this regard
prior to any reoffer or sale.
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 us by Sidley &
Austin, our counsel.
FINANCIAL INFORMATION
A new trust will be formed with respect to each series of offered
certificates. None of those trusts will engage in any business activities or
have any assets or obligations prior to the issuance of the related series of
offered certificates. Accordingly, no financial statements with respect to any
trust will be included in this prospectus or in the related prospectus
supplement. We have determined that our 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, at the time of issuance, at least one nationally recognized statistical
rating organization has rated those certificates in one of its generic rating
categories which signifies investment grade. Typically, the four highest rating
categories, within which there may be sub-categories or gradations indicating
relative standing, signify investment grade.
Ratings on mortgage pass-through certificates address the likelihood of
receipt by the holders of all payments of interest and/or principal to which
they are entitled. These ratings address the structural, legal and
issuer-related aspects associated with the certificates, the nature of the
underlying mortgage assets and the credit quality of any third-party credit
enhancer. The rating(s) on a class of offered certificates will not represent
any assessment of:
o whether the price paid for those certificates is fair;
o whether those certificates are a suitable investment for any
particular investor;
o the tax attributes of those certificates or of the related trust;
o the yield to maturity or, if they have principal balances, the average
life of those certificates;
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o the likelihood or frequency of prepayments of principal on the
underlying mortgage loans;
o the degree to which the amount or frequency of prepayments on the
underlying mortgage loans might differ from those originally
anticipated;
o whether or to what extent the interest payable on those certificates
may be reduced in connection with interest shortfalls resulting from
the timing of voluntary prepayments;
o the likelihood that any amounts other than interest at the related
mortgage interest rates and principal will be received with respect to
the underlying mortgage loans; or
o if those certificates provide solely or primarily for payments of
interest, whether the holders, despite receiving all payments of
interest to which they are entitled, would ultimately recover their
initial investments in those 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
organization. Each security rating should be evaluated independently of any
other security rating.
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