<PAGE>
Filed Pursuant to Rule 424(b)(3)
Registration File No.: 333-51771
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION. THESE SECURITIES MAY NOT
BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME A FINAL PROSPECTUS
SUPPLEMENT AND THE RELATED PROSPECTUS IS DELIVERED. THIS PROSPECTUS SUPPLEMENT
AND THE RELATED PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION.
SUBJECT TO COMPLETION DATED JUNE 11, 1998
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JUNE 11, 1998
$
(APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
DEPOSITOR
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
PAINE WEBBER REAL ESTATE SECURITIES INC.
MORTGAGE LOAN SELLERS
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1998-C1
The Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage
Pass-Through Certificates, Series 1998-C1 (the "Certificates") will consist of
(i) the Class A-1A, Class A-1B, Class A-2MF and Class A-X Certificates
(collectively, the "Senior Certificates"), (ii) the Class B, Class C, Class D
and Class E Certificates (collectively, the "Mezzanine Certificates" and,
together with the Senior Certificates, the "Offered Certificates"), (iii) the
Class F, Class G, Class H, Class I and Class J Certificates (collectively, the
"Private Certificates" and, together with the Offered Certificates, the
"Regular Certificates"), (iv) the Class R and Class LR Certificates (together,
the "Residual Certificates") and (v) the Class V-1 and Class V-2 Certificates.
Only the Offered Certificates are offered hereby. It is a condition of the
issuance of the Offered Certificates that, upon issuance, each Class thereof be
rated by one or more of three nationally recognized rating agencies: Fitch
IBCA, Inc. ("Fitch"), Moody's Investors Service, Inc. ("Moody's") and/or
Standard & Poor's Ratings Services, a division of The McGraw Hill Companies,
Inc. ("S&P" and, together with Fitch and Moody's, the "Rating Agencies"), as
set forth in the table below. The Certificates will evidence beneficial
ownership interests in a trust fund (the "Trust Fund") to be created by Credit
Suisse First Boston Mortgage Securities Corp. (the "Depositor") pursuant to a
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement") to be
dated as of June , 1998 among the Depositor, Banc One Mortgage Capital
Markets, LLC, as servicer (the "Servicer"), Lennar Partners, Inc., as special
servicer (the "Special Servicer"), and State Street Bank and Trust Company, as
trustee (the "Trustee"). The assets of the Trust Fund will consist primarily of
324 loans having an initial aggregate principal balance as of the Cut-off Date
of approximately $2,482,942,297 and secured by mortgages or deeds of trust on
multifamily and commercial properties (the "Mortgage Loans"). The Mortgage
Loans, all of which bear interest at fixed rates, were originated by Credit
Suisse First Boston Mortgage Capital LLC ("CSFB Mortgage Capital") and an
affiliate of Paine Webber Real Estate Securities Inc. ("PWRES" and, together
with CSFB Mortgage Capital, the "Mortgage Loan Sellers") or were acquired by
the Mortgage Loan Sellers from third-party originators or in the secondary
market, and will be sold by the Mortgage Loan Sellers to the Depositor on the
Closing Date (as defined herein). The Mortgage Loans are described more fully
in this Prospectus Supplement.
<TABLE>
<CAPTION>
==================================================================================================
INITIAL
CERTIFICATE ASSUMED
BALANCE OR PASS- FINAL RATING WEIGHTED
NOTIONAL THROUGH DISTRIBUTION FITCH/MOODY'S/ AVERAGE
CLASS BALANCE(A) RATE DATE(B) S&P(C) LIFE(D)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A-1A ..........
Class A-1B ..........
Class A-2MF .........
Class A-X ........... (e)
Class B .............
Class C .............
Class D .............
Class E .............
==================================================================================================
(Notes to table on next page)
</TABLE>
The Offered Certificates are being offered by Credit Suisse First Boston
Corporation ("CSFB") and PaineWebber Incorporated ("PaineWebber" and, together
with CSFB, the "Underwriters") from time to time in negotiated transactions or
otherwise at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. Proceeds to the
Depositor from the sale of the Offered Certificates will be approximately %
of the initial principal balance thereof as of the Cut-off Date (as defined
herein) plus accrued interest from such date, before deducting issuance
expenses payable by the Depositor.
PROSPECTIVE INVESTORS SHOULD REVIEW THE INFORMATION APPEARING UNDER THE CAPTION
"RISK FACTORS" COMMENCING ON PAGE S-29 HEREIN AND COMMENCING ON PAGE 4 IN THE
PROSPECTUS BEFORE PURCHASING ANY OFFERED CERTIFICATES.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Offered Certificates are offered by the Underwriters when, as and if
issued by the Depositor, delivered to and accepted by the Underwriters and
subject to their right to reject orders in whole or in part. It is expected
that delivery of the Offered Certificates will be made in book-entry form
through the facilities of The Depository Trust Company ("DTC") on or about June
, 1998 against payment in immediately available funds.
CREDIT SUISSE FIRST BOSTON PAINEWEBBER INCORPORATED
Prospectus Supplement dated June , 1998
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1998-C1
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
[MAP OF THE UNITED STATES OF AMERICA]
Alaska Missouri Pennsylvania North Carolina
1 property 2 properties 11 properties 9 properties
$11,311,417 $7,276,465 $57,452,772 $37,330,716
0.5% of total 0.3% of total 2.3% of total 1.5% of total
Washington Texas New Hampshire South Carolina
4 properties 26 properties 5 properties 8 properties
$34,268,913 $169,855,476 $35,496,147 $21,846,491
1.4% of total 6.8% of total 1.4% of total 0.9% of total
Oregon Arkansas Maine Tennessee
7 properties 2 properties 5 properties 4 properties
$25,136,787 $4,670,000 $4,500,465 $10,029,847
1.0% of total 0.2% of total 0.2% of total 0.4% of total
Nevada Louisiana Massachusetts Georgia
1 property 8 properties 20 properties 16 properties
$5,989,474 $37,690,998 $49,704,039 $64,173,840
0.2% of total 1.5% of total 2.0% of total 2.6% of total
California Wisconsin Connecticut Florida
67 properties 3 properties 2 properties 40 properties
$359,558,687 $23,146,041 $18,511,938 $121,062,897
14.5% of total 0.9% of total 0.7% of total 4.9% of total
Colorado Illinois New York Puerto Rico
6 properties 7 properties 40 properties 4 properties
$47,145,017 $49,689,225 $281,487,486 $103,938,474
1.9% of total 2.0% of total 11.3% of total 4.2% of total
Arizona Mississippi New Jersey US Virgin Islands
9 properties 7 properties 21 properties 1 property
$24,396,466 $19,125,337 $147,691,430 $9,953,764
1.0% of total 0.8% of total 5.9% of total 0.4% of total
New Mexico Michigan Delaware Mexico
1 property 14 properties 6 properties 1 property
$1,435,822 $39,653,466 $46,737,407 $75,000,000
0.1% of total 1.6% of total 1.9% of total 3.0% of total
Utah Indiana Maryland
2 properties 6 properties 13 properties
$3,494,364 $29,681,678 $97,092,492
0.1% of total 1.2% of total 3.9% of total
Oklahoma Kentucky District of Columbia
5 properties 5 properties 4 properties
$9,951,763 $40,404,022 $66,121,571
0.4% of total 1.6% of total 2.7% of total
Kansas Ohio Virginia
2 properties 12 properties 20 properties
$17,079,993 $79,402,305 $130,937,860
0.7% of total 3.2% of total 5.3% of total
Minnesota Alabama West Virginia
18 properties 6 properties 1 property
$42,679,979 $18,730,777 $2,098,187
1.7% of total 0.8% of total 0.1% of total
- --------------------------------------------------------
less than 1.00% of Cut-Off Date Allocated Loan Amount
1.00-5.99% of Cut-Off Date Allocated Loan Amount
6.00-9.99% of Cut-Off Date Allocated Loan Amount
greater than 9.99% of Cut-Off Date Allocated Loan Amount
- --------------------------------------------------------
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
[PIE CHART]
Retail Multifamily, Cooperative
25.4% 4.6%
Lodging Industrial
16.7% 2.5%
Multifamily Mobile Home Park
16.3% 2.3%
Credit Lease HealthCare
15.3% 1.2%
Office Other
14.7% 1.0%
<PAGE>
- ----------
(Notes to Table)
(a) The initial aggregate Certificate Balances of the respective Classes
of Offered Certificates are subject to a permitted variance of plus
or minus 5%, depending on the aggregate principal balance of the
Mortgage Loans actually transferred to the Trust Fund. Any variance
in such principal balance may or may not be apportioned pro rata
among the Classes of Offered Certificates.
(b) The "Assumed Final Distribution Date" with respect to any Class of
Offered Certificates other than the Class A-X Certificates is the
Distribution Date (as defined herein) on which the last principal
payment would be made on such Class based on the Mortgage Loan
Assumptions and Prepayment Assumptions at 0% CPR (each as defined
herein). The "Assumed Final Distribution Date" with respect to the
Class A-X Certificates is the Distribution Date on which the
Notional Balance of such Class would be reduced to zero based on the
Mortgage Loan Assumptions and Prepayment Assumptions at 0% CPR. The
actual performance and experience of the Mortgage Loans will likely
differ from such assumptions. See "Prepayment and Yield
Considerations."
(c) It is a condition to their issuance that each Class of Offered
Certificates be assigned the ratings by Fitch, Moody's and/or S&P
set forth above. The ratings on the Offered Certificates do not
represent any assessment of (i) the likelihood or frequency of
voluntary or involuntary principal prepayments on the Mortgage
Loans, (ii) the degree to which such prepayments might differ from
those originally anticipated or (iii) the possibility that the
holders of the Offered Certificates might realize a lower than
anticipated yield.
(d) The weighted average life of a Class refers to the average amount of
time that will elapse from the Closing Date to the date of
distribution of each dollar in reduction of Certificate Balance or
Notional Balance that is to be distributed to such Class, calculated
as provided herein under "Prepayment and Yield Considerations --
Weighted Average Life of Offered Certificates," and based on the
Mortgage Loan Assumptions and Prepayment Assumptions assuming 0%
CPR. The Class A-X Certificates are not entitled to distributions of
principal and the weighted average life shown is for illustrative
purposes only.
(e) The Pass-Through Rate on the Class A-X Certificates for any
Distribution Date will be a per annum rate, expressed as a
percentage, equal to the weighted average of the Component Rates (as
defined herein) for such Distribution Date.
Interest and principal will be distributed to the holders of Offered
Certificates on the 17th day of each month (or, if such day is not a business
day, on the following business day), commencing in July 1998 (each, a
"Distribution Date"); provided, however, that no Distribution Date will fall on
a date that is fewer than four business days after the related Determination
Date (as defined herein).
During each Interest Accrual Period (as defined herein), the Class A-1A,
Class A-1B, Class A-2MF, Class B, Class C, Class D and Class E Certificates
will bear interest at fixed per annum rates (the "Class A-1A Pass-Through
Rate," the "Class A-1B Pass-Through Rate," the "Class A-2MF Pass-Through Rate,"
the "Class B Pass-Through Rate," the "Class C Pass-Through Rate," the "Class D
Pass-Through Rate" and the "Class E Pass-Through Rate," respectively) shown on
the cover page hereof. The Pass-Through Rate on the Class A-X Certificates for
any Distribution Date will be a per annum rate, expressed as a percentage,
equal to the weighted average of the Component Rates (as defined herein) for
such Distribution Date.
A portion of all Prepayment Premiums and Yield Maintenance Charges will be
distributed to the Offered Certificates, as described herein. See "Description
of the Offered Certificates -- Distributions -- Allocation of Prepayment
Premiums and Yield Maintenance Charges."
The rights of the holders of the Private Certificates to receive
distributions of principal and interest on or in respect of the Mortgage Loans
will be subordinate to those of the holders of the Mezzanine Certificates
(together with the Private Certificates, the "Subordinate Certificates"). The
rights of the holders of the Mezzanine Certificates to receive distributions of
principal and interest on or in respect of the Mortgage Loans will be
subordinate to those of the holders of the Senior Certificates. The rights of
the holders of the Residual Certificates to receive distributions of amounts
collected on or advanced in respect of the Mortgage Loans will be subordinate
to those of the holders of the Regular Certificates, in each case to the extent
described herein.
The Mortgage Loans comprise two separate groups, Loan Group 1 and Loan
Group 2 (each, a "Loan Group"). Loan Group 2 will consist of 46 Mortgage Loans,
representing approximately 12.1% of the
S-2
<PAGE>
Initial Pool Balance, each of which is a Multifamily Loan (as defined herein)
and as of the Cut-Off Date has a remaining term to scheduled maturity (or, in
the case of an ARD Loan (as defined herein), to the Anticipated Repayment Date
(as defined herein)) of ten years or less. Loan Group 1 will consist of the
remaining 278 Mortgage Loans representing approximately 87.9% of the Initial
Pool Balance. Balloon Payments and Unscheduled Payments of Principal on the
Mortgage Loans in Loan Group 2 (the "A-2MF Principal Distribution Amount") will
be paid first to the Class A-2MF Certificates. All remaining payments in
respect of principal (including Balloon Payments and Unscheduled Payments of
Principal on the Mortgage Loans in Loan Group 1 and scheduled payments (other
than Balloon Payments) of principal on all Mortgage Loans) will be paid
sequentially to each Class of Certificates as described herein. See
"Description of the Offered Certificates -- Distributions."
THE YIELD TO INVESTORS IN THE OFFERED CERTIFICATES WILL BE SENSITIVE TO
THE TIMING OF PREPAYMENTS, EXTENSIONS, REPURCHASES OR PURCHASES OF MORTGAGE
LOANS, AND THE MAGNITUDE OF LOSSES ON THE MORTGAGE LOANS DUE TO LIQUIDATIONS.
THE YIELD TO INVESTORS IN THE CLASS A-2MF CERTIFICATES WILL BE PARTICULARLY
SENSITIVE TO THE RATE AND TIMING OF RECEIPT OF THE A-2MF PRINCIPAL DISTRIBUTION
AMOUNT. NO REPRESENTATION IS MADE AS TO THE RATE OF PREPAYMENTS ON, OR RATE OR
AMOUNT OF LIQUIDATIONS OF, THE MORTGAGE LOANS OR AS TO THE ANTICIPATED YIELD TO
MATURITY OF ANY OFFERED CERTIFICATE. THE YIELD TO MATURITY ON EACH CLASS OF THE
OFFERED CERTIFICATES WILL BE SENSITIVE TO, AND THE YIELD TO MATURITY OF THE
CLASS A-X CERTIFICATES WILL BE EXTREMELY SENSITIVE TO, THE RATE AND TIMING OF
PRINCIPAL PAYMENTS (INCLUDING BOTH VOLUNTARY AND INVOLUNTARY PREPAYMENTS,
DEFAULTS AND LIQUIDATIONS) ON THE MORTGAGE LOANS AND PAYMENTS WITH RESPECT TO
REPURCHASES THEREOF THAT ARE APPLIED IN REDUCTION OF THE CERTIFICATE BALANCE OR
NOTIONAL BALANCE OF SUCH CLASS. A RAPID RATE OF SUCH PRINCIPAL PAYMENTS COULD
RESULT IN THE FAILURE OF INVESTORS IN THE CLASS A-X CERTIFICATES TO FULLY
RECOVER THEIR INITIAL INVESTMENTS. SEE "PREPAYMENT AND YIELD CONSIDERATIONS."
There currently is no secondary market for the Offered Certificates. The
Underwriters expect to make a secondary market in the Offered Certificates but
have no obligation to do so. There can be no assurance that a secondary market
for the Offered Certificates will develop or, if it does develop, that it will
continue. See "Risk Factors -- The Offered Certificates -- Limited Liquidity
and Market Value."
As described herein, two separate "real estate mortgage investment
conduit" ("REMIC") elections will be made with respect to the Trust Fund for
federal income tax purposes. The Offered Certificates will be treated as REMIC
"regular interests," except to the extent described herein. See "Certain
Federal Income Tax Consequences" herein and in the Prospectus.
The Offered Certificates will be available to investors only in book-entry
form through the facilities of The Depository Trust Company ("DTC"). Beneficial
interests in the Offered Certificates will be shown on, and transfers thereof
will be effected only through, records maintained by DTC and its participants.
Physical certificates for the Offered Certificates will be available only under
certain limited circumstances as described herein. See "Description of the
Offered Certificates -- Book-Entry Registration and Definitive Certificates."
For a discussion of certain significant matters affecting investments in
the Offered Certificates, see "Risk Factors" herein and "Certain Legal Aspects
of the Mortgage Loans" in the Prospectus.
THE PHOTOGRAPHS OF THE MORTGAGED PROPERTIES INCLUDED IN THIS PROSPECTUS
SUPPLEMENT ARE NOT REPRESENTATIVE OF ALL THE MORTGAGED PROPERTIES OR OF ANY
PARTICULAR TYPE OF MORTGAGED PROPERTY.
THE OFFERED CERTIFICATES REPRESENT AN INTEREST ONLY IN THE MORTGAGE LOANS
AND CERTAIN OTHER ASSETS OF THE TRUST FUND AND DO NOT REPRESENT AN INTEREST IN
OR OBLIGATION OF THE DEPOSITOR, EITHER MORTGAGE LOAN SELLER, THE SERVICER, THE
SPECIAL SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
THE CERTIFICATES NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
THE OFFERED CERTIFICATES CONSTITUTE PART OF A SEPARATE SERIES OF
CERTIFICATES BEING OFFERED BY THE DEPOSITOR FROM TIME TO TIME PURSUANT TO ITS
PROSPECTUS DATED JUNE 10, 1998, WHICH ACCOMPANIES THIS PROSPECTUS
S-3
<PAGE>
SUPPLEMENT AND OF WHICH THIS PROSPECTUS SUPPLEMENT FORMS A PART. THE PROSPECTUS
CONTAINS IMPORTANT INFORMATION REGARDING THIS OFFERING WHICH IS NOT CONTAINED
HEREIN, AND PROSPECTIVE INVESTORS ARE URGED TO READ THE PROSPECTUS AND THIS
PROSPECTUS SUPPLEMENT IN FULL. SALES OF THE OFFERED CERTIFICATES MAY NOT BE
CONSUMMATED UNLESS THE PURCHASER HAS RECEIVED BOTH THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS.
REPORTS TO CERTIFICATEHOLDERS
The Trustee will make available the Distribution Date Statement and
certain other information through its Corporate Trust home page on the world
wide web and/or by facsimile through its Street Fax automated fax-back system.
The web page is located at "corporatetrust.statestreet.com." CMBS information
is available by clicking the "Investor Information & Reporting" button, and
selecting the appropriate transaction. Interested parties can register for
Street Fax by calling (617) 664-5600 and requesting an account application by
following the instructions provided by the system.
S-4
<PAGE>
EXECUTIVE SUMMARY
Prospective investors are advised to carefully read, and should rely
solely on, the detailed information appearing elsewhere in this Prospectus
Supplement and the Prospectus relating to the Offered Certificates in making
their investment decision. This Executive Summary does not include all relevant
information relating to the securities and collateral described herein,
particularly with respect to the risks and special considerations involved with
an investment in such securities, and is qualified in its entirety by reference
to the detailed information appearing elsewhere in this Prospectus Supplement
and the Prospectus. Prior to making an investment decision, a prospective
investor should carefully review this Prospectus Supplement and the Prospectus.
Capitalized terms used and not otherwise defined herein have the respective
meanings assigned to them in this Prospectus Supplement and the Prospectus. See
"Index of Significant Definitions" in this Prospectus Supplement.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
INITIAL % OF PASS-
CERTIFICATE AGGREGATE THROUGH WEIGHTED
BALANCE OR INITIAL APPROXIMATE RATE AS AVERAGE
NOTIONAL CERTIFICATE CREDIT OF CUT-OFF LIFE (2) PRINCIPAL
CLASS RATING(1) BALANCE BALANCE SUPPORT DESCRIPTION DATE (YEARS) WINDOW(2)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Offered Certificates
- ------------------------------------------------------------------------------------------------------------------
A-1A AAA $ % % Fixed Rate %
- ------------------------------------------------------------------------------------------------------------------
A-1B AAA $ % % Fixed Rate %
- ------------------------------------------------------------------------------------------------------------------
A-2MF AAA $ % % Fixed Rate %
(Component
Structure)
- ------------------------------------------------------------------------------------------------------------------
A-X AAA $ NAP NAP Interest Only %
- ------------------------------------------------------------------------------------------------------------------
B AA $ % % Fixed Rate %
- ------------------------------------------------------------------------------------------------------------------
C A $ % % Fixed Rate %
- ------------------------------------------------------------------------------------------------------------------
D BBB $ % % Fixed Rate %
- ------------------------------------------------------------------------------------------------------------------
E BBB- $ % % Fixed Rate %
- ------------------------------------------------------------------------------------------------------------------
Private Certificates (3)
- ------------------------------------------------------------------------------------------------------------------
F BB $ % % Fixed Rate %
- ------------------------------------------------------------------------------------------------------------------
G BB- $ % % Fixed Rate %
- ------------------------------------------------------------------------------------------------------------------
H B $ % % Fixed Rate %
- ------------------------------------------------------------------------------------------------------------------
I B- $ % % Fixed Rate %
- ------------------------------------------------------------------------------------------------------------------
J NR $ % NAP Fixed Rate %
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Ratings shown are those of Fitch, Moody's and/or S&P. Classes marked
"NR" will not be rated by any Rating Agency.
(2) Based on the Mortgage Loan Assumptions and Prepayment Assumptions,
assuming 0% CPR (each as defined in "Prepayment and Yield
Considerations.")
(3) Not offered hereby.
S-5
<PAGE>
MORTGAGE LOAN EXECUTIVE SUMMARY
GENERAL MORTGAGE LOAN CHARACTERISTICS
(AS OF THE CUT-OFF DATE, UNLESS OTHERWISE INDICATED)
<TABLE>
<S> <C>
Initial Pool Balance (1) ................................................................ $2,482,942,297
Initial Balance of Loan Group 1 (1) .................................................... $2,182,078,302
Initial Balance of Loan Group 2 (1) .................................................... $ 300,863,995
Number of Mortgage Loans ................................................................ 324
Number of Mortgage Loans in Group 1 .................................................... 278
Number of Mortgage Loans in Group 2 .................................................... 46
Number of Mortgaged Properties .......................................................... 452
Average Mortgage Loan Balance ........................................................... $ 7,663,402
Maximum Mortgage Loan Principal Balance ................................................. $ 115,590,907
Minimum Mortgage Loan Principal Balance ................................................. $ 707,174
Weighted Average Mortgage Rate .......................................................... 7.614%
Range of Mortgage Rates ................................................................. 6.34% - 9.61%
Weighted Average Remaining Term to the Earlier of Maturity or Anticipated Repayment Date 145 months
Range of Remaining Term to the Earlier of Maturity or Anticipated Repayment Date ........ 49-299
Weighted Average Amortization Term (2) .................................................. 318 months
Range of Amortization Terms (2) ......................................................... 0 to 479 months
Weighted Average DSCR (2)(3) ............................................................ 1.51 x
Range of DSCRs (2)(3) ................................................................... 1.03x - 3.08x
Weighted Average LTV (2)(3) ............................................................. 68%
Range of LTVs (3) ....................................................................... 17% - 97%
Weighted Average LTV at Earlier of Anticipated Repayment Date or Maturity (2)(3)(4) ..... 58%
Percentage of Initial Pool Balance made up of:
ARD Loans .............................................................................. 67.8 %
Fully Amortizing Loans (other than ARD Loans) .......................................... 13.7 %
Balloon Loans .......................................................................... 18.6 %
Multi-Property Loans ................................................................... 24.8 %
Crossed Loans .......................................................................... 4.5 %
Credit Lease Loans ..................................................................... 15.3 %
Number of Mortgage Loans Delinquent as of Cut-off Date .................................. 0
Percentage of Initial Pool Balance contributed by each Mortgage Loan Seller:
Credit Suisse First Boston Mortgage Capital LLC ........................................ 84.4 %
Paine Webber Real Estate Securities Inc. ............................................... 15.6 %
</TABLE>
- ---------
(1) Subject to a permitted variance of plus or minus 5%.
(2) As defined or described in "Description of the Mortgage Loans --
Additional Mortgage Loan Information."
(3) Excluding the Credit Lease Loans (as defined herein).
(4) Excluding Fully Amortizing Loans (as defined herein).
S-6
<PAGE>
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Reports to Certificateholders .................... S-4
Executive Summary ................................ S-5
Mortgage Loan Executive Summary .................. S-6
Summary of Prospectus Supplement ................. S-9
Risk Factors ..................................... S-29
The Mortgage Loans ............................ S-29
The Offered Certificates ...................... S-58
Description of the Mortgage Loans ................ S-63
General ....................................... S-63
Security for the Mortgage Loans ............... S-64
CSFB Mortgage Capital Underwriting
Standards .................................. S-65
PWRES Underwriting Standards .................. S-69
Certain Characteristics of the Mortgage
Loans ......................................... S-73
Credit Lease Loans ............................ S-73
Significant Mortgage Loans .................... S-75
Certain Terms and Conditions of the
Mortgage Loans ............................. S-94
Additional Mortgage Loan Information S-103
Changes in Mortgage Loan
Characteristics ............................ S-123
Certain Legal Aspects of Foreign
Mortgage Loans ............................. S-123
Description of the Offered Certificates .......... S-125
General ....................................... S-125
Book-Entry Registration and Definitive
Certificates ............................... S-126
Distributions ................................. S-128
Definitions ................................... S-132
Assumed Final Distribution Date;
Rated Final Distribution Date .............. S-138
Subordination; Allocation of Collateral
Support Deficits and Certificate
Deferred Interest .......................... S-139
Prepayment and Yield Considerations .............. S-141
Yield ......................................... S-141
Modeling Assumptions .......................... S-142
Yield on the Class A-X Certificates ........... S-143
Rated Final Distribution Date ................. S-144
Weighted Average Life of Offered
Certificates ............................... S-144
The Pooling and Servicing Agreement .............. S-153
General ....................................... S-153
Assignment of the Mortgage Loans .............. S-153
Representations and Warranties;
Repurchase ................................. S-153
Servicing of the Mortgage Loans;
Collection of Payments ..................... S-163
Advances ...................................... S-164
Appraisal Reductions .......................... S-166
Accounts ...................................... S-167
Withdrawals from the Certificate
Account .................................... S-169
Enforcement of "Due-on-Sale" and
"Due-on-Encumbrance" Clauses ............... S-170
Inspections; Collection of Operating
Information ................................ S-170
Insurance Policies ............................ S-171
Evidence as to Compliance ..................... S-171
Certain Matters Regarding the
Depositor, the Trustee, the Servicer
and the Special Servicer ................... S-172
Events of Default ............................. S-173
Rights Upon Event of Default .................. S-173
Amendment ..................................... S-174
Voting Rights ................................. S-175
Realization Upon Mortgage Loans ............... S-175
Modifications ................................. S-178
Optional Termination .......................... S-179
The Trustee ................................... S-180
Certificate Registrar and
Authenticating Agent ....................... S-180
Duties of the Trustee ......................... S-181
The Servicer .................................. S-181
Servicing Compensation and Payment
of Expenses ................................ S-181
The Special Servicer .......................... S-183
Servicer and Special Servicer Permitted
to Buy Certificates ........................ S-184
Reports to Certificateholders; Available
Information ................................ S-184
Use of Proceeds .................................. S-187
Certain Federal Income Tax
Consequences .................................. S-187
ERISA Considerations ............................. S-191
Senior Certificates ........................... S-191
Mezzanine Certificates ........................ S-192
Legal Investment ................................. S-193
Underwriting ..................................... S-193
Legal Matters .................................... S-194
Rating ........................................... S-195
Index of Significant Definitions ................. S-196
Annex A--Loan Characteristics .................... A-1
Annex B--Credit Lease Loan
Characteristics ............................... B-1
Annex C--Certain Information
Regarding the Loan Group 2 Mortgage
Loans ......................................... C-1
Annex D--Servicer Reports ........................ D-1
</TABLE>
S-7
<PAGE>
TABLE OF CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
------------
<S> <C>
Prospectus Supplement ............................ 2
Additional Information ........................... 2
Incorporation of Certain Information by
Reference ..................................... 3
Risk Factors ..................................... 4
Limited Liquidity ............................. 4
Limited Assets ................................ 4
Prepayments and Effect on Average Life
of Certificates and Yields ................. 5
Limited Nature of Ratings ..................... 5
Risks Associated with Mortgage Loans
and Mortgaged Properties ................... 6
Risks Associated with Mortgage Loans
and Leases ................................. 6
Balloon Payments .............................. 7
Junior Mortgage Loans ......................... 7
Obligor Default ............................... 7
Mortgagor Type ................................ 8
Enhancement Limitations ....................... 8
Enforceability ................................ 8
Environmental Risks ........................... 9
Delinquent and Non-Performing
Mortgage Loans ............................. 9
ERISA Considerations .......................... 10
Certain Federal Tax Considerations
Regarding Residual Interest
Certificates ............................... 10
Control ....................................... 10
Book-Entry Registration ....................... 10
The Depositor .................................... 11
Use of Proceeds .................................. 11
Description of the Certificates .................. 11
General ....................................... 11
Distribution on Certificates .................. 12
Accounts ...................................... 13
Amendment ..................................... 15
Termination; Repurchase of Mortgage
Loans ...................................... 16
Reports to Certificateholders ................. 16
The Trustee ................................... 16
The Mortgage Pools ............................... 17
General ....................................... 17
Assignment of Mortgage Loans .................. 18
Mortgage Underwriting Standards and
Procedures ................................. 19
Representations and Warranties ................ 20
Servicing of the Mortgage Loans .................. 22
General ....................................... 22
Collections and Other Servicing
Procedures ................................. 22
Insurance ..................................... 22
Fidelity Bonds and Errors and Omissions
Insurance .................................. 24
Servicing Compensation and Payment of
Expenses ................................... 24
Advances ...................................... 24
Modifications, Waivers and Amendments 24
Evidence of Compliance ........................ 25
Certain Matters With Respect to the
Master Servicer, the Special Servicer
and the Trustee ............................ 25
Events of Default ............................. 26
Enhancement ...................................... 27
General ....................................... 27
Subordinate Certificates ...................... 27
Cross-Support Features ........................ 28
Letter of Credit .............................. 28
Certificate Guarantee Insurance ............... 28
Reserve Funds ................................. 28
Certain Legal Aspects of the Mortgage
Loans ......................................... 29
Mortgages and Deeds of Trust Generally 29
Installment Contracts ......................... 30
Junior Mortgages; Rights of Senior
Mortgagees or Beneficiaries ................ 30
Foreclosure ................................... 32
Environmental Risks ........................... 34
Statutory Rights of Redemption ................ 35
Anti-Deficiency Legislation ................... 36
Bankruptcy Laws ............................... 36
Enforceability of Certain Provisions .......... 38
Applicability of Usury Laws ................... 40
Alternative Mortgage Instruments .............. 40
Leases and Rents .............................. 40
Secondary Financing; Due-on
Encumbrance Provisions ..................... 41
Certain Laws and Regulations .................. 41
Type of Mortgaged Property .................... 41
Americans with Disabilities Act ............... 42
Certain Federal Income Tax Consequences 43
General ....................................... 43
Taxation of the REMIC and its Holders 43
Taxation of Regular Interests ................. 44
REMIC Expenses ................................ 48
Sale or Exchange of REMIC Regular
Interest Certificates ...................... 48
Taxation of the REMIC ......................... 48
Taxation of Holders of Residual Interest
Certificates ............................... 49
Excess Inclusions ............................. 50
Restrictions on Ownership and Transfer
of Residual Interest Certificates .......... 51
Administrative Matters ........................ 52
Tax Status as a Grantor Trust ................. 52
Miscellaneous Tax Aspects ..................... 55
Tax Treatment of Foreign Investors ............ 56
State Tax Considerations ......................... 57
ERISA Considerations ............................. 57
Prohibited Transactions ....................... 57
Unrelated Business Taxable Income--
Residual Interests ......................... 59
Legal Investment ................................. 59
Plan of Distribution ............................. 61
Legal Matters .................................... 61
Index of Defined Terms ........................... 62
</TABLE>
S-8
<PAGE>
SUMMARY OF PROSPECTUS SUPPLEMENT
Prospective investors are advised to carefully read, and should rely
solely on, the detailed information appearing elsewhere in this Prospectus
Supplement and in the accompanying Prospectus. The following Summary of
Prospectus Supplement does not include all relevant information relating to the
securities and assets described herein, particularly with respect to the risks
and special considerations involved with an investment in such securities, and
is qualified in its entirety by reference to the detailed information appearing
elsewhere in this Prospectus Supplement and in the Prospectus. Prior to making
an investment decision, a prospective investor should carefully review this
Prospectus Supplement and the Prospectus. Capitalized terms used and not
otherwise defined herein have the respective meanings assigned to them in the
Prospectus. See "Index of Significant Definitions" herein and "Index of Defined
Terms" in the Prospectus.
TITLE OF
CERTIFICATES ..... Credit Suisse First Boston Mortgage Securities Corp.
Commercial Mortgage Pass-Through Certificates, Series
1998-C1 (the "Certificates").
CERTIFICATE
BALANCE........... Each Class of Offered Certificates has the approximate
aggregate initial Certificate Balance or Notional Balance
set forth on the cover page of this Prospectus Supplement,
subject to a permitted variance of plus or minus 5%. The
Offered Certificates, together with the Private
Certificates, will be issued pursuant to a Pooling and
Servicing Agreement to be dated as of June , 1998 (the
"Pooling and Servicing Agreement") among the Depositor, the
Servicer, the Special Servicer and the Trustee.
DEPOSITOR......... Credit Suisse First Boston Mortgage Securities Corp., a
Delaware corporation and an affiliate of Credit Suisse
First Boston Mortgage Capital LLC, one of the Mortgage Loan
Sellers, and of Credit Suisse First Boston Corporation, one
of the Underwriters. See "The Depositor" in the Prospectus.
SERVICER.......... Banc One Mortgage Capital Markets, LLC (the "Servicer").
Although the Servicer may employ agents, including
sub-servicers, the Servicer will remain liable for its
servicing obligations under the Pooling and Servicing
Agreement. See "The Pooling and Servicing Agreement -- The
Servicer." The Servicer will be permitted to purchase any
Class of Certificates. See "Risk Factors -- The Offered
Certificates -- Servicer or Special Servicer May Purchase
Certificates; Conflict of Interest."
SPECIAL SERVICER... Lennar Partners, Inc. (the "Special Servicer"). The
Special Servicer will be responsible for servicing Mortgage
Loans that, in general, are in default or as to which
default is imminent and for administering any REO Property
(as defined herein). The holders of greater than 50% of the
Percentage Interests of the most subordinate Class of
Certificates then outstanding and having a Certificate
Balance equal to or greater than 25% of the initial
Certificate Balance of such Class (or, if no such Class
exists, the most subordinate Class then outstanding) (the
"Controlling Class") will be entitled to remove the Special
Servicer as special servicer of the Mortgage Loans and
appoint a successor special servicer with respect to such
Mortgage Loans, provided that each Rating Agency confirms
in writing that such removal and appointment, in and of
itself, would not cause a downgrade, qualification or
withdrawal of the then-current ratings assigned to any
Class of Certificates. The Special Servicer will be
permitted to purchase any Class of Certificates. See "Risk
Factors -- The Offered Certificates -- Servicer or Special
Servicer May Purchase Certificates; Conflict of Interest."
S-9
<PAGE>
TRUSTEE........... State Street Bank and Trust Company, a Massachusetts
trust company (the "Trustee"). See "The Pooling and
Servicing Agreement -- The Trustee."
MORTGAGE LOAN
SELLERS......... Credit Suisse First Boston Mortgage Capital LLC ("CSFB
Mortgage Capital"), a Delaware limited liability company,
an affiliate of the Depositor and an affiliate of Credit
Suisse First Boston Corporation, one of the Underwriters,
and Paine Webber Real Estate Securities Inc. ("PWRES"), a
Delaware corporation and an affiliate of PaineWebber
Incorporated, one of the Underwriters.
CUT-OFF DATE...... June 11, 1998.
CLOSING DATE...... On or about June , 1998.
DUE DATE.......... With respect to 207 Mortgage Loans, representing
approximately 76.2% of the Initial Pool Balance, the 11th
day of each month; with respect to 109 Mortgage Loans,
representing approximately 21.2% of the Initial Pool
Balance, the first day of each month; and, with respect to
eight Mortgage Loans, representing approximately 2.7% of
the Initial Pool Balance the fifth day of each month. With
the exception of five Mortgage Loans, representing
approximately 0.4% of the Initial Pool Balance, no Mortgage
Loan has a grace period for payment defaults that extends
beyond the related Determination Date. See "Description of
the Mortgage Loans -- Certain Terms and Conditions of the
Mortgage Loans -- Due Dates" and "The Pooling and Servicing
Agreement -- Advances."
DETERMINATION
DATE.............. With respect to each Distribution Date, the close of
business on the 11th day of the month in which such
Distribution Date occurs or, if such 11th day is not a
business day, the business day immediately following such
11th day.
DISTRIBUTION
DATE.............. The 17th day of each month or, if such 17th day is not a
business day, the business day immediately following such
17th day, commencing in July 1998; provided, however, that
no Distribution Date will fall on a date that is fewer than
four business days after the related Determination Date. A
business day is any day other than a Saturday, a Sunday or
any day on which banking institutions in the States of New
York, Massachusetts, Texas, or Florida are authorized or
obligated by law, executive order or governmental decree to
close.
RECORD DATE....... With respect to each Distribution Date, the close of
business on the last business day of the month immediately
preceding the month in which such Distribution Date occurs.
INTEREST ACCRUAL
PERIOD.......... With respect to any Distribution Date, the period
commencing on the 11th day of the calendar month preceding
the month in which such Distribution Date occurs and ending
on the 10th day of the month in which such Distribution
Date occurs. Each Interest Accrual Period is deemed to
consist of 30 days.
ASSUMED FINAL
DISTRIBUTION
DATE............ As to each Class of Offered Certificates, the date set
forth on the cover page hereof.
S-10
<PAGE>
RATED FINAL DISTRIBUTION
DATE............ As to each Class of Offered Certificates, , 20 ,
the first Distribution Date following the date that is two
years after the latest Assumed Maturity Date of any of the
Mortgage Loans. The "Assumed Maturity Date" of (a) any
Mortgage Loan that is not a Balloon Loan or ARD Loan is the
maturity date of such Mortgage Loan and (b) any Balloon
Loan or ARD Loan is the date on which such Balloon Loan or
ARD Loan, as applicable, would fully amortize, assuming
interest were calculated on such Mortgage Loan on a 30/360
basis (as defined herein).
DUE PERIOD........ With respect to each Distribution Date, the period
beginning on the day following the Determination Date in
the month immediately preceding the month in which such
Distribution Date occurs and ending at the close of
business on the Determination Date of the month in which
such Distribution Date occurs.
DENOMINATIONS..... The Offered Certificates (other than the Class A-X
Certificates) will be issuable in registered form, in
denominations of initial Certificate Balance of $10,000 and
multiples of $1,000 in excess thereof. The Class A-X
Certificates will be issuable in registered form, in
denominations of $100,000 initial Notional Balance and
integral multiples of $10,000 in excess thereof. A single
additional Class A-X Certificate may be issued in a
denomination of authorized initial Notional Balance that
includes the excess of (i) the initial Notional Balance of
Class A-X over (ii) the largest integral multiple of
$10,000 that does not exceed such amount.
CLEARANCE AND
SETTLEMENT...... The Offered Certificates will be issued in book-entry
form and, so long as they are Book-Entry Certificates (as
defined herein), will be evidenced by one or more
certificates registered in the name of Cede & Co. ("Cede"),
as nominee of The Depository Trust Company ("DTC"). The
Depositor may elect to terminate the book-entry system
through DTC with respect to all or any portion of any Class
of the Offered Certificates. See "Description of the
Offered Certificates -- Book-Entry Registration and
Definitive Certificates."
REPORTS TO
CERTIFICATE-
HOLDERS.......... On each Distribution Date, the Trustee will be
required to prepare and forward to each Certificateholder,
the Depositor, the Servicer, the Special Servicer, each
Rating Agency, Bloomberg, L.P., the Trepp Group, Charter
Research Corporation and Intex Solutions, Inc. and, if
requested in writing, any potential investors in the
Certificates a Distribution Date Statement as described
under "The Pooling and Servicing Agreement -- Reports to
Certificateholders; Available Information -- Trustee
Reports." In addition, the Servicer (in the case of
Specially Serviced Mortgage Loans (as defined herein) and
REO Properties, based solely on the information provided by
the Special Servicer) will be required to deliver to the
Trustee, and the Trustee will be required to deliver to
each Certificateholder, the Depositor, each Underwriter,
each Rating Agency and, if requested in writing, any
potential investor in the Certificates, on each
Distribution Date, a Comparative Financial Status Report, a
Delinquent Loan Status Report, a Historical Loan
Modification Report, a Historical Loss Estimate Report, an
REO Status Report and a Watch List, each as described under
"The Pooling and Servicing
S-11
<PAGE>
Agreement -- Reports to Certificateholders; Available
Information -- Servicer Reports." The Trustee also will be
required to make available at its offices, upon reasonable
advance written notice, during normal business hours, for
review by any Holder of a Certificate, the Depositor, the
Special Servicer, the Servicer, any Rating Agency, any
potential investor in the Certificates or any other Person
to whom the Depositor believes such disclosure is
appropriate, among other things, the following items, to
the extent delivered to the Trustee: Mortgaged Property
operating statements, rent rolls, retail sales
information, Mortgaged Property inspection reports and all
modifications, waivers and amendments of the terms of a
Mortgage Loan entered into by the Servicer or the Special
Servicer. See "The Pooling and Servicing Agreement --
Reports to Certificateholders; Available Information --
Other Information." A Current Report on Form 8-K (the
"Form 8-K") will be filed by the Depositor, together with
the Pooling and Servicing Agreement, with the Securities
and Exchange Commission (the "Commission") within fifteen
days after the initial issuance of the Offered
Certificates. If Mortgage Loans are removed from the Trust
Fund, such removal will be noted in the Form 8-K. Such
Form 8-K will be available to purchasers and potential
purchasers of the Offered Certificates.
THE MORTGAGE
LOANS............. The Trust Fund will consist primarily of 324 loans with an
aggregate principal balance, as of the Cut-off Date, of
approximately $2,482,942,297 (collectively, the "Mortgage
Loans" and, individually, a "Mortgage Loan"). The Mortgage
Loans encumber land improved by Retail Properties, Office
Properties, Hospitality Properties, Multifamily Properties,
Healthcare Properties, Industrial Properties, Self Storage
Facility Properties, Cooperative Properties, Mobile
Home/Recreational Vehicle Park Properties and Other
Properties (each, as defined herein). Approximately 84.4%
of the Mortgage Loans (the "CSFBMC Mortgage Loans") were
originated or purchased by CSFB Mortgage Capital and
approximately 15.6% of the Mortgage Loans (the "PWRES
Mortgage Loans") were originated by an affiliate of PWRES,
or purchased from unaffiliated third parties by PWRES. Each
Mortgage Loan Seller will sell the Mortgage Loans to the
Depositor and, in connection therewith, will make certain
representations and warranties with respect to the Mortgage
Loans sold by such Mortgage Loan Seller, as more fully
described herein. The Depositor will assign the Mortgage
Loans, together with its rights and remedies in respect of
breaches of the applicable Mortgage Loan Seller's
representations and warranties to the Trustee for the
benefit of Certificateholders. See "The Pooling and
Servicing Agreement -- Representations and Warranties;
Repurchase." All statistical information presented herein
with respect to the Mortgage Loans is presented on an
approximate basis.
The Mortgage Loans comprise two separate groups, Loan
Group 1 and Loan Group 2 (each, a "Loan Group"). Loan
Group 2 will consist of 46 Mortgage Loans, representing
approximately 12.1% of the Initial Pool Balance, each of
which is a Multifamily Loan (as defined herein) and has a
remaining term to scheduled maturity (or, in the case of
an ARD Loan (as defined herein), to the Anticipated
Repayment Date (as defined herein)) as of the Cut-Off Date
of ten years or less. See Annex C -- "Certain Information
Regarding the Loan Group 2 Mortgage Loans." Loan Group 1
will consist of the remaining 278 Mortgage Loans,
representing approximately 87.9% of the Initial Pool
Balance. Balloon Payments and Unscheduled Payments of
Principal (as
S-12
<PAGE>
defined herein) on the Mortgage Loans in Loan Group 2 (the
"A-2MF Principal Distribution Amount") will be paid first
to the Class A-2MF Certificates. All remaining payments in
respect of principal will be paid sequentially to each
Class of Certificates as described herein. See
"Description of the Offered Certificates --
Distributions."
GENERAL MORTGAGE LOAN CHARACTERISTICS
(AS OF THE CUT-OFF DATE, UNLESS OTHERWISE INDICATED)
<TABLE>
<CAPTION>
MORTGAGE LOAN LOAN
POOL GROUP 1 GROUP 2
------------------------- ------------------------- -----------------------
<S> <C> <C> <C>
Initial Balance (1) ..................... $2,482,942,297 $2,182,078,302 $300,863,995
Number of Mortgage Loans ................ 324 278 46
Number of Mortgaged Properties .......... 452 381 71
Average Mortgage Loan Balance ........... $ 7,663,402 $ 7,849,203 $ 6,540,522
Maximum Mortgage Loan Principal
Balance ................................ $ 115,590,907 $ 115,590,907 $ 20,111,247
Minimum Mortgage Loan Principal
Balance ................................ $ 707,174 $ 707,174 $ 898,560
Weighted Average Mortgage Rate .......... 7.614% 7.645% 7.387%
Range of Mortgage Rates ................. 6.34%-9.61% 6.34%-9.61% 6.90%-8.91%
Weighted Average Remaining Term
to the Earlier of Maturity or
Anticipated Repayment Date ............. 145 148 118
Range of Remaining Term to the
Earlier of Maturity or Anticipated
Repayment Date ......................... 49-299 59-299 49-120
Weighted Average Amortization
Term (2) ............................... 318 313 353
Range of Amortization Terms (2) ......... 0-479 0-479 231-360
Weighted Average DSCR (2)(3) ............ 1.51x 1.54x 1.34x
Range of DSCRs (2)(3) ................... 1.03x-3.08x 1.03x-3.08x 1.14x-1.77x
Weighted Average LTV (2)(3) ............. 68% 66% 77%
Range of LTVs (3) ....................... 17%-97% 17%-97% 62%-84%
Weighted Average LTV at Earlier of
Anticipated Repayment Date or
Maturity (2)(3)(4) ..................... 58% 56% 67%
Percentage of Initial Pool Balance
made up of:
ARD Loans .............................. 67.8% 65.5% 84.5%
Fully Amortizing Loans (other
than ARD Loans) ....................... 13.7% 15.6% 0%
Balloon Loans .......................... 18.6% 19.0% 15.5%
Multi-Property Loans ................... 24.8% 25.3% 21.9%
Crossed Loans .......................... 4.5% 5.1% 0%
Credit Lease Loans ..................... 15.3% 17.5% 0%
Number of Mortgage Loans
Delinquent as of Cut-off Date .......... 0 0 0
</TABLE>
----------
(1) Subject to a permitted variance of plus or minus 5%.
(2) As defined or described in "Certain Characteristics of
the Mortgage Loans -- Additional Mortgage Loan
Information."
(3) Excluding the Credit Lease Loans (as defined herein).
(4) Excluding Fully Amortizing Loans (as defined herein).
S-13
<PAGE>
SECURITY FOR THE
MORTGAGE LOANS.. Each Mortgage Loan is secured by one or more first
priority mortgages, deeds of trust, or other similar
security instruments (collectively, "Mortgages") on the
borrower's interest (as set forth below) in certain land
used for commercial or multifamily residential purposes,
all buildings and improvements thereon and certain personal
property located thereon, and, in certain cases, reserve
funds (collectively, "Mortgaged Properties").
<TABLE>
<CAPTION>
INTEREST OF % OF NUMBER OF
BORROWER INITIAL POOL MORTGAGED
ENCUMBERED BALANCE(1) PROPERTIES
---------- ---------- ----------
<S> <C> <C>
Fee Simple Estate (2) ........... 89.6% 426
Leasehold Estate ................ 10.4 26
----- ---
TOTAL ........................... 100.0% 452
===== ===
</TABLE>
------------
(1) Based on the principal balance of the Mortgage Loan
or, for any Multi-Property Loan (as defined herein),
the Allocated Loan Amount (as defined herein) with
respect to each portion of the related Mortgaged
Property.
(2) For any Mortgaged Property with respect to which the
ground lessee and ground lessor are both parties to the
Mortgage, the Mortgaged Property has been categorized
as a fee simple estate. For any Mortgaged Property that
partially consists of a leasehold interest, the
encumbered interest has been categorized as a fee
simple interest if the leasehold interest does not
constitute a material portion of the Mortgaged
Property.
CREDIT LEASE
LOANS............. Sixty-one Mortgage Loans (described in the table contained
in the section entitled "Description of the Mortgage Loans
-- Credit Lease Loans"), representing approximately 15.3%
of the Initial Pool Balance, are backed by net lease
obligations ("Credit Leases") of, or net lease obligations
guaranteed by, various corporations, each of which has a
credit rating of B-- (or the equivalent) or higher by at
least one of the Rating Agencies (the "Credit Lease
Loans"). With respect to 36 Credit Lease Loans,
representing approximately 9.6% of the Initial Pool Balance
(the "Fully Amortizing Credit Lease Loans"), scheduled
monthly rent payments thereunder (the "Monthly Rental
Payments") by the tenants (each, a "Tenant" and
collectively, the "Tenants") under the Credit Leases
generally are sufficient to pay in full and on a timely
basis all interest and principal and other sums scheduled
to be paid with respect to the related Credit Lease Loans.
Twenty-five of the Credit Lease Loans, representing
approximately 5.8% of the Initial Pool Balance (the
"Balloon Payment Credit Lease Loans"), provide for Balloon
Payments (as defined herein) on their respective maturity
dates. Fourteen of the Balloon Payment Credit Lease Loans,
representing approximately 4.3% of the Initial Pool
Balance, have the benefit of a residual value insurance
policy, which generally provides, subject to certain
conditions, that if the related Mortgaged Properties cannot
be sold or if the proceeds from the disposition of such
Mortgaged Properties is insufficient to repay the related
Credit Lease Loans upon maturity thereof, the insurer in
each case will be required to pay the remaining principal
amount of such Credit Lease Loans. The remaining Balloon
Payment Credit Lease Loans are guaranteed by the related
Tenant or an affiliate thereof, each of which has a credit
rating of at least B- (or the equivalent) by at least one
of the Rating Agencies. See "Certain Characteristics of the
Mortgage Loans -- Certain Terms and Conditions of the
Mortgage Loans -- Credit Lease Loans."
All of the Credit Lease Loans are secured by assignments
of leases and rents (the "Credit Lease Assignments") on
properties (the "Credit Lease Properties") net-leased to
the Tenants pursuant to the Credit Leases. Except with
S-14
<PAGE>
respect to thirteen Credit Lease Properties which are
subject to Double Net Leases (as defined herein), each
Credit Lease Loan provides that the related Tenant is
responsible for all costs and expenses incurred in
connection with the maintenance and operation of the
related Mortgaged Property and that (i) in the event of a
casualty to or condemnation of the related Mortgaged
Property, the Tenant is obligated to continue making
payments, (ii) the Tenant must make an offer to purchase
the applicable Credit Lease Property for an amount not
less than the unpaid principal balance plus accrued
interest on the related Credit Lease Loan in the event of
a casualty to or condemnation of a material portion of the
related Mortgaged Property, (iii) the Trustee on behalf of
the Certificateholders will have the benefit of certain
non-cancelable credit lease enhancement insurance policies
(the "Lease Enhancement Policies") obtained to cover
certain casualty and/or condemnation risks or (iv) the
Trustee on behalf of the Certificateholders will have the
benefit of additional insurance purchased by the related
borrowers to cover certain casualty risks not covered by
the insurance carried by the Tenant. See "Certain
Characteristics of the Mortgage Loans -- Credit Lease
Loans."
CROSSED LOANS,
MULTI-PROPERTY
LOANS AND RELATED
BORROWER LOANS ... Thirty-eight Mortgage Loans, each of which is identified
on Annex A hereto as having more than one related "Loan
No.," which Mortgage Loans represent approximately 24.8%
of the Initial Pool Balance, are secured by liens on more
than one Mortgaged Property (the "Multi-Property Loans").
Seventeen Mortgage Loans, each of which is identified on
the table entitled "Mortgage Loans Secured by More Than
One Mortgaged Property" under "Risk Factors -- The
Mortgage Loans -- Concentration of Mortgage Loans;
Borrowers" as "Crossed Loans" are cross-defaulted and
cross-collateralized with the other Mortgage Loans in the
same group and, in the aggregate, represent approximately
4.5% of the Initial Pool Balance. A default under one of
the mortgages that secures a group of Crossed Loans will
result in a default under all of the mortgages securing
such Mortgage Loan. The Mortgage Loans identified under
the table entitled "Related Borrower Loans" under "Risk
Factors -- The Mortgage Loans -- Concentration of Mortgage
Loans; Borrowers on Related Mortgage Loans" (the "Related
Borrower Loans") are not cross-collateralized or
cross-defaulted with each other (unless otherwise noted in
this Prospectus Supplement) but do have borrowers that are
affiliated with borrowers under other Mortgage Loans.
Twenty of the Multi-Property Loans, representing
approximately 6.1% of the Initial Pool Balance, prohibit
the release of any related Mortgaged Property prior to
payment in full of the Mortgage Loan. Eighteen of the
Multi-Property Loans, representing approximately 18.7% of
the Initial Pool Balance, permit a Mortgaged Property to
be released from the lien of the related Multi-Property
Loan prior to payment in full of the Mortgage Loan
provided that, generally, 125% of the Property Release
Amount (as defined herein) of such Mortgaged Property be
defeased or prepaid and that the DSCR (as defined herein)
with respect to the remaining Mortgaged Properties after
defeasance or prepayment, as applicable, be no less than
the greater of (x) a specified DSCR (generally the DSCR at
origination) and (y) the DSCR immediately prior to such
defeasance or prepayment, as applicable. Eleven of the
Crossed Loans, representing approximately 2.6% of the
Initial Pool Balance, prohibit the
S-15
<PAGE>
release of any related Mortgaged Property prior to payment
in full of all related Crossed Loans. Six of the Crossed
Loans, representing approximately 1.8% of the Initial Pool
Balance, permit a Mortgaged Property to be released from
the lien of the related Crossed Loan prior to payment in
full of all related Crossed Loans, provided that,
generally, the borrower must prepay (or, if applicable,
defease) 125% of the outstanding principal balance of such
Crossed Loan, and the excess, if any, of such payment over
such principal balance will be applied to prepay (or, with
respect to a defeasance, will provide additional
collateral for) the other Crossed Loan(s) secured by such
Mortgaged Property.
LOCKBOX TERMS..... Two-hundred twenty-six Mortgage Loans, representing
approximately 84.9% of the Initial Pool Balance, generally
provide that all rents, credit card receipts, accounts
receivable payments and other income derived from the
related Mortgaged Properties will be (i) paid directly to a
Lockbox Account (as defined herein) (or, in the case of
Multifamily Properties, collected and deposited in such
account by the Manager) controlled by the Servicer on
behalf of the Trust Fund (a "Hard Lockbox"), (ii) paid to
the manager of the Mortgaged Properties, which will deposit
all sums collected into a Lockbox Account on a regular
basis (a "Modified Lockbox") or (iii) collected by the
borrower until such time (if any) as a triggering event
(such as the failure to pay the related Mortgage Loan in
full on or before the related Anticipated Repayment Date or
a decline, by more than a specified amount in the net
operating income of the related Mortgaged Property and/or a
failure to meet a specified DSCR) occurs, at which time all
rents derived from the related Mortgaged Property generally
will be deposited directly into a Lockbox Account (a
"Springing Lockbox"). Each such Mortgage Loan is identified
on Annex A hereto as having a Lockbox. For any Hard
Lockbox, income deposited directly into the related Lockbox
Account will not include amounts paid in cash or paid
"over-the-counter". Such cash or "over-the-counter" monies
will be paid to the manager of the Mortgaged Properties,
which will deposit all sums collected into a Lockbox
Account on a regular basis. Lockbox Accounts will not be
assets of the Trust Fund. The Mortgage Loans provide for
such Lockbox Accounts as follows:
<TABLE>
<CAPTION>
% OF NUMBER OF
TYPE OF INITIAL POOL MORTGAGE
LOCKBOX BALANCE LOANS
------- ------- -----
<S> <C> <C>
Hard Lockbox ................ 35.9% 83
Modified Lockbox ............ 18.4% 35
Springing Lockbox ........... 30.6% 108
No Lockbox .................. 15.1% 98
----- ---
TOTAL ....................... 100.0% 324
===== ===
</TABLE>
PAYMENT TERMS..... The Mortgage Loans provide for scheduled payments of
principal and interest ("Monthly Payments") to be due (i)
on the first day of each month (with respect to 109
Mortgage Loans, representing approximately 21.2% of the
Initial Pool Balance); (ii) on the fifth day of each month
(with respect to eight Mortgage Loans, representing
approximately 2.7% of the Initial Pool Balance); and (iii)
on the eleventh day of each month (with respect to 207
Mortgage Loans, representing approximately 76.2% of the
Initial Pool Balance). With the exception of five Mortgage
Loans, representing approximately 0.4% of the Initial Pool
Balance, no Mortgage Loan has a grace period for payment
defaults that extends beyond the related Determination
Date.
S-16
<PAGE>
Each Mortgage Loan accrues interest at the per annum rate
set forth for such Mortgage Loan on Annex A (the "Mortgage
Rate"), which is fixed for the entire term of such loan,
except as discussed below. Such interest accrues on a
30/360 basis or on an Actual/360 basis (each as defined
herein).
ARD LOANS......... One hundred fifty-eight Mortgage Loans, representing
approximately 67.8% by Initial Pool Balance, are Mortgage
Loans (the "ARD Loans") which generally accrue interest at
a higher rate following the applicable Anticipated
Repayment Date (as defined below). As used herein, the term
"Mortgage Rate" does not include the portion of the
interest rate attributable to such rate increase. The
excess of interest at such higher rate over interest at the
Mortgage Rate (together with interest thereon) is referred
to herein as "Excess Interest." As described below, all of
the Mortgage Loans that provide for Excess Interest permit
the related borrower to prepay the related Mortgage Loan
without payment of a Prepayment Premium or Yield
Maintenance Charge beginning on, or up to six months prior
to, the date on which Excess Interest begins accruing. The
date on which any such Mortgage Loan begins accruing Excess
Interest is referred to herein as the "Anticipated
Repayment Date" or "ARD." The Anticipated Repayment Date
for any such ARD Loan is set forth on Annex A. The ARD
Loans provide for substantially full amortization over
their stated terms, which extend at least 60 months beyond
their related Anticipated Repayment Dates. If the related
borrower elects to prepay an ARD Loan in full on the
related Anticipated Repayment Date, a substantial amount of
principal will be due on such date. If a borrower elects
not to prepay an ARD Loan on or before its Anticipated
Repayment Date, all or a substantial portion of Excess Cash
Flow (as defined herein) collected after such date will be
applied towards the prepayment of such ARD Loan and, after
the principal balance thereof has been reduced to zero, to
the payment of accrued Excess Interest. Payment of Excess
Interest with respect to any ARD Loan will be deferred
until the principal of such ARD Loan has been paid in full.
Substantially all of the ARD Loans for which a Lockbox
Account has not been established on or before the Closing
Date provide that a Lockbox Account must be established on
or prior to the applicable Anticipated Repayment Date. See
"Certain Characteristics of the Mortgage Loans -- Certain
Terms and Conditions of the Mortgage Loans -- Excess
Interest."
BALLOON LOANS..... One hundred nine Mortgage Loans representing
approximately 18.6% of the Initial Pool Balance, provide
for Monthly Payments based on amortization schedules at
least 60 months longer than the remaining stated terms of
such Mortgage Loans (such Mortgage Loans, the "Balloon
Loans"), such that substantial amounts of principal are due
and payable on the respective maturity dates (each such
amount, after application of all constant Monthly Payments
due on or prior to the respective maturity date, a "Balloon
Payment"), unless prepaid prior thereto.
FULLY AMORTIZING
LOANS........... Fifty-seven Mortgage Loans, representing approximately
13.7% of the Initial Pool Balance, fully amortize or, in
the case of any such Mortgage Loans that accrue interest on
an Actual/360 basis, substantially fully amortize, over
their terms and are not ARD Loans (such Mortgage Loans, the
"Fully Amortizing Loans").
S-17
<PAGE>
PREPAYMENT
CHARACTERISTICS OF
THE MORTGAGE LOANS. Each Mortgage Loan restricts voluntary prepayments in one
or more of the following ways: (i) by prohibiting any
prepayments for a specified period of time after the date
of origination of such Mortgage Loan (a "Lockout Period"),
(ii) by requiring that any principal prepayment made
during a specified period of time after the date of
origination of such Mortgage Loan or, in the case of a
Mortgage Loan also subject to a Lockout Period, after the
date of expiration of such Lockout Period (a "Yield
Maintenance Period") be accompanied by a Yield Maintenance
Charge (as defined below) and (iii) by imposing fees or
premiums equal to a percentage of the then outstanding
principal balance of such Mortgage Loan ("Prepayment
Premiums") in connection with full or partial principal
prepayments for a specified period of time after the
expiration of the related Yield Maintenance Period or
Lockout Period, as the case may be (in either case, a
"Prepayment Premium Period"). The Mortgage Loans (other
than Credit Lease Loans) generally permit principal
prepayments to be made either (i) on a Due Date or (ii)
provided that such prepayment is accompanied by a full
month's interest, on any date. Credit Lease Loans
generally permit principal prepayments to be made on any
date after the related Lockout Period with interest only
up to the date of prepayment. Notwithstanding the related
Lockout Period, Additional Collateral Loans (as defined
herein) generally require partial principal prepayments in
certain circumstances, with respect to which holders of
the Offered Certificates will be entitled to Yield
Protection Payments as described herein.
As of the Cut-off Date, approximately 98.3% of the
Mortgage Loans by Initial Pool Balance were within their
respective Lockout Periods, and the weighted average of
such Lockout Periods was 133 months.
For a description of the Yield Maintenance Periods, Yield
Maintenance Charges, Prepayment Premium Periods and
Prepayment Premiums of the Mortgage Loans, see "Risk
Factors -- The Offered Certificates -- Special Prepayment
and Yield Considerations" and "Certain Characteristics of
the Mortgage Loans -- Certain Terms and Conditions of the
Mortgage Loans -- Prepayment Provisions" and "-- Property
Releases."
DEFEASANCE........ Two-hundred sixty-seven Mortgage Loans, representing
approximately 89.3% of the Initial Pool Balance, provide
that after a specified period (a "Defeasance Lockout
Period"), the applicable borrower may obtain the release of
the related Mortgaged Property (or, in the case of any
Crossed Loan and most of the Multi-Property Loans, one or
more of the related Mortgaged Properties) from the lien of
the related Mortgage(s) (a "Defeasance Option") upon the
pledge to the Trustee of noncallable U.S. government
obligations that provide for payments, on or prior to all
successive scheduled payment dates on which interest and
principal payments are due under the related Mortgage Note,
in the amounts due on such dates, and upon satisfaction of
certain other conditions. The Servicer will purchase such
U.S. government obligations on behalf of a borrower
exercising a Defeasance Option. The related borrower
generally will be required (or, in the case of certain of
the Mortgage Loans, permitted), to transfer the pledged
U.S. government obligations, together with all obligations
under the related Mortgage Loan or defeased portion
thereof, to a successor limited purpose borrower, and such
successor borrower will assume the obligations under the
Mortgage Loan or defeased portion thereof.
S-18
<PAGE>
ADDITIONAL
COLLATERAL
LOANS........... Three of the CSFBMC Mortgage Loans (each, an "Additional
Collateral Loan"), representing approximately 2.9% of the
Initial Pool Balance, are additionally secured by cash
reserves or irrevocable letters of credit that will be
released to the borrower upon satisfaction by the borrower
of certain leasing-related conditions including, in certain
cases, achieving certain DSCRs. Failure to satisfy such
conditions within the time periods specified therefor may
result in the application of the related reserve or credit
enhancement amount (each, a "Required Prepayment") to
partially prepay the related Mortgage Loan, and such
partial prepayment may not be required to be accompanied by
payment of a Prepayment Premium or Yield Maintenance
Charge. The holders of the Class A-X Certificates and any
Class of Offered Certificates receiving any such prepayment
will be entitled to receive payments ("Yield Protection
Payments") to compensate such holders for the absence of
any such Prepayment Premium or Yield Maintenance Charge
payments. With respect to any Class of Offered Certificates
receiving a distribution of principal in connection with a
Required Prepayment, the Yield Protection Payment will
equal 2% of such distribution of principal. With respect to
the Class A-X Certificates, the Yield Protection Payment
will be a yield-maintenance payment calculated in the
manner provided in the Pooling and Servicing Agreement. The
Servicer will be required to advance such Yield Protection
Payments on the related Servicer Remittance Date and will
be reimbursed therefor, with interest thereon at the
Reimbursement Rate, by CSFB Mortgage Capital. The rights of
any Class of Offered Certificates to receive Yield
Protection Payments, to the extent described herein, will
be treated as assets separate from the REMIC regular
interest represented by such Class. See "Certain Federal
Income Tax Consequences". See "Description of the Offered
Certificates -- Distributions -- Yield Protection
Payments."
For the purposes of this Prospectus Supplement and the
statistical information presented herein, the entire
principal balance of each Additional Collateral Loan is
deemed to be subject to a Lockout Period for the related
"Remaining Lockout" period set forth on Annex A hereto,
notwithstanding the fact that Required Prepayments could
occur under such loans during such Lockout Period.
The characteristics of each of the Mortgage Loans are more
particularly described in Annex A hereto.
NONE OF THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY
THE UNITED STATES, ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY OR ANY PRIVATE MORTGAGE INSURER. See
"Description of the Mortgage Loans -- General."
THE CERTIFICATES... The Certificates will be issued pursuant to a Pooling and
Servicing Agreement, to be dated as of June , 1998, among
the Depositor, the Servicer, the Special Servicer and the
Trustee (the "Pooling and Servicing Agreement"), and will
represent in the aggregate the entire beneficial ownership
interest in the Trust Fund, which will consist of the
Mortgage Loans and certain related assets.
The aggregate of the Certificate Balances of the Regular
Certificates (other than the Class A-X Certificates) as of
the Closing Date will equal the sum of the Initial Pool
Balance.
S-19
<PAGE>
THE OFFERED
CERTIFICATES.... Each Class of Offered Certificates will have the initial
Certificate Balance or Notional Balance and the initial
Pass-Through Rate set forth on the cover page hereof
(subject, in the case of each such Certificate Balance or
Notional Balance, to a permitted variance of plus or minus
5%).
The Class A-X Certificates will not have a Certificate
Balance or entitle their holders to distributions of
principal. The Class A-X Certificates will, however,
represent the right to receive distributions of interest
accrued as described herein on a notional balance (the
"Notional Balance"). The Class A-X Certificates will have
an initial Notional Balance of approximately $ , which
is equal to the aggregate Certificate Balance of the
Regular Certificates (other than the Class A-X
Certificates) as of the Closing Date. With respect to any
Distribution Date, the Notional Balance of the Class A-X
Certificates will be equal to the aggregate Certificate
Balance of the Regular Certificates (other than the Class
A-X Certificates) as of the first day of the related
Interest Accrual Period. The Notional Balance of the Class
A-X Certificates is used solely for purposes of
calculating interest payable on the Class A-X Certificates
and does not represent an interest in or right to
principal payments on the Mortgage Loans.
THE PRIVATE
CERTIFICATES (NOT
OFFERED HEREBY).. The Private Certificates will have the initial
Certificate Balances and Pass-Through Rates set forth in
the "Executive Summary" above (subject, in the case of
such Certificate Balances, to a permitted variance of plus
or minus 5%), provided that the Class V-1, Class V-2,
Class R and Class LR Certificates will not have
Certificate Balances or Notional Balances.
None of the Class F, Class G, Class H, Class I, Class J,
Class V-1 or Class V-2 Certificates or the Residual
Certificates are offered hereby.
AVAILABLE
DISTRIBUTION
AMOUNT......... The "Available Distribution Amount" for any Distribution
Date generally is the total of all payments or other
collections (or available P&I Advances) (other than
Prepayment Premiums and Yield Maintenance Charges and
Excess Interest, which are distributed separately as
described herein) on or in respect of the Mortgage Loans
that are available for distribution on the Certificates on
such date. The Available Distribution Amount for either
Loan Group for any Distribution Date generally is the total
of all payments or other collections (or available P&I
Advances) (other than Prepayment Premiums and Yield
Maintenance Charges and Excess Interest, which are
distributed separately as described herein) on or in
respect of the Mortgage Loans in such Loan Group that are
available for distribution on the Certificates on such
date. See "Description of the Offered Certificates --
Distributions -- Method, Timing and Amount."
INTEREST
DISTRIBUTIONS..... On each Distribution Date, to the extent of the Available
Distribution Amount and subject to the distribution
priorities described herein, each Class of Offered
Certificates will be entitled to receive distributions of
interest in an aggregate amount equal to the Monthly
Interest Distributable Amount with respect to such Class
for such Distribution Date and, to the extent not
previously paid, for all prior Distribution Dates (such
amount, the "Optimal Interest Distribution Amount" for such
Class). No interest will accrue on such
S-20
<PAGE>
overdue amounts. See "Description of the Offered
Certificates -- Distributions." The "Monthly Interest
Distributable Amount" with respect to any Class of Offered
Certificates other than the Class A-X Certificates for any
Distribution Date will equal the amount of interest
accrued during the related Interest Accrual Period (as
defined herein) at the related Pass-Through Rate on the
Certificate Balance of such Class immediately prior to
such Distribution Date, reduced by the allocable share for
such Class of (i) the Uncovered Prepayment Interest
Shortfall Amount (as defined herein), (ii) any Certificate
Deferred Interest (as defined herein) and (iii) certain
indemnification expenses of the Trust Fund. The Monthly
Interest Distributable Amount with respect to the Class
A-X Certificates for any Distribution Date will equal the
amount of interest accrued during the related Interest
Accrual Period at the Class A-X Pass-Through Rate on the
Notional Balance of such Class immediately prior to such
Distribution Date, reduced by such Class's share of (x)
the Uncovered Prepayment Interest Shortfall Amount and (y)
certain indemnification expenses of the Trust Fund, in
each case for such Distribution Date. See "--
Subordination" below. For each Distribution Date, interest
will accrue with respect to the Certificates on the basis
of a 360-day year for the Interest Accrual Period to which
such Distribution Date relates. Each Interest Accrual
Period will be deemed to consist of 30 days. See
"Description of the Offered Certificates --
Distributions."
PRINCIPAL
DISTRIBUTIONS... On each Distribution Date, to the extent of the Available
Distribution Amount remaining after the distribution of
interest to be made on such Class of Offered Certificates
on such date and subject to the distribution priorities
described herein, each Class of Offered Certificates (other
than the Class A-X Certificates) will be entitled to
distributions of principal (until the Certificate Balance
of such Class of Certificates is reduced to zero) in an
aggregate amount up to the Principal Distribution Amount
for such Distribution Date. See "Description of the Offered
Certificates -- Distributions."
PRIORITY OF
DISTRIBUTIONS... On each Distribution Date prior to the date on which the
principal balances of the Private Certificates and the
Mezzanine Certificates have been reduced to zero, the
Trustee will apply amounts on deposit in the Distribution
Account, to the extent of the Available Distribution Amount
for such Distribution Date, in the following order of
priority:
(i) concurrently, (A) from the Available
Distribution Amount for Loan Group 1, to the
Class A-1A and Class A-1B Certificates, pro
rata, the Optimal Interest Distribution Amounts
for each such Class for such Distribution Date,
(B) from the Available Distribution Amount for
Loan Group 2, to the Class A-2MF Certificates,
the Optimal Interest Distribution Amount for
such Class for such Distribution Date, and (C)
from the Available Distribution Amount, the
amount payable to the Class A-X Certificates
with respect to each Component thereof;
provided, however, that if the Available
Distribution Amount for either Loan Group is
insufficient to pay in full the Optimal
Interest Distribution Amounts to be distributed
to any such Classes as described above, the
Available Distribution Amount will be allocated
among such Classes pro rata in proportion to
such Optimal Interest Distribution Amounts,
without regard to Loan Group;
S-21
<PAGE>
(ii) to the Class A-2MF Certificates, in reduction
of the Certificate Principal Balance thereof
until the Certificate Principal Balance thereof
has been reduced to zero, an amount up to the
A-2MF Principal Distribution Amount for such
Distribution Date;
(iii) to the Class A-1A, Class A-1B and Class A-2MF
Certificates, in reduction of the Certificate
Balances thereof, an amount up to the Principal
Distribution Amount for such Distribution Date
remaining after the distribution described in
clause (ii), in the following order of
priority:
first, to the Class A-1A Certificates, until
the Certificate Balance thereof has been
reduced to zero;
second, to the Class A-1B Certificates, until
the Certificate Balance thereof has been
reduced to zero; and
third, to Class A-2MF Certificates, until the
Certificate Balance thereof has been reduced to
zero;
(iv) to the Class A-1A, Class A-1B and Class A-2MF
Certificates, pro rata (based on the aggregate
unreimbursed Collateral Support Deficit
previously allocated to each such Class), until
all amounts of such Collateral Support Deficit
previously allocated to such Classes but not
previously reimbursed have been reimbursed in
full; and
(v) to the Mezzanine and Private Certificates, in
the following order of priority:
(A) to the Class B Certificates, in respect of
interest, the Optimal Interest
Distribution Amount for such Class for
such Distribution Date;
(B) to the Class B Certificates, in reduction
of the Certificate Balance thereof, an
amount up to the Remaining Principal
Distributable Amount for such Distribution
Date until such Certificate Balance has
been reduced to zero;
(C) to the Class B Certificates, until all
amounts of Collateral Support Deficit
previously allocated to the Class B
Certificates, but not previously
reimbursed, have been reimbursed in full;
(D) to the Class C Certificates, in respect of
interest, the Optimal Interest
Distribution Amount for such Class for
such Distribution Date;
(E) to the Class C Certificates, in reduction
of the Certificate Balance thereof, an
amount up to the Remaining Principal
Distributable Amount for such Distribution
Date until such Certificate Balance has
been reduced to zero;
(F) to the Class C Certificates, until all
amounts of Collateral Support Deficit
previously allocated to the Class C
Certificates, but not previously
reimbursed, have been reimbursed in full;
(G) to the Class D Certificates, in respect of
interest, the Optimal Interest
Distribution Amount for such Class for
such Distribution Date;
S-22
<PAGE>
(H) to the Class D Certificates, in reduction
of the Certificate Balance thereof, an
amount up to the Remaining Principal
Distributable Amount for such Distribution
Date until such Certificate Balance has
been reduced to zero;
(I) to the Class D Certificates, until all
amounts of Collateral Support Deficit
previously allocated to the Class D
Certificates, but not previously
reimbursed, have been reimbursed in full;
(J) to the Class E Certificates, in respect of
interest, the Optimal Interest
Distribution Amount for such Class for
such Distribution Date;
(K) to the Class E Certificates, in reduction
of the Certificate Balance thereof, an
amount up to the Remaining Principal
Distributable Amount for such Distribution
Date until such Certificate Balance
thereof has been reduced to zero; and
(L) to the Class E Certificates, until all
amounts of Collateral Support Deficit
previously allocated to the Class E
Certificates, but not previously
reimbursed, have been reimbursed in full.
The Private Certificates will be entitled to receive
distributions from the Available Distribution Amount
remaining after giving effect to the distributions made on
such Distribution Date pursuant to clauses (i) through
(v), as described under "Description of the Offered
Certificates -- Distributions -- Priority of
Distributions."
On each Distribution Date on or after the date on which
the principal balances of the Mezzanine Certificates and
Private Certificates have been reduced to zero, the
Trustee will apply amounts on deposit in the Distribution
Account in the following order of priority:
(i) concurrently, to the Class A-1A, Class A-1B,
Class A-2MF and Class A-X Certificates, pro
rata in respect of interest;
(ii) to the Class A-1A, Class A-1B and Class A-2MF
Certificates, pro rata in reduction of the
Certificate Balances thereof, until the
Certificate Balance of each such Class has been
reduced to zero; and
(iii) to the Class A-1A, Class A-1B and Class A-2MF
Certificates, pro rata (based on the aggregate
unreimbursed Collateral Support Deficit
previously allocated to such Class), until all
amounts of such Collateral Support Deficit
previously allocated to such Classes but not
previously reimbursed have been reimbursed in
full.
Capitalized terms used above are defined in "Description
of the Offered Certificates -- Distributions --
Definitions."
PREPAYMENT PREMIUMS
AND YIELD
MAINTENANCE
CHARGES .......... On each Distribution Date, any Prepayment Premiums and
Yield Maintenance Charges collected on the Mortgage Loans
during the related Due Period will be distributed
separately from the Available Distribution Amount for such
Distribution Date to the Offered Certificates (and to
certain other Classes of Regular Certificates) in the
manner and priority described herein under "Description of
the Offered Certificates -- Distributions -- Allocation of
Prepayment Premiums and Yield Maintenance Charges."
S-23
<PAGE>
OTHER
DISTRIBUTIONS..... Except as described in the next sentence, the holders of
the Class V-1, Class V-2, Class R and Class LR Certificates
will not be entitled to distributions of interest or
principal. The Class V-1 Certificates will be entitled to
all distributions of Excess Interest with respect to the
CSFBMC Mortgage Loans, and the Class V-2 Certificates will
be entitled to all distributions of Excess Interest with
respect to the PWRES Mortgage Loans, in each case subject
to the limitations set forth in the Pooling and Servicing
Agreement. The holders of the Class R Certificates in the
aggregate will be entitled to receive that portion of the
Available Distribution Amount remaining in the Distribution
Account on any Distribution Date after the distribution to
the holders of the Regular Certificates of all amounts
which they are entitled to receive, and the remaining
assets in the Trust Fund, if any, after the Certificate
Balances of the Regular Certificates have been reduced to
zero and the holders of the Regular Certificates have
received all other distributions to which they are
entitled. It is not anticipated that there will be any
assets remaining in the Trust Fund on such date.
Additionally, the holders of 100% of the Class V-1
Certificates will have the option to purchase at the
purchase price specified herein any CSFBMC Mortgage Loan
that is an ARD Loan on or after its Anticipated Repayment
Date and the holders of 100% of the Class V-2 Certificates
will have the option to purchase at the purchase price
specified herein any PWRES Mortgage Loan that is an ARD
Loan on or after its Anticipated Repayment Date under the
circumstances described under "Certain Characteristics of
the Mortgage Loans -- Certain Terms and Conditions of the
Mortgage Loans."
SUBORDINATION..... Except as described below, as a means of providing
protection to the holders of the Offered Certificates
against losses associated with delinquent and defaulted
Mortgage Loans, the rights of the holders of the Private
Certificates to receive distributions of principal and
interest on or in respect of the Mortgage Loans will be
subordinate to those of the holders of the Mezzanine
Certificates, and the rights of the holders of the
Mezzanine Certificates to receive distributions of
principal and interest on or in respect of the Mortgage
Loans will be subordinate to those of the holders of the
Senior Certificates and each Class of Mezzanine
Certificates with an earlier alphabetical designation,
other than, in each case, with respect to Uncovered
Prepayment Interest Shortfalls and certain indemnification
expenses. This subordination will be effected by the
preferential right of holders of a Class of Offered
Certificates to receive on any Distribution Date the
amounts of interest and principal distributable in respect
of such Offered Certificates on such date prior to any
distribution on such Distribution Date in respect of any
Classes of Certificates subordinate thereto, and by the
allocation of Collateral Support Deficits to the Private
Certificates before allocation to the Offered Certificates.
No other form of credit enhancement will be available for
the benefit of the holders of the Offered Certificates, and
the Offered Certificates are not insured or guaranteed by
any government agency or instrumentality or by any other
party. See "Description of the Offered Certificates."
The payment of servicing compensation other than the
Servicing Fee and Primary Servicing Fee (as defined
herein), interest on Advances (to the extent not covered
by Penalty Charges (as defined herein) on the related
Mortgage Loans), extraordinary expenses of the Trust Fund
(other than indemnification expenses), a reduction in the
interest rate of a Mortgage Loan by a
S-24
<PAGE>
bankruptcy court pursuant to a plan of reorganization or
pursuant to any of its equitable powers, a reduction in
the interest rate or a forgiveness of the principal of a
Mortgage Loan as described under "The Pooling and
Servicing Agreement -- Modifications" or otherwise will
result in reductions in the interest entitlements of
certain Classes and may result in Collateral Support
Deficits, in each case affecting Classes in reverse
alphabetical order, as described herein.
Shortfalls in the Available Distribution Amount resulting
from Uncovered Prepayment Interest Shortfalls (as defined
herein) and indemnification expenses of the Trust Fund
will be allocated to all Classes of the Regular
Certificates on the basis of their respective Monthly
Interest Distributable Amounts (before giving effect to
any reductions therefrom for such Uncovered Prepayment
Interest Shortfalls or indemnification expenses or for
Certificate Deferred Interest) and will reduce the
respective interest entitlements of such Classes.
ADVANCES.......... The Servicer is required to make advances of principal
and interest (each, a "P&I Advance") with respect to
delinquent Monthly Payments on the Mortgage Loans, subject
to the limitations described herein. P&I Advances generally
will equal the delinquent portion of the Monthly Payment as
specified in the related Mortgage Note, less (i) the
Servicing Fee and Primary Servicing Fee (except to the
extent that the related borrower is required to reimburse
such amounts) and (ii) if applicable, the related Workout
Fee (as defined herein). If a borrower defaults on its
obligation to pay amounts due on the maturity date of the
related Mortgage Loan, the Servicer will be required to
advance only an amount equal to the interest and principal
portion of the constant Monthly Payment (or portion thereof
not received) that was due prior to the maturity date,
subject to the limitations described above. The Servicer
will not be required or permitted to make any P&I Advance
in respect of Excess Interest. The amount required to be
advanced in respect of delinquent Monthly Payments on a
Mortgage Loan that has been subject to an Appraisal
Reduction Event will equal the amount required to be
advanced by the Servicer without giving effect to the
related Appraisal Reduction (as defined herein) minus the
related Appraisal Reduction Amount (as defined herein). See
"The Pooling and Servicing Agreement -- Distributions --
Advances." If the Servicer fails to make a required P&I
Advance, the Trustee will be required to make the P&I
Advance pursuant to the Pooling and Servicing Agreement, in
each case subject to a determination of recoverability. See
"The Pooling and Servicing Agreement -- Advances" and "--
Appraisal Reductions."
OPTIONAL
TERMINATION....... Each of the Mortgage Loan Sellers, the holders of a
majority of the Controlling Class and the Servicer will
have the option to purchase, at the Purchase Price
specified herein, all of the Mortgage Loans and all
property acquired through exercise of remedies in respect
of any Mortgage Loan remaining in the Trust Fund, and
thereby effect termination of the Trust Fund and early
retirement of the then outstanding Certificates, on any
Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans remaining in the Trust Fund
is less than % of the Initial Pool Balance, as described
in more detail herein. See "The Pooling and Servicing
Agreement -- Optional Termination."
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<PAGE>
CERTAIN FEDERAL
INCOME TAX
CONSIDERATIONS... Two separate elections will be made to treat the Trust
Fund (exclusive of the Excess Interest and certain
assumption fees and the right to receive Yield Protection
Payments and the corresponding collateral pledged to
support the obligation to make such payments as described
below) as real estate mortgage investment conduits (each, a
"REMIC" or, in the alternative, the "Upper-Tier REMIC" and
the "Lower-Tier REMIC," respectively) for federal income
tax purposes. The Class A-1A, Class A-1B, Class A-2MF,
Class A-X, Class B, Class C, Class D, Class E, Class F,
Class G, Class H, Class I and Class J Certificates
(collectively, the "Regular Certificates") will constitute
"regular interests" in the Upper-Tier REMIC, except as
described below. The Class R and Class LR Certificates
(together, the "Residual Certificates") will represent the
beneficial ownership of the sole Class of the "residual
interest" in each of the Upper-Tier REMIC and the
Lower-Tier REMIC, respectively. The Class V-1 Certificates
will represent the right to receive Excess Interest with
respect to the CSFBMC Mortgage Loans and the Class V-2
Certificates will represent the right to receive Excess
Interest with respect to the PWRES Mortgage Loans. The
interests in the Trust Fund described in the preceding
sentence will be treated as grantor trusts for federal
income tax purposes and not as an asset of either REMIC.
The Offered Certificates generally will be treated as newly
originated debt instruments for federal income tax
purposes. Beneficial owners of the Offered Certificates
will be required to report income thereon in accordance
with the accrual method of accounting. Based on expected
issue prices, it is anticipated that the Class A-X and the
Class Certificates will be issued with original issue
discount and the Class will not be issued with original
issue discount. See "Certain Federal Income Tax
Consequences" herein and "Certain Federal Income Tax
Consequences -- Taxation of the REMIC and its Holders" in
the Prospectus. Although not free from doubt, it is
anticipated that any Prepayment Premiums and Yield
Maintenance Charges allocable to the Offered Certificates
will be ordinary income to the related Certificateholders
as such amounts accrue. See "Description of the Offered
Certificates -- Distributions."
The rights of any Class of Offered Certificates to receive
Yield Protection Payments, to the extent described herein,
will be treated as assets separate from the REMIC regular
interest represented by each such Class. The purchase
price paid for each such Class must be allocated between
the right to receive Yield Protection Payments and the
REMIC regular interest represented by such Class. See
"Certain Federal Income Tax Consequences."
ERISA
CONSIDERATIONS... The acquisition of an Offered Certificate by a pension or
other employee benefit plan (a "Plan") subject to the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), could, in some instances, result in a prohibited
transaction or other violation of the fiduciary
responsibility provisions of ERISA and Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code").
The United States Department of Labor has granted to CSFB
and PaineWebber individual administrative exemptions,
Prohibited Transaction Exemption ("PTE") 89-90 and PTE
90-36, respectively (collectively, and as amended by PTE
97-34, the "Exemption"), for certain mortgage-backed and
asset-backed certificates underwritten in whole or in part
by CSFB or PaineWebber, as
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<PAGE>
applicable. The Exemption might be applicable to the
initial purchase, the holding, and the subsequent resale
by a Plan of certain certificates, such as the Senior
Certificates, underwritten by CSFB or PaineWebber,
representing interests in pass-through trusts that consist
of certain receivables, loans and other obligations,
provided that the conditions and requirements of the
Exemption are satisfied. The loans described in the
Exemption include mortgage loans such as the Mortgage
Loans.
The Underwriters believe that the conditions to the
applicability of the Exemption generally will be met with
respect to the Senior Certificates, other than possibly
those conditions which are dependent on facts unknown to
the Underwriters or which they cannot control, such as
those relating to the circumstances of the Plan purchaser
or the Plan fiduciary making the decision to purchase any
such Class of Certificates. However, before purchasing a
Senior Certificate, a fiduciary of a Plan should make its
own determination as to the availability of the exemptive
relief provided by the Exemption or the availability of
any other prohibited transaction exemptions, and whether
the conditions of any such exemption will be applicable to
the Senior Certificates.
Any Plan fiduciary considering whether to purchase any
Offered Certificate on behalf of a Plan should consult
with its counsel regarding the applicability of the
provisions of ERISA and the Code. See "ERISA
Considerations" herein and in the Prospectus.
RATINGS........... It is a condition to the issuance of the Offered
Certificates that they receive the following credit ratings
from one or more of the following Rating Agencies:
<TABLE>
<CAPTION>
FITCH MOODY'S S&P
------- --------- ----
<S> <C> <C> <C>
Class A-1A...........
Class A-1B...........
Class A-2MF..........
Class A-X ...........
Class B .............
Class C .............
Class D .............
Class E .............
</TABLE>
The Rated Final Distribution Date for each Class of
Offered Certificates is , 20 . For a description of
the limitations of the ratings of the Offered
Certificates, see "Ratings." 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. The ratings on the Offered
Certificates by the Rating Agencies address the likelihood
of the timely payment of interest and the ultimate
repayment of principal by the Rated Final Distribution
Date. A security rating does not address the frequency of
prepayments (both voluntary and involuntary) or the
possibility that Certificateholders might suffer a lower
than anticipated yield, nor does a security rating address
the likelihood of receipt of Prepayment Premiums, Yield
Maintenance Charges, Yield Protection Payments or Excess
Interest. With respect to Credit Lease Loans, a downgrade
in the credit rating of the related Tenants or Guarantors
(as defined herein) and/or of the issuer of the Lease
Enhancement Policy or Residual Value Insurance Policy may
have a related
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<PAGE>
adverse effect on the rating of the Offered Certificates.
A security rating does not represent any assessment of the
yield to maturity that investors may experience or the
possibility that the holders of the Class A-X Certificates
might not fully recover their initial investment in the
event of delinquencies or rapid prepayments of the
Mortgage Loans (including both voluntary and involuntary
prepayments). As described herein, the amounts payable
with respect to the Class A-X Certificates consist only of
interest. If the entire pool were to prepay in the initial
month, with the result that the Class A-X
Certificateholders receive only a single month's interest
and thus suffer a nearly complete loss of their
investment, all amounts "due" to such holders will
nevertheless have been paid, and such result is consistent
with the rating received on the Class A-X Certificates.
Accordingly, the ratings of the Class A-X Certificates
should be evaluated independently from similar ratings on
other types of securities. There can be no assurance that
another rating agency that assigns a rating to any Class
of Offered Certificates would assign a rating consistent
with those described herein. See "Risk Factors," "Ratings"
and "Prepayment and Yield Considerations."
LEGAL INVESTMENT... The Offered Certificates will not constitute "mortgage
related securities" for purposes of the Secondary Mortgage
Market Enhancement Act of 1984, as amended. The appropriate
characterization of the Offered Certificates under various
legal investment restrictions and, thus, the ability of
investors subject to these restrictions to purchase the
Offered Certificates, may be subject to significant
interpretive uncertainties. All investors whose investment
authority is subject to legal restrictions should consult
their own legal advisors to determine whether and to what
extent the Offered Certificates constitute legal
investments for them. See "Legal Investment" herein and in
the Prospectus.
RISK FACTORS...... See "Risk Factors" immediately following this Summary of
Prospectus Supplement for a discussion of certain factors
that should be considered in connection with the purchase
of the Offered Certificates.
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<PAGE>
RISK FACTORS
Prospective holders of Offered Certificates should consider, among other
things, the following factors in connection with the purchase of the Offered
Certificates.
THE MORTGAGE LOANS
Risks Associated with Commercial and Multifamily Lending Generally. The
Mortgage Loans are secured by Mortgaged Properties consisting of
income-producing real estate. Mortgage Loans secured by commercial and
multifamily properties are markedly different from one-to four-family
residential mortgage loans. Commercial and multifamily lending generally is
viewed as exposing a lender to a greater risk of loss than lending on the
security of single-family residences, because income property lending typically
involves larger loans to single borrowers or groups of related borrowers than
single-family lending. In addition, and unlike loans made on the security of
single-family residences, repayment of loans secured by income-producing real
property typically depends upon the successful operation of the related real
estate project, the businesses operated by the tenants and the creditworthiness
of such tenants, that is, the ability of the applicable property to produce
cash flow. Even the liquidation value of a commercial or multifamily
residential property is determined more by capitalization of the property's
cash flow than any absolute value of buildings and improvements thereon.
Lenders typically look to the debt service coverage ratio ("DSCR") (that is,
the ratio of net cash flow to debt service) of a loan secured by
income-producing property as an important measure of the risk of default on
such a loan.
Volatility. Commercial and multifamily property values and cash flows from
such properties are subject to volatility and may be insufficient to cover debt
service on the related Mortgage Loan at any given time. The volatility of cash
flows available to cover debt service and the property values (which would
affect the ability to refinance the property and proceeds available upon
foreclosure) depend upon a number of factors, including (i) the volatility of
property revenue and (ii) the property's "operating leverage," which generally
refers to (a) the percentage of total property operating expenses in relation
to property revenue, (b) the breakdown of property operating expenses between
those that are fixed and those that vary with revenue and (c) the level of
capital expenditures required to maintain the property and retain or replace
tenants. The net operating income and value of the Mortgaged Properties may be
adversely affected by a number of factors, including but not limited to,
national, regional and local economic conditions (which may be adversely
impacted by plant or military base closings, industry slowdowns and other
factors); local real estate conditions (such as an oversupply of housing,
nursing home beds, retail space, hotel rooms, office space, mobile home and
recreational vehicle space or self-storage facilities); changes or continued
weakness in specific industry segments; changes in applicable healthcare
regulations, including reimbursement requirements, or legal requirements such
as rent stabilization laws; perceptions by prospective tenants and, in the case
of retail properties, retailers and shoppers, of the safety, convenience,
services and attractiveness of the property or the relative convenience of
alternatives such as direct mail, video shopping networks and shopping through
electronic media; the willingness and ability of the property's owner to
provide capable management and adequate maintenance; demographic factors;
retroactive changes to building or similar codes; increases in operating
expenses (such as energy costs); the number of tenants or, if applicable, the
diversity of types of business operated by such tenants; and laws regulating
the maximum rental permitted to be charged to a residential tenant. Properties
with short-term, less creditworthy revenue sources and/or relatively high
operating leverage, such as health care related facilities, hotels and motels
can be expected to have more volatile cash flows, and to respond more quickly
to changes in general economic conditions, than properties with medium to
long-term tenant commitments from creditworthy tenants and/or relatively low
operating leverage. A decline in the real estate market, in the financial
condition of a major tenant or, with respect to hotels and motels, the
financial condition or public perception of a franchisor, or a general decline
in the local or national economy will tend to have a more immediate effect on
the net operating income of such properties and may lead to higher rates of
delinquency or defaults. Historical operating results of the Mortgaged
Properties may not be comparable to future operating results.
The age, construction quality and design of a particular property may
affect the occupancy level as well as the rents that may be charged for
individual leases. The negative effects of poor construction
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<PAGE>
quality or design can increase over time in the form of increased maintenance
and an increased need for capital improvements. Even good construction will
deteriorate over time if the property managers do not schedule and perform
adequate maintenance in a timely fashion. If, during the terms of the Mortgage
Loans, competing properties of a similar type are built in the areas where the
Mortgaged Properties are located or similar properties in the vicinity of the
Mortgaged Properties are substantially updated and refurbished, the value and
net operating income of such Mortgaged Properties could be reduced. There is no
assurance that the value of any Mortgaged Property during the term of the
related Mortgage Loan will equal or exceed the appraised value determined in
connection with the origination of such Mortgage Loan. However, the Mortgage
Loans generally provide for deferred maintenance reserves in an amount
sufficient to remediate any deficiencies identified by the engineering report
issued in connection with origination. In addition, substantially all of the
Mortgage Loans (excluding Credit Lease Loans) require reserves for ongoing
repairs and replacements. Such reserves generally are funded by the related
borrower from the operating cashflow of the Mortgaged Property or otherwise,
unless a Lockbox is in place, in which case such reserves generally will be
funded before any excess cash is released to the related borrower.
Some of the Mortgaged Properties may not readily be converted to
alternative uses if such Mortgaged Properties become unprofitable due to
competition, age of the improvements, decreased demand, zoning restrictions or
other factors. The conversion of Self-Storage Facility Properties, Senior
Housing Properties, Hospitality Properties (or, in the case of the Other
Properties, any of the racquet clubs, movie theatres and health clubs) to
alternative uses generally would require substantial capital expenditures.
Thus, if the operation of any such Mortgaged Properties becomes unprofitable
such that the borrower becomes unable to meet its obligations on the related
Mortgage Loan, the liquidation value of any such Mortgaged Property may be
substantially less, relative to the amount owing on the related loan, than
would be the case if such property were readily adaptable to other uses.
Other multifamily residences and commercial properties located in the
vicinity of the Mortgaged Properties may compete with such Mortgaged Properties
to attract residents, retailers, customers, patients and tenants. Increased
competition frequently leads to lowering of rents in a market and could
adversely affect income from, and market value of, the Mortgaged Properties.
In addition, there are other factors, including changes in zoning or tax
laws, the availability of credit for refinancing and changes in prevailing
interest rate levels that may adversely affect the value of a project (and thus
the borrower's ability to sell or refinance the property) without necessarily
affecting the ability to generate current income. Moreover, as described below,
particular types of income properties are exposed to particular risks.
Borrower Default; Nonrecourse Mortgage Loans. The Mortgage Loans will not
be an obligation of, or be insured or guaranteed by, any governmental entity,
by any private mortgage insurer, or by the Depositor, the Mortgage Loan
Sellers, the Servicer, the Special Servicer, the Trustee or any of their
respective affiliates.
Each Mortgage Loan generally is a nonrecourse loan as to which, in the
event of a default under such Mortgage Loan (other than a default resulting
from fraud or other willful misconduct of the borrower), recourse generally may
be had only against the specific properties and other assets that have been
pledged to secure such Mortgage Loan. See "Certain Characteristics of the
Mortgage Loans." Consequently, payment on each Mortgage Loan prior to maturity
is dependent primarily on the sufficiency of the net operating income of the
related Mortgaged Property, and at maturity (whether at scheduled maturity or,
in the event of a default under the Mortgage Loan, upon the acceleration of
such maturity), on the then-current market value of the related Mortgaged
Property (taking into account any adverse effect of a foreclosure proceeding on
such market value) or the ability of the related borrower to refinance the
Mortgaged Property. Moreover, even if a Mortgage Loan provides for recourse to
a borrower or its affiliates, there can be no assurance that the Trust Fund
ultimately could collect sums due under such Mortgage Loan. Substantially all
of the Mortgage Loans were originated within twelve months before the Cut-off
Date. Consequently, the Mortgage Loans generally do not have as long-standing a
payment
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<PAGE>
history as mortgage loans originated on earlier dates. In general, in the event
of default on a mortgage loan with a relatively high LTV or relatively low DSCR
and foreclosure of the related mortgaged property, proceeds of the sale of the
mortgaged property are more likely to be inadequate to satisfy the outstanding
debt under the related mortgage note.
In order to maximize recoveries on defaulted Mortgage Loans, the Special
Servicer may, under certain limited circumstances, extend the maturity date of
and/or otherwise modify Mortgage Loans that are in default or as to which a
payment default is reasonably foreseeable, including in particular with respect
to Balloon Payments. While the Special Servicer will have a duty to determine
that any such extension or modification is likely to produce a greater recovery
on a net present value basis than liquidation, there can be no assurance that
such flexibility with respect to extensions or modifications will increase the
net present value of receipts from, or proceeds of, Mortgage Loans that are in
default or as to which a default is reasonably foreseeable.
Property Management. The successful operation of a real estate project
also depends on the performance and viability of the property manager of such
project. Different property types vary in the extent to which the property
manager is involved in property marketing, leasing and operations on a daily
basis. Properties deriving revenues primarily from short-term sources (such as
hotels, nursing homes, self-storage facilities and health care facilities)
generally are more management intensive than properties leased to creditworthy
tenants under long-term leases. The property manager is responsible for
responding to changes in the local market, planning and implementing the rental
structure, including establishing levels of rent payments, operating the
properties and providing building services, managing operating expenses and
advising the borrowers so that maintenance and capital improvements can be
carried out in a timely fashion. There can be no assurance that the property
managers will at all times be in a financial condition to continue to fulfill
their management responsibilities under the related management agreements
throughout the terms thereof. Property managers generally are operating
companies and, unlike limited purpose entities, may not be restricted from
incurring debt and other liabilities in the ordinary course of business or
otherwise. Moreover, certain of the Mortgaged Properties are managed by
affiliates of the applicable borrower. Such relationship could raise additional
difficulties in connection with a Mortgage Loan in default or undergoing
special servicing, and a dispute between the partners or members of a borrower
could disrupt the management of the underlying property, which may cause an
adverse effect on cash flow. However, the Mortgage Loans generally permit the
lender to remove the property manager upon the occurrence of an event of
default, a decline in cash flow below specified triggers or other specified
triggers.
Risks Associated with Office Properties. Approximately 14.7% of the
Mortgage Loans (by Initial Pool Balance) are secured by Office Properties (as
defined herein). See "Description of the Mortgage Loans -- Additional Mortgage
Loan Information." Significant factors determining the value of office
properties are the quality of the tenants in the building, the physical
attributes of the building in relation to competing buildings and the strength
and stability of the market area as a desirable business location. Office
properties may be adversely affected by an economic decline in the business
operated by the tenants. The risk of such an adverse effect 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. Approximately
2.2% of the Mortgage Loans (excluding the Credit Lease Loans), based on Initial
Pool Balance, are secured by Office Properties that are single tenant
properties. See "Certain Characteristics of the Mortgage Loans -- Credit Lease
Loans."
Office properties also are subject to competition with other office
properties in the same market. Competition is affected by a property's age,
condition, design (for example, floor sizes and layout), access to
transportation and ability or inability to offer certain amenities to its
tenants, including sophisticated building systems (such as fiberoptic cables,
satellite communications or other base building technological features).
The success of an office property also depends on the local economy. A
company's decision to locate office headquarters in a given area, for example,
may be affected by such factors as labor cost and quality, tax environment and
quality of life issues such as schools and cultural amenities. A central
business district
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<PAGE>
may have an economy that is markedly different from that of a suburb. The local
economy and the financial condition of the owner will impact on an office
property's ability to attract stable tenants on a consistent basis. In
addition, the cost of refitting office space for a new tenant is often more
costly than for other property types.
Risks Associated with Retail Properties. Approximately 25.4% of the
Mortgage Loans (by Initial Pool Balance) are secured by Retail Properties (as
defined herein). See "Description of the Mortgage Loans -- Additional Mortgage
Loan Information." Significant factors determining the value of retail
properties are the quality of the tenants, as well as fundamental aspects of
real estate such as location and market demographics. The correlation between
the success of tenant businesses and property value is more direct with respect
to retail properties than other types of commercial property because a
significant component of the total rent paid by retail tenants often is tied to
a percentage of gross sales. Whether a retail property is "anchored" or
"unanchored" also is an important distinction. Retail properties that are
anchored traditionally have been perceived to be less risky. While there is no
strict definition of an anchor, it generally is understood that a retail anchor
tenant is a tenant that is proportionately large in size and is vital in
attracting customers to the property. As used herein an "anchored property"
means a property in which a nationally or regionally recognized tenant or a
credit tenant occupies a significant portion of the Mortgaged Property, or in
which any tenant occupies more than 20,000 square feet. Approximately 19.1% of
the Mortgage Loans (by Initial Pool Balance) are secured by multi-tenant retail
properties that are "anchored properties." Approximately 3.5% of the Mortgage
Loans (by Initial Pool Balance) are secured by Retail Properties (excluding
Credit Lease Loans) that are "unanchored properties." The loss of an anchor
tenant, the assignment of an anchor tenant's interest under any lease to a less
desirable tenant or a significant decline in the level of an anchor tenant's
business may have an adverse effect on the overall operation of such
properties. The correlation between the success of tenant businesses and credit
quality of the Mortgage Loan is increased when the property is a single tenant
property.
Unlike office or hotel properties, retail properties also face competition
from sources outside a given real estate market. Catalog retailers, home
shopping networks, shopping through electronic media, telemarketing and outlet
centers all compete with more traditional retail properties for consumer
dollars. Continued growth of these alternative retail outlets (which often are
characterized by lower operating costs) could adversely affect the rents
collectible at the Retail Properties securing Mortgage Loans in the Trust Fund.
Risks Associated with Hospitality Properties. Approximately 16.7% of the
Mortgage Loans (by Initial Pool Balance) are secured by full service hotels,
limited service hotels or extended stay hotels. These hotels include hotels
associated with national franchise chains, hotels associated with regional
franchise chains and hotels that are not affiliated with any franchise chain
but may have their own brand identity. See "Certain Characteristics of the
Mortgage Loans -- Additional Mortgage Loan Information" for certain statistical
information on the Hospitality Properties and Hospitality Loans (each as
defined herein).
Various factors, including location, quality and franchise affiliation may
affect the economic performance of a hotel. Adverse economic conditions, either
local, regional or national, may limit the amount that can be charged for a
room and may result in a reduction in occupancy levels. The construction of
competing hotels can have similar effects. To meet competition in the industry
and to maintain economic values, continuing expenditures must be made for
modernizing, refurbishing, and maintaining existing facilities prior to the
expiration of their anticipated useful lives. In connection with such concerns,
with respect to substantially all of the Hospitality Loans, the related
borrower is required to fund reserves for replacements of furniture, fixtures
and equipment ("FF&E"). Because hotel rooms generally are rented for short
periods of time, hotels tend to be more sensitive to adverse economic
conditions and competition than do other commercial properties. Furthermore,
the financial strength and capabilities of the owner and operator of a hotel
may have a substantial impact on such hotel's quality of service and economic
performance. Because limited service lodging establishments are relatively
quick and inexpensive to construct and may quickly reflect a positive value, an
over-building of such lodging establishments could occur in any given region,
which would likely adversely affect occupancy and daily room rates.
Approximately 7.9% of the Mortgage Loans, based on Initial Pool Balance, are
secured by
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limited service hotels. Additionally, in many parts of the country the hotel
and lodging industry is generally seasonal in nature, and this seasonality can
be expected to cause periodic fluctuations in room and other revenues,
occupancy levels, room rates and operating expenses. In order to mitigate the
effects of such periodic fluctuations in the case of certain of the Hospitality
Loans, the related borrower is required to fund seasonal reserves. The demand
for particular accommodations also may be affected by changes in travel
patterns caused by changes in energy prices, strikes, relocation of highways,
the construction of additional highways and other factors.
Certain of the Hospitality Properties are franchisees of national or
regional hotel chains. The viability of any such Hospitality Property depends
in large part on the continued existence and financial strength of the
franchisor, the public perception of the franchise service mark and the
continued existence of the franchise license agreement. In the event of a
foreclosure of a Hospitality Property, a lender may be unable to remove a
franchisor that it desires to replace. In connection with the origination of
each Mortgage Loan secured by a Hospitality Property, the Mortgage Loan Seller
generally has obtained assurances from the franchisor that, in the event of a
foreclosure of a Mortgage Loan secured by such Hospitality Property, the rights
under the franchise agreement for such Hospitality Property would be
transferable to the Trustee (or Servicer or Special Servicer) or purchaser in
any such sale.
Many of the Hospitality Properties have liquor licenses. The liquor
licenses for some of such properties may be held by the property manager rather
than by the related borrower. In addition, some states do not permit liquor
licenses to be held other than by a natural person and, consequently, liquor
licenses for hotel properties located in such jurisdictions are held by an
individual affiliated with the related borrower or manager. Furthermore, the
applicable laws and regulations relating to such licenses generally prohibit
the transfer of such licenses to any person without the prior approval of the
relevant licensing authority. In the event of a foreclosure of a Hospitality
Property, it is unlikely that the Trustee (or Servicer or Special Servicer) or
purchaser in any such sale would be entitled to the rights under the liquor
license for such Hospitality Property, and such party would be required to
apply in its own name for such license. There can be no assurance that a new
liquor license could be obtained or that it could be obtained promptly.
Risks Associated with Credit Lease Properties. Approximately 15.3% of the
Mortgage Loans (by Initial Pool Balance) are secured by Credit Lease
Properties. Because of the ratings of the Tenants or Guarantors, the Credit
Lease Loans were generally underwritten to lower DSCRs and/or higher LTVs than
would otherwise have been acceptable had the related Mortgaged Properties been
leased to non-credit tenants. If a Tenant defaults in its obligations under a
Credit Lease, there can be no assurance that the Mortgaged Property could be
re-let for sufficiently high rent to support debt service on the related Credit
Lease Loan or that Liquidation Proceeds from such Mortgaged Property would be
sufficient to satisfy the borrower's obligations under such Credit Lease Loan.
See "-- Tenant Credit Risk," "-- Credit Quality of Tenants and Guarantors" and
"-- Factors Affecting Lease Enhancement Policy Proceeds" below.
Any rating assigned to a Tenant or Guarantor, as applicable, by a rating
agency will reflect only such rating agency's assessment of long-term unsecured
debt obligations of such entity. Such rating does not imply an assessment of
the likelihood that the Credit Leases will not be terminated (pursuant to their
terms or otherwise), that Principal Prepayments on the Credit Lease Loans will
not be made by the related Borrowers, or that any Prepayment Premium will be
paid or, if paid, will be sufficient to provide the anticipated yield. As a
result, such rating will not address the possibility that a prepayment of a
Mortgage Loan may cause a Certificateholder to experience a lower than
anticipated yield. See "Prepayment and Yield Considerations." See "Certain
Characteristics of the Mortgage Pool -- Additional Mortgage Loan Information --
Cut-off Date Loan Amount by Property Type" for certain statistical information
on the Credit Lease Loans.
Credit Quality of Tenants and Guarantors. Interest and principal payments
on the Credit Lease Loans are dependent principally on the payment by the
related Tenant or by the guarantor of such Tenant's Credit Lease (the
"Guarantor"), if any, of Monthly Rental Payments and other payments due under
the terms of its Credit Lease. A downgrade in the credit rating of any of the
Tenants and/or the Guarantors may have an adverse effect on the rating of the
Offered Certificates.
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<PAGE>
If a Tenant or Guarantor defaults on its obligation to make Monthly Rental
Payments under the related Credit Lease or the associated guarantee, as the
case may be, the borrower under the related Credit Lease Loan may not have the
ability to make required payments on such Credit Lease Loan. If a payment
default on a Credit Lease Loan occurs, the Special Servicer may be entitled to
foreclose upon or otherwise realize upon the related Credit Lease Property to
recover amounts due under the Credit Lease Loan, and also will be entitled to
pursue any available remedies against the defaulting Tenant and any Guarantor,
which may include rights to all future Monthly Rental Payments. If the default
occurs before significant amortization of the Credit Lease Loan has occurred
and no recovery is available from the related borrower, the Tenant or any
Guarantor, it is unlikely in most cases that the Special Servicer will be able
to recover in full the amounts then due under the Credit Lease Loan. See
"Certain Characteristics of the Mortgage Loans -- Credit Lease Loans."
Factors Affecting Lease Enhancement Policy and Residual Value Policy
Proceeds. With respect to each Credit Lease Loan not secured by the assignment
of a Bond-Type Lease (as defined herein), the Trustee generally is the
beneficiary of one or more non-cancelable insurance policies ("Lease
Enhancement Policies") obtained to cover certain lease termination and, with
respect to losses arising from condemnation, rent abatement events, arising out
of a casualty to, or condemnation of, a Credit Lease Property issued by Chubb
Custom Insurance Company ("Chubb" or the "Lease Enhancement Insurer"). As of
the Cut-off Date, Chubb was rated "AAA" and "Aaa" by S&P and Moody's,
respectively. Each Lease Enhancement Policy provides that, in the event of a
permitted termination by a Tenant of a Credit Lease occurring as a result of a
casualty or a condemnation, the Lease Enhancement Insurer will pay the Servicer
on behalf of the Trustee a payment of all outstanding principal plus, subject
to certain limitations, interest on the related Credit Lease Loan. The Lease
Enhancement Insurer generally is not required to pay any amount due under a
Credit Lease Loan other than principal and, subject to the limitation above,
accrued interest, and therefore is not required to pay any Prepayment Premium
or Yield Maintenance Charge due thereunder or any amounts the related borrower
is obligated to pay thereunder to reimburse the Servicer or the Trustee for
outstanding Servicing Advances.
With respect to fourteen Credit Lease Loans, representing approximately
4.3% of the Initial Pool Balance, that do not fully amortize over their terms,
the related borrowers have obtained residual value insurance policies (the
"Residual Value Policies") to insure against any diminution in the value of
each related Credit Lease Property as a result of changes in market conditions
in the event that a liquidation of the related Credit Lease Properties is
required in connection with a default in the payment of the Balloon Payment
required under such Mortgage Loan. The insurer will be required to pay the
amount of any deficiency between the proceeds of the sale of any of the related
Credit Lease Properties and the indebtedness remaining under such Credit Lease
Loans that is secured by such property at its maturity, or if the sale of such
Credit Lease Properties cannot take place, the insurer will be required to pay
the full amount of the remaining indebtedness. The Residual Value Policies were
issued by R.V.I. America Insurance Company (the "Residual Value Insurer"),
which had a claims paying rating as of the Cut-off Date of "A" by Fitch and "A"
by S&P.
Certificateholders may be adversely affected by any failure by the Lease
Enhancement Insurer or the Residual Value Insurer to pay under the terms of its
Lease Enhancement Policies or Residual Value Policies, respectively, and any
downgrade of the credit rating of the Lease Enhancement Insurer and the
Residual Value Insurer may adversely affect the ratings of the Offered
Certificates. See "Certain Characteristics of the Mortgage Loans -- Credit
Lease Loans."
Risks Associated with Multifamily Properties. Approximately 16.3% of the
Mortgage Loans (by Initial Pool Balance) are secured by multifamily apartment
buildings. All of the Mortgage Loans in Loan Group 2, representing
approximately 12.1% of the Initial Pool Balance, are Multifamily Loans. See
"Certain Characteristics of the Mortgage Loans -- Additional Mortgage Loan
Information" for certain statistical information on such loans.
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<PAGE>
Significant factors determining the value and successful operation of a
multifamily property are the location of the property, the number of competing
residential developments in the local market (such as apartment buildings,
manufactured housing communities and site-built single family homes), the
physical attributes of the multifamily apartment building (such as its age and
appearance) and state and local regulations affecting such property. In
addition, the successful operation of an apartment building will depend upon
other factors, such as its reputation, the ability of management to provide
adequate maintenance and insurance, and the types of services it provides.
Certain states regulate the relationship of an owner and its tenants.
Commonly, these laws require a written lease, good cause for eviction,
disclosure of fees, and notification to residents of changed land use, while
prohibiting unreasonable rules, retaliatory evictions and restrictions on a
resident's choice of unit vendors. Apartment building owners have been the
subject of suits under state "Unfair and Deceptive Practices Acts" and other
general consumer protection statutes for coercive, abusive or unconscionable
leasing and sales practices. A few states offer more significant protection.
For example, there are provisions that limit the bases on which a landlord may
terminate a tenancy or increase its rent or prohibit a landlord from
terminating a tenancy solely by reason of the sale of the owner's building.
In addition to state regulation of the landlord-tenant relationship,
numerous counties and municipalities impose rent stabilization and/or rent
control on apartment buildings. These ordinances may limit rent increases to
fixed percentages, to percentages of increases in the consumer price index, to
increases set or approved by a governmental agency, or to increases determined
through mediation or binding arbitration. In many cases, the rent control laws
do not permit vacancy decontrol. Local authority to impose rent control is
preempted by state law in certain states, and rent control generally is 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 in such states may be subject to various forms of rent
control with respect to those tenants. Any limitations on a borrower's ability
to raise property rents may impair such borrower's ability to repay its
Mortgage Loan from its net operating income or the proceeds of a sale or
refinancing of the related Mortgaged Property.
Adverse economic conditions, either local or national, may limit the
amount of rent that can be charged and may result in a reduction in timely rent
payments or a reduction in occupancy levels. Occupancy and rent levels also may
be affected by construction of additional housing units, local military base or
factory closings and national and local politics, including current or future
rent stabilization and rent control laws and agreements. In addition, the level
of mortgage interest rates may encourage tenants to purchase single-family
housing. The location and construction quality of a particular building may
affect the occupancy level as well as the rents that may be charged for
individual units. The characteristics of a neighborhood may change over time or
in relation to newer developments.
Risks Associated with Cooperative Properties. Approximately 4.6% of the
Mortgage Loans (by Initial Pool Balance) are secured by cooperative housing
properties ("Cooperative Properties"). A cooperative apartment building and the
land under the building is owned or leased by a non-profit cooperative
corporation. The cooperative owns all the apartment units in the building and
all common areas. The cooperative is directly responsible for building
management and payment of real estate taxes and hazard and liability insurance
premiums. A cooperative is owned by tenant-stockholders who, through ownership
of stock, shares or membership certificates in the corporation, receive
proprietary leases or occupancy agreements which confer exclusive rights to
occupy specific apartments or units. Generally, a tenant-stockholder of a
cooperative must make a monthly maintenance payment to the cooperative
representing such tenant-stockholder's pro rata share of the cooperative's
payments for its mortgage loan real property taxes, maintenance expenses and
other capital expenses and ordinary expenses, less any other income that the
cooperative may realize. Such payments to the cooperative are in addition to
any payments of principal and interest the tenant-stockholder must make on any
loans of the tenant-stockholder secured by its shares in the cooperative.
Unanticipated expenditures in some cases may be paid by raising maintenance
payments or through special assessments on the tenant-stockholders.
In a typical cooperative conversion plan, the owner of a rental apartment
building contracts to sell the building to a newly-formed cooperative
corporation. Under a typical non-eviction plan, shares are
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<PAGE>
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. The sponsor usually also controls the cooperative's board of
directors and management for a limited period of time until the controlling
shares in the corporation are sold to tenant stockholders. A tenant at the time
of conversion who chooses not to purchase shares is entitled to reside in the
unit as a subtenant from the owner of the shares allocated to such apartment
unit. Any applicable rent control or rent stabilization laws would continue to
be applicable to such subtenancy and the subtenant may be entitled to renew its
lease indefinitely and would continue to be protected from rent increases above
those permitted by any applicable rent control and rent stabilization laws. The
stockholder is responsible for the maintenance payments to the cooperative
without regard to its receipt or non-receipt of rent from the subtenant, which
may be lower than maintenance payments on the units. Newly-formed cooperatives
typically have the greatest concentration of non-tenant stockholders. In
addition, the sponsor of the cooperative conversion may own a significant
percentage of the units in the cooperative. If the sponsor controls a
significant number of units and is unable to or does not make required
payments, the ability of the related borrower to meet debt service obligations
will be adversely affected.
Each borrower's ability to meet debt service obligations on its Mortgage
Loan, as well as all other operating expenses, is dependent primarily upon the
receipt of maintenance payments from the tenant-stockholders, any rental income
from units or commercial areas that the cooperative might control and sales
proceeds from units that are sold. The net operating income of the Mortgaged
Properties and the market value of the Mortgaged Properties may be adversely
affected if space in the Mortgaged Properties cannot be leased, if tenants are
unable to meet their lease obligations or for any other reason rental payments
cannot be collected or if tenant-stockholders are unable to make their
maintenance payments or pay any special assessments.
In addition, because qualification as a "cooperative housing corporation"
under the Code is generally made on a year-to-year basis, there can be no
assurance that the borrowers will continue to qualify for any subsequent year.
If a borrower fails to qualify for one or more years, the value of the
collateral securing the related Mortgage Loan could be impaired because such
favorable tax treatment would not be available to tenant-stockholders with
respect to those years.
In addition, a lender that takes possession of a Cooperative Property will
take the property subject to any applicable rent control laws, rent
stabilization laws and tenants' rights laws. Following foreclosure of a
Mortgage Loan, such proprietary lessees may be entitled to remain in occupancy
of their respective apartments at rents that are regulated by the applicable
jurisdiction and that may be substantially below market rents. A recent New
York case, Federal Home Loan Mortgage Corporation v. New York Division of
Housing and Community Renewal, 87 N.Y. 2d 325 (1995), has held that "units in a
rent stabilized building that was converted to cooperative ownership revert to
units subject to the New York City Rent Stabilization Law (see, NYC Admin. Code
Section 26-501, et. seq.) upon the foreclosure of the cooperative's underlying
mortgage and the return of the building to operation as rental housing." The
case, however, did not resolve the uncertainty as to the appropriate rent
level. It is anticipated that this issue will be addressed by regulations that
are being promulgated by the New York State Division of Housing and Community
Renewal. The rights of such proprietary lessees to remain in their apartments,
and at potentially below market rents, may adversely affect the marketability
of such mortgaged property or the price at which such mortgaged property may be
sold. DSCRs at origination of the Cooperative Properties as multifamily rental
properties set forth in this Prospectus Supplement were calculated on the
assumption that each apartment (other than apartments that, as of the date of
the applicable appraisal, were rent controlled or rent stabilized apartments)
could be rented at a market rate.
Risks Associated with Industrial Properties. Approximately 2.5% of the
Mortgage Loans (by Initial Pool Balance) are secured by Industrial Properties
(as defined herein). See "Description of the Mortgage Loans -- Additional
Mortgage Loan Information." Significant factors determining the value of
Industrial Properties are the quality of tenants, building design and
adaptability and the location of the property. Concerns about the quality of
tenants, particularly major tenants, are similar in both Office Properties and
Industrial Properties, although Industrial Properties more frequently are
dependent on a single tenant.
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<PAGE>
Approximately 1.0% of the Mortgage Loans (by Initial Pool Balance) are secured
by single tenant Industrial Properties. Industrial Properties may be adversely
affected by reduced demand for industrial space occasioned by a decline in a
particular industry segment (for example, a decline in defense spending), and a
particular Industrial Property that suited the needs of its original tenant may
be difficult to re-let to another tenant or may become functionally obsolete
relative to newer properties. In addition, properties used for many Industrial
Purposes are more prone to environmental concerns than other property types.
Aspects of building site design and adaptability affect the value of an
Industrial Property. Site characteristics that are valuable to an industrial
property include clear heights, column spacing, zoning restrictions, number of
bays and bay depths, divisibility, truck turning radius and overall
functionality and accessibility.
Location also is important because an Industrial Property requires the
availability of labor sources, proximity to supply sources and customers and
accessibility to rail lines, major roadways and other distribution channels.
Risks Associated with Mobile Home/Recreational Vehicle Park Properties.
Approximately 2.3% of the Mortgage Loans (by Initial Pool Balance) are operated
as mobile home parks, recreational vehicle parks or combinations thereof. See
"Description of the Mortgage Loans -- Additional Mortgage Loan Information."
Significant factors determining the value of mobile home park properties
generally are similar to the factors affecting the value of multifamily
residential properties. In addition, mobile home park properties are "special
purpose" properties that generally cannot be readily converted to general
residential, retail or office use. Additionally, certain states regulate
changes in mobile home park use and require that the landlord give written
notice to its tenants a substantial period of time prior to any projected
change. Consequently, if the operation of any of the Mobile Home/Recreational
Vehicle Properties becomes unprofitable due to competition, age of the
improvements or other factors such that the borrower becomes unable to meet its
obligation on the related Mortgage Loan, the liquidation value of that Mobile
Home/Recreational Vehicle Property may be substantially less, relative to the
amount owed on the Mortgage Loan, than would be the case if the Mobile
Home/Recreational Vehicle Property were readily adaptable to other uses.
Risks Associated with Commercial Other/Mixed Use Properties. Approximately
1.0% of the Mortgage Loans (by Initial Pool Balance) are operated as mixed use
properties, including racquet clubs, movie theatres and health clubs. See "--
Risks Associated with Commercial and Multifamily Lending Generally," and "--
Volatility" above.
Risks Associated with Healthcare Properties. Approximately 1.2% of the
Mortgage Loans (by Initial Pool Balance) are secured by Mortgaged Properties
operated as Healthcare Properties, and include nursing home and congregate care
facilities. See "Description of the Mortgage Loans -- Additional Mortgage Loan
Information" for certain statistical information on such loans. Significant
factors determining the value of nursing homes, congregate care facility and
hospital properties include federal and state laws, competition with similar
properties on a local and regional basis and the continued availability of
revenue from government reimbursement programs, primarily Medicaid and
Medicare.
Hospitals and providers of long-term nursing care and other medical
services are subject to federal and state laws that relate to the adequacy of
medical care, distribution of pharmaceuticals, rate setting, equipment,
personnel, operating policies and additions to facilities and services and, to
the extent dependent on patients whose fees are reimbursed by private insurers,
to the reimbursement policies of such insurers. In addition, facilities where
such care or other medical services are provided are subject to periodic
inspection by governmental authorities to determine compliance with various
standards necessary for continued licensing under state law and continued
participation in the Medicaid and Medicare reimbursement programs. The failure
of any of such borrower to maintain or renew any required license or regulatory
approval could prevent it from continuing operations as a Mortgaged Property
(in which case no revenues would be received from such property or portion
thereof requiring licensing) or, if applicable, bar it from participation in
government reimbursement programs. Furthermore, in the event of foreclosure,
there can be no assurance that the Trustee (or Servicer or Special Servicer) or
purchaser in a foreclosure sale would be entitled to the rights under such
license, and such party may have to apply in its own right for such a license.
There can be no assurance that a new license could be obtained.
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Under applicable federal and state Medicare and Medicaid laws and
regulations, only the provider who actually furnished the related medical goods
and services generally may sue for or enforce its rights to reimbursement.
Accordingly, in the event of foreclosure, the Trustee, the Servicer, the
Special Servicer or a subsequent lessee or operator of the property generally
would not be entitled to obtain from federal or state governments any
outstanding reimbursement payments relating to services furnished at the
respective properties prior to such foreclosure.
The operators of hospitals, nursing homes and other healthcare facilities
are likely to compete on a local and regional basis with others that operate
similar facilities, some of which competitors may be better capitalized, may
offer services not offered by such operators or may be owned by non-profit
organizations or government agencies supported by endowments, charitable
contributions, tax revenues and other sources not available to such operators.
The successful operation of a Mortgaged Property that is a hospital, nursing
home or other healthcare facility will generally depend upon the number of
competing facilities in the local market, as well as upon other factors such as
its age, appearance, reputation and management, the types of services it
provides and the quality of care and the cost of that care.
Hospitals, nursing home facilities and other healthcare facilities may
receive a substantial portion of their revenues from government reimbursement
programs, primarily Medicaid and Medicare. Medicaid and Medicare are subject to
statutory and regulatory changes, retroactive rate adjustments, administrative
rulings, policy interpretations, delays by fiscal intermediaries and government
funding restrictions. Moreover, governmental payors have employed
cost-containment measures that limit payments to healthcare providers and have
been subject to initiatives for national health care reform that could further
limit those payments. Accordingly, there can be no assurance that payments
under government reimbursement programs will, in the future, be sufficient to
fully reimburse the cost of caring for program beneficiaries. If not, net
operating income of the Mortgaged Properties that receive revenues from those
sources, and consequently the ability of the related borrowers to meet their
Mortgage Loan obligations, could be adversely affected.
Hospitals and nursing homes also receive a substantial portion of their
revenues from other third-party payors such as private health insurance plans.
There can be no assurance that third-party reimbursement will continue to be
available for hospital and nursing home services, or at what such rate it will
be available. Congress and certain state legislatures are considering reforms
in the health care industry that may affect current reimbursement practices.
Furthermore, the development of managed care programs in which the providers
contract to provide comprehensive health care to a patient population at a
fixed cost per person has given rise to similar pressures on health care
providers to lower costs.
Risks Associated with Self-Storage Facilities. Approximately 0.5% of the
Mortgage Loans (by Initial Pool Balance) are secured by self-storage
facilities. Self-storage facilities are considered vulnerable to competition
because both acquisition costs and break-even occupancy are relatively low. The
conversion of self-storage facilities to alternative uses generally would
require substantial capital expenditures. Thus, if the operation of any of the
self-storage Mortgaged Properties becomes unprofitable due to decreased demand,
competition, age of improvements or other factors such that the borrower
becomes unable to meet its obligation on the related Mortgage Loan, the
liquidation value of the self-storage Mortgaged Property may be substantially
less, relative to the amount owing on the Mortgage Loan, than would be the case
if the self-storage Mortgaged Property were readily adaptable to other uses.
Tenant privacy, anonymity and efficient access also may heighten environmental
risks. The environmental assessments discussed herein did not include an
inspection of the contents of the self-storage units included in the
self-storage Mortgaged Properties, and there is no assurance that all of the
units included in the self-storage Mortgaged Properties are free from hazardous
substances or other pollutants or contaminants or will remain so in the future;
however, substantially all of the lease agreements used in connection with such
Mortgaged Properties prohibit the storage of hazardous substances, pollutants
or contaminants.
Tenant Credit Risk. Approximately 6.1% of the Mortgage Loans (by Initial
Pool Balance) (other than the Credit Lease Loans) are secured by single tenant
properties. For a description of risk factors
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relating to single tenant properties, see "-- Credit Quality of Tenants and
Guarantors" below. Income from and the market value of retail, office and
industrial Mortgaged Properties would be adversely affected if space in such
Mortgaged Properties could not be leased, if tenants were unable to meet their
lease obligations, if a significant tenant were to become a debtor in a
bankruptcy case under any bankruptcy or other similar law related to creditors
rights or if for any other reason rental payments could not be collected. If
tenant sales in the Mortgaged Properties that contain retail space were to
decline, rents based upon such sales would decline and tenants may be unable to
pay their rent or other occupancy costs. Upon the occurrence of an event of
default by a tenant, delays and costs in enforcing the lessor's rights could be
experienced. Repayment of the Mortgage Loans will be affected by the expiration
of space leases, tenant defaults and the ability of the respective borrowers to
renew the leases or relet the space on comparable terms. Even if vacated space
is successfully relet, the costs associated with reletting, including tenant
improvements, leasing commissions and free rent, could exceed the amount of any
reserves maintained for such purpose and could reduce cash flow from the
Mortgaged Properties. Although certain of the Mortgage Loans require the
borrower to maintain escrows for such expenses, there can be no assurance that
such factors will not adversely affect the ability of a borrower to repay a
mortgage loan.
In the case of retail properties, the failure of an anchor tenant to renew
its lease, the termination of an anchor tenant's lease, the bankruptcy or
economic decline of an anchor tenant, an anchor tenant's "going dark" or the
cessation of its business, notwithstanding its continued payment of rent, can
have a particularly negative effect on the economic performance of a shopping
center property, given the importance of anchor tenants in attracting traffic
to other stores. In addition, the failure of one or more specified tenants,
such as an anchor tenant, to operate from its premises may give certain tenants
the right to terminate or reduce rents under their leases. For several Mortgage
Loans, the land and improvements utilized by an anchor or other tenant are not
subject to the related mortgage. Additionally, certain Retail Loans permit
undeveloped land adjacent to a Retail Property to be released from the related
Mortgage to be used for an anchor or other tenant. In either event, the failure
to be secured by a lien on the property utilized by the anchor or other tenant
could adversely affect the related Mortgage Loan.
Certain Risks Associated with Foreign Law. Six Mortgage Loans,
representing approximately 7.6% of the Initial Pool Balance, are secured by
Mortgaged Properties located outside of the United States. Loan No. 3, a loan
on a Hospitality Property known as the Ritz-Carlton Hotel (the "Ritz-Carlton
Property"), is located in Cancun, Mexico, and represents approximately 3.0% of
the Initial Pool Balance. Loan No. 6, which is a Mortgage Loan on a Retail
Property (the "Plaza Rio Hondo Property") and Loan Nos. 29, 33 and 63, which
are Mortgage Loans on three Retail Properties (the "Senorial Plaza Property,"
the "Rexville Plaza Property" and the "Plaza del Atlantico Property,"
respectively, and, collectively, the "Puerto Rico Crossed Properties") are
located in Puerto Rico and collectively represent approximately 4.2% of the
Initial Pool Balance. Loan No. 62, a Retail Property located in St. Thomas,
U.S. Virgin Islands, represents approximately 0.4% of the Initial Pool Balance.
See "Certain Characteristics of the Mortgage Loans -- Significant Mortgage
Loans -- The Ritz-Carlton Loan," "-- The Plaza Rio Hondo Loan." and "-- The
Puerto Rico Crossed Loans." There are certain unique legal and other risks
associated with a financing secured by a property that is located outside of
the United States. See "-- Exercise of Remedies; Realization Upon Defaulted
Mortgage Loans" and "Certain Characteristics of the Mortgage Loans -- Certain
Legal Aspects of Foreign Loans."
A foreign state has the ability to influence a transaction in many ways,
including but not limited to the imposition of exchange controls that limit the
export of local or foreign currency, declaration of a moratorium on payments on
external debt, diversion of debt service payments or expropriation of property.
In addition, there is the risk that a country's existing social structure will
be subject to violent upheaval or other crisis.
Certain Risks Associated with the Ritz-Carlton Loan. The Mexican
government has exercised and continues to exercise a significant influence over
many aspects of the Mexican economy, which may affect the value of the
Ritz-Carlton Property and the Ritz-Carlton Borrower's ability to repay the
Ritz-Carlton Loan. Developments in Mexico that could adversely affect the value
of the Ritz-Carlton Property and the ability of the Ritz-Carlton Borrower to
repay the Ritz-Carlton Loan include currency devaluation, high
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inflation, high unemployment, restrictions on the repatriation of funds, social
and political unrest, expropriation of the Ritz-Carlton Property and
moratoriums or other limitations on the enforceability of the rights of various
obligee's and restrictions on ownership of property by foreign entities.
Nationalism, expropriation, confiscatory taxation, political changes,
governmental regulation, social instability or diplomatic developments could
materially adversely affect the economy of Mexico, the value of the
Ritz-Carlton Property, the willingness of the Ritz-Carlton Borrower to make
timely payments on the Ritz-Carlton Loan or the ability of the Trustee to
realize on the security afforded by the Ritz-Carlton Property. The political
and economic environment in Mexico is volatile and could affect the value of
Ritz-Carlton Property and the ability of the Trustee to realize upon the
security afforded by the Ritz-Carlton Property. In recent years, there have
been a number of incidences of political unrest, as well as crimes directed at
foreigners. Cancun is an important tourist center and the Mexican government
has implemented safety procedures to protect the region from political unrest
and incidents of crime.
To the extent that the income of the Ritz-Carlton Borrower is received in
currencies other than U.S. dollars, there is a risk that changes in currency
exchange rates could adversely affect the amount of U.S. dollars available for
debt service. Based on information provided by the Ritz-Carlton Borrower,
approximately 95% of the Ritz-Carlton Borrower's 1997 revenues were denominated
in U.S. dollars and approximately 80% of the 1997 net operating income of the
Ritz-Carlton Borrower was settled in U.S. dollars. There can be no assurance,
however, that the percentage of such income that is received in U.S. dollars
will not decline, thus increasing the Ritz-Carlton Borrower's exposure to
currency risk. Because substantially all of the hotel's revenues are
denominated in U.S. dollars and substantially all of its operating expenses
(other than management fees) are settled in pesos, the Ritz-Carlton Borrower
also is exposed to currency risk in the event of increases in the value of the
Mexican peso. However, the exchange rate for the conversion of Mexican pesos to
U.S. dollars has not materially decreased for any sustained period over the
last 15 years. Although the Depositor does not believe that there will be any
material increase in the relative value of the peso in the foreseeable future,
neither the Depositor nor the Underwriters make any representation with respect
to the peso-dollar exchange rate, and potential investors must make their own
determination of the likelihood of such an occurrence. For a discussion of
foreign investment, exchange controls, taxation and other issues relating to
the Ritz Carlton Loan, see "Certain Characteristics of the Mortgage Loans --
Certain Legal Aspects of Foreign Mortgage Loans".
Risks Associated With Concentration of Mortgage Loans; Borrowers. Several
of the Mortgage Loans have Cut-off Date Principal Balances that are
substantially higher than the average Cut-off Date Principal Balance. In
addition, there are several groups of Mortgage Loans ("Related Borrower Loans")
with respect to which the borrowers are affiliated. The largest Mortgage Loan
has a Cut-off Date Principal Balance that represents approximately 4.7% of the
Initial Pool Balance. The second largest Mortgage Loan has a Cut-off Date
Principal Balance that represents approximately 3.4% of the Initial Pool
Balance. The third largest Mortgage Loan has a Cut-off Date Principal Balance
that represents approximately 3.0% of the Initial Pool Balance. The ten largest
Mortgage Loans have Cut-off Date Principal Balances that represent, in the
aggregate, approximately 27.2% of the Initial Pool Balance. See "Certain
Characteristics of the Mortgage Loans -- Significant Mortgage Loans" for a
description of these Mortgage Loans.
In general, concentrations in a mortgage pool in which one or more loans
that have outstanding principal balances that are substantially larger than the
other mortgage loans in such pool can result in losses that are more severe,
relative to the size of the pool, than would be the case if the aggregate
balance of such pool were more evenly distributed among the mortgage loans in
such pool.
As set forth in the following tables, approximately 29.3% of the Mortgage
Loans based on the Initial Pool Balance are secured by more than one Mortgaged
Property (24.8% of such Mortgage Loans being Multi-Property Loans and 4.5% of
such Mortgage Loans being Crossed Loans) and approximately 26.7% of the
Mortgage Loans were made to affiliated borrowers that are not
cross-collateralized loans ("Related Borrower Loans"). Although securing a
Mortgage Loan with multiple properties generally reduces the risk that the
inability of a Mortgaged Property to generate net operating income sufficient
to pay debt service will result in defaults and ultimate losses, such Mortgaged
Properties generally will be managed by the same managers or affiliated
managers or will be subject to the management of the same borrowers or
affiliated borrowers.
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MORTGAGE LOANS SECURED BY MORE THAN ONE MORTGAGED PROPERTY
<TABLE>
<CAPTION>
NUMBER OF
LOAN NO. LOAN NAME PROPERTIES
- ---------- --------------------------------------- ------------
<S> <C> <C>
MULTI-PROPERTY LOANS
1 Combined Properties Summary 15
2 Edens and Avant Summary 21
4 Reichmann / Intell Portfolio Summary 5
10 Alexandria Single Tenant Portfolio 2
Summary
15 G.I. Joe Summary 6
18 Pantzer Cross-Summary 3
19 Sadler Portfolio Summary 10
20 American Restaurant Group Summary 8
21 Smith Hotel Portfolio Summary 3
24 Essex/Brookdale Summary 2
31 Wentwood Portfolio Summary 7
35 Torgerson Project Summary 6
36 Builders Square 2
51 Inland Cold Storage Summary 2
52 Bay Park Center Summary 2
54 Shemin Nursery Portfolio Summary 6
61 San Ant Res. Inn/Fair Inn Summary 2
64 Ind. Apt Res. Inn/Fair Inn Summary 2
70 Host Funding Portfolio Summary 3
74 RHC-Continental/Mulberry Summary 2
83 South Beach Multis Summary 15
91 Essex Hospitality Summary 3
94 Kratsa Portfolio Summary 2
100 Super 8 4
102 1249 and 1255 Boylston Street 2
120 Meadowbrook Office Park Summary 2
131 Delta Hotels Summary 2
171 Rite Aid Macon & College Park 2
Summary
188 283 Bleeker St. & 59-61 Thompson St. 2
197 Keith Properties 5
209 Day's Inn/Denny's Summary 2
217 Parkview Nursing Portfolio Summary 4
221 Great Woods Office Park 2
238 Holiday Inn/Heritage Inn Summary 2
271 Greenbrier Partners I 2
299 Two (2) US Post Offices 2
302 Indian Hills Mobile/Valley View Summary 2
320 Clay/Morrison Summary 2
Total .................................
<CAPTION>
% OF INITIAL
CUT-OFF DATE POOL
LOAN NO. PRINCIPAL BALANCE BALANCE RELEASE PRICE(1)
- ---------- ------------------ --------------- -----------------------------------
<S> <C> <C> <C>
1 $115,590,907 4.66% 125% of Property Release Amount
2 $ 84,100,000 3.39% 125% of Property Release Amount
4 $ 74,857,607 3.02% 125% of Property Release Amount
10 $ 36,478,677 1.47% 125% of Property Release Amount(2)
15 $ 20,979,468 0.85% 125% of Property Release Amount
18 $ 20,111,247 0.81% None Permitted
19 $ 19,683,975 0.79% 125% of Property Release Amount
20 $ 18,546,279 0.75% None Permitted
21 $ 17,983,571 0.72% None Permitted
24 $ 16,975,768 0.68% None Permitted
31 $ 16,177,074 0.65% 125% of Property Release Amount
35 $ 15,559,810 0.63% None Permitted
36 $ 14,500,000 0.58% 110% of Property Release Amount
51 $ 11,542,256 0.47% None Permitted
52 $ 11,443,725 0.46% 125% on New Appraised Amount
54 $ 11,390,457 0.46% None Permitted
61 $ 9,990,663 0.40% 125% of Property Release Amount
64 $ 9,491,130 0.38% 125% of Property Release Amount
70 $ 9,067,689 0.37% 125% of Property Release Amount
74 $ 8,847,471 0.36% 110% of Property Release Amount
83 $ 8,290,186 0.33% 125% of Property Release Amount
91 $ 7,553,519 0.30% 100% of Property Release Amount
94 $ 7,163,548 0.30% 125% of Property Release Amount
100 $ 6,838,507 0.28% 125% of Property Release Amount
102 $ 6,800,000 0.27% None Permitted
120 $ 5,500,000 0.22% None Permitted
131 $ 4,896,100 0.20% None Permitted
171 $ 3,884,658 0.16% None Permitted
188 $ 3,342,509 0.14% None Permitted
197 $ 3,188,665 0.13% 125% of Property Release Amount
209 $ 2,908,162 0.12% None Permitted
217 $ 2,707,586 0.11% None Permitted
221 $ 2,592,147 0.10% None Permitted
238 $ 2,316,187 0.09% None Permitted
271 $ 1,896,336 0.08% None Permitted
299 $ 1,388,001 0.06% None Permitted
302 $ 1,349,263 0.05% None Permitted
320 $ 997,168 0.04% None Permitted
------------ -----
$616,930,316 24.85%
============ =====
</TABLE>
- -------
(1) The release price shown is the percentage of the Property Release Amount
(as defined herein) that the borrower must prepay or defease, as
applicable, in order to obtain the release of an individual Mortgaged
Property from the lien of the related Mortgage.
(2) 100% of Property Release Amount in case of condemnation only.
S-41
<PAGE>
<TABLE>
<CAPTION>
% OF INITIAL
NUMBER OF CUT-OFF DATE POOL
LOAN NO. LOAN NAME PROPERTIES PRINCIPAL BALANCE BALANCE RELEASE PRICE(1)
- ---------- -------------------------------- ------------ ------------------ --------------- --------------------------------
<S> <C> <C> <C> <C> <C>
CROSSED LOANS
29 Plaza del Atlantico $ 16,190,416 0.65% 125% of Property Release Amount
33 Senioral Plaza 16,090,475 0.65% 125% of Property Release Amount
63 Rexville Plaza 9,694,261 0.39% 125% of Property Release Amount
------------ ----
Total .......................... $ 41,975,152 1.69%
============ ====
11 Elder-Beerman at the Dayton Mall $ 27,509,152 1.11% None Permitted
81 Elder-Beerman at Millcreek Mall 8,490,238 0.34% None Permitted
------------ ----
Total .......................... $ 35,999,390 1.45%
============ ====
178 PETsMART Store No. 475 $ 3,689,244 0.1% None Permitted
179 PETsMART Store No. 586 3,689,244 0.1% None Permitted
------------ ----
Total .......................... $ 7,378,488 0.30%
============ ====
177 Hoyts Cinemas - Concord, NH $ 3,733,234 0.15% None Permitted
198 Hoyts Cinemas - Hooksett, NH 3,185,239 0.13% None Permitted
------------ ----
Total .......................... $ 6,918,473 0.30%
============ ====
176 PETsMART Store No. 688 $ 3,788,953 0.15% None Permitted
212 PETsMART Store No. 648 2,791,860 0.11% None Permitted
------------ ----
Total .......................... $ 6,580,313 0.26%
============ ====
172 PETsMART Store No. 102 $ 3,846,309 0.15% None Permitted
219 PETsMART Store No. 145 2,692,151 0.11% None Permitted
------------ ----
Total .......................... $ 6,538,460 0.26%
============ ====
313 Quality Inn-Maggie Valley $ 1,142,455 0.05% 100% of Property Release Amount
237 Quality Inn-Sylva 2,334,582 0.09% None Permitted
------------ ----
Total .......................... $ 3,477,037 0.14%
============ ====
308 Palm Haven Mobile Home Park $ 1,197,312 0.05% 100% of Property Release Amount
319 East Pine Ridge Mobile Home Park 997,731 0.04% 100% of Property Release Amount
------------ ----
Total .......................... $ 2,195,043 0.08%
============ ====
TOTAL .......................... $111,062,856 4.47%
============ ====
</TABLE>
- -------
(1) The release price shown is the percentage of the Property Release Amount
(as defined herein) that the borrower must prepay or defease, as
applicable, in order to obtain the release of an individual Mortgaged
Property from the lien of the related Mortgage.
S-42
<PAGE>
RELATED BORROWER LOANS
<TABLE>
<CAPTION>
CUT-OFF DATE % OF INITIAL
LOAN NO. PROPERTY NAME PRINCIPAL BALANCE POOL BALANCE
- ---------- ------------------------------------- ------------------- ---------------
<S> <C> <C> <C>
172 PETsMART No. 102--Aliso Viejo, CA $ 3,846,309
219 PETsMART No. 145--Prescott, AZ 2,692,151
212 PETsMART No. 648--Murphreesboro, TN 2,791,860
176 PETsMART No. 688--Northville, MI 3,788,953
165 PETsMART No. 157--Glendale, AZ 4,025,692
185 PETsMART No. 689--Taylor, MI 3,390,116
196 PETsMART No. 239--Bannister, MO 3,189,766
193 PETsMART No. 685--Roseville, MI 3,290,407
16 Kmart #4987--Carson, CA 20,814,442
17 Kmart #4986--Virginia Beach,VA 20,300,506
58 Kmart #3639--Inglewood, CA 10,634,081
-----------
Total ............................... $78,764,285 3.17%
===========
18 Pantzer Cross--Summary $20,111,247
26 Top of the Hill Apartments 16,469,614
28 Foxfire Apartments 16,313,585
43 Heather Ridge Apartments 13,207,048
99 Arundel Apartments 6,911,712
195 Cynwyd Club Apartments 3,244,834
-----------
Total ............................... $76,258,039 3.07%
===========
9 767 Third Avenue $41,500,000
113 320 West 13th Street 5,850,000
-----------
Total ............................... $47,350,000 1.91%
===========
25 Circuit City Stores, Inc. -Naperville $16,890,594
42 Circuit City Stores, Inc.-Fort Worth 13,463,517
27 Circuit City Stores, Inc.-Miami 16,401,012
-----------
Total ............................... $46,755,123 1.88%
===========
61 San Ant Res. Inn/Fair Inn Summary $ 9,990,663
64 Ind. Apt Res. Inn/Fair Inn Summary 9,491,130
80 Denver Fairfield Inn 8,492,064
123 Fairfield Inn Tampa/Brandon 5,245,098
144 Austin South Residence Inn 4,495,798
145 Courtyard by Marriott-Mishawaka 4,495,798
-----------
Total ............................... $42,210,552 1.70%
===========
14 Rachel Bridge Apartments $22,882,398
24 Essex/Brookdale Summary 16,975,768
-----------
Total ............................... $39,858,166 1.61%
===========
</TABLE>
S-43
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF DATE % OF INITIAL
LOAN NO. PROPERTY NAME PRINCIPAL BALANCE POOL BALANCE
- ---------- ---------------------------------------- ------------------- ----------------
<S> <C> <C> <C>
77 Best Buy-Springfield, PA $ 8,656,976
90 Best Buy-Mayfield, OH 7,558,145
141 Best Buy-Akron, OH 4,579,531
150 Best Buy-Columbia, SC 4,469,298
161 Best Buy-Inver Grove Heights, MN 4,142,785
181 Best Buy-LaCrosse, WI 3,597,915
-----------
Total .................................. $33,004,650 1.33%
===========
37 Peak At Somerset $14,127,948
45 Highland Apartments 12,733,126
135 Highland Court Apartments 4,783,146
-----------
Total .................................. $31,644,220 1.27%
===========
74 RHC-Continental/Mulberry Summary $ 8,847,471
118 RHC-Capistrano 5,640,133
129 RHC-Towne & Country Mobile Home Park (1) 4,950,437
166 RHC-Club Marina Mobile Home Park 4,005,551
205 RHC-Trees Country Place Mobile Home Park 2,996,226
243 RHC-Adobe Mobile Lodge 2,269,017
288 RHC-Diablo Mobile Lodge 1,527,326
-----------
Total .................................. $30,236,160 1.22%
===========
117 Eagle--Moline, IL $ 5,673,660
109 Eagle--Geneva, IL 6,104,894
39 Cobb--Tampa, FL 13,636,651
-----------
Total .................................. $25,415,205 1.02%
===========
41 Valley Stream Village Apts. $13,491,939
72 Perry Lake Village 8,894,686
292 Stirrup Woods 1,499,132
-----------
Total .................................. $23,885,756 0.96%
===========
91 Essex Hospitality Summary $ 7,553,519
213 Lancaster Microtel Inn 2,772,604
226 Rochester Microtel 2,500,839
229 Columbus Microtel Inn 2,472,863
234 Knoxville Microtel 2,393,956
256 Charleston Microtel 2,098,187
261 Syracuse Microtel 2,015,259
-----------
Total .................................. $21,807,226 0.88%
===========
55 Eagle Hardware-Anchorage, AK $11,311,417
76 Eagle Hardware and Garden, Inc. 8,669,328
-----------
Total .................................. $19,980,745 0.81%
===========
</TABLE>
S-44
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF DATE % OF INITIAL
LOAN NO. PROPERTY NAME PRINCIPAL BALANCE POOL BALANCE
- ---------- ------------------------------------------------ ------------------- ----------------
<S> <C> <C> <C>
35 Torgerson Project Summary $15,559,810
192 Holiday Inn Express Hotel & Suites Golden Valley 3,293,409
-----------
Total .......................................... $18,853,219 0.76%
===========
57 British Woods Apartments $10,655,199
101 Yorktown Apartments and Townhouses 6,837,119
-----------
Total .......................................... $17,492,318 0.70%
===========
78 Fossil Ridge Apartments $ 8,554,761
85 Harvestree Apartments 8,075,130
-----------
Total .......................................... $16,629,891 0.67%
===========
158 Colony Club Apartments $ 4,220,948
167 41 Elm Street Apartment & Office Building 3,996,077
210 Somerset Professional Plaza 2,877,268
-----------
Total .......................................... $11,094,293 0.45%
===========
248 Rite Aid Corporation--Garettsville $ 2,204,870
276 Rite Aid Corporation--Canton 1,768,742
200 Rite Aid Corporation--Cleveland 3,174,044
180 Rite Aid Corporation--Baltimore 3,607,480
-----------
Total .......................................... $10,755,136 0.43%
===========
178 PETsMART No. 475--Downer's Grove, IL $ 3,689,244
179 PETsMART No. 586--North Fayette, PA 3,689,244
207 PETsMART No. 686--Commerce, MI 2,975,899
-----------
$10,354,387 0.42%
===========
114 Winfield Landing Apartments $ 5,802,554
148 Wisteria Gardens Apartments 4,491,484
-----------
Total .......................................... $10,294,037 0.42%
===========
249 Rite Aid--Auburn Hills, MI $ 2,198,478
215 Rite Aid-Washington, MI 2,736,245
247 Rite Aid-Melvindale, MI 2,226,480
279 Rite Aid-Hazel Park, MI 1,745,647
-----------
Total .......................................... $ 8,906,850 0.36%
===========
134 Holiday Inn-Ft. Collins, CO $ 4,786,010
162 Holiday Inn Exp.-Wheatridge, CO 4,088,531
-----------
Total .......................................... $ 8,874,541 0.36%
===========
273 Jamad II $ 1,854,093
297 Principal Court Business Center 1,407,317
271 Greenbrier Partners I 1,896,336
272 Brinks 1,864,932
-----------
Total .......................................... $ 7,022,678 0.28%
===========
</TABLE>
S-45
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF DATE % OF INITIAL
LOAN NO. PROPERTY NAME PRINCIPAL BALANCE POOL BALANCE
- ---------- ------------------------------------ ------------------- ----------------
<S> <C> <C> <C>
173 Beltline Village Shopping Center $ 3,844,619
202 Timber Trails Shopping Center 3,095,773
------------
Total .............................. $ 6,940,391 0.28%
============
259 RiteAid--Cleveland, OH $ 2,026,436
171 Rite Aid--Macon College Park Summary 3,884,658
------------
Total .............................. $ 5,911,104 0.24%
============
321 Meeting House Office Building $ 997,039
221 Great Woods Office Park 2,592,147
------------
Total .............................. $ 3,589,186 0.15%
============
278 Kmart-Lackawanna $ 1,750,000
285 Kmart-Cheektowaga 1,650,000
------------
Total .............................. $ 3,400,000 0.14%
============
299 Two US Post Offices $ 1,388,001
309 US Post Office-Lakewood 1,193,336
------------
Total .............................. $ 2,581,337 0.10%
============
306 Kittridge Apartments/Santa Monica $ 1,275,162
311 Chatsworth Shopping Center 1,179,455
------------
Total .............................. $ 2,454,617 0.10%
============ -----
TOTAL .............................. $662,324,112 26.67%
============ =====
</TABLE>
- ----------
(1) The RHC--Towne & Country Mobile Home Park Loan is in the process of being
assumed by a non-related third party.
Concentrations of Mortgage Loans with the same borrower or related
borrowers can pose increased risks. For example, if an entity that owns or
controls several Mortgaged Properties experiences financial difficulty at one
Mortgaged Property, it could defer maintenance at another Mortgaged Property in
order to satisfy current expenses with respect to the troubled Mortgaged
Property, or it could attempt to avert foreclosure by filing a bankruptcy
petition that might have the effect of interrupting Monthly Payments (subject
to the Servicer's obligation to make Advances) for an indefinite period on all
of the related Mortgage Loans. Securing a Mortgage Loan with more than one
Mortgaged Property also imposes certain risks relating to possible fraudulent
conveyances. See "-- Limitations on Enforceability of Cross-Collateralization"
below and "Certain Characteristics of the Mortgage Loans -- Certain Terms and
Conditions of the Mortgage Loans -- Cross-Collateralization and Cross-Default
of Certain Mortgage Loans."
Limitations on Enforceability; Cross-Collateralized and Cross-Defaulted
Properties. Seventeen of the Mortgage Loans, representing approximately 4.5% of
the Initial Pool Balance and having Cut-off Date Principal Balances ranging
from $997,731 to $16,190,416, are cross-collateralized and/or cross-defaulted
with other Mortgage Loans in the Mortgage Pool. These arrangements are intended
to reduce the risk that the inability of a Mortgaged Property securing each
such Mortgage Loan to generate net operating income sufficient to pay debt
service will result in defaults and ultimate losses. See "-- Concentration of
Mortgage Loans; Borrowers" above.
Cross-collateralization arrangements involving more than one borrower (as
indicated in the table entitled "Related Borrowers" above) could be challenged
as a fraudulent conveyance by creditors of a
S-46
<PAGE>
borrower or by the representative of the bankruptcy estate of a borrower, if a
borrower were to become a debtor in a bankruptcy case. Generally, under federal
and most state fraudulent conveyance statutes, the incurring of an obligation
or the transfer of property by a person will be subject to avoidance under
certain circumstances if the person did not receive fair consideration or
reasonably equivalent value in exchange for such obligation or transfer and (i)
was insolvent or was rendered insolvent by such obligation or transfer, (ii)
was engaged in business or a transaction, or was about to engage in business or
a transaction, for which any property remaining with the person was an
unreasonably small amount of capital or (iii) intended to, or believed that it
would, incur debts that would be beyond the person's ability to pay as such
debts matured. Accordingly, a lien granted by a borrower to secure repayment of
another borrower's Mortgage Loan could be avoided if a court were to determine
that (i) the borrower granting such lien was insolvent at the time of such
grant, was rendered insolvent by the granting of the lien or was left with
inadequate capital or was not able to pay its debts as they matured and (ii)
the borrower did not, when it allowed its Mortgaged Property to be encumbered
by a lien securing the entire indebtedness represented by the other Mortgage
Loan, receive fair consideration or reasonably equivalent value for pledging
such Mortgaged Property for the equal benefit of the other borrower.
Other Financing. The Mortgage Loans generally prohibit borrowers from
incurring any additional debt that is secured by the related Mortgaged
Property. The Mortgage Loans do, however, generally permit the related borrower
to incur unsecured indebtedness in limited circumstances for the payment of
certain items in connection with the ordinary operation and maintenance of the
related Mortgaged Property and, in the case of certain of the Mortgage Loans,
limited amounts of secured debt or unsecured debt is permitted for other
purposes, including without limitation the purchase of equipment for use in the
ordinary course of business. In addition, in the case of certain Mortgage
Loans, certain "insiders" are permitted to make unsecured loans to the related
borrower if subordination and standstill agreements are obtained. The existence
of such other indebtedness could adversely affect the financial viability of
the related borrowers or the security interest of the lender in the equipment
or other assets acquired through such financings or could complicate bankruptcy
proceedings and delay foreclosure on the Mortgaged Property. Except as set
forth in the table below, the applicable Mortgage Loan Seller has not permitted
any of such debt to be secured by a Mortgaged Property. If a junior lender
files an involuntary petition for bankruptcy against a borrower, or if a
borrower files a voluntary petition to stay enforcement by a junior lender, the
ability of the Trust Fund to take certain actions such as foreclosure would be
automatically stayed and principal and interest payments might not be made
during the course of a bankruptcy case. The bankruptcy of a subordinate lender
also may operate to stay foreclosure or similar proceedings by the Trust Fund.
See "Certain Legal Aspects of the Mortgage Loans -- Secondary Financing;
Due-on-Encumbrance Provisions" in the Prospectus.
In connection with the origination of the Mortgage Loans set forth in the
table entitled "Secured Subordinate Loans" below, the related Mortgage Loan
Seller consented to subordinate debt (a "Secured Subordinate Loan") remaining
as an encumbrance on the related Mortgaged Properties. With respect to Loan
Nos. 5, 101 and 296, the holder of each Secured Subordinate Loan has agreed not
to exercise any remedies against the related Mortgaged Property notwithstanding
that an event of default may have occurred under the related subordinate
mortgage. With respect to six Cooperative Loans, no such "standstill" agreement
has been executed and the holder of the related subordinate mortgage may
foreclose on the related Mortgaged Property upon the occurrence of an event of
default under the related Secured Subordinate Loan. If the holder of the
subordinate mortgage did foreclose, it would take title to the related
Mortgaged Property subject to the related first mortgage. The related second
mortgage loans are credit lines that may only be drawn to finance capital
expenses at the related Mortgaged Property. CSFB Mortgage Capital holds a
wraparound mortgage with respect to each of Loan Nos. 57 and 101. CSFB Mortgage
Capital has agreed to subordinate such wraparound mortgages to the lien of the
related Mortgage Loans and not to commence any enforcement action under such
wraparound mortgages until the related Mortgage Loan is paid in full. See
"Certain Legal Aspects of the Mortgage Loans -- Secondary Financing;
Due-on-Encumbrance Provisions" in the Prospectus.
S-47
<PAGE>
SECURED
SUBORDINATE LOANS
<TABLE>
<CAPTION>
LOAN PROPERTY
NO. BORROWER NAME
- ------ ------------------------------------- ------------------------------------
<S> <C> <C>
47 The Briarcliff Owners, Inc. NCB/Briarcliff
49 Goodrich Executive, LLC Executive Center
57 New British Woods Associates British Woods Apartments
59 Geddes Lake Cooperative Homes, Inc. NCB/Geddes Lake Cooperative
60 Bell Apartments Owners Corp. NCB/Bell Apartments Owners Corp.
66 BMR Owners Corp. NCB/Bryn Mawr Ridge Apartments
89 Laurelton Gardens Corp. NCB/Laurelton Gardens
101 New Yorktowne Associates Yorktown Apartments and Townhouses
296 G&K Dodge, Inc. Comfort Inn--Santa Rosa
TOTAL
Percentage of Initial Pool Balance: 3.2%
<CAPTION>
CUT-OFF
CUT-OFF DATE ORIGINAL DATE
PRINCIPAL PRINCIPAL PRINCIPAL SUBORDINATE
BALANCE BALANCE BALANCE OF LOAN CUT-OFF DATE STANDSTILL
LOAN OF MORTGAGE OF SUBORDINATE SUBORDINATE MATURITY AGGREGATE AGREEMENT
NO. LOAN LOAN LOAN DATE LTV (1) IN PLACE
- ------ -------------- ---------------- ----------------- ------------ -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
47 $12,450,554 $ 2,500,000 $ 760,000 1/1/08 38.85% No
49 $12,355,597 $ 2,262,565 $ 2,262,565 1/2/00 88.59% No
57 $10,655,199 $ 5,100,139 $ 5,100,139 9/1/24 111.74% Yes
59 $10,184,010 $ 500,000(2) $ 500,000(2) 12/11/02 42.08% No
60 $ 9,996,212 $ 500,000 $ 500,000 5/5/13 49.98% No
66 $ 9,467,505 $ 2,500,000 $ 850,000 1/1/08 43.90% No
89 $ 7,694,531 $ 300,000 $ 300,000 4/1/08 42.05% No
101 $ 6,837,119 $ 4,253,951 $ 4,253,951 9/1/24 121.88% Yes
296 $ 1,435,822 $ 340,000 $ 340,000 On demand 93.46% Yes
----------- ------------ ------------
TOTAL $81,076,549 $18,256,655 $14,866,655
=========== ============ ============
</TABLE>
- -------
(1) The "Cut-off Date Aggregate LTV" is the ratio of the sum of the Cut-off
Date Principal Balance of the indicated Mortgage Loan and related
subordinate debt to the Value of the related Mortgaged Property.
(2) May be increased up to $1 million.
Additionally, CSFB Mortgage Capital has made loans (the "Mezzanine Loans")
to affiliates of certain of the borrowers secured by such affiliate's equity
interest in such borrower as set forth in the following table:
MEZZANINE LOANS
<TABLE>
<CAPTION>
LOAN PROPERTY
NO. BORROWER NAME
- ------ ---------------------------------------- ---------------------------------------
<S> <C> <C>
1 Combined Properties Incorporated Combined Properties Summary
4 IPC Office Properties, LLC Reichmann/Intell Portfolio Summary
13 SAMCO I Investment Limited Partnership Holiday Inn--Denver Downtown
70 Host Ventures, Inc. Host Funding Portfolio Summary
74 Bahia Associates, LLC RHC--Continental/Mulberry Summary
118 Capistrano Terrace Associates, LLC RHC--Capistrano
129 Towne & Country Associates, LLC RHC--Towne & Country Mobile Home Park
166 Club Marina Associates, LLC RHC--Club Marina Mobile Home Park
243 Adobe Associates, LLC RHC--Adobe Mobile Lodge
288 Diablo Associates, LLC RHC--Diablo Mobile Lodge
TOTAL
Percentage of Initial Pool Balance: 10.06%
<CAPTION>
CUT-OFF
CUT-OFF DATE ORIGINAL DATE
PRINCIPAL PRINCIPAL PRINCIPAL FORECLOSEABLE
BALANCE BALANCE BALANCE OF CUT-OFF DATE ON
LOAN OF MORTGAGE OF MEZZANINE MEZZANINE MATURITY AGGREGATE MORTGAGED
NO. LOAN LOAN LOAN DATE LTV (1) PROPERTY
- ------ -------------- -------------- -------------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
1 $115,590,907 $27,800,000 $27,800,000 5/11/08 86.65% No
4 $ 74,857,607 $ 2,325,859 $ 2,325,859 4/11/00 74.39% No
13 $ 22,982,097 $ 1,000,000 $ 1,000,000 5/11/08 72.67% No
70 $ 9,067,689 $ 825,000 $ 825,000 7/11/03 82.10% No
74 $ 8,847,471 $ 140,076 $ 140,076 4/11/03 77.81% No
118 $ 5,640,133 $ 220,231 $ 220,231 4/11/03 79.73% No
129 $ 4,950,437 $ 193,300 $ 193,300 4/11/03 80.37% No
166 $ 4,005,551 $ 63,417 $ 63,417 4/11/03 79.32% No
243 $ 2,269,017 $ 88,598 $ 88,598 4/11/03 82.72% No
288 $ 1,527,326 $ 60,175 $ 60,175 4/11/03 83.55% No
------------ ----------- -----------
TOTAL $249,738,235 $32,716,656 $32,716,656
============ =========== ===========
</TABLE>
- -------
(1) The "Cut-off Date Aggregate LTV" is the ratio of the sum of the Cut-off
Date Principal Balance of the indicated Mortgage Loan and related
Mezzanine Loan to the Value of the related Mortgaged Property.
S-48
<PAGE>
Upon a default under a Mezzanine Loan, the holder (the "Mezzanine Lender")
of such Mezzanine Loan would be entitled to foreclose upon the equity in the
related mortgagor, which has been pledged to secure payment of such Mezzanine
Loan. Such transfer of equity would not trigger the "due on sale" clause under
the related Mortgage Loan, as described herein. An attempt to foreclose upon
such pledged equity may cause the obligor under such Mezzanine Loan to file for
bankruptcy, which could negatively affect the operation of the related
Mortgaged Property and such mortgagor's ability to pay the Mortgage Loan in a
timely manner.
No Mezzanine Lender has a lien on, or has the power to foreclose on, any
of the Mortgaged Properties or on any of the Escrow Accounts, Lockbox Accounts
or Cash Collateral Accounts established under the related Mortgage Loans. The
Mezzanine Lender's sole remedy in the event of non-payment is to foreclose upon
the equity and cash collateral accounts pledged to it and to terminate the
related property manager.
Equity Investments by the Mortgage Loan Sellers and/or Affiliates. CSFB
Mortgage Capital and/or affiliates (the "Preferred Interest Holders") have
acquired preferred equity interests in borrowers, as set forth in the following
table:
PREFERRED EQUITY INVESTMENTS IN BORROWERS
<TABLE>
<CAPTION>
SCHEDULED FINAL
CUT-OFF DATE INITIAL AMOUNT DISTRIBUTION
LOAN MORTGAGE PRINCIPAL OF EQUITY DATE OF
NO. ENTITY LOAN BALANCE INVESTMENT (1) PREFERRED EQUITY (2)
- ------ -------------------------------- ---------------------------- -------------- ---------------- ---------------------
<S> <C> <C> <C> <C> <C>
4 IPC Office Properties, LLC Reichmann/Intell Portfolio
Summary $ 7,587,298 $ 7,587,298 4/11/00
18 Meldon Apt LLC Pantzer Cross--Summary 2,922,354 $ 2,922,354 6/11/08
26 Top of the Hill Associates LLC Top of the Hill Apartments 2,121,181 $ 2,121,181 6/11/08
28 Foxfire Associates Foxfire Apartments 2,119,859 $ 2,119,859 5/11/08
43 Heather Ridge LLC Heather Ridge Apartments 1,792,988 $ 1,792,988 6/11/08
99 Arundel Associates LLC Arundel Apartments 896,614 $ 896,614 6/11/08
195 Cynwyd Club Associates LLC Cynwyd Club Apartments $ 483,950 $ 483,950 6/11/08
----------- -----------
TOTAL: $17,924,244 $17,924,244
=========== ===========
Percentage of Initial Pool Balance: 0.72%
</TABLE>
- ----------
(1) Determined as of the related origination date.
(2) In accordance with the minimum payments due monthly.
(3) The Reichmann/Intell Portfolio Special Member has an obligation to make
an additional preferred equity investment in the Reichmann/Intell
Portfolio Mezzanine Borrower in an amount not to exceed $3,525,276
subject to certain conditions, in connection with such Mezzanine
Borrower's acquisition of interests in additional properties.
In general, with respect to each such borrower, the Preferred Interest
Holder is entitled to receive certain preferred distributions prior to
distributions being made to the other partners or members. No monthly
distribution to the Preferred Interest Holder is permitted to be made until all
required monthly debt service payments, reserve payments, other payments under
the related Mortgage Loan ("Monthly Mortgage Loan Payments") and any
obligations to other creditors have been made when due and all monthly
operating expenses with respect to the related Mortgaged Property ("Monthly
Operating Expenses") have been paid. After payment of such amounts, the
Preferred Interest Holder is entitled to receive a distribution of a preferred
yield and, except with respect to the Reichmann/Intell Portfolio Loan, a
monthly return of capital generally equal to the greater of (i) a scheduled
minimum payment or (ii) a specified percentage (generally 75%) of certain
remaining cash flow from the Mortgaged Property or Properties, after payment of
Monthly Mortgage Loan Payments, Monthly Operating Expenses and the monthly
preferred yield to the Preferred Interest Holder (or, in each case, if certain
breaches have occurred, 100% of such remaining cash flow). Certain equity
investments by certain of the Preferred Interest Holder do not require any
minimum redemption payments until a scheduled redemption date.
S-49
<PAGE>
Under the related partnership agreement, operating agreement or similar
agreement, the Preferred Interest Holder has certain specified rights,
including, in most cases, the right to terminate and replace the manager of the
related Mortgaged Property or Properties upon the occurrence of certain
specified breaches or, in some cases, if the DSCR as of certain dates falls
below certain levels. However, the right of the Preferred Interest Holder to
terminate any manager is expressly subordinate to the right of the Servicer to
terminate and replace such manager. If the Preferred Interest Holder is
entitled to terminate a manager at a time when the Servicer does not have such
a right, then prior to termination, the Preferred Interest Holder must receive
written confirmation from each of the Rating Agencies that such termination
would not cause any Rating Agency to withdraw, qualify or downgrade any of its
then-current ratings on the Certificates. Other than the increase in the
percentage of the cash flow used to calculate the monthly return of capital and
the right to terminate the manager as described above, the Preferred Interest
Holder has no further remedies under the relevant partnership, operating or
similar agreement in the event of nonpayment of its monthly preferred yield and
return of capital. Certain preferred equity investments involve the right to
change the managing membership or general partnership rights of the sponsor
upon the occurrence of specified events. In the case of the Reichmann/Intell
Portfolio Loan, if the related preferred equity investment is not redeemed by
April 11, 2000, the Preferred Interest Holder may exercise certain warrants in
the company that owns a 99% regular membership interest in the Reichmann/Intell
Portfolio Borrower.
In general, the Preferred Interest Holder has the right to approve the
annual budget for the Mortgaged Properties, which right is subject to any right
that the Servicer may have to approve such budgets. The Preferred Interest
Holder also has the right to approve certain actions of the related borrowers,
including certain transactions with affiliates, prepayment or refinancing of
the related Mortgage Loan, transfer of the related Mortgaged Property, entry
into or modification of substantial leases or improvement of the related
Mortgaged Properties to a materially higher standard than comparable properties
in the vicinity of such Mortgaged Properties (unless approved by the Servicer
as described below), and the dissolution, liquidation or the taking of certain
bankruptcy actions with respect to the related borrower. With respect to the
making of any capital improvements in addition to those reserved for under the
related Mortgage Loan, the Servicer alone may approve such improvements without
the consent of the Preferred Interest Holder. In such event, the expenditure or
amounts to make such additional capital improvements, rather than to make the
monthly distribution to the Preferred Interest Holder, will not cause a breach
which gives rise to a right to terminate the related manager.
Other Equity Investments by Affiliates of CSFB Mortgage Capital. An
affiliate of CSFB Mortgage Capital owns equity interests in the borrowers with
respect to eight Mortgage Loans, representing approximately 2.8% of the Initial
Pool Balance, including two Crossed Mortgaged Loans with respect to which such
affiliate owns a 100% ownership interest in the related borrowers as follows:
OTHER EQUITY INVESTMENTS IN BORROWERS
<TABLE>
<CAPTION>
LOAN MORTGAGE %
NO. ENTITY LOAN OWNERSHIP
- ------ -------------------- ----------------------------------- ----------
<S> <C> <C> <C>
11 Elder OHI, LLC Elder Bearman at the Dayton Mall 100
81 Elder PAI, LLC Elder Bearman at Millcreek Mall 100
77 SW Portfolio, Inc. Best Buy--Springfield, PA 35
90 SW Portfolio, Inc. Best Buy--Mayheld, OH 35
141 SW Portfolio, Inc. Best Buy--Akron, OH 35
150 SW Portfolio, Inc. Best Buy--Columbia, SC 35
161 SW Portfolio, Inc. Best Buy--Inver Grove Heights, MN 35
181 SW Portfolio, Inc. Best Buy--LaCrosse, WI 35
TOTAL:
Percentage of Initial Pool Balance: 2.8%
</TABLE>
- ----------
(1) Determined as of the related origination date.
S-50
<PAGE>
Tax Considerations Related to Foreclosure. If the Trust Fund were to
acquire a Mortgaged Property subsequent to a default on the related Mortgage
Loan pursuant to a foreclosure or delivery of a deed in lieu of foreclosure,
the Special Servicer would be required to retain an independent contractor to
operate and manage the Mortgaged Property. By reference to rules applicable to
real estate investment trusts, such property will be considered "foreclosure
property" for a period of at least two years. An extension of up to four
additional years can be requested from the IRS and recent legislation would,
for federal purposes (but possibly not for certain state tax purposes), make
the initial period three years. Any net income from such "foreclosure property"
other than qualifying "rents from real property," 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 Lower-Tier REMIC to federal (and possibly state or local) tax on such
income at the highest marginal federal corporate tax rate (currently 35%),
thereby reducing net proceeds available for distribution to Certificateholders.
See "The Pooling and Servicing Agreement -- Realization Upon Mortgage Loans."
Risk of Different Timing of Mortgage Loan Amortization. As set forth in
the table below, Mortgage Loans secured by different types of Mortgaged
Properties have varying weighted average terms to maturity (or, in the case of
ARD Loans, varying weighted average terms to Anticipated Repayment Date). As
principal payments or prepayments are made on a Mortgage Loan, the remaining
Mortgage Loans may be subject to more concentrated risk with respect to the
diversity of properties, types of properties, geographic concentration (see "--
Geographic Concentration" below) and with respect to the number of borrowers.
Geographic Concentration. The Mortgaged Properties are located in 40
states, the District of Columbia, Puerto Rico, Mexico and St. Thomas, U.S.
Virgin Islands. The table below sets forth the states in which a significant
percentage of the Mortgaged Properties are located. See the table entitled
"Mortgaged Properties By State" for a description of geographic location of the
Mortgaged Properties. Except as set forth below, no state contains more than
5.0% (by Cut-off Date Principal Balance or Allocated Loan Amount) of the
Mortgaged Properties.
SIGNIFICANT GEOGRAPHIC CONCENTRATION OF MORTGAGED PROPERTIES
<TABLE>
<CAPTION>
NUMBER OF
% OF INITIAL MORTGAGED
STATE POOL BALANCE PROPERTIES
- -------------------- -------------- -----------
<S> <C> <C>
California ......... 14.5% 67
New York ........... 11.3% 40
Texas .............. 6.8% 26
New Jersey ......... 5.9% 21
Virginia ........... 5.3% 20
</TABLE>
Repayments by borrowers, as well as the market value of the Mortgaged
Properties, could be adversely affected by economic conditions generally or in
regions where the borrowers and the Mortgaged Properties are located,
conditions in the real estate markets where the Mortgaged Properties are
located, changes in governmental rules and fiscal policies, acts of God (which
may result in uninsured losses) and other factors which are beyond the control
of the borrowers.
The economy of any state or region in which a Mortgaged Property is
located may be adversely affected to a greater degree than that of other areas
of the country by certain developments affecting industries concentrated in
such state or region. Moreover, in recent periods, several regions of the
United States have experienced significant downturns in the market value of
real estate. To the extent that general economic or other relevant conditions
in states or regions in which concentrations of Mortgaged Properties securing
significant portions of the aggregate principal balance of the Mortgage Loans
are located decline and result in a decrease in commercial property, housing or
consumer demand in the region, the income from and market value of the
Mortgaged Properties may be adversely affected.
Exercise of Remedies; Realization Upon Defaulted Mortgage Loans. The
Mortgage Loans generally contain due-on-sale and "due-on-encumberance" clauses
that, in each case, permit the holder of the
S-51
<PAGE>
Mortgage Loan to accelerate the maturity of the Mortgage Loan if the related
borrower sells or otherwise transfers or encumbers the related Mortgaged
Property or its interest in the Mortgaged Property in violation of the
mortgage. All of the Mortgage Loans also include a debt-acceleration clause,
which permits the lender to accelerate the debt upon specified monetary or
non-monetary defaults of the borrower. The courts of all states will enforce
clauses providing for acceleration in the event of a material payment default.
The equity courts of any state, however, may refuse the foreclosure or other
sale of a mortgaged property or refuse to permit the acceleration of the
indebtedness as a result of a default deemed to be immaterial or if the
exercise of such remedies would be inequitable or unjust or the circumstances
would render the acceleration unconscionable.
Subject to the discussion under "--Certain Risks Associated with the Ritz
Carlton Loan," each of the Mortgage Loans is secured by an assignment of leases
and rents pursuant to which the related borrower assigned its right, title and
interest as landlord under the leases on the related Mortgaged Property and the
income derived therefrom to the lender as further security for the related
Mortgage Loan. The borrower generally retains a license to collect rents for so
long as there is no default. Certain of the Mortgage Loans do, however, require
the related borrower to have all rents deposited by tenants into a Hard
Lockbox. In those Mortgage Loans as to which the borrower retains a license to
collect rents, if the borrower defaults, the license terminates and the Special
Servicer is entitled to collect rents. In some cases, such assignments may not
be perfected as security interests prior to actual possession of the cash flow.
In some cases, state law may require the Special Servicer to take possession of
the Mortgaged Property and obtain the judicial appointment of a receiver before
becoming entitled to collect the rents. In addition, if bankruptcy or similar
proceedings are commenced by or in respect of the borrower, the lender's
ability to collect the rents may be limited. See "Certain Legal Aspects of
Mortgage Loans -- Leases and Rents" in the Prospectus.
Investment in and lending on the security of real estate in Mexico entails
risks related to the operation of Mexican federal, state and local law. Mexican
law provides for foreclosure upon a mortgaged property in a manner similar to
that provided under U.S. law, and a debtor is entitled to defenses similar to
those available to a debtor under U.S. law. The security interest of the
Trustee in the Ritz-Carlton Property is established through the use of a
Mexican "guaranty trust" (the "Property Trust") established by a trust
agreement pursuant to which record ownership of the Ritz-Carlton Property is
held in the name of a trustee. The trust agreement with respect to the Property
Trust is filed in the real property records of the jurisdiction in which the
Ritz-Carlton Property is located. To secure the repayment of the Ritz-Carlton
Loan, the Trustee has been named as the primary beneficiary of the Property
Trust, which gives the Trustee the right to direct the trustee of the Property
Trust to conduct a sale of the Ritz-Carlton Property upon an event of default
under the Ritz-Carlton Loan. The originator has received an opinion of local
counsel that the lender has a valid, first priority, perfected lien upon, and
security interest in, the Ritz-Carlton Property through the Property Trust, and
has been advised by local counsel that such a foreclosure process would take
substantially less time to effectuate than would foreclosure under Mexican
mortgage law or under the foreclosure law in most states in the U.S. Under the
trust agreement for the Property Trust, the lender has agreed to not take any
action to enforce its remedies with respect to the Ritz-Carlton Property for a
period of 90 days (180 days if there is an economic crisis occurring in Mexico
at that time) after an event of default. Such period is intended to give the
Ritz-Carlton Borrower a period of time in which to arrange a refinancing of the
Ritz-Carlton Loan.
The costs of taking title to a property securing a financing and
transferring ownership of real property in Mexico may be substantially higher
than the costs associated with realizing upon real estate located in the United
States due to high property transfer taxes, improvement transfer taxes, value
added taxes, notary public fees, trustee fees and capital gains and other taxes
on the proceeds of sale. Any such additional costs may increase the risk of
loss on the Ritz-Carlton Loan.
Under the laws of the Commonwealth of Puerto Rico the foreclosure of a
real estate mortgage usually follows an ordinary "civil action" filed in the
Superior Court for the district where the mortgaged property is located. If the
defendant does not contest the action filed, a default judgment is rendered for
the plaintiff and the mortgaged property is sold at public auction, after
publication of the sale for two weeks. There may be as many as three public
sales of the mortgaged property. If the defendant contests the foreclosure, the
case may be tried and judgment rendered based on the merits of the case.
S-52
<PAGE>
There are no redemption rights after the public sale of a foreclosed
property under the laws of the Commonwealth of Puerto Rico. Commonwealth of
Puerto Rico law provides for a summary proceeding for the foreclosure of a
mortgage, but it is very seldom used because of concerns regarding the validity
of such actions. The process may be expedited if the mortgagee can obtain the
consent of the defendant to the execution of a deed in lieu of foreclosure.
Environmental Law Considerations. Under various federal, state and local
environmental laws, ordinances and regulations, a current or previous owner or
operator of real property may be liable for the costs of removal or remediation
of hazardous or toxic substances on, under, adjacent to, or in such property.
Such laws often impose liability whether or not the owner or operator knew of,
or was responsible for, the presence of such hazardous or toxic substances. The
cost of any required remediation and the owner's liability therefor generally
is not limited under such circumstances and could exceed the value of the
property and/or the aggregate assets of the owner. Under the laws of certain
states, contamination of a property may give rise to a lien on the property to
assure the costs of cleanup. In some such states this lien has priority over
the lien of an existing mortgage against such property. In addition, under the
federal Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA"), the United States Environmental Protection Agency ("EPA") may
impose a lien on property where the EPA has incurred costs in investigating
and/or cleaning up contamination. However, a CERCLA lien is subordinate to
pre-existing, perfected security interests. In addition, the presence of
hazardous or toxic substances, or the failure to properly remediate such
property, may adversely affect the owner's or operator's ability to refinance
using such property as collateral. Persons who arrange for the disposal or
treatment of hazardous or toxic substances also may be liable for the costs of
removal or remediation of such substances at the disposal or treatment
facility. Certain laws impose liability for release of asbestos containing
materials ("ACMs") into the air or require the removal or containment of ACMs
and third parties may seek recovery from owners or operators of real properties
for personal injury associated with ACMs or other exposure to chemicals or
other hazardous substances. For all of these reasons, the presence of, or
contamination by, hazardous substances at, on, under, adjacent to, or in a
property can materially adversely affect the value of the property.
Under the laws of some states and under CERCLA, it is conceivable that a
secured lender (such as the Trust Fund) may be held liable as an "owner" or
"operator" for the costs of addressing releases or threatened releases of
hazardous substances at a Mortgaged Property, even though the environmental
damage or threat was caused by a prior or current owner or operator. CERCLA
imposes liability for such costs on any and all "responsible parties",
including owners and operators. However, CERCLA excludes from the definition of
"owner or operator" a secured creditor who holds indicia of ownership primarily
to protect its security interest, but does not "participate in the management"
of the Mortgaged Property (the "secured creditor exclusion"). Thus, if a
lender's activities begin to encroach on the actual management of a
contaminated property, the lender may incur liability as an "owner or operator"
under CERCLA. Similarly, if a lender forecloses and takes title to a
contaminated property, the lender may incur CERCLA liability in various
circumstances, including, but not limited to, when it holds the property as an
investment (including leasing the property to a third party), or fails to
market the property in a timely fashion.
Recently enacted amendments to CERCLA have clarified the range of
activities in which a lender may engage without becoming subject to liability
under CERCLA. However, liability for costs associated with the investigation
and cleanup of environmental contamination also may be governed by state law,
which may not provide any specific protections to lenders.
CERCLA does not apply to petroleum products, and the secured creditor
exclusion does not govern liability for cleanup costs associated with releases
of petroleum contamination. Federal regulation of underground petroleum storage
tanks (other than heating oil tanks) is governed by Subtitle I of the federal
Resource Conservation and Recovery Act ("RCRA"). The EPA has promulgated a
lender liability rule for underground storage tanks regulated by Subtitle I of
RCRA. Under the EPA rule, a holder of a security interest in an underground
storage tank, or real property containing an underground storage tank, is not
considered an operator of the underground storage tank as long as petroleum is
not added to, stored in or dispensed from the tank. Moreover, recent amendments
to RCRA, enacted concurrently with
S-53
<PAGE>
the CERCLA amendments discussed above, extend to the holders of security
interests in petroleum underground storage tanks the same protections accorded
to secured creditors under CERCLA. It should be noted, however, that liability
for cleanup of petroleum contamination may be governed by state law, which may
not provide any specific protection for lenders. See "Certain Legal Aspects of
the Mortgage Loans -- Environmental Risks" in the Prospectus.
In connection with the origination of the Ritz-Carlton Loan, the
Ritz-Carlton Borrower obtained an environmental assessment with respect to the
Ritz-Carlton Property in which no material non-compliance with any
environmental laws was found. The requirements of Mexican environmental laws
are different from those in effect in the U.S., and there can be no assurance
that all environmental conditions and risks were identified in such
environmental assessment. The environmental site assessment did not identify
any material environmental concerns regardless of applicable law and generally
concluded that potentially toxic substances were being appropriately handled.
Substantially all of the Mortgaged Properties have been subject to
environmental site assessments or studies within the period of twelve months
preceding the Cut-off Date. No assessment or study revealed any environmental
condition or circumstance that the Depositor believes will have a material
adverse impact on the value of the related Mortgaged Property or the related
borrower's ability to pay its debt. In the cases where the environmental
assessments revealed the existence of material amounts of friable and
non-friable ACMs and lead-based paint requiring remediation or abatement, the
related borrowers agreed to establish and maintain operations and maintenance
or abatement programs and/or environmental reserves. Certain of the Mortgaged
Properties have off-site leaking underground storage tank sites located nearby
which the environmental consultant has advised are not likely to contaminate
the related Mortgaged Properties but will require future monitoring or with
respect to which the related Mortgage Loan Seller has received satisfactory
indemnification. The environmental assessments revealed other adverse
environmental conditions such as the existence of storage tanks needing
replacement or removal, contaminated groundwater, PCBs in equipment on-site and
elevated radon levels, in connection with which environmental reserves have
been established and/or removal or monitoring programs have been implemented.
There can be no assurance that all environmental conditions and risks have been
identified in such environment assessments or studies, as applicable, or that
any such environmental conditions will not have a material adverse effect on
the value or cash flow of the related Mortgaged Property.
The information set forth below is based on information contained in the
environmental assessments described above. With respect to Loan No. 92, the
reports for Phase I and Phase II site assessments performed in April 1998 noted
that (i) a leaking underground storage tank for heating oil had recently been
removed, (ii) asbestos readings were present in insulation in both common areas
and areas not accessible to the public and (iii) lead-based paint was found on
exterior doorways and moulding. The reports recommended removal of the three
remaining underground storage tanks, abatement of asbestos in accessible areas
and implementation of an Operations and Maintenance Plan to manage asbestos in
areas not accessible to the public. A reserve of $425,833, which represents
110% of the estimated cost of such remediation, was established as security for
completion of this work. With respect to Loan No. 140, the report for a Phase I
site assessment performed in February 1998 noted that a leaking diesel fuel
underground storage tank was recently removed and that groundwater
contamination was present. A reserve of $200,000, which represents 200% of the
estimated cost of such remediation, was established for costs of remediation.
With respect to Loan No. 4, a reserve of $199,716, which represents 110% of the
estimated cost of such remediation, was established with respect to defective
underground storage tanks. For a description of additional environmental issues
with respect to the Edens & Avant Properties (as defined herein) and the
Combined Properties Portfolio Property (as defined herein), see "Significant
Mortgage Loans--The Edens & Avant Loan" and "The Combined Properties Loan." In
addition, the borrowers under Loan No. 4 were required to obtain insurance to
cover certain losses due to environmental contamination. See "Significant
Mortgage Loans--Reichmann/Intell Portfolio Loan."
Federal law requires owners of residential housing constructed prior to
1978 to disclose to potential residents or purchasers any condition on the
property that causes exposure to lead-based paint. In addition, every contract
for the purchase and sale of any interest in residential housing constructed
prior to 1978 must contain a "Lead Warning Statement" that informs the
purchaser of the potential hazards to
S-54
<PAGE>
pregnant women and young children associated with exposure to lead-based paint.
The ingestion of lead-based paint chips and/or the inhalation of dust particles
from lead-based paint by children can cause permanent injury, even at low
levels of exposure. Property owners can be held liable for injuries to their
tenants resulting from exposure to lead-based paint under various state and
local laws and regulations that impose affirmative obligations on property
owners of residential housing containing lead-based paint. The environmental
assessments revealed the existence of lead-based paint at certain of the
multifamily residential properties. In these cases the borrowers generally have
either implemented operations and maintenance programs or are in the process of
removing the lead-based paint. The Depositor believes that the presence of
lead-based paint at these Mortgaged Properties will not have a material adverse
effect on the value of the related Mortgaged Property or on the ability of the
related borrowers to repay their loans.
The Pooling and Servicing Agreement requires that the Special Servicer
obtain an environmental site assessment of a Mortgaged Property prior to
acquiring title thereto on behalf of the Trust Fund or assuming its operation.
Such requirement may effectively preclude enforcement of the security for the
related Mortgage Loan until a satisfactory environmental site assessment is
obtained (or until any required remedial action is thereafter taken), but will
decrease the likelihood that the Trust Fund will become liable under any
environmental law. However, there can be no assurance that the requirements of
the Pooling and Servicing Agreement will effectively insulate the Trust Fund
from potential liability under environmental laws. See "The Pooling and
Servicing Agreement -- Realization Upon Mortgage Loans" herein and "Certain
Legal Aspects of Mortgage Loans -- Environmental Risks" in the Prospectus.
Balloon Payments. As set forth in the following table, certain of the
Mortgage Loans are Balloon Loans which will have substantial payments of
principal outstanding at their stated maturities unless previously prepaid.
Additionally, all of the ARD Loans will have substantial scheduled principal
balances due on their Anticipated Repayment Date. Loans that require Balloon
Payments involve a greater risk to the lender than fully amortizing loans
because the ability of a borrower to make a Balloon Payment typically will
depend upon its ability either to refinance the loan or to sell the related
Mortgaged Property at a price sufficient to permit the borrower to make the
Balloon Payment. Similarly, the ability of a borrower to repay a loan on the
Anticipated Repayment Date will depend on its ability either to refinance the
Mortgage Loan or to sell the related Mortgaged Property. The ability of a
borrower to accomplish either of these goals will be affected by all of the
factors described above affecting property value and cash flow, as well as a
number of other factors at the time of attempted sale or refinancing, including
the level of available mortgage rates, prevailing economic conditions and the
availability of credit for multifamily or commercial properties (as the case
may be) generally. See "Risk Factors -- Balloon Payments" in the Prospectus.
AMORTIZATION CHARACTERISTICS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
% OF
INITIAL POOL NUMBER OF
TYPE OF LOAN BALANCE MORTGAGE LOANS
- -------------------------------- -------------- ---------------
<S> <C> <C>
ARD Loans ...................... 67.8% 158
Fully Amortizing Loans ......... 13.7 57
Balloon Loans .................. 18.6 109
------ ---
TOTAL ...................... 100.00% 324
====== ===
</TABLE>
One Action Considerations. Several states (including California) have laws
that prohibit more than one "judicial action" to enforce a mortgage obligation,
and some courts have construed the term "judicial action" broadly. Accordingly,
the Pooling and Servicing Agreement will require the Special Servicer to obtain
advice of counsel prior to enforcing any of the Trust Fund's rights under any
of the Mortgage Loans that include Mortgaged Properties where the rule could be
applicable. In addition, in the case of a Multi-Property Loan or Crossed Loans
secured by Mortgaged Properties located in multiple states, the Special
Servicer may be required to foreclose first on properties located in states
where such "one action" rules apply (and where non-judicial foreclosure is
permitted) before foreclosing on properties located in
S-55
<PAGE>
states where judicial foreclosure is the only permitted method of foreclosure.
See "Certain Legal Aspects of Mortgage Loans -- Foreclosure" in the Prospectus.
Limitations of Appraisals and Market Studies. In general, appraisals
represent the analysis and opinion of the respective appraisers at or before
the time made and are not guarantees, and may not be indicative, of present or
future value. There can be no assurance that another appraiser would not have
arrived at a different valuation, even if such appraiser used the same general
approach to, and the same method of, appraising the property. Moreover,
appraisals seek to establish the amount a typically motivated buyer would pay a
typically motivated seller. Such amount could be significantly higher than the
amount obtained from the sale of a Mortgaged Property under a distress or
liquidation sale. Information regarding the values of the Mortgaged Properties
as of the Cut-off Date is presented under "Description of the Mortgage Loans"
herein for illustrative purposes only.
Conflicts of Interest. A substantial number of the Mortgaged Properties
are managed by property managers affiliated with the respective borrowers.
These property managers also may manage and/or franchise additional properties,
including properties that may compete with the Mortgaged Properties. Moreover,
affiliates of the managers and/or the borrowers, or the managers and/or the
borrowers themselves, also may own other properties, including competing
properties. Accordingly, the managers of the Mortgaged Properties and the
borrowers may experience conflicts of interest in the management and/or
ownership of such properties.
Additionally, as described above under "-- Other Financing," and "--
Equity Investments by the Mortgage Loan Sellers and/or Affiliates," the
Mortgage Loan Sellers or affiliates thereof have acquired preferred equity
interests or direct equity interests in certain of the borrowers or their
affiliates. In addition, the Mortgage Loan Sellers or affiliates thereof may
have other financing arrangements with affiliates of the borrowers and may
enter into additional financing relationships in the future.
Conflicts Between the Servicer, Special Servicer and the Trust Fund. The
Servicer and Special Servicer have advised the Depositor that they and their
respective affiliates intend to continue to service existing mortgage loans and
new mortgage loans for third parties, including portfolios of mortgage loans
similar to the Mortgage Loans, in the ordinary course of their business. These
mortgage loans and the related mortgaged properties may be in the same markets
as, or have owners, obligors and/or property managers in common with, certain
of the Mortgage Loans and the Mortgaged Properties. Certain personnel of the
Servicer and Special Servicer and their respective affiliates may, on behalf of
the Servicer or Special Servicer, as applicable, perform services with respect
to the Mortgage Loans at the same time as they are performing services, on
behalf of other persons, with respect to other mortgage loans secured by
properties in the same markets as the Mortgaged Properties. In that event, the
interests of the Servicer, the Special Servicer and their respective affiliates
and their other clients may differ from, and compete with, the interests of the
Trust Fund. Under the Pooling and Servicing Agreement, the Servicer and the
Special Servicer are required to service the Mortgage Loans that each of them
services in the same manner, and with the same care, that each of them services
similar mortgage loans for its own portfolio or for the portfolios of third
parties.
Ground Leases. Twenty-six Mortgage Loans, representing approximately 10.4%
of the Initial Pool Balance, are secured by leasehold interests with respect to
which the related owner of the fee estate has not mortgaged such fee estate as
security for the related Mortgage Loan. For the purposes of this Prospectus
Supplement, any Mortgaged Property a material portion of which consists of a
leasehold estate is considered a leasehold interest unless the Trust Fund also
holds a mortgage on the fee, in which case it is considered a fee interest.
Each Mortgage Loan secured by mortgages on leasehold estates was
underwritten taking into account payment of the ground lease rent, except in
cases where such Mortgage Loan has a lien on both the ground lessor's and
ground lessee's interest in the Mortgaged Property. Certain Mortgage Loans
secured by leasehold interests provide for the resetting of ground lease rents
based upon certain factors, which may include the fair market value of the
related Mortgaged Property and prevailing interest rates. Increases in ground
rents may adversely impact a borrower's ability to make payments under the
related Mortgage Loan. Upon the bankruptcy of a lessor or a lessee under a
ground lease, the debtor entity has
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the right to assume (that is, continue) or reject (that is, terminate) the
ground lease. Pursuant to Section 365(h) of the Bankruptcy Code, as it is
currently in effect, a ground lessee whose ground lease is rejected by a debtor
ground lessor has the right to remain in possession of its leased premises
under the rent reserved in the lease for the term (including renewals) of the
ground lease but is not entitled to enforce the obligation of the ground lessor
to provide any services required under the ground lease. If a ground
lessee/borrower in bankruptcy rejects any or all of its ground leases, the
leasehold mortgagee would have the right to succeed to the ground
lessee/borrower's position under the lease only if the ground lessor had
specifically granted the mortgagee such right. In the event of concurrent
bankruptcy proceedings involving the ground lessor and the ground
lessee/borrower, the Trustee may be unable to enforce the bankrupt ground
lessee/borrower's obligation to refuse to treat a ground lease rejected by a
bankrupt ground lessor as terminated. In such circumstances, a ground lease
could be terminated notwithstanding lender protection provisions contained
therein or in the mortgage.
Zoning Compliance; Inspections. As a consequence of, among other things,
changes in applicable building and zoning ordinances and codes ("Zoning Laws")
affecting certain of the Mortgaged Properties which have come into effect after
the construction of improvements on such Mortgaged Properties, certain
improvements may not comply fully with current Zoning Laws, including density,
use, parking and set-back requirements, but qualify as permitted non-conforming
uses. Such changes may limit the ability of the borrower to rebuild the
premises "as is" in the event of a substantial casualty loss with respect
thereto and may adversely affect the ability of the borrower to meet its
Mortgage Loan obligations from cash flow. While it is expected that insurance
proceeds would be available for application to the related Mortgage Loan if a
substantial casualty were to occur, no assurance can be given that such
proceeds would be sufficient to pay off such Mortgage Loan in full or, if the
Mortgaged Property were to be repaired or restored in conformity with current
law, what its value would be relative to the remaining balance on the related
Mortgage Loan, whether the Mortgaged Property would have a value equal to that
before the casualty, or what its revenue-producing potential would be.
Inspections of the Mortgaged Properties were conducted in connection with
the origination of the Mortgage Loans by licensed engineers to assess the
structure, exterior walls, roofing interior construction, mechanical and
electrical systems and general condition of the site, buildings and other
improvements located on the Mortgaged Properties. There can be no assurance
that all conditions requiring repair or replacement have been identified in
such inspections.
Costs of Compliance with Americans with Disabilities Act. Under the
Americans with Disabilities Act of 1990 (the "ADA"), all public accommodations
are required to meet certain federal requirements related to access and use by
disabled persons. To the extent the Mortgaged Properties do not comply with the
ADA, the borrowers may be required to incur costs of complying with the ADA. In
addition, noncompliance could result in the imposition of fines by the federal
government or an award of damages to private litigants.
Litigation. There may be legal proceedings pending and, from time to time,
threatened against the borrowers or their affiliates relating to the business
of or arising out of the ordinary course of business of the borrowers and their
affiliates. There can be no assurance that such litigation will not have a
material adverse effect on the distributions to Certificateholders. With
respect to Loan Nos. 57 and 101, a former general partner of the borrowers has
filed a claim in the Superior Court of New Jersey for payment of a debt
obligation aggregating approximately $200,000. The borrower has filed a motion
to dismiss. With respect to Loan Nos. 57 and 101, the partners and sponsors of
the respective borrowers were involved in bankruptcy proceedings during the
1980s and early 1990s. The borrowers were subject to the jurisdiction of the
bankruptcy court but were not themselves the subject of any bankruptcy
proceeding. The bankruptcy matters concluded in September 1997 upon the
purchase by CSFB Mortgage Capital of the related loans.
Additional Collateral Loans. Three of the CSFB Mortgage Loans,
representing approximately 2.9% of the Initial Pool Balance, are Additional
Collateral Loans that could experience partial prepayments ("Required
Prepayments"), including during their Lockout Periods, if certain
leasing-related performance tests, including the achievement of certain DSCRs,
have not been satisfied. If any such test is not
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met and a Required Prepayment of the related Mortgage Loan results, such
Required Prepayment may not be subject to payment of a Prepayment Premium or
Yield Maintenance Charge. See "-- The Offered Certificates -- Special
Prepayment and Yield Considerations." The holders of the Class A-X Certificates
and any Class of Offered Certificates receiving any such Required Prepayment
will be entitled to receive payments ("Yield Protection Payments") to
compensate them for the absence of any such Prepayment Premium or Yield
Maintenance Charge payments. With respect to any Class of Offered Certificates
receiving a distribution of principal in connection with a Required Prepayment,
the Yield Protection Payment will equal 2% of such distribution of principal.
With respect to the Class A-X Certificates, the Yield Protection Payment will
be a yield-maintenance payment calculated in the manner provided in the Pooling
and Servicing Agreement. The Servicer will be required to advance such Yield
Protection Payments on the related Servicer Remittance Date and will be
reimbursed therefor, and will be paid interest thereon at the Reimbursement
Rate, by CSFB Mortgage Capital. Although such Yield Protection Payments are
intended to offset any loss of yield experienced by an investor in the Offered
Certificates as the result of a Required Prepayment, the Depositor makes no
representation that such Yield Protection Payments will fully offset the effect
of any such Required Prepayment on a Certificateholder's yield to maturity. See
"Prepayment and Yield Considerations."
For the purposes of this Prospectus Supplement and the statistical
information presented herein, the entire principal balance of each Additional
Collateral Loan is deemed to be subject to a Lockout Period for the related
"Remaining Lockout" period set forth on Annex A hereto, notwithstanding the
fact that Required Prepayments could occur under such loans during such Lockout
Period.
THE OFFERED CERTIFICATES
Limited Assets. If the assets of the Trust Fund are insufficient to make
payments on the Offered Certificates, no other assets will be available for
payment of the deficiency. See "Risk Factors -- Limited Assets" in the
Prospectus.
Special Prepayment and Yield Considerations. The yield to maturity on the
Offered Certificates will depend on, among other things, the rate and timing of
principal payments (including both voluntary prepayments, in the case of
Mortgage Loans that permit voluntary prepayment, and involuntary prepayments,
such as prepayments resulting from casualty or condemnation, defaults and
liquidations) on the Mortgage Loans and the allocation thereof to reduce the
Certificate Balances of the Offered Certificates entitled to distributions of
principal. The yield to maturity of the Class A-2MF Certificates will be
particularly sensitive to the rate and timing receipt of the A-2MF Principal
Distribution Amount. In addition, in the event of any repurchase of a Mortgage
Loan from the Trust Fund by the related Mortgage Loan Seller or the Depositor
under the circumstances described under "The Pooling and Servicing Agreement --
Representations and Warranties; Repurchase" or the purchase of the Mortgage
Loans by either of the Mortgage Loan Sellers, the holders of a majority of the
Percentage Interests in the Controlling Class or the Servicer under the
circumstances described under "The Pooling and Servicing Agreement -- Optional
Termination," the Purchase Price paid would be passed through to the holders of
the Certificates with the same effect as if such Mortgage Loan had been prepaid
in full (except that no Prepayment Premium or Yield Maintenance Charge would be
payable with respect to any such repurchase). No representation is made as to
the anticipated rate of prepayments (voluntary or involuntary) on the Mortgage
Loans or as to the anticipated yield to maturity of any Certificate. See
"Prepayment and Yield Considerations" herein and "Risk Factors -- Prepayments
and Effect on Average Life of Certificates and Yields" in the Prospectus.
In general, if an Offered Certificate is purchased at a premium and
principal distributions thereon occur at a rate faster than anticipated at the
time of purchase, to the extent that the required Prepayment Premiums or Yield
Maintenance Charges are not received, the investor's actual yield to maturity
may be lower than that assumed at the time of purchase. Conversely, if an
Offered Certificate is purchased at a discount and principal distributions
thereon occur at a rate slower than that assumed at the time of purchase, the
investor's actual yield to maturity may be lower than that assumed at the time
of purchase.
The investment performance of the Offered Certificates may vary materially
and adversely from the investment expectations of investors due to prepayments
on the Mortgage Loans that are higher or lower
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than anticipated by investors. The actual yield to the holder of an Offered
Certificate may not be equal to the yield anticipated at the time of purchase
of the Offered Certificate or, notwithstanding that the actual yield is equal
to the yield anticipated at that time, the total return on investment expected
by the investor or the expected weighted average life of the Offered
Certificate may not be realized. In deciding whether to purchase any Offered
Certificates, an investor should make an independent decision as to the
appropriate prepayment assumptions to be used. See "Prepayment and Yield
Considerations."
Most of the Mortgage Loans provide for a Lockout Period during which
voluntary prepayment is prohibited. See "Description of the Mortgage Loans --
Certain Terms and Conditions of the Mortgage Loans -- Prepayment Provisions."
For statistical information relating to the Lock-out Periods on a loan-by-loan
basis, see Annex A hereto.
As of the Cut-off Date, approximately 98.3% of the Mortgage Loans were
within their respective Lockout Periods, and the weighted average of such
Lockout Periods was 133 months.
The rate at which voluntary prepayments are made on the Mortgage Loans
will be affected by a variety of factors, including, without limitation, the
terms of the Mortgage Loans, the level of prevailing interest rates as compared
to the applicable Mortgage Rate, the availability of mortgage credit and
economic, demographic, tax, legal and other factors. In general, however, if
prevailing interest rates are at or above the rates borne by such Mortgage
Loans, such Mortgage Loans may be the subject of lower principal prepayments
than if prevailing rates fall significantly below the mortgage rates of the
Mortgage Loans. The rate of principal payments on the Offered Certificates may
be affected by the rate of principal payments on the Mortgage Loans and is
likely to be affected by the Lockout Period, Prepayment Premium and Yield
Maintenance Charge provisions applicable to the Mortgage Loans and by the
extent to which the Servicer is able to enforce such provisions. The rate of
principal payments on the Class A-2MF Certificates will be particularly
sensitive to the rate and timing of receipt of the A-2MF Principal Distribution
Amount. Mortgage Loans with Lockout Period, Prepayment Premium or Yield
Maintenance Charge provisions, to the extent enforceable, generally would be
expected to experience a lower rate of principal prepayments than otherwise
identical mortgage loans without such provisions, with shorter Lockout Periods
or with lower Prepayment Premiums or Yield Maintenance Charges.
Fifty-seven Mortgage Loans, representing approximately 10.7% of the
Initial Pool Balance do not provide for defeasance. The remaining Mortgage
Loans provide that, after the applicable Defeasance Lockout Period, the
borrower may obtain the release of the related Mortgaged Property from the lien
of the related Mortgage upon the pledge to the Trustee of noncallable U.S.
Treasury or other noncallable U.S. government obligations which provide
payments on or prior to all successive payment dates through maturity (in the
case of the ARD Loans, through the related Anticipated Repayment Dates or, in
the case of one ARD Loan, through the date which is six months before the
Anticipated Repayment Date) in the amounts due on such dates and upon the
satisfaction of certain other conditions. All Mortgage Loans containing
defeasance provisions have a Defeasance Lockout Period of not less than two
years after the Closing Date. See "Certain Characteristics of the Mortgage
Loans -- Certain Terms and Conditions of the Mortgage Loans -- Property
Releases." The related borrower will be required to transfer the pledged U.S.
government obligations, together with all obligations under the related
Mortgage Loan or defeased portion thereof, to a successor limited purpose
borrower, and such successor borrower will assume the obligations under the
Mortgage Loan or defeased portion thereof.
Provisions requiring Prepayment Premiums or Yield Maintenance Charges may
not be enforceable in some states and under federal bankruptcy law, and may
constitute interest for usury purposes. Accordingly, no assurance can be given
that the obligation to pay a Prepayment Premium or a Yield Maintenance Charge
will be enforceable under applicable state or federal law or, if enforceable,
that the foreclosure proceeds will be sufficient to pay such Prepayment Premium
or Yield Maintenance Charge. Additionally, although the collateral substitution
provisions related to defeasance are not intended to be, and do not have the
same effect on the Certificateholders as, prepayment, there can be no assurance
that a court would not interpret such provisions as requiring a Prepayment
Premium or Yield Maintenance Charge and thus unenforceable or usurious under
applicable law.
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Effect of Mortgagor Defaults. The aggregate amount of distributions on the
Offered Certificates, the yield to maturity of the Offered Certificates, the
rate of principal payments on the Offered Certificates and the weighted average
life of the Offered Certificates will be affected by the rate and timing of
delinquencies and defaults on the Mortgage Loans. Delinquencies on the Mortgage
Loans, if the delinquent amounts are not advanced, may result in shortfalls in
distributions of interest and/or principal to the Offered Certificates for the
current month. Any late payments received on or in respect of the Mortgage
Loans will be distributed to the Certificates in the priorities described more
fully herein, but no interest will accrue on such shortfall during the period
of time such payment is delinquent.
If a purchaser of an Offered Certificate of any Class calculates its
anticipated yield based on an assumed rate of default and an assumed amount of
losses on the Mortgage Loans that are lower than the default rate and the
amount of losses actually experienced, and if such losses are allocated to such
Class of Certificates, such purchaser's actual yield to maturity will be lower
than the yield so calculated and could, under certain scenarios, be negative.
The timing of any loss on a liquidated Mortgage Loan also will affect the
actual yield to maturity of the Offered Certificates to which all or a portion
of such loss is allocable, even if the rate of defaults and severity of losses
are consistent with an investor's expectations. In general, the earlier a loss
borne by an investor occurs, the greater the effect on such investor's yield to
maturity. See "Prepayment and Yield Considerations."
As and to the extent described herein, the Servicer, the Special Servicer
or the Trustee, as applicable, will be entitled to receive interest on
unreimbursed Advances and unreimbursed servicing expenses that (a) are
recovered out of amounts received on the Mortgage Loan as to which such
Advances were made or such servicing expenses were incurred, which amounts are
in the form of reimbursement from the related borrower, late payments,
liquidation proceeds, insurance proceeds, condemnation proceeds or amounts paid
in connection with the purchase of such Mortgage Loan out of the Trust Fund or
(b) are determined to be nonrecoverable Advances. Such interest will accrue
from (and including) the date on which the related Advance is made or the
related expense incurred to (but excluding) the date on which (x) in the case
of clause (a) above, such amounts are recovered and (y) in the case of clause
(b) above, a determination of nonrecoverability is made to the extent that
there are funds available in the Certificate Account for reimbursement of such
Advance. The right of the Servicer, the Special Servicer or the Trustee, as
applicable, to receive such payments of interest is senior to the rights of
Certificateholders to receive distributions on the Offered Certificates and,
consequently, may result in losses being allocated to the Offered Certificates
that would not have resulted absent the accrual of such interest. In addition,
certain circumstances, including delinquencies in the payment of principal and
interest, may result in a Mortgage Loan being specially serviced. The Special
Servicer is entitled to additional compensation for special servicing
activities which may result in losses being allocated to the Offered
Certificates that would not have resulted absent such compensation. See "The
Pooling and Servicing Agreement -- Servicing Compensation and Payment of
Expenses."
Even if losses on the Mortgage Loans are not borne by an investor in a
particular Class of Offered Certificates, such losses may affect the weighted
average life and yield to maturity of such investor's Certificates. Losses on
the Mortgage Loans, to the extent not allocated to such Class of Offered
Certificates, may result in a higher percentage ownership interest evidenced by
such Certificates than would otherwise have resulted absent such loss. The
consequent effect on the weighted average life and yield to maturity of the
Offered Certificates will depend upon the characteristics of the remaining
Mortgage Loans.
Regardless of whether losses ultimately result, delinquencies and defaults
on the Mortgage Loans may significantly delay the distribution of payments to
the holder of an Offered Certificate, to the extent that Advances or the
subordination of another Class of Certificates does not fully offset the
effects of any such delinquency or default. The Available Distribution Amount
generally consists of principal and interest on the Mortgage Loans actually
collected or advanced, as more fully described herein.
As described under "Description of the Offered Certificates --
Distributions," if the portion of the Available Distribution Amount
distributable in respect of interest on any Class of Offered Certificates on
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any Distribution Date is less than the Optimal Interest Distribution Amount
then payable to such Class, the shortfall will be distributable without
interest on such shortfall to holders of such Class on subsequent Distribution
Dates, to the extent of the Available Distribution Amount for each such
subsequent Distribution Date.
Servicer or Special Servicer May Purchase Certificates; Conflict of
Interest. The Servicer or Special Servicer or an affiliate thereof will be
permitted to purchase any Class of Certificates. It is anticipated that the
Special Servicer or an affiliate of the Special Servicer will purchase all or a
portion of the Class H, Class I and Class J Certificates. However, there can be
no assurance that the Special Servicer or an affiliate of the Special Servicer
will purchase such Certificates. Following any such purchase of Certificates,
the Servicer or Special Servicer will have rights as a holder of Certificates,
including certain Voting Rights, which are in addition to such entity's rights
as Servicer or Special Servicer under the Pooling and Servicing Agreement.
Consequently, any purchase of Certificates by the Servicer or Special Servicer,
as the case may be, could cause a conflict between such entity's duties
pursuant to the Pooling and Servicing Agreement and its interest as a holder of
a Certificate, especially to the extent that certain actions or events have a
disproportionate effect on one or more Classes of Certificates. In addition,
the holders of a majority of the Percentage Interests of the Controlling Class
(initially certain of the Private Certificates, a portion of which will be
purchased by the Special Servicer) will be entitled, at their option, to remove
the Special Servicer, with or without cause, and appoint a successor Special
Servicer, provided that each Rating Agency confirms in writing that such
removal and appointment, in and of itself, would not cause a downgrade,
qualification or withdrawal of the then current ratings assigned to any Class
of Certificates. The Pooling and Servicing Agreement provides that the Mortgage
Loans are required to be administered in accordance with the servicing standard
set forth therein without regard to ownership of any Certificate by the
Servicer, the Special Servicer or any affiliate thereof. See "The Pooling and
Servicing Agreement -- Amendment."
Consents. Under certain circumstances, the consent or approval of the
holders of a specified percentage of the outstanding Certificates will be
required to direct, and will be sufficient to bind all Certificateholders to,
certain actions, including amending the Pooling and Servicing Agreement. See
"The Pooling and Servicing Agreement -- Amendment."
Book-Entry Registration. Each Class of Offered Certificates initially will
be represented by one or more certificates registered in the name of Cede &
Co., as the nominee for DTC, and will not be registered in the names of the
related holders of Certificates or their nominees. As a result, unless and
until Definitive Certificates are issued, holders of Offered Certificates will
not be recognized as "Certificateholders" for certain purposes. Hence, until
such time, those beneficial owners will be able to exercise the rights of
holders of Certificates only indirectly through DTC, and its participating
organizations. A beneficial owner holding a certificate through the book-entry
system will be entitled to receive the reports described under "The Pooling and
Servicing Agreement -- Reports to Certificateholders; Available Information"
and notices only through the facilities of DTC and its respective participants
or from the Trustee (if the Depositor has provided the name of such beneficial
owner to the Certificate Registrar). For additional information on the
book-entry system, see "Description of the Offered Certificates -- Book-Entry
Registration and Definitive Certificates." Upon presentation of evidence
satisfactory to the Trustee of their beneficial ownership interest in the
Offered Certificates, such beneficial owners are entitled to receive, upon
request in writing, copies of monthly reports to Certificateholders from the
Trustee.
Limited Liquidity and Market Value. There currently is no secondary market
for the Offered Certificates. Although the Underwriters have advised the
Depositor that they currently intend to make a secondary market in the Offered
Certificates, they are under no obligation to do so. Accordingly, there can be
no assurance that a secondary market for the Offered Certificates will develop.
Moreover, if a secondary market does develop, there can be no assurance that it
will provide holders of Offered Certificates with liquidity of investment or
that it will continue for the life of the Offered Certificates. The Offered
Certificates will not be listed on any securities exchange. Lack of liquidity
could adversely affect the market value of the Offered Certificates. The market
value of the Offered Certificates at any time may
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be affected by many other factors, including then prevailing interest rates,
and no representation is made by any person or entity as to what the market
value of any Offered Certificate will be at any time. See "Risk Factors --
Limited Liquidity" in the Prospectus.
Subordination. As and to the extent described below under "Description of
the Offered Certificates -- Subordination; Allocation of Collateral Support
Deficits and Certificate Deferred Interest," the rights of the holders of the
Mezzanine Certificates are subordinate in right of payment to each Class of
Senior Certificates and to each class of Mezzanine Certificates with an earlier
alphabetical designation.
Allocation of Collateral Support Deficits on the Mortgage Loans. All
Collateral Support Deficits (as defined below under "Description of the Offered
Certificates -- Subordination; Allocation of Collateral Support Deficits and
Certificate Deferred Interest") in collections on the Mortgage Loans will be
allocated first, to the Private Certificates until the Certificate Balances
thereof have been reduced to zero, and then to the Class E, Class D, Class C
and Class B Certificates, in that order, until the Certificate Balance of each
such Class has been reduced to zero. After the principal balances of the
Private Certificates and Mezzanine Certificates have been reduced to zero, the
Trustee will be required to allocate any remaining portion of such Collateral
Support Deficit to the Class A-1A, Class A-1B and Class A-2MF Certificates, pro
rata (based upon the respective Certificate Balances of such Classes), until
the remaining Certificate Balances of such Classes are reduced to zero.
Allocation of Certificate Deferred Interest. Any Certificate Deferred
Interest (which would result from the modification of Mortgage Loans to reduce
their interest payment rates and the accrual of interest on any interest
deferred), will be allocated on each Distribution Date to the Classes of
Regular Certificates (other than the Class A-X Certificates) to reduce the
Monthly Interest Distributable Amount to the Class J, Class I, Class H, Class
G, Class F, Class E, Class D, Class C and Class B Certificates, in that order.
Any Certificate Deferred Interest in excess of the Monthly Interest
Distributable Amount for any Class to which such Certificate Deferred Interest
is allocable will be allocated to the next most senior Class of Certificates,
in the manner set forth in the preceding sentence. If the Certificate Balance
of at least one Class of Senior Certificates has not been reduced to zero, then
any amounts representing Certificate Deferred Interest after allocation thereof
to the Offered Certificates in accordance with the preceding sentence will be
allocated to the Senior Certificates (other than the Class A-X Certificates)
pro rata on the basis of the respective interest entitlements of such Classes
on such date (before giving effect to any reduction therefrom on such
Distribution Date). The effect of such an allocation of Certificate Deferred
Interest will be to reduce the interest otherwise distributable to such Classes
of Certificates. Because of the subordination of the Offered Certificates to
each other Class of Offered Certificates with an earlier alphabetical Class
designation, the yields to maturity on the Offered Certificates will be
sensitive in varying degrees to the allocation of Certificate Deferred Interest
to such Certificates. See "Description of the Offered Certificates --
Subordination; Allocation of Collateral Support Deficits and Certificate
Deferred Interest."
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DESCRIPTION OF THE MORTGAGE LOANS
GENERAL
The Trust Fund will consist primarily of 324 fixed-rate loans secured by
452 multifamily and commercial properties. The Mortgage Loans will have an
aggregate Cut-off Date Principal Balance of approximately $2,482,942,297 (the
"Initial Pool Balance"), subject to a variance of plus or minus 5%. For the
purposes of this Prospectus Supplement, any loan evidenced by one note (each, a
"Note" or a "Mortgage Note") is considered to be one Mortgage Loan. Any loans
made to affiliated borrowers, whether or not cross-collateralized, are
considered separate Mortgage Loans. For purposes of describing the property
type and geographic distribution of Mortgaged Properties, Allocated Loan
Amounts, as shown on Annex A, are used for Mortgage Loans secured by more than
one property. All numerical information provided herein with respect to the
Mortgage Loans is provided on an approximate basis. All percentages of the
Trust Fund, or of any specified sub-group thereof, referred to herein without
further description are approximate percentages by aggregate Cut-off Date
Principal Balance. Descriptions of the terms and provisions of the Mortgage
Loans are generalized descriptions of the terms and provisions of the Mortgage
Loans in the aggregate. Many of the individual Mortgage Loans have specific
terms and provisions that deviate from the general description.
Each Mortgage Loan is evidenced by a Mortgage Note and secured by one or
more mortgages, deeds of trust or other similar security instruments (a
"Mortgage"). Each of the Mortgages creates a first lien on the interests of the
related borrower in the related Mortgaged Property, as set forth in the
following table:
SECURITY FOR THE MORTGAGE LOANS
<TABLE>
<CAPTION>
NUMBER OF
% OF INITIAL MORTGAGED
INTEREST OF BORROWER ENCUMBERED POOL BALANCE (1) PROPERTIES
- --------------------------------- ------------------ -----------
<S> <C> <C>
Fee Simple Estate(2) ............ 89.6% 426
Leasehold ....................... 10.4% 26
----- ---
TOTAL ........................... 100.0% 452
===== ===
</TABLE>
- ----------
(1) Based on the principal balance of the Mortgage Loan or, for any
Multi-Property Loan, the Allocated Loan Amount with respect to each
portion of the related Mortgaged Property.
(2) For any Mortgaged Property where the ground lessee and ground lessor are
both parties to the Mortgage, the Mortgaged Property was categorized as a
fee simple estate. For any Mortgaged Property that partially consists of
a leasehold interest, the encumbered interest has been categorized as a
fee simple interest if the leasehold interest does not constitute a
material portion of the Mortgaged Property.
Two hundred forty of the Mortgage Loans (the "CSFBMC Mortgage Loans"),
representing approximately 84.4% of the Initial Pool Balance, will be sold to
the Depositor by CSFB Mortgage Capital and 84 of the Mortgage Loans (the "PWRES
Mortgage Loans"), representing 15.6% of the Initial Pool Balance, will be sold
by PWRES. Each Mortgage Loan was originated or purchased by the related
Mortgage Loan Seller.
Each Mortgaged Property consists of land improved by (i) a retail property
(a "Retail Property," and any Mortgage Loan secured thereby, a "Retail Loan"),
(ii) an office building (an "Office Property," and any Mortgage Loan secured
thereby, an "Office Loan"), (iii) a full or limited service or extended stay
hotel property (a "Hospitality Property," and any Mortgage Loan secured
thereby, a "Hospitality Loan"), (iv) an apartment building or complex
consisting of five or more rental units (a "Multifamily Property," and any
Mortgage Loan secured thereby, a "Multifamily Loan"), (v) a nursing home or
congregate care facility (each, a "Healthcare Property," and any Mortgage Loan
secured thereby, a "Healthcare Loan"), (vi) an industrial property (an
"Industrial Property," and any Mortgage Loan secured thereby, an "Industrial
Loan"), (vii) a self-storage facility (a "Self-Storage Facility Property," and
any Mortgage Loan secured thereby, a "Self-Storage Facility Loan"), (viii) a
cooperative apartment building (a "Cooperative Property", and any Mortgage Loan
secured thereby, a "Cooperative Loan"), (ix) a mobile home
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community or recreational vehicle park or a combination thereof (a "Mobile
Home/Recreational Vehicle Property," and any Mortgage Loan secured thereby, a
"Mobile Home/Recreational Vehicle Loan") or (x) certain other properties (each,
an "Other Property" and any Mortgage Loan secured thereby, an "Other Loan").
Certain statistical information relating to the various types of Mortgaged
Properties is set forth in the table under "-- Additional Mortgage Loan
Information -- Mortgaged Properties by Property Type."
Fifty-five Mortgage Loans, representing approximately 29.3% of the Initial
Pool Balance, are secured by two or more Mortgaged Properties, either by
cross-collateralization with other Mortgage Loans in the Trust Fund or under a
single Mortgage Note by a single borrower secured by multiple Mortgaged
Properties, or both. See "Risk Factors -- The Mortgage Loans -- Concentration
of Mortgage Loans; Borrowers."
The Mortgage Loans comprise two separate groups, Loan Group 1 and Loan
Group 2. Loan Group 2 will consist of 46 Mortgage Loans, representing
approximately 12.1% of the Initial Pool Balance, each of which is a Multifamily
Loan having a remaining term to scheduled maturity (or, in the case of an ARD
Loan, to the Anticipated Repayment Date) as of the Cut-off Date of ten years or
less. See Annex C -- "Certain Information Regarding the Loan Group 2 Mortgage
Loans." Loan Group 1 will consist of the remaining Mortgage Loans.
None of the Mortgage Loans are insured or guaranteed by the United States,
any governmental agency or instrumentality, any private mortgage insurer or by
the Depositor, the Mortgage Loan Sellers, the Servicer, the Special Servicer,
the Trustee or any of their respective affiliates. All of the Mortgage Loans
generally are non-recourse except in limited circumstances such as a default
resulting from fraud or other willful misconduct of the borrower. If a borrower
defaults on any Mortgage Loan, recourse generally may be had only against the
specific Mortgaged Property or Mortgaged Properties securing such Mortgage Loan
and such limited other assets as have been pledged to secure such Mortgage
Loan, and not against the borrower's other assets.
The Mortgage Loans generally were underwritten in accordance with the
underwriting criteria described under "-- CSFB Mortgage Capital Underwriting
Standards" and "-- PWRES Underwriting Standards." The Depositor will purchase
the Mortgage Loans to be included in the Trust Fund on or before the Closing
Date from the related Mortgage Loan Seller pursuant to a Mortgage Loan Purchase
Agreement (the "Mortgage Loan Purchase Agreement") to be dated as of the
Cut-off Date between such Mortgage Loan Seller and the Depositor. The related
Mortgage Loan Seller will be obligated under the Mortgage Loan Purchase
Agreement to repurchase a Mortgage Loan sold by it in the event of (i) a breach
of a representation or warranty of the Mortgage Loan Seller with respect to
such Mortgage Loan as described under "The Pooling and Servicing Agreement --
Representations and Warranties; Repurchase" or (ii) certain instances of
missing or defective documents. The Depositor will assign the Mortgage Loans,
together with the Depositor's rights and remedies against the Mortgage Loan
Sellers in respect of breaches of representations or warranties regarding the
Mortgage Loans, to the Trustee, for the benefit of the Certificateholders,
pursuant to the Pooling and Servicing Agreement. Banc One Mortgage Capital
Markets, LLC, in its capacity as Servicer, will service the Mortgage Loans
pursuant to the Pooling and Servicing Agreement. The Depositor will make no
representations or warranties with respect to the Mortgage Loans and will have
no obligation to repurchase or substitute for Mortgage Loans with deficient
documentation or which are otherwise defective. Each Mortgage Loan Seller, as a
seller of Mortgage Loans to the Depositor, is selling the Mortgage Loans sold
by it without recourse, and, accordingly, in such capacity, will have no
obligations with respect to the Certificates other than pursuant to the limited
representations, warranties and covenants made by it to the Depositor and
assigned by the Depositor to the Trustee for the benefit of the
Certificateholders. See "The Pooling and Servicing Agreement -- Assignment of
the Mortgage Loans" and "The Mortgage Pools -- Representations and Warranties"
in the Prospectus.
SECURITY FOR THE MORTGAGE LOANS
In addition to the security of one or more Mortgages encumbering the
related borrower's interest in the applicable Mortgaged Property or Properties,
each Mortgage Loan also is secured by an assignment
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of the related borrower's interest in the leases, rents, issues and profits of
the related Mortgaged Properties. In certain instances, additional collateral
exists in the nature of partial indemnities or guaranties, or one or more
Escrow Accounts (as defined herein) for, among other things, necessary repairs,
replacements and environmental remediation, real estate taxes and insurance
premiums, deferred maintenance and/or scheduled capital improvements,
re-leasing reserves and seasonal working capital reserves. Additionally,
certain of the Credit Lease Loans have the benefit of Lease Enhancement
Policies or Residual Value Policies. The Mortgage Loans generally provide for
the indemnification of the mortgagee by the borrower (or related principals)
for the presence of any hazardous substances affecting the Mortgaged Property.
In addition, one of the Reichmann/Intell Portfolio Properties is covered by a
policy insuring against certain losses due to environmental contamination. Each
Mortgage constitutes a first lien on a Mortgaged Property, subject generally
only to (i) liens for real estate and other taxes and special assessments not
yet due and payable, (ii) covenants, conditions, restrictions, rights of way,
easements and other encumbrances whether or not of public record as of the date
of recording of the related Mortgage, such exceptions having been acceptable to
the related Mortgage Loan Seller in connection with the purchase or origination
of such Mortgage Loan and (iii) such other exceptions and encumbrances on
Mortgaged Properties as are reflected in the related title insurance policies.
See "Certain Characteristics of the Mortgage Loans -- Certain Terms and
Conditions of the Mortgage Loans -- Escrows."
CSFB MORTGAGE CAPITAL UNDERWRITING STANDARDS
Each Mortgage Loan originated or purchased by CSFB Mortgage Capital (each,
a "CSFBMC Mortgage Loan") generally is consistent with the underwriting
standards applied by CSFB Mortgage Capital, as described below.
CSFB Mortgage Capital has implemented guidelines establishing certain
procedures with respect to underwriting mortgage loans. The CSFBMC Mortgage
Loans generally were originated in accordance with such guidelines; provided,
however, that the underwriting standards for such Mortgage Loans which are
secured by cooperative apartments, mobile home/recreational vehicle parks,
restaurants and self-storage facilities were originated utilizing prudent
underwriting practices for mortgage loans secured by similar mortgaged
properties and may differ from the standards described below. With respect to
the Mortgage Loans which were acquired by CSFB Mortgage Capital, CSFB Mortgage
Capital applied its general guidelines to such loans in reliance on information
provided to it by the originators of such loans without independent
investigation. In some instances, one or more provisions of the guidelines were
waived or modified where it was determined not to adversely affect the Mortgage
Loans in any material respect. The underwriting standards for the CSFBMC
Mortgage Loans addressed, with respect to each Mortgaged Property,
environmental conditions, physical conditions, property valuations, property
financial performance, code compliance, property management, title insurance,
borrower evaluation and property insurance, as described below.
Environmental Assessments. Substantially all of the Mortgaged Properties
relating to the CSFBMC Mortgage Loans have been subject to environmental site
assessments or studies within the period of 12 months preceding the Cut-off
Date. Additionally, all borrowers were required to provide environmental
representations and warranties and covenants relating to the existence and use
of hazardous substances on the Mortgaged Properties relating to the CSFBMC
Mortgage Loans. The borrower under Loan No. 4 also was required to obtain
insurance against certain losses due to environmental contamination. See
"Certain Characteristics of the Mortgage Loans -- Significant Mortgage Loans --
"Reichmann/ Intell Portfolio Loan."
Property Condition Assessments. Inspections of the related Mortgaged
Properties were conducted by engineering firms prior to origination of the
CSFBMC Mortgage Loans. Such inspections generally were commissioned to assess
the structure, exterior walls, roofing, interior constructions, mechanical and
electrical systems and general conditions of the site, buildings and other
improvements located at each Mortgaged Property. The resulting reports
indicated a variety of deferred maintenance items and recommended capital
improvements with respect to each Mortgaged Property. The estimated cost of the
necessary repairs or replacements at each Mortgaged Property was included in
each property condition
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report. In each instance, the originator of the Mortgage Loan either determined
that the necessary repairs or replacements were being addressed by the related
borrowers in a satisfactory manner, or required that they be addressed
post-closing and, in most instances, that reserves be established to cover the
cost of such repairs or replacements.
Appraisals. An appraisal of each of the Mortgaged Properties relating to
the CSFBMC Mortgage Loans was performed. The appraisals generally were
performed by independent MAI appraisers and indicated that at the time of the
respective appraisals the aggregate value of the related Mortgaged Properties
exceeded the original principal amount of each CSFBMC Mortgage Loan. The
appraisals also were used as a source of information for rental and vacancy
rates and were used to calculate tenant improvement reserves. In general,
appraisals represent the analysis and opinion of qualified experts and are not
guarantees of present or future value. Moreover, appraisals seek to establish
the amount a typically motivated buyer would pay a typically motivated seller.
Such amount could be significantly higher than the amount obtained from the
sale of a Mortgaged Property under a distress or liquidation sale.
Operating and Occupancy Statements. In connection with the origination of
the CSFBMC Mortgage Loans (other than the Credit Lease Loans), the originator
reviewed current rent rolls (and, where available, up to three years of prior
rent rolls) and related information or statements of occupancy rates, census
data, financial data, historical operating statements and, with respect to the
CSFBMC Mortgage Loans secured by Office Properties, Industrial Properties and
Retail Properties, a selection of major tenant leases. In underwriting each
Mortgage Loan, income and operating information provided by the related
borrower was examined by the originator of the Mortgage Loan. Neither the
Depositor nor CSFBMC Mortgage makes any representation as to the accuracy of
such information; provided, however, that, with respect to several of the
CSFBMC Mortgage Loans, the originator thereof or the related borrower engaged
independent accountants to review or perform certain procedures to verify such
information.
Zoning and Building Code Compliance. All of the borrowers generally have
represented under the related Mortgage or loan agreement and, in connection
with substantially all of the CSFBMC Mortgage Loans, provided other evidence to
the effect, that the use and operation of the related Mortgaged Properties was,
as of the date on which the Mortgage Loan was originated, and is currently, in
compliance in all material respects with all applicable zoning, land-use,
environmental, building, fire and health ordinances, rules, regulations and
orders applicable to the related Mortgaged Properties. For a discussion of
zoning issues, see "Risk Factors -- Zoning Compliance; Inspections."
Property Management. Generally, for all CSFBMC Mortgage Loans (other than
Credit Lease Loans), a manager (which may be an employee of the borrower) is
responsible for responding to changes in the local rental or lodging market,
planning and implementing the rental rate or operating structure, which may
include establishing levels of rent payments or rates, and insuring that
maintenance and capital improvements are carried out in a timely fashion.
Management errors may adversely affect the performance and long-term viability
of a project. Each of the original managers was approved by the originator of
each CSFBMC Mortgage Loan in connection with the origination of the related
Mortgage Loan. In most cases, the Special Servicer may cause the borrower to
terminate management contracts upon certain events specified in the documents
executed in connection with the CSFBMC Mortgage Loans and generally any change
in a manager must be approved by the Special Servicer. No change in a manager
may be effected by the Special Servicer unless the Rating Agencies have
confirmed in writing that such change will not cause any withdrawal,
qualification or downgrade in the then current ratings of each Class of
Certificates. For a discussion of property management issues, see "Risk Factors
- -- Property Management -- Conflicts of Interest."
Title Insurance Policy. With the exception of the Ritz-Carlton Loan (see
"Certain Characteristics of the Mortgage Loans -- Significant Mortgage Loans --
The Ritz-Carlton Loan"), each borrower has provided, and CSFB Mortgage Capital
has obtained, a title insurance policy for each Mortgaged Property relating to
CSFBMC Mortgage Loans. Each title insurance policy generally complies with the
following requirements: (a) the policy must be written by a title insurer
licensed to do business in the jurisdiction
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where the Mortgaged Property is located, (b) the policy must be in an amount
equal to the original principal balance of the related Mortgage Loan, (c) the
protection and benefits must run to the mortgagee and its successors and
assigns, (d) the policy should be written on a standard policy form of the
American Land Title Association or equivalent policy promulgated in the
jurisdiction where the Mortgaged Property is located and (e) the legal
description of the Mortgaged Property in the policy must conform to that shown
on the survey of the Mortgaged Property, where a survey has been required.
Property Insurance. Each borrower has provided, and CSFB Mortgage Capital
has reviewed, certificates of required insurance with respect to each Mortgaged
Property. Such insurance generally may include: (1) commercial general
liability insurance for bodily injury or death and property damage; (2) an "All
Risk of Physical Loss" policy; (3) if applicable, boiler and machinery
coverage; (4) if the Mortgaged Property is located in a 100-year flood zone,
flood insurance; (5) if the Mortgaged Property is located in an earthquake
prone area, earthquake insurance; and (6) such other coverage as CSFB Mortgage
Capital may require based on the specific characteristics of the Mortgaged
Property. Generally, with respect to Mortgage Loans with original principal
balances less than $20 million, the claims-paying ability of the related
insurance providers must have a rating by S&P of "A" or better and, with
respect to Mortgage Loans with original principal balances greater than $20
million, the related insurance provider must have a rating by S&P of "AA" or
better.
Evaluation of Borrower. CSFB Mortgage Capital evaluates each borrower and
its principals with respect to credit history and prior experience as an owner
and operator of commercial real estate properties. The evaluation generally
includes obtaining and reviewing a credit report or other reliable indication
of the borrower's financial capacity; obtaining and verifying credit references
and/or business and trade references; and obtaining and reviewing
certifications provided by the borrower as to prior real estate experience and
current contingent liabilities. Approximately 99% of the borrowers are single
asset special purpose entities. In addition, in general, in connection with
each CSFBMC Mortgage Loan with an original principal balance in excess of $20
million and each Credit Lease Loan, each borrower is required to be organized
as a bankruptcy-remote entity, and CSFB Mortgage Capital has reviewed the
organizational documents of the borrower to verify compliance with such
requirement.
DSCR and LTV Ratio. CSFB Mortgage Capital's underwriting standards
generally require, for all mortgage loans other than Credit Lease Loans, the
following minimum DSCR and Loan-to-Value Ratios for each of the indicated
property types:
<TABLE>
<CAPTION>
LEASED
DSCR LTV RATIO
PROPERTY TYPE GUIDELINE GUIDELINE
- ------------- --------- ---------
<S> <C> <C>
Anchored Retail ......................... 1.25x 80%
Unanchored Retail ....................... 1.25x 75%
Multifamily (excluding Cooperative) ..... 1.20x 80%
Cooperative ............................. 1.00x (as cooperative) 60% (as cooperative)
1.35x (as rental) 70% (as rental)
Industrial .............................. 1.25x 75%
Office .................................. 1.25x 75%
Hotel ................................... 1.35x 70%
Mobile Home Park ........................ 1.20x 80%
</TABLE>
The DSCR guidelines listed above are calculated based on Net Cash Flow at
the time of origination. Therefore, the DSCR for each CSFBMC Mortgage Loan as
reported elsewhere in this Prospectus Supplement may differ from the ratio
calculated at the time of origination. The foregoing guidelines generally were
applied in connection with the origination of the CSFBMC Mortgage Loans, but
certain Mortgage Loans, as indicated on Annex A hereto, may deviate from these
guidelines. For Credit Lease Loans, CSFB Mortgage Capital's underwriting
standards generally require that the DSCR will be no less than 1.00x and the
Leased LTV (as set forth on Annex B) will be no greater than 100%.
Escrow Requirements. CSFB Mortgage Capital generally requires a borrower
to fund various escrows (each, an "Escrow Account") for items including taxes
and insurance, ground rent, replacement
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of furniture, fixtures and equipment and/or capital expenditures, and tenant
improvements and leasing commissions (with respect to Office Properties and
Retail Properties). Escrow Accounts generally must be held at Eligible Banks
(as defined herein). Generally, the required escrows for Mortgage Loans
originated by CSFB Mortgage Capital are as follows:
Ground Rent -- Typically, a pro rated initial deposit and monthly deposits
equal to 1/12th of the annual ground rent for any ground lease relating to the
Mortgaged Property.
Taxes and Insurance -- Typically, a pro rated initial deposit and monthly
deposits equal to 1/12th of the annual property taxes (based on the most recent
property assessment and the current tax rate) and annual property insurance
premium relating to the Mortgaged Property.
Capital Item Reserves -- Monthly deposits generally based on the greater
of the amount recommended pursuant to a building condition report prepared for
CSFB Mortgage Capital or the following minimum amounts:
<TABLE>
<S> <C>
Retail ...................................... $0.15 per square foot
Multifamily (excluding Cooperative) ......... $250 per Unit
Industrial .................................. $0.15 per square foot
Office ...................................... $0.20 per square foot
Hotel ....................................... 5% of gross revenues
Mobile Home Parks ........................... $50 per pad
</TABLE>
The actual reserve deposits for periodic replacement, capital expenditures
and FF&E (collectively, "Capital Items") required under each Mortgage Loan are
set forth on Annex A.
Tenant Improvements and Leasing Commission Reserves -- Monthly deposits
generally based upon anticipated lease turnover rates, estimated costs for
tenant improvements and leasing commissions in the related market.
In certain cases, CSFB Mortgage Capital allowed a borrower to post a
letter of credit in lieu of funding ongoing reserves for Capital Items and/or
tenant improvements and leasing commissions. Even if the actual funded reserves
under a Mortgage Loan are less than the foregoing amounts, CSFB Mortgage
Capital generally deducted such amounts from Net Operating Income when
calculating Net Cash Flow.
Deferred Maintenance/Environmental Remediation -- An initial deposit, upon
funding of a CSFBMC Mortgage Loan, in an amount equal to no less than 100%, and
as much as 125%, of (i) the estimated cost of the recommended substantial
repairs or replacements pursuant to a building condition report completed by a
licensed engineer and (ii) the estimated cost of environmental remediation
expenses as recommended by an independent environmental assessment.
Credit Lease Loans. Generally each Monthly Payment due under a Credit
Lease Loan will be paid entirely from the rent due from the Tenant at the
related Credit Lease Property. CSFB Mortgage Capital's underwriting criteria
for a Credit Lease Loan generally depend on whether such Credit Lease Loan is
secured by a Bondable Lease, a Triple Net Lease or a Double Net Lease.
<TABLE>
<CAPTION>
LEASED
DSCR LTV RATIO
LEASE TYPE GUIDELINE GUIDELINE
- ---------- --------- ---------
<S> <C> <C>
Bondable ........... 1.00x 100%
Triple Net ......... 1.02x 95%
Double Net ......... 1.05x 90%
</TABLE>
Generally, when calculating the DSCR guidelines set forth above, CSFB
Mortgage Capital did not adjust the rental income payments in the manner
described herein with respect to the calculation of Net Cash Flow. In addition,
CSFB Mortgage Capital did not require the escrowing of amounts for taxes,
insurance, Capital Items, tenant improvements or leasing commissions for
Bondable Leases. CSFB Mortgage Capital did require, in many instances, the
escrowing of amounts for taxes, insurance, Capital Items, tenant improvements
and/or leasing commissions for Double Net Leases and Triple Net Leases. The
actual DSCR and Loan to Value Ratios (both "Leased Value" and "Dark Value") for
the Credit Lease Loans is set forth on Annex B hereto.
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<PAGE>
PWRES UNDERWRITING STANDARDS
Each Mortgage Loan originated by an affiliate of PWRES, or purchased by
PWRES from an unaffiliated originator (each, a "PWRES Loan") generally is
consistent with the underwriting standards applied by PWRES, as described
below.
PWRES has implemented guidelines establishing certain procedures with
respect to underwriting mortgage loans. The PWRES Loans generally were
originated in accordance with such guidelines; provided, however, that the
underwriting standards for the Mortgage Loans which are secured by cooperative
apartments, mobile home/recreational vehicle parks, restaurants and
self-storage facilities were originated utilizing prudent underwriting
practices for mortgage loans secured by similar mortgaged properties and may
differ from the standards described below. With respect to the Mortgage Loans
which were acquired by PWRES, PWRES applied its general guidelines to such
loans in reliance on information provided to it by the originators of such
loans, in certain cases without independent investigation. In some instances,
one or more provisions of the guidelines were waived or modified where it was
determined not to adversely affect the Mortgage Loans in any material respect.
The underwriting standards for the PWRES Loans addressed, with respect to each
Mortgaged Property, environmental conditions, physical conditions, property
valuations, property financial performance, code compliance, property
management, title insurance, borrower evaluation and property insurance, as
described below.
Environmental Assessments. Substantially all of the Mortgaged Properties
relating to the PWRES Loans have been subject to environmental site assessments
or studies within the period of 12 months preceding the Cut-off Date.
Additionally, all borrowers were required to provide environmental
representations and warranties and covenants relating to the existence and use
of hazardous substances on the Mortgaged Properties relating to the PWRES
Loans.
Property Condition Assessments. Inspections of the related Mortgaged
Properties were conducted by engineers prior to origination of the PWRES Loans.
Such inspections generally were commissioned to assess the structure, exterior
walls, roofing, interior constructions, mechanical and electrical systems and
general conditions of the site, buildings and other improvements located at
each Mortgaged Property. The resulting reports indicated a variety of deferred
maintenance items and recommended capital improvements with respect to each
Mortgaged Property. The estimated cost of the necessary repairs or replacements
at each Mortgaged Property was included in each property condition report. In
each instance, the originator of the Mortgage Loan either determined that the
necessary repairs or replacements were being addressed by the related borrowers
in a satisfactory manner, or required that they be addressed post-closing and,
in most instances, that reserves be established to cover the cost of such
repairs or replacements.
Appraisals. An appraisal of each of the Mortgaged Properties relating to
the PWRES Loans was performed. The appraisals generally were performed by
independent MAI appraisers and indicated that at the time of the respective
appraisals the aggregate value of the related Mortgaged Properties exceeded the
original principal amount of each PWRES Loan. The appraisals also were used as
a source of information for rental and vacancy rates and were used to calculate
tenant improvement reserves. In general, appraisals represent the analysis and
opinion of qualified experts and are not guarantees of present or future value.
Moreover, appraisals seek to establish the amount a typically motivated buyer
would pay a typically motivated seller. Such amount could be significantly
higher than the amount obtained from the sale of a Mortgaged Property under a
distress or liquidation sale.
Operating and Occupancy Statements. In connection with the origination of
the PWRES Loans (other than the Credit Lease Loans), the originator reviewed
current rent rolls (and, where available, up to three years of prior rent
rolls) and related information or statements of occupancy rates, census data,
financial data, historical operating statements and, with respect to the PWRES
Loans secured by Office Properties, Industrial Properties and Retail
Properties, a selection of major tenant leases. In underwriting each Mortgage
Loan, income and operating information provided by the related borrower was
examined by the originator of the Mortgage Loan. Neither the Depositor nor
PWRES makes any representation as to the accuracy of such information.
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<PAGE>
Zoning and Building Code Compliance. All of the borrowers generally have
represented under the related Mortgage or loan agreement and, in connection
with substantially all of the PWRES Loans, provided other evidence to the
effect, that the use and operation of the related Mortgaged Properties was, as
of the date on which the Mortgage Loan was originated, and is currently, in
compliance in all material respects with all applicable zoning, land-use,
environmental, building, fire and health ordinances, rules, regulations and
orders applicable to the related Mortgaged Properties. For a discussion of
zoning issues, see "Risk Factors -- Zoning Compliance; Inspections."
Property Management. Generally, for all PWRES Loans (other than Credit
Lease Loans), a manager (which may be an employee of the borrower) is
responsible for responding to changes in the local rental or lodging market,
planning and implementing the rental rate or operating structure, which may
include establishing levels of rent payments or rates, and insuring that
maintenance and capital improvements are carried out in a timely fashion.
Management errors may adversely affect the performance and long-term viability
of a project. The qualification of the original managers was approved by the
originator of each PWRES Loan and reviewed by PWRES in connection with the
origination of the related Mortgage Loan. In most cases, the Special Servicer
may cause the borrower to terminate management contracts upon certain events
specified in the documents executed in connection with the PWRES Loans and
generally any change in a manager must be approved by the Special Servicer. No
change in a manager may be effected by the Special Servicer unless the Rating
Agencies have confirmed in writing that such change will not cause any
withdrawal, qualification or downgrade in the then current ratings of each
Class of Certificates. For a discussion of property management issues, see
"Risk Factors -- Property Management -- Conflicts of Interest."
Title Insurance Policy. Each borrower has provided, and the PWRES has
obtained, a title insurance policy for each Mortgaged Property relating to the
PWRES Loans. Each title insurance policy generally complies with the following
requirements: (a) the policy must be written by a title insurer licensed to do
business in the jurisdiction where the Mortgaged Property is located, (b) the
policy must be in an amount equal to the original principal balance of the
related Mortgage Loan, (c) the protection and benefits must run to the
mortgagee and its successors and assigns, (d) the policy should be written on a
standard policy form of the American Land Title Association or equivalent
policy promulgated in the jurisdiction where the Mortgaged Property is located
and (e) the legal description of the Mortgaged Property in the policy must
conform to that shown on the survey of the Mortgaged Property, where a survey
has been required.
Property Insurance. Each borrower has provided, and PWRES has reviewed,
certificates of required insurance with respect to each Mortgaged Property.
Such insurance generally may include: (1) commercial general liability
insurance for bodily injury or death and property damage; (2) an "All Risk of
Physical Loss" policy; (3) if applicable, boiler and machinery coverage; (4) if
the Mortgaged Property is located in a 100-year flood zone, flood insurance;
(5) if the Mortgaged Property is located in an earthquake prone area,
earthquake insurance; and (6) such other coverage as PWRES may require based on
the specific characteristics of the Mortgaged Property.
Evaluation of Borrower. PWRES evaluates each borrower and its principals
with respect to credit history and prior experience as an owner and operator of
commercial real estate properties. The evaluation generally includes obtaining
and reviewing a credit report or other reliable indication of the borrower's
financial capacity; obtaining and verifying credit references and/or business
and trade references; and obtaining and reviewing certifications provided by
the borrower as to prior real estate experience and current contingent
liabilities. Approximately 95.6% of the borrowers are single asset special
purpose entities. In addition, in general, in connection with each PWRES Loan
with an original principal balance in excess of $20 million, each borrower is
required to be organized as a bankruptcy-remote entity, and PWRES has reviewed
the organizational documents of the borrower to verify compliance with such
requirement.
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<PAGE>
DSCR and LTV Ratio. PWRES' underwriting standards generally require, for
all mortgage loans other than Credit Lease Loans, the following minimum DSCR
and Loan-to-Value Ratios for each of the indicated property types:
<TABLE>
<CAPTION>
LEASED
DSCR LTV RATIO
PROPERTY TYPE GUIDELINE GUIDELINE
- ------------- --------- ---------
<S> <C> <C>
Anchored Retail ............................. 1.25x 80%
Unanchored Retail ........................... 1.25x 75%
Multifamily (excluding Cooperative) ......... 1.20x 80%
Cooperative ................................. 1.05x (as cooperative) 60% (as cooperative)
1.75x (as rental) 50% (as rental)
Industrial .................................. 1.25x 75%
Office ...................................... 1.25x 75%
Hotel ....................................... 1.35x 70%
Mobile Home Park ............................ 1.20x 80%
</TABLE>
The DSCR guidelines listed above are calculated based on Net Cash Flow at
the time of origination. Therefore, the DSCR for each PWRES Loan as reported
elsewhere in this Prospectus Supplement may differ from the ratio calculated at
the time of origination. The foregoing guidelines generally were applied in
connection with the origination of the PWRES Loans, but certain Mortgage Loans,
as indicated on Annex A hereto, may deviate from these guidelines. For Credit
Lease Loans, PWRES' underwriting standards generally require that the DSCR will
be no less than 1.00x and the Leased LTV (as set forth on Annex B) will be no
greater than 100%.
Escrow Requirements. PWRES generally requires a borrower to fund various
escrows (each, an "Escrow Account") for taxes and insurance, replacement of
furniture, fixtures and equipment and/or capital expenditures and, in certain
cases, tenant improvements and leasing commissions (with respect to Office
Properties and Retail Properties). Escrow Accounts generally must be held at
Eligible Banks (as defined herein). Generally, the required escrows for
Mortgage Loans originated by PWRES are as follows:
Taxes and Insurance -- Typically, a pro rated initial deposit and monthly
deposits equal to 1/12th of the annual property taxes (based on the most recent
property assessment and the current tax rate) and annual property insurance
premium relating to the Mortgaged Property.
Capital Item Reserves -- Monthly deposits generally based on the greater
of the amount recommended pursuant to a building condition report prepared for
PWRES or the following minimum amounts:
<TABLE>
<S> <C>
Retail ...................................... $0.15 per square foot
Multifamily (excluding Cooperative) ......... $250 per Unit
Industrial .................................. $0.15 per square foot
Office ...................................... $0.20 per square foot
Hotel ....................................... 5% of gross revenues
Mobile Home Parks ........................... $50 per pad
</TABLE>
The actual reserve deposits for periodic replacement, capital expenditures
and FF&E (collectively, "Capital Items") required under each Mortgage Loan are
set forth on Annex A.
Tenant Improvements and Leasing Commission Reserves -- Monthly deposits
generally based on estimated costs for tenant improvements and leasing
commissions in the related market.
In certain cases, PWRES allowed a borrower to post a letter of credit in
lieu of funding ongoing reserves for Capital Items and/or tenant improvements
and leasing commissions. Any such letter of credit may be drawn by the lender
to the full extent of such letter of credit and no such letter of credit is
pledged
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<PAGE>
to any person other than the lender. Even if the actual funded reserves under a
Mortgage Loan are less than the foregoing amounts, PWRES generally deducted
such amounts from Net Operating Income when calculating Net Cash Flow.
Deferred Maintenance/Environmental Remediation -- An initial deposit, upon
funding of a PWRES Loan, in an amount equal to no less than 100%, and as much
as 125%, of (i) the estimated cost of the recommended substantial repairs or
replacements pursuant to a building condition report completed by a licensed
engineer and (ii) the estimated cost of environmental remediation expenses as
recommended by an independent environmental assessment.
Credit Lease Loans. Generally each Monthly Payment due under a Credit
Lease Loan will be paid entirely from the rent due from the Tenant at the
related Credit Lease Property. PWRES' underwriting criteria for a Credit Lease
Loan generally depend on whether such Credit Lease Loan is secured by a
Bondable Lease, a Triple Net Lease or a Double Net Lease.
<TABLE>
<CAPTION>
LEASED
DSCR LTV RATIO
LEASE TYPE GUIDELINE GUIDELINE
- ------------------------- ----------- ----------
<S> <C> <C>
Bondable ........... 1.00x 100%
Triple Net ......... 1.02x 100%
Double Net ......... 1.04x 100%
</TABLE>
Generally, when calculating the DSCR guidelines set forth above, PWRES did
not adjust the rental income payments in the manner described herein with
respect to the calculation of Net Cash Flow. In addition, PWRES did not require
the escrowing of amounts for taxes, insurance, Capital Items, tenant
improvements or leasing commissions for Bondable Leases. PWRES did require, in
many instances, the escrowing of amounts for capital reserves and insurance for
Double Net Leases and Triple Net Leases. The actual DSCR and Loan to Value
Ratios (both "Leased Value" and "Dark Value") for the Credit Lease Loans is set
forth on Annex B hereto.
S-72
<PAGE>
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
CREDIT LEASE LOANS
Sixty-one Mortgage Loans, representing approximately 15.3% of the Initial
Pool Balance (the "Credit Lease Loans") are secured by Mortgaged Properties
("Credit Lease Properties") that are, in each case, subject to a net lease
obligations (a "Credit Lease") of a tenant (a "Tenant"), or net lease
obligations guaranteed by a Guarantor that possesses a rating or internal
classification of "B--" (or the equivalent) or higher by one or more of the
Rating Agencies. See "Risk Factors -- The Mortgage Loans -- Credit Lease
Properties."
Lease termination rights and rent abatement rights, if any, in the Credit
Leases may be divided into three categories: (i) termination and abatement
rights directly arising from certain defined casualties or condemnation
("Casualty or Condemnation Rights"), (ii) termination and abatement rights
arising from a borrower's default relating to its obligations (other than the
obligation to maintain a Lease Enhancement Policy) under the Credit Leases to
perform required maintenance, repairs or replacements with respect to the
related Credit Lease Property ("Maintenance Rights") and (iii) termination and
abatement rights arising from a borrower's default in the performance of
various other obligations under the Credit Lease, including but not limited to
remediating environmental conditions not caused by the Tenant, enforcement of
restrictive covenants affecting property owned directly or indirectly by the
borrower in the area of the Credit Lease Property and complying with laws
regulating such Credit Lease Property or common areas related to such Credit
Lease Property ("Additional Rights"). Certain Credit Leases ("Bond-Type Leases"
or "Bondable Leases") have neither Casualty nor Condemnation Rights,
Maintenance Rights nor Additional Rights (with the exception of Loan No. 20,
with respect to which the Tenant provides an additional insurance policy to,
among other things, reduce the deductibles on the tenant policy and to provide
flood insurance), and the Tenants thereunder are required, at their expense, to
maintain their Credit Lease Property, in good order and repair. Other Credit
Leases have Casualty or Condemnation Rights and may have Additional Rights
("Triple Net Leases"). The tenants under Triple Net Leases are required, at
their expense, to maintain their Credit Lease Property, including the roof and
structure, in good order and repair. Additionally, certain of the Credit Leases
have Casualty or Condemnation Rights and Maintenance Rights, and may have
Additional Rights ("Double Net Leases"). If the borrower defaults in the
performance of certain obligations under Triple Net Leases or Double Net Leases
and the Tenant exercises its Additional Rights or Maintenance Rights, there
would be a disruption in the stream of Monthly Rental Payments available to pay
principal and interest to the Certificateholders.
Credit Leases with respect to 37 of the Credit Lease Properties, which
represent 8.6% of the aggregate Initial Pool Balance, are Bond-Type Leases,
Credit Leases with respect to 24 of the Credit Lease Properties, which
represent 5.4% of the aggregate Initial Pool Balance, are Triple Net Leases,
and Credit Leases with respect to 13 of the Credit Lease Properties, which
represent 1.4% of the aggregate Initial Pool Balance, are Double Net Leases.
With respect to each Credit Lease Loan not secured by the assignment of a
Bond-Type Lease (as defined herein), the Trustee generally is the beneficiary
of one or more non-cancelable insurance policies ("Lease Enhancement Policies")
obtained to cover certain lease termination and rent abatement (with respect to
losses arising out of a condemnation) events arising out of a casualty to, or
condemnation of, a Credit Lease Property issued by Chubb Custom Insurance
Company ("Chubb" or the "Lease Enhancement Insurer"). As of the Cut-off Date,
the claims paying ability of Chubb was rated "AAA" and "Aaa" by S&P and
Moody's, respectively. Each Lease Enhancement Policy provides that, in the
event of a permitted termination by a Tenant of a Credit Lease occurring as a
result of a casualty or a condemnation, the Lease Enhancement Insurer will pay
the Servicer on behalf of the Trustee a payment of all outstanding principal of
plus, subject to certain limitations, interest on such Credit Lease Loan. The
Lease Enhancement Insurer generally is not required to pay any amount due under
a Credit Lease Loan other than principal and, subject to the limitation above,
accrued interest and therefore is not required to pay any Prepayment Premium or
Yield Maintenance Charge due thereunder or any amounts the related borrower is
obligated to pay thereunder to reimburse the Servicer or the Trustee for
outstanding Servicing Advances.
S-73
<PAGE>
With respect to 36 Credit Lease Loans representing approximately 9.6% of
the Initial Pool Balance (the "Fully Amortizing Credit Lease Loans"), scheduled
monthly payments under each Credit Lease are sufficient to pay in full and on a
timely basis all interest and principal and other sums scheduled to be paid
with respect to the related Credit Lease Loan. Twenty-five of the Credit Lease
Loans, representing approximately 5.8% of the Initial Pool Balance (the
"Balloon Payment Credit Lease Loans"), are not fully amortizing and require the
payment of Balloon Payments at maturity (which coincides with the expiration of
the Primary Term of the related Credit Leases). Fourteen of the Balloon Payment
Credit Lease Loans, representing approximately 4.3% of the Initial Pool
Balance, each have the benefit of a residual value insurance policy (a
"Residual Value Policy") from R.V.I. America Insurance Company, which had a
claims paying rating of "A" by Fitch and "A" by S&P as of the Cut-off Date. The
Residual Value Policies insure the related borrowers against any diminution in
the value of the related Credit Lease Properties as a result of changes in
market conditions. If the related Credit Lease Properties cannot be sold or if
the proceeds from the disposition of such properties are insufficient to repay
the indebtedness secured by such Credit Lease Properties upon the maturity of
such Credit Lease Loans, the insurer in each case will be required to pay the
amount of such remaining indebtedness. The premium for each Residual Value
Policy was fully paid at the time of the issuance of such policy, and each such
policy is non-cancelable. The Trustee is a named insured of each Residual Value
Policy.
At the end of the term of a Credit Lease, a Tenant is generally obligated
to surrender the Credit Lease Property in good order and in its original
condition received by the Credit Tenant, except for ordinary wear and tear and
repairs required to be performed by the Mortgagor.
S-74
<PAGE>
SIGNIFICANT MORTGAGE LOANS
The ten largest Mortgage Loans and the largest Related Borrower Loan by
Initial Pool Balance are as follows:
The Combined Properties Portfolio Loan
The Loan. The largest Mortgage Loan in the Mortgage Pool (the "Combined
Properties Portfolio Loan") was originated by CSFB Mortgage Capital on May 11,
1998, and has a principal balance as of the Cut-off Date of $115,590,907, which
represents approximately 4.7% of the Initial Pool Balance. The Combined
Properties Portfolio Loan is secured by first priority liens encumbering 15
shopping center properties located in Virginia, Maryland, California and the
District of Columbia (collectively, the "Combined Properties Portfolio
Property"). The Combined Properties Portfolio Loan was made jointly and
severally to Aspen Manor Plaza LLC, Bladen II LLC, Chantilly Plaza LLC,
Columbia Road II LLC, Enterprise Shopping Center LLC, Fairfax Circle LLC, Forty
West LLC, Georgia Ave II LLC, Lee & Harrison II LLC, McLean II LLC, Montebello
LLC, Pickett LLC, Reseda Shopping Center II LLC, Silver Hill II LLC and
Turnpike LLC (collectively, the "Combined Properties Portfolio Borrower"), each
a Delaware limited liability company.
----------------
<TABLE>
<S> <C>
Cut-off Date Principal
Balance: $115,590,907
Origination Date: May 11, 1998
Loan Type: ARD; cross-collateralized,
cross-defaulted
Monthly Payment: $819,025
Interest Rate: 7.631%
Amortization Term: 360 months
DSCR: 1.44x
Cut-off Date LTV: 70%
Anticipated Repayment
Date: May 11, 2008
ARD Balance: $101,294,485
</TABLE>
<TABLE>
<S> <C>
ARD LTV: 61%
Defeasance Period: May 11, 2002 until ARD
Partial Defeasance: Yes
Prepayment Lockout
Expiration: 6 months prior to ARD
Property Substitution: None
Borrower Special Purpose
Entity: Yes, with an independent
director of the corporate
managing member and a
non-consolidation opinion
Maturity Date: May 11, 2028
Property Type: Retail
No. of Properties: 15
Lock Box: Hard
</TABLE>
----------------
S-75
<PAGE>
Additional Mortgage Loan Information by Property. Certain information with
respect to each Mortgaged Property relating to the Combined Properties
Portfolio Loan is set forth below:
<TABLE>
<CAPTION>
PROPERTY APPRAISED SQUARE YEAR
NAME LOCATION VALUE FEET BUILT
- ---------------------- ----------------- ------------- ---------- -------
<S> <C> <C> <C> <C>
Aspen Manor Rockville, MD $ 7,100,000 44,928 1954
Shopping Center
Bladen Shopping Bladensburg, MD $ 4,600,000 46,147 1953
Center
Chantilly Plaza Chantilly, VA $ 6,400,000 100,217 1973
Columbia Road Washington, DC $ 3,700,000 12,432 1910
Center
Enterprise Lanham, MD $20,300,000 206,963 1972
Shopping Center
Fairfax Circle Plaza Fairfax, VA $15,600,000 104,523 1973
Shopping Center
Forty West Plaza Baltimore, MD $14,250,000 196,938 1964
Shopping Center
Georgia Avenue Washington, DC $ 940,000 9,000 1937
Lee & Harrison Arlington, VA $ 3,700,000 19,970 1961
Shopping Center
Loehmann's Reseda, CA $19,000,000 183,431 1958
Mart At Montebello, CA $19,800,000 213,070 1961
Montebello
McLean Chain McLean, VA $ 8,400,000 30,504 1969
Pickett Shopping Fairfax, VA $13,600,000 90,340 1967
Center
Silver Hill Plaza Forestville, MD $14,200,000 126,625 1972
Turnpike Shopping Fairfax, VA $13,900,000 103,944 1967
Center
<CAPTION>
PROPERTY FEE OR MAJOR ALLOCATED
NAME LEASEHOLD TENANTS OCCUPANCY(1) LOAN AMOUNT
- ---------------------- ----------- --------------------- -------------- --------------
<S> <C> <C> <C> <C>
Aspen Manor Leasehold Big "D" Discount, 97% $ 4,959,185
Shopping Center TrakAuto, 6-Twelve
Mart
Bladen Shopping Leasehold Drug Emporium, 93% $ 3,212,993
Center Trak Auto, Murry's
Steaks
Chantilly Plaza Leasehold Food Lion, Staples, 97% $ 4,470,251
Total Crafts
Columbia Road Leasehold Blockbuster Video, 100% $ 2,584,364
Center Foot Locker, Up
Against the Wall,
Enterprise Leasehold Shopper's Food, 87% $14,179,077
Shopping Center Frank's Nursery,
Montgomery Ward
Dark
Fairfax Circle Plaza Leasehold Staples, Hudson 94% $10,896,236
Shopping Center Trail, Trak Auto
Forty West Plaza Leasehold Baby Superstore, 99% $ 9,953,293
Shopping Center Drug Emporium,
PetsMart
Georgia Avenue Leasehold Trak Auto 100% $ 656,568
Lee & Harrison Leasehold CVS Pharmacy, 100% $ 2,584,364
Shopping Center Trak Auto,
Blockbuster Video
Loehmann's Leasehold Von's Grocery, Save 97% $13,271,057
on Drugs,
Loehmann's
Mart At Leasehold Service 96% $13,829,838
Montebello Merchandise
(Dark), Von's
Grocery, Ross
Dress for Less
McLean Chain Leasehold Total Beverages, 100% $ 5,867,204
Super Crown Books
Pickett Shopping Leasehold Zany Brainy, Show 94% $ 9,499,283
Center Biz Pizza, CVS
Pharmacy
Silver Hill Plaza Leasehold Shopper's Food 92% $ 9,918,369
Warehouse, CVS
Pharmacy, Super
Trak
Turnpike Shopping Leasehold Giant Food 76% $ 9,708,826
Center
</TABLE>
- ----------
(1) As of most recently available rent roll.
The Borrower. Each Combined Properties Portfolio Borrower has been
structured as a single purpose, bankruptcy remote entity, with a single
purpose, bankruptcy remote managing member whose board contains an independent
director. Each Combined Properties Portfolio Borrower is owned and controlled
by Ronald S. Haft. The Combined Properties Portfolio Borrower is affiliated
with Combined Properties, Inc., a privately-held full-service, retail asset and
property management company, which owns and operates approximately thirty
shopping centers comprising approximately 4 million square feet located in
metropolitan Washington, D.C. and Los Angeles. Combined Properties, Inc. was
the subject of a Chapter 11 reorganization proceeding from which it emerged in
August 1997.
Certain additional information on the Combined Properties Portfolio Loan
and the Combined Properties Portfolio Property is set forth on Annex A hereto.
S-76
<PAGE>
The Ground Lease. The shopping centers making up the Combined Properties
Portfolio Property are ground leased by the Combined Properties Portfolio
Borrower from one or more affiliates pursuant to ground leases that expire on
May 11, 2038, with two renewal periods of 25 years each.
Certain Environmental Matters. The reports for Phase I site assessments
performed in April 1998 generally noted that (i) there was evidence of asbestos
at each of the Combined Properties Portfolio Properties, (ii) ten of the
Combined Properties Portfolio Properties contain spaces formerly occupied by
dry cleaners, (iii) four of the Combined Properties Portfolio Properties
contain spaces occupied by automobile service providers that have in-ground
hydraulic lifts, (iv) one of the Combined Properties Portfolio Properties has
ground water contamination that has immigrated from an adjoining gas station
property, (v) one of the Combined Properties Portfolio Properties is adjacent
to a property that contains an active leaking underground storage tank site
undergoing active remediation and (vi) one of the Combined Properties Portfolio
Properties has utility-owned electrical transformers that may contain PCBs. A
reserve of approximately $3.4 million was established by the Combined
Properties Portfolio Borrower at closing to fund additional testing and any
required remediation. Such reserve represents approximately 125% of the
estimated cost of such remediation.
Property Management. The Combined Properties Portfolio Property is managed
by Combined Properties, Incorporated, a District of Columbia corporation (the
"Combined Properties Portfolio Manager"), an affiliate of the Combined
Properties Portfolio Borrower pursuant to a management agreement. The Combined
Properties Portfolio Manager may be terminated upon the occurrence and
continuation of any event of default under the Combined Properties Portfolio
Loan. The management agreement provides for the payment to the Combined
Properties Portfolio Manager of a management fee equal to 5%, provided that
payment of such fee may be suspended if the DSCR on a trailing 12-month basis
is less than 1.10x (such fee subsequently to be paid to the Combined Properties
Portfolio Manager if a DSCR of at least 1.15x is maintained for two consecutive
quarterly periods).
Mezzanine Loan. 7 Prop Mezz, LLC and 8 Prop Mezz, LLC, each a Delaware
limited liability company (collectively, the "Combined Mezzanine Borrower"),
are the regular members of the Combined Properties Portfolio Borrower and the
borrowers under a Mezzanine Loan in the principal amount of $27,800,000 (the
"Combined Mezzanine Loan") secured by the regular membership interests in the
Combined Properties Portfolio Borrower and the stock in the respective 1%
managing members of the entities constituting the Combined Properties Portfolio
Borrower, made by CSFB Mortgage Capital (in its capacity as mezzanine lender,
the "Combined Mezzanine Lender") on May 11, 1998. The Combined Mezzanine Lender
has agreed not to foreclose on its interests in the Combined Properties
Portfolio Borrower without the consent of the mortgage lender. The Combined
Mezzanine Loan matures on May 11, 2008, but can be extended, at the election of
the Combined Mezzanine Lender, to May 11, 2010. The Combined Mezzanine Loan
bears interest at a fixed rate per annum of 10% and, if extended, at a variable
interest rate per annum of LIBOR plus 10%. The Combined Mezzanine Borrower is
required to make a constant monthly payment of $292,796, applied first to
interest and then to principal.
The Combined Mezzanine Lender has certain approval rights over budgets and
significant leases and can terminate and replace the Combined Properties
Portfolio Manager upon the occurrence of an event of default under the Combined
Mezzanine Loan or if the DSCR is less than 1.05x. The Combined Mezzanine Lender
has agreed not to take any such action with respect to the Combined Properties
Portfolio Manager unless each Rating Agency confirms that such action would not
cause a withdrawal, qualification or downgrade of its ratings on the
Certificates. The exercise of such rights by the Combined Mezzanine Lender
relating to budgeting, management and leases is subject to the approval of the
Servicer. In addition, the Combined Mezzanine Lender has agreed not to transfer
its interest in the Combined Mezzanine Loan (other than to certain permitted
institutional transferees) or exercise certain remedies without prior written
confirmation from each Rating Agency that such transfer or exercise would not
cause a withdrawal, qualification or downgrade of its ratings on the
Certificates.
S-77
<PAGE>
The Edens and Avant Loan
The Loan. The second largest Mortgage Loan in the Mortgage Pool (the
"Edens & Avant Loan") was originated by CSFB Mortgage Capital on May 13, 1998,
and has a principal balance as of the Cut-off Date of $84,100,000, which
represents approximately 3.4% of the Initial Pool Balance. The Edens & Avant
Loan is secured by first priority liens encumbering 21 shopping center
properties located in seven states in the Southeastern United States
(collectively, the "Edens & Avant Property"). The Edens & Avant Loan was made
to Edens & Avant Financing II Limited Partnership (the "Edens & Avant
Borrower"), a Delaware limited partnership.
----------------
<TABLE>
<S> <C>
Cut-off Date Principal
Balance: $84,100,000
Origination Date: May 13, 1998
Loan Type: ARD; Interest-only;
cross-collateralized, cross-defaulted
Monthly Payment $474,815
Interest Rate: 6.775%
Amortization Term: Interest only
DSCR: 2.59x
Cut-off Date LTV: 48%
Anticipated Repayment
Date: May 13, 2010
ARD Balance: $84,100,000
ARD LTV: 48%
Defeasance Period: Commencing two years after the
Closing Date
Partial Defeasance: Yes
</TABLE>
<TABLE>
<S> <C>
Prepayment Lockout
Expiration: 180 days prior to ARD
Property Substitution: Permitted provided appraised value,
NOI, DSCR, Loan-to-Value ratio,
major tenants and leases meet
certain requirements (generally at
least comparable to or better than
the replaced property)
Borrower Special Purpose
Entity: Yes, with an independent manager
of the general partner and a
non-consolidation opinion
Maturity Date: May 13, 2028
Property Type: Retail
No. of Properties: 21
Lock Box: Modified; Hard if Event of Default
or if DSCR below 1.25x
</TABLE>
----------------
S-78
<PAGE>
Additional Mortgage Loan Information by Property. Certain information with
respect to each Mortgaged Property relating to the Edens & Avant Loan is set
forth below:
<TABLE>
<CAPTION>
PROPERTY APPRAISED SQUARE YEAR
NAME LOCATION VALUE FEET BUILT
- -------------------- ------------------ ------------- ---------- -------
<S> <C> <C> <C> <C>
Amelia Plaza Fernandina, FL $ 4,750,000 91,727 1987
Armstrong Plaza Fountain Inn, SC $ 4,850,000 52,438 1966
Crossroads South Jonesboro, GA $12,800,000 211,178 1987
Dawson Village Dawsonville, GA $ 8,900,000 83,272 1997
Five Forks Corners Lilburn, GA $ 9,000,000 88,646 1996
Florence Square Florence, AL $13,650,000 244,731 1991
Marketplace/
Goodings Plaza Palm Bay, FL $ 9,450,000 149,752 1986
Gulfdale Mobile, AL $ 3,700,000 94,376 1981
Kennerly Place Irmo, SC $ 4,165,000 46,800 1998
Lincoln Center Lincolnton, NC $ 5,800,000 78,770 1989
Lynnwood Place Jackson, TN $ 6,400,000 96,666 1986
Overlook Village Asheville, NC $12,100,000 147,991 1989
Parkway Village Macon, GA $12,000,000 168,430 1988
Palm Bay West Palm Bay, FL $17,900,000 263,356 1989
Ridgewood Farm Salem, VA $ 5,200,000 79,342 1987
Village
Riverdale Crossing Macon, GA $ 9,700,000 92,786 1976
Rockbridge Place Stone Mountain, $ 5,000,000 71,268 1984
GA
Sangaree Plaza Summerville, SC $ 4,475,000 58,948 1981
Southwest Plaza Roanoke, VA $ 5,750,000 87,802 1988
South Square
Marketplace Charlotte, NC $ 5,460,000 72,219 1993
Wal-Mart Super
Center Moultrie, GA $13,370,000 196,589 1997
<CAPTION>
PROPERTY FEE OR MAJOR OCCUPANCY ALLOCATED
NAME LEASEHOLD TENANTS (1) LOAN AMOUNT
- -------------------- ----------- ----------------------- ----------- ------------
<S> <C> <C> <C> <C>
Amelia Plaza Fee Winn Dixie, 95% $2,290,305
Eckerd Drugs, Cato
Armstrong Plaza Fee Bi-Lo, Revco, Pizza 100% $2,338,522
Hut
Crossroads South Fee Kmart, Kroger 99% $6,171,769
Dawson Village Fee Kroger, Moovies 100% $4,291,308
Five Forks Corners Fee Publix, Blockbuster 96% $4,339,525
Video
Florence Square Fee Kmart, Bruno's 97% $6,581,613
Food World, TJ
Maxx
Marketplace/
Goodings Plaza Fee Winn Dixie, 97% $4,556,502
Beall's Department
Stores,
Pro Health &
Fitness
Gulfdale Fee Delchamps Grocery 91% $1,784,027
Kennerly Place Fee Food Lion 86% $2,008,236
Lincoln Center Fee Bi-Lo, Revco, Cato 100% $2,796,583
Lynnwood Place Fee Kroger, Jackson 87% $3,085,885
Clinic
Overlook Village Fee and Phar-Mor, TJ Maxx, 100% $5,834,251
Leasehold Books-A-Million
Parkway Village Fee Kroger, Circuit City, 97% $5,786,034
Discovery Zone
Palm Bay West Fee Kmart, 96% $8,630,834
Ridgewood Farm Fee Kroger, 99% $2,507,281
Village Revco
Riverdale Crossing Fee Publix, Revco 87% $4,677,044
Rockbridge Place Fee Winn Dixie 100% $2,410,847
Sangaree Plaza Fee Bi-Lo, Revco 97% $2,157,708
Southwest Plaza Fee Harris Teeter, 97% $2,772,474
Wood's Sentry
Hardware,
Revco
South Square
Marketplace Fee Winn Dixie, 98% $2,632,645
Blockbuster Video,
Cato
Wal-Mart Super
Center Fee Wal-Mart, 96% $6,446,606
Blockbuster Video
</TABLE>
- ----------
(1) As of most recently available rent roll.
The Borrower. The Edens & Avant Borrower has been structured as a single
purpose, bankruptcy remote entity, with a single purpose, bankruptcy remote
general partner having a single purpose, bankruptcy remote corporate managing
member whose board contains an independent director. The Edens & Avant Borrower
is a Delaware limited partnership, the general partner of which is E&A
Financing II, LLC, a Delaware limited liability company, the managing member of
which is E&A Special Purpose II, Inc., a Delaware corporation. The Edens &
Avant Borrower is affiliated with Edens & Avant, which is one of the largest
private full-service commercial real estate companies in the United States. The
State of Michigan Pension Fund owns approximately 80% of Edens & Avant.
S-79
<PAGE>
Certain additional information on the Edens & Avant Loan and the Edens &
Avant Property is set forth on Annex A hereto.
Certain Environmental Matters. The reports for Phase I site assessments,
performed between May 1997 and May 1998, and, in the case of four of the Edens
& Avant Properties, Phase II site assessments, performed between July 1997 and
April 1998, noted that (i) there was evidence of asbestos at one of the Edens &
Avant Properties, (ii) seven of the Edens & Avant Properties contain spaces
occupied or formerly occupied by dry cleaners, (iii) four of the Edens & Avant
Properties are adjacent to properties containing leaking underground storage
tanks and (iv) one of the Edens & Avant Properties contains a small quantity of
diesel impacted soil. A reserve of $812,500 was established by the Edens &
Avant Borrower at closing to fund additional testing and any required
remediation, which represents approximately 125% of the estimated cost of
remediation.
Property Management. Nineteen of the Edens & Avant Properties are managed
by Edens & Avant Properties Limited Partnership (the "Edens & Avant Properties
Manager"), an affiliate of the Edens & Avant Borrower, pursuant to a management
agreement. The management agreement provides for the payment to the Edens &
Avant Properties Manager of a management fee of 4%, which fee is subordinated
to payments to be made under the Edens & Avant Loan. The Edens & Avant
Properties Manager may be terminated (i) upon the occurrence of any event of
default under the Edens & Avant Loan or the management agreement, (ii) upon a
50% or greater change in control of the Edens & Avant Properties Manager, (iii)
at any time for cause, or (v) if the DSCR for the Edens & Avant Loan falls
below 1.25x.
Two of the Edens & Avant Properties are managed by Centennial America
Properties, LLC (the "Edens & Avant Centennial Manager") pursuant to a
management agreement. The management agreement provides for the payment to the
Edens & Avant Centennial Manager of a management fee of 4%, which fee is
subordinated to payments to be made under the Edens & Avant Loan. The Edens &
Avant Centennial Manager may be terminated (i) upon the occurrence of any event
of default under the Edens & Avant Loan or the management agreement, (ii) upon
a 50% or greater change in control of the Edens & Avant Centennial Manager,
(iii) at any time for cause, or (v) if the DSCR for the Edens & Avant Loan
falls below 1.25x.
The Pantzer Portfolio Loans
The Loan. The largest Related Borrower Mortgage Loan in the Mortgage Pool
(the "Pantzer Portfolio Loans") was originated by CSFB Mortgage Capital on May
13, 1998, and has a principal balance as of the Cut-off Date of $76,258,039,
which represents approximately 3.1% of the Initial Pool Balance. The Pantzer
Portfolio Loans are secured by six first mortgages, five of which each encumber
a multi-family housing complex located in New Jersey, Maryland or Delaware and
one of which is a Multi-Property Loan which encumbers three multi-family
housing complexes located in Delaware (collectively, the "Pantzer Portfolio
Property"). The Pantzer Portfolio Loans were made to Arundel Associates, LLC,
Cynwyd Club Associates LLC, Heather Ridge LLC, Meldon Apt., LLC, and Top of the
Hill Associates LLC, each a Delaware limited liability company, and Foxfire
Associates, a New Jersey limited partnership (together, the "Pantzer Portfolio
Borrower").
----------------
<TABLE>
<S> <C>
Cut-off Date Principal
Balance: $76,258,039
Origination Date: May 13, 1998
Loan Type: ARD
Monthly Payment: Arundel - $48,211
Cynwyd - $22,633
Foxfire - $113,793
Heather Ridge - $92,124
Pantzer-Cross Summary
- $140,283
Top of the Hill - $144,881
Interest Rate: 7.47%
Amortization Term: 360 months
DSCR: 1.21x
Cut-off Date LTV: 74%
Anticipated Repayment
Date: May 11, 2008
</TABLE>
<TABLE>
<S> <C>
ARD Balance: $68,032,315
ARD LTV: 66%
Defeasance Period: Two years after the Closing Date
Partial Defeasance: No
Prepayment Lockout
Expiration: Three months prior to ARD
Property Substitution: No
Borrower Special Purpose
Entities: Yes, with independent managing
members and an independent
manager of the general partner
and a non-consolidation opinion
<PAGE>
Maturity Date: May 11, 2028
Property Type: Multi-family
No. of Properties: 8
No. of Loans: 6
Lock Box: Hard
</TABLE>
----------------
S-80
<PAGE>
Additional Mortgage Loan Information By Property. Certain information with
respect to each Mortgaged Property relating to the Pantzer Portfolio Loan is
set forth below:
<TABLE>
<CAPTION>
PROPERTY APPRAISED
NAME LOCATION VALUE UNITS
- ------------------------------------ ----------------------- -------------- -------
<S> <C> <C> <C>
Top of the Hill Apartments ......... Wilmington, DE $20,500,000 403
Foxfire Apartments ................. Laurel, MD $21,500,000 500
Heather Ridge Apartments ........... West Deptford, NJ $15,800,000 400
Oaktree Apartments ................. New Castle County, DE $10,350,000 298
Sandalwood Apartments .............. Newark, DE $ 9,950,000 367
Arundel Apartments ................. Wilmington, DE $ 8,625,000 211
Cedar Tree Apartments .............. New Castle County, DE $ 6,900,000 158
Cynwyd Club Apartments ............. Wilmington, DE $ 4,550,000 124
<CAPTION>
ALLOCATED
LOAN
AMOUNTS/
CUT-OFF DATE
PROPERTY YEAR FEE OR OCCUPANCY PRINCIPAL
NAME BUILT LEASEHOLD (1) BALANCE
- ------------------------------------ ------- ----------- ----------- --------------------
<S> <C> <C> <C> <C>
Top of the Hill Apartments ......... 1971 Fee 97% $ 16,469,614(2)
Foxfire Apartments ................. 1972 Fee 90% $ 16,313,585(2)
Heather Ridge Apartments ........... 1974 Fee 94% $ 13,207,048(2)
Oaktree Apartments ................. 1973 Fee 95% $ 7,652,625(3)
Sandalwood Apartments .............. 1973 Fee 91% $ 7,356,872(3)
Arundel Apartments ................. 1970 Fee 98% $ 6,911,712(2)
Cedar Tree Apartments .............. 1965 Fee 98% $ 5,101,750(3)
Cynwyd Club Apartments ............. 1965 Fee 94% $ 3,244,834(2)
</TABLE>
- ----------
(1) As of most recently available rent roll.
(2) Cut-off Date Principal Balance.
(3) Multi-Property Loan; Allocated Loan Amount.
The Borrower. Except for Foxfire Associates, each of the entities
constituting the Pantzer Portfolio Borrower has been structured as a single
purpose, bankruptcy remote limited liability company, with a single purpose,
bankruptcy remote managing member whose board contains an independent director.
Foxfire Associates has been structured as a single purpose, bankruptcy remote
limited partnership, with a single purpose, bankruptcy remote general partner
that has an independent manager. A principal of each of the entities
constituting the Pantzer Portfolio Borrower is Edward S. Pantzer. The Pantzer
Portfolio Borrower is an affiliate of Pantzer Properties, Inc., which was
founded in 1971 and owns and/or manages a commercial real estate portfolio
valued in excess of $450 million.
Edward S. Pantzer has pledged all of his general and limited partnership
interests in the Pantzer Portfolio Borrower as additional security for the
Pantzer Portfolio Loan. Although the Pantzer Portfolio Loans are not
cross-defaulted or cross-collateralized, the pledged general and limited
partnership interests for each of the entities constituting the Pantzer
Portfolio Borrower secures the obligations of the Pantzer Portfolio Borrower
under all Pantzer Portfolio Loans.
Certain additional information on the Pantzer Portfolio Loans and the
Pantzer Portfolio Property is set forth on Annex A hereto.
Property Management. The Pantzer Portfolio Property is managed by Panco
Management Corporation (the "Pantzer Portfolio Manager"), an affiliate of the
Pantzer Portfolio Borrower, under a management agreement which provides for
payment to the Pantzer Portfolio Manager of management fees equal to 5%. The
Pantzer Portfolio Manager can be terminated (i) upon the occurrence and
continuation of any event of default under the Pantzer Portfolio Loan, the
related mezzanine loan or the management agreement or (ii) if within 45 days of
the end of each calendar quarter, the DSCR for each of the Pantzer Portfolio
Properties is less than 1.0x on a trailing two-month basis.
Preferred Equity Interest. CSFB Mortgage Capital (in such capacity, the
"Pantzer Special Member") owns preferred equity investments in the Pantzer
Portfolio Borrower (each, a "Pantzer Preferred Equity Interest"), in an
aggregate amount as of the Cut-off Date equal to approximately $10,336,946. The
Pantzer Preferred Equity Interests accrue yield at a preferred rate of LIBOR
plus 5.5% and are scheduled to be partially redeemed on a monthly basis, with a
final distribution scheduled to be made on May 11, 2008, in the amount of
$29,295. In addition, each Pantzer Preferred Equity Interest requires the
<PAGE>
payment of an exit fee when such interest is paid in full. Certain affiliates
of the Pantzer Portfolio Borrower have guaranteed the payments due on the
Pantzer Preferred Equity Interests to the extent of their ownership interests
in, and distributions from, the Pantzer Portfolio Borrower, or the regular
member of the Pantzer Portfolio Borrower which are pledged as security for such
guaranty.
S-81
<PAGE>
The Pantzer Special Member has certain approval rights with respect to
budgets and significant leases and may terminate the Pantzer Portfolio Manager
upon the occurrence of a breach under any of the Pantzer Preferred Equity
Interests or if the DSCR falls below certain thresholds, subject to the
approval of the Servicer.
Recent Developments. On June 5, 1998, a fire occurred at Foxfire
Apartments, resulting in fire, water and smoke damage to four apartments and
less extensive damage to several other units. The cost of repair and
restoration are not known as of the date hereof. CSFB Mortgage Capital has been
informed by the Pantzer Portfolio Management Company that the fire has been
reported to the applicable casualty insurance company and believes that the
cost of repair and restoration is fully insured (subject to any applicable
deductible).
The Reichmann/Intell Portfolio Loan
The Loan. The third largest Mortgage Loan in the Mortgage Pool (the
"Reichmann/Intell Portfolio Loan") was originated by CSFB Mortgage Capital on
May 19, 1998, and has a principal balance as of the Cut-off Date of
$74,857,607, which represents approximately 3.0% of the Initial Pool Balance.
The note relating to the Reichmann/Intell Portfolio Loan provides for two
payment components, one of which (referred to herein as the "A Component") is
calculated on a principal sum, as of the Cut-off Date, of $72,427,044 and the
other of which (referred to herein as the "B Component") is calculated on a
principal sum, as of the Cut-off Date, of $2,430,563. The B Component fully
amortizes over the term of the NYNEX lease (City Hall Plaza). The
Reichmann/Intell Portfolio Loan is secured by first priority liens encumbering
five office complexes located in Wichita, Kansas; Louisville, Kentucky;
Worcester, Massachusetts and Manchester, New Hampshire (collectively, the
"Reichmann/Intell Portfolio Property"). The Reichmann/Intell Portfolio Loan was
made to IPC Office Properties, LLC (the "Reichmann/Intell Portfolio Borrower"),
a Delaware limited liability company.
----------------
<TABLE>
<S> <C>
Cut-off Date Principal
Balance: $74,857,607
Origination Date: May 19, 1998
Loan Type: ARD
Monthly Payment: $524,768 until June 11, 2007
(A Component-$494,080;
B Component-$30,705);
$494,080 thereafter
Interest Rate: 7.25%
Amortization Term: A Component-360 months;
B Component-108 months
DSCR: 1.21x
Cut-off Date LTV: 72%
Anticipated Repayment
Date: June 11, 2008
ARD Balance: $63,592,357
</TABLE>
<TABLE>
<S> <C>
ARD LTV: 61%
Defeasance Period: Commencing two years after
Closing Date.
Partial Defeasance: Yes
Prepayment Lockout
Expiration: 6 months prior to ARD
Property Substitution: No
Borrower Special Purpose
Entity: Yes, with an independent director
and a non-consolidation opinion
Maturity Date: June 11, 2028
Property Type: Office Complex
No. of Properties: 5
Lock Box: Hard
</TABLE>
----------------
S-82
<PAGE>
Additional Mortgage Loan Information by Property. Certain information with
respect to each Mortgaged Property relating to the Reichmann/Intell Portfolio
Loan is set forth below:
<TABLE>
<CAPTION>
PROPERTY APPRAISED SQUARE YEAR
NAME LOCATION VALUE FEET BUILT
- ------------------- ----------------- -------------- --------- -------
<S> <C> <C> <C> <C>
City Hall Plaza Manchester, $26,500,000 210,331 1992
New Hampshire
Epic Center Wichita, Kansas $21,600,000 304,873 1987
Hurstbourne Forum Louisville, $33,400,000 326,431 1989
Office Park Kentucky
Chestnut Worcester, $14,500,000 222,606 1991
Place I and II Massachusetts
Lakeview Office St. Matthews, $ 7,760,000 76,999 1989
Building Kentucky
<CAPTION>
PROPERTY FEE OR MAJOR OCCUPANCY ALLOCATED
NAME LEASEHOLD TENANTS (1) LOAN AMOUNT
- ------------------- ----------- ---------------------- ----------- --------------
<S> <C> <C> <C> <C>
City Hall Plaza Fee NYNEX, 100% $19,118,414
McLane, Graf, et al.,
Merrill Lynch
Epic Center Fee Hugoton Energy Corp, 91% $15,583,311
Klenda, Mitchell,
Austerman,
GSA US Attorney
Hurstbourne Forum Fee General Electric, 92% $24,096,416
Office Park Homecare,
Sprint
Chestnut Fee Fallon Comm. Health 92% $10,461,019
Place I and II Plan,
Premier Insurance,
Amica Insurance
Lakeview Office Fee Caretenders, 92% $ 5,598,449
Building Galen of Kentucky,
Healthsource
</TABLE>
- ----------
(1) As of most recently available rent roll.
The Borrower. The Reichmann/Intell Portfolio Borrower has been structured
as a single purpose, bankruptcy remote entity, with a single purpose,
bankruptcy remote managing member whose managing member is a single purpose,
bankruptcy remote corporation, whose board contains an independent director.
The principal of the Reichmann/Intell Portfolio Borrower is Paul Reichmann,
formerly a principal of Olympia & York. Olympia & York developed real estate
projects in Toronto, Canada; the United States; Mexico City, Mexico; and
London, England; including 40 office towers and the World Financial Center in
New York City, Canary Wharf in London and 1st Canadian Place in Toronto. In
1992, Olympia & York became subject to a bankruptcy proceeding.
Certain additional information on the Reichmann/Intel Portfolio Loan and
the Reichmann/Intell Portfolio Property is set forth on Annex A and Annex B
hereto.
Certain Environmental Matters. The groundwater conditions at the site of
the Epic Center Property in Wichita, Kansas are exposed to an area groundwater
contamination plume (North Industrial Corridor site) covering a large part of
Wichita. The City of Wichita has offered, and the Reichmann/Intell Portfolio
Borrower has received, approval for a certificate of release which will release
the Reichmann/Intel Portfolio Borrower from liability by the City of Wichita.
The Trust Fund will have the benefit of a non-cancellable environmental
insurance policy from American International Speciality Line Insurance Company
("AISLIC"), an affiliate of American International Group, Inc., covering the
Epic Center property for up to $18,900,000. In the event of a default by the
Reichmann/Intell Portfolio Borrower, the policy covers the lesser of
environmental clean-up costs required by a governmental entity or the
outstanding loan balance, subject to the policy's definitions, terms and
conditions. The policy also covers claims made against the lender with respect
to bodily injury, property damage or environmental clean-up costs, also subject
to the policy's definitions, terms and conditions. The policy is for the lesser
of a 20 year period or the term of the loan, is renewable for an additional 10
years, subject to terms and conditions, and has a $25,000 deductible. As of the
Cut-off Date, AISLIC's claims-paying ability was rated "AAA" by S&P.
Property Management. The Reichmann/Intell Portfolio Property is managed by
IPC (U.S.) Management, Inc. (the "Reichmann/Intell Portfolio Manager"), an
affiliate of the Reichmann/Intell Portfolio Borrower pursuant to a management
agreement. The management agreement provides for the payment to the
Reichmann/Intell Portfolio Manager of management fees of 4%, which are
subordinated to payments under the Reichmann/Intell Portfolio Loan. The
Reichmann/Intell Portfolio Manager may
S-83
<PAGE>
be terminated (i) upon an event of default under the Reichmann/Intell Portfolio
Loan or the Reichmann/Intell Portfolio Mezzanine Loan (as defined below) or a
breach in respect of the Reichmann/ Intell Portfolio Preferred Equity Interest
(as defined below), (ii) if the DSCR for the Reichmann/Intell Portfolio Loan
falls below 1.05x, or (iii) in the event of a default by the Reichmann/Intell
Portfolio Manager under the management agreement.
Mezzanine Loan and Preferred Equity Interest. IPC Office Holdings, LLC,
the regular member of the IPC Office Portfolio Borrower, and two of its
affiliates, IPC Retail Holdings, LLC and IPC Commercial Holdings, LLC, each a
Delaware limited liability company, are the borrowers (collectively, the
"Reichmann/Intell Portfolio Mezzanine Borrower") under a mezzanine loan in the
principal amount of $2,235,859 (the "Reichmann/Intell Portfolio Mezzanine
Loan"), made by CSFB Mortgage Capital (in its capacity as mezzanine lender, the
"Reichmann/Intell Portfolio Mezzanine Lender") on May 19, 1998. The
Reichmann/Intell Portfolio Mezzanine Loan is secured by, among other things, a
pledge of the regular membership interests in the Reichmann/Intell Portfolio
Borrower, the regular membership interests in the managing member of the
Reichmann/Intell Portfolio Borrower, and the stock of the managing member of
the managing member of the Reichmann/Intell Portfolio Borrower. The Reichmann/
Intell Portfolio Mezzanine Lender has agreed not to foreclose on its interests
in the Reichmann/Intell Portfolio Borrower without the consent of the Servicer.
The Reichmann/Intell Portfolio Mezzanine Lender has also agreed not to transfer
its interest in the Reichmann/Intell Portfolio Mezzanine Loan to any entity
other than certain permitted institutional transferees unless each Rating
Agency confirms that such transfer would not cause a withdrawal, qualification
or downgrade of its ratings on the Certificates. The Reichmann/Intell Portfolio
Mezzanine Loan matures on April 11, 2000 and bears interest at a per annum rate
of LIBOR plus 2.5%.
CSFB Mortgage Capital owns a preferred equity investment (as such holder,
the "Reichmann/Intell Portfolio Special Member") in the Reichmann/Intell
Portfolio Borrower in the approximate amount as of the Cut-off Date of
$7,587,298 (the "Reichmann/Intell Preferred Equity Interest"). The
Reichmann/Intell Portfolio Special Member has an obligation to make an
additional preferred equity investment in the Reichmann/Intell Portfolio
Mezzanine Borrower in an amount not to exceed $3,525,276, subject to certain
conditions. The Reichmann/Intell Portfolio Special Member is entitled to
receive preferred monthly distributions at a yield of LIBOR plus 2.5% and is
scheduled to be redeemed in full on April 11, 2000. The Reichmann/Intell
Portfolio Mezzanine Borrower has guaranteed the payments due on the Reichmann/
Intel Portfolio Preferred Equity Interest to the extent of certain
distributions it receives with respect to the regular membership interests in
the Reichmann/Intel Portfolio Borrower and in certain affiliates.
Commencing on July 11, 1998, the Reichmann/Intell Portfolio Mezzanine Loan
and the Reichmann/
Intell Portfolio Preferred Equity Interest require monthly payments of interest
and yield, respectively, and a balloon payment on April 11, 2000 of the
principal and capital amounts thereof, respectively. Upon the occurrence of an
event of default under the Reichmann/Intell Portfolio Mezzanine Loan or a
breach with respect to the Reichmann/Intell Portfolio Preferred Equity
Interest, all cash flow from the Reichmann/ Intell Portfolio Property
remaining after payment of operating expenses and debt service will be applied
to repay such principal and capital amounts.
The Reichmann/Intell Portfolio Mezzanine Lender and Reichman/Intell
Portfolio Special Member each have certain approval rights over budgets and
significant leases and can terminate and replace the Reichmann/Intell Portfolio
Manager upon an event of default under the Reichmann/Intell Portfolio Mezzanine
Loan or a breach under the preferred equity documents, respectively, or if the
debt and yield service coverage ratio is less than 1.05x in the aggregate. The
Reichmann/Intell Portfolio Mezzanine Lender and the Reichmann/Intell Portfolio
Special Member have agreed that they will not take any such action with respect
to the Reichmann/Intell Portfolio Manager unless each Rating Agency confirms
that such action would not cause a withdrawal, qualification or downgrade of
its ratings on the Certificates. The rights of Reichmann/Intell Portfolio
Mezzanine Lender and the Reichmann/Intell Portfolio Special Member relating to
budgeting, management and leases will be exercised through the Reichmann/Intell
Portfolio Special Member, subject to the consent of the Servicer to such
exercise.
The Ritz-Carlton Loan
The Loan. The fourth largest Mortgage Loan in the Mortgage Pool (the
"Ritz-Carlton Loan") was originated by Credit Suisse First Boston, New York
Branch, a branch of a foreign bank licensed under the
S-84
<PAGE>
laws of the State of New York and an affiliate of CSFB Mortgage Capital, on May
29, 1998 and has a principal balance, as of the Cut-off Date, of $75,000,000,
which represents approximately 3.0% of the Initial Pool Balance. The
Ritz-Carlton Loan is secured by a primary beneficiary's interest in a trust
(the "Property Trust") holding a hotel (the "Ritz-Carlton Property") located in
Cancun, Mexico. The Ritz-Carlton Loan was made to Grupo Inmobiliaro Mosa, S.A.,
a special purpose Mexican corporation (the "Ritz-Carlton Borrower").
----------------
<TABLE>
<S> <C>
Cut-off Date Principal
Balance: $75,000,000
Origination Date: May 29, 1998
Loan Type: ARD
Monthly Payment: $622,734
Interest Rate: 8.87%
Amortization Term: 300 months
DSCR: 1.70x
Cut-off Date LTV: 57%
Anticipated Repayment
Date: June 11, 2008
ARD Balance: $63,557,954
ARD LTV: 48%
Defeasance Period: Commencing two years after the
Closing Date until ARD
Prepayment Lockout
Expiration: Locked out until December 11, 2007
</TABLE>
<TABLE>
<S> <C>
Borrower Special Purpose
Entity: Yes
Maturity Date: June 11, 2023
Property Type: Hospitality
No. of Properties: 1
Location of Property: Cancun, Mexico
Appraised Value: $131,400,000
Rooms: 365
Year Built: 1994
Cut-off Date
Balance/Room: $205,479
Fee or Leasehold: Fee
Occupancy: 79%
Lock Box: Modified
</TABLE>
----------------
The Borrower. The Ritz-Carlton Borrower is a single purpose entity whose
sole purpose is the operation, management and financing of the Ritz-Carlton
Property and the holding of a secondary beneficiary's interest in the Property
Trust. The Ritz-Carlton Borrower has no material assets other than its interest
in the Property Trust. The Ritz-Carlton Borrower is controlled by Enrique
Carlos Molina Sobrino (the "Key Principal"), who also owns controlling
interests in Pepsi-Gemex, the largest Pepsi bottler outside of the United
States; Consorcio Azucarero Escorpion, the largest producer of refined sugar in
Mexico, and certain limited service hotels located in Mexico.
Certain additional information on the Ritz-Carlton Loan and the
Ritz-Carlton Property is set forth on Annex A hereto.
The Property. The Ritz-Carlton Property is a nine-story, 365-room
(including 53 suites), full-service luxury resort hotel situated on
approximately 9.9 acres of beach front property in Cancun, Mexico, which was
opened in 1994. The Ritz-Carlton Property is ranked as the fourth best luxury
resort hotel in the world by Travel & Leisure magazine, is listed on Conde
Nast's Gold List and is one of only two hotels in Mexico to have maintained a
five diamond rating by the American Automobile Association from 1995 through
1998. Based on the Ritz-Carlton Borrower's December 1997 operating statement,
the 12-month occupancy for calendar year 1997 for the Ritz-Carlton Hotel was
79% at an average daily rate of $204.10. The Ritz-Carlton Property contains two
swimming pools, a fitness center, four restaurants and two bars and is situated
on approximately 1,200 feet of beach front. In addition, the Ritz-Carlton
Property contains approximately 27,700 square feet of meeting space, three
tennis courts, 90 parking spaces, a sports shop, a gift shop and other
concessionaires. The Ritz-Carlton Borrower has obtained a permit from the city
of Cancun on an annual basis to use the beach as a private beach.
Security. The record ownership of the Ritz-Carlton Property will be held
in the name of Banco Nacional de Mexico acting as trustee of the Property Trust
(the "Property Trustee"). The guaranty trust is a customary form of real estate
finance security instrument in Mexico. The trust agreement with respect to the
Property Trust designates the lender and its successors and assigns as the
primary beneficiary of the Property Trust and the Ritz-Carlton Borrower as the
secondary beneficiary of the Property Trust. The
S-85
<PAGE>
lender's primary beneficial interest in the Property Trust gives the lender the
right to direct the Property Trustee to direct the sale of the related property
upon an event of default under the Ritz-Carlton Loan. The Ritz-Carlton
Borrower's beneficial interest in the Property Trust gives it the right to use
occupy and enjoy the Ritz-Carlton Property for so long as it is not in default
on its obligations in respect of the Ritz-Carlton Loan. Under the trust
agreement for the Property Trust the lender has agreed to not take any action
to enforce its remedies with respect to the Ritz-Carlton Property for a period
of 90 days (180 days if there is an economic crisis occurring in Mexico at that
time) after an event of default. Such period is intended to give the borrower a
period of time in which to arrange a refinancing of the Ritz-Carlton Loan.
Property Management. The Ritz-Carlton Property is managed by the
Ritz-Carlton Hotel Company of Mexico, S.A. de C.V. (the "Ritz-Carlton
Manager"), which is independent of the Ritz-Carlton Borrower, pursuant to the
terms of a management agreement. The Ritz-Carlton Manager is a subsidiary of
Marriott International, Inc. The management agreement provides for the payment
to the Ritz-Carlton Manager of management fees equal to 3%. The Property
Trustee has the right to direct the Ritz-Carlton Borrower to terminate the
Ritz-Carlton Manager if an event of default occurs under the management
agreement. The Ritz-Carlton Manager is permitted to continue to manage the
Ritz-Carlton Property if the Trustee acquires title thereto. The Ritz-Carlton
Manager has agreed to use commercially reasonable efforts to establish each of
the Ritz-Carlton Mexico Account and the Ritz-Carlton Exchange Account as a
trust account, or at a bank whose long term debt rating is at least "AA--" by
S&P or, with respect to any Escrow Account held at a Mexican financial
institution, whose peso-denominated long-term debt rating is at least
investment grade.
Cash Management. The revenues of the Ritz-Carlton Property generally
include (i) receipts from advanced bookings by tour operators and other group
reservations, including value added tax and gratuity charges relating thereto
(the "Group Receipts"); (ii) credit card and other receipts from individual
guests (the "Individual Receipts"); and (iii) deposits of over-the-counter
receipts (including receipts from the exchange of dollars) (the
"Over-the-Counter Receipts"), which generally are denominated in dollars. The
Group Receipts are deposited by the Ritz-Carlton Manager directly into the
account of the Ritz-Carlton Manager at a bank in the United States meeting
certain specified requirements (the "Ritz-Carlton U.S. Account") and the
Individual Receipts (after conversion to pesos by Banamex) are deposited by the
Ritz-Carlton Manager directly into the account of the Ritz-Carlton Manager held
by Banamex (the "Ritz-Carlton Mexico Account"). The Over-the-Counter Receipts
are generally deposited into a dollar denominated account in Mexico (the
"Mexican Dollar Account") and used to reconvert pesos to dollars and to hold
cash deposited by guests for use as spending money during their stay and, with
any excess amount (the "Excess Exchange Amount") to pay dollar denominated
expenses. Amounts in the Ritz-Carlton U.S. Account may be withdrawn by the
Ritz-Carlton Manager to pay U.S-based expenses and, if necessary, to pay
peso-denominated expenses not covered by Individual Receipts and any Excess
Exchange Amount. The Ritz-Carlton Manager has agreed to withdraw funds from the
Ritz-Carlton Mexico Account in order to fund a furniture, fixtures and
equipment reserve and to pay its peso denominated expenses. Only if the funds
in the Ritz-Carlton Mexico Account or Excess Exchange Amounts are insufficient
to cover such peso-denominated expenses the Ritz-Carlton Manager may withdraw
funds from the Ritz-Carlton U.S. Account for the payment of peso denominated
operating expenses.
Reserves. The Ritz-Carlton Borrower has guaranteed an unsecured debt
obligation of an affiliate of the Ritz-Carlton Borrower to a Mexican bank that
currently is in receivership. Because such debt obligation could not be repaid
prior to the origination of the Ritz-Carlton Loan due to receivership
proceedings involving the bank, the Ritz-Carlton Borrower established an escrow
account in an amount exceeding the amount of the outstanding debt obligation,
which amount is required to be utilized to pay such debt obligation. In
addition to the reserves for taxes and insurance and FFIE, the Ritz-Carlton
Borrower is also required to maintain a seasonality reserve to offset seasonal
fluctuation in occupancy.
The 45 Wall Street Loan
The Loan. The fifth largest Mortgage Loan in the Mortgage Pool (the "45
Wall Street Loan") was originated by an affiliate of PWRES on February 9, 1998
and has a principal balance as of the Cut-off
S-86
<PAGE>
Date of $74,499,220, which represents approximately 3.0% of the Initial Pool
Balance. The 45 Wall Street Loan is secured by a first mortgage (the "45 Wall
Street Mortgage") encumbering a multifamily property in New York, New York (the
"45 Wall Street Property"). The 45 Wall Street Loan was made to 45 Wall St.
L.L.C., a New York limited liability company (the "45 Wall Street Borrower").
----------------
<TABLE>
<S> <C>
Cut-off Date Principal
Balance: $74,499,220
Origination Date: February 9, 1998
Loan Type: ARD
Monthly Payment $576,828
Interest Rate: 6.573%
Amortization Term: 228 months
Prepayment Lockout
Expiration: To ARD
Defeasance: After September 1, 2000 up to
(but excluding) the ARD
DSCR: 1.23x
Cut-off Date LTV: 75%
Anticipated Repayment
Date: March 1, 2008
ARD Balance: $46,930,614
ARD LTV: 47%
Borrower Special Purpose
Entity: Yes, with an independent
managing member and a
non-consolidation opinion
</TABLE>
<TABLE>
<S> <C>
% of Initial Pool Balance: 3.00%
Maturity Date: March 1, 2017
Property Type: Multifamily
No. of Properties: 1
Location of Property: New York, New York
Appraised Value: $100,000,000
Square Feet: 340,173 net rentable square feet
No. of Units: 435
Year Built: 1957; conversion from office to
residential 1997
Cut-off Date Balance/Unit: $171,263
Fee or Leasehold: Fee
Major Tenants: NYU -- residential; Starbucks and
Bank of New York -- commercial
Occupancy: 100%
Lock Box: Hard
</TABLE>
----------------
The Borrower. The 45 Wall Street Borrower has been structured as a special
purpose, bankruptcy remote entity with a single purpose, bankruptcy remote
managing member whose board of managers contains a special manager. The 45 Wall
Street Borrower is a New York limited liability company, the members of which
are the managing member, Whitehall Street Real Estate Limited Partnership VIII
(a real estate fund organized by The Goldman Sachs Group, L.P. and managed by
affiliates of Goldman Sachs & Co.) and 45 Wall (HTF) L.L.C. (of which Rockrose
Assets (WC) L.L.C. is a member), an affiliate of Rockrose Development
Corporation (a New York real estate owner, builder and manager).
Certain information on the 45 Wall Street Loan and the 45 Wall Street
Property is set forth on Annex A hereto.
The Property. The 45 Wall Street Property is a 28 story, 435-unit
residential property with parking space for 137 cars and small retail spaces
located at 45 Wall Street in New York, New York. The 45 Wall Street Property
was constructed in 1958 and renovated in 1997 in accordance with the Lower
Manhattan Plan, which provides for abatement of certain taxes and for certain
exemptions from the assessed value of improvements upon the conversion of
obsolete pre-1977 lower Manhattan commercial buildings into Class A multifamily
dwellings. These exemptions and abatements are phased out over a period of
eight to ten years. Apartments that lease for less than $2,000 per month (which
currently represent approximately 31% of the total units) are subject to rent
stabilization with annual rent increases promulgated by the Rent Control Board.
Apartments that lease for more than $2,000 per month (which currently represent
approximately 69% of the total units) are not subject any rent stabilization
laws. The 45 Wall Street Property contains approximately 327,973 rentable
square feet of residential space, approximately 15,300 square feet of parking
space and approximately 12,200 square feet of rentable retail space. The major
tenants of the 45 Wall Street Property are New York University (with leases to
175 student residential units), Starbucks and Bank of New York. Based on the 45
Wall Street Borrower's May 1998 rent roll, the 45 Wall Street Property was
100% occupied at an average annual residential rental per square foot of
$31.52.
Property Management. The 45 Wall Street Property is managed by Rockrose
Development Corp. (the "45 Wall Street Manager"), an affiliate of the 45 Wall
Street Borrower, pursuant to a management
S-87
<PAGE>
agreement. The management agreement provides for the payment to the 45 Wall
Street Manager of management fees equal to 5%, which are subordinated to
payments to be made under the 45 Wall Street Loan. The 45 Wall Street Manager
can be terminated (i) upon the occurrence of a default by the 45 Wall Street
Manager under the management agreement, (ii) under certain circumstances, if
the DSCR for the 45 Wall Street Loan falls below 1.10x or (iii) if the 45 Wall
Street Manager becomes insolvent.
The Plaza Rio Hondo Loan
The Loan. The sixth largest Mortgage Loan (the "Plaza Rio Hondo Loan") was
originated by CSFB Mortgage Capital on April 24, 1998 and has a principal
balance, as of the Cut-off Date, of $61,963,322, which represents approximately
2.5% of the Initial Pool Balance. The Plaza Rio Hondo Loan is secured by a
first mortgage (the "Plaza Rio Hondo Mortgage") encumbering an anchored retail
center in San Juan, Puerto Rico (the "Plaza Rio Hondo Property"). The Plaza Rio
Hondo Loan was made to MBRD-Plaza Rio Hondo L.P., S.E. (the "Plaza Rio Hondo
Borrower"), a Delaware limited partnership.
----------------
<TABLE>
<S> <C>
Cut-off Date Principal
Balance: $61,963,322
Origination Date: April 24, 1998
Loan Type: ARD
Monthly Payment: $420,010
Interest Rate: 7.18%
Amortization Term: 360 months
DSCR: 1.47x
Cut-off Date LTV: 77%
Anticipated Repayment
Date: May 11, 2008
ARD Balance: $54,346,512
ARD LTV: 67%
Defeasance Period: Commencing two years after the
Closing Date
Prepayment Lockout
Expiration: 119 days before ARD
</TABLE>
<TABLE>
<S> <C>
Borrower Special Purpose
Entity: Yes, with an independent director
and a non-consolidation opinion
Maturity Date: May 11, 2028
Property Type: Anchored retail (enclosed mall)
No. of Properties: 1
Location of Property: Bayamon, Puerto Rico
Appraised Value: $81,000,000
Square Feet: 423,755
Year Built: 1980
Cut-off Date Balance/SF: $146
Fee or Leasehold: Fee
Major Tenants: K-Mart, Xtra, Woolworth
Occupancy as of most
recent rent roll: 100%
Lock Box: Springing
</TABLE>
----------------
The Borrower. The Plaza Rio Hondo Borrower has been structured as a single
purpose, bankruptcy remote entity, with a single purpose, bankruptcy remote
managing member whose board contains an independent director. The Plaza Rio
Hondo Borrower is a Delaware limited partnership, sponsored by North Star
Capital Investment Corp., a recently formed REIT. The Plaza Rio Hondo Borrower
is affiliated with the Borrower with respect to Loan Nos. 29, 33, and 63, which
together comprise the Puerto Rico Crossed Borrower (as defined below).
Certain additional information on the Plaza Rio Hondo Loan and the Plaza
Rio Hondo Property is set forth on Annex A hereto.
The Property. Plaza Rio Hondo is an enclosed shopping center located at
the intersections of Highways 22 and 167 in Bayamon, along the western edge of
the San Juan metropolitan area. Plaza Rio Hondo contains approximately 423,755
square feet of rentable retail space. The Plaza Rio Hondo Property includes a
theatre located on a mall outparcel that currently is being expanded from six
to over twenty screens. The major tenants of Plaza Rio Hondo Property are
K-Mart, Xtra, Woolworth, Tiendas Capri and Walgreens. Woolworth currently is
paying rent on 36,680 square feet it previously occupied, although it is using
only a portion of the space for a Footlocker store. Based on the Plaza Rio
Hondo Borrower's April 2, 1998 rent roll, the Plaza Rio Hondo Property was 100%
rented at an average annual rental per square foot of $15.04.
Property Management. The Plaza Rio Hondo Property is managed by
Manley-Berenson Realty & Development -- Puerto Rico (the "Plaza Rio Hondo
Manager"), an affiliate of the Plaza Rio Hondo
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<PAGE>
Borrower, pursuant to a management agreement. The management agreement provides
for the payment to the Plaza Rio Hondo Manager of management fees of 4%, which
are subordinated to payments to be made under the Plaza Rio Hondo Loan. The
Plaza Rio Hondo Manager may be terminated (i) upon the occurrence of any event
of default under the respective Loan; (ii) a default by Plaza Rio Hondo Manager
under the management agreement; or (iii) if the DSCR falls below 1.08x for the
previous calendar year.
Cash Collateral Account. If at any time while the Plaza Rio Hondo Mortgage
is outstanding the DSCR for the Plaza Rio Hondo Property falls below 1.10x, all
excess cash flow is held in a cash collateral account until the DSCR is again
equal to or greater than 1.10x.
The 4000 Wisconsin Loan
The Loan. The seventh largest Mortgage Loan (the "4000 Wisconsin Loan")
was originated by CSFB Mortgage Capital on May 8, 1998 and has a principal
balance, as of the Cut-off Date, of $60,880,640, which represents approximately
2.5% of the Initial Pool Balance. The 4000 Wisconsin Loan is secured by a first
mortgage (the "4000 Wisconsin Mortgage") encumbering an office property in
Washington, D.C., (the "4000 Wisconsin Property"). The 4000 Wisconsin Loan was
made to 4000 Wisconsin Avenue Associates Limited Partnership, a District of
Columbia limited partnership (the "4000 Wisconsin Borrower").
----------------
<TABLE>
<S> <C>
Cut-off Date Principal
Balance: $ 60,880,640
Origination Date: May 8, 1998
Loan Type: ARD
Monthly Payment: $434,712 plus additional
amortization of $83,333 until
expiration of Fannie Mae lease
(April 2003); $389,179 thereafter
Interest Rate: 7.59%
Amortization Term: 360 months; reamortizes June
2003 to 300 months
DSCR: 1.49x
Cut-off Date LTV: 58%
Anticipated Repayment
Date: May 11, 2008
ARD Balance: $ 47,282,444
ARD LTV: 45%
Prepayment Lockout
Expiration: Until two months prior to the
ARD
</TABLE>
<TABLE>
<S> <C>
Defeasance Period: Commencing two years after
Closing Date
Borrower Special Purpose
Entity: Yes, with an independent director
and a non-consolidation opinion
Maturity Date: May 11, 2028
Property Type: Office
No. of Properties: 1
Location of Property: Washington, D.C.
Appraised Value: $105,000,000
Square Feet: 491,892 including 388,690 office,
92,054 retail and 11,148 storage
Year Built: 1988
Cut-off Date Balance/SF: $124
Fee or Leasehold: Leasehold
Major Tenants: Fannie Mae, Cineplex Odeon,
Tenley Sport and Health
Occupancy: 100%
Lock Box: Hard
</TABLE>
----------------
The Borrower. The 4000 Wisconsin Borrower has been structured as a single
purpose, bankruptcy remote entity, with a single purpose, bankruptcy remote
managing member whose board contains an independent director. The 4000
Wisconsin Borrower is a District of Columbia limited partnership, the two
general partners of which are Holladay/4000 Wisconsin Avenue Limited
Partnership and Donohoe/4000 Wisconsin Avenue Inc. The two primary sponsors of
the 4000 Wisconsin Borrower are Wallace Holladay and James Donohoe, III. Mr.
Donohoe manages the Donohoe Companies, which was founded in 1887 and has
developed and/or built over $9 billion of commercial and residential projects
primarily in the Washington D.C. metropolitan area.
Certain additional information on the 4000 Wisconsin Loan and the 4000
Wisconsin Property is set forth on Annex A hereto.
<PAGE>
The Property. The 4000 Wisconsin Property is a five-story mixed-use
building (with an additional four levels below ground) including 1,029 parking
spaces located at 4000 Wisconsin Avenue in Washington, D.C. The project is
designed with three buildings surrounding an open courtyard. The buildings are
separated at the first and second floors and connected on floors three through
five. Constructed in 1988, the 4000 Wisconsin Property contains approximately
388,690 square feet of Class A office space and 92,054 square feet of retail
space occupied primarily by an athletic club and a six-screen cinema. The major
tenants of the 4000 Wisconsin Property are Fannie Mae, Cineplex Odeon and
Tenley
S-89
<PAGE>
Sport and Health. Based on the 4000 Wisconsin Borrower's May 13, 1998 rent
roll, the 4000 Wisconsin Property was 100% occupied at an average annual rental
per square foot of $25.71,
Ground Lease. The 4000 Wisconsin Property is subject to a 75-year ground
lease expiring in August 2059. The base ground rent increases every year by the
greater of 3.0% or CPI and resets every 21 years to a rent equal to 10% of the
land value. The current ground rent is approximately $1,400,000 per year with
the first reset date scheduled for June 2006. The ground lease allows the
lessee to defer and accrue any increase of (i) greater than 3% annually or (ii)
greater than 150% of base rent at the reset.
Property Management. The 4000 Wisconsin Property is managed by Donohoe
Real Estate Services (the "4000 Wisconsin Manager"), an affiliate of one of the
general partners of the 4000 Wisconsin Borrower, pursuant to a management
agreement. The management agreement provides for the payment to the 4000
Wisconsin Manager of management fees of between 2% and 3% (depending on the
space leased), which fees are subordinated to payments to be made under the
4000 Wisconsin Loan. The 4000 Wisconsin Manager can be terminated upon the
occurrence of any event of default under the 4000 Wisconsin Loan.
Reserves: The borrower is required to fund: (i) leasing reserves of (a)
$4.00/sf or $2,000,000 per year (funded in equal monthly installments) through
April 2003 and (b) $2.00/sf or $1,000,000 per year thereafter and (ii) capital
reserves of $0.20/sf per year (funded in equal monthly installments). All
excess cash flow through Fannie Mae's lease term is required to be deposited
into a reserve account, which would result in a total reserve of approximately
$12.5 million (i.e. $32 per square foot of Fannie Mae space) by the expiration
of the Fannie Mae lease term.
The Fountain Centre Loan
The Loan. The eighth largest Mortgage Loan in the Mortgage Pool (the
"Fountain Centre Loan") was originated by CSFB Mortgage Capital on August 7,
1997 and modified on May 11, 1998 and has a principal balance as of the Cut-off
Date of $49,961,708, which represents approximately 2.0% of the Initial Pool
Balance. The Fountain Centre Loan is secured by a first mortgage (the "Fountain
Centre Mortgage") encumbering an anchored retail property in Houston, Texas
(the "Fountain Centre Property"). The Fountain Centre Loan was made to F.P.
Centre Limited, a Texas limited partnership (the "Fountain Centre Borrower").
----------------
<TABLE>
<S> <C>
Cut-off Date Principal
Balance: $49,961,708
Origination Date: August 7, 1997; modified
May 11, 1998
Loan Type: ARD
Monthly Payment: $ 397,375.53
Interest Rate: 8.34%
Amortization Term: 300 months
DSCR: 1.07x
Cut-off Date LTV: 71%
Anticipated Repayment
Date: August 11, 2009
ARD Balance: $39,973,779
ARD LTV: 57%
Borrower Special Purpose
Entity: Yes, with an independent
director and a non-
consolidation opinion
% of Initial Pool Balance: 2.01%
Maturity Date: August 11, 2022
</TABLE>
<TABLE>
<S> <C>
Property Type: Anchored retail
shopping center
No. of Properties: 1
Location of Property: Stafford (Houston),
Texas
Appraised Value: $70,000,000
Square Feet: 572,459
Year Built: 1996
Cut-off Date Balance/SF: $87
Fee or Leasehold: Fee
Major Tenants: Loews/Sony Theatres,
Oshman's
Hobby Lobby,
Occupancy: 86%
Prepayment Lockout
Expiration: Until 6 months prior to
ARD
Defeasance Period: Commencing 2 years
after Closing Date
Lock Box: Hard
</TABLE>
----------------
<PAGE>
The Borrower. The Fountain Centre Borrower has been structured as a single
purpose, bankruptcy remote entity, with a single purpose, bankruptcy remote
managing member whose board contains an
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<PAGE>
independent director. The Fountain Centre Borrower is a Texas limited
partnership, the general partner of which is F.P. Center GP, Inc. a Texas
corporation owned by Aron S. Gordon. The principals of the Fountain Centre
Borrower are Aron Gordon, Dan Gordon, Jim Gordon and Tom Gordon. The members of
the Gordon family have developed and managed over 7 million square feet of
retail space as well as 5,000 apartment units through out the United States.
Certain additional information on the Fountain Centre Loan and the
Fountain Centre Property is set forth on Annex A hereto.
The Property. The Fountain Centre Property is an anchored retail shopping
center located in Stafford, Texas, a suburb of Houston. The Fountain Centre
Property consists of two separate multi-tenant retail buildings, a
free-standing movie theatre and a free-standing Fudruckers Restaurant on
approximately 71 acres. A third multi-tenant retail building, partially leased
to Sterling Bank, and three separate pad sites leased to regionally-recognized
restaurant chains are proposed. The Fountain Centre Property was constructed in
1996. The Fountain Centre Property currently contains approximately 572,459
square feet of retail space and 3,359 parking spaces. The major tenants of the
Fountain Centre Property are Loews/Sony Theatres, Oshman's, Hobby Lobby, Saks
Off-Fifth and Borders Books. Based on the Borrower's June 1, 1998 rent roll,
the Fountain Centre Property was 86% occupied at an average annual rental per
square foot of $9.96.
Property Management. The Fountain Centre Property is managed by Gemstone
Management Company (the "Fountain Centre Manager"), an affiliate of the
Fountain Centre Borrower, pursuant to a management agreement. The management
agreement provides for payment to the Fountain Centre Manager of management
fees equal to 5%, which fees are subordinated to payments made under the
Fountain Centre Loan. The Fountain Centre Manager can be terminated (i) upon
the occurrence of any event of default under the Fountain Centre Loan or (ii)
if the Fountain Centre Property DSCR falls below 1.05x.
Additional Collateral. The Fountain Centre Property is an Additional
Collateral Loan and provides for a reserve of $7,900,000 to be released to the
Fountain Centre Borrower in up to three draws upon achievement of specified
levels of underwritten Net Cash Flow on or before May 1, 1999. If such levels
are not achieved by such date, the remaining amount of the reserve is required
to be applied to the partial prepayment of the Fountain Centre Loan, upon which
prepayment the amortization payments will be recalculated based upon the
remaining amortization term, outstanding principal balance and mortgage rate.
The Puerto Rico Crossed Loan
The Loan. The ninth largest Mortgage Loan (the "Puerto Rico Crossed Loan")
was originated by CSFB Mortgage Capital on April 24, 1998 and has an aggregate
principal balance, as of the Cut-off Date, of $41,975,152, which represents
approximately 1.7% of the Initial Pool Balance. The Puerto Rico Crossed Loan is
secured by three cross-collateralized first mortgages (the "Senorial Plaza
Mortgage," the "Rexville Plaza Mortgage," and the "Plaza del Atlantico
Mortgage" and, collectively, the "Puerto Rico Crossed Mortgages") on three
retail centers (the "Senorial Plaza Property," the "Rexville Plaza Property"
and the "Plaza del Atlantico Property" and, collectively, the "Puerto Rico
Crossed Properties.") The Puerto Rico Crossed Loan was made to MBRD-Senorial
Plaza L.P., S.E. (the "Senorial Plaza Borrower"), MBRD-Rexville Plaza L.P.,
S.E. (the "Rexville Plaza Borrower") and MBRD-Plaza del Atlantico L.P., S.E.
(the "Plaza del Atlantico Borrower" and, collectively with the Senorial Plaza
Borrower and the Rexville Plaza Borrower, the "Puerto Rico Crossed Borrowers").
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<PAGE>
----------------
<TABLE>
<S> <C>
Cut-off Date Principal
Balance: $41,975,152
Origination Date: April 24, 1998
Loan Type: ARD; cross-collateralized,
cross-defaulted
Monthly Payment: $284,525
Interest Rate: 7.18%
Amortization Term: 360 months
DSCR: 1.44x
Cut-off Date LTV: 74%
Anticipated Repayment
Date: May 11, 2008
ARD Balance: $67,439,106
ARD LTV: 67%
Defeasance Period: Commencing two years after the
Closing Date
</TABLE>
<TABLE>
<S> <C>
Partial Defeasance: Yes
Prepayment Lockout
Expiration: 120 days prior to ARD
Borrower Special Purpose
Entities: Yes, with independent managers
of the general partners of the
general partners and
non-consolidation opinions
Maturity Date: May 11, 2028
Property Type: Anchored retail; 2 enclosed malls
(Senorial Plaza and Rexville
Plaza) and a strip center (Plaza
del Atlantico)
No. of Properties: 3
Lock Box: Springing
</TABLE>
----------------
Additional Mortgage Loan Information by Property. Certain information with
respect to each Mortgaged Property relating to the Puerto Rico Crossed Loan is
set forth below:
<TABLE>
<CAPTION>
PROPERTY APPRAISED SQUARE YEAR
NAME LOCATION VALUE FEET BUILT
- ------------------------ ---------------- -------------- --------- -------
<S> <C> <C> <C> <C>
Plaza del Atlantico Arecibo, P.R. $24,300,000 219,809 1980
Senorial Plaza ......... San Juan, P.R. $24,600,000 206,567 1975
Rexville Plaza ......... Bayamon, P.R. $14,000,000 131,600 1977
<CAPTION>
CUT-OFF
DATE
PROPERTY FEE OR MAJOR OCCUPANCY PRINCIPAL
NAME LEASEHOLD TENANTS (1) BALANCE
- ------------------------ ----------- -------------------------- ----------- --------------
<S> <C> <C> <C> <C>
Plaza del Atlantico Fee Kmart, Capri Del, 99% $16,190,416
Walgreens
Senorial Plaza ......... Fee Kmart, Pueblo, 100% $16,090,475
Senorial Cinemas
Rexville Plaza ......... Fee Kmart, Pueblo, Walgreens 100% $ 9,700,000
</TABLE>
- ----------
(1) As of most recently available rent roll.
The Borrowers. Each Puerto Rico Crossed Borrower has been structured as a
single purpose, bankruptcy remote entity, with a single purpose, bankruptcy
remote managing member whose board contains an independent director. Each
Puerto Rico Crossed Borrower is a Delaware limited partnership sponsored by
North Star Capital Investment Corp., a recently formed REIT. The Puerto Rico
Crossed Borrower is affiliated with the Borrower with respect to Loan No. 6
(the Plaza Rio Hondo Borrower).
Certain additional information in the Puerto Rico Crossed Loan and the
Puerto Rico Crossed Properties is set forth on Annex A hereto.
Property Management. Each Puerto Rico Crossed Property is managed by
Manley-Berenson Realty & Development -- Puerto Rico, Inc., (the "Puerto Rico
Crossed Manager"), an affiliate of the Puerto Rico Crossed Borrower, pursuant
to a management agreement. The management agreement provides for payment to the
Puerto Rico Crossed Manager of management fees equal to 4%, which fees are
subordinated to payments to be made under the Puerto Rico Crossed Loan. The
Puerto Rico Crossed Manager can be terminated (i) upon the occurrence of any
event of default under the Puerto Rico Crossed Loan; (ii) upon a default by
Puerto Rico Crossed Manager under the management agreement or (iii) if the DSCR
for the Puerto Rico Crossed Property falls below 1.08x for the previous
calendar year.
Cash Collateral Account. If at any time while the Puerto Rico Crossed Loan
is outstanding the DSCR for the Puerto Rico Crossed Properties falls below
1.10x, all excess cash flow is required to be deposited in a cash collateral
account until the DSCR is again equal to or greater than 1.10x.
The 767 Third Avenue Loan
The Loan. The tenth largest Mortgage Loan in the Mortgage Pool (the "767
Third Avenue Loan") was originated by CSFB Mortgage Capital on May 11, 1998,
and has a principal balance, as of the Cut-off
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<PAGE>
Date, of $41,500,000, which represents approximately 1.7% of the Initial Pool
Balance. The 767 Third Avenue Loan is secured by a first mortgage (the "767
Third Avenue Mortgage") encumbering an office property in New York, New York
(the "767 Third Avenue Property"). The 767 Third Avenue Loan was made to 767
Third Avenue LLC (the "767 Third Avenue Borrower"), a New York limited
liability company.
----------------
<TABLE>
<S> <C>
Cut-off Principal Balance: $41,500,000
Origination Date: May 11, 1998
Loan Type: ARD
Monthly Payment: Interest only until May 11, 2003;
then constant monthly payment of
$314,824
Initial Term Interest Rate: 7.80%
Prepayment Lockout
Expiration: June 11, 2003
Prepayment Premium:
June 11, 2003 --
May 11, 2005 5% of outstanding principal balance
May 12, 2005 --
May 11, 2006 4% of outstanding principal balance
May 12, 2006 --
May 11, 2007 3% of outstanding principal balance
May 12, 2007 --
March 11, 2008 2% of outstanding principal balance
March 12, 2008 and
thereafter 0% of outstanding principal balance
Amortization Term: 300 months commencing June 11,
2003
DSCR: 1.21x
</TABLE>
<TABLE>
<S> <C>
Cut-off Date LTV: 62%
Anticipated Repayment
Date: May 11, 2008
ARD Balance: $38,495,735
ARD LTV: 57%
Borrower Special Purpose
Entity: Yes
Maturity Date: May 11, 2028
Property Type: Office building
No. of Properties: 1
Location of Property New York, New York
Appraised Value: $67,000,000
Square Feet: 287,952
Year Built: 1981
Cut-off Date Balance/SF: $144.00
Fee or Leasehold: Fee
Major Tenants: M.J. Whitman, et. al.; Consulate
General of Jamaica; Permanent
Mission of Jamaica to the United
Nations
Occupancy: 99%
Lock Box: Hard
</TABLE>
----------------
The Borrower. The 767 Third Avenue Borrower has been structured as a
single purpose, bankruptcy remote entity, with a single purpose, bankruptcy
remote managing member whose board contains an independent manager. The 767
Third Avenue Borrower is structured as a New York limited liability company,
the key principals of which are Melvyn and Robert Kaufman. Melvyn and Robert
Kaufman own and manage approximately ten commercial office properties in
Manhattan and one in London.
Certain additional information for the 767 Third Avenue Loan and the 767
Third Avenue Loan is set forth on Annex A hereto.
The Property. The 767 Third Avenue Property is a 40 story "Class A" office
property located at 767 Third Avenue in mid-town Manhattan and constructed in
1981. The 767 Third Avenue Property contains approximately 281,966 rentable
square feet. The major tenants of the 767 Third Avenue Property are M.J.
Whitman, et. al., Consulate General of Jamaica and Permanent Mission of Jamaica
to the United Nations. Based on the 767 Third Avenue Borrower's May 1, 1998
rent roll, the 767 Third Avenue Property was 99% occupied at an average annual
base rental per square foot of $36. The tenant base, includes securities, law
and financial services firms as well as a foreign consulate.
Property Management. The 767 Third Avenue Property is managed by Sage
Realty Corporation, a New York corporation (the "767 Third Avenue Manager"), an
affiliate of the 767 Third Avenue Borrower, pursuant to a management agreement
dated May 11, 1998. The management agreement provides for the payment to the
767 Third Avenue Manager of management fees equal to 3%, which fees are
subordinated to payments to be made under the 767 Third Avenue Loan. The 767
Third Avenue Manager can be terminated upon the occurrence of any event of
default under the 767 Third Avenue Loan.
<PAGE>
Cash Collateral Accounts and Leasing Escrow. If at any time while the 767
Third Avenue Mortgage is outstanding the DSCR for the 767 Third Avenue Property
falls below 1.10x, all excess cashflow is required to be held in a cash
collateral account until the DSCR is again equal to or greater than 1.10x.
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<PAGE>
In lieu of a leasing escrow account, a $600,000 letter of credit from a "AA"
rated issuer has been pledged as additional collateral for the 767 Third Avenue
Loan.
CERTAIN TERMS AND CONDITIONS OF THE MORTGAGE LOANS
Annex A. For a detailed presentation of the characteristics of the
Mortgage Loans on a loan-by-loan basis, see Annex A hereto.
Due Dates. The Mortgage Loans provide for scheduled payments of principal
and interest to be due on various days (each, a "Due Date") of each month. With
respect to 207 Mortgage Loans (representing approximately 76.2% of the Initial
Pool Balance), the Due Date is the 11th day of each month, with respect to
eight Mortgage Loans (representing approximately 2.7% of the Initial Pool
Balance), the Due Date is the 5th day of each month and with respect to 109
Mortgage Loans (representing approximately 21.2% of the Initial Pool Balance),
the Due Date is the 1st day of each month. With the exception of five Mortgage
Loans, representing approximately 0.4% of the Initial Pool Balance, no Mortgage
Loan has a grace period for payment defaults that extends beyond the related
Determination Date.
Mortgage Rates; Calculations of Interest. Fifty-five Mortgage Loans,
representing 21.7% of the Initial Pool Balance, accrue interest on the basis of
a 360-day year consisting of twelve 30-day months (a "30/360" basis). The
balance of the Mortgage Loans accrue interest on the basis of the actual number
of days elapsed in a 360-day year (an "Actual/360" basis). Each of the Mortgage
Loans accrues interest at the related Mortgage Rate, which is fixed for the
entire remaining term to maturity (or, in the case of an ARD Loan, the
remaining term to Anticipated Repayment Date) of such Mortgage Loan. Except as
described below under "--Excess Interest", most of the Mortgage Loans accrue
interest at a higher rate after their respective Anticipated Repayment Dates.
Each Mortgage Loan (other than Credit Lease Loans) generally requires the
related borrower to make a constant monthly payment of principal and interest
(each, a "Monthly Payment") that is calculated based on the related Mortgage
Rate, the amortization schedule for such Mortgage Loan and the initial
principal balance thereof and assumes that such Mortgage Loan accrues interest
on a 30/360 basis. As used herein, the term "Mortgage Rate" does not include
the Revised Rate (as defined below). Each Credit Lease Loan generally provides
for the payment of principal and interest based on a specified schedule set
forth in the related Mortgage Note, which may include periodic increases in
monthly payments.
Excess Interest. One hundred fifty-eight of the Mortgage Loans,
representing 67.8% of the Initial Pool Balance, bear interest at their
respective Mortgage Rates until an Anticipated Repayment Date. Commencing on
the respective Anticipated Repayment Date, each such Mortgage Loan generally
will bear interest at a fixed rate (the "Revised Rate") per annum equal to the
Mortgage Rate plus a specified percentage (generally, no more than 2%, so long
as the Mortgage Loan is included in the Trust Fund). Until the principal
balance of each such Mortgage Loan has been reduced to zero, such Mortgage Loan
will only be required to pay interest at the Mortgage Rate, and the interest
accrued at the excess of the related Revised Rate over the related Mortgage
Rate will be deferred (such accrued and deferred interest and interest thereon,
if any, is referred to herein as "Excess Interest"). Except where limited by
applicable law, Excess Interest so accrued will not be added to the principal
balance of the related Mortgage Loan but will accrue interest at the Revised
Rate. Prior to the Anticipated Repayment Date, borrowers under ARD Loans
generally have entered into, or will be required to enter into, a lockbox
agreement whereby all revenue generally will be deposited directly into a
Lockbox Account controlled by the Servicer. From and after the Anticipated
Repayment Date, the related borrower generally will be required to apply all
monthly cash flow from the related Mortgaged Property to pay the following
amounts in the following order of priority: (i) required payments to the tax
and insurance escrow fund and any ground lease escrow fund, (ii) payment of
monthly debt service, (iii) payments to any other required escrow funds, (iv)
payment of operating expenses pursuant to the terms of an annual budget
approved by the Servicer, (v) payment of approved extraordinary operating
expenses or capital expenses not set forth in the approved annual budget or
allotted for in any escrow fund, (vi) principal on the Mortgage Loan until such
principal is paid in full and (vii) Excess Interest. The cash flow from the
Mortgaged Property securing an ARD Loan after payments of items (i) through (v)
above is referred to herein as "Excess Cash Flow." As described below, each ARD
Loan generally provides that the related borrower is prohibited from
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<PAGE>
prepaying the Mortgage Loan until one to six months prior to the Anticipated
Repayment Date but, upon the commencement of such period, may prepay the loan,
in whole or in part, without payment of a Prepayment Premium or Yield
Maintenance Charge. The Anticipated Repayment Date for each ARD Loan is listed
in Annex A.
The holder of 100% of the Class V-1 Certificates will have the option for
up to two months after the Anticipated Repayment Date for any ARD Loan which is
a CSFBMC Mortgage Loan to purchase such ARD Loan at a price equal to its
outstanding principal balance plus accrued and unpaid interest and unreimbursed
Advances with interest thereon. The holder of 100% of the Class V-2
Certificates will have the option for up to two months after the Anticipated
Repayment Date for any ARD Loan which is a PWRES Mortgage Loan to purchase such
ARD Loan at a price equal to its outstanding principal balance plus secured and
unpaid interest and unreimbursed Advances with interest thereon. As a condition
to such purchase, each such holder will be required to deliver an opinion of
counsel to the effect that such purchase (or such right to purchase) would not
cause (a) either REMIC to fail to qualify as a REMIC under the Code at anytime
that any Certificate is outstanding and (b) would not cause the arrangement
between the REMIC and the Class V-1 Certificateholders and Class V-2
Certificateholders to be other than a grantor trust for federal income tax
purposes, and (i) an opinion of counsel to the effect that such purchase would
not result in a gain which would be subject to the tax on net income derived
from prohibited transactions imposed by Code Section 860F(a)(1) or otherwise
result in the imposition of any other tax on either REMIC under the REMIC
provisions of the Code or (ii) an accountant's certification to the effect that
such purchase would not result in the realization of any net income to either
REMIC.
Amortization of Principal. As set forth in the following table, certain
Mortgage Loans (the "Balloon Loans") provide for monthly payments of principal
based on amortization schedules at least 60 months longer than their original
terms, thereby resulting in substantial principal amounts due and payable (each
such payment, a "Balloon Payment") on their respective maturity dates, unless
previously prepaid. The remaining Mortgage Loans have remaining amortization
terms that are generally the same as their respective remaining terms to
maturity.
AMORTIZATION CHARACTERISTICS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
% OF INITIAL NUMBER OF
TYPE OF LOAN POOL BALANCE (1) MORTGAGE LOANS
- ------------------------------------- ------------------ ---------------
<S> <C> <C>
ARD Loans ........................ 67.8% 158
Fully Amortizing Loans (other than
ARD Loans) ..................... 13.7% 57
Balloon Mortgage Loans ........... 18.6% 109
----- ---
Total ............................ 100.00% 324
====== ===
</TABLE>
Prepayment Provisions. Each Mortgage Loan restricts voluntary prepayments
in one or more of the following ways: (i) by prohibiting any prepayments for a
specified period of time after the date of origination of such Mortgage Loan (a
"Lockout Period"), (ii) by requiring that any principal prepayment made during
a specified period of time after the date of origination of such Mortgage Loan
or, in the case of a Mortgage Loan also subject to a Lockout Period, after the
date of expiration of such Lockout Period (a "Yield Maintenance Period") be
accompanied by a Yield Maintenance Charge (as defined below) and (iii) by
imposing fees or premiums generally equal to a percentage of the then
outstanding principal balance of such Mortgage Loan ("Prepayment Premiums") in
connection with full or partial principal prepayments for a specified period of
time after the expiration of the related Yield Maintenance Period or, in the
case of Mortgage Loans not subject to a Yield Maintenance Period, the related
Lockout Period (in either case, a "Prepayment Premium Period"). The Mortgage
Loans generally permit prepayments to be made either (i) on a Due Date or (ii)
provided that such prepayment is accompanied by a full month's interest, on any
date. Credit Lease Loans generally permit principal prepayments to be made on
any date after the related Lockout Period, with interest only to the date of
prepayment. 248 of the Mortgage Loans, representing approximately 85.1% of the
Initial Pool Balance, specify a period of time (generally two to nineteen
months) prior to the maturity date or Anticipated Repayment Date, as
applicable, of such
S-95
<PAGE>
Mortgage Notes during which there are no restrictions on voluntary prepayments,
and the remaining Mortgage Notes, representing approximately 14.9% of the
Initial Pool Balance, restrict voluntary prepayments prior to the maturity date
or Anticipated Repayment Date, as applicable. For the purposes of this
Prospectus Supplement and the statistical information presented herein, (i) the
entire principal balance of each Additional Collateral Loan is deemed to be
subject to a Lockout Period for the related "Remaining Lockout" period set
forth on Annex A hereto, notwithstanding the fact that Required Repayments
could occur under such Additional Collateral Loans during such Lockout Period
and (ii) each ARD Loan prepays on the related Anticipated Repayment Date,
notwithstanding the fact that prepayments could occur under such ARD Loans
prior to such Anticipated Repayment Date and that, in either case, such
prepayments would not be accompanied by payment of a Yield Maintenance Charge
or Prepayment Premium. See "Risks Factors -- The Offered Certificates --
Special Prepayment and Yield Considerations."
The "Yield Maintenance Charge" for any Mortgage Loan providing for such a
charge generally will be equal to the greater of (a) a specified Prepayment
Premium and (b) the present value, as of the date of such prepayment, of the
remaining scheduled payments of principal and interest on the portion of the
Mortgage Loan being prepaid (including any Balloon Payment or, with respect to
any ARD Loans, the remaining principal balance due on the related Anticipated
Repayment Date) determined by discounting such payments at the Yield Rate, less
the amount prepaid.
The "Yield Rate" generally is defined as a rate equal to a per annum rate
calculated by the linear interpolation of the yields, as reported in "Federal
Reserve Statistical Release H.15 -- Selected Interest Rates" under the heading
U.S. Government Securities/Treasury constant maturities for the week ending
prior to the date of the relevant prepayment of any Mortgage Loan, of U.S.
Treasury constant maturities with maturity dates (one longer, one shorter) most
nearly approximating the maturity date of the Mortgage Loan being prepaid or,
with respect to the PWRES Mortgage Loans, the monthly equivalent of such rate.
Generally, if Federal Reserve Statistical Release H.15 -- Selected Interest
Rates is no longer published, the Servicer, on behalf of the Trustee, shall
select a comparable publication to determine the Yield Rate with respect to
Mortgage Loans.
S-96
<PAGE>
The following table sets forth for the Distribution Date in each indicated
month the percentage of the aggregate Stated Principal Balance of all Mortgage
Loans expected to be outstanding (after giving effect to scheduled principal
payments for the Due Date relating to such Distribution Date) with respect to
which (i) a Lockout Period is in effect, (ii) a prepayment must be accompanied
by (A) a Yield Maintenance Charge, (B) a prepayment penalty equal to the
greater of a Yield Maintenance Charge ("YM" on such table) or a Prepayment
Premium ("Premium" on such table) (the percentage used in calculating which
Prepayment Premium is also set forth in such table) or (C) a Prepayment Premium
(the percentage used in calculating which Prepayment Premium is also set forth
in such table) or (iii) no Lockout Period, Yield Maintenance Period or
Prepayment Premium Period is applicable ("Open" on such table). The following
table was prepared on the basis of the Modeling Assumptions and assumes a 0%
CPR. See "Prepayment and Yield Considerations -- Modeling Assumptions."
CALL PROTECTION ANALYSIS
PERCENTAGE OF MORTGAGE POOL BY PREPAYMENT RESTRICTION ASSUMING NO PREPAYMENTS
<TABLE>
<CAPTION>
CURRENT 12 24 36 48
PREPAYMENT PREMIUM/RESTRICTION JUN-98 JUN-99 JUN-00 JUN-01 JUN-02
- -------------------------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Lockout/Defeasance 98.3% 98.3% 97.8% 97.2% 96.8%
Greater of YM and 5% Penalty 0.3% 0.0% 0.0% 0.0% 0.0%
Greater of YM and 4% Penalty 0.0% 0.3% 0.0% 0.0% 0.0%
Greater of YM and 2% Penalty 0.0% 0.0% 0.0% 0.0% 0.0%
Greater of YM and 1% Penalty 1.4% 1.4% 2.0% 2.4% 2.5%
Yield Maintenance 0.0% 0.0% 0.0% 0.0% 0.0%
5% Penalty 0.0% 0.0% 0.0% 0.0% 0.2%
4% Penalty 0.0% 0.0% 0.0% 0.2% 0.0%
3% Penalty 0.0% 0.0% 0.0% 0.0% 0.2%
2% Penalty 0.0% 0.0% 0.2% 0.2% 0.0%
1% Penalty 0.0% 0.0% 0.0% 0.0% 0.2%
Open 0.0% 0.0% 0.0% 0.0% 0.1%
- ---------------------------------------------------------------------------------------------------------
Total 100.0% 100.0% 100.0% 100.0% 100.0%
- ---------------------------------------------------------------------------------------------------------
Mortgage Pool Balance (000s) $2,482,942 $2,453,552 $2,422,192 $2,387,880 $2,350,669
% of Cut-Off Date Balance 100.0% 98.8% 97.6% 96.2% 94.7%
<CAPTION>
60 72 84 96 108 120
PREPAYMENT PREMIUM/RESTRICTION JUN-03 JUN-04 JUN-05 JUN-06 JUN-07 JUN-08
- -------------------------------- -------------- -------------- -------------- -------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Lockout/Defeasance 93.2% 93.2% 92.9% 92.9% 90.0% 92.6
Greater of YM and 5% Penalty 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Greater of YM and 4% Penalty 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Greater of YM and 2% Penalty 0.4% 0.4% 0.4% 0.4% 0.3% 1.3%
Greater of YM and 1% Penalty 4.2% 4.2% 4.3% 4.3% 4.9% 2.1%
Yield Maintenance 0.0% 0.0% 0.4% 0.4% 0.4% 1.5%
5% Penalty 2.0% 1.8% 0.0% 0.0% 0.0% 2.6%
4% Penalty 0.0% 0.2% 1.8% 0.0% 0.0% 0.0%
3% Penalty 0.0% 0.0% 0.2% 1.9% 0.0% 0.0%
2% Penalty 0.3% 0.0% 0.0% 0.2% 2.3% 0.0%
1% Penalty 0.0% 0.3% 0.0% 0.0% 1.1% 0.0%
Open 0.0% 0.0% 0.0% 0.0% 1.1% 0.0%
- ------------------------------------------------------------------------------------------------------------------------
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
- ------------------------------------------------------------------------------------------------------------------------
Mortgage Pool Balance (000s) $2,304,503 $2,262,155 $2,189,824 $2,140,333 $2,086,700 $525,505
% of Cut-Off Date Balance 92.8% 91.1% 88.2% 86.2% 84.0% 21.2%
</TABLE>
- -------
* For the purposes of this Prospectus Supplement and the statistical
information presented herein, (i) the entire principal balance of each
Additional Collateral Loan is deemed to be subject to a Lockout Period
for the related "Remaining Lockout" period set forth on Annex A hereto,
notwithstanding the fact that Required Prepayments could occur under such
loans during such Lockout Period and (ii) each ARD Loan prepays on the
related Anticipated Repayment Date, notwithstanding the fact that
prepayments could occur under such ARD Loans prior to such Anticipated
Repayment Date and that, in either case, such prepayments would not be
accompanied by payment of a Yield Maintenance Charge or Prepayment
Premium. Any such prepayment will be accompanied by a Yield Protection
Payment. See "Description of the Mortgage Loans -- Certain Terms and
Conditions of the Mortgage Loans -- Additional Collateral Loans."
S-97
<PAGE>
Prepayment Premiums and Yield Maintenance Charges are distributable as
described herein under "Description of the Offered Certificates -- Allocation
of Prepayment Premiums and Yield Maintenance Charges."
Unless a Mortgage Loan is relatively near its stated maturity date or
unless the sale price or the amount of the refinancing of the related Mortgaged
Property is considerably higher than the current outstanding principal balance
of such Mortgage Loan (due to an increase in the value of the Mortgaged
Property or otherwise), the Yield Maintenance Charge or Prepayment Premium may,
even in a relatively low interest rate environment, offset entirely or render
insignificant any economic benefit to be received by the borrower upon a
refinancing or sale of the Mortgaged Property. The Yield Maintenance Charge or
Prepayment Premium provision of a Mortgage Loan creates an economic
disincentive for the borrower to prepay such Mortgage Loan voluntarily and,
accordingly, the related borrower may elect not to prepay such Mortgage Loan.
However, there can be no assurance that the imposition of a Yield Maintenance
Charge or Prepayment Premium will provide a sufficient disincentive to prevent
a voluntary principal prepayment. Furthermore, certain state laws limit the
amounts that a lender may collect from a borrower as an additional charge in
connection with the prepayment of a mortgage loan. Even if a borrower does
elect to pay a Yield Maintenance Charge or Prepayment Premium, the Pooling and
Servicing Agreement provides that amounts received from borrowers will be
applied to payments of principal and interest on the Mortgage Loans being
prepaid prior to being distributed as Yield Maintenance Charges or Prepayment
Premiums.
The Mortgage Loans generally provide that in the event of an involuntary
prepayment made after an event of default has occurred, a Yield Maintenance
Charge or Prepayment Premium will be due. The enforceability of provisions
providing for payments comparable to the Prepayment Premiums and/or Yield
Maintenance Charges upon an involuntary prepayment is unclear under the laws of
a number of states. No assurance can be given that, at the time a Prepayment
Premium or a Yield Maintenance Charge is required to be made on a Mortgage Loan
in connection with an involuntary prepayment, the obligation to pay such
Prepayment Premium or Yield Maintenance Charge will be enforceable under
applicable state law. See "Certain Legal Aspects of the Mortgage Loans --
Enforceability of Certain Provisions -- Prepayment Provisions" in the
Prospectus.
Neither the Depositor nor either Mortgage Loan Seller makes any
representation as to the enforceability of the provision of any Mortgage Loan
requiring the payment of a Prepayment Premium or Yield Maintenance Charge, or
of the collectability of any Prepayment Premium or Yield Maintenance Charge.
See "Risk Factors -- The Offered Certificates -- Special Prepayment and Yield
Considerations."
Casualty and Condemnation. In the event of a condemnation or casualty the
Mortgage Loans generally require the borrower to restore the related Mortgaged
Property, and the mortgagee may under certain circumstances apply the
condemnation award or insurance proceeds to the repayment of debt, which, in
the case of substantially all of the Mortgage Loans, will not require payment
of any Prepayment Premium or Yield Maintenance Charge. In the case of a
majority of the Mortgage Loans, if the award or loss is less than a specified
amount or a specified percentage of the original principal balance of the
Mortgage Loan or affects less than a specified percentage of Mortgaged Property
and if in the reasonable judgment of the mortgagee (i) the Mortgaged Property
can be restored within six to eighteen months and at least six months prior to
the maturity (or, in the case of an ARD Loan, the related Anticipated Repayment
Date) of the related Mortgage Loan to a property no less valuable or useful
than it was prior to the condemnation or casualty, (ii) after a restoration the
Mortgaged Property would adequately secure the outstanding balance of the
Mortgage Note and (iii) no event of default under such Mortgage Loan has
occurred or is continuing, the proceeds or award may be applied by the borrower
to the costs of repairing or replacing the Mortgaged Property.
A limited number of Mortgage Loans provide that if casualty or
condemnation proceeds are above a specified amount, the borrower will be
permitted to supplement such proceeds with an amount sufficient to prepay the
entire principal balance of the Mortgage Loan. Certain Mortgage Loans provide
that, in the event of a partial prepayment resulting from the occurrence of a
casualty or condemnation, the constant Monthly Payment may be reduced. In such
event, no Prepayment Premium or Yield Maintenance Charge would be required to
be paid.
S-98
<PAGE>
Defeasance. 267 of the Mortgage Loans, representing 89.3% of the Initial
Pool Balance, permit the applicable borrower at any time after a specified
period (the "Defeasance Lockout Period"), in all cases not less than two years
after the Closing Date, provided no event of default exists, to obtain a
release of a Mortgaged Property from the lien of the related Mortgage (a
"Defeasance Option") if, among other conditions, the borrower (a) pays on any
Due Date (the "Release Date") (i) all interest accrued and unpaid on the
principal balance of the Mortgage Note to and including the Release Date, (ii)
all other sums, excluding scheduled interest or principal payments, due under
the Mortgage Loan, (iii) an amount (the "Collateral Substitution Deposit")
equal to the sum of (x) the remaining principal amount of the Mortgage Loan or
an amount generally equal to 125% of the principal balance of the related
Mortgage for Crossed Loans, or of the Property Release Amount of the related
Mortgaged Property for Multi-Property Loans, (y) the amount, if any, which,
when added to such amount, will be sufficient to purchase direct non-callable
obligations of the United States of America providing payments (1) on or prior
to, but as close as possible to, all successive scheduled payment dates from
the Release Date to the related maturity date, assuming, in the case of an ARD
Loan, that such Mortgage Loan prepays on the related Anticipated Repayment Date
or, in the case of the Ritz-Carlton Loan, the date which is six months prior to
the Anticipated Repayment Date and (2) in amounts equal to the scheduled
payments due on such dates under the Mortgage Loan and (z) any costs and
expenses incurred in connection with the purchase of such U.S. government
obligations and (b) delivers a security agreement granting the Trust Fund a
first priority lien on the Collateral Substitution Deposit and the U.S.
government obligations purchased with the Collateral Substitution Deposit and
an opinion of counsel to such effect. The Servicer will be responsible for
purchasing the U.S. government obligations on behalf of the borrower at the
borrower's expense. Any amount in excess of the amount necessary to purchase
such U.S. government obligations will be returned to the borrower.
Simultaneously with such actions, the related Mortgaged Property will be
released from the lien of the Mortgage Loan and the pledged U.S. government
obligations (together with any Mortgaged Property not released, in the case of
a partial defeasance) will be substituted as the collateral securing the
Mortgage Loan or remaining Crossed Loans, as applicable.
In certain of the Mortgage Loans which contain a Defeasance Option, a
successor borrower established or designated by the related Mortgage Loan
Seller will assume all of the defeased obligations of a borrower exercising a
Defeasance Option under a Mortgage Loan and the borrower will be relieved of
all of the defeased obligations thereunder. If a Mortgage Loan is partially
defeased, the related Mortgage Note will be split and only the defeased portion
of the borrower's obligations will be transferred to the successor borrower.
The Depositor makes no representation as to the enforceability of the
defeasance provisions of any Mortgage Loan. See "Risk Factors -- The Offered
Certificates -- Special Prepayment and Yield Considerations."
Property Releases. Twenty of the Multi-Property Loans, representing
approximately 6.1% of the Initial Pool Balance, prohibit the release of any
related Mortgage Property prior to payment in full of the Mortgage Loan.
Eighteen of the Multi-Property Loans representing approximately 18.7% of the
Initial Pool Balance, permit a Mortgaged Property to be released from the lien
of the related Multi-Property Loan prior to payment in full of the Mortgage
Loan provided that, generally, 125% of the applicable Release Property Amount
(as defined herein) be defeased or prepaid and that the DSCR (as defined
herein) with respect to the remaining Mortgaged Properties after defeasance or
prepayment, as applicable, be no less than the greater of (x) a specified DSCR
(generally the DSCR at origination) and (y) the DSCR immediately prior to such
defeasance or prepayment, as applicable. Eleven of the Crossed Loans,
representing approximately 2.6% of the Initial Pool Balance, prohibit the
release of any related Mortgaged Property prior to payment in full of all
related Crossed Loans. Six of the Crossed Loans, representing approximately
1.8% of the Initial Pool Balance, permit a Mortgaged Property to be released
from the lien of the related Crossed Loan provided that, generally, the
borrower must prepay (or, if applicable, defease) 125% of the outstanding
principal balance of such Crossed Loan, and the excess, if any, of such payment
over such principal balance will be applied to prepay (or, with respect to a
defeasance, will provide additional collateral for) the other Crossed Loan(s)
secured by such Mortgaged Property.
S-99
<PAGE>
Lockboxes. Two-hundred twenty-six Mortgage Loans, representing
approximately 84.9% of the Initial Pool Balance, generally provide that all
rents, credit card receipts, accounts receivables payments and other income
derived from the related Mortgaged Properties will be (i) paid directly into a
Lockbox Account (or, in the case of Multifamily Properties, collected and
deposited by the Manager) controlled by the Servicer (a "Hard Lockbox"), (ii)
paid to the manager of borrower, which will deposit all sums collected into a
Lockbox Account on a regular basis (a "Modified Lockbox") or (iii) collected by
the borrower until such time (if any) as a triggering event (such as the
failure to pay the related Mortgage Loan in full on or before the related
Anticipated Repayment Date or a decline, by more than a specified amount, in
the net operating income of the related Mortgaged Property), at which time all
rents derived from the related Mortgaged Property generally will be directly
deposited into a Lockbox Account (a "Springing, Lockbox"), which will be
generally administered thereafter on the same terms as a Hard Lockbox. Each
such Mortgage Loan is identified on Annex A hereto as having a "Hard, In-place"
"Modified, In-place" or "Springing, Hard" Lockbox. For any Hard Lockbox, income
deposited directly into the related Lockbox Account may not include amounts
paid in cash which are paid directly to the related property manager
(notwithstanding requirements to the contrary) or paid "over-the-counter" (such
as at a Hospitality Property). Mortgage Loans whose terms call for the
establishment of a Lockbox Account require that amounts paid to the manager of
the related Mortgaged Properties or "over-the-counter" will be deposited into a
Lockbox Account on a regular basis. Lockbox Accounts will not be assets of the
Trust Fund. Overall, the Mortgage Loans provide for Lockbox Accounts as
follows:
<TABLE>
<CAPTION>
% OF INITIAL NUMBER OF
TYPE OF LOCKBOX: POOL BALANCE MORTGAGE LOANS
- ------------------------------ -------------- ---------------
<S> <C> <C>
Hard Lockbox .............. 35.9% 83
Modified Lockbox .......... 18.4 35
Springing Lockbox ......... 30.6 108
None ...................... 15.1 98
----- ---
TOTAL ..................... 100.0% 324
===== ===
</TABLE>
Escrows. Substantially all Mortgage Loans provide for monthly escrows to
cover property taxes and insurance premiums on the Mortgaged Properties. The
Mortgage Loans secured by leasehold interests generally also provide for
escrows to make ground lease payments. Substantially all of the Mortgage Loans
require the monthly funding of escrows for ongoing repair and maintenance,
tenant improvement and leasing commission expenses, replacement of furniture,
fixtures and equipment and/or seasonal fluctuations in occupancy. Certain of
the Mortgage Loans also required the funding of reserves at the time of
origination for deferred maintenance and/or environmental remediation. See
"--Underwriting Standards" above.
"Due-on-Sale" and "Due-on-Encumbrance" Provisions. The Mortgage Loans
generally contain "due-on-sale" and "due-on-encumbrance" clauses that in each
case permit the holder of the Mortgage Loan to accelerate the maturity of the
Mortgage Loan if the related borrower sells or otherwise transfers or encumbers
the related Mortgaged Property other than in accordance with the terms of the
related loan documents. Subject to the limitations described herein, the
Special Servicer will determine, in a manner consistent with the Servicing
Standard, whether to exercise any right the mortgagee may have under any such
clause to accelerate payment of the related Mortgage Loan upon, or to withhold
its consent to, any transfer or further encumbrance of the related Mortgaged
Property. Certain of the Mortgage Loans provide that the mortgagee may
condition an assumption of the loan on the receipt of an assumption fee (which
will not be available for payment of principal or interest on the
Certificates). Such an assumption fee generally is equal to one percent of the
then unpaid principal balance of the applicable Mortgage Note (for Mortgage
Loans with original principal balances less than $20 million) or a fee set
forth in the related Mortgage Loan (for Mortgage Loans with original principal
balances greater than $20 million), in addition to the payment of all costs and
expenses incurred in connection with such assumption. Certain of the Mortgages
provide that such consent may not be unreasonably withheld provided that (i) no
event of default has occurred under the related Mortgage Loan, (ii) the
proposed transferee is creditworthy and has sufficient experience in the
ownership and management of properties similar to the Mortgaged Property, (iii)
the Rating Agencies have confirmed in writing that such transfer will not
result in a
S-100
<PAGE>
qualification, reduction or withdrawal of the then-current rating of the
Certificates, (iv) the transferee has executed and delivered an assumption
agreement evidencing its agreement to abide by the terms of the Mortgage Loan
together with legal opinions and title insurance endorsements and (v) the
assumption fee has been received. See "Certain Legal Aspects of Mortgage Loans
- -- Secondary Financing; Due-on-Encumbrance Provisions" in the Prospectus and
"Risk Factors -- The Mortgage Loans -- Exercise of Remedies"; and "The Pooling
and Servicing Agreement -- Enforcement of Due-on-Sale and Due-on-Encumbrance
Clauses" herein. The Depositor makes no representation as to the enforceability
of any due-on-sale or due-on-encumbrance provision in any Mortgage Loan.
Mortgage Provisions Relating to Special Servicer's Right to Terminate
Management Agreements. Certain of the Mortgage Loans permit the Special
Servicer to cause the related borrowers to terminate the related management
agreements upon the occurrence of certain events. Generally, each Mortgage Loan
with a Cut-off Date Principal Balance in excess of $20 million and certain
other Mortgage Loans provide that if the DSCR for such Mortgage Loan falls
below a certain level, the Special Servicer will have the right to cause the
termination of the related management agreement and replace the manager with a
manager acceptable to the Special Servicer. The Mortgage Loans generally allow
the Special Servicer to terminate the related management agreements upon the
occurrence of certain events of default under the related loan agreements or
mortgage documents. In addition, the Special Servicer is generally permitted to
cause the termination of a management agreement if the manager breaches certain
provisions of the management agreement which would permit the termination of
such agreement thereunder.
Cross-Collateralization and Cross-Default of Certain Mortgage Loans.
Thirty-eight of the Mortgage Loans (the "Multi-Property Loans"), with Cut-off
Date Principal Balances ranging from $997,168 to $115,590,907 and representing
24.8% of the Initial Pool Balance, are secured by more than one Mortgaged
Property. Seventeen of the Mortgage Loans (the "Crossed Loans"), with Cut-off
Date Principal Balances ranging from $997,731 to $16,190,416, and representing
4.5% of the Initial Pool Balance, are cross-defaulted and cross-collateralized
with other Mortgage Loans. Because certain states require the payment of a
mortgage recording or documentary stamp tax based upon the principal amount of
debt secured by a mortgage, the Mortgages recorded with respect to certain
Crossed Loans or Multi-Property Loans with properties in such states may secure
only a multiple (generally 150%) of the applicable initial principal balance of
the applicable Mortgage Loan (for Crossed Loans) or a multiple (generally 150%)
of the Property Release Amount of such Mortgaged Property (for Multi-Property
Loans) rather than the entire initial principal balance of the related Mortgage
Note. See "Risk Factors -- The Mortgage Loans -- Limitations on Enforceability
of Cross-Collateralization."
Hazard, Liability and Other Insurance. The Mortgage Loans generally
require that each Mortgaged Property be insured by a hazard insurance policy in
a minimum amount equal to the lesser of (i) the principal balance of the
related Mortgage Loan and (ii) 100% of the full replacement cost of the
improvements and equipment without deduction for physical depreciation, or in
an amount satisfying other similar standards and by a flood insurance policy if
any part of the Mortgaged Property is located in an area identified by the
Federal Emergency Management Agency as an area having special flood hazards and
for which flood insurance has been made available under the National Flood
Insurance Program in an amount at least equal to the outstanding principal
amount of the Mortgage Loan (or with respect to certain Multi-Property Loans,
the full insurable value of the related Mortgaged Property) or the maximum
limit of coverage available, whichever is less, or in an amount satisfying
other similar standards. Certain of the Mortgaged Properties located in
earthquake risk areas are insured by earthquake insurance, and certain of such
insured Mortgaged Properties may be insured in amounts less than the
outstanding principal balance of such Mortgage Loans. Certain of the Mortgaged
Properties located in areas having special hurricane hazards are insured by
hurricane insurance in amounts less than the outstanding principal balance of
such Mortgage Loans. Additional types of insurance, including earthquake
insurance, may be required. The hazard insurance policy is required to cover
loss or damage by fire and lightning or other risks and hazards covered by a
standard extended coverage insurance policy including, but not limited to, riot
and civil commotion, vandalism, malicious mischief, burglary and theft.
The Mortgage Loans also generally require that the related borrower obtain
and maintain during the entire term of the Mortgage Loan (i) comprehensive
public liability insurance, including broad form
S-101
<PAGE>
property damage, blanket contractual and personal injuries coverages and
containing minimum limits per occurrence as specified in the related Mortgage,
(ii) rent loss and/or business interruption insurance in an amount generally
equal to the greater of (x) estimated annual (or a specified longer period)
gross revenues from the operations of the Mortgaged Property and (y) projected
annual (or a specified longer period) operating expense (including debt
service) for the maintenance and operation of the Mortgaged Property, or in an
amount satisfying other similar standards, (iii) insurance against loss or
damage from leakage of sprinkler systems and explosion of steam boilers, air
conditioning equipment, high pressure piping, machinery and equipment, and
pressure vessels, (iv) worker's compensation insurance, (v) during any period
of repair or restoration, builders "all risk" insurance, and (vi) such other
insurance as may from time to time be reasonably required by the mortgagee in
order to protect its interests.
Credit Lease Loans. Each Credit Lease has a Primary Term that expires
contemporaneously with or after the scheduled final maturity date of the
related Credit Lease Loan, with the exception of Loan No. 305, the primary
lease term (the "Primary Term") of which expires one month before the scheduled
final maturity date of the related Credit Lease Loan. The Credit Lease Loans
are scheduled to be fully repaid from Monthly Rental Payments made over the
Primary Term of the related Credit Lease. Certain of the Credit Leases give the
Tenant the right to extend the term thereof by one or more renewal periods
after the end of the related Primary Term. Each borrower under a Credit Lease
Loan is a single-purpose, bankruptcy-remote entity. The amount of the Monthly
Rental Payments payable by each Tenant is equal to or greater than the
scheduled payment of all principal, interest and other amounts due each month
on the related Credit Lease Loan. Each Credit Lease generally provides that the
related Tenant must pay all real property taxes and assessments levied or
assessed against the related Credit Lease Property, and except as discussed
below in certain of the Double Net Leases, all charges for utility services,
insurance and other operating expenses incurred in connection with the
operation of such Credit Lease Property.
At the end of the term of the Credit Lease, the Tenants generally are
obligated to surrender the Credit Lease Property in good order and in its
original condition received by the Tenant, except for ordinary wear and tear
and repairs required to be performed by the Mortgagor. Most of the Credit
Leases permit the Tenant, at its own expense, and generally with the consent of
the Mortgagor, to make such alterations and construct additional buildings or
improvements on the Credit Lease Property as the Tenant may deem necessary or
desirable, and the Tenant may demolish any part of a building, provided that
the Tenant restores the building to a structure whose value is equal to or
greater than that of the original building. Such actions, if undertaken by the
Tenant, will not affect the Tenant's obligations under the Credit Lease.
Certain of the Credit Leases provide that the Tenant thereunder may
terminate its Credit Lease and/or abate rent in the event of an environmental
problem which existed prior to the Credit Lease or which is not caused by the
Tenant. In all such cases an environmental report was prepared in connection
with the origination of the respective Credit Lease Loan which indicated no
significant environmental problems.
Pursuant to the terms of each Credit Lease Assignment, the related
Mortgagor has assigned to the mortgagee of the related Credit Lease Loan, as
security for such Mortgagor's obligations thereunder, such Mortgagor's rights
under the related Credit Lease and its rights to all income and profits to be
derived from the operation and leasing of the related Credit Lease Property,
including, but not limited to, an assignment of any guarantee of the Tenant's
obligations under such Credit Lease and an assignment of the right to receive
all Monthly Rental Payments due under such Credit Lease. Pursuant to the terms
of each Credit Lease Assignment, each Tenant is obligated under the related
Credit Lease to make all Monthly Rental Payments directly to the Servicer.
Repayment of the Credit Lease Loans and other obligations of the Mortgagors
will be funded from such Monthly Rental Payments. Notwithstanding the
foregoing, the Mortgagors remain liable for all obligations under the Credit
Lease Loans (subject to the non-recourse provisions thereof).
Generally, each Credit Lease Loan that has a Casualty or Condemnation
Right has the benefit of a Lease Enhancement Policy issued by Lease Enhancement
Insurer which, as described above, will make payments to the Servicer on behalf
of the Trustee in certain cases where the related Credit Lease Property has
sustained damage on account of a casualty or a condemnation event.
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<PAGE>
Additional Collateral Loans. Three Mortgage Loans (the "Additional
Collateral Loans"), representing approximately 2.9% of the Initial Pool
Balance, are additionally secured by cash reserves or irrevocable letters of
credit that will be released upon satisfaction by the borrower of certain
leasing-related conditions including, in certain cases, achieving certain
DSCRs. Failure to satisfy such conditions within the time periods specified
therefor may result in the application of the related reserve or credit
enhancement amount (each, a "Required Prepayment") to partially prepay the
related Mortgage Loan, and such partial prepayment may not be required to be
accompanied by payment of a Prepayment Premium or Yield Maintenance Charge.
ADDITIONAL COLLATERAL LOANS
<TABLE>
<CAPTION>
TYPE OF AMOUNT OF
ADDITIONAL ADDITIONAL
LOAN NO. PROPERTY NAME COLLATERAL COLLATERAL RELEASE CONDITIONS
- ---------- ---------------------------- ----------------- ------------ -------------------------------------------------
<S> <C> <C> <C> <C>
8 The Fountains on the Lake Cash Collateral $7,900,000 Increase in underwritten net operating income
to maintain 1.27x DSCR; reserves may be
released in up to 3 draws (on or before 5/1/99)
48 Christmas Tree Shops Plaza Cash Collateral $2,250,000 Increase in underwritten net operating income
to maintain 1.20x DSCR; reserves must be
released on or before 9/1/98
65 Kew Gardens Cash Collateral $ 500,000 Reduction of vacant sponsor units to 25 or less;
reserves must be released on or before 3/30/99
</TABLE>
The holders of the Class A-X Certificates and any Class of Offered
Certificates receiving any such prepayment will be entitled to receive payments
("Yield Protection Payments") to compensate such holders for the absence of any
such Prepayment Premium or Yield Maintenance Charge payments. With respect to
any Class of Offered Certificates receiving a distribution of principal in
connection with a Required Prepayment, the Yield Protection Payment will equal
2% of such prepayment. With respect to the Class A-X Certificates, the Yield
Protection Payment will be in the nature of a yield-maintenance payment and
will be as described in the Pooling and Servicing Agreement. See "Description
of the Offered Certificates -- Distributions -- Yield Protection Payments."
ADDITIONAL MORTGAGE LOAN INFORMATION
The following tables and Annex A hereto set forth certain information with
respect to the Mortgage Loans and Mortgaged Properties. The statistics in the
following tables and Annex A were primarily derived from information provided
to the Depositor by the Mortgage Loan Sellers, which information may have been
obtained from the borrowers without independent verification. For purposes of
this Prospectus Supplement, including the tables herein and Annex A:
(1) "Net Cash Flow" with respect to a given Mortgage Loan or Mortgaged
Property (other than Mortgage Loans relating to Cooperative Properties) means
cash flow available for debt service, as determined by the related Mortgage
Loan Seller based on borrower-supplied information for a recent period that is
generally calendar year 1997 or the most recent twelve-month period preceding
the origination date. Net Cash Flow does not reflect debt service, subordinated
ground rent, non-cash items such as depreciation or amortization, and does not
reflect actual capital expenditures and may have been adjusted by, among other
things, (i) in the case of the Multifamily Properties, rental revenue shown on
a recent rent roll was annualized before applying a vacancy factor without
further regard to the terms (including expiration dates) of the leases shown
thereon, (ii) in the case of Cooperative Properties, "Net Cash Flow" generally
equals net operating income at such Cooperative Property estimated by the
applicable Mortgage Loan Seller, assuming such Cooperative Property were
operated as a multifamily rental Property, reduced by underwritten capital
expenditures (See Annex A), (iii) in the case of certain Office Properties,
Industrial Properties and Retail Properties, determining current revenues from
leases in place, (iv) in the case of certain of the Hospitality Properties,
assuming the occupancy rate was less than the actual occupancy rate (and
generally no more than 75-80%) to account for a high occupancy rate or to
reflect new construction in the market, (v) assuming a minimum vacancy rate
generally equal to the greatest of (A) actual vacancy, (B) market vacancy and
(C) 5-10%, depending upon property type, (vi) in
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<PAGE>
the case of the Retail Properties, excluding certain percentage rent, (vii)
excluding certain non-recurring income and/or expenses, (viii) assuming a
management fee of 3.5-5% for Hospitality Property, 4-5% of revenue for
multi-tenant commercial and multifamily Mortgage Loans and 2-3% of revenue for
single-tenant net leased Mortgage Loans other than the Credit Lease Loans, (ix)
making a 4-7% adjustment to room revenues for franchise fees or marketing fees
(if combined with franchise fees) (for all franchised Hospitality Properties
and most unflagged Hospitality Properties) payable with respect to the
Mortgaged Property and assuming that franchise fees and marketing fees are less
than 12% of revenues, (x) where such information was made available to the
Mortgage Loan Seller to take into account new tax assessments and insurance
contracts, (xi) in certain cases, assuming that operating expenses with respect
to the Mortgaged Property were greater than actual expenses, (xii) subtracting
from net operating income reserves for Capital Items (see Annex A) and (xiii)
in the case of the Retail Properties and Office Properties, subtracting from
net operating income an assumed allowance for tenant improvements and leasing
commissions (see Annex A). "Net Cash Flow" in the case of Credit Lease Loans
generally equals annual net rent.
Net Cash Flow reflects the calculations and adjustments used by the
related Mortgage Loan Seller for its underwriting process and may or may not
reflect the amounts calculated and adjusted by the Rating Agencies for their
own analysis. In addition, "Net Cash Flow" and the DSCR derived therefrom are
not a substitute for cash flow as determined in accordance with generally
accepted accounting principles as a measure of the results of the property's
operations or a substitute for cash flows from operating activities determined
in accordance with generally accepted accounting principles as a measure of
liquidity. In certain cases, net cash flow deducts amounts for Capital Items
and tenant improvement and leasing commission reserves but under the related
Mortgage Loan the borrower is not required to fund Escrow Accounts therefor.
Reletting costs and capital expenditures are crucial to the operation of
commercial and multifamily properties. Each investor should make its own
assessment of the level of reletting costs and capital expenditures of the
Mortgaged Properties, and the consequent effect of such costs and expenditures
on the actual net operating income, Net Cash Flow and DSCRs of the Mortgage
Loans.
No representation is made as to the future net cash flow of the Mortgaged
Properties, nor is "Net Cash Flow" set forth herein intended to represent such
future net cash flow.
(2) "U/W NOI" or "Underwritten NOI" means Net Cash Flow before deducting
for Capital Items, tenant improvements and leasing commissions.
(3) "1995 NOI", "1996 NOI" and "1997 NOI" (which is for the period ending
as of the date specified in Annex A) is the net operating income for a
Mortgaged Property as established by information provided by the borrowers,
except that in certain cases such net operating income has been adjusted by
removing certain non-recurring expenses and revenue or by certain other
normalizations. 1995 NOI, 1996 NOI and 1997 NOI do not necessarily reflect
accrual of certain costs such as taxes and capital expenditures and do not
reflect non-cash items such as depreciation or amortization. In some cases,
capital expenditures may have been treated by a borrower as an expense or
expenses treated as capital expenditures. The Depositor makes no
representations as to the accuracy of any information provided by any borrower
or with respect to net operating income that may have occurred since the date
of the information provided by each borrower for the related Mortgaged
Property. 1995 NOI, 1996 NOI and 1997 NOI were not necessarily determined in
accordance with generally accepted accounting principles. Moreover, 1995 NOI,
1996 NOI and 1997 NOI are not a substitute for net income determined in
accordance with generally accepted accounting principles as a measure of the
results of a property's operations or a substitute for cash flows from
operating activities determined in accordance with generally accepted
accounting principles as a measure of liquidity and in certain cases may
reflect partial-year annualizations. "Rev" is gross revenues for the applicable
period, as reported by the related borrower, or, for "U/W Rev", taking into
account certain adjustments thereto in accordance with the related Mortgage
Loan Seller's underwriting standards.
(4) "Allocated Loan Amount" means, for each Mortgaged Property, the
portion of the principal amount of the related Multi-Property Loan allocated to
such Mortgaged Property solely for the purpose
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of presenting statistical information in this Prospectus Supplement. The
Allocated Loan Amount for each Mortgaged Property securing a Multi-Property
Loan was generally determined based on the ratio of the appraised value of such
Mortgaged Property to the aggregate appraised value of all the Mortgaged
Properties securing such Multi-Property Loan or, in certain cases, based on
other economic factors.
(5) "Original Principal Loan Balance" means the principal balance of the
Mortgage Loan as of the date of origination.
(6) "Monthly Payment" means, for any Mortgage Loan, the constant monthly
payment set forth in the related Mortgage Note as being due on the Cut-off Date
and, with respect to any Mortgage Loan that pays only interest on the Cut-off
Date, the constant monthly payment of principal and interest on such Mortgage
Loan after such interest-only period ends (such date being the "First P&I
Date"). Certain Credit Lease Loans provide for periodic increases in the
related Monthly Payments as set forth on Annex B.
(7) "Cut-off Date Principal Loan Balance" means the principal balance of
the Mortgage Loan as of the Cut-off Date and, with respect to the
Multi-Property Loans, the Allocated Loan Amount assigned to each related
Mortgaged Property.
(8) "Cut-off Date Principal Balance/Unit" means the principal balance per
unit for multi-family, cooperatives, hotels and self storage or per square foot
for substantially all other property types of measure as of the Cut-off Date.
(9) "Annual Debt Service" means for any Mortgage Loan the annualized
Monthly Payment on such Mortgage Loan.
(10) "DSCR" or "Debt Service Coverage Ratio" means, with respect to any
Mortgage Loan (a) the Net Cash Flow for the related Mortgaged Property, divided
by (b) the Annual Debt Service for such Mortgage Loan. The calculation of
"DSCR" may differ from the calculation of the debt service coverage ratios
referred to under "--Description of the Mortgage Loans -- Underwriting
Standards." For the following tables, the DSCR for each group of Crossed Loans
is the ratio of the aggregate Net Cash Flow for all of the Mortgaged Properties
securing such Crossed Loans to the aggregate Annual Debt Service for the
Crossed Loans in such group.
(11) "Interest Calc." means the method by which interest accrues on the
related Mortgage Loan. "30/360" means interest is calculated on the basis of a
360-day year consisting of twelve 30-day months. "Act/360" means interest is
calculated on the basis of a 360-day year and for the actual number of days
elapsed in each interest accrual period.
(12) "Stated Maturity Date" means the maturity date of the Mortgage Loan
as stated in the related Mortgage Note or loan agreement.
(13) "Anticipated Repayment Date" means for ARD Loans, the date on which
interest begins accruing at the Revised Rate and/or excess cash flow is
retained pursuant to the related Lock-box Agreements for application to payment
of principal and Excess Interest.
(14) "Anticipated Remaining Term" means the term of the Mortgage Loan from
the Cut-off Date to the earlier of the Anticipated Repayment Date, if
applicable, and the maturity date.
(15) "Remaining Lockout" means the period of the term of the related
Mortgage Loan from the Cut-off Date during which the Mortgage Loan may not be
voluntarily prepaid. For the purposes of this Prospectus Supplement and the
statistical information presented herein, the entire principal balance of each
Additional Collateral Loan is deemed to be subject to a Lockout Period for the
related "Remaining Lockout" period set forth on Annex A hereto.
(16) "Remaining Lockout and YM" means the period of the term of the
related Mortgage Loan from the Cut-off Date during which the Mortgage Loan may
not be prepaid or a Yield Maintenance Charge will be imposed.
(17) "Seasoning" means, with respect to any Mortgage Loan, the number of
months between the Cut-off Date and the first Due Date on or after the date on
which such Mortgage Loan was originated.
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(18) "Value" means for each of the Mortgaged Properties, the appraised
value of such Mortgaged Property as determined by an appraisal thereof and
generally in accordance with MAI standards generally made not more than 18
months prior to the origination date of the related Mortgage Loan. In general
MAI appraisals were obtained on all of the Mortgaged Properties.
(19) "Maturity Date/Anticipated Repayment Date LTV" for any Mortgage Loan
is calculated in the same manner as Cut-off Date LTV, except that the Mortgage
Loan Cut-off Date Principal Balance used to calculate the Cut-off Date LTV has
been adjusted to give effect to the amortization of the applicable Mortgage
Loan to its maturity date or, in the case of a an ARD Loan, to its Anticipated
Repayment Date. Such calculation thus assumes that the appraised value of the
Mortgaged Property securing a Mortgage Loan on the maturity date or Anticipated
Repayment Date, as applicable, is the same as the appraised value as of the
Cut-off Date. There can be no assurance that the value of any particular
Mortgaged Property has not or will not decline from the appraised value.
(20) "Original Amortization Term" means the number of months, based on the
constant Monthly Payment as stated in the related Mortgage Note or loan
agreement, that would be necessary to reduce the original principal balance of
the related Mortgage Note substantially to zero if interest on such Mortgage
Note was calculated based on twelve 30-day months and a 360-day year.
(21) "Year Built/Renovated" means the later of the year in which the
respective Mortgaged Property was built and/or most recently renovated.
(22) "Units" and "Unit of Measure" mean the number of units, pads, rooms
or square footage with respect to the Mortgaged Property.
(23) "Occupancy" means the percentage of gross (or, in the case of the
PWRES Mortgage Loans, net) leasable area, rooms, units, beds or sites of the
Mortgaged Property that are leased. Occupancy rates are calculated for the
specified "Occupancy Period" which is a period ending on the indicated date. In
certain cases, Occupancy reflects the average occupancy rate over a period of
time. The Occupancy Period may be the trailing twelve months or shorter period
ending on the indicated date, or the occupancy rate as of the indicated date.
(24) "U/W Occupancy" means the occupancy rate used in determining Net Cash
Flow.
(25) "Anchor Tenant" means, with respect to the Retail Properties, a
nationally or regionally recognized tenant, or a credit tenant that occupies a
significant portion of such Mortgaged Property, or a tenant that occupies more
than 20,000 square feet.
(26) "Actual Ongoing Capital Item Deposits" means the dollars per Unit or
percentage of revenues required to be deposited in Escrow Accounts annually
under the related Mortgage Loan with respect to Capital Items.
(27) "Tenant 1," "Tenant 2" and "Tenant 3" (each, a "Tenant") mean, with
respect to Office Properties and Retail Properties, the largest, second largest
and third largest Tenants, respectively, with respect to such properties, as
applicable. With respect to Retail Properties, such Tenants may constitute
Anchor Tenants.
(28) "% of Total Square Feet" means the square feet leased to a Tenant as
a percentage of (i) in the case of a CSFB Mortgage Loan, the gross square feet
of the Mortgaged Property and (ii) in the case of a PWRES Mortgage Loan, the
net rentable square feet of the Mortgaged Property.
(29) "Lease Expiration Date" means the year in which a Tenant's lease is
scheduled to expire.
(30) "Loan to Value Ratio" or "LTV" is the outstanding balance of a
Mortgage Loan as of the Cut-off Date divided by the Value of the related
Mortgaged Property. The LTV for a group of Crossed Loans is the ratio of the
aggregate Cut-off Date Principal Balance for such group of Crossed Loans to the
aggregate Value for all the related Mortgaged Properties.
(31) "Weighted Average LTV" and "Weighted Average DSCR" are the weighted
average of the Loan to Value Ratios and Debt Service Coverage Ratios for each
Mortgage Loan, weighted on the basis of the Cut-off Date Principal Balances
thereof. Such calculations exclude the Credit Lease Loans.
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<PAGE>
(32) "Net Lease" means "Credit Lease."
(33) "Remaining Amortization Term" for each Mortgage Loan is the related
Original Amortization Term minus the related Seasoning.
(34) "NAP" means not applicable and relates to the omission of Credit
Lease Loans in the calculation of LTV and DSCR.
(35) "Property Release Amount" means, for each Mortgaged Property, the
portion of principal of the related Multi-Property Loan or Crossed Loan
allocated to such Mortgaged Property for certain purposes (including
determining the release prices of properties, if permitted) under such
Multi-Property Loan or Crossed Loan as set forth in the related loan documents.
There can be no assurance, and it is unlikely, that the Property Release
Amounts represent the current values of individual Mortgaged Properties, the
price at which an individual Mortgaged Property could be sold in the future to
a willing buyer or the replacement cost of the Mortgaged Properties.
Due to rounding, percentages in the following tables may not add to 100%
and amounts may not add to indicated total or subtotal.
The following adjustments to the foregoing assumptions were made in
connection with the calculations of the tables set forth herein and/or Annex A,
as applicable:
(i) DSCR for Loan No. 3 was calculated based on the assumption that the
related borrower will incur withholding tax at a rate of 4.9% and such
amount was included as additional interest solely for purposes of
calculating DSCR and Annual Debt Service;
(ii) with respect to Loan No. 8, the DSCR of 1.27x was calculated based
on the underwritten Net Cash Flow set forth in Annex A and an annual debt
service payment based on the Mortgage Loan's current amortization schedule
and assuming a balance reduced by the $7.9 million future lease reserve;
(iii) the underwritten revenues, NOI and Net Cash Flow for Loan No. 66 in
Annex A is based on market rental rates as determined by the applicable
Mortgage Loan Seller, adjusted for in place, rent stabilized units; for
purposes of the tables herein, underwritten net cash flow of $3,067,129,
reflecting only market level rental rates, is assumed.
Mortgaged Properties secured, or partially secured, by a leasehold estate
are indicated on Annex A under the heading "Property Name" with an asterisk
(*). Certain Mortgage Loans are secured by both the fee estate and related
leasehold interest and, for the purpose of presenting certain statistical
information herein, are considered to be secured by fee simple estates.
The tables set forth in Annex B hereto set forth certain information with
respect to the Credit Lease Loans and related Mortgaged Properties. The
statistics in Annex B were primarily derived from information provided to the
Depositor by the Mortgage Loan Sellers, which information may have been
obtained from the borrowers without independent verification. For the purposes
of Annex B, the following footnotes apply:
(1) With respect to Loan Nos. 42, 27 and 25, Circuit City is an
electronics retailer; Carmax sells automobiles.
(2) With respect to Loan No. 20, American Restaurant Group, Inc. has a
Senior Secured rating of B by S&P. With respect to Loan Nos. 172, 219, 165,
196, 178, 179, 212, 193, 207, 176 and 185, PETsMart, Inc. has a Senior
Secured rating of B2 by Moody's. With respect to Loan No. 39, Cobb Theaters
was acquired by Regal Cinemas, Inc., which has a rating of Ba2 by Moody's
and BB-- by S&P.
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<PAGE>
(3) With respect to Loan No. 39, additional Rent and debt service steps
are as follows:
(S7) 12/11/04 (d) 126,056 (r) 130,306 (DSCR) 1.03;
(S8) 6/11/05 (d) 129,965 (r) 134,215 (DSCR) 1.03;
(S9) 6/11/06 (d) 133,908 (r) 138,241 (DSCR) 1.03;
(S10) 6/11/07 (d) 138,056 (r) 142,389 (DSCR) 1.03;
(S11) 6/11/08 (d) 142,203 (r) 146,661 (DSCR) 1.03;
(S12) 6/11/09 (d) 146,561 (r) 151,060 (DSCR) 1.03;
(S13) 6/11/10 (d) 151,092 (r) 155,592 (DSCR) 1.03;
(S14) 6/11/11 (d) 155,760 (r) 160,260 (DSCR) 1.03;
(S15) 6/11/12 (d) 160,568 (r) 165,068 (DSCR) 1.03.
(4) With respect to Loan No. 152, reflects Annual Debt Service and net
rent payments, respectively, both of which commence in August, 1998.
The tables below set forth certain summary information regarding the
Mortgage Loans. See Annex A hereto for certain characteristics of Mortgage
Loans on a loan-by-loan basis. All percentages of Initial Pool Balances used
herein and in Annex A are based upon the Cut-off Date Principal Balance of the
related Mortgage Loan or, with respect to each Pool Loan are based upon the
Allocated Loan Amount of the related Mortgaged Property. All weighted average
information regarding the Mortgage Loans reflects weighting of the Mortgage
Loans by their Cut-off Date Principal Balances or, with respect to
Multi-Property Loans, Allocated Loan Amounts. The "Cut-off Date Principal
Balance" of each Mortgage Loan is equal to the unpaid principal balance thereof
as of the Cut-off Date, after application of all payments of principal due on
or before such date, whether or not received. All numerical information
provided herein and in Annex A with respect to the Mortgage Loans is provided
on an approximate basis. Certain statistical information set forth herein may
change prior to the date of issuance of the Certificates due to changes in the
composition of the Trust Fund prior to the Closing Date. See "--Changes in
Mortgage Loan Characteristics" below.
S-108
<PAGE>
MORTGAGE NOTES
<TABLE>
<CAPTION>
CSFB
LOAN CONTROL
NO. NO. PROPERTY NAME
- ------ ---------- --------------------------------------------
<S> <C> <C>
1 66 Combined Properties Summary
2 87 Edens and Avant Summary
3 188 Ritz-Carlton Cancun
4 179 Reichmann/Intell Portfolio Summary
5 Wall_001 45 Wall Street
6 172 Plaza Rio Hondo
7 23 4000 Wisconsin Avenue
8 99 The Fountains on the Lake
9 15 767 Third Avenue
10 30 Alexandria Single Tenant Portfolio Summary
11 CL23 Elder-Beerman at the Dayton Mall
12 231 Westgate Shopping Center
13 114 Holiday Inn -- Denver Downtown
14 175 Rachel Bridge Apartments
15 100 G.I. Joe Summary
16 CL29 Kmart -- Carson, CA # 4987
17 CL28 Kmart -- Virginia Beach # 4986
18 159AA Pantzer Cross-Summary
19 196 Sadler Portfolio Summary
20 CL4 American Restaurant Group Summary
21 204 Smith Hotel Portfolio Summary
22 C-2455 Le Parc Suite Hotel De Luxe
23 90 Embassy Suites -- Milwaukee, WI
24 92 Essex/Brookdale Summary
25 C-3012A Circuit City Stores, Inc. -- Naperville
26 159G Top of the Hill Apartments
27 C-3012C Circuit City Stores, Inc. -- Miami
28 159H Foxfire Apartments
29 173B Plaza del Atlantico
30 156 Opera Plaza
31 230 Wentwood Portfolio Summary
32 CL9 Best Buy Dist. Ctr. -- Staunton, VA
33 173C Senioral Plaza
34 136 Laurel Promenade
35 223 Torgerson Project Summary
36 C-1566 Builders Square-Summary
37 164 Peak At Somerset
38 237 Wood River Village
39 CL16 Cobb Theaters -- Tampa, FL
40 42 Best Western Beach Resort
41 228 Valley Stream Village Apts.
42 C-3012B Circuit City Stores, Inc. -- Fort Worth
43 159I Heather Ridge Apartments
44 56 Chateau Marmont
45 111 Highland Apartments
46 CL25 Fortunoff Backyard Store
47 CP8 NCB/Briarcliff
<CAPTION>
CUT-OFF PRIMARY STATED
LOAN DATE MONTHLY MORTGAGE SERVICING INTEREST MATURITY
NO. BORROWER NAME BALANCE PAYMENT RATE FEE RATE CALC. DATE
- ------ ------------------------------------------------ --------------- ----------- ---------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Combined Properties Incorporated $115,590,907 $819,025 7.6308 0.0500 Actual/360 5/11/28
2 Edens & Avant Financing II Limited Partnership $ 84,100,000 $474,815 6.7750 0.0500 30/360 5/13/28
3 Grupo Inmobiliaro Mosa S.A. de C.V. $ 75,000,000 $622,734 8.8700 0.0500 Actual/360 6/11/23
4 IPC Office Properties, LLC $ 74,857,607 $524,786 7.2500 0.0500 Actual/360 6/11/28
5 45 Wall L.L.C. $ 74,499,220 $576,828 6.5730 0.0500 30/360 3/1/17
6 MBRD-Plaza Rio Hondo L.P., S.E. $ 61,963,322 $420,010 7.1800 0.0500 Actual/360 5/11/28
7 4000 Wisconsin Avenue Associates, L.P. $ 60,880,640 $518,046 7.5900 0.0500 Actual/360 5/11/28
8 F.P. Centre, Ltd. $ 49,961,708 $397,376 8.3400 0.0500 Actual/360 8/11/22
9 767 Third Avenue LLC $ 41,500,000 $314,825 7.8000 0.0500 Actual/360 5/11/28
10 ARE-Western Newbrook, LLC $ 36,478,677 $248,252 7.2200 0.0500 Actual/360 5/11/28
11 Elder Ohio I Delaware Business Trust $ 27,509,152 $223,545 8.9427 0.0500 30/360 3/11/18
12 Monarch Ventures, L.P. $ 27,465,930 $194,738 7.6300 0.0500 Actual/360 4/11/28
13 SAMCO I Investment Limited Partnership $ 22,982,097 $181,497 8.2600 0.0500 Actual/360 5/11/23
14 Rachel Bridge Corp. $ 22,882,398 $160,219 6.8400 0.0500 Actual/360 1/11/23
15 WREP 1998-1 LLC $ 20,979,468 $158,146 7.6100 0.0500 Actual/360 5/11/23
16 CRICKM Carson Trust $ 20,814,442 $164,994 8.2276 0.0500 30/360 11/1/22
17 CRICKM Virginia Beach Trust $ 20,300,506 $160,920 8.2276 0.0500 30/360 11/1/22
18 Meldon Apt LLC $ 20,111,247 $140,283 7.4700 0.0000 Actual/360 5/11/28
19 Carlton Manor, Inc., et al $ 19,683,975 $153,093 8.0800 0.0500 Actual/360 5/11/23
20 ARG Properties II, LLC $ 18,546,279 $154,664 8.7829 0.0500 Actual/360 5/11/23
21 S&R Hotels, LLC $ 17,983,571 $134,074 7.5900 0.0300 Actual/360 5/11/23
22 LeParc Investment Group LLC $ 17,884,363 $135,557 7.7800 0.0500 Actual/360 5/1/08
23 Brookfield Hotel Limited Partnership $ 17,065,054 $127,370 7.5900 0.0500 Actual/360 4/11/23
24 Bloomfield Condominium Associates, L.L.C. $ 16,975,768 $113,902 7.0700 0.0500 Actual/360 4/11/28
25 CM Naperville, L.L.C. $ 16,890,594 $131,244 7.5400 0.0500 30/360 6/1/20
26 Top of the Hill Associates LLC $ 16,469,614 $114,882 7.4700 0.0000 Actual/360 5/11/28
27 CM Miami Trust $ 16,401,012 $127,440 7.5400 0.0500 30/360 6/1/20
28 Foxfire Associates $ 16,313,585 $113,793 7.4700 0.0000 Actual/360 5/11/28
29 MBRD-Plaza del Atlantico L.P., S.E. $ 16,190,416 $109,745 7.1800 0.0500 Actual/360 5/11/28
30 Opera Plaza, L.P. $ 16,179,619 $114,050 7.5700 0.0500 Actual/360 4/1/28
31 Wentwood Capital Fund VI, L.P. $ 16,177,074 $110,836 7.2800 0.0500 Actual/360 4/11/28
32 Staunton Sundar LLC $ 16,154,318 $124,926 8.8400 0.0500 30/360 12/11/17
33 MBRD-Senorial Plaza L.P., S.E. $ 16,090,475 $109,068 7.1800 0.0500 Actual/360 5/11/28
34 Laurel Center Group $ 15,781,417 $114,068 7.8300 0.0500 Actual/360 4/11/28
35 Torgerson Properties, L.P. and TPI Core, Inc. $ 15,559,810 $118,987 7.8700 0.0300 Actual/360 4/11/23
36 SPE controlled by Kyle & Arnold Tauch $ 14,500,000 $114,969 7.5600 0.0500 Actual/360 6/1/19
37 Graoch Associates #5, Limited Partnership $ 14,127,948 $ 94,211 6.9900 0.0500 Actual/360 2/11/28
38 Wood River Partners $ 14,072,269 $106,872 7.7900 0.0400 Actual/360 4/11/23
39 Cobbtampa Realty, L.P. $ 13,636,651 $106,997 8.5596 0.0500 30/360 10/11/22
40 The Furma Trust $ 13,587,530 $101,123 7.5700 0.0500 Actual/360 5/11/23
41 Valleystream Village LLC $ 13,491,939 $ 91,180 7.1500 0.0500 Actual/360 5/11/28
42 CM Fort Worth Trust $ 13,463,517 $104,615 7.5400 0.0500 30/360 6/1/20
43 Heather Ridge LLC $ 13,207,048 $ 92,124 7.4700 0.0000 Actual/360 5/11/28
44 Chateau Holdings, Ltd. $ 12,788,157 $ 94,841 7.5300 0.0500 Actual/360 5/11/23
45 Graoch Associates #52 Limited Partnership $ 12,733,126 $ 88,018 7.3700 0.0500 Actual/360 4/11/28
46 Century Road Plaza, LLC $ 12,603,934 $100,218 8.2232 0.0500 Actual/360 3/11/13
47 The Briarcliff Owners, Inc. $ 12,450,554 $ 85,187 7.2400 0.3550 30/360 1/1/08
<CAPTION>
REMAINING
ANTICIPATED LOCKOUT ANTICIPATED ORIGINAL REMAINING FIRST
LOAN REPAYMENT REMAINING AND YIELD REMAINING AMORTIZATION AMORTIZATION P&I
NO. DATE LOCKOUT MAINTENANCE TERM TERM TERM DATE SEASONING
- ------ ------------- ----------- ------------- ------------- -------------- -------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 5/11/08 112 112 119 360 359 6/11/98 1
2 5/13/10 137 137 143
3 6/11/08 113 113 120 300 300 7/11/98 0
4 6/11/08 113 113 120 360 360 7/11/98 0
5 3/1/08 117 117 117 228 225 4/1/98 3
6 5/11/08 114 114 119 360 359 6/11/98 1
7 5/11/08 117 117 119 360 359 6/11/98 1
8 8/11/09 127 127 134 300 299 6/11/98 1
9 5/11/08 59 59 119 300 300 6/11/03 0
10 5/11/08 115 115 119 360 359 6/11/98 1
11 233 233 237 336 335 6/11/98 1
12 4/11/08 113 113 118 360 358 5/11/98 2
13 5/11/08 115 115 119 300 299 6/11/98 1
14 1/11/08 113 113 115 300 296 3/11/98 4
15 5/11/08 117 117 119 300 299 6/11/98 1
16 289 289 293 300 293 12/1/97 7
17 289 289 293 300 293 12/1/97 7
18 5/11/08 115 115 119 360 359 6/11/98 1
19 5/11/13 172 172 179 300 299 6/11/98 1
20 296 296 299 299 299 7/11/98 0
21 5/11/08 115 115 119 300 299 6/11/98 1
22 119 119 119 300 299 6/1/98 1
23 4/11/08 116 116 118 300 298 5/11/98 2
24 4/11/08 111 111 118 360 358 5/11/98 2
25 264 264 264 264 264 7/1/98 0
26 5/11/08 115 115 119 360 359 6/11/98 1
27 264 264 264 264 264 7/1/98 0
28 5/11/08 115 115 119 360 359 6/11/98 1
29 5/11/08 114 114 119 360 359 6/11/98 1
30 4/1/08 114 114 118 360 358 5/1/98 2
31 4/11/08 111 111 118 360 358 5/11/98 2
32 230 230 234 315 310 2/11/98 5
33 5/11/08 114 114 119 360 359 6/11/98 1
34 4/11/08 116 116 118 360 358 5/11/98 2
35 4/11/13 171 171 178 300 298 5/11/98 2
36 252 252 252 252 252 7/1/98 0
37 2/11/08 109 109 116 360 356 3/11/98 4
38 4/11/08 114 114 118 300 298 5/11/98 2
39 288 288 292 297 292 2/11/98 5
40 5/11/08 112 112 119 300 299 6/11/98 1
41 5/11/08 114 114 119 360 359 6/11/98 1
42 264 264 264 264 264 7/1/98 0
43 5/11/08 115 115 119 360 359 6/11/98 1
44 5/11/08 116 116 119 300 299 6/11/98 1
45 4/11/08 111 111 118 360 358 5/11/98 2
46 173 173 177 179 177 5/11/98 2
47 97 97 115 360 355 2/1/98 5
</TABLE>
S-109
<PAGE>
<TABLE>
<CAPTION>
CSFB
LOAN CONTROL
NO. NO. PROPERTY NAME
- ------ --------- ---------------------------------------
<S> <C> <C>
48 59 Christmas Tree Shops Plaza
49 13 Executive Center
50 CL26 Hoyts Theatre -- Linthicum, MD
51 122 Inland Cold Storage Summary
52 39 Bay Park Center Summary
53 CP12 NCB/St. George Tower and Grill
54 CL54 Shemin Nursery Portfolio Summary
55 82 Eagle Hardware -- Anchorage, AK
56 C-2534 Northbridge Park
57 50 British Woods Apartments
58 CL30 Kmart -- Inglewood, CA # 3639
59 CP10 NCB/Geddes Lake Cooperative
60 CP7 NCB/Bell Apartments Owners Corp.
61 198 San Ant Res. Inn/Fair Inn Summary
62 123 International Plaza
63 173A Rexville Plaza
64 120 Ind. Apt Res. Inn/Fair Inn Summary
65 CP2 Kew Garden Estates
66 CP9 NCB/Bryn Mawr Ridge Apartments
67 225 University Heights Apartments
68 CP6 NCB/720-730 Fort Washington Avenue
69 44 Best Western Travel Plaza
70 118 Host Funding Portfolio Summary
71 170 Pomona Marketplace Shopping Center
72 165 Perry Lake Village
73 CP5 NCB/310/312 East 23rd Apartment Corp.
74 184 RHC-Continental/Mulberry Summary
75 103 Glenmont Shopping Plaza
76 83 Eagle Hardware and Garden, Inc.
77 CL13 Best Buy -- Springfield, PA
78 74A Fossil Ridge Apartments
79 3 5 Garret Mountain Plaza
80 79 Denver Fairfield Inn
81 CL24 Elder-Beerman at Millcreek Mall
82 220 The Design Pavilion
83 207 South Beach Multis Summary
84 48 Bradshaw Corporate Center
85 74C Harvestree Apartments
86 163 Peachtree Corners Shopping Center
87 43 Best Western River North, Chicago
88 CP3 NCB/1150 5th Ave.
89 CP11 NCB/Laurelton Gardens
90 CL10 Best Buy -- Mayfield, OH
91 93 Essex Hospitality Summary
92 40 Bay Plaza
93 C-1209 40 West 72 Street
94 130 Kratsa Portfolio Summary
95 76 CW-Crowne Plaza Hotel
96 C-1851 Howard Johnsons Deerfield
<CAPTION>
CUT-OFF PRIMARY
LOAN DATE MONTHLY MORTGAGE SERVICING INTEREST
NO. BORROWER NAME BALANCE PAYMENT RATE FEE RATE CALC.
- ------ ----------------------------------------------------- -------------- ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
48 Beckenstein Enterprises-Route One L.L.C. $12,381,376 $102,871 7.8900 0.0500 Actual/360
49 Goodrich Executive, LLC $12,355,597 $ 86,363 7.4600 0.0500 Actual/360
50 READCO BWII-A, LLC $11,740,441 $ 83,541 8.2377 0.0500 Actual/360
51 Inland Refrigerated Enterprises, LLC $11,542,256 $ 95,665 8.8400 0.0500 Actual/360
52 Baypark Real Estate, L.P. $11,443,725 $ 79,434 7.4200 0.0500 Actual/360
53 St. George Tower and Grill Owners Corp. $11,431,763 $ 87,784 6.8000 0.1000 30/360
54 Shemin Real Estate II, L.L.C. $11,390,457 $101,523 8.4914 0.0500 30/360
55 Lexington Anchorage, L.L.C. $11,311,417 $ 78,979 7.4800 0.0500 Actual/360
56 Northbridge Park Co-op, Inc. $11,000,000 $ 83,836 6.7800 0.0500 Actual/360
57 New British Woods Associates $10,655,199 $ 78,145 7.9900 0.0500 Actual/360
58 CRICKM Inglewood Trust $10,634,081 $ 84,295 8.2276 0.0500 30/360
59 Geddes Lake Cooperative Homes, Inc. $10,184,010 $ 81,784 7.3100 0.5750 30/360
60 Bell Apartments Owners Corp. $ 9,996,212 $ 62,288 7.0200 0.0600 30/360
61 Hotel Properties Texas L.P. $ 9,990,663 $ 73,834 7.4900 0.0500 Actual/360
62 Triad Partnership, Ltd. $ 9,953,764 $ 73,769 7.4800 0.0500 Actual/360
63 MBRD-Rexville Plaza L.P., S.E. $ 9,694,261 $ 65,712 7.1800 0.0500 Actual/360
64 Limited Service Indianapolis, LLC $ 9,491,130 $ 70,142 7.4900 0.0500 Actual/360
65 Kew Gardens Hills Apartment Owners Inc. $ 9,488,914 $ 68,783 7.8600 0.0500 Actual/360
66 BMR OWNERS CORP. $ 9,467,505 $ 69,509 7.9700 0.6850 30/360
67 SHP IV-Austin University Heights Associates, L.P. $ 9,444,669 $ 64,979 7.3300 0.0500 Actual/360
68 720-730 Fort Washington Ave. Owners Corp. $ 9,368,170 $ 61,783 6.8800 0.1950 30/360
69 Calverton Hotel Venture, LLC $ 9,132,247 $ 69,775 7.8600 0.0600 Actual/360
70 Host Ventures, Inc. $ 9,067,689 $ 70,766 8.1200 0.0500 Actual/360
71 Pomona Marketplace, LLC $ 8,967,401 $ 70,156 7.0700 0.0500 Actual/360
72 Perry Lake Village, LLC $ 8,894,686 $ 60,111 7.1500 0.0500 Actual/360
73 310/312 East 23rd Apartment Corp. $ 8,890,321 $ 57,483 7.1000 0.0600 30/360
74 Bahia Associates, LLC $ 8,847,471 $ 63,705 7.7900 0.0500 Actual/360
75 L & T Associates, LLC. $ 8,765,322 $ 62,558 7.6700 0.0500 Actual/360
76 Lexington Federal Way, L.L.C. $ 8,669,328 $ 60,531 7.4800 0.0500 Actual/360
77 SunWest F.B. - Limited Partnership $ 8,656,976 $ 66,667 7.6609 0.0500 30/360
78 Fossil Properties I Limited Partnership $ 8,554,761 $ 57,353 7.0700 0.0500 Actual/360
79 Garret Park Associates $ 8,495,478 $ 59,491 7.5100 0.0500 Actual/360
80 FI-DEN LLC $ 8,492,064 $ 62,759 7.4900 0.0500 Actual/360
81 Elder PA I Delaware Business Trust $ 8,490,238 $ 65,209 8.8601 0.0500 30/360
82 200K, LLC $ 8,389,405 $ 59,080 7.5600 0.0500 Actual/360
83 Euclid, L.C. and Pennsylvania, L.C. $ 8,290,186 $ 58,736 7.6300 0.0500 Actual/360
84 Bradshaw Corporate Plaza, L.P. $ 8,147,952 $ 54,267 6.9900 0.0500 Actual/360
85 Harvestree Apartment Properties, Ltd. $ 8,075,130 $ 54,409 7.1200 0.0500 Actual/360
86 Peachtree Corners Center, LLC $ 7,995,994 $ 56,982 7.6900 0.0600 Actual/360
87 Best Western River North Hotel, L.L.C. $ 7,982,956 $ 58,444 7.3700 0.0500 Actual/360
88 1150 Fifth Avenue Owners Corp. $ 7,887,415 $ 53,411 7.1600 0.0600 30/360
89 Laurelton Gardens Corp. $ 7,694,531 $ 49,311 7.2600 0.2100 30/360
90 SunWest F.B. IV Limited Partnership $ 7,558,145 $ 59,167 7.6457 0.0500 30/360
91 Essex Hospitality Associates III, LP $ 7,553,519 $ 57,650 7.8600 0.0500 Actual/360
92 Bay Plaza, LLC $ 7,446,826 $ 55,394 8.1400 0.0500 Actual/360
93 The Bancroft Owners, Inc. $ 7,273,200 $ 56,465 6.9700 0.0500 Actual/360
94 Premier Hsptly Grp-W Mifflin & Premier Hsptly Grp-N $ 7,163,548 $ 55,809 8.0500 0.0500 Actual/360
95 SAM Hospitality Corp. $ 7,061,557 $ 53,210 7.6600 0.0700 Actual/360
96 Deerfield 21 Corporation $ 6,993,375 $ 51,411 7.4300 0.0500 Actual/360
<CAPTION>
REMAINING
STATED ANTICIPATED LOCKOUT ANTICIPATED ORIGINAL REMAINING FIRST
LOAN MATURITY REPAYMENT REMAINING AND YIELD REMAINING AMORTIZATION AMORTIZATION P&I
NO. DATE DATE LOCKOUT MAINTENANCE TERM TERM TERM DATE SEASONING
- ------ ---------- ------------- ----------- ------------- ------------- -------------- -------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
48 5/11/18 237 237 239 240 239 6/11/98 1
49 1/11/28 1/11/08 111 111 115 360 355 2/11/98 5
50 1/11/23 291 291 295 300 294 1/11/98 6
51 5/11/23 5/11/08 117 117 119 300 299 6/11/98 1
52 5/1/28 5/1/08 115 115 119 360 359 6/1/98 1
53 3/5/08 99 114 117 240 237 4/5/98 3
54 2/11/17 220 220 224 230 224 1/11/98 6
55 5/11/28 5/11/08 115 115 119 360 359 6/11/98 1
56 6/1/18 240 240 240 240 240 7/1/98 0
57 5/11/28 5/11/08 117 117 119 360 359 6/11/98 1
58 11/1/22 289 289 293 300 293 12/1/97 7
59 12/11/17 54 174 234 240 234 1/11/98 6
60 5/5/13 131 131 179 480 479 6/5/98 1
61 5/11/23 5/11/08 116 116 119 300 299 6/11/98 1
62 2/11/23 2/11/08 109 109 116 300 296 3/11/98 4
63 5/11/28 5/11/08 114 114 119 360 359 6/11/98 1
64 5/11/23 5/11/08 116 116 119 300 299 6/11/98 1
65 4/11/28 4/11/08 111 111 118 360 358 5/11/98 2
66 1/1/08 97 97 115 360 355 2/5/98 5
67 5/11/28 5/11/08 112 112 119 360 359 6/11/98 1
68 2/1/08 97 97 116 360 356 3/5/98 4
69 4/11/23 4/11/05 78 78 82 300 298 5/11/98 2
70 6/11/23 6/11/08 116 116 120 300 299 6/11/98 1
71 4/11/18 233 233 238 240 238 5/11/98 2
72 5/11/28 5/11/08 114 114 119 360 359 6/11/98 1
73 4/5/13 118 118 178 420 418 5/5/98 2
74 4/11/28 4/11/08 111 111 118 360 358 5/11/98 2
75 12/11/27 12/11/07 107 107 114 360 354 1/11/98 6
76 5/11/28 5/11/08 117 117 119 360 359 6/11/98 1
77 2/11/18 232 232 236 281 278 4/11/98 3
78 5/11/28 5/11/08 112 112 119 360 359 6/11/98 1
79 5/11/28 5/11/08 117 117 119 360 359 6/11/98 1
80 5/11/23 5/11/08 116 116 119 300 299 6/11/98 1
81 1/11/21 267 267 271 443 442 6/11/98 1
82 4/11/28 4/11/05 75 75 82 360 358 5/11/98 2
83 5/11/28 5/11/08 112 112 119 360 359 6/11/98 1
84 3/11/28 3/11/08 110 110 117 360 357 4/11/98 3
85 5/11/28 5/11/08 112 112 119 360 359 6/11/98 1
86 5/11/28 5/11/18 235 235 239 360 359 6/11/98 1
87 4/1/08 58 114 118 300 298 5/1/98 2
88 4/5/13 147 147 178 360 358 5/5/98 2
89 4/5/08 99 99 118 480 478 5/5/98 2
90 2/11/18 232 232 236 268 265 4/11/98 3
91 5/11/23 5/11/08 112 112 119 300 299 6/11/98 1
92 5/11/28 5/11/08 112 112 119 360 359 6/11/98 1
93 4/1/18 0 234 238 240 238 5/1/98 2
94 1/11/22 1/11/08 111 111 115 300 295 2/11/98 5
95 1/11/23 1/11/08 111 111 115 300 295 2/11/98 5
96 5/1/08 0 119 119 300 299 6/1/98 1
S-110
<PAGE>
<CAPTION>
CSFB
LOAN CONTROL
NO. NO. PROPERTY NAME
- ------ --------- -----------------------------------------
<S> <C> <C>
97 140 Logan Manor Nursing Home
98 97 Forest Pointe Apartments
99 159F Arundel Apartments
100 C-2016 Super 8-Summary
101 239 Yorktown Apartments and Townhouses
102 C-1400 1249 and 1255 Boylston Street-Summary
103 C-3769 AT&T Center
104 C-3222 Best Western Oak Manor Inn
105 CL55 United Artists -- Camarillo, CA
106 232 Westport Inn
107 C-1723 Best Western Beachside Inn
108 91 Empire Office Center II
109 CL19 Eagle Foods- Geneva IL
110 176 Radisson Resort Hotel
111 151 Nevada Cares
112 CL32 Office Depot -- Paramus, NJ
113 10 320 West 13th Street
114 234 Winfield Landing Apartments
115 226 USC Center
116 45 Holiday Inn Aberdeen
117 CL20 Eagle Country Market
118 182 RHC -- Capistrano
119 35 Atlantis Apartments
120 C-1511 Meadowbrook Office Park-Summary
121 142 Lynnwood Marketplace
122 C-2135 World Marine
123 218 Fairfield Inn Tampa/Brandon
124 46 Bluegrass Shopping Center
125 C-3418 Green Oaks Apartments
126 16 902-938 Highland Avenue
127 109 Hecker Pass Plaza
128 62 Cobblestone Village Shopping Center
129 187 RHC -- Towne & Country Mobile Home Park
130 70 Concord Apartments
131 78 Delta Hotels Summary
132 224 Transouth
133 33 Any Mountain
134 113 Holiday Inn -- Ft. Collins, CO
135 112 Highland Court Apartments
136 189 River Road
137 68 Commerce University
138 C-1361 Dutch Centre
139 C-1332 Murchison Medical Plaza
140 160 Park Magnolia Apartments
141 CL6 Best Buy -- Akron, OH
142 88 Edwards Warehouse
143 47 Boynton Medical Arts Center
144 37 Austin South Residence Inn
145 147 Courtyard by Marriott -- Mishawaka
<CAPTION>
CUT-OFF PRIMARY
LOAN DATE MONTHLY MORTGAGE SERVICING INTEREST
NO. BORROWER NAME BALANCE PAYMENT RATE FEE RATE CALC.
- ------ ------------------------------------------------------------- ------------- --------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
97 Logan Manor L.L.C. $6,993,301 $51,184 7.3800 0.0600 Actual/360
98 Forest Pointe Apartments, LLC $6,990,619 $48,085 7.3200 0.0500 Actual/360
99 Arundel Associates LLC $6,911,712 $48,212 7.4700 0.0000 Actual/360
100 Various(1) $6,838,507 $55,574 8.5900 0.0500 Actual/360
101 New Yorktowne Associates $6,837,119 $51,002 8.1700 0.0500 Actual/360
102 SPE controlled by Joseph & Thomas Swan $6,800,000 $54,076 7.3300 0.0500 Actual/360
103 Provident Sunnyside LLC and Provident Somerset Partners LLC $6,500,000 $45,315 7.4700 0.0500 Actual/360
104 Gama Corporation $6,494,148 $48,670 7.6500 0.0500 Actual/360
105 Media Park, LLC $6,480,848 $50,655 8.0941 0.0500 Actual/360
106 BP Westport Inn, LLC $6,130,562 $49,105 8.3800 0.0500 Actual/360
107 El Patio Beachside Inn, Inc. $6,119,486 $45,863 7.6500 0.0500 Actual/360
108 Empire Office Center, L.L.C. $6,111,602 $42,345 7.3700 0.0500 Actual/360
109 Eagle Geneva Realty, L.P. $6,104,894 $47,286 8.1645 0.0500 30/360
110 SPI Management Co. $6,083,154 $57,188 7.6800 0.0500 Actual/360
111 Royalcrest Living Centers (Carson City) Inc. $5,989,474 $47,789 8.3700 0.0500 Actual/360
112 OD-Paramus Ham Business Trust $5,898,234 $41,167 7.3989 0.0500 Actual/360
113 320 West 13th Realty, LLC $5,850,000 $38,318 7.8600 0.0500 Actual/360
114 Balboa Partners, Ltd. $5,802,554 $40,915 7.5500 0.0500 Actual/360
115 Campus Partners $5,777,412 $41,432 7.7200 0.0500 Actual/360
116 The Blacksmith Corporation $5,744,752 $42,829 7.5900 0.0500 Actual/360
117 Eagle Moline Realty, L.P. $5,673,660 $43,768 8.1684 0.0500 30/360
118 Capistrano Terrace Associates, LLC $5,640,133 $39,295 7.4500 0.0500 Actual/360
119 W.W.W. Associates, Inc. $5,592,477 $38,430 7.3100 0.0500 Actual/360
120 Park Central LLC $5,500,000 $37,296 7.1900 0.0500 Actual/360
121 3100 E. Imperial Hwy., LLC $5,386,260 $43,810 8.0800 0.0500 Actual/360
122 Flosden Residential Community, Inc. $5,297,000 $36,407 7.3200 0.0500 Actual/360
123 FI-Brand, LLC $5,245,098 $38,763 7.4900 0.0500 Actual/360
124 Bluegrass Center, LLC $5,225,494 $38,524 7.4200 0.0500 Actual/360
125 Palos Green Oaks, LP $5,200,000 $35,297 7.2000 0.0500 Actual/360
126 Mellen Highland Associates, LLC $5,097,286 $35,695 7.5100 0.0500 Actual/360
127 Hecker Pass Plaza Investors, a Limited Partnership $4,997,520 $34,642 7.4700 0.0500 Actual/360
128 Cobblestone Village Equities, LLC $4,984,687 $34,619 7.4000 0.0500 Actual/360
129 Towne & Country Associates, LLC $4,950,437 $34,490 7.4500 0.0500 Actual/360
130 Wentwood Capital Fund IV, L.P. $4,898,523 $36,415 8.1000 0.0500 Actual/360
131 Delta Management International L.C. $4,896,100 $38,372 8.1700 0.0500 Actual/360
132 Domain Beach, Ltd. $4,871,941 $35,670 7.3300 0.0500 Actual/360
133 E.R. Hoffman Properties, LLC $4,790,953 $33,152 7.3750 0.0750 Actual/360
134 U.S. Motels Ft. Collins, Inc. $4,786,010 $36,035 7.6800 0.0500 Actual/360
135 Graoch Associates #47 Limited Partnership $4,783,146 $33,727 7.5500 0.0500 Actual/360
136 Tri Property, L.L.C. $4,747,234 $32,339 7.2300 0.1000 Actual/360
137 17000 Horizon Associates, A Limited Partnership $4,743,393 $32,146 7.1700 0.0500 Actual/360
138 Eukos Properties,Ltd. $4,732,467 $32,629 7.3200 0.0500 Actual/360
139 Murchison Medical Plaza, Ltd. $4,700,000 $33,769 7.7800 0.0500 Actual/360
140 15101 Magnolia Group, LLC $4,693,284 $31,459 7.0600 0.0500 Actual/360
141 SunWest F.B. III Limited Partnership $4,579,531 $35,000 7.6676 0.0500 30/360
142 Edwards Avenue Commerce Center, L.L.C. $4,511,607 $31,388 7.4300 0.1000 Actual/360
143 Siemens West Boynton, LTD. $4,497,921 $32,769 7.9200 0.0500 Actual/360
144 White Lodging Services Corp. $4,495,798 $33,225 7.4900 0.0500 Actual/360
145 Mishacourt, L.L.C. $4,495,798 $33,225 7.4900 0.0500 Actual/360
<CAPTION>
REMAINING
STATED ANTICIPATED LOCKOUT ANTICIPATED ORIGINAL REMAINING FIRST
LOAN MATURITY REPAYMENT REMAINING AND YIELD REMAINING AMORTIZATION AMORTIZATION P&I
NO. DATE DATE LOCKOUT MAINTENANCE TERM TERM TERM DATE SEASONING
- ------ ---------- ------------- ----------- ------------- ------------- -------------- -------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
97 5/11/23 5/11/08 115 115 119 300 299 6/11/98 1
98 4/1/08 58 114 118 360 358 5/1/98 2
99 5/11/28 5/11/08 115 115 119 360 359 6/11/98 1
100 4/1/08 21 118 118 300 298 5/1/98 2
101 5/11/08 117 117 119 360 359 6/11/98 1
102 6/1/18 240 240 240 240 240 7/1/98 0
103 6/1/08 114 114 120 360 360 7/1/98 0
104 5/1/08 119 119 119 300 299 6/1/98 1
105 12/11/15 206 206 210 215 210 2/11/98 5
106 1/11/23 1/11/08 110 110 115 300 295 2/11/98 5
107 5/1/08 35 119 119 300 299 6/1/98 1
108 1/11/28 1/11/08 108 108 115 360 355 2/11/98 5
109 4/11/20 258 258 262 312 311 6/11/98 1
110 5/11/13 5/11/08 116 116 119 180 179 6/11/98 1
111 4/11/23 5/11/08 119 119 119 300 298 5/11/98 2
112 9/11/16 215 215 219 220 219 6/11/98 1
113 5/11/28 5/11/05 35 35 83 6/11/98 1
114 1/11/28 1/11/08 111 111 115 360 355 2/11/98 5
115 12/11/27 12/11/07 111 111 114 360 354 1/11/98 6
116 5/11/08 119 119 119 300 299 6/11/98 1
117 4/11/20 258 258 262 317 316 6/11/98 1
118 4/11/28 4/11/08 111 111 118 360 358 5/11/98 2
119 4/11/28 4/11/08 116 116 118 360 358 5/11/98 2
120 6/1/08 120 120 120 360 360 7/1/98 0
121 4/11/20 4/11/08 111 111 118 264 262 5/11/98 2
122 5/1/08 119 119 119 360 359 6/1/98 1
123 5/11/23 5/11/08 116 116 119 300 299 6/11/98 1
124 2/11/23 2/11/08 114 114 116 300 296 3/11/98 4
125 6/1/08 120 120 120 360 360 7/1/98 0
126 5/11/28 5/11/08 112 112 119 360 359 6/11/98 1
127 5/11/28 5/11/08 112 112 119 360 359 6/11/98 1
128 2/11/28 2/11/08 114 114 116 360 356 3/11/98 4
129 4/11/28 4/11/08 111 111 118 360 358 5/11/98 2
130 12/11/27 12/11/07 107 107 114 360 354 1/11/98 6
131 5/11/23 5/11/08 115 115 119 300 299 6/11/98 1
132 1/11/23 1/11/08 108 108 115 300 295 2/11/98 5
133 3/11/28 3/11/08 110 110 117 360 357 4/11/98 3
134 3/11/23 3/11/08 115 115 117 300 297 4/11/98 3
135 1/11/28 1/11/08 108 108 115 360 355 2/11/98 5
136 5/11/28 5/11/08 112 112 119 360 359 6/11/98 1
137 4/11/28 4/11/08 111 111 118 360 358 5/11/98 2
138 1/1/08 1/1/08 0 115 115 360 355 2/1/98 5
139 6/1/08 120 120 120 360 360 7/1/98 0
140 4/11/28 4/11/08 116 116 118 360 358 5/11/98 2
141 2/11/18 232 232 236 287 284 4/11/98 3
142 3/11/28 3/11/08 110 110 117 360 357 4/11/98 3
143 5/11/28 5/11/08 47 47 119 360 359 6/11/98 1
144 5/11/23 5/11/08 116 116 119 300 299 6/11/98 1
145 5/11/23 5/11/08 116 116 119 300 299 6/11/98 1
- ---------------------
1) Ionia Hotel Corp. 2) Charlotte Hotel Corp. 3) ColdwaterHotel Corp. 4) LaGrange Hotel Corp.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CSFB
LOAN CONTROL
NO. NO. PROPERTY NAME
- ------ --------- --------------------------------------------------
<S> <C> <C>
146 49 Brentwood Manor Mobile Home Park
147 C-1460 Burke Commerce Center
148 236 Wisteria Gardens Apartments
149 52 Brunswick Hotel
150 CL8 Best Buy -- Columbia, SC
151 C-3261 Winn-Dixie Stores, Inc. -- Selma
152 CL17 CVS Pharmacy -- Stoughton, MA
153 C-1984 Holiday Inn Holidome
154 233 Winchester Plaza
155 25 Corporate Court at Westview
156 C-1316 Alameda Apartments
157 98 Forest Ridge Apartments
158 63 Colony Club Apartments
159 C-1798 Webster Square Shopping Center
160 C-1599 Oswego Village Apartments
161 CL11 Best Buy -- Inver Grove Heights, MN
162 115 Holiday Inn Exp. -- Wheatridge, CO
163 128 K-Mart -- Sikeston
164 C-3715 Comfort Inn Santa Monica
165 CL35 PETsMART Store No. 157
166 183 RHC -- Club Marina Mobile Home Park
167 6 41 Elm Street Apartment & Office Building
168 209 Sports World
169 219 Terrado Plaza
170 54 Carydale East Apartments
171 CL50 Rite Aid Macon & College Park Summary
172 CL33 PETsMART Store No. 102
173 41 Beltline Village Shopping Center
174 131 Laguna Creek Racquet Club
175 C-2955 Riverside Medical Center
176 CL42 PETsMART Store No. 688
177 CL14 Hoyts Cinemas -- Concord, NH
178 CL37 PETsMART Store No. 475
179 CL38 PETsMART Store No. 586
180 C-2792 Rite Aid Corporation -- Baltimore
181 CL5 Best Buy -- LaCrosse, WI
182 127 Kleinfelder Office Building
183 22 2308 Broadway
184 31 American Mini Storage
185 CL43 PETsMART Store No. 689
186 202 Shoppes of Hunt Club
187 C-2787 Winn-Dixie Stores, Inc. -- Bunkie
188 C-1512 283 Bleeker St. & 59-61 Thompson St.-Summary
189 77 Delray Industrial Park
190 211 Staples, Ocean Avenue
191 149 Natomas Racquet Club
192 116 Holiday Inn Express Hotel & Suites Golden Valley
193 CL40 PETsMART Store No. 685
194 110 Heritage Plaza
<CAPTION>
CUT-OFF PRIMARY STATED
LOAN DATE MONTHLY MORTGAGE SERVICING INTEREST MATURITY
NO. BORROWER NAME BALANCE PAYMENT RATE FEE RATE CALC. DATE
- ------ ---------------------------------------------------- ------------- --------- ---------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
146 Gilbert A. & Joyce A. Mobley $4,495,655 $32,788 7.3400 0.0500 Actual/360 5/1/08
147 Burke Commerce Center, LC $4,495,509 $32,353 7.1900 0.0500 Actual/360 5/1/08
148 Ashford Est. Partners, LTD. $4,491,484 $31,034 7.3600 0.0500 Actual/360 3/11/28
149 L.A Brunswick Associates, L.P. $4,479,941 $33,872 7.7100 0.0500 Actual/360 2/11/23
150 SunWest F.B. V Limited Partnership $4,469,298 $34,167 7.6674 0.0500 30/360 2/11/18
151 WD Selma RIC L.L.C. $4,441,452 $32,408 7.1300 0.0500 30/360 2/1/18
152 Stoughton Washington L.P. $4,420,015 $29,468 6.5927 0.0500 Actual/360 1/11/19
153 Boulder Hotel Associates $4,396,316 $33,843 7.9600 0.0500 Actual/360 5/1/03
154 Winchester Plaza, LLC $4,385,245 $31,553 7.7600 0.0500 Actual/360 1/11/28
155 W-M 85 Limited Partnership $4,295,994 $31,777 7.5000 0.0500 Actual/360 5/11/23
156 1415 Broadway Alameda Hotel, LLC $4,244,735 $30,096 7.6300 0.0500 Actual/360 4/1/28
157 Forest Ridge Apartments Development LTD $4,222,767 $29,629 7.5300 0.0500 Actual/360 5/11/28
158 Regency Holding-Spring Lake, LLC $4,220,948 $30,866 7.3700 0.0500 Actual/360 5/11/23
159 Webster Square Shopping Center, LLC $4,185,833 $29,524 6.9400 0.0500 Actual/360 3/1/08
160 Oswego Village LLC $4,157,320 $27,398 6.9000 0.0500 Actual/360 5/1/08
161 SunWest F.B. VII Limited Partnership $4,142,785 $31,667 7.6675 0.0500 30/360 2/11/18
162 U.S. Motels Denver Central, Inc. a Colorado Corpor $4,088,531 $31,319 7.8800 0.0500 Actual/360 3/11/23
163 DDM/Sikeston, L.P., a Missouri Limited Partnership $4,086,699 $35,144 8.2100 0.0500 Actual/360 4/11/18
164 Dawn Dee Motel and Apartments $4,062,000 $32,624 7.4600 0.0500 Actual/360 6/1/08
165 CRICPETS Glendale Trust $4,025,692 $31,820 8.7700 0.0500 30/360 1/11/08
166 Club Marina Associates, LLC $4,005,551 $28,841 7.7900 0.0500 Actual/360 4/11/28
167 Morris-Elm LLC $3,996,077 $28,964 7.2700 0.0500 Actual/360 5/11/23
168 SW-93 Partners, L.P. $3,978,892 $30,371 7.8100 0.0500 Actual/360 1/11/23
169 Covina Office Partners, LLC $3,966,563 $29,091 7.3900 0.0500 Actual/360 4/11/23
170 The 2727 L.L.C. $3,906,159 $46,217 6.8900 0.1000 Actual/360 2/11/08
171 TAC Funding II, LLC $3,884,658 $31,006 7.0000 0.0500 Actual/360 9/11/17
172 CRICPETS Aliso Viejo Trust $3,846,309 $30,402 8.7700 0.0500 30/360 1/11/08
173 BV PLAZA LTD. $3,844,619 $26,003 7.1500 0.0500 Actual/360 4/11/28
174 Laguna Creek Racquet Club Investors, LP $3,844,492 $32,660 8.1900 0.0500 Actual/360 5/11/18
175 300 Riverside, Ltd. $3,818,129 $26,876 7.5500 0.0500 Actual/360 3/1/08
176 CRICPETS Northville Trust $3,788,953 $29,949 8.7700 0.0500 30/360 1/11/08
177 Readco Concord, LLC $3,733,234 $29,302 8.0176 0.0500 Actual/360 1/11/23
178 CRICPETS Downers Grove Trust $3,689,244 $29,161 8.7700 0.0500 30/360 1/11/08
179 CRICPETS Fayette Township Trust $3,689,244 $29,161 8.7700 0.0500 30/360 1/11/08
180 RA Baltimore Trust $3,607,480 $27,917 7.3750 0.0500 30/360 12/1/19
181 SunWest F.B. VIII Limited Partnership $3,597,915 $27,500 7.6675 0.0500 30/360 2/11/18
182 3077 Fite Circle, L.P. $3,592,963 $24,534 7.2400 0.0500 Actual/360 3/11/28
183 Way-Off Broadway LLC $3,496,921 $26,437 7.7500 0.1200 Actual/360 5/11/23
184 El Toro Mini-Partners $3,492,847 $26,070 7.5900 0.0500 Actual/360 4/1/08
185 CRICPETS Taylor Trust $3,390,116 $26,796 8.7700 0.0500 30/360 1/11/08
186 Shoppes Of Hunt Club Enterprises, Inc. $3,383,902 $24,751 7.3300 0.1000 Actual/360 2/11/23
187 SSG 961 L.L.C. $3,375,192 $29,579 8.2500 0.0500 30/360 2/1/17
188 Whistlepig Associates, Inc. $3,342,509 $23,913 7.1100 0.0500 Actual/360 4/1/08
189 Delray Industrial Assoc, Inc. & I.R.E. Real Estate $3,297,043 $24,753 7.6700 0.0500 Actual/360 5/11/23
190 HSPR Associates, LLC $3,296,842 $24,130 7.3800 0.0500 Actual/360 5/11/23
191 Natomas Racquet Club Investor $3,295,279 $27,994 8.1900 0.0500 Actual/360 5/11/18
192 Christianson and Torgerson Partnership, L.L.P. $3,293,409 $24,839 7.7100 0.1000 Actual/360 4/11/23
193 CRICPETS Roseville Trust $3,290,407 $26,008 8.7700 0.0500 30/360 1/11/08
194 Heritage Plaza, L.L.C. $3,285,872 $22,669 7.3200 0.0500 Actual/360 12/11/27
<CAPTION>
REMAINING
ANTICIPATED LOCKOUT ANTICIPATED ORIGINAL REMAINING FIRST
LOAN REPAYMENT REMAINING AND YIELD REMAINING AMORTIZATION AMORTIZATION P&I
NO. DATE LOCKOUT MAINTENANCE TERM TERM TERM DATE SEASONING
- ------ ------------- ----------- ------------- ------------- -------------- -------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
146 59 115 119 300 299 6/1/98 1
147 119 119 119 300 299 6/1/98 1
148 3/11/08 115 115 117 360 357 4/11/98 3
149 2/11/08 109 109 116 300 296 3/11/98 4
150 232 232 236 287 284 4/11/98 3
151 236 236 236 286 284 5/1/98 2
152 243 243 247 246 246 8/11/98 0
153 23 23 59 300 299 6/1/98 1
154 12/11/07 111 111 114 360 355 2/11/98 5
155 5/11/08 112 112 119 300 299 6/11/98 1
156 4/1/08 118 118 118 360 358 5/1/98 2
157 5/11/08 117 117 119 360 359 6/11/98 1
158 5/11/08 116 116 119 300 299 6/11/98 1
159 0 117 117 300 297 4/1/98 3
160 119 119 119 360 359 6/1/98 1
161 232 232 236 287 284 4/11/98 3
162 3/11/08 115 115 117 300 297 4/11/98 3
163 234 234 238 240 238 5/11/98 2
164 114 114 120 240 240 7/1/98 0
165 111 111 115 360 355 2/11/98 5
166 4/11/08 111 111 118 360 358 5/11/98 2
167 5/11/08 116 116 119 300 299 6/11/98 1
168 1/11/08 108 108 115 300 295 2/11/98 5
169 4/11/05 75 75 82 300 298 5/11/98 2
170 112 112 116 120 116 3/11/98 4
171 227 227 231 234 231 4/11/98 3
172 111 111 115 360 355 2/11/98 5
173 4/11/08 111 111 118 360 358 5/11/98 2
174 5/11/08 112 112 119 240 239 6/11/98 1
175 110 110 117 360 357 4/1/98 3
176 111 111 115 360 355 2/11/98 5
177 291 291 295 300 295 2/11/98 5
178 111 111 115 360 355 2/11/98 5
179 111 111 115 360 355 2/11/98 5
180 78 258 258 265 258 12/1/97 7
181 232 232 236 287 284 4/11/98 3
182 3/11/08 110 110 117 360 357 4/11/98 3
183 5/11/08 112 112 119 300 299 6/11/98 1
184 58 114 118 300 298 5/1/98 2
185 111 111 115 360 355 2/11/98 5
186 2/11/08 109 109 116 300 296 3/11/98 4
187 106 224 224 238 224 5/1/97 14
188 118 118 118 300 298 5/1/98 2
189 5/11/08 115 115 119 300 299 6/11/98 1
190 5/11/08 112 112 119 300 299 6/11/98 1
191 5/11/08 112 112 119 240 239 6/11/98 1
192 4/11/13 171 171 178 300 298 5/11/98 2
193 111 111 115 360 355 2/11/98 5
194 12/11/07 108 108 114 360 354 1/11/98 6
</TABLE>
S-112
<PAGE>
<TABLE>
<CAPTION>
CSFB
LOAN CONTROL
NO. NO. PROPERTY NAME
- ------ --------- ---------------------------------------------
<S> <C> <C>
195 159C Cynwyd Club Apartments
196 CL36 PETsMART Store No. 239
197 C-1031 Keith Properties-Summary
198 CL15 Hoyts Cinemas -- Hooksett, NH
199 C-1730 Comfort Inn-Selma
200 C-2791 Rite Aid Corporation -- Cleveland
201 C-1656 Cedar Creek Apartments
202 222 Timber Trails Shopping Center
203 152 North La Brea Shopping Center
204 21 1801-1811 Williamsbridge Road
205 185 RHC -- Trees Country Place Mobile Home Park
206 C-1708 Kon Tiki Mobile Home Park
207 CL41 PETsMART Store No. 686
208 65 Columbus Plaza
209 C-3767 Days InnDenny's-Summary
210 206 Somerset Professional Plaza
211 CL21 Eckerd Pharmacy -- Mary Esther, FL
212 CL39 PETsMART Store No. 648
213 134 Lancaster Microtel Inn
214 205 Snyder Warehouse
215 CL51 Rite Aid -- Washington, MI
216 C-1488 3190 Northeast Expressway
217 161 Parkview Nursing Portfolio Summary
218 143 Manhattan Brewery/40-42 Thompson St.
219 CL34 PETsMART Store No. 145
220 C-1284 Setauket Village Mart
221 C-1590 Great Woods Office Park-Summary
222 CL31 Office Depot -- College Twp PA
223 C-2788 Winn-Dixie Stores, Inc. -- Auburn
224 24 5520 Santa Monica Boulevard
225 235 Winston Vista Shopping Center
226 194 Rochester Microtel
227 C-3225 Alpine Meadows
228 C-1494 Kenosha Office/Industrial Building
229 64 Columbus Microtel Inn
230 117 Hoosic Valley Center
231 7 200 South Newman Street
232 C-1912 Value Inn Suites
233 137 Leeman Labs
234 129 Knoxville Microtel
235 C-3279 Eckerd Corporation -- Forest Park
236 72 Corum Plaza
237 C-1765b Quality Inn- Sylva
238 C-2182 Holiday Inn/ Heritage Inn-Summary
239 CL56 Walgreen Co. -- Bedford, TX
240 96 Falcon View Plaza
241 CL22 Eckerd Pharmacy -- Houma, LA
242 144 Maple Gardens Apartments
243 181 RHC -- Adobe Mobile Lodge
<CAPTION>
CUT-OFF PRIMARY STATED
LOAN DATE MONTHLY MORTGAGE SERVICING INTEREST MATURITY
NO. BORROWER NAME BALANCE PAYMENT RATE FEE RATE CALC. DATE
- ------ ---------------------------------------------------- ------------- --------- ---------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
195 Cynwyd Club Associates LLC $3,244,834 $22,634 7.4700 0.0000 Actual/360 5/11/28
196 CRICPETS Kansas City Trust $3,189,766 $25,213 8.7700 0.0500 30/360 1/11/08
197 SPEs with a managing partner of John W. Keith $3,188,665 $22,397 7.5100 0.0500 Actual/360 1/1/08
198 Readco Hookset, LLC $3,185,239 $25,001 8.0175 0.0500 Actual/360 1/11/23
199 Nirvana, Inc. $3,178,901 $27,427 8.3300 0.0500 Actual/360 2/1/18
200 RA Cleveland Trust $3,174,044 $24,563 7.3750 0.0500 30/360 12/1/19
201 Cedar Creek Village, LLC $3,150,000 $21,939 7.4600 0.0500 Actual/360 6/1/08
202 Timber Trails, LTD. $3,095,773 $21,147 7.2500 0.0500 Actual/360 4/11/28
203 Lambert Equities, LLC $3,088,350 $22,466 7.8700 0.0500 Actual/360 12/11/27
204 1801 Williamsbridge Road Realty Associates LLC $2,997,624 $23,533 8.1900 0.0500 Actual/360 5/11/23
205 Purviance Park Associates, LLC $2,996,226 $21,120 7.5700 0.0500 Actual/360 4/11/28
206 Sailaway Holdings, Ltd. And JOMA Enterprises, Ltd. $2,993,292 $21,414 7.1100 0.0500 Actual/360 4/1/08
207 CRICPETS Commerce Township Trust $2,975,899 $23,522 8.7700 0.0500 30/360 1/11/08
208 Columbus Plaza Fee Associates, LP, and Twelth Tamp $2,918,815 $21,445 7.4100 0.0500 Actual/360 4/11/23
209 Hospitality Associates of Ft. Meyers, Ltd. $2,908,162 $22,968 7.9300 0.0500 Actual/360 5/1/08
210 Regency Holding-Somerset LLC $2,877,268 $21,133 7.4200 0.0500 Actual/360 5/11/23
211 ECKTRUST -- Florida $2,867,198 $21,505 6.6125 0.0500 Actual/360 12/11/17
212 CRICPETS Murfreesboro Trust $2,791,860 $22,068 8.7700 0.0500 30/360 1/11/08
213 Essex Microtel 1989 L.P. $2,772,604 $21,106 7.8300 0.0500 Actual/360 5/11/23
214 G & R Snyder Ltd LLP $2,745,074 $19,342 7.5600 0.1000 Actual/360 3/11/28
215 RAC Washington II $2,736,245 $18,944 6.5892 0.0500 Actual/360 12/11/22
216 Group Three Associates, LP $2,721,394 $18,812 7.3700 0.0500 Actual/360 4/1/08
217 Parkview AdultCare Centers, Inc. $2,707,586 $22,159 8.6400 0.0500 Actual/360 1/11/23
218 Substation Company $2,696,533 $18,860 7.4900 0.0500 Actual/360 4/11/28
219 CRICPETS Prescott Trust $2,692,151 $21,280 8.7700 0.0500 30/360 1/11/08
220 Setauket Village Mart Associates $2,676,535 $25,045 7.5100 0.0500 Actual/360 3/1/13
221 Sebonic Partners, LLC $2,592,147 $18,126 7.4700 0.0500 Actual/360 2/1/08
222 RIC College Station Trust $2,560,318 $18,333 7.6699 0.0500 Actual/360 3/11/16
223 Tiger Crossing WD GP $2,537,596 $23,768 8.5000 0.0500 30/360 2/1/15
224 5520 Santa Monica Boulevard LLC $2,533,444 $19,320 8.4000 0.0500 Actual/360 4/1/08
225 Pacific Coast Property Fund I, LLC $2,518,764 $18,054 7.7500 0.0500 Actual/360 5/11/28
226 Essex Microtel Lehigh L.P. $2,500,839 $19,038 7.8300 0.0500 Actual/360 5/11/23
227 Goldbar Investments Corporation $2,500,000 $17,925 7.1600 0.0500 Actual/360 6/1/08
228 Kenosha Corporation $2,483,072 $23,483 9.6100 0.0500 Actual/360 1/1/08
229 Essex Microtel Associates, LP $2,472,863 $18,825 7.8300 0.0500 Actual/360 5/11/23
230 E.D.K. Enterprises, Inc $2,439,124 $18,883 8.5700 0.0500 Actual/360 5/11/23
231 200 South Newman Associates, LLC $2,437,803 $18,270 7.6500 0.0500 Actual/360 5/11/23
232 Value Inn Suites, LLC $2,400,000 $19,970 7.9300 0.0500 Actual/360 6/1/08
233 6 Wentworth Drive Realty Corp. $2,397,703 $17,549 7.3800 0.0500 Actual/360 5/11/23
234 Essex Knoxville Associates, LP $2,393,956 $18,303 7.8800 0.0500 Actual/360 5/11/23
235 Trinity Forest Parkway L.L.C. $2,391,354 $18,797 7.0600 0.0500 30/360 1/1/18
236 8505 Gulf Freeway Limited $2,376,990 $16,723 7.5500 0.0500 Actual/360 4/1/08
237 Various(2) $2,334,582 $20,201 8.3700 0.0500 Actual/360 2/1/18
238 Sunbelt Lodging LLC/ Heritage Inn Ltd $2,316,187 $18,261 8.2400 0.0500 Actual/360 5/1/08
239 MT Capital Limited Partnership $2,303,898 $18,401 6.6775 0.0500 Actual/360 8/11/16
240 RcKellips, L.L.C. $2,298,740 $15,956 7.4200 0.0500 Actual/360 5/11/28
241 RCBM-I TRUST $2,290,248 $16,747 6.3365 0.0500 Actual/360 10/11/17
242 Maple Gardens Apartments, LLC $2,273,683 $15,520 7.2500 0.0500 Actual/360 5/11/28
243 Adobe Associates, LLC $2,269,017 $15,808 7.4500 0.0500 Actual/360 4/11/28
<CAPTION>
REMAINING
ANTICIPATED LOCKOUT ANTICIPATED ORIGINAL REMAINING FIRST
LOAN REPAYMENT REMAINING AND YIELD REMAINING AMORTIZATION AMORTIZATION P&I
NO. DATE LOCKOUT MAINTENANCE TERM TERM TERM DATE SEASONING
- ------ ------------- ----------- ------------- ------------- -------------- -------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
195 5/11/08 115 115 119 360 359 6/11/98 1
196 111 111 115 360 355 2/11/98 5
197 0 115 115 360 355 2/1/98 5
198 291 291 295 300 295 2/11/98 5
199 236 236 236 240 236 3/1/98 4
200 78 258 258 265 258 12/1/97 7
201 120 120 120 360 360 7/1/98 0
202 4/11/08 111 111 118 360 358 5/11/98 2
203 12/11/07 112 112 114 360 354 1/11/98 6
204 5/11/08 112 112 119 300 299 6/11/98 1
205 4/11/08 111 111 118 360 358 5/11/98 2
206 118 118 118 300 298 5/1/98 2
207 111 111 115 360 355 2/11/98 5
208 3/11/08 113 113 117 300 298 5/11/98 2
209 119 119 119 276 275 6/1/98 1
210 5/11/08 116 116 119 300 299 6/11/98 1
211 230 230 234 239 234 2/11/98 5
212 111 111 115 360 355 2/11/98 5
213 5/11/08 112 112 119 300 299 6/11/98 1
214 3/11/08 110 110 117 360 357 4/11/98 3
215 290 290 294 297 294 4/11/98 3
216 0 115 118 360 358 5/1/98 2
217 1/11/08 108 108 115 300 295 2/11/98 5
218 4/11/08 114 114 118 360 358 5/11/98 2
219 111 111 115 360 355 2/11/98 5
220 177 177 177 180 177 4/1/98 3
221 0 116 116 360 356 3/1/98 4
222 209 209 213 219 213 1/11/98 6
223 82 200 200 238 200 5/1/95 38
224 58 114 118 360 358 5/1/98 2
225 6/11/08 118 118 120 360 359 6/11/98 1
226 5/11/08 112 112 119 300 299 6/11/98 1
227 120 120 120 300 300 7/1/98 0
228 115 115 115 240 235 2/1/98 5
229 5/11/08 112 112 119 300 299 6/11/98 1
230 5/11/08 115 115 119 360 359 6/11/98 1
231 5/11/08 117 117 119 300 299 6/11/98 1
232 113 113 120 240 240 7/1/98 0
233 5/11/08 117 117 119 300 299 6/11/98 1
234 5/11/08 112 112 119 300 299 6/11/98 1
235 235 235 235 237 235 5/1/98 2
236 58 114 118 360 358 5/1/98 2
237 236 236 236 240 236 3/1/98 4
238 35 119 119 300 299 6/1/98 1
239 214 214 218 223 218 2/11/98 5
240 5/11/08 117 117 119 360 359 6/11/98 1
241 228 228 232 216 212 3/11/98 4
242 5/11/08 117 117 119 360 359 6/11/98 1
243 4/11/08 111 111 118 360 358 5/11/98 2
- ------------
(2) 1) Maggie Valley Investments, Inc. 2) Great Smokey Mountain Enterprises, Inc.
</TABLE>
S-113
<PAGE>
<TABLE>
<CAPTION>
CSFB
LOAN CONTROL
NO. NO. PROPERTY NAME
- ------ --------- --------------------------------------
<S> <C> <C>
244 C-1746 New Heritage Plaza
245 C-1438 Pine Ridge Mobile Home Park
246 CL18 CVS Pharmacy -- Woodstock, Ga
247 CL48 Rite Aid -- Melvindale, MI
248 C-2789 Rite Aid Corporation -- Garettsville
249 CL52 Rite Aid -- Auburn Hills, MI
250 85 Econo Lodge-FL
251 C-1620 Winyah Village Shopping Center
252 C-1409 Painters Mill Professional Building
253 C-2217 Holiday Inn Express (Ocean Springs)
254 C-1197 Wyndham Court Apartments
255 166 Peter Piper Plaza
256 55 Charleston Microtel
257 145 Marshall's Plaza Springfield
258 195 Royal Palms Mobile Home Park
259 CL46 Rite Aid -- Cleveland, OH
260 C-2206 Days Inn-Lanett Alabama
261 217 Syracuse Microtel
262 C-1647 717 D Street
263 154 Oakbrook Manufactured Home Community
264 4A NCB/148 W. 24 Tenants Corp.
265 C-1264 Deerfield East Apartments
266 C-1520 Stewartstown Station Village Square
267 141 Loma Verde Apartments
268 C-1360 701 East Trade Street, Equity Bldg
269 199 Santa Gertrudes Apartments
270 86 Econo Lodge-Virginia Beach, VA
271 C-1430 Greenbrier Partners I-Summary
272 C-1431 Brinks
273 C-1419 JAMAD II
274 210 Stadium Corporate Center
275 CL45 Rite Aid -- Auburn, ME
276 C-2790 Rite Aid Corporation -- Canton
277 155 Olympia Medical Center
278 C-3915 Kmart- Lackawanna
279 CL49 Rite Aid -- Hazel Park, MI
280 C-1127 44-46 Beach Street-Retail
281 14 701-703 West 184th Street
282 208 Spare Room Self Storage
283 227 Valley Pines Mobile Home Park
284 C-1496 North Plantation Square Shopping Ctr
285 C-2475 Kmart- Cheektowaga
286 CL47 Rite Aid -- Morrow, GA
287 17 925 Wilshire
288 186 RHC -- Diablo Mobile Lodge
289 C-2129 Glenwood Townhomes
290 240 Yorktown Medical
291 C-1809 Liberty Square Shopping Center
292 213 Stirrup Woods
<CAPTION>
CUT-OFF PRIMARY STATED
LOAN DATE MONTHLY MORTGAGE SERVICING INTEREST MATURITY
NO. BORROWER NAME BALANCE PAYMENT RATE FEE RATE CALC. DATE
- ------ ---------------------------------------------------- ------------- --------- ---------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
244 New Heritage Plaza Partnership $2,250,000 $15,655 7.4500 0.0500 Actual/360 6/1/08
245 Pine Ridge Associates, LLC $2,241,423 $15,227 7.1700 0.0500 Actual/360 1/1/08
246 KDF Holdings-CVS Woodstock, LLC $2,232,279 $14,091 6.4849 0.0500 Actual/360 1/11/18
247 R.A.C. Melvindale, L.L.C. $2,226,480 $15,991 6.8601 0.0500 Actual/360 3/11/22
248 RA Garrettsville Trust $2,204,870 $17,063 7.3750 0.0500 30/360 12/1/19
249 R.A.C. Auburn Hills, LLC $2,198,478 $15,188 6.6090 0.0500 Actual/360 3/11/23
250 Real Hospitality II, Inc. $2,196,770 $18,443 8.0300 0.0500 Actual/360 5/11/18
251 Winyah Village Partners LLC $2,195,723 $15,023 7.2600 0.0500 Actual/360 3/1/08
252 Painters Mill Professional Building LP $2,187,977 $17,696 7.4800 0.0500 30/360 3/1/08
253 Shree Ram, Inc. $2,181,233 $20,645 7.7000 0.0500 Actual/360 3/1/13
254 Wyndam Court Partners, LP $2,140,788 $14,754 7.3100 0.0500 Actual/360 12/1/07
255 HSI Holdings LLC $2,115,958 $16,401 8.0000 0.1800 Actual/360 2/11/23
256 Essex Charleston Associates L.P. $2,098,187 $15,972 7.8300 0.0500 Actual/360 5/11/23
257 Springfield Post Road Corporation $2,097,999 $15,382 7.4000 0.0500 Actual/360 5/11/23
258 Royal Palms, LLC $2,096,812 $13,705 6.8100 0.0500 Actual/360 4/11/28
259 15 PPA Cleveland LLC, a Delaware Limited Liability $2,026,436 $15,394 6.3466 0.0500 Actual/360 7/11/17
260 Shiv-Shakti, Inc. $2,018,641 $17,064 8.1000 0.0500 Actual/360 4/1/18
261 Essex Microtel Carrier Circle L.P. $2,015,259 $15,341 7.8300 0.0500 Actual/360 5/11/23
262 717 D Street Associates $2,000,000 $13,848 7.3900 0.0500 Actual/360 6/1/08
263 Oakbrook Manufactured Home Community, LC $1,997,464 $14,039 7.5400 0.0500 Actual/360 4/1/08
264 148 W. 24 Tenants Corp. $1,989,083 $16,100 7.4900 0.1900 30/360 3/5/08
265 Deerfield East Associates, LTD $1,986,880 $14,741 7.4700 0.0500 Actual/360 12/1/07
266 Stewartstown Station Village Square LP $1,983,477 $17,231 6.9000 0.0500 Actual/360 3/1/14
267 Loma Verde Investors Limited Partnership $1,976,125 $17,077 8.9100 0.0500 30/360 7/1/02
268 Equity Associates, LP $1,918,982 $14,013 7.3300 0.0500 Actual/360 3/1/08
269 Santa Gertrudes, LLC $1,899,042 $13,507 7.6700 0.0500 Actual/360 5/1/08
270 NHB, LLC $1,898,625 $15,363 8.5500 0.0500 Actual/360 5/11/23
271 Greenbrier Partners I, LLC $1,896,336 $13,013 7.2900 0.0500 Actual/360 3/1/13
272 Brellis Partners, L.P. $1,864,932 $14,604 7.0600 0.0500 Actual/360 3/1/13
273 Jamad II, LLC $1,854,093 $12,588 7.0900 0.0500 Actual/360 3/1/13
274 Santa Cruz Partners $1,814,577 $12,776 7.5400 0.0500 Actual/360 2/11/28
275 Troy Street Limited Liability Company $1,792,879 $14,085 6.9655 0.0500 30/360 10/11/17
276 RA Canton Trust $1,768,742 $13,688 7.3750 0.0500 30/360 12/1/19
277 Olympia Medical Center Limited Partnership $1,758,032 $12,939 8.0200 0.0500 Actual/360 4/11/28
278 M&W Limited Partnership $1,750,000 $14,055 7.4600 0.0500 Actual/360 6/1/08
279 R.A.C. Hazel Park, LLC $1,745,647 $12,398 6.7654 0.0500 Actual/360 5/11/22
280 Beach Street Management, Inc. $1,741,444 $13,798 8.2500 0.0500 Actual/360 1/1/08
281 Broadway Inwood Realty, Inc. $1,723,404 $12,781 7.5300 0.0500 Actual/360 5/11/23
282 Storage Masters, L.L.C. $1,716,650 $13,093 7.8400 0.0500 Actual/360 4/1/08
283 Valley Pines Mobile Home Park,LLC $1,716,431 $12,722 7.5100 0.0500 Actual/360 4/1/08
284 North Plantation Square Limited Partnership $1,694,537 $12,222 7.1900 0.0500 Actual/360 3/1/23
285 B&W Limited Partnership $1,650,000 $13,353 7.5600 0.0500 Actual/360 6/1/08
286 DiScala/Georgia, LLC $1,592,986 $12,523 6.7069 0.0500 Actual/360 4/11/17
287 Tenwil $1,574,269 $11,459 7.9100 0.0500 Actual/360 5/11/28
288 Diablo Associates, LLC $1,527,326 $10,641 7.4500 0.0500 Actual/360 4/11/28
289 Glenwood Townhomes, LLC $1,520,000 $12,023 7.2600 0.0500 Actual/360 6/1/18
290 Colchester Associates LLC $1,515,454 $10,649 7.5200 0.0500 Actual/360 2/11/28
291 Liberty Square, Inc. $1,500,000 $10,978 7.3900 0.0500 Actual/360 6/1/08
292 Stirrup Woods, LLC $1,499,132 $10,233 7.2500 0.0500 Actual/360 5/11/28
<CAPTION>
REMAINING
ANTICIPATED LOCKOUT ANTICIPATED ORIGINAL REMAINING FIRST
LOAN REPAYMENT REMAINING AND YIELD REMAINING AMORTIZATION AMORTIZATION P&I
NO. DATE LOCKOUT MAINTENANCE TERM TERM TERM DATE SEASONING
- ------ ------------- ----------- ------------- ------------- -------------- -------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
244 120 120 120 360 360 7/1/98 0
245 0 112 115 360 355 2/1/98 5
246 231 231 235 281 279 5/11/98 2
247 281 281 285 290 285 2/11/98 5
248 78 258 258 265 258 12/1/97 7
249 293 293 297 299 297 5/11/98 2
250 235 235 239 240 239 6/11/98 1
251 117 117 117 360 357 4/1/98 3
252 32 114 117 240 237 4/1/98 3
253 177 177 177 180 177 4/1/98 3
254 114 114 114 360 354 1/1/98 6
255 2/11/08 109 109 116 300 296 3/11/98 4
256 5/11/08 112 112 119 300 299 6/11/98 1
257 5/11/08 117 117 119 300 299 6/11/98 1
258 5/11/08 114 114 119 360 358 5/11/98 2
259 225 225 229 232 229 4/11/98 3
260 238 238 238 240 238 5/1/98 2
261 5/11/08 112 112 119 300 299 6/11/98 1
262 120 120 120 360 360 7/1/98 0
263 58 114 118 360 358 5/1/98 2
264 98 98 117 240 237 4/5/98 3
265 114 114 114 300 294 1/1/98 6
266 189 189 189 192 189 4/1/98 3
267 45 45 49 266 231 8/1/95 35
268 117 117 117 300 297 4/1/98 3
269 59 115 119 360 359 6/1/98 1
270 5/11/08 112 112 119 300 299 6/11/98 1
271 0 117 177 360 357 4/1/98 3
272 0 116 177 240 237 4/1/98 3
273 0 116 177 360 357 4/1/98 3
274 2/11/08 113 113 116 360 356 3/11/98 4
275 228 228 232 238 232 1/11/98 6
276 78 258 258 265 258 12/1/97 7
277 4/11/08 114 114 118 360 358 5/11/98 2
278 120 120 120 240 240 7/1/98 0
279 283 283 287 292 287 2/11/98 5
280 115 115 115 300 295 2/1/98 5
281 5/11/08 112 112 119 300 299 6/11/98 1
282 58 114 118 300 298 5/1/98 2
283 58 114 118 300 298 5/1/98 2
284 3/1/08 113 113 117 300 297 4/1/98 3
285 120 120 120 240 240 7/1/98 0
286 222 222 226 232 226 1/11/98 6
287 6/11/08 118 118 120 360 359 6/11/98 1
288 4/11/08 111 111 118 360 358 5/11/98 2
289 240 240 240 240 240 7/1/98 0
290 2/11/08 112 112 116 360 356 3/11/98 4
291 120 120 120 300 300 7/1/98 0
292 5/11/08 114 114 119 360 359 6/11/98 1
</TABLE>
S-114
<PAGE>
<TABLE>
<CAPTION>
CSFB
LOAN CONTROL
NO. NO. PROPERTY NAME
- ------ --------- -----------------------------------------
<S> <C> <C>
293 11 342 Newbury Street
294 80 Deseret Self Storage
295 201 Security Self Storage
296 C-1128 Comfort Inn Santa Rosa
297 C-1429 Principal Court Business Center
298 132 Lake Center
299 C-1501 Two (2) US Post Offices-Summary
300 169 Plaza Las Mares
301 125 Jurupa Town Center
302 121 Indian Hills Mobile/Valley View Summary
303 C-2127 The Parliament House
304 C-2166 Willow Road Apartments
305 C-2785 Rite Aid Corporation -- Monticello
306 200 Kittridge Apartments/ Santa Monica
307 C-2048 Greenridge Apartments
308 158 Palm Haven Mobile Home Park
309 C-3465 (1) US Post Office-Lakewood
310 C-2784 Rite Aid Corporation -- Mount Morris
311 57 Chatsworth Shopping Center
312 51 Broken Arrow Expressway Mini-Storage
313 C-1765a Quality Inn- Maggie Valley
314 C-2113 Comfort Inn
315 C-1443 7402 Neuhaus
316 C-2939 Wilton Plaza
317 157 Orange Show Industrial Park
318 C-1449 Meadowood Center
319 84 East Pine Ridge Mobile Home Park
320 61 Clay/Morrison Summary
321 C-1589 Meeting House Office Building
322 34 Arabian Mobile Home Park
323 C-2195 85 Broad Street
324 12 411 North Harbor Blvd.
<CAPTION>
CUT-OFF PRIMARY STATED
LOAN DATE MONTHLY MORTGAGE SERVICING INTEREST MATURITY
NO. BORROWER NAME BALANCE PAYMENT RATE FEE RATE CALC. DATE
- ------ ------------------------------------------- ----------------- --------- ---------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
293 342 Newbury Street, LLC $ 1,496,975 $11,241 7.6600 0.0500 Actual/360 4/11/23
294 Deseret Storage L.L.C. $ 1,496,899 $11,114 7.5300 0.0500 Actual/360 4/1/08
295 Overland Park Storage Investments, L.L.C. $ 1,496,683 $10,765 7.1700 0.0500 Actual/360 4/1/08
296 G&K Dodge, Inc. $ 1,435,822 $12,634 8.6500 0.0500 Actual/360 4/1/08
297 PCP I, LP $ 1,407,317 $ 9,705 7.3400 0.0500 Actual/360 3/1/13
298 Lake Forest Partners II $ 1,395,703 $ 9,684 7.3900 0.0500 Actual/360 2/11/28
299 Pony Express Associates, LLC $ 1,388,001 $10,929 6.8200 0.0500 Actual/360 2/1/17
300 Rainwater Limited Partnership $ 1,364,211 $ 9,863 7.8100 0.0500 Actual/360 1/11/28
301 Jurupa Town Center $ 1,362,508 $10,689 8.1700 0.0500 Actual/360 4/1/08
302 Indian Hills LLC $ 1,349,263 $ 9,377 7.4320 0.0500 Actual/360 5/1/08
303 Turkson Management Consulting, Inc. $ 1,347,108 $ 9,836 7.3400 0.0500 Actual/360 4/1/08
304 Peakmont Corp. $ 1,298,750 $ 9,489 7.3600 0.0500 Actual/360 5/1/08
305 Saranac Lake Haven $ 1,292,665 $11,351 8.1400 0.0500 30/360 9/1/16
306 11750 Kittridge Street Apartments $ 1,275,162 $ 8,697 7.2100 0.1200 Actual/360 1/11/28
307 Greenridge Apartments, LLC $ 1,246,111 $ 8,587 7.3200 0.0500 Actual/360 2/1/08
308 Palm Haven $ 1,197,312 $ 8,558 7.1000 0.0500 Actual/360 4/1/08
309 Lakewood Associates, LLC $ 1,193,336 $ 9,343 6.9800 0.0500 Actual/360 12/1/17
310 The Insite Group LLC $ 1,179,598 $10,426 8.2900 0.0500 30/360 11/1/16
311 Devonshire Plaza, LLC $ 1,179,455 $ 8,593 7.9200 0.1200 Actual/360 5/11/28
312 Broken Arrow Expressway Mini Storage, LLC $ 1,148,919 $ 8,469 7.4600 0.0500 Actual/360 5/1/08
313 Various(3) $ 1,142,455 $ 9,886 8.3700 0.0500 Actual/360 2/1/18
314 Budget Inn, Inc. $ 1,098,419 $ 9,311 8.1600 0.0500 Actual/360 5/1/18
315 7402 Neuhaus LLC $ 1,067,368 $ 9,213 7.3000 0.0500 Actual/360 3/1/08
316 Continental Investments $ 1,048,975 $ 7,617 7.2900 0.0500 Actual/360 5/1/08
317 Orange Show Partners, LLC $ 1,046,921 $ 7,862 7.6500 0.0500 Actual/360 3/11/23
318 30th & High School Company, LP $ 1,044,845 $ 7,488 7.1000 0.0500 Actual/360 2/1/08
319 East Pine Ridge $ 997,731 $ 7,087 7.0300 0.0500 Actual/360 4/1/08
320 J. R. Bronz Corp. $ 997,168 $ 7,599 7.8200 0.0500 Actual/360 3/11/23
321 Peconic Partners, LLC $ 997,039 $ 7,040 7.5700 0.0500 Actual/360 2/1/08
322 Calhoun Street Partners, LLC $ 958,180 $ 7,397 7.9800 0.0500 Actual/360 4/1/08
323 Merlin Realty Management, LLC $ 898,560 $ 7,245 7.4900 0.0500 Actual/360 5/1/08
324 Harbor View Office Building 411, LLC $ 707,174 $ 5,132 7.8700 0.0500 Actual/360 4/11/28
--------------
$2,482,942,297
<CAPTION>
REMAINING
ANTICIPATED LOCKOUT ANTICIPATED ORIGINAL REMAINING FIRST
LOAN REPAYMENT REMAINING AND YIELD REMAINING AMORTIZATION AMORTIZATION P&I
NO. DATE LOCKOUT MAINTENANCE TERM TERM TERM DATE SEASONING
- ------ ------------- ----------- ------------- ------------- -------------- -------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
293 4/11/08 116 116 118 300 298 5/11/98 2
294 58 114 118 300 298 5/1/98 2
295 46 111 118 300 298 5/1/98 2
296 118 118 118 240 238 5/1/98 2
297 0 117 177 360 357 4/1/98 3
298 2/11/08 113 113 116 360 356 3/11/98 4
299 224 224 224 228 224 3/1/98 4
300 1/11/08 113 113 115 360 355 2/11/98 5
301 58 114 118 300 298 5/1/98 2
302 115 115 119 360 359 6/1/98 1
303 118 118 118 300 298 5/1/98 2
304 119 119 119 300 299 6/1/98 1
305 102 218 219 236 219 2/1/97 17
306 1/11/08 113 113 115 360 355 2/11/98 5
307 116 116 116 360 356 3/1/98 4
308 58 114 118 300 298 5/1/98 2
309 0 234 234 237 234 4/1/98 3
310 103 221 221 238 221 2/1/97 17
311 5/11/08 117 117 119 360 359 6/11/98 1
312 59 115 119 300 299 6/1/98 1
313 236 236 236 240 236 3/1/98 4
314 233 233 239 240 239 6/1/98 1
315 117 117 117 204 201 4/1/98 3
316 119 119 119 300 299 6/1/98 1
317 3/11/05 74 74 81 300 297 4/11/98 3
318 116 116 116 300 296 3/1/98 4
319 58 114 118 300 298 5/1/98 2
320 3/11/08 110 110 117 300 297 4/11/98 3
321 0 116 116 360 356 3/1/98 4
322 58 114 118 300 298 5/1/98 2
323 119 119 119 240 239 6/1/98 1
324 4/11/08 116 116 118 360 358 5/11/98 2
- --------------
(3) 1) Maggie Valley Investments, Inc. 2) Great Smokey Mountain Enterprises, Inc.
</TABLE>
S-115
<PAGE>
RANGE OF DEBT SERVICE COVERAGE RATIOS
<TABLE>
<CAPTION>
RANGE OF NUMBER PERCENT BY WEIGHTED WEIGHTED WEIGHTED
DEBT SERVICE OF LOANS/ CUT-OFF DATE CUT-OFF AVERAGE AVERAGE AVERAGE WEIGHTED WEIGHTED
COVERAGE LOAN PRINCIPAL PRINCIPAL MORTGAGE REMAINING AMORTIZATION AVERAGE AVERAGE
RATIOS POOLS BALANCE BALANCE RATE TERM (MOS.) TERM (MOS.) LTV (%) DSCR
- ------------------------ ----------- ----------------- ------------ ---------- ------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1.00x - 1.09x .......... 3 $ 19,974,700 0.8% 7.642% 247 247 92 1.05x
1.10x - 1.19x .......... 17 $ 110,225,440 4.4% 7.562% 128 341 78 1.17x
1.20x - 1.29x .......... 47 $ 572,129,050 23.0% 7.487% 121 324 72 1.23x
1.30x - 1.39x .......... 55 $ 307,199,967 12.4% 7.604% 128 322 71 1.35x
1.40x - 1.49x .......... 45 $ 454,849,457 18.3% 7.481% 124 339 71 1.45x
1.50x - 1.59x .......... 41 $ 189,808,992 7.6% 7.628% 118 319 72 1.54x
1.60x - 1.69x .......... 16 $ 153,480,404 6.2% 8.191% 119 299 63 1.64x
1.70x - 1.79x .......... 8 $ 30,231,657 1.2% 7.560% 118 298 63 1.74x
1.80x - 1.89x .......... 8 $ 45,930,054 1.8% 7.589% 118 304 62 1.85x
1.90x - 1.99x .......... 6 $ 16,928,334 0.7% 7.402% 126 269 57 1.93x
2.00x and over......... 17 $ 201,307,463 8.1% 6.998% 154 332 40 2.61x
Credit Lease ........... 61 $ 380,876,780 15.3% 8.086% 243 287 NAP NAP
-- -------------- ---- ------- --- --- -- ------
TOTAL ............... 324 $2,482,942,297 100.0% 7.614% 145 318 68 1.51x
=== ============== ========== ======= === === == ====
</TABLE>
RANGE OF LOAN-TO-VALUE RATIOS
<TABLE>
<CAPTION>
NUMBER PERCENT BY WEIGHTED WEIGHTED WEIGHTED
OF LOANS/ CUT-OFF DATE CUT-OFF AVERAGE AVERAGE AVERAGE WEIGHTED WEIGHTED
RANGE OF LOAN LOAN PRINCIPAL PRINCIPAL MORTGAGE REMAINING AMORTIZATION AVERAGE AVERAGE
TO VALUE RATIOS POOLS BALANCE BALANCE RATE TERM (MOS.) TERM (MOS.) LTV (%) DSCR
- -------------------- ----------- ----------------- ------------ ---------- ------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
50% or less ........ 21 $ 215,348,444 8.7% 7.055% 151 318 40 2.55x
51% -- 60% ......... 16 $ 215,951,040 8.7% 8.095% 120 313 57 1.53x
61% -- 70% ......... 64 $ 483,798,572 19.5% 7.618% 123 324 67 1.45x
71% -- 75% ......... 78 $ 632,533,750 25.5% 7.440% 122 316 73 1.36x
76% -- 80% ......... 69 $ 460,201,130 18.5% 7.518% 128 341 77 1.35x
81% -- 85% ......... 14 $ 79,732,582 3.2% 7.468% 120 349 81 1.21x
91% -- 100% ........ 1 $ 14,500,000 0.6% 7.560% 252 252 97 1.03x
Credit Lease ....... 61 $ 380,876,780 15.3% 8.086% 243 287 NAP NAP
-- -------------- ----- ----- --- --- -- ------
TOTAL ............ 324 $2,482,942,297 100.0% 7.614% 145 318 68 1.51x
=== ============== ===== ===== === === == ====
</TABLE>
RANGE OF LOAN-TO-VALUE RATIOS AT EARLIER OF ANTICIPATED REPAYMENT DATES OR
MATURITY
<TABLE>
<CAPTION>
NUMBER PERCENT BY WEIGHTED
RANGE OF OF LOANS/ CUT-OFF DATE CUT-OFF AVERAGE
LOAN TO LOAN PRINCIPAL PRINCIPAL MORTGAGE
VALUE RATIOS POOLS BALANCE BALANCE RATE
- -------------------------- ----------- ---------------- ------------ ----------
<S> <C> <C> <C> <C>
50% or less .............. 42 519,488,359 20.9 7.477
51% -- 60% ............... 69 493,682,862 19.9 7.682
61% -- 70% ............... 104 830,311,256 33.4 7.476
71% -- 75% ............... 27 156,571,845 6.3 7.547
Credit Lease ............. 61 380,876,779 15.3 8.086
Fully amortizing ......... 21 102,011,195 4.1 7.437
--- ----------- ----- -----
TOTAL .................. 324 2,482,942,297 100.0 7.614
=== ============= ===== =====
<PAGE>
<CAPTION>
WEIGHTED
WEIGHTED WEIGHTED AVERAGE
RANGE OF AVERAGE AVERAGE WEIGHTED WEIGHTED LTV AT
LOAN TO REMAINING AMORTIZATION AVERAGE AVERAGE ARD OR/
VALUE RATIOS TERM (MOS.) TERM (MOS.) LTV (%) DSCR MATURITY
- -------------------------- ------------- -------------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
50% or less .............. 128 303 55 1.85x 43
51% -- 60% ............... 124 311 69 1.42x 57
61% -- 70% ............... 118 349 74 1.38x 64
71% -- 75% ............... 113 355 80 1.26x 71
Credit Lease ............. 243 287 NAP NAP 0
Fully amortizing ......... 231 231 63 1.65x 11
--- --- -- ----- --
TOTAL .................. 145 318 68 1.51x 58
=== === == ===== ==
</TABLE>
S-116
<PAGE>
MORTGAGE PROPERTIES BY GEOGRAPHIC LOCATION
<TABLE>
<CAPTION>
PERCENT BY WEIGHTED WEIGHTED WEIGHTED
CUT-OFF DATE CUT-OFF AVERAGE AVERAGE AVERAGE WEIGHTED WEIGHTED
NUMBER OF PRINCIPAL PRINCIPAL MORTGAGE REMAINING AMORTIZATION AVERAGE AVERAGE
STATE PROPERTIES BALANCE BALANCE RATE TERM (MOS.) TERM (MOS.) LTV (%) DSCR
- ------------------------ ------------ ----------------- ------------ ---------- ------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alabama ................ 6 $ 18,730,777 0.8% 7.315% 181 256 54 2.27x
Alaska ................. 1 $ 11,311,417 0.5% 7.480% 119 359 64 1.39x
Arizona ................ 9 $ 24,396,466 1.0% 8.014% 111 325 72 1.37x
Arkansas ............... 2 $ 4,670,000 0.2% 7.395% 159 321 78 1.37x
California ............. 67 $ 359,558,687 14.5% 7.783% 146 328 72 1.39x
Colorado ............... 6 $ 47,145,017 1.9% 7.985% 113 296 69 1.49x
Connecticut ............ 2 $ 18,511,938 0.8% 8.052% 198 258 72 1.25x
Delaware ............... 6 $ 46,737,407 1.9% 7.470% 119 359 77 1.20x
Florida ................ 40 $ 121,062,897 4.9% 7.590% 166 300 67 1.70x
Georgia ................ 16 $ 64,173,840 2.6% 7.000% 164 319 59 2.12x
Illinois ............... 7 $ 49,689,225 2.0% 7.796% 211 295 55 1.61x
Indiana ................ 6 $ 29,681,678 1.2% 7.496% 118 324 74 1.47x
Kansas ................. 2 $ 17,079,993 0.7% 7.243% 120 355 71 1.27x
Kentucky ............... 5 $ 40,404,022 1.6% 7.352% 122 348 72 1.26x
Louisiana .............. 8 $ 37,690,998 1.5% 7.503% 135 309 69 1.53x
Maine .................. 5 $ 4,500,465 0.2% 7.973% 162 270 82 1.63x
Maryland ............... 13 $ 97,092,492 3.9% 7.694% 144 330 71 1.37x
Massachusetts .......... 20 $ 49,704,039 2.0% 7.335% 149 310 67 1.44x
Mexico ................. 1 $ 75,000,000 3.0% 8.870% 120 300 57 1.63x
Michigan ............... 14 $ 39,653,466 1.6% 7.871% 187 301 46 1.81x
Minnesota .............. 18 $ 42,679,979 1.7% 7.935% 184 297 71 1.46x
Mississippi ............ 7 $ 19,125,337 0.8% 7.660% 126 303 67 1.48x
Missouri ............... 2 $ 7,276,465 0.3% 8.456% 184 289 79 1.09x
Nevada ................. 1 $ 5,989,474 0.2% 8.370% 119 298 70 1.69x
New Hampshire .......... 5 $ 35,496,147 1.4% 7.490% 153 330 67 1.27x
New Jersey ............. 21 $ 147,691,430 5.9% 7.408% 137 316 67 1.64x
New Mexico ............. 1 $ 1,435,822 0.1% 8.650% 118 238 76 1.58x
New York ............... 40 $ 281,487,486 11.3% 7.203% 128 297 61 1.69x
North Carolina ......... 9 $ 37,330,716 1.5% 7.687% 147 323 67 1.80x
Ohio ................... 12 $ 79,402,305 3.2% 7.891% 193 323 77 1.50x
Oklahoma ............... 5 $ 9,951,763 0.4% 7.301% 118 351 76 1.32x
Oregon ................. 7 $ 25,136,787 1.0% 7.493% 119 309 75 1.37x
Pennsylvania ........... 11 $ 57,452,772 2.3% 8.026% 167 315 74 1.46x
Puerto Rico ............ 4 $ 103,938,474 4.2% 7.180% 119 359 73 1.47x
South Carolina ......... 8 $ 21,846,491 0.9% 7.226% 149 329 64 1.86x
Tennessee .............. 4 $ 10,029,847 0.4% 7.784% 125 322 61 1.96x
Texas .................. 26 $ 169,855,476 6.8% 7.676% 147 307 74 1.33x
Utah ................... 2 $ 3,494,364 0.1% 7.536% 118 332 67 1.59x
U.S. Virgin Islands 1 $ 9,953,764 0.4% 7.480% 116 296 66 1.38x
Virginia ............... 20 $ 130,937,860 5.3% 7.701% 164 329 69 1.51x
Washington ............. 4 $ 34,268,913 1.4% 7.187% 118 353 70 1.39x
Washington DC .......... 4 $ 66,121,571 2.7% 7.586% 119 359 59 1.26x
West Virginia .......... 1 $ 2,098,187 0.1% 7.830% 119 299 68 1.70x
Wisconsin .............. 3 $ 23,146,041 0.9% 7.819% 136 289 69 1.37x
-- -------------- ----- ----- --- --- -- ----
TOTAL ............... 452 $2,482,942,297 100.0% 7.614% 145 318 68 1.51x
=== ============== ===== ===== === === == ====
</TABLE>
S-117
<PAGE>
YEAR BUILT OR RENOVATED
<TABLE>
<CAPTION>
PERCENT BY WEIGHTED
RANGE OF CUT-OFF DATE CUT-OFF AVERAGE
YEAR BUILT/ NUMBER OF PRINCIPAL PRINCIPAL MORTGAGE
RENOVATED PROPERTIES BALANCE BALANCE RATE
- ------------------- ------------ ----------------- ------------ ----------
<S> <C> <C> <C> <C>
Pre 1970 .......... 40 $ 150,058,563 6.0% 7.364%
1970-1974 ......... 14 $ 38,949,636 1.6% 7.655%
1975-1979 ......... 18 $ 65,439,199 2.6% 7.668%
1980-1984 ......... 29 $ 182,874,086 7.4% 7.529%
1985-1987 ......... 40 $ 199,883,791 8.1% 7.446%
1988-1990 ......... 57 $ 319,171,923 12.9% 7.501%
1991-1993 ......... 52 $ 282,211,598 11.4% 7.578%
1994-1998 ......... 202 $1,244,353,500 50.1% 7.716%
--- -------------- ----- -----
TOTAL .......... 452 $2,482,942,297 100.0% 7.614%
=== ============== ===== =====
<CAPTION>
WEIGHTED WEIGHTED WEIGHTED
RANGE OF AVERAGE AVERAGE WEIGHTED WEIGHTED AVERAGE
YEAR BUILT/ REMAINING AMORTIZATION AVERAGE AVERAGE YEAR BUILT/
RENOVATED TERM (MOS.) TERM (MOS.) LTV (%) DSCR RENOVATED
- ------------------- ------------- -------------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Pre 1970 .......... 121 321 71 1.45x 1955
1970-1974 ......... 143 290 58 1.65x 1971
1975-1979 ......... 148 338 61 1.77x 1976
1980-1984 ......... 126 334 62 1.57x 1982
1985-1987 ......... 123 335 70 1.49x 1986
1988-1990 ......... 123 338 65 1.50x 1989
1991-1993 ......... 126 331 69 1.48x 1992
1994-1998 ......... 163 305 69 1.50x 1996
--- --- -- ---- ----
TOTAL .......... 145 318 68 1.51x 1989
=== === == ==== ====
</TABLE>
S-118
<PAGE>
MORTGAGE PROPERTIES BY PROPERTY TYPE
<TABLE>
<CAPTION>
PERCENT BY WEIGHTED
CUT-OFF DATE CUT-OFF AVERAGE
PROPERTY NUMBER OF PRINCIPAL PRINCIPAL MORTGAGE
TYPE PROPERTIES BALANCE BALANCE RATE
- -------------------------- ------------ ----------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Retail ................... Anchored 57 $ 474,104,013 19.1% 7.445%
Single Tenant 18 $ 67,723,081 2.7% 7.566%
Unanchored 25 $ 87,726,225 3.5% 7.668%
Total Retail ............. 100 $ 629,553,319 25.4% 7.489%
- --------------------------------------------------------------------------------------------------
Hospitality .............. Extended Stay 3 $ 15,861,223 0.6% 7.490%
Full Service 16 $ 202,642,005 8.2% 8.204%
Limited Service 62 $ 196,809,927 7.9% 7.835%
Total Hospitality ........ 81 $ 415,313,155 16.7% 8.002%
- --------------------------------------------------------------------------------------------------
Multifamily .............. 75 $ 403,671,772 16.3% 7.200%
- --------------------------------------------------------------------------------------------------
Credit Lease ............. 74 $ 380,876,779 15.3% 8.086%
- --------------------------------------------------------------------------------------------------
Office ................... 50 $ 327,684,830 13.2% 7.480%
R&D 2 $ 36,478,677 1.5% 7.220%
Total Office ............. 52 $ 364,163,506 14.7% 7.454%
- --------------------------------------------------------------------------------------------------
Cooperative .............. 12 $ 115,132,594 4.6% 7.189%
- --------------------------------------------------------------------------------------------------
Industrial ............... 19 $ 61,921,141 2.5% 7.781%
- --------------------------------------------------------------------------------------------------
Mobile Home/Recreational Vehicle
Park .................................... 21 $ 58,076,722 2.3% 7.446%
- --------------------------------------------------------------------------------------------------
Healthcare ............... 7 $ 29,762,630 1.2% 7.888%
- --------------------------------------------------------------------------------------------------
Mixed Use ................ Office/Retail 2 $ 4,149,775 0.2% 7.320%
- --------------------------------------------------------------------------------------------------
Other .................... Health Club 2 $ 7,139,772 0.3% 8.190%
Restaurant 1 $ 1,163,265 0.1% 7.930%
Self Storage
Facility 6 $ 12,017,866 0.5% 7.516%
Total Other .............. 9 $ 20,320,903 0.8% 7.776%
- --------------------------------------------------------------------------------------------------
TOTAL .................. 452 $2,482,942,297 100.0% 7.614%
=== ============== ===== =====
<CAPTION>
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE WEIGHTED WEIGHTED LOAN WEIGHTED AVERAGE
PROPERTY REMAINING AMORTIZATION AVERAGE AVERAGE PROPERTY PER AVERAGE YEAR BUILT/
TYPE TERM (MOS.) TERM (MOS.) LTV (%) DSCR SIZE SIZE OCCUP RENOVATED
- -------------------------- ------------- -------------- ---------- ---------- ----------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retail ................... 132 341 68 1.60x 7,641,701 $ 62 95% 1991
159 298 75 1.29x 1,119,406 $ 60 100% 1990
119 331 70 1.38x 1,032,526 $ 85 95% 1989
Total Retail ............. 133 334 69 1.54x 9,793,633 $ 64 95% 1991
- ------------------------------------------------------------------------------------------------------------------------
Hospitality .............. 119 299 70 1.56x 256 $61,958 80% 1997
121 299 63 1.54x 2,829 $71,630 75% 1992
133 287 68 1.54x 6,068 $32,434 74% 1990
Total Hospitality ........ 127 293 66 1.54x 9,153 $45,375 75% 1991
- ------------------------------------------------------------------------------------------------------------------------
Multifamily .............. 118 324 76 1.34x 12,268 $32,904 94% 1988
- ------------------------------------------------------------------------------------------------------------------------
Credit Lease ............. 243 287 NAP NAP 3,422,819 $ 111 100% 1995
- ------------------------------------------------------------------------------------------------------------------------
Office ................... 119 344 68 1.30x 4,060,134 $ 81 97% 1987
119 359 72 1.44x 289,161 $ 126 100% 1987
Total Office ............. 119 346 68 1.31x 4,349,295 $ 84 97% 1987
- ------------------------------------------------------------------------------------------------------------------------
Cooperative .............. 161 339 35 2.59x 3,480 $33,084 94% 1982
- ------------------------------------------------------------------------------------------------------------------------
Industrial ............... 119 317 70 1.37x 1,828,979 $ 34 99% 1985
- ------------------------------------------------------------------------------------------------------------------------
Mobile Home/Recreational
Vehicle
Park .................. 118 343 75 1.30x 2,599 $22,346 97% 1972
- ------------------------------------------------------------------------------------------------------------------------
Healthcare ............... 118 298 71 1.66x 722 $41,222 93% 1989
- ------------------------------------------------------------------------------------------------------------------------
Mixed Use ................ 209 255 65 1.40x 67,486 $ 61 97% 1996
- ------------------------------------------------------------------------------------------------------------------------
Other .................... 119 239 59 1.60x 64,809 $ 110 100% 1992
119 275 71 1.79x 4,320 $ 269 100% 1972
118 312 67 1.61x 333,621 $ 36 93% 1987
Total Other .............. 119 284 65 1.62x 402,750 $ 50 96% 1988
- ------------------------------------------------------------------------------------------------------------------------
TOTAL .................. 145 318 68 1.51x NAP NAP 93% 1989
=== === == ======== === ====
</TABLE>
- -------
(1) Property Size refers to total leasable square feet with respect to
retail, office and industrial/warehouse properties, number of units with
respect to multifamily properties and the mobile home/recreational
vehicle parks, number of guest rooms with respect to each hospitality
property and the number of beds with respect to each senior housing
property.
(2) Weighted average of the occupancy percentages for the corresponding
property type determined on the basis of the individual occupancy set
forth on Annex A.
S-119
<PAGE>
RANGE OF CUT-OFF PRINCIPAL BALANCES
<TABLE>
<CAPTION>
NUMBER PERCENT BY
OF LOANS/ CUT-OFF DATE CUT-OFF
RANGE OF CUT-OFF LOAN PRINCIPAL PRINCIPAL
PRINCIPAL BALANCES POOLS BALANCE BALANCE
- ---------------------------------- ----------- ----------------- ------------
<S> <C> <C> <C>
$ 500,000 + -- 1,000,000 ...... 6 $ 5,555,852 0.2%
$ 1,000,000 + -- 2,000,000 ...... 57 $ 87,867,329 3.5%
$ 2,000,000 + -- 3,000,000 ...... 58 $ 142,422,104 5.7%
$ 3,000,000 + -- 4,000,000 ...... 37 $ 129,520,843 5.2%
$ 4,000,000 + -- 5,000,000 ...... 40 $ 179,970,120 7.2%
$ 5,000,000 + -- 6,000,000 ...... 16 $ 88,919,833 3.6%
$ 6,000,000 + -- 7,000,000 ...... 15 $ 98,389,326 4.0%
$ 7,000,000 + -- 8,000,000 ...... 10 $ 75,617,691 3.0%
$ 8,000,000 + -- 9,000,000 ...... 15 $ 128,626,718 5.2%
$ 9,000,000 + -- 10,000,000 ...... 11 $ 105,095,224 4.2%
$10,000,000 + -- 15,000,000 ...... 24 $ 296,732,994 12.0%
$15,000,000 + -- 20,000,000 ...... 17 $ 286,346,944 11.5%
$20,000,000 + -- 30,000,000 ...... 8 $ 183,045,239 7.4%
$30,000,000 + -- 40,000,000 ...... 1 $ 36,478,677 1.5%
$40,000,000 + -- 50,000,000 ...... 2 $ 91,461,708 3.7%
$60,000,000 + -- 70,000,000 ...... 2 $ 122,843,962 4.9%
$70,000,000 + -- 80,000,000 ...... 3 $ 224,356,827 9.0%
$80,000,000 + -- 90,000,000 ...... 1 $ 84,100,000 3.4%
$90,000,000 + .................... 1 $ 115,590,907 4.7%
-- -------------- -----
TOTAL .......................... 324 $2,482,942,297 100.0%
=== ============== =====
<CAPTION>
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE WEIGHTED WEIGHTED
RANGE OF CUT-OFF MORTGAGE REMAINING AMORTIZATION AVERAGE AVERAGE
PRINCIPAL BALANCES RATE TERM (MOS.) TERM (MOS.) LTV (%) DSCR
- ---------------------------------- ---------- ------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
$ 500,000 + -- 1,000,000 ...... 7.614% 118 306 63 1.77x
$ 1,000,000 + -- 2,000,000 ...... 7.526% 144 296 71 1.47x
$ 2,000,000 + -- 3,000,000 ...... 7.631% 151 298 71 1.44x
$ 3,000,000 + -- 4,000,000 ...... 7.795% 147 306 68 1.47x
$ 4,000,000 + -- 5,000,000 ...... 7.532% 134 323 72 1.40x
$ 5,000,000 + -- 6,000,000 ...... 7.609% 132 323 71 1.38x
$ 6,000,000 + -- 7,000,000 ...... 7.738% 142 302 69 1.47x
$ 7,000,000 + -- 8,000,000 ...... 7.576% 160 325 54 1.91x
$ 8,000,000 + -- 9,000,000 ...... 7.476% 146 350 73 1.45x
$ 9,000,000 + -- 10,000,000 ...... 7.510% 121 342 60 1.86x
$10,000,000 + -- 15,000,000 ...... 7.658% 173 299 65 1.62x
$15,000,000 + -- 20,000,000 ...... 7.697% 161 322 73 1.36x
$20,000,000 + -- 30,000,000 ...... 7.922% 175 318 74 1.39x
$30,000,000 + -- 40,000,000 ...... 7.220% 119 359 73 1.44x
$40,000,000 + -- 50,000,000 ...... 8.095% 127 299 67 1.24x
$60,000,000 + -- 70,000,000 ...... 7.383% 119 359 67 1.36x
$70,000,000 + -- 80,000,000 ...... 7.567% 119 295 68 1.36x
$80,000,000 + -- 90,000,000 ...... 6.775% 143 NAP 48 2.59x
$90,000,000 + .................... 7.631% 119 359 70 1.44x
----- --- --- -- ----
TOTAL .......................... 7.614% 145 318 68 1.51x
===== === === == ====
</TABLE>
YEARS OF SCHEDULED MATURITY
<TABLE>
<CAPTION>
NUMBER PERCENT BY WEIGHTED WEIGHTED WEIGHTED
YEARS OF OF LOANS/ CUT-OFF DATE CUT-OFF AVERAGE AVERAGE AVERAGE WEIGHTED WEIGHTED
SCHEDULED LOAN PRINCIPAL PRINCIPAL MORTGAGE REMAINING AMORTIZATION AVERAGE AVERAGE
MATURITY POOLS BALANCE BALANCE RATE TERM (MOS.) TERM (MOS.) LTV (%) DSCR
- ----------------- ----------- ----------------- ------------ ---------- ------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2002 ............ 1 $ 1,976,125 0.1% 8.910% 49 231 76 1.14x
2003 ............ 1 $ 4,396,316 0.2% 7.960% 59 299 67 1.50x
2007 ............ 2 $ 4,127,668 0.2% 7.387% 114 325 74 1.61x
2008 ............ 83 $ 304,130,097 12.2% 7.650% 118 323 62 1.72x
2013 ............ 11 $ 57,341,481 2.3% 7.455% 171 310 44 2.11x
2014 ............ 1 $ 1,983,477 0.1% 6.900% 189 189 60 1.41x
2015 ............ 2 $ 9,018,445 0.4% 8.208% 207 207 NAP NAP
2016 ............ 5 $ 13,234,713 0.5% 7.478% 218 218 NAP NAP
2017 ............ 13 $ 132,638,937 5.3% 7.132% 167 236 69 1.32x
2018 ............ 25 $ 140,717,101 5.7% 7.815% 231 269 61 1.75x
2019 ............ 6 $ 29,675,150 1.2% 7.349% 253 253 97 1.03x
2020 ............ 6 $ 63,919,937 2.6% 7.701% 251 273 44 1.82x
2021 ............ 1 $ 8,490,238 0.3% 8.860% 271 442 NAP NAP
2022 ............ 9 $ 129,219,306 5.2% 8.218% 221 295 72 1.26x
2023 ............ 68 $ 519,298,748 20.9% 7.935% 135 299 67 1.52x
2027 ............ 5 $ 25,815,478 1.0% 7.742% 114 354 75 1.32x
2028 ............ 85 $1,036,959,079 41.8% 7.393% 121 356 70 1.44x
-- -------------- ----- ----- --- --- -- ----
TOTAL ......... 324 $2,482,942,297 100.0% 7.614% 145 318 68 1.51x
=== ============== ===== ===== === === == ====
</TABLE>
- ----------
The weighted average year of scheduled maturity is 2022.
S-120
<PAGE>
RANGE OF REMAINING ANTICIPATED TERMS
<TABLE>
<CAPTION>
RANGE OF NUMBER PERCENT BY WEIGHTED
ANTICIPATED OF NOTES/ CUT-OFF DATE CUT-OFF AVERAGE
REMAINING LOAN PRINCIPAL PRINCIPAL MORTGAGE
TERM POOLS BALANCE BALANCE RATE
- ---------------------- ----------- ----------------- ------------ ----------
<S> <C> <C> <C> <C>
4 + -- 5 years ...... 2 $ 6,372,441 0.3% 8.255%
6 + -- 7 years ...... 5 $ 28,385,136 1.1% 7.698%
9 + -- 10 years...... 234 $1,792,161,028 72.2% 7.563%
11 + -- 12 years...... 2 $ 134,061,708 5.4% 7.358%
14 + -- 15 years...... 13 $ 89,795,521 3.6% 7.658%
15 + -- 16 years...... 1 $ 1,983,477 0.1% 6.900%
16 + -- 17 years...... 1 $ 2,537,596 0.1% 8.500%
17 + -- 18 years...... 2 $ 9,041,166 0.4% 7.974%
18 + -- 19 years...... 8 $ 28,421,031 1.1% 7.883%
19 + -- 20 years...... 32 $ 181,966,405 7.3% 7.772%
20 + -- 21 years ..... 2 $ 18,920,015 0.8% 7.334%
21 + -- 22 years...... 9 $ 69,288,812 2.8% 7.621%
22 + -- 23 years...... 1 $ 8,490,238 0.3% 8.860%
23 + -- 24 years...... 2 $ 3,972,127 0.2% 6.819%
24 + -- 25 years...... 10 $ 107,525,595 4.3% 8.278%
--- -------------- ------ -----
TOTAL .............. 324 $2,482,942,297 100.0% 7.614%
=== ============== ====== =====
<CAPTION>
WEIGHTED
RANGE OF WEIGHTED WEIGHTED WEIGHTED AVERAGE
ANTICIPATED AVERAGE AVERAGE WEIGHTED WEIGHTED AVERAGE REMAINING
REMAINING REMAINING AMORTIZATION AVERAGE AVERAGE REMAINING LOCK-OUT +
TERM TERM (MOS.) TERM (MOS.) LTV (%) DSCR LOCK-OUT YIELD MAINT.
- ---------------------- ------------- -------------- ---------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
4 + -- 5 years ...... 56 278 70 1.39x 30 30
6 + -- 7 years ...... 82 320 75 1.37x 68 68
9 + -- 10 years...... 118 330 69 1.44x 108 112
11 + -- 12 years...... 140 299 57 2.10x 133 133
14 + -- 15 years...... 178 314 57 1.84x 147 156
15 + -- 16 years...... 189 189 60 1.41x 189 189
16 + -- 17 years...... 200 200 NAP NAP 82 200
17 + -- 18 years...... 211 211 NAP NAP 207 207
18 + -- 19 years...... 222 222 84 1.09x 195 219
19 + -- 20 years...... 237 273 59 1.75x 213 230
20 + -- 21 years ..... 251 251 97 1.03x 250 250
21 + -- 22 years...... 263 271 NAP NAP 234 262
22 + -- 23 years...... 271 442 NAP NAP 267 267
23 + -- 24 years...... 286 286 NAP NAP 282 282
24 + -- 25 years...... 294 294 NAP NAP 291 291
--- --- -- ------ --- ---
TOTAL .............. 145 318 68 1.51x 133 138
=== === == ==== === ===
</TABLE>
ANTICIPATED REPAYMENT BY YEAR
<TABLE>
<CAPTION>
NUMBER PERCENT BY WEIGHTED WEIGHTED WEIGHTED
ANTICIPATED OF LOANS/ CUT-OFF DATE CUT-OFF AVERAGE AVERAGE AVERAGE WEIGHTED WEIGHTED
REPAYMENT LOAN PRINCIPAL PRINCIPAL MORTGAGE REMAINING AMORTIZATION AVERAGE AVERAGE
BY YEAR POOLS BALANCE BALANCE RATE TERM (MOS.) TERM (MOS.) LTV (%) DSCR
- ------------------ ----------- ----------------- ------------ ---------- ------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2002 ............. 1 $ 1,976,125 0.1% 8.910% 49 231 76 1.14x
2003 ............. 1 $ 4,396,316 0.2% 7.960% 59 299 67 1.50x
2005 ............. 5 $ 28,385,136 1.1% 7.698% 82 320 75 1.37x
2007 ............. 8 $ 34,328,391 1.4% 7.702% 114 351 75 1.35x
2008 ............. 226 $1,757,852,636 70.8% 7.560% 118 329 69 1.45x
2009 ............. 1 $ 49,961,708 2.0% 8.340% 134 299 71 1.27x
2010 ............. 1 $ 84,100,000 3.4% 6.775% 143 NAP 48 2.59x
2013 ............. 13 $ 89,795,521 3.6% 7.658% 178 314 57 1.84x
2014 ............. 1 $ 1,983,477 0.1% 6.900% 189 189 60 1.41x
2015 ............. 2 $ 9,018,445 0.4% 8.208% 207 207 NAP NAP
2016 ............. 5 $ 13,234,713 0.5% 7.478% 218 218 NAP NAP
2017 ............. 12 $ 58,139,718 2.3% 7.848% 230 251 38 1.85x
2018 ............. 24 $ 141,573,324 5.7% 7.789% 238 275 63 1.72x
2019 ............. 6 $ 29,675,150 1.2% 7.349% 253 253 97 1.03x
2020 ............. 5 $ 58,533,677 2.4% 7.666% 264 274 NAP NAP
2021 ............. 1 $ 8,490,238 0.3% 8.860% 271 442 NAP NAP
2022 ............. 7 $ 72,094,050 2.9% 8.151% 292 292 NAP NAP
2023 ............. 5 $ 39,403,671 1.6% 8.365% 297 297 NAP NAP
--- -------------- ----- ----- --- --- -- ----
TOTAL ......... 324 $2,482,942,297 100.0% 7.614% 145 318 68 1.51x
=== ============== ===== ===== === === == ====
</TABLE>
- ----------
The weighted average year of anticipated repayment is 2010.
S-121
<PAGE>
RANGE OF MORTGAGE RATES
<TABLE>
<CAPTION>
PERCENT BY WEIGHTED WEIGHTED WEIGHTED
NUMBER CUT-OFF DATE CUT-OFF AVERAGE AVERAGE AVERAGE WEIGHTED WEIGHTED
RANGE OF OF LOANS/ PRINCIPAL PRINCIPAL MORTGAGE REMAINING AMORTIZATION AVERAGE AVERAGE
MORTGAGE RATES LOAN POOLS BALANCE BALANCE RATE TERM (MOS.) TERM (MOS.) LTV (%) DSCR
- ------------------ ------------ ----------------- ------------ ---------- ------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6.000% -- 6.999% . 28 $ 290,174,377 11.7% 6.747% 147 262 59 1.96x
7.000% -- 7.499% . 129 $ 843,710,410 34.0% 7.299% 129 342 70 1.47x
7.500% -- 7.999% . 99 $ 811,518,013 32.7% 7.676% 138 321 69 1.41x
8.000% -- 8.499% . 42 $ 306,974,503 12.4% 8.226% 187 286 71 1.39x
8.500% -- 8.999% . 25 $ 228,081,922 9.2% 8.811% 172 317 60 1.57x
9.500% -- 9.999% . 1 $ 2,483,072 0.1% 9.610% 115 235 49 1.62x
--- -------------- ----- ----- --- --- -- ----
TOTAL .......... 324 $2,482,942,297 100.0% 7.614% 145 318 68 1.51x
=== ============== ===== ===== === === == ====
</TABLE>
RANGE OF REMAINING LOCK-OUT PLUS YIELD MAINTENANCE TERMS
<TABLE>
<CAPTION>
REMAINING
LOCK-OUT NUMBER PERCENT BY WEIGHTED
AND YIELD OF NOTES/ CUT-OFF DATE CUT-OFF AVERAGE
MAINTENANCE LOAN PRINCIPAL PRINCIPAL MORTGAGE
PERIODS POOLS BALANCE BALANCE RATE
- ------------------------ ----------- ----------------- ------------ ----------
<S> <C> <C> <C> <C>
1+ - 2 years .......... 1 $ 4,396,316 0.2% 7.960%
2+ - 3 years .......... 1 $ 5,850,000 0.2% 7.860%
3+ - 4 years .......... 2 $ 6,474,046 0.3% 8.222%
4+ - 5 years .......... 1 $ 41,500,000 1.7% 7.800%
6+ - 7 years .......... 4 $ 22,535,136 0.9% 7.656%
8+ - 9 years .......... 13 $ 80,372,726 3.2% 7.504%
9+ - 10 years ......... 224 $1,681,723,379 67.7% 7.555%
10+ - 11 years ......... 2 $ 59,957,919 2.4% 8.120%
11+ - 12 years ......... 1 $ 84,100,000 3.4% 6.775%
12+ - 13 years ......... 1 $ 7,887,415 0.3% 7.160%
14+ - 15 years ......... 7 $ 66,182,906 2.7% 7.885%
15+ - 16 years ......... 1 $ 1,983,477 0.1% 6.900%
16+ - 17 years ......... 1 $ 2,537,596 0.1% 8.500%
17+ - 18 years ......... 4 $ 17,243,298 0.7% 7.604%
18+ - 19 years ......... 10 $ 30,213,120 1.2% 7.681%
19+ - 20 years ......... 27 $ 161,788,175 6.5% 7.867%
20+ - 21 years ......... 2 $ 18,920,015 0.8% 7.334%
21+ - 22 years ......... 9 $ 69,288,812 2.8% 7.621%
22+ - 23 years ......... 1 $ 8,490,238 0.3% 8.860%
23+ - 24 years ......... 3 $ 17,608,777 0.7% 8.167%
24+ - 25 years ......... 9 $ 93,888,944 3.8% 8.237%
--- -------------- ----- -----
TOTAL ................ 324 $2,482,942,297 100.0% 7.614%
=== ============== ===== =====
<CAPTION>
REMAINING WEIGHTED
LOCK-OUT WEIGHTED WEIGHTED WEIGHTED AVERAGE
AND YIELD AVERAGE AVERAGE WEIGHTED WEIGHTED AVERAGE REMAINING
MAINTENANCE REMAINING AMORTIZATION AVERAGE AVERAGE REMAINING LOCK-OUT +
PERIODS TERM (MOS.) TERM (MOS.) LTV (%) DSCR LOCK-OUT YIELD MAINT
- ------------------------ ------------- -------------- ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
1+ - 2 years .......... 59 299 67 1.50x 23 23
2+ - 3 years .......... 83 NAP 73 1.37x 35 35
3+ - 4 years .......... 98 320 78 1.19x 46 46
4+ - 5 years .......... 119 300 62 1.21x 59 59
6+ - 7 years .......... 82 320 76 1.36x 76 76
8+ - 9 years .......... 115 355 55 2.16x 102 102
9+ - 10 years ......... 119 329 70 1.42x 109 114
10+ - 11 years ......... 142 329 65 1.45x 128 128
11+ - 12 years ......... 143 NAP 48 2.59x 137 137
12+ - 13 years ......... 178 358 17 2.77x 147 147
14+ - 15 years ......... 187 257 62 1.59x 154 173
15+ - 16 years ......... 189 189 60 1.41x 189 189
16+ - 17 years ......... 200 200 NAP NAP 82 200
17+ - 18 years ......... 215 215 NAP NAP 211 211
18+ - 19 years ......... 226 225 84 1.09x 200 223
19+ - 20 years ......... 237 278 64 1.71x 222 234
20+ - 21 years ......... 251 251 97 1.03x 250 250
21+ - 22 years ......... 263 271 NAP NAP 234 262
<PAGE>
22+ - 23 years ......... 271 442 NAP NAP 267 267
23+ - 24 years ......... 291 291 NAP NAP 287 287
24+ - 25 years ......... 295 295 NAP NAP 291 291
--- --- -- ----- --- ---
TOTAL ................ 145 318 68 1.51x 133 138
=== === == ===== === ===
</TABLE>
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CHANGES IN MORTGAGE LOAN CHARACTERISTICS
The description in this Prospectus Supplement of the Trust Fund and the
Mortgaged Properties is based upon the Trust Fund as expected to be constituted
at the close of business on the Cut-off Date, as adjusted for the scheduled
principal payments due on the Mortgage Loans on or before the Cut-off Date.
Prior to the issuance of the Offered Certificates, a Mortgage Loan may be
removed from the Trust Fund if the Depositor deems such removal necessary or
appropriate or if it is prepaid. This may cause the range of Mortgage Rates and
maturities as well as the other characteristics of the Mortgage Loans to vary
from those described herein.
A Current Report on Form 8-K (the "Form 8-K") will be available to
purchasers of the Offered Certificates and will be filed by the Depositor,
together with the Pooling and Servicing Agreement with the Securities and
Exchange Commission within fifteen days after the initial issuance of the
Offered Certificates. In the event Mortgage Loans are removed from the Trust
Fund as set forth in the preceding paragraph, such removal will be noted in the
Form 8-K. Such Form 8-K will be available to purchasers and potential
purchasers of the Offered Certificates.
CERTAIN LEGAL ASPECTS OF FOREIGN MORTGAGE LOANS
The following discussion contains general summaries of certain legal
aspects of loans secured by commercial and multifamily residential properties
located in Mexico. The Trust Fund also includes Mortgage Loans secured by
Mortgaged Properties in Puerto Rico and the U.S. Virgin Islands. Because the
legal aspects of Loans are governed by the law of the applicable jurisdiction
(which laws may differ substantially from the law of the United States), the
summaries do not purport to be complete, to reflect the laws of any particular
jurisdiction, or to encompass the laws of all jurisdictions in which the
security for the Mortgage Loans is situated. Accordingly, the summaries are
qualified in their entirely by reference to the applicable laws of those
jurisdictions.
Mexican Law
Foreign Investment Law. Until December 1996, the Foreign Investment Law of
Mexico prohibited foreign entities and Mexican entities with any percentage of
foreign ownership from having any ownership interest in real property located
within 100 kilometers of Mexico's borders and within 50 kilometers of its
coasts (the "Restricted Zone"). In December 1996, the Foreign Investment Law of
Mexico was amended to ease those restrictions and permit Mexican entities with
foreign investors to own real property in Mexico under certain circumstances.
Nevertheless, outright ownership by a foreign entity of real property within
the Restricted Zone remains prohibited under Mexican law. As described herein,
title to the Ritz-Carlton Property is vested in a Property Trust (as defined
herein), a Mexican entity, not in the Ritz-Carlton Borrower. See "Description
of the Mortgage Loans -- Significant Mortgage Loans -- The Ritz-Carlton Loan --
Security." Upon the occurrence of an event of default under the Ritz-Carlton
Loan, the Trustee may extinguish the interest of the Ritz-Carlton Borrower in
the Property Trust and would own the Ritz-Carlton Property through the Property
Trust. If the Special Servicer determines that it is in the best interests of
Certificateholders to take title to the Ritz-Carlton Property directly rather
than to own it through the Property Trust, the Trustee must take ownership
through a Mexican entity, which would necessitate establishing a Mexican entity
owned by the Trustee to take title to the hotel and may create unanticipated
trust fund expenses. Similarly, if the Special Servicer elects to sell the
Ritz-Carlton Property (rather than selling the Trustee's interest in the
Property Trust), such restrictions could limit the saleability of or purchase
price that can be obtained for the Ritz-Carlton Property. Any change in the
Foreign Investment Law of Mexico that reinstates the restriction of indirect
ownership of real property in the Restricted Zone could significantly affect
the Trustee's ability to realize upon its security interest in the Ritz-Carlton
Property.
Exchange Controls. As of the date hereof, the Mexican peso is freely
convertible into foreign currencies, there are no exchange controls in place
and there are no restrictions regarding the transfer of dollars from Mexico to
the United States. Future regulatory actions or governmental policies in Mexico
(including the re-imposition of exchange controls, which were abolished in
1991) could adversely affect the Ritz-Carlton Borrower's ability to obtain
sufficient U.S. dollars to pay the amounts due under the Ritz-Carlton Loan if
the Ritz-Carlton Borrower did not otherwise have sufficient dollars available
for debt service. There can be no assurance that the Mexican government will
maintain its current policies or that the Mexican peso will not be subject to
future devaluations or exchange controls. Under general principles of
international law, if Mexico were to impose exchange controls, such law
generally would not apply to transactions occurring solely within the United
States. Under the Ritz-Carlton Loan, all revenues
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<PAGE>
and other receipts from group sales will be directly deposited into a Modified
Lockbox Account held at Ocean Bank (in the United States) by the Ritz-Carlton
Manager (as defined herein). Substantially all revenues from transient
travelers consist of dollar-denominated credit card receivables which, pursuant
to the terms of the Ritz-Carlton Borrower's agreements with various credit card
companies, must be deposited in a Mexican bank. Under current Mexican law, all
dollar-denominated credit card receivables cleared by a Mexican bank must be
settled in pesos. The Ritz-Carlton Manager has covenanted to pay its
peso-denominated expenses out of peso receipts to the extent receipts are
sufficient for such purpose. Only if peso receipts are insufficient to cover
the peso denominated expenses would the Ritz-Carlton Manager convert some of
its U.S. dollar revenues into pesos. The Ritz-Carlton Borrower also maintains a
dollar denominated account at Banco Nacional de Mexico into which dollar
denominated over-the-counter receipts are deposited.
Mexican law provides that an obligation of an obligor to pay its obligee
in U.S. dollars outside of Mexico is enforceable, but with respect to
obligations payable in Mexico, the obligor has a statutory right to pay its
debts in Mexican pesos at the then-current exchange rate. While the related
financing documents require that the Ritz-Carlton Borrower pay its obligations
with respect to the Ritz-Carlton Loan in the United States, if an action is
brought in Mexico to enforce such obligations, the Ritz-Carlton Borrower will
have the right to pay its obligations in Mexican pesos. The Ritz-Carlton
Borrower has indemnified the lender (Trustee) for any losses incurred as a
result of its payment in any currency other than U.S. dollars; however, such
provisions may not be enforceable if the Trustee is required to bring an
enforcement action in Mexico, thereby exposing the Trust Fund to currency risk.
Taxation. All payments by the Ritz-Carlton Borrower in respect of the
Ritz-Carlton Loan Agreement will be made after deduction or withholding for or
on account of any present or future taxes, duties, assessments or other
governmental charges of whatever nature imposed or levied by or on behalf of
Mexico or any Mexican taxing authority ("Mexican Taxes"). Under Mexican law,
interest payments on indebtedness generally are subject to a Mexican
withholding tax at a rate of 35%; however, the Ritz-Carlton Loan has been
structured to be subject to a 4.9% withholding tax under current Mexican law.
The originator has applied for a ruling from the Mexican Ministry of Finance to
confirm that payments on the Ritz-Carlton Loan will be subject to a 4.9%
withholding tax rate under current Mexican law. The Ritz-Carlton Borrower will
pay additional amounts ("Additional Amounts") to the Trustee in respect of this
4.9% withholding tax so that the net amounts received by the Trustee after such
4.9% withholding are equal to the amounts that would have been payable to the
Trustee had no such 4.9% withholding been required. If such ruling is not
received or an opinion of Mexican counsel confirming such treatment under
Mexican law is not available and payments by the Ritz-Carlton Borrower to the
Trustee are subject to Mexican Taxes at a rate in excess of 4.9%, the
additional amounts payable by the Ritz-Carlton Borrower to the Trustee on
account of Mexican Taxes will be limited to those amounts that otherwise would
have been payable in respect of an effective rate of Mexican withholding tax of
4.9% plus 50% of the amounts in excess of the amounts that would be payable if
the Mexican withholding tax rate was 4.9%, but in no event in excess of the
additional amounts that would be payable if the Mexican Taxes were imposed at a
rate of 9.9%. In such a case, if the effective rate of Mexican withholding
exceeds 4.9%, CSFB Mortgage Capital will indemnify the Trust Fund in respect of
any Mexican withholding taxes imposed in excess of the Ritz-Carlton Borrower's
obligation to pay additional amounts. If the ruling or tax opinion is received,
but Mexican law changes after receipt of the ruling (or the tax opinion) and
the structure of the Ritz-Carlton Loan is no longer entitled to a 4.9%
withholding tax rate, then the Ritz-Carlton Borrower will be obligated to pay
additional amounts so that the net amounts received by the Trustee are equal to
the amounts payable to the Trustee had no such withholding been required. In
this case, the Ritz-Carlton Borrower's obligations to pay additional amounts
will be subject to any limitation.
The bankruptcy procedures under the Mexican Federal Bankruptcy Code and
state and local laws affording relief to debtors operate similarly to those in
the United States and may prohibit or affect the ability of the Trustee to
realize upon the security provided by the collateral provided by the
Ritz-Carlton Borrower. Although the Ritz-Carlton Borrower is not required to
have an independent director on its board of directors, the single purpose
nature of the Property Trust in conjunction with Mexican law's strict
observance of corporate separateness will enable the Property Trust to be
treated for bankruptcy purposes in the same manner as a special purpose
corporation.
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<PAGE>
Usury. Under Mexican law, interest may not be collected on financings that
are deemed to be usurious; however, Mexican state and federal laws do not
provide for a maximum interest rate that may be collected. Accordingly, there
can be no assurance that a financing made in Mexico will not be declared
usurious.
Title Insurance. Title insurance generally is not obtained in Mexico and
has not been obtained with respect to the Ritz-Carlton Property. Although a
certificate as to the status of title has been obtained from a local notary in
accordance with local practice and a title opinion has been obtained from
counsel to the Ritz-Carlton Borrower, the notary and counsel that issued such
certificate and opinion, respectively, are not liable for any losses incurred
by the recipients of such certificate or opinion due to an inaccurate search.
The Island of Cancun was developed by the Mexican government as a tourist
destination in the 1960's and 1970's. At that time, the government of Mexico
laid out lots for sale to developers. The Ritz-Carlton Borrower purchased the
lots on which the is situated directly from the government and developed the
hotel with the assistance of the Mexican government.
Real Estate Surveys. It is not customary in Mexico to obtain a survey
review in connection with an acquisition or financing of real property and,
accordingly, a survey review has not been performed in connection with the
Ritz-Carlton Loan. Instead of a survey review, a review of the public records
and parcel maps was conducted in order to determine the extent of any easement
or other encumbrances that might interfere with the use and ownership of the
Ritz-Carlton Property. However, a review of public records does not provide the
same level of assurance as a survey review and may increase the risk of the
existence of an easement or other encumbrances that might interfere with the
use and ownership of the Ritz-Carlton Property.
DESCRIPTION OF THE OFFERED CERTIFICATES
GENERAL
The Certificates will be issued pursuant to the Pooling and Servicing
Agreement and will represent in the aggregate the entire beneficial ownership
interest in the Trust Fund consisting of: (i) the Mortgage Loans and all
payments under and proceeds of the Mortgage Loans received after the Cut-off
Date (exclusive of payments of principal and interest due on or before the
Cut-off Date); (ii) any Mortgaged Property acquired by the Special Servicer on
behalf of the Trust Fund through foreclosure or deed in lieu of foreclosure
(upon acquisition, an "REO Property"); (iii) such funds or assets as from time
to time are deposited in the Certificate Account, the Distribution Accounts,
the Excess Interest Distribution Account, the Interest Reserve Account, any
Servicing Accounts and, if established, the REO Account; (iv) the rights of the
mortgagee under all insurance policies with respect to the Mortgage Loans; and
(v) certain rights of the Depositor under the Mortgage Loan Purchase Agreement
relating to Mortgage Loan document delivery requirements with respect to the
Mortgage Loans and the representations and warranties of the related Mortgage
Loan Seller regarding the Mortgage Loans.
The Credit Suisse First Boston Mortgage Securities Corp., Commercial
Mortgage Pass-Through Certificates, Series 1998-C1 (the "Certificates") will
consist of the following classes (each, a "Class"): (i) the Class A-1A, Class
A-1B, Class A-2MF and Class A-X Certificates (collectively, the "Senior
Certificates"); (ii) the Class B, Class C, Class D and Class E Certificates
(collectively, the "Mezzanine Certificates" and, together with the Senior
Certificates, the "Offered Certificates"), (iii) the Class F, Class G, Class H,
Class I and Class J Certificates (collectively, the "Private Certificates" and,
together with the Offered Certificates, the "Regular Certificates"), (iv) the
Class R and Class LR Certificates (together, the "Residual Certificates") and
(v) the Class V-1 and Class V-2 Certificates.
Only the Offered Certificates are offered hereby. The Class F, Class G,
Class H, Class I, Class J, Class V-1, Class V-2, Class R, and Class LR
Certificates have not been registered under the Securities Act of 1933 and are
not offered hereby.
The "Certificate Balance" of any Class of Regular Certificates (other than
the Class A-X Certificates) outstanding at any time represents the maximum
amount which the holders thereof are entitled to receive as distributions
allocable to principal from the cash flow on the Mortgage Loans and the other
assets in
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<PAGE>
the Trust Fund. On each Distribution Date, the Certificate Balance of each
Class of Certificates will be reduced by any distributions of principal
actually made on, and any Collateral Support Deficit actually allocated to,
such Class of Certificates on such Distribution Date and, except for the
purposes of determining Voting Rights and the identity of the Controlling
Class, will be increased by the amount of any Certificate Deferred Interest (as
defined herein) allocated to such Class of Certificates on such Distribution
Date. The initial Certificate Balance or Notional Balance of each Class of
Offered Certificates is expected to be the balance set forth on the cover of
this Prospectus Supplement, subject to a permitted variance of plus or minus
5%, depending on the aggregate principal balance of the Mortgage Loans actually
transferred to the Trust Fund.
The Offered Certificates (other than the Class A-X Certificates) will be
maintained and transferred on the book-entry records of DTC and its
Participants and issued in denominations of $10,000 initial Certificate Balance
and integral multiples of $1,000 in excess thereof. The Class A-X Certificates
will be maintained and transferred on the book-entry records of DTC and its
Participants and issued in denominations of $100,000 initial Notional Balance
and integral multiples of $10,000 in excess thereof. A single additional Class
A-X Certificate may be issued in a denomination of authorized initial Notional
Balance that includes the excess of (i) the initial Notional Balance of Class
A-X over (ii) the largest integral multiple of $10,000 that does not exceed
such amount. The "Percentage Interest" evidenced by any Regular Certificate is
equal to the initial denomination thereof as of the Closing Date, divided by
the initial Certificate Balance or Notional Balance of the Class to which it
belongs.
The Offered Certificates will initially be represented by one or more
global Certificates registered in the name of the nominee of DTC. The Depositor
has been informed by DTC that DTC's nominee will be Cede & Co. No Certificate
Owner will be entitled to receive a Definitive Certificate representing its
interest in such Class, except as set forth below under "-- Book-Entry
Registration and Definitive Certificates." Unless and until Definitive
Certificates are issued, all references to actions by holders of the Offered
Certificates will refer to actions taken by DTC upon instructions received from
Certificate Owners through its Participants, and all references herein to
payments, notices, reports and statements to holders of the Offered
Certificates will refer to payments, notices, reports and statements to DTC or
Cede & Co., as the registered holder of the Offered Certificates, for
distribution to Certificate Owners through its Participants in accordance with
DTC procedures.
Until Definitive Certificates are issued, interests in any Class of
Offered Certificates will be transferred only on the book-entry records of DTC
and its Participants.
BOOK-ENTRY REGISTRATION AND DEFINITIVE CERTIFICATES
General. DTC is a limited-purpose trust company organized under the New
York Banking Law, a "banking corporation" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. DTC was created to hold securities for its participating organizations
("Participants") and facilitate the clearance and settlement of securities
transactions between Participants through electronic computerized book-entry
changes in their accounts, thereby eliminating the need for physical movement
of securities certificates. "Direct Participants," which maintain accounts with
DTC, include securities brokers and dealers, banks, trust companies and
clearing corporations and may include certain other organizations. DTC is owned
by a number of its Direct Participants and by The New York Stock Exchange,
Inc., The American Stock Exchange, Inc. and National Association of Securities
Dealers, Inc. Access to the DTC system also is available to others such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The rules applicable to DTC and its Participants are
on file with the Commission.
Purchases of Book-Entry Certificates under the DTC system must be made by
or through Direct Participants, which will receive a credit for the Book-Entry
Certificates on DTC's records. The ownership interest of each actual purchaser
of a Book-Entry Certificate (a "Certificate Owner") is in turn to be recorded
on the Direct and Indirect Participants' records. Certificate Owners will not
receive written confirmation from DTC of their purchases, but Certificate
Owners are expected to receive written
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<PAGE>
confirmations providing details of such transactions, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which each Certificate Owner entered into the transaction. Transfers of
ownership interest in the Book-Entry Certificates are to be accomplished by
entries made on the books of Participants acting on behalf of Certificate
Owners. Certificate Owners will not receive certificates representing their
ownership interests in the Book-Entry Certificates, except in the event that
use of the book-entry system for the Book-Entry Certificates of any series is
discontinued as described below.
DTC has no knowledge of the actual Certificate Owners of the Book-Entry
Certificates; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Certificates are credited, which may or may
not be the Certificate Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Certificate Owners will be governed
by arrangements among them, subject to any statutory or regulatory requirements
as may be in effect from time to time.
Distributions on the Book-Entry Certificates will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the related Distribution
Date in accordance with their respective holdings shown on DTC's records unless
DTC has reason to believe that it will not receive payment on such date.
Disbursement of such distributions by Participants to Certificate Owners will
be governed by standing instructions and customary practices, as is the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of each such Participant (and
not of DTC, the Depositor or any Trustee or Servicer), subject to any statutory
or regulatory requirements as may be in effect from time to time. Under a
book-entry system, Certificate Owners may receive payments after the related
Distribution Date.
The only "Certificateholder" will be the nominee of DTC, and the
Certificate Owners will not be recognized as Certificateholders under the
Pooling and Servicing Agreement. Certificate Owners will be permitted to
exercise the rights of Certificateholders under the Pooling and Servicing
Agreement only indirectly through the Participants, which in turn will exercise
their rights through DTC. The Depositor is informed that DTC will take action
permitted to be taken by a Certificateholder under the Pooling and Servicing
Agreement only at the direction of one or more Participants to whose account
with DTC interests in the Book-Entry Certificates are credited.
Because DTC can act only on behalf of Participants, which in turn act on
behalf of Indirect Participants and certain Certificate Owners, the ability of
a Certificate Owner to pledge its interest in Book-Entry Certificates to
persons or entities that do not participate in the DTC system, or otherwise
take actions in respect of its interest in Book-Entry Certificates, may be
limited due to the lack of a physical certificate evidencing such interest.
Certificate Owners that are not Direct or Indirect Participants but desire
to purchase, sell or otherwise transfer ownership of, or other interests in,
the Offered Certificates may do so only through Direct and Indirect
Participants. In addition, Certificate Owners will receive all distributions of
principal and of and interest on the Offered Certificates from the Trustee
through DTC and its Direct and Indirect Participants. Accordingly, Certificate
Owners may experience delays in their receipt of payments. Unless and until
Definitive Certificates are issued, it is anticipated that the only registered
Certificateholder of the Offered Certificates will be Cede & Co., as nominee of
DTC. Except as otherwise provided under "The Pooling and Servicing Agreement --
Reports to Certificateholders; Certain Available Information" below,
Certificate Owners will not be recognized by the Certificate Registrar, the
Trustee, the Special Servicer or the Servicer as Certificateholders, as such
term is used in the Pooling and Servicing Agreement, and Certificate Owners
will be permitted to receive information furnished to Certificateholders and to
exercise the rights of Certificateholders only indirectly through DTC and its
Direct and Indirect Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
the Offered Certificates among Participants
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<PAGE>
and to receive and transmit distributions of principal of, and interest on, the
Offered Certificates. Direct and Indirect Participants with which Certificate
Owners have accounts with respect to the Offered Certificates similarly are
required to make book-entry transfers and receive and transmit such
distributions on behalf of their respective Certificate Owners. Accordingly,
although Certificate Owners will not possess physical certificates evidencing
their interests in the Offered Certificates, the Rules provide a mechanism by
which Certificate Owners, through their Direct and Indirect Participants, will
receive distributions and will be able to transfer their interests in the
Offered Certificates.
None of the Depositor, the Servicer, the Certificate Registrar, the
Underwriters, the Special Servicer or the Trustee will have any liability for
any actions taken by DTC or its nominee, including, without limitation, actions
for any aspect of the records relating to or payments made on account of
beneficial ownership interests in the Offered Certificates held by Cede & Co.,
as nominee for DTC, or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interest.
Definitive Certificates. Certificates initially issued in book-entry form
will be issued in fully registered, certificated form to Certificate Owners or
their nominees ("Definitive Certificates"), rather than to DTC or its nominee,
only if (i) the Depositor advises the Trustee in writing that DTC is no longer
willing or able to discharge properly its responsibilities as depository with
respect to such Certificates and the Depositor is unable to locate a qualified
successor, (ii) the Depositor, at its option, elects to terminate the
book-entry system through DTC with respect to such Certificates or (iii) the
Trustee determines that Definitive Certificates are required because the
Trustee has instituted or has been directed to institute any judicial
proceeding in a court to enforce the rights of the Certificateholders under the
Certificates, and the Trustee has been advised by counsel that in connection
with such proceeding it is necessary or appropriate for the Trustee to obtain
possession of all or any portion of those Certificates evidenced in book-entry
form. Upon the occurrence of either of the events described in the preceding
sentence, the Trustee is required to notify, through DTC, Direct Participants
who have ownership of Offered Certificates as indicated on the records of DTC
of the availability of Definitive Certificates. Upon surrender by DTC of the
Definitive Certificates representing the Offered Certificates and upon receipt
of instructions from DTC for re-registration, the Certificate Registrar and the
Authenticating Agent will reissue the Offered Certificates as Definitive
Certificates issued in the respective Certificate Balances or Notional
Balances, as applicable, owned by individual Certificate Owners, and thereafter
the Certificate Registrar, the Trustee, the Special Servicer and the Servicer
will recognize the holders of such Definitive Certificates as
Certificateholders under the Pooling and Servicing Agreement.
DISTRIBUTIONS
Method, Timing and Amount. Distributions on the Certificates will be made
by the Trustee, to the extent of available funds, on the 17th day of each month
or, if any such 17th day is not a business day, then on the next succeeding
business day, commencing in July 1998 (each, a "Distribution Date"); provided,
however, that no Distribution Date will fall on a date that is fewer than four
business days after the related Determination Date. All such distributions
(other than the final distribution on any Certificate) will be made to the
Certificateholders in whose names the Certificates are registered at the close
of business on each Record Date. With respect to any Distribution Date, the
"Record Date" will be the close of business on the last business day of the
month immediately preceding the month in which such Distribution Date occurs.
The Record Date for the Distribution Date occurring in July 1998 for all
purposes is the Closing Date. Each such distribution will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has provided the Trustee with written
wiring instructions no less than five business days prior to the related Record
Date (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions) and is the registered owner of
Certificates with an aggregate initial Certificate Balance or Notional Balance,
as the case may be, of at least $5,000,000, or otherwise by check mailed to
such Certificateholder. The final distribution on any Certificate will be made
in like manner, but only upon presentation and surrender of such Certificate at
the location that will be specified in a notice of the pendency of such final
distribution. All distributions made with respect to a Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class
based on their respective Percentage Interests.
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The Servicer shall establish and maintain, or cause to be established and
maintained, one or more accounts (collectively, the "Certificate Account") as
described in the Pooling and Servicing Agreement. The Servicer is required to
deposit in the Certificate Account on a daily basis (and in no event later than
the business day following receipt in available funds) all payments and
collections due after the Cut-off Date and other amounts received or advanced
with respect to the Mortgage Loans (including, without limitation, insurance
and condemnation proceeds and liquidation proceeds), and will be permitted to
make withdrawals therefrom as set forth in the Pooling and Servicing Agreement.
The Trustee will establish and maintain an account (the "Distribution
Account") in the name of the Trustee and for the benefit of the
Certificateholders. On each Distribution Date, the Trustee will apply amounts
on deposit in the Distribution Account (which will include all funds that were
remitted by the Servicer from the Certificate Account plus, among other things,
any P&I Advances, less amounts, if any, distributable to the Class R
Certificates as set forth in the Pooling and Servicing Agreement) generally to
make distributions of interest and principal from the Available Distribution
Amount to Offered Certificateholders as described herein. Each of the
Certificate Account and the Distribution Account will conform to certain
eligibility requirements set forth in the Pooling and Servicing Agreement.
The aggregate amount available from the Mortgage Loans for distribution to
Offered Certificateholders on each Distribution Date (the "Available
Distribution Amount") will, in general, equal the sum of the following amounts:
(a) the total amount of all cash received on the Mortgage Loans and any
related REO Properties that is on deposit in the Certificate Account and the
Lower-Tier Distribution Account as of the business day preceding the related
Servicer Remittance Date (including funds released from the Interest Reserve
Account for distribution on such Distribution Date), exclusive of:
(i) all Monthly Payments collected but due on a Due Date subsequent to
the related Due Period;
(ii) all principal prepayments, Balloon Payments, liquidation proceeds,
insurance and condemnation proceeds and other unscheduled recoveries
received subsequent to the related Determination Date;
(iii) all amounts in the Certificate Account and Lower-Tier Distribution
Account that are due or reimbursable to (x) any person other than the
Certificateholders and (y) the Class V-1 and V-2 Certificates;
(iv) all Prepayment Premiums, Yield Maintenance Charges and Yield
Protection Payments;
(v) all net investment income on the funds in the Certificate Account;
(vi) all Withheld Amounts relating to a subsequent Distribution Date;
and
(vii) all amounts deposited in the Certificate Account and Distribution
Account in error; and
(b) all P&I Advances made with respect to such Distribution Date by the
Servicer or the Trustee, as applicable, with respect to the Mortgage Loans (net
of certain amounts that are due or reimbursable to persons other than the
Certificateholders). See "Description of the Offered Certificates -- Accounts"
in the Prospectus.
The Available Distribution Amount for either Loan Group for any
Distribution Date generally is the total of all payments or other collections
(or available P&I Advances) (other than Prepayment Premiums and Yield
Maintenance Charges and Excess Interest, which are distributed separately as
described herein) on or in respect of the Mortgage Loans in such Loan Group
that are available for distribution on the Certificates on such date.
The "Due Period" for each Distribution Date will be the period beginning
on the day following the Determination Date in the month immediately preceding
the month in which such Distribution Date occurs and ending at the close of
business on the Determination Date of the month in which such Distribution Date
occurs.
Pass-Through Rates. The initial Pass-Through Rate applicable to each Class
of Offered Certificates for any Distribution Date will equal the rates per
annum specified on the cover of this Prospectus Supplement. Interest will
accrue for each Class of Certificates during the related Interest Accrual
Period.
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Interest Distributions. On each Distribution Date, to the extent of the
Available Distribution Amount and subject to the distribution priorities
described below under "-- Priority of Distributions," each Class of Offered
Certificates will be entitled to receive distributions of interest in an
aggregate amount equal to the Monthly Interest Distributable Amount (as defined
herein) with respect to such Class for such Distribution Date and, to the
extent not previously paid, for all prior Distribution Dates. No interest will
accrue on such overdue amounts. Interest will accrue with respect to the
Certificates on the basis of a 360-day year consisting of twelve 30-day months.
Principal Distributions. On each Distribution Date, to the extent of the
Available Distribution Amount remaining after the distribution of interest to
be made on such Class of Offered Certificates on such date and subject to the
distribution priorities described below under "-- Priority of Distributions,"
each Class of Offered Certificates will be entitled to distributions of
principal (until the Certificate Balance of such Class of Certificates is
reduced to zero) in an aggregate amount up to the Principal Distribution Amount
for such Distribution Date.
Priority of Distributions. On each Distribution Date prior to the date on
which the principal balances of the Private Certificates and the Mezzanine
Certificates have been reduced to zero, the Trustee will apply amounts on
deposit in the Distribution Account, to the extent of the Available
Distribution Amount for such Distribution Date, in the following order of
priority:
(i) concurrently, (A) from the Available Distribution Amount for Loan
Group 1, to the Class A-1A and Class A-1B Certificates, pro rata, the Optimal
Interest Distribution Amounts for each such Class for such Distribution Date,
(B) from the Available Distribution Amount for Loan Group 2, to the Class A-2MF
Certificates, the Optimal Interest Distribution Amount for such Class for such
Distribution Date, and (C) from the Available Distribution Amount, the amount
payable to the Class A-X Certificates with respect to each Component thereof;
provided, however, that if the Available Distribution Amount for either Loan
Group is insufficient to pay in full the Optimal Interest Distribution Amounts
to be distributed to any such Classes as described above, the Available
Distribution Amount will be allocated among all such Classes pro rata in
proportion to such Optimal Interest Distribution Amounts, without regard to
Loan Group;
(ii) to the Class A-2MF Certificates, in reduction of the Certificate
Principal Balance thereof until the Certificate Principal Balance thereof has
been reduced to zero, an amount up to the A-2MF Principal Distribution Amount
for such Distribution Date;
(iii) to the Class A-1A, Class A-1B and Class A-2MF Certificates, in
reduction of the Certificate Balances thereof, an amount up to the Principal
Distribution Amount for such Distribution Date remaining after the distribution
described in clause (ii), in the following order of priority:
first, to the Class A-1A Certificates, until the Certificate Balance
thereof has been reduced to zero;
second, to the Class A-1B Certificates, until the Certificate Balance
thereof has been reduced to zero; and
third, to the Class A-2MF Certificates, until the Certificate Balance
thereof has been reduced to zero;
(iv) to the Class A-1A, Class A-1B and Class A-2MF Certificates, pro rata
(based on the aggregate unreimbursed Collateral Support Deficit previously
allocated to each such Class), until all amounts of such Collateral Support
Deficit previously allocated to such Classes, but not previously reimbursed,
have been reimbursed in full; and
(v) to the Mezzanine and Private Certificates, in the following order of
priority:
(A) to the Class B Certificates, in respect of interest, the Optimal
Interest Distribution Amount for such Class for such Distribution Date;
(B) to the Class B Certificates, in reduction of the Certificate Balance
thereof, an amount up to the Remaining Principal Distributable Amount for
such Distribution Date until such Certificate Balance has been reduced to
zero;
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(C) to the Class B Certificates, until all amounts of Collateral Support
Deficit previously allocated to the Class B Certificates, but not
previously reimbursed, have been reimbursed in full;
(D) to the Class C Certificates, in respect of interest, the Optimal
Interest Distribution Amount for such Class for such Distribution Date;
(E) to the Class C Certificates, in reduction of the Certificate Balance
thereof, an amount up to the Remaining Principal Distributable Amount for
such Distribution Date until such Certificate Balance has been reduced to
zero;
(F) to the Class C Certificates, until all amounts of Collateral Support
Deficit previously allocated to the Class C Certificates, but not
previously reimbursed, have been reimbursed in full;
(G) to the Class D Certificates, in respect of interest, the Optimal
Interest Distribution Amount for such Class for such Distribution Date;
(H) to the Class D Certificates, in reduction of the Certificate Balance
thereof, an amount up to the Remaining Principal Distributable Amount for
such Distribution Date until such Certificate Balance has been reduced to
zero;
(I) to the Class D Certificates, until all amounts of Collateral Support
Deficit previously allocated to the Class D Certificates, but not
previously reimbursed, have been reimbursed in full;
(J) to the Class E Certificates, in respect of interest, the Optimal
Interest Distribution Amount for such Class for such Distribution Date;
(K) to the Class E Certificates, in reduction of the Certificate Balance
thereof, an amount up to the Remaining Principal Distributable Amount for
such Distribution Date until such Certificate Balance has been reduced to
zero;
(L) to the Class E Certificates, until all amounts of Collateral Support
Deficit previously allocated to the Class E Certificates, but not
previously reimbursed, have been reimbursed in full;
(M) to the Class F Certificates, in respect of interest, the Optimal
Interest Distribution Amount for such Class for such Distribution Date;
(N) to the Class F Certificates, in reduction of the Certificate Balance
thereof, an amount up to the Remaining Principal Distributable Amount for
such Distribution Date until such Certificate Balance has been reduced to
zero;
(O) to the Class F Certificates, until all amounts of Collateral Support
Deficit previously allocated to the Class F Certificates, but not
previously reimbursed, have been reimbursed in full;
(P) to the Class G Certificates, in respect of interest, the Optimal
Interest Distribution Amount for such Class for such Distribution Date;
(Q) to the Class G Certificates, in reduction of the Certificate Balance
thereof, an amount up to the Remaining Principal Distributable Amount for
such Distribution Date until such Certificate Balance has been reduced to
zero;
(R) to the Class G Certificates, until all amounts of Collateral Support
Deficit previously allocated to the Class G Certificates, but not
previously reimbursed, have been reimbursed in full;
(S) to the Class H Certificates, in respect of interest, the Optimal
Interest Distribution Amount for such Class for such Distribution Date;
(T) to the Class H Certificates, in reduction of the Certificate Balance
thereof, an amount up to the Remaining Principal Distributable Amount for
such Distribution Date until such Certificate Balance has been reduced to
zero;
(U) to the Class H Certificates, until all amounts of Collateral Support
Deficit previously allocated to the Class H Certificates, but not
previously reimbursed, have been reimbursed in full;
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(V) to the Class I Certificates, in respect of interest, the Optimal
Interest Distribution Amount for such Class for such Distribution Date;
(W) to the Class I Certificates, in reduction of the Certificate Balance
thereof, an amount up to the Remaining Principal Distributable Amount for
such Distribution Date until such Certificate Balance has been reduced to
zero;
(X) to the Class I Certificates, until all amounts of Collateral Support
Deficit previously allocated to the Class I Certificates, but not
previously reimbursed, have been reimbursed in full;
(Y) to the Class J Certificates, in respect of interest, the Optimal
Interest Distribution Amount for such Class for such Distribution Date;
(Z) to the Class J Certificates, in reduction of the Certificate Balance
thereof, an amount up to the Remaining Principal Distributable Amount for
such Distribution Date until such Certificate Balance has been reduced to
zero;
(AA) to the Class J Certificates, until all amounts of Collateral Support
Deficit previously allocated to the Class J Certificates, but not
previously reimbursed, have been reimbursed in full; and
(BB) to the Class R Certificates, any remaining amounts.
Notwithstanding the foregoing, on each Distribution Date occurring on or
after the date on which the principal balances of the Mezzanine Certificates
and Private Certificates have been reduced to zero, the Trustee will apply
amounts on deposit in the Distribution Account in the following order of
priority: (i) concurrently, to the Class A-1A, Class A-1B, Class A-2MF and
Class A-X Certificates, pro rata, in respect of interest; (ii) to the Class
A-1A, Class A-1B and Class A-2MF Certificates, pro rata in reduction of the
Certificate Balances thereof, until the Certificate Balance of each such Class
has been reduced to zero; and (iii) to the Class A-1A, Class A-1B and Class
A-2MF Certificates, pro rata (based on the aggregate unreimbursed Collateral
Support Deficit previously allocated to such Class), until all amounts of such
Collateral Support Deficit previously allocated to such Classes but not
previously reimbursed have been reimbursed in full.
Reimbursement of previously allocated Collateral Support Deficits will not
constitute distributions of principal for any purpose and will not result in an
additional reduction in the Certificate Balance of the Class of Certificates in
respect of which any such reimbursement is made.
Definitions.
"A-2MF Principal Distribution Amount": With respect to Loan Group 2 and
any Distribution Date, the portion of the Principal Distribution Amount for
Loan Group 2 for such Distribution Date that represents Balloon Payments and
Unscheduled Payments of Principal.
"Class A-1A Pass-Through Rate": % per annum.
"Class A-1B Pass-Through Rate": % per annum.
"Class A-2MF Pass-Through Rate": % per annum.
"Class A-X Pass-Through Rate": As to any Distribution Date, the per annum
rate, expressed as a percentage, obtained by dividing (i) the sum of the
products of (a) the Certificate Balance of each Class of Regular Certificates
(other than the Class A-X Certificates) and (b) the related Component Rate for
such Distribution Date by (ii) the sum of all such Certificate Balances.
"Class B Pass-Through Rate": % per annum.
"Class C Pass-Through Rate": % per annum.
"Class D Pass-Through Rate": % per annum.
"Class E Pass-Through Rate": % per annum.
"Class F Pass-Through Rate": % per annum.
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"Class G Pass-Through Rate": % per annum.
"Class H Pass-Through Rate": % per annum.
"Class I Pass-Through Rate": % per annum.
"Class J Pass-Through Rate": % per annum.
"Component Rate": As to each Component, the rate set forth below with
respect thereto:
Class A-1A Component: The amount, if any, by which the Weighted Average
Net Mortgage Rate for such Distribution Date exceeds the Class A-1A
Pass-Through Rate.
Class A-1B Component: The amount, if any, by which the Weighted Average
Net Mortgage Rate for such Distribution Date exceeds the Class A-1B
Pass-Through Rate.
Class A-2MF Component: The amount, if any, by which the Weighted Average
Net Mortgage Rate for such Distribution Date exceeds the Class A-2MF
Pass-Through Rate.
Class B Component: The amount, if any, by which the Weighted Average Net
Mortgage Rate for such Distribution Date exceeds the Class B Pass-Through
Rate.
Class C Component: The amount, if any, by which the Weighted Average Net
Mortgage Rate for such Distribution Date exceeds the Class C Pass-Through
Rate.
Class D Component: The amount, if any, by which the Weighted Average Net
Mortgage Rate for such Distribution Date exceeds the Class D Pass-Through
Rate for such Distribution Date.
Class E Component: The amount, if any, by which the Weighted Average Net
Mortgage Rate for such Distribution Date exceeds the Class E Pass-Through
Rate for such Distribution Date.
Class F Component: The amount, if any, by which the Weighted Average Net
Mortgage Rate for such Distribution Date exceeds the Class F Pass-Through
Rate for such Distribution Date.
Class G Component: The amount, if any, by which the Weighted Average Net
Mortgage Rate for such Distribution Date exceeds the Class G Pass-Through
Rate for such Distribution Date.
Class H Component: The amount, if any, by which the Weighted Average Net
Mortgage Rate for such Distribution Date exceeds the Class H Pass-Through
Rate for such Distribution Date.
Class I Component: The amount, if any, by which the Weighted Average Net
Mortgage Rate for such Distribution Date exceeds the Class I Pass-Through
Rate for such Distribution Date.
Class J Component: The amount, if any, by which the Weighted Average Net
Mortgage Rate for such Distribution Date exceeds the Class J Pass-Through
Rate for such Distribution Date.
"Excess Rate": With respect to each ARD Loan after the related Anticipated
Repayment Date, the excess of the Revised Rate thereof over the Mortgage Rate
thereof.
"Interest Accrual Period": As to any Distribution Date, the period
commencing on the 11th day of the calendar month preceding the month in which
such Distribution Date occurs and ending on the 10th day of the month in which
such Distribution Date occurs. Each Interest Accrual Period is deemed to
consist of 30 days.
"Interest Shortfall Amount": As to any Distribution Date and any Class of
Regular Certificates, the amount, if any, by which the amount distributed on
such Class on such Distribution Date in respect of interest is less than the
related Optimal Interest Distribution Amount.
"Monthly Interest Distributable Amount": As to any Distribution Date and
any Class of Regular Certificates other than the Class A-X Certificates, the
amount of interest accrued for the related Interest Accrual Period at the
related Pass-Through Rate on the Certificate Balance of such Class as of such
Distribution Date, reduced by (i) such Class's share of (x) the Uncovered
Prepayment Interest Shortfall Amount and (y) certain indemnification expenses
of the Trust Fund and (ii) any allocations to such Class of any Certificate
Deferred Interest for such Distribution Date. As to any Distribution Date and
the Class
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A-X Certificates, the amount of interest accrued during the related Interest
Accrual Period at the Class A-X Pass-Through Rate on the Notional Balance as of
such Distribution Date, reduced by such Class's share of (x) the Uncovered
Prepayment Interest Shortfall Amount and (y) certain indemnification expenses
of the Trust Fund, in each case for such Distribution Date.
"Mortgage Interest Accrual Period": With respect to any Mortgage Loan, the
period during which interest accrues pursuant to the related Mortgage Note.
"Mortgage Pass-Through Rate": With respect to any Mortgage Loan that
provides for calculations of interest based on twelve months of 30 days each
for any Mortgage Interest Accrual Period, the Net Mortgage Rate thereof. With
respect to any Mortgage Loan that provides for interest accrual on an
Actual/360 basis, (a) for any Mortgage Interest Accrual Period relating to an
Interest Accrual Period beginning in any January, February, April, June,
September and November and any December occurring in a year immediately
preceding any year that is not a leap year, the Net Mortgage Rate thereof or
(b) for any Mortgage Interest Accrual Period relating to any Interest Accrual
Period beginning in any March, May, July, August and October and any December
occurring in a year immediately preceding a year that is a leap year, the Net
Mortgage Rate thereof multiplied by a fraction whose numerator is 31 and whose
denominator is 30.
The Mortgage Rate for purposes of calculating Mortgage Pass-Through Rates
and the Weighted Average Net Mortgage Rate will be the Mortgage Rate of such
Mortgage Loan without taking into account any reduction in the interest rate by
a bankruptcy court pursuant to a plan of reorganization or pursuant to any of
its equitable powers or any reduction in the interest rate resulting from a
work-out as described herein under "The Pooling and Servicing Agreement --
Modifications."
"Net Mortgage Pass-Through Rate": With respect to any Mortgage Loan and
any Distribution Date, the Mortgage Pass-Through Rate for such Mortgage Loan
for the related Interest Accrual Period minus the sum of the Servicing Fee Rate
and the Trustee Fee Rate, plus, if such Mortgage Loan is set forth below, the
related Servicing Fee Reimbursement Rate set forth below:
<TABLE>
<CAPTION>
SERVICING FEE
LOAN NO. PROPERTY NAME REIMBURSEMENT RATE
- ---------- ---------------------------- -------------------
<S> <C> <C>
18 Pantzer Cross-Summary 0.05%
26 Top of the Hill Apartments 0.05%
28 Foxfire Apartments 0.05%
43 Heather Ridge Apartments 0.05%
99 Arundel Apartments 0.05%
195 Cynwyd Club Apartments 0.05%
</TABLE>
"Net Mortgage Rate": With respect to any Interest Accrual Period and any
Mortgage Loan, a per annum rate equal to the Mortgage Rate for such Mortgage
Loan as of the Cut-off Date minus the related Primary Servicing Fee Rate, if
any.
"Optimal Interest Distribution Amount": As to any Distribution Date and
any Class of Regular Certificates, the sum of the Monthly Interest
Distributable Amount and the Unpaid Interest Shortfall Amount for such Class
for such Distribution Date.
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"Pass-Through Rate": As to each Class of Certificates, the rate set forth
below:
<TABLE>
<S> <C>
Class A-1A: Class A-1A Pass-Through Rate
Class A-1B: Class A-1B Pass-Through Rate
Class A-2MF: Class A-2MF Pass-Through Rate
Class A-X: Class A-X Pass-Through Rate
Class B: Class B Pass-Through Rate
Class C: Class C Pass-Through Rate
Class D: Class D Pass-Through Rate
Class E: Class E Pass-Through Rate
Class F: Class F Pass-Through Rate
Class G: Class G Pass-Through Rate
Class H: Class H Pass-Through Rate
Class I: Class I Pass-Through Rate
Class J: Class J Pass-Through Rate
</TABLE>
"Prepayment Interest Excess": With respect to any Distribution Date, for
each Mortgage Loan that was subject to a principal prepayment in full or in
part, or as to which insurance or condemnation proceeds were received by the
Servicer or the Special Servicer for application to such Mortgage Loan, in each
case after the Due Date in the month of such Distribution Date and on or prior
to the related Determination Date, the amount of interest accrued at the
Mortgage Rate (plus, as applicable, the related Servicing Fee Reimbursement
Rate and Primary Servicing Fee Reimbursement Rate) for such Mortgage Loan on
the amount of such principal prepayment, insurance proceeds or condemnation
proceeds after the Mortgage Interest Accrual Period relating to such Due Date
and accruing in the manner set forth in the loan documents relating to such
Mortgage Loan, to the extent such interest is collected by the Servicer or the
Special Servicer.
"Prepayment Interest Shortfall": With respect to any Distribution Date,
for each Mortgage Loan that was subject to a principal prepayment in full or in
part, or as to which insurance or condemnation proceeds were received by the
Servicer or the Special Servicer for application to such Mortgage Loan, in each
case after the Determination Date in the calendar month preceding such
Distribution Date but prior to the Due Date in the related Due Period, the
amount of interest that would have accrued at the Net Mortgage Pass-Through
Rate for such Mortgage Loan on the amount of such principal prepayment,
insurance proceeds or condemnation proceeds during the period commencing on the
date as of which such principal prepayment, insurance proceeds or condemnation
proceeds were applied to the unpaid principal balance of such Mortgage Loan and
ending on (and including) the day immediately preceding such Due Date.
"Principal Distribution Amount": As to any Distribution Date, the sum of
(i) the amount collected or otherwise received on or in respect of principal of
the Mortgage Loans during the related Due Period and (ii) that portion of the
P&I Advance, if any, made in respect of principal of the Mortgage Loans with
respect to such Distribution Date.
"Remaining Principal Distributable Amount": As to any Distribution Date
and any Class of Mezzanine or Private Certificates, the amount, if any, by
which the Principal Distribution Amount for such Distribution Date exceeds the
aggregate amount distributed in respect of principal on such Distribution Date
on all Classes senior to such Class.
"Uncovered Prepayment Interest Shortfall Amount": As to any Distribution
Date, the sum of the Uncovered Prepayment Interest Shortfalls (as defined
herein), if any, for such Distribution Date.
"Unpaid Interest Shortfall Amount": As to the first Distribution Date and
any Class of Regular Certificates, zero. As to any Distribution Date after the
first Distribution Date and any Class of Regular Certificates, the amount, if
any, by which the sum of the Interest Shortfall Amounts for such Class for
prior Distribution Dates exceeds the sum of the amounts distributed on such
Class on prior Distribution Dates in respect of such Interest Shortfall
Amounts.
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"Unscheduled Payments of Principal": Principal prepayments, Liquidation
Proceeds, Insurance Proceeds, condemnation awards and any other unscheduled
recoveries of principal.
"Weighted Average Net Mortgage Rate": As to any Distribution Date, the
average, as of such Distribution Date, of the Net Mortgage Pass-Through Rates
of the Mortgage Loans, weighted by the Stated Principal Balances thereof.
Certain Calculations with Respect to Individual Mortgage Loans. The Stated
Principal Balance of each Mortgage Loan outstanding at any time represents the
principal balance of such Mortgage Loan ultimately due and payable to the
Certificateholders. The "Stated Principal Balance" of each Mortgage Loan will
initially equal the Cut-off Date Balance thereof and, on each Distribution
Date, will be reduced by the portion of the Principal Distribution Amount for
such date that is attributable to such Mortgage Loan. The Stated Principal
Balance of a Mortgage Loan may also be reduced in connection with any forced
reduction of the actual unpaid principal balance thereof imposed by a court
presiding over a bankruptcy proceeding in which the related borrower is the
debtor. See "Certain Legal Aspects of the Mortgage Loans -- Bankruptcy Laws" in
the Prospectus. If any Mortgage Loan is paid in full or such Mortgage Loan (or
any Mortgaged Property acquired in respect thereof) is otherwise liquidated,
then, as of the first Distribution Date that follows the end of the Due Period
in which such payment in full or liquidation occurred and notwithstanding that
a loss may have occurred in connection with any such liquidation, the Stated
Principal Balance of such Mortgage Loan shall be zero.
For purposes of calculating distributions on, and allocations of
Collateral Support Deficit to, the Certificates, as well as for purposes of
calculating the Servicing Fee, Primary Servicing Fee and Trustee Fee payable
each month, each REO Property will be treated as if there exists with respect
thereto an outstanding mortgage loan (an "REO Loan"), and all references to
"Mortgage Loan" and "Mortgage Loans" herein and in the Prospectus, when used in
such context, will be deemed to also be references to or to also include, as
the case may be, any REO Loans. Each REO Loan will generally be deemed to have
the same characteristics as its actual predecessor Mortgage Loan, including the
same fixed Mortgage Rate (and, accordingly, the same Net Mortgage Pass-Through
Rate) and the same unpaid principal balance and Stated Principal Balance.
Amounts due on such predecessor Mortgage Loan, including any portion thereof
payable or reimbursable to the Servicer, will continue to be "due" in respect
of the REO Loan; and amounts received in respect of the related REO Property,
net of payments to be made, or reimbursement to the Servicer or the Special
Servicer for payments previously advanced, in connection with the operation and
management of such property, generally will be applied by the Servicer as if
received on the predecessor Mortgage Loan.
Allocation of Prepayment Premiums and Yield Maintenance Charges. On any
Distribution Date, Prepayment Premiums collected on the Mortgage Loans in Loan
Group 1 during the related Due Period will be distributed as follows by the
Trustee to the holders of the following Classes of Regular Certificates: to the
Class A-1A, Class A-1B, Class B, Class C, Class D and Class E Certificates, an
amount equal to the product of (a) a fraction whose numerator is the amount
distributed as principal to such Class on such Distribution Date, and whose
denominator is the total amount distributed as principal to the Class A-1A,
Class A-1B, Class B, Class C, Class D, Class E, Class F, Class G, Class H,
Class I and Class J Certificates on such Distribution Date, (b) 25% and (c) the
total amount of Prepayment Premiums relating to the Mortgage Loans in Loan
Group 1 collected during the related Due Period. Any Prepayment Premiums
relating to the Mortgage Loans in Loan Group 1 collected during the related Due
Period and remaining after such distributions will be distributed to the
holders of the Class A-X Certificates.
On any Distribution Date, Prepayment Premiums collected on the Mortgage
Loans in Loan Group 2 during the related Due Period will be distributed as
follows by the Trustee to the holders of the Class A-2MF Certificates, an
amount equal to the product of (a) a fraction, not greater than 1, whose
numerator is the amount distributed as principal to such Class on such
Distribution Date, and whose denominator is the total amount distributed as
principal prepayments on such Distribution Date from the Mortgage Loans in Loan
Group 2, (b) 25% and (c) the total amount of Prepayment Premiums relating to
the Mortgage Loans in Loan Group 2 collected during the related Due Period. Any
Prepayment Premiums relating to the Mortgage Loans in Loan Group 2 collected
during the related Due Period and remaining after such distributions will be
distributed to the holders of the Class A-X Certificates.
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On any Distribution Date, Yield Maintenance Charges collected on the
Mortgage Loans in Loan Group 1 during the related Due Period will be
distributed by the Trustee to the following Classes of Offered Certificates: to
the Class A-1A, Class A-1B, Class B, Class C, Class D and Class E Certificates,
in an amount equal to the product of (a) a fraction whose numerator is the
amount distributed as principal to such Class on such Distribution Date, and
whose denominator is the total amount distributed as principal to the Class
A-1A, Class A-1B, Class B, Class C, Class D, Class E, Class F, Class G, Class
H, Class I and Class J Certificates on such Distribution Date, (b) the Base
Interest Fraction for the related principal prepayment and such Class of
Certificates, and (c) the aggregate amount of Yield Maintenance Charges
relating to the Mortgage Loans in Loan Group 1 collected on such principal
prepayment during the related Due Period. Any Yield Maintenance Charges
relating to the Mortgage Loans in Loan Group 1 collected during the related Due
Period remaining after such distributions will be distributed to the holders of
the Class A-X Certificates.
On any Distribution Date, Yield Maintenance Charges collected on the
Mortgage Loans in Loan Group 2 during the related Due Period will be
distributed by the Trustee to the Class A-2MF Certificates, in an amount equal
to the product of (a) a fraction, not greater than one, whose numerator is the
amount distributed as principal to such Class on such Distribution Date, and
whose denominator is the total amount distributed as principal prepayments on
such Distribution Date from the Mortgage Loans in Loan Group 2, (b) the Base
Interest Fraction for the related principal prepayment and such Class of
Certificates, and (c) the aggregate amount of Yield Maintenance Charges
relating to the Mortgage Loans in Loan Group 2 collected on such principal
prepayment during the related Due Period. Any Yield Maintenance Charges
relating to the Mortgage Loans in Loan Group 2 collected during the related Due
Period remaining after such distributions will be distributed to the holders of
the Class A-X Certificates.
The "Base Interest Fraction" with respect to any principal prepayment on
any Mortgage Loan and with respect to any Class of Offered Certificates (other
than the Class A-X Certificates) is a fraction (a) whose numerator is the
amount, if any, by which (i) the Pass-Through Rate on such Class of
Certificates exceeds (ii)(x) the Yield Rate used in calculating the Yield
Maintenance Charge with respect to such principal prepayment and (b) whose
denominator is the amount, if any, by which the (i) Mortgage Rate on such
Mortgage Loan exceeds (ii) the Yield Rate used in calculating the Yield
Maintenance Charge with respect to such principal prepayment; provided,
however, that under no circumstances shall the Base Interest Fraction be
greater than one. If such Yield Rate is greater than or equal to the lesser of
(x) the Mortgage Rate on such Mortgage Loan and (y) the Pass-Through Rate
described in the preceding sentence, then the Base Interest Fraction shall
equal zero.
No Prepayment Premiums or Yield Maintenance Charges will be distributed to
holders of the Class F, Class G, Class H, Class I, Class J, Class V-1, Class
V-2 or Residual Certificates. Instead, after the Certificate Principal Balances
of the Class A-1A, Class A-1B, Class A-2MF, Class B, Class C, Class D and Class
E Certificates have been reduced to zero, all Prepayment Premiums and Yield
Maintenance Charges will be distributed to holders of the Class A-X
Certificates. For a description of Prepayment Premiums and Yield Maintenance
Charges, see "Description of the Mortgage Loans -- Certain Terms and Provisions
of the Mortgage Loans -- Prepayment Provisions." See also "Certain Legal
Aspects of the Mortgage Loans -- Enforceability of Certain Provisions --
Prepayment Provisions" in the Prospectus regarding the enforceability of Yield
Maintenance Charges and Prepayment Premiums.
For a description of Prepayment Premiums and Yield Maintenance Charges,
see "Description of the Mortgage Loans -- Certain Terms and Conditions of the
Mortgage Loans -- Prepayment Provisions."
Yield Protection Payments. The Servicer will be required to make an
advance in an amount equal to the sum of all Yield Protection Payments, if any,
with respect to any Distribution Date. On such Distribution Date, such Yield
Protection Payments will be distributed to the holders of the Class A-X
Certificates and to the holders of any Class of Offered Certificates receiving
a Required Prepayment under the Additional Collateral Loans. Such Yield
Protection Payments are intended to compensate such Classes for the absence of
Prepayment Premiums or Yield Maintenance Charges in connection with such a
Required Prepayment. With respect to any Class of Offered Certificates
receiving a distribution of principal in connection with a Required Prepayment,
the Yield Protection Payment will equal 2% of such
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distribution of principal. With respect to the Class A-X Certificates, the
Yield Protection Payment will be in the nature of a yield-maintenance payment,
as described in the Pooling and Servicing Agreement. The rights of any Class of
Offered Certificates to receive Yield Protection Payments, to the extent
described herein, will be treated as assets separate from the REMIC regular
interest represented by each such Class. The purchase price paid for each such
Class must be allocated between the right to receive Yield Protection Payments
and the REMIC regular interest represented by such Class. See "Description of
the Mortgage Loans -- Additional Mortgage Loan Information -- Additional
Collateral Loans" and "Certain Federal Income Tax Consequences."
Excess Interest. On each Distribution Date, Excess Interest with respect
to the CSFBMC Mortgage Loans and the PWRES Mortgage Loans collected during the
related Due Period will be distributed solely to the Class V-1 Certificates and
Class V-2 Certificates, respectively, to the extent set forth in the Pooling
and Servicing Agreement, and will not be available for distribution to holders
of the Offered Certificates. The holders of the Class V-1 Certificates will
have the right to purchase ARD Loans that are CSFBMC Mortgage Loans on or after
their related Anticipated Repayment Dates under the circumstances described
under "Description of the Mortgage Loans -- Certain Terms and Conditions of the
Mortgage Loans." The holders of the Class V-2 Certificates will have the
limited right to purchase ARD Loans that are PWRES Mortgage Loans on or after
their related Anticipated Repayment Dates under the circumstances described
under "Description of the Mortgage Loans -- Certain Terms and Conditions of the
Mortgage Loans." The Class V-1 Certificates and Class V-2 Certificates are not
entitled to any other distributions of interest, principal, Prepayment Premiums
or Yield Maintenance Charges.
ASSUMED FINAL DISTRIBUTION DATE; RATED FINAL DISTRIBUTION DATE
The "Assumed Final Distribution Date" with respect to any Class of Offered
Certificates is the Distribution Date on which the aggregate Certificate
Balance of such Class of Certificates would be reduced to zero based on the
assumptions set forth below. Such Distribution Date shall in each case be as
follows:
<TABLE>
<CAPTION>
CLASS DESIGNATION ASSUMED FINAL DISTRIBUTION DATE
- ------------------- --------------------------------
<S> <C>
Class A-1A
Class A-1B
Class A-2MF
Class A-X
Class B
Class C
Class D
Class E
</TABLE>
The Assumed Final Distribution Dates set forth above were calculated on
the assumption that all ARD Loans will pay on their respective Anticipated
Repayment Dates and also without regard to any delays in the collection of
Balloon Payments or to any liquidation time with respect to any Mortgage Loans
that may become delinquent. Accordingly, in the event of defaults on the
Mortgage Loans, the actual final Distribution Date for one or more Classes of
the Offered Certificates may be later, and could be substantially later, than
the related Assumed Final Distribution Date(s).
In addition, the Assumed Final Distribution Dates set forth above were
calculated on the basis of a 0% CPR. Since the rate of payment (including
prepayments) of the Mortgage Loans may exceed the scheduled rate of payments,
and could exceed such scheduled rate by a substantial amount, the actual final
Distribution Date for one or more Classes of the Offered Certificates may be
earlier, and could be substantially earlier, than the related Assumed Final
Distribution Date(s). The rate of payments (including prepayments) on the
Mortgage Loans will depend on the characteristics of the Mortgage Loans, as
well as on the prevailing level of interest rates and other economic factors,
and no assurance can be given as to actual payment experience. Finally, the
Assumed Final Distribution Dates were calculated assuming that there would not
be an early termination of the Trust Fund.
The "Rated Final Distribution Date" for each Class of Offered Certificates
will be , 20 , the first Distribution Date following the date that is two
years after the latest Assumed Maturity Date.
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<PAGE>
The "Assumed Maturity Date" of (a) any Mortgage Loan that is not a Balloon Loan
is the maturity date of such Mortgage Loan and (b) any Balloon Loan is the date
on which such Balloon Loan fully amortizes, assuming interest is paid on a
30/360 basis.
SUBORDINATION; ALLOCATION OF COLLATERAL SUPPORT DEFICITS AND CERTIFICATE
DEFERRED INTEREST
The rights of the holders of the Private Certificates to receive
distributions of principal and interest on or in respect of the Mortgage Loans
will be subordinate to those of the holders of the Mezzanine Certificates, and
the rights of the holders of any class of Mezzanine Certificates to receive
distributions of principal and interest on or in respect of the Mortgage Loans
will be subordinate to those of the holders of the Senior Certificates and each
class of Mezzanine Certificates with an earlier alphabetical designation, other
than, in each case, with respect to Uncovered Prepayment Interest Shortfalls
and certain indemnification expenses. This subordination is intended to enhance
the likelihood of timely receipt by the holders of the Senior Certificates of
the full amount of all interest payable in respect of the Senior Certificates
on each Distribution Date, and the ultimate receipt by the holders of the
Senior Certificates (other than the Class A-X Certificates) of principal in an
amount equal to, in each case, the entire Certificate Balance of such Class of
Certificates. Similarly, but to decreasing degrees, this subordination is also
intended to enhance the likelihood of timely receipt by the holders of Class B,
Class C, Class D and Class E Certificates of the full amount of interest
payable in respect of such Classes of Certificates on each Distribution Date,
and the ultimate receipt by the holders of such Certificates of principal equal
to, in each case, the entire Certificate Balance of each such Class of
Certificates. The protection afforded to the holders of and Class of Offered
Certificates by means of the subordination of each Class of Offered
Certificates, if any, subordinate thereto and by means of the subordination of
the Private Certificates will be accomplished by the application of the
Available Distribution Amount on each Distribution Date in accordance with the
order of priority described under "-- Distributions" above and by the
allocation of Collateral Support Deficits in the manner described below. No
other form of credit support will be available for the benefit of the holders
of the Offered Certificates.
Allocation to each class of Offered Certificates (other than the Class A-X
Certificates), in order of declining seniority for so long as such class is
outstanding, of the Principal Distribution Amount on a given Distribution Date
will have the effect of reducing the aggregate Certificate Balance of such
class at a proportionately faster rate than the rate at which the aggregate
Stated Principal Balance of the Mortgage Loans will decrease. Thus, as
principal is distributed to each class of Offered Certificates, the percentage
interest in the Trust Fund evidenced by such class will be decreased (with a
corresponding increase in the percentage interest in the Trust Fund evidenced
by the Private Certificates and those classes of Offered Certificates
subordinate to the class of Offered Certificates then receiving distributions
of principal), thereby increasing, relative to their respective Certificate
Balances, the subordination afforded such class by the Offered Certificates
subordinate thereto and by the Private Certificates.
On each Distribution Date, immediately following the distributions to be
made to the Certificateholders on such date, the Trustee is to calculate the
amount, if any, by which (i) the aggregate Stated Principal Balance of the
Mortgage Loans expected to be outstanding immediately following such
Distribution Date is less than (ii) the aggregate Certificate Balance of the
Certificates after giving effect to distributions of principal on such
Distribution Date (any such deficit, "Collateral Support Deficit"). The Trustee
will be required to allocate any such Collateral Support Deficit among the
respective Classes of Certificates as follows: to the Class J, Class I, Class
H, Class G, Class F, Class E, Class D, Class C and Class B Certificates in that
order, in reduction of the respective Certificate Balances thereof, in each
case until the remaining Certificate Balance of each such Class has been
reduced to zero. Following the reduction of the Certificate Balances of all
such Classes to zero, any remaining Collateral Support Deficit will be
allocated among the Class A-1A, Class A-1B and Class A-2MF Certificates, pro
rata (based upon such Classes' respective Certificate Balances), until the
remaining Certificate Balances of such Classes have been reduced to zero. Any
Collateral Support Deficit allocated to a Class of Certificates will be
allocated among respective Certificates of such Class in proportion to the
Percentage Interests evidenced thereby.
In general, Collateral Support Deficits could result from the occurrence
of: (i) losses and other shortfalls on or in respect of the Mortgage Loans,
including as a result of defaults and delinquencies
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<PAGE>
thereon, the payment to the Special Servicer of any compensation as described
in "The Pooling and Servicing Agreement -- Servicing Compensation and Payment
of Expenses," and the payment of interest on Advances (to the extent not
covered by Penalty Charges collected on the related Mortgage Loans), and
certain servicing expenses; and (ii) certain unanticipated, non-Mortgage Loan
specific expenses of the Trust Fund, including certain reimbursements to the
Trustee, the Servicer, the Special Servicer and the Depositor and certain
federal, state and local taxes, and certain tax-related expenses, payable out
of the Trust Fund (but excluding Uncovered Prepayment Interest Shortfalls and
certain indemnification expenses of the Trust Fund, which will be allocated to
all or several of the Classes of Regular Certificates on a pro rata basis as a
reduction of such Classes' interest entitlement, as described below) as
described herein under "The Pooling and Servicing Agreement." Accordingly, the
allocation of Collateral Support Deficit as described above will constitute an
allocation of losses and other shortfalls experienced by the Trust Fund. A
Class of Offered Certificates will be considered outstanding until its
Certificate Balance is reduced to zero; provided, however, that reimbursement
of any previously allocated Collateral Support Deficit may thereafter be made
to such Class.
Shortfalls in the Available Distribution Amount resulting from Uncovered
Prepayment Interest Shortfalls and indemnification expenses of the Trust Fund
will generally be allocated to all Classes of the Regular Certificates. In each
case such allocations will be made pro rata to such Classes on the basis of
their Monthly Interest Distributable Amounts (before giving effect to any
reductions therefrom for such Uncovered Prepayment Interest Shortfalls or
indemnification expenses or for Certificate Deferred Interest) and will reduce
such Classes' respective interest entitlements.
Certificate Deferred Interest. On each Distribution Date, the Monthly
Interest Distributable Amount for each Class of Regular Certificates will be
reduced by an amount of Certificate Deferred Interest equal to the aggregate
amount of Mortgage Deferred Interest for all Mortgage Loans for the related Due
Date and allocated to such Class of Certificates, the amount representing such
Certificate Deferred Interest to be allocated first, to the Private
Certificates, second, to the Class E Certificates, third, to the Class D
Certificates, fourth, to the Class C Certificates, and fifth, to the Class B
Certificates. Any Certificate Deferred Interest in excess of the Monthly
Interest Distributable Amount for any Class to which such Certificate Deferred
Interest is allocable will be allocated to the next most senior Class of
Certificates, in the manner set forth above. If the Certificate Balance of at
least one Class of Senior Certificates is not zero, then any amounts
representing Certificate Deferred Interest after allocation thereof to the
Mezzanine Certificates and Private Certificates in accordance with the
preceding sentence, will be allocated to the Senior Certificates (other than
the Class A-X Certificates) pro rata on the basis of such Classes' respective
interest entitlements on such date (before giving effect to any reduction
therefrom on such Distribution Date). The effect of such an allocation of
Certificate Deferred Interest is to reduce the interest otherwise distributable
to such Classes of Certificates. Additionally, on each Distribution Date, the
Certificate Balance of each Class of Regular Certificates (other than the Class
A-X Certificates) will be increased (except for the purposes of determining
Voting Rights and the identity of the Controlling Class) by the amount of
Certificate Deferred Interest, if any, allocated to such Class of Certificates.
"Certificate Deferred Interest": For any Distribution Date with respect to
any Class of Certificates, the amount of Mortgage Deferred Interest allocated
to such Class as described above.
"Mortgage Deferred Interest": With respect to any Mortgage Loan that as of
any Due Date has been modified to reduce the rate at which interest is paid
currently below the Mortgage Rate, the excess, if any, of (a) interest accrued
on the Stated Principal Balance thereof during the related one-month interest
accrual period set forth in the related Mortgage Note at the related Mortgage
Rate over (b) the interest portion of the related Monthly Payment or, if
applicable, Assumed Scheduled Payment due on such Due Date.
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<PAGE>
PREPAYMENT AND YIELD CONSIDERATIONS
YIELD
The yield to maturity on the Offered Certificates will depend upon the
price paid by the Certificateholder, the rate and timing of the distributions
in reduction of Certificate Balance of such Certificates and the rate, timing
and severity of losses on the Mortgage Loans and the extent to which such
losses are allocable in reduction of the Certificate Balance of such
Certificates, as well as prevailing interest rates at the time of prepayment or
default.
The rate of distributions in reduction of the Certificate Balance of any
Class of Offered Certificates, the aggregate amount of distributions on any
Class of Offered Certificates and the yield to maturity of any Class of Offered
Certificates will be directly related to the rate of payments of principal
(both scheduled and unscheduled) on the Mortgage Loans and the amount and
timing of borrower defaults. The yield to maturity of the Class A-2MF
Certificates will be particularly sensitive to the rate and timing of the A-2MF
Principal Distribution Amount. In addition, such distributions in reduction of
Certificate Balance may result from repurchases by the related Mortgage Loan
Seller due to missing or defective documentation or breaches of representations
and warranties with respect to the Mortgage Loans as described herein under
"The Pooling and Servicing Agreement -- Representations and Warranties;
Repurchase," purchases of the Mortgage Loans in the manner described herein
under "The Pooling and Servicing Agreement -- Optional Termination" or
purchases of ARD Loans by Class V-1 or Class V-2 Certificateholders as
described herein under "Description of the Mortgage Loans -- Certain Terms and
Conditions of the Mortgage Loans."
The Certificate Balance of any Class of Offered Certificates may be
reduced without distributions thereon as a result of the allocation of
Collateral Support Deficits to such Class (or the related Classes), reducing
the maximum amount distributable to such Class in respect of Certificate
Balance, as well as the amount of interest that would have accrued thereon in
the absence of such reduction. A Collateral Support Deficit generally results
when the aggregate principal balance of a Mortgage Loan is reduced without an
equal distribution to Certificateholders in reduction of the Certificate
Balances of the Certificates. Collateral Support Deficits are likely to arise
under the circumstances described in the penultimate paragraph of "Description
of the Offered Certificates -- Subordination; Allocation of Collateral Support
Deficits and Certificate Deferred Interests."
Because the ability of a borrower to make a Balloon Payment or to repay an
ARD Loan in full on its Anticipated Repayment Date will depend upon its ability
either to refinance the Mortgage Loan or to sell the related Mortgaged
Properties, there is a risk that a borrower may default at the maturity date in
the case of a Balloon Loan or fail to fully repay an ARD Loan at its
Anticipated Repayment Date. In connection with a default on the Balloon
Payment, the Special Servicer may agree to extend the maturity date thereof as
described herein under "The Pooling and Servicing Agreement -- Realization Upon
Mortgage Loans." In the case of any such default, recovery of proceeds may be
delayed by and until, among other things, work-outs are negotiated,
foreclosures are completed or bankruptcy proceedings are resolved. In addition,
the Directing Holders (as defined below) may instruct to delay the commencement
of any foreclosure proceedings under certain conditions described herein.
Certificateholders are not entitled to receive distributions of Monthly
Payments or the Balloon Payment when due except to the extent they are either
covered by an Advance or actually received. Consequently, any defaulted Monthly
Payment for which no such Advance is made and a defaulted Balloon Payment will
tend to extend the weighted average lives of the Certificates, whether or not a
permitted extension of the due date of the related Mortgage Loan has been
effected.
The rate of payments (including voluntary and involuntary prepayments) on
pools of Mortgage Loans is influenced by a variety of economic, demographic,
geographic, social, tax, legal and other factors, including the level of
mortgage interest rates and the rate at which borrowers default on their
mortgage loans.
The timing of changes in the rate of prepayment on the Mortgage Loans may
significantly affect the actual yield to maturity experienced by an investor
even if the average rate of principal payments
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<PAGE>
experienced over time is consistent with such investor's expectation. In
general, the earlier a prepayment of principal on the Mortgage Loans is applied
in reduction of the Certificate Balance of a Class of Offered Certificates, the
greater the effect on such investor's yield to maturity.
Substantially all of the Mortgage Loans have Lockout Periods ranging from
21 months to 296 months following the Cut-off Date. The weighted average
Lockout Period for the Mortgage Loans is approximately 133 months. The Mortgage
Loans are generally locked out until no earlier than six months preceding their
Anticipated Repayment Date or maturity date, as applicable. See "Description of
the Mortgage Loans -- Certain Terms and Conditions of the Mortgage Loans --
Prepayment Provisions."
As described herein, all of the Mortgage Loans have one or more
call-protection features (i.e., Lockout Periods, Prepayment Premiums or Yield
Maintenance Charges), which are intended to prohibit or discourage borrowers
from prepaying their Mortgage Loans. Notwithstanding the existence of such call
protection, no representation is made as to the rate of principal payments on
the Mortgage Loans or as to the yield to maturity of any Class of Offered
Certificates. In addition, although Excess Cash Flow is applied to reduce the
principal of the ARD Loans after their respective Anticipated Repayment Dates
and the Mortgage Rates are reset at the Revised Rates, there can be no
assurance that any of such Mortgage Loans will be prepaid on that date or any
date prior to maturity. An investor is urged to make an investment decision
with respect to any Class of Offered Certificates based on the anticipated
yield to maturity of such Class of Offered Certificates resulting from its
purchase price and such investor's own determination as to anticipated Mortgage
Loan prepayment rates under a variety of scenarios. The extent to which any
Class of Offered Certificates is purchased at a discount or a premium and the
degree to which the timing of payments on such Class of Offered Certificates is
sensitive to prepayments will determine the extent to which the yield to
maturity of such Class of Offered Certificates may vary from the anticipated
yield. An investor should carefully consider the associated risks, including,
in the case of any Offered Certificates purchased at a discount, the risk that
a slower than anticipated rate of principal payments on the Mortgage Loans
could result in an actual yield to such investor that is lower than the
anticipated yield and, in the case of any Offered Certificates purchased at a
premium, the risk that a faster than anticipated rate of principal payments
could result in an actual yield to such investor that is lower than the
anticipated yield.
An investor should consider the risk that rapid rates of prepayments on
the Mortgage Loans, and therefore of amounts distributable in reduction of the
principal balance of the Offered Certificates entitled to distributions of
principal may coincide with periods of low prevailing interest rates. During
such periods, the effective interest rates on securities in which an investor
may choose to reinvest amounts distributed in reduction of the principal
balance of such investor's Offered Certificate may be lower than the
Pass-Through Rate. Conversely, slower rates of prepayments on the Mortgage
Loans, and therefore of amounts distributable in reduction of principal balance
of the Offered Certificates entitled to distributions of principal, may
coincide with periods of high prevailing interest rates. During such periods,
the amount of principal distributions resulting from prepayments available to
an investor in such Certificates for reinvestment at such high prevailing
interest rates may be relatively small.
The effective yield to holders of Offered Certificates will be lower than
the yield otherwise produced by the applicable Pass-Through Rate and purchase
prices because while interest is generally required to be paid by the borrower
on a specified day between the first day and the eleventh day of each month,
the distribution of such interest will not be made until the Distribution Date
occurring in such month, and principal paid on any Distribution Date will not
bear interest during the period after the interest is paid and before the
Distribution Date occurs. Additionally, as described under "Description of the
Offered Certificates -- Distributions" herein, if the portion of the Available
Distribution Amount distributable in respect of interest on any Class of
Offered Certificates on any Distribution Date is less than the amount of
interest required to be paid to the holders of such Class, the shortfall will
be distributable to holders of such Class of Certificates on subsequent
Distribution Dates, to the extent of Available Funds on such Distribution
Dates. Any such shortfall will not bear interest, however, and will therefore
negatively affect the yield to maturity of such Class of Certificates for so
long as it is outstanding.
MODELING ASSUMPTIONS
Prepayments on mortgage loans may be measured by a prepayment standard or
model. The model used in this Prospectus Supplement is the "Constant Prepayment
Rate" or "CPR" model. The CPR
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<PAGE>
model represents an assumed constant annual rate of prepayment each month,
expressed as a per annum percentage of the then-scheduled principal balance of
the pool of mortgage loans. As used in the following tables, the column headed
"0% CPR" assumes that none of the Mortgage Loans is prepaid before the earlier
of the Anticipated Repayment Date or maturity date, as applicable. All columns
in the following tables assume that all of the ARD Loans are fully prepaid on
their related Anticipated Repayment Date and all of the other Mortgage Loans
are paid in full on their maturity date. There is no assurance, however, that
prepayments of the Mortgage Loans will conform to any level of CPR, and no
representation is made that the Mortgage Loans will prepay at the levels of CPR
shown or at any other prepayment rate. The foregoing assumptions are referred
to herein as the "Prepayment Assumptions."
For purposes of this Prospectus Supplement, the "Mortgage Loan
Assumptions" are the following: (i) each Mortgage Loan will pay principal and
interest in accordance with its terms and scheduled payments will be timely
received on the related Due Date; (ii) all Mortgage Loans have Due Dates on
the eleventh day of each month and accrue interest on the respective basis
described herein; (iii) all prepayments are accompanied by a full month's
interest and there are no Prepayment Interest Shortfalls; (iv) no Prepayment
Premiums or Yield Maintenance Charges are allocated to the Certificates; (v)
distributions on the Certificates are made on the seventeenth day (each assumed
to be a business day) of each month, commencing in July 1998; (vi) the Mortgage
Loan Sellers do not repurchase any Mortgage Loan as described under "The
Pooling and Servicing Agreement -- Representations and Warranties --
Repurchase"; (vii) there are no delinquencies or defaults with respect to, and
no modifications, waivers or amendments of the terms of, the Mortgage Loans;
(viii) there are no Collateral Support Deficits or Appraisal Reduction Amounts
with respect to the Mortgage Loans or the Trust Fund; (ix) none of the Mortgage
Loan Sellers, the Controlling Class or the Servicer exercises the right to
cause the early termination of the Trust Fund; (x) the Servicing Fee Rate,
Trustee Fee Rate and Primary Servicing Fee Rate for each Distribution Date are
the rates set forth herein on the Stated Principal Balance of the Mortgage
Loans as of the related Due Date; and (xi) the date of determination of weighted
average life is , 1998.
YIELD ON THE CLASS A-X CERTIFICATES
The yield-to-call on the Class A-X Certificates will be extremely
sensitive to the rate and timing of principal payments (including prepayments,
defaults and liquidations) and principal losses on the Mortgage Loans, which
may fluctuate significantly from time to time, and to other factors set forth
herein, including the timing of the exercise, if any, of the optional
termination right. Investors should fully consider the associated risks,
including the risk that a rapid rate of principal payments or principal losses
on the Mortgage Loans could result in the failure by investors in the Class A-X
Certificates to fully recoup their initial investments.
The table below indicates the sensitivity of the pre-tax corporate bond
equivalent yields-to-call of the Class A-X Certificates at various prices and
constant prepayment rates. The yields set forth in the table were calculated by
determining the monthly discount rates that, when applied to the assumed stream
of cash flows to be paid on the Class A-X Certificates, would cause the
discounted present value of such assumed stream of cash flows to equal the
assumed purchase prices plus accrued interest of such Class of Certificates and
converting such monthly rates to corporate bond equivalent rates. Such
calculations do not take into account variations that may occur in the interest
rates at which investors may be able to reinvest funds received by them as
distributions on the Class A-X Certificates and consequently do not purport to
reflect the return on any investment in such Class of Certificates when such
reinvestment rates are considered.
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The table below has been prepared in accordance with the Mortgage Loan
Assumptions and the Prepayment Assumptions described above (except that the
optional termination right is assumed to be exercised) and with the assumed
respective purchase prices (as a percentage of the Notional Balance) of the
Class A-X Certificates set forth in the table, plus accrued interest thereon
from June , 1998 to (but not including) June , 1998. Such table assumes that
no Prepayment Premiums or Yield Maintenance Charges are distributed to the
Class A-X Certificates in connection with any prepayment.
SENSITIVITY TO PRINCIPAL PREPAYMENTS OF THE PRE-TAX YIELDS TO CALL OF THE
CLASS A-X CERTIFICATES
<TABLE>
<CAPTION>
ASSUMED PURCHASE PRICE
AS A PERCENTAGE OF NOTIONAL BALANCE 0% CPR 5% CPR 10% CPR 15% CPR 25% CPR
- ------------------------------------- -------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
% % % % % %
% % % % % %
% % % % % %
</TABLE>
There can be no assurance that the Mortgage Loans will prepay at any of
the rates shown in the table or at any other particular rate, that the cash
flows on any of the Class A-X Certificates will correspond to the cash flows
described herein or that the aggregate purchase price of the Class A-X
Certificates will be as assumed. In addition, it is unlikely that the Mortgage
Loans will prepay at any of the specified percentages of CPR until maturity or
that all the Mortgage Loans will so prepay at the same rate. Timing of changes
in the rate of prepayments may significantly affect the actual yield to
maturity to investors, even if the average rate of principal prepayments is
consistent with the expectations of investors. Investors must make their own
decisions as to the appropriate prepayment assumption to be used in deciding
whether to purchase any Class A-X Certificates.
RATED FINAL DISTRIBUTION DATE
The ratings provided by the Rating Agencies address the likelihood that
all principal due on the Offered Certificates will be received by the Rated
Final Distribution Date, which is , 20 , the first Distribution Date
following the date that is two years after the latest Assumed Maturity Date.
Most of the Mortgage Loans have maturity dates or Anticipated Repayment Dates
that occur earlier than the latest Assumed Maturity Date, and most of the
Mortgage Loans may be prepaid prior to maturity. Consequently, it is possible
that the Certificate Balance of each Class of Offered Certificates will be
reduced to zero significantly earlier than the Rated Final Distribution Date.
WEIGHTED AVERAGE LIFE OF OFFERED CERTIFICATES
Weighted average life refers to the average amount of time that will
elapse from the date of determination to the date of distribution or allocation
to the investor of each dollar in reduction of Certificate Balance that is
distributed or allocated, respectively. The weighted average lives of the
Offered Certificates will be influenced by, among other things, the rate at
which principal of the Mortgage Loans is paid, which may occur as a result of
scheduled amortization, Balloon Payments, voluntary or involuntary prepayments
or liquidations.
The weighted average lives of the Offered Certificates may also be
affected to the extent that additional distributions in reduction of the
Certificate Balance of such Certificates occur as a result of the repurchase or
purchase of Mortgage Loans from the Trust Fund as described under "The Pooling
and Servicing Agreement -- Representations and Warranties; Repurchase" or "--
Optional Termination" herein. Such a repurchase or purchase from the Trust Fund
will have the same effect on distributions to the holders of Certificates as if
the related Mortgage Loans had prepaid in full, except that no Prepayment
Premiums or Yield Maintenance Charges are made in respect thereof.
The tables of "Percentage of Initial Certificate Balance Outstanding at
the Respective CPRs Set Forth Below" and "Percentage of Initial Notional
Balance Outstanding at the Respective CPRs Set Forth Below" indicate the
weighted average life of each Class of Offered Certificates and set forth the
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percentage of the initial Certificate Balance or Notional Balance of such
Offered Certificates that would be outstanding after each of the dates shown at
the various CPRs and based on the Prepayment Assumptions. The tables have also
been prepared on the basis of the Mortgage Loan Assumptions. The Mortgage Loan
Assumptions made in preparing the previous and following tables are expected to
vary from the actual performance of the Mortgage Loans. It is highly unlikely
that principal of the Mortgage Loans will be repaid consistent with assumptions
underlying any one of the scenarios. Investors are urged to conduct their own
analysis concerning the likelihood that the Mortgage Loans may pay or prepay on
any particular date.
Based on the Mortgage Loan Assumptions, the Prepayment Assumptions and the
various CPRs, the tables indicate the weighted average life of the Offered
Certificates and set forth the percentages of the initial Certificate Balance
or Notional Balance of the Offered Certificates that would be outstanding after
each of the indicated Distribution Dates, at the indicated CPRs.
PERCENTAGE OF INITIAL NOTIONAL BALANCE
OUTSTANDING AT THE RESPECTIVE CPRS SET FORTH BELOW
<TABLE>
<CAPTION>
CLASS A-X
------------------------------------------------------
DISTRIBUTION DATE 0% CPR 5% CPR 10% CPR 15% CPR 25% CPR
- ------------------------- -------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Initial Percent .........
, 1999 .............
, 2000 .............
, 2001 .............
, 2002 .............
, 2003 .............
, 2004 .............
, 2005 .............
, 2006 .............
, 2007 .............
, 2008 .............
, 2009 .............
, 2010 .............
, 2011 .............
, 2012 .............
, 2013 .............
, 2014 .............
, 2015 .............
, 2016 .............
, 2017 .............
, 2018 .............
, 2019 .............
, 2020 .............
, 2021 .............
, 2022 .............
Weighted Average Life
(in years)(1) ..........
</TABLE>
- ----------
(1) The weighted average life of the Class A-X Certificates is determined by
(i) multiplying the amount of each distribution in reduction of Notional
Balance of such Class by the number of years from the Closing Date to the
related Distribution Date, (ii) adding the results and (iii) dividing the
sum by the aggregate distributions in reduction of Notional Balance
referred to in clause (i). The weighted average life data presented above
for the Class A-X Certificates is for illustrative purposes only, as the
Class A-X Certificates are not entitled to any distributions of
principal.
S-145
<PAGE>
PERCENTAGE OF INITIAL CERTIFICATE BALANCE
OUTSTANDING AT THE RESPECTIVE CPRS SET FORTH BELOW
<TABLE>
<CAPTION>
CLASS A-1A
------------------------------------------------------
DISTRIBUTION DATE 0% CPR 5% CPR 10% CPR 15% CPR 25% CPR
- ------------------------- -------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Initial Percent .........
, 1999 .............
, 2000 .............
, 2001 .............
, 2002 .............
, 2003 .............
, 2004 .............
, 2005 .............
, 2006 .............
, 2007 .............
, 2008 .............
, 2009 .............
, 2010 .............
, 2011 .............
, 2012 .............
, 2013 .............
, 2014 .............
, 2015 .............
, 2016 .............
, 2017 .............
, 2018 .............
, 2019 .............
, 2020 .............
, 2021 .............
, 2022 .............
Weighted Average Life
(in years)(1) ..........
</TABLE>
- ----------
(1) The weighted average life of the Class A-1A Certificates is determined by
(i) multiplying the amount of each distribution in reduction of
Certificate Balance of such Class by the number of years from the Closing
Date to the related Distribution Date, (ii) adding the results and (iii)
dividing the sum by the aggregate distributions in reduction of
Certificate Balance referred to in clause (i).
S-146
<PAGE>
PERCENTAGE OF INITIAL CERTIFICATE BALANCE
OUTSTANDING AT THE RESPECTIVE CPRS SET FORTH BELOW
<TABLE>
<CAPTION>
CLASS A-1B
------------------------------------------------------
DISTRIBUTION DATE 0% CPR 5% CPR 10% CPR 15% CPR 25% CPR
- ------------------------- -------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Initial Percent .........
, 1999 ..................
, 2000 ..................
, 2001 ..................
, 2002 ..................
, 2003 ..................
, 2004 ..................
, 2005 ..................
, 2006 ..................
, 2007 ..................
, 2008 ..................
, 2009 ..................
, 2010 ..................
, 2011 ..................
, 2012 ..................
, 2013 ..................
, 2014 ..................
, 2015 ..................
, 2016 ..................
, 2017 ..................
, 2018 ..................
, 2019 ..................
, 2020 ..................
, 2021 ..................
, 2022 ..................
Weighted Average Life
(in years)(1) ..........
</TABLE>
- ----------
(1) The weighted average life of the Class A-1B Certificates is determined by
(i) multiplying the amount of each distribution in reduction of
Certificate Balance of such Class by the number of years from the Closing
Date to the related Distribution Date, (ii) adding the results and (iii)
dividing the sum by the aggregate distributions in reduction of
Certificate Balance referred to in clause (i).
S-147
<PAGE>
PERCENTAGE OF INITIAL CERTIFICATE BALANCE
OUTSTANDING AT THE RESPECTIVE CPRS SET FORTH BELOW
<TABLE>
<CAPTION>
CLASS A-2MF
------------------------------------------------------
DISTRIBUTION DATE 0% CPR 5% CPR 10% CPR 15% CPR 25% CPR
- ------------------------- -------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Initial Percent .........
, 1999 .............
, 2000 .............
, 2001 .............
, 2002 .............
, 2003 .............
, 2004 .............
, 2005 .............
, 2006 .............
, 2007 .............
, 2008 .............
, 2009 .............
, 2010 .............
, 2011 .............
, 2012 .............
, 2013 .............
, 2014 .............
, 2015 .............
, 2016 .............
, 2017 .............
, 2018 .............
, 2019 .............
, 2020 .............
, 2021 .............
, 2022 .............
Weighted Average Life
(in years)(1) ..........
</TABLE>
- ----------
(1) The weighted average life of the Class A-2MF Certificates is determined
by (i) multiplying the amount of each distribution in reduction of
Certificate Balance of such Class by the number of years from the Closing
Date to the related Distribution Date, (ii) adding the results and (iii)
dividing the sum by the aggregate distributions in reduction of
Certificate Balance referred to in clause (i).
S-148
<PAGE>
PERCENTAGE OF INITIAL CERTIFICATE BALANCE
OUTSTANDING AT THE RESPECTIVE CPRS SET FORTH BELOW
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------
DISTRIBUTION DATE 0% CPR 5% CPR 10% CPR 15% CPR 25% CPR
- ------------------------- -------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Initial Percent .........
, 1999 .............
, 2000 .............
, 2001 .............
, 2002 .............
, 2003 .............
, 2004 .............
, 2005 .............
, 2006 .............
, 2007 .............
, 2008 .............
, 2009 .............
, 2010 .............
, 2011 .............
, 2012 .............
, 2013 .............
, 2014 .............
, 2015 .............
, 2016 .............
, 2017 .............
, 2018 .............
, 2019 .............
, 2020 .............
, 2021 .............
, 2022 .............
Weighted Average Life
(in years)(1) ..........
</TABLE>
- ----------
(1) The weighted average life of the Class B Certificates is determined by
(i) multiplying the amount of each distribution in reduction of
Certificate Balance of such Class by the number of years from the Closing
Date to the related Distribution Date, (ii) adding the results and (iii)
dividing the sum by the aggregate distributions in reduction of
Certificate Balance referred to in clause (i).
S-149
<PAGE>
PERCENTAGE OF INITIAL CERTIFICATE BALANCE
OUTSTANDING AT THE RESPECTIVE CPRS SET FORTH BELOW
<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------
DISTRIBUTION DATE 0% CPR 5% CPR 10% CPR 15% CPR 25% CPR
- ------------------------- -------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Initial Percent .........
, 1999 .............
, 2000 .............
, 2001 .............
, 2002 .............
, 2003 .............
, 2004 .............
, 2005 .............
, 2006 .............
, 2007 .............
, 2008 .............
, 2009 .............
, 2010 .............
, 2011 .............
, 2012 .............
, 2013 .............
, 2014 .............
, 2015 .............
, 2016 .............
, 2017 .............
, 2018 .............
, 2019 .............
, 2020 .............
, 2021 .............
, 2022 .............
Weighted Average Life
(in years)(1) ..........
</TABLE>
- ----------
(1) The weighted average life of the Class C Certificates is determined by
(i) multiplying the amount of each distribution in reduction of
Certificate Balance of such Class by the number of years from the Closing
Date to the related Distribution Date, (ii) adding the results and (iii)
dividing the sum by the aggregate distributions in reduction of
Certificate Balance referred to in clause (i).
S-150
<PAGE>
PERCENTAGE OF INITIAL CERTIFICATE BALANCE
OUTSTANDING AT THE RESPECTIVE CPRS SET FORTH BELOW
<TABLE>
<CAPTION>
CLASS D
------------------------------------------------------
DISTRIBUTION DATE 0% CPR 5% CPR 10% CPR 15% CPR 25% CPR
- ------------------------- -------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Initial Percent .........
, 1999 .............
, 2000 .............
, 2001 .............
, 2002 .............
, 2003 .............
, 2004 .............
, 2005 .............
, 2006 .............
, 2007 .............
, 2008 .............
, 2009 .............
, 2010 .............
, 2011 .............
, 2012 .............
, 2013 .............
, 2014 .............
, 2015 .............
, 2016 .............
, 2017 .............
, 2018 .............
, 2019 .............
, 2020 .............
, 2021 .............
, 2022 .............
Weighted Average Life
(in years)(1) ..........
</TABLE>
- ----------
(1) The weighted average life of the Class D Certificates is determined by
(i) multiplying the amount of each distribution in reduction of
Certificate Balance of such Class by the number of years from the Closing
Date to the related Distribution Date, (ii) adding the results and (iii)
dividing the sum by the aggregate distributions in reduction of
Certificate Balance referred to in clause (i).
S-151
<PAGE>
PERCENTAGE OF INITIAL CERTIFICATE BALANCE
OUTSTANDING AT THE RESPECTIVE CPRS SET FORTH BELOW
<TABLE>
<CAPTION>
CLASS E
------------------------------------------------------
DISTRIBUTION DATE 0% CPR 5% CPR 10% CPR 15% CPR 25% CPR
- ------------------------- -------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Initial Percent .........
, 1999 .............
, 2000 .............
, 2001 .............
, 2002 .............
, 2003 .............
, 2004 .............
, 2005 .............
, 2006 .............
, 2007 .............
, 2008 .............
, 2009 .............
, 2010 .............
, 2011 .............
, 2012 .............
, 2013 .............
, 2014 .............
, 2015 .............
, 2016 .............
, 2017 .............
, 2018 .............
, 2019 .............
, 2020 .............
, 2021 .............
, 2022 .............
Weighted Average Life
(in years)(1) ..........
</TABLE>
- ----------
(1) The weighted average life of the Class E Certificates is determined by
(i) multiplying the amount of each distribution in reduction of
Certificate Balance of such Class by the number of years from the Closing
Date to the related Distribution Date, (ii) adding the results and (iii)
dividing the sum by the aggregate distributions in reduction of
Certificate Balance referred to in clause (i).
S-152
<PAGE>
THE POOLING AND SERVICING AGREEMENT
GENERAL
The Certificates will be issued pursuant to a Pooling and Servicing
Agreement to be dated as of June , 1998 (the "Pooling and Servicing
Agreement"), by and among the Depositor, the Servicer, the Special Servicer and
the Trustee.
Reference is made to the Prospectus for important information in addition
to that set forth herein regarding the terms of the Pooling and Servicing
Agreement and terms and conditions of the Offered Certificates. The Trustee
will provide a copy of the Pooling and Servicing Agreement to a prospective or
actual holder of an Offered Certificate, upon written request and, at the
Trustee's discretion, payment of a reasonable fee for any expenses. The Pooling
and Servicing Agreement will also be made available by the Trustee on its
Website, at the address set forth on page S-4 hereof. The Pooling and Servicing
Agreement will also be filed with the Commission by the Depositor by means of
the EDGAR System and should be available on the Commission's Website, the
address of which is "www.sec.gov".
ASSIGNMENT OF THE MORTGAGE LOANS
On the Closing Date, the Depositor will sell, transfer or otherwise
convey, assign or cause the assignment of the Mortgage Loans, without recourse,
to the Trustee for the benefit of the holders of Certificates. On or prior to
the Closing Date, the Depositor will deliver to the Trustee, with respect to
each Mortgage Loan, a mortgage file ("Mortgage File") containing certain
documents and instruments, including, among other things, the following: (i)
the original Mortgage Note endorsed without recourse to the order of the
Trustee, as trustee; (ii) the original mortgage or counterpart thereof (or, in
either case, a certified copy thereof); (iii) the assignment of the mortgage in
recordable form in favor of the Trustee; (iv) if applicable, preceding
assignments of mortgages; (v) the related security agreement, if any; (vi) if
applicable, the original assignment of the assignment of leases and rents to
the Trustee; (vii) if applicable, preceding assignments of assignments of
leases and rents; (viii) a certified copy of the UCC-1 Financing Statements, if
any, including UCC-3 continuation statements and UCC-3 assignments; (x) if
applicable, the original loan agreements; (xi) the original lender's title
insurance policy (or marked commitments to insure) and (xii) if applicable, the
original Lease Enhancement Policies and Residual Value Insurance Policies or,
in the case of the Ritz Carlton Loan, such other documents and instruments as
may be necessary to effect the transfer thereof. The Trustee will hold such
documents in trust for the benefit of the holders of the Certificates. The
Trustee is obligated to review such documents for each Mortgage Loan within 60
days after the Closing Date and promptly thereafter (but in no event later than
90 days after the Closing Date) report any missing documents or certain types
of defects therein (in each such case, a "Defect" in the related Mortgage File)
to the Depositor, the Servicer, the Special Servicer and the Mortgage Loan
Seller.
REPRESENTATIONS AND WARRANTIES; REPURCHASE
In the Pooling and Servicing Agreement, the Depositor will assign the
representations and warranties made by the related Mortgage Loan Seller to the
Depositor in the Mortgage Loan Purchase Agreement to the Trustee for the
benefit of the Certificateholders. In the Mortgage Loan Purchase Agreement, the
related Mortgage Loan Seller will represent and warrant, among other things,
that (subject to certain exceptions specified in the Mortgage Loan Purchase
Agreement), as of the Closing Date (unless otherwise specified)
(i) Immediately prior to the sale, transfer and assignment to the
Depositor, no Mortgage Note or Mortgage was subject to any assignment (other
than to the Mortgage Loan Seller), participation or pledge, and the Mortgage
Loan Seller had good and marketable title to, and was the sole owner of, the
related Mortgage Loan;
(ii) The Mortgage Loan Seller has full right and authority to sell, assign
and transfer such Mortgage Loan, and the assignment to the Depositor
constitutes a legal, valid and binding assignment of such Mortgage Loan;
S-153
<PAGE>
(iii) The Mortgage Loan Seller is transferring such Mortgage Loan free and
clear of any and all liens, pledges, charges or security interests of any
nature encumbering such Mortgage Loan;
(iv) Each related Mortgage Note, Mortgage, assignment of leases (if any)
and other agreement executed in connection with such Mortgage Loan is the
legal, valid and binding obligation of the related borrower, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors rights generally, or by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and to the Mortgage Loan Seller's knowledge, there is no
valid defense, counterclaim, or right of rescission available to the related
borrower with respect to such Mortgage Note, Mortgage, assignment of leases and
other agreements;
(v) Each related assignment of leases creates a valid collateral or first
priority assignment of, or a valid first priority security interest in, certain
rights under the related lease, subject only to a license granted to the
related borrower to exercise certain rights and to perform certain obligations
of the lessor under such lease, including the right to operate the related
Mortgaged Property; no person other than the related borrower owns any interest
in any payments due under such lease that is superior to or of equal priority
with the mortgagee's interest therein;
(vi) Each related assignment of Mortgage from the Mortgage Loan Seller to
the Depositor and related assignment of the assignment of leases, if any, or
assignment of any other agreement executed in connection with such Mortgage
Loan from the Mortgage Loan Seller to the Depositor constitutes the legal,
valid and binding assignment from the Mortgage Loan Seller to the Depositor,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, liquidation, receivership, moratorium or other laws relating to
or affecting creditors' rights generally, or by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law);
(vii) Since origination, and except as set forth in the related mortgage
file, such Mortgage Loan has not been modified, altered, satisfied, canceled,
subordinated or rescinded and, each related Mortgaged Property has not been
released from the lien of the related Mortgage in any manner which materially
interferes with the security intended to be provided by such Mortgage;
(viii) Each related Mortgage is a valid and enforceable first lien on the
related Mortgaged Property (subject to the matters described in clause (xi)
below), and such Mortgaged Property is free and clear of any mechanics' and
materialmen's liens which are prior to or equal with the lien of the related
Mortgage, except those which are insured against by a lender's title insurance
policy (as described below);
(ix) The Mortgage Loan Seller has not taken any action that would cause
the representations and warranties made by each related borrower in the
Mortgage Loan not to be true;
(x) The Mortgage Loan Seller has no knowledge that the material
representations and warranties made by each related borrower in such Mortgage
Loan are not true in any material respect;
(xi) The lien of each related Mortgage is a first priority lien in the
original principal amount of such Mortgage Loan or allocated loan amount of the
portions of the Mortgaged Property covered thereby (as set forth in the related
Mortgage) after all advances of principal and is insured by an ALTA lender's
title insurance policy (or a binding commitment therefor), or its equivalent as
adopted in the applicable jurisdiction, insuring the Mortgage Loan Seller, its
successors and assigns, subject only to (a) the lien of current real property
taxes, ground rents, water charges, sewer rents and assessments not yet due and
payable, (b) covenants, conditions and restrictions, rights of way, easements
and other matters of public record, none of which, individually or in the
aggregate, materially interferes with the current use of the Mortgaged Property
or the security intended to be provided by such Mortgage or with the borrower's
ability to pay its obligations when they become due or the value of the
Mortgaged Property and (c) the exceptions (general and specific) set forth in
such policy, none of which, individually or in the aggregate, materially
interferes with the current general use of the Mortgaged Property or materially
interferes with the security intended to be provided by such Mortgage or with
the related borrower's ability to pay its obligations when they become due or
the value of the Mortgaged Property; such policy was issued by a title
insurance company licensed to issue policies in the state in which the related
Mortgaged Property is
S-154
<PAGE>
located and is assignable to the Depositor and the Trustee without the consent
of or any notification to the insurer, and is in full force and effect upon the
consummation of the transactions contemplated by the Mortgage Loan Purchase
Agreement; no claims have been made under such policy and the Mortgage Loan
Seller has not undertaken any action or omitted to take any action, and has no
knowledge of any such act or omission, which would impair or diminish the
coverage of such policy;
(xii) The proceeds of such Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder and the Mortgage Loan
Seller covenants that it will not make any future advances under the Mortgage
Loan to the related borrower;
(xiii) As of the later of the closing date for each Mortgage Loan or the
most recent inspection of the related Mortgaged Property by the Mortgage Loan
Seller, each related Mortgaged Property is free of any material damage that
would affect materially and adversely the value of such Mortgaged Property as
security for the Mortgage Loan or reserves have been established to remediate
such damage and, as of the closing date for each Mortgage Loan and, to the
Mortgage Loan Seller's knowledge, as of the date hereof, there is no proceeding
pending for the total or partial condemnation of such Mortgaged Property that
would have a material adverse effect on the value of the Mortgaged Property;
(xiv) The Mortgage Loan Seller has inspected or caused to be inspected
each related Mortgaged Property within the past twelve months or within three
months of origination of the Mortgage Loan;
(xv) No Mortgage Loan has a shared appreciation feature, any other
contingent interest feature or a negative amortization feature other than the
ARD Loans which may have negative amortization from and after the Anticipated
Repayment Date;
(xvi) Each Mortgage Loan is a whole loan and contains no equity
participation by the Mortgage Loan Seller or the applicable Originator;
(xvii) The Mortgage Rate (exclusive of any default interest, late charges,
or prepayment premiums) of such Mortgage Loan complied as of the date of
origination with, or is exempt from, applicable state or federal laws,
regulations and other requirements pertaining to usury; and any and all other
requirements of any federal, state or local laws, including, without
limitation, truth-in-lending, real estate settlement procedures, equal credit
opportunity or disclosure laws, applicable to such Mortgage Loan have been
complied with as of the date of origination of such Mortgage Loan;
(xviii) Neither the Mortgage Loan Seller, nor, to the Mortgage Loan
Seller's best knowledge, any Originator other than the Mortgage Loan Seller,
committed any fraudulent acts during the origination process of any Mortgage
Loan it originated and to the best of the Mortgage Loan Seller's knowledge, the
origination, servicing and collection of each Mortgage Loan is in all respects
legal, proper and prudent in accordance with customary industry standards;
(xix) All taxes and governmental assessments that became due and owing
prior to the Closing Date with respect to each related Mortgaged Property have
been paid or an escrow of funds in an amount sufficient to cover such payments
has been established;
(xx) All escrow deposits and payments required pursuant to each Mortgage
Loan are in the possession, or under the control, of the Mortgage Loan Seller
or its agent and there are no deficiencies in connection therewith and all such
escrows and deposits have been conveyed by the Mortgage Loan Seller to the
Depositor and identified as such with appropriate detail;
(xxi) Each related Mortgaged Property is insured by a fire and extended
perils insurance policy, issued by an insurer meeting the requirements of the
Pooling and Servicing Agreement, in an amount not less than the replacement
cost and the amount necessary to avoid the operation of any co-insurance
provisions with respect to the related Mortgaged Property; each related
Mortgaged Property is also covered by business interruption insurance which
covers a period of not less than 12 months and comprehensive general liability
insurance in amounts generally required by institutional lenders for similar
properties; all premiums on such insurance policies required to be paid as of
the date hereof have been paid; such insurance policies require prior notice to
the insured of termination or cancellation, and no such notice has been
received; such insurance names the Mortgagee under the Mortgage Loan and its
S-155
<PAGE>
successors and assigns as a named or additional insured; other than the Credit
Lease Loans, each related Mortgage Loan obligates the related borrower to
maintain all such insurance and, at such borrower's failure to do so,
authorizes the mortgagee to maintain such insurance at the borrower's cost and
expense and to seek reimbursement therefor from such borrower;
(xxii) There is no monetary default, breach, violation or event of
acceleration existing under the related Mortgage Loan. To the Mortgage Loan
Seller's knowledge, there is no (a) material non-monetary default, breach,
violation or event of acceleration existing under the related Mortgage Loan or
(b) event (other than payments due but not yet delinquent) which, with the
passage of time or with notice and the expiration of any grace or cure period,
would and does constitute a default, breach, violation or event of
acceleration;
(xxiii) No Mortgage Loan has been more than 30 days delinquent since
origination and as of the Cut-off Date no Mortgage Loan is 30 or more days
delinquent;
(xxiv) Each related Mortgage contains provisions so as to render the
rights and remedies of the holder thereof adequate for the realization against
the Mortgaged Property of the benefits of the security, including realization
by judicial or, if applicable, non-judicial foreclosure, and there is no
exemption available to the borrower which would interfere with such right to
foreclose (except as may be imposed by bankruptcy, insolvency, moratorium,
redemption or other similar laws affecting creditors' rights generally, or by
general principles of equity) and to the Mortgage Loan Seller's knowledge, no
borrower is a debtor in a state or federal bankruptcy or insolvency proceeding;
(xxv) Each borrower represents and warrants that except as set forth in
certain environmental reports and to the best of its knowledge it has not used,
caused or permitted to exist and will not use, cause or permit to exist on the
related Mortgaged Property any hazardous materials in any manner which violates
federal, state or local laws, ordinances, regulations, orders, directives or
policies governing the use, storage, treatment, transportation, manufacture,
refinement, handling, production or disposal of hazardous materials; the
related borrower or an affiliate or an affiliate thereof agrees to indemnify,
defend and hold the mortgagee and its successors and assigns harmless from and
against losses, liabilities, damages, injuries, penalties, fines, expenses, and
claims of any kind whatsoever (including attorneys' fees and costs) paid,
incurred or suffered by, or asserted against, any such party resulting from a
breach of certain representations, warranties or covenants given by the
borrower in connection with such Mortgage Loan. A Phase I environmental report
and with respect to certain Mortgage Loans, a Phase II Environmental Report,
was conducted by a reputable environmental engineer in connection with such
Mortgage Loan, which report did not indicate any material non-compliance or
material existence of hazardous materials or, if any material non-compliance or
material existence of hazardous materials were indicated in any such report,
funds sufficient to cure such findings have been escrowed by the related
borrower and held by the related mortagee. To the best of the Mortgage Loan
Seller's knowledge, in reliance on such environmental reports, each Mortgaged
Property is in material compliance with all applicable federal, state and local
laws pertaining to environmental hazards, and to the best of the Mortgage Loan
Seller's knowledge, no notice of violation of such laws has been issued by any
governmental agency or authority, except, in all cases, as indicated in certain
environmental reports or other documents previously provided to the Rating
Agencies; the Mortgage Loan Seller has not taken any action which would cause
the Mortgaged Property to not be in compliance with all federal, state and
local laws pertaining to environmental hazards;
(xxvi) Each Mortgage Loan contains provisions for the acceleration of the
payment of the unpaid principal balance of such Mortgage Loan if, without
complying with the requirements of the Mortgage Loan, the related Mortgaged
Property, or any controlling interest therein, is directly or indirectly
transferred or sold, or encumbered in connection with subordinate financing;
(xxvii) All improvements included in any MAI appraisals are within the
boundaries of the related Mortgaged Property, except for de minimis
encroachments onto adjoining parcels for which the Mortgage Loan Seller has
obtained title insurance against losses arising therefrom and no improvements
on adjoining parcels encroach onto the related Mortgaged Property except for de
minimis encroachments;
S-156
<PAGE>
(xxviii) The mortgage loan schedule which is attached as an exhibit to the
Pooling and Servicing Agreement is complete and accurate in all material
respects as of the dates of the information set forth therein;
(xxix) With respect to any Mortgage Loan where all or a material portion
of the estate of the related borrower therein is a leasehold estate, based upon
the terms of the ground lease and any estoppel received from the ground lessor,
the Mortgage Loan Seller represents and warrants that:
(A) The ground lease or a memorandum regarding such ground lease has been
duly recorded. The ground lease permits the interest of the lessee to be
encumbered by the related Mortgage and does not restrict the use of the
related Mortgaged Property by such lessee, its successors or assigns in a
manner that would adversely affect the security provided by the related
Mortgage. To the Mortgage Loan Seller's best knowledge, there has been no
material change in the terms of the ground lease since its recordation,
except by any written instruments which are included in the related
mortgage file;
(B) The lessor under such ground lease has agreed in a writing included
in the related mortgage file that the ground lease may not be amended,
modified, canceled or terminated without the prior written consent of the
mortgagee and that any such action without such consent is not binding on
the mortgagee, its successors or assigns;
(C) The ground lease has an original term (or an original term plus one
or more optional renewal terms, which, under all circumstances, may be
exercised, and will be enforceable, by the mortgagee) that extends not less
than 10 years beyond the stated maturity of the related Mortgage Loan;
(D) Based on the title insurance policy (or binding commitment therefor)
obtained by the Mortgage Loan Seller, the ground lease is not subject to
any liens or encumbrances superior to, or of equal priority with, the
Mortgage, subject to exceptions of the types described in clause (xi) above
and liens that encumber the ground lessor's fee interest;
(E) The ground lease is assignable to the mortgagee under the leasehold
estate and its assigns without the consent of the lessor thereunder;
(F) As of the closing date of the related Mortgage Loan, the ground lease
is in full force and effect, the Mortgage Loan Seller has received no
notice that any default beyond applicable notice and grace periods has
occurred, and there is no existing condition which, but for the passage of
time or giving of notice, would result in a default under the terms of the
ground lease;
(G) The ground lease or ancillary agreement between the lessor and the
lessee requires the lessor to give notice of any default by the lessee to
the mortgagee;
(H) A mortgagee is permitted a reasonable opportunity (including, where
necessary, sufficient time to gain possession of the interest of the lessee
under the ground lease through legal proceedings, or to take other action
so long as the mortgagee is proceeding diligently) to cure any default
under the ground lease which is curable after the receipt of notice of any
default before the lessor may terminate the ground lease. All rights of the
mortgagee under the ground lease and the related Mortgage (insofar as it
relates to the ground lease) may be exercised by or on behalf of the
mortgagee;
(I) The ground lease does not impose any restrictions on subletting that
would be viewed as commercially unreasonable by an institutional investor.
The lessor is not permitted to disturb the possession, interest or quiet
enjoyment of any subtenant of the lessee in the relevant portion of the
Mortgaged Property subject to the ground lease for any reason, or in any
manner, which would adversely affect the security provided by the related
Mortgage;
(J) Under the terms of the ground lease and the related Mortgage, any
related insurance proceeds or condemnation award (other than in respect of
a total or substantially total loss or taking) will be applied either to
the repair or restoration of all or part of the related Mortgaged Property,
with the mortgagee or a trustee appointed by it having the right to hold
and disburse such proceeds
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as repair or restoration progresses, or to the payment of the outstanding
principal balance of the Mortgage Loan, together with any accrued interest,
except that in the case of condemnation awards, the ground lessor may be
entitled to a portion of such award;
(K) Under the terms of the ground lease and the related Mortgage, any
related insurance proceeds, or condemnation award in respect of a total or
substantially total loss or taking of the related Mortgaged Property will
be applied first to the payment of the outstanding principal balance of the
Mortgage Loan, together with any accrued interest (except as provided by
applicable law or in cases where a different allocation would not be viewed
as commercially unreasonable by any institutional investor, taking into
account the relative duration of the ground lease and the related Mortgage
and the ratio of the market value of the related Mortgaged Property to the
outstanding principal balance of such Mortgage Loan). Until the principal
balance and accrued interest rate are paid in full, neither the lessee nor
the lessor under the ground lease will have an option to terminate or
modify the ground lease without the prior written consent of the mortgagee
as a result of any casualty or partial condemnation, except to provide for
an abatement of the rent; and
(L) Provided that the mortgagee cures any defaults which are susceptible
to being cured, the lessor has agreed to enter into a new lease upon
termination of the ground lease for any reason, including rejection of the
ground lease in a bankruptcy proceeding;
(xxx) With respect to Mortgage Loans that are cross-collateralized, all
other loans that are cross-collateralized by such Mortgage Loans are included
in the Trust Fund;
(xxxi) Neither the Mortgage Loan Seller nor any affiliate thereof has any
obligation to make any capital contribution to any borrower under a Mortgage
Loan, other than contributions made on or prior to the Closing Date;
(xxxii) (1) The Mortgage Loan is directly secured by a Mortgage on a
commercial property or multifamily residential property, and (2) the fair
market value of such real property, as evidenced by an MAI appraisal conducted
within 12 months of the origination of the Mortgage Loan, was at least equal to
80% of the principal amount of the Mortgage Loan (a) at origination (or if the
Mortgage Loan has been modified in a manner that constituted a deemed exchange
under Section 1001 of the Code at a time when the Mortgage Loan was not in
default or default with respect thereto was not reasonably foreseeable, the
date of the last such modification) or (b) at the Closing Date; provided that
the fair market value of the real property interest must first be reduced by
(A) the amount of any lien on the real property interest that is senior to the
Mortgage Loan (unless such senior lien also secures a Mortgage Loan, in which
event the computation described in (a) and (b) shall be made on an aggregated
basis) and (B) a proportionate amount of any lien that is in parity with the
Mortgage Loan (unless such other lien secures a Mortgage Loan that is
cross-collateralized with such Mortgage Loan, in which event the computation
described in (a) and (b) shall be made on an aggregate basis);
(xxxiii) There are no subordinate mortgages encumbering the related
Mortgaged Property, nor are there any preferred equity interests held by the
Mortgage Loan Seller or any mezzanine debt related to such Mortgaged Property,
except as set forth herein or in Schedule V to the Mortgage Loan Purchase
Agreement;
(xxxiv) The loan documents executed in connection with each Mortgage Loan
require that the related borrower be a single-purpose entity. (For this
purpose, "single-purpose entity" shall mean an entity, other than an
individual, that is formed or organized solely for the purpose of owning and
operating one or more Mortgaged Properties, is prohibited from engaging in any
business unrelated to such property and the related Mortgage Loan, does not
have any assets other than those related to its interest in the related
Mortgaged Property or its financing, or any indebtedness other than as
permitted under the related Mortgage Loan);
(xxxv) Each Mortgage Loan prohibits the related borrower from mortgaging
or otherwise encumbering the Mortgaged Property and in carrying any additional
indebtedness except in connection with trade debt and equipment financings in
the ordinary course of borrower's business and liens contested in accordance
with the terms of the Mortgage Loans;
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(xxxvi) Each borrower covenants in the Mortgage Loan documents that it
shall remain in material compliance with all material licenses, permits and
other legal requirements necessary and required to conduct its business;
(xxxvii) Each Mortgaged Property is located on or adjacent to a dedicated
road, or has access to an irrevocable easement permitting ingress and egress,
is served by public utilities and services generally available in the
surrounding community or otherwise appropriate for the use in which the
Mortgaged Property is currently being utilized, and is a separate tax parcel;
(xxxviii) Based solely on a flood zone certification or a survey of the
related Mortgaged Property, if any portion of the improvements on the Mortgaged
Property is located in an area identified by the Federal Emergency Management
Agency, with respect to certain Mortgage Loans, or the Secretary of Housing and
Urban Development with respect to other Mortgage Loans, as having special flood
hazards, the terms of the Mortgage Loan require the borrower to maintain flood
insurance;
(xxxix) To the knowledge of the Mortgage Loan Seller, with respect to each
Mortgage which is a deed of trust, a trustee, duly qualified under applicable
law to serve as such, currently so serves and is named in the deed of trust or
has been substituted in accordance with applicable law, and except in
connection with a trustee's sale after a default by the related Mortgagor, no
fees are payable to such trustee;
(xl) With respect to each Mortgage Loan which is identified in this
Prospectus Supplement as a Credit Lease Loan:
(A) the base rental payments under each Credit Lease are equal to or
greater than the payments due under the loan documents executed in
connection with the related Credit Lease Loan and are payable without
notice or demand, and without setoff, counterclaim, recoupment, abatement,
reduction or defense and, subject to the rights of the Tenant to terminate
the Credit Lease or offset, abate, suspend or otherwise diminish any
amounts payable by the Tenant under the Credit Lease which have been
disclosed to Depositor, each Credit Lease Loan fully amortizes over its
original term and there is no balloon payment of rent due under any Credit
Lease;
(B) either (i) the obligations of the Tenant under each Credit Lease,
including, but not limited to, the obligation of Tenant to pay fixed and
additional rent, are not affected by reason of any damage to or destruction
of any portion of the related Credit Lease Property; any taking of such
Credit Lease Property or any part thereof by condemnation or otherwise; or
any prohibition, limitation, interruption, cessation, restriction,
prevention or interference of Tenant's use, occupancy or enjoyment of such
Credit Lease Property or (ii) a Lease Enhancement Policy has been obtained;
(C) every obligation associated with managing, owning, developing and
operating the Credit Lease Property, including, but not limited to, the
costs associated with utilities, taxes, insurance, capital and structural
improvements, maintenance and repairs is an obligation of the Tenant;
(D) no borrower has any monetary obligations under any Credit Lease that
have not been met, or any nonmonetary obligations under any Credit Lease
the breach of which would result in either the abatement of rent, a right
of setoff or the termination of the related Credit Lease;
(E) no Tenant can terminate any Credit Lease for any reason (except for a
default by the related borrower under the Credit Lease) prior to the
payments in full of (a) the principal balance of the related Credit Lease
Loan, (b) all accrued and unpaid interest on such Credit Lease Loan and (c)
any other sums due and payable under such Credit Lease Loan, or, if a
Tenant can terminate any Credit Lease as a result of a casualty or
condemation, a Lease Enhancement Policy has been obtained with respect to
the related Credit Lease Loan;
(F) if a Tenant assigns its Credit Lease or sublets the related Credit
Lease Property, such Tenant remains primarily obligated under such Credit
Lease unless each Rating Agency has confirmed in writing that such transfer
or sublet will not result in a downgrade, qualification or withdrawal of
the then-current ratings of the Certificates;
(G) each Tenant has agreed to indemnify the related borrower from any
claims of any nature relating to the related Credit Lease and Credit Lease
Property, except for environmental problems that were not created by such
Tenant;
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(H) if the obligations of the Tenant under any Credit Lease are
guaranteed by a guarantor pursuant to a guaranty, the guaranty states that
it represents the unconditional obligation of the guarantor and is a
guarantee of payment, not merely of collection; and
(I) with respect to Loan No. 11 and Loan No. 81, the Tenant shall take
occupancy of the premises by January 1, 1999 and the improvements which are
required to be made under such Loans will be completed as required under
such Credit Leases, subject to any applicable grace periods;
(J) to the Seller's knowledge, each Credit Lease contains customary and
enforceable provisions which render the rights and remedies of the lessor
thereunder adequate for the enforcement and satisfaction of the lessor's
rights thereunder;
(K) to the Seller's knowledge, in reliance on a tenant estoppel
certificate and representation made by the Tenant under the Credit Lease or
representations made by the related Borrower under the Mortgage Loan
documents, as of the closing date of each Credit Lease Loan (a) each Credit
Lease was in full force and effect, and no default by the Borrower or the
Tenant has occurred under the Credit Lease, nor is there any existing
condition which, but for the passage of time or the giving of notice, or
both, would result in a default under the terms of the Credit Lease, (b)
none of the terms of the Credit Lease have been impaired, waived, altered
or modified in any respect (except as described in the related tenant
estoppel), (c) no Tenant has been released, in whole or in part, from its
obligations under the Credit Leases, (d) there is no right of recission,
offset, abatement, diminution, defense or counterclaim to any Credit Lease,
nor will the operation of any of the terms of the Credit Leases, or the
exercise of any rights thereunder, render the Credit Lease unenforceable,
in whole or in part, or subject to any right of rescission, offset,
abatement, diminution, defense or counterclaim, and no such right of
rescission, offset, abatement, diminution, defense or counterclaim has been
asserted with respect thereto and (e) each Credit Lease has a term ending
on or after the final maturity of the related Credit Lease Loan;
(L) to the Seller's knowledge, the Mortgaged Property is not subject to
any lease other than the related Credit Lease, no Person has any possessory
interest in, or right to occupy, the Mortgaged property except under and
pursuant to such Credit Lease and the Tenant under the related Credit Lease
is in occupancy of the Mortgaged Property;
(M) the mortgagee is entitled to notice of any event of default from the
Tenant under the Credit Leases;
(N) each Tenant under a Credit Lease is required to make all rental
payments directly to the mortgagee, its successors and assigns under the
related Credit Lease Loan; and
(O) each Credit Lease Loan provides that the related Credit Lease cannot
be modified without the consent of the mortgagee thereunder;
(xli) With respect to any Credit Lease Loan for which a residual value
insurance has been obtained, the related Mortgage Loan:
(A) There is a residual value insurance policy in effect for each such
mortgage loan, each of which was issued by R.V.I. America Insurance
Company;
(B) The claims on the residual value insurance policy will be payable to
the loss payee and the Trustee, on behalf of the Certificateholders, has
been designated as the loss payee;
(C) Pursuant to the terms of the residual value insurance policy, the
person designated as loss payee is only obligated to file a notice of final
claim with R.V. I. American Insurance Company in order to collect the
insured amount;
(D) The residual value insurance policy has been paid in full as of the
effective date of such policy;
(E) As long as there is no event of default under the terms of the
related Credit Lease, the residual value insurance policy cannot be
terminated prior to the termination date;
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(F) The effective date for each related Credit Lease Loan on the residual
value insurance policy is prior to the Closing Date;
(G) The date upon which the outstanding principal balance of each related
Credit Lease Loan is reduced to zero is the policy termination date;
(H) The insured value is a pre-determined amount for each related Credit
Lease Loan and, unless otherwise noted, equal to the expected mortgage loan
balance at loan maturity or expiration of initial lease term;
(I) The insured value shall always be greater than the insured amount.
The insured amount is the amount R.V. I. America Insurance Company will pay
to the loss payee upon the notification of a claim. It is defined as the
lesser of (i) the insured value and (ii) the outstanding principal balance
at the time the claim is made, plus all accrued interest, less any sales
proceeds received by the loss payee;
(J) The residual value insurance policy will not be amended at any time
without the consent of the mortgagee;
(K) So long as there is no event of default under terms of the mortgage,
the residual value insurance policy will not contain borrower transfer
restriction; and
(L) The lease termination date does not accrue prior to the policy
termination date or loan maturity date;
(xli) To the knowledge of the Mortgage Loan Seller, as of the date of the
origination of the related Mortgage Loan, there was no pending action, suit or
proceeding, arbitration or governmental investigation against a borrower or
Mortgaged Property, an adverse outcome of which would materially and adversely
affect such borrower's ability to perform under the related Mortgage Loan;
(xlii) No advance of funds has been made by the Mortgage Loan Seller to
the related borrower (other than Mezzanine Debt and the acquisition of
preferred equity interests by the Preferred Interest Holder) and no funds have
been received from any person other than, or on behalf of, the related borrower
for, or on account of, payments due on the Mortgage Loan;
(xliii) To the extent required under applicable law, as of the Cut-off
Date, the Mortgage Loan Seller was authorized to transact and do business in
the jurisdiction in which each related Mortgaged Property is located;
(xliv) All collateral for the Mortgage Loans is being transferred as part
of the Mortgage Loans;
(xlv) Except in connection with Crossed-Loans and Multi-Property Loans, no
Mortgage Loan requires the mortgagee to release any portion of the Mortgaged
Property from the lien of the related Mortgage except upon (a) payment in full
or defeasance of the related Mortgage Loan, (b) releases of unimproved
out-parcels or (c) releases of portions of the Mortgaged Property which will
not have a material adverse effect on the value of the collateral for the
related Mortgage Loan;
(xlvi) Any insurance proceeds in respect of a casualty loss or taking,
will be applied either to (a) the repair or restoration of all or part of the
related Mortgaged Property, with, in the case of all Mortgage Loans other than
Credit Lease Loans and with respect to all casualty losses or takings in excess
of a specified percentage of the related loan amount, the mortgagee (or a
trustee appointed by it) having the right to hold and disburse such proceeds as
the repair or restoration progresses, or (b) to the payment of the outstanding
principal balance of such Mortgage Loan together with any accrued interest
thereon;
(xlvii) A copy of each Form UCC-1 financing statement, if any, filed with
respect to personal property constituting a part of the related Mortgaged
Property, together with a copy of each Form UCC-2 or UCC-3 assignment, if any,
of such financing statement to the Mortgage Loan Seller and a copy of each Form
UCC-2 or UCC-3 assignment, if any, of such financing statement executed by the
Mortgage Loan Seller in blank which the Trustee or its designee is authorized
to complete (and but for the insertion of the name of the assignee and any
related filing information which is not yet available to the Mortgage Loan
Seller) is in suitable form for filing in the filing office in which such
financing statement was filed;
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(xlviii) To the Mortgage Loan Seller's knowledge, (a) all material
commercial leases affecting the Mortgaged Properties securing the Mortgage
Loans are in full force and effect and (b) there exists no default under any
such material commercial lease either by the lessee thereunder or by the
related borrower that could give rise to the termination of such lease;
(xlix) The improvements located on or forming part of each Mortgaged
Property comply with applicable zoning laws and ordinances, or constitute a
legal non-conforming use or structure or, if any such improvement does not so
comply, such non-compliance does not materially and adversely affect the value
of the related Mortgaged Property;
(l) Each Mortgage Loan constitutes a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code (but without regard to the rule in
Treasury Regulations Section 1.860G-2(f)(2) that treats a defective obligation
as a qualified mortgage or any substantially similar successor provision) and
all Prepayment Premiums and Yield Maintenance charges constitute "customary
prepayment penalties" within the meaning of Treasury Regulation
Section 1.860G-1(b)(2);
(li) With respect to any Mortgage Loan that pursuant to the mortgage
documents can be defeased, the Mortgage Loan cannot be defeased within two
years of the Closing Date, the borrower can pledge only United States
government securities (within the meaning of section 2(a)(16) of the Investment
Company Act of 1940) as the substitute collateral, and the borrower can be
required by the Servicer to establish that the release of the lien is to
facilitate the disposition of the Mortgaged Property or is in connection with
some other customary commercial transaction;
(lii) With respect to any Mortgage Loan that pursuant to the mortgage
documents can be defeased, the Mortgage Loan cannot be defeased within two
years of the Closing Date, the borrower can pledge only United States
government securities (within the meaning of section 2(a)(16) of the Investment
Company Act of 1940) as the substitute collateral, and the borrower can be
required by the Servicer to establish that the release of the lien is to
facilitate the disposition of the Mortgaged Property or is in connection with
some other customary commercial transaction; and
(liii) With respect to each Mortgage Loan for which there are uncompleted
improvements, the only security for such Mortgage Loan (disregarding pledges of
rents, third party guarantees and any personal liability of the obligor) is the
real property securing such Mortgage Loan and at least 90% of the funds
received by the borrower under such Mortgage Loan have been spent or, pursuant
to a binding agreement, are required to be spent to acquire and/or improve the
related Mortgaged Property.
(liv) (A) The Mortgage Loan Documents for each Mortgage Loan provide that
such Mortgage Loan is non-recourse to the related parties thereto except for
certain acts including the fraud, willful misconduct or material
misrepresentation by the related mortgagor and/or its affiliates and, solely
with respect to the CSFBMC Mortgage Loans, any act resulting in the Mortgaged
Property becoming an asset in a voluntary bankruptcy or insolvency proceeding.
Additionally, the Mortgage Loan Documents for each Mortgage Loan provide that
the related mortgagor thereunder shall be liable to the related Mortgage Loan
Seller for any losses incurred by related Mortgage Loan Seller due to (1) the
misapplication or misappropriation of rents, insurance proceeds or condemnation
awards, (2) any act of waste, and (3) any breach of the environmental covenants
contained in the related Mortgage Loan Documents.
(lv) If such Mortgage Loan is a ARD Loan, it commenced amortizing on its
initial scheduled Due Date and provides that: (i) its Mortgage Rate will
increase by no more than two percentage points in connection with the passage
of its Anticipated Repayment Date; (ii) its Anticipated Repayment Date is not
less than seven years following the origination of such Mortgage Loan; (iii) no
later than the related Anticipated Repayment Date, if it has not previously
done so, the related Mortgagor is required to enter into a "lockbox agreement"
whereby all revenue from the related Mortgaged Property shall be deposited
directly into a designated account controlled by the Master Servicer; and (iv)
any cash flow from the related Mortgaged Property that is applied to amortize
such Mortgage Loan following its Anticipated Repayment Date shall, to the
extent such net cash flow is in excess of the Monthly Payment payable
therefrom, be net of budgeted and discretionary (servicer approved) capital
expenditures.
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If either Mortgage Loan Seller has been notified of a Defect in any
Mortgage File or a breach of any of the foregoing representations and
warranties (a "Breach"), which, in either case, materially and adversely
affects the value of any Mortgage Loan or the interests of the
Certificateholders therein, and if such Mortgage Loan Seller cannot cure such
Defect or Breach within a period of 90 days following the earlier of its
receipt of such notice or its discovery of the Defect or Breach, then such
Mortgage Loan Seller will be obligated pursuant to the related Mortgage Loan
Purchase Agreement (the relevant rights under which will be assigned, together
with the Depositor's interests in the Mortgage Loans, by the Depositor to the
Trustee) to repurchase the affected Mortgage Loan within such 90-day period at
a price (the "Purchase Price") equal to the sum of (i) the outstanding
principal balance of such Mortgage Loan as of the date of purchase, (ii) all
accrued and unpaid interest on such Mortgage Loan at the related Mortgage Rate
in effect from time to time, to but not including the Due Date in the Due
Period of purchase, (iii) all related unreimbursed Servicing Advances plus
accrued and unpaid interest on related Advances at the Reimbursement Rate, and
unpaid Servicing, Primary Servicing and Special Servicing Fees allocable to
such Mortgage Loan and (iv) all reasonable out-of-pocket expenses reasonably
incurred or to be incurred by the Servicer, the Special Servicer, the Depositor
and the Trustee in respect of the Defect or Breach giving rise to the
repurchase obligation, including any expenses arising out of the enforcement of
the repurchase obligation.
The foregoing repurchase obligation will constitute the sole remedy
available to the Certificateholders and the Trustee for any Defect in a
Mortgage File or any Breach of either Mortgage Loan Seller's representations
and warranties regarding the Mortgage Loans. Each Mortgage Loan Seller will be
the sole warranting party in respect of the Mortgage Loans sold by the Mortgage
Loan Seller to the Depositor, and none of the Depositor, the Servicer, the
Special Servicer, the Trustee, the Underwriters or any of their affiliates
(other than the Mortgage Loan Seller) will be obligated to repurchase any
affected Mortgage Loan in connection with a breach of the related Mortgage Loan
Seller's representations and warranties if such Mortgage Loan Seller defaults
on its obligation to do so and no assurance can be given that such Mortgage
Loan Seller will fulfill such obligation. However, the Depositor will not
include any Mortgage Loan in the Trust Fund if anything has come to the
Depositor's attention prior to the Closing Date that causes it to believe that
the representations and warranties made by the related Mortgage Loan Seller
regarding such Mortgage Loan will not be correct in all material respects when
made.
Any Defect or any Breach of a representation or warranty that, in either
case, causes any Mortgage Loan not to be a "qualified mortgage" within the
meaning of the REMIC provisions of the Code, shall be deemed to materially and
adversely affect the interests of Certificateholders therein, requiring the
Mortgage Loan Seller to purchase the affected Mortgage Loan from the Trust Fund
at the Purchase Price.
SERVICING OF THE MORTGAGE LOANS; COLLECTION OF PAYMENTS
The Servicer and the Special Servicer will service and administer the
Mortgage Loans for which it is responsible on behalf of the Trust Fund and in
the best interests of and for the benefit of the Certificateholders (as
determined by the Servicer or the Special Servicer, as the case may be, in its
good faith and reasonable judgment), in accordance with applicable law and, to
the extent consistent with the foregoing, the terms of the respective Mortgage
Loans or Specially Serviced Mortgage Loan and, to the extent consistent with
the foregoing, the terms of the Pooling and Servicing Agreement and, to the
extent consistent with the foregoing, in accordance with the higher of the
following standards of care: (i) the same manner in which, and with the same
care, skill, prudence and diligence with which the Servicer or Special
Servicer, as the case may be, services and administers similar commercial or
multifamily mortgage loans for other third-party portfolios, giving due
consideration to the customary and usual standards of practice of prudent
institutional commercial or multifamily mortgage lenders servicing their own
mortgage loans and (ii) the same care, skill, prudence and diligence with which
the Servicer or Special Servicer, as the case may be, services and administers
similar commercial or multifamily mortgage loans owned by the Servicer or
Special Servicer, as the case may be, in either case exercising reasonable
business judgment and acting in accordance with applicable law, the respective
Mortgage Loans or Specially Serviced Mortgage Loans, as applicable, and, to the
extent not inconsistent with the foregoing, the terms of the Pooling and
Servicing Agreement, and with a view to the maximization, on a present value
basis (discounting at the related Mortgage Rate), of timely recovery of
principal and interest on the Mortgage
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Loans or Specially Serviced Mortgage Loans, as applicable, and the best
interests of the Trust Fund and the Certificateholders, as determined by the
Servicer or the Special Servicer, as the case may be, in its reasonable
judgment, but without regard to: (A) any relationship that the Servicer or the
Special Servicer, as the case may be, or any affiliate thereof, may have with
the related Mortgagor or any other party to the Pooling and Servicing
Agreement; (B) the ownership of any Certificate by the Servicer or the Special
Servicer, as the case may be, or any affiliate thereof; (C) the Servicer's
obligation to make Advances; and (D) the Servicer's or the Special Servicer's,
as the case may be, right to receive compensation for its services under the
Pooling and Servicing Agreement or with respect to any particular transaction
(the foregoing, collectively referred to as the "Servicing Standard").
The Servicer will enter into a sub-servicing agreement (the
"Seller-Servicer Agreement") with certain seller-servicers (each, a
"Seller-Servicer") pursuant to which, in the event the Servicer is terminated
or resigns, the successor to the Servicer (other than the Trustee or its
designee) will succeed to the rights and obligations of the Servicer under the
Seller-Servicer Agreement. The Seller-Servicer Agreement provides that the
Seller-Servicers are not terminable unless certain events of default or
termination events occur thereunder. In addition, the Servicer and the Special
Servicer are permitted, at their own expense, to employ sub-servicers, agents
or attorneys in performing any of their respective obligations under the
Pooling and Servicing Agreement, but will not thereby be relieved of any such
obligation and will remain liable to the Trustee and the Certificateholders for
the acts and omissions of any such subservicers, agents or attorneys. The
Pooling and Servicing Agreement provides, however, that neither the Servicer,
the Special Servicer nor any of their respective directors, officers, employees
or agents shall have any liability to the Trust Fund or the Certificateholders
for taking any action or refraining from taking an action in good faith, or for
errors in judgment. The foregoing provision would not protect the Servicer or
the Special Servicer for the breach of its representations or warranties in the
Pooling and Servicing Agreement, the breach of certain specified covenants
therein or any liability by reason of willful misfeasance, bad faith, fraud or
negligence in the performance of its duties or by reason of its grossly
negligent disregard of obligations or duties under the Pooling and Servicing
Agreement. Under the Pooling and Servicing Agreement and the Seller-Servicer
Agreement, the Servicer is primarily liable to the Trust Fund for the servicing
of Mortgage Loans by the Seller-Servicers and each Seller-Servicer has agreed
to indemnify the Servicer for any liability that the Servicer may incur as a
result of the Seller-Servicer's failure to perform its obligations under the
Seller-Servicer Agreement.
The Pooling and Servicing Agreement requires the Servicer or the Special
Servicer, as applicable, to make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans, including, if
applicable, to receive reimbursement of Servicing Fees and Primary Servicing
Fees. Consistent with the above, the Servicer or Special Servicer may, in its
discretion, waive any Penalty Charges in connection with any delinquent Monthly
Payment or Balloon Payment with respect to any Mortgage Loan. With respect to
the ARD Loans, the Servicer and Special Servicer will be directed in the
Pooling and Servicing Agreement not to take any enforcement action with respect
to payment of Excess Interest or principal in excess of the principal component
of the constant Monthly Payment, other than requests for collections, prior to
the final maturity date. With respect to any Specially Serviced Mortgage Loan,
subject to the restrictions set forth below under "-- Realization Upon Mortgage
Loans," the Special Servicer will be entitled to pursue any of the remedies set
forth in the related Mortgage, including the right to acquire, through
foreclosure, all or any of the Mortgaged Properties securing such Mortgage
Loan. The Special Servicer may elect to extend a Mortgage Loan (subject to
conditions described herein) notwithstanding its decision to foreclose on
certain of the Mortgaged Properties.
ADVANCES
On the business day immediately preceding each Distribution Date (the
"Servicer Remittance Date"), the Servicer will be obligated, subject to the
recoverability determination described below, to make advances (each, a "P&I
Advance") out of its own funds or, subject to the replacement thereof as
provided in the Pooling and Servicing Agreement, certain funds held in the
Certificate Account that are not required to be part of the Available
Distribution Amount for such Distribution Date, in an amount equal to (but
subject to reduction as described in the following paragraph) the aggregate of:
(i) all Monthly Payments (net of any related Servicing Fees and Primary
Servicing Fees, except to the extent
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that the related borrower is obligated to reimburse such fees, as provided
herein), other than Balloon Payments, which were due during any related Due
Period and delinquent (or not advanced by any sub-servicer) as of the business
day preceding such Servicer Remittance Date; and (ii) in the case of each
Mortgage Loan delinquent in respect of its Balloon Payment as of the end of the
related Due Period (including any REO Loan as to which the Balloon Payment
would have been past due), an amount (the "Assumed Scheduled Payment") equal to
the sum of (a) the principal portion of the Monthly Payment that would have
been due on such Mortgage Loan on the related Due Date based on the constant
payment required by the related Mortgage Note or the original amortization
schedule thereof (as calculated with interest at the related Mortgage Rate), if
applicable, assuming such Balloon Payment had not become due, after giving
effect to any modification of such Mortgage Loan, and (b) interest on the
Stated Principal Balance of such Mortgage Loan at the applicable Net Mortgage
Rate (net of interest at the Servicing Fee Rate, except to the extent that the
related borrower is obligated to reimburse Servicing Fees). The Servicer's
obligations to make P&I Advances in respect of any Mortgage Loan or REO
Property will continue through liquidation of such Mortgage Loan or disposition
of such REO Property, as the case may be. To the extent the Servicer fails to
make a P&I Advance that it is required to make under the Pooling and Servicing
Agreement, the Trustee is obligated to make such required P&I Advance pursuant
to the Pooling and Servicing Agreement.
With respect to Loan Nos. 187, 223, 235, 305 and 310, the related Mortgage
Loan provides for a grace period for payment defaults which extends beyond the
related Determination Date. As a result, failure to make payments on such
Mortgage Loan by the P&I Advance Date in a given month may not constitute an
event of default thereunder. Pursuant to the Pooling and Servicing Agreement,
the Servicer has agreed to make a P&I Advance with respect to such Mortgage
Loan for any month in which such grace period is still in effect on the related
Servicer Remittance Date and not charge interest thereon at the Reimbursement
Rate until after such grace period has ended or unless an event of default has
otherwise occurred thereunder. For the purposes of determining whether a
Servicing Transfer Event has occurred or reporting the number of P&I Advances
made with respect to a given Distribution Date, any P&I Advance made during
such grace period with respect to such loan will not be counted unless the
related Monthly Payment has not been received by the end of such grace period.
With respect to any Distribution Date, the amount required to be advanced
in respect of delinquent Monthly Payments or Assumed Scheduled Payments on a
Mortgage Loan that has been subject to an Appraisal Reduction Event will equal
the amount that would be required to be advanced by the Servicer without giving
effect to the Appraisal Reduction less any Appraisal Reduction Amount with
respect to such Mortgage Loan for such Distribution Date. Neither the Servicer
nor the Trustee will be required or permitted to make a P&I Advance for Penalty
Charges, Yield Maintenance Charges, Excess Interest, Balloon Payments or
Prepayment Premiums. If the monthly payment on any Mortgage Loan has been
reduced or if the final maturity on any Mortgage Loan is extended in connection
with a bankruptcy or similar proceeding involving the related Mortgagor or a
modification, waiver or amendment granted or agreed to by the Special Servicer,
and the monthly payment due and owing during the extension period is less than
the related Assumed Scheduled Payment, then the Servicer shall, as to such
Mortgage Loan only, advance only the amount of the monthly payment due and
owing after taking into account such reduction (net of related Primary
Servicing Fees and Servicing Fees, except to the extent the related borrower is
obligated to reimburse such amounts), in the event of subsequent delinquencies
thereon.
In addition to P&I Advances, the Servicer will also be obligated (subject
to the limitations described herein) to make advances ("Servicing Advances"
and, collectively with P&I Advances, "Advances") in connection with the
servicing and administration of any Mortgage Loan or in connection with the
servicing and administration of any Mortgaged Property or REO Property, to pay
delinquent real estate taxes, assessments, hazard insurance premiums,
environmental inspections and remediation, operating, leasing, managing and
liquidation expenses for REO Properties and to cover other similar costs and
expenses. To the extent that the Servicer fails to make a Servicing Advance
that it is required to make under the Pooling and Servicing Agreement and a
responsible officer of the Trustee has been notified in writing of such
failure, the Trustee will make such required Servicing Advance pursuant to the
Pooling and Servicing Agreement.
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The Servicer or the Trustee, as applicable, will be entitled to recover
any Advance made out of its own funds from any amounts collected in respect of
the Mortgage Loan as to which such Advance was made, whether in the form of
related payments, insurance and condemnation proceeds, Liquidation Proceeds,
any revenues from REO Properties or otherwise from the Mortgage Loan ("Related
Proceeds"). Notwithstanding the foregoing, neither the Servicer nor the Trustee
will be obligated to make any Advance that it determines in its reasonable good
faith judgment would, if made, not be recoverable (including interest thereon)
out of Related Proceeds (a "Nonrecoverable Advance"), and the Servicer or the
Trustee will be entitled to recover any Advance that it so determines to be a
Nonrecoverable Advance out of general funds on deposit in the Certificate
Account. The Servicer will not be entitled to recover Advances made to pay
Yield Protection Payments from collections on Mortgage Loans, but shall be
reimbursed for such amounts by CSFB Mortgage Capital. The Trustee will be
entitled to rely conclusively on any non-recoverability determination of the
Servicer. Nonrecoverable Advances will represent a portion of the losses to be
borne by the Certificateholders.
In connection with its recovery of any Advance, each of the Servicer and
the Trustee will be entitled to be paid, out of any amounts then on deposit in
the Certificate Account, interest at the Prime Rate (the "Reimbursement Rate")
accrued on the amount of such Advance from the date made to but not including
the date of reimbursement.
The "Prime Rate" shall be the rate, for any day, set forth as such in the
"Money Rates" section of The Wall Street Journal, New York edition. Each
Distribution Date Statement delivered by the Trustee to the Certificateholders
will contain information relating to the amount of Advances made with respect
to the related Distribution Date. See "-- Reports to Certificateholders;
Available Information" herein.
APPRAISAL REDUCTIONS
After an Appraisal Reduction Event has occurred with respect to a Mortgage
Loan, an Appraisal Reduction will be calculated for such Mortgage Loan. An
"Appraisal Reduction Event" will occur on the earliest of (i) the third
anniversary of the date on which the first extension of the maturity date of a
Mortgage Loan becomes effective as a result of a modification of such Mortgage
Loan by the Special Servicer, which extension does not decrease the aggregate
amount of Monthly Payments on the Mortgage Loan, (ii) 120 days after an uncured
delinquency occurs in respect of a Mortgage Loan, (iii) the date on which a
reduction in the amount of Monthly Payments on a Mortgage Loan, or a change in
any other material economic term of the Mortgage Loan (other than an extension
of its maturity) becomes effective as a result of a modification of such
Mortgage Loan by the Special Servicer, (iv) 60 days after a receiver has been
appointed, (v) 60 days after a borrower declares bankruptcy and (vi)
immediately after a Mortgage Loan becomes an REO Loan; provided, however, that
an Appraisal Reduction Event shall not occur at any time when the aggregate
Certificate Balances of all Classes of Certificates (other than the Senior
Certificates) have been reduced to zero. The "Appraisal Reduction" for any
Distribution Date and for any Mortgage Loan as to which any Appraisal Reduction
Event has occurred will be an amount equal to the excess, if any, of (a) the
outstanding Stated Principal Balance of such Mortgage Loan over (b) the excess
of (i) 90% of the appraised value of the related Mortgaged Property as
determined (A) by one or more independent MAI appraisals with respect to any
Mortgage Loan with an outstanding principal balance equal to or in excess of
$2,000,000 (the costs of which shall be paid by the Servicer as a Servicing
Advance) or (B) by an independent MAI appraisal or an internal valuation
performed by the Special Servicer with respect to any Mortgage Loan with an
outstanding principal balance less than $2,000,000 over (ii) the sum of (A) to
the extent not previously advanced by the Servicer or the Trustee, all unpaid
interest on such Mortgage Loan at a per annum rate equal to its Mortgage Rate,
(B) all unreimbursed Advances and interest thereon at the Reimbursement Rate in
respect of such Mortgage Loan and (C) all currently due and unpaid real estate
taxes and assessments, insurance premiums, ground rents and all other amounts
due and unpaid with respect to such Mortgage Loan (which taxes, assessments,
premiums, ground rents and other amounts have not been subject to an Advance by
the Servicer or the Trustee and/or for which funds have not been escrowed). If
required to obtain an MAI appraisal pursuant to the foregoing, the Special
Servicer must receive such appraisal within 60 days of the occurrence of such
event (taking into account the passage of any time period set forth in the
definition of Appraisal Reduction Event). If such appraisal is not received by
such date or if, for any Mortgage Loan with a Stated Principal
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Balance of $1,000,000 or less, the Special Servicer elects not to obtain an
appraisal, the Appraisal Reduction for the related Mortgage Loan will be 35% of
the Stated Principal Balance of such Mortgage Loan as of the date of the
related Appraisal Reduction Event. On the first Determination Date occurring on
or after the delivery of such MAI appraisal, the Special Servicer will be
required to calculate and report to the Servicer, and the Servicer will report
to the Trustee, the Appraisal Reduction to take into account such appraisal.
As a result of calculating an Appraisal Reduction with respect to a
Mortgage Loan, the P&I Advance for such Mortgage Loan for the related Servicer
Remittance Date will be reduced, which will have the effect of reducing the
amount of interest available for distribution to the Subordinate Certificates
in reverse alphabetical order of the Classes. See "-- Advances" above. The
"Appraisal Reduction Amount" for any Distribution Date and any Mortgage Loan
for which an Appraisal Reduction has been calculated will equal the product of
(i) the Reduction Rate (as defined below) for such Distribution Date and (ii)
the Appraisal Reduction with respect to such Mortgage Loan. The "Reduction
Rate" will be a rate per annum equal to the average of the Pass-Through Rates
of each Class to which Appraisal Reductions have been allocated pursuant to the
Pooling and Servicing Agreement, weighted on the basis of the amount of the
Appraisal Reductions allocated to each such Class. In addition, Appraisal
Reductions will be allocated to the Subordinate Certificates in reverse
alphabetical order of the Classes for purposes of determining Voting Rights and
the identity of the Controlling Class. See "-- Voting Rights" below and "--
Realization Upon Mortgage Loans" herein.
With respect to each Mortgage Loan as to which an Appraisal Reduction has
occurred (unless such Mortgage Loan has become a Corrected Mortgage Loan and
has remained current for twelve consecutive Monthly Payments and no other
Appraisal Reduction Event has occurred and is continuing), the Special Servicer
is required, within 30 days before each anniversary of such Appraisal Reduction
Event, to order an appraisal (which may be an update of a prior appraisal) or,
with respect to any Mortgage Loan with an outstanding principal balance less
than $2,000,000, perform an internal valuation or obtain an appraisal (which
may be an update of a prior appraisal), the cost of which shall be paid by the
Servicer as a Servicing Advance recoverable from the Trust Fund. Based upon
such appraisal, internal valuation or, as described in the second preceding
paragraph, percentage calculation of the Appraisal Reduction, as the case may
be, the Special Servicer shall redetermine and report to the Trustee and the
Servicer the amount of the Appraisal Reduction with respect to such Mortgage
Loan, and such redetermined Appraisal Reduction shall replace the prior
Appraisal Reduction with respect to such Mortgage Loan. Notwithstanding the
foregoing, the Special Servicer will not be required to obtain an appraisal or
perform an internal valuation, as the case may be, with respect to a Mortgage
Loan which is the subject of an Appraisal Reduction Event if the Special
Servicer has obtained an appraisal with respect to the related Mortgaged
Property within the 12-month period immediately prior to the occurrence of such
Appraisal Reduction Event. Instead, the Special Servicer may use such prior
appraisal in calculating any Appraisal Reduction with respect to such Mortgage
Loan.
With respect to each Mortgage Loan as to which an Appraisal Reduction has
occurred and which has become current and has remained current for twelve
consecutive Monthly Payments, and with respect to which no other Appraisal
Reduction Event has occurred and is continuing, the Special Servicer may,
within 30 days after the date of such twelfth Monthly Payment, order an
appraisal (which may be an update of a prior appraisal) or, with respect to any
Mortgage Loan with an outstanding principal balance less than $2,000,000,
perform an internal valuation or obtain an appraisal (which may be an update of
a prior appraisal), the cost of which shall be paid by the Servicer as a
Servicing Advance recoverable from the Trust Fund. Based upon such appraisal,
the Special Servicer shall redetermine and report to the Trustee the amount of
the Appraisal Reduction with respect to such Mortgage Loan, and such
redetermined Appraisal Reduction shall replace the prior Appraisal Reduction
with respect to such Mortgage Loan.
ACCOUNTS
Lockbox Accounts. With respect to 324 Mortgage Loans, which represent in
the aggregate 86.0% of the Initial Pool Balance, one or more accounts in the
name of the related borrower (which are the
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Lockbox Accounts) have been, or upon the occurrence of certain events will be,
established into which rents or other revenues from the related Mortgaged
Properties are deposited by the related tenants or manager. Agreements
governing the Lockbox Accounts provide that the borrower has no withdrawal or
transfer rights with respect thereto and that all funds on deposit in the
Lockbox Accounts are periodically swept into the Cash Collateral Accounts (as
defined below). Additionally, for substantially all ARD Loans for which a
Lockbox Account has not already been established such loans require the related
mortgagee to establish a Lockbox Account prior to its Anticipated Repayment
Date. The Lockbox Accounts will not be assets of the Trust Fund.
Cash Collateral Accounts. With respect to each Mortgage Loan that has a
Lockbox Account, one or more accounts in the name of the Servicer (the "Cash
Collateral Accounts") have been established into which funds in the related
Lockbox Accounts will be swept on a regular basis. Unless certain trigger
events occur as specified in the related Mortgage Loan, any excess over the
amount necessary to fund the Monthly Payment, the Escrow Accounts and any other
amounts due under the Mortgage Loans will be returned to or retained by the
related borrower, provided, that, no event of default of which the Servicer is
aware has occurred and is continuing with respect to such Mortgage Loan.
However, as described under "Description of the Mortgage Loans -- Certain Terms
and Conditions of the Mortgage Loans -- Excess Interest," after the respective
Anticipated Repayment Date, if applicable, all or substantially all amounts in
the related Cash Collateral Account in excess of the amount necessary to fund
the Monthly Payment and Escrow Accounts will be applied to (i) operating and
capital expenses, (ii) the reduction of the principal balance of the related
Mortgage Loan until such principal is paid in full and (iii) Excess Interest,
in that order. The Cash Collateral Accounts will not be an asset of the Trust
Fund.
Certificate Account. The Servicer will establish and maintain a segregated
account (the "Certificate Account") pursuant to the Pooling and Servicing
Agreement, and on each Due Date withdraw from each Cash Collateral Account an
amount equal to the Monthly Payment on the related Mortgage Loan and deposit
such amount into the Certificate Account for application towards the Monthly
Payment, net of Servicing Fees and Primary Servicing Fees and other amounts due
the Servicer or applicable Seller-Servicer and not required to be deposited
into the Certificate Account. The Servicer will also deposit into the
Certificate Account within one business day of receipt all other payments in
respect of the Mortgage Loans, other than amounts to be deposited into any
Escrow Account, net of Servicing Fees and Primary Servicing Fees and other
amounts due the Servicer or applicable Seller-Servicer and not required to be
deposited into the Certificate Account.
Distribution Account. The Trustee will establish and maintain one or more
segregated accounts (collectively, the "Distribution Account") in the name of
the Trustee for the benefit of the holders of Certificates. With respect to
each Distribution Date, the Servicer will deliver to the Trustee for deposit
into the Distribution Account, to the extent of funds on deposit in the
Certificate Account, on the Servicer Remittance Date an aggregate amount of
immediately available funds. The Servicer will deposit all P&I Advances into
the Distribution Account on the related Servicer Remittance Date. To the extent
the Servicer fails to do so, the Trustee shall deposit any required P&I
Advances into the Distribution Account on the related Distribution Account as
described herein and as provided in the Pooling and Servicing Agreement. See
"Description of the Offered Certificates -- Distributions" herein.
Interest Reserve Account. The Trustee will establish and maintain an
Interest Reserve Account ("Interest Reserve Account") in the name of the
Trustee for the benefit of the holders of the Certificates. On each Servicer
Remittance Date in any February and on any Servicer Remittance Date in any
January which occurs in a year which is not a leap year, the Servicer will be
required to deposit, in respect of the Mortgage Loans that accrue on an
Actual/360 basis, into the Interest Reserve Account, an amount withheld from
the related Monthly Payment or Advance equal to one day's interest collected on
the Stated Principal Balance of such Mortgage Loan as of the Due Date occurring
in the month preceding the month in which such Servicer Remittance Date occurs
at the related Mortgage Rate, to the extent a full Monthly Payment or P&I
Advance is made in respect thereof (all amounts so deposited in any consecutive
January and February, "Withheld Amounts"). On each Servicer Remittance Date
occurring in March, the Servicer will be required to withdraw from the Interest
Reserve Account an amount equal to the Withheld Amounts from the preceding
December and January Interest Accrual Periods, if any, and deposit such amount
(excluding any net investment income thereon) into a Distribution Account.
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The Trustee also will establish and maintain one or more segregated
accounts for the "Excess Interest Distribution Account", each in the name of
the Trustee for the benefit of the holders of the Certificates.
The Cash Collateral Accounts, Certificate Account, any REO Account, the
Escrow Accounts, the Distribution Account, the Interest Reserve Account and the
Excess Interest Distribution Account will be held in the name of the Trustee
(or the Servicer on behalf of the Trustee) on behalf of the holders of
Certificates and the Servicer will be authorized to make withdrawals from the
Cash Collateral Accounts, the Certificate Account and the Interest Reserve
Account. Each of the Cash Collateral Account, Certificate Account, any REO
Account, the Interest Reserve Account, the Escrow Accounts and the Excess
Interest Distribution Account will be either (i) (A) an account or accounts
maintained with a depository institution or trust company the short term
unsecured debt obligations or commercial paper of which are rated at least
"A-1" by S&P, "P-1" by Moody's and "F-1+" by Fitch (if rated by Fitch) in the
case of accounts in which funds are held for 30 days or less (or, in the case
of accounts in which funds are held for more than 30 days, the long term
unsecured debt obligations of which are rated at least "A+" by Fitch (if rated
by Fitch), "AA" by S&P and "Aa3" by Moody's, each, as defined herein) or (B) as
to which the Trustee has received written confirmation from each of the Rating
Agencies that holding funds in such account would not cause any Rating Agency
to qualify, withdraw or downgrade any of its then current ratings on the
Certificates or (ii) a segregated trust account or accounts maintained with a
federal or state chartered depository institution or trust company acting in
its fiduciary capacity which, in the case of a state chartered depository
institution, is subject to regulations substantially similar to 12 C.F.R.
Section 9.10(b), having in either case a combined capital surplus of at least
$50,000,000 and subject to supervision or examination by federal and state
authority, or any other account that, as evidenced by a written confirmation
from each Rating Agency that such account would not, in and of itself, cause a
downgrade, qualification or withdrawal of the then current ratings assigned to
the Certificates, which may be an account maintained with the Trustee or the
Servicer (an "Eligible Bank"). Amounts on deposit in the Certificate Account,
Excess Interest Distribution Accounts, any Servicing Accounts, Cash Collateral
Account, any REO Account and the Interest Reserve Account may be invested in
certain United States government securities and other high-quality investments
specified in the Pooling and Servicing Agreement ("Permitted Investments").
Interest or other income earned on funds in the Certificate Account, Excess
Interest Distribution Account, any Escrow Accounts and Cash Collateral Accounts
will be paid to the Servicer (except to the extent required to be paid to the
related borrower) as additional servicing compensation and interest or other
income earned on funds in any REO Account will be payable to the Special
Servicer. Interest or other income earned on funds in the Interest Reserve
Account will be paid to the Mortgage Loan Seller. Amounts on deposit in the
Distribution Accounts shall remain uninvested.
WITHDRAWALS FROM THE CERTIFICATE ACCOUNT
The Servicer may make withdrawals from the Certificate Account for the
following purposes, to the extent permitted and in the priorities provided in
the Pooling and Servicing Agreement: (i) to remit to the Trustee for deposit in
the Distribution Accounts the amounts required to be remitted or that may be
applied to make P&I Advances; (ii) to pay itself unpaid Servicing Fees or to
pay any unpaid Primary Servicing Fees, and the Special Servicer unpaid Special
Servicing Fees, Liquidation Fees and Workout Fees; (iii) to reimburse itself or
the Trustee, for unreimbursed P&I Advances; (iv) to reimburse itself or the
Trustee, for unreimbursed Servicing Advances; (v) to reimburse itself or the
Trustee, for Nonrecoverable Advances; (vi) to pay itself or the Trustee, any
interest accrued and payable thereon for any unreimbursed P&I Advances,
Servicing Advances or Nonrecoverable Advances; (vii) to reimburse itself, the
Special Servicer, the Depositor or the Trustee, as the case may be, for any
unreimbursed expenses reasonably incurred by such Person in respect of any
breach or defect giving rise to a repurchase obligation of the Mortgage Loan
Seller, or the enforcement of such obligation, under the Mortgage Loan Purchase
Agreement; (viii) to pay itself, as additional servicing compensation any net
investment earnings and Penalty Charges on Mortgage Loans (other than Specially
Serviced Mortgage Loans), but only to the extent collected from the related
Mortgagor; and to pay the Special Servicer, as additional servicing
compensation, Penalty Charges on Specially Serviced Mortgage Loans; (ix) to
recoup any amounts deposited in the Certificate Account in error; (x) to pay
itself, the Trustee, the Special Servicer, the
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Depositor or any affiliate, and their respective directors, officers, employees
and agents, any amounts payable pursuant to any indemnification clauses in the
Pooling and Servicing Agreement; (xi) to pay for (a) the cost of the opinions
of counsel for purposes of REMIC Administration or amending the Pooling and
Servicing Agreement and (b) the cost of obtaining an REO Extension; (xii) to
pay for any and all federal, state and local taxes imposed on any REMIC or
their assets or transactions; (xiii) to reimburse the Servicer and the Special
Servicer for expenses incurred by and reimbursable to each of them by the Trust
Fund; (xiv) to pay to any Person, with respect to each Mortgage Loan previously
purchased by such Person, all amounts received thereon subsequent to the date
of purchase; (xv) to pay for costs and expenses incurred by the Trust Fund due
to actions taken pursuant to an environmental assessment; and (xvi) to clear
and terminate the Certificate Account.
ENFORCEMENT OF "DUE-ON-SALE" AND "DUE-ON-ENCUMBRANCE" CLAUSES
The Mortgage Loans contain provisions in the nature of "due-on-sale"
clauses, which by their terms (a) provide that the Mortgage Loans shall (or may
at the mortgagee's option) become due and payable upon the sale or other
transfer of an interest in the related Mortgaged Property or (b) provide that
the Mortgage Loans may not be assumed without the consent of the related
mortgagee in connection with any such sale or other transfer. The Special
Servicer will be required to enforce any such due-on-sale clause, unless the
Special Servicer determines, in accordance with the Servicing Standard, that
granting such consent would likely result in a greater recovery, on a present
value basis (discounting at the related Mortgage Rate), than would enforcement
of such clause. If the Special Servicer determines that granting such consent
would likely result in a greater recovery, the Special Servicer, is authorized
to take or enter into an assumption agreement from or with the proposed
transferee as obligor thereon, provided that (a) the credit status of the
prospective transferee is in compliance with the Special Servicer's regular
commercial mortgage origination or Servicing Standard and criteria and the
terms of the related Mortgage and (b) with respect to any Mortgage Loan (i) the
principal balance of which is $20,000,000 or more or (ii) that is a Mortgage
Loan, part of a group of Crossed Loans or a group of Related Borrower Loans
that, in each case, in the aggregate represents 5% or more of the aggregate
outstanding. Certificate Balance of all Classes at such time, the Special
Servicer has received written confirmation from each of the Rating Agencies
that such assumption or substitution would not, in and of itself, cause a
downgrade, qualification or withdrawal of the then current ratings assigned to
the Certificates. No assumption agreement may contain any terms that are
different from any term of any Mortgage or related Mortgage Note, except
pursuant to the provisions described under "-- Realization Upon Mortgage Loans"
and "--Modifications," herein.
The consent of the Special Servicer and, except as described herein, the
receipt of a rating confirmation will not be required in the event that the
holder of Mezzanine Debt forecloses upon the equity in a borrower under a
Mortgage Loan.
The Mortgage Loans contain provisions in the nature of a
"due-on-encumbrance" clause which by their terms (a) provide that the Mortgage
Loans shall (or may at the mortgagee's option) become due and payable upon the
creation of any lien or other encumbrance on the related Mortgaged Property or
(b) require the consent of the related mortgagee to the creation of any such
lien or other encumbrance on the related Mortgaged Property. The Special
Servicer will be required to enforce such due-on-encumbrance clauses and in
connection therewith will be required to (i) accelerate payments thereon or
(ii) withhold its consent to such lien or encumbrance unless the Special
Servicer, (x) determines, in accordance with the Servicing Standard, that such
enforcement would not be in the best interests of the Trust Fund and (y)
receives prior written confirmation from each of the Rating Agencies, that (1)
not accelerating payments on the related Mortgage Loan or (2) granting such
consent would not, in and of itself, cause a downgrade, qualification or
withdrawal of any of the then current ratings assigned to the Certificates. See
"Certain Legal Aspects of the Mortgage Loans -- Enforceability of Certain
Provisions -- Due-on-Sale Provisions and Secondary Financing;
Due-on-Encumbrance Provisions" in the Prospectus.
INSPECTIONS; COLLECTION OF OPERATING INFORMATION
The Servicer (or, with respect to the Specially Serviced Mortgage Loans,
the Special Servicer) will perform (at its own expense), or shall cause to be
performed (at its own expense), physical inspections of
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each Mortgaged Property at such times and in such manner as are consistent with
the Servicing Standard, but in any event shall inspect each Mortgaged Property
securing a Mortgage Note with a Stated Principal Balance of (A) $3,000,000 or
more at least once every 12 months and (B) less than $3,000,000 at least once
every 24 months, in each case commencing in July 1998; provided, however, that
if the related Mortgage Loan (i) has a DSCR of less than 1.0x, (ii) becomes a
Specially Serviced Mortgage Loan, or (iii) is delinquent for 60 days, the
Special Servicer shall inspect the related Mortgaged Property as soon as
practicable and thereafter at least every 12 months for so long as such
condition exists. The Special Servicer or the Servicer, as applicable, will
prepare a written report of each such inspection describing the condition of
the Mortgaged Property.
Most of the Mortgages obligate the related borrower to deliver quarterly,
and all Mortgages require annual, property operating statements. However, there
can be no assurance that any operating statements required to be delivered will
in fact be delivered, nor is the Special Servicer or the Servicer likely to
have any practical means of compelling such delivery in the case of an
otherwise performing Mortgage Loan.
INSURANCE POLICIES
To the extent permitted by the related Mortgage Loan and required by the
Servicing Standard, the Servicer (or, with respect to the Specially Serviced
Mortgage Loans, the Special Servicer) will use its reasonable best efforts to
cause each Mortgagor to maintain, and if the Mortgagor does not so maintain,
shall itself maintain to the extent available at commercially reasonable rates
(as determined by the Servicer in accordance with the Servicing Standard), any
insurance policy coverage determined to be applicable by the Servicer or, with
respect to any Specially Serviced Mortgage Loan, by the Special Servicer, in
accordance with the Servicing Standard. The coverage of each such policy will
be in an amount that is not less than the lesser of the full replacement cost
of the improvements securing such Mortgage Loan or the outstanding principal
balance owing on such Mortgage Loan. During all such times as the Mortgaged
Property is located in an area identified as a federally designated special
flood hazard area (and such flood insurance has been made available), the
Servicer or the Special Servicer, as applicable, will use its reasonable best
efforts to cause each Mortgagor to maintain (to the extent required by the
related Mortgage Loan), and if the Mortgagor does not so maintain, shall itself
maintain to the extent available at commercially reasonable rates (as
determined by the Servicer or the Special Servicer, as applicable, in
accordance with the Servicing Standard), a flood insurance policy in an amount
representing coverage not less than the lesser of (i) the outstanding principal
balance of the related Mortgage Loan and (ii) the maximum amount of insurance
which is available under the Flood Disaster Protection Act of 1973, as amended.
The Special Servicer will be required to maintain (or cause to be maintained)
fire and hazard insurance on each REO Property in an amount that is not less
than the lesser of the full replacement cost of the improvements on such
Mortgaged Property or the outstanding principal balance owing on such Mortgage
Loan. In addition, during all such times as the REO Property is located in an
area identified as a federally designated special flood hazard area, the
Special Servicer will cause to be maintained, to the extent available at
commercially reasonable rates (as determined by the Special Servicer in
accordance with the Servicing Standard), a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
in an amount representing coverage not less than the maximum amount of
insurance which is available under the Flood Disaster Protection Act of 1973,
as amended. The Pooling and Servicing Agreement provides that the Servicer and
the Special Servicer may satisfy their respective obligations to cause each
borrower to maintain a hazard insurance policy by maintaining a blanket policy
insuring against hazard losses on the Mortgage Loans. Any losses incurred with
respect to Mortgage Loans due to uninsured risks (including earthquakes,
mudflows and floods) or insufficient hazard insurance proceeds may adversely
affect payments to Certificateholders. Any cost incurred by the Servicer in
maintaining any such insurance policy if the borrower defaults on its
obligation to do so shall be advanced by the Servicer as a Servicing Advance
and will be charged to the related borrower.
EVIDENCE AS TO COMPLIANCE
The Pooling and Servicing Agreement requires the Servicer and the Special
Servicer to cause a firm of nationally recognized independent public
accountants, which is a member of the American Institute of
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Certified Public Accountants, to furnish to the Trustee, the Depositor and the
Rating Agencies on or before April 15 of each year, beginning April 15, 1999, a
statement to the effect that such firm has examined the servicing operations of
the reporting person and that on the basis of their examination, conducted
substantially in compliance with the Uniform Single Attestation Program
("USAP") for Mortgage Bankers or the Audit Program for Mortgages serviced for
FHLMC (the "Audit Program"), the Servicer and the Special Servicer have
complied with the minimum servicing standards identified in USAP or the Audit
Program, in all material respects, except for such significant exceptions or
errors in records that, in the opinion of each such firm, the USAP or the Audit
Program require such firm to report, in which case such exceptions and errors
shall be so reported.
The Pooling and Servicing Agreement also requires the Servicer to deliver
to the Trustee, the Depositor and the Rating Agencies on or before April 15 of
each year, beginning April 15, 1999, an officer's certificate of the Servicer
stating that, to the best of such officer's knowledge, the Servicer has
fulfilled its obligations under the Pooling and Servicing Agreement in all
material respects throughout the preceding year or, if there has been a
material default, specifying each material default known to such officer and
the action proposed to be taken with respect thereto.
CERTAIN MATTERS REGARDING THE DEPOSITOR, THE TRUSTEE, THE SERVICER AND THE
SPECIAL SERVICER
The Pooling and Servicing Agreement permits the Depositor, the Servicer
and the Special Servicer to resign from their respective obligations thereunder
only upon (a) with respect to the Servicer or Special Servicer, the appointment
of, and the acceptance of such appointment by, a successor thereto and receipt
by the Trustee of written confirmation from each applicable Rating Agency that
such resignation and appointment will, in and of itself, not result in a
downgrade, withdrawal or qualification of the then applicable rating assigned
by such Rating Agency to any Class of Certificates or (b) a determination that
such obligations are no longer permissible under applicable law. No such
resignation will become effective until the Trustee or other successor has
assumed the obligations and duties of the resigning Servicer or Special
Servicer, as the case may be, under the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement will provide that none of the
Servicer, the Special Servicer, the Trustee (whether acting in such capacity or
as the Authenticating Agent or Certificate Registrar), the Depositor, the
Directing Certificateholder or any affiliate, director, officer, employee or
agent of any of them will be under any liability to the Trust Fund or the
Certificateholders for any action taken, or not taken, in good faith pursuant
to the Pooling and Servicing Agreement or for errors in judgment; provided,
however, that none of the Servicer, the Special Servicer, the Trustee, the
Directing Certificateholder, the Depositor or any such person will be protected
against any liability that would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of obligations or
duties thereunder or by reason of grossly negligent disregard of such
obligations and duties. The Pooling and Servicing Agreement will also provide
that the Servicer, the Special Servicer, the Trustee (whether acting in such
capacity or as the Authenticating Agent or Certificate Registrar), the
Depositor, the Directing Certificateholder and any affiliate, director,
officer, employee or agent of any of them will be entitled to indemnification
by the Trust Fund against any loss, liability or expense incurred in connection
with any legal action that relates to the Pooling and Servicing Agreement, the
Mortgage Loans or the Certificates; provided, however, that such
indemnification will not extend to any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of
obligations or duties under the Pooling and Servicing Agreement, by reason of
grossly negligent disregard of such obligations or duties, or in the case of
the Depositor and any of its directors, officers, employees and agents, any
violation by any of them of any state or federal securities law.
In addition, the Pooling and Servicing Agreement will provide that none of
the Servicer, the Special Servicer, the Trustee (whether acting in such
capacity or as the Authenticating Agent or Certificate Registrar), the
Directing Certificateholder or the Depositor will be under any obligation to
appear in, prosecute or defend any legal action that is not incidental to its
respective responsibilities under the Pooling and Servicing Agreement and that
in its opinion may involve it in any expense or liability. However, each of the
Servicer, the Special Servicer, the Trustee, the Directing Certificateholder
and the Depositor will be permitted, in the exercise of its discretion, to
undertake any such action that it may
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deem necessary or desirable with respect to the enforcement and/or protection
of the rights and duties of the parties to the Pooling and Servicing Agreement
and the interests of the Certificateholders thereunder. In such event, the
legal expenses and costs of such action, and any liability resulting therefrom,
will be expenses, costs and liabilities of the Trust Fund, and the Servicer,
the Special Servicer, the Trustee, the Directing Certificateholder or the
Depositor, as the case may be, will be entitled to reimbursement from the
Certificate Account or Lower-Tier Distribution Account, as applicable,
therefor.
Pursuant to the Pooling and Servicing Agreement, the Servicer and Special
Servicer will each be required to maintain a fidelity bond and errors and
omissions policy or their equivalent that provides coverage against losses that
may be sustained as a result of an officer's or employee's misappropriation of
funds or errors and omissions, subject to certain limitations as to amount of
coverage, deductible amounts, conditions, exclusions and exceptions permitted
by the Pooling and Servicing Agreement. Notwithstanding the foregoing, the
Servicer or the Special Servicer will be allowed to self-insure with respect to
a fidelity bond so long as certain conditions set forth in the Pooling and
Servicing Agreement are met.
Any person into which the Servicer, the Special Servicer or the Depositor
may be merged or consolidated, or any person resulting from any merger or
consolidation to which the Servicer, the Special Servicer or the Depositor is a
party, or any person succeeding to the business of the Servicer, the Special
Servicer or the Depositor, will be the successor of the Servicer, the Special
Servicer or the Depositor, as the case may be, under the Pooling and Servicing
Agreement; provided, however, that such merger, consolidation or succession
will not, or has not, resulted in a withdrawal, downgrade or qualification of
the then current ratings of the Certificates that have been so rated, as
confirmed in writing by each Rating Agency. The Servicer and the Special
Servicer may have other normal business relationships with the Depositor or the
Depositor's affiliates.
EVENTS OF DEFAULT
"Events of Default" under the Pooling and Servicing Agreement with respect
to the Servicer or the Special Servicer, as the case may be, will include,
without limitation, (i) any failure by the Servicer to make any remittance
required to be made by the Servicer by 5:00 p.m. on the Servicer Remittance
Date; (ii) any failure by the Special Servicer to deposit into the REO Account,
or to remit to the Servicer for deposit in the Certificate Account, any such
remittance required to be made by the Special Servicer on the day such
remittance is required to be made under the Pooling and Servicing Agreement;
(iii) any failure by the Servicer or the Special Servicer duly to observe or
perform in any material respect any of its other covenants or obligations under
the Pooling and Servicing Agreement, which failure continues unremedied for
thirty days (or fifteen days for payment of premiums on any insurance policies
or 60 days so long as such Servicer is in good faith diligently pursuing such
obligation) after written notice thereof has been given to the Servicer or the
Special Servicer, as the case may be, by any other party to the Pooling and
Servicing Agreement, or to the Servicer or the Special Servicer, the Depositor
and the Trustee, by Certificateholders of any Class, evidencing, as to such
Class, Percentage Interests aggregating not less than 25%; (iv) any breach by
the Servicer or Special Servicer of a representation or warranty contained in
the Pooling and Servicing Agreement which materially and adversely affects the
interests of the Certificates and continues unremedied for thirty days; (v)
certain events of insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings in respect of or relating to the Servicer or
the Special Servicer, and certain actions by or on behalf of the Servicer or
the Special Servicer indicating its insolvency or inability to pay its
obligations; and (vi) the Trustee shall have received written notice from any
Rating Agency that the continuation of the Servicer or the Special Servicer in
such capacity would result, or has resulted, in a downgrade, qualification or
withdrawal of any rating then assigned by such Rating Agency to any Class of
Certificates if the Servicer or Special Servicer is not replaced.
RIGHTS UPON EVENT OF DEFAULT
If an Event of Default occurs with respect to the Servicer or the Special
Servicer under the Pooling and Servicing Agreement, then, in each and every
such case, so long as the Event of Default remains unremedied, the Trustee will
be authorized, and at the direction of Certificateholders entitled to not less
than 51% of the Voting Rights, the Trustee will be required, to terminate all
of the rights and obligations
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of the defaulting party as Servicer or Special Servicer, as applicable, under
the Pooling and Servicing Agreement, whereupon the Trustee will succeed to all
of the responsibilities, duties and liabilities of the defaulting party as
Servicer or Special Servicer, as applicable, under the Pooling and Servicing
Agreement and will be entitled to similar compensation arrangements as the
terminated party. If the Trustee is unwilling or unable so to act or is not
approved by each Rating Agency, it may (or, at the written request of
Certificateholders entitled to not less than 51% of the Voting Rights, it will
be required to) appoint, or petition a court of competent jurisdiction to
appoint as successor to the Servicer or Special Servicer, as the case may be,
any established mortgage loan servicing institution or other entity as to which
the Trustee has received written notice from each Rating Agency that such
appointment would not result in the downgrading, qualification or withdrawal of
the then current ratings assigned to any Class of Certificates by such Rating
Agency.
No Certificateholder will have any right under the Pooling and Servicing
Agreement to institute any proceeding with respect to the Certificates or the
Pooling and Servicing Agreement unless such holder previously has given to the
Trustee written notice of default and the continuance thereof and unless the
holders of Certificates of any Class evidencing not less than 25% of the
aggregate Percentage Interests constituting such Class have made written
request upon the Trustee to institute such proceeding in its own name (as
Trustee thereunder) and have offered to the Trustee reasonable indemnity, and
the Trustee for 60 days after receipt of such request and indemnity has
neglected or refused to institute any such proceeding. However, the Trustee
will be under no obligation to exercise any of the trusts or powers vested in
it by the Pooling and Servicing Agreement or to institute, conduct or defend
any litigation thereunder or in relation thereto at the request, order or
direction of any of the Certificateholders, unless such Certificateholders have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby.
AMENDMENT
The Pooling and Servicing Agreement may be amended by the parties thereto,
without the consent of any of the holders of Certificates (i) to cure any
ambiguity, (ii) to correct or supplement any provision therein which may be
inconsistent with any other provision therein or with this Prospectus
Supplement or the Prospectus or to correct any error, (iii) to change the
timing and/or nature of deposits in the Certificate Account, the Distribution
Accounts or the REO Account, provided that (A) the Servicer Remittance Date
shall not be later than the related Distribution Date, (B) such change would
not adversely affect in any material respect the interests of any
Certificateholder, as evidenced by an opinion of counsel (at the expense of the
party requesting the amendment) and (C) such change would not result in the
downgrading, qualification or withdrawal of the then current ratings assigned
to any Class of Certificates by any Rating Agency, as evidenced by a letter
from each Rating Agency, (iv) to modify, eliminate or add to any of its
provisions (A) to such extent as shall be necessary to maintain the
qualification of the Trust Fund (or either of Lower-Tier REMIC or Upper-Tier
REMIC) as a REMIC or to avoid or minimize the risk of imposition of any tax on
the Trust Fund, provided that the Trustee has received an opinion of counsel
(at the expense of the party requesting the amendment) to the effect that (1)
such action is necessary or desirable to maintain such qualification or to
avoid or minimize such risk and (2) such action will not adversely affect in
any material respect the interests of any holder of the Certificates or (B) to
restrict the transfer of the Residual Certificates, provided that the Depositor
has determined that the then-current ratings of any Class of the Certificates
will not be downgraded, qualified or withdrawn, as evidenced by a letter from
each Rating Agency, and that any such amendment will not give rise to a federal
tax with respect to the transfer of the Residual Certificates to a
non-permitted transferee (see "Certain Federal Income Tax Consequences" in the
Prospectus), (v) to make any other provisions with respect to matters or
questions arising under the Pooling and Servicing Agreement or any other
change, provided that such action will not adversely affect in any material
respect the interests of any Certificateholder or (vi) to amend or supplement
any provision of the Pooling and Servicing Agreement to the extent necessary to
maintain the then current ratings assigned to each Class of Certificates by
each Rating Agency as confirmed in writing.
The Pooling and Servicing Agreement may also be amended by the parties
thereto with the consent of the holders of Certificates of each Class affected
thereby evidencing, in each case, not less than 66 2/3%
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of the aggregate Percentage Interests constituting such Class for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of the Pooling and Servicing Agreement or of modifying in any manner
the rights of the holders of the Certificates, except that no such amendment
may (i) reduce in any manner the amount of, or delay the timing of, payments
received on the Mortgage Loans which are required to be distributed on a
Certificate of any Class without the consent of the holder of such Certificate,
(ii) reduce the aforesaid percentage of Certificates of any Class the holders
of which are required to consent to any such amendment without the consent of
the holders of all Certificates of such Class then outstanding, (iii) adversely
affect the Voting Rights of any Class of Certificates without the consent of
the holders of all Certificates of such Class then outstanding and (iv) amend
the section of the Pooling and Servicing Agreement that relates to the
provisions described in this paragraph.
Notwithstanding the foregoing, the Trustee will not be required to consent
to any amendment to the Pooling and Servicing Agreement without having first
received an opinion of counsel (at the Trust Fund's expense) to the effect that
such amendment or the exercise of any power granted to the Servicer, the
Special Servicer, the Depositor, the Trustee or any other specified person in
accordance with such amendment will not result in the imposition of a tax on
the REMIC constituted by the Trust Fund or cause the Trust Fund (or either of
the Lower-Tier REMIC or Upper-Tier REMIC) to fail to qualify as a REMIC.
VOTING RIGHTS
For any date of determination, the voting rights for the Certificates (the
"Voting Rights") shall be allocated among the respective Classes of
Certificateholders as follows: (i) 2% in the case of the Class A-X
Certificates, and (ii) in the case of any other Class of Certificates (other
than the Class V-1, Class V-2 and Residual Certificates), a percentage equal to
the product of 98% and a fraction, the numerator of which is the aggregate
Certificate Balance of such Class, in each case, determined as of the
Distribution Date immediately preceding such date of determination, and the
denominator of which is equal to the aggregate Certificate Balance of all
Classes of Certificates, each determined as of the Distribution Date
immediately preceding such date of determination. None of the Class V-1, Class
V-2 or Residual Certificates will be entitled to any Voting Rights. For
purposes of determining Voting Rights, the Certificate Balance of any Class
shall be deemed reduced by allocation of Collateral Support Deficit to such
Class. Voting Rights allocated to a Class of Certificateholders shall be
allocated among such Certificateholders in proportion to the Percentage
Interests evidenced by their respective Certificates. Solely for purposes of
giving any consent, approval or waiver pursuant to the Pooling and Servicing
Agreement, none of the Servicer, the Special Servicer, the Depositor or any
affiliate will be entitled to exercise any Voting Rights with respect to any
Certificates registered in its name, if such consent, approval or waiver would
in any way increase its compensation or limit its obligations in such capacity
under the Pooling and Servicing Agreement; provided, however, the Servicer and
Special Servicer will be entitled to exercise such Voting Rights as to matters
which could adversely affect its compensation or increase its liabilities or
obligations; provided, however, that such restrictions will not apply to the
exercise of the Special Servicer's rights as a member of the Controlling Class.
REALIZATION UPON MORTGAGE LOANS
Pursuant to the Pooling and Servicing Agreement, if a default on a
Mortgage Loan has occurred or, in the Special Servicer's judgment, a payment
default is imminent, the Special Servicer, on behalf of the Trust Fund, may at
any time institute foreclosure proceedings, exercise any power of sale
contained in the related Mortgage or otherwise acquire title to the related
Mortgaged Property. The Special Servicer shall not, however, acquire title to
any Mortgaged Property or take any other action with respect to any Mortgaged
Property that would cause the Trustee, for the benefit of the
Certificateholders, or any other specified person to be considered to hold
title to, to be a "mortgagee-in-possession" of or to be an "owner" or an
"operator" of such Mortgaged Property within the meaning of certain federal
environmental laws, unless the Special Servicer has previously received a
report prepared by a person who regularly conducts environmental audits (which
report will be a Servicing Advance) and either:
(i) such report indicates that (a) the Mortgaged Property is in compliance
with applicable environmental laws and regulations and (b) there are no
circumstances or conditions present at the
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Mortgaged Property for which investigation, testing, monitoring, containment,
clean-up or remediation could be required under any applicable environmental
laws and regulations; or
(ii) the Special Servicer, based solely (as to environmental matters and
related costs) on the information set forth in such report, determines that
taking such actions as are necessary to bring the Mortgaged Property into
compliance with applicable environmental laws and regulations and/or taking the
actions contemplated by clause (i)(b) above, is reasonably likely to increase
the net proceeds of the liquidation of such Mortgaged Property, than not taking
such actions.
The Pooling and Servicing Agreement grants to the Special Servicer a right
(or to the Servicer, to the extent that the Special Servicer does not exercise
its right) to purchase from the Trust Fund, at the Purchase Price, any Mortgage
Loan as to which a specified number of scheduled payments are delinquent. In
addition, the Special Servicer may offer to sell any defaulted Mortgage Loan if
and when the Special Servicer determines, consistent with the Servicing
Standard, that such a sale would produce a greater recovery, on a present value
basis, than would liquidation of the related Mortgaged Property. In the absence
of any such sale, the Special Servicer will generally be required to proceed
against the related Mortgaged Property, subject to the discussion above.
If title to any Mortgaged Property is acquired by the Trust Fund, the
Special Servicer, on behalf of the Trust Fund, will be required to sell the
Mortgaged Property within two years of acquisition, unless (i) the Internal
Revenue Service (the "IRS") grants an extension of time to sell such property
or (ii) the Trustee receives an opinion of independent counsel to the effect
that the holding of the property by the Trust Fund for more than two years
after its acquisition will not result in the imposition of taxes on "prohibited
transactions" on the REMIC constituted by the Trust Fund or cause the Trust
Fund (or Lower-Tier REMIC or Upper-Tier REMIC) to fail to qualify as a REMIC
under the Code at any time that any Certificate is outstanding. The Special
Servicer will also be required to ensure that any REO Property acquired by the
Trust Fund is administered so that it constitutes "foreclosure property" within
the meaning of Code Section 860G(a)(8) at all times, that the sale of such
property does not result in the receipt by the Trust Fund of any income from
nonpermitted assets as described in Code Section 860F(a)(2)(B). If the Trust
Fund acquires title to any Mortgaged Property, the Special Servicer, on behalf
of the Trust Fund, will retain an independent contractor to manage and operate
such property. The retention of an independent contractor, however, will not
relieve the Special Servicer of its obligation to manage such Mortgaged
Property as required under the Pooling and Servicing Agreement.
Generally, neither the Lower-Tier REMIC nor the Upper-Tier REMIC will be
taxed on income received with respect to a Mortgaged Property acquired by the
Trust Fund to the extent that it constitutes "rents from real property," within
the meaning of Code Section 856(c)(3)(A) and Treasury regulations thereunder.
"Rents from real property" include fixed rents and rents based on the receipts
or sales of a tenant but do not include the portion of any rental based on the
net income or profit of any tenant or sub-tenant. No determination has been
made whether rent on any of the Mortgaged Properties meets this requirement.
"Rents from real property" include charges for services customarily furnished
or rendered in connection with the rental of real property, whether or not the
charges are separately stated. Services furnished to the tenants of a
particular building will be considered as customary if, in the geographic
market in which the building is located, tenants in buildings which are of
similar class are customarily provided with the service. No determination has
been made whether the services furnished to the tenants of the Mortgaged
Properties are "customary" within the meaning of applicable regulations. It is
therefore possible that a portion of the rental income with respect to a
Mortgaged Property owned by the Trust Fund, presumably allocated based on the
value of any non-qualifying services, would not constitute "rents from real
property." Any of the foregoing types of income may instead constitute "net
income from foreclosure property," which would be taxable to the Upper-Tier
REMIC at the highest marginal federal corporate rate (currently 35%) and may
also be subject to state or local taxes. Because these sources of income, if
they exist, are already in place with respect to the Mortgaged Properties, it
is generally viewed as beneficial to Certificateholders to permit the Trust
Fund to continue to earn them if it acquires a Mortgaged Property, even at the
cost of this tax. Any such taxes would be chargeable against the related income
for purposes of determining the proceeds available for distribution to holders
of Certificates. See "Certain Federal Income Tax Consequences."
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To the extent that Liquidation Proceeds collected with respect to any
Mortgage Loan are less than the sum of (i) the outstanding principal balance of
such Mortgage Loan, (ii) interest accrued thereon, (iii) interest accrued on
any P&I Advances made with respect to such Mortgage Loan and (iv) the aggregate
amount of outstanding reimbursable expenses (including any unreimbursed
Servicing Advances and unpaid and accrued interest on such Advances) incurred
with respect to such Mortgage Loan, then the Trust Fund will realize a loss in
the amount of such shortfall. The Trustee, the Servicer and/or the Special
Servicer will be entitled to reimbursement out of the Liquidation Proceeds
recovered on any Mortgage Loan, prior to the distribution of such Liquidation
Proceeds to Certificateholders, of any and all amounts that represent unpaid
servicing compensation in respect of such Mortgage Loan, certain unreimbursed
expenses incurred with respect to such Mortgage Loan and any unreimbursed
Advances made with respect to such Mortgage Loan. In addition, amounts
otherwise distributable on the Certificates will be further reduced by interest
payable to the Servicer or Trustee on any such Advances.
If any Mortgaged Property suffers damage such that the proceeds, if any,
of the related hazard insurance policy are insufficient to restore fully the
damaged property, the Servicer will not be required to expend its own funds to
effect such restoration unless (i) the Special Servicer determines that such
restoration will increase the proceeds to Certificateholders on liquidation of
the Mortgage Loan after reimbursement of the Special Servicer or the Servicer,
as the case may be, for its expenses and (ii) the Servicer determines that such
expenses will be recoverable by it from related Liquidation Proceeds.
With respect to any Mortgage Loan (i) as to which a payment default has
occurred at its maturity date, (ii) as to which any Monthly Payment (other than
a Balloon Payment) is more than 60 days delinquent, (iii) as to which the
borrower has (a) filed for, or consented to, bankruptcy, appointment of a
receiver or conservator or a similar insolvency proceeding, (b) become the
subject of a decree or order for such a proceeding which is not stayed or
discharged within 60 days, or (c) has admitted in writing its inability to pay
its debts generally as they become due, (iv) as to which the Servicer shall
have received notice of the foreclosure or proposed foreclosure of any other
lien on the Mortgaged Property, (v) as to which, in the judgment of the
Servicer, a payment default has occurred or is imminent and is not likely to be
cured by the borrower within 60 days or (vi) any other default has occurred
which has materially and adversely affected the value of the related Mortgage
Loan, and prior to acceleration of amounts due under the related Mortgage Note
or commencement of any foreclosure or similar proceedings, the Servicer will
transfer its servicing responsibilities to the Special Servicer, but will
continue to receive payments on such Mortgage Loan (including amounts collected
by the Special Servicer), to make certain calculations with respect to such
Mortgage Loan and to make remittances and prepare certain reports to the
Trustee with respect to such Mortgage Loan. If the related Mortgaged Property
is acquired in respect of any such Mortgage Loan (upon acquisition, an "REO
Property") whether through foreclosure, deed-in-lieu of foreclosure or
otherwise, the Special Servicer will continue to be responsible for the
operation and management thereof. The Mortgage Loans serviced by the Special
Servicer and any Mortgage Loans that have become REO Properties are referred to
herein as the "Specially Serviced Mortgage Loans." The Servicer will have no
responsibility for the performance by the Special Servicer of its duties under
the Pooling and Servicing Agreement.
If any Specially Serviced Mortgage Loan, in accordance with its original
terms or as modified in accordance with the Pooling and Servicing Agreement,
becomes a performing Mortgage Loan for three consecutive Monthly Payments
(provided no additional event of default is foreseeable in the reasonable
judgment of the Special Servicer), the Special Servicer will return servicing
of such Mortgage Loan (a "Corrected Mortgage Loan") to the Servicer.
The Special Servicer will prepare a report (an "Asset Status Report") for
each Mortgage Loan which becomes a Specially Serviced Mortgage Loan not later
than 30 days after the servicing of such Mortgage Loan is transferred to the
Special Servicer. Each Asset Status Report will be delivered to the Servicer,
the Directing Certificateholder (as defined below) and the Rating Agencies. The
Directing Certificateholder may object to any Asset Status Report within 10
business days of receipt; provided, however, that the Special Servicer shall
implement the recommended action as outlined in such Asset Status Report if it
makes an affirmative determination that such objection is not in the best
interest of all the Certificate-
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holders. In connection with making such affirmative determination, the Special
Servicer will request a vote by all the Certificateholders. If the Directing
Certificateholder does not disapprove an Asset Status Report within 10 business
days, the related Special Servicer shall implement the recommended action as
outlined in such Asset Status Report.
If the majority of Certificateholders fail within five days after the
notice of such vote is sent to them to reject such Asset Status Report, the
Special Servicer shall implement the same. If the majority of
Certificateholders reject the Asset Status Report, the Special Servicer shall
revise such Asset Status Report as set forth below.
If the Directing Certificateholder disapproves such Asset Status Report
and the Special Servicer has not made the affirmative determination described
above, the Special Servicer will revise such Asset Status Report as soon as
practicable thereafter, but in no event later than 30 days after such
disapproval. The Special Servicer will revise such Asset Status Report until
the earlier of (a) the Directing Certificateholder's failure to disapprove such
revised Asset Status Report as described above; or (b) until the Special
Servicer makes a determination that such objection is not in the best interests
of the Certificateholders; or (c) 60 days from the date of preparation of the
first Asset Status Report at which time the Special Servicer will implement the
recommended action.
A "Controlling Class Certificateholder" is each holder (or Certificate
Owner, if applicable) of a Certificate of the Controlling Class as certified by
the Certificate Registrar to the Trustee from time to time by such holder (or
Certificate Owner).
The "Controlling Class" will be as of any time of determination the most
subordinate Class of Certificates then outstanding that has a Certificate
Balance at least equal to 25% of the initial Certificate Balance of such Class
(or if no such Class exists, the most subordinate Class then outstanding). For
purposes of determining identity of the Controlling Class, the Certificate
Balance of each Class shall be deemed to be reduced by the amount allocated to
such Class of any Appraisal Reductions relating to Mortgage Loans as to which
Liquidation Proceeds or other final payment has not yet been received.
The Controlling Class as of the Closing Date will be the Class J
Certificates.
The Special Servicer will not be required to take or refrain from taking
any action pursuant to instructions from the Directing Certificateholder that
would cause it to violate applicable law, the Pooling and Servicing Agreement,
including the Servicing Standard, or the REMIC Provisions.
MODIFICATIONS
The Pooling and Servicing Agreement will permit the Special Servicer to
modify, waive or amend any term of any Mortgage Loan if (a) it determines, in
accordance with the Servicing Standard, that it is appropriate to do so and (b)
except as described in the following paragraph, such modification, waiver or
amendment, will not (i) affect the amount or timing of any scheduled payments
of principal, interest or other amount (including Prepayment Premiums and Yield
Maintenance Charges) payable under the Mortgage Loan, (ii) affect the
obligation of the related borrower to pay a Prepayment Premium or Yield
Maintenance Charge or permit a principal prepayment during the applicable
Lockout Period, (iii) except as expressly provided by the related Mortgage or
in connection with a material adverse environmental condition at the related
Mortgaged Property, result in a release of the lien of the related Mortgage on
any material portion of such Mortgaged Property without a corresponding
principal prepayment or (iv) in the judgment of the Special Servicer,
materially impair the security for the Mortgage Loan or reduce the likelihood
of timely payment of amounts due thereon.
Notwithstanding clause (b) of the preceding paragraph, the Special
Servicer may (i) reduce the amounts owing under any Specially Serviced Mortgage
Loan by forgiving principal, accrued interest and/or any Prepayment Premium or
Yield Maintenance Charge, (ii) reduce the amount of the Monthly Payment on any
Specially Serviced Mortgage Loan, including by way of a reduction in the
related Mortgage Rate, (iii) forbear in the enforcement of any right granted
under any Mortgage Note or Mortgage relating to a Specially Serviced Mortgage
Loan, (iv) waive Excess Interest if such waiver conforms to the Servicing
Standard and/or (v) accept a principal prepayment during any Lockout Period;
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provided that (w) the related borrower is in default with respect to the
Specially Serviced Mortgage Loan or, in the judgment of the Special Servicer,
such default is reasonably foreseeable, (x) in the sole, good faith judgment of
the Special Servicer, such modification, waiver or amendment would increase the
recovery to Certificateholders on a net present value basis documented to the
Trustee and (y) such modification, waiver or amendment does not result in a tax
being imposed on the Trust Fund or cause any REMIC created pursuant to the
Pooling and Servicing Agreement to fail to qualify as a REMIC at any time the
Certificates are outstanding. In no event will the Special Servicer be
permitted to (i) extend the maturity date of a Mortgage Loan beyond a date that
is three years prior to the Rated Final Distribution Date, (ii) extend the
maturity date of any Mortgage Loan at an interest rate less than the lower of
(a) the interest rate in effect prior to such extension or (b) the then
prevailing interest rate for comparable loans, as determined by the Special
Servicer by reference to available indices for commercial mortgage lending,
(iii) if the Mortgage Loan is secured by a ground lease, extend the maturity
date of such Mortgage Loan beyond a date which is 10 years prior to the
expiration of the term of such ground lease; (iv) reduce the Mortgage Rate to a
rate below the lesser of (x) % per annum and (y) the then prevailing
interest rate for comparable loans, as determined by the Special Servicer by
reference to available indices for commercial mortgage lending; or (v) defer
interest due on any Mortgage Loan in excess of % of the Stated Principal
Balance of such Mortgage Loan. Neither the Servicer nor the Special Servicer
may permit or modify a loan to permit a voluntary prepayment of a Mortgage Loan
(other than a Specially Serviced Mortgage Loan) on any day other than its Due
Date, unless the Servicer or Special Servicer also collects interest thereon
through the Due Date following the date of such prepayment or unless otherwise
permitted under the Mortgage Loan Documents. Prepayments of Specially Serviced
Mortgage Loans will be permitted to be made on any day without the payment of
interest through the following Due Date.
With respect to any Mortgage Loan the modification of which would create a
deferral of interest, the Pooling and Servicing Agreement will provide that the
amount of Certificate Deferred Interest resulting from such negative
amortization or any such modification will be allocated to reduce the Monthly
Interest Distributable Amount of the Class or Classes (other than the Class A-X
Certificates) with the latest alphabetical designation then outstanding and, to
the extent so allocated, shall be added to the Certificate Balance of such
Class or Classes (other than for the purposes of determining Voting Rights or
the identity of the Controlling Class).
The Special Servicer will notify the Servicer and the Trustee of any
modification, waiver or amendment of any term of any Mortgage Loan and must
deliver to the Trustee or the Custodian for deposit in the related mortgage
file an original counterpart of the agreement related to such modification,
waiver or amendment, promptly following the execution thereof. The special
Servicer will notify the Rating Agencies of any modification, waiver or
amendment of any term of any Mortgage Loan (i) the principal balance of which
is $20,000,000 or more or (ii) that is a Mortgage Loan, part of a group of
Crossed Loans or a group of loans made to affiliated borrowers that, in each
case, in the aggregate represent 5% or more of the aggregate outstanding
principal balances of all of the Mortgage Loans. Copies of each agreement
whereby any such modification, waiver or amendment of any term of any Mortgage
Loan is effected are to be available for review during normal business hours,
upon reasonable advance written notice, at the offices of the Trustee.
OPTIONAL TERMINATION
The obligations created by the Pooling and Servicing Agreement will
terminate following the earlier of (i) the final payment (or advance in respect
thereof) or other liquidation of the last Mortgage Loan or REO Property subject
thereto or (ii) the purchase of all of the assets of the Trust Fund by the
Mortgage Loan Seller, the holders of the Controlling Class or the Servicer.
Written notice of termination of the Pooling and Servicing Agreement will be
given to each Certificateholder, and the final distribution will be made only
upon surrender and cancellation of the Certificates at the office of the
Certificate Registrar or other location specified in such notice of
termination.
Subject to the requirement set forth in the last sentence of this
paragraph, CSFB Mortgage Capital will have the option to purchase all of the
assets of the Trust Fund. If CSFB Mortgage Capital does not exercise such
option within 60 days after it becomes exercisable by CSFB Mortgage Capital,
PWRES may
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notify CSFB Mortgage Capital of its intention to exercise such option and, if
CSFB Mortgage Capital does not exercise such option within ten Business Days
thereafter, PWRES will be entitled to exercise such option. If PWRES does not
exercise such option within 60 days after it becomes exercisable by PWRES, the
holders of a majority of the Percentage Interests in the Controlling Class can
notify CSFB Mortgage Capital and PWRES of their intention to exercise such
option and if neither CSFB Mortgage Capital nor PWRES exercises such option
within ten Business Days thereafter, such holders of the Controlling Class will
be entitled to exercise such option. If the Controlling Class does not exercise
its option to purchase all of the assets of the Trust Fund within 60 days after
such option becomes exercisable, the Servicer may notify the Mortgage Loan
Sellers and the holders of the Controlling Class of its intention to exercise
such option and if neither the Mortgage Loan Sellers nor the holders of a
majority of the Percentage Interests in the Controlling Class exercise such
option within ten Business Days, the Servicer will be entitled to exercise such
option. Any such purchase of all the Mortgage Loans and other assets in the
Trust Fund is required to be made at a price equal to the sum of (i) the
aggregate Purchase Price of all the Mortgage Loans (in each case exclusive of
REO Loans) then included in the Trust Fund and (ii) the aggregate fair market
value of all REO Properties then included in the Trust Fund (which fair market
value for any REO Property may be less than the Purchase Price for the
corresponding REO Loan), as determined by an appraiser selected and mutually
agreed upon by the Servicer and the Trustee. Such purchase will effect early
retirement of the then outstanding Offered Certificates, but the right of
either Mortgage Loan Seller, the holders of the Controlling Class or the
Servicer to effect such termination is subject to the requirement that the then
aggregate Stated Principal Balance of the Mortgage Loans and any REO Mortgage
Loans be less than % of the Initial Pool Balance.
On the final Distribution Date, the aggregate amount paid by the Mortgage
Loan Sellers, the holders of the Controlling Class or the Servicer, as the case
may be, for the Mortgage Loans and other assets in the Trust Fund (if the Trust
Fund is to be terminated as a result of the purchase described in the preceding
paragraph), together with all other amounts on deposit in the Certificate
Account and not otherwise payable to a person other than the Certificateholders
(see "Description of the Pooling Agreements -- Certificate Account" in the
Prospectus), will be applied generally as described above under "Description of
the Offered Certificates -- Distributions -- Priority."
THE TRUSTEE
State Street Bank and Trust Company shall serve as Trustee under the
Pooling and Servicing Agreement pursuant to which the Certificates are being
issued. Except in circumstances such as those involving defaults (when it might
request assistance from other departments in the bank), its responsibilities as
trustee are carried out by its Corporate Trust Department. Its principal
corporate trust office is located at 5th Floor, Two International Place,
Boston, Massachusetts 02110, Attention: Credit Suisse First Boston Mortgage
Securities Corp., Series 1998-C1. The telephone number is (617) 664-5469. As
compensation for the performance of its duties, the Trustee will be paid a fee
(the "Trustee Fee"). The Trustee Fee will be payable monthly on a loan-by-loan
basis and will accrue at a rate (the "Trustee Fee Rate") equal to 0.00175% per
annum, and will be computed on the basis of a 360-day year consisting of twelve
30-day months on the Stated Principal Balance of the related Mortgage Loan. In
addition, the Trustee will be entitled to recover from the Trust Fund all
reasonable unanticipated expenses and disbursements incurred or made by the
Trustee in accordance with any of the provisions of the Pooling and Servicing
Agreement, but not including expenses incurred in the ordinary course of
performing its duties as Trustee under the Pooling and Servicing Agreement, and
not including any such expense, disbursement or advance as may arise from its
willful misconduct, negligence or bad faith.
CERTIFICATE REGISTRAR AND AUTHENTICATING AGENT
The Trustee will initially serve as registrar (in such capacity, the
"Certificate Registrar") for purposes of recording and otherwise providing for
the registration of the Offered Certificates and of transfers and exchanges of
the Definitive Certificates, if issued, and as authenticating agent of the
Certificates (in such capacity, the "Authenticating Agent").
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DUTIES OF THE TRUSTEE
If the Servicer fails to make a required Advance, the Trustee shall make
such Advance, provided that the Trustee shall not be obligated to make any
Nonrecoverable Advance. The Trustee shall be entitled to rely conclusively on
any determination by the Servicer or the Special Servicer that an Advance, if
made, would not be recoverable. The Trustee will be entitled to reimbursement
for each Advance, with interest, made by it in the same manner and to the same
extent as the Servicer or the Special Servicer.
If no Event of Default has occurred, and after the curing of all Events of
Default which may have occurred, the Trustee is required to perform only those
duties specifically required under the Pooling and Servicing Agreement. Upon
receipt of the various certificates, reports or other instruments required to
be furnished to it, the Trustee is required to examine such documents and to
determine whether they conform on their face to the requirements of the Pooling
and Servicing Agreement.
THE SERVICER
Banc One Mortgage Capital Markets, LLC ("Banc One"), a Delaware limited
liability company, will be the Servicer and in such capacity will be
responsible for servicing the Mortgage Loans. The principal offices of Banc One
Mortgage Capital Markets, LLC are located at 1717 Main Street, Dallas, Texas
75201.
As of March 31, 1998, Banc One and its affiliates were responsible for
servicing approximately 5,829 commercial and multifamily loans with an
aggregate principal balance of approximately $7.38 billion, the collateral for
which is located in 49 states, Puerto Rico and the District of Columbia. With
respect to such loans, approximately 4,441 loans with an aggregate principal
balance of approximately $4.34 billion pertain to commercial and multifamily
mortgage backed securities.
The information concerning the Servicer set forth herein has been provided
by the Servicer, and none of the Mortgage Loan Sellers, the Special Servicer,
the Depositor, the Trustee or the Underwriters makes any representation or
warranty as to the accuracy thereof. The Servicer (except for the information
under this heading) will make no representation as to the validity or
sufficiency of the Pooling and Servicing Agreement, the Certificates, the
Mortgage Loans, this Prospectus Supplement, the Prospectus or any related
documents.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The fee of the Servicer (the "Servicing Fee") will be payable monthly on a
loan-by-loan basis from interest received, will accrue at a rate (the
"Servicing Fee Rate") of 0.03% per annum, and will be computed on the basis of
a 360-day year consisting of twelve 30-day months on the Stated Principal
Balance of the related Mortgage Loan. The Servicer and certain Seller-Servicers
will be entitled to retain out of amounts to be remitted to the Trust Fund a
fee (each, a "Primary Servicing Fee") that accrues on the Stated Principal
Balance of the related Mortgage Loans at a rate of 0.05% per annum with respect
to the Mortgage Loans primarily serviced by the Servicer and, with respect to
any Mortgage Loans which are primarily serviced by a Seller-Servicer, the fee
set forth in the related Seller-Servicer Agreement. The per annum rate at which
the Primary Servicing Fee accrues (the "Primary Servicing Fee Rate") is set
forth herein in the table entitled "Mortgage Notes" under "Certain
Characteristics of the Mortgage Loans -- Additional Mortgage Loan Information".
The Primary Servicing Fee with respect to each Mortgage Loan will be calculated
in the same manner as interest on such Mortgage Loan. The Servicer will be
required to pay the fees and expenses of any other sub-servicer retained by the
Servicer out of the Servicing Fee. Except to the extent set forth in the
related Seller-Servicer Agreement, in no event will the Servicer or any
Seller-Servicer be entitled to retain a servicing fee from the amount of any
P&I Advance or to pay itself separate servicing compensation from amounts
otherwise constituting Prepayment Interest Excess, regardless of whether the
related borrower is obligated to reimburse Servicing Fees or Primary Servicing
Fees. In addition to the Servicing Fee, the Servicer will be entitled to
retain, as additional servicing compensation, (i) 50% of all assumption fees
paid by the Mortgagors on Mortgage Loans that are not Specially Serviced
Mortgage Loans and (ii) late payment charges and default interest
(collectively, "Penalty Charges") paid by the borrowers and collected by the
Servicer, but only to the extent such amounts are not needed to pay outstanding
interest on all Advances accrued with respect to such
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Mortgage Loan. The remainder of the assumption fees shall be delivered to the
Special Servicer as additional servicing compensation. The Servicer also is
authorized but not required to invest or direct the investment of funds held in
the Certificate Account in Permitted Investments, and the Servicer will be
entitled to retain any interest or other income earned on such funds (but only
to the extent such interest or other income is not required, together with the
Servicing Fee, to cover Prepayment Interest Shortfalls) and will bear any
losses resulting from the investment of such funds. The Servicer also is
entitled to invest or direct the investments held in the Cash Collateral
Accounts, Lockbox Accounts or Escrow Accounts and to retain any interest to the
extent such interest is not required to be paid to the related borrowers.
Finally, the Servicer is entitled to retain any miscellaneous fees collected
from borrowers. The Servicer will pay the annual fees of each Rating Agency and
shall be reimbursed therefor by the Mortgage Loan Seller. The Servicer is also
entitled to receive all Prepayment Interest Excesses as additional servicing
compensation unless such Prepayment Interest Excess results from the Servicer
accepting a voluntary prepayment with respect to a Mortgage Loan and waiving a
right under such Mortgage Loan to collect interest thereon through the Due Date
following the date of prepayment.
The principal compensation to be paid to the Special Servicer in respect
of its special servicing activities will be the Special Servicing Fee, the
Workout Fee and the Liquidation Fee. The "Special Servicing Fee" will accrue
with respect to each Specially Serviced Mortgage Loan at a rate equal to 0.25%
per annum (the "Special Servicing Fee Rate") on the basis of the same principal
amount and for the same period respecting which any related interest payment
due or deemed due on such Specially Serviced Mortgage Loan is computed, and
will be payable monthly from the Trust Fund. A "Workout Fee" will in general be
payable with respect to each Corrected Mortgage Loan. As to each Corrected
Mortgage Loan, the Workout Fee will be payable out of, and will be calculated
by application of a "Workout Fee Rate" of (i) 1.0% for any Mortgage Loan with a
Stated Principal Balance of less than $10,000,000, (ii) 0.75% for any Mortgage
Loan with a Stated Principal Balance equal to or greater than $10,000,000 but
less than $20,000,000 and (iii) 0.5% for any Mortgage Loan with a Stated
Principal Balance equal to or greater than $20,000,000, to each collection of
interest and principal (including scheduled payments, prepayments, Balloon
Payments and payments at maturity) received on such Mortgage Loan for so long
as it remains a Corrected Mortgage Loan. The Workout Fee with respect to any
Corrected Mortgage Loan will cease to be payable if such loan again becomes a
Specially Serviced Mortgage Loan; provided that a new Workout Fee will become
payable if and when such Mortgage Loan again becomes a Corrected Mortgage Loan.
If the Special Servicer is terminated (other than for cause), it shall retain
the right to receive any and all Workout Fees payable with respect to Mortgage
Loans that became Corrected Mortgage Loans during the period that it acted as
Special Servicer and were still such at the time of such termination or
resignation (and the successor Special Servicer shall not be entitled to any
portion of such Workout Fee), in each case until the Workout Fee for any such
loan ceases to be payable in accordance with the preceding sentence. A
"Liquidation Fee" will be payable with respect to each Specially Serviced
Mortgage Loan as to which the Special Servicer obtains a full or discounted
payoff with respect thereto from the related Mortgagor and, except as otherwise
described below, with respect to any Specially Serviced Mortgage Loan or REO
Property as to which the Special Servicer receives any amounts in connection
with a taking of a Mortgaged Property by exercise of a power of eminent domain
or condemnation or the liquidation of a defaulted Mortgage Loan, by foreclosure
or otherwise ("Liquidation Proceeds"). As to each such Specially Serviced
Mortgage Loan, the Liquidation Fee will be payable from, and will be calculated
by application of a "Liquidation Fee Rate" of (i) 1.0% for any Mortgage Loan
with a Stated Principal Balance of less than $10,000,000, (ii) 0.75% for any
Mortgage Loan with a Stated Principal Balance equal to or greater than
$10,000,000 but less than $20,000,000 and (iii) 0.5% for any Mortgage Loan with
a Stated Principal Balance equal to or greater than $20,000,000, to the net
liquidation proceeds received with respect to such Specially Serviced Mortgage
Loan. Notwithstanding anything to the contrary described above, no Liquidation
Fee will be payable based on, or out of, Liquidation Proceeds received in
connection with the repurchase of any Mortgage Loan by the Mortgage Loan Seller
for a breach of representation or warranty or for defective or deficient
Mortgage Loan documentation, the purchase of any Specially Serviced Mortgage
Loan by the Servicer or the Special Servicer or the purchase of all of the
Mortgage Loans and REO Properties in connection with an optional termination of
the Trust Fund. If, however, Liquidation Proceeds are received with respect to
any Corrected Mortgage Loan and
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the Special Servicer is properly entitled to a Workout Fee, such Workout Fee
will be payable based on and out of the portion of such Liquidation Proceeds
that constitutes principal and/or interest. The Special Servicer will be
entitled to additional servicing compensation in the form of (i) all assumption
fees on all Specially Serviced Mortgage Loans, (ii) 50% of all assumption fees
on any Mortgage Loans other than Specially Serviced Mortgage Loans and (iii)
all extension fees and modification fees received on or with respect to any
Mortgage Loans. The Special Servicer will also be entitled to Penalty Charges
collected by the Special Servicer on any Specially Serviced Mortgage Loans net
of any outstanding interest on Advances accrued thereon.
Although the Servicer and the Special Servicer are each required to
service and administer the Mortgage Loans in accordance with the Servicing
Standard above and, accordingly, without regard to their right to receive
compensation under the Pooling and Servicing Agreement, additional servicing
compensation in the nature of assumption and modification fees may under
certain circumstances provide the Servicer or the Special Servicer, as the case
may be, with an economic disincentive to comply with such standard.
As and to the extent described herein under "Advances," the Servicer will
be entitled to receive interest on Advances at the Reimbursement Rate, such
interest to be paid contemporaneously with the reimbursement of the related
Advance.
Each of the Servicer and the Special Servicer generally will be required
to pay all expenses incurred by it in connection with its servicing activities
under the Pooling and Servicing Agreement and will not be entitled to
reimbursement therefor except as expressly provided in the Pooling and
Servicing Agreement. In connection therewith, the Servicer will be responsible
for all fees of any sub-servicers.
Any Prepayment Interest Shortfall in excess of the sum of (i) the
Servicing Fee attributable to a Mortgage Loan (other than a Specially Serviced
Mortgage Loan) being prepaid and (ii) the investment income accruing on the
related Principal Prepayment due to the Servicer for the period from the date
of such prepayment to the following Servicer Remittance Date (or, in the case
of a Specially Serviced Mortgage Loan, for the period from the date of such
prepayment to the immediately following Due Date) (such excess amount, an
"Uncovered Prepayment Interest Shortfall") will be allocated to each Class of
Regular Certificates, pro rata, based on amounts distributable to each such
Class. Any Prepayment Interest Excess on a Mortgage Loan (other than a Mortgage
Loan the terms of which expressly permit collections of interest through the
following Due Date in connection with any voluntary principal prepayment) will
be paid to the Servicer.
THE SPECIAL SERVICER
Lennar Partners, Inc., a Florida corporation, a subsidiary of LNR Property
Corporation ("LNR"), will serve as the Special Servicer and in such capacity
will be responsible for servicing the Specially Serviced Mortgage Loans. The
principal executive offices of the Special Servicer are located at 760 N.W.
107th Avenue, Miami, Florida 33172, and its telephone number is (305) 485-2000.
LNR, its subsidiaries and affiliates are involved in the real estate investment
and management business and engage principally in (i) developing, acquiring and
actively managing commercial and residential multi-family rental real estate,
(ii) acquiring portfolios of commercial mortgage loans and properties and
providing workout, property management and asset sale services with regard to
the portfolio assets, (iii) acting as special servicer with regard to
commercial mortgage pools which are the subject of commercial mortgage backed
securities ("CMBS"), (iv) acquiring unrated and rated CMBS issued with regard
to commercial mortgage pools as to which the Special Servicer acts as special
servicer, and (v) making mortgage loans to companies and individuals engaged in
commercial real estate activities and to developers and builders of residential
communities. The Special Servicer has regional offices located across the
country in Florida, Georgia, and California. As of April 1998, the Special
Servicer and its affiliates were managing a portfolio including over 7,700
assets in most states with an original face value of over $24.4 billion, most
of which are commercial real estate assets. Included in this managed portfolio
are $18.6 billion of commercial real estate assets representing 41
securitization transactions, for which the Special Servicer is the servicer or
special servicer. The Special Servicer and its affiliates own and are in the
business of acquiring assets similar in type to the assets of the Trust Fund.
Accordingly, the assets of the Special Servicer and its
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affiliates may, depending upon the particular circumstances, including the
nature and location of such assets, compete with the Mortgaged Properties for
tenants, purchasers, financing and so forth.
The information set forth herein concerning the Special Servicer has been
provided by the Special Servicer, and none of the Mortgage Loan Sellers, the
Trustee, the Depositor, the Master Servicer or the Underwriters make any
representation or warranty as to the accuracy or completeness of such
information.
The Special Servicer may be removed, and a successor Special Servicer
appointed, at any time by the holders of Certificates representing more than
50% of the Percentage Interest of the Controlling Class, provided that each
Rating Agency confirms in writing that such replacement of the Special
Servicer, in and of itself, will not cause a qualification, withdrawal or
downgrading of the then-current ratings assigned to any Class of Certificates.
SERVICER AND SPECIAL SERVICER PERMITTED TO BUY CERTIFICATES
The Servicer and Special Servicer will be permitted to purchase any Class
of Certificates. Such a purchase by the Servicer or Special Servicer could
cause a conflict relating to the Servicer's or Special Servicer's duties
pursuant to the Pooling and Servicing Agreement and the Servicer's or Special
Servicer's interest as a holder of Certificates, especially to the extent that
certain actions or events have a disproportionate effect on one or more Classes
of Certificates. The Pooling and Servicing Agreement provides that the Servicer
or Special Servicer shall administer the Mortgage Loans in accordance with the
servicing standard set forth therein without regard to ownership of any
Certificate by the Servicer or Special Servicer or any affiliate thereof.
REPORTS TO CERTIFICATEHOLDERS; AVAILABLE INFORMATION
Trustee Reports. Based solely on information provided in monthly reports
prepared by the Servicer regarding the Mortgage Loans (which may also publish
such reports on the Internet), and the Special Servicer, and delivered to the
Trustee, the Trustee will prepare and forward on each Distribution Date to each
Certificateholder, the Depositor, the Servicer, the Special Servicer, the
Underwriters, each Rating Agency, Bloomberg, L.P., the Trepp Group, Charter
Research Corporation and Intex Solutions, Inc. and, if requested, any potential
investors in the Certificates, all of which will be made available
electronically to any interested party via the Trustee's Website, electronic
bulletin board and/or, with respect to Distribution Date Statements only, its
fax-on-demand service:
(a) A statement (a "Distribution Date Statement") setting forth, among
other things: (i) the aggregate amount of distributions, if any, made on such
Distribution Date to the holders of each Class of Certificates applied to
reduce the respective Certificate Balances thereof; (ii) the aggregate amount
of distributions, if any, made on such Distribution Date to holders of each
Class of Certificates allocable to (A) such Class's Optimal Interest
Distribution Amount and, separately stated, the portion thereof representing
the Unpaid Interest Shortfall Amount for such Class, (B) Prepayment Premiums
and Yield Maintenance Charges; (iii) the number of outstanding Mortgage Loans,
the aggregate unpaid principal balance of the Mortgage Loans at the close of
business on the related Determination Date; (iv) the number and aggregate
unpaid principal balance of Mortgage Loans (A) delinquent one Due Period, (B)
delinquent two Due Periods, (C) delinquent three or more Due Periods, (D) that
are Specially Serviced Mortgage Loans and are not delinquent, or (E) as to
which foreclosure proceedings have been commenced; (v) with respect to any
Mortgage Loan as to which the related Mortgaged Property became a REO Property
during the preceding calendar month, the city, state, property type, latest
DSCR, Stated Principal Balance and unpaid principal balance of such Mortgage
Loan as of the date such Mortgaged Property became an REO Property; (vi) as to
any Mortgage Loan repurchased by the Mortgage Loan Seller or otherwise
liquidated or disposed of during the related Due Period, the loan number
thereof and the amount of proceeds of any repurchase of a Mortgage Loan,
Liquidation Proceeds and/or other amounts, if any, received thereon during the
related Due Period and the portion thereof included in the Available
Distribution Amount for such Distribution Date; (vii) with respect to any REO
Property included in the Trust Fund as of the close of business on the related
Due Date, the loan number of the
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related Mortgage Loan, the value of such REO Property based on the most recent
appraisal or valuation and the amount of any other income collected with
respect to any REO Property, net of related expenses and any other amounts, if
any, received on such REO Property during the related Due Period and the
portion thereof included in the Available Distribution Amount for such
Distribution Date; (viii) with respect to any REO Property sold or otherwise
disposed of during the related Due Period, (A) the loan number of the related
Mortgage Loan and the amount of the sale proceeds and other amounts, if any,
received in respect of such REO Property during the related Due Period and the
portion thereof included in the Available Distribution Amount for such
Distribution Date and (B) the date of the related determination by the Special
Servicer that it has recovered all payments which it expects to be finally
recoverable (the "Final Recovery Determination"); (ix) the aggregate
Certificate Balance or Notional Balances of each Class of Certificates before
and after giving effect to the distributions made on such Distribution Date,
separately identifying any reduction in the aggregate Certificate Balance of
each such Class due to any Collateral Support Deficit; (x) the amount of
Principal Prepayments (in the aggregate and broken out on a loan-by-loan basis)
made during the related Due Period, the amount of any Yield Maintenance Charges
and/or Prepayment Premiums (in the aggregate and broken out on a loan-by-loan
basis) paid during the related Due Period and the aggregate amount of any
Prepayment Interest Shortfalls not covered by the Servicer for such
Distribution Date; (xi) the Pass-Through Rate for each Class of Certificates
applicable for such Distribution Date; (xii) the aggregate amount of the
Trustee Fee, the Servicing Fee, Primary Servicing Fee, Special Servicing Fee
and any other servicing or special servicing compensation retained by the Trust
or paid to the Servicer and the Special Servicer during the related Due Period;
(xiii) the Collateral Support Deficit, if any, for such Distribution Date;
(xiv) certain Trust Fund expenses incurred during the related Due Period as
described in the Pooling and Servicing Agreement; (xv) the aggregate amount of
Servicing Advances and P&I Advances outstanding which have been made by the
Servicer, the Special Servicer and the Trustee; and (xvi) the amount of any
Appraisal Reduction Amounts allocated during the related Due Period on a
loan-by-loan basis and the total Appraisal Reduction Amounts as of such
Distribution Date on a loan-by-loan basis. In the case of information furnished
pursuant to subclauses (i), (ii), (viii) and (ix) above, the amounts shall be
expressed as a dollar amount in the aggregate for all Certificates of each
applicable Class and per $1,000 of original Certificate Balance or Notional
Balance, as the case may be.
(b) A report containing information regarding the Mortgage Loans as of the
end of the related Due Period, which report shall contain substantially the
categories of information regarding the Mortgage Loans set forth in this
Prospectus Supplement in the tables under the caption "Description of the
Mortgage Loans -- Certain Terms and Conditions of the Mortgage Loans"
(reported, where applicable, solely on the basis of the most recent relevant
information provided by the borrowers to the Servicer or the Special Servicer
and by the Servicer or the Special Servicer, as the case may be, to the
Trustee) and such information shall include a loan-by-loan listing (in
descending balance order) showing loan name, property type, location, unpaid
principal balance, Mortgage Rate, paid through date, maturity date, net
interest portion of the Monthly Payment, principal portion of the Monthly
Payment and any Prepayment Premiums or Yield Maintenance Charges received. Such
loan-by-loan listing will be made available electronically in accordance with
the provisions of the Pooling and Servicing Agreement; provided, however, that
the Trustee will provide Certificateholders with a written copy of such report
upon written request.
Servicer Reports. The Servicer is required to deliver to the Trustee on
the Business Day prior to each Distribution Date, and the Trustee is to deliver
to each Certificateholder, the Depositor, the Underwriters, each Rating Agency
and, if requested in writing, any potential investor in the Certificates, on
each Distribution Date, the following six reports, all of which will be made
available electronically to any interested party via the Trustee's Website and
electronic bulletin board:
(a) A "Comparative Financial Status Report," in the form set forth in
Annex D, setting forth, among other things, the occupancy, revenue, net
operating income and DSCR for the Mortgage Loans as of the current
Determination Date for each of the following three periods: (i) the most
current available year-to-date, (ii) the previous two full fiscal years and
(iii) the "base year" (representing the original analysis of information used
as of the Cut-off Date).
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(b) A "Delinquent Loan Status Report," in the form set forth in Annex D,
setting forth, among other things, those Mortgage Loans which, as of the close
of business on the Determination Date immediately preceding the preparation of
such report, were delinquent 30 to 59 days, delinquent 60 to 89 days,
delinquent 90 days or more, current but specially serviced, or in foreclosure
but not an REO Property.
(c) An "Historical Loan Modification Report," in the form set forth in
Annex D, setting forth, among other things, those Mortgage Loans which, as of
the close of business on the Determination Date immediately preceding the
preparation of such report, have been modified pursuant to the Pooling and
Servicing Agreement (i) during the related Due Period and (ii) since the
Cut-off Date, showing the original and the revised terms thereof.
(d) An "Historical Loss Estimate Report," in the form set forth in Annex
D, setting forth, among other things, as of the close of business on the
Determination Date immediately preceding the preparation of such report, (i)
the aggregate amount of Liquidation Proceeds, both for the related Due Period
and historically, and (ii) the amount of realized losses occurring on the
Mortgage Loans during the related Due Period, set forth on a Mortgage
Loan-by-Mortgage Loan basis.
(e) An "REO Status Report," in the form set forth in Annex D, setting
forth, among other things, with respect to each REO Property that was included
in the Trust Fund as of the close of business on the Determination Date
immediately preceding the preparation of such report, (i) the acquisition date
of such REO Property, (ii) the amount of income collected with respect to any
REO Property net of related expenses and other amounts, if any, received on
such REO Property during the related Due Period and (iii) the value of the REO
Property based on the most recent appraisal or other valuation thereof
available to the Special Servicer as of such date of determination.
(f) A "Servicer Watch List," in the form set forth in Annex D, setting
forth, among other things, any Mortgage Loan that, as of the Determination Date
immediately preceding the preparation thereof, is in jeopardy of becoming a
Specially Serviced Mortgage Loan.
The information that pertains to Specially Serviced Mortgage Loans and REO
Properties reflected in such reports shall be based solely upon the reports
delivered by the Special Servicer to the Servicer at least two business days
prior to the Servicer Remittance Date. Absent manifest error, none of the
Servicer, the Special Servicer or the Trustee shall be responsible for the
accuracy or completeness of any information supplied to it by a borrower or
third party that is included in any reports, statements, materials or
information prepared or provided by the Servicer, the Special Servicer or the
Trustee, as applicable.
The Servicer is also required to deliver to the Trustee on or before June
15 of each year, commencing with June 15, 1999, with respect to each Mortgaged
Property and REO Property, an "Operating Statement Analysis" as of the end of
the preceding fiscal year, together with copies of the operating statements and
rent rolls (but only to the extent the related borrower is required by the
Mortgage to deliver, or otherwise agrees to provide such information) for such
Mortgaged Property or REO Property as of the end of the preceding fiscal year.
The Servicer (or the Special Servicer in the case of Specially Serviced
Mortgage Loans and REO Properties) is required to use its best reasonable
efforts to obtain said annual operating statements and rent rolls.
The Servicer will maintain certain information relating to the servicing
of the Mortgage Loans accessible by password on its web site "bomcm.com."
The Trustee is to deliver a copy of each Operating Statement Analysis
report that it receives from the Servicer to the Depositor, the Underwriters
and each Rating Agency promptly after its receipt thereof. Upon written
request, the Trustee will make such reports available to the Certificateholders
and the Special Servicer.
In addition, within a reasonable period of time after the end of each
calendar year, the Trustee is required to send to each person who at any time
during the calendar year was a Certificateholder of record, a report
summarizing on an annual basis (if appropriate) the items provided to
Certificateholders in the monthly Distribution Date Statements and such other
information as may be required to enable
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such Certificateholders to prepare their federal income tax returns. The
Trustee shall be deemed to have satisfied this requirement to the extent it has
complied with applicable provisions of the Code. Such information is to include
the amount of original issue discount accrued on each Class of Certificate held
by persons other than holders exempted from the reporting requirements and
information regarding the expenses of the Trust Fund.
Other Information. The Pooling and Servicing Agreement requires that the
Trustee make available at its offices, during normal business hours, upon not
less than five Business Days' prior written notice, for review by any Holder of
a Certificate, the Depositor, the Special Servicer, the Servicer, any Rating
Agency, any potential investor in the Certificates or any other Person to whom
the Depositor believes such disclosure is appropriate, originals or copies of,
among other things, the following items (except to the extent not permitted by
applicable law or under any of the Mortgage Loan documents): (i) the Pooling
and Servicing Agreement and any amendments thereto, (ii) all Distribution Date
Statements delivered to holders of the relevant Class of Offered Certificates
since the Closing Date, (iii) all annual officers' certificates and
accountants' reports delivered by the Servicer and Special Servicer to the
Trustee since the Closing Date regarding compliance with the relevant
agreements, (iv) the most recent property inspection report prepared by or on
behalf of the Servicer or the Special Servicer with respect to each Mortgaged
Property, (v) the most recent annual operating statements, rent rolls (to the
extent such rent rolls have been made available by the related borrower) and/or
lease summaries and retail "sales information", if any, collected by or on
behalf of the Servicer or the Special Servicer with respect to each Mortgaged
Property, (vi) any and all modifications, waivers and amendments of the terms
of a Mortgage Loan entered into by the Servicer and/or the Special Servicer,
and (vii) any and all officers' certificates and other evidence delivered to or
by the Trustee to support the Servicer's or the Trustee's, as the case may be,
determination that any Advance, if made, would be a Nonrecoverable Advance.
Copies of any and all of the foregoing items will be available from the Trustee
upon written request; however, the Trustee will be permitted to require payment
of a sum sufficient to cover the reasonable costs and expenses of providing
such copies.
The Trustee will make available the Distribution Date Statement and
certain other information through its Corporate Trust home page on the world
wide web and/or by facsimile throught its Street Fax automated fax-back system.
The web page is located at "corporatetrust.statestreet.com". CMBS information
is available by clicking the "Investor Information & Reporting" button, and
selecting the appropriate transaction. Interested parties can register for
Street Fax by calling (617) 664-5600 and requesting an account application by
following the instructions provided by the system.
In connection with providing access to the Trustee's and/or the Servicer's
Website or electronic bulletin board, the Trustee or the Servicer, as the case
may be, may require registration and the acceptance of a disclaimer. Neither
the Servicer nor the Trustee shall be liable for the dissemination of
information in accordance with the Pooling and Servicing Agreement.
USE OF PROCEEDS
The net proceeds from the sale of Offered Certificates will be used by the
Depositor to pay part of the purchase price of the Mortgage Loans.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain United States federal income tax
consequences of an investment in the Offered Certificates by holders that
acquire the Offered Certificates in their initial offering. This summary is
based on the Internal Revenue Code of 1986 (the "Code") as well as Treasury
regulations and administrative and judicial rulings and practice. Legislative,
judicial and administrative changes may occur, possibly with retroactive
effect, that could alter or modify the continued validity of the statements and
conclusions set forth herein. This summary does not purport to address all
federal income tax matters that may be relevant to particular holders. For
example, it generally is addressed only to original purchasers of the Offered
Certificates, deals only with Offered Certificates held as capital assets
within the meaning of Section 1221 of the Code, and does not address tax
consequences to holders that
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may be relevant to investors subject to special rules, such as non-U.S.
investors, banks, insurance companies, tax-exempt organizations, dealers in
securities or currencies, electing large partnerships, mutual funds, REITs,
RICs, natural persons, cash method taxpayers, S corporations, estates and
trusts, investors that hold the Offered Certificates as part of a hedge,
straddle or integrated or conversion transaction, or holders whose "functional
currency" is not the United States dollar. Further, it does not address
alternative minimum tax consequences or the indirect effects on the holders of
equity interests in a holder of the Offered Certificates. Investors should
consult their own tax advisors to determine the United States federal, state,
local and other tax consequences of the purchase, ownership and disposition of
the Offered Certificates.
The following discussion is based in part upon the rules governing
original issue discount that are set forth in Code Sections 1271 through 1273
and 1275 and in Treasury regulations issued under the original issue discount
provisions of the Code (the "OID Regulations"), and the Treasury regulations
issued under the provisions of the Code relating to REMICs (the "REMIC
Regulations"). Purchasers of the Offered Certificates should be aware that
Section 1272(a)(6) of the Code and the OID Regulations do not adequately
address certain issues relevant to, or applicable to, prepayable obligations
such as the Offered Certificates.
Elections will be made to treat the Trust Fund, exclusive of the Excess
Interest and certain assumption fees collected with respect to the Mortgage
Loans and the right to receive Yield Protection Payments, including the
collateral pledged to secure the payment of such obligation (such portion of
the Trust Fund, the "Trust REMICs"), as two separate REMICs (the "Upper-Tier
REMIC" and the "Lower-Tier REMIC," respectively) within the meaning of Code
Section 860D. The reserve accounts, the Lockbox Accounts and the Cash
Collateral Accounts will be treated as beneficially owned by the respective
borrowers for federal income tax purposes. The Lower-Tier REMIC will hold the
Mortgage Loans (exclusive of Excess Interest and certain assumption fees),
proceeds therefrom, the Collection Account, the Distribution Account and any
REO Property, and will issue (i) certain uncertificated classes of regular
interests (the "Lower-Tier Regular Interests") to the Upper-Tier REMIC, (ii)
the Class LR Certificates, which will represent the sole class of residual
interests in the Lower-Tier REMIC. The Upper-Tier REMIC will hold the
Lower-Tier REMIC Regular Interests, and the Upper-Tier Distribution Account in
which distributions thereon will be deposited, and will issue the Class A-1A,
Class A-1B, Class A-2MF, Class A-X, Class B, Class C, Class D, Class E, Class
F, Class G, Class H, Class I and Class J Certificates (the "Regular
Certificates") as classes of regular interests and the Class R Certificates as
representing the sole class of residual interests in the Upper-Tier REMIC.
Qualification as a REMIC requires ongoing compliance with certain conditions.
Assuming (i) the making of appropriate elections, (ii) compliance with the
Pooling and Servicing Agreement and (iii) compliance with any changes in the
law, including any amendments to the Code or applicable temporary or final
regulations of the United States Department of the Treasury ("Treasury
Regulations") thereunder, in the opinion of Orrick, Herrington & Sutcliffe LLP,
each REMIC will qualify as a separate REMIC. References in this discussion to
the "REMIC" will, unless the context dictates otherwise, refer to each of the
Upper-Tier REMIC and the Lower-Tier REMIC. The Class V-1 Certificates will
represent pro rata undivided beneficial interests in the portion of the Trust
Fund consisting of Excess Interest with respect to the CSFB Mortgage Loans, and
the Class V-2 Certificates will represent pro rata undivided beneficial
interests in the portion of the Trust Fund consisting of Excess Interest with
respect to the PWRES Mortgage Loans, and each such portion will be treated as a
grantor trust for federal income tax purposes.
The Offered Certificates (excluding the right to receive Yield Protection
Payments) will be treated as "loans . . . secured by an interest in real
property which is . . . residential real property" or "loans secured by an
interest in . . . health . . . institutions or facilities, including structures
designed or used primarily for residential purposes for . . . persons under
care" for domestic building and loan associations (but only to the extent of
the allocable portion of the Mortgage Loans secured by multifamily properties
or nursing homes and assisted living facilities, respectively) and will be
treated as "real estate assets" for real estate investment trusts, to the
extent described in the Prospectus. As of the Cut-off Date, Multifamily Loans
and Healthcare Loans represent approximately 16.3% and 1.2%, respectively, of
the Mortgage Loans by unpaid principal balance. Investors are cautioned that
since the Offered Certificates
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comprise rights in addition to the rights as regular interests in a REMIC, the
Offered Certificates will not in their entirety constitute assets described in
section 7701(a)(19)(C) of the Code or real estate assets described in Section
856(c)(4)(A) of the Code, and income earned on the Offered Certificates will
qualify as "interest on obligations secured by mortgages on real property"
under Section 856(c)(3)(B) of the Code only to the extent that the income
reflects the income so qualifying earned by the Offered Certificates. The right
to receive Yield Protection Payments will not be treated as a real estate asset
for purposes of Section 856(c)(4)(A) of the Code and income from such payments
will not be treated as income described in Section 856(c)(3) of the Code and
may not qualify as income described in Section 856(c)(2). The Offered
Certificates will not be treated as "qualified mortgages" under Section
860G(a)(3) of the Code and are not appropriate investments for other REMICs.
The Offered Certificates (excluding the right to receive Yield Protection
Payments) generally will be treated as newly originated debt instruments for
federal income tax purposes. Beneficial owners of the Offered Certificates will
be required to report income on such regular interests in accordance with the
accrual method of accounting. Based on expected issue prices, it is anticipated
that the Class A-X and the Class Certificates will be issued with original
issue discount and the Class Certificates will not be issued with original
issue discount. See "Certain Federal Income Tax Consequences -- Taxation of the
REMIC and its Holders" and "-- Taxation of Regular Interests" in the
Prospectus.
The rights of the Class A-X Certificates and any other Class of Offered
Certificates to receive Yield Protection Payments will be treated as an asset
separate from the REMIC regular interest represented by each such Class. Each
Holder of Class A-X Certificates and any other Class of Offered Certificates
entitled to receive Yield Protection Payments must allocate such holder's
purchase price between the REMIC regular interest and the right to receive the
Yield Protection Payments on the basis of the relative fair market value of
each, and the Trust will account for such rights as discrete property rights.
The manner in which any portion of the purchase price allocated to the right to
receive Yield Protection Payments can be used to offset or reduce income from
the receipt of such payments is unclear, but in general a Certificateholder
should be able to reduce any income from the receipt of such payments, or claim
a loss equal to such allocated purchase price, no later than the date on which
the final such payment is received or the right to receive such payments
lapses. Although certain hedge instruments can be integrated with debt
instruments under the Treasury regulations applicable to the calculation of
original issue discount, such regulations expressly exclude REMIC regular
interests from their application. Investors should consult with their tax
advisors as to the correct manner to account for the right to receive the Yield
Protection Payments.
The manner in which income should be accrued on the Class A-X Certificates
is unclear. The Trustee, for purposes of calculating the income on the
Upper-Tier REMIC and reporting income to the Class A-X Certificateholders
intends to take the position that the Class A-X Certificates will be treated as
having been issued with OID for federal income tax purposes in an amount equal
to the excess of all expected payments of interest on such Certificates (based
on the Prepayment Assumption) over their issue price. Accruing income in such a
manner could result in the accrual of negative amounts for certain periods.
Such negative amounts cannot be deducted currently but may only be offset
against future accruals of income. Although unclear, a holder of a Class A-X
Certificate may be entitled to deduct a loss to the extent that its remaining
tax basis exceeds the maximum amount of future payments to which such
Certificateholder would be entitled if there were no further prepayments on the
Mortgage Loans. Investors in the Class A-X Certificates should consult their
tax advisors as to the manner in which income should be accrued on such
Certificates and the timing and character of any loss that could result from
such investment.
For purposes of accruing original issue discount, determining whether such
original issue discount is de minimis and amortizing any premium, the
Prepayment Assumption will be 0% CPR, with all ARD Loans prepaying on their
related Anticipated Repayment Dates. See "Prepayment and Yield Considerations"
herein. No representation is made as to the rate, if any, at which the Mortgage
Loans will prepay.
For a discussion of the tax consequences of the ownership of Offered
Certificates by any person who is not a citizen or resident of the United
States, a corporation or partnership or other entity created or organized in or
under the laws of the United States or any political subdivision thereof or is
a foreign estate or trust, see "Certain Federal Income Tax Consequences -- Tax
Treatment of Foreign Investors" in the Prospectus.
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TAX ASPECTS OF YIELD PROTECTION PAYMENTS
General. For federal income tax purposes, a Certificateholder will be
treated as having entered into a notional principal contract ("Interest Rate
Floor Agreement") pursuant to the Pooling and Servicing Agreement on the date
on which such Certificate is purchased. The IRS has issued final regulations
under Section 446 of the Code relating to notional principal contracts (the
"Swap Regulations").
Floor Premium. In general, the Certificateholders must allocate the price
they pay for the Offered Certificates between their REMIC regular interests and
the Interest Rate Floor Agreement based on the relative fair market values of
such property rights. For purposes of tax information reporting, it is
anticipated that the Trustee will assume that all of the purchase price for
Classes of Offered Certificates will be wholly allocable to such Certificates'
proportionate interest in the REMIC regular interests. However, if rights of
any Class of Offered Certificates under the Interest Rate Floor Agreement are
determined to have a value on the Start-Up Date that is greater than zero, a
portion of such purchase price will be allocable to such rights, and such
portion will be treated as a floor premium (the "Floor Premium"). In this
event, a Certificateholder may be permitted to amortize the Floor Premium under
a level payment method as if the Floor Premium represented the present value of
a series of equal payments made over the life of the Interest Rate Floor
Agreement (adjusted to take into account decreases or increases in notional
principal amount), discounted at a rate equal to the rate used to determine the
amount of the Floor Premium (or some other reasonable rate), or under other
methods permitted by the Swap Regulations, to the extent applicable.
Prospective purchasers of Offered Certificates should consult their own tax
advisors regarding the appropriate method of amortizing any Floor Premium. The
Swap Regulations treat a nonperiodic payment made under a cap contract as a
loan for federal income tax purposes if the payment is "significant." It is not
known whether any Floor Premium will be treated in part as a loan under the
Swap Regulations.
Periodic Payments. The Interest Rate Floor Agreement provides that
payments will, to the extent provided under the Pooling and Servicing
Agreement, be made at intervals of less than one year. Accordingly, the
payments will apparently be viewed as "periodic payments" under the Swap
Regulations. Under the Swap Regulations, (i) all taxpayers must recognize
periodic payments with respect to a notional principal contract under the
accrual method of accounting, and (ii) any periodic payments received under the
Interest Rate Floor Agreements must be netted against payments, if any, deemed
made as a result of the Floor Premiums over the recipient's taxable year,
rather than accounted for on a gross basis. Although the Swap Regulations do
not address the character of income received or payments made under a notional
principal contract, it appears that net income or deduction with respect to net
payments under a notional principal contract for a taxable year should
constitute ordinary income or ordinary deduction. The IRS could however contend
the amount is capital gain or loss.
Termination Payments. Any amount of proceeds from the sale or retirement
of an Offered Certificate that is considered to be allocated to rights under
the Interest Rate Floor Agreement may be considered a "termination payment"
under the Swap Regulations. It is anticipated that the Trustee will account for
any termination payments for reporting purposes in accordance with the Swap
Regulations, which generally provide that a Certificateholder will recognize
gain or loss from termination of the Interest Rate Floor Agreement based on the
difference between any termination payment it receives or is deemed to have
received and the unamortized portion of any Floor Premium paid (or deemed paid)
by such Certificateholder. Certificateholders should consult their own tax
advisors concerning the character of such gain or loss.
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ERISA CONSIDERATIONS
SENIOR CERTIFICATES
The purchase by or transfer to an employee benefit plan or other
retirement arrangement, including an individual retirement account or a Keogh
plan, which is subject to Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or Section 4975 of the Code, or a
governmental plan (as defined in Section 3(32) of ERISA) that is subject to any
federal, state or local law ("Similar Law") which is, to a material extent,
similar to the foregoing provisions of ERISA or the Code (each, a "Plan"), or a
collective investment fund in which such Plans are invested, an insurance
company using the assets of separate accounts or general accounts which include
assets of Plans (or which are deemed pursuant to ERISA or any Similar Law to
include assets of Plans) or other Persons acting on behalf of any such Plan or
using the assets of any such Plan to acquire the Senior Certificates is
restricted. Accordingly, except as specifically referenced herein, the
following discussion does not purport to discuss the considerations under
ERISA, Section 4975 of the Code or Similar Law with respect to the purchase,
holding or disposition of the Senior Certificates.
As described in the Prospectus under "ERISA Considerations," ERISA and the
Code impose certain duties and restrictions on Plans and certain persons who
perform services for Plans. For example, unless exempted, investment by a Plan
in the Senior Certificates may constitute or give rise to a prohibited
transaction under ERISA or the Code. There are certain exemptions issued by the
United States Department of Labor (the "Department") that may be applicable to
an investment by a Plan in the Senior Certificates. The Department has granted
CSFB and PaineWebber individual prohibited transaction exemptions, Prohibited
Transaction Exemptions ("PTEs") 89-90, 54 Fed. Reg. 42597 (Oct. 17, 1989), and
90-36, 55 Fed. Reg. 25903 (June 25 1990), respectively (collectively, and as
amended by PTE 97-34, 62 Fed. Reg. 39021 (July 21, 1997), the "Exemption"), for
certain mortgage-backed and asset-backed certificates underwritten, in whole or
in part, by the Underwriters. The Exemption might be applicable to the initial
purchase, the holding, and the subsequent resale by a Plan of certain
certificates, such as the Senior Certificates, underwritten by the
Underwriters, representing interests in pass-through trusts that consist of
certain receivables, loans and other obligations, provided that the conditions
and requirements of the Exemption are satisfied. The loans described in the
Exemption include mortgage loans such as the Mortgage Loans.
Among the conditions that must be satisfied for the Exemption to apply to
the acquisition, holding and resale of the Senior Certificates are the
following:
(1) The acquisition of Senior Certificates by a Plan is on terms
(including the price for the Certificates) that are at least as favorable to
the Plan as they would be in an arm's-length transaction with an unrelated
party;
(2) The rights and interests evidenced by Senior Certificates acquired by
the Plan are not subordinate to the rights and interests evidenced by the other
Certificates of the Trust Fund;
(3) The Senior Certificates acquired by the Plan have received a rating at
the time of such acquisition that is one of the three highest generic rating
categories from any of Standard & Poor's Ratings Services, Moody's Investors
Service, Inc., Fitch IBCA, Inc. or Duff & Phelps Credit Rating Co. ("DCR");
(4) The Trustee is not an affiliate of any other member of the Restricted
Group (as defined below);
(5) The sum of all payments made to and retained by the Underwriters in
connection with the distribution of Senior Certificates represents not more
than reasonable compensation for underwriting the Certificates. The sum of all
payments made to and retained by the Depositor pursuant to the assignment of
the Mortgage Loans to the Trust Fund represents not more than the fair market
value of such Mortgage Loans. The sum of all payments made to and retained by
the Servicer and any other servicer represents not more than reasonable
compensation for such person's services under the Pooling and Servicing
Agreement and reimbursement of such person's reasonable expenses in connection
therewith; and
(6) The Plan investing in the certificates is an "accredited investor" as
defined in Rule 501(a)(1) of Regulation D of the Securities and Exchange
Commission under the Securities Act of 1933.
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The Trust Fund must also meet the following requirements:
(a) the corpus of the Trust Fund must consist solely of assets of the type
that have been included in other investment pools;
(b) certificates in such other investment pools must have been rated in
one of the three highest rating categories of S&P, Moody's, Fitch or DCR for at
least one year prior to the Plan's acquisition of the Senior Certificates
pursuant to the Exemption; and
(c) certificates evidencing interests in such other investment pools must
have been purchased by investors other than Plans for at least one year prior
to any Plan's acquisition of the Senior Certificates pursuant to the Exemption.
If all of the conditions of the Exemption are met, whether or not a Plan's
assets would be deemed to include an ownership interest in the Mortgage Loans,
the acquisition, holding and resale of the Senior Certificates by Plans would
be exempt from the prohibited transaction provisions of ERISA and Section 4975
of the Code.
Moreover, the Exemption can provide relief from certain
self-dealing/conflict of interest prohibited transactions that may occur if a
Plan fiduciary causes a Plan to acquire certificates in a trust in which the
fiduciary (or its affiliate) is an obligor on the receivables, loans or
obligations held in the trust, provided that, among other requirements, (a) in
the case of an acquisition in connection with the initial issuance of
certificates, at least fifty percent of each class of certificates in which
Plans have invested is acquired by persons independent of the Restricted Group
(as defined below) and at least fifty percent of the aggregate interest in the
trust is acquired by persons independent of the Restricted Group (as defined
below); (b) such fiduciary (or its affiliate) is an obligor with respect to
five percent or less of the fair market value of the obligations contained in
the trust; (c) the Plan's investment in certificates of any class does not
exceed twenty-five percent of all of the certificates of that class outstanding
at the time of the acquisitions; and (d) immediately after the acquisition no
more than twenty-five percent of the assets of the Plan with respect to which
such person is a fiduciary are invested in certificates representing an
interest in one or more trusts containing assets sold or served by the same
entity.
The Exemption does not apply to the purchasing or holding of Senior
Certificates by Plans sponsored by the Depositor, the Underwriters, the
Trustee, the Servicer, any obligor with respect to Mortgage Loans included in
the Trust Fund constituting more than five percent of the aggregate unamortized
principal balance of the assets in the Trust Fund, or any affiliate of such
parties (the "Restricted Group").
The Underwriters believe that the conditions to the applicability of the
Exemption will generally be met with respect to the Senior Certificates, other
than possibly those conditions which are dependent on facts unknown to the
Underwriters or which it cannot control, such as those relating to the
circumstances of the Plan purchaser or the Plan fiduciary making the decision
to purchase any such Class of Certificates. However, before purchasing a Senior
Certificate, a fiduciary of a Plan should make its own determination as to the
availability of the exemptive relief provided by the Exemption or the
availability of any other prohibited transaction exemptions, and whether the
conditions of any such exemption will be applicable to the Senior Certificates.
A fiduciary of a Plan that is 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 a Plan considering whether to purchase a Senior
Certificate should also carefully review with its own legal advisors the
applicability of the fiduciary duty and prohibited transaction provisions of
ERISA and the Code to such investment. See "ERISA Considerations" in the
Prospectus.
The sale of Senior Certificates to a Plan is in no respect a
representation by the Depositor or the Underwriters that this investment meets
all relevant legal requirements with respect to investments by Plans generally
or any particular Plan, or that this investment is appropriate for Plans
generally or any particular Plan.
MEZZANINE CERTIFICATES
Under current law, the purchase and holding of Mezzanine Certificates by
or on behalf of any Plan may result in a non-exempt prohibited transaction
under ERISA and Section 4975 of the Code or any
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similar Law. Consequently, no transfer of a Mezzanine Certificate shall be made
unless the prospective transferee (i) executes an investment representation
letter substantially in the form set forth as an exhibit to the Pooling and
Servicing Agreement stating that the prospective transferee is not (a) a Plan
or (b) a person acting on behalf of or using "plan assets" of any Plan
(including an entity whose underlying assets include "plan assets" by reason of
investment in the entity by any Plan and the application of Department of Labor
Regulation Section 2510.3-101), other than an insurance company using the
assets of its general account under circumstances whereby the purchase and
holding of Mezzanine Certificates by such insurance company would be exempt
from the prohibited transaction provisions of ERISA and Section 4975 of the
Code that is available under Sections I and III of Prohibited Transaction Class
Exemption 95-60 or (ii) provides to the Certificate Registrar an opinion of
counsel, in form and substance satisfactory to the Certificate Registrar and
the Depositor, to the effect that the acquisition and holding of such
Certificate by such prospective transferee will not constitute or result in a
non-exempt prohibited transaction under of ERISA, Section 4975 of the Code or
any Similar Law and will not subject the Depositor, the Trustee, the Servicer,
the Special Servicer, the Underwriters or the Certificate Registrar to any
obligation or liability (including obligations or liabilities under ERISA,
Section 4975 of the Code or any Similar Law) in addition to those set forth in
the Pooling and Servicing Agreement. Such opinion of counsel shall not be an
expense of the Depositor, the Trustee, the Servicer, the Special Servicer, the
Trust Fund, the Underwriters or the Certificate Registrar. In addition, so long
as the Mezzanine Certificates are registered in the name of Cede & Co., as
nominee of DTC, any purchaser of any such Certificates will be deemed to have
represented by such purchase that either: (a) such purchaser is not a Plan and
is not purchasing such Certificates by or on behalf of, or with "plan assets"
of, any Plan or (b) the purchase of any such Certificate by or on behalf of, or
with "plan assets" of, any Plan is permissible under applicable law, will not
result in any non-exempt prohibited transaction under ERISA or Section 4975 of
the Code, and will not subject the Depositor, the Trustee or the Servicer to
any obligation in addition to those undertaken in the Pooling and Servicing
Agreement, and the following conditions are met: (a) the source of funds used
to purchase such Certificate is an "insurance company general account" (as such
term is defined in PTCE 95-60) and (b) the conditions as set forth in Sections
I and III of PTCE 95-60 have been satisfied as the date of the acquisition of
such Certificates.
LEGAL INVESTMENT
The Offered Certificates will not constitute "mortgage related securities"
for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as
amended. No representation is made as to the proper characterization of the
Offered Certificates for legal investment purposes, financial institution
regulatory purposes, or other purposes, or as to the ability of particular
investors to purchase the Offered Certificates under applicable legal
investment restrictions. These uncertainties may adversely affect the liquidity
of the Offered Certificates. Accordingly, all institutions whose investment
activities are subject to legal investment laws and regulations, regulatory
capital requirements or review by regulatory authorities should consult with
their own legal advisors in determining whether and to what extent the Offered
Certificates constitute a legal investment or are subject to investment,
capital or other restrictions. See "Legal Investment" in the Prospectus.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement between the Depositor and the Underwriters, the Offered Certificates
will be purchased upon issuance from the Depositor by each of the Underwriters
name below, severally and not jointly, the percentage of the Certificate
Balance or Notional Balance, as the case may be, of each Class of Offered
Certificates set forth opposite its name below:
S-193
<PAGE>
<TABLE>
<CAPTION>
CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS
A-1A A-1B A-2MF B C D E A-X
------ ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Credit Suisse First Boston
Corporation ...............
PaineWebber Incorported.....
--- --- --- --- --- --- --- ---
Total ...................... 100% 100% 100% 100% 100% 100% 100% 100%
=== === === === === === === ===
</TABLE>
CSFB, one of the Underwriters, is an affiliate of the Depositor. Proceeds
to the Depositor from the sale of the Offered Certificates will be
approximately % of the initial aggregate principal balance thereof as of the
Cut-off Date, plus accrued interest from the Cut-off Date, before deducting
expenses payable by the Depositor.
Distribution of the Offered Certificates will be made by the Underwriters
from time to time in negotiated transactions or otherwise at varying prices to
be determined at the time of sale. The Underwriters may effect such
transactions by selling the Offered Certificates to or through dealers, and
such dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Underwriters. In connection with the
purchase and sale of the Offered Certificates, the Underwriters may be deemed
to have received compensation from the Depositor in the form of underwriting
discounts. The Underwriters and any dealers that participate with the
Underwriters in the distribution of the Offered Certificates may be deemed to
be "underwriters" within the meaning of the Securities Act 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.
Purchasers of the Offered Certificates, including dealers, may, depending
on the facts and circumstances of such purchases, be deemed to be
"underwriters" within the meaning of the Securities Act in connection with
reoffers and sales by them of Offered Certificates. Certificateholders should
consulting with their legal advisors in this regard prior to any such reoffer
or sale.
The Depositor also has been advised by the Underwriters that the
Underwriters currently intend to make a market in the Offered Certificates;
however, the Underwriters do not have any obligation to do so, any market
making may be discontinued at any time and there can be no assurance that an
active public market for the Offered Certificates will develop. See "Risk
Factors -- The Offered Certificates -- Limited Liquidity."
The Depositor has agreed to indemnify the Underwriters and each person, if
any, who controls the Underwriters within the meaning of Section 15 of the
Securities Act against, or make contributions to the Underwriters and each such
controlling person with respect to, certain liabilities, including certain
civil liabilities under the Securities Act. Each Mortgage Loan Seller has
agreed to indemnify the Depositor with respect to certain liabilities,
including certain civil liabilities under the Securities Act, relating to the
Mortgage Loans sold by it to the Depositor.
LEGAL MATTERS
Certain legal matters will be passed upon for the Depositor and for the
Underwriters, by Orrick, Herrington & Sutcliffe LLP, New York, New York.
S-194
<PAGE>
RATING
It is a condition to the issuance of the Offered Certificates that they
receive the following credit ratings from Rating Agencies:
<TABLE>
<CAPTION>
FITCH MOODY'S S&P
------- --------- ----
<S> <C> <C> <C>
Class A-1A ..................
Class A-1B ..................
Class A-2MF .................
Class A-X ...................
Class B .....................
Class C .....................
Class D .....................
Class E .....................
</TABLE>
The Rating Agencies' ratings on mortgage pass-through certificates address
the likelihood of the timely payment of interest and the ultimate repayment of
principal by the Rated Final Distribution Date. The Rating Agencies' ratings
take into consideration the credit quality of the Mortgage Loans, structural
and legal aspects associated with the Offered Certificates, and the extent to
which the payment stream in the Trust Fund is adequate to make payments
required under the Offered Certificates. Ratings on mortgage pass-through
certificates do not, however, represent an assessment of the likelihood, timing
or frequency of principal prepayments (both voluntary and involuntary) by
mortgagors, or the degree to which such prepayments might differ from those
originally anticipated. The security ratings do not address the possibility
that Certificateholders might suffer a lower than anticipated yield. In
addition, ratings on mortgage pass-through certificates do not address the
likelihood of receipt of Prepayment Premiums, Yield Maintenance Charges, Yield
Protection Payments or Excess Interest or the timing or frequency of the
receipt thereof. In general, the ratings thus address credit risk and not
prepayment risk. Also, a security rating does not represent any assessment of
the yield to maturity that investors may experience or the possibility that the
holders of the Class A-X Certificates might not fully recover their initial
investment in the event of delinquencies or rapid prepayments of the Mortgage
Loans (including both voluntary and involuntary prepayments). As described
herein, the amounts payable with respect to the Class A-X Certificates consist
only of interest. If the entire pool were to prepay in the initial month, with
the result that the Class A-X Certificateholders receive only a single month's
interest and thus suffer a nearly complete loss of their investment, all
amounts "due" to such holders will nevertheless have been paid, and such result
is consistent with the rating received on the Class A-X Certificates.
Accordingly, the ratings of the Class A-X Certificates should be evaluated
independently from similar ratings on other types of securities. With respect
to Credit Lease Loans, a downgrade in the credit rating of the related Tenants,
Guarantors and/or of the issuer of the Lease Enhancement Policy may have a
related adverse effect on the rating of the Offered Certificates.
There can be no assurance as to whether any rating agency not requested to
rate the Offered Certificates will nonetheless issue a rating and, if so, what
such rating would be. A rating assigned to the Offered Certificates by a rating
agency that has not been requested by the Depositor to do so may be lower than
the rating assigned by the Rating Agencies pursuant to the Depositor's request.
The rating of the Offered Certificates should be evaluated independently
from similar ratings on other types of securities. A security rating is not a
recommendation to buy, sell or hold securities and may be subject to revision
or withdrawal at any time by the assigning rating agency.
S-195
<PAGE>
INDEX OF SIGNIFICANT DEFINITIONS
<TABLE>
<S> <C>
1995 NOI ............................ S-104
1996 NOI ............................ S-104
1997 NOI ............................ S-104
30/360 .............................. S-105
4000 Wisconsin Borrower ............. S-89
4000 Wisconsin Loan ................. S-89
4000 Wisconsin Manager .............. S-90
4000 Wisconsin Mortgage ............. S-89
4000 Wisconsin Property ............. S-89
45 Wall Street Borrower ............. S-87
45 Wall Street Loan ................. S-86
45 Wall Street Manager .............. S-87
45 Wall Street Mortgage ............. S-87
45 Wall Street Property ............. S-87
767 Third Avenue Borrower ........... S-93
767 Third Avenue Loan ............... S-92
767 Third Avenue Manager ............ S-93
767 Third Avenue Mortgage ........... S-93
767 Third Avenue Property ........... S-93
A
A Component ......................... S-82
A-2MF Principal Distribution
Amount ........................... S-3, S-13, S-132
ACMs ................................ S-53
Act/360 ............................. S-105
Actual Ongoing Capital Item
Deposits ......................... S-106
Actual/360 .......................... S-94
ADA ................................. S-57
Additional Collateral Loan .......... S-19
Additional Collateral Loans ......... S-103
Additional Rights ................... S-73
Advances ............................ S-165
Advances, ........................... S-183
AISLIC .............................. S-83
Allocated Loan Amount ............... S-104
Anchor Tenant ....................... S-106
Annual Debt Service ................. S-105
Anticipated Remaining Term .......... S-105
Anticipated Repayment Date .......... S-17, S-105
Appraisal Reduction ................. S-166
Appraisal Reduction Amount .......... S-167
Appraisal Reduction Event ........... S-166
ARD ................................. S-17
ARD Loans ........................... S-17
Asset Status Report ................. S-177
Assumed Final Distribution Date ..... S-2, S-138
Assumed Maturity Date ............... S-11, S-139
Assumed Scheduled Payment ........... S-165
Audit Program ....................... S-172
Authenticating Agent ................ S-180
Available Distribution Amount ....... S-20, S-129
B
B Component ......................... S-82
Balloon Loans ....................... S-17, S-95
Balloon Payment ..................... S-17, S-95
Balloon Payment Credit Lease
Loans ............................ S-14, S-74
Banc One ............................ S-181
Base Interest Fraction .............. S-137
Bondable Leases ..................... S-73
Bond-Type Leases .................... S-73
Breach .............................. S-163
C
Capital Items ....................... S-68, S-71
Cash Collateral Accounts ............ S-168
Casualty or Condemnation Rights ..... S-73
Cede ................................ S-11
CERCLA .............................. S-53
Certain Federal Income Tax
Consequences ..................... S-174
Certificate Account ................. S-129, S-168
Certificate Balance ................. S-125
Certificate Owner ................... S-126
Certificate Registrar ............... S-180
Certificateholder ................... S-127
Certificateholders .................. S-61
Certificates ........................ S-1, S-9, S-125
Chubb ............................... S-34, S-73
Class ............................... S-125
Class A-1A Pass-Through Rate ........ S-2, S-132
Class A-1B Pass-Through Rate ........ S-2, S-132
Class A-2MF Pass-Through Rate ....... S-2, S-132
Class A-X Pass-Through Rate ......... S-132
Class B Pass-Through Rate ........... S-2, S-132
Class C Pass-Through Rate ........... S-2, S-132
Class D Pass-Through Rate ........... S-2, S-132
Class E Pass-Through Rate ........... S-2, S-132
Class F Pass-Through Rate ........... S-132
Class G Pass-Through Rate ........... S-133
Class H Pass-Through Rate ........... S-133
Class I Pass-Through Rate ........... S-133
Class J Pass-Through Rate ........... S-133
Code ................................ S-26, S-187
Collateral Substitution Deposit ..... S-99
Collateral Support Deficit .......... S-139
Combined Mezzanine Borrower ......... S-77
Combined Mezzanine Lender ........... S-77
Combined Mezzanine Loan ............. S-77
Combined Properties Portfolio
Borrower ......................... S-75
Combined Properties Portfolio
Loan ............................. S-75
Combined Properties Portfolio
Manager .......................... S-77
Combined Properties Portfolio
Property ......................... S-75
Commission .......................... S-12
Comparative Financial Status
Report ........................... S-185
Component Rate ...................... S-133
Constant Prepayment Rate ............ S-142
Controlling Class ................... S-9, S-178
</TABLE>
S-196
<PAGE>
<TABLE>
<S> <C>
Controlling Class Certificateholder ..... S-178
Cooperative Loan ........................ S-63
Cooperative Properties .................. S-35
Cooperative Property .................... S-63
Corrected Mortgage Loan ................. S-177
CPR ..................................... S-142
Credit Lease ............................ S-73, S-107
Credit Lease Assignments ................ S-14
Credit Lease Loans ...................... S-14, S-73
Credit Lease Properties ................. S-14, S-73
Credit Leases ........................... S-14
Crossed Loans ........................... S-15, S-101
CSFB .................................... S-1
CSFB Mortgage Capital ................... S-1, S-10
CSFBMC Mortgage Loan .................... S-65
CSFBMC Mortgage Loans ................... S-12, S-63
Cut-off Date Aggregate LTV .............. S-48
Cut-off Date Principal Balance .......... S-108
Cut-off Date Principal Balance/Unit S-105
Cut-off Date Principal Loan
Balance .............................. S-105
D
Dark Value .............................. S-68, S-72
DCR ..................................... S-191
Debt Service Coverage Ratio ............. S-105
Defeasance Lockout Period ............... S-18, S-99
Defeasance Option ....................... S-18, S-99
Defect .................................. S-153
Definitive Certificates ................. S-128
Delinquent Loan Status Report ........... S-186
Department .............................. S-191
Depositor ............................... S-1
Direct Participants ..................... S-126
Distribution Account .................... S-129, S-168
Distribution Date ....................... S-2, S-128
Distribution Date Statement ............. S-184
Double Net Leases ....................... S-73
DSCR .................................... S-29, S-105
DTC ..................................... S-1, S-3, S-11
Due Date ................................ S-94
Due Period .............................. S-129
E
Edens & Avant Borrower .................. S-78
Edens & Avant Centennial
Manager .............................. S-80
Edens & Avant Loan ...................... S-78
Edens & Avant Properties Manager S-80
Edens & Avant Property .................. S-78
Eligible Bank ........................... S-169
EPA ..................................... S-53
ERISA ................................... S-26, S-191
Escrow Account .......................... S-67, S-71
Events of Default ....................... S-173
Excess Cash Flow ........................ S-94
Excess Exchange Amount .................. S-86
Excess Interest ......................... S-17, S-94
Excess Interest Distribution
Account .............................. S-169
Excess Rate ............................. S-133
Exemption ............................... S-26, S-191
F
FF&E .................................... S-32
Final Recovery Determination ............ S-185
First P&I Date .......................... S-105
Fitch ................................... S-1
Floor Premium ........................... S-190
Form 8-K ................................ S-12, S-123
Fountain Centre Borrower ................ S-90
Fountain Centre Loan .................... S-90
Fountain Centre Manager ................. S-91
Fountain Centre Mortgage ................ S-90
Fountain Centre Property ................ S-90
Fully Amortizing Credit Lease
Loans ................................ S-14, S-74
Fully Amortizing Loans .................. S-17
G
Group Receipts .......................... S-86
Guarantor ............................... S-33
H
Hard Lockbox ............................ S-16, S-100
Healthcare Loan ......................... S-63
Healthcare Property ..................... S-63
Historical Loan Modification
Report ............................... S-186
Historical Loss Estimate Report ......... S-186
Hospitality Loan ........................ S-63
Hospitality Property .................... S-63
I
Indirect Participants ................... S-126
Individual Receipts ..................... S-86
Industrial Loan ......................... S-63
Industrial Property ..................... S-63
Initial Pool Balance .................... S-63
Interest Accrual Period ................. S-133
Interest Calc ........................... S-105
Interest Rate Floor Agreement ........... S-190
Interest Reserve Account ................ S-168
Interest Shortfall Amount ............... S-133
IRS ..................................... S-176
K
Key Principal ........................... S-85
L
Lease Enhancement Insurer ............... S-34, S-73
Lease Enhancement Policies .............. S-34, S-73
Lease Expiration Date ................... S-106
Leased Value ............................ S-68, S-72
Liquidation Fee ......................... S-182
Liquidation Fee Rate .................... S-182
Liquidation Proceeds .................... S-182
LNR ..................................... S-183
Loan Group .............................. S-2, S-12
Loan No. ................................ S-15
Loan to Value Ratio ..................... S-106
Lockout Period .......................... S-18, S-95
Lower-Tier Regular Interests ............ S-188
Lower-Tier REMIC ........................ S-26
LTV ..................................... S-106
</TABLE>
S-197
<PAGE>
<TABLE>
<S> <C>
M
Maintenance Rights .................... S-73
Maturity Date/Anticipated
Repayment Date LTV ................. S-106
Mexican Dollar Account ................ S-86
Mexican Taxes ......................... S-124
Mezzanine Certificates ................ S-1, S-125
Mezzanine Lender ...................... S-49
Mezzanine Loans ....................... S-48
Mobile Home/Recreational Vehicle
Loan ............................... S-64
Mobile Home/Recreational Vehicle
Property ........................... S-64
Modified Lockbox ...................... S-16, S-100
Monthly Interest Distributable
Amount ............................. S-21, S-133
Monthly Mortgage Loan Payments S-49
Monthly Operating Expenses ............ S-49
Monthly Payment ....................... S-94, S-105
Monthly Payments ...................... S-16
Monthly Rental Payments ............... S-14
Moody's ............................... S-1
Mortgage .............................. S-63
Mortgage File ......................... S-153
Mortgage Interest Accrual Period ...... S-134
Mortgage Loan ......................... S-12, S-136
Mortgage Loan Assumptions ............. S-143
Mortgage Loan Purchase
Agreement .......................... S-64
Mortgage Loan Sellers ................. S-1
Mortgage Loans ........................ S-1, S-12, S-136
Mortgage Note ......................... S-63
Mortgage Pass-Through Rate ............ S-134
Mortgage Rate ......................... S-17, S-94
Mortgaged Properties .................. S-14
Mortgages ............................. S-14
Multifamily Loan ...................... S-63
Multifamily Property .................. S-63
Multi-Property Loans .................. S-15, S-101
N
NAP ................................... S-107
Net Cash Flow ......................... S-103
Net Lease ............................. S-107
Net Mortgage Pass-Through Rate ........ S-134
Net Mortgage Rate ..................... S-134
Nonrecoverable Advance ................ S-166
Note .................................. S-63
Notional Balance ...................... S-20
O
Occupancy ............................. S-106
Occupancy Period ...................... S-106
Offered Certificates .................. S-1, S-125
Office Loan ........................... S-63
Office Property ....................... S-63
OID Regulations ....................... S-188
Open .................................. S-97
Operating Statement Analysis .......... S-186
Optimal Interest Distribution
Amount ............................. S-20, S-134
Original Amortization Term ............ S-106
Original Principal Loan Balance ....... S-105
Other Loan ............................ S-64
Other Property ........................ S-64
P
PaineWebber ........................... S-1
Pantzer Portfolio Borrower ............ S-80
Pantzer Portfolio Loans ............... S-80
Pantzer Portfolio Manager ............. S-81
Pantzer Portfolio Property ............ S-80
Pantzer Preferred Equity Interest ..... S-81
Pantzer Special Member ................ S-81
Participants .......................... S-126
Pass-Through Rate ..................... S-135
Penalty Charges ....................... S-181
Percentage Interest ................... S-126
Permitted Investments ................. S-169
P&I Advance ........................... S-25, S-164
Plan .................................. S-26, S-191
Plaza del Atlantico Borrower .......... S-91
Plaza del Atlantico Mortgage .......... S-91
Plaza del Atlantico Property .......... S-39, S-91
Plaza Rio Hondo Borrower .............. S-88
Plaza Rio Hondo Loan .................. S-88
Plaza Rio Hondo Manager ............... S-88
Plaza Rio Hondo Mortgage .............. S-88
Plaza Rio Hondo Property .............. S-39, S-88
Pooling and Servicing Agreement ....... S-1, S-9, S-19,
S-153
Preferred Interest Holders ............ S-49
Premium ............................... S-97
Prepayment and Yield
Considerations ..................... S-5
Prepayment Assumptions ................ S-143
Prepayment Interest Excess ............ S-135
Prepayment Interest Shortfall ......... S-135
Prepayment Premium Period ............. S-18, S-95
Prepayment Premiums ................... S-18, S-95
Primary Servicing Fee ................. S-181
Primary Term .......................... S-102
Prime Rate ............................ S-166
Principal Distribution Amount ......... S-135
Private Certificates .................. S-1, S-125
Property Name ......................... S-107
Property Release Amount ............... S-107
Property Trust ........................ S-52, S-85
Property Trustee ...................... S-85
PTE ................................... S-26
PTEs .................................. S-191
Puerto Rico Crossed Borrowers ......... S-91
Puerto Rico Crossed Loan .............. S-91
Puerto Rico Crossed Manager ........... S-92
Puerto Rico Crossed Mortgages ......... S-91
Puerto Rico Crossed Properties ........ S-39, S-91
Purchase Price ........................ S-163
PWRES ................................. S-1, S-10
PWRES Loan ............................ S-69
PWRES Mortgage Loans .................. S-12, S-63
</TABLE>
S-198
<PAGE>
<TABLE>
<S> <C>
R
Rated Final Distribution Date ........ S-138
Rating Agencies ...................... S-1
RCRA ................................. S-53
Record Date .......................... S-128
Reduction Rate ....................... S-167
Regular Certificates ................. S-1, S-26, S-125,
S-188
Reichmann/Intell Portfolio
Borrower .......................... S-82
Reichmann/Intell Portfolio Loan ...... S-82
Reichmann/Intell Portfolio
Manager ........................... S-83
Reichmann/Intell Portfolio
Mezzanine Borrower ................ S-84
Reichmann/Intell Portfolio
Mezzanine Lender .................. S-84
Reichmann/Intell Portfolio
Mezzanine Loan .................... S-84
Reichmann/Intell Portfolio Property S-82
Reichmann/Intell Portfolio Special
Member ............................ S-84
Reichmann/Intell Preferred Equity
Interest .......................... S-84
Reimbursement Rate ................... S-166
Related Borrower Loans ............... S-15, S-40
Related Borrowers .................... S-46
Related Proceeds ..................... S-166
Release Date ......................... S-99
Remaining Amortization Term .......... S-107
Remaining Lockout .................... S-19, S-96, S-105
Remaining Lockout and YM ............. S-105
Remaining Principal Distributable
Amount ............................ S-135
REMIC ................................ S-3, S-26, S-188
REMIC Regulations .................... S-188
REO Loan ............................. S-136
REO Property ......................... S-125, S-177
REO Status Report .................... S-186
Required Prepayment .................. S-19, S-103
Required Prepayments ................. S-57
Residual Certificates ................ S-1, S-26, S-125
Residual Value Insurer ............... S-34
Residual Value Policies .............. S-34
Residual Value Policy ................ S-74
Restricted Group ..................... S-192
Restricted Zone ...................... S-123
Retail Loan .......................... S-63
Retail Property ...................... S-63
Rev .................................. S-104
Revised Rate ......................... S-94
Rexville Plaza Borrower .............. S-91
Rexville Plaza Mortgage .............. S-91
Rexville Plaza Property .............. S-39, S-91
Ritz-Carlton Borrower ................ S-85
Ritz-Carlton Loan .................... S-84
Ritz-Carlton Manager ................. S-86
Ritz-Carlton Mexico Account .......... S-86
Ritz-Carlton Property ................ S-39, S-85
Ritz-Carlton U.S. Account ............ S-86
Rules ................................ S-127
S
Seasoning ............................ S-105
secured creditor exclusion ........... S-53
Secured Subordinate Loan ............. S-47
Self-Storage Facility Loan ........... S-63
Self-Storage Facility Property ....... S-63
Seller-Servicer ...................... S-164
Seller-Servicer Agreement ............ S-164
Senior Certificates .................. S-1, S-125
Senorial Plaza Borrower .............. S-91
Senorial Plaza Mortgage .............. S-91
Senorial Plaza Property .............. S-39, S-91
Servicer ............................. S-1, S-9
Servicer Remittance Date ............. S-164
Servicer Watch List .................. S-186
Servicing Advances ................... S-165
Servicing Fee ........................ S-181
Servicing Fee Rate ................... S-181
Servicing Standard ................... S-164
Similar Law .......................... S-191
S&P .................................. S-1
Special Servicer ..................... S-1, S-9
Special Servicing Fee ................ S-182
Special Servicing Fee Rate ........... S-182
Specially Serviced Mortgage Loans. S-177
Springing Lockbox .................... S-16
Springing, Lockbox ................... S-100
Stated Maturity Date ................. S-105
Stated Principal Balance ............. S-136
Subordinate Certificates ............. S-2
Swap Regulations ..................... S-190
T
Tenant ............................... S-14, S-73, S-106
Tenant 1 ............................. S-106
Tenant 2 ............................. S-106
Tenant 3 ............................. S-106
Tenants .............................. S-14
Treasury Regulations ................. S-188
Triple Net Leases .................... S-73
Trust Fund ........................... S-1
Trust REMICs ......................... S-188
Trustee .............................. S-1, S-10, S-124
Trustee Fee .......................... S-180
Trustee Fee Rate ..................... S-180
U
Uncovered Prepayment Interest
Shortfall ......................... S-183
Uncovered Prepayment Interest
Shortfall Amount .................. S-135
Underwriters ......................... S-1
Underwritten NOI ..................... S-104
Unit of Measure ...................... S-106
Units ................................ S-106
Unpaid Interest Shortfall Amount ..... S-135
Unscheduled Payments of Principal S-136
Upper-Tier REMIC ..................... S-26, S-188
USAP ................................. S-172
</TABLE>
S-199
<PAGE>
<TABLE>
<S> <C>
U/W NOI ........................... S-104
U/W Occupancy ..................... S-106
U/W Rev ........................... S-104
V
Value ............................. S-106
Voting Rights ..................... S-175
W
Weighted Average DSCR ............. S-106
Weighted Average LTV .............. S-106
Weighted Average Net Mortgage
Rate ........................... S-136
Withheld Amounts .................. S-168
Workout Fee ....................... S-182
Workout Fee Rate .................. S-182
Y
Year Built/Renovated .............. S-106
Yield Maintenance Charge .......... S-96
Yield Maintenance Period .......... S-18, S-95
Yield Protection Payments ......... S-19, S-58
Yield Rate ........................ S-96
YM ................................ S-97
Z
Zoning Laws ....................... S-57
</TABLE>
S-200
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<PAGE>
<TABLE>
<CAPTION>
Loan # Control # CSFB Control # Property Name
- ------ -------- -------------- -------------
<S> <C> <C> <C>
1 1 66 Combined Properties Summary
1 1A 66A Lee & Harrison Shopping Center*
1 1B 66B Columbia Road Center*
1 1C 66C Aspen Manor Shopping Center*
1 1E 66E Chantilly Plaza*
1 1F 66F Enterprise Shopping Center*
1 1G 66G Fairfax Circle Plaza Shopping Center*
1 1H 66H Turnpike Shopping Center*
1 1I 66I Georgia Avenue*
1 1J 66J Mart at Montebello*
1 1K 66K Loehmann's*
1 1M 66M McLean Chain Shopping Center*
1 1N 66N Pickett Shopping Center*
1 1O 66O Silver Hill Plaza Shopping Center*
1 1P 66P Bladen Shopping Center*
1 1R 66R Forty West Plaza Shopping Center*
2 2 87 Edens and Avant Summary
2 2A 87A Lincoln Center
2 2B 87B Florence Square
2 2C 87C Armstrong Plaza
2 2D 87D Overlook Village Shopping Center
2 2E 87E Rockbridge Place
2 2F 87F Five Forks Corners Shopping Center
2 2G 87G Dawson Village
2 2H 87H Riverdale Crossing
2 2I 87I Parkway Village
2 2J 87J Crossroads South
2 2K 87K Amelia Plaza
2 2L 87L Sanagree Plaza
2 2M 87M Marketplace (Goodings Plaza)
2 2N 87N Palm Bay West Shopping Center
2 2O 87O Ridgewood Farm Village Center
2 2P 87P Southwest Plaza
2 2Q 87Q Lynnwood Place Shopping Center
2 2R 87R Wal-Mart SuperCenter (South C)
2 2S 87S South Square Marketplace
2 2T 87T Gulfdale Plaza
2 2U 87U Kennerly Place Shopping Center
3 3 188 Ritz-Carlton Cancun
4 4 179 Reichmann / Intell Portfolio Summary
4 4B 179B Lakeview Office Building
4 4F 179F City Hall Plaza
4 4I 179I Hurstbourne Forum Office Park
4 4J 179J Chestnut Place One and Two
4 4K 179K Epic Center
5 5 Wall_001 45 Wall Street
6 6 172 Plaza Rio Hondo
7 7 23 4000 Wisconsin Avenue*
8 8 99 The Fountains on the Lake
9 9 15 767 Third Avenue
10 10 30 Alexandria Single Tenant Portfolio Summary
10 10A 30A AML Research Building
10 10B 30B UW Building 3000/3018
11 11 CL23 Elder-Beerman at the Dayton Mall
12 12 231 Westgate Shopping Center
13 13 114 Holiday Inn - Denver Downtown*
14 14 175 Rachel Bridge Apartments
15 15 100 G.I. Joe Summary
15 15A 100A G.I. Joe District Office/Wrhse
15 15B 100B Tualatin-G.I. Joe's
15 15C 100C Office Depot
15 15D 100D Lancaster-G.I. Joe's
15 15E 100E Oak Grove-G.I. Joe's
15 15F 100F Gresham-G.I. Joe's*
16 16 CL29 Kmart - Carson, CA # 4987
17 17 CL28 Kmart - Virginia Beach # 4986
18 18 159AA Pantzer Cross-Summary
18 18A 159AA1 Sandalwood Apartments
18 18B 159AA2 Cedar Tree Apartments
18 18C 159AA3 Oaktree Apartments
19 19 196 Sadler Portfolio Summary
19 19A 196A Travelodge Hotel-Rochester, NY
19 19B 196B Super 8 South #2
19 19C 196C Econo Lodge
19 19D 196D Colonial Inn
19 19E 196E Days Inn South
19 19F 196F Econo Lodge South
19 19G 196G Days Inn Downtown
19 19H 196H Best Western
19 19I 196I Super 8 West*
19 19J 196J Super 8 South 1
20 20 CL4 American Restaurant Group Summary
20 20A CL4A Stuart Anderson's Black Angus Restaurant
20 20B CL4B Stuart Anderson's Black Angus
20 20C CL4C Stuart Anderson's Black Angus
20 20E CL4E Stuart Anderson's Black Angus
20 20G CL4G Stuart Anderson's Black Angus
20 20H CL4H Stuart Anderson's Black Angus
20 20J CL4J Stuart Anderson's Black Angus
20 20N CL4N Stuart Anderson\'s Black Angus
21 21 204 Smith Hotel Portfolio Summary
21 21A 204A Best Western Richmond Suites - Baton Rouge
21 21B 204B Best Western Richmond Suites - Shreveport
21 21C 204C Best Western Richmond Suites - Lake Charles
22 22 C-2455 Le Parc Suite Hotel De Luxe
23 23 90 Embassy Suites - Milwaukee, WI
24 24 92 Essex/Brookdale Summary
24 24A 92A Brookdale Gardens Condominiums
24 24B 92B Essex House Apartments
25 25 C-3012A Circuit City/Carmax-Naperville
26 26 159G Top of the Hill Apartments
27 27 C-3012C Circuit City/Carmax - Miami
28 28 159H Foxfire Apartments
29 29 173B Plaza del Atlantico
30 30 156 Opera Plaza
31 31 230 Wentwood Portfolio Summary
31 31A 230A Crosswinds Apartments
31 31B 230B Legends Apartments
31 31C 230C Parkview Apartments
31 31D 230D Spanish Gardens Apartments
31 31E 230E Sussex Place Apartments
31 31F 230F Terrace Hills Apartments
31 31G 230G Windcrest Place Apartments
32 32 CL9 Best Buy Dist. Ctr. - Staunton, VA
33 33 173C Senioral Plaza
34 34 136 Laurel Promenade
35 35 223 Torgerson Project Summary
35 35A 223A Holiday Inn/Conference Center and Comfort Inn-Willmar, MN
35 35B 223B Holiday Inn and Conference Center-Austin, MN
35 35C 223C Holiday Inn and Conference Center-Fairmont, MN
35 35D 223D Super 8 Hotel and Perkins Restaurant-Fairmont, MN
35 35E 223E Days Inn and Perkins Restaurant-Austin,MN
35 35F 223F Days Inn
36 36 C-1566 Builders Square-Summary
36 36A C-1566a Builders Square Pasedena
36 36B C-1566b Builders Square Woodlands
37 37 164 Peak At Somerset
38 38 237 Wood River Village
39 39 CL16 Cobb Theaters - Tampa, FL
40 40 42 Best Western Beach Resort
41 41 228 Valley Stream Village Apts.
42 42 C-3012B Circuit City/Carmax - Fort Worth
43 43 159I Heather Ridge Apartments
44 44 56 Chateau Marmont
45 45 111 Highland Apartments
46 46 CL25 Fortunoff Backyard Store
47 47 CP8 NCB/Briarcliff
48 48 59 Christmas Tree Shops Plaza
49 49 13 Executive Center*
50 50 CL26 Hoyts Theatre - Linthicum, MD
51 51 122 Inland Cold Storage Summary
51 51A 122A 2324 Fleetwood Drive
51 51B 122B 2344 Fleetwood Drive
52 52 39 Bay Park Center Summary
52 52A 39A Bay Park Center
52 52B 39B Bay Park Center Self Storage
53 53 CP12 NCB/St. George Tower and Grill
54 54 CL54 Shemin Nursery Portfolio Summary
54 54A CL54A Shemin Nursery - Mahwah, NJ*
54 54B CL54B Shemin Nursery - Burtonsville, MD*
54 54C CL54C Shemin Nursery - Addison, IL*
54 54D CL54D Shemin Nursery - Taylor, MI*
54 54E CL54E Shemin Nursery - Oaks, PA*
54 54F CL54F Shemin Nursery - Hudson, MA*
55 55 82 Eagle Hardware - Anchorage, AK
56 56 C-2534 Northbridge Park
57 57 50 British Woods Apartments
58 58 CL30 Kmart - Inglewood, CA # 3639
59 59 CP10 NCB/Geddes Lake Cooperative
60 60 CP7 NCB/Bell Apartments Owners Corp.*
61 61 198 San Ant Res. Inn/Fair Inn Summary
61 61A 198A San Antonio Downtown Residence Inn by Marriott
61 61B 198B San Antonio Downtown Fairfield Inn
62 62 123 International Plaza
63 63 173A Rexville Plaza
64 64 120 Ind. Apt Res. Inn/Fair Inn Summary
64 64A 120A Fairfield Inn -Indianapolis Airport
64 64B 120B Residence Inn - Indianapolis Airport
65 65 CP2 Kew Garden Estates
66 66 CP9 NCB/Bryn Mawr Ridge Apartments
67 67 225 University Heights Apartments
68 68 CP6 NCB/720-730 Fort Washington Avenue
69 69 44 Best Western Travel Plaza
70 70 118 Host Funding Portfolio Summary
70 70A 118A Super 8 Hotel
70 70B 118B Sleep Inn Hotel
70 70C 118C Sleep Inn Hotel
71 71 170 Pomona Marketplace Shopping Center
72 72 165 Perry Lake Village
73 73 CP5 NCB/310/312 East 23rd Apartment Corp.
74 74 184 RHC-Continental/Mulberry Summary
74 74A 184A RHC - Continental Mobile Home Park
74 74B 184B RHC - Mulberry Mobile Home Park
75 75 103 Glenmont Shopping Plaza
76 76 83 Eagle Hardware and Garden, Inc.
77 77 CL13 Best Buy - Springfield, PA
78 78 74A Fossil Ridge Apartments
79 79 3 5 Garret Mountain Plaza
80 80 79 Denver Fairfield Inn
81 81 CL24 Elder-Beerman at Millcreek Mall*
82 82 220 The Design Pavilion
83 83 207 South Beach Multis Summary
83 83A 207A 800-820 10th Street
83 83B 207B 1043-47 Euclid
83 83C 207C 714-722 15th Street
83 83D 207D 610-612 16th Street
83 83E 207E 1234 Pennsylvania
83 83F 207F 1509-1519 Pennsylvania
83 83G 207G 701-11th & 1110 Euclid
83 83H 207H 700-14th & 1350 Euclid
83 83I 207I 700-716 14th Place
83 83J 207J 631-639 13th Street
83 83L 207L 725-729 Lenox Avenue
83 83M 207M 626-652 Jefferson
83 83N 207N 744 Jefferson
83 83O 207O 831 Meridian
83 83Q 207Q 1311 Meridian Avenue
84 84 48 Bradshaw Corporate Center
85 85 74C Harvestree Apartments
86 86 163 Peachtree Corners Shopping Center
87 87 43 Best Western River North, Chicago
88 88 CP3 NCB/1150 5th Ave.
89 89 CP11 NCB/Laurelton Gardens
90 90 CL10 Best Buy - Mayfield, OH
91 91 93 Essex Hospitality Summary
91 91A 93A Hampton Inn- Rochester, NY
91 91B 93B Microtel Inn - Chattanooga, TN
91 91C 93C Microtel Inn - Birmingham, AL
92 92 40 Bay Plaza
93 93 C-1209 40 West 72 Street
94 94 130 Kratsa Portfolio Summary
94 94A 130A Comfort Inn - West Mifflin
94 94B 130B Comfort Inn - New Stanton
95 95 76 CW-Crowne Plaza Hotel
96 96 C-1851 Howard Johnsons Deerfield
97 97 140 Logan Manor Nursing Home
98 98 97 Forest Pointe Apartments
99 99 159F Arundel Apartments
100 100 C-2016 Super 8-Summary
100 100A C-2016A Super 8
100 100B C-2016B Super 8
100 100C C-2016C Super 8
100 100D C-2016D Super 8
101 101 239 Yorktown Apartments and Townhouses*
102 102 C-1400 1249 and 1255 Boylston Street-Summary
102 102A C-1400A 1249 Boylston Street
102 102B C-1400B 1255 Boylston Street
103 103 C-3769 AT&T Office Center*
104 104 C-3222 Best Western Oak Manor Inn
105 105 CL55 United Artists - Camarillo, CA
106 106 232 Westport Inn
107 107 C-1723 Beachside Inn Hotel
108 108 91 Empire Office Center II
109 109 CL19 Eagle Country Market - Geneva IL
110 110 176 Radisson Resort Hotel*
111 111 151 Nevada Cares
112 112 CL32 Office Depot - Paramus, NJ*
113 113 10 320 West 13th Street
114 114 234 Winfield Landing Apartments
115 115 226 USC Center
116 116 45 Holiday Inn Aberdeen
117 117 CL20 Eagle Country Market
118 118 182 RHC - Capistrano
119 119 35 Atlantis Apartments
120 120 C-1511 Meadowbrook Office Park
120 120A C-1511A Meadowbrook Office Park
120 120B C-1511B Meadowbrook Office Park
121 121 142 Lynnwood Marketplace
122 122 C-2135 World Marine Estates
123 123 218 Fairfield Inn Tampa/Brandon
124 124 46 Bluegrass Shopping Center
125 125 C-3418 Green Oaks Apartments
126 126 16 902-938 Highland Avenue
127 127 109 Hecker Pass Plaza
128 128 62 Cobblestone Village Shopping Center
129 129 187 RHC - Towne & Country Mobile Home Park
130 130 70 Concord Apartments
131 131 78 Delta Hotels Summary
131 131A 78A Holiday Inn - Cutler Ridge
131 131B 78B Holiday Inn Express - Homestead
132 132 224 Transouth
133 133 33 Any Mountain
134 134 113 Holiday Inn - Ft. Collins, CO
135 135 112 Highland Court Apartments
136 136 189 River Road
137 137 68 Commerce University
138 138 C-1361 Dutch Centre
139 139 C-1332 Murchison Medical Plaza
140 140 160 Park Magnolia Apartments
141 141 CL6 Best Buy - Akron, OH
142 142 88 Edwards Warehouse
143 143 47 Boynton Medical Arts Center*
144 144 37 Austin South Residence Inn
145 145 147 Courtyard by Marriott - Mishawaka
146 146 49 Brentwood Manor Mobile Home Park
147 147 C-1460 Burke Commerce Center
148 148 236 Wisteria Gardens Apartments
149 149 52 Brunswick Hotel
150 150 CL8 Best Buy - Columbia, SC
151 151 C-3261 Winn-Dixie Stores, Inc. - Selma
152 152 CL17 CVS Pharmacy - Stoughton, MA
153 153 C-1984 Holiday Inn Holidome
154 154 233 Winchester Plaza
155 155 25 Corporate Court at Westview
156 156 C-1316 Alameda Apartments
157 157 98 Forest Ridge Apartments
158 158 63 Colony Club Apartments
159 159 C-1798 Webster Square
160 160 C-1599 Oswego Village Apartments
161 161 CL11 Best Buy - Inver Grove Heights, MN
162 162 115 Holiday Inn Exp. - Wheatridge, CO
163 163 128 K-Mart - Sikeston
164 164 C-3715 Comfort Inn Santa Monica
165 165 CL35 PETsMART Store No. 157
166 166 183 RHC - Club Marina Mobile Home Park
167 167 6 41 Elm Street Apartment & Office Building
168 168 209 Sports World
169 169 219 Terrado Plaza
170 170 54 Carydale East Apartments
171 171 CL50 Rite Aid Macon & College Park Summary
171 171A CL50A Rite Aid - Macon, GA
171 171B CL50B Rite Aid - College Park, GA
172 172 CL33 PETsMART Store No. 102
173 173 41 Beltline Village Shopping Center
174 174 131 Laguna Creek Racquet Club
175 175 C-2955 Riverside Medical Center
176 176 CL42 PETsMART Store No. 688
177 177 CL14 Hoyts Cinemas - Concord, NH
178 178 CL37 PETsMART Store No. 475
179 179 CL38 PETsMART Store No. 586
180 180 C-2792 Rite Aid Corporation - Baltimore
181 181 CL5 Best Buy - LaCrosse, WI
182 182 127 Kleinfelder Office Building
183 183 22 2308 Broadway
184 184 31 American Mini Storage
185 185 CL43 PETsMART Store No. 689
186 186 202 Shoppes of Hunt Club
187 187 C-2787 Winn-Dixie Stores, Inc. - Bunkie
188 188 C-1512 283 Bleeker St. & 59-61 Thompson St.
188 188A C-1512A Bleeker & Thompson
188 188B C-1512B Bleeker & Thompson
189 189 77 Delray Industrial Park
190 190 211 Staples, Ocean Avenue
191 191 149 Natomas Racquet Club
192 192 116 Holiday Inn Express Hotel & Suites Golden Valley
193 193 CL40 PETsMART Store No. 685
194 194 110 Heritage Plaza
195 195 159C Cynwyd Club Apartments
196 196 CL36 PETsMART Store No. 239
197 197 C-1031 Keith Properties-Summary
197 197A C-1031A Keith Properties
197 197B C-1031B Keith Properties
197 197C C-1031C Keith Properties
197 197D C-1031D Keith Properties
197 197E C-1031E Keith Properties
198 198 CL15 Hoyts Cinemas - Hooksett, NH
199 199 C-1730 Comfort Inn-Selma
200 200 C-2791 Rite Aid Pharmacy
201 201 C-1656 Cedar Creek Apartments
202 202 222 Timber Trails Shopping Center
203 203 152 North La Brea Shopping Center
204 204 21 1801-1811 Williamsbridge Road
205 205 185 RHC - Trees Country Place Mobile Home Park
206 206 C-1708 Kon Tiki Mobile Home Park
207 207 CL41 PETsMART Store No. 686
208 208 65 Columbus Plaza
209 209 C-3767 Days Inn / Denny's-Summary
209 209A C-3767A Days Inn / Denny's
209 209B C-3767B Days Inn / Denny's
210 210 206 Somerset Professional Plaza
211 211 CL21 Eckerd Pharmacy - Mary Esther, FL
212 212 CL39 PETsMART Store No. 648
213 213 134 Lancaster Microtel Inn
214 214 205 Snyder Warehouse
215 215 CL51 Rite Aid - Washington, MI
216 216 C-1488 3190 Northeast Expressway
217 217 161 Parkview Nursing Portfolio Summary
217 217A 161A Parkview Lodge
217 217B 161B Parkview South
217 217C 161C Parkview Main
217 217D 161D Parkview Manor
218 218 143 Manhattan Brewery/40-42 Thompson St.
219 219 CL34 PETsMART Store No. 145
220 220 C-1284 Setauket Village Mart
221 221 C-1590 Great Woods Office Park-Summary
221 221A C-1590A Great Woods Office Park
221 221B C-1590B Great Woods Office Park
222 222 CL31 Office Depot - College Twp PA*
223 223 C-2788 Winn-Dixie Montgomery
224 224 24 5520 Santa Monica Boulevard
225 225 235 Winston Vista Shopping Center
226 226 194 Rochester Microtel
227 227 C-3225 Alpine Meadows
228 228 C-1494 Dynamatic Mfg. Facility
229 229 64 Columbus Microtel Inn
230 230 117 Hoosic Valley Center
231 231 7 200 South Newman Street
232 232 C-1912 Value Inn Motel
233 233 137 Leeman Labs
234 234 129 Knoxville Microtel*
235 235 C-3279 Eckerd Corporation - Forest Park
236 236 72 Corum Plaza
237 237 C-1765b Quality Inn- Sylva
238 238 C-2182 Holiday Inn/ Heritage Inn-Summary
238 238A C-2182A Holiday Inn/ Heritage Inn
238 238B C-2182B Holiday Inn/ Heritage Inn
239 239 CL56 Walgreen Co. - Bedford, TX
240 240 96 Falcon View Plaza
241 241 CL22 Eckerd Pharmacy - Houma, LA
242 242 144 Maple Gardens Apartments
243 243 181 RHC - Adobe Mobile Lodge
244 244 C-1746 New Heritage Plaza
245 245 C-1438 Pine Ridge Mobile Home Park
246 246 CL18 CVS Pharmacy - Woodstock, Ga
247 247 CL48 Rite Aid - Melvindale, MI
248 248 C-2789 Rite Aid Corporation - Garettsville
249 249 CL52 Rite Aid - Auburn Hills, MI
250 250 85 Econo Lodge-FL
251 251 C-1620 Winyah Village Shopping Center
252 252 C-1409 Painters Mill Professional Building
253 253 C-2217 Holiday Inn Express (Ocean Springs)
254 254 C-1197 Wyndham Court Apartments
255 255 166 Peter Piper Plaza
256 256 55 Charleston Microtel
257 257 145 Marshall's Plaza Springfield
258 258 195 Royal Palms Mobile Home Park
259 259 CL46 Rite Aid - Cleveland, OH
260 260 C-2206 Days Inn-Lanett Alabama
261 261 217 Syracuse Microtel
262 262 C-1647 717 D Street
263 263 154 Oakbrook Manufactured Home Community
264 264 4A NCB/148 W. 24 Tenants Corp.
265 265 C-1264 Deerfield East Apartments
266 266 C-1520 Stewartstown Station Village Square
267 267 141 Loma Verde Apartments
268 268 C-1360 701 East Trade Street, Equity Bldg
269 269 199 Santa Gertrudes Apartments
270 270 86 Econo Lodge-Virginia Beach, VA
271 271 C-1430 Greenbrier Partners I-Summary
271 271A C-1430A Greenbrier Partners I
271 271B C-1430B USUI International Bldg
272 272 C-1431 Brinks
273 273 C-1419 JAMAD II
274 274 210 Stadium Corporate Center
275 275 CL45 Rite Aid - Auburn, ME
276 276 C-2790 Rite Aid Corporation - Canton
277 277 155 Olympia Medical Center
278 278 C-3915 Kmart- Lackawanna
279 279 CL49 Rite Aid - Hazel Park, MI
280 280 C-1127 44-46 Beach Street-Retail
281 281 14 701-703 West 184th Street
282 282 208 Spare Room Self Storage
283 283 227 Valley Pines Mobile Home Park
284 284 C-1496 North Plantation Square Shopping Ctr
285 285 C-2475 Kmart- Cheektowaga
286 286 CL47 Rite Aid - Morrow, GA
287 287 17 925 Wilshire
288 288 186 RHC - Diablo Mobile Lodge
289 289 C-2129 Glenwood Townhomes
290 290 240 Yorktown Medical
291 291 C-1809 Liberty Square Shopping Center
292 292 213 Stirrup Woods
293 293 11 342 Newbury Street
294 294 80 Deseret Self Storage
295 295 201 Security Self Storage
296 296 C-1128 Comfort Inn Santa Rosa
297 297 C-1429 Principal Court Business Center
298 298 132 Lake Center
299 299 C-1501 Two (2) US Post Offices-Summary
299 299A C-1501A Two (2) US Post Offices
299 299B C-1501B Two (2) US Post Offices
300 300 169 Plaza Las Mares
301 301 125 Jurupa Town Center
302 302 121 Indian Hills Mobile/Valley View Summary
302 302A 121A Indian Hills Mobile Park
302 302B 121B Valley View Mobile Home Park
303 303 C-2127 The Parliament House
304 304 C-2166 Willow Road Apartments
305 305 C-2785 Rite Aid Corporation - Monticello
306 306 200 Kittridge Apartments/ Santa Monica
307 307 C-2048 Greenridge Apartments
308 308 158 Palm Haven Mobile Home Park
309 309 C-3465 (1) US Post Office-Lakewood
310 310 C-2784 Rite Aid Corporation - Mount Morris
311 311 57 Chatsworth Shopping Center
312 312 51 Broken Arrow Expressway Mini-Storage
313 313 C-1765a Quality Inn- Maggie Valley
314 314 C-2113 Comfort Inn
315 315 C-1443 7402 Neuhaus
316 316 C-2939 Wilton Plaza
317 317 157 Orange Show Industrial Park
318 318 C-1449 Meadowood Center
319 319 84 East Pine Ridge Mobile Home Park
320 320 61 Clay/Morrison Summary
320 320A 61A 1250 Morrison Avenue
320 320B 61B 1812 Clay Avenue
321 321 C-1589 Meeting House Office Building
322 322 34 Arabian Mobile Home Park
323 323 C-2195 85 Broad Street
324 324 12 411 North Harbor Blvd.
<PAGE>
<CAPTION>
Loan # Address City State
------ ------- ---- -----
<S> <C> <C> <C>
1 Various Addresses Various Various
1 5400 Lee Highway Arlington VA
1 1749-1753 Columbia Road NW Washington DC
1 13623-13625 Georgia Avenue Rockville MD
1 13621-13653 Lee Jackson Highway Chantilly VA
1 9411-9501 Annapolis Road Lanham MD
1 9470-9542 Arlington Blvd. Chantilly VA
1 9500-9580 Main Street Fairfax VA
1 5928 Georgia Avenue Washington DC
1 800-896 W. Beverly Boulevard Montebello CA
1 19313-19417 Victory Road Reseda CA
1 1451 Chain Bridge Road McLean VA
1 9400-9490 Main Street Fairfax VA
1 5812-5870 Silver Hill Road Forestville MD
1 5416-5452 Annapolis Road Bladensburg MD
1 6447-6505 Baltimore National Baltimore MD
2 Various Addresses Various Various
2 Sigmon Rd. & Old U.S. Highway 321 Lincolnton NC
2 Cox Creek Parkway Florence AL
2 N. Main & Valley View Fountain Inn SC
2 80 South Tunnel Road Asheville NC
2 5765 Rockbridge Road & Stone Mountain Stone Mountain GA
2 4045 Five Forks Trickum Rd. Lilburn GA
2 6625 Hwy 53 East & Ga. Hwy 400 Dawsonville GA
2 7520-87 Hwy 85 & 138 Riverdale GA
2 3620, 3640 3670, Eisenhower Pk Macon GA
2 Georgia Hwy 138 & Tara Blvd. Jonesboro GA
2 1722 South 8th Street Fernandina FL
2 1609-1629 North Main Street Summerville SC
2 5270 Babcock Street Palm Bay FL
2 160 Malabar Rd. Palm Bay FL
2 1923-1969 Electric Road Salem VA
2 2004-2048 Electric Road Roanoke VA
2 925-955 North Parkway Jackson TN
2 641 By-Pass SE Moultrie GA
2 818 East Arrowwood Road Charlotte NC
2 Dauphin Island Parkway Mobile AL
2 South Side of Broad River Road Irmo SC
3 Retorno del Rey Lot 36 Cancun MX
4 Various Addresses Various Various
4 100 Mallard Creek Rd. St. Matthews KY
4 900 Elm Street Manchester NH
4 301-307 North Hurstborne Lane Louisville KY
4 8 Chestnut Street and 22 Elm Street Worchester MA
4 301 North Main Wichita KS
5 45 Wall Street New York NY
6 Intersection of PR 22 and PR 167 Bayamon PR
7 4000 Wisconsin Avenue, NW Washington DC
8 11375 Fountain Lake Circle Stafford TX
9 767 Third Avenue New York NY
10 Various Addresses Various Various
10 14225 Newbrook Chantilly VA
10 3000 and 3018 Western Avenue Seattle WA
11 2700 Miamisburg-Centervalle Road Dayton OH
12 1933 Davis Street San Leandro CA
13 1450 Glenarm Place Denver CO
14 1365-1370 St. Nicholas Avenue New York NY
15 Various Addresses Various Various
15 9805 SW-Boeckman Rd. Wilsonville OR
15 17799 SW Boones Ferry Rd. Tualatin OR
15 255 Lancaster Dr. NE Salem OR
15 275 Lancaster Dr. NE Salem OR
15 15600 SE McLoughlin Blvd. Oak Grove OR
15 700 NW Eastman Avenue Gresham OR
16 500 Carson Tower Center Carson CA
17 3901 Holland Road Virginia Beach VA
18 Various Addresses Various Cities Various
18 24 Sandalwood Drive Newark DE
18 2510 Cedar Tree Drive, Brandywine Hundred New Castle County DE
18 2 Wenark Drive, Pencader Hundred New Castle County DE
19 Various Addresses Various Cities Various
19 426 Second Street SW Rochester MN
19 106 21st Street SE Rochester MN
19 519 3rd Avenue SW Rochester MN
19 114 Second Street SW Rochester MN
19 111 SE 28th Street Rochester MN
19 1850 South Broadway Rochester MN
19 6 First Avenue NW Rochester MN
19 16 & 20 Fifth Avenue NW Rochester MN
19 1608 Second Street Rochester MN
19 1230 South Broadway Rochester MN
20 Various Addresses Various Various
20 6601 Florin Road Sacramento CA
20 1000 Graves Avenue El Cajon CA
20 707 E Street Chula Vista CA
20 1616 Sisk Road Modesto CA
20 3610 Park Sierra Boulevard Riverside CA
20 7111 Beach Boulevard Buena Park CA
20 23221 Lake Center Drive Lake Forest CA
20 3601 Rosendale Highway Bakersfield CA
21 Various Addresses Various Various
21 5668 Hilton Avenue Baton Rouge LA
21 5101 Monkhouse Drive Shreveport LA
21 2600 Moeling Lake Charles LA
22 733 West Knoll Street West Hollywood CA
23 1200 S. Moorland Road Brookfield WI
24 Various Addresses Various Various
24 917 Broad Street Bloomfield NJ
24 249 Belleview Avenue Bloomfield NJ
25 3220 Odyssey Avenue Naperville IL
26 2101 Prior Road Wilmington DE
27 1300 N.W. 98th Court Miami FL
28 8737 Contee Road Laurel MD
29 North of intersection of PR-2 and Ssan Daniel Ave Arecibo PR
30 601 Van Ness Avenue San Francisco CA
31 Various Addresses Various Various
31 2704 NW 52nd Street Lawton OK
31 201 East Almar Drive Chickasha OK
31 1710 West Plato Road Duncan OK
31 3604 No. Country Club Rd. Irving TX
31 6731 Larmanda Street Dallas TX
31 7510 Northwest Tango Road Lawton OK
31 8000 Midcrown Drive San Antonio TX
32 1 Industry Way Staunton VA
33 Las Americas Expressway & State Road 177 San Juan PR
34 12050-12070 Ventura Bouldvard Studio City CA
35 Various Addresses Various Various
35 2100 East Highway 12 Willmar MN
35 1701 4th Street Northwest Austin MN
35 1201 Torgerson Drive Fairmont MN
35 1200 and 1203 Torgerson Drive Fairmont MN
35 700 16th Avenue, NW Austin MN
35 225 28th Street Southeast Willmar MN
36 25415 N. I-45 Various Various
36 5118 Fairmont Parkway Pasadena TX
36 25415 North I-45 Woodlands TX
37 1704 Barnes Boulevard Tumwater WA
38 3200 Bensalem Boulevard Bensalem PA
39 3975 Van Dyke Road Lutz FL
40 4333 Collins Avenue Miami Beach FL
41 6400 Glenhurst Drive Maumee OH
42 8400 Anderson Blvd. Fort Worth TX
43 145 Parkville Station Road, T-454 West Deptford NJ
44 8221 Sunset Blvd Los Angeles CA
45 2822 177th Drive Hammond IN
46 150 Route 17 North Paramus NJ
47 250 Gorge Rd. Cliffside Park NJ
48 200-220 Indian River Road Orange CT
49 560 Sylvan Road Englewood Cliffs NJ
50 West Nursery Road Linthicum MD
51 Various Addresses Various Various
51 2324 Fleetwood Drive Riverside CA
51 2344 Fleetwood Drive Riverside CA
52 Various Addresses Various Various
52 2165-2175 Francisco Boulevard San Rafael CA
52 2165-2175 Francisco Boulevard San Rafael CA
53 111 Hicks Street Brooklyn NY
54 Various Addresses Various Various
54 100 Weyerhaeuser Road Mahwah NJ
54 4100 Sandy Springs Road Burtonsville MD
54 4 N 755 Lombard Road Addison IL
54 6900 Pardee Road Taylor MI
54 100 Green Tree Road Oaks PA
54 570 Main Street Hudson MA
55 333 East Tudor Road Anchorage AK
56 2200 Central Road Fort Lee NJ
57 901 Chalk Level Road Durham NC
58 8801 South La Cienega Boulevard Inglewood CA
59 3000 Lakehaven Drive Ann Arbor MI
60 211-35 23rd Ave Bay Terrace NY
61 Various Addresses Various Various
61 628 South Santa Rosa Blvd. San Antonio TX
61 620 South Santa Rosa San Antonio TX
62 #22 Dronningens Gade St. Thomas, US Virgin Islands VI
63 N/E/C of State Road & 167 & Las Cumbres Avenue Bayamon PR
64 Various Addresses Various Various
64 5220 W. Southern Avenue Indianapolis IN
64 5224 West Southern Avenue Indianapolis IN
65 138-05 78th Avenue Flushing NY
66 1-22 Arlington St, 1-25 Burbank St, Yonkers NY
67 2101 Burton Drive Austin TX
68 720-730 Fort Washington Avenue New York NY
69 5625 O'Donnell Street Baltimore MD
70 Various Addresses Various Various
70 3725 Kaspar Avenue Flagstaff AZ
70 900 University Parkway Sarasota FL
70 7412 Tucker Road Ocean Springs MS
71 2727 South Towne Avenue Pomona CA
72 26741 Lake Vue Drive Perrysburg OH
73 310/312 East 23rd Street New York NY
74 Various Addresses Various Various
74 28606 Huntwood Avenue Hayward CA
74 25000 Hawkbryan Avenue Santa Clarita CA
75 376-400 Fuera Bush Road Bethlehem NY
76 35205 16th Avenue South Federal Way WA
77 642 Baltimore Pike Springfield PA
78 5600 N. Beach Street Haltom City TX
79 5 Garret Mountain Plaza West Paterson NJ
80 1680 S. Colorado Blvd. Denver CO
81 5800 Peach Street Millcreek Township (Erie) PA
82 200 Kansas Street San Francisco CA
83 Various Addresses Various Various
83 800-820 10th Street Miami Beach FL
83 1043-47 Euclid Miami Beach FL
83 714-722 15th Street Miami Beach FL
83 610-612 16th Street Miami Beach FL
83 1234 Pennsylvania Miami Beach FL
83 1509-1519 Pennsylvania Miami Beach FL
83 701-11th & 1110 Euclid Miami Beach FL
83 700-14th & 1350 Euclid Miami Beach FL
83 700-716 14th Place Miami Beach FL
83 631-639 13th Street Miami Beach FL
83 725-729 Lenox Avenue Miami Beach FL
83 626-652 Jefferson/900-910 7th Street Miami Beach FL
83 744 Jefferson Miami Beach FL
83 831 Meridian Miami Beach FL
83 1311 Meridina Avenue Miami Beach FL
84 9500-9580 Micron Avenue Rancho Cordova CA
85 5401 Independence Parkway Plano TX
86 7040 and 7050 Jimmy Carter Blvd. Norcross GA
87 125 West Ohio Street Chicago IL
88 1150 Fifth Avenue New York NY
89 131-42 234th St. Laurelton NY
90 1417 Golden Gate Blvd. Mayfield Heights OH
91 Various Addresses Various Various
91 500 Center Place Drive Rochester NY
91 7014 McCutcheon Road Chattanooga TN
91 251 Summit Parkway Homewood AL
92 1420-1430 East Plaza Blvd National City CA
93 40 West 72 St. New York NY
94 Various Addresses Various Various
94 1340 Lebanon Church Road West Mifflin PA
94 106 Bair Boulavard New Stanton PA
95 2 Somerset Parkway Nashua NH
96 2096 NE 2nd St. Deerfield Beach FL
97 23 Schoolhouse Road Whiting NJ
98 444 Forest Hill Road Macon GA
99 2901 Crossfork Drive New Castle County DE
100 Various Addresses Various Various
100 7245 South State Road Orange Township MI
100 600 Orleans Boulevard Coldwater MI
100 828 Sherperd Street Charlotte MI
100 7333 North State Road 9 Lima Township IN
101 2132 Bedford Street Durham NC
102 1249 and 1255 Boylston Street Boston MA
102 1249 Boylston Street Boston MA
102 1255 Boylston Street Boston MA
103 19 Schoolhouse Road Franklin Township NJ
104 886 Beach Boulevard Biloxi MS
105 5001 Verdugo Way Camarillo CA
106 1595 Post Road East Westport CT
107 336 West Cabrillo Blvd. & 321 West Mason Street Santa Barbara CA
108 250 Moonachie Road Moonachie NJ
109 West Side Randall Road Geneva IL
110 500 Padre Boulevard South Padre Island TX
111 2765, 2861, 2907 Mountain Street Carson City NV
112 404 Route 17 North Paramus NJ
113 320 West 13th Street New York NY
114 2002 San Sebastian Nassau Bay TX
115 2301/2361 Campus Drive Irvine CA
116 1007 Beards Hill Rd Aberdeen MD
117 750 West 42 Avenue Moline IL
118 32802 Valle Rd San Juan Capistrano CA
119 555 Shore Road Somers Point NJ
120 I-55 4266 and 4270 North Frontage Road Jackson MS
120 4266 I-55 North Jackson MS
120 4270 I -55 North Jackson MS
121 3100 East Imperial Highway Lynnwood CA
122 2555 Flosden Road American Canyon CA
123 10150 Palm River Road Brandon FL
124 U.S. Route 68 Maysville KY
125 8573 West 99th Terrace Palos Hills IL
126 902-910 and 920-938 Highland Avenue Needham MA
127 1230-1360 First Street Gilroy CA
128 821-901 W. Park Avenue Ocean Township NJ
129 1060 San Miguel Road Concord CA
130 2931 Fernor Street Allentown PA
131 Various Addresses Various Various
131 10775 Caribbean Boulevard Miami FL
131 990 Homestead Boulevard Homestead FL
132 2001 Beach Street Fort Worth TX
133 10495 North De Anza Blvd. Cupertino CA
134 3836 East Mulberry Street Fort Collins CO
135 241 Blanchard Street West Monroe LA
136 620 & 640 River Road Westwago LA
137 17000 Horizon Way Mount Laurel NJ
138 810 Dutch Square Boulevard Columbia SC
139 1300 Murchison Drive El Paso TX
140 15101 Magnolia Blvd. Van Nuys CA
141 96 Roth Rock Road Fairlawn OH
142 500 Edwards Avenue Harahan LA
143 10075 Jog Road Boynton Beach FL
144 4537 South IH-35 Austin TX
145 4825 North Main Street Mishawaka IN
146 8305 Gatewood Drive Jessup MA
147 5575-5609 Sandy Lewis Drive Burke VA
148 610 North Dairy Ashford Houston TX
149 Queen & Chestnut Streets Lancaster PA
150 7006 Two Notch Road Columbia SC
151 1952 West Dallas Avenue Selma AL
152 345 Washington St Stoughton MA
153 800 28th Street Boulder CO
154 U.S. Highway 60 Winchester KY
155 7215 Corporate Court Frederick MD
156 1415 Broadway Alameda CA
157 5531 Chevrolet Blvd. Parma OH
158 1212-1218 Allaire Road & 1908-1922 Old Mill Road Spring Lake Heights NJ
159 N/E/C Stafford Street & Curtis Pkwy Worcester MA
160 3938 Southwest Carman Drive Lake Oswego OR
161 1350 50th Street East Inver Grove Heights MN
162 4700 Kipling St Wheatridge CO
163 1110 S. Main Street Sikeston MO
164 2815 Santa Monica Boulevard Santa Monica CA
165 7290 West Bell Road Glendale AZ
166 55 Pacifica Avenue Bay Point CA
167 41 Elm Street Morristown NJ
168 200 Route 17 North Paramus NJ
169 750 Terrado Plaza Covina CA
170 2727 Duke Street Alexandria VA
171 Various Addresses Various Various
171 1390 Pio Nono Avenue Macon GA
171 Corner of Old National Highway and Flat Schoals Road College Park GA
172 26761 Aliso Creek Road Aliso Viejo CA
173 3435 North Beltline Road Irving TX
174 9570 Racquet Court Elk Grove CA
175 300 Riverside Drive East Bradenton FL
176 17877 Haggerty Road Northville MI
177 282 Loudon Road Concord NH
178 2010 Butterfield Road Downers Grove IL
179 420 Home Drive North Fayette Township PA
180 118 N. Howard St. Baltimore MD
181 9420 Highway 16 East Onalaska WI
182 3077 Fite Circle Rancho Cordova CA
183 2308 Broadway Santa Monica CA
184 20941 Canada Road Lake Forest CA
185 23271 Eureka Road Taylor MI
186 444-510 Hunt Club Blvd. Apopka FL
187 US 71/Shirley Road Bunkie LA
188 283 Bleeker St. & 59-61 Thompson St. New York NY
188 59-61 Thompson Street New York NY
188 283 Bleeker Street New York NY
189 1845-1895 SE 4th Avenue Delray Beach FL
190 2892 Ocean Avenue Brooklyn NY
191 2450 Natomas Park Drive Sacramento CA
192 6020 Wayzata Boulevard Golden Valley MN
193 20530 13 Mile Road Roseville MI
194 2934 - 2990 West Ina Road Tucson AZ
195 1302 Cynwyd Club Drive Wilmington DE
196 9321 Hillcrest Road Kansas City MO
197 Various Addresses Various Various
197 532 Page Street Stoughton MA
197 14 Page Terrace Stoughton MA
197 30 Tremont Street Duxbury MA
197 42 Tremont Street Duxbury MA
197 136 Shoppers Row Duxbury MA
198 4 Technology Drive Hooksett NH
199 1705 Industrial Park Drive Selma NC
200 5411 Superior Ave. Cleveland OH
201 51 Cedar Creek Court Van Buren AR
202 23221 Aldine Westfield Road Houston TX
203 712-736 NORTH La Brea Av. Los Angeles, CA
204 1801-1811 Williamsbridge Road Bronx NY
205 1840-1850 West Orangethorpe Ave. Fullerton CA
206 555 West Warner Road Chandler AZ
207 365 Haggerty Highway Commerce MI
208 5050 10th Avenue East Tampa FL
209 13351-53 North Cleveland Avenue Fort Meyers FL
209 13351 Cleveland Avenue Fort Myers FL
209 13353 Cleveland Avenue Fort Myers FL
210 1527 Route 27 Franklin NJ
211 NEC US Hwy 98 and Mary Esther Cutoff(SR 383) Town of Mary Esther FL
212 135 Mall Drive Murfreesboro TN
213 50 Freeman Road Lancaster NY
214 1711-1755 North Powerline Road Pompano Beach FL
215 66054 Van Dyke Washington Township MI
216 3190 Northeast Expressway Atlanta GA
217 Various Addresses Various Various
217 Route 109 Springvale ME
217 7 West Elm Street Sanford ME
217 107 Main Street Sanford ME
217 6 Knight Street Sanford ME
218 40 Thompson Street New York NY
219 277 North Walker Road Prescott AZ
220 212-254 Main Street (Rte 25A) East Setauket NY
221 792 & 800 South Main Street Mansfield MA
221 792 South Main Street Mansfield MA
221 800 South Main Street Mansfield MA
222 389 Benner Pike State College PA
223 1617 South College Street Auburn AL
224 5520 Santa Monica Los Angeles CA
225 2070 Hacienda Drive Vista CA
226 905 Lehigh Station Road Henrietta NY
227 210 10th Street Gold Bar WA
228 1322 Fourteenth Avenue Kenosha WI
229 7500 Vantage Drive Worthington OH
230 Route 4 Schaghticoke NY
231 200 South Newman Street Hackensack NJ
232 6885 Highway 94 Colorado Springs CO
233 6 Wentworth Drive Hudson NH
234 309 N. Peters Road Knoxville TN
235 833 Forest Parkway Forest Park GA
236 8505 Gulf Freeway Houston TX
237 US Highway 23 Sylva NC
238 U.S. 78 and Highway 7 / 155 Clarice Drive Holly Springs MS
238 US 178/78 Bypass and SR7 Holly Springs MS
238 155 Clarice Drive Holly Springs MS
239 2253 Central Drive Bedford TX
240 5901 East McKellips Road Mesa AZ
241 9407 East Park Avenue (Hwy 659) Houma LA
242 495 North Maple Drive Rialto CA
243 3120 Grant Street Concord CA
244 81 Pope Avenue Hilton Head Island SC
245 6465 Highway 9 Alpharetta GA
246 1600 Towne Lake Parkway Woodstock GA
247 4016 Oakwood Melvindale MI
248 10764 North Street Garettsville OH
249 2480 Lapeer Road Auburn Hills MI
250 5221 West University Blvd. Jacksonville FL
251 North Fraser Street and North Street Georgetown SC
252 110 Painter's Mill Road Owings Mill MD
253 7304 Washington Avenue Ocean Springs MS
254 6607 East Lovers Lane Dallas TX
255 1801-803 & 1807-1813 E. Baseline Road Tempe AZ
256 600 2nd Avenue S. Charleston WV
257 NW Corner of Rt. 20 & Rt. 21 Springfield MA
258 205 East Drifill Blvd. Oxnard CA
259 8404 Madison Avenue Cleveland OH
260 2314 South Broad Avenue Lanett AL
261 6808 Old Collamer Road DeWitt NY
262 717 D Street Washington DC
263 1025 North 300 West Springville UT
264 148 West 24th Street New York NY
265 1323 SE Eighth Avenue Deerfield Beach FL
266 71 North Main Street Stewartstown Borough PA
267 555 North 7th Street Sierra Vista AZ
268 701 East Trade Street Charlotte NC
269 10350 Santa Gertrudes Avenue Whittier CA
270 5819 Northampton Blvd. Virginia Beach VA
271 804-826 Professional Place, 1134-1138 Executive Boulevard Chesapeake VA
271 804-826 Professional Place Chesapeake VA
271 1134-38 Executive Blvd. Chesapeake VA
272 1223 Executive Boulevard Chesapeake VA
273 540 Woodlake Circle Chesapeake VA
274 2040-2050 South Santa Cruz Street Anaheim CA
275 60 Union Street Bypass Auburn ME
276 2103 East Tuscarawas Ave Canton OH
277 2221 Livernois Troy MI
278 1001 Ridge Road Lackawanna NY
279 John R. Road & Nine Mile Road Hazel Park MI
280 44-46 Beach Street Boston MA
281 701-703 West 184th Street New York NY
282 4601 White Lane Bakersfield CA
283 615 Lomaland Drive El Paso TX
284 1672 North Main Street Summerville SC
285 1460 French Road Cheektowaga NY
286 2350 Lake Harbin Road Morrow GA
287 925-929 Wilshire Blvd. Santa Monica CA
288 1146 Meadow Lane Concord CA
289 1155 & 1225 Cumulus Drive Conway AR
290 1974 Maple Hill Street Yorktown Heights NY
291 211-215 West Camp Wisdom Road Duncanville TX
292 2101-2115 Stirrup Lane Toledo OH
293 342 Newbury Street Boston MA
294 707 West State Street Pleasant Grove UT
295 7840 Farley Overland Park KS
296 3443 Will Rogers Drive Santa Rosa NM
297 800 Principal Court Chesapeake VA
298 23072 Lake Center Drive Lake Forest CA
299 3235 Union Street / 76-78 Pulteney Street N. Chili/ Hammondsport NY
299 3235 Union Street North Chili NY
299 76-78 Pulteney Street Hammondsport NY
300 629 Camino De Los Mares San Clemente CA
301 9415 Mission Blvd. Glen Avon CA
302 Various Addresses Various Various
302 Route 48 Granby NY
302 7235 Telephone Road Pavilion NY
303 1512 S. Arlington Ridge Road Arlington VA
304 54 Willow Road West New York NY
305 147 Broadway Monticello NY
306 11750 Kittridge Street North Hollywood CA
307 3830 West McDowell Road Phoenix AZ
308 4791 Southwest 82nd Avenue Davie FL
309 184 Chautauqua Avenue Lakewood NY
310 40 East State Street Mount Morris NY
311 21911-21929 Devonshire Street Chatsworth CA
312 9510 Broken Arrow Expressway Tulsa OK
313 70 Soco Road Maggie Valley NC
314 4646 Scottsville Road Bowling Green KY
315 7402 Neuhaus Houston TX
316 1881 NE 26th St. Wilton Manor FL
317 320-396 Orange Show Lane San Bernardino CA
318 3009-3091 N High School Road Speedway IN
319 4800 S. Pine Island Rd. Davie FL
320 Various Addresses Various Various
320 1250 Morrison Avenue New York NY
320 1812 Clay Avenue New York NY
321 275 Turnpike Street Canton MA
322 46-200 Calhoun Street Indio CA
323 85 Broad Street Marlborough MA
324 411 North Harbor Blvd. San Pedro CA
<PAGE>
<CAPTION>
Original Cut-off Date
Principal Principal
Loan # Zip Property Type Loan Balance Loan Balance
------ --- ------------- ------------ ------------
<S> <C> <C> <C> <C>
1 Various Retail 115,650,000 115,590,907
1 22207 Retail, Anchored 2,584,364
1 20009 Retail, Unanchored 2,584,364
1 20906 Retail, Anchored 4,959,185
1 22021 Retail, Anchored 4,470,251
1 20706 Retail, Anchored 14,179,077
1 22030 Retail, Anchored 10,896,236
1 22030 Retail, Anchored 9,708,826
1 20011 Retail, Single Tenant 656,568
1 90640 Retail, Anchored 13,829,838
1 91335 Retail, Anchored 13,271,057
1 22102 Retail, Anchored 5,867,204
1 22031 Retail, Anchored 9,499,283
1 20747 Retail, Anchored 9,918,369
1 20710 Retail, Unanchored 3,212,993
1 21228 Retail, Anchored 9,953,293
2 Various Retail 84,100,000 84,100,000
2 28092 Retail, Anchored 2,796,583
2 35630 Retail, Anchored 6,581,613
2 29644 Retail, Anchored 2,338,522
2 28805 Retail, Anchored 5,834,251
2 30087 Retail, Anchored 2,410,847
2 30047 Retail, Anchored 4,339,525
2 30534 Retail, Anchored 4,291,308
2 30274 Retail, Anchored 4,677,044
2 31206 Retail, Anchored 5,786,034
2 30236 Retail, Anchored 6,171,769
2 32216 Retail, Anchored 2,290,305
2 29483 Retail, Anchored 2,157,708
2 32905 Retail, Anchored 4,556,502
2 32907 Retail, Anchored 8,630,834
2 24018 Retail, Anchored 2,507,281
2 24018 Retail, Anchored 2,772,474
2 38305 Retail, Anchored 3,085,885
2 31768 Retail, Anchored 6,446,606
2 28210 Retail, Anchored 2,632,645
2 Retail, Anchored 1,784,027
2 Retail, Anchored 2,008,236
3 77500 Lodging, Full Service 75,000,000 75,000,000
4 Various Office 74,857,607 74,857,607
4 40207 Office 5,598,449
4 3101 Office 19,118,414
4 40203 Office 24,096,416
4 1608 Office 10,461,019
4 67202 Office 15,583,311
5 10005 Multifamily 75,000,000 74,499,220
6 UAV Retail, Anchored 62,000,000 61,963,322
7 20016 Office 61,000,000 60,880,640
8 77477 Retail, Anchored 50,000,000 49,961,708
9 10017 Office 41,500,000 41,500,000
10 Various Office, R&D 36,500,000 36,478,677
10 22021 Medical Office 27,507,039
10 98121 Medical Office 8,971,637
11 45458 Credit Lease 27,527,554 27,509,152
12 94577 Retail, Anchored 27,500,000 27,465,930
13 80202 Lodging, Full Service 23,000,000 22,982,097
14 10033 Multifamily 23,000,000 22,882,398
15 Various Various Prop. Types 21,000,000 20,979,468
15 97070 Industrial 5,737,469
15 97035 Retail, Single Tenant 4,051,717
15 97301 Retail, Single Tenant 1,615,511
15 97301 Retail, Single Tenant 3,327,140
15 97267 Retail, Single Tenant 3,386,289
15 97030 Retail, Single Tenant 2,861,341
16 90745 Credit Lease 20,966,233 20,814,442
17 23452 Credit Lease 20,448,548 20,300,506
18 Various Multifamily 20,122,095 20,111,247
18 19713 Multifamily 7,356,872
18 19810 Multifamily 5,101,750
18 19713 Multifamily 7,652,625
19 Various Lodging 19,700,000 19,683,975
19 55902 Lodging, Limited Service 999,577
19 55904 Lodging, Limited Service 1,230,248
19 55902 Lodging, Limited Service 1,153,358
19 55902 Lodging, Limited Service 845,796
19 55904 Lodging, Limited Service 2,460,497
19 55904 Lodging, Limited Service 1,460,920
19 55901 Lodging, Limited Service 2,614,278
19 55901 Lodging, Limited Service 3,844,526
19 55902 Lodging, Limited Service 1,845,373
19 55904 Lodging, Limited Service 3,229,402
20 Various Credit Lease 18,546,279 18,546,279
20 95828 Credit Lease 1,524,602
20 92021 Credit Lease 2,382,761
20 91910 Credit Lease 2,629,253
20 95350 Credit Lease 2,350,808
20 92505 Credit Lease 2,464,925
20 90621 Credit Lease 2,177,350
20 92630 Credit Lease 2,305,161
20 93308 Credit Lease 2,711,418
21 Various Lodging 18,000,000 17,983,571
21 70808 Lodging, Limited Service 6,850,884
21 71109 Lodging, Limited Service 3,975,960
21 70615 Lodging, Limited Service 7,156,727
22 90069 Lodging, Full Service 17,900,000 17,884,363
23 53008 Lodging, Full Service 17,100,000 17,065,054
24 Various Multifamily 17,000,000 16,975,768
24 7003 Multifamily 13,745,865
24 7003 Multifamily 3,229,903
25 60566 Credit Lease 16,890,594 16,890,594
26 19809 Multifamily 16,478,498 16,469,614
27 33172 Credit Lease 16,401,012 16,401,012
28 20708 Multifamily 16,322,384 16,313,585
29 612 Retail, Anchored 16,200,000 16,190,416
30 94012 Retail, Unanchored 16,200,000 16,179,619
31 Various Multifamily 16,199,000 16,177,074
31 73505 Multifamily 3,933,428
31 73018 Multifamily 1,875,768
31 73533 Multifamily 1,485,456
31 75062 Multifamily 1,811,347
31 75231 Multifamily 1,925,030
31 73505 Multifamily 1,508,193
31 78218 Multifamily 3,637,852
32 24401 Credit Lease 16,183,288 16,154,318
33 UAV Retail, Anchored 16,100,000 16,090,475
34 91604 Retail, Anchored 15,800,000 15,781,417
35 Various Lodging 15,590,000 15,559,810
35 56201 Lodging, Full Service 4,359,575
35 55192 Lodging, Full Service 4,006,096
35 56031 Lodging, Full Service 2,844,665
35 56031 Lodging, Limited Service 2,120,874
35 55912 Lodging, Limited Service 1,851,557
35 56201 Lodging, Limited Service 377,044
36 Various Single Tenant Retail 14,500,000 14,500,000
36 77504 Credit Lease 7,733,333
36 77038 Credit Lease 6,766,667
37 98512 Multifamily 14,175,000 14,127,948
38 19020 Nursing Home 14,100,000 14,072,269
39 33549 Credit Lease 13,684,262 13,636,651
40 33140 Lodging, Limited Service 13,600,000 13,587,530
41 43537 Multifamily 13,500,000 13,491,939
42 76120 Credit Lease 13,463,517 13,463,517
43 8051 Multifamily 13,214,172 13,207,048
44 90046 Lodging, Full Service 12,800,000 12,788,157
45 46323 Multifamily 12,750,000 12,733,126
46 7054 Credit Lease 12,631,593 12,603,934
47 7010 Multifamily, Cooperative 12,500,000 12,450,554
48 6477 Retail, Anchored 12,400,000 12,381,376
49 7632 Office 12,400,000 12,355,597
50 21225 Credit Lease 11,753,060 11,740,441
51 Various Industrial 11,550,000 11,542,256
51 92509 Industrial 5,159,442
51 92509 Industrial 6,382,815
52 Various Various Prop. Types 11,450,000 11,443,725
52 94901 Office 8,777,858
52 94901 Self-Storage 2,665,868
53 11201 Multifamily, Cooperative 11,500,000 11,431,763
54 Various Credit Lease 11,512,938 11,390,457
54 7430 Credit Lease 2,268,370
54 20866 Credit Lease 1,847,101
54 60101 Credit Lease 4,147,876
54 48180 Credit Lease 437,471
54 19456 Credit Lease 1,458,238
54 1749 Credit Lease 1,231,401
55 99501 Retail, Single Tenant 11,317,498 11,311,417
56 7024 Multifamily, Cooperative 11,000,000 11,000,000
57 27707 Multifamily 10,660,000 10,655,199
58 90301 Credit Lease 10,711,631 10,634,081
59 48104 Multifamily, Cooperative 10,300,000 10,184,010
60 11360 Multifamily, Cooperative 10,000,000 9,996,212
61 Various Lodging 10,000,000 9,990,663
61 78204 Lodging, Extended Stay 5,483,597
61 78204 Lodging, Limited Service 4,507,066
62 802 Retail, Unanchored 10,000,000 9,953,764
63 Retail, Anchored 9,700,000 9,694,261
64 Various Lodging 9,500,000 9,491,130
64 46241 Lodging, Limited Service 3,609,303
64 46241 Lodging, Extended Stay 5,881,827
65 11367 Multifamily, Cooperative 9,500,000 9,488,914
66 10710 Multifamily, Cooperative 9,500,000 9,467,505
67 78741 Multifamily 9,450,000 9,444,669
68 10040 Multifamily, Cooperative 9,400,000 9,368,170
69 21224 Lodging, Limited Service 9,150,000 9,132,247
70 Various Lodging 9,075,000 9,067,689
70 86004 Lodging, Limited Service 3,762,527
70 34234 Lodging, Limited Service 2,671,394
70 39565 Lodging, Limited Service 2,633,769
71 91766 Retail, Anchored 9,000,000 8,967,401
72 43551 Multifamily 8,900,000 8,894,686
73 10010 Multifamily, Cooperative 8,900,000 8,890,321
74 Various Mobile Home Park 8,857,999 8,847,471
74 94544 Mobile Home Park 5,093,998
74 91321 Mobile Home Park 3,753,473
75 12077 Retail, Anchored 8,800,000 8,765,322
76 98003 Retail, Single Tenant 8,673,989 8,669,328
77 19064 Credit Lease 8,690,743 8,656,976
78 78579 Multifamily 8,560,000 8,554,761
79 7424 Office 8,500,000 8,495,478
80 80222 Lodging, Limited Service 8,500,000 8,492,064
81 16565 Credit Lease 8,492,742 8,490,238
82 94103 Industrial 8,400,000 8,389,405
83 Various Multifamily 8,294,425 8,290,186
83 33139 Multifamily 450,947
83 33139 Multifamily 394,579
83 33139 Multifamily 603,947
83 33139 Multifamily 426,790
83 33139 Multifamily 410,684
83 33139 Multifamily 736,816
83 33139 Multifamily 978,395
83 33139 Multifamily 885,790
83 33139 Multifamily 442,895
83 33139 Multifamily 434,842
83 33139 Multifamily 370,421
83 33139 Multifamily 1,207,895
83 33139 Multifamily 314,053
83 33139 Multifamily 273,790
83 33139 Multifamily 358,342
84 95827 Office 8,165,000 8,147,952
85 75023 Multifamily 8,080,000 8,075,130
86 30092 Retail, Anchored 8,000,000 7,995,994
87 60610 Lodging, Limited Service 8,000,000 7,982,956
88 10128 Multifamily, Cooperative 7,900,000 7,887,415
89 11422 Multifamily, Cooperative 7,700,000 7,694,531
90 44124 Credit Lease 7,590,760 7,558,145
91 Various Lodging 7,560,000 7,553,519
91 14615 Lodging, Limited Service 4,427,925
91 37421 Lodging, Limited Service 1,758,147
91 35209 Lodging, Limited Service 1,367,447
92 91950 Retail, Anchored 7,450,000 7,446,826
93 10023 Multifamily, Cooperative 7,300,000 7,273,200
94 Various Lodging 7,200,000 7,163,548
94 15122 Lodging, Limited Service 3,900,154
94 15672 Lodging, Limited Service 3,263,394
95 3063 Lodging, Full Service 7,100,000 7,061,557
96 33441 Lodging, Full Service 7,000,000 6,993,375
97 8759 Nursing Home 7,000,000 6,993,301
98 31210 Multifamily 7,000,000 6,990,619
99 19808 Multifamily 6,915,440 6,911,712
100 Various Lodging, Limited Service 6,850,000 6,838,507
100 48446 Lodging, Limited Service 1,367,701
100 49036 Lodging, Limited Service 2,051,552
100 48813 Lodging, Limited Service 1,502,475
100 46746 Lodging, Limited Service 1,916,779
101 27707 Multifamily 6,840,000 6,837,119
102 2215 Office/Retail 6,800,000 6,800,000
102 2215 Office/Retail 3,100,800
102 2215 Office/Retail 3,699,200
103 8873 Office 6,500,000 6,500,000
104 39530 Lodging, Limited Service 6,500,000 6,494,148
105 93012 Credit Lease 6,513,452 6,480,848
106 6880 Lodging, Full Service 6,160,000 6,130,562
107 93105 Lodging, Full Service 6,125,000 6,119,486
108 7074 Office 6,134,000 6,111,602
109 60134 Credit Lease 6,110,605 6,104,894
110 78597 Lodging, Limited Service 6,100,000 6,083,154
111 89703 Assisted Living Facility 6,000,000 5,989,474
112 7652 Credit Lease 5,901,798 5,898,234
113 10014 Office 5,850,000 5,850,000
114 77573 Multifamily 5,823,000 5,802,554
115 92612 Office 5,800,000 5,777,412
116 21001 Lodging, Full Service 5,750,000 5,744,752
117 61265 Credit Lease 5,678,772 5,673,660
118 92675 Mobile Home Park 5,647,458 5,640,133
119 8244 Multifamily 5,600,000 5,592,477
120 39211 Office 5,500,000 5,500,000
120 39211 Office 2,766,500
120 39211 Office 2,733,500
121 90262 Retail, Unanchored 5,400,000 5,386,260
122 94589 Mobile Home Park 5,300,000 5,297,000
123 33619 Lodging, Limited Service 5,250,000 5,245,098
124 41056 Retail, Anchored 5,250,000 5,225,494
125 60465 Multifamily 5,200,000 5,200,000
126 2914 Retail, Anchored 5,100,000 5,097,286
127 95020 Retail, Unanchored 5,000,000 4,997,520
128 7712 Retail, Unanchored 5,000,000 4,984,687
129 94518 Mobile Home Park 4,956,866 4,950,437
130 18103 Multifamily 4,916,000 4,898,523
131 Various Lodging 4,900,000 4,896,100
131 33189 Lodging, Limited Service 2,373,867
131 33030 Lodging, Limited Service 2,522,234
132 76103 Office 4,900,000 4,871,941
133 95014 Office 4,800,000 4,790,953
134 80524 Lodging, Full Service 4,800,000 4,786,010
135 71291 Multifamily 4,800,000 4,783,146
136 70094 Industrial 4,750,000 4,747,234
137 8054 Office 4,750,000 4,743,393
138 29201 Office 4,750,000 4,732,467
139 79902 Medical Office 4,700,000 4,700,000
140 91403 Multifamily 4,700,000 4,693,284
141 44321 Credit Lease 4,596,528 4,579,531
142 70123 Industrial 4,520,000 4,511,607
143 33426 Medical Office 4,500,000 4,497,921
144 78744 Lodging, Extended Stay 4,500,000 4,495,798
145 46545 Lodging, Limited Service 4,500,000 4,495,798
146 20794 Mobile Home Park 4,500,000 4,495,655
147 22032 Industrial 4,500,000 4,495,509
148 77075 Multifamily 4,500,000 4,491,484
149 17602 Lodging, Full Service 4,500,000 4,479,941
150 29223 Credit Lease 4,485,916 4,469,298
151 36701 Credit Lease 4,465,692 4,441,452
152 02072 Credit Lease 4,420,015 4,420,015
153 80303 Lodging, Full Service 4,400,000 4,396,316
154 40391 Retail, Unanchored 4,400,000 4,385,245
155 21701 Office 4,300,000 4,295,994
156 94501 Multifamily 4,250,000 4,244,735
157 44130 Multifamily 4,225,000 4,222,767
158 7762 Multifamily 4,225,000 4,220,948
159 1603 Retail, Anchored 4,200,000 4,185,833
160 97035 Multifamily 4,160,000 4,157,320
161 55077 Credit Lease 4,158,175 4,142,785
162 80033 Lodging, Limited Service 4,100,000 4,088,531
163 63801 Retail, Single Tenant 4,100,000 4,086,699
164 90404 Lodging, Limited Service 4,062,000 4,062,000
165 85308 Credit Lease 4,037,429 4,025,692
166 94565 Mobile Home Park 4,010,317 4,005,551
167 7960 Multifamily 4,000,000 3,996,077
168 7652 Retail, Single Tenant 4,000,000 3,978,892
169 91723 Office 3,975,000 3,966,563
170 22314 Multifamily 4,000,000 3,906,159
171 Various Credit Lease 3,907,904 3,884,658
171 31204 Credit Lease 1,757,345
171 30337 Credit Lease 2,127,313
172 92656 Credit Lease 3,857,523 3,846,309
173 75062 Retail, Anchored 3,850,000 3,844,619
174 95758 Health Club 3,850,000 3,844,492
175 34208 Medical Office 3,825,000 3,818,129
176 48167 Credit Lease 3,800,000 3,788,953
177 3301 Credit Lease 3,753,796 3,733,234
178 60515 Credit Lease 3,700,000 3,689,244
179 15275 Credit Lease 3,700,000 3,689,244
180 21201 Credit Lease 3,642,146 3,607,480
181 54650 Credit Lease 3,611,276 3,597,915
182 95827 Office 3,600,000 3,592,963
183 90404 Office 3,500,000 3,496,921
184 92630 Self-Storage 3,500,000 3,492,847
185 48180 Credit Lease 3,400,000 3,390,116
186 32703 Retail, Anchored 3,400,000 3,383,902
187 71322 Credit Lease 3,460,000 3,375,192
188 10118 Multifamily 3,350,000 3,342,509
188 10118 Multifamily 1,905,230
188 10118 Multifamily 1,437,279
189 33444 Industrial 3,300,000 3,297,043
190 11225 Retail, Single Tenant 3,300,000 3,296,842
191 95833 Health Club 3,300,000 3,295,279
192 55416 Lodging, Limited Service 3,300,000 3,293,409
193 48066 Credit Lease 3,300,000 3,290,407
194 85710 Retail, Unanchored 3,300,000 3,285,872
195 19808 Multifamily 3,246,584 3,244,834
196 64138 Credit Lease 3,199,066 3,189,766
197 Various Office 3,200,000 3,188,665
197 2072 Office 647,698
197 2072 Office 896,812
197 2332 Office 1,145,927
197 2332 Office 498,229
197 2332 Office --
198 3106 Credit Lease 3,202,783 3,185,239
199 27576 Lodging, Limited Service 3,200,000 3,178,901
200 44103 Credit Lease 3,204,545 3,174,044
201 72956 Multifamily 3,150,000 3,150,000
202 77373 Retail, Anchored 3,100,000 3,095,773
203 90038 Retail, Unanchored 3,100,000 3,088,350
204 10461 Retail, Unanchored 3,000,000 2,997,624
205 92633 Mobile Home Park 3,000,000 2,996,226
206 85224 Mobile Home Park 3,000,000 2,993,292
207 48391 Credit Lease 2,984,575 2,975,899
208 33619 Retail, Anchored 2,925,000 2,918,815
209 33903 Lodging, Limited Service/Rest 2,911,250 2,908,162
209 33903 Lodging, Limited Service 1,744,897
209 33903 Restaurant 1,163,265
210 8873 Medical Office 2,880,000 2,877,268
211 32569 Credit Lease 2,894,746 2,867,198
212 37129 Credit Lease 2,800,000 2,791,860
213 14221 Lodging, Limited Service 2,775,000 2,772,604
214 33069 Industrial 2,750,000 2,745,074
215 48302 Credit Lease 2,746,881 2,736,245
216 30341 Office 2,725,000 2,721,394
217 Various Assisted Living Facility 2,720,000 2,707,586
217 4083 Assisted Living Facility 676,897
217 4073 Assisted Living Facility 676,897
217 4073 Assisted Living Facility 676,897
217 4083 Assisted Living Facility 676,897
218 10013 Office 2,700,000 2,696,533
219 86301 Credit Lease 2,700,000 2,692,151
220 11773 Retail, Unanchored 2,700,000 2,676,535
221 2048 Office 2,600,000 2,592,147
221 2048 Office 907,251
221 2048 Office 1,684,895
222 16804 Credit Lease 2,570,801 2,560,318
223 36830 Credit Lease 2,730,000 2,537,596
224 90038 Retail, Unanchored 2,536,000 2,533,444
225 92083 Retail, Unanchored 2,520,000 2,518,764
226 14467 Lodging, Limited Service 2,503,000 2,500,839
227 98251 Mobile Home Park 2,500,000 2,500,000
228 53140 Industrial 2,500,000 2,483,072
229 43235 Lodging, Limited Service 2,475,000 2,472,863
230 12154 Retail, Anchored 2,440,000 2,439,124
231 7601 Industrial 2,440,000 2,437,803
232 80915 Lodging, Limited Service 2,400,000 2,400,000
233 3051 Industrial 2,400,000 2,397,703
234 37922 Lodging, Limited Service 2,396,000 2,393,956
235 30050 Credit Lease 2,399,340 2,391,354
236 77017 Retail, Unanchored 2,380,000 2,376,990
237 28779 Lodging, Limited Service 2,350,000 2,334,582
238 38635 Lodging, Limited Service 2,318,000 2,316,187
238 38635 Lodging, Limited Service 1,213,682
238 38635 Lodging, Limited Service 1,102,505
239 76021 Credit Lease 2,330,926 2,303,898
240 85215 Retail, Unanchored 2,300,000 2,298,740
241 70363 Credit Lease 2,308,632 2,290,248
242 92376 Multifamily 2,275,000 2,273,683
243 94520 Mobile Home Park 2,271,964 2,269,017
244 29928 Retail, Unanchored 2,250,000 2,250,000
245 30201 Mobile Home Park 2,250,000 2,241,423
246 30189 Credit Lease 2,235,903 2,232,279
247 48217 Credit Lease 2,242,105 2,226,480
248 44231 Credit Lease 2,226,058 2,204,870
249 48302 Credit Lease 2,204,187 2,198,478
250 32216 Lodging, Limited Service 2,200,000 2,196,770
251 29442 Retail, Anchored 2,200,000 2,195,723
252 21117 Office 2,200,000 2,187,977
253 39564 Lodging, Limited Service 2,200,000 2,181,233
254 75214 Multifamily 2,150,000 2,140,788
255 85283 Retail, Unanchored 2,125,000 2,115,958
256 25303 Lodging, Limited Service 2,100,000 2,098,187
257 1119 Retail, Anchored 2,100,000 2,097,999
258 93030 Mobile Home Park 2,100,000 2,096,812
259 44102 Credit Lease 2,039,609 2,026,436
260 36863 Lodging, Limited Service 2,025,000 2,018,641
261 13057 Lodging, Limited Service 2,017,000 2,015,259
262 20004 Office 2,000,000 2,000,000
263 84663 Mobile Home Park 2,000,000 1,997,464
264 10011 Office 2,000,000 1,989,083
265 33441 Multifamily 2,000,000 1,986,880
266 17363 Retail, Anchored 2,000,000 1,983,477
267 85635 Multifamily 2,050,000 1,976,125
268 28202 Office 1,925,000 1,918,982
269 90603 Multifamily 1,900,000 1,899,042
270 23455 Lodging, Limited Service 1,900,000 1,898,625
271 23462 Industrial 1,900,000 1,896,336
271 23462 Industrial 891,278
271 23462 Industrial 1,005,058
272 23462 Industrial 1,875,000 1,864,932
273 23320 Industrial 1,875,000 1,854,093
274 92805 Office 1,820,000 1,814,577
275 4210 Credit Lease 1,814,505 1,792,879
276 44707 Credit Lease 1,785,739 1,768,742
277 48084 Medical Office 1,760,000 1,758,032
278 14043 Retail, Single Tenant 1,750,000 1,750,000
279 48030 Credit Lease 1,757,897 1,745,647
280 2111 Retail, Unanchored 1,750,000 1,741,444
281 10017 Multifamily 1,725,000 1,723,404
282 93309 Self-Storage 1,720,000 1,716,650
283 79907 Mobile Home Park 1,720,000 1,716,431
284 29483 Retail, Anchored 1,700,000 1,694,537
285 14043 Retail, Single Tenant 1,650,000 1,650,000
286 30260 Credit Lease 1,613,698 1,592,986
287 90401 Retail, Unanchored 1,575,000 1,574,269
288 94518 Mobile Home Park 1,529,310 1,527,326
289 72032 Multifamily 1,520,000 1,520,000
290 10598 Medical Office 1,520,000 1,515,454
291 75116 Retail, Unanchored 1,500,000 1,500,000
292 43613 Multifamily 1,500,000 1,499,132
293 2115 Retail, Unanchored 1,500,000 1,496,975
294 84062 Self-Storage 1,500,000 1,496,899
295 66204 Self-Storage 1,500,000 1,496,683
296 88435 Lodging, Limited Service 1,440,000 1,435,822
297 23320 Industrial 1,410,000 1,407,317
298 92630 Office 1,400,000 1,395,703
299 14840& 14514 Retail, Single Tenant 1,400,000 1,388,001
299 14840 Retail, Single Tenant 805,041
299 14514 Retail, Single Tenant 582,961
300 92673 Office 1,368,750 1,364,211
301 92509 Retail, Unanchored 1,365,000 1,362,508
302 Various Mobile Home Park 1,350,000 1,349,263
302 13069 Mobile Home Park 1,019,443
302 14525 Mobile Home Park 329,820
303 22202 Multifamily 1,350,000 1,347,108
304 10303 Multifamily 1,300,000 1,298,750
305 12701 Credit Lease 1,334,000 1,292,665
306 91606 Multifamily 1,280,000 1,275,162
307 85009 Multifamily 1,250,000 1,246,111
308 33328 Mobile Home Park 1,200,000 1,197,312
309 14750 Retail, Single Tenant 1,200,000 1,193,336
310 14510 Credit Lease 1,216,000 1,179,598
311 91311 Retail, Unanchored 1,180,000 1,179,455
312 74145 Self-Storage 1,150,000 1,148,919
313 28751 Lodging, Limited Service 1,150,000 1,142,455
314 42104 Lodging, Limited Service 1,100,000 1,098,419
315 77061 Industrial 1,075,000 1,067,368
316 33305 Office/Retail 1,050,000 1,048,975
317 92408 Industrial 1,050,000 1,046,921
318 46224 Retail, Unanchored 1,050,000 1,044,845
319 33328 Mobile Home Park 1,000,000 997,731
320 Various Multifamily 1,000,000 997,168
320 10472 Multifamily 662,404
320 10457 Multifamily 334,763
321 2210 Office 1,000,000 997,039
322 92201 Mobile Home Park 960,000 958,180
323 1752 Multifamily 900,000 898,560
324 90731 Office 708,000 707,174
<PAGE>
<CAPTION>
Cut-off Date
Principal
Loan # Balance/Unit 1995 NOI 1996 NOI 1997 NOI
----- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C>
1 78 16,161,977 15,148,415 16,283,944
1 129 382,207 398,577 350,276
1 208 365,204 385,095 365,650
1 110 767,662 832,186 889,725
1 45 883,627 424,423 520,739
1 69 2,003,612 1,652,618 1,834,161
1 104 1,535,368 1,605,581 1,612,033
1 93 1,710,535 1,411,998 1,425,529
1 73 90,454 99,548 97,634
1 65 1,597,907 1,492,036 1,641,532
1 72 1,678,226 1,553,023 1,648,197
1 192 819,038 897,164 1,028,207
1 105 1,098,717 1,149,529 1,472,972
1 78 1,263,052 1,229,753 1,302,910
1 70 478,856 507,757 524,520
1 51 1,487,512 1,509,127 1,569,859
2 34 2,823,824 4,996,700 5,374,143
2 36 -- -- 629,904
2 27 -- -- --
2 45 -- -- 422,692
2 39 934,959 1,014,104 --
2 34 -- 452,823 --
2 49 -- 243,394 487,586
2 52 -- -- 191,295
2 50 -- -- --
2 34 -- -- --
2 29 -- 1,424,105 --
2 25 -- -- 417,394
2 37 -- -- 433,671
2 30 799,552 745,533 765,513
2 33 -- -- --
2 32 -- -- --
2 32 -- -- 629,339
2 32 702,332 724,506 650,944
2 33 -- -- --
2 36 -- -- 326,644
2 19 386,981 392,235 419,161
2 43 -- -- --
3 205,479 10,967,000 15,010,000 16,471,000
4 66 -- 9,497,425 10,027,785
4 73 -- 665,185 765,154
4 91 -- 2,417,477 2,483,401
4 74 -- 2,935,947 2,932,469
4 47 -- 1,213,277 1,398,586
4 52 -- 2,265,539 2,448,175
5 171,263 -- -- --
6 146 6,461,642 6,986,039 7,809,391
7 124 9,313,937 9,032,554 9,372,751
8 87 -- 18,928 3,149,494
9 144 5,055,339 4,674,954 5,076,174
10 123 -- -- 3,879,824
10 111 -- -- 3,879,824
10 219 -- -- --
11 130 -- -- --
12 48 -- 3,268,961 3,362,565
13 58,330 3,067,110 3,467,280 3,849,889
14 23,836 3,310,493 3,245,009 --
15 47 -- -- --
15 33 -- -- --
15 74 -- -- --
15 54 -- -- --
15 50 -- -- --
15 51 -- -- --
15 51 -- -- --
16 121 -- -- --
17 107 -- -- --
18 24,318 1,868,162 1,856,753 2,118,000
18 20,046 731,029 695,866 775,767
18 32,290 541,531 474,167 529,153
18 25,680 595,602 686,720 813,080
19 25,731 3,036,255 3,174,967 3,331,477
19 15,866 179,914 229,960 246,632
19 15,573 109,088 82,318 157,461
19 18,603 203,742 210,938 208,638
19 13,866 135,070 223,976 195,011
19 18,927 375,862 291,494 358,215
19 23,563 203,922 236,238 246,565
19 36,821 417,243 467,404 486,749
19 46,320 628,232 594,063 603,045
19 27,960 285,596 303,529 299,949
19 36,698 497,586 535,047 529,212
20 233 -- -- --
20 142 -- -- --
20 231 -- -- --
20 255 -- -- --
20 248 -- -- --
20 268 -- -- --
20 224 -- -- --
20 238 -- -- --
20 266 -- -- --
21 46,349 2,408,103 3,703,924 1,436,920
21 56,619 -- 1,261,914 --
21 32,859 834,957 757,111 --
21 49,019 1,573,146 1,684,899 1,436,920
22 116,132 -- 2,617,760 3,161,377
23 84,064 -- -- --
24 43,306 1,771,731 1,847,918 2,106,639
24 35,066 1,463,854 1,543,250 1,735,453
24 32,299 307,877 304,668 371,186
25 267 -- -- --
26 40,868 1,440,481 1,410,313 1,721,119
27 222 -- -- --
28 32,627 1,532,506 1,521,572 1,749,970
29 74 1,772,010 332,039 1,799,455
30 175 1,799,855 1,777,978 1,970,605
31 20,400 2,015,887 1,940,853 1,428,479
31 14,461 582,871 526,943 533,927
31 16,170 221,288 247,850 256,539
31 14,563 182,297 201,914 213,639
31 14,376 216,948 196,895 --
31 15,158 153,440 154,527 219,292
31 14,228 199,667 185,643 205,082
31 16,461 459,376 427,081 --
32 23 -- -- --
33 78 2,072,607 2,025,541 2,218,628
34 297 1,559,459 1,540,201 1,604,846
35 28,291 2,812,131 2,749,568 --
35 27,592 1,169,794 723,574 --
35 33,108 642,249 719,907 --
35 26,836 124,035 496,954 --
35 45,125 426,811 421,788 --
35 31,382 408,592 325,680 --
35 6,391 40,650 61,665 --
36 66 1,475,536 1,501,118 --
36 70
36 62
37 38,184 1,370,980 1,474,709 1,546,432
38 39,640 2,028,150 2,475,470 2,456,320
39 169 -- -- --
40 54,350 -- -- 2,559,000
41 34,863 1,601,653 1,625,595 1,635,479
42 182 -- -- --
43 33,018 1,209,519 1,251,162 1,358,040
44 202,987 1,904,147 3,016,586 3,077,393
45 17,734 1,441,537 1,571,825 1,478,733
46 313 -- -- --
47 39,906 1,637,895 1,563,909 --
48 91 -- -- 804,896
49 78 1,200,907 1,396,358 1,589,184
50 204 -- -- --
51 70 975,223 882,198 1,401,272
51 70 975,223 882,198 1,401,272
51 70 -- -- --
52 89 1,342,566 1,367,920 1,498,133
52 102 1,023,329 1,029,173 1,138,769
52 63 319,237 338,747 359,364
53 38,362 1,247,307 1,148,267 --
54 46 -- -- --
54 47 -- -- --
54 38 -- -- --
54 94 -- -- --
54 22 -- -- --
54 29 -- -- --
54 32 -- -- --
55 70 -- -- --
56 39,286
57 26,638 1,374,376 1,210,900 1,232,919
58 102 -- -- --
59 28,289 1,344,662 1,235,016 1,133,765
60 32,350 743,638 871,561 --
61 48,735 490,568 1,335,155 1,322,901
61 57,722 490,568 639,319 634,208
61 40,973 -- 695,836 688,693
62 283 1,297,967 1,218,711 1,272,718
63 74 1,071,167 1,115,092 1,162,316
64 52,437 1,021,122 1,137,258 1,391,320
64 41,969 371,006 438,021 518,083
64 61,914 650,116 699,237 873,237
65 22,119 998,687 624,074 --
66 17,796 1,457,179 1,312,289 --
67 26,090 -- 205,051 942,523
68 40,207 826,057 805,123 --
69 52,184 184,703 1,037,685 1,196,375
70 36,563 386,068 -- 1,452,043
70 41,806 -- -- 662,076
70 33,392 386,068 -- 294,114
70 33,766 -- -- 495,853
71 83 -- -- --
72 27,623 1,066,899 1,150,712 1,153,022
73 66,346 800,767 787,584 --
74 28,819 -- 867,074 880,455
74 25,727 -- 518,885 523,277
74 34,436 -- 348,189 357,178
75 66 1,007,096 1,030,398 --
76 65 -- -- --
77 183 -- -- --
78 29,704 742,304 921,919 998,288
79 86 1,049,387 1,029,368 1,034,964
80 49,953 981,899 1,261,358 1,414,950
81 71 -- -- --
82 107 855,800 843,867 --
83 34,980 213,587 204,290 284,524
83 37,579 -- -- --
83 28,184 16,501 13,279 41,864
83 37,747 -- -- --
83 42,679 -- -- --
83 29,335 -- -- --
83 33,492 -- -- --
83 40,766 -- -- --
83 36,908 -- -- --
83 36,908 -- -- --
83 36,237 -- -- --
83 30,868 45,428 45,130 50,176
83 30,197 106,984 107,393 97,959
83 34,895 -- -- 56,032
83 34,224 44,674 38,488 38,493
83 44,793 -- -- --
84 59 1,285,339 1,193,395 699,077
85 39,584 868,191 948,751 937,478
86 76 1,028,399 798,677 950,323
87 53,939 1,282,388 1,777,131 1,816,987
88 108,047 661,882 607,866 --
89 20,038 1,174,293 772,466 --
90 185 -- -- --
91 23,605 673,426 1,155,541 1,341,340
91 37,525 425,385 873,934 890,672
91 17,581 16,460 112,749 220,167
91 13,406 231,581 168,858 230,501
92 96 907,693 959,774 961,301
93 53,479
94 50,095 -- -- --
94 53,427 -- -- --
94 46,620 -- -- --
95 34,114 647,183 1,017,365 1,293,978
96 39,511 1,818,102 1,927,144 2,167,016
97 38,852 1,497,722 1,359,438 1,423,488
98 34,953 778,793 803,878 1,000,102
99 32,757 562,494 514,245 689,225
100 26,506 909,096 1,199,732 1,484,803
100 18,736
100 35,372
100 30,050
100 24,893
101 28,971 867,689 808,671 930,388
102 97 869,706 978,638 774,131
102 78
102 123
103 73 -- -- 770,251
104 55,984 899,292 1,397,066 1,241,895
105 161 -- -- --
106 52,850 858,004 1,082,145 --
107 101,991 969,138 1,183,502 1,191,775
108 62 -- 98,304 --
109 122 -- -- --
110 47,525 1,122,000 1,151,000 1,278,000
111 50,758 110,447 148,682 255,558
112 147 -- -- --
113 33 173,374 370,192 647,619
114 23,397 -- 562,652 --
115 73 1,052,413 987,331 --
116 47,088 707,018 743,411 773,782
117 113 -- -- --
118 36,864 -- 547,890 594,086
119 27,686 669,781 646,927 657,950
120 110 -- -- 267,950
120 110
120 110
121 73 656,967 572,996 679,557
122 42,040 492,277 484,069 523,338
123 49,020 -- -- 515,008
124 33 536,917 649,642 --
125 27,083 514,606 594,263 612,083
126 146 -- 9,520 140,620
127 72 516,597 487,224 530,528
128 62 583,063 498,732 --
129 29,643 401,462 403,805 472,321
130 22,165 318,221 388,608 538,651
131 16,212 1,091,112 962,154 1,175,950
131 15,415 519,396 386,385 457,230
131 17,042 571,716 575,769 718,720
132 55 -- -- 625,910
133 177 217,858 237,164 --
134 24,418 721,681 633,412 582,996
135 29,166 569,632 581,210 --
136 20 651,565 656,515 616,206
137 69 605,511 612,094 586,414
138 47 555,073 701,017 651,589
139 99 566,298 608,383 598,139
140 45,128 580,479 617,972 559,053
141 100 -- -- --
142 23 -- 565,878 582,132
143 119 -- 97,824 296,509
144 68,118 -- -24,703 683,031
145 57,638 -- 544,156 676,841
146 25,837 -- 552,454 637,699
147 53 541,246 547,394 636,422
148 38,720 300,855 430,318 473,918
149 20,180 1,422,000 1,344,000 1,286,000
150 99 -- -- --
151 101 -- -- --
152 196 -- -- --
153 26,644 1,107,000 1,067,000 1,027,000
154 34 286,608 461,683 473,887
155 77 777,827 820,941 603,405
156 45,642 512,547 640,344 604,681
157 19,194 526,604 552,975 462,749
158 51,475 426,461 422,452 428,309
159 21 1,225,037 1,031,264 1,138,097
160 88,454 -- -- --
161 109 -- -- --
162 33,790 502,451 550,731 594,753
163 43 502,061 502,115 501,528
164 35,632 998,593 1,169,787 1,308,230
165 153 -- -- --
166 25,677 -- -- 321,322
167 51,232 442,765 444,535 466,334
168 72 -- 650,116 --
169 67 -- 522,613 527,760
170 16,765 859,105 860,990 --
171 181 -- -- --
171 156 -- -- --
171 188 -- -- --
172 148 -- -- --
173 51 410,881 492,824 --
174 120 -- -- --
175 66 -- 57,105 144,900
176 146 -- -- --
177 134 -- -- --
178 141 -- -- --
179 142 -- -- --
180 172 -- -- --
181 80 -- -- --
182 88 376,734 474,665 503,434
183 159 -- -- 496,075
184 43 438,694 395,283 455,131
185 130 -- -- --
186 37 -- -- 433,812
187 70 -- -- --
188 66,850 382,148 411,621 426,124
188 56,036
188 89,830
189 25 468,859 440,584 420,437
190 150 -- -- --
191 100 661,292 705,455 680,429
192 30,215 210,396 599,575 745,818
193 130 -- -- --
194 77 320,130 331,191 --
195 26,168 310,080 357,363 351,231
196 122 -- -- --
197 42 423,266 458,897 509,474
197 72
197 51
197 48
197 50
197 --
198 131 -- -- --
199 39,736 631,507 712,698 644,626
200 295 -- -- --
201 23,507 279,404 359,204 352,910
202 29 388,896 395,992 --
203 145 457,028 427,667 --
204 166 418,253 445,867 462,268
205 26,283 275,100 213,846 275,477
206 16,911 -- 337,321 376,895
207 114 -- -- --
208 25 176,722 229,366 272,672
209 653,767 550,623 566,805
209 13,739
209 269
210 88 287,731 271,024 433,752
211 263 -- -- --
212 124 -- -- --
213 27,726 409,815 453,326 467,606
214 37 266,749 277,283 264,153
215 245 -- -- --
216 70 348,131 359,323 371,673
217 39,240 193,668 290,704 --
217 13,272 193,668 290,704 --
217 112,816 -- -- --
217 112,816 -- -- --
217 112,816 -- -- --
218 96 145,274 371,201 443,672
219 122 -- -- --
220 88 466,961 471,494 461,653
221 46 -- 165,888 --
221 46
221 46
222 80 -- -- --
223 58 -- -- --
224 144 348,501 306,454 326,228
225 105 294,383 343,662 321,210
226 25,261 444,679 399,414 459,483
227 23,585 238,459 245,315 279,929
228 8 -- -- --
229 24,729 333,894 397,979 426,867
230 67 -- -- 288,204
231 29 420,094 358,882 390,751
232 21,053 346,358 419,126 477,825
233 48 -- -- --
234 22,800 426,522 409,882 371,776
235 219 -- -- --
236 36 -- 275,432 259,162
237 32,881 502,282 498,307 --
238 26,320 -- 517,098 511,415
238 25,285 325,110 270,115
238 27,563 246,983
239 166 -- -- --
240 93 109,062 136,922 279,445
241 210 -- -- --
242 37,895 249,648 295,284 281,670
243 29,468 187,867 202,351 229,390
244 59 219,090 254,624 309,625
245 11,494 242,844 161,194 --
246 220 -- -- --
247 199 -- -- --
248 205 -- -- --
249 220 -- -- --
250 12,204 458,690 486,770 432,139
251 38 326,397 317,754 335,336
252 54 323,422 318,651 318,071
253 33,557 -- -- --
254 13,215 232,615 234,563 217,331
255 40 165,654 283,136 --
256 20,570 314,403 312,951 382,668
257 46 114,776 248,067 251,237
258 14,264 -- -- --
259 181 -- -- --
260 18,866 297,953 405,366 --
261 20,153 360,837 339,511 386,203
262 84 263,358 241,822 242,058
263 17,835 -- 5,197 155,262
264 40 244,144 237,726 247,498
265 24,836 239,999 237,902 --
266 54 373,532 350,586 --
267 15,438 318,131 260,575 266,521
268 81 217,737 250,160 283,833
269 52,751 -- -- --
270 18,256 379,405 315,687 340,533
271 47 285,252 292,039 307,947
271 45
271 49
272 76 234,320 234,511 233,494
273 30 253,667 267,057 277,616
274 59 136,482 173,204 --
275 160 -- -- --
276 165 -- -- --
277 142 130,841 183,664 --
278 26 226,445 212,372 229,292
279 156 -- -- --
280 62 -- -- --
281 25,344 248,770 253,524 293,118
282 17 270,274 268,293 252,864
283 11,676 171,553 228,130 --
284 36 308,194 292,929 305,934
285 24 225,727 225,630 215,926
286 141 -- -- --
287 184 -- 177,442 203,369
288 20,922 152,419 143,763 142,541
289 33,043 -- -- --
290 86 234,348 213,767 233,913
291 28 193,688 227,052 --
292 20,821 187,849 212,189 173,538
293 227 -- -- 34,383
294 18 185,268 231,130 --
295 36 95,394 213,450 249,284
296 31,907 -- 363,487 355,995
297 51 172,916 180,703 190,625
298 72 173,098 160,099 --
299 175 -- -- --
299 187
299 161
300 58 216,259 152,976 --
301 60 169,039 194,902 217,464
302 10,379 210,337 216,600 201,049
302 9,709 181,907 184,906 165,483
302 13,193 28,430 31,694 35,566
303 40,821 156,314 150,592 --
304 24,051 259,762 281,035 288,135
305 116 -- -- --
306 30,361 -- 130,032 --
307 17,307 118,754 143,990 140,689
308 15,156 160,126 191,645 200,104
309 209 -- -- --
310 104 -- -- --
311 154 136,717 157,905 165,205
312 18 144,487 160,654 163,511
313 11,201 -- 258,222 --
314 14,082 503,484 438,578 359,697
315 21 179,400 179,650 179,400
316 38 -- 175,634 172,191
317 26 -- 180,231 171,411
318 37 -- 156,041 205,554
319 13,128 152,991 162,766 138,065
320 19,552 -- -- --
320 22,842 -- -- --
320 15,217 -- -- --
321 25 -161,962 27,815 101,815
322 11,544 132,730 139,014 148,560
323 23,646 -- 195,472 192,921
324 49 -- 71,191 86,493
<PAGE>
Loan # 1997 Period U/W NOI 1995 Rev 1996 Rev 1997 Rev
------ ----------- ------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
1 15,387,404 20,277,093 19,352,589 20,761,986
1 12/31/97 442,636 454,726 477,505 465,368
1 12/31/97 391,204 468,399 481,500 501,064
1 12/31/97 342,537 938,559 1,005,846 1,103,532
1 12/31/97 831,224 1,085,497 645,988 752,113
1 12/31/97 1,721,288 2,542,558 2,290,255 2,374,840
1 12/31/97 1,624,180 1,862,378 1,949,591 1,944,514
1 12/31/97 1,401,455 2,046,816 1,741,625 1,776,526
1 12/31/97 93,718 106,486 115,915 113,995
1 12/31/97 1,253,311 2,136,105 2,113,847 2,280,712
1 12/31/97 1,733,048 2,189,102 1,960,768 2,244,902
1 12/31/97 932,260 935,566 1,055,531 1,158,254
1 12/31/97 1,231,860 1,370,354 1,442,262 1,787,786
1 12/31/97 1,204,826 1,560,935 1,523,782 1,645,329
1 12/31/97 534,570 641,923 654,437 668,369
1 12/31/97 1,649,287 1,937,689 1,893,737 1,944,682
2 16,911,851 3,692,281 6,547,627 6,673,542
2 12/31/97 603,843 791,012
2 1,395,348
2 12/31/97 471,096 473,128
2 1,080,884 1,199,291 1,385,536
2 505,642 640,937
2 12/31/97 838,810 328,224 627,232
2 12/31/97 877,918 224,464
2 789,918
2 1,194,520
2 1,479,821 1,688,728
2 12/31/97 546,641 601,999
2 12/31/97 393,956 529,957
2 12/31/97 1,001,400 1,067,272 1,027,959 854,029
2 1,736,755
2 566,574
2 12/31/97 390,262 773,757
2 12/31/97 603,710 916,971 945,828 882,627
2 1,218,512
2 12/31/97 557,797 374,434
2 12/31/97 336,067 508,747 530,415 540,903
2 322,377
3 12/31/97 14,639,000 32,711,000 38,147,000 42,425,000
4 9,629,006 17,058,321 17,647,245
4 12/31/97 671,393 1,070,065 1,192,489
4 12/31/97 2,353,501 4,508,254 4,560,190
4 12/31/97 2,909,661 4,245,994 4,235,329
4 12/31/97 1,349,906 3,424,219 3,652,180
4 12/31/97 2,344,545 3,809,789 4,007,057
5 8,609,350
6 12/31/97 7,546,804 8,537,679 9,155,354 10,137,472
7 12/31/97 8,819,606 16,919,509 17,010,520 17,086,918
8 12/31/97 5,276,245 296,959 5,031,510
9 12/31/97 5,221,633 10,250,243 10,019,994 10,667,072
10 4,716,751 4,134,481
10 12/31/97 3,588,283 4,134,481
10 1,128,468
11
12 12/31/97 3,320,164 4,688,352 4,840,207 4,972,058
13 12/31/97 3,732,225 8,777,829 9,720,460 10,696,648
14 3,419,542 8,782,283 8,810,412
15 2,915,691
15 717,520
15 610,893
15 188,817
15 503,258
15 452,792
15 442,411
16
17
18 2,243,955 4,456,514 4,585,537 4,929,488
18 12/31/97 857,520 1,888,613 1,856,141 1,986,342
18 12/31/97 568,852 1,052,874 1,065,245 1,110,210
18 12/31/97 817,583 1,515,027 1,664,151 1,832,936
19 2,933,228 7,818,693 8,270,255 8,644,770
19 12/31/97 223,823 574,256 638,343 661,778
19 12/31/97 102,527 515,011 467,439 501,792
19 12/31/97 201,824 576,911 627,891 656,329
19 12/31/97 143,124 407,731 537,066 496,562
19 12/31/97 304,940 1,023,735 985,023 1,109,544
19 12/31/97 207,148 574,553 649,795 705,953
19 12/31/97 427,491 1,010,293 1,069,680 1,108,392
19 12/31/97 611,785 1,319,186 1,293,650 1,274,521
19 12/31/97 261,568 739,569 770,140 812,187
19 12/31/97 448,998 1,077,448 1,231,228 1,317,712
20
20
20
20
20
20
20
20
20
21 2,941,695 5,750,407 9,191,706 9,142,999
21 12/31/97 1,048,503 2,956,730 3,124,167
21 12/31/97 684,664 2,260,516 2,331,109 2,392,857
21 12/31/97 1,208,528 3,489,891 3,903,867 3,625,975
22 3,207,084 5,629,424 6,658,703
23 2,412,790 7,653,289 7,557,143 7,952,109
24 2,024,201 2,996,497 3,044,622 3,324,266
24 12/31/97 1,585,337 2,408,044 2,464,888 2,657,709
24 12/31/97 438,864 588,453 579,734 666,557
25
26 12/31/97 1,739,155 2,900,692 2,944,383 3,264,090
27
28 12/31/97 1,746,510 3,317,724 3,330,157 3,488,582
29 12/31/97 2,073,463 3,039,403 3,302,594 3,451,323
30 12/31/97 1,929,064 3,057,310 3,081,584 3,245,343
31 2,017,804 4,459,726 4,507,023 2,937,531
31 12/31/97 530,453 1,061,847 1,030,068 1,049,257
31 12/31/97 248,778 399,551 431,500 446,725
31 12/31/97 208,998 345,655 368,012 382,473
31 252,530 492,728 507,085
31 12/31/97 225,094 574,430 607,988 644,575
31 12/31/97 205,082 379,942 378,828 414,501
31 346,869 1,205,573 1,183,542
32
33 12/31/97 2,025,085 2,902,037 2,900,442 3,204,253
34 12/31/97 1,657,263 2,237,545 2,506,961 2,612,168
35 2,911,258 13,780,143 14,221,912
35 12/31/97 869,013 3,842,766 4,080,589 4,404,129
35 12/31/97 766,556 3,379,731 3,571,810 3,465,919
35 12/31/97 549,443 2,474,654 2,495,389 2,566,964
35 12/31/97 353,535 1,908,628 1,873,298 1,926,724
35 12/31/97 317,165 1,841,463 1,816,291 1,886,529
35 12/31/97 55,546 332,901 384,535 352,254
36 1,422,324 1,543,483 1,543,483
36
36
37 12/31/97 1,634,533 2,399,912 2,573,083 2,673,238
38 12/31/97 2,209,188 8,120,364 8,791,400 8,924,423
39
40 12/31/97 2,132,878 7,281,000
41 12/31/97 1,776,496 2,355,480 2,475,835 2,409,742
42
43 12/31/97 1,421,573 2,667,790 2,663,209 2,886,478
44 12/31/97 2,467,460 5,556,823 6,829,904 7,232,610
45 12/31/97 1,545,751 3,291,827 3,480,841 3,484,652
46
47 3,115,190 3,488,562 3,466,852
48 12/31/97 1,641,715 1,114,054
49 12/31/97 1,470,740 2,727,129 2,762,330 2,824,908
50
51 1,579,376 2,150,167 1,641,727 3,027,358
51 12/31/97 1,579,376 2,150,167 1,641,727 3,027,358
51
52 1,534,577 1,738,275 1,812,563 1,949,861
52 12/31/97 1,130,154 1,329,879 1,365,312 1,473,519
52 12/31/97 404,423 408,396 447,251 476,342
53 2,665,376 3,442,648 3,677,233
54
54
54
54
54
54
54
55 1,488,475
56 2,899,480 527,295 347,840 359,719
57 12/31/97 1,431,478 2,102,768 2,049,961 2,139,983
58
59 3/31/97 2,094,528 2,810,739 2,746,142 2,664,178
60 1,841,373 2,740,434 2,878,083
61 1,458,560 1,508,383 3,476,810 3,648,441
61 12/31/97 664,193 1,508,383 1,717,696 1,803,231
61 12/31/97 794,417 1,759,114 1,845,210
62 12/31/97 1,333,478 1,671,330 1,697,240 1,760,593
63 12/31/97 1,108,979 1,528,981 1,579,601 1,709,376
64 1,661,499 2,606,498 2,953,492 3,404,908
64 12/31/97 663,031 1,038,544 1,220,111 1,304,065
64 12/31/97 998,468 1,567,954 1,733,381 2,100,843
65 1,408,346 2,892,861 2,622,718
66 2,321,554 3,180,538 3,234,570
67 12/31/97 1,342,989 1,452,341 2,182,118
68 1,648,258 1,854,919 1,894,118
69 12/31/97 1,531,446 3,958,022 4,924,563 5,308,417
70 1,437,194 950,694 3,358,556
70 12/31/97 500,240 1,336,761
70 12/31/97 317,727 950,694 988,578
70 12/31/97 619,227 1,033,217
71 1,022,826
72 12/31/97 1,179,090 1,763,476 1,883,561 1,818,679
73 1,749,349 1,585,559 1,603,790
74 896,552 1,499,403 1,542,411
74 12/31/97 520,617 892,116 918,836
74 12/31/97 375,935 607,287 623,575
75 12/31/97 1,038,429 1,398,773 1,457,997
76 1,171,857
77
78 12/31/97 1,053,883 1,410,337 1,785,870 1,864,633
79 12/31/97 1,031,504 1,055,580 1,040,580 1,057,079
80 12/31/97 1,348,808 2,487,652 2,911,846 3,260,381
81
82 978,625 1,220,037 1,196,930
83 948,692 410,128 417,759 509,470
83 55,267
83 12/31/97 36,460 43,170 45,870 63,300
83 72,236
83 52,340
83 50,451
83 91,547
83 119,949
83 105,226
83 52,291
83 51,924
83 12/31/97 45,345 69,266 70,690 77,780
83 12/31/97 108,579 234,229 243,989 241,450
83 12/31/97 31,098 67,884
83 12/31/97 31,462 63,463 57,210 59,056
83 44,517
84 12/31/97 1,318,146 1,688,848 1,628,235 1,037,364
85 12/31/97 937,470 1,501,519 1,604,599 1,623,228
86 12/31/97 1,016,646 1,250,873 1,192,010 1,243,788
87 12/31/97 1,426,078 4,246,033 4,876,984 5,208,855
88 1,793,528 1,733,906 1,735,179
89 1,723,106 2,514,079 2,200,319
90
91 1,337,803 2,453,500 3,734,507 3,952,050
91 12/31/97 890,672 1,321,367 2,076,708 2,106,477
91 12/31/97 225,755 264,581 780,171 920,221
91 12/31/97 221,376 867,552 877,628 925,352
92 12/31/97 897,275 1,124,469 1,188,821 1,184,961
93 2,119,074 49,768 74,656 76,874
94 920,605
94 492,615
94 427,990
95 12/31/97 1,242,350 5,800,648 6,269,331 7,225,548
96 1,884,906 4,533,339 4,710,772 5,099,806
97 12/31/97 1,180,288 7,716,382 7,678,984 7,849,950
98 12/31/97 757,487 1,263,148 1,211,852 1,398,914
99 12/31/97 739,126 1,273,550 1,301,216 1,457,195
100 1,373,037 2,104,144 2,501,839 2,904,391
100
100
100
100
101 12/31/97 999,406 1,427,577 1,472,388 1,633,397
102 1,027,711 1,349,855 1,413,868 1,207,488
102
102
103 774,599 1,021,710
104 1,251,797 1,638,030 2,352,958 2,537,264
105
106 960,848 4,262,499 4,467,219
107 1,093,465 1,566,779 1,778,518 1,852,751
108 1,057,113 285,062
109
110 12/31/97 1,322,095 6,447,000 6,674,000 7,283,000
111 12/31/97 1,001,004 780,046 1,153,864 1,570,815
112
113 12/31/97 866,797 1,971,384 2,486,823 2,711,641
114 665,819 1,507,306
115 830,990 1,052,413 1,308,643
116 12/31/97 787,119 2,674,790 2,763,883 2,984,803
117
118 12/31/97 592,798 864,292 923,426
119 12/31/97 605,064 1,307,021 1,285,258 1,314,353
120 649,824 428,963
120
120
121 12/31/97 1,207,719 2,771,388 2,556,594 2,703,711
122 509,185 648,654 662,055 690,637
123 12/31/97 818,945 1,260,608
124 800,568 631,764 738,187
125 656,802 1,205,896 1,305,037 1,296,714
126 12/31/97 552,760 37,262 305,562
127 12/31/97 660,281 661,585 657,242 689,986
128 665,654 1,002,065 963,677
129 12/31/97 491,043 905,077 833,689 925,628
130 12/31/97 593,314 972,168 1,071,628 1,188,918
131 978,209 2,590,437 2,515,307 2,536,246
131 12/31/97 429,777 1,191,780 1,143,807 1,192,043
131 12/31/97 548,432 1,398,657 1,371,500 1,344,203
132 12/31/97 769,177 1,210,388
133 605,750 300,000 342,780
134 12/31/97 729,726 2,619,846 2,222,615 2,152,555
135 658,862 946,270 960,247
136 12/31/97 662,183 729,000 734,250 731,916
137 12/31/97 584,494 880,126 927,020 882,829
138 647,484 989,294 1,146,953 1,107,755
139 544,726 921,160 965,999 922,295
140 12/31/97 596,475 905,959 889,239 834,211
141
142 12/31/97 534,835 673,101 696,957
143 12/31/97 526,033 216,727 510,494
144 12/31/97 622,996 212,949 1,870,156
145 12/31/97 653,837 1,626,315 1,854,098
146 12/31/97 505,635 866,087 928,757
147 580,368 702,130 702,130 764,726
148 12/31/97 490,424 760,678 814,542 881,056
149 11/30/97 926,265 4,574,000 4,573,000 4,408,000
150
151
152
153 1,015,400 3,577,000 3,405,000 3,358,000
154 12/31/97 573,097 400,664 590,192 626,195
155 12/31/97 585,845 1,113,064 1,167,973 904,121
156 548,839 724,904 818,874 820,738
157 12/31/97 547,702 1,034,727 1,076,239 1,065,289
158 12/31/97 470,801 739,628 778,501 770,646
159 1,034,314 1,870,142 1,917,852 1,964,358
160 472,048
161
162 12/31/97 615,368 1,098,810 1,140,818 1,431,053
163 12/31/97 476,919 507,399 507,399 507,399
164 1,016,879 2,149,060 2,420,418 2,659,341
165
166 12/31/97 417,781 572,028
167 12/31/97 511,695 789,090 816,997 825,093
168 656,543 652,896
169 12/31/97 542,694 790,677 795,113
170 921,415 1,977,608 1,989,587
171
171
171
172
173 584,978 573,265 658,352
174 703,136 2,190,753 2,227,283 2,180,105
175 487,988 252,457 389,199
176
177
178
179
180
181
182 12/31/97 438,768 512,467 589,028 626,605
183 12/31/97 470,808 728,959
184 12/31/97 517,771 666,074 646,113 722,554
185
186 12/20/97 535,521 675,304
187
188 404,987 540,690 575,766 583,636
188
188
189 12/31/97 528,955 714,201 678,517 659,210
190 442,864
191 12/31/97 585,946 1,811,081 1,892,055 1,891,972
192 12/31/97 774,946 514,607 1,381,611 1,733,016
193
194 395,590 553,948 524,706
195 12/31/97 363,499 792,341 817,756 818,058
196
197 419,675 671,599 743,557 768,365
197
197
197
197
197
198
199 625,649 1,237,185 1,308,147 1,348,216
200
201 398,042 432,359 520,334 540,913
202 439,583 585,368 592,839
203 412,498 493,477 470,732
204 12/31/97 406,213 498,977 524,713 513,246
205 12/31/97 341,320 496,897 451,782 547,276
206 410,934 528,787 550,910
207
208 12/31/97 424,406 311,674 373,615 439,972
209 779,062 2,019,611 1,899,008 1,899,377
209
209
210 12/31/97 380,235 403,191 459,375 587,992
211
212
213 12/31/97 435,266 1,024,896 1,058,642 1,066,535
214 12/31/97 326,794 318,123 379,845 418,129
215
216 328,124 539,216 554,807 579,075
217 453,252 1,046,583 1,329,961
217 453,252 1,046,583 1,329,961
217
217
217
218 12/31/97 391,521 311,056 530,134 597,385
219
220 439,320 622,778 622,355 626,733
221 408,321 478,789
221
221
222
223 350,636 350,026
224 12/31/97 305,068 451,606 410,567 402,969
225 12/31/97 308,886 406,017 429,897 415,166
226 12/31/97 386,013 1,105,500 1,074,147 1,149,272
227 278,329 323,119 340,256 380,036
228 608,190
229 12/31/97 398,675 923,373 968,234 994,534
230 12/31/97 320,716 419,451
231 12/31/97 291,664 559,910 516,496 552,330
232 493,340 778,075 911,925 1,044,978
233 326,448
234 12/31/97 353,719 1,053,820 1,077,730 1,017,461
235
236 12/31/97 344,869 447,812 416,236
237 477,526 1,051,705 1,098,989
238 462,329 660,280 1,091,614 1,118,897
238 199,663 660,280 581,094 525,839
238 262,666 -- 510,520 593,058
239
240 12/31/97 289,786 253,777 279,815 430,766
241
242 12/31/97 296,332 396,200 435,125 441,143
243 12/31/97 233,077 370,246 372,722 390,053
244 324,702 353,306 390,459 437,097
245 286,170 414,752 461,660
246
247
248
249
250 12/31/97 370,689 1,482,937 1,381,128 1,273,091
251 330,075 445,877 463,878 487,898
252 325,069 538,036 529,875 545,215
253
254 335,532 581,440 696,544 732,674
255 315,677 327,175 434,132
256 12/31/97 375,513 866,054 916,068 1,000,868
257 12/31/97 286,426 377,736 404,412 422,164
258 278,833
259
260 409,214 707,542 743,402
261 12/31/97 335,395 925,649 948,557 987,703
262 270,740 526,999 503,556 471,876
263 12/31/97 242,435 14,119 190,863
264 12/31/97 475,231 527,870 526,562 533,253
265 295,015 444,215 457,744
266 308,712 431,212 412,015
267 12/31/97 269,566 574,099 569,932 580,437
268 255,521 321,505 361,900 386,129
269 1/1/01 204,909
270 12/31/97 302,615 832,751 810,740 803,583
271 282,352 335,291 359,952 371,298
271
271
272 244,086 263,152 265,512 263,471
273 269,263 310,246 312,210 334,239
274 237,292 332,287 369,790
275
276
277 225,385 282,016 296,901
278 215,796 245,000 245,000 245,000
279
280 328,519
281 12/31/97 261,851 508,163 536,605 540,645
282 12/31/97 277,947 387,589 393,973 379,677
283 212,402 271,609 381,388
284 273,568 361,342 348,243 363,278
285 208,787 238,000 238,000 238,000
286
287 12/31/97 218,163 201,216 226,986
288 12/31/97 156,858 296,141 275,803 282,498
289 203,839
290 11/30/97 217,133 424,858 423,817 440,097
291 286,426 255,653 289,034
292 12/31/97 209,555 327,108 350,614 324,524
293 12/31/97 177,631 53,333
294 255,875 247,119 301,669
295 12/31/97 252,092 207,337 336,139 389,801
296 339,529 685,981 673,103
297 187,752 212,699 231,897 234,354
298 189,527 297,849 270,492
299 144,761
299
299
300 203,548 358,699 289,871
301 12/31/97 204,360 227,398 269,822 264,460
302 194,244 296,242 301,602 290,731
302 12/31/97 162,689 253,042 254,102 237,931
302 12/31/97 31,555 43,200 47,500 52,800
303 161,334 256,610 251,885
304 202,078 355,700 365,455 372,555
305
306 189,501 228,525
307 182,723 326,194 360,028 362,895
308 12/26/97 210,435 269,491 282,076 297,069
309 125,178
310
311 12/31/97 155,661 176,073 184,847 185,575
312 12/31/97 152,497 262,056 289,779 274,634
313 305,534 555,300
314 360,223 821,714 918,339 853,061
315 168,945 202,894 202,898 202,026
316 154,224 302,484 322,549
317 12/31/97 162,608 221,273 208,581
318 176,449 232,414 267,632
319 12/31/97 165,614 249,073 278,061 266,089
320 177,856
320 126,781
320 51,075
321 259,470 26,286 278,314 367,298
322 12/31/97 130,258 268,161 281,537 272,155
323 142,565 284,833 295,918
324 12/31/97 99,541 124,428 143,782
<PAGE>
<CAPTION>
Loan # U/W Rev U/W Net Cash Flow DSCR Annual Debt Service Mortgage Rate Interest Calc.
------ ------- ---------------- ---- ------------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1 20,160,724 14,166,951 1.44 9,828,299 7.6308 Actual/360
1 542,429 416,675
1 535,457 374,421
1 555,282 314,306
1 1,084,016 779,796
1 2,330,707 1,527,731
1 1,986,227 1,528,673
1 1,776,272 1,301,161
1 111,249 81,388
1 1,897,077 1,128,919
1 2,370,596 1,566,031
1 1,105,691 895,656
1 1,569,798 1,135,459
1 1,553,881 1,118,403
1 690,001 476,734
1 2,052,041 1,521,598
2 21,440,651 14,754,671 2.59 5,697,775 6.775 30/360
2 761,954 496,632
2 1,658,704 1,252,158
2 575,632 449,380
2 1,419,863 851,603
2 738,927 434,147
2 1,058,144 796,513
2 976,694 837,027
2 974,730 736,262
2 1,464,652 986,181
2 1,842,100 1,370,530
2 717,138 474,895
2 511,730 352,895
2 1,291,666 773,397
2 2,328,020 1,434,419
2 699,344 478,243
2 520,022 296,394
2 838,587 493,600
2 1,502,469 1,149,739
2 695,886 527,364
2 452,242 255,135
2 412,147 308,157
3 39,133,000 12,683,000 1.63 7,801,936 8.87 Actual/360
4 17,857,887 7,598,087 1.21 6,297,433 7.25 Actual/360
4 1,132,557 552,045
4 4,462,593 2,027,489
4 4,242,230 2,384,613
4 3,786,760 809,659
4 4,233,747 1,824,281
5 11,013,350 8,500,600 1.23 6,921,938 6.573 30/360
6 9,813,134 7,392,501 1.47 5,040,120 7.18 Actual/360
7 16,596,600 7,753,231 1.25 6,216,554 7.59 Actual/360
8 7,432,911 5,098,187 1.27 4,768,506 8.34 Actual/360
9 10,954,461 4,584,305 1.21 3,777,900 7.8 Actual/360
10 5,541,518 4,288,123 1.44 2,979,025 7.22 Actual/360
10 3,985,270 3,260,405
10 1,556,248 1,027,718
11 2,682,539 8.9427 30/360
12 5,016,438 2,936,255 1.26 2,336,855 7.63 Actual/360
13 10,696,648 3,197,393 1.47 2,177,967 8.26 Actual/360
14 8,921,271 3,169,332 1.65 1,922,631 6.84 Actual/360
15 3,100,198 2,596,940 1.37 1,897,756 7.61 Actual/360
15 739,711 647,408
15 629,787 548,115
15 194,657 162,419
15 518,823 436,330
15 466,796 407,985
15 550,424 394,683
16 1,979,927 8.2276 30/360
17 1,931,040 8.2276 30/360
18 4,967,234 2,037,205 1.21 1,683,402 7.47 Actual/360
18 2,025,873 765,770
18 1,122,273 528,352
18 1,819,088 743,083
19 8,164,931 2,482,197 1.35 1,837,119 8.08 Actual/360
19 640,444 183,915
19 467,209 79,167
19 626,582 169,770
19 484,146 107,567
19 983,154 250,094
19 644,358 157,794
19 1,021,240 376,429
19 1,357,124 543,929
19 766,958 223,220
19 1,173,716 390,312
20 1,855,964 8.7829 Actual/360
20
20
20
20
20
20
20
20
21 8,570,634 2,621,726 1.63 1,608,887 7.59 Actual/360
21 3,054,776 1,035,054
21 2,356,094 616,386
21 3,159,764 970,286
22 6,851,378 2,245,438 1.38 1,626,679 7.78 Actual/360
23 7,620,829 2,031,749 1.33 1,528,443 7.59 Actual/360
24 3,383,976 1,915,003 1.4 1,366,821 7.07 Actual/360
24 2,620,553 1,507,837
24 763,423 407,166
25 1,574,925 7.54 30/360
26 3,292,923 1,635,655 1.19 1,378,581 7.47 Actual/360
27 1,529,275 7.54 30/360
28 3,422,814 1,621,510 1.19 1,365,516 7.47 Actual/360
29 3,436,111 2,009,247 1.48 1,316,940 7.18 Actual/360
30 3,245,573 1,760,754 1.29 1,368,603 7.57 Actual/360
31 4,640,882 1,748,804 1.32 1,330,027 7.28 Actual/360
31 1,049,256 462,453
31 443,208 218,778
31 381,730 182,998
31 557,266 221,030
31 645,842 193,344
31 414,501 178,582
31 1,149,079 291,619
32 1,499,114 8.84 30/360
33 3,015,989 1,956,679 1.49 1,308,816 7.18 Actual/360
34 2,514,109 1,618,454 1.18 1,368,814 7.83 Actual/360
35 14,692,166 2,042,534 1.43 1,427,840 7.87 Actual/360
35 4,401,773 592,729
35 3,513,635 545,768
35 2,560,973 388,581
35 1,938,109 256,629
35 1,925,912 220,869
35 351,764 37,958
36 1,466,314 1,422,324 1.03 1,379,625 7.56 Actual/360
36 Actual/360
36 Actual/360
37 2,771,899 1,544,281 1.37 1,130,537 6.99 Actual/360
38 8,680,734 2,009,188 1.57 1,282,463 7.79 Actual/360
39 1,283,966 8.5596 30/360
40 6,809,706 1,792,393 1.48 1,213,476 7.57 Actual/360
41 2,610,570 1,681,337 1.54 1,094,159 7.15 Actual/360
42 1,255,375 7.54 30/360
43 2,893,831 1,321,573 1.2 1,105,489 7.47 Actual/360
44 6,476,044 2,143,658 1.88 1,138,089 7.53 Actual/360
45 3,444,660 1,366,251 1.29 1,056,212 7.37 Actual/360
46 1,202,621 8.2232 Actual/360
47 5,261,770 3,037,190 2.97 1,022,247 7.24 30/360
48 2,022,494 1,510,215 1.22 1,234,455 7.89 Actual/360
49 2,732,808 1,254,113 1.21 1,036,359 7.46 Actual/360
50 1,002,495 8.2377 Actual/360
51 2,095,995 1,542,456 1.34 1,147,978 8.84 Actual/360
51 2,095,995 1,542,456
51
52 2,022,742 1,320,173 1.38 953,205 7.42 Actual/360
52 1,477,910 915,750
52 544,832 404,423
53 5,251,389 2,590,876 2.46 1,053,409 6.8 30/360
54 1,218,274 8.4914 30/360
54
54
54
54
54
54
55 1,532,056 1,319,567 1.39 947,744 7.48 Actual/360
56 5,436,380 2,813,461 2.79 1,006,036 6.78 Actual/360
57 2,361,644 1,331,478 1.42 937,740 7.99 Actual/360
58 1 1,011,543 8.2276 30/360
59 3,735,422 2,004,528 2.04 981,403 7.31 30/360
60 4,154,846 1,764,123 2.36 947,461 7.02 30/360
61 4,186,016 1,365,692 1.54 886,009 7.49 Actual/360
61 1,805,775 788,987
61 2,380,241 576,705
62 1,836,231 1,225,588 1.38 885,229 7.48 Actual/360
63 1,667,300 1,073,310 1.48 788,544 7.18 Actual/360
64 4,027,072 1,460,145 1.73 841,709 7.49 Actual/360
64 1,642,252 580,918
64 2,384,820 879,227
65 3,468,783 1,302,346 1.58 825,393 7.86 Actual/360
66 4,376,502 2,188,554 2.62 834,109 7.97 30/360
67 2,425,844 1,234,989 1.58 779,751 7.33 Actual/360
68 2,696,605 1,590,008 2.14 741,393 6.88 30/360
69 5,459,951 1,263,417 1.51 837,296 7.86 Actual/360
70 3,311,824 1,271,602 1.5 849,187 8.12 Actual/360
70 1,016,030 449,438
70 991,671 268,143
70 1,304,123 554,021
71 1,350,881 957,680 1.14 841,872 7.07 Actual/360
72 1,863,416 1,088,038 1.51 721,334 7.15 Actual/360
73 2,758,788 1,715,849 2.49 689,800 7.1 30/360
74 1,560,483 880,174 1.15 764,458 7.79 Actual/360
74 905,919 509,689
74 654,564 370,485
75 1,443,929 942,581 1.26 750,702 7.67 Actual/360
76 1,210,006 1,012,323 1.39 726,372 7.48 Actual/360
77 800,000 7.6609 30/360
78 1,913,913 981,883 1.43 688,235 7.07 Actual/360
79 1,077,345 878,054 1.23 713,897 7.51 Actual/360
80 3,163,161 1,190,650 1.58 753,108 7.49 Actual/360
81 782,513 8.8601 30/360
82 1,420,307 886,538 1.25 708,954 7.56 Actual/360
83 1,565,739 866,233 1.23 704,831 7.63 Actual/360
83 84,132 50,853
83 65,983 31,837
83 114,741 66,387
83 82,479 48,952
83 78,546 46,034
83 144,552 83,235
83 177,327 111,463
83 159,486 96,285
83 81,453 48,375
83 81,510 47,510
83 75,981 41,313
83 240,511 95,117
83 54,515 27,524
83 55,268 29,298
83 69,255 42,050
84 1,736,172 1,214,444 1.86 651,205 6.99 Actual/360
85 1,634,180 882,258 1.35 652,910 7.12 Actual/360
86 1,341,985 939,246 1.37 683,780 7.69 Actual/360
87 4,389,628 1,206,597 1.72 701,334 7.37 Actual/360
88 3,085,311 1,775,278 2.77 640,926 7.16 30/360
89 3,002,993 1,627,606 2.75 591,734 7.26 30/360
90 710,000 7.6457 30/360
91 3,952,050 1,140,200 1.65 691,799 7.86 Actual/360
91 2,106,477 785,348
91 920,221 179,744
91 925,352 175,108
92 1,150,499 803,590 1.21 664,731 8.14 Actual/360
93 3,156,366 2,084,824 3.08 677,585 6.97 Actual/360
94 2,157,453 812,733 1.21 669,714 8.05 Actual/360
94 1,162,386 434,496
94 995,067 378,237
95 7,139,527 885,374 1.39 638,514 7.66 Actual/360
96 4,671,096 1,174,149 1.9 616,933 7.43 Actual/360
97 7,846,217 1,135,288 1.85 614,210 7.38 Actual/360
98 1,270,580 707,487 1.23 577,022 7.32 Actual/360
99 1,498,075 683,896 1.18 578,541 7.47 Actual/360
100 2,847,907 998,086 1.5 666,890 8.59 Actual/360
100
100
100
100
101 1,715,219 935,776 1.53 612,030 8.17 Actual/360
102 1,507,650 919,973 1.42 648,908 7.33 Actual/360
102
102
103 1,050,009 682,314 1.25 543,786 7.47 Actual/360
104 2,394,128 870,024 1.49 584,045 7.65 Actual/360
105 607,855 8.0941 Actual/360
106 3,842,563 768,720 1.3 589,258 8.38 Actual/360
107 1,849,072 807,535 1.47 550,350 7.65 Actual/360
108 1,460,310 805,181 1.58 508,141 7.37 Actual/360
109 567,434 8.1645 30/360
110 7,283,000 957,945 1.4 686,250 7.68 Actual/360
111 1,751,556 971,504 1.69 573,470 8.37 Actual/360
112 494,000 7.3989 Actual/360
113 2,920,769 631,392 1.37 459,810 7.86 Actual/360
114 1,571,029 603,819 1.23 490,978 7.55 Actual/360
115 1,201,836 757,461 1.52 497,181 7.72 Actual/360
116 2,984,803 637,879 1.24 513,950 7.59 Actual/360
117 525,210 8.1684 30/360
118 905,152 585,148 1.24 471,536 7.45 Actual/360
119 1,312,292 548,894 1.19 461,160 7.31 Actual/360
120 906,635 593,391 1.33 447,554 7.19 Actual/360
120
120
121 2,832,762 958,725 1.82 525,721 8.08 Actual/360
122 686,383 499,525 1.14 436,888 7.32 Actual/360
123 2,010,876 718,401 1.54 465,155 7.49 Actual/360
124 933,843 608,255 1.32 462,291 7.42 Actual/360
125 1,365,626 608,802 1.44 423,564 7.2 Actual/360
126 741,953 524,073 1.22 428,340 7.51 Actual/360
127 825,315 558,424 1.34 415,709 7.47 Actual/360
128 1,119,052 513,430 1.24 415,428 7.4 Actual/360
129 932,834 482,063 1.16 413,875 7.45 Actual/360
130 1,210,401 535,945 1.23 436,982 8.1 Actual/360
131 2,536,246 851,397 1.85 460,470 8.17 Actual/360
131 1,192,043 370,175
131 1,344,203 481,222
132 1,373,120 635,315 1.48 428,046 7.33 Actual/360
133 630,990 543,142 1.37 397,829 7.375 Actual/360
134 2,448,080 607,322 1.4 432,426 7.68 Actual/360
135 1,033,821 610,721 1.51 404,721 7.55 Actual/360
136 776,626 562,908 1.45 388,068 7.23 Actual/360
137 886,002 555,763 1.44 385,752 7.17 Actual/360
138 1,111,627 520,462 1.33 391,550 7.32 Actual/360
139 918,422 466,479 1.15 405,226 7.78 Actual/360
140 903,796 556,781 1.47 377,508 7.06 Actual/360
141 420,000 7.6676 30/360
142 662,893 456,055 1.21 376,657 7.43 Actual/360
143 728,874 477,801 1.22 393,228 7.92 Actual/360
144 1,730,346 536,479 1.35 398,704 7.49 Actual/360
145 1,892,575 559,204 1.4 398,704 7.49 Actual/360
146 823,870 496,935 1.26 393,452 7.34 Actual/360
147 765,748 520,872 1.34 388,231 7.19 Actual/360
148 915,038 458,322 1.23 372,413 7.36 Actual/360
149 3,925,422 729,994 1.8 406,461 7.71 Actual/360
150 410,000 7.6674 30/360
151 388,901 7.13 30/360
152 353,619 6.5927 Actual/360
153 3,308,000 608,620 1.5 406,121 7.96 Actual/360
154 706,121 494,707 1.31 378,636 7.76 Actual/360
155 896,095 499,805 1.31 381,319 7.5 Actual/360
156 788,975 525,589 1.46 361,150 7.63 Actual/360
157 1,128,723 471,498 1.33 355,544 7.53 Actual/360
158 785,116 447,553 1.21 370,392 7.37 Actual/360
159 1,930,149 757,876 2.14 354,290 6.94 Actual/360
160 645,516 457,948 1.39 328,773 6.9 Actual/360
161 380,000 7.6675 30/360
162 1,422,282 544,254 1.45 375,831 7.88 Actual/360
163 497,251 459,848 1.09 421,726 8.21 Actual/360
164 2,216,266 767,918 1.96 391,487 7.46 Actual/360
165 381,842 8.77 30/360
166 692,175 409,844 1.18 346,096 7.79 Actual/360
167 869,995 491,945 1.42 347,566 7.27 Actual/360
168 679,800 648,233 1.78 364,451 7.81 Actual/360
169 836,323 431,679 1.24 349,093 7.39 Actual/360
170 2,010,998 863,165 1.56 554,603 6.89 Actual/360
171 372,066 7 Actual/360
171
171
172 364,827 8.77 30/360
173 813,580 480,320 1.54 312,038 7.15 Actual/360
174 2,199,380 637,155 1.63 391,916 8.19 Actual/360
175 753,827 438,677 1.36 322,512 7.55 Actual/360
176 359,387 8.77 30/360
177 351,626 8.0176 Actual/360
178 349,929 8.77 30/360
179 349,929 8.77 30/360
180 335,000 7.375 30/360
181 330,000 7.6675 30/360
182 565,127 376,316 1.28 294,407 7.24 Actual/360
183 752,112 432,848 1.36 317,238 7.75 Actual/360
184 765,662 505,697 1.62 312,839 7.59 Actual/360
185 321,557 8.77 30/360
186 780,165 441,260 1.49 297,011 7.33 Actual/360
187 354,950 8.25 30/360
188 576,872 389,497 1.36 286,952 7.11 Actual/360
188
188
189 772,124 461,926 1.56 297,033 7.67 Actual/360
190 456,561 403,825 1.39 289,557 7.38 Actual/360
191 1,865,036 529,995 1.58 335,928 8.19 Actual/360
192 1,961,738 676,859 2.27 298,071 7.71 Actual/360
193 312,099 8.77 30/360
194 605,711 314,089 1.15 272,028 7.32 Actual/360
195 830,232 328,255 1.21 271,607 7.47 Actual/360
196 302,553 8.77 30/360
197 733,252 361,736 1.35 268,761 7.51 Actual/360
197
197
197
197
197
198 300,009 8.0175 Actual/360
199 1,262,715 461,148 1.4 329,124 8.33 Actual/360
200 294,750 7.375 30/360
201 581,495 364,542 1.38 263,269 7.46 Actual/360
202 654,860 374,665 1.48 253,770 7.25 Actual/360
203 496,316 382,870 1.42 269,597 7.87 Actual/360
204 481,254 359,168 1.27 282,400 8.19 Actual/360
205 586,497 332,102 1.31 253,445 7.57 Actual/360
206 587,267 402,084 1.56 256,972 7.11 Actual/360
207 282,268 8.77 30/360
208 588,139 361,169 1.4 257,335 7.41 Actual/360
209 2,061,605 493,322 1.79 275,612 7.93 Actual/360
209
209
210 543,049 315,358 1.24 253,600 7.42 Actual/360
211 258,058 6.6125 Actual/360
212 264,811 8.77 30/360
213 1,066,535 381,939 1.51 253,276 7.83 Actual/360
214 460,205 283,202 1.22 232,098 7.56 Actual/360
215 227,329 6.5892 Actual/360
216 564,057 276,351 1.22 225,739 7.37 Actual/360
217 1,511,874 434,019 1.63 265,913 8.64 Actual/360
217 1,511,874 434,019
217
217
217
218 588,757 348,457 1.54 226,324 7.49 Actual/360
219 255,354 8.77 30/360
220 615,916 404,074 1.34 300,536 7.51 Actual/360
221 726,848 336,068 1.55 217,514 7.47 Actual/360
221
221
222 220,000 7.6699 Actual/360
223 285,212 8.5 30/360
224 407,865 275,713 1.19 231,842 8.4 Actual/360
225 405,877 284,994 1.32 216,648 7.75 Actual/360
226 1,091,058 331,460 1.45 228,450 7.83 Actual/360
227 386,636 273,029 1.27 215,106 7.16 Actual/360
228 627,000 457,460 1.62 281,798 9.61 Actual/360
229 994,508 348,950 1.54 225,895 7.83 Actual/360
230 467,409 308,768 1.36 226,596 8.57 Actual/360
231 474,351 262,562 1.2 219,241 7.65 Actual/360
232 1,129,149 368,711 1.54 239,642 7.93 Actual/360
233 429,173 301,448 1.43 210,587 7.38 Actual/360
234 1,017,461 302,846 1.38 219,632 7.88 Actual/360
235 203,013 7.06 30/360
236 550,000 301,654 1.5 200,674 7.55 Actual/360
237 1,049,300 343,914 1.53 242,411 8.37 Actual/360
238 1,089,022 285,198 1.3 219,129 8.24 Actual/360
238 526,437 121,551
238 562,585 163,647
239 220,812 6.6775 Actual/360
240 437,671 254,269 1.33 191,474 7.42 Actual/360
241 200,968 6.3365 Actual/360
242 445,500 281,332 1.51 186,240 7.25 Actual/360
243 388,048 228,567 1.2 189,698 7.45 Actual/360
244 475,973 283,194 1.51 187,864 7.45 Actual/360
245 476,006 274,080 1.5 182,725 7.17 Actual/360
246 169,088 6.4849 Actual/360
247 191,893 6.8601 Actual/360
248 204,750 7.375 30/360
249 182,254 6.609 Actual/360
250 1,273,091 307,034 1.39 221,313 8.03 Actual/360
251 482,507 274,087 1.52 180,274 7.26 Actual/360
252 543,311 263,774 1.24 212,354 7.48 30/360
253 485,166 1.96 247,741 7.7 Actual/360
254 776,929 295,032 1.67 177,053 7.31 Actual/360
255 481,608 269,437 1.37 196,813 8 Actual/360
256 1,000,868 325,470 1.7 191,668 7.83 Actual/360
257 491,966 263,289 1.43 184,590 7.4 Actual/360
258 445,921 271,133 1.65 164,460 6.81 Actual/360
259 184,731 6.3466 Actual/360
260 760,105 282,427 1.38 204,770 8.1 Actual/360
261 987,703 286,010 1.55 184,093 7.83 Actual/360
262 500,279 219,014 1.31 166,007 7.39 Actual/360
263 312,720 236,835 1.41 168,469 7.54 Actual/360
264 793,350 389,131 2.01 193,196 7.49 30/360
265 528,629 275,015 1.55 176,890 7.47 Actual/360
266 402,141 291,527 1.41 206,770 6.9 Actual/360
267 579,442 234,494 1.14 204,928 8.91 30/360
268 362,069 225,843 1.34 168,161 7.33 Actual/360
269 312,198 197,709 1.22 162,083 7.67 Actual/360
270 803,583 262,436 1.42 184,361 8.55 Actual/360
271 349,603 260,225 1.67 156,155 7.29 Actual/360
271
271
272 279,448 229,475 1.31 175,254 7.06 Actual/360
273 332,055 237,252 1.57 151,056 7.09 Actual/360
274 423,453 201,448 1.31 153,312 7.54 Actual/360
275 169,017 6.9655 30/360
276 164,250 7.375 30/360
277 302,171 200,125 1.29 155,266 8.02 Actual/360
278 232,750 193,498 1.15 168,661 7.46 Actual/360
279 148,777 6.7654 Actual/360
280 476,203 298,521 1.8 165,575 8.25 Actual/360
281 534,733 238,732 1.56 153,375 7.53 Actual/360
282 431,247 262,689 1.67 157,121 7.84 Actual/360
283 387,897 205,052 1.34 152,662 7.51 Actual/360
284 339,442 217,416 1.48 146,665 7.19 Actual/360
285 226,100 190,377 1.19 160,235 7.56 Actual/360
286 150,273 6.7069 Actual/360
287 244,667 198,264 1.44 137,508 7.91 Actual/360
288 293,423 153,040 1.2 127,690 7.45 Actual/360
289 256,444 192,339 1.33 144,275 7.26 Actual/360
290 427,748 171,808 1.34 127,787 7.52 Actual/360
291 383,449 223,917 1.7 131,733 7.39 Actual/360
292 369,236 188,644 1.54 122,792 7.25 Actual/360
293 221,000 170,324 1.26 134,897 7.66 Actual/360
294 334,747 243,519 1.83 133,370 7.53 Actual/360
295 381,032 245,793 1.9 129,179 7.17 Actual/360
296 679,213 239,196 1.58 151,604 8.65 Actual/360
297 238,045 171,769 1.47 116,459 7.34 Actual/360
298 305,690 163,446 1.41 116,208 7.39 Actual/360
299 151,008 143,175 1.09 131,146 6.82 Actual/360
299
299
300 350,114 166,085 1.4 118,352 7.81 Actual/360
301 264,585 178,368 1.39 128,274 8.17 Actual/360
302 301,437 187,744 1.67 112,519 7.432 Actual/360
302 250,080 157,439
302 51,357 30,305
303 282,321 151,831 1.29 118,036 7.34 Actual/360
304 365,085 188,578 1.66 113,866 7.36 Actual/360
305 136,214 8.14 30/360
306 291,104 178,001 1.71 104,366 7.21 Actual/360
307 404,116 161,303 1.57 103,040 7.32 Actual/360
308 308,434 206,485 1.96 102,697 7.1 Actual/360
309 130,080 124,038 1.11 112,121 6.98 Actual/360
310 125,111 8.29 30/360
311 183,366 143,933 1.4 103,112 7.92 Actual/360
312 275,219 138,616 1.36 101,622 7.46 Actual/360
313 671,843 208,846 1.53 118,627 8.37 Actual/360
314 809,223 259,147 2.32 111,728 8.16 Actual/360
315 198,655 144,501 1.31 110,557 7.3 Actual/360
316 299,226 122,114 1.34 91,399 7.29 Actual/360
317 202,833 139,078 1.47 94,346 7.65 Actual/360
318 259,218 144,608 1.61 89,860 7.1 Actual/360
319 287,476 161,814 1.96 85,043 7.03 Actual/360
320 345,797 161,343 1.77 91,192 7.82 Actual/360
320 219,929 115,768
320 125,868 45,575
321 516,756 200,609 2.37 84,482 7.57 Actual/360
322 274,170 126,108 1.42 88,761 7.98 Actual/360
323 271,926 133,065 1.53 86,938 7.49 Actual/360
324 159,545 85,634 1.39 61,584 7.87 Actual/360
<PAGE>
<CAPTION>
Stated Anticipated Anticipated Remaining
Maturity Repayment Remaining Remaining Lockout
Loan # Date Date Term Lockout and YM Lockbox
------ -------- ----------- ------------ --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
1 5/11/28 5/11/08 119 112 112 Modified, In-Place
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2 5/13/28 5/13/10 143 137 137 Modified, In-Place
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
3 6/11/23 6/11/08 120 113 113 Modified, In-Place
4 6/11/28 6/11/08 120 113 113 Hard, In-Place
4
4
4
4
4
5 3/1/17 3/1/08 117 117 117 Hard, In-Place
6 5/11/28 5/11/08 119 114 114 Springing, Hard
7 5/11/28 5/11/08 119 117 117 Hard, In-Place
8 8/11/22 8/11/09 134 127 127 Hard, In-Place
9 5/11/28 5/11/08 119 59 59 Hard, In-Place
10 5/11/28 5/11/08 119 115 115 Hard, In-Place
10
10
11 3/11/18 237 233 233 Hard, In-Place
12 4/11/28 4/11/08 118 113 113 Springing, Hard
13 5/11/23 5/11/08 119 115 115 Hard, In-Place
14 1/11/23 1/11/08 115 113 113 Springing, Hard
15 5/11/23 5/11/08 119 117 117 Hard, In-Place
15
15
15
15
15
15
16 11/1/22 293 289 289 Hard, In-Place
17 11/1/22 293 289 289 Hard, In-Place
18 5/11/28 5/11/08 119 115 115 Hard, In-Place
18
18
18
19 5/11/23 5/11/13 179 172 172 Springing, Hard
19
19
19
19
19
19
19
19
19
19
20 5/11/23 299 296 296 Hard, In-Place
20
20
20
20
20
20
20
20
21 5/11/23 5/11/08 119 115 115 Modified, In-Place
21
21
21
22 5/1/08 119 119 119
23 4/11/23 4/11/08 118 116 116 Springing, Hard
24 4/11/28 4/11/08 118 111 111 Springing, Hard
24
24
25 6/1/20 264 264 264 Hard, In-Place
26 5/11/28 5/11/08 119 115 115 Hard, In-Place
27 6/1/20 264 264 264 Hard, In-Place
28 5/11/28 5/11/08 119 115 115 Hard, In-Place
29 5/11/28 5/11/08 119 114 114 Springing, Hard
30 4/1/28 4/1/08 118 114 114 Springing, Hard
31 4/11/28 4/11/08 118 111 111 Springing, Hard
31
31
31
31
31
31
31
32 12/11/17 234 230 230 Hard, In-Place
33 5/11/28 5/11/08 119 114 114 Springing, Hard
34 4/11/28 4/11/08 118 116 116 Hard, In-Place
35 4/11/23 4/11/13 178 171 171 Springing, Hard
35
35
35
35
35
35
36 6/1/19 252 252 252
36
36
37 2/11/28 2/11/08 116 109 109 Springing, Hard
38 4/11/23 4/11/08 118 114 114 Springing, Hard
39 10/11/22 292 288 288 Hard, In-Place
40 5/11/23 5/11/08 119 112 112 Springing, Hard
41 5/11/28 5/11/08 119 114 114 Springing, Hard
42 6/1/20 264 264 264 Hard, In-Place
43 5/11/28 5/11/08 119 115 115 Hard, In-Place
44 5/11/23 5/11/08 119 116 116 Springing, Hard
45 4/11/28 4/11/08 118 111 111 Springing, Hard
46 3/11/13 177 173 173 Hard, In-Place
47 1/1/08 115 97 97
48 5/11/18 239 237 237 Modified, In-Place
49 1/11/28 1/11/08 115 111 111 Springing, Hard
50 1/11/23 295 291 291 Hard, In-Place
51 5/11/23 5/11/08 119 117 117 Springing, Hard
51
51
52 5/1/28 5/1/08 119 115 115 Springing, Hard
52
52
53 3/5/08 117 99 114
54 2/11/17 224 220 220 Hard, In-Place
54
54
54
54
54
54
55 5/11/28 5/11/08 119 115 115 Springing, Hard
56 6/1/18 240 240 240
57 5/11/28 5/11/08 119 117 117 Modified, In-Place
58 11/1/22 293 289 289 Hard, In-Place
59 2/11/17 234 54 174
60 5/5/13 179 131 131
61 5/11/23 5/11/08 119 116 116 Springing, Hard
61
61
62 2/11/23 2/11/08 116 109 109 Modified, In-Place
63 5/11/28 5/11/08 119 114 114 Springing, Hard
64 5/11/23 5/11/08 119 116 116 Springing, Hard
64
64
65 4/11/28 4/11/08 118 111 111 Modified, In-Place
66 1/1/08 115 97 97
67 5/11/28 5/11/08 119 112 112 Springing, Hard
68 2/1/08 116 97 97
69 4/11/23 4/11/05 82 78 78 Springing, Hard
70 6/11/23 6/11/08 120 116 116 Modified, In-Place
70
70
70
71 4/11/18 238 233 233 Springing, Hard
72 5/11/28 5/11/08 119 114 114 Springing, Hard
73 4/5/13 178 118 118
74 4/11/28 4/11/08 118 111 111 Modified, In-Place
74
74
75 12/11/27 12/11/07 114 107 107 Modified, In-Place
76 5/11/28 5/11/08 119 117 117 Modified, In-Place
77 2/11/18 236 232 232 Hard, In-Place
78 5/11/28 5/11/08 119 112 112 Hard, In-Place
79 5/11/28 5/11/08 119 117 117 Hard, In-Place
80 5/11/23 5/11/08 119 116 116 Springing, Hard
81 1/11/21 271 267 267 Hard, In-Place
82 4/11/28 4/11/05 82 75 75 Springing, Hard
83 5/11/28 5/11/08 119 112 112 Springing, Hard
83
83
83
83
83
83
83
83
83
83
83
83
83
83
83
84 3/11/28 3/11/08 117 110 110 Modified, In-Place
85 5/11/28 5/11/08 119 112 112 Springing, Hard
86 5/11/28 5/11/18 239 235 235 Springing, Hard
87 4/1/08 118 58 114
88 4/5/13 178 147 147
89 4/5/08 118 99 99
90 2/11/18 236 232 232 Hard, In-Place
91 5/11/23 5/11/08 119 112 112 Springing, Hard
91
91
91
92 5/11/28 5/11/08 119 112 112 Springing, Hard
93 4/1/18 238 0 234
94 1/11/22 1/11/08 115 111 111 Modified, In-Place
94
94
95 1/11/23 1/11/08 115 111 111 Springing, Hard
96 5/1/08 119 0 119
97 5/11/23 5/11/08 119 115 115 Hard, In-Place
98 4/1/08 118 58 114
99 5/11/28 5/11/08 119 115 115 Hard, In-Place
100 4/1/08 118 21 118
100
100
100
100
101 5/11/08 119 117 117 Modified, In-Place
102 6/1/18 240 240 240 Springing, Hard
102
102
103 6/1/08 120 114 114
104 5/1/08 119 119 119
105 12/11/15 210 206 206 Hard, In-Place
106 1/11/23 1/11/08 115 110 110 Springing, Hard
107 5/1/08 119 35 119
108 1/11/28 1/11/08 115 108 108 Springing, Hard
109 4/11/20 262 258 258 Hard, In-Place
110 5/11/13 5/11/08 119 116 116 Springing, Hard
111 4/11/23 5/11/08 119 119 119 Springing, Hard
112 9/11/16 219 215 215 Hard, In-Place
113 5/11/28 5/11/05 83 35 35 Springing, Hard
114 1/11/28 1/11/08 115 111 111 Springing, Hard
115 12/11/27 12/11/07 114 111 111 Springing, Hard
116 5/11/08 119 119 119 Springing, Hard
117 4/11/20 262 258 258 Hard, In-Place
118 4/11/28 4/11/08 118 111 111 Modified, In-Place
119 4/11/28 4/11/08 118 116 116 Springing, Hard
120 6/1/08 120 120 120
120
120
121 4/11/20 4/11/08 118 111 111 Springing, Hard
122 5/1/08 119 119 119
123 5/11/23 5/11/08 119 116 116 Springing, Hard
124 2/11/23 2/11/08 116 114 114 Springing, Hard
125 6/1/08 120 120 120
126 5/11/28 5/11/08 119 112 112 Springing, Hard
127 5/11/28 5/11/08 119 112 112 Springing, Hard
128 2/11/28 2/11/08 116 114 114 Springing, Hard
129 4/11/28 4/11/08 118 111 111 Modified, In-Place
130 12/11/27 12/11/07 114 107 107 Springing, Hard
131 5/11/23 5/11/08 119 115 115 Springing, Hard
131
131
132 1/11/23 1/11/08 115 108 108 Modified, In-Place
133 3/11/28 3/11/08 117 110 110 Springing, Hard
134 3/11/23 3/11/08 117 115 115 Modified, In-Place
135 1/11/28 1/11/08 115 108 108 Springing, Hard
136 5/11/28 5/11/08 119 112 112 Springing, Hard
137 4/11/28 4/11/08 118 111 111 Springing, Hard
138 1/1/28 1/1/08 115
139 6/1/08 120 120 120
140 4/11/28 4/11/08 118 116 116 Springing, Hard
141 2/11/18 236 232 232 Hard, In-Place
142 3/11/28 3/11/08 117 110 110 Springing, Hard
143 5/11/28 5/11/08 119 47 47 Springing, Hard
144 5/11/23 5/11/08 119 116 116 Springing, Hard
145 5/11/23 5/11/08 119 116 116 Springing, Hard
146 5/1/08 119 59 115
147 5/1/08 119 119 119
148 3/11/28 3/11/08 117 115 115 Modified, In-Place
149 2/11/23 2/11/08 116 109 109 Springing, Hard
150 2/11/18 236 232 232 Hard, In-Place
151 2/1/18 236 236 236 Hard, In-Place
152 1/11/19 247 243 243 Hard, In-Place
153 5/1/03 59 23 23
154 1/11/28 12/11/07 114 111 111 Springing, Hard
155 5/11/23 5/11/08 119 112 112 Springing, Hard
156 4/1/28 4/1/28 118 118 118 None
157 5/11/28 5/11/08 119 117 117 Springing, Hard
158 5/11/23 5/11/08 119 116 116 Springing, Hard
159 3/1/08 117 0 117
160 5/1/08 119 119 119
161 2/11/18 236 232 232 Hard, In-Place
162 3/11/23 3/11/08 117 115 115 Modified, In-Place
163 4/11/18 238 234 234 Hard, In-Place
164 6/1/08 120 114 114
165 1/11/08 115 111 111 Hard, In-Place
166 4/11/28 4/11/08 118 111 111 Modified, In-Place
167 5/11/23 5/11/08 119 116 116 Springing, Hard
168 1/11/23 1/11/08 115 108 108 Springing, Hard
169 4/11/23 4/11/05 82 75 75 Springing, Hard
170 2/11/08 116 112 112 Springing, Hard
171 9/11/17 231 227 227 Hard, In-Place
171
171
172 1/11/08 115 111 111 Hard, In-Place
173 4/11/28 4/11/08 118 111 111 Springing, Hard
174 5/11/18 5/11/08 119 112 112 Springing, Hard
175 3/1/08 117 110 110
176 1/11/08 115 111 111 Hard, In-Place
177 1/11/23 295 291 291 Hard, In-Place
178 1/11/08 115 111 111 Hard, In-Place
179 1/11/08 115 111 111 Hard, In-Place
180 12/1/19 258 78 258 Hard, In-Place
181 2/11/18 236 232 232 Hard, In-Place
182 3/11/28 3/11/08 117 110 110 Springing, Hard
183 5/11/23 5/11/08 119 112 112 Springing, Hard
184 4/1/08 118 58 114
185 1/11/08 115 111 111 Hard, In-Place
186 2/11/23 2/11/08 116 109 109 Modified, In-Place
187 2/1/17 224 106 224 Hard, In-Place
188 4/1/08 118 118 118
188
188
189 5/11/23 5/11/08 119 115 115 Springing, Hard
190 5/11/23 5/11/08 119 112 112 Hard, In-Place
191 5/11/18 5/11/08 119 112 112 Springing, Hard
192 4/11/23 4/11/13 178 171 171 Springing, Hard
193 1/11/08 115 111 111 Hard, In-Place
194 12/11/27 12/11/07 114 108 108 Springing, Hard
195 5/11/28 5/11/08 119 115 115 Hard, In-Place
196 1/11/08 115 111 111 Hard, In-Place
197 1/1/08 115 0 115
197
197
197
197
197
198 1/11/23 295 291 291 Hard, In-Place
199 2/1/18 236 236 236
200 12/1/19 258 78 258 Hard, In-Place
201 6/1/08 120 120 120
202 4/11/28 4/11/08 118 111 111 Springing, Hard
203 12/11/27 12/11/07 114 112 112 Springing, Hard
204 5/11/23 5/11/08 119 112 112 Hard, In-Place
205 4/11/28 4/11/08 118 111 111 Modified, In-Place
206 4/1/08 118 118 118
207 1/11/08 115 111 111 Hard, In-Place
208 4/11/23 3/11/08 117 113 113 Modified, In-Place
209 5/1/08 119 119 119
209
209
210 5/11/23 5/11/08 119 116 116 Springing, Hard
211 12/11/17 234 230 230 Hard, In-Place
212 1/11/08 115 111 111 Hard, In-Place
213 5/11/23 5/11/08 119 112 112 Springing, Hard
214 3/11/28 3/11/08 117 110 110 Modified, In-Place
215 12/11/22 294 290 290 Hard, In-Place
216 4/1/08 118 0 115
217 1/11/23 1/11/08 115 108 108 Modified, In-Place
217
217
217
217
218 4/11/28 4/11/08 118 114 114 Modified, In-Place
219 1/11/08 115 111 111 Hard, In-Place
220 3/1/13 177 177 177
221 2/1/08 116 0 116
221
221
222 3/11/16 213 209 209 Hard, In-Place
223 2/1/15 200 82 200 Hard, In-Place
224 4/1/08 118 58 114
225 5/11/28 6/11/08 120 118 118 Springing, Hard
226 5/11/23 5/11/08 119 112 112 Springing, Hard
227 6/1/08 120 120 120
228 1/1/08 115 115 115
229 5/11/23 5/11/08 119 112 112 Springing, Hard
230 5/11/23 5/11/08 119 115 115 Modified, In-Place
231 5/11/23 5/11/08 119 117 117 Modified, In-Place
232 6/1/08 120 113 113
233 5/11/23 5/11/08 119 117 117 Springing, Hard
234 5/11/23 5/11/08 119 112 112 Springing, Hard
235 1/1/18 235 235 235 Hard, In-Place
236 4/1/08 118 58 114
237 2/1/18 236 236 236
238 5/1/08 119 35 119
238
238
239 8/11/16 218 214 214 Hard, In-Place
240 5/11/28 5/11/08 119 117 117 Springing, Hard
241 10/11/17 232 228 228 Hard, In-Place
242 5/11/28 5/11/08 119 117 117 Modified, In-Place
243 4/11/28 4/11/08 118 111 111 Modified, In-Place
244 6/1/08 120 120 120
245 1/1/08 115 0 112
246 1/11/18 235 231 231 Hard, In-Place
247 3/11/22 285 281 281 Hard, In-Place
248 12/1/19 258 78 258 Hard, In-Place
249 3/11/23 297 293 293 Hard, In-Place
250 5/11/18 239 235 235 Springing, Hard
251 3/1/08 117 117 117
252 3/1/08 117 32 114
253 3/1/13 177 177 177
254 12/1/07 114 114 114
255 2/11/23 2/11/08 116 109 109 Springing, Hard
256 5/11/23 5/11/08 119 112 112 Springing, Hard
257 5/11/23 5/11/08 119 117 117 Springing, Hard
258 4/11/28 5/11/08 119 114 114 Springing, Hard
259 7/11/17 229 225 225 Hard, In-Place
260 4/1/18 238 238 238
261 5/11/23 5/11/08 119 112 112 Springing, Hard
262 6/1/08 120 120 120
263 4/1/08 118 58 114
264 3/5/08 117 98 98
265 12/1/07 114 114 114
266 3/1/14 189 189 189
267 7/1/02 49 45 45
268 3/1/08 117 117 117
269 5/1/08 119 59 115
270 5/11/23 5/11/08 119 112 112 Springing, Hard
271 3/1/13 177 0 117
271
271
272 3/1/13 177 0 116
273 3/1/13 177 0 116
274 2/11/28 2/11/08 116 113 113 Springing, Hard
275 10/11/17 232 228 228 Hard, In-Place
276 12/1/19 258 78 258 Hard, In-Place
277 4/11/28 4/11/08 118 114 114 Modified, In-Place
278 6/1/08 120 120 120
279 5/11/22 287 283 283 Hard, In-Place
280 1/1/08 115 115 115
281 5/11/23 5/11/08 119 112 112 Springing, Hard
282 4/1/08 118 58 114
283 4/1/08 118 58 114
284 3/1/23 3/1/08 117 113 113 Hard, In-Place
285 6/1/08 120 120 120
286 4/11/17 226 222 222 Hard, In-Place
287 5/11/28 6/11/08 120 118 118 Springing, Hard
288 4/11/28 4/11/08 118 111 111 Modified, In-Place
289 6/1/18 240 240 240
290 2/11/28 2/11/08 116 112 112 Springing, Hard
291 6/1/08 120 120 120
292 5/11/28 5/11/08 119 114 114 Springing, Hard
293 4/11/23 4/11/08 118 116 116 Springing, Hard
294 4/1/08 118 58 114
295 4/1/08 118 46 111
296 4/1/08 118 118 118
297 3/1/13 177 0 117
298 2/11/28 2/11/08 116 113 113 Modified, In-Place
299 2/1/17 224 224 224
299
299
300 1/11/28 1/11/08 115 113 113 Springing, Hard
301 4/1/08 118 58 114
302 5/1/08 119 115 115
302
302
303 4/1/08 118 118 118
304 5/1/08 119 119 119
305 9/1/16 219 102 218 Hard, In-Place
306 1/11/28 1/11/08 115 113 113 Springing, Hard
307 2/1/08 116 116 116
308 4/1/08 118 58 114
309 12/1/17 234 0 234
310 11/1/16 221 103 221 Hard, In-Place
311 5/11/28 5/11/08 119 117 117 Springing, Hard
312 5/1/08 119 59 115
313 2/1/18 236 236 236
314 5/1/18 239 233 233
315 3/1/08 117 117 117
316 5/1/08 119 119 119
317 3/11/23 3/11/05 81 74 74 Springing, Hard
318 2/1/08 116 116 116
319 4/1/08 118 58 114
320 3/11/23 3/11/08 117 110 110 Springing, Hard
320
320
321 2/1/08 116 0 116
322 4/1/08 118 58 114
323 5/1/08 119 119 119
324 4/11/28 4/11/08 118 116 116 Springing, Hard
<PAGE>
<CAPTION>
Anticipated Original
Repayment Amortization Year
Loan # Value LTV Date LTV Term Year Built Renovated Unit
----- ----- --- ------------ ------------ ---------- --------- ----
<S> <C> <C> <C> <C> <C> <C> <C>
1 165,490,000 70 62 360 1,489,032
1 3,700,000 1961 1980 19,970
1 3,700,000 1910 1989 12,432
1 7,100,000 1954 1988 44,928
1 6,400,000 1973 1998 100,217
1 20,300,000 1972 1992 206,963
1 15,600,000 1973 1985 104,523
1 13,900,000 1967 1986 103,944
1 940,000 1937 9,000
1 19,800,000 1961 1993 213,070
1 19,000,000 1958 1996 183,431
1 8,400,000 1969 1980 30,504
1 13,600,000 1967 1990 90,340
1 14,200,000 1972 1992 126,625
1 4,600,000 1953 1991 46,147
1 14,250,000 1964 1989 196,938
2 174,420,000 48 48 2,477,087
2 5,800,000 1989 78,770
2 13,650,000 1991 244,731
2 4,850,000 1966 52,438
2 12,100,000 1989 147,991
2 5,000,000 1984 71,268
2 9,000,000 1996 88,646
2 8,900,000 1997 83,272
2 9,700,000 1976 1997 92,786
2 12,000,000 1988 1992 168,430
2 12,800,000 1987 211,178
2 4,750,000 1987 91,727
2 4,475,000 1981 58,948
2 9,450,000 1986 1998 149,752
2 17,900,000 1989 263,356
2 5,200,000 1987 79,342
2 5,750,000 1988 87,802
2 6,400,000 1986 96,666
2 13,370,000 1997 196,589
2 5,460,000 1993 72,219
2 3,700,000 1981 94,376
2 4,165,000 1998 46,800
3 131,400,000 57 48 300 1994 365
4 103,760,000 72 61 360 1,141,240
4 7,760,000 1989 76,999
4 26,500,000 1992 210,331
4 33,400,000 1989 326,431
4 14,500,000 1991 222,606
4 21,600,000 1987 304,873
5 100,000,000 74 47 228 1958 1997 435
6 81,000,000 76 67 360 1980 1994 423,755
7 105,000,000 58 45 360 1988 491,892
8 70,000,000 71 57 300 1996 572,459
9 67,000,000 62 57 300 1981 287,952
10 50,825,000 72 63 360 289,161
10 38,325,000 1986 248,186
10 12,500,000 1926 1990 40,975
11 336 1970 1996 212,000
12 36,200,000 76 67 360 1954 1990 573,563
13 33,000,000 70 58 300 1974 1993 394
14 30,600,000 75 60 300 1960 960
15 28,375,000 74 59 300 445,275
15 7,760,000 1983 171,734
15 5,480,000 1985 1995 55,110
15 2,185,000 1981 29,952
15 4,500,000 1976 66,046
15 4,580,000 1972 1989 66,545
15 3,870,000 1987 55,888
16 300 1996 171,962
17 300 1996 190,543
18 27,200,000 74 65 360 823
18 9,950,000 1973 1996 367
18 6,900,000 1965 1997 158
18 10,350,000 1973 1997 298
19 25,600,000 77 52 300 765
19 1,300,000 1991 1990 63
19 1,600,000 1977 1998 79
19 1,500,000 1964 1992 62
19 1,100,000 1916 1993 61
19 3,200,000 1978 1994 130
19 1,900,000 1985 1997 62
19 3,400,000 1919 1993 71
19 5,000,000 1964 1997 83
19 2,400,000 1984 1992 66
19 4,200,000 1979 1994 88
20 299 79,661
20 1974 1995 10,774
20 1974 1994 10,300
20 1977 10,300
20 1982 1995 9,487
20 1983 1996 9,200
20 1983 1995 9,700
20 1984 1994 9,700
20 1986 1995 10,200
21 29,400,000 61 50 300 388
21 11,200,000 1995 121
21 6,500,000 1966 1995 121
21 11,700,000 1968 1995 146
22 25,200,000 71 58 300 1973 1997 154
23 23,900,000 71 58 300 1985 203
24 22,600,000 75 66 360 492
24 18,300,000 1950 392
24 4,300,000 1946 1998 100
25 264 1997 63,331
26 20,500,000 80 71 360 1971 1997 403
27 264 1997 73,907
28 21,500,000 76 67 360 1972 1997 500
29 24,300,000 67 58 360 1980 219,809
30 21,600,000 75 66 360 1982 1997 92,610
31 21,345,000 76 67 360 1,070
31 5,190,000 1982 1998 272
31 2,475,000 1982 1998 116
31 1,960,000 1984 1998 102
31 2,390,000 1970 1998 126
31 2,540,000 1969 1998 127
31 1,990,000 1978 1998 106
31 4,800,000 1975 1998 221
32 315 1994 709,050
33 24,600,000 65 57 360 1975 1995 206,567
34 19,750,000 80 71 360 1993 53,176
35 23,110,000 67 45 300 550
35 6,475,000 1972 1996 158
35 5,950,000 1989 1997 121
35 4,225,000 1979 1993 106
35 3,150,000 1983 1997 47
35 2,750,000 1989 1990 59
35 560,000 1990 59
36 15,000,000 97 4 252 219,600
36 8,000,000 1994 109,800
36 7,000,000 1994 109,800
37 19,440,000 73 64 360 1994 370
38 18,800,000 75 61 300 1981 1993 355
39 297 1997 80,518
40 20,600,000 66 54 300 1952 250
41 17,500,000 77 68 360 1991 387
42 264 1997 73,939
43 15,800,000 84 74 360 1974 1996 400
44 21,400,000 60 49 300 1955 1994 63
45 16,000,000 80 70 360 1965 1991 718
46 179 1988 40,317
47 34,000,000 37 32 360 1975 312
48 16,750,000 74 3 240 1996 135,663
49 16,500,000 75 66 360 1970 1996 157,801
50 300 1997 57,500
51 21,700,000 53 45 300 165,453
51 9,700,000 1997 73,841
51 12,000,000 1980 91,612
52 17,600,000 65 57 360 128,331
52 13,500,000 1984 86,236
52 4,100,000 1982 42,095
53 37,100,000 31 21 240 1929 1981 298
54 230 249,284
54 1978 48,180
54 1982 48,800
54 1984 44,000
54 1985 19,571
54 1986 49,933
54 1987 38,800
55 17,700,000 64 56 360 1992 160,864
56 32,200,000 34 1 240 1964 1995 280
57 14,100,000 76 68 360 1972 1997 400
58 300 1992 1997 104,231
59 38,400,000 27 240 1970 360
60 30,930,000 32 28 480 1960 1984 309
61 13,300,000 75 61 300 205
61 7,300,000 1994 1998 95
61 6,000,000 1995 110
62 15,000,000 67 54 300 1993 35,209
63 14,000,000 69 61 360 1977 131,600
64 14,200,000 67 54 300 181
64 5,400,000 1995 1997 86
64 8,800,000 1995 1997 95
65 15,800,000 60 54 360 1939 429
66 25,100,000 38 33 360 1951 1998 532
67 12,750,000 74 65 360 1973 1996 362
68 24,800,000 38 32 360 1939 1990 233
69 12,900,000 71 63 300 1986 175
70 12,050,000 75 62 300 248
70 5,000,000 1985 90
70 3,550,000 1993 1997 80
70 3,500,000 1995 1995 78
71 11,300,000 79 3 240 1993 1998 108,576
72 11,700,000 76 67 360 1986 322
73 23,550,000 38 31 420 1905 1984 134
74 11,550,000 77 68 360 307
74 6,650,000 1964 198
74 4,900,000 1960 109
75 11,200,000 78 70 360 1990 132,225
76 13,750,000 63 56 360 1992 133,861
77 281 1996 47,245
78 10,700,000 80 70 360 1987 288
79 11,800,000 72 64 360 1984 99,000
80 12,000,000 71 58 300 1985 1997 170
81 443 1975 119,479
82 10,600,000 79 74 360 1935 1981 78,659
83 10,295,000 81 71 360 237
83 560,000 1947 1990 12
83 490,000 1940 14
83 750,000 1936 1988 16
83 530,000 1931 1989 10
83 510,000 1940 1990 14
83 915,000 1937 1990 22
83 1,215,000 1946 1993 24
83 1,100,000 1938 1989 24
83 550,000 1937 1990 12
83 540,000 1937 1991 12
83 460,000 1946 12
83 1,500,000 1955 40
83 390,000 1930 1993 9
83 340,000 1940 8
83 445,000 1947 1990 8
84 11,000,000 74 65 360 1990 137,405
85 10,100,000 80 70 360 1983 204
86 10,000,000 80 52 360 1994 104,634
87 15,600,000 51 42 300 1965 1986 148
88 45,200,000 17 13 360 1924 1997 73
89 20,200,000 38 36 480 1950 1988 384
90 268 1994 40,940
91 11,600,000 65 54 300 320
91 6,800,000 1995 118
91 2,700,000 1995 100
91 2,100,000 1994 102
92 10,200,000 73 66 360 1987 77,272
93 24,000,000 30 1 240 1925 1997 136
94 9,000,000 80 66 300 143
94 4,900,000 1996 73
94 4,100,000 1996 70
95 13,700,000 52 42 300 1988 1998 207
96 12,100,000 58 47 300 1971 1989 177
97 11,840,000 59 48 300 1985 1995 180
98 8,800,000 79 70 360 1986 200
99 8,625,000 80 71 360 1970 1997 211
100 9,070,000 75 63 300 258
100 2,450,000 1993 1997 73
100 2,000,000 1991 1996 58
100 1,670,000 1994 50
100 2,950,000 1992 1997 77
101 9,100,000 75 68 360 1969 1998 236
102 11,000,000 62 2 240 70,000
102 1917 1997 40,000
102 1920 1996 30,000
103 8,500,000 76 68 360 1988 89,409
104 10,100,000 64 53 300 1995 116
105 215 1995 40,219
106 9,000,000 68 57 300 1960 1989 116
107 8,950,000 68 56 300 1947 1995 60
108 8,500,000 72 64 360 1985 1997 98,481
109 312 1997 1997 50,150
110 10,800,000 56 27 180 1982 1990 128
111 8,500,000 70 59 300 1997 118
112 220 1997 40,000
113 8,000,000 73 73 1912 1985 179,492
114 7,880,000 74 65 360 1969 1994 248
115 7,910,000 73 65 360 1980 79,167
116 8,900,000 65 53 300 1985 1998 122
117 317 1997 50,132
118 7,350,000 77 68 360 1958 153
119 6,800,000 82 72 360 1965 1998 202
120 7,700,000 71 63 360 50,020
120 1996 25,140
120 1997 24,880
121 12,200,000 44 34 264 1972 1990 73,849
122 6,490,000 82 72 360 1987 126
123 7,000,000 75 61 300 1997 107
124 7,400,000 71 57 300 1972 1997 156,907
125 8,400,000 62 54 360 1969 192
126 6,200,000 82 73 360 1900 1996 34,871
127 6,800,000 73 66 360 1990 68,940
128 7,480,000 67 59 360 1987 1997 80,872
129 6,400,000 77 68 360 1966 167
130 6,575,000 75 67 360 1970 221
131 6,600,000 74 62 300 302
131 3,200,000 1979 1993 154
131 3,400,000 1963 1998 148
132 7,300,000 67 54 300 1976 89,262
133 6,400,000 75 66 360 1977 1992 27,000
134 6,600,000 73 59 300 1985 1998 196
135 6,000,000 80 71 360 1984 164
136 6,300,000 75 66 360 1966 1997 242,400
137 6,950,000 68 60 360 1993 68,540
138 6,000,000 79 70 360 1976 1996 101,019
139 6,250,000 75 67 360 1991 47,500
140 6,300,000 74 65 360 1961 104
141 287 1994 45,650
142 5,700,000 79 70 360 1934 1996 200,000
143 5,700,000 79 70 360 1995 37,678
144 6,600,000 68 55 300 1996 66
145 6,000,000 75 61 300 1995 78
146 6,550,000 69 56 300 1986 174
147 6,100,000 74 59 300 1988 85,406
148 5,520,000 81 72 360 1970 1996 116
149 6,900,000 65 53 300 1970 1996 222
150 287 1994 45,102
151 286 1997 44,000
152 246 1950 1998 22,509
153 6,600,000 67 62 300 1983 1998 165
154 5,550,000 79 71 360 1970 1997 129,628
155 5,800,000 74 60 300 1988 1997 55,510
156 5,700,000 74 66 360 1925 1998 93
157 5,300,000 80 71 360 1958 220
158 5,300,000 80 65 300 1963 82
159 12,300,000 34 27 300 1958 1992 199,236
160 5,200,000 80 70 360 1997 47
161 287 1995 38,145
162 6,400,000 64 53 300 1972 1994 121
163 5,200,000 79 240 1993 94,841
164 8,895,000 46 32 240 1964 1992 114
165 360 1997 26,338
166 5,130,000 78 70 360 1976 156
167 5,000,000 80 65 300 1947 78
168 6,800,000 59 48 300 1956 1991 55,400
169 4,950,000 80 71 300 1974 58,497
170 9,370,000 42 120 1963 233
171 234 21,504
171 1997 11,288
171 1997 11,288
172 360 1997 26,040
173 5,550,000 69 61 360 1988 75,729
174 6,400,000 60 43 240 1993 32,000
175 5,100,000 75 66 360 1980 1996 57,418
176 360 1996 26,040
177 300 1996 27,944
178 360 1997 26,123
179 360 1997 26,040
180 3,680,000 265 1925 1997 20,980
181 3,800,000 287 1994 45,037
182 4,450,000 81 71 360 1991 40,959
183 5,000,000 70 57 300 1950 1988 22,000
184 5,000,000 70 57 300 1988 80,495
185 360 1996 26,079
186 4,700,000 72 58 300 1984 1997 91,569
187 238 1996 48,466
188 4,330,000 77 62 300 50
188 2,470,000 1900 1993 34
188 1,860,000 1900 1993 16
189 5,000,000 66 54 300 1984 133,982
190 5,700,000 58 47 300 1952 1979 21,995
191 5,650,000 58 41 240 1990 32,809
192 6,450,000 51 34 300 1995 1997 109
193 360 1996 25,362
194 4,600,000 71 63 360 1989 42,850
195 4,550,000 71 63 360 1965 124
196 360 1996 26,108
197 4,570,000 70 62 360 75,912
197 660,000 1985 1995 9,000
197 1,220,000 1985 17,658
197 2,020,000 1985 23,959
197 670,000 1974 9,732
197 1986 15,563
198 300 1993 24,268
199 4,025,000 79 4 240 1991 1996 80
200 265 1997 10,752
201 4,100,000 77 68 360 1994 134
202 5,450,000 57 50 360 1986 105,521
203 4,200,000 74 66 360 1931 1986 21,288
204 4,400,000 68 57 300 1955 1993 18,013
205 3,900,000 77 68 360 1958 114
206 4,375,000 68 55 300 1965 177
207 360 1996 26,154
208 3,900,000 75 61 300 1970 1996 116,929
209 4,100,000 71 56 276
209 1972 1991 127
209 1972 4,320
210 3,750,000 77 62 300 1985 32,624
211 239 1987 10,908
212 360 1997 22,457
213 3,700,000 75 62 300 1990 100
214 3,650,000 75 67 360 1983 75,135
215 297 1997 11,180
216 3,700,000 74 65 360 1989 38,818
217 3,300,000 82 69 300 69
217 3,300,000 1972 1996 51
217 1938 6
217 1905 6
217 1900 6
218 4,100,000 66 58 360 1923 1992 28,215
219 360 1997 22,036
220 4,330,000 62 1 180 1960 30,480
221 3,500,000 74 66 360 56,406
221 1985 19,789
221 1988 36,617
222 219 1996 32,150
223 238 1994 44,000
224 3,380,000 76 68 360 1986 17,576
225 3,250,000 78 69 360 1987 23,943
226 3,600,000 69 57 300 1989 99
227 3,300,000 76 61 300 1978 1992 106
228 5,100,000 49 36 240 1971 297,300
229 3,300,000 75 62 300 1992 100
230 3,050,000 80 73 360 1991 36,196
231 3,400,000 72 59 300 1947 84,475
232 3,700,000 65 46 240 1980 1997 114
233 3,400,000 71 57 300 1982 1997 50,000
234 3,200,000 75 62 300 1994 105
235 237 1997 10,908
236 3,700,000 64 57 360 1978 66,948
237 3,200,000 73 3 240 1986 71
238 4,200,000 55 46 300 88
238 2,200,000 1985 1996 48
238 2,000,000 1996 40
239 223 1996 13,905
240 3,150,000 73 64 360 1988 24,640
241 216 1997 10,908
242 2,850,000 80 70 360 1991 60
243 2,850,000 80 70 360 1969 77
244 3,400,000 66 58 360 1978 1994 38,417
245 2,900,000 77 68 360 1973 195
246 281 1997 10,125
247 290 1997 11,180
248 265 1997 10,752
249 299 1998 10,004
250 3,000,000 73 3 240 1970 1994 180
251 3,000,000 73 64 360 1988 58,050
252 3,150,000 69 47 240 1978 40,387
253 3,400,000 65 1 180 1995 65
254 2,900,000 74 65 360 1973 162
255 3,175,000 67 55 300 1974 53,163
256 3,100,000 68 56 300 1993 102
257 3,000,000 70 57 300 1976 45,306
258 2,900,000 72 63 360 1963 147
259 232 1997 11,220
260 2,800,000 72 3 240 1965 107
261 2,900,000 69 57 300 1992 100
262 2,750,000 73 64 360 1904 1986 23,771
263 2,510,000 80 70 360 1996 112
264 6,840,000 29 20 240 1910 1993 49,200
265 2,700,000 74 60 300 1970 1992 80
266 3,300,000 60 1 192 1994 36,988
267 2,600,000 76 71 266 1983 128
268 2,450,000 78 64 300 1968 23,619
269 2,540,000 75 66 360 1997 36
270 2,600,000 73 61 300 1978 1996 104
271 2,450,000 77 60 360 40,400
271 1,150,000 1988 20,000
271 1,300,000 1989 20,400
272 2,450,000 76 32 240 1993 24,450
273 2,450,000 76 57 360 1987 61,995
274 2,650,000 68 61 360 1981 30,978
275 238 1997 11,180
276 265 1997 10,752
277 2,400,000 73 66 360 1990 12,400
278 2,200,000 80 55 240 1978 68,337
279 292 1997 11,180
280 2,550,000 68 57 300 1890 28,000
281 2,300,000 75 61 300 1924 1990 68
282 2,150,000 80 66 300 1985 101,720
283 2,300,000 75 61 300 1989 147
284 2,400,000 71 57 300 1985 46,560
285 2,150,000 77 53 240 1978 68,337
286 232 1997 11,325
287 2,225,000 71 63 360 1990 8,555
288 1,900,000 80 71 360 1958 73
289 1,900,000 80 3 240 1997 46
290 2,100,000 72 64 360 1970 17,619
291 2,300,000 65 53 300 1985 1993 53,370
292 2,200,000 68 60 360 1976 72
293 2,000,000 75 61 300 1890 1997 6,600
294 3,000,000 50 41 300 1995 83,928
295 2,450,000 61 49 300 1995 41,990
296 1,900,000 76 55 240 1995 1997 45
297 1,770,000 80 62 360 1989 27,660
298 2,000,000 70 62 360 1983 19,479
299 1,645,000 84 3 228 7,930
299 960,000 1997 4,312
299 685,000 1997 3,618
300 2,100,000 65 58 360 1978 23,537
301 1,710,000 80 66 300 1990 22,850
302 2,250,000 60 53 360 130
302 1,700,000 1968 105
302 550,000 1977 25
303 1,900,000 71 57 300 1964 33
304 1,835,000 71 57 300 1971 1995 54
305 236 1996 11,180
306 1,600,000 80 70 360 1964 1997 42
307 1,800,000 69 61 360 1986 72
308 1,940,000 62 50 300 1970 79
309 1,415,000 84 3 237 1997 5,700
310 238 1996 11,348
311 1,500,000 79 70 360 1974 1984 7,646
312 1,530,000 75 61 300 1976 63,095
313 1,700,000 67 3 240 1973 1996 102
314 3,180,000 35 2 240 1970 1995 78
315 1,600,000 67 39 204 1973 50,400
316 1,420,000 74 60 300 1978 1995 27,486
317 1,400,000 75 67 300 1979 1995 39,530
318 1,435,000 73 59 300 1965 1997 28,500
319 1,600,000 62 50 300 1970 76
320 1,400,000 71 59 300 51
320 930,000 1920 29
320 470,000 1920 22
321 2,800,000 36 32 360 1987 39,266
322 1,200,000 80 66 300 1948 1980 83
323 1,350,000 67 46 240 1930 1985 38
324 1,050,000 67 60 360 1990 14,425
<PAGE>
<CAPTION>
Actual Ongoing
Unit of Occupancy U/W Capital Items
Loan # Measure Occupancy Period Occupancy Deposits Tenant 1
------ ------- --------- ------- -------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
1 Sq Ft 0.21
1 Sq Ft 100% 3/31/98 98% CVS Pharmacy
1 Sq Ft 100% 3/31/98 97% Blockbuster Video
1 Sq Ft 97% 3/31/98 98% Big "D" Discount
1 Sq Ft 97% 3/31/98 94% Food Lion
1 Sq Ft 87% 3/31/98 74% Shoppers Food
1 Sq Ft 94% 3/31/98 94% Staples
1 Sq Ft 76% 3/31/98 76% Giant Food
1 Sq Ft 100% 3/31/98 95% Trak Auto
1 Sq Ft 96% 3/31/98 71% Service Merchandise (Dark)
1 Sq Ft 97% 3/31/98 88% Von's Grocery
1 Sq Ft 100% 3/31/98 94% Total Beverages
1 Sq Ft 94% 3/31/98 90% Zany Brainy
1 Sq Ft 92% 3/31/98 91% Shopper Food Warehouse
1 Sq Ft 93% 3/31/98 93% Drug Emporium
1 Sq Ft 99% 3/31/98 97% Baby Super Store
2 Sq Ft 0.2
2 Sq Ft 100% 5/7/98 95% Bi-Lo, Inc.
2 Sq Ft 97% 1/1/98 98% K-Mart
2 Sq Ft 100% 4/15/98 98% Bi-Lo, Inc.
2 Sq Ft 100% 4/15/98 97% Phar-Mor
2 Sq Ft 100% 4/15/98 96% Winn Dixie
2 Sq Ft 96% 4/15/98 96% Publix #564
2 Sq Ft 100% 4/15/98 97% Kroger
2 Sq Ft 87% 1/1/98 87% Publix
2 Sq Ft 98% 4/15/98 98% Kroger Company
2 Sq Ft 99% 4/15/98 99% K-Mart
2 Sq Ft 95% 4/15/98 95% Winn Dixie
2 Sq Ft 97% 4/15/98 97% Bi-Lo, Inc.
2 Sq Ft 97% 4/15/98 97% Winn Dixie
2 Sq Ft 97% 4/15/98 98% K-Mart
2 Sq Ft 99% 4/15/98 99% Kroger
2 Sq Ft 97% 4/15/98 96% Harris Teeter
2 Sq Ft 87% 4/15/98 87% Kroger
2 Sq Ft 96% 2/1/98 96% Wal-Mart
2 Sq Ft 98% 5/14/98 98% Winn Dixie
2 Sq Ft 91% 4/30/98 91% Delchamps (Jittney Jungle)
2 Sq Ft 86% 4/28/98 86% Food Lion
3 Rooms 79% 12/31/97 75% 4%
4 Sq Ft 0.2
4 Sq Ft 92% 4/20/98 89% Caretenders
4 Sq Ft 100% 5/15/98 85% NYNEX
4 Sq Ft 93% 4/1/98 90% General Electric
4 Sq Ft 92% 5/1/98 89% Fallon Comm. Health Plan
4 Sq Ft 91% 5/1/98 88% Hugoton Energy Corporation
5 Units 100% 95% 250
6 Sq Ft 100% 4/2/98 93% 0.19 K Mart
7 Sq Ft 100% 5/13/98 98% 0.2 Fannie Mae
8 Sq Ft 86% 6/1/98 77% 0.14 Lowes Cinemas (Sony)
9 Sq Ft 100% 4/29/98 93% 0.25 M.J. Whitman, et. al.
10 Sq Ft 0.2
10 Sq Ft 100% 1/13/98 93% American Medical Laboratories
10 Sq Ft 100% 2/13/98 93% University of Washington
11 Sq Ft 100% 4/16/98 100% The Elder-Beerman Stores Corp.
12 Sq Ft 97% 1/31/98 92% 0.22 The Home Depot
13 Rooms 75% 12/31/97 75% 4%
14 Units 99% 9/29/97 92% 260
15 Sq Ft 0.29
15 Sq Ft 100% 12/30/97 95% G.I. Joe's, Inc.
15 Sq Ft 100% 5/11/98 95% G.I. Joe's, Inc.
15 Sq Ft 100% 5/11/98 98% Office Depot
15 Sq Ft 100% 4/17/98 95% G.I. Joe's, Inc.
15 Sq Ft 100% 5/11/98 95% G.I. Joe's, Inc.
15 Sq Ft 100% 5/11/98 95% G.I. Joe's, Inc.
16 Sq Ft 100% 9/17/97 100% Kmart Corp.
17 Sq Ft 100% 9/16/97 100% Kmart Corp.
18 Units 250
18 Units 91% 4/15/98 80%
18 Units 98% 4/15/98 94%
18 Units 95% 4/15/98 95%
19 Rooms 4%
19 Rooms 64% 2/28/98 62%
19 Rooms 49% 2/28/98 48%
19 Rooms 74% 3/13/98 70%
19 Rooms 62% 2/11/98 62%
19 Rooms 60% 2/11/98 52%
19 Rooms 70% 2/11/98 72%
19 Rooms 81% 2/11/98 75%
19 Rooms 81% 2/11/98 79%
19 Rooms 78% 2/11/98 75%
19 Rooms 83% 2/11/98 75%
20 Sq Ft
20 Sq Ft 100% 5/8/98 100% ARG Enterprises, Inc.
20 Sq Ft 100% 5/5/98 100% ARG Enterprises, Inc.
20 Sq Ft 100% 5/5/98 100% ARG Enterprises, Inc.
20 Sq Ft 100% 5/5/98 100% ARG Enterprises, Inc.
20 Sq Ft 100% 5/3/98 100% ARG Enterprises, Inc.
20 Sq Ft 100% 5/3/98 100% ARG Enterprises, Inc.
20 Sq Ft 100% 5/3/98 100% ARG Enterprises, Inc.
20 Sq Ft 100% 5/3/98 100% ARG Enterprises, Inc.
21 Rooms 5%
21 Rooms 74% 3/31/98 72%
21 Rooms 75% 3/31/98 75%
21 Rooms 85% 3/31/98 73%
22 Rooms 80% 80% 5%
23 Rooms 72% 12/31/97 72% 5%
24 Units 186
24 Units 98% 3/19/98 95%
24 Units 97% 3/19/98 95%
25 Sq Ft 100% 100% Circuit City Stores, Inc.
26 Units 97% 4/15/98 95% 250
27 Sq Ft 100% 100% Circuit City Stores, Inc.
28 Units 90% 4/15/98 87% 250
29 Sq Ft 99% 4/9/98 96% 0.22 K MART
30 Sq Ft 100% 3/31/98 96% 0.46 Kaiser Permanente
31 Units 252
31 Units 91% 4/1/98 80%
31 Units 91% 4/1/98 82%
31 Units 96% 12/8/97 87%
31 Units 100% 10/19/97 100%
31 Units 93% 1/5/98 84%
31 Units 96% 4/1/98 86%
31 Units 88% 10/16/97 100%
32 Sq Ft 100% 1/1/98 100% Best Buy Co., Inc.
33 Sq Ft 100% 4/9/98 93% 0.18 K MART
34 Sq Ft 100% 6/1/98 95% 0.15 Good Guys
35 Rooms 4%
35 Rooms 65% 3/19/98 65%
35 Rooms 63% 3/19/98 63%
35 Rooms 50% 2/28/98 50%
35 Rooms 64% 2/28/98 64%
35 Rooms 55% 3/19/98 55%
35 Rooms 41% 2/28/98 41%
36 Sq Ft
36 Sq Ft 100% 95% Builders Square
36 Sq Ft 100% 95% Builders Square
37 Units 91% 3/23/98 91% 218
38 Beds 93% 11/30/97 93% 563
39 Sq Ft 100% 10/31/97 100% Cobb Theaters II, Inc.
40 Rooms 80% 12/31/97 75% 3.50%
41 Units 90% 4/16/98 95% 200
42 Sq Ft 100% 100% Circuit City Stores, Inc.
43 Units 94% 4/15/98 91% 250
44 Rooms 86% 4/23/98 75%
45 Units 93% 3/24/98 93% 250
46 Sq Ft 100% 3/12/98 100% M. Fortunoff of Westbury Corp.
47 Units 100% 11/24/97 95%
48 Sq Ft 88% 1/21/98 95% 0.15 Christmas Tree Shops, Inc.
49 Sq Ft 96% 12/19/97 90% 0.2 Essex Street Assoc.
50 Sq Ft 100% 2/1/98 100% Frederick Plaza Cinemas, Inc
51 Sq Ft 0.32
51 Sq Ft 100% 4/18/98 95% Inland Cold Storage
51 Sq Ft 100% 4/18/98 100% Inland Cold Storage
52 Sq Ft 0.24
52 Sq Ft 98% 2/28/98 95% Stereographics
52 Sq Ft 98% 2/25/98 93%
53 Units 100% 1/14/98 95% 313
54 Sq Ft
54 Sq Ft 100% 2/28/97 100% Shemin Nurseries, Inc. (NJ)
54 Sq Ft 100% 2/28/97 100% Shemin Nurseries, Inc. (MD)
54 Sq Ft 100% 2/28/97 100% Shemin Nurseries, Inc. (IL)
54 Sq Ft 100% 2/28/97 100% Shemin Nurseries, Inc. (MI)
54 Sq Ft 100% 2/28/97 100% Shemin Nurseries, Inc. (PA)
54 Sq Ft 100% 2/28/97 100% Shemin Nurseries, Inc. (MA)
55 Sq Ft 100% 4/30/98 95% 0.15 Eagle Home & Garden
56 Units 100% 12/31/97 95%
57 Units 93% 4/1/98 93% UAV
58 Sq Ft 100% 9/17/97 100% Kmart Corp.
59 Units 100% 11/21/97 95%
60 Units 100% 2/13/98 95%
61 Rooms 4%
61 Rooms 83% 12/31/97 80%
61 Rooms 71% 12/31/97 71%
62 Sq Ft 84% 4/1/98 83% 0.3 Hard Rock Cafe
63 Sq Ft 100% 4/9/98 97% 0.16 K-Mart
64 Rooms 4%
64 Rooms 74% 3/31/98 74%
64 Rooms 71% 12/31/97 71%
65 Units 93% 3/1/98 87% 250
66 Units 94% 8/26/97 95% 74
67 Units 93% 1/21/98 90% 300
68 Units 96% 10/6/97 95%
69 Rooms 71% 4/6/98 70% 5% TDI One gift shop & office
70 Rooms 5%
70 Rooms 71% 12/31/97 65%
70 Rooms 65% 12/31/97 60%
70 Rooms 69% 12/31/97 75%
71 Sq Ft 100% 1/12/98 95% 0.22 Toys "R" US
72 Units 89% 3/1/98 86% 251
73 Units 100% 12/31/97 95%
74 Pads 53
74 Pads 100% 3/11/98 96%
74 Pads 95% 5/19/98 95%
75 Sq Ft 95% 4/1/98 95% 0.15 Ames Department Store
76 Sq Ft 100% 5/1/98 95% 0.24 Eagle Hardware and Garden, Inc
77 Sq Ft 100% 2/26/98 100% Best Buy Co., Inc. #582
78 Units 97% 2/25/98 95% 250
79 Sq Ft 100% 2/1/98 87% 0.2 Cytec Industries, Inc.
80 Rooms 79% 12/31/97 75% 4%
81 Sq Ft 100% 4/17/98 100% The Elder-Beerman Stores Corp.
82 Sq Ft 100% 3/1/98 95% 0.17 Beacon Hill Showrooms
83 Units 288
83 Units 100% 3/13/98 95%
83 Units 93% 4/1/98 95%
83 Units 100% 3/13/98 95%
83 Units 100% 3/13/98 95%
83 Units 100% 3/13/98 95%
83 Units 100% 5/1/98 95%
83 Units 100% 3/13/98 95%
83 Units 92% 3/13/98 95%
83 Units 100% 3/13/98 95%
83 Units 100% 3/13/98 95%
83 Units 100% 3/27/98 95%
83 Units 95% 12/31/97 95%
83 Units 89% 4/9/98 95%
83 Units 100% 4/3/98 95%
83 Units 88% 3/13/98 95%
84 Sq Ft 82% 11/17/97 85% 0.24 24 Hour Fitness
85 Units 96% 2/24/98 95%
86 Sq Ft 96% 2/1/98 95% 0.15 Upton's, Inc.
87 Rooms 89% 1/26/98 80% 5%
88 Units 100% 1/23/98 95%
89 Units 95% 2/25/98 95%
90 Sq Ft 100% 2/27/98 100% Best Buy Co., Inc. #271
91 Rooms 4%
91 Rooms 72% 3/23/98 72%
91 Rooms 67% 3/26/98 67%
91 Rooms 68% 4/8/98 68%
92 Sq Ft 100% 2/15/98 94% 0.19 Seafood City Supermarket
93 Units 99% 3/12/98 95% 250
94 Rooms 5%
94 Rooms 86% 12/5/97 71%
94 Rooms 89% 12/5/97 75%
95 Rooms 69% 12/31/97 67% 5%
96 Rooms 61% 12/31/97 4%
97 Beds 87% 3/26/98 92% 250
98 Units 93% 1/19/98 92% 250
99 Units 98% 4/15/98 93% 263
100 Rooms 4%
100 Rooms 77% 12/31/96 68%
100 Rooms 71% 12/31/96 68%
100 Rooms 66% 12/31/96 68%
100 Rooms 86% 12/31/96 68%
101 Units 98% 4/1/98 95% 250
102 Sq Ft 100% 2/1/98 95% 0.1 Staples
102 Sq Ft 100% 2/1/98 95%
102 Sq Ft 100% 2/1/98 95%
103 Sq Ft 100% 12/31/97 95% 0.15 AT&T
104 Rooms 78% 1/31/98 4.00% 4.00%
105 Sq Ft 100% 7/12/97 100% 0.64 United Artists
106 Rooms 81% 11/18/97 75%
107 Rooms 79% 11/30/97 79% 5%
108 Sq Ft 100% 9/30/97 88% 0.2 Neuman Distributors, Inc.
109 Sq Ft 100% 4/30/98 100% Eagle Food Centers, Inc.
110 Rooms 68% 12/31/97 62% 5%
111 Units 97% 1/31/98 95% 250
112 Sq Ft 100% 4/14/98 100% Office Depot, Inc.
113 Sq Ft 94% 6/1/98 92% 0.25 Walker Group
114 Units 96% 9/1/97 92% 200
115 Sq Ft 89% 2/5/98 87% 0.25 Southern Cal. Fitness Ctr.
116 Rooms 74% 74% 5%
117 Sq Ft 100% 4/30/98 100% Eagle Food Centers, Inc.
118 Pads 99% 3/11/98 96% 50
119 Units 89% 1/31/98 92% 247
120 Sq Ft 0.2
120 Sq Ft 100% 95% Morgan Keegan
120 Sq Ft 91% 2/1/98 95% Union Planter's National Bank
121 Sq Ft 100% 1/31/98 95% 0.49 Imperial Market
122 Units 100% 2/28/98 97% 50
123 Rooms 72% 4/15/98 75% 4%
124 Sq Ft 92% 11/11/97 91% 0.22 Kroger (Big Lots, sublessee)
125 Units 96% 2/26/98 97% 250
126 Sq Ft 93% 4/5/98 95% 0.14 Trader Joes
127 Sq Ft 95% 4/1/98 92% 0.2 Sears Appliance Center
128 Sq Ft 92% 10/31/97 90% 0.15 Sovereign Bank
129 Pads 99% 5/8/98 96% 50
130 Units 91% 10/3/97 91% 251
131 Rooms 5%
131 Rooms 68% 2/10/98 68% 5%
131 Rooms 71% 2/10/98 71% 5%
132 Sq Ft 94% 12/31/97 93% 0.2 TranSouth Suite 300
133 Sq Ft 100% 12/19/97 95% 0.23 Packeteer, Inc.
134 Rooms 51% 12/31/97 58% 5%
135 Units 96% 9/19/97 95% 250
136 Sq Ft 100% 10/12/97 92% 0.2 Monsanto
137 Sq Ft 100% 1/26/98 98% 0.13 Commerce Bank
138 Sq Ft 100% 93% 0.2 Inspire Insurance Solutions
139 Sq Ft 93% 91% 0.32 Cardiology Diagnostic Associates
140 Units 96% 3/25/98 90% 315
141 Sq Ft 100% 2/27/98 100% Best Buy Co., Inc., #285
142 Sq Ft 100% 2/8/98 93% 0.2 Avondale Industries
143 Sq Ft 96% 4/1/98 91% DCH Diagnostic
144 Rooms 88% 3/31/98 80% 4%
145 Rooms 76% 4/9/98 75% 4%
146 Pads 100% 1/1/98 94%
147 Sq Ft 98% 95% Kingley-Bate
148 Units 94% 2/23/98 94% 178
149 Rooms 73% 3/31/98 64% 5%
150 Sq Ft 100% 2/28/98 100% Best Buy Co., Inc. #270
151 Sq Ft 100% 100% 0.19 Winn-Dixie Stores, Inc.
152 Sq Ft 100% 2/6/98 100% 0.32 Stoughton CVS, Inc.
153 Units 67% 2/28/98 68% 3.00%
154 Sq Ft 98% 4/9/98 97% 0.22 Watson's Clothing Store
155 Sq Ft 100% 5/8/98 90% 0.2 Bechtel Power Corporation
156 Units 100% 2/28/98 95% 250
157 Units 97% 3/12/98 92% 302
158 Units 99% 2/26/98 95% 283
159 Sq Ft 100% 3/1/98 97% 0.59 Ames Pert Store
160 Units 95% 3/27/98 95% 300
161 Sq Ft 100% 2/26/98 100% Best Buy Co., Inc. (#6)
162 Rooms 67% 12/31/97 65% 5%
163 Sq Ft 100% 3/1/98 98% K-Mart
164 Units 88% 12/31/97 80% 5%
165 Sq Ft 100% 11/14/97 100% PETsMART, Inc.
166 Pads 90% 3/11/98 90% 51
167 Units 97% 4/8/98 95% 221.38 Dr. Eileen Hartsoe
168 Sq Ft 100% 11/11/97 100% 0.15 SPORTSWORLD
169 Sq Ft 92% 3/20/98 92% 0.2 City Limits Restaurant
170 Units 95% 1/21/98 95% Variety Mart
171 Sq Ft 0.39
171 Sq Ft 100% 5/7/98 100% Rite Aid of Georgia, Inc.
171 Sq Ft 100% 5/7/98 100% Rite Aid of Georgia, Inc.
172 Sq Ft 100% 11/21/97 100% PETsMART, Inc.
173 Sq Ft 81% 10/30/97 87% 0.24 TJ Maxx
174 Sq Ft 100% 2/9/98 100% 3%
175 Sq Ft 95% 1/31/98 95% 0.35 Manatee Diagnostic
176 Sq Ft 100% 12/19/97 100% PETsMART, Inc.
177 Sq Ft 100% 12/15/97 100% Canad, Inc.
178 Sq Ft 100% 10/25/97 100% PETsMART, Inc.
179 Sq Ft 100% 10/27/97 100% PETsMART, Inc.
180 Sq Ft 100% 6/1/98 100% Rite Aid Corporation
181 Sq Ft 100% 2/26/98 100% Best Buy Co., Inc.
182 Sq Ft 100% 4/1/98 92% 0.2 Kleinfelder, Inc.
183 Sq Ft 100% 5/14/98 89% 0.27 Digiscope (Sullivan Graphics)
184 Sq Ft 92% 1/31/98 90%
185 Sq Ft 100% 11/3/97 100% PETsMART, Inc.
186 Sq Ft 95% 12/10/97 90% 0.2 Ross Dress for Less
187 Sq Ft 100% 6/1/98 100% Winn Dixie Stores, Inc.
188 Units 258
188 Units 100% 1/21/98 95%
188 Units 100% 1/21/98 95%
189 Sq Ft 96% 4/23/98 95% 0.2 Hofer Machinery, Inc.
190 Sq Ft 100% 5/1/98 95% Staples, Inc.
191 Sq Ft 100% 3/30/98 100% 3% Natomas Racquet CLub
192 Rooms 76% 2/28/98 71% 5%
193 Sq Ft 100% 11/3/97 100% PETsMART, Inc.
194 Sq Ft 100% 11/5/97 87% 4% Ace Hardware
195 Units 94% 5/8/98 90% 267
196 Sq Ft 100% 11/20/97 100% PETsMART, Inc.
197 Sq Ft 0.13
197 Sq Ft 100% 12/1/97 95% Keith Properties
197 Sq Ft 100% 12/1/97 95% Old Colony Hospice
197 Sq Ft 100% 12/1/97 95% Leo R. Mugo
197 Sq Ft 100% 12/1/97 95% Fun Designs Inc.
197 Sq Ft 100% 12/1/97 95%
198 Sq Ft 100% 12/15/97 100% Canad, Inc.
199 Rooms 91% 8/31/97 80% 5%
200 Sq Ft 100% 6/1/98 100% Rite Aid Corporation
201 Units 98% 12/31/97 95% 200
202 Sq Ft 77% 11/12/97 70% 0.15 Brookshire Brothers Supermkt
203 Sq Ft 100% 5/1/97 95% 0.2 Aaron Brothers
204 Sq Ft 92% 5/1/98 94% 1.19 Med & Health Research Assoc NY
205 Pads 97% 3/11/98 94% 49.58
206 Pads 100% 1/23/98 95%
207 Sq Ft 100% 11/3/97 100% PETsMART, Inc.
208 Sq Ft 73% 3/11/98 80% 0.15 Kash - N - Karry
209 5%
209 Rooms 53% 12/31/97 55%
209 Sq Ft 100% 12/31/97 55% Denny's
210 Sq Ft 100% 12/31/97 89% 0.28 Fertility & Gynecology
211 Sq Ft 100% 1/1/98 100% Eckerd Corp.
212 Sq Ft 100% 11/13/97 100% PETsMART, Inc.
213 Rooms 73% 12/31/97 72% 4%
214 Sq Ft 100% 2/1/98 93% 0.18 Iberia Tile
215 Sq Ft 100% 12/2/97 100% Rite Aid of Michigan, Inc.
216 Sq Ft 99% 3/12/98 94% 0.2 Harbor Management
217 Units 250
217 Units 100% 8/31/97 95%
217 Units 100% 8/31/97 100%
217 Units 100% 8/31/97 100%
217 Units 100% 8/31/97 100%
218 Sq Ft 100% 2/18/98 95% 0.25 Better than Butter Corp.
219 Sq Ft 100% 11/14/97 100% PETsMART, Inc.1/10/18
220 Sq Ft 98% 4/1/98 95% 0.21 Mario's Italian Restaurant
221 Sq Ft Zahn Dental
221 Sq Ft 89% 11/19/97 89% GMAC
221 Sq Ft 89% 11/19/97 89% ADC
222 Sq Ft 100% 6/17/97 100% Office Depot, Inc.
223 Sq Ft 100% 6/1/98 100% 0.15 Winn Dixie Stores, Inc.
224 Sq Ft 100% 3/1/98 95% 0.28 Tempo
225 Sq Ft 100% 10/7/97 94% 0.28 Oliver & Winston, Inc.
226 Rooms 79% 12/31/97 75% 4%
227 Pads 99% 3/1/98 95% 50
228 Sq Ft 95% 1/31/98 95% 0.22 Dynamatic Corp
229 Rooms 68% 2/15/98 68% 4%
230 Sq Ft 98% 11/1/97 93% 0.1 The Grand Union Company
231 Sq Ft 100% 4/22/98 90% 0.2 Summit Graphics
232 Rooms 97% 1/31/98 95% 5%
233 Sq Ft 100% 4/1/98 95% 0.5 Leeman Labs
234 Rooms 70% 3/25/98 70% 4%
235 Sq Ft 100% 6/1/98 100% 0.19 Eckerd Corporation
236 Sq Ft 82% 1/5/98 81% 0.22 Lone Wolf Cafe
237 Rooms 73% 10/31/97 72% 5%
238 Rooms 5.00%
238 Rooms 67% 12/31/97 70% 5%
238 Rooms 72% 12/31/97 70% 5%
239 Sq Ft 100% 11/1/97 100% 0.38 Walgreen Co.
240 Sq Ft 86% 3/19/98 84% 0.23 Video Update
241 Sq Ft 100% 12/23/97 100% Eckerd Corp.
242 Units 95% 3/31/98 95% 250
243 Pads 100% 3/11/98 96% 64
244 Sq Ft 100% 3/1/98 95% 0.15 NYC Pizza
245 Pads 100% 12/1/97 94% 66
246 Sq Ft 100% 3/3/98 100% 0.3 Towne Lake Parkway CVS, Inc.
247 Sq Ft 100% 7/31/97 100% 0.37 Rite Aid of Michigan, Inc.
248 Sq Ft 100% 6/1/98 100% Rite Aid Corporation
249 Sq Ft 100% 4/6/98 100% 0.65 Rite Aid Corporation
250 Rooms 56% 12/31/97 50% 5%
251 Sq Ft 97% 3/27/98 95% 0.22 Winn Dixie
252 Sq Ft 100% 9/30/97 95% 0.16 Catonsville Comm. College
253 Rooms 86% 11/30/97 80% 5%
254 Units 98% 3/27/98 94% 250
255 Sq Ft 96% 11/27/97 93% 0.35 Peter Piper Pizza
256 Rooms 64% 4/17/98 70% 5%
257 Sq Ft 100% 3/8/98 98% 0.28 Marshalls
258 Pads 92% 2/19/98 95% 51
259 Sq Ft 100% 2/18/98 100% 0.38 Rite Aid of Ohio, Inc.
260 Rooms 56% 11/30/97 57% 6.80%
261 Rooms 68% 12/31/97 68% 4%
262 Sq Ft 100% 2/1/98 95% Devrouax & Purnell
263 Pads 94% 1/27/98 93% 50
264 Sq Ft 100% 1/29/98 90%
265 Units 99% 10/8/97 95% 250
266 Sq Ft 100% 2/4/98 95% 0.15 Graceton Supermarkets
267 Units 96% 3/26/98 91% 275
268 Sq Ft 100% 12/31/97 93% 0.2 Dozier, Millard, Pollard & Murphy
269 Units 100% 1/22/98 95% 250
270 Rooms 58% 12/31/97 58% 5%
271 Sq Ft 0.2
271 Sq Ft 100% 11/17/97 95% ATI
271 Sq Ft 100% 11/17/97 95% USUI
272 Sq Ft 100% 3/25/98 95% 0.2 Brinks Security
273 Sq Ft 100% 3/25/98 95% 0.15 Volvo GM
274 Sq Ft 92% 2/20/98 92% 0.25 SS. Herron & Associates
275 Sq Ft 100% 11/18/97 100% 0.3 Rite Aid of Maine, Inc.
276 Sq Ft 100% 6/1/98 100% Rite Aid Corporation
277 Sq Ft 100% 8/1/97 95% 0.2 Troy Internal Medicine
278 Sq Ft 100% 3/16/98 95% 0.33 Kmart Corporation
279 Sq Ft 100% 6/17/97 100% 0.37 Rite Aid of Michigan, Inc.
280 Sq Ft 78% 9/19/97 82% 0.28 California Beauty Academy
281 Units 97% 4/30/98 94% 260
282 Sq Ft 83% 2/6/98 83% 0.11
283 Pads 99% 12/16/97 95% 50
284 Sq Ft 100% 12/9/97 95% 0.15 Food Lion
285 Sq Ft 95% 3/16/98 95% 0.27 Kmart Corporation
286 Sq Ft 100% 5/7/98 100% 0.48 Rite Aid of Georgia, Inc.
287 Sq Ft 100% 3/31/98 94% 0.15 Classic Tile
288 Pads 97% 3/11/98 95% 52
289 Units 100% 3/1/98 95% 250
290 Sq Ft 100% 1/1/98 95% 0.35 Levine, Hirsch
291 Sq Ft 88% 1/1/98 88% 0.29 Knick Knack Craft Mall
292 Units 85% 4/16/98 85% 253
293 Sq Ft 100% 3/11/98 95% 0.12 Skechers USA, Inc.
294 Sq Ft 98% 12/15/97 93%
295 Sq Ft 99% 9/25/97 90%
296 Units 83% 6/30/97 75% 5%
297 Sq Ft 100% 3/25/98 95% 0.2 FDGM, Inc.
298 Sq Ft 100% 1/28/98 95% 0.32 New Liberty Insurance
299 Sq Ft 0.2 U.S. Postal Service
299 Sq Ft 100% 12/20/97 100% U.S. Postal Service
299 Sq Ft 100% 12/20/97 100% U.S. Postal Service
300 Sq Ft 98% 12/8/97 95% 0.25 The Jag Group
301 Sq Ft 95% 3/1/98 90% 0.16 Riverside County Health Clinic
302 Pads 50
302 Pads 77% 12/31/97 77%
302 Pads 100% 12/31/97 95%
303 Units 100% 2/1/98 95% 288
304 Units 100% 12/15/97 95% 250
305 Sq Ft 100% 6/1/98 100% 0.15 Rite Aid
306 Units 91% 9/25/97 90% 187
307 Units 90% 2/1/98 90% 298
308 Pads 100% 12/31/97 95%
309 Sq Ft 100% 2/19/98 100% 0.2 U.S. Postal Service
310 Sq Ft 100% 6/1/98 100% 0.15 Rite Aid
311 Sq Ft 100% 4/1/98 94% 0.24 Seven Eleven
312 Sq Ft 88% 1/20/98 88% 0.22
313 Rooms 33% 10/31/97 33% 5%
314 Rooms 60% 12/31/97 60% 5%
315 Sq Ft 100% 3/12/98 95% 0.2 Alloy & Stainless, Inc.
316 Sq Ft 99% 2/1/98 90% 0.18 Pub Set Inc.
317 Sq Ft 97% 3/31/98 91% 0.2 Protective Services, Inc.#3204
318 Sq Ft 100% 4/1/98 92% 0.2 Hoosier Motor Club
319 Pads 100% 12/31/97 95%
320 Units 324
320 Units 100% 10/3/97 95%
320 Units 100% 10/3/97 95%
321 Sq Ft 83% 12/1/97 83% 0.2 Pastene Food Companies
322 Pads 96% 1/31/98 95% 50
323 Units 100% 3/1/98 90% 250
324 Sq Ft 97% 4/2/98 85% 0.24 Diversified Transportation
<PAGE>
<CAPTION>
Lease % of Lease % of
Expiration Total Expiration Total
Loan # Date 1 SF Tenant 2 Date 2 SF
------ ---------- ---- -------- ---------- -----
<S> <C> <C> <C> <C> <C>
1
1 1/31/02 40 Blockbuster 1/31/01 30
1 10/31/99 25 Footlocker 10/31/01 25
1 3/31/01 55 Trak Auto 1/31/01 17
1 3/31/18 39 Staples 4/30//07 24
1 11/30/06 23 Frank's Nursery & Crafts 11/1/11 17
1 4/30/01 21 Hudson Trail Outfitters 2/29/08 20
1 1/31/08 23 Super Crown Books 3/31/00 8
1 1/31/08 100
1 2/28/03 16 Von's Grocery 3/31/06 15
1 12/31/00 16 Save on Drugs 2/27/01 15
1 10/31/05 71 Super Crown Books 12/31/00 29
1 1/31/06 15 Show Biz Pizza 10/31/02 14
1 3/31/11 41 CVS Pharmacy 12/31/99 19
1 5/31/01 40 Trak Auto 1/31/03 19
1 12/31/04 20 Drug Emporium 7/31/99 19
2
2 1/31/09 42 Revco 2/28/04 11
2 12/1/98 43 Bruno's 12/1/98 20
2 12/31/17 74 Revco 1/31/12 16
2 11/30/04 31 TJ Maxx 8/31/07 19
2 12/31/01 63 CVS Pharmacy 2/28/04 13
2 8/1/16 63 Blockbuster Video 6/30/01 7
2 9/30/17 66 Moovies, Inc. 9/30/07 7
2 4/30/17 52 Revco 8/31/06 8
2 10/31/04 27 Circut City 1/31/13 13
2 11/30/12 41 Kroger 1/30/12 28
2 7/22/07 50 Eckerds 5/14/03 11
2 5/31/13 64 Revco 7/31/01 14
2 11/30/06 38 Beall's 6/17/02 24
2 11/30/14 33 Winn Dixie 1/18/09 21
2 10/31/09 47 Revco 3/31/00 12
2 3/4/08 34 Wood's Sentry Hardware 6/30/98 13
2 8/31/06 51 Jackson Clinic 6/30/99 7
2 9/9/17 76 Blockbuster 12/1/02 3
2 3/1/13 62 Cato 1/1/03 9
2 3/30/09 41 Badcock Home Furnishing 5/31/02 14
2 4/14/18 71 Blimipie 6/30/08 3
3
4
4 2/28/01 28 Homecare 10/31/01 16
4 5/30/07 52 McLane, Graf, et al 5/27/12 27
4 3/31/99 20
4 12/31/99 47
4 7/15/06 11
5
6 1/31/13 21 Xtra 4/30/12 12
7 4/30/03 75 Tenley Sport & Health 12/31/07 8
8 4/24/17 14 Oshmans 1/31/17 10
9 2/28/03 7 Consulate General of Jamaica 4/30/08 6
10
10 12/31/16 100
10 2/28/08 100
11 3/31/18 100
12 1/31/04 26 JBR, Inc. 6/30/03 11
13
14
15
15 4/30/13 100
15 4/30/13 100
15 5/1/08 100
15 4/30/13 100
15 4/30/13 100
15 4/30/13 100
16 10/31/22 100
17 10/31/22 100
18
18
18
18
19
19
19
19
19
19
19
19
19
19
19
20
20 5/31/23 100
20 6/1/23 100
20 6/1/23 100
20 6/1/23 100
20 6/1/23 100
20 6/1/23 100
20 6/1/23 100
20 6/1/23 100
21
21
21
21
22
23
24
24
24
25 6/30/20 100
26
27 6/30/20 100
28
29 9/30/13 44 Capri Del 3/31/13 12
30 11/30/99 18 Vivaande Restaurant 8/31/04 8
31
31
31
31
31
31
31
31
32 11/30/17 100
33 8/30/05 29 Pueblo 1/31/05 17
34 5/31/08 29 Super Crown Books 1/31/99 19
35
35
35
35
35
35
35
36
36
36
37
38
39 10/31/22 100
40
41
42 6/30/20 100
43
44
45
46 4/30/13 100
47
48 8/31/16 41 Three D Departments, Inc. 8/31/12 18
49 8/31/00 7 Commonwealth Metal 6/30/01 6
50 1/31/23 100
51
51 4/1/03 100
51 4/1/03 100
52
52 7/30/00 13 Ecumenical Association 3/31/99 7
52
53
54
54 2/28/17 100
54 2/28/17 100
54 2/28/17 100
54 2/28/17 100
54 2/28/17 88
54 2/28/17 100
55 10/30/17 100
56
57
58 10/31/22 100
59
60
61
61
61
62 3/31/03 17 Gold's Gym 3/31/03 11
63 8/31/03 40 Pueblo 1/31/09 34
64
64
64
65
66
67
68
69 4/30/10 Wilson's Little Texas 12/10/02 22
70
70
70
70
71 11/21/18 42 Circuit City Stores, Inc. 1/31/15 36
72
73
74
74
74
75 12/31/05 44 Grand Union Supermarket 9/1/10 32
76 8/31/17 100
77 2/26/18 100
78
79 11/30/02 100
80
81 1/31/21 100
82 12/1/02 35 Pacific Showrooms West, Inc. 9/1/01 12
83
83
83
83
83
83
83
83
83
83
83
83
83
83
83
83
84 7/1/01 18 GSA Veterans Administration 4/1/03 14
85
86 7/30/00 44 Brookwood Grill 2/28/01 7
87
88
89
90 2/26/18 100
91
91
91
91
92 6/30/20 34 IHOP 3/31/08 7
93
94
94
94
95
96
97
98
99
100
100
100
100
100
101
102 1/1/01 29 New England College of Optometry 7/31/06 29
102
102
103 1/31/02 60 Thoroughbred Software 12/31/02 21
104
105 12/31/15 100
106
107
108 7/31/04 76 First Union 3/31/00 8
109 4/30/20 100
110
111
112 9/29/16 100
113 5/31/00 18 Young Adult Institute 9/30/04 14
114
115 4/30/00 28 USC 6/30/03 15
116
117 4/30/20 100
118
119
120
120 10/31/06 50 Pan Energy Inc. 16
120 8/31/07 66 Allen & Hoshall Limited 25
121 4/30/99 8 Discount Mart 1/30/01 2
122
123
124 3/31/00 20 Goody's 8/31/99 13
125
126 6/30/07 23 CVS 3/31/13 22
127 6/7/99 15 Ace Hardware 8/31/07 15
128 9/30/04 8 Buy-Rite Liquors, Inc. 5/30/04 4
129
130
131
131
131
132 5/13/04 16 Bank One (Suite 100) 9/30/99 15
133 11/30/02 100
134
135
136 11/30/00 34 Port Cargo Services 3/31/02 34
137 6/30/04 89 Interarch 6/30/04 7
138 4/30/03 35 Computer Store 5/31/00 7
139 5/30/01 22 NME Hospital, Inc. 6/23/05 20
140
141 2/26/18 100
142 10/31/00 70 Morse Controls 10/31/99 20
143 6/30/06 17 Pediatric Associates 5/31/02 12
144
145
146
147 11/19/98 18 Trinity Church 6/20/05 17
148
149
150 2/26/18 100
151 2/25/18 100
152 1/31/19 100
153
154 4/15/11 23 Dawahares 11/30/07 14
155 2/28/03 100
156
157
158
159 1/1/05 39 Shaw's Supermarket 2/1/12 20
160
161 2/26/18 100
162
163 6/30/18 100
164
165 1/10/18 100
166
167 12/31/01 3 Universal Property 5/31/99 3
168 9/30/16 100
169 7/31/08 5 Wells Fargo Gaurd Service 2/28/01 5
170 3/31/98 1 American PCS, LP 8/31/99
171
171 7/15/17 100
171 7/15/17 100
172 1/10/18 100
173 10/31/00 34 Tai Pan 6/30/98 6
174
175 8/31/03 25 Women's Health 8/17/07 14
176 1/10/18 100
177 1/31/23 100
178 1/10/18 100
179 1/10/18 100
180 12/1/19 100
181 2/26/18 100
182 5/31/04 73 Computer Utilization 1/31/00 18
183 8/31/02 60 Cenergi Service, Inc. 1/31/01 28
184
185 1/10/18 100
186 8/31/04 48 Seminole Community College 10/31/99 18
187 2/26/17 100
188
188
188
189 1/31/99 7 Auto Fitness Center 3/31/00 7
190 2/28/03 100
191 100
192
193 1/10/18 100
194 11/30/01 21 Blockbuster Video 6/30/99 18
195
196 1/10/18 100
197
197 9/1/00 33 Keith Construction 11/1/98 33
197 11/1/98 3 Farina & Associates 7/1/98 11
197 12/1/98 8 Kevin LaLonge 10/1/98 8
197 4/1/00 38 Smith/Monsees/Penza 10/1/02 18
197
198 1/31/23 100
199
200 12/1/19 100
201
202 6/30/07 44 Family Dollar 12/31/98 8
203 3/31/04 37 Rocket Video 1/30/01 21
204 9/30/00 17 Best Bagels 6/30/03 11
205
206
207 1/10/18 100
208 5/15/21 33 Eckerd Drug 3/31/03 9
209
209
209
210 9/30/01 17 Marc Malberg, M.D. 11/1/02 11
211 12/17/17 100
212 1/10/18 100
213
214 5/1/01 27 Schwans Wholesale Foods 2/1/01 18
215 12/31/22 100
216 4/30/99 16 Spectronis 6/21/05 11
217
217
217
217
217
218 5/31/05 43 Next Management Agency 3/31/04 30
219 1/10/18 100
220 12/31/07 16 Unique Cleaners 6/25/05 12
221 8/31/98 10 ADC Communications 6/24/05 8
221
221
222 3/30/16 100
223 3/2/15 100
224 12/31/02 35 El Pollo Loco 7/30/06 12
225 12/21/03 25 Frazee Industries, Inc. 1/12/02 21
226
227
228 7/9/05 95
229
230 11/30/11 54 Rite Aid of New York, Inc. 11/30/11 30
231 5/31/01 46 Closure Systems 4/30/02 24
232
233 3/1/08 100
234
235 1/31/18 100
236 9/30/03 16 Slick Willie's 7/31/02 13
237
238
238
238
239 8/31/56 100
240 9/30/06 28 Famous Fred Pizza & Grill 12/31/01 13
241 10/21/17 100
242
243
244 8/31/02 11 Le Cabaret 6/20/05 10
245
246 1/31/18 100
247 3/31/22 100
248 12/1/19 100
249 3/31/23 100
250
251 7/31/05 44 CVS Pharmacy 6/22/05 15
252 6/30/00 31 Premier Travel 1/31/10 25
253
254
255 2/28/06 23 Elliot's Unfinished Furniture 5/31/98 13
256
257 7/1/01 62 Olive Garden 7/27/05 19
258
259 8/31/17 100
260
261
262 9/30/02 32 Kenneth Robinson & N. Hantz 6/21/05 18
263
264
265
266 3/11/14 77 Eckerd Drug Store 7/6/05 20
267
268 3/31/99 35 Southernet, Inc. 8/31/01 18
269
270
271
271 4/30/99 60 Law Engineering 8/31/98 40
271 9/30/02 100
272 2/28/08 100
273 6/30/99 40 PPG Industries 9/30/99 29
274 7/31/98 14 Handleman Company 8/14/98 12
275 10/31/17 100
276 12/1/19 100
277 12/31/99 62 Michigan Heart 10/31/99 16
278 10/25/03 100
279 5/31/22 100
280 5/31/99 13 Emperor's Kitchen 6/25/05 13
281
282
283
284 12/17/05 54 Eckerd Drugs 6/28/05 19
285 4/6/03 100
286 4/25/17 100
287 11/30/01 39 Wilshire Coin 12/1/02 25
288
289
290 4/30/00 13 Dr, Schwartz 4/30/00 12
291 10/29/00 32 Flowers Baking 7/31/99 19
292
293 6/30/07 67 Olin Ctr for Internat'l Study 1/31/03 33
294
295
296
297 2/28/01 55 L.E. Balance Electrical 7/31/99 27
298 9/30/01 18 West Comp Insurance 2/26/01 13
299 100
299 11/2/16 100
299 6/19/17 100
300 6/30/02 16 Henken Orthodontics 12/31/00 7
301 9/15/00 37 Riverside County Office of Ed. 1/17/99 14
302
302
302
303
304
305 9/1/16 100
306
307
308
309 12/1/17 100
310 11/17/16 100
311 5/31/03 34 Town Cleaners 10/31/98 21
312
313
314
315 5/1/10 100
316 9/30/99 9 Life Extension Foundation 11/30/98 5
317 10/31/00 16 Diamond & Jewelry #3268 7/31/98 7
318 8/1/02 17 McGilvery's Pub 6/25/05 12
319
320
320
320
321 6/30/02 15 ISI/Checkpoint 6/24/05 13
322
323
324 10/31/00 26 Kirk Howell,CPA 3/31/01 16
<PAGE>
<CAPTION>
Lease % of
Expiration Total
Loan # Tenant 3 Date 3 SF
------ -------- ----------- ----
<S> <C> <C> <C>
1
1 Trak Auto 1/31/01 30
1 Up Against the Wall 8/31/01 25
1 6-Twelve 1/31/98 6
1 Total Crafts 7/31/03 14
1 Montgomery Wards (Dark) 4/30/02 13
1 Trak Auto 1/31/01 6
1 Blockbuster Video 3/31/00 6
1
1 Ross Dress for Less 1/31/04 12
1 Loehmann's 11/30/03 14
1
1 CVS 3/31/05 12
1 Super Trak #619 9/30/04 15
1 Murry's Steaks 4/30/01 16
1 PetsMart 1/31/03 15
2
2 Cato 1/31/99 8
2 TJ Maxx 12/1/98 10
2 Pizza Hut 1/8/02 3
2 Books-a-Million 1/31/06 15
2 Movie Gallery 12/31/99 3
2 Dollar Tree 6/30/01 5
2 Jo's Hallmark 2/28/03 5
2 Ladies Workout Express 1/31/02 5
2 Discovery Zone 10/31/03 8
2 Fashion Bug 1/31/99 4
2 The CATO Corporation 1/31/97 6
2 Lenz Dry Cleaning 2/28/00 4
2 Pro Health & Fitness 12/31/99 14
2 Regal Theatre 5/31/06 11
2 Movie Starz 8/31/99 7
2 Revco 11/30/98 12
2 American Homepatient 4/30/00 4
2 Hibbett Sporting Goods 8/1/02 3
2 Blockbuster Video 2/1/06 8
2 Rite Aid (fka Harco) 10/14/00 9
2 Lake Murray Cleaners 8/31/03 3
3
4
4 Sprint 4/30/01 12
4 Merrill Lynch 3/31/05 4
4
4
4
5
6 Woolworth 1/31/03 9
7 Cineplex Odeon 12/31/03 7
8 Hobby Lobby 10/31/16 9
9 P.M. of Jamaica to the UN 4/30/08 5
10
10
10
11
12 Sportmart 1/31/01 11
13
14
15
15
15
15
15
15
15
16
17
18
18
18
18
19
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
20
20
20
20
21
21
21
21
22
23
24
24
24
25
26
27
28
29 Walgreens 10/31/05 4
30 Opera Cinema 8/31/04 7
31
31
31
31
31
31
31
31
32
33 Senorial Cinemas 11/30/07 6
34 Blockbuster Music 12/31/03 19
35
35
35
35
35
35
35
36
36
36
37
38
39
40
41
42
43
44
45
46
47
48 A.C. Moore 7/31/07 16
49 Carle & Christie 10/22/01 4
50
51
51
51
52
52 Stetson Engineers 10/31/98 6
52
53
54
54
54
54
54
54
54
55
56
57
58
59
60
61
61
61
62 Citco 4/30/01 8
63 Walgreen's 11/30/98 10
64
64
64
65
66
67
68
69 Sbarro 9/30/03
70
70
70
70
71 OfficeMax, Inc. 4/30/13 22
72
73
74
74
74
75 CVS Drug Store 12/31/05 7
76
77
78
79
80
81
82 Provasi 3/1/03 6
83
83
83
83
83
83
83
83
83
83
83
83
83
83
83
83
84 Franchise Tax Board 7/1/03 14
85
86 Cafe Renaissance 12/31/99 4
87
88
89
90
91
91
91
91
92 99 Cent Warehouse 11/30/02 6
93
94
94
94
95
96
97
98
99
100
100
100
100
100
101
102 Partners Healthcare 12/31/07 29
102
102
103 Enorex Microsystems 8/31/02 8
104
105
106
107
108 Burns International 3/31/02 5
109
110
111
112
113 Housing Works, Inc 8/31/15 11
114
115 A.D. Banker 12/31/02 8
116
117
118
119
120
120 Kerioth Corp. 2/29/08 14
120
121 Shoes 4 Less 3/15/01 2
122
123
124 Heilig-Meyer 8/31/01 13
125
126 Allstar Video 2/1/04 17
127 S. Valley Care 5/20/02 9
128 Gloria Nilson, Realtors, Inc. 2/28/99 4
129
130
131
131
131
132 TranSouth (Suite 700) 5/11/00 13
133
134
135
136 Hopeman 8/31/91 17
137 Site Development, Inc. 6/30/04 4
138 Time Warner Corp 4/14/00 5
139 Medical Ambulatory Care, Inc. 12/31/02 20
140
141
142 President Baking Company, Inc. 6/30/99 5
143 Dr. Fine 5/31/03 7
144
145
146
147 Karon Gym 2/28/99 16
148
149
150
151
152
153
154 Watson's Home Store 4/15/11 14
155
156
157
158
159 CVS Pharmacy 8/1/99 7
160
161
162
163
164
165
166
167
168
169 HRN Services 4/30/99 4
170 APC 3/31/98
171
171
171
172
173 Dallas Teachers 8/31/98 5
174
175 Doctors of Manatee 7/31/02 10
176
177
178
179
180
181
182
183 Digiscope 8/31/02 12
184
185
186 Connextions International 12/31/93 8
187
188
188
188
189 Florida Drilling and Saw 7/31/99 4
190
191
192
193
194 Mattress Liquidators 9/30/00 18
195
196
197
197 Gould Paes 11/1/98 18
197 F.W. Davison 9/1/98 10
197 Anchor Intl. 9/1/00 5
197 Comprehensive Medical 2/1/00 10
197
198
199
200
201
202 Movie Gallery, MGA Inc. 6/30/99 6
203 Orbit Entertainment 9/30/00 15
204 US Post Office 6/30/99 8
205
206
207
208 Kilgore True Value Hardware 9/30/02 8
209
209
209
210 Fein, M.D./Richards, M.D. 12/31/99 11
211
212
213
214 So. Florida Leather Furniture 6/1/00 9
215
216 Dominion Mngmt 6/18/05 11
217
217
217
217
217
218 Prime 1 Media 2/28/03 16
219
220 Antique Store 9/30/01 11
221 Ro Jack's/Great Woods Software 5/31/98 10
221
221
222
223
224 Young Choi, DDS 4/30/01 6
225 U-Do Unfinished Furniture 11/30/99 14
226
227
228
229
230 Moreno's Pizza 11/30/03 5
231 SZW&E, Inc. 9/30/99 13
232
233
234
235
236 Confetti's 6/30/03 10
237
238
238
238
239
240 Payless Shoe Source 1/31/99 13
241
242
243
244 Swiss Cookery 4/30/98 7
245
246
247
248
249
250
251 Sally Bumgazdnec 4/30/00 8
252 District Court 7/31/99 19
253
254
255 Famous Sam's 1/31/06 11
256
257 Main Chinese Buffet 6/23/01 11
258
259
260
261
262 Middle East Executive Reports 3/31/99 11
263
264
265
266 Peoples Bank of Glen Rock 4/11/14 4
267
268 LCI International, Inc. 7/31/00 12
269
270
271
271
271
272
273 Courtlands 11/30/02 18
274 ICS/PICS 12/14/02 12
275
276
277 Dr. David Kearney 12/31/99 12
278
279
280 Asian Garden 7/31/01 9
281
282
283
284 National Home Video of Sangaree 3/31/99 7
285
286
287 Federal Express 3/1/00 22
288
289
290 Dr. Miller 12/31/01 11
291 Cretia's Collectibles 12/31/02 10
292
293
294
295
296
297 Standard Medical Imaging 11/30/02 18
298 Gyorkos & Fenton 2/28/00 13
299
299
299
300 Jand Inc. 6/30/99 6
301 Royal Liquor Market 1/16/99 11
302
302
302
303
304
305
306
307
308
309
310
311 Donut King 12/31/98 15
312
313
314
315
316 Little Seamstress 11/30/98 4
317 Video Services #3768 4/30/02 7
318 Sun Shop 3/31/02 9
319
320
320
320
321 Greenefield, Altman, Brown 3/31/03 13
322
323
324 Diversified Transportation 10/31/00 15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CSFB
Loan No. Control # Control # Property Name/Location Tenant/Lease Guarantor
- -------- --------- --------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
20 20 CL4 American Restaurant Group-Summary American Restaurant Group, Inc
20 20A CL4A American Restaurant Group - Sacramento, CA American Restaurant Group, Inc
20 20B CL4B American Restaurant Group - El Cajun, CA American Restaurant Group, Inc
20 20C CL4C American Restaurant Group - Chula Vista, CA American Restaurant Group, Inc
20 20E CL4E American Restaurant Group - Modesto, CA American Restaurant Group, Inc
20 20G CL4G American Restaurant Group - Riverside, CA American Restaurant Group, Inc
20 20H CL4H American Restaurant Group - Buena Park, CA American Restaurant Group, Inc
20 20J CL4J American Restaurant Group - Lake Forest, CA American Restaurant Group, Inc
20 20N CL4N American Restaurant Group - Bakersfield, CA American Restaurant Group, Inc
141 141 CL6 Best Buy - Akron, OH Best Buy Co., Inc.
150 150 CL8 Best Buy - Columbia, SC Best Buy Co., Inc.
161 161 CL11 Best Buy - Inver Grove Heights, MN Best Buy Co., Inc.
181 181 CL5 Best Buy - LaCrosse, WI Best Buy Co., Inc.
90 90 CL10 Best Buy - Mayfield, OH Best Buy Co., Inc.
77 77 CL13 Best Buy - Springfield, PA Best Buy Co., Inc.
32 32 CL9 Best Buy Dist. Ctr. - Staunton, VA Best Buy Co., Inc.
42 42 C-3012B Circuit City Stores, Inc./Carmax - Fort Worth Circuit City Stores, Inc.
27 27 C-3012C Circuit City Stores, Inc./Carmax - Miami Circuit City Stores, Inc.
25 25 C-3012A Circuit City Stores, Inc./Carmax - Naperville Circuit City Stores, Inc.
152 152 CL17 CVS Pharmacy - Stoughton, MA CVS Corporation
246 246 CL18 CVS Pharmacy - Woodstock, Ga CVS Corporation
109 109 CL19 Eagle Food- Geneva IL Eagle Food Centers, Inc.
117 117 CL20 Eagle Food - Molina, IL Eagle Food Centers, Inc.
235 235 C-3279 Eckerd Corporation - Forest Park Eckerd Corp.
241 241 CL22 Eckerd Pharmacy - Houma, LA Eckerd Corp.
211 211 CL21 Eckerd Pharmacy - Mary Esther, FL Eckerd Corp.
81 81 CL24 Elder-Beerman at Millcreek Mall, Erie, PA Elder-Beerman Stores Corp.
11 11 CL23 Elder-Beerman at the Dayton Mall, Dayton, OH Elder-Beerman Stores Corp.
177 177 CL14 Hoyts Cinemas - Concord, NH Hoyts Cinemas Limited
198 198 CL15 Hoyts Cinemas - Hooksett, NH Hoyts Cinemas Limited
50 50 CL26 Hoyts Theatre - Linthicum, MD Hoyts Cinemas America Limited
16 16 CL29 Kmart # 4987 - Carson, CA Kmart Corp.
58 58 CL30 Kmart # 3639 - Inglewood, CA Kmart Corp.
17 17 CL28 Kmart # 4986 - Virginia Beach Kmart Corp.
46 46 CL25 Fortunoff Backyard Store - Paramus, NJ M. Fortunoff of Westbury Corp.
222 222 CL31 Office Depot - College Twp PA Office Depot, Inc.
112 112 CL32 Office Depot - Paramus, NJ Office Depot, Inc.
172 172 CL33 PETsMART No. 102 - Aliso Viejo, CA PETsMart, Inc.
219 219 CL34 PETsMART No. 145 - Prescott, AZ PETsMart, Inc.
165 165 CL35 PETsMART No. 157 - Glendale, AZ PETsMart, Inc.
196 196 CL36 PETsMART No. 239 - Bannister, MO PETsMart, Inc.
178 178 CL37 PETsMART No. 475 - Downer\'s Grove, IL PETsMart, Inc.
179 179 CL38 PETsMART No. 586 - North Fayette, PA PETsMart, Inc.
212 212 CL39 PETsMART No. 648 - Murphreesboro, TN PETsMart, Inc.
193 193 CL40 PETsMART No. 685 - Roseville, MI PETsMart, Inc.
207 207 CL41 PETsMART No. 686 - Commerce, MI PETsMart, Inc.
176 176 CL42 PETsMART No. 688 - Northville, MI PETsMart, Inc.
185 185 CL43 PETsMART No. 689 - Taylor, MI PETsMart, Inc.
39 39 CL16 Cobb Theaters - Tampa, FL R. C. Cobb, Inc.
249 249 CL52 Rite Aid - Auburn Hills, MI Rite Aid Corporation
275 275 CL45 Rite Aid - Auburn, ME Rite Aid Corporation
259 259 CL46 Rite Aid - Cleveland, OH Rite Aid Corporation
171 171 CL50 Rite Aid Macon & College Park Summary Rite Aid Corporation
171 171A CL50A Rite Aid - Macon, GA Rite Aid Corporation
171 171B CL50B Rite Aid - College Park, GA Rite Aid Corporation
279 279 CL49 Rite Aid - Hazel Park, MI Rite Aid Corporation
247 247 CL48 Rite Aid - Melvindale, MI Rite Aid Corporation
286 286 CL47 Rite Aid - Morrow, GA Rite Aid Corporation
215 215 CL51 Rite Aid - Washington, MI Rite Aid Corporation
180 180 C-2792 Rite Aid Corporation - Baltimore Rite Aid Corporation
276 276 C-2790 Rite Aid Corporation - Canton Rite Aid Corporation
200 200 C-2791 Rite Aid Corporation - Cleveland Rite Aid Corporation
248 248 C-2789 Rite Aid Corporation - Garettsville Rite Aid Corporation
305 305 C-2785 Rite Aid Corporation - Monticello Rite Aid Corporation
310 310 C-2784 Rite Aid Corporation - Mount Morris Rite Aid Corporation
54 54 CL54 Shemin Nursery Portfolio Summary Shemin Nurseries, Inc.
54 54A CL54A Shemin Nursery - Mahwah, NJ Shemin Nurseries, Inc.
54 54B CL54B Shemin Nursery - Burtonsville, MD Shemin Nurseries, Inc.
54 54C CL54C Shemin Nursery - Addison, IL Shemin Nurseries, Inc.
54 54D CL54D Shemin Nursery - Taylor, MI Shemin Nurseries, Inc.
54 54E CL54E Shemin Nursery - Oaks, PA Shemin Nurseries, Inc.
54 54F CL54F Shemin Nursery - Hudson, MA Shemin Nurseries, Inc.
105 105 CL55 United Artists - Camarillo, CA United Artists Theatre Circuit
239 239 CL56 Walgreen Co. - Bedford, TX Walgreen Co.
223 223 C-2788 Winn-Dixie Stores, Inc. - Auburn Winn-Dixie Stores, Inc.
187 187 C-2787 Winn-Dixie Stores, Inc. - Bunkie Winn-Dixie Stores, Inc.
151 151 C-3261 Winn-Dixie Stores, Inc. - Selma Winn-Dixie Stores, Inc.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Tenant/Lease Guarantor Rating Cut-off Date
- ----------------------------------------------------------------------------------------------------- Principal
Property Type Moody's S&P Lease Type Balance
- ------------- ------- --- ---------- -------
<S> <C> <C> <C> <C>
Food Service B Bondable Lease 18,546,279
Food Service B Bondable Lease 1,524,602
Food Service B Bondable Lease 2,382,761
Food Service B Bondable Lease 2,629,253
Food Service B Bondable Lease 2,350,808
Food Service B Bondable Lease 2,464,925
Food Service B Bondable Lease 2,177,350
Food Service B Bondable Lease 2,305,161
Food Service B Bondable Lease 2,711,418
Electronics Ba3 BB|m- Triple Net Lease 4,579,531
Electronics Ba3 BB|m- Triple Net Lease 4,469,298
Electronics Ba3 BB|m- Triple Net Lease 4,142,785
Electronics Ba3 BB|m- Triple Net Lease 3,597,915
Electronics Ba3 BB|m- Triple Net Lease 7,558,145
Electronics Ba3 BB|m- Triple Net Lease 8,656,976
Distribution Center Ba3 BB|m- Triple Net Lease 16,154,318
Electronics Bondable Lease 13,463,517
Electronics Bondable Lease 16,401,012
Electronics Bondable Lease 16,890,594
Drug A3 A|m- Double Net Lease 4,420,015
Drug A3 A|m- Double Net Lease 2,232,279
Grocery B1 B+ Triple Net Lease 6,104,894
Grocery B1 B+ Triple Net Lease 5,673,660
Drug A Double Net Lease 2,391,354
Drug A Triple Net Lease 2,290,248
Drug A Triple Net Lease 2,867,198
Department Stores Bondable Lease 8,490,238
Department Stores Bondable Lease 27,509,152
Entertainment BB Triple Net Lease 3,733,234
Entertainment BB Triple Net Lease 3,185,239
Entertainment BB Triple Net Lease 11,740,441
Discount & General Merchandise Store Ba3 BB Bondable Lease 20,814,442
Discount & General Merchandise Store Ba3 BB Bondable Lease 10,634,081
Discount & General Merchandise Store Ba3 BB Bondable Lease 20,300,506
Discount & General Merchandise Store Ba3 BB Triple Net Lease 12,603,934
Office Products BB+ Triple Net Lease 2,560,318
Office Products BB+ Triple Net Lease 5,898,234
Discount & General Merchandise Store B2 B+ Bondable Lease 3,846,309
Discount & General Merchandise Store B2 B+ Bondable Lease 2,692,151
Discount & General Merchandise Store B2 B+ Bondable Lease 4,025,692
Discount & General Merchandise Store B2 B+ Bondable Lease 3,189,766
Discount & General Merchandise Store B2 B+ Bondable Lease 3,689,244
Discount & General Merchandise Store B2 B+ Bondable Lease 3,689,244
Discount & General Merchandise Store B2 B+ Bondable Lease 2,791,860
Discount & General Merchandise Store B2 B+ Bondable Lease 3,290,407
Discount & General Merchandise Store B2 B+ Bondable Lease 2,975,899
Discount & General Merchandise Store B2 B+ Bondable Lease 3,788,953
Discount & General Merchandise Store B2 B+ Bondable Lease 3,390,116
Entertainment Ba2 BB|m- Triple Net Lease 13,636,651
Drug Baa1 BBB+ Double Net Lease 2,198,478
Drug Baa1 BBB+ Double Net Lease 1,792,879
Drug Baa1 BBB+ Double Net Lease 2,026,436
Drug Baa1 BBB+ Double Net Lease 3,884,658
Drug Baa1 BBB+ Double Net Lease 1,757,345
Drug Baa1 BBB+ Double Net Lease 2,127,313
Drug Baa1 BBB+ Double Net Lease 1,745,647
Drug Baa1 BBB+ Double Net Lease 2,226,480
Drug Baa1 BBB+ Double Net Lease 1,592,986
Drug Baa1 BBB+ Double Net Lease 2,736,245
Drug Baa1 BBB+ Bondable Lease 3,607,480
Drug Baa1 BBB+ Bondable Lease 1,768,742
Drug Baa1 BBB+ Bondable Lease 3,174,044
Drug Baa1 BBB+ Bondable Lease 2,204,870
Drug Baa1 BBB+ Double Net Lease 1,292,665
Drug Baa1 BBB+ Double Net Lease 1,179,598
Agriculture Bondable Lease 11,390,457
Agriculture Bondable Lease 2,268,370
Agriculture Bondable Lease 1,847,101
Agriculture Bondable Lease 4,147,876
Agriculture Bondable Lease 437,471
Agriculture Bondable Lease 1,458,238
Agriculture Bondable Lease 1,231,401
Entertainment B+ Double Net Lease 6,480,848
Drug Aa3 A+ Double Net Lease 2,303,898
Grocery Aa3 Double Net Lease 2,537,596
Grocery Aa3 Triple Net Lease 3,375,192
Grocery Aa3 Double Net Lease 4,441,452
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Leased Leased Dark Dark Balloon Stated Expiration of
Value (1) LTV Value (2) LTV Amount Maturity Date Primary Lease Term
--------- --- --------- --- ------ ------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
20,315,000 91 17,290,000 107 5/11/23
1,670,000 91 1,190,000 128 5/31/23
2,610,000 91 2,160,000 110 6/1/23
2,880,000 91 2,400,000 109 6/1/23
2,575,000 91 2,185,000 108 6/1/23
2,700,000 91 2,435,000 101 6/1/23
2,385,000 91 2,100,000 103 6/1/23
2,525,000 91 2,145,000 107 6/1/23
2,970,000 91 2,675,000 101 6/1/23
4,800,000 95 3,800,000 121 1,440,000 2/11/18 2/26/18
4,500,000 99 3,700,000 121 1,400,000 2/11/18 2/26/18
4,000,000 104 3,400,000 122 1,300,000 2/11/18 2/26/18
3,800,000 95 3,000,000 120 1,130,000 2/11/18 2/26/18
8,100,000 93 5,700,000 133 1,550,000 2/11/18 2/26/18
9,300,000 93 7,100,000 122 2,425,000 2/11/18 2/26/18
16,500,000 98 13,500,000 120 8,374,898 12/11/17 11/30/17
13,800,000 98 9,600,000 140 5/31/20 6/30/20
16,800,000 98 10,900,000 150 5/31/20 6/30/20
17,300,000 98 10,700,000 158 5/31/20 6/30/20
4,420,000 100 3,800,000 116 1/11/19 1/31/19
2,200,000 101 1,750,000 128 695,000 1/11/18 1/31/18
6,300,000 97 4,900,000 125 1,921,872 4/11/20 4/30/20
5,800,000 98 4,500,000 126 1,927,329 4/11/20 4/30/20
2,500,000 96 2,000,000 120 700,000 1/1/18 1/31/18
2,300,000 100 1,800,000 127 1/11/16 10/21/17
3,100,000 92 2,200,000 130 12/11/17 12/17/17
8,500,000 100 6,600,000 129 2,300,027 1/11/21 1/31/21
29,100,000 95 15,800,000 174 6,000,000 3/11/18 3/31/18
4,000,000 93 3,000,000 124 1/11/23 1/31/23
3,400,000 94 2,700,000 118 1/11/23 1/31/23
12,100,000 97 9,500,000 124 1/11/23 1/31/23
21,200,000 98 17,400,000 120 11/1/22 10/31/22
12,200,000 87 9,700,000 110 11/1/22 10/31/22
20,500,000 99 16,600,000 122 11/1/22 10/31/22
14,200,000 89 7,700,000 164 3/11/13 4/30/13
2,600,000 98 2,100,000 122 3/11/16 3/30/16
6,050,000 97 4,700,000 125 9/11/16 9/29/16
3,900,000 99 3,200,000 120 3,430,038 1/11/08 1/10/18
2,700,000 100 2,200,000 122 2,400,788 1/11/08 1/10/18
4,200,000 96 3,500,000 115 3,590,007 1/11/08 1/10/18
3,300,000 97 2,700,000 118 2,844,550 1/11/08 1/10/18
3,700,000 100 3,000,000 123 3,289,970 1/11/08 1/10/18
3,700,000 100 3,000,000 123 3,289,970 1/11/08 1/10/18
2,800,000 100 2,300,000 121 2,489,708 1/11/08 1/10/18
3,300,000 100 2,700,000 122 2,934,298 1/11/08 1/10/18
3,100,000 96 2,500,000 119 2,653,829 1/11/08 1/10/18
3,800,000 100 3,100,000 122 3,378,888 1/11/08 1/10/18
3,400,000 100 2,700,000 126 3,023,216 1/11/08 1/10/18
14,000,000 97 11,400,000 120 10/11/22 10/31/22
2,300,000 96 2,000,000 110 3/11/23 3/31/23
2,000,000 90 1,800,000 100 10/11/17 10/31/17
2,200,000 92 1,800,000 113 7/11/17 8/31/17
4,200,000 92 3,300,000 118 9/11/17
1,900,000 92 1,500,000 117 9/11/17 7/15/17
2,300,000 92 1,800,000 118 9/11/17 7/15/17
1,700,000 103 1,400,000 125 5/11/22 5/31/22
2,200,000 101 1,800,000 124 3/11/22 3/31/22
1,700,000 94 1,360,000 117 4/11/17 4/25/17
2,800,000 98 2,200,000 124 12/11/22 12/31/22
3,680,000 98 2,880,000 125 12/1/19 12/1/19
1,825,000 97 1,300,000 136 12/1/19 12/1/19
3,275,000 97 2,000,000 159 12/1/19 12/1/19
2,275,000 97 1,500,000 147 12/1/19 12/1/19
1,550,000 83 1,350,000 96 9/1/16 9/1/16
1,400,000 84 1,195,000 99 11/1/16 11/17/16
17,575,000 65 13,645,000 83 2/11/17
3,500,000 65 2,650,000 86 2/28/17
2,850,000 65 1,220,000 151 2/28/17
6,400,000 65 5,250,000 79 2/28/17
675,000 65 475,000 92 2/28/17
2,250,000 65 1,550,000 94 2/28/17
1,900,000 65 2,500,000 49 2/28/17
7,100,000 91 5,800,000 112 12/11/15 12/31/15
2,500,000 92 2,000,000 115 8/11/16 8/31/56
3,350,000 76 2,780,000 91 2/1/15 3/2/15
3,950,000 85 3,347,000 118 2/1/17 2/26/17
4,750,000 94 3,700,000 120 1,360,000 2/1/18 2/25/18
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Cut-Off Cut-Off First Step First Step First Step
Date Annual Date Annual Date of Date Annual Date Annual First Step
Debt Service Net Rent DSCR Debt Service Debt Service Net Rent Date DSCR (3)
- ------------ -------- ---- ------------ ------------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
1,855,964 1,937,300 1.04
1,937,300
420,000 420,000 1
410,000 410,000 1
380,000 380,000 1
330,000 330,000 1
710,000 710,000 1
800,000 800,000 1
1,499,114 1,509,200 1.01 1/11/03 1,574,070 1,584,660 1.01
1,255,375 1,255,375 1
1,529,275 1,529,275 1
1,574,925 1,574,925 1
353,619**** 370,797**** 1.05 7/11/03 389,668 408,597 1.05
169,088 172,116 1.02 2/11/03 182,858 185,895 1.02
567,434 582,400 1.03
525,210 540,800 1.03
203,013 205,043 1.01 2/1/03 210,438 212,542
200,968 200,968 1 11/11/02 206,422 206,422 1
258,058 259,926 1.01 1/11/03 263,472 263,492 1.01
782,513 790,081 1 5/11/03 832,594 832,594 1
2,682,539 2,682,539 1 4/11/03 2,854,222 2,854,222 1
351,626 388,359 1.1 2/11/10 351,626 434,962 1.24
300,009 331,456 1.1 2/11/10 300,009 371,231 1.24
1,002,495 1,083,875 1.08 2/11/03 1,060,618 1,147,125 1.08
1,979,927 1,979,927 1
1,011,543 1,011,543 1
1,931,040 1,931,040 1
1,202,621 1,252,621 1.04 6/11/99 106,575 110,742 1.04
220,000 220,000 1 4/11/01 253,000 253,000 1
494,000 495,000 1 10/11/01 568,250 568,250 1
364,827 364,827 1
255,354 255,354 1
381,842 381,842 1
302,553 302,553 1
349,929 349,929 1
349,929 349,929 1
264,811 264,811 1
312,099 312,099 1
282,268 282,268 1
359,387 359,387 1
321,557 321,557 1
1,283,966 1,318,512 1.03 11/11/02 1,322,484 1,358,062 1.03
182,254 182,254 1
169,017 177,468 1.05
184,731 184,731 1
372,066 372,066 1 7/11/17 235,940 235,940 1
164,345 164,345 1
204,398 207,398 1
148,777 163,451 1.1
191,893 193,350 1.01
150,273 150,273 1
227,329 227,330 1
335,000 335,000 1
164,250 164,250 1
294,750 294,750 1
204,750 204,750 1
136,214 149,331 1.1
125,111 131,455 1.05
1,218,274 1,584,000 1.3
360,000
360,000
324,000
120,000
240,000
180,000
607,855 607,855 1 4/11/01 676,228 752,101 1.11
220,812 220,812 1
285,212 296,929 1.04
354,950 375,320 1.06
388,901 394,790 1.02
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Second Third
Second Step Second Step Second Step Step Third Step Third Step Third Step Step Fourth Step Fourth Step
Date of Date Annual Date Annual Date Date of Date Annual Date Annual Date Date of Date Annual
Debt Service Debt Service Net Rent DSCR (3) Debt Service Debt Service Net Rent DSCR (3) Debt Service Debt Service
- ------------ ------------ -------- -------- ------------ ------------ -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1/11/08 1,652,773 1,663,893 1.01 1/11/13 1,735,412 1,747,088 1.01
7/11/08 429,321 450,177 1.05 7/11/13 472,940 495,939 1.05
2/11/08 197,729 200,767 1.02 2/11/13 213,790 216,828 1.01
2/1/08 215,838 217,986 2/1/13 221,238 223,450
11/11/07 211,876 211,876 1 11/11/12 217,330 217,330 1 10/11/17 147,224
1/11/08 268,887 270,834 1/11/13 276,288 276,288
5/11/08 885,880 885,880 1 5/11/13 942,576 942,576 1
4/11/08 3,036,892 3,036,892 1 4/11/13 3,231,253 3,231,253 1
2/11/08 1,239,158 1,339,750 1.08 2/11/13 1,318,932 1,426,000 1.08 2/11/18 1,398,706
6/11/00 114,064 109,814 1.04 6/11/01 117,486 113,236 1.04 6/11/02 121,011
4/11/06 290,950 290,950 1 4/11/11 334,592 334,592
10/11/06 653,637 653,637 1 10/11/11 751,832 751,832 1 9/11/16 726,771
11/11/07 1,362,159 1,398,804 1.03 11/11/12 1,403,023 1,440,768 1.03 11/11/17 1,445,115
8/11/17 203,270 203,270 1 9/11/17 47,914 47,914 1
4/11/06 750,634 826,507 1.1 4/11/11 835,094 910,967 1.09
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Fourth Fifth Sixth
Fourth Step Step Fifth Step Fifth Step Fifth Step Step Sixth Step Sixth Step Sixth Step Step
Date Annual Date Date of Date Annual Date Annual Date Date of Date Annual Date Annual Date
Net Rent DSCR (3) Debt Service Debt Service Net Rent DSCR (3) Debt Service Debt Service Net Rent DSCR (3)
- -------- -------- ------------ ------------ -------- --------------------- ------------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
147,224 1
1,512,252 1.08
116,761 1.04 6/11/03 124,641 120,391 1.04 6/11/04 128,380 124,130 1.03
726,771 1
1,483,991 1.03
</TABLE>
<PAGE>
CERTAIN INFORMATION REGARDING THE LOAN GROUP 2 MORTGAGE LOANS
ANNEX C
<TABLE>
<CAPTION>
CUT-OFF
LOAN # PROPERTY NAME DATE BALANCE PROPERTY COUNTY
- ---------- ------------------------------------ -------------- ------------------
<S> <C> <C> <C>
18 Pantzer Cross-Summary $20,111,247 New Castle
18A Sandalwood Apartments New Castle
18B Cedar Tree Apartments New Castle
18C Oaktree Apartments New Castle
24 Essex/Brookdale Summary $16,975,768 Essex
24A Brookdale Gardens Condominiums Essex
24B Essex House Apartments Essex
26 Top of the Hill Apartments $16,469,614 New Castle
28 Foxfire Apartments $16,313,585 Prince George's
County
31 Wentwood Portfolio Summary $16,177,074 Various Counties
31A Crosswinds Apartments Comanche
31B Legends Apartments Grady
31C Parkview Apartments Stephens
31D Spanish Gardens Apartments Dallas
31E Sussex Place Apartments Dallas
31F Terrace Hills Apartments Comanche
31G Windcrest Place Apartments Bexar
37 Peak At Somerset $14,127,948 Thurston County
41 Valley Stream Village Apts. $13,491,939 Lucas
43 Heather Ridge Apartments $13,207,048 Gloucester County
45 Highland Apartments $12,733,126 Lake
57 British Woods Apartments $10,655,199 Durham
67 University Heights Apartments $ 9,444,669 Travis
72 Perry Lake Village $ 8,894,686 Wood
78 Fossil Ridge Apartments $ 8,554,761 Tarrant
83 South Beach Multis Summary $ 8,290,186 Miami-Dade
83A 800-820 10th Street Miami-Dade
83B 1043-47 Euclid Miami-Dade
83C 714-722 15th Street Miami-Dade
83D 610-612 16th Street Miami-Dade
83E 1234 Pennsylvania Miami-Dade
83F 1509-1519 Pennsylvania Miami-Dade
83G 701-11th & 1110 Euclid Miami-Dade
83H 700-14th & 1350 Euclid Miami-Dade
83I 700-716 14th Place Miami-Dade
83J 631-639 13th Street Miami-Dade
83L 725-729 Lenox Avenue Miami-Dade
83M 626-652 Jefferson Miami-Dade
83N 744 Jefferson Miami-Dade
83O 831 Meridian Miami-Dade
83Q 1311 Meridian Avenue Miami-Dade
85 Harvestree Apartments $ 8,075,130 Collin
98 Forest Pointe Apartments $ 6,990,619 Bibb County
99 Arundel Apartments $ 6,911,712 New Castle
101 Yorktown Apartments and Townhouses $ 6,837,119 Durham
</TABLE>
C-1
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF
LOAN # PROPERTY NAME DATE BALANCE PROPERTY COUNTY
- ----------- ------------------------------------------- -------------- ----------------
<S> <C> <C> <C>
114 Winfield Landing Apartments $ 5,802,554 Harris
119 Atlantis Apartments $ 5,592,477 Atlantic
125 Green Oaks Apartments $ 5,200,000 Cook
130 Concord Apartments $ 4,898,523 Lehigh
135 Highland Court Apartments $ 4,783,146 Ouachita
140 Park Magnolia Apartments $ 4,693,284 Los Angeles
148 Wisteria Gardens Apartments $ 4,491,484 Harris
156 Alameda Apartments $ 4,244,735 Alameda
157 Forest Ridge Apartments $ 4,222,767 Cuyahoga
158 Colony Club Apartments $ 4,220,948 Monmouth
160 Oswego Village Apartments $ 4,157,320 Clakamas
167 41 Elm Street Apartment & Office Building $ 3,996,077 Morris
188 283 Bleeker St. & 59-61 Thompson St. $ 3,342,509 New York
195 Cynwyd Club Apartments $ 3,244,834 New Castle
201 Cedar Creek Apartments $ 3,150,000 Crawford
242 Maple Gardens Apartments $ 2,273,683 San Bernardino
254 Wyndham Court Apartments $ 2,140,788 Dallas
265 Deerfield East Apartments $ 1,986,880 Broward
267 Loma Verde Apartments $ 1,976,125 Cochise
269 Santa Gertrudes Apartments $ 1,899,042 Los Angeles
281 701-703 West 184th Street $ 1,723,404 New York
292 Stirrup Woods $ 1,499,132 Lucas
303 The Parliament House $ 1,347,108 Arlington
304 Willow Road Apartments $ 1,298,750 Richmond
306 Kittridge Apartments/ Santa Monica $ 1,275,162 Los Angeles
307 Greenridge Apartments $ 1,246,111 Maricopa
320 Clay/Morrison Summary $ 997,168 Bronx
320A 1250 Morrison Avenue Bronx
320B 1812 Clay Avenue Bronx
323 85 Broad Street $ 898,560 Middlesex
------------
$300,863,995
</TABLE>
C-2
<PAGE>
ANNEX D
Credit Suisse First Boston
Commercial Mortgage Pass-Through Certificates, Series 1998-C1
COMPARATIVE FINANCIAL STATUS REPORT
as of _______
<TABLE>
<CAPTION>
2ND PRECEDING
ORIGINAL UNDERWRITING ANNUAL OPERATING
---------------------------------- --------------------------------
INFORMATION INFORMATION
---------------------------------- --------------------------------
BASIS YEAR AS OF NORMALIZED
---------------------------------- --------------------------------
LAST
PROPERTY PAID ANNUAL FINANCIAL FINANCIAL
PROSPECTUS INSPECT SCHEDULED THRU DEBT INFO AS OF % TOTAL $ (1) INFO AS OF % TOTAL $ (1)
ID CITY STATE DATE LOAN BALANCE DATE SERVICE DATE OCC REVENUE NOI DSCR DATE OCC REVENUE NOI DSCR
- ---------- ---- ----- ------- ------------ ---- ------- ---------- --- ------- ---- ----- ----------- ---- ------- --- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
yy/mm yy/mm yy/mm
List all properties currently in deal with or without information largest to smallest loan
Total: $ $ WA $ $ WA WA $ $ WA
RECEIVED REQUIRED
---------------- -------------------
FINANCIAL INFORMATION: LOANS BALANCE LOANS BALANCE
----- ----------- ------- ---------
# % $ % # % $ %
Current Full Year:
Current Full Yr. received with DSC(less than)1:
Prior Full Year:
Prior Full Yr. received with DSC(less than)1:
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
PRECEDING ANNUAL OPERATING TRAILING FINANCIAL OR YTD NET CHANGE
-------------------------------------- --------------------------------- ---------------
INFORMATION INFORMATION
-------------------------------------- ---------------------------------
AS OF NORMALIZED MONTH REPORTED ACTUAL PRECEDING & BASIS
-------------------------------------- --------------------------------- ------------------
FINANCIAL %
PROSPECTUS INFO AS OF % TOTAL $ (1) FS START FS END TOTAL $ % % TOTAL (1)
ID DATE OCC REVENUE NOI DSCR DATE DATE REVENUE NOI DSC OCC REVENUE DSCR
- ---------- ---------- ----- ------- --- ---- -------- ------ ------- --- ------ --- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
yy/mm yy/mm yy/mm
Total: WA $ $ WA WA $ $ WA WA $ WA
</TABLE>
- ------------
(1) DSCR should match to Operating Statement and is normally calculated
using NOI/Debt Service.
(2) Net change should compare the latest year to the underwriting year.
D-1
<PAGE>
Credit Suisse First Boston Mortgage Securities Corp.
Commercial Mortgage Pass-Through Certificates, Series 1998-C1
DELINQUENT LOAN STATUS REPORT
as of _______
<TABLE>
<CAPTION>
S4 S55 S61 S57 S58 P74 P75
- ---------- ----------- -------- ---- ----- ----------- --------- --------- ------------- ----------
(f)=P38/P81 (g)=(.92*f)-e (h)=(g/e)
----------- --------- --------- ------------- ----------
APPRAISAL
SHORT NAME VALUE USING BPO OR LOSS USING
PROSPECTUS (WHEN PROPERTY NOI & CAP VALUATION INTERNAL 90% APPR. OR ESTIMATED
ID APPROPRIATE) TYPE CITY STATE RATE DATE VALUE** BPO (f) RECOVERY %
- ---------- ----------- -------- ---- ----- ----------- --------- --------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
90+ DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
CURRENT & AT SPECIAL SERVICER
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
S4 P35 P77 P79 P42 P82 P76
- ---------- --------- -------- ---------- --------- -------- --------
TOTAL
APPRAISAL EXPECTED
PROSPECTUS REDUCTION TRANSFER RESOLUTION FCL START FCL SALE WORKOUT
ID REALIZED DATE DATE DATE DATE STRATEGY COMMENTS
- ---------- --------- -------- ---------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
90+ DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
CURRENT & AT SPECIAL SERVICER
</TABLE>
- ------------
FCL - Foreclosure
LTM - Latest 12 Months either Last Annual or Trailing 12 months
* Workout Strategy should match the CSSA Loan file using abbreviated
words in place of a code number such as (FCL - In Foreclosure, MOD
- Modification, DPO - Discount Payoff, NS - Note Sale, BK - Bankruptcy,
PP - Payment Plan, TBD - To Be Determined etc...)
It is possible to combine the status codes if the loan is going in more
than one direction. (i.e. FCL/Mod, BK/Mod, BK/FCL/DPO)
** App - Appraisal, BPO - Broker opinion, Int. - Internal Value
*** How to determine the cap rate is agreed upon by Underwriter and
servicers - to be provided by a third party.
D-2
<PAGE>
Credit Suisse First Boston Mortgage Securities Corp.
Commercial Mortgage Pass-Through Certificates, Series 1998-C1
DELINQUENT LOAN STATUS REPORT
as of ______
<TABLE>
<CAPTION>
S4 S55 S61 S57 S58 S62 OR S63 P8 P7 P37 P39
- ---------- ----------- -------- ---- ----- ---------- --------- --------- ----------- -----------
(a) (b) (c)
--------- ----------- -----------
SHORT NAME SCHEDULED TOTAL P&I TOTAL
PROSPECTUS (WHEN PROPERTY SQ FT OR PAID THRU LOAN ADVANCES TO EXPENSES TO
ID APPROPRIATE) TYPE CITY STATE UNITS DATE BALANCE DATE DATE
- ---------- ----------- -------- ---- ----- ---------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
90+ DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
CURRENT & AT SPECIAL SERVICER
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
S4 P38 P25 P10 P11 P58 P54 P55 P81
- ---------- -------- --------- ----------- ------------- -------- ------- ------- -------- -----------
(D) (E)=A+B+C+D
-------- ---------
OTHER
ADVANCES
PROSPECTUS (TAXES & TOTAL CURRENT CURRENT MATURITY LTM NOI ***CAP RATE
ID ESCROW) EXPOSURE MONTHLY P&I INTEREST RATE DATE DATE LTM NOI LTM DSCR ASSIGNED
- ---------- -------- --------- ----------- ------------- -------- ------- ------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
90+ DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
CURRENT & AT SPECIAL SERVICER
</TABLE>
- ------------
FCL - Foreclosure
LTM - Latest 12 Months either Last Annual or Trailing 12 months
* Workout Strategy should match the CSSA Loan file using abbreviated
words in place of a code number such as (FCL - In Foreclosure, MOD
- Modification, DPO - Discount Payoff, NS - Note Sale, BK - Bankruptcy,
PP - Payment Plan, TBD - To Be Determined etc...)
It is possible to combine the status codes if the loan is going in more
than one direction. (i.e. FCL/Mod, BK/Mod, BK/FCL/DPO)
** App - Appraisal, BPO - Broker opinion, Int. - Internal Value
*** How to determine the cap rate is agreed upon by Underwriter and
servicers - to be provided by a third party.
D-3
<PAGE>
Credit Suisse First Boston
Commercial Mortgage Pass-Through Certificates, Series 1998-C1
HISTORICAL LOAN MODIFICATION REPORT
as of _______
<TABLE>
<CAPTION>
BALANCE
MOD/ WHEN SENT BALANCE AT THE # MTHS
EXTENSION EFFECT TO SPECIAL EFFECTIVE DATE OF FOR RATE
PROSPECTUS ID CITY STATE FLAG DATE SERVICER REHABILITATION OLD RATE CHANGE
- ------------- ---- ----- --------- ------ ---------- ----------------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS HISTORICAL
Information is as of modification. Each line it should not change in the future.
Only new modifications should be added.
TOTAL FOR ALL LOANS:
TOTAL FOR LOANS IN CURRENT MONTH:
# of Loans $ Balance
MODIFICATIONS:
MATURITY DATE EXTENSIONS:
TOTAL:
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
(2) EST.
FUTURE
TOTAL # (1) INTEREST LOSS
MTHS FOR REALIZED TO TRUST $
NEW OLD NEW CHANGE OF LOSS TO (RATE
PROSPECTUS ID RATE OLD P&I NEW P&I MATURITY MATURITY MOD TRUST $ REDUCTION) COMMENT
- ------------- ------- ------- ------- -------- --------- ----------- ------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS HISTORICAL
Information is as of modification. Each line it should not change in the future. Only
new modifications should be added.
TOTAL FOR ALL LOANS:
TOTAL FOR LOANS IN CURRENT MONTH:
MODIFICATIONS:
MATURITY DATE EXTENSIONS:
TOTAL:
</TABLE>
- ------------
* The information in these columns is from a particular point in time and
should not change on this report once assigned.
(1) Actual principal loss taken by bonds
(2) Expected future loss due to a rate reduction. This is just an estimate
calculated at the time of the modification.
D-4
<PAGE>
Credit Suisse First Boston
Commercial Mortgage Pass-Through Certificates
Series 1998-C1
HISTORICAL LOSS ESTIMATE REPORT (REO-SOLD OR DISCOUNTED PAYOFF)
as of ___________
<TABLE>
<CAPTION>
S4 S55 S61 S57 S58 P45/P7 P75 P45 P7
- ---------- ----------- -------- ---- ----- --------- ------------ ------- ----------- --------- ---------
(c)=b/a (a) (b) (d) (e)
--------- ------------ ------- ----------- --------- ---------
LATEST
SHORT NAME % APPRAISAL OR EFFECT NET AMT
PROSPECTUS (WHEN PROPERTY RECEIVED BROKERS DATE OF RECEIVED SCHEDULED
ID APPROPRIATE) TYPE CITY STATE FROM SALE OPINION SALE SALES PRICE FROM SALE BALANCE
- ---------- ----------- -------- ---- ----- --------- ------------ ------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS HISTORICAL
All Information is from the liquidation date and does not need to be updated.
TOTAL ALL LOANS:
CURRENT MONTH ONLY:
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
S4 P37 P39+P38
- ---------- --------- --------
(f) (g) (h) (i)=d-(f+g+h) (k)=i-e (m) (n)=k+m (o)=n/e
--------- -------- ------------- ------------ ------------- --------- ------------ ------ --------------- ---------
MINOR
DATE LOSS ADJ TOTAL LOSS % OF
PROSPECTUS TOTAL P&I TOTAL SERVICING FEES NET ACTUAL LOSSES PASSED MINOR ADJ TO PASSED LOSS WITH SCHEDULED
ID ADVANCED EXPENSES EXPENSE PROCEEDS PASSED THRU THRU TRUST THRU ADJUSTMENT BALANCE
- ---------- --------- -------- ------------- ------------ ------------- --------- ------------ ------ --------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS HISTORICAL
All Information is from the liquidation date and does not need to be updated.
TOTAL ALL LOANS:
CURRENT MONTH ONLY:
</TABLE>
D-5
<PAGE>
Credit Suisse First Boston Mortgage Securities Corp.
Commercial Mortgage Pass-Through Certificates, Series 1998-C1
REO STATUS REPORT
as of ________
<TABLE>
<CAPTION>
S63 (a) (b) (c) (d)
-------- ---- --------- --------- --------
SHORT NAME PAID SCHEDULED TOTAL P&I TOTAL
PROSPECTUS (WHEN PROPERTY SQ FT OR THRU LOAN ADVANCES EXPENSES
ID APPROPRIATE) TYPE CITY STATE UNITS DATE BALANCE TO DATE TO DATE
- ---------- ----------- -------- ---- ----- -------- ---- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
(e)=a+b+c+d (k) (j)
--------- -------- ------- -------- ---- ----
OTHER
ADVANCES CURRENT LTM LTM CAP RATE
PROSPECTUS (TAXES & TOTAL MONTHLY MATURITY NOI NOI/ ASSIGN VALUATION
ID ESCROW) EXPOSURE P&I DATE DATE DSC *** DATE
- ---------- --------- -------- ------- -------- ---- ---- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
- ------------
(1) Use the following codes; App. - Appraisal, BPO - Brokers Opinion, Int
- Internal Value
*** How to determine the cap rate is agreed upon by Underwriter and
servicers - to be provided by a third party.
D-6
<PAGE>
Credit Suisse First Boston Mortgage Securities Corp.
Commercial Mortgage Pass-Through Certificates, Series 1998-C1
REO STATUS REPORT
as of ______
<TABLE>
<CAPTION>
(f)=(k/j) (g) (h)=(.92*g)
--------- --------- ----------
VALUE APPRAISAL
SHORT NAME USING NOI BPO OR LOSS USING
PROSPECTUS (WHEN PROPERTY & CAP INTERNAL 92% APPR.
ID APPROPRIATE) TYPE CITY STATE RATE VALUE** OR BPO (f)
- ---------- ----------- -------- ---- ----- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
(i)=(g/e)
----------
TOTAL
APPRAISAL REO PENDING
PROSPECTUS ESTIMATED REDUCTION TRANSFER ACQUISITION RESOLU-
ID RECOVERY % REALIZED DATE DATE TION DATE COMMENTS
- ---------- ---------- --------- -------- ----------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
- ------------
(1) Use the following codes; App. - Appraisal, BPO - Brokers Opinion,
Int - Internal Value
*** How to determine the cap rate is agreed upon by Underwriter and
servicers - to be provided by a third party.
D-7
<PAGE>
Credit Suisse First Boston Mortgage Securities Corp.
Commercial Mortgage Pass-Through Certificates, Series 1998-C1
SERVICER WATCH LIST
as of _______
<TABLE>
<CAPTION>
SHORT NAME SCHEDULED PAID
PROSPECTUS (WHEN PROPERTY LOAN THRU MATURITY LTM* COMMENT/REASON ON
ID APPROPRIATE) TYPE CITY STATE BALANCE DATE DATE DSCR WATCH LIST
- -------------- --------------- -------- -------- --------- ------------------- ------------ ------ -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
List all loans on watch list and reason sorted in descending balance order.
Total: $
- -------------- --------------- -------- -------- --------- ------------------- ------------ ------ -------------------
</TABLE>
- ------------
* LTM - Last 12 months either trailing or last annual
D-8
<PAGE>
Credit Suisse First Boston
Commercial Mortgage Pass-Through Certificates, Series 1998-C1
FORM OF OPERATING STATEMENT ANALYSIS REPORT
as of ______________
<TABLE>
<CAPTION>
<S> <C>
PROPERTY OVERVIEW
----------------
Prospectus Number | |
------------------------------
Scheduled Balance/Paid to Date | |
-------------------------------------------------------------------------------------------------
Property Name | |
-------------------------------------------------------------------------------------------------
Property Type | |
-------------------------------------------------------------------------------------------------
Property Address, City, State | |
-------------------------------------------------------------------------------------------------
Net Rentable Square Feet | |
------------------------------
Year Built/Year Renovated | |
-------------------------------------------------------------------------
Year of Operations | UNDERWRITING | 1994 | 1995 | 1996 | TRAILING |
-------------------------------------------------------------------------
Occupancy Rate* | | | | | |
-------------------------------------------------------------------------
Average Rental Rate | | | | | |
-------------------------------------------------------------------------
* OCCUPANCY RATES ARE YEAR END OR THE ENDING DATE OF THE FINANCIAL
STATEMENT FOR THE PERIOD.
NO. OF MOS.
-------------
INCOME: PRIOR YEAR CURRENT YR. | |
Number of Mos. -------------------------------------------------------------------------------------------------
Period Ended | UNDERWRITING | 1994 | 1995 | 1996 | 97 TRAILING**| 1996-BASE | 1996-1995 |
Statement Classification | BASE LINE | NORMALIZED | NORMALIZED | NORMALIZED | AS OF / /97 | VARIANCE | VARIANCE |
-------------------------------------------------------------------------------------------------
Rental Income (Category 1) | | | | | | | |
-------------------------------------------------------------------------------------------------
Rental Income (Category 2) | | | | | | | |
-------------------------------------------------------------------------------------------------
Rental Income (Category 3) | | | | | | | |
-------------------------------------------------------------------------------------------------
Pass Through/Escalations | | | | | | | |
-------------------------------------------------------------------------------------------------
Other Income | | | | | | | |
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
GROSS INCOME | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | % | % |
-------------------------------------------------------------------------------------------------
Normalized - Full year Financial statements that have been reviewed by the underwriter or Servicer
** Servicer will not be expected to "Normalize" these YTD numbers.
OPERATING EXPENSES:
-------------------------------------------------------------------------------------------------
Real Estate Taxes | | | | | | | |
-------------------------------------------------------------------------------------------------
Property Insurance | | | | | | | |
-------------------------------------------------------------------------------------------------
Utilities | | | | | | | |
-------------------------------------------------------------------------------------------------
General & Administration | | | | | | | |
-------------------------------------------------------------------------------------------------
Repairs and Maintenance | | | | | | | |
-------------------------------------------------------------------------------------------------
Management Fees | | | | | | | |
-------------------------------------------------------------------------------------------------
Payroll & Benefits Expense | | | | | | | |
-------------------------------------------------------------------------------------------------
Advertising & Marketing | | | | | | | |
-------------------------------------------------------------------------------------------------
Professional Fees | | | | | | | |
-------------------------------------------------------------------------------------------------
Other Expenses | | | | | | | |
-------------------------------------------------------------------------------------------------
Ground Rent | | | | | | | |
-------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | % | % |
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
OPERATING EXPENSE RATIO | | | | | | | |
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
NET OPERATING INCOME | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | | |
-------------------------------------------------------------------------------------------------
<PAGE>
-------------------------------------------------------------------------------------------------
Leasing Commissions | | | | | | | |
-------------------------------------------------------------------------------------------------
Tenant Improvements | | | | | | | |
-------------------------------------------------------------------------------------------------
Replacement Reserve | | | | | | | |
-------------------------------------------------------------------------------------------------
TOTAL CAPITAL ITEMS | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | | $0.00 |
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
N.O.I. AFTER CAPITAL ITEMS | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | | |
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
DEBT SERVICE (PER SERVICER) | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | | |
-------------------------------------------------------------------------------------------------
CASH FLOW AFTER DEBT SERVICE | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | | |
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
(1) DSCR: (NOI/DEBT SERVICE) | | | | | | | |
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
DSCR: (AFTER RESERVES\CAP EXP.) | | | | | | | |
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
SOURCE OF FINANCIAL DATA: | |
-------------------------------------------------------------------------------------------------
(i.e. operating statements, financial statements, tax return, other)
</TABLE>
NOTES AND ASSUMPTIONS:
- -----------------------------------------------------------------------------
The years shown above will roll always showing a three year history. 1996 is
the current year financials; 1995 is the prior year financials.
This report may vary depending on the property type and because of the way
information may vary in each borrower's statement.
Rental Income needs to be broken down, differently whenever possible for each
property type as follows: Retail: 1) Base Rent 2) Percentage rents on cashflow
Hotel: 1) Room Revenue 2) Food/Beverage Nursing Home: 1) Private 2) Medicaid
3) Medicare
INCOME: COMMENT
EXPENSE: COMMENT
CAPITAL ITEMS: COMMENT
(1) Used in the Comparative Financial Status Report
Quarterly
D-9
<PAGE>
PROSPECTUS
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
DEPOSITOR
Commercial/Multifamily Mortgage Pass-Through Certificates
(Issuable in Series)
Credit Suisse First Boston Mortgage Securities Corp. (the "Depositor") from
time to time will offer Commercial/Multifamily Mortgage Pass-Through
Certificates (the "Certificates") in "Series" by means of this Prospectus and
a separate Prospectus Supplement for each Series. The Certificates of each
Series will evidence beneficial ownership interests in a trust fund (the
"Trust Fund") to be established by the Depositor. The Certificates of a
Series may be divided into two or more "Classes" which may have different
interest rates and which may receive principal payments in differing
proportions and at different times. In addition, rights of the holders of
certain Classes to receive principal and interest may be subordinated to
those of other Classes.
Each Trust Fund will consist of a pool (the "Mortgage Pool") of one or more
mortgage loans secured by first or junior liens on commercial real estate
properties, multifamily residential properties, cooperatively owned
multifamily properties and/or mixed residential/commercial properties, and
related property and interests, conveyed to such Trust Fund by the Depositor,
and other assets, including any reserve funds established with respect to a
Series, insurance policies on the Mortgage Loans, letters of credit,
certificate guarantee insurance policies or other enhancement described in
the related Prospectus Supplement. If so specified in the related Prospectus
Supplement, the Mortgage Pool may also include participation interests in
such types of mortgage loans, installment contracts for the sale of such
types of properties and/or mortgage pass-through certificates. Such mortgage
loans, participation interests, mortgage pass-through certificates and
installment contracts are hereinafter referred to as the "Mortgage Loans."
The Mortgage Loans will have fixed or adjustable interest rates. Some
Mortgage Loans will fully amortize over their remaining terms to maturity and
others will provide for balloon payments at maturity. The Mortgage Loans will
provide for recourse against only the Mortgaged Properties or provide for
recourse against the other assets of the obligors thereunder. The Mortgage
Loans will be newly originated or seasoned, and will be acquired by the
Depositor either directly or through one or more affiliates. Information
regarding each Series of Certificates, including interest and principal
payment provisions for each Class, as well as information regarding the size,
composition and other characteristics of the Mortgage Pool relating to such
Series, will be furnished in the related Prospectus Supplement. The Mortgage
Loans will be serviced by a Master Servicer identified in the related
Prospectus Supplement.
------
The Certificates do not represent an obligation of or an interest in the
Depositor or any affiliate thereof. Unless so specified in the related
Prospectus Supplement, neither the Certificates nor the Mortgage Loans are
insured or guaranteed by any governmental agency or instrumentality or by any
other person or entity.
The Depositor, as specified in the related Prospectus Supplement, may elect
to treat all or a specified portion of the collateral securing any Series of
Certificates as a "real estate mortgage investment conduit" (a "REMIC"), or
an election may be made to treat the arrangement by which a Series of
Certificates is issued as a REMIC. If such election is made, each Class of
Certificates of a Series will be either Regular Interest Certificates or
Residual Interest Certificates (each, as defined herein), as specified in the
related Prospectus Supplement. If no such election is made, the Trust Fund,
as specified in the related Prospectus Supplement, will be classified as a
grantor trust for federal income tax purposes. See "Certain Federal Income
Tax Consequences."
------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
------
PROSPECTIVE INVESTORS SHOULD REVIEW THE INFORMATION APPEARING UNDER THE
CAPTION "RISK FACTORS" AFTER THE SECTION CAPTIONED "INCORPORATION OF CERTAIN
INFORMATION BY REFERENCE" HEREIN.
------
Offers of the Certificates may be made through one or more different
methods, including offerings through underwriters, which may include Credit
Suisse First Boston Corporation, an affiliate of the Depositor, as more fully
described under "Plan of Distribution" herein and in the related Prospectus
Supplement. Certain offerings of the Certificates, as specified in the
related Prospectus Supplement, may be made in one or more transactions exempt
from the registration requirements of the Securities Act of 1933, as amended.
Such offerings are not being made pursuant to the Registration Statement of
which this Prospectus forms a part.
There will have been no public market for the Certificates of any Series
prior to the offering thereof. No assurance can be given that such a market
will develop as a result of such offering or, if it does develop, that it
will continue.
This Prospectus may not be used to consummate sales of the Certificates
offered hereby unless accompanied by a Prospectus Supplement.
CREDIT SUISSE FIRST BOSTON
Prospectus dated June 11, 1998.
<PAGE>
PROSPECTUS SUPPLEMENT
The Prospectus Supplement relating to each Series of Certificates will,
among other things, set forth with respect to such Series of Certificates:
(i) the identity of each Class within such Series; (ii) the initial aggregate
principal amount, the interest rate (the "Pass-Through Rate") (or the method
for determining it) and the authorized denominations of each Class of
Certificates of such Series; (iii) certain information concerning the
Mortgage Loans relating to such Series, including the principal amount, type
and characteristics of such Mortgage Loans on the date of issue of such
Series of Certificates, and, if applicable, the amount of any Reserve Fund
for such Series; (iv) the circumstances, if any, under which the Certificates
of such Series are subject to redemption prior to maturity; (v) the final
scheduled distribution date of each Class of Certificates of such Series;
(vi) the method used to calculate the aggregate amount of principal available
and required to be applied to the Certificates of such Series on each
Distribution Date; (vii) the order of the application of principal and
interest payments to each Class of Certificates of such Series and the
allocation of principal to be so applied; (viii) the extent of subordination
of any Subordinate Certificates; (ix) the principal amount of each Class of
Certificates of such Series that would be outstanding on specified
Distribution Dates, if the Mortgage Loans relating to such Series were
prepaid at various assumed rates; (x) the Distribution Dates for each Class
of Certificates of such Series; (xi) relevant financial information with
respect to the Borrower(s) and the Mortgaged Properties underlying the
Mortgage Loans relating to such Series, if applicable; (xii) information with
respect to the terms of the Subordinate Certificates or Residual Interest
Certificates, if any, of such Series; (xiii) additional information with
respect to the Enhancement (as defined herein) relating to such Series; (xiv)
additional information with respect to the plan of distribution of such
Series; and (xv) whether the Certificates of such Series will be registered
in the name of the nominee of The Depository Trust Company or another
depository.
ADDITIONAL INFORMATION
This Prospectus contains, and the Prospectus Supplement for each Series of
Certificates will contain, a summary of the material terms of the documents
referred to herein and therein, but neither contains nor will contain all of
the information set forth in the Registration Statement (the "Registration
Statement") of which this Prospectus and the related Prospectus Supplement is
a part. For further information, reference is made to such Registration
Statement and the exhibits thereto which the Depositor has filed with the
Securities and Exchange Commission (the "Commission"), under the Securities
Act of 1933, as amended (the "Act"). Statements contained in this Prospectus
and any Prospectus Supplement as to the contents of any contract or other
document referred to are summaries and in each instance reference is made to
the copy of the contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects
by such reference. Copies of the Registration Statement may be obtained from
the Commission, upon payment of the prescribed charges, or may be examined
free of charge at the Commission's offices. The Depositor is subject to the
informational requirements of the Securities Exchange Act of 1934 and in
accordance therewith files reports and other information with the Commission.
Reports and other information filed with the Commission can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Regional Offices of
the Commission at Seven World Trade Center, 13th Floor, New York, New York
10048; and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. The Commission maintains a Web site at
http://www.sec.gov containing reports, proxy and information statements and
other information regarding registrants, including Credit Suisse First Boston
Mortgage Securities Corp., that file electronically with the Commission.
Copies of such material can be obtained from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Copies of the Agreement pursuant to which a Series of
Certificates is issued will be provided to each person to whom a Prospectus
and the related Prospectus Supplement are delivered, upon written or oral
request directed to: Credit Suisse First Boston Mortgage Securities Corp.,
Eleven Madison Avenue, New York, New York 10010, telephone number (212)
325-2000.
2
<PAGE>
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
There are incorporated herein by reference all documents and reports filed
or caused to be filed by the Depositor with respect to a Trust Fund pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
prior to the termination of the offering of Certificates offered hereby. The
Depositor will provide or cause to be provided without charge to each person
to whom this Prospectus is delivered in connection with the offering of one
or more Classes of Certificates, upon request, a copy of any or all such
documents or reports incorporated herein by reference, in each case to the
extent such documents or reports relate to one or more of such Classes of
such Certificates, other than the exhibits to such documents (unless such
exhibits are specifically incorporated by reference in such documents).
Requests to the Depositor should be directed to: Credit Suisse First Boston
Mortgage Securities Corp., Eleven Madison Avenue, New York, New York 10010,
telephone number (212) 325-2000.
3
<PAGE>
RISK FACTORS
INVESTORS SHOULD CONSIDER, IN CONNECTION WITH THE PURCHASE OF
CERTIFICATES, AMONG OTHER THINGS, THE FOLLOWING FACTORS AND CERTAIN OTHER
FACTORS AS MAY BE SET FORTH IN "RISK FACTORS" IN THE RELATED PROSPECTUS
SUPPLEMENT.
LIMITED LIQUIDITY
There can be no assurance that a secondary market for the Certificates of
any Series will develop or, if it does develop, that it will provide holders
with liquidity of investment or will continue while Certificates of such
Series remain outstanding. Any such secondary market may provide less
liquidity to investors than any comparable market for securities evidencing
interests in single family mortgage loans. The market value of Certificates
will fluctuate with changes in prevailing rates of interest. Consequently,
sale of Certificates by a holder in any secondary market that may develop may
be at a discount from 100% of their original principal balance or from their
purchase price. Furthermore, secondary market purchasers may look only
hereto, to the related Prospectus Supplement and to the reports to
Certificateholders delivered pursuant to the related Agreement. Except to the
extent described herein and in the related Prospectus Supplement,
Certificateholders will have no redemption rights and the Certificates are
subject to early retirement only under certain specified circumstances
described herein and in the related Prospectus Supplement.
LIMITED ASSETS
The Certificates will not represent an interest in or obligation of the
Depositor, the Master Servicer, or any of their affiliates. The only
obligations with respect to the Certificates or the Mortgage Loans will be
the obligations (if any) of the Depositor (or, if otherwise provided in the
related Prospectus Supplement, the person identified therein as the person
making certain representations and warranties with respect to the Mortgage
Loans, as applicable) pursuant to certain limited representations and
warranties made with respect to the Mortgage Loans. Since certain
representations and warranties with respect to the Mortgage Loans may have
been made and/or assigned in connection with transfers of such Mortgage Loans
prior to the Closing Date, the rights of the Trustee and the
Certificateholders with respect to such representations or warranties will be
limited to their rights as an assignee thereof. Unless otherwise specified in
the related Prospectus Supplement, none of the Depositor, the Master Servicer
or any affiliate thereof will have any obligation with respect to
representations or warranties made by any other entity. Unless otherwise
specified in the related Prospectus Supplement, neither the Certificates nor
the underlying Mortgage Loans will be guaranteed or insured by any
governmental agency or instrumentality, or by the Depositor, the Master
Servicer or any of their affiliates. Proceeds of the assets included in the
related Trust Fund for each Series of Certificates (including the Mortgage
Loans and any form of Enhancement) will be the sole source of payments on the
Certificates, and there will be no recourse to the Depositor or any other
entity in the event that such proceeds are insufficient or otherwise
unavailable to make all payments provided for under the Certificates.
Unless otherwise specified in the related Prospectus Supplement, a Series
of Certificates will not have any claim against or security interest in the
Trust Funds for any other Series. If the related Trust Fund is insufficient
to make payments on such Certificates, no other assets will be available for
payment of the deficiency. Additionally, certain amounts remaining in certain
funds or accounts, including the Distribution Account, the Collection Account
and the REO Account and any accounts maintained as Enhancement, may be
withdrawn under certain conditions, as described in the related Prospectus
Supplement. In the event of such withdrawal, such amounts will not be
available for future payment of principal of or interest on the Certificates.
If so provided in the Prospectus Supplement for a Series of Certificates that
includes one or more classes of Subordinate Certificates, on any Distribution
Date in respect of which losses or shortfalls in collections on the Trust
Funds have been incurred, the amount of such losses or shortfalls will be
borne first by one or more classes of the Subordinate Certificates, and,
thereafter, by the remaining classes of Certificates in the priority and
manner and subject to the limitations specified in such Prospectus
Supplement.
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PREPAYMENTS AND EFFECT ON AVERAGE LIFE OF CERTIFICATES AND YIELDS
Prepayments (including those caused by defaults) on the Mortgage Loans in
any Trust Fund generally will result in a faster rate of principal payments
on one or more classes of the related Certificates than if payments on such
Mortgage Loans were made as scheduled. Thus, the prepayment experience on the
Mortgage Loans may affect the average life of each class of related
Certificates. The rate of principal payments on pools of mortgage loans
varies between pools and from time to time is influenced by a variety of
economic, demographic, geographic, social, tax, legal and other factors.
There can be no assurance as to the rate of prepayment on the Mortgage Loans
in any Trust Fund or that the rate of payments will conform to any model
described herein or in any Prospectus Supplement. If prevailing interest
rates fall significantly below the applicable mortgage interest rates,
principal prepayments are likely to be higher than if prevailing rates remain
at or above the rates borne by the Mortgage Loans underlying or comprising
the Mortgaged Properties in any Trust Fund. As a result, the actual maturity
of any class of Certificates could occur significantly earlier than expected.
A Series of Certificates may include one or more classes of Certificates with
priorities of payment and, as a result, yields on other classes of
Certificates of such Series may be more sensitive to prepayments on Mortgage
Loans. A Series of Certificates may include one or more classes offered at a
significant premium or discount. Yields on such classes of Certificates will
be sensitive, and in some cases extremely sensitive, to prepayments on
Mortgage Loans and, where the amount of interest payable with respect to a
class is disproportionately high, as compared to the amount of principal, as
with certain classes of Stripped Certificates, a holder might, in some
prepayment scenarios, fail to recoup its original investment. A Series of
Certificates may include one or more classes of Certificates that provide for
distribution of principal thereof from amounts attributable to interest
accrued but not currently distributable on one or more classes of
Certificates (the "Accrual Certificates") and, as a result, yields on such
Certificates will be sensitive to (a) the provisions of such Accrual
Certificates relating to the timing of distributions of interest thereon and
(b) if such Accrual Certificates accrue interest at a variable or floating
Pass-Through Rate, changes in such rate.
LIMITED NATURE OF RATINGS
Any rating assigned by a Rating Agency to a class of Certificates will
reflect such Rating Agency's assessment solely of the likelihood that holders
of Certificates of such class will receive payments to which such
Certificateholders are entitled under the related Agreement. Such rating will
not constitute an assessment of the likelihood that principal prepayments
(including those caused by defaults) on the related Mortgage Loans will be
made, the degree to which the rate of such prepayments might differ from that
originally anticipated or the likelihood of early optional termination of the
Series of Certificates. Such rating will not address the possibility that
prepayment at higher or lower rates than anticipated by an investor may cause
such investor to experience a lower than anticipated yield or that an
investor purchasing a Certificate at a significant premium might fail to
recoup its initial investment under certain prepayment scenarios. Each
Prospectus Supplement will identify any payment to which holders of
Certificates of the related Series are entitled that is not covered by the
applicable rating.
The amount, type and nature of any Enhancement established with respect to
a Series of Certificates will be determined on the basis of criteria
established by each Rating Agency rating classes of such Series. Such
criteria are sometimes based upon an actuarial analysis of the behavior of
mortgage loans in a larger group. Such analysis is often the basis upon which
each Rating Agency determines the amount of credit support required with
respect to each such class. There can be no assurance that the historical
data supporting any such actuarial analysis will accurately reflect future
experience nor any assurance that the data derived from a large pool of
mortgage loans accurately predicts the delinquency, foreclosure or loss
experience of any particular pool of Mortgage Loans. No assurance can be
given that values of any Mortgaged Properties have remained or will remain at
their levels on the respective dates of origination of the related Mortgage
Loans. Moreover, there is no assurance that appreciation of real estate
values generally will limit loss experiences on the Mortgaged Properties. If
the commercial or multifamily residential real estate markets should
experience an overall decline in property values such that the outstanding
principal balances of the Mortgage Loans underlying or comprising the
Mortgage Loans in a particular Trust Fund and any secondary financing on the
related Mortgaged Properties become equal to or greater than the value of the
Mortgaged Properties, the rates of delinquencies, foreclosures and
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losses could be higher than those now generally experienced by institutional
lenders. In addition, adverse economic conditions (which may or may not
affect real property values) may affect the timely payment by mortgagors of
scheduled payments of principal and interest on the Mortgage Loans and,
accordingly, the rates of delinquencies, foreclosures and losses with respect
to any Trust Fund. To the extent that such losses are not covered by
Enhancement, if any, described in the related Prospectus Supplement, such
losses will be borne, at least in part, by the holders of one or more classes
of the Certificates of the related Series.
RISKS ASSOCIATED WITH MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage loans made with respect to multifamily or commercial property may
entail risks of delinquency and foreclosure, and risks of loss in the event
thereof, that are greater than similar risks associated with single family
property. The ability of a mortgagor to repay a loan secured by an
income-producing property typically is dependent primarily upon the
successful operation of such property rather than any independent income or
assets of the mortgagor; thus, the value of an income-producing property is
directly related to the net operating income derived from such property. In
contrast, the ability of a mortgagor to repay a single family loan typically
is dependent primarily upon the mortgagor's household income, rather than the
capacity of the property to produce income; thus, other than in geographical
areas where employment is dependent upon a particular employer or an
industry, the mortgagor's income tends not to reflect directly the value of
such property. A decline in the net operating income of an income-producing
property will likely affect both the performance of the related loan as well
as the liquidation value of such property, whereas a decline in the income of
a mortgagor on a single family property will likely affect the performance of
the related loan but may not affect the liquidation value of such property.
Moreover, a decline in the value of a Mortgaged Property will increase the
risk of loss particularly with respect to any related junior Mortgage Loan.
The performance of a mortgage loan secured by an income-producing property
leased by the mortgagor to tenants as well as the liquidation value of such
property may be dependent upon the business operated by such tenants in
connection with such property, the creditworthiness of such tenants or both.
The risks associated with such loans may be offset by the number of tenants
or, if applicable, a diversity of types of business operated by such tenants.
It is anticipated that a substantial portion of the Mortgage Loans
included in any Trust Fund will be nonrecourse loans or loans for which
recourse may be restricted or unenforceable, as to which, in the event of a
mortgagor's default, recourse may be had only against the specific property
and such other assets, if any, as have been pledged to secure the related
Mortgage Loan. With respect to those Mortgage Loans that provide for recourse
against the mortgagor and its assets generally, there can be no assurance
that such recourse will ensure a recovery in respect of a defaulted Mortgage
Loan greater than the liquidation value of the related Mortgaged Property.
Further, the concentration of default, foreclosure and loss risks in
individual mortgagors or Mortgage Loans in a particular Trust Fund or the
related Mortgaged Properties will generally be greater than for pools of
single family loans both because the Mortgage Loans in a Trust Fund will
generally consist of a smaller number of loans than would a single family
pool of comparable aggregate unpaid principal balance and because of the
higher principal balance of individual Mortgage Loans. Mortgage Loans in a
Trust Fund may consist of only a single or limited number of Mortgage Loans
and/or relate to Leases to only a single Lessee or a limited number of
Lessees.
If applicable, certain legal aspects of the Mortgage Loans for a Series of
Certificates may be described in the related Prospectus Supplement.
RISKS ASSOCIATED WITH MORTGAGE LOANS AND LEASES
If so described in the related Prospectus Supplement, each mortgagor under
a Mortgage Loan may be an entity created by the owner or purchaser of the
related Mortgaged Property solely to own or purchase such property, in part
to isolate the property from the debts and liabilities of such owner or
purchaser. Unless otherwise specified, each such Mortgage Loan will represent
a nonrecourse obligation
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of the related mortgagor secured by the lien of the related Mortgage and the
related Lease assignments. Whether or not such loans are recourse or
nonrecourse obligations, it is not expected that the mortgagors will have any
significant assets other than the Mortgaged Properties and the related
Leases, which will be pledged to the Trustee under the related Agreement.
Therefore, the payment of amounts due on any such Mortgage Loans, and,
consequently, the payment of principal of and interest on the related
Certificates, will depend primarily or solely on rental payments by the
Lessees. Such rental payments will, in turn, depend on continued occupancy
by, and/or the creditworthiness of, such Lessees, which in either case may be
adversely affected by a general economic downturn or an adverse change in
their financial condition. Moreover, to the extent a Mortgaged Property was
designed for the needs of a specific type of tenant (e.g., a nursing home,
hotel or motel), the value of such property in the event of a default by the
Lessee or the early termination of such Lease may be adversely affected
because of difficulty in re-leasing the property to a suitable substitute
lessee or, if re-leasing to such a substitute is not possible, because of the
cost of altering the property for another more marketable use. As a result,
without the benefit of the Lessee's continued support of the Mortgaged
Property, and absent significant amortization of the Mortgage Loan, if such
loan is foreclosed on and the Mortgaged Property is liquidated following a
lease default, the net proceeds might be insufficient to cover the
outstanding principal and interest owing on such loan, thereby increasing the
risk that holders of the Certificates will suffer some loss.
BALLOON PAYMENTS
Certain of the Mortgage Loans (the "Balloon Mortgage Loans") as of the
Cut-Off Date may not be fully amortizing over their terms to maturity and,
thus, will require substantial principal payments (i.e., balloon payments) at
their stated maturity. Mortgage Loans with balloon payments involve a greater
degree of risk because the ability of a mortgagor to make a balloon payment
typically will depend upon its ability either to timely refinance the loan or
to timely sell the related Mortgaged Property. The ability of a mortgagor to
accomplish either of these goals will be affected by a number of factors,
including the level of available mortgage interest rates at the time of sale
or refinancing, the mortgagor's equity in the related Mortgaged Property, the
financial condition and operating history of the mortgagor and the related
Mortgaged Property, tax laws, rent control laws (with respect to certain
multifamily properties and mobile home parks), reimbursement rates (with
respect to certain nursing homes), renewability of operating licenses,
prevailing general economic conditions and the availability of credit for
commercial or multifamily real properties, as the case may be, generally.
JUNIOR MORTGAGE LOANS
To the extent specified in the related Prospectus Supplement, certain of
the Mortgage Loans may be secured primarily by junior mortgages. In the case
of liquidation, Mortgage Loans secured by junior mortgages are entitled to
satisfaction from proceeds that remain from the sale of the related Mortgaged
Property after the mortgage loans senior to such Mortgage Loans have been
satisfied. If there are not sufficient funds to satisfy such junior Mortgage
Loans and senior mortgage loans, such Mortgage Loan would suffer a loss and,
accordingly, one or more classes of Certificates would bear such loss.
Therefore, any risks of deficiencies associated with first Mortgage Loans
will be greater with respect to junior Mortgage Loans.
OBLIGOR DEFAULT
If so specified in the related Prospectus Supplement, in order to maximize
recoveries on defaulted Mortgage Loans, a Master Servicer or a Special
Servicer will be permitted (within prescribed parameters) to extend and
modify Mortgage Loans that are in default or as to which a payment default is
imminent, including in particular with respect to balloon payments. In
addition, a Master Servicer or a Special Servicer may receive a workout fee
based on receipts from or proceeds of such Mortgage Loans. While any such
entity generally will be required to determine that any such extension or
modification is reasonably likely to produce a greater recovery on a present
value basis than liquidation, there can be no assurance that such flexibility
with respect to extensions or modifications or payment of a workout fee will
increase the present value of receipts from or proceeds of Mortgage Loans
that are in default or as to
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which a payment default is imminent. Additionally, if so specified in the
related Prospectus Supplement, certain of the Mortgage Loans included in the
Mortgage Pool for a Series may have been subject to workouts or similar
arrangements following periods of delinquency and default.
MORTGAGOR TYPE
Mortgage Loans made to partnerships, corporations or other entities may
entail risks of loss from delinquency and foreclosure that are greater than
those of Mortgage Loans made to individuals. The mortgagor's sophistication
and form of organization may increase the likelihood of protracted litigation
or bankruptcy in default situations.
ENHANCEMENT LIMITATIONS
The Prospectus Supplement for a Series of Certificates will describe any
Enhancement in the related Trust Fund, which may include letters of credit,
insurance policies, guarantees, reserve funds or other types of credit
support, or combinations thereof. The use of Enhancement will be subject to
the conditions and limitations described herein and in the related Prospectus
Supplement. Moreover, such Enhancement may not cover all potential losses or
risks. For example, Enhancement may or may not cover fraud or negligence by a
mortgage loan originator or other parties.
A Series of Certificates may include one or more classes of Subordinate
Certificates, if so provided in the related Prospectus Supplement. Although
subordination is intended to reduce the risk to holders of Senior
Certificates of delinquent distributions or ultimate losses, the amount of
subordination will be limited and may decline under certain circumstances. In
addition, if principal payments on one or more classes of Certificates of a
Series are made in a specified order of priority, any limits with respect to
the aggregate amount of claims under any related Enhancement may be exhausted
before the principal of the lower priority classes of Certificates of such
Series has been repaid. As a result, the impact of significant losses and
shortfalls on the Trust Funds may fall primarily upon those classes of
Certificates having a lower priority of payment. Moreover, if a form of
Enhancement covers more than one Series of Certificates (each, a "Covered
Trust"), holders of Certificates evidencing an interest in a Covered Trust
will be subject to the risk that such Enhancement will be exhausted by the
claims of other Covered Trusts.
The amount of any applicable Enhancement supporting one or more classes of
Certificates, including the subordination of one or more classes of other
Certificates, will be determined on the basis of criteria established by each
Rating Agency rating such classes of Certificates based on an assumed level
of defaults, delinquencies, other losses or other factors. There can,
however, be no assurance that the loss experience on the related Mortgage
Loans will not exceed such assumed levels.
Regardless of the form of Enhancement provided, the amount of coverage
will be limited in amount and in most cases will be subject to periodic
reduction in accordance with a schedule or formula. The Master Servicer will
generally be permitted to reduce, terminate or substitute all or a portion of
the Enhancement for any Series of Certificates, if the applicable Rating
Agency indicates that the then-current rating thereof will not be adversely
affected. The rating of any Series of Certificates by any applicable Rating
Agency may be lowered following the initial issuance thereof as a result of
the downgrading of the obligations of any applicable Enhancement provider, or
as a result of losses on the related Mortgage Loans substantially in excess
of the levels contemplated by such Rating Agency at the time of its initial
rating analysis. None of the Depositor, the Master Servicer or any of their
affiliates will have any obligation to replace or supplement any Enhancement,
or to take any other action to maintain any rating of any Series of
Certificates.
ENFORCEABILITY
Mortgages may contain a due-on-sale clause, which in general permits the
lender to accelerate the maturity of the Mortgage Loan if the mortgagor
sells, transfers or conveys the related Mortgaged Property or its interest in
the Mortgaged Property. Mortgages may also include a debt-acceleration
clause, which permits the lender to accelerate the debt upon a monetary or
non-monetary default by the mortgagor. Such clauses are generally enforceable
subject to certain exceptions. The courts of all states
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will enforce clauses providing for acceleration in the event of a material
payment default. The equity courts of any state, however, may refuse the
foreclosure of a mortgage or deed of trust when an acceleration of the
indebtedness would be inequitable or unjust or the circumstances would render
the acceleration unconscionable.
If so specified in the related Prospectus Supplement, the Mortgage Loans
will be secured by an assignment of leases and rents pursuant to which the
mortgagor typically assigns its right, title and interest as landlord under
the leases on the related Mortgaged Property and the income derived therefrom
to the lender as further security for the related Mortgage Loan, while
retaining a license to collect rents for so long as there is no default. In
the event the mortgagor defaults, the license terminates and the lender is
entitled to collect rents. Such assignments are typically not perfected as
security interests prior to actual possession of the cash flows. Some state
laws may require that the lender take possession of the Mortgaged Property
and obtain a judicial appointment of a receiver before becoming entitled to
collect the rents. In addition, if bankruptcy or similar proceedings are
commenced by or in respect of the mortgagor, the lender's ability to collect
the rents may be adversely affected.
ENVIRONMENTAL RISKS
Real property pledged as security for a mortgage loan may be subject to
certain environmental risks. Under the laws of certain states, contamination
of a property may give rise to a lien on the property to assure the costs of
cleanup. In several states, such a lien has priority over the lien of an
existing mortgage against such property. In addition, under the laws of some
states and under the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA") a lender may be liable, as
an "owner" or "operator," for costs of addressing releases or threatened
releases of hazardous substances that require remedy at a property, if agents
or employees of the lender have become sufficiently involved in the
operations of the mortgagor, regardless of whether or not the environmental
damage or threat was caused by a prior owner. A lender also risks such
liability on foreclosure of the mortgage. Each Agreement will provide that
the Master Servicer, acting on behalf of the Trust Fund, may not acquire
title to a Mortgaged Property securing a Mortgage Loan or take over its
operation unless such Master Servicer has previously determined, based upon a
report prepared by a person who regularly conducts environmental audits,
that: (i) the Mortgaged Property is in compliance with applicable
environmental laws or, if not, that taking such actions as are necessary to
bring the Mortgaged Property in compliance therewith is likely to produce a
greater recovery on a present value basis, after taking into account any
risks associated therewith, than not taking such actions and (ii) there are
no circumstances present at the Mortgaged Property relating to the use,
management or disposal of any hazardous substances for which investigation,
testing, monitoring, containment, cleanup or remediation could be required
under any federal, state or local law or regulation, or that, if any
hazardous substances are present for which such action would be required,
taking such actions with respect to the affected Mortgaged Property is
reasonably likely to produce a greater recovery on a present value basis,
after taking into account any risks associated therewith, than not taking
such actions. Any additional restrictions on acquiring title to a Mortgaged
Property may be set forth in the related Prospectus Supplement.
DELINQUENT AND NON-PERFORMING MORTGAGE LOANS
If so provided in the related Prospectus Supplement, the Trust Fund for a
particular Series of Certificates may include Mortgage Loans that are past
due or are non-performing. Unless otherwise described in the related
Prospectus Supplement, the servicing of such Mortgage Loans as to which a
specified number of payments are delinquent will be performed by the Special
Servicer; however, the same entity may act as both Master Servicer and
Special Servicer. Enhancement provided with respect to a particular Series of
Certificates may not cover all losses related to such delinquent or
nonperforming Mortgage Loans, and investors should consider the risk that the
inclusion of such Mortgage Loans in the Trust Fund may adversely affect the
rate of defaults and prepayments on the Mortgage Loans in such Trust Fund and
the yield on the Certificates of such Series.
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ERISA CONSIDERATIONS
Generally, ERISA applies to investments made by employee benefit plans and
transactions involving the assets of such plans. Due to the complexity of
regulations which govern such plans, prospective investors that are subject
to ERISA are urged to consult their own counsel regarding consequences under
ERISA of acquisition, ownership and disposition of the Certificates of any
Series.
CERTAIN FEDERAL TAX CONSIDERATIONS REGARDING RESIDUAL INTEREST CERTIFICATES
Holders of Residual Interest Certificates will be required to report on
their federal income tax returns as ordinary income their pro rata share of
the taxable income of the REMIC, regardless of the amount or timing of their
receipt of cash payments, as described in "CERTAIN FEDERAL INCOME TAX
CONSEQUENCES." Accordingly, under certain circumstances, holders of
Certificates that constitute Residual Interest Certificates may have taxable
income and tax liabilities arising from such investment during a taxable year
in excess of the cash received during such period. Individual holders of
Residual Interest Certificates may be limited in their ability to deduct
servicing fees and other expenses of the REMIC. In addition, Residual
Interest Certificates are subject to certain restrictions on transfer.
Because of the special tax treatment of Residual Interest Certificates, the
taxable income arising in a given year on a Residual Interest Certificate
will not be equal to the taxable income associated with investment in a
corporate bond or stripped instrument having similar cash flow
characteristics and pre-tax yield. Therefore, the after-tax yield on the
Residual Interest Certificate may be significantly less than that of a
corporate bond or stripped instrument having similar cash flow
characteristics. A Residual Interest Certificate acquired after January 3,
1995 cannot be marked-to-market.
CONTROL
Under certain circumstances, the consent or approval of the holders of a
specified percentage of the aggregate Certificate balance of all outstanding
Certificates of a Series or a similar means of allocating decision-making
under the related Agreement ("Voting Rights") will be required to direct, and
will be sufficient to bind all Certificateholders of such Series to, certain
actions, including directing the Special Servicer or the Master Servicer with
respect to actions to be taken with respect to certain Mortgage Loans and REO
Properties and amending the related Agreement in certain circumstances.
BOOK-ENTRY REGISTRATION
If so provided in the related Prospectus Supplement, one or more classes
of the Certificates will be initially represented by one or more certificates
registered in the name of Cede & Co., the nominee for The Depository Trust
Company ("DTC"), and will not be registered in the names of the beneficial
owners of such Certificates or their nominees. Because of this, unless and
until definitive certificates are issued, such beneficial owners will not be
recognized by the Trustee as "Certificateholders" (as that term is to be used
in the related Agreement). Hence, until such time, such beneficial owners
will be able to exercise the rights of Certificateholders only indirectly
through DTC and its participating organizations.
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THE DEPOSITOR
The Depositor was incorporated in the State of Delaware on December 31,
1985, and is a wholly-owned subsidiary of Credit Suisse First Boston
Management Corporation ("CSFBMC"). CSFBMC is a wholly-owned subsidiary of
Credit Suisse First Boston, Inc. Credit Suisse First Boston Corporation,
which may act as an underwriter in offerings made hereby, as described in
"PLAN OF DISTRIBUTION" below, is also a wholly-owned subsidiary of Credit
Suisse First Boston, Inc. The principal executive offices of the Depositor
are located at Eleven Madison Avenue, New York, N.Y. 10010. Its telephone
number is (212) 325-2000.
The Depositor was organized, among other things, for the purposes of
establishing trusts, selling beneficial interests therein and acquiring and
selling mortgage assets to such trusts. Neither the Depositor, its parent nor
any of the Depositor's affiliates will insure or guarantee distributions on
the Certificates of any Series.
The assets of the Trust Funds will be acquired by the Depositor directly
or through one or more affiliates.
USE OF PROCEEDS
The Depositor will apply all or substantially all of the net proceeds from
the sale of each Series offered hereby and by the related Prospectus
Supplement to purchase the Mortgage Loans relating to such Series, to repay
indebtedness which has been incurred to obtain funds to acquire Mortgage
Loans, to establish the Reserve Funds, if any, for the Series, to obtain
other Enhancement, if any, for the Series and to pay costs of structuring and
issuing the Certificates. If so specified in the related Prospectus
Supplement, Certificates may be exchanged by the Depositor for Mortgage
Loans.
DESCRIPTION OF THE CERTIFICATES*
* Whenever in this Prospectus the terms "Certificates," "Trust Fund" and
"Mortgage Pool" are used, such terms will be deemed to apply, unless the
context indicates otherwise, to a specific Series of Certificates, the Trust
Fund underlying the related Series and the related Mortgage Pool.
The Certificates of each Series will be issued pursuant to a separate
Pooling and Servicing Agreement (the "Agreement") to be entered into among
the Depositor, the Master Servicer and the Trustee for that Series and any
other parties described in the applicable Prospectus Supplement,
substantially in the form filed as an exhibit to the Registration Statement
of which this Prospectus is a part or in such other form as may be described
in the applicable Prospectus Supplement. The following summaries describe
certain provisions expected to be common to each Series and the Agreement
with respect to the underlying Trust Fund. However, the Prospectus Supplement
for each Series will describe more fully the Certificates and the provisions
of the related Agreement, which may be different from the summaries set forth
below.
At the time of issuance, the Certificates of each Series will be rated
"investment grade," typically one of the four highest generic rating
categories, by at least one nationally recognized statistical rating
organization. Each of such rating organizations specified in the applicable
Prospectus Supplement as rating the Certificates of the related Series is
hereinafter referred to as a "Rating Agency." A security rating is not a
recommendation to buy, sell or hold securities and may be subject to revision
or withdrawal at any time by the assigning Rating Agency.
GENERAL
The Certificates of each Series will be issued in registered or book-entry
form and will represent beneficial ownership interests in the trust fund (the
"Trust Fund") created pursuant to the Agreement for such Series. The Trust
Fund for each Series will comprise, to the extent provided in the Agreement:
(i) the Mortgage Pool, consisting primarily of the Mortgage Loans conveyed to
the Trustee pursuant to the Agreement; (ii) all payments on or collections in
respect of the Mortgage Loans; (iii) all property acquired by foreclosure or
deed in lieu of foreclosure with respect to the Mortgage Loans; and (iv) such
other assets or rights as are described in the related Prospectus Supplement.
In addition, the Trust Fund for a Series
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may include private mortgage pass-through certificates, certificates issued
or guaranteed by the Federal Home Loan Mortgage Corporation ("FHLMC"), the
Federal National Mortgage Association ("FNMA") or the Governmental National
Mortgage Association ("GNMA") or mortgage pass-through certificates
previously created by the Depositor, as well as various forms of Enhancement,
such as, but not limited to, insurance policies on the Mortgage Loans,
letters of credit, certificate guarantee insurance policies, the right to
make draws upon one or more Reserve Funds or other arrangements acceptable to
each Rating Agency rating the Certificates. See "ENHANCEMENT." Such other
assets will be described more fully in the related Prospectus Supplement.
If so specified in the applicable Prospectus Supplement, Certificates of a
given Series may be issued in several Classes which may pay interest at
different rates, may represent different allocations of the right to receive
principal and interest payments, and certain of which may be subordinated to
other Classes in the event of shortfalls in available cash flow from the
underlying Mortgage Loans. Alternatively, or in addition, Classes may be
"time-tranched" and, therefore, structured to receive principal payments in
sequence. Each Class in a group of "time-tranched" Classes would be entitled
to be paid in full before the next Class in the group is entitled to receive
any principal payments. A Class of Certificates may also provide for payments
of principal only or interest only or for disproportionate payments of
principal and interest. Subordinate Certificates of a given Series of
Certificates may be offered in the same Prospectus Supplement as the Senior
Certificates of such Series or may be offered in a separate Prospectus
Supplement. Each Class of Certificates of a Series will be issued in the
minimum denominations specified in the related Prospectus Supplement.
The Prospectus Supplement for any Series including Classes similar to any
of those described above will contain a complete description of their
characteristics and risk factors, including, as applicable, (i) mortgage
principal prepayment effects on the weighted average lives of Classes, (ii)
the risk that interest only, or disproportionately interest weighted, Classes
purchased at a premium may not return their purchase prices under rapid
prepayment scenarios and (iii) the degree to which an investor's yield is
sensitive to principal prepayments.
The Certificates of each Series will be freely transferable and
exchangeable at the office specified in the related Agreement and Prospectus
Supplement, provided, however, that certain Classes of Certificates may be
subject to transfer restrictions described in the related Prospectus
Supplement. If specified in the related Prospectus Supplement, the
Certificates may be transferable only on the books of The Depository Trust
Company or another depository identified in such Prospectus Supplement.
DISTRIBUTIONS ON CERTIFICATES
Distributions of principal and interest on the Certificates of each Series
will be made to the registered holders thereof ("Certificateholders" or
"Holders") by the Trustee (or such other paying agent as may be identified in
the related Prospectus Supplement) on the day (the "Distribution Date")
specified in the related Prospectus Supplement, beginning in the period
specified in the related Prospectus Supplement following the establishment of
the related Trust Fund. Distributions for each Series will be made by check
mailed to the address of the person entitled thereto as it appears on the
certificate register for such Series maintained by the Trustee, by wire
transfer or by such other method as is specified in the related Prospectus
Supplement. Unless otherwise specified in the applicable Prospectus
Supplement, the final distribution in retirement of the Certificates of each
Series will be made only upon presentation and surrender of the Certificates
at the office or agency specified in the notice to the Certificateholders of
such final distribution. In addition, the Prospectus Supplement relating to
each Series will set forth the applicable due period, prepayment period,
record date, Cut-Off Date and determination date in respect of each Series of
Certificates.
With respect to each Series of Certificates on each Distribution Date, the
Trustee (or such other paying agent as may be identified in the applicable
Prospectus Supplement) will distribute to the Certificateholders the amounts
described in the related Prospectus Supplement that are due to be paid on
such Distribution Date. In general, such amounts will include previously
undistributed payments of
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principal (including principal prepayments, if any) and interest on the
Mortgage Loans received by the Trustee after a date specified in the related
Prospectus Supplement (the "Cut-Off Date") and prior to the day preceding
each Distribution Date specified in the related Prospectus Supplement.
ACCOUNTS
It is expected that the Agreement for each Series of Certificates will
provide that the Trustee establish an account (the "Distribution Account")
into which the Master Servicer will deposit amounts held in the Collection
Account from which account distributions will be made with respect to a given
Distribution Date. On each Distribution Date, the Trustee will apply amounts
on deposit in the Distribution Account generally to make distributions of
interest and principal to the Certificateholders in the manner described in
the related Prospectus Supplement.
It is also expected that the Agreement for each Series of Certificates
will provide that the Master Servicer establish and maintain a special trust
account (the "Collection Account") in the name of the Trustee for the benefit
of Certificateholders. Unless otherwise specified in the related Prospectus
Supplement, the Master Servicer will deposit into the Collection Account, as
more fully described in the related Prospectus Supplement: (1) all payments
on account of principal, including principal prepayments, on the Mortgage
Loans; (2) all payments on account of interest on the Mortgage Loans and all
Prepayment Premiums; (3) all proceeds from any insurance policy relating to a
Mortgage Loan ("Insurance Proceeds") other than proceeds applied to
restoration of the related Mortgaged Property; (4) all proceeds from the
liquidation of a Mortgage Loan ("Liquidation Proceeds"), including the sale
of any Mortgaged Property acquired on behalf of the Trust Fund through
foreclosure or deed in lieu of foreclosure ("REO Property"); (5) all proceeds
received in connection with the taking of a Mortgaged Property by eminent
domain; (6) any amounts required to be deposited by the Master Servicer to
cover net losses on Permitted Investments made with funds held in the
Collection Account; (7) any amounts required to be deposited in connection
with the application of co-insurance clauses, flood damage to REO Properties
and blanket policy deductibles; (8) any amounts required to be deposited from
income with respect to any REO Property; and (9) any amounts received from
Borrowers which represent recoveries of Property Protection Expenses.
"Prepayment Premium" means any premium paid or payable by the related
Borrower in connection with any principal prepayment on any Mortgage Loan.
"Property Protection Expenses" comprise certain costs and expenses incurred
in connection with defaulted Mortgage Loans, acquiring title or management of
REO Property or the sale of defaulted Mortgage Loans or REO Properties, as
more fully described in the related Agreement. As set forth in the Agreement
for each Series, the Master Servicer will be entitled to make certain
withdrawals from the Collection Account to, among other things: (i) remit
certain amounts for the related Distribution Date into the Distribution
Account; (ii) reimburse Property Protection Expenses and pay taxes,
assessments and insurance premiums and certain third-party expenses in
accordance with the Agreement; (iii) pay accrued and unpaid servicing fees to
the Master Servicer out of all Mortgage Loan collections; and (iv) reimburse
the Master Servicer, the Trustee and the Depositor for certain expenses and
provide indemnification to the Depositor and the Master Servicer as described
in the Agreement.
The amount at any time credited to the Collection Account may be invested
in Permitted Investments that are payable on demand or in general mature or
are subject to withdrawal or redemption on or before the business day
preceding the next succeeding Master Servicer Remittance Date. The Master
Servicer will be required to remit amounts required for distribution to
Certificateholders to the Distribution Account on the business day preceding
the related Distribution Date (the "Master Servicer Remittance Date"). The
income from the investment of funds in the Collection Account in Permitted
Investments will constitute additional servicing compensation for the Master
Servicer, and the risk of loss of funds in the Collection Account resulting
from such investments will be borne by the Master Servicer. The amount of
each such loss will be required to be deposited by the Master Servicer in the
Collection Account immediately as realized.
It is expected that the Agreement for each Series of Certificates will
provide that a special trust account (the "REO Account") will be established
and maintained in order to be used in connection with REO Properties and, if
specified in the related Prospectus Supplement, certain other Mortgaged
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Properties. To the extent set forth in the Agreement, certain withdrawals
from the REO Account will be made to, among other things, (i) make
remittances to the Collection Account as required by the Agreement, (ii) pay
taxes, assessments, insurance premiums, other amounts necessary for the
proper operation, management and maintenance of the REO Properties and such
Mortgaged Properties and certain third-party expenses in accordance with the
Agreement and (iii) provide for the reimbursement of certain expenses in
respect of the REO Properties and such Mortgaged Properties.
The amount at any time credited to the REO Account will be fully insured
to the maximum coverage possible or will be invested in Permitted Investments
(as defined herein) that mature, or are subject to withdrawal or redemption,
on or before the business day on which such amounts are required to be
remitted to the Master Servicer for deposit in the Collection Account. The
income from the investment of funds in the REO Account in Permitted
Investments shall be deposited in the REO Account for remittance to the
Collection Account, and the risk of loss of funds in the REO Account
resulting from such investments will be borne by the Trust Fund.
Unless otherwise specified in the applicable Prospectus Supplement,
"Permitted Investments" will consist of one or more of the following:
(i) direct obligations of, or guarantees as to timely payment of
principal and interest by, the United States or any agency or
instrumentality thereof provided that such obligations are backed by the
full faith and credit of the United States of America;
(ii) direct obligations of, or guarantees as to timely payment of
principal and interest by, the FHLMC, FNMA or the Federal Farm Credit
System, provided that any such obligation, at the time of purchase of such
obligation or contractual commitment providing for the purchase thereof,
is qualified by each Rating Agency as an investment of funds backing
securities having ratings equivalent to each Rating Agency's highest
initial rating of the Certificates;
(iii) demand and time deposits in or certificates of deposit of, or
bankers' acceptances issued by, any bank or trust company, savings and
loan association or savings bank, provided that, in the case of
obligations that are not fully FDIC-insured deposits, the commercial paper
and/or long-term unsecured debt obligations of such depository institution
or trust company (or in the case of the principal depository institution
in a holding company system, the commercial paper or long-term unsecured
debt obligations of such holding company) have the highest rating
available for such securities by each Rating Agency (in the case of
commercial paper) or have received one of the two highest ratings
available for such securities by each Rating Agency (in the case of
long-term unsecured debt obligations), or such lower rating as will not
result in the downgrade or withdrawal of the rating or ratings then
assigned to the Certificates by any Rating Agency;
(iv) general obligations of or obligations guaranteed by any state of the
United States or the District of Columbia receiving one of the two highest
long-term debt ratings available for such securities by each Rating
Agency, or such lower rating as will not result in the downgrading or
withdrawal of the rating or ratings then assigned to the Certificates by
any such Rating Agency;
(v) commercial or finance company paper (including both
non-interest-bearing discount obligations and interest-bearing obligations
payable on demand or on a specified date not more than one year after the
date of issuance thereof) that is rated by each Rating Agency in its
highest short-term unsecured rating category at the time of such
investment or contractual commitment providing for such investment, and is
issued by a corporation the outstanding senior long-term debt obligations
of which are then rated by each Rating Agency in one of its two highest
long-term unsecured rating categories, or such lower rating as will not
result in the downgrading or withdrawal of the rating or ratings then
assigned to the Certificates by any Rating Agency;
(vi) guaranteed reinvestment agreements issued by any bank, insurance
company or other corporation rated in one of the two highest ratings
available to such issuers by each Rating Agency at the time of such
investment provided that any such agreement must by its terms provide that
it is terminable by the purchaser without penalty in the event any such
rating is at any time lower than such level;
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(vii) repurchase obligations with respect to any security described in
clause (i) or (ii) above entered into with a depository institution or
trust company (acting as principal) meeting the ratings standard described
in (iii) above;
(viii) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any state
thereof and rated by each Rating Agency in one of its two highest
long-term unsecured rating categories at the time of such investment or
contractual commitment providing therefor; provided, however, that
securities issued by any such corporation will not be Permitted
Investments to the extent that investment therein would cause the then
outstanding principal amount of securities issued by such corporation and
held as part of the Collection Account or the Distribution Account to
exceed 20% of the aggregate principal amount of all Permitted Investments
held in the Collection Account and the Distribution Account;
(ix) units of taxable money market funds which funds are regulated
investment companies, seek to maintain a constant net asset value per
share and invest solely in obligations backed by the full faith and credit
of the United States, and have been designated in writing by each Rating
Agency as Permitted Investments with respect to this definition;
(x) if previously confirmed in writing to the Trustee, any other demand,
money market or time deposit, or any other obligation, security or
investment, as may be acceptable to each Rating Agency as an investment of
funds backing securities having ratings equivalent to each Rating Agency's
highest initial rating of the Certificates; and
(xi) such other obligations as are acceptable as Permitted Investments to
each Rating Agency;
provided, however, that (a) such instrument or security shall qualify as a
"cash flow investment" pursuant to the Internal Revenue Code of 1986, as
amended (the "Code") and (b) no instrument or security shall be a Permitted
Investment if (i) such instrument or security evidences a right to receive
only interest payments or (ii) the stated interest rate on such investment is
in excess of 120% of the yield to maturity produced by the price at which
such investment was purchased.
AMENDMENT
The Agreement for each Series will provide that it may be amended by the
parties thereto without the consent of any of the Certificateholders to cure
any ambiguity, to correct or supplement any provision therein that may be
inconsistent with any other provision therein, to maintain the rating or
ratings assigned to the Certificates by a Rating Agency or to make other
provisions with respect to matters or questions arising under the Agreement
which are not inconsistent with the provisions of the Agreement, provided
that such action will not, as evidenced by an opinion of counsel acceptable
to the Depositor and the Trustee, adversely affect in any material respect
the interests of any Certificateholder.
Each Agreement will also provide that it may be amended by the parties
thereto with the consent of the Holders of Certificates representing an
aggregate outstanding principal amount of not less than a percentage
specified in the related Agreement of each Class of Certificates affected by
the proposed amendment for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Agreement
or modifying in any manner the rights of Certificateholders; provided,
however, that no such amendment may (i) reduce in any manner the amount of,
or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Certificate without the consent of each
affected Certificateholder, (ii) reduce the aforesaid percentage of
Certificates the Holders of which are required to consent to any such
amendment, without the consent of the Holders of all Certificates then
outstanding, or (iii) alter the servicing standard set forth in the
Agreement. Further, the Agreement for each Series may provide that the
parties thereto, at any time and from time to time, without the consent of
the Certificateholders, may amend the Agreement to modify, eliminate or add
to any of its provisions to such extent as shall be necessary to maintain the
qualification of the REMIC Pool as a REMIC at all times that any of the
Certificates are outstanding; provided, however, that such action, as
evidenced by an opinion of counsel acceptable to the Trustee, is necessary or
helpful to maintain such qualification, and would not adversely affect in any
material respect the interest of any Certificateholder.
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The Agreement relating to each Series may provide that no amendment to
such Agreement will be made unless there has been delivered in accordance
with such Agreement an opinion of counsel to the effect that such amendment
will not cause such Series to fail to qualify as a REMIC at any time that any
of the Certificates are outstanding.
The Prospectus Supplement for a Series may describe other or different
provisions concerning the amendment of the related Agreement.
TERMINATION; REPURCHASE OF MORTGAGE LOANS
The obligations of the parties to the Agreement for each Series will
terminate upon: (i) the purchase of all of the assets of the related Trust
Fund, as described in the related Prospectus Supplement; (ii) the later of
(a) the distribution to Certificateholders of that Series of final payment
with respect to the last outstanding Mortgage Loan or (b) the disposition of
all property acquired upon foreclosure or deed in lieu of foreclosure with
respect to the last outstanding Mortgage Loan and the remittance to the
Certificateholders of all funds due under the Agreement; (iii) the sale of
the assets of the related Trust Fund after the principal amounts of all
Certificates have been reduced to zero under circumstances set forth in the
Agreement; or (iv) mutual consent of the parties and all Certificateholders.
With respect to each Series, the Trustee will give or cause to be given
written notice of termination of the Agreement to each Certificateholder and,
unless otherwise specified in the applicable Prospectus Supplement, the final
distribution under the Agreement will be made only upon surrender and
cancellation of the related Certificates at an office or agency specified in
the notice of termination.
REPORTS TO CERTIFICATEHOLDERS
Concurrently with each distribution for each Series, the Trustee (or such
other paying agent as may be identified in the applicable Prospectus
Supplement) will forward to each Certificateholder a statement setting forth
such information relating to such distribution as is specified in the
Agreement and described in the applicable Prospectus Supplement.
THE TRUSTEE
The Depositor will select a bank or trust company to act as trustee (the
"Trustee") under the Agreement for each Series and the Trustee will be
identified, and its obligations under that Agreement will be described, in
the applicable Prospectus Supplement.
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THE MORTGAGE POOLS
GENERAL
Each Mortgage Pool will consist of mortgage loans secured by first or
junior mortgages, deeds of trust or similar security instruments
("Mortgages") on, or installment contracts ("Installment Contracts") for the
sale of, fee simple or leasehold interests in commercial real estate
property, multifamily residential property, cooperatively owned multifamily
properties and/or mixed residential/commercial property and related property
and interests (each such interest or property, as the case may be, a
"Mortgaged Property") located, unless otherwise specified in the related
Prospectus Supplement, in any of the fifty states, the District of Columbia
or the Commonwealth of Puerto Rico. A Mortgage Pool may also include any or
all of the participation interests in such types of mortgage loans, private
mortgage pass-through certificates, certificates issued or guaranteed by
FHLMC, FNMA or GNMA and mortgage pass-through certificates previously created
by the Depositor. Each such mortgage loan, Installment Contract,
participation interest or certificate is herein referred to as a "Mortgage
Loan."
All Mortgage Loans will be of one or more of the following types:
1. mortgage loans with fixed interest rates;
2. mortgage loans with adjustable interest rates;
3. mortgage loans whose principal balances fully amortize over their
remaining terms to maturity;
4. mortgage loans whose principal balances do not fully amortize but
instead provide for a substantial principal payment at the stated maturity
of the loan;
5. mortgage loans that provide for recourse against only the Mortgaged
Properties;
6. mortgage loans that provide for recourse against the other assets of
the related Borrowers (as defined below); and
7. any other types of mortgage loans described in the applicable
Prospectus Supplement.
Certain Mortgage Loans ("Simple Interest Loans") may provide that
scheduled interest and principal payments thereon are applied first to
interest accrued from the last date to which interest has been paid to the
date such payment is received and the balance thereof is applied to
principal, and other Mortgage Loans may provide for payment of interest in
advance rather than in arrears.
Mortgage Loans may also be secured by one or more assignments of leases
and rents, management agreements or operating agreements relating to the
Mortgaged Property and in some cases by certain letters of credit, personal
guarantees or both. Pursuant to an assignment of leases and rents, the
obligor (the "Borrower") on the related promissory note (the "Note") assigns
its right, title and interest as landlord under each lease and the income
derived therefrom to the related lender, while retaining a license to collect
the rents for so long as there is no default. If the Borrower defaults, the
license terminates and the related lender is entitled to collect the rents
from tenants to be applied to the monetary obligations of the Borrower. State
law may limit or restrict the enforcement of the assignment of leases and
rents by a lender until the lender takes possession of the related Mortgaged
Property and a receiver is appointed. See "CERTAIN LEGAL ASPECTS OF THE
MORTGAGE LOANS -- Leases and Rents."
A Trust Fund may consist of a single Mortgage Loan or a number of Mortgage
Loans with a single obligor or related obligors thereunder, or multiple
Mortgage Loans with multiple unrelated obligors thereunder, as specified in
the related Prospectus Supplement. The Mortgage Loans will be newly
originated or seasoned, and will be acquired by the Depositor either directly
or through one or more affiliates.
Unless otherwise specified in the Prospectus Supplement for a Series, the
Mortgage Loans will not be insured or guaranteed by the United States, any
governmental agency, any private mortgage insurer or any other person or
entity.
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The Prospectus Supplement relating to each Series will specify the
originator or originators relating to the Mortgage Loans, which may include,
among others, commercial banks, savings and loan associations, other
financial institutions, insurance companies or real estate developers, and
the underwriting criteria to the extent available in connection with
originating the Mortgage Loans. The criteria applied by the Depositor in
selecting the Mortgage Loans to be included in a Mortgage Pool will vary from
Series to Series. The Prospectus Supplement relating to each Series also will
provide specific information regarding the characteristics of the Mortgage
Loans, as of the Cut-Off Date, including, among other things: (i) the
aggregate principal balance of the Mortgage Loans; (ii) the types of
properties securing the Mortgage Loans and the aggregate principal balance of
the Mortgage Loans secured by each type of property; (iii) the interest rate
or range of interest rates of the Mortgage Loans; (iv) the origination dates
and the original and, with respect to seasoned Mortgage Loans, remaining
terms to stated maturity of the Mortgage Loans; (v) the loan-to-value ratios
at origination and, with respect to seasoned Mortgage Loans, current loan
balance-to-original value ratios of the Mortgage Loans; (vi) the geographic
distribution of the Mortgaged Properties underlying the Mortgage Loans; (vii)
the minimum interest rates, margins, adjustment caps, adjustment frequencies,
indices and other similar information applicable to adjustable rate Mortgage
Loans; (viii) the debt service coverage ratios relating to the Mortgage
Loans; and (ix) payment delinquencies, if any, relating to the Mortgage
Loans. The applicable Prospectus Supplement will also specify any inadequate,
incomplete or obsolete documentation relating to the Mortgage Loans and other
characteristics of the Mortgage Loans relating to each Series. If specified
in the applicable Prospectus Supplement, the Depositor may segregate the
Mortgage Loans in a Mortgage Pool into separate "Mortgage Loan Groups" (as
described in the related Prospectus Supplement) as part of the structure of
the payments of principal and interest on the Certificates of a Series. In
such case, the Depositor will disclose the above-specified information by
Mortgage Loan Group.
The Depositor will file a current report on Form 8-K (the "Form 8-K") with
the Securities and Exchange Commission within 15 days after the initial
issuance of each Series of Certificates (each, a "Closing Date"), as
specified in the related Prospectus Supplement, which will set forth
information with respect to the Mortgage Loans included in the Trust Fund for
a Series as of the related Closing Date. The Form 8-K will be available to
the Certificateholders of the related Series promptly after its filing.
ASSIGNMENT OF MORTGAGE LOANS
At the time of issuance of the Certificates of each Series, the Depositor
will cause the Mortgage Loans to be assigned to the Trustee, together with,
as more fully specified in the related Prospectus Supplement, all principal
and interest due on or with respect to such Mortgage Loans, other than
principal and interest due on or before the Cut-Off Date and principal
prepayments received on or before the Cut-Off Date. The Trustee, concurrently
with such assignment, will execute and deliver Certificates evidencing the
beneficial ownership interests in the related Trust Fund to the Depositor in
exchange for the Mortgage Loans. Each Mortgage Loan will be identified in a
schedule appearing as an exhibit to the Agreement for the related Series (the
"Mortgage Loan Schedule"). The Mortgage Loan Schedule will include, among
other things, as to each Mortgage Loan, information as to its outstanding
principal balance as of the close of business on the Cut-Off Date, as well as
information respecting the interest rate, the scheduled monthly (or other
periodic) payment of principal and interest as of the Cut-Off Date and the
maturity date of each Note.
In addition, except to the extent otherwise specified in the applicable
Prospectus Supplement, the Depositor will, as to each Mortgage Loan, deliver
to the Trustee: (i) the Note, endorsed to the order of the Trustee without
recourse; (ii) the Mortgage and an executed assignment thereof in favor of
the Trustee or otherwise as required by the Agreement; (iii) any assumption,
modification or substitution agreements relating to the Mortgage Loan; (iv) a
lender's title insurance policy (or owner's policy in the case of an
Installment Contract), together with its endorsements, or an attorney's
opinion of title issued as of the date of origination of the Mortgage Loan;
(v) if the assignment of leases, rents and profits is separate from the
Mortgage, an executed re-assignment of assignment of leases, rents and
profits to the Trustee; and (vi) such other documents as may be described in
the Agreement (such documents collectively, the "Mortgage Loan File"). Unless
otherwise expressly permitted by the Agreement, all documents included in the
Mortgage Loan File are to be original executed documents; provided, however,
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that in instances where the original recorded Mortgage, Mortgage assignment
or any document necessary to assign the Depositor's interest in Installment
Contracts to the Trustee, as described in the Agreement, has been retained by
the applicable jurisdiction or has not yet been returned from recordation,
the Depositor may deliver a photocopy thereof certified to be the true and
complete copy of the original thereof submitted for recording.
The Trustee will hold the Mortgage Loan File for each Mortgage Loan in
trust for the benefit of all Certificateholders. Pursuant to the Agreement,
the Trustee is obligated to review the Mortgage Loan File for each Mortgage
Loan within a specified number of days after the execution and delivery of
the Agreement. Unless otherwise specified in the related Prospectus
Supplement, if any document in the Mortgage Loan File is found to be
defective in any material respect, the Trustee will promptly notify the
Depositor and the Master Servicer. Unless otherwise specified in the related
Prospectus Supplement, if the Master Servicer or other entity cannot cure
such defect within the time period specified in such Prospectus Supplement,
the Master Servicer or such other entity will be obligated to either
substitute the affected Mortgage Loan for a Substitute Mortgage Loan or
Loans, or to repurchase the related Mortgage Loan from the Trustee within the
time period specified in such Prospectus Supplement at a price equal to the
principal balance thereof as of the date of purchase or, in the case of a
Series as to which an election has been made to treat the related Trust Fund
as a REMIC, at such other price as may be necessary to avoid a tax on a
prohibited transaction, as described in Section 860F(a) of the Code, in each
case together with accrued interest at the applicable Pass-Through Rate to
the first day of the month following such repurchase, plus the amount of any
unreimbursed advances made by the Master Servicer in respect of such Mortgage
Loan. Unless otherwise specified in the applicable Prospectus Supplement,
this purchase obligation constitutes the sole remedy available to the Holders
of Certificates or the Trustee for a material defect in a constituent
document.
MORTGAGE UNDERWRITING STANDARDS AND PROCEDURES
The underwriting procedures and standards for Mortgage Loans included in a
Mortgage Pool will be specified in the related Prospectus Supplement to the
extent such procedures and standards are known or available. Such Mortgage
Loans may be originated in contemplation of the transactions contemplated by
this Prospectus and the related Prospectus Supplement or may have been
originated by third-parties and acquired by the Depositor directly or through
its affiliates in negotiated transactions.
Except as otherwise set forth in the related Prospectus Supplement for a
Series, the originator of a Mortgage Loan will have applied underwriting
procedures intended to evaluate, among other things, the income derived from
the Mortgaged Property, the capabilities of the management of the project,
including a review of management's past performance record, its management
reporting and control procedures (to determine its ability to recognize and
respond to problems) and its accounting procedures (to determine cash
management ability, the obligor's credit standing and repayment ability and
the value and adequacy of the Mortgaged Property as collateral). Mortgage
Loans insured by the Federal Housing Administration ("FHA"), a division of
the United States Department of Housing and Urban Development ("HUD"), will
have been originated by mortgage lenders which are approved by HUD as an FHA
mortgagee in the ordinary course of their real estate lending activities and
will comply with the underwriting policies of FHA.
If so specified in the related Prospectus Supplement, the adequacy of a
Mortgaged Property as security for repayment will generally have been
determined by appraisal by appraisers selected in accordance with
preestablished guidelines established by or acceptable to the loan originator
for appraisers. If so specified in the related Prospectus Supplement, the
appraiser must have personally inspected the property and verified that it
was in good condition and that construction, if new, has been completed.
Unless otherwise stated in the applicable Prospectus Supplement, the
appraisal will have been based upon a cash flow analysis and/or a market data
analysis of recent sales of comparable properties and, when deemed
applicable, a replacement cost analysis based on the current cost of
constructing or purchasing a similar property.
No assurance can be given that values of the Mortgaged Properties have
remained or will remain at their levels on the dates of origination of the
related Mortgage Loans. Further, there is no assurance that
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appreciation of real estate values generally will limit loss experiences on
commercial properties or multifamily residential properties. If the
commercial real estate market should experience an overall decline in
property values such that the outstanding balances of the Mortgage Loans and
any additional financing on the Mortgaged Properties in a particular Mortgage
Pool become equal to or greater than the value of the Mortgaged Properties,
the actual rates of delinquencies, foreclosures and losses could be higher
than those now generally experienced in the mortgage lending industry. To the
extent that such losses are not covered by the methods of Enhancement or the
insurance policies described herein, the ability of the Depositor to pay
principal of and interest on the Certificates may be adversely affected. Even
where credit support covers all losses resulting from defaults and
foreclosure, the effect of defaults and foreclosures may be to increase
prepayment experience on the Mortgage Loans, thus shortening weighted average
life and affecting yield to maturity.
REPRESENTATIONS AND WARRANTIES
Unless otherwise specified in the related Prospectus Supplement, the
seller (the "Unaffiliated Seller") of a Mortgage Loan to the Depositor or any
of its affiliates (or the Master Servicer, if the Unaffiliated Seller is also
the Master Servicer under the Agreement) will have made representations and
warranties in respect of the Mortgage Loans sold by such Unaffiliated Seller
(or the Master Servicer) to the Depositor or its affiliates. Such
representations and warranties will generally include, among other things:
(i) with respect to each Mortgaged Property, that title insurance (or in the
case of Mortgaged Properties located in areas where such policies are
generally not available, an attorney's opinion of title) and any required
hazard insurance was effective at the origination of each Mortgage Loan, and
that each policy (or opinion of title) remained in effect on the date of
purchase of the Mortgage Loan from the Unaffiliated Seller; (ii) that the
Unaffiliated Seller had good and marketable title to each such Mortgage Loan;
(iii) with respect to each Mortgaged Property, that each mortgage constituted
a valid first lien on the Mortgaged Property (subject only to permissible
title insurance exceptions), unless otherwise specified in the related
Prospectus Supplement; (iv) that there were no delinquent tax or assessment
liens against the Mortgaged Property; and (v) that each Mortgage Loan was
current as to all required payments (unless otherwise specified in the
related Prospectus Supplement).
All of the representations and warranties of an Unaffiliated Seller in
respect of a Mortgage Loan will have been made as of the date on which such
Unaffiliated Seller sold the Mortgage Loan to the Depositor or its affiliate.
A substantial period of time may have elapsed between such date and the date
of the initial issuance of the Series of Certificates evidencing an interest
in such Mortgage Loan. Since the representations and warranties of an
Unaffiliated Seller do not address events that may occur following the sale
of a Mortgage Loan by an Unaffiliated Seller, the repurchase obligation of
the Unaffiliated Seller described below will not arise if, on or after the
date of the sale of a Mortgage Loan by the Unaffiliated Seller to the
Depositor or its affiliates, the relevant event occurs that would have given
rise to such an obligation. However, the Depositor will not include any
Mortgage Loan in the Trust Fund for any Series of Certificates if anything
has come to the Depositor's attention that would cause it to believe that the
representations and warranties of an Unaffiliated Seller will not be accurate
and complete in all material respects in respect of such Mortgage Loan as of
the related Cut-Off Date. If so specified in the related Prospectus
Supplement, the Depositor will make certain representations and warranties
for the benefit of Holders of Certificates of a Series in respect of a
Mortgage Loan that relate to the period commencing on the date of sale of
such Mortgage Loan to the Depositor or its affiliates.
Unless otherwise set forth or specified in the related Prospectus
Supplement, upon the discovery of the breach of any representation or
warranty made by an Unaffiliated Seller in respect of a Mortgage Loan that
materially and adversely affects the interests of the Certificateholders of
the related Series, such Unaffiliated Seller or, if so specified in the
related Prospectus Supplement, the Master Servicer will be obligated to
repurchase such Mortgage Loan at a purchase price equal to 100% of the unpaid
principal balance thereof at the date of repurchase or, in the case of a
Series of Certificates as to which the Depositor has elected to treat the
related Trust Fund as a REMIC, as defined in the Code, at such other price as
may be necessary to avoid a tax on a prohibited transaction, as described in
Section 860F(a) of the Code, in each case together with accrued interest at
the Pass-Through Rate for the related Mortgage Pool, to the first day of the
month following such repurchase and the amount of any unreimbursed
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advances made by the Master Servicer in respect of such Mortgage Loan. The
Master Servicer will be required to enforce such obligation of the
Unaffiliated Seller for the benefit of the Trustee and the
Certificateholders, following the practices it would employ in its good faith
business judgment were it the owner of such Mortgage Loan. Unless otherwise
specified in the applicable Prospectus Supplement and subject to the ability
of the Unaffiliated Seller or the Master Servicer to deliver Substitute
Mortgage Loans for certain Mortgage Loans as described below, this repurchase
obligation constitutes the sole remedy available to the Certificateholders of
such Series for a breach of a representation or warranty by an Unaffiliated
Seller.
Any obligation of the Master Servicer to purchase a Mortgage Loan if an
Unaffiliated Seller defaults on its obligation to do so is subject to
limitations, and no assurance can be given that an Unaffiliated Seller will
carry out its repurchase obligation with respect to the Mortgage Loans.
The Depositor will make representations and warranties with respect to the
Mortgage Loans in a Mortgage Pool, as specified in the related Prospectus
Supplement. Upon a breach of any representation or warranty by the Depositor
that materially and adversely affects the interests of the
Certificateholders, the Depositor will be obligated either to cure the breach
in all material respects or to purchase the related Mortgage Loan at the
purchase price set forth above. Unless otherwise specified in the applicable
Prospectus Supplement and subject to the ability of the Depositor to deliver
Substitute Mortgage Loans for certain Mortgage Loans as described below, this
repurchase obligation constitutes the sole remedy available to the
Certificateholders or the Trustee for a breach of representation or warranty
by the Depositor.
The proceeds of any repurchase of a Mortgage Loan will be deposited,
subject to certain limitations set forth in the related Agreement, into the
Collection Account.
Within the period of time specified in the related Prospectus Supplement,
following the date of issuance of a Series of Certificates, the Depositor,
the Master Servicer or the Unaffiliated Seller, as the case may be, may
deliver to the Trustee Mortgage Loans ("Substitute Mortgage Loans") in
substitution for any one or more of the Mortgage Loans ("Deleted Mortgage
Loans") initially included in the Trust Fund but which do not conform in one
or more respects to the description thereof contained in the related
Prospectus Supplement, as to which a breach of a representation or warranty
is discovered, which breach materially and adversely affects the interests of
the Certificateholders, or as to which a document in the related Mortgage
Loan File is defective in any material respect. Unless otherwise specified in
the related Prospectus Supplement, the required characteristics of any
Substitute Mortgage Loan will generally include, among other things, that
such Substitute Mortgage Loan on the date of substitution, will (i) have an
outstanding principal balance, after deduction of all scheduled payments due
in the month of substitution, not in excess of the outstanding principal
balance of the Deleted Mortgage Loan (the amount of any shortfall to be
distributed to Certificateholders in the month of substitution), (ii) have a
per annum interest rate (the "Mortgage Interest Rate") not less than (and not
more than 1% greater than) the Mortgage Interest Rate of the Deleted Mortgage
Loan, (iii) have a remaining term to maturity not greater than (and not more
than one year less than) that of the Deleted Mortgage Loan and (iv) comply
with all the representations and warranties set forth in the Agreement as of
the date of substitution.
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SERVICING OF THE MORTGAGE LOANS
GENERAL
The Prospectus Supplement related to a Series will identify the master
servicer, or if there is only one servicer of the Mortgage Loans, the
servicer thereof (as applicable, the "Master Servicer") and will set forth
certain information concerning the Master Servicer. The Master Servicer may
be an affiliate of the Depositor and may have other business relationships
with the Depositor and its affiliates.
The Master Servicer will be responsible for servicing the Mortgage Loans
pursuant to the Agreement for the related Series. If so specified in the
related Prospectus Supplement, the Master Servicer may subcontract the
servicing of all or a portion of the Mortgage Loans to one or more
sub-servicers and may subcontract the servicing of certain Mortgage Loans
that are in default or otherwise require special servicing (the "Specially
Serviced Mortgage Loans") to a special servicer (the "Special Servicer"), and
certain information with respect to the Special Servicer will be set forth in
such Prospectus Supplement. Such sub-servicers and the Special Servicer may
be an affiliate of the Depositor and may have other business relationships
with Depositor and its affiliates.
COLLECTIONS AND OTHER SERVICING PROCEDURES
The Master Servicer will make reasonable efforts to collect all payments
called for under the Mortgage Loans and will, consistent with the related
Agreement, following such collection procedures as it deems necessary or
desirable. Consistent with the above, the Master Servicer may, in its
discretion, waive any late payment or assumption charge or penalty interests
in connection with late payment or assumption of a Mortgage Loan and, if so
specified in the related Prospectus Supplement, may extend the due dates for
payments due on a Note.
It is expected that the Agreement for each Series will provide that the
Master Servicer establish and maintain an escrow account (the "Escrow
Account") in which the Master Servicer will be required to deposit amounts
received from each Borrower, if required by the terms of the related Note,
for the payment of taxes, assessments, certain mortgage and hazard insurance
premiums and other comparable items. The Special Servicer, if any, will be
required to remit amounts received for such purposes on Mortgage Loans
serviced by it for deposit in the Escrow Account, and will be entitled to
direct the Master Servicer to make withdrawals from the Escrow Account as may
be required for servicing of such Mortgage Loans. Withdrawals from the Escrow
Account may be made to effect timely payment of taxes, assessments, mortgage
and hazard insurance premiums, to refund to Borrowers amounts determined to
be overages, to remove amounts deposited therein in error, to pay interest to
Borrowers on balances in the Escrow Account, if required, to repair or
otherwise protect the Mortgaged Properties and to clear and terminate such
account. The Master Servicer will be entitled to all income on the funds in
the Escrow Account invested in Permitted Investments not required to be paid
to Borrowers under applicable law. The Master Servicer will be responsible
for the administration of the Escrow Account. If amounts on deposit in the
Escrow Account are insufficient to pay any tax, insurance premium or other
similar item when due, such item will be payable from amounts on deposit in
the Collection Account or, to the extent such amounts are insufficient, in
the manner set forth in the Prospectus Supplement and Agreement for the
related Series.
INSURANCE
Unless otherwise specified in the applicable Prospectus Supplement, the
Agreement for each Series will require that the Master Servicer maintain or
require each Borrower to maintain insurance in accordance with the related
Mortgage, which generally will include a standard fire and hazard insurance
policy with extended coverage. To the extent required by the related
Mortgage, the coverage of each such standard hazard insurance policy will be
in an amount that is not less than the lesser of the full replacement cost of
the improvements securing such Mortgage Loan or the outstanding principal
balance owing on such Mortgage Loan. If a Mortgaged Property was located at
the time of origination of the related Mortgage Loan in a federally
designated special flood hazard area, the Master Servicer will also
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maintain or require the related Borrower to maintain flood insurance in an
amount equal to the lesser of the unpaid principal balance of the related
Mortgage Loan and the maximum amount obtainable with respect to the Mortgage
Loan. To the extent set forth in the related Prospectus Supplement, the cost
of any such insurance maintained by the Master Servicer will be an expense of
the Trust Fund payable out of the Collection Account. The Master Servicer
will cause to be maintained fire and hazard insurance with extended coverage
on each REO Property in an amount which is at least equal to the greater of
(i) an amount not less than the amount necessary to avoid the application of
any coinsurance clause contained in the related insurance policy and (ii) the
replacement cost of the improvements which are a part of such property. The
cost of any such insurance with respect to an REO Property will be an expense
of the Trust Fund payable out of amounts on deposit in the related REO
Account or, if such amounts are insufficient, from the Collection Account.
The Master Servicer will maintain flood insurance providing substantially the
same coverage as described above on any REO Property which was located in a
federally designated special flood hazard area at the time the related
Mortgage Loan was originated. The related Agreement will provide that the
Master Servicer may satisfy its obligation to cause hazard policies to be
maintained by maintaining a master, or single interest blanket, insurance
policy insuring against losses on the Mortgage Loans or REO Properties, as
the case may be. The incremental cost of such insurance allocable to any
particular Mortgage Loan, if not borne by the related Borrower, will be an
expense of the Trust Fund. Alternatively, the Master Servicer may satisfy its
obligation by maintaining, at its expense, a blanket policy (i.e., not a
single interest or master policy) insuring against losses on the Mortgage
Loans or REO Properties, as the case may be. If such a blanket policy
contains a deductible clause, the Master Servicer will be obligated to
deposit in the Collection Account all sums which would have been deposited
therein but for such clause.
In general, the standard form of fire and hazard extended coverage policy
will cover physical damage to, or destruction of, the improvements on the
Mortgaged Property caused by fire, lightning, explosion, smoke, windstorm,
hail, riot, strike and civil commotion, subject to the conditions and
exclusions particularized in each policy. Since the standard hazard insurance
policies relating to the Mortgage Loans will be underwritten by different
insurers and will cover Mortgaged Properties located in various states, such
policies will not contain identical terms and conditions. The most
significant terms thereof, however, generally will be determined by state law
and conditions. Most such policies typically will not cover any physical
damage resulting from war, revolution, governmental actions, floods and other
water-related causes, earth movement (including earthquakes, landslides and
mud flows), nuclear reaction, wet or dry rot, vermin, rodents, insects or
domestic animals, theft and, in certain cases, vandalism. The foregoing list
is merely indicative of certain kinds of uninsured risks and is not intended
to be all-inclusive. Any losses incurred with respect to Mortgage Loans due
to uninsured risks (including earthquakes, mud flows and floods) or
insufficient hazard insurance proceeds could affect distributions to the
Certificateholders.
The standard hazard insurance policies covering Mortgaged Properties
securing Mortgage Loans typically will contain a "coinsurance" clause which,
in effect, will require the insured at all times to carry insurance of a
specified percentage (generally 80% to 90%) of the full replacement value of
the dwellings, structures and other improvements on the Mortgaged Property in
order to recover the full amount of any partial loss. If the insured's
coverage falls below this specified percentage, such clause will provide that
the insurer's liability in the event of partial loss will not exceed the
greater of (i) the actual cash value (the replacement cost less physical
depreciation) of the structures and other improvements damaged or destroyed
and (ii) such proportion of the loss, without deduction for depreciation, as
the amount of insurance carried bears to the specified percentage of the full
replacement cost of such dwellings, structures and other improvements.
In addition, to the extent required by the related Mortgage, the Master
Servicer may require the Borrower to maintain other forms of insurance
including, but not limited to, loss of rent endorsements, business
interruption insurance and comprehensive public liability insurance, and the
related Agreement may require the Master Servicer to maintain public
liability insurance with respect to any REO Properties. Any cost incurred by
the Master Servicer in maintaining any such insurance policy will be added to
the amount owing under the Mortgage Loan where the terms of the Mortgage Loan
so permit;
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provided, however, that the addition of such cost will not be taken into
account for purposes of calculating the distribution to be made to
Certificateholders. Such costs may be recovered by the Master Servicer from
the Collection Account, with interest thereon, as provided by the Agreement.
Unless otherwise specified in the applicable Prospectus Supplement, no
pool insurance policy, special hazard insurance policy, bankruptcy bond,
repurchase bond or guarantee insurance will be maintained with respect to the
Mortgage Loans, nor will any Mortgage Loan be subject to FHA insurance.
The FHA is responsible for administering various federal programs,
including mortgage insurance, authorized under the National Housing Act of
1934, as amended, and the United States Housing Act of 1937, as amended. To
the extent specified in the related Prospectus Supplement, all or a portion
of the Mortgage Loans may be insured by the FHA. The Master Servicer will be
required to take such steps as are reasonably necessary to keep such
insurance in full force and effect.
FIDELITY BONDS AND ERRORS AND OMISSIONS INSURANCE
Unless otherwise specified in the applicable Prospectus Supplement, the
Agreement for each Series will require that the Master Servicer obtain and
maintain in effect a fidelity bond or similar form of insurance coverage
(which may provide blanket coverage) or any combination thereof insuring
against loss occasioned by fraud, theft or other intentional misconduct of
the officers, employees and agents of the Master Servicer. The related
Agreement will allow the Master Servicer to self-insure against loss
occasioned by the errors and omissions of the officers, employees and agents
of the Master Servicer so long as certain criteria set forth in the Agreement
are met.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Master Servicer's principal compensation for its activities under the
Agreement for each Series will come from the payment to it or retention by
it, with respect to each Mortgage Loan, of a "Servicing Fee" (as defined in
the related Prospectus Supplement). The exact amount and calculation of such
Servicing Fee will be established in the Prospectus Supplement and Agreement
for the related Series. Since the aggregate unpaid principal balance of the
Mortgage Loans will generally decline over time, the Master Servicer's
servicing compensation will ordinarily decrease as the Mortgage Loans
amortize.
In addition, the Agreement for a Series may provide that the Master
Servicer be entitled to receive, as additional compensation, (i) Prepayment
Premiums, late fees and certain other fees collected from Borrowers and (ii)
any interest or other income earned on funds deposited in the Collection
Account (as described under "DESCRIPTION OF THE CERTIFICATES -- Accounts")
and, except to the extent such income is required to be paid to the related
Borrowers, the Escrow Account.
Unless otherwise specified in the related Prospectus Supplement, the
Master Servicer will pay the fees and expenses of the Trustee.
If the Master Servicer subcontracts the servicing of Specially Serviced
Mortgage Loans to a Special Servicer, the exact amount and calculation of the
Special Servicer Fee will be established in the Prospectus Supplement and
Agreement for the related Series.
In addition to the compensation described above, the Master Servicer (or
any other party specified in the applicable Prospectus Supplement) may
retain, or be entitled to the reimbursement of, such other amounts and
expenses as are described in the applicable Prospectus Supplement.
ADVANCES
The applicable Prospectus Supplement will set forth the obligations, if
any, of the Master Servicer to make any advances with respect to delinquent
payments on Mortgage Loans, payments of taxes, insurance and Property
Protection Expenses or otherwise. Any such advances will be made in the form
and manner described in the Prospectus Supplement and Agreement for the
related Series.
MODIFICATIONS, WAIVERS AND AMENDMENTS
If so specified in the related Prospectus Supplement, the Agreement for
each Series will provide that the Master Servicer or the Special Servicer, if
any, may have the discretion, subject to certain conditions
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set forth herein, to modify, waive or amend certain of the terms of any
Mortgage Loan without the consent of the Trustee or any Certificateholder.
The extent to which the Master Servicer or the Special Servicer, if any, may
modify, waive or amend any terms of the Mortgage Loans without such consent
will be specified in the related Prospectus Supplement.
The Special Servicer, if any, may, with respect to any Specially Serviced
Mortgage Loan, subject to the terms and conditions set forth in the
Agreement, modify, waive or amend the terms of such Mortgage Loan if the
Special Servicer determines that a material default has occurred or a payment
default has occurred or is reasonably foreseeable. The Special Servicer, if
any, may extend the maturity date of such Mortgage Loan to a date not later
than the date described in the related Prospectus Supplement.
Unless otherwise provided in the applicable Prospectus Supplement, the
Special Servicer, if any, will not agree to any modification, waiver or
amendment of the payment terms of a Mortgage Loan unless the Special Servicer
has determined that such modification, waiver or amendment is reasonably
likely to produce a greater recovery on a present value basis than
liquidation of the Mortgage Loan. Prior to agreeing to any such modification,
waiver or amendment of the payment terms of a Mortgage Loan, the Special
Servicer, if any, will give notice thereof in the manner set forth in the
Prospectus Supplement and Agreement for the related Series.
The Prospectus Supplement for a Series may describe other or different
provisions concerning the modification, waiver or amendment of the terms of
the related Mortgage Loans.
EVIDENCE OF COMPLIANCE
The Agreement for each Series will provide that the Master Servicer, at
its expense, will cause a firm of independent public accountants to furnish
to the Trustee, annually on or before a date specified in the Agreement, a
statement as to compliance by the Master Servicer with the Agreement.
In addition, the Agreement will provide that the Master Servicer will
deliver to the Trustee, annually on or before a date specified in the
Agreement, a statement signed by an officer to the effect that, based on a
review of its activities during the preceding calendar year, to the best of
such officer's knowledge, the Master Servicer has fulfilled its obligations
under the Agreement throughout such year or, if there has been a default in
the fulfillment of any such obligation, specifying each such default and the
nature and status thereof.
CERTAIN MATTERS WITH RESPECT TO THE MASTER SERVICER, THE SPECIAL SERVICER AND
THE TRUSTEE
The Agreement for each Series will also provide that neither the Master
Servicer nor any of its directors, officers, employees or agents will be
under any liability to the Trust Fund or the Certificateholders for any
action taken, or for refraining from the taking of any action, in good faith
pursuant to the Agreement, or for errors in judgment; provided, however, that
neither the Master Servicer nor any such person will be protected against any
breach of representations or warranties made by the Master Servicer in the
Agreement, or any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith, or negligence in the performance of its
duties or by reason of reckless disregard of its obligations and duties
thereunder. The Agreement will further provide that the Master Servicer and
any of its directors, officers, employees or agents will be entitled to
indemnification by the Trust Fund and will be held harmless against any loss,
liability or expense incurred in connection with any legal action relating to
the Agreement or the Certificates, other than any loss, liability or expense
incurred (i) by reason of willful misfeasance, bad faith or negligence in the
performance of its duties or by reason of reckless disregard of its
obligations and duties thereunder or (ii) in certain other circumstances
specified in the Agreement. Any loss resulting from such indemnification will
reduce amounts distributable to Certificateholders and will be borne pro rata
by all Certificateholders without regard to subordination, if any, of one
Class to another.
Unless otherwise provided in the related Prospectus Supplement, the Master
Servicer may not resign from its obligations and duties under the Agreement
except upon a determination that its duties thereunder are no longer
permissible under applicable law. No such resignation will become effective
until the Trustee or a successor Master Servicer has assumed the Master
Servicer's obligations and duties under the Agreement.
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If the Master Servicer subcontracts the servicing of Specially Serviced
Mortgage Loans to a Special Servicer, the standard of care for, and any
indemnification to be provided to, the Special Servicer will be set forth in
the related Agreement.
The Trustee under each Agreement will be named in the applicable
Prospectus Supplement. The commercial bank or trust company serving as
Trustee may have normal banking relationships with the Depositor and/or its
affiliates and with the Master Servicer and/or its affiliates.
The Trustee may resign from its obligations under the Agreement at any
time, in which event a successor Trustee will be appointed. In addition, the
Depositor may remove the Trustee if the Trustee ceases to be eligible to act
as Trustee under the Agreement or if the Trustee becomes insolvent, at which
time the Depositor will become obligated to appoint a successor Trustee. The
Trustee may also be removed at any time by the Holders of Certificates
evidencing the Voting Rights specified in the applicable Prospectus
Supplement. Any resignation and removal of the Trustee, and the appointment
of a successor Trustee, will not become effective until acceptance of such
appointment by the successor Trustee.
EVENTS OF DEFAULT
Events of default (each, an "Event of Default") with respect to the Master
Servicer under the Agreement for each Series will, unless otherwise provided
in the applicable Prospectus Supplement, include: (i) any failure by the
Master Servicer to remit to the Trustee for deposit in the Distribution
Account for distribution to Certificateholders any payment required to be
made by the Master Servicer under the terms of the Agreement at least one
business day prior to the related Distribution Date; (ii) any failure on the
part of the Master Servicer duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Master
Servicer, which failure continues unremedied for a period of 90 days after
written notice of such failure has been given to the Master Servicer; (iii)
the entering against the Master Servicer of a decree or order of a court,
agency or supervisory authority for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to the Master
Servicer, or for the winding-up or liquidation of its affairs; provided that
any such decree or order shall have remained in force undischarged or
unstayed for a period of 60 days; (iv) the consent by the Master Servicer to
the appointment of a conservator or receiver or liquidator or liquidating
committee in any insolvency, readjustment of debt, marshalling of assets and
liabilities, voluntary liquidation or similar proceedings of or relating to
the Master Servicer or of or relating to all or substantially all of its
property; and (v) the admission by the Master Servicer in writing of its
inability to pay its debts generally as they become due, the filing by the
Master Servicer of a petition to take advantage of any applicable insolvency
or reorganization statute or the making of an assignment for the benefit of
its creditors or the voluntary suspension of the payment of its obligations.
As long as an Event of Default remains unremedied, the Trustee may, and
(a) at the written direction of the Holders of Certificates (other than
Residual Interest Certificates) entitled to at least 25% of the aggregate
Voting Rights of the Certificates of any Class in the case of an Event of
Default described in clause (i) above, (b) at the written direction of
Holders of Certificates holding at least 25% of all of the Voting Rights, or
(c) in all cases of an Event of Default described in clauses (ii) through (v)
above, shall terminate all of the rights and obligations of the Master
Servicer whereupon the Trustee or another successor Master Servicer appointed
by the Trustee will succeed to all authority and power of the Master Servicer
under the Agreement and will be entitled to similar compensation
arrangements. "Voting Rights" means the portion of the voting rights of all
Certificates that is allocated to any Certificate in accordance with the
terms of the Agreement.
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ENHANCEMENT
GENERAL
If specified in the related Prospectus Supplement for any Series, credit
enhancement may be provided with respect to one or more Classes thereof or
the related Mortgage Loans (the "Enhancement"). Enhancement may be in the
form of a letter of credit, the subordination of one or more Classes of the
Certificates of such Series, the establishment of one or more reserve funds,
overcollateralization, cross collateralization provisions in the Mortgage
Loans, certificate guarantee insurance, the use of cross-support features or
another method of Enhancement described in the related Prospectus Supplement,
or any combination of the foregoing.
Unless otherwise specified in the related Prospectus Supplement for a
Series, the Enhancement will not provide protection against all risks of loss
and will not guarantee repayment of the entire principal balance of the
Certificates and interest thereon. If losses occur which exceed the amount
covered by Enhancement or which are not covered by the Enhancement,
Certificateholders will bear their allocable share of deficiencies.
If Enhancement is provided with respect to a Series, or the related
Mortgage Loans, the applicable Prospectus Supplement will include a
description of (a) the amount payable under such Enhancement, (b) any
conditions to payment thereunder not otherwise described herein, (c) the
conditions (if any) under which the amount payable under such Enhancement may
be reduced and under which such Enhancement may be terminated or replaced and
(d) the material provisions of any agreement relating to such Enhancement.
Additionally, the applicable Prospectus Supplement will set forth certain
information with respect to the issuer of any third-party Enhancement,
including (i) a brief description of its principal business activities, (ii)
its principal place of business, place of incorporation and the jurisdiction
under which it is chartered or licensed to do business, (iii) if applicable,
the identity of regulatory agencies which exercise primary jurisdiction over
the conduct of its business and (iv) its total assets, and its stockholders'
or policyholders' surplus, if applicable, as of the date specified in such
Prospectus Supplement.
SUBORDINATE CERTIFICATES
If so specified in the related Prospectus Supplement, one or more Classes
of a Series may be Subordinate Certificates. If so specified in the related
Prospectus Supplement, the rights of the Holders of subordinate Certificates
(the "Subordinate Certificates") to receive distributions of principal and
interest from the Collection Account on any Distribution Date will be
subordinated to such rights of the Holders of senior Certificates (the
"Senior Certificates") to the extent specified in the related Prospectus
Supplement. The Agreement may require a trustee that is not the Trustee to be
appointed to act on behalf of Holders of Subordinate Certificates.
A Series may include one or more Classes of Subordinate Certificates
entitled to receive cash flows remaining after distributions are made to all
other Senior Certificates of such Series. Such right to receive payments will
effectively be subordinate to the rights of other Holders of Senior
Certificates. A Series may also include one or more Classes of Subordinate
Certificates entitled to receive cash flows remaining after distributions are
made to other Subordinate Certificates of such Series. If so specified in the
related Prospectus Supplement, the subordination of a Class may apply only in
the event of (or may be limited to) certain types of losses not covered by
insurance policies or other credit support, such as losses arising from
damage to property securing a Mortgage Loan not covered by standard hazard
insurance policies.
The related Prospectus Supplement will set forth information concerning
the amount of subordination of a Class or Classes of Subordinate Certificates
in a Series, the circumstances in which such subordination will be
applicable, the manner, if any, in which the amount of subordination will
decrease over time, the manner of funding any related Reserve Fund and the
conditions under which amounts in any applicable Reserve Fund will be used to
make distributions to Holders of Senior Certificates and/or to Holders of
Subordinate Certificates or be released from the applicable Trust Fund. If
cash flows
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otherwise distributable to Holders of Subordinate Certificates secured by a
Mortgage Loan Group will be used as credit support for Holders of Senior
Certificates secured by another Mortgage Loan Group within the Trust Fund,
the applicable Prospectus Supplement will specify the manner and conditions
for applying such a cross-support feature.
CROSS-SUPPORT FEATURES
If the Mortgage Pool for a Series is divided into separate Mortgage Loan
Groups, each securing a separate Class or Classes of a Series, credit support
may be provided by a cross-support feature which requires that distributions
be made on Senior Certificates secured by one Mortgage Loan Group prior to
distributions on Subordinate Certificates secured by another Mortgage Loan
Group within the Trust Fund. The related Prospectus Supplement for a Series
which includes a cross-support feature will describe the manner and
conditions for applying such cross-support feature.
LETTER OF CREDIT
If specified in the related Prospectus Supplement, a letter of credit with
respect to a Series of Certificates will be issued by the bank or financial
institution specified in such Prospectus Supplement (the "L/C Bank"). Under
the letter of credit, the L/C Bank will be obligated to honor drawings
thereunder in an aggregate fixed dollar amount, net of unreimbursed payments
thereunder, equal to the percentage specified in the related Prospectus
Supplement of the aggregate principal balance of the Mortgage Loans on the
applicable Cut-Off Date or of one or more Classes of Certificates (the "L/C
Percentage"). If so specified in the related Prospectus Supplement, the
letter of credit may permit drawings in the event of losses not covered by
insurance policies or other credit support, such as losses arising from
damage not covered by standard hazard insurance policies. The amount
available under the letter of credit will, in all cases, be reduced to the
extent of the unreimbursed payments thereunder. The obligations of the L/C
Bank under the letter of credit for each Series of Certificates will expire
at the earlier of the date specified in the related Prospectus Supplement or
the termination of the Trust Fund. A copy of the letter of credit for a
Series, if any, will be filed with the Commission as an exhibit to a Current
Report on Form 8-K to be filed within 15 days of issuance of the Certificates
of the applicable Series.
CERTIFICATE GUARANTEE INSURANCE
If so specified in the related Prospectus Supplement, certificate
guarantee insurance, if any, with respect to a Series of Certificates will be
provided by one or more insurance companies. Such certificate guarantee
insurance will guarantee, with respect to one or more Classes of Certificates
of the applicable Series, timely distributions of interest and full
distributions of principal on the basis of a schedule of principal
distributions set forth in or determined in the manner specified in the
related Prospectus Supplement. If so specified in the related Prospectus
Supplement, the certificate guarantee insurance will also guarantee against
any payment made to a Certificateholder which is subsequently covered as a
"voidable preference" payment under the Bankruptcy Code. A copy of the
certificate guarantee insurance for a Series, if any, will be filed with the
Commission as an exhibit to a Current Report on Form 8-K to be filed with the
Commission within 15 days of issuance of the Certificates of the applicable
Series.
RESERVE FUNDS
If specified in the related Prospectus Supplement, one or more reserve
funds (each, a "Reserve Fund") may be established with respect to a Series,
in which cash, a letter of credit, Permitted Investments or a combination
thereof, in the amounts, if any, so specified in the related Prospectus
Supplement will be deposited. The Reserve Funds for a Series may also be
funded over time by depositing therein a specified amount of the
distributions received on the applicable Mortgage Loans if specified in the
related Prospectus Supplement. The Depositor may pledge the Reserve Funds to
a separate collateral agent specified in the related Prospectus Supplement.
Amounts on deposit in any Reserve Fund for a Series, together with the
reinvestment income thereon, if any, will be applied by the Trustee for the
purposes, in the manner, and to the extent specified
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in the related Prospectus Supplement. A Reserve Fund may be provided to
increase the likelihood of timely payments of principal of and interest on
the Certificates, if required as a condition to the rating of such Series by
each Rating Agency. If so specified in the related Prospectus Supplement,
Reserve Funds may be established to provide limited protection, in an amount
satisfactory to each Rating Agency, against certain types of losses not
covered by insurance policies or other credit support, such as losses arising
from damage not covered by standard hazard insurance policies. Reserve Funds
may also be established for other purposes and in such amounts as will be
specified in the related Prospectus Supplement. Following each Distribution
Date amounts in any Reserve Fund in excess of any amount required to be
maintained therein may be released from the Reserve Fund under the conditions
and to the extent specified in the related Prospectus Supplement and will not
be available for further application by the Trustee.
Moneys deposited in any Reserve Fund will be invested in Permitted
Investments at the direction of the Depositor, except as otherwise specified
in the related Prospectus Supplement. Unless otherwise specified in the
related Prospectus Supplement, any reinvestment income or other gain from
such investments will be credited to the related Reserve Fund for such
Series, and any loss resulting from such investments will be charged to such
Reserve Fund. If specified in the related Prospectus Supplement, such income
or other gain may be payable to the Master Servicer as additional servicing
compensation, and any loss resulting from such investment will be borne by
the Master Servicer. The Reserve Fund, if any, for a Series will not be a
part of the Trust Fund unless otherwise specified in the related Prospectus
Supplement, but the right of the Trustee to make draws on the Reserve Fund
will be an asset of the Trust Fund.
Additional information concerning any Reserve Fund will be set forth in
the related Prospectus Supplement, including the initial balance of such
Reserve Fund, the balance required to be maintained in the Reserve Fund, the
manner in which such required balance will decrease over time, the manner of
funding such Reserve Fund, the purpose for which funds in the Reserve Fund
may be applied to make distributions to Certificateholders and use of
investment earnings from the Reserve Fund, if any.
CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS
The following discussion contains summaries of certain legal aspects of
mortgage loans which are general in nature. Because many of the legal aspects
of mortgage loans are governed by applicable state laws (which may vary
substantially), the following summaries do not purport to be complete, to
reflect the laws of any particular state, to reflect all the laws applicable
to any particular Mortgage Loan or to encompass the laws of all states in
which the properties securing the Mortgage Loans are situated. The summaries
are qualified in their entirety by reference to the applicable federal and
state laws governing the Mortgage Loans. In the event that the Trust Fund for
a given Series includes Mortgage Loans having characteristics other than as
described below, the applicable Prospectus Supplement will set forth
additional legal aspects relating thereto.
MORTGAGES AND DEEDS OF TRUST GENERALLY
The Mortgage Loans (other than Installment Contracts) included in the
Mortgage Pool for a Series will consist of (or, in the case of mortgage
pass-through certificates, be supported by) loans secured by either mortgages
or deeds of trust or other similar security instruments. There are two
parties to a mortgage, the mortgagor, who is the borrower and owner of the
mortgaged property, and the mortgagee, who is the lender. In a mortgage
transaction, the mortgagor delivers to the mortgagee a note, bond or other
written evidence of indebtedness and a mortgage. A mortgage creates a lien
upon the real property encumbered by the mortgage as security for the
obligation evidenced by the note, bond or other evidence of indebtedness.
Although a deed of trust is similar to a mortgage, a deed of trust has three
parties, the borrower-property owner called the trustor (similar to a
mortgagor), a lender called the beneficiary (similar to a mortgagee), and a
third-party grantee called the trustee. Under a deed of trust, the borrower
irrevocably grants the property to the trustee, until the debt is paid, in
trust for the benefit of the beneficiary to secure payment of the obligation
generally with a power of sale. The trustee's authority under a deed of trust
and the mortgagee's authority under a mortgage are governed by applicable
law, the express provisions of the deed of trust or mortgage, and, in some
cases, the directions of the beneficiary.
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The real property covered by a mortgage is most often the fee estate in
land and improvements. However, a mortgage may encumber other interests in
real property such as a tenant's interest in a lease of land or improvements,
or both, and the leasehold estate created by such lease. A mortgage covering
an interest in real property other than the fee estate requires special
provisions in the instrument creating such interest or in the mortgage to
protect the mortgagee against termination of such interest before the
mortgage is paid. Certain representations and warranties in the related
Agreement will be made with respect to the Mortgage Loans which are secured
by an interest in a leasehold estate.
Priority of the lien on mortgaged property created by mortgages and deeds
of trust depends on their terms and, generally, on the order of filing with a
state, county or municipal office, although such priority may in some states
be altered by the mortgagee's or beneficiary's knowledge of unrecorded liens,
leases or encumbrances against the mortgaged property. However, filing or
recording does not establish priority over governmental claims for real
estate taxes and assessments or, in some states, for reimbursement of
remediation costs of certain environmental conditions. See "--Environmental
Risks." In addition, the Code provides priority to certain tax liens over the
lien of the mortgage.
INSTALLMENT CONTRACTS
The Mortgage Loans included in the Mortgage Pool for a Series may also
consist of Installment Contracts. Under an Installment Contract the seller
(hereinafter referred to in this Section as the "lender") retains legal title
to the property and enters into an agreement with the purchaser (hereinafter
referred to in this Section as the "borrower") for the payment of the
purchase price, plus interest, over the term of such contract. Only after
full performance by the borrower of the contract is the lender obligated to
convey title to the real estate to the purchaser. As with mortgage or deed of
trust financing, during the effective period of the Installment Contract, the
borrower is generally responsible for maintaining the property in good
condition and for paying real estate taxes, assessments and hazard insurance
premiums associated with the property.
The method of enforcing the rights of the lender under an Installment
Contract varies on a state-by-state basis depending upon the extent to which
state courts are willing, or able pursuant to state statute, to enforce the
contract strictly according to its terms. The terms of Installment Contracts
generally provide that upon a default by the borrower, the borrower loses his
or her right to occupy the property, the entire indebtedness is accelerated,
and the borrower's equitable interest in the property is forfeited. The
lender in such a situation does not have to foreclose in order to obtain
title to the property, although in some cases a quiet title action is in
order if the borrower has filed the Installment Contract in local land
records and an ejectment action may be necessary to recover possession. In a
few states, particularly in cases of borrower default during the early years
of an Installment Contract, the courts will permit ejectment of the borrower
and a forfeiture of his or her interest in the property. However, most state
legislatures have enacted provisions by analogy to mortgage law protecting
borrowers under Installment Contracts from the harsh consequences of
forfeiture. Under such statutes, a judicial or nonjudicial foreclosure may be
required, the lender may be required to give notice of default and the
borrower may be granted some grace period during which the contract may be
reinstated upon full payment of the default amount and the borrower may have
a post-foreclosure statutory redemption right. In other states, courts in
equity may permit a borrower with significant investment in the property
under an Installment Contract for the sale of real estate to share in the
proceeds of sale of the property after the indebtedness is repaid or may
otherwise refuse to enforce the forfeiture clause. Nevertheless, generally
speaking, the lender's procedures for obtaining possession and clear title
under an Installment Contract for the sale of real estate in a given state
are simpler and less time-consuming and costly than are the procedures for
foreclosing and obtaining clear title to a mortgaged property.
JUNIOR MORTGAGES; RIGHTS OF SENIOR MORTGAGEES OR BENEFICIARIES
Some of the Mortgage Loans included in the Mortgage Pool for a Series will
be secured by junior mortgages or deeds of trust which are subordinate to
senior mortgages or deeds of trust held by other lenders or institutional
investors. The rights of the Trust Fund (and therefore the
Certificateholders), as beneficiary under a junior deed of trust or as
mortgagee under a junior mortgage, are subordinate to those
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of the mortgagee or beneficiary under the senior mortgage or deed of trust,
including the prior rights of the senior mortgagee or beneficiary to receive
rents, hazard insurance and condemnation proceeds and to cause the property
securing the Mortgage Loan to be sold upon default of the mortgagor or
trustor, thereby extinguishing the junior mortgagee's or junior beneficiary's
lien unless the Master Servicer asserts its subordinate interest in a
property in foreclosure litigation or satisfies the defaulted senior loan. As
discussed more fully below, in many states a junior mortgagee or beneficiary
may satisfy a defaulted senior loan in full, or may cure such default and
bring the senior loan current, in either event adding the amounts expended to
the balance due on the junior loan. Absent a provision in the senior
mortgage, no notice of default is required to be given to the junior
mortgagee.
The form of the mortgage or deed of trust used by many institutional
lenders confers on the mortgagee or beneficiary the right both to receive all
proceeds collected under any hazard insurance policy and all awards made in
connection with any condemnation proceedings, and to apply such proceeds and
awards to any indebtedness secured by the mortgage or deed of trust, in such
order as the mortgagee or beneficiary may determine. Thus, in the event
improvements on the property are damaged or destroyed by fire or other
casualty, or in the event the property is taken by condemnation, the
mortgagee or beneficiary under the senior mortgage or deed of trust will have
the prior right to collect any insurance proceeds payable under a hazard
insurance policy and any award of damages in connection with the condemnation
and to apply the same to the indebtedness secured by the senior mortgage or
deed of trust. Proceeds in excess of the amount of senior mortgage
indebtedness will, in most cases, be applied to the indebtedness of a junior
mortgage or deed of trust. The laws of certain states may limit the ability
of mortgagees or beneficiaries to apply the proceeds of hazard insurance and
partial condemnation awards to the secured indebtedness. In such states, the
mortgagor or trustor must be allowed to use the proceeds of hazard insurance
to repair the damage unless the security of the mortgagee or beneficiary has
been impaired. Similarly, in certain states, the mortgagee or beneficiary is
entitled to the award for a partial condemnation of the real property
security only to the extent that its security is impaired.
The form of mortgage or deed of trust used by many institutional lenders
typically contains a "future advance" clause, which provides, in essence,
that additional amounts advanced to or on behalf of the mortgagor or trustor
by the mortgagee or beneficiary are to be secured by the mortgage or deed of
trust. While such a clause is valid under the laws of most states, the
priority of any advance made under the clause depends, in some states, on
whether the advance was an "obligatory" or "optional" advance. If the
mortgagee or beneficiary is obligated to advance the additional amounts, the
advance may be entitled to receive the same priority as amounts initially
made under the mortgage or deed of trust, notwithstanding that there may be
intervening junior mortgages or deeds of trust and other liens between the
date of recording of the mortgage or deed of trust and the date of the future
advance, and notwithstanding that the mortgagee or beneficiary had actual
knowledge of such intervening junior mortgages or deeds of trust and other
liens at the time of the advance. Where the mortgagee or beneficiary is not
obligated to advance the additional amounts and has actual knowledge of the
intervening junior mortgages or deeds of trust and other liens, the advance
may be subordinate to such intervening junior mortgages or deeds of trust and
other liens. Priority of advances under a "future advance" clause rests, in
many other states, on state law giving priority to all advances made under
the loan agreement up to a "credit limit" amount stated in the recorded
mortgage.
Another provision typically found in the form of the mortgage or deed of
trust used by many institutional lenders obligates the mortgagor or trustor
to pay before delinquency all taxes and assessments on the property and, when
due, all encumbrances, charges and liens on the property which appear prior
to the mortgage or deed of trust, to provide and maintain fire insurance on
the property, to maintain and repair the property and not to commit or permit
any waste thereof, and to appear in and defend any action or proceeding
purporting to affect the property or the rights of the mortgagee or
beneficiary under the mortgage or deed of trust. Upon a failure of the
mortgagor or trustor to perform any of these obligations, the mortgagee or
beneficiary is given the right under the mortgage or deed of trust to perform
the obligation itself, at its election, with the mortgagor or trustor
agreeing to reimburse the mortgagee or beneficiary for any sums expended by
the mortgagee or beneficiary on behalf of the trustor. All sums so expended
by the mortgagee or beneficiary become part of the indebtedness secured by
the mortgage or deed of trust.
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The form of mortgage or deed of trust used by many institutional lenders
typically requires the mortgagor or trustor to obtain the consent of the
mortgagee or beneficiary in respect of actions affecting the mortgaged
property, including, without limitation, leasing activities (including new
leases and termination or modification of existing leases), alterations and
improvements to buildings forming a part of the mortgaged property and
management and leasing agreements for the mortgaged property. Tenants will
often refuse to execute a lease unless the mortgagee or beneficiary executes
a written agreement with the tenant not to disturb the tenant's possession of
its premises in the event of a foreclosure. A senior mortgagee or beneficiary
may refuse to consent to matters approved by a junior mortgagee or
beneficiary with the result that the value of the security for the junior
mortgage or deed of trust is diminished. For example, a senior mortgagee or
beneficiary may decide not to approve a lease or to refuse to grant to a
tenant a non-disturbance agreement. If, as a result, the lease is not
executed, the value of the mortgaged property may be diminished.
FORECLOSURE
Foreclosure of a mortgage is generally accomplished by judicial action
initiated by the service of legal pleadings upon all necessary parties having
an interest in the real property. Delays in completion of foreclosure may
occasionally result from difficulties in locating necessary party defendants.
When the mortgagee's right to foreclose is contested, the legal proceedings
necessary to resolve the issue can be time-consuming. A judicial foreclosure
may be subject to most of the delays and expenses of other litigation,
sometimes requiring up to several years to complete. At the completion of the
judicial foreclosure proceedings, if the mortgagee prevails, the court
ordinarily issues a judgment of foreclosure and appoints a referee or other
designated official to conduct the sale of the property. Such sales are made
in accordance with procedures which vary from state to state. The purchaser
at such sale acquires the estate or interest in real property covered by the
mortgage. If the mortgage covered the tenant's interest in a lease and
leasehold estate, the purchaser will acquire such tenant's interest subject
to the tenant's obligations under the lease to pay rent and perform other
covenants contained therein.
In a majority of cases, foreclosure of a deed of trust is accomplished by
a non-judicial trustee's sale under a specific provision in the deed of trust
and/or applicable statutory requirements which authorizes the trustee,
generally following a request from the beneficiary, to sell the property at
public sale upon any default by the trustor under the terms of the note or
deed of trust. A number of states may also require that a beneficiary provide
notice of acceleration of a note to the trustor. Notice requirements under a
trustee's sale vary from state to state. In some states, prior to the
trustee's sale the trustee must record a notice of default and send a copy to
the trustor, to any person who has recorded a request for a copy of a notice
of default and notice of sale and to any successor in interest to the
trustor. In addition, the trustee must provide notice in some states to any
other person having an interest in the real property, including any junior
lienholders, and to certain other persons connected with the deed of trust.
In some states, the trustor, or any other person having a junior encumbrance
on the real estate, may, during a reinstatement period, cure the default by
paying the entire amount in arrears plus the costs and expenses (in some
states, limited to reasonable costs and expenses) incurred in enforcing the
obligation. Generally, state law controls the amount of foreclosure expenses
and costs, including attorneys' fees, which may be recovered by a
beneficiary. If the deed of trust is not reinstated, a notice of sale must be
posted in a public place and, in most states, published for a specific period
of time in one or more newspapers. In addition, some state laws require that
a copy of the notice of sale be posted on the property and sent to all
parties having an interest in the real property.
In case of foreclosure under either a mortgage or a deed of trust, the
sale by the referee or other designated official or by the trustee is often a
public sale. However, because of the difficulty a potential buyer at the sale
might have in determining the exact status of title to the property subject
to the lien of the mortgage or deed of trust and the redemption rights that
may exist (see "--Statutory Rights of Redemption" below), and because the
physical condition and financial performance of the property may have
deteriorated during the foreclosure proceedings and/or for a variety of other
reasons, a third party may be unwilling to purchase the property at the
foreclosure sale. Some states require that the lender disclose to potential
bidders at a trustee's sale all known facts materially affecting the value of
the property. Such disclosure may have an adverse effect on the trustee's
ability to sell the property or the sale
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price thereof. Potential buyers may further question the prudence of
purchasing property at a foreclosure sale as a result of the 1980 decision of
the United States Court of Appeals for the Fifth Circuit in Durrett v.
Washington National Insurance Company, other decisions that have followed the
reasoning of Durrett and the codification of the Durrett reasoning in the
federal bankruptcy code, as amended from time to time (11 U.S.C.) (the
"Bankruptcy Code"). Under the reasoning of Durrett, even a non-collusive,
regularly conducted foreclosure sale may be a fraudulent transfer, regardless
of the parties' intent, and, therefore, may be rescinded in favor of the
bankrupt's estate, if (i) the foreclosure sale is held while the debtor is
insolvent and not more than one year prior to the filing of the bankruptcy
petition (or if applicable state fraudulent conveyance law also allows the
avoidance of such a foreclosure sale, the applicable state statute of
limitations if the bankruptcy trustee elects to proceed under state
fraudulent conveyance law), and (ii) the price paid for the foreclosed
property does not represent "fair consideration." In May 1994 the Supreme
Court held in BFP v. RTC that in the absence of actual intent to defraud a
non-collusive, regularly conducted foreclosure sale cannot be rescinded as a
fraudulent transfer under federal bankruptcy law. However, BFP does not
address state law, and the impact of BFP on potential buyers' willingness to
purchase property at a foreclosure sale cannot yet be assessed. Prior to BFP,
a common practice was for the lender to purchase the property from the
trustee, referee or other designated official for an amount equal to the
outstanding principal amount of the indebtedness secured by the mortgage or
deed of trust, together with accrued and unpaid interest and the expenses of
foreclosure, in which event, if the amount bid by the lender equals the full
amount of such debt, interest and expenses, the mortgagee's debt will be
extinguished. Thereafter, the lender will assume the burdens of ownership,
including paying operating expenses and real estate taxes and making repairs.
The lender is then obligated as an owner until it can arrange a sale of the
property to a third party. Frequently, the lender employs a third-party
management company to manage and operate the property. The costs of operating
and maintaining commercial property may be significant and may be greater
than the income derived from that property. The costs of management and
operation of those mortgaged properties which are hotels, motels or nursing
or convalescent homes or hospitals may be particularly significant because of
the expertise, knowledge and, with respect to nursing or convalescent homes
or hospitals, regulatory compliance, required to run such operations and the
effect which foreclosure and a change in ownership may have on the public's
and the industry's (including franchisors') perception of the quality of such
operations. The lender will commonly obtain the services of a real estate
broker and pay the broker's commission in connection with the sale of the
property. Depending upon market conditions, the ultimate proceeds of the sale
of the property may not equal the lender's investment in the property.
Moreover, a lender commonly incurs substantial legal fees and court costs in
acquiring a mortgaged property through contested foreclosure and/or
bankruptcy proceedings. Furthermore, some states require that any
environmental hazards be eliminated before a property may be resold. In
addition, a lender may be responsible under federal or state law for the cost
of cleaning up a mortgaged property that is environmentally contaminated. See
"--Environmental Risks" below. As a result, a lender could realize an overall
loss on a mortgage loan even if the related 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 mortgage loan, plus
accrued interest.
In foreclosure proceedings, some courts have applied general equitable
principles. These equitable principles are generally designed to relieve the
borrower from the legal effect of his defaults under the loan documents.
Examples of judicial remedies that have been fashioned include judicial
requirements that the lender undertake affirmative and expensive actions to
determine the causes of the borrower's default and the likelihood that the
borrower will be able to reinstate the loan. In some cases, courts have
substituted their judgment for the lender's judgment and have required that
lenders reinstate loans or recast payment schedules in order to accommodate
borrowers who are suffering from temporary financial disability. In other
cases, courts have limited the right of the lender to foreclose if the
default under the mortgage instrument is not monetary, such as the borrower's
failing to maintain adequately the property or the borrower's executing a
second mortgage or deed of trust affecting the property. Finally, some courts
have been faced with the issue of whether or not federal or state
constitutional provisions reflecting due process concerns for adequate notice
require that borrowers under deeds of trust or mortgages receive
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notices in addition to the statutorily prescribed minimum. For the most part,
these cases have upheld the notice provisions as being reasonable or have
found that the sale by a trustee under a deed of trust, or under a mortgage
having a power of sale, does not involve sufficient state action to afford
constitutional protections to the borrower.
Under the REMIC provisions of the Code and under the related Agreement,
the Master Servicer or Special Servicer, if any, may be permitted to hire an
independent contractor to operate any REO Property. The costs of such
operation may be significantly greater than the costs of direct operation by
the Master Servicer or Special Servicer, if any. See "SERVICING OF THE
MORTGAGE LOANS -- Collections and Other Servicing Procedures."
ENVIRONMENTAL RISKS
Real property pledged as security to a lender may be subject to potential
environmental risks. Of particular concern may be those mortgaged properties
which are, or have been, the site of manufacturing, industrial or disposal
activity. Such environmental risks may give rise to a diminution in value of
property securing any Mortgage Loan or, as more fully described below,
liability for cleanup costs or other remedial actions, which liability could
exceed the value of such property or the principal balance of the related
Mortgage Loan. In certain circumstances, a lender may choose not to foreclose
on contaminated property rather than risk incurring liability for remedial
actions.
Under the laws of certain states where the Mortgaged Properties are
located, the owner's failure to perform remedial actions required under
environmental laws may in certain circumstances give rise to a lien on the
Mortgaged Property to ensure the reimbursement of remedial costs incurred by
the state. In several states such lien has priority over the lien of an
existing mortgage against such property. Because the costs of remedial action
could be substantial, the value of a Mortgaged Property as collateral for a
Mortgage Loan could be adversely affected by the existence of an
environmental condition giving rise to a lien.
Under some circumstances, cleanup costs, or the obligation to take
remedial actions, can be imposed on a secured lender such as the Trust Fund
with respect to each Series. Under the laws of some states and under the
federal Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended ("CERCLA"), current ownership or operation of a property
provides a sufficient basis for imposing liability for the costs of
addressing prior or current releases or threatened releases of hazardous
substances on that property. Under such laws, a secured lender who holds
indicia of ownership primarily to protect its interest in a property may, by
virtue of holding such indicia, fall within the literal terms of the
definition of "owner or operator"; consequently, such laws often specifically
exclude such a secured lender from the definitions of "owner" or "operator",
provided that the lender does not participate in the management of the
facility.
Whether actions taken by a secured creditor would constitute such
participation in the management of a facility or property, so that the lender
loses the protection of the secured creditor exclusion, has been a matter of
judicial interpretation of the statutory language, and court decisions have
historically been inconsistent. In 1990, the United States Court of Appeals
for the Eleventh Circuit suggested, in United States v. Fleet Factors Corp.,
that the mere capacity of the lender to influence a borrower's decisions
regarding disposal of hazardous substances was sufficient participation in
the management of the borrower's business to deny the protection of the
secured creditor exclusion to the lender, regardless of whether the lender
actually exercised such influence. Other judicial decisions did not interpret
the secured creditor exclusion as narrowly as did the Eleventh Circuit.
This ambiguity appears to have been resolved by the enactment of the Asset
Conservation, Lender Liability and Deposit Insurance Protection Act of 1996
(the "Asset Conservation Act"), which took effect on September 30, 1996. The
Asset Conservation Act provides that in order to be deemed to have
participated in the management of a secured property, a lender must actually
participate in the operational affairs of the property or the borrower. The
Asset Conservation Act also provides that participation in the management of
the property does not include "merely having the capacity to influence, or
unexercised right to control" operations. Rather, a lender will lose the
protection of the
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secured creditor exclusion only if it exercises decision-making control over
the borrower's environmental compliance and hazardous substance handling and
disposal practices, or assumes day-to-day management of all operational
functions of the secured property.
It should be noted that the secured creditor exclusion does not govern
liability for cleanup costs under federal laws other than CERCLA. CERCLA's
jurisdiction extends to the investigation and remediation of releases of
"hazardous substances". The definition of "hazardous substances" under CERCLA
specifically excludes petroleum products. Under federal law, the operation
and management of underground petroleum storage tanks (excluding heating oil)
is governed by Subtitle I of the Resource Conservation and Recovery Act
("RCRA"). Under the Asset Conservation Act, the protections accorded to
lenders under CERCLA are also accorded to the holders of security interests
in underground storage tanks. However, liability for cleanup of petroleum
contamination will most likely be governed by state law, which may not
provide any specific protection for secured creditors.
Except as otherwise specified in the applicable Prospectus Supplement, at
the time the Mortgage Loans were originated, it is possible that no
environmental assessment or a very limited environmental assessment of the
Mortgaged Properties was conducted.
The related Agreement will provide that the Master Servicer, acting on
behalf of the Trust Fund, may not acquire title to, or possession of, a
Mortgaged Party underlying a Mortgage Loan, take over its operation or take
any other action that might subject a given Trust Fund to liability under
CERCLA or comparable laws unless the Master Servicer has previously
determined, based upon a phase I or other specified environmental assessment
prepared by a person who regularly conducts such environmental assessments,
that the Mortgaged Property is in compliance with applicable environmental
laws and that there are no circumstances relating to use, management or
disposal of any hazardous substances for which investigation, monitoring,
containment, clean-up or remediation could be required under applicable
environmental laws, or that it would be in the best economic interest of a
given Trust Fund to take such actions as are necessary to bring the Mortgaged
Property into compliance therewith or as may be required under such laws.
This requirement effectively precludes enforcement of the security for the
related Note until a satisfactory environmental assessment is obtained or any
required remedial action is taken, reducing the likelihood that a given Trust
Fund will become liable for any environmental conditions affecting a
Mortgaged Property, but making it more difficult to realize on the security
for the Mortgage Loan. However, there can be no assurance that any
environmental assessment obtained by the Master Servicer will detect all
possible environmental conditions or that the other requirements of the
Agreement, even if fully observed by the Master Servicer will in fact
insulate a given Trust Fund from liability for environmental conditions.
If a lender is or becomes liable for clean-up costs, it may bring an
action for contribution against the current owners or operators, the owners
or operators at the time of on-site disposal activity or any other party who
contributed to the environmental hazard, but such persons or entities may be
bankrupt or otherwise judgment-proof. Furthermore, such action against the
Borrower may be adversely affected by the limitations on recourse in the loan
documents. Similarly, in some states anti-deficiency legislation and other
statutes requiring the lender to exhaust its security before bringing a
personal action against the borrower-trustor (see "--Anti-Deficiency
Legislation" below) may curtail the lender's ability to recover from its
borrower the environmental clean-up and other related costs and liabilities
incurred by the lender. Shortfalls occurring as the result of imposition of
any clean-up costs will be addressed in the Prospectus Supplement and
Agreement for the related Series.
STATUTORY RIGHTS OF REDEMPTION
In some states, after foreclosure sale pursuant to a deed of trust or a
mortgage, the borrower and certain foreclosed junior lienors are given a
statutory period in which to redeem the property from the foreclosure sale.
In some states, redemption may occur only upon payment of the entire
principal balance of the loan, accrued interest and expenses of foreclosure.
In other states, redemption may be authorized if the former borrower pays
only a portion of the sums due. The effect of a statutory right of redemption
is to diminish the ability of the lender to sell the foreclosed property. The
right of redemption may defeat the title of any purchaser at a foreclosure
sale or any purchaser from the lender subsequent to a
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foreclosure sale. Certain states permit a lender to avoid a post-sale
redemption by waiving its right to a deficiency judgment. Consequently, the
practical effect of the redemption right is often to force the lender to
retain the property and pay the expenses of ownership until the redemption
period has run. In some states, there is no right to redeem property after a
trustee's sale under a deed of trust.
Borrowers under Installment Contracts generally do not have the benefits
of redemption periods such as exist in the same jurisdiction for mortgage
loans. Where redemption statutes do exist under state laws for Installment
Contracts, the redemption period is usually far shorter than for mortgages.
ANTI-DEFICIENCY LEGISLATION
Some of the Mortgage Loans included in the Mortgage Pool for a Series will
be nonrecourse loans as to which, in the event of default by a Borrower,
recourse may be had only against the specific property pledged to secure the
related Mortgage Loan and not against the Borrower's other assets. Even if
recourse is available pursuant to the terms of the Mortgage Loan against the
Borrower's assets in addition to the Mortgaged Property, certain states have
imposed statutory prohibitions which impose prohibitions against or
limitations on such recourse. For example, some state statutes limit the
right of the beneficiary or mortgagee to 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
in most cases 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 require the beneficiary or mortgagee to exhaust the security
afforded under a deed of trust or mortgage by foreclosure in an attempt to
satisfy the full debt before bringing a personal action against the borrower.
In certain states, the lender has the option of bringing a personal action
against the borrower on the debt without first exhausting such security;
however, in some of these states, the lender, following judgment on such
personal action, may be deemed to have elected a remedy and may be precluded
from exercising remedies with respect to the security. Consequently, the
practical effect of the election requirement, when applicable, is that
lenders will usually proceed first against the security rather than bringing
personal action against the borrower. Other statutory provisions limit any
deficiency judgment against the former borrower following a judicial sale to
the excess of the outstanding debt over the fair market value of the property
at the time of the public sale. The purpose of these statutes is generally to
prevent a beneficiary or a mortgagee from obtaining a large deficiency
judgment against the former borrower as a result of low bids or the absence
of bids at the judicial sale.
BANKRUPTCY LAWS
Numerous statutory provisions, including the Bankruptcy Code and state
laws affording relief to debtors, may interfere with and delay the ability of
the secured mortgage lender to obtain payment of the loan, to realize upon
collateral and/or to enforce a deficiency judgment. For example, under the
Bankruptcy Code, virtually all actions (including foreclosure actions and
deficiency judgment proceedings) are automatically stayed upon the filing of
the bankruptcy petition, and, often, no interest or principal payments are
made during the course of the bankruptcy proceeding. The delay and
consequences thereof caused by such automatic stay can be significant. Also,
under the Bankruptcy Code, the filing of a petition in bankruptcy by or on
behalf of a junior lienor, including, without limitation, any junior
mortgagee or beneficiary, may stay the senior lender from taking action to
foreclose out such junior lien. Certain of the Mortgaged Properties may have
a junior "wraparound" mortgage or deed of trust encumbering such Mortgaged
Property. In general terms, a "wraparound" mortgage is a junior mortgage
where the full amount of the mortgage is increased by an amount equal to the
principal balance of the senior mortgage and where the junior lender agrees
to pay the senior mortgage out of the payments received from the mortgagor
under the "wraparound" mortgage. As with other junior mortgages, the filing
of a petition under the Bankruptcy Code by or on behalf of such a "wrap"
mortgagee may stay the senior lender from taking action to foreclose upon
such junior "wrap" mortgage.
Under the Bankruptcy Code, provided certain substantive and procedural
safeguards for the lender are met, the amount and terms of a mortgage or deed
of trust secured by property of the debtor may be modified under certain
circumstances. The outstanding amount of the loan secured by the real
property may be reduced to the then current value of the property (with a
corresponding partial reduction of the
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amount of the lender's security interest), thus leaving the lender a general
unsecured creditor for the difference between such value and the outstanding
balance of the loan. Other modifications may include the reduction in the
amount of each monthly payment, which reduction may result from a reduction
in the rate of interest and/or the alteration of the repayment schedule (with
or without affecting the unpaid principal balance of the loan), and/or an
extension (or reduction) of the final maturity date. Some bankruptcy courts
have approved plans, based on the particular facts of the reorganization
case, that effected the curing of a mortgage loan default by paying
arrearages over a number of years. Also, under the Bankruptcy Code, a
bankruptcy court may permit a debtor through its plan to de-accelerate a
secured loan and to reinstate the loan even though the lender accelerated the
mortgage loan and final judgment of foreclosure had been entered in state
court (provided no sale of the property had yet occurred) prior to the filing
of the debtor's petition. This may be done even if the full amount due under
the original loan is never repaid. Other types of significant modifications
to the terms of the mortgage may be acceptable to the bankruptcy court, often
depending on the particular facts and circumstances of the specific case.
A "deficient valuation" with respect to any mortgage loan is the excess of
(a)(i) the then outstanding principal balance of the mortgage loan, plus (ii)
accrued and unpaid interest and expenses reimbursable under the terms of the
related note to the date of the bankruptcy petition (collectively, the
"Outstanding Balance"), over (b) a valuation by a court of competent
jurisdiction of the mortgaged property which reduces the principal balance
receivable on such mortgage loan to an amount less than the Outstanding
Balance of the mortgage loan, which valuation results from a proceeding
initiated under the Bankruptcy Code. As used herein, "Deficient Valuation"
means, with respect to any Mortgage Loan, the deficient valuation described
in the preceding sentence, without giving effect to clause (a)(ii) thereof.
If the terms of a court order in respect of any retroactive Deficient
Valuation provide for a reduction in the indebtedness of a Mortgage Loan and
the earlier maturity thereof, the term Deficient Valuation includes an
additional amount equal to the excess, if any, of (a) the amount of principal
that would have been due on such Mortgage Loan for each month retroactively
affected (i.e. each month occurring after the effective date of such
Deficient Valuation but before the distribution of amounts in respect of such
Deficient Valuation to Certificateholders pursuant to the related Agreement),
based on the original payment terms and amortization schedule of such
Mortgage Loan over (b) the amount of principal due on such Mortgage Loan for
each such retroactive month (assuming the effect of such retroactive
application according to such Mortgage Loan's revised amortization schedule).
A "Debt Service Reduction," with respect to any Mortgage Loan, is a reduction
in the scheduled monthly payment, as described in the Agreement, for such
Mortgage Loan by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code, except such a reduction resulting from a Deficient
Valuation.
Federal bankruptcy law may also interfere with or affect the ability of
the secured mortgage lender to enforce an assignment by a mortgagor of rents
and leases related to the mortgaged property if the related mortgagor is in a
bankruptcy proceeding. Under Section 362 of the Bankruptcy Code, the
mortgagee will be stayed from enforcing the assignment, and the legal
proceedings necessary to resolve the issue can be time-consuming and may
result in significant delays in the receipt of the rents. Rents may also
escape an assignment thereof (i) if the assignment is not fully perfected
under state law prior to commencement of the bankruptcy proceeding, (ii) to
the extent such rents are used by the borrower to maintain the mortgaged
property, or for other court authorized expenses, or (iii) to the extent
other collateral may be substituted for the rents.
To the extent a mortgagor's ability to make payment on a mortgage loan is
dependent on payments under a lease of the related property, such ability may
be impaired by the commencement of a bankruptcy proceeding relating to a
lessee under such lease. Under the Bankruptcy Code, the filing of a petition
in bankruptcy by or on behalf of a lessee results in a stay in bankruptcy
against the commencement or continuation of any state court proceeding for
past due rent, for accelerated rent, for damages or for a summary eviction
order with respect to a default under the lease that occurred prior to the
filing of the lessee's petition.
In addition, federal bankruptcy law generally provides that a trustee or
debtor in possession in a bankruptcy or reorganization case under the
Bankruptcy Code may, subject to approval of the court, (a) assume the lease
and retain it or assign it to a third party or (b) reject the lease. If the
lease is assumed,
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the trustee or debtor in possession (or assignee, if applicable) must cure
any defaults under the lease, compensate the lessor for its losses and
provide the lessor with "adequate assurance" of future performance. Such
remedies may be insufficient, however, as the lessor may be forced to
continue under the lease with a lessee that is a poor credit risk or an
unfamiliar tenant if the lease was assigned, and any assurances provided to
the lessor may, in fact, be inadequate. Furthermore, there is likely to be a
period of time between the date upon which a lessee files a bankruptcy
petition and the date upon which the lease is assumed or rejected. Although
the lessee is obligated to make all lease payments currently with respect to
the post-petition period, there is a risk that such payments will not be made
due to the lessee's poor financial condition. If the lease is rejected, the
lessor will be treated as an unsecured creditor with respect to its claim for
damages for termination of the lease and the mortgagor must relet the
mortgaged property before the flow of lease payments will recommence. In
addition, pursuant to Section 502(b)(6) of the Bankruptcy Code, a lessor's
damages for lease rejection are limited.
In a bankruptcy or similar proceeding action may be taken seeking the
recovery as a preferential transfer of any payments made by the mortgagor
under the related Mortgage Loan to the Trust Fund. Payments on long-term debt
may be protected from recovery as preferences if they are payments in the
ordinary course of business made on debts incurred in the ordinary course of
business. Whether any particular payment would be protected depends upon the
facts specific to a particular transaction.
ENFORCEABILITY OF CERTAIN PROVISIONS
Prepayment Provisions
Courts generally enforce claims requiring prepayment fees unless
enforcement would be unconscionable. However, the laws of certain states may
render prepayment fees unenforceable after a mortgage loan has been
outstanding for a certain number of years, or may limit the amount of any
prepayment fee to a specified percentage of the original principal amount of
the mortgage loan, to a specified percentage of the outstanding principal
balance of a mortgage loan, or to a fixed number of months' interest on the
prepaid amount. In certain states, prepayment fees payable on default or
other involuntary acceleration of a mortgage loan may not be enforceable
against the mortgagor. Some state statutory provisions may also treat certain
prepayment fees as usurious if in excess of statutory limits. See
"--Applicability of Usury Laws." Some of the Mortgage Loans included in the
Mortgage Pool for a Series may not require the payment of specified fees as a
condition to prepayment or such requirements have expired, and to the extent
some Mortgage Loans do require such fees, such fees generally may not deter
Borrowers from prepaying their Mortgage Loans.
Due-on-Sale Provisions
The enforceability of due-on-sale clauses has been the subject of
legislation or litigation in many states, and in some cases, typically
involving single family residential mortgage transactions, their
enforceability has been limited or denied. In any event, the Garn-St Germain
Depository Institutions Act of 1982 (the "Garn-St Germain Act") preempts
state constitutional, statutory and case law that prohibits the enforcement
of due-on-sale clauses and permits lenders to enforce these clauses in
accordance with their terms, subject to certain exceptions. As a result,
due-on-sale clauses have become generally enforceable except in those states
whose legislatures exercised their authority to regulate the enforceability
of such clauses with respect to mortgage loans that were (i) originated or
assumed during the "window period" under the Garn-St Germain Act, which ended
in all cases not later than October 15, 1982, and (ii) originated by lenders
other than national banks, federal savings institutions and federal credit
unions. FHLMC has taken the position in its published mortgage servicing
standards that, out of a total of eleven "window period states," five states
(Arizona, Michigan, Minnesota, New Mexico and Utah) have enacted statutes
extending, on various terms and for varying periods, the prohibition on
enforcement of due-on-sale clauses with respect to certain categories of
window period loans. Also, the Garn-St Germain Act does "encourage" lenders
to permit assumption of loans at the original rate of interest or at some
other rate less than the average of the original rate and the market rates.
The Agreement for each Series will provide that if any Mortgage Loan
contains a provision in the nature of a "due-on-sale" clause, which by its
terms provides that: (i) such Mortgage Loan shall (or may
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at the mortgagee's option) become due and payable upon the sale or other
transfer of an interest in the related Mortgaged Property; or (ii) such
Mortgage Loan may not be assumed without the consent of the related mortgagee
in connection with any such sale or other transfer, then, for so long as such
Mortgage Loan is included in the Trust Fund, the Master Servicer, on behalf
of the Trustee, shall take such actions as it deems to be in the best
interest of the Certificateholders in accordance with the servicing standard
set forth in the Agreement, and may waive or enforce any due-on-sale clause
contained in the related Note or Mortgage.
In addition, under federal bankruptcy law, due-on-sale clauses may not be
enforceable in bankruptcy proceedings and may, under certain circumstances,
be eliminated in any modified mortgage resulting from such bankruptcy
proceeding.
Acceleration on Default
Some of the Mortgage Loans included in the Mortgage Pool for a Series will
include a "debt-acceleration" clause, which permits the lender to accelerate
the full debt upon a monetary or nonmonetary default of the Borrower. The
courts of all states will enforce clauses providing for acceleration in the
event of a material payment default after giving effect to any appropriate
notices. The courts of any state, however, may refuse to permit foreclosure
of a mortgage or deed of trust when an acceleration of the indebtedness would
be inequitable or unjust or the circumstances would render the acceleration
unconscionable. Furthermore, in some states, the Borrower may avoid
foreclosure and reinstate an accelerated loan by paying only the defaulted
amounts and the costs and attorneys' fees incurred by the lender in
collecting such defaulted payments.
State courts also are known to apply various legal and equitable
principles to avoid enforcement of the forfeiture provisions of Installment
Contracts. For example, a lender's practice of accepting late payments from
the borrower may be deemed a waiver of the forfeiture clause. State courts
also may impose equitable grace periods for payment of arrearages or
otherwise permit reinstatement of the contract following a default. Not
infrequently, if a borrower under an Installment Contract has significant
equity in the property, equitable principles will be applied to reform or
reinstate the contract or to permit the borrower to share the proceeds upon a
foreclosure sale of the property if the sale price exceeds the debt.
Soldiers' and Sailors' Relief Act
Under the terms of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended (the "Relief Act"), a Borrower who enters military service after the
origination of such Borrower's Mortgage Loan (including a Borrower who is a
member of the National Guard or is in reserve status at the time of the
origination of the Mortgage Loan and is later called to active duty) may not
be charged interest (including fees and charges) above an annual rate of 6%
during the period of such Borrower's active duty status, unless a court
orders otherwise upon application of the lender. Any shortfall in interest
collections resulting from the application of the Relief Act, to the extent
not covered by any applicable Enhancements, could result in losses to the
Holders of the Certificates. The Relief Act applies to mortgagors who are
members of the Army, Navy, Air Force, Marines, National Guard, Reserves,
Coast Guard and officers of the U.S. Public Health Service assigned to duty
with the military. Because the Relief Act applies to mortgagors who enter
military service (including reservists who are later called to active duty)
after origination of the related Mortgage Loan, no information can be
provided as to the number of Mortgage Loans that may be affected by the
Relief Act. Some of the Mortgaged Properties relating to Mortgage Loans
included in the Mortgage Pool for a Series may be owned by Borrowers who are
individuals. In addition, the Relief Act imposes limitations which would
impair the ability of the Master 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 months thereafter. Thus, in
the event that such a Mortgage Loan goes into default, there may be delays
and losses occasioned by the inability to realize upon the Mortgage Property
in a timely fashion.
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APPLICABILITY OF USURY LAWS
State and federal usury laws limit the interest that lenders are entitled
to receive on a mortgage loan. In determining whether a given transaction is
usurious, courts may include charges in the form of "points" and "fees" as
"interest," but may exclude payments in the form of "reimbursement of
foreclosure expenses" or other charges found to be distinct from "interest."
If, however, the amount charged for the use of the money loaned is found to
exceed a statutorily established maximum rate, the form employed and the
degree of overcharge are both immaterial. Statutes differ in their provision
as to the consequences of a usurious loan. One group of statutes requires the
lender to forfeit the interest above the applicable limit or imposes a
specified penalty. Under this statutory scheme, the borrower may have the
recorded mortgage or deed of trust cancelled upon paying its debt with lawful
interest, or the lender may foreclose, but only for the debt plus lawful
interest. A second group of statutes is more severe. A violation of this type
of usury law results in the invalidation of the transaction, thereby
permitting the borrower to have the recorded mortgage or deed of trust
cancelled without any payment and prohibiting the lender from foreclosing.
Under the Agreement, a representation and warranty will be made to the
effect that the Mortgage Loans included in a given Trust Fund complied at
origination with applicable laws, including usury laws. If this
representation and warranty is breached with respect to any Mortgage Loan in
a manner that materially and adversely affects the interests of
Certificateholders, a Substitute Mortgage Loan will be substituted for such
Mortgage Loan or such Mortgage Loan will be repurchased in accordance with
the applicable Agreement. See "THE MORTGAGE POOLS -- Representations and
Warranties."
The Agreement for each Series will provide that the Master Servicer not
charge interest in excess of that permitted under any applicable state and
federal usury laws, notwithstanding that the applicable Note may provide for
a higher rate.
ALTERNATIVE MORTGAGE INSTRUMENTS
Alternative mortgage instruments, including adjustable rate mortgage
loans, originated by non-federally chartered lenders have historically been
subjected to a variety of restrictions. Such restrictions differed from state
to state, resulting in difficulties in determining whether a particular
alternative mortgage instrument originated by a state-chartered lender was in
compliance with applicable law. These difficulties were alleviated
substantially as a result of the enactment of Title VIII of the Garn-St
Germain Act ("Title VIII"). Title VIII provides that, notwithstanding any
state law to the contrary, state-chartered banks may originate alternative
mortgage instruments in accordance with regulations promulgated by the
Comptroller of the Currency with respect to origination of alternative
mortgage instruments by national banks, state-chartered credit unions may
originate alternative mortgage instruments in accordance with regulations
promulgated by the National Credit Union Administration (the "NCUA") with
respect to origination of alternative mortgage instruments by federal credit
unions, and all other non-federally chartered housing creditors, including
state-chartered savings and loan associations, state-chartered savings banks
and mortgage banking companies, may originate alternative mortgage
instruments in accordance with the regulations promulgated by the Federal
Home Loan Bank Board (now the Office of Thrift Supervision) with respect to
origination of alternative mortgage instruments by federal savings and loan
associations. Title VIII provides that any state may reject applicability of
the provision of Title VIII by adopting, prior to October 15, 1985, a law or
constitutional provision expressly rejecting the applicability of such
provisions. Certain states have taken such action.
LEASES AND RENTS
Some of the Mortgage Loans included in the Mortgage Pool for a Series may
be secured by an assignment of leases (each, a "Lease") and rents of one or
more lessees (each, a "Lessee"), either through a separate document of
assignment or as incorporated in the mortgage. Under such assignments, the
Borrower under the mortgage loan typically assigns its right, title and
interest as landlord under each lease and the income derived therefrom to the
lender, while retaining a license to collect the rents for so long as there
is no default under the mortgage loan documentation. The manner of perfecting
the lender's
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interest in rents may depend on whether the borrower's assignment was
absolute or one granted as security for the loan. Failure to properly perfect
the lender's interest in rents may result in the loss of a substantial pool
of funds which could otherwise serve as a source of repayment for the loan.
In the event the Borrower defaults, the license terminates and the lender may
be entitled to collect rents. Some state laws may require that to perfect its
interest in rents, the lender must take possession of the property and/or
obtain judicial appointment of a receiver before becoming entitled to collect
the rents. Lenders that actually take possession of the property, however,
may incur potentially substantial risks attendant to being a mortgagee in
possession. Such risks include liability for environmental clean-up costs and
other risks inherent to property ownership. In addition, if bankruptcy or
similar proceedings are commenced by or in respect of the borrower, the
lender's ability to collect the rents may be adversely affected. In the event
of borrower default, the amount of rent the lender is able to collect from
the tenants can significantly affect the value of the lender's security
interest.
SECONDARY FINANCING; DUE-ON-ENCUMBRANCE PROVISIONS
Some of the Mortgage Loans included in the Mortgage Pool for a Series may
not restrict secondary financing, thereby permitting the Borrower to use the
Mortgaged Property as security for one or more additional loans. Some of the
Mortgage Loans may preclude secondary financing (often by permitting the
first lender to accelerate the maturity of its loan if the Borrower further
encumbers the Mortgaged Property) or may require the consent of the senior
lender to any junior or substitute financing; however, such provisions may be
unenforceable in certain jurisdictions under certain circumstances. The
Agreement for each Series will provide that if any Mortgage Loan contains a
provision in the nature of a "due-on-encumbrance" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at the mortgagee's option)
become due and payable upon the creation of any lien or other encumbrance on
the related Mortgaged Property; or (ii) requires the consent of the related
mortgagee to the creation of any such lien or other encumbrance on the
related Mortgaged Property, then for so long as such Mortgage Loan is
included in a given Trust Fund, the Master Servicer or, if such Mortgage Loan
is a Specially Serviced Mortgage Loan, the Special Servicer, if any, on
behalf of such Trust Fund, shall exercise (or decline to exercise) any right
it may have as the mortgagee of record with respect to such Mortgage Loan (x)
to accelerate the payments thereon, or (y) to withhold its consent to the
creation of any such lien or other encumbrance, in a manner consistent with
the servicing standard set forth in the Agreement.
Where the Borrower encumbers the Mortgaged Property with one or more
junior liens, the senior lender is subject to additional risk. First, the
Borrower may have difficulty servicing and repaying multiple loans. Second,
acts of the senior lender which prejudice the junior lender or impair the
junior lender's security may create a superior equity in favor of the junior
lender. For example, if the Borrower and the senior lender agree to an
increase in the principal amount of or the interest rate payable on the
senior loan, the senior lender may lose its priority to the extent an
existing junior lender is prejudiced or the Borrower is additionally
burdened. Third, if the Borrower defaults on the senior loan and/or any
junior loan or loans, the existence of junior loans and actions taken by
junior lenders can impair the security available to the senior lender and can
interfere with, delay and in certain circumstances even prevent the taking of
action by the senior lender. Fourth, the bankruptcy of a junior lender may
operate to stay foreclosure or similar proceedings by the senior lender.
CERTAIN LAWS AND REGULATIONS
The Mortgaged Properties will be subject to compliance with various
federal, state and local statutes and regulations. Failure to comply
(together with an inability to remedy any such failure) could result in
material diminution in the value of a Mortgaged Property which could,
together with the possibility of limited alternative uses for a particular
Mortgaged Property (i.e., a nursing or convalescent home or hospital), result
in a failure to realize the full principal amount of the related Mortgage
Loan.
TYPE OF MORTGAGED PROPERTY
The lender may be subject to additional risk depending upon the type and
use of the Mortgaged Property in question. For instance, Mortgaged Properties
which are hospitals, nursing homes or
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convalescent homes may present special risks to lenders in large part due to
significant governmental regulation of the operation, maintenance, control
and financing of health care institutions. Mortgages on Mortgaged Properties
which are owned by the Borrower under a condominium form of ownership are
subject to the declaration, by-laws and other rules and regulations of the
condominium association. Mortgaged Properties which are hotels or motels may
present additional risk to the lender in that: (i) hotels and motels are
typically operated pursuant to franchise, management and operating agreements
which may be terminable by the operator; and (ii) the transferability of the
hotel's operating, liquor and other licenses to the entity acquiring the
hotel either through purchase or foreclosure is subject to the vagaries of
local law requirements. In addition, Mortgaged Properties which are
multifamily residential properties or cooperatively owned multifamily
properties may be subject to rent control laws, which could impact the future
cash flows of such properties.
AMERICANS WITH DISABILITIES ACT
Under Title III of the Americans with Disabilities Act of 1990 and rules
promulgated thereunder (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, such altered portions are readily
accessible to and usable by disabled individuals. The "readily achievable"
standard takes into account, among other factors, the financial resources of
the affected site, owner, landlord or other applicable Person. In addition to
imposing a possible financial burden on the borrower in its capacity as owner
or landlord, the ADA may also impose such requirements on a foreclosing
lender who succeeds to the interest of the Borrower as owner or landlord.
Furthermore, since the "readily achievable" standard may vary depending on
the financial condition of the owner or landlord, a foreclosing lender who is
financially more capable than the Borrower of complying with the requirements
of the ADA may be subject to more stringent requirements than those to which
the Borrower is subject.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following is a summary of certain anticipated federal income tax
consequences of the purchase, ownership, and disposition of the Certificates.
The summary is based upon the provisions of the Code, the regulations
promulgated thereunder, including, where applicable, proposed regulations,
and the judicial and administrative rulings and decisions now in effect, all
of which are subject to change or possible differing interpretations. The
statutory provisions, regulations, and interpretations on which this summary
is based are subject to change, and such change could apply retroactively.
As used herein, a "U.S. Person" means a beneficial owner of a Certificate
that is for United States federal income tax purposes (i) a citizen or
resident of the United States, (ii) a corporation or a partnership (including
an entity treated as a corporation or partnership for federal income tax
purposes) created or organized in or under the laws of the United States, any
state thereof or the District of Columbia (unless, in the case of a
partnership, Treasury regulations are adopted that provide otherwise), (iii)
an estate whose income is subject to United States federal income tax
regardless of its source, or (iv) a trust if a court within the United States
is able to exercise primary supervision over the administration of the trust
and one or more United States persons have the authority to control all
substantial decisions of the trust. Certain trusts not described in clause
(iv) above in existence on August 20, 1996 that elect to be treated as a
United States Person will also be a U.S. Person.
The summary does not purport to deal with all aspects of federal income
taxation that may affect particular investors in light of their individual
circumstances, nor with certain types of investors subject to special
treatment under the federal income tax laws. This summary focuses primarily
upon investors who will hold Certificates as "capital assets" (generally,
property held for investment) within the meaning of Section 1221 of the Code,
but much of the discussion is applicable to other investors as well.
Potential purchasers of Certificates are advised to consult their own tax
advisers concerning the federal, state or local tax consequences to them of
the purchase, holding and disposition of Certificates.
TAXATION OF THE REMIC AND ITS HOLDERS
General. In the opinion of Brown & Wood llp, Cadwalader, Wickersham & Taft
or Orrick, Herrington & Sutcliffe llp (as specified in the related Prospectus
Supplement), special counsel to the Depositor, if a REMIC election is made
with respect to a Series of Certificates, then the arrangement by which the
Certificates of that Series are issued will be treated as one or more REMICs
as long as all of the provisions of the applicable Agreement are complied
with and the statutory and regulatory requirements are satisfied.
Certificates will be designated as "Regular Interests" or "Residual
Interests" in the REMICs, as specified in the related Prospectus Supplement.
The opinion of special counsel may in certain cases be based on
representations of the Depositor or other persons.
If a REMIC election is made with respect to a Series of Certificates, (i)
Certificates held by a domestic building and loan association will constitute
"a regular or a residual interest in a REMIC" within the meaning of Code
Section 7701(a)(19)(C)(xi) (assuming that at least 95% of the REMIC's assets
consist of cash, government securities, "loans secured by an interest in real
property," and other types of assets described in Code Section 7701(a)(19)(C)
(except that if the underlying Mortgage Loans are not residential Mortgage
Loans, the Certificates will not so qualify)); and (ii) Certificates held by
a real estate investment trust will constitute "real estate assets" within
the meaning of Code Section 856(c)(4)(A), and income with respect to the
Certificates will be considered "interest on obligations secured by mortgages
on real property or on interests in real property" within the meaning of Code
Section 856(c)(3)(B) (assuming, for both purposes, that at least 95% of the
REMIC's assets are qualifying assets). If less than 95% of the REMIC's assets
consist of assets described in (i) or (ii) above, then a Certificate will
qualify for the tax treatment described in (i) or (ii) in the proportion that
such REMIC assets are qualifying assets.
It is possible that various reserves or funds will reduce the proportion
of REMIC assets which qualify under the standards described above.
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TAXATION OF REGULAR INTERESTS
Interest and Acquisition Discount. Certificates representing Regular
Interests in a REMIC ("Regular Interest Certificates") are generally taxable
to Holders in the same manner as evidences of indebtedness issued by the
REMIC. Stated interest on the Regular Interest Certificates will be taxable
as ordinary income and taken into account using the accrual method of
accounting, regardless of the Certificateholder's normal accounting method.
Reports will be made annually to the Internal Revenue Service (the "IRS") and
to Holders of Regular Interest Certificates that are not excepted from the
reporting requirements regarding amounts treated as interest (including
accrual of original issue discount) on Regular Interest Certificates.
Certificates on which interest is not paid currently ("Compound Interest
Certificates") will, and certain of the other Certificates constituting
Regular Interests may, be issued with original issue discount ("OID") within
the meaning of Code Section 1273. Rules governing OID are set forth in
Sections 1271-1275 of the Code (the "OID Regulations"). The discussion herein
is based in part on the OID Regulations. Moreover, although the Code contains
specific provisions governing the calculation of OID on securities, such as
the Certificates, on which principal is required to be prepaid based on
prepayments of the underlying assets, regulations interpreting those
provisions have not yet been issued.
In general, OID, if any, will equal the difference between the stated
redemption price at maturity of a Regular Interest Certificate and its issue
price. A Holder of a Regular Interest Certificate must include such OID in
gross income as ordinary income as it accrues under a method taking into
account an economic accrual of the discount. In general, OID must be included
in income in advance of the receipt of the cash representing that income. The
amount of OID on a Regular Interest Certificate will be considered to be zero
if it is less than a de minimis amount determined under the Code.
The issue price of a Regular Interest Certificate of a Class will
generally be the initial offering price at which a substantial amount of the
Certificates in the Class is sold to the public, and will be treated by the
Depositor as including, in addition, the amount paid by the Certificateholder
for accrued interest that relates to a period prior to the issue date of such
Regular Interest Certificate. Under the Final Regulations, the stated
redemption price at maturity is the sum of all payments on the Certificate
other than any "qualified stated interest" payments. Qualified stated
interest is interest that is unconditionally payable at least annually during
the entire term of the Certificate at either (a) a single fixed rate that
appropriately takes into account the length of the interval between payments
or (b) the current values of (i) a single "qualified floating rate" or (ii) a
single "objective rate" (each a "Single Variable Rate"). A "current value" is
the value of a variable rate on any day that is no earlier than three months
prior to the first day on which that value is in effect and no later than one
year following that day. A qualified floating rate is a rate the variations
in which reasonably can be expected to measure contemporaneous variations in
the cost of newly borrowed funds in the currency in which the Regular
Interest Certificate is denominated (e.g., LIBOR). The rules for determining
the qualified stated interest payable with respect to certain variable rate
Regular Interest Certificates not bearing interest at a Single Variable Rate
are discussed below under "--Variable Rate Regular Interests." In the case of
the Compound Interest Certificates, Interest Weighted Certificates, and
certain of the other Regular Interest Certificates, none of the payments
under the instrument will be considered qualified stated interest, and thus
the aggregate amount of all payments will be included in the stated
redemption price at maturity. Further, because Certificateholders are
entitled to receive interest only to the extent that payments are made on the
Mortgage Loans, interest might not be considered to be "unconditionally
payable." In that case, none of the Regular Interest Certificates will have
qualified stated interest.
The Holder of a Regular Interest Certificate issued with OID must include
in gross income, for all days during its taxable year on which it holds such
Regular Interest Certificate, the sum of the "daily portions" of such OID.
Under Code Section 1272(a)(6), the amount of OID to be included in income by
a Holder of a debt instrument, such as a Regular Interest Certificate, that
is subject to acceleration due to prepayments on other debt obligations
securing such instruments, is computed by taking into account the anticipated
rate of prepayments assumed in pricing the debt instrument (the "Prepayment
Assumption"). The amount of OID includible in income by a Holder will be
computed by allocating to each day
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during a taxable year a pro-rata portion of the OID that accrued during the
relevant accrual period. The amount of OID that will accrue during an accrual
period (generally the period between interest payments or compounding dates)
is the excess(if any) of the sum of (a) the present value of all payments
remaining to be made on the Regular Interest Certificate as of the close of
the accrual period and (b) the payments during the accrual period of amounts
included in the stated redemption price of the Regular Interest Certificate,
over the "adjusted issue price" of the Regular Interest Certificate at the
beginning of the accrual period. The adjusted issue price of a Regular
Interest Certificate is the sum of its issue price plus prior accruals of
OID, reduced by the total payments made with respect to such Regular Interest
Certificate in all prior periods, other than qualified stated interest
payments. Code Section 1272(a)(6) requires the present value of the remaining
payments to be determined on the basis of three factors: (i) the original
yield to maturity of the Regular Interest Certificate (determined on the
basis of compounding at the end of each accrual period and properly adjusted
for the length of the accrual period), (ii) events which have occurred before
the end of the accrual period and (iii) the assumption that the remaining
payments will be made in accordance with the original Prepayment Assumption.
The effect of this method would be to increase the portions of OID required
to be included in income by a Certificateholder taking into account
prepayments with respect to the Mortgage Loans at a rate that exceeds the
Prepayment Assumption, and to decrease (but not below zero for any period)
the portions of OID required to be included in income by a Certificateholder
taking into account prepayments with respect to the Mortgage Loans at a rate
that is slower than the Prepayment Assumption. Although OID will be reported
to Certificateholders based on the Prepayment Assumption, no representation
is made to Certificateholders that Mortgage Loans will be prepaid at that
rate or at any other rate.
Certain classes of Certificates may represent more than one class of REMIC
Regular Interests. Unless the applicable Prospectus Supplement specifies
otherwise, the Trustee intends, based on the OID Regulations, to calculate
OID on such Certificates as if, solely for the purposes of computing OID, the
separate Regular Interests were a single debt instrument.
A subsequent Holder of a Regular Interest Certificate will also be
required to include OID in gross income, but such a Holder who purchases such
Regular Interest Certificate for an amount that exceeds its adjusted issue
price will be entitled (as will an initial Holder who pays more than a
Regular Interest Certificate's issue price) to offset such OID by comparable
economic accruals of portions of such excess.
Interest Weighted Certificates. It is not clear how income should be
accrued with respect to Regular Interest Certificates the payments on which
consist solely or primarily of a specified portion of the interest payments
on qualified mortgages held by the REMIC ("Interest Weighted Certificate").
The Depositor intends to take the position that all of the income derived
from an Interest Weighted Certificate should be treated as OID and that the
amount and rate of accrual of such OID should be calculated by treating the
Interest Weighted Certificate as a Compound Interest Certificate. However,
the IRS could assert that income derived from an Interest Weighted
Certificate should be calculated as if the Interest Weighted Certificate were
a Certificate purchased at a premium equal to the excess of the price paid by
such Holder for the Interest Weighted Certificate over its stated principal
amount, if any. Under this approach, a Holder would be entitled to amortize
such premium only if it has in effect an election under Section 171 of the
Code with respect to all taxable debt instruments held by such holder, as
described below. Alternatively, the IRS could assert that the Interest
Weighted Certificate should be taxable under the contingent debt rules
governing certain bonds issued with contingent principal payments, in which
case a Holder might recognize income at a slower rate than if the Interest
Weighted Certificate were treated as a Compound Interest Certificate.
Variable Rate Regular Interests. Regular Interest Certificates bearing
interest at one or more variable rates are subject to certain special rules.
The qualified stated interest payable with respect to certain variable rate
debt instruments not bearing interest at a Single Variable Rate generally is
determined under the OID Regulations by converting such instruments into
fixed rate debt instruments. Instruments qualifying for such treatment
generally include those providing for stated interest at (i) more than one
qualified floating rates, or at (ii) a single fixed rate and (a) one or more
qualified floating rates or (b) a single "qualified inverse floating rate"
(each, a "Multiple Variable Rate"). A qualified inverse
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floating rate is an objective rate equal to a fixed rate reduced by a
qualified floating rate, the variations in which can reasonably be expected
to inversely reflect contemporaneous variations in the cost of newly borrowed
funds (disregarding permissible rate caps, floors, governors, and similar
restrictions such as are described above).
Purchasers of Regular Interest Certificates bearing a variable rate of
interest should be aware that there is uncertainty concerning the application
of Code Section 1272(a)(6), and the OID Regulations to such Certificates. In
the absence of other authority, the Depositor intends to be guided by the
provisions of the OID Regulations governing variable rate debt instruments in
adapting the provisions of Code Section 1272(a)(6) to such Certificates for
the purpose of preparing reports furnished to the IRS and Certificateholders.
In that regard, in determining OID with respect to Regular Interest
Certificates bearing interest at a Single Variable Rate, (a) all stated
interest with respect to a Regular Interest Certificate is treated as
qualified stated interest and (b) the amount and accrual of OID, if any, is
determined under the OID rules applicable to fixed rate debt instruments
discussed above by assuming that the Single Variable Rate is a fixed rate
equal to (i) in the case of a qualified floating rate or qualified inverse
floating rate, the issue date value of the rate, or (ii) in the case of any
other objective rate, a fixed rate that reflects the yield that is reasonably
expected for the Regular Interest Certificate. Interest and OID attributable
to Regular Interest Certificates bearing interest at a Multiple Variable Rate
similarly will be taken into account under a methodology that converts the
Certificate into an equivalent fixed rate debt instrument. However, in
determining the amount and accrual of OID, the assumed fixed rates are (a)
for each qualified floating rate, the value of each such rate as of the issue
date (with appropriate adjustment for any differences in intervals between
interest adjustment dates), (b) for a qualified inverse floating rate, the
value of the rate as of the issue date, and (c) for any other objective rate,
the fixed rate that reflects the yield that is reasonably expected for the
Certificate. In the case of a Certificate that provides for stated interest
at a fixed rate in one or more accrual periods and either one or more
qualified floating rates or a qualified inverse floating rate in other
accrual periods, the fixed rate is initially converted into a qualified
floating rate (or a qualified inverse floating rate, if the Certificate
provides for a qualified inverse floating rate). The qualified floating rate
or qualified inverse floating rate that replaces the fixed rate must be such
that the fair market value of the Regular Interest Certificate as of its
issue date is approximately the same as the fair market value of an otherwise
identical debt instrument that provides for either the qualified floating
rate or the qualified inverse floating rate. Subsequent to converting the
fixed rate into either a qualified floating rate or a qualified inverse
floating rate, the Regular Interest Certificate is then converted into an
equivalent fixed rate debt instrument in the manner described above. If the
interest paid or accrued with respect to a Single Variable Rate or Multiple
Variable Rate Certificate during an accrual period differs from the assumed
fixed interest rate, such difference will be an adjustment (to interest or
OID, as applicable) to the Certificateholder's taxable income for the taxable
period or periods to which such difference relates.
Purchasers of Certificates bearing a variable rate of interest should be
aware that the provisions of the OID Regulations governing variable rate debt
instruments are limited in scope and may not apply to some Regular Interest
Certificates having variable rates. If such a Certificate is not subject to
the provisions of the OID Regulations governing variable rate debt
instruments, it may be subject to the Contingent Regulations described below.
In June 1996, the Internal Revenue Service (the "IRS") issued OID
Regulations (the "Contingent Regulations") governing the calculation of OID
on instruments having contingent interest payments. In general, the
Contingent Regulations would cause the timing and character of income, gain
or loss reported on a contingent payment debt instrument to substantially
differ from the timing and character of income, gain or loss reported on a
contingent payment debt instrument under general principles of current United
States Federal income tax law. Specifically, the Contingent Regulations
generally require a U.S. Person that is a holder of such an instrument to
include future contingent and noncontingent interest payments in income as
such interest accrues based upon a projected payment schedule. Moreover, in
general, under the Contingent Regulations, any gain recognized by a U.S.
Person on the sale, exchange, or retirement of a contingent payment debt
instrument will be treated as ordinary income and all or a portion of any
loss realized could be treated as ordinary loss as opposed to capital loss
(depending upon
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the circumstances). The Contingent Regulations apply to debt instruments
issued on or after August 13, 1996. Prospective purchasers of variable rate
Regular Interest Certificates should consult their tax advisers concerning
the appropriate tax treatment of such Certificates.
The Contingent Regulations specifically do not apply for purposes of
calculating OID on debt instruments subject to Code Section 1272(a)(6).
Additionally, the OID Regulations do not contain provisions specifically
interpreting Code Section 1272(a)(6). Until the Treasury issues guidance to
the contrary, the Trustee intends to base its computation on Code Section
1272(a)(6) and the OID Regulations as described in this Prospectus. However,
because no regulatory guidance currently exists under Code Section
1272(a)(6), there can be no assurance that such methodology represents the
correct manner of calculating OID.
Market Discount and Premium. A purchaser of a Regular Interest Certificate
may also be subject to the market discount rules of the Code. Such purchaser
generally will be required to recognize accrued market discount as ordinary
income as payments of principal are received on such Regular Interest
Certificate, or upon sale or exchange of the Regular Interest Certificate. In
general terms, until regulations are promulgated, market discount may be
treated as accruing, at the election of the Holder, either (i) under a
constant yield method, taking into account the Prepayment Assumption, or (ii)
in proportion to accruals of OID (or, if there is no OID, in proportion to
accruals of stated interest). A Holder of a Regular Interest Certificate
having market discount may also be required to defer a portion of the
interest deductions attributable to any indebtedness incurred or continued to
purchase or carry the Regular Interest Certificate. As an alternative to the
inclusion of market discount in income on the foregoing basis, the Holder may
elect to include such market discount in income currently as it accrues on
all market discount instruments acquired by such Holder in that taxable year
or thereafter, in which case the interest deferral rule will not apply.
A Holder who purchases a Regular Interest Certificate (other than an
Interest Weighted Certificate, to the extent described above) at a cost
greater than its stated redemption price at maturity, generally will be
considered to have purchased the Certificate at a premium, which it may elect
to amortize as an offset to interest income on such Certificate (and not as a
separate deduction item) on a constant yield method. The legislative history
of the Tax Reform Act of 1986 (the "1986 Act") indicates that premium is to
be accrued in the same manner as market discount. Accordingly, it appears
that the accrual of premium on a Regular Interest Certificate will be
calculated using the prepayment assumption used in pricing such Regular
Interest Certificate. If a Holder makes an election to amortize premium on a
Certificate, such election will apply to all taxable debt instruments
(including all REMIC Regular Interests) held by the Holder at the beginning
of the taxable year in which the election is made, and to all taxable debt
instruments acquired thereafter by such Holder, and will be irrevocable
without the consent of the IRS. Purchasers who pay a premium for Regular
Interest Certificates should consult their tax advisers regarding the
election to amortize premium and the method to be employed.
Interest Election. Under the OID Regulations, holders of Regular Interest
Certificates generally may elect to include all accrued interest on a Regular
Interest Certificate in gross income using the constant yield to maturity
method. For purposes of this election, interest includes stated interest,
original issue discount, de minimis original issue discount, market discount,
de minimis market discount and unstated interest, as adjusted by any premium.
If a holder of a Regular Interest Certificate makes such an election and (i)
the Regular Interest Certificate has amortizable bond premium, the holder is
deemed to have made an election to amortize bond premium with respect to all
debt instruments having amortizable bond premium that such Certificateholder
owns or acquires, or (ii) the Regular Interest Certificate has market
discount, the holder is deemed to have made an election to include market
discount in income currently for all debt instruments having market discount
acquired during the year of the election or thereafter. See "--Market
Discount and Premium" above. A holder of a Regular Interest Certificate
should consult its tax adviser before making this election.
Treatment of Subordinate Certificates. As described above under
"ENHANCEMENT -- Subordinate Certificates," certain Series of Certificates may
contain one or more Classes of Subordinate Certificates. Holders of
Subordinate Certificates will be required to report income with respect to
such
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Certificates on the accrual method without giving effect to delays and
reductions in distributions attributable to defaults or delinquencies on any
Mortgage Loans, except possibly to the extent that it can be established that
such amounts are uncollectible. As a result, the amount of income reported by
a Holder of a Subordinate Certificate in any period could significantly
exceed the amount of cash distributed to such Holder in that period.
Although not entirely clear, it appears that a corporate Holder generally
should be allowed to deduct as an ordinary loss any loss sustained on account
of partial or complete worthlessness of a Subordinate Certificate. Although
similarly unclear, a noncorporate Holder generally should be allowed to
deduct as a short-term capital loss any loss sustained on account of complete
worthlessness of a Subordinate Certificate. A noncorporate Holder
alternatively may be allowed such a loss deduction as the principal balance
of a Subordinate Certificate is reduced by reason of realized losses
resulting from liquidated Mortgage Loans; however, the IRS could contend that
a noncorporate Holder should be allowed such losses only after all Mortgage
Loans in the Trust Fund have been liquidated or the Subordinate Certificates
otherwise have been retired. Special rules are applicable to banks and thrift
institutions, including rules regarding reserves for bad debts. Holders of
Subordinate Certificates should consult their own tax advisers regarding the
appropriate timing, character and amount of any loss sustained with respect
to Subordinate Certificates.
REMIC EXPENSES
As a general rule, all of the expenses of a REMIC will be taken into
account by Holders of the Residual Interest Certificates. In the case of a
"single-class REMIC," however, the expenses will be allocated, under
temporary Treasury regulations, among the Holders of the Regular Interest
Certificates and the Holders of the Residual Interest Certificates on a daily
basis in proportion to the relative amounts of income accruing to each
Certificateholder on that day. In the case of a Regular Interest
Certificateholder who is an individual or a "pass-through interest holder"
(including certain pass-through entities but not including real estate
investment trusts), such expenses will be deductible only to the extent that
such expenses, plus other "miscellaneous itemized deductions" of the
Certificateholder, exceed 2% of such Certificateholder's adjusted gross
income. In addition, itemized deductions are further restricted by other
Sections of the Code. The disallowance of some or all of these deductions may
have a significant impact on the yield of the Regular Interest Certificate to
such a Holder. In general terms, a single-class REMIC is one that either (i)
would qualify, under existing Treasury regulations, as a grantor trust if it
were not a REMIC (treating all interests as ownership interests, even if they
would be classified as debt for federal income tax purposes) or (ii) is
similar to such a trust and is structured with the principal purpose of
avoiding the single-class REMIC rules.
SALE OR EXCHANGE OF REMIC REGULAR INTEREST CERTIFICATES
A Regular Interest Certificateholder's tax basis in its Regular Interest
Certificate is the price such Holder pays for a Certificate, plus amounts of
OID or market discount included in income and reduced by any payments
received (other than qualified stated interest payments) and any amortized
premium. Gain or loss recognized on a sale, exchange, or redemption of a
Regular Interest Certificate, measured by the difference between the amount
realized and the Regular Interest Certificate's basis as so adjusted, will
generally be capital gain or loss, assuming that the Regular Interest
Certificate is held as a capital asset. If, however, a Certificateholder is a
bank, thrift, or similar institution described in Section 582 of the Code,
gain or loss realized on the sale or exchange of a Certificate will be
taxable as ordinary income or loss. In addition, gain from the disposition of
a Regular Interest Certificate that might otherwise be capital gain will be
treated as ordinary income to the extent of the excess, if any, of (i) the
amount that would have been includible in the Holder's income if the yield on
such Regular Interest Certificate had equaled 110% of the applicable federal
rate as of the beginning of such Holder's holding period, over (ii) the
amount of ordinary income actually recognized by the Holder with respect to
such Regular Interest Certificate.
TAXATION OF THE REMIC
General. Although a REMIC is a separate entity for federal income tax
purposes, a REMIC is not generally subject to entity-level taxation. Rather,
except in the case of a "single-class REMIC," the
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taxable income or net loss of a REMIC is taken into account by the Holders of
Residual Interests. The Regular Interests are generally taxable as debt of
the REMIC.
Calculation of REMIC Income. The taxable income or net loss of a REMIC is
determined under an accrual method of accounting and in the same manner as in
the case of an individual, with certain adjustments. In general, the taxable
income or net loss will be the difference between (i) the gross income
produced by the REMIC's assets, including stated interest and any OID or
market discount on loans and other assets, and (ii) deductions, including
stated interest and OID accrued on Regular Interest Certificates,
amortization of any premium with respect to loans, and servicing fees and
other expenses of the REMIC. A Holder of a Residual Interest Certificate that
is an individual or a "pass-through interest holder" (including certain
pass-through entities, but not including real estate investment trusts) will
be unable to deduct servicing fees payable on the loans or other
administrative expenses of the REMIC for a given taxable year to the extent
that such expenses, when aggregated with the Residual Interest
Certificateholder's other miscellaneous itemized deductions for that year, do
not exceed two percent of such Holder's adjusted gross income.
For purposes of computing its taxable income or net loss, the REMIC should
have an initial aggregate tax basis in its assets equal to the aggregate fair
market value of the Regular Interests and the Residual Interests on the
Startup Day (generally, the day that the interests are issued). That
aggregate basis will be allocated among the assets of the REMIC in proportion
to their respective fair market values.
The OID provisions of the Code apply to loans of individuals originated on
or after March 2, 1984, and the market discount provisions apply to all
loans. Subject to possible application of the de minimis rules, the method of
accrual by the REMIC of OID or market discount income on such loans will be
equivalent to the method under which Holders of Regular Interest Certificates
accrue OID (i.e., under the constant yield method taking into account the
Prepayment Assumption). The REMIC will deduct OID on the Regular Interest
Certificates in the same manner that the Holders of the Certificates include
such discount in income, but without regard to the de minimis rules. See
"--Taxation of Regular Interests" above. However, a REMIC that acquires loans
at a market discount must include such market discount in income currently,
as it accrues, on a constant interest basis.
To the extent that the REMIC's basis allocable to loans that it holds
exceeds their principal amounts, the resulting premium, if attributable to
mortgages originated after September 27, 1985, will be amortized over the
life of the loans (taking into account the Prepayment Assumption) on a
constant yield method. Although the law is somewhat unclear regarding
recovery of premium attributable to loans originated on or before such date,
it is possible that such premium may be recovered in proportion to payments
of loan principal.
TAXATION OF HOLDERS OF RESIDUAL INTEREST CERTIFICATES
The Holder of a Certificate representing a residual interest (a "Residual
Interest Certificate") will take into account the "daily portion" of the
taxable income or net loss of the REMIC for each day during the taxable year
on which such Holder held the Residual Interest Certificate. The daily
portion is determined by allocating to each day in any calendar quarter its
ratable portion of the taxable income or net loss of the REMIC for such
quarter, and by allocating that amount among the Holders (on such day) of the
Residual Interest Certificates in proportion to their respective holdings on
such day.
Prohibited Transactions and Contributions Tax. The REMIC will be subject
to a 100% tax on any net income derived from a "prohibited transaction." For
this purpose, net income will be calculated without taking into account any
losses from prohibited transactions or any deductions attributable to any
prohibited transaction that resulted in a loss. In general, prohibited
transactions include (i) subject to limited exceptions, the sale or other
disposition of any qualified mortgage transferred to the REMIC; (ii) subject
to a limited exception, the sale or other disposition of a cash flow
investment; (iii) the receipt of any income from assets not permitted to be
held by the REMIC pursuant to the Code; or (iv) the receipt of any fees or
other compensation for services rendered by the REMIC. It is anticipated that
a REMIC will not engage in any prohibited transactions in which it would
recognize a material amount of net income. In addition, subject to a number
of exceptions, a tax is imposed at the rate of 100% on amounts
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contributed to a REMIC after the close of the three-month period beginning on
the Startup Day. The Holders of Residual Interest Certificates will generally
be responsible for the payment of any such taxes imposed on the REMIC. To the
extent not paid by such Holders or otherwise, however, such taxes will be
paid out of the Trust Fund and will be allocated pro-rata to all outstanding
Classes of Certificates of such REMIC.
The Holder of a Residual Interest Certificate must report its
proportionate share of the taxable income of the REMIC whether or not it
receives cash distributions from the REMIC attributable to such income or
loss. The reporting of taxable income without corresponding distributions
could occur, for example, in certain REMICs in which the loans held by the
REMIC were issued or acquired at a discount, since mortgage prepayments cause
recognition of discount income, while the corresponding portion of the
prepayment could be used in whole or in part to make principal payments on
REMIC Regular Interests issued without any discount or at an insubstantial
discount. (If this occurs, it is likely that cash distributions will exceed
taxable income in later years.) Taxable income may also be greater in the
earlier years of certain REMICs as a result of the fact that interest expense
deductions, as a percentage of outstanding principal of REMIC Regular
Interest Certificates, will typically increase over time as lower yielding
Certificates are paid, whereas interest income with respect to loans will
generally remain constant over time as a percentage of loan principal.
In any event, because the Holder of a Residual Interest is taxed on the
net income of the REMIC, the taxable income derived from a Residual Interest
Certificate in a given taxable year will not be equal to the taxable income
associated with investment in a corporate bond or stripped instrument having
similar cash flow characteristics and pre-tax yield. Therefore, the after-tax
yield on the Residual Interest Certificate may be less than that of such a
bond or instrument.
Limitation on Losses. The amount of the REMIC's net loss that a Holder may
take into account currently is limited to the Holder's adjusted basis at the
end of the calendar quarter in which such loss arises. A Holder's basis in a
Residual Interest Certificate will initially equal such Holder's purchase
price, and will subsequently be increased by the amount of the REMIC's
taxable income allocated to the Holder, and decreased (but not below zero) by
the amount of distributions made and the amount of the REMIC's net loss
allocated to the Holder. Any disallowed loss may be carried forward
indefinitely, but may be used only to offset income of the REMIC generated by
the same REMIC. The ability of Residual Interest Certificateholders to deduct
net losses may be subject to additional limitations under the Code, as to
which such Holders should consult their tax advisers.
Distributions. Distributions on a Residual Interest Certificate (whether
at their scheduled times or as a result of prepayments) will generally not
result in any additional taxable income or loss to a Holder of a Residual
Interest Certificate. If the amount of such payment exceeds a Holder's
adjusted basis in the Residual Interest Certificate, however, the Holder will
recognize gain (treated as gain from the sale of the Residual Interest
Certificate) to the extent of such excess.
Sale or Exchange. A Holder of a Residual Interest Certificate will
recognize gain or loss on the sale or exchange of a Residual Interest
Certificate equal to the difference, if any, between the amount realized and
such Certificateholder's adjusted basis in the Residual Interest Certificate
at the time of such sale or exchange. Any such loss may be a capital loss
subject to limitation; gain which might otherwise be capital may be treated
as ordinary income under certain circumstances. See "--Sale or Exchange of
REMIC Regular Interest Certificates" above. Except to the extent provided in
regulations, which have not yet been issued, any loss upon disposition or a
Residual Interest Certificate will be disallowed if the selling
Certificateholder acquires any residual interest in a REMIC or similar
mortgage pool within six months before or after such disposition.
EXCESS INCLUSIONS
The portion of a Residual Interest Certificateholder's REMIC taxable
income consisting of "excess inclusion" income may not be offset by other
deductions or losses, including net operating losses, on such
Certificateholder's federal income tax return. If the Holder of a Residual
Interest Certificate is an organization subject to the tax on unrelated
business income imposed by Code Section 511, such Residual
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Interest Certificateholder's excess inclusion income will be treated as
unrelated business taxable income of such Certificateholder. In addition,
under Treasury regulations yet to be issued, if a real estate investment
trust, a regulated investment company, a common trust fund, or certain
cooperatives were to own a Residual Interest Certificate, a portion of
dividends (or other distributions) paid by the real estate investment trust
(or other entity) would be treated as excess inclusion income. If a Residual
Certificate is owned by a foreign person, excess inclusion income is subject
to tax at a rate of 30%, which rate may not be reduced by treaty and is not
eligible for treatment as "portfolio interest."
The excess inclusion portion of a REMIC's income is generally equal to the
excess, if any, of REMIC taxable income for the quarterly period allocable to
a Residual Interest Certificate, over the daily accruals for such quarterly
period of (i) 120% of the long term applicable federal rate on the Startup
Day multiplied by (ii) the adjusted issue price of such Residual Interest
Certificate at the beginning of such quarterly period. The adjusted issue
price of a Residual Interest at the beginning of each calendar quarter will
equal its issue price (calculated in a manner analogous to the determination
of the issue price of a Regular Interest), increased by the aggregate of the
daily accruals for prior calendar quarters, and decreased (but not below
zero) by the amount of loss allocated to a Holder and the amount of
distributions made on the Residual Interest Certificate before the beginning
of the quarter. The long-term federal rate, which is announced monthly by the
Treasury Department, is an interest rate that is based on the average market
yield of outstanding marketable obligations of the United States government
having remaining maturities in excess of nine years.
In addition, the Small Business Job Protection Act of 1996 provides three
rules for determining the effect on excess inclusions on the alternative
minimum taxable income of a Residual Interest Certificateholder. First,
alternative minimum taxable income for such Residual Interest
Certificateholder is determined without regard to the special rule that
taxable income cannot be less than excess inclusions. Second, a Residual
Interest Certificateholder's alternative minimum taxable income for a tax
year cannot be less than excess inclusions for the year. Third, the amount of
any alternative minimum tax net operating loss deductions must be computed
without regard to any excess inclusions. These rules are effective for tax
years beginning after December 31, 1986, unless a Residual Interest
Certificateholder elects to have such rules apply only to tax years beginning
after August 20, 1996.
Under the "REMIC Regulations," in certain circumstances, transfers of
Residual Certificates may be disregarded. See "CERTAIN FEDERAL INCOME TAX
CONSEQUENCES -- Restrictions on Ownership and Transfer of Residual Interest
Certificates" and "--Tax Treatment of Foreign Investors."
RESTRICTIONS ON OWNERSHIP AND TRANSFER OF RESIDUAL INTEREST CERTIFICATES
As a condition to qualification as a REMIC, reasonable arrangements must
be made to prevent the ownership of a Residual Interest Certificate by any
"Disqualified Organization." Disqualified Organizations include the United
States, any State or political subdivision thereof, any foreign government,
any international organization, or any agency or instrumentality of any of
the foregoing, a rural electric or telephone cooperative described in Section
1381(a)(2)(C) of the Code, or any entity exempt from the tax imposed by
Sections 1-1399 of the Code, if such entity is not subject to tax on its
unrelated business income. Accordingly, the applicable Agreement will
prohibit Disqualified Organizations from owning a Residual Interest
Certificate. In addition, no transfer of a Residual Interest Certificate will
be permitted unless the proposed transferee shall have furnished to the
Trustee an affidavit representing and warranting that it is neither a
Disqualified Organization nor an agent or nominee acting on behalf of a
Disqualified Organization.
If a Residual Interest Certificate is transferred to a Disqualified
Organization (in violation of the restrictions set forth above), a
substantial tax will be imposed on the transferor of such Residual Interest
Certificate at the time of the transfer. In addition, if a Disqualified
Organization holds an interest in a pass-through entity (including, among
others, a partnership, trust, real estate investment trust, regulated
investment company, or any person holding as nominee) that owns a Residual
Interest Certificate, the pass-through entity will be required to pay an
annual tax on its allocable share of the excess inclusion income of the
REMIC.
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The Taxpayer Relief Act of 1997 adds provisions to the Code that will
apply to an "electing large partnership." If an electing large partnership
holds a Residual Interest Certificate, all interests in the electing large
partnership are treated as held by disqualified organizations for purposes of
the tax imposed upon a pass-through entity by section 860E(e) of the Code. An
exception to this tax, otherwise available to a pass-through entity that is
furnished certain affidavits by record holders of interests in the entity and
that does not know such affidavits are false, is not available to an electing
large partnership.
Under the REMIC Regulations, if a Residual Interest Certificate is a
"noneconomic residual interest," as described below, a transfer of a Residual
Interest Certificate to a United States person will be disregarded for all
Federal tax purposes unless no significant purpose of the transfer was to
impede the assessment or collection of tax. A Residual Interest Certificate
is a "noneconomic residual interest" unless, at the time of the transfer (i)
the present value of the expected future distributions on the Residual
Interest Certificate at least equals the product of the present value of the
anticipated excess inclusions and the highest rate of tax for the year in
which the transfer occurs, and (ii) the transferor reasonably expects that
the transferee will receive distributions from the REMIC at or after the time
at which the taxes accrue on the anticipated excess inclusions in an amount
sufficient to satisfy the accrued taxes. The present value is calculated
based on the Prepayment Assumption, using a discount rate equal to the
"applicable federal rate" at the time of transfer. If a transfer of a
Residual Interest is disregarded, the transferor would be liable for any
Federal income tax imposed upon the taxable income derived by the transferee
from the REMIC. A significant purpose to impede the assessment or collection
of tax exists if the transferor, at the time of transfer, knew or should have
known that the transferee would be unwilling or unable to pay taxes on its
share of the taxable income of the REMIC. A similar type of limitation exists
with respect to certain transfers of residual interests by foreign persons to
United States persons. See "CERTAIN FEDERAL INCOME TAX CONSEQUENCES -- Tax
Treatment of Foreign Investors."
ADMINISTRATIVE MATTERS
The REMIC's books must be maintained on a calendar year basis and the
REMIC must file an annual federal income tax return. The REMIC will also be
subject to the procedural and administrative rules of the Code applicable to
partnerships, including the determination of any adjustments to, among other
things, items of REMIC income, gain, loss, deduction, or credit, by the IRS
in a unified administrative proceeding.
TAX STATUS AS A GRANTOR TRUST
General. In the opinion of Brown & Wood llp, Cadwalader, Wickersham & Taft
or Orrick, Herrington & Sutcliffe llp (as specified in the related Prospectus
Supplement), special counsel to the Depositor, if a REMIC election is not
made with respect to a Series of Certificates, the Trust Fund will be
classified for federal income tax purposes as a grantor trust under Subpart
E, Part 1 of Subchapter J of the Code and not as an association taxable as a
corporation. In some Series ("Pass-Through Certificates"), there will be no
separation of the principal and interest payments on the Mortgage Loans. In
such circumstances, a Certificateholder will be considered to have purchased
an undivided interest in each of the Mortgage Loans. In other cases
("Stripped Certificates"), sale of the Certificates will produce a separation
in the ownership of the principal payments and interest payments on the
Mortgage Loans.
Each Certificateholder must report on its federal income tax return its
pro rata share of the gross income derived from the Mortgage Loans (not
reduced by the amount payable as fees to the Trustee and the Master Servicer
and similar fees (collectively, the "Trustee/Master Servicer Fee")), at the
same time and in the same manner as such items would have been reported under
the Certificateholder's tax accounting method had it held its interest in the
Mortgage Loans directly, received directly its share of the amounts received
with respect to the Mortgage Loans, and paid directly its share of the
Trustee/Master Servicer Fees. In the case of Pass-Through Certificates, such
gross income will consist of a pro rata share of all of the income derived
from all of the Mortgage Loans and, in the case of Stripped Certificates,
such income will consist of a pro rata share of the income derived from each
stripped bond or stripped coupon in which the Certificateholder owns an
interest. The Holder of a Certificate will generally be entitled to deduct
such Trustee/Master Servicer Fees under Section 162 or Section 212 of the
Code to the extent that
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such Trustee/Master Servicer Fees represent "reasonable" compensation for the
services rendered by the Trustee and the Master Servicer. In the case of a
noncorporate holder, however, Trustee/Master Servicer Fees (to the extent not
otherwise disallowed, e.g., because they exceed reasonable compensation) will
be deductible in computing such Holder's regular tax liability only to the
extent that such fees, when added to other miscellaneous itemized deductions,
exceed 2% of adjusted gross income and may not be deductible to any extent in
computing such Holder's alternative minimum tax liability. Further, other
Sections of the Code limit the amount of itemized deductions otherwise
allowable.
Discount or Premium on Pass-Through Certificates. The Holder's purchase
price of a Pass-Through Certificate is to be allocated among the Mortgage
Loans in proportion to their fair market values, determined as of the time of
purchase of the Certificates. In the typical case, the Trustee believes it is
reasonable for this purpose to treat each Mortgage Loan as having a fair
market value proportional to the share of the aggregate principal balances of
all of the Mortgage Loans that it represents, since the Mortgage Loans,
unless otherwise specified in the applicable Prospectus Supplement, will have
a relatively uniform interest rate and other common characteristics. To the
extent that the portion of the purchase price of a Certificate allocated to a
Mortgage Loan (other than to a right to receive any accrued interest thereon
and any undistributed principal payments) is less than or greater than the
portion of the principal balance of the Mortgage Loan allocable to the
Certificate, the interest in the Mortgage Loan allocable to the Certificate
will be deemed to have been acquired at a discount or premium, respectively.
The treatment of any discount will depend on whether the discount
represents OID or market discount. In the case of a Mortgage Loan with OID in
excess of a prescribed de minimis amount, a Holder of a Certificate will be
required to report as interest income in each taxable year its share of the
amount of OID that accrues during that year, determined under a constant
yield method by reference to the initial yield to maturity of the Mortgage
Loan, in advance of receipt of the cash attributable to such income and
regardless of the method of federal income tax accounting employed by that
Holder. OID with respect to a Mortgage Loan could arise, for example, by
virtue of the financing of points by the originator of the Mortgage Loan, or
by virtue of the charging of points by the originator of the Mortgage Loan in
an amount greater than a statutory de minimis exception, in circumstances
under which the points are not currently deductible pursuant to applicable
Code provisions. However, the Code provides for a reduction in the amount of
OID includible in the income of a Holder who acquires an obligation after its
initial issuance at a price greater than the sum of the original issue price
of the Mortgage Loan and the previously accrued OID, less prior payments of
principal. Accordingly, if the Mortgage Loans acquired by a Certificateholder
are purchased at a price equal to the then unpaid principal amount of such
Mortgage Loans, any OID should be reduced or eliminated.
Certificateholders also may be subject to the market discount rules of
Sections 1276-1278 of the Code. A Certificateholder that acquires an interest
in Mortgage Loans with more than a prescribed de minimis amount of "market
discount" (generally, the excess of the principal amount of the Mortgage
Loans over the purchaser's purchase price) will be required under Section
1276 of the Code to include accrued market discount in income as ordinary
income in each month, but limited to an amount not exceeding the principal
payments on the Mortgage Loans received in that month and, if the
Certificates are sold, the gain realized. Such market discount would accrue
in a manner to be provided in Treasury regulations. The legislative history
of the 1986 Act indicates that, until such regulations are issued, such
market discount would in general accrue either (i) on the basis of a constant
interest rate or (ii) in the ratio of (a) in the case of Mortgage Loans not
originally issued with OID, stated interest payable in the relevant period to
total stated interest remaining to be paid at the beginning of the period, or
(b) in the case of Mortgage Loans originally issued at a discount, OID in the
relevant period to total OID remaining to be paid.
Section 1277 of the Code provides that, regardless of the origination
date, the excess of interest paid or accrued to purchase or carry a loan with
market discount over interest received on such loan is allowed as a current
deduction only to the extent such excess is greater than the market discount
that accrued during the taxable year in which such interest expense was
incurred. In general, the deferred portion of any interest expense will be
deductible when such market discount is included in income, including upon
the sale, disposition, or repayment of the loan. A Holder may elect to
include market discount in income currently as it accrues, on all market
discount obligations acquired by such Holder during the taxable year such
election is made and thereafter, in which case the interest deferral rule
discussed above will not apply.
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A Certificateholder who purchases a Certificate at a premium generally
will be deemed to have purchased its interest in the underlying Mortgage
Loans at a premium. A Certificateholder who holds a Certificate as a capital
asset may generally elect under Section 171 of the Code to amortize such
premium as an offset to interest income on the Mortgage Loans (and not as a
separate deduction item) on a constant yield method. The legislative history
of the 1986 Act suggests that the same rules that will apply to the accrual
of market discount (described above) will generally also apply in amortizing
premium with respect to Mortgage Loans originated after September 27, 1985.
If a Holder makes an election to amortize premium, such election will apply
to all taxable debt instruments held by such Holder at the beginning of the
taxable year in which the election is made, and to all taxable debt
instruments acquired thereafter by such Holder, and will be irrevocable
without the consent of the IRS. Purchasers who pay a premium for the
Certificates should consult their tax advisers regarding the election to
amortize premium and the method to be employed. Although the law is somewhat
unclear regarding recovery of premium allocable to Mortgage Loans originated
before September 28, 1985, it is possible that such premium may be recovered
in proportion to payments of Mortgage Loan principal.
Discount or Premium on Stripped Certificates. A Stripped Certificate may
represent a right to receive only a portion of the interest payments on the
Mortgage Loans, a right to receive only principal payments on the Mortgage
Loans, or a right to receive certain payments of both interest and principal.
Certain Stripped Certificates ("Ratio Strip Certificates") may represent a
right to receive differing percentages of both the interest and principal on
each Mortgage Loan. Pursuant to Section 1286 of the Code, the separation of
ownership of the right to receive some or all of the interest payments on an
obligation from ownership of the right to receive some or all of the
principal payments results in the creation of "stripped bonds" with respect
to principal payments and "stripped coupons" with respect to interest
payments. Section 1286 of the Code applies the OID rules to stripped bonds
and stripped coupons. For purposes of computing OID, a stripped bond or a
stripped coupon is treated as a debt instrument issued on the date that such
stripped interest is purchased with an issue price equal to its purchase
price or, if more than one stripped interest is purchased, the ratable share
of the purchase price allocable to such stripped interest. The Code, Final
Regulations, Proposed Regulations (as defined herein), and judicial decisions
provide little direct guidance as to how the OID rules are to apply to
Stripped Certificates, although regulations indicate that in determining
whether the portion of the interest on a Mortgage Loan payable to a
particular Class of Certificates is "qualified stated interest," all
principal and interest payments payable to that Class from that Mortgage Loan
are taken into account. Under the method described above for REMIC Regular
Interest Certificates (the "Cash Flow Bond Method"), a prepayment assumption
is used and periodic recalculations are made which take into account with
respect to each accrual period the effect of prepayments during such period.
The Code prescribes the same method for debt instruments "secured by" other
debt instruments, the maturity of which may be affected by prepayments on the
underlying debt instruments. However, the Code does not, absent Treasury
regulations, appear specifically to cover instruments such as the Stripped
Certificates which technically represent ownership interests in the
underlying Mortgage Loans, rather than being debt instruments "secured by"
those loans. Nevertheless, it is believed that the Cash Flow Bond Method is a
reasonable method of reporting income for such Certificates, and it is
expected that OID will be reported on that basis unless otherwise specified
in the related Prospectus Supplement. In applying the calculation to Stripped
Certificates, the Trustee will treat all payments to be received with respect
to a Class of Certificates as payments on a single installment obligation.
The IRS could, however, assert that OID must be calculated separately for
each Mortgage Loan underlying a Class of Certificates.
Under certain circumstances, if the Mortgage Loans prepay at a rate faster
than the Prepayment Assumption, the use of the Cash Flow Bond Method may
accelerate a Certificateholder's recognition of income. If, however, the
Mortgage Loans prepay at a rate slower that the prepayment assumption, in
some circumstances the use of this method may decelerate a
Certificateholder's recognition of income.
In the case of a Stripped Certificate the payments on which consist solely
or primarily of a specified portion of the interest payments on the Mortgage
Loans ("Interest Weighted Stripped Certificate"), additional uncertainty
exists because of the enhanced potential for applicability of the contingent
principal provisions of the Contingent Regulations. The Contingent
Regulations do not, however, apply to debt instruments subject to Section
1272(a)(6).
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Possible Alternative Characterizations. The characterizations of the
Stripped Certificates described above are not the only possible
interpretations of the applicable Code provisions. Among other possibilities,
the IRS could contend that (i) in certain Series, each Stripped Certificate
other than an Interest Weighted Stripped Certificate is composed of an
unstripped, undivided ownership interest in Mortgage Loans and an installment
obligation consisting of stripped principal payments; (ii) the Stripped
Certificates other than the Interest Weighted Stripped Certificates are
subject to the contingent payment provisions of the Proposed Regulations; or
(iii) each Interest Weighted Stripped Certificate is composed of an
unstripped undivided ownership interest in Mortgage Loans and an installment
obligation consisting of stripped interest payments.
Given the variety of alternatives for treatment of the Certificates and
the different federal income tax consequences that result from each
alternative, potential purchasers are urged to consult their own tax advisers
regarding the proper treatment of the Certificates for federal income tax
purposes.
Character as Qualifying Mortgage Loans. In the case of Stripped
Certificates there is no specific legal authority existing regarding whether
the character of the Certificates, for federal income tax purposes, will be
the same as the Mortgage Loans. The IRS could take the position that the
Mortgage Loans' character is not carried over to the Certificates in such
circumstances. Pass-Through Certificates will be, and, although the matter is
not free from doubt, Stripped Certificates should be considered to represent
"real estate assets" within the meaning of Section 856(c)(4)(A) of the Code,
and "loans secured by an interest in real property" within the meaning of
Section 7701(a)(19)(C)(v) of the Code (except that if the underlying Mortgage
Loans are not residential Mortgage Loans, the Certificates will not so
qualify): interest income attributable to the Certificates should be
considered to represent "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. Reserves or funds underlying the Certificates may
cause a proportionate reduction in the above-described qualification of
Certificates.
Sale of Certificates. As a general rule, if a Certificate is sold, gain or
loss will be recognized by the Holder thereof in an amount equal to the
difference between the amount realized on the sale and the
Certificateholder's adjusted tax basis in the Certificate. Such gain or loss
will generally be capital gain or loss if the Certificate is held as a
capital asset. In the case of Pass-Through Certificates, such tax basis will
generally equal the Holder's cost of the Certificate increased by any
discount income with respect to the loans represented by such Certificate
previously included in income, and decreased by the amount of any
distributions of principal previously received with respect to the
Certificate. Such gain, to the extent not otherwise treated as ordinary
income, will be treated as ordinary income to the extent of any accrued
market discount not previously reported as income. Gain attributable to a
Certificate held as part of a conversion transaction or subject to an
election under Code Section 163(d)(4) may also be treated in whole or part as
ordinary income. See "--Sale or Exchange of REMIC Regular Interest
Certificates" above. In the case of Stripped Certificates, the tax basis will
generally equal the Certificateholder's cost for the Certificate, increased
by any discount income with respect to the Certificate previously included in
income, and decreased by the amount of all payments previously received with
respect to such Certificate.
MISCELLANEOUS TAX ASPECTS
Backup Withholding. A Certificateholder, other than a Residual Interest
Certificateholder, may, under certain circumstances, be subject to "backup
withholding" at the rate of 31% with respect to distributions or the proceeds
of a sale of certificates to or through brokers that represent interest or
original issue discount on the Certificates. This withholding generally
applies if the Holder of a Certificate (i) fails to furnish the Trustee with
its taxpayer identification number ("TIN"); (ii) furnishes the Trustee an
incorrect TIN; (iii) fails to report properly interest, dividends or other
"reportable payments" as defined in the Code; or (iv) under certain
circumstances, fails to provide the Trustee or such Holder's securities
broker with a certified statement, signed under penalty of perjury, that the
TIN provided is its correct TIN and that the Holder is not subject to backup
withholding. Backup withholding will not apply, however, with respect to
certain payments made to Certificateholders, including payments to certain
exempt recipients (such as exempt organizations) and to certain Nonresidents
(as defined below). Holders
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of the Certificates should consult their tax advisers as to their
qualification for exemption from backup withholding and the procedure for
obtaining the exemption.
Final regulations dealing with withholding tax on income paid to foreign
persons, backup withholding on income paid to U.S. persons and related
matters (the "New Withholding Regulations") were issued by the Treasury
Department on October 6, 1997. The New Withholding Regulations will generally
be effective for payments made after December 31, 1998, subject to certain
transition rules. Prospective Certificateholders are strongly urged to
consult their own tax advisors with respect to the New Withholding
Regulations.
The Trustee will report to the Certificateholders and to the Master
Servicer for each calendar year the amount of any "reportable payments"
during such year and the amount of tax withheld, if any, with respect to
payments on the Certificates.
TAX TREATMENT OF FOREIGN INVESTORS
Under the Code, unless interest (including OID) paid on a Certificate
(other than a Residual Interest Certificate) is considered to be "effectively
connected" with a trade or business conducted in the United States by a
nonresident alien individual, foreign partnership or foreign corporation
("Nonresidents"), such interest will normally qualify as portfolio interest
(except where (i) the recipient is a holder, directly or by attribution, of
10% or more of the capital or profits interest in the issuer or (ii) the
recipient is a controlled foreign corporation as to which the issuer is a
related person) and will be exempt from Federal income tax. Upon receipt of
appropriate ownership statements, the issuer normally will be relieved of
obligations to withhold tax from such interest payments. These provisions
supersede the generally applicable provisions of United States law that would
otherwise require the issuer to withhold at a 30% rate (unless reduced or
eliminated by an applicable tax treaty) on, among other things, interest and
other fixed or determinable, annual or periodical income paid to
Nonresidents. Holders of Pass-Through Certificates and Stripped Certificates,
including Ratio Certificates, however, may be subject to withholding to the
extent that the Mortgage Loans were originated on or before July 18, 1984. In
addition, prospective Certificateholders who are Nonresidents are strongly
urged to consult their own tax advisors with respect to the New Withholding
Regulations. See "--Miscellaneous Tax Aspects -- Backup Withholding" above.
Interest and OID of Certificateholders who are foreign persons are not
subject to withholding if they are effectively connected with a United States
business conducted by the Certificateholder. They will, however, generally be
subject to the regular United States income tax.
Payments to Holders of Residual Interest Certificates who are foreign
persons will generally be treated as interest for purposes of the 30% (or
lower treaty rate) United States withholding tax. Holders should assume that
such income does not qualify for exemption from United States withholding tax
as "portfolio interest." It is clear that, to the extent that a payment
represents a portion of REMIC taxable income that constitutes excess
inclusion income, a Holder of a Residual Interest Certificate will not be
entitled to an exemption from or reduction of the 30% (or lower treaty rate)
withholding tax. If the payments are subject to United States withholding
tax, they generally will be taken into account for withholding tax purposes
only when paid or distributed (or when the Residual Interest Certificate is
disposed of). The Treasury has statutory authority, however, to promulgate
regulations which would require such amounts to be taken into account at an
earlier time in order to prevent the avoidance of tax. Such regulations
could, for example, require withholding prior to the distribution of cash in
the case of Residual Interest Certificates that do not have significant
value. Under the Regulations, if a Residual Interest Certificate has tax
avoidance potential, a transfer of a Residual Interest Certificate to a
Nonresident will be disregarded for all Federal tax purposes. A Residual
Interest Certificate has tax avoidance potential unless, at the time of the
transfer, the transferor reasonably expects that the REMIC will distribute to
the transferee Residual Interest holder amounts that will equal at least 30%
of each excess inclusion, and that such amounts will be distributed at or
after the time at which the excess inclusion accrues and not later than the
close of the calendar year following the calendar year of accrual. If a
Nonresident transfers a Residual Interest Certificate to a United States
person, and if the transfer has the effect of allowing the transferor to
avoid tax on accrued excess inclusions, then the transfer is
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disregarded and the transferor continues to be treated as the owner of the
Residual Interest Certificate for purposes of the withholding tax provisions
of the Code. See "CERTAIN FEDERAL INCOME TAX CONSEQUENCES -- Excess
Inclusions."
STATE TAX CONSIDERATIONS
In addition to the Federal income tax consequences described in "CERTAIN
FEDERAL INCOME TAX CONSEQUENCES," potential investors should consider the
state income tax consequences of the acquisition, ownership, and disposition
of the Certificates. State income tax law may differ substantially from the
corresponding federal law, and this discussion does not purport to describe
any aspect of the income tax laws of any state. Therefore, potential
investors should consult their own tax advisers with respect to the various
state tax consequences of an investment in the Certificates.
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
imposes certain requirements on employee benefit plans subject to ERISA
("ERISA Plans") and prohibits certain transactions between ERISA Plans and
persons who are parties in interest (as defined in ERISA) ("parties in
interest") with respect to assets of such Plans. Section 4975 of the Code
prohibits a similar set of transactions between certain plans ("Code Plans,"
and together with ERISA Plans, "Plans") and persons who are disqualified
persons (as defined in the Code) (hereafter, also "parties in interest") with
respect to Code Plans. Certain employee benefit plans, such as governmental
plans and church plans (if no election has been made under Section 410(d) of
the Code), are not subject to the requirements of ERISA or Section 4975 of
the Code, and assets of such plans may be invested in Certificates, subject
to the provisions of other applicable federal and state law. Any such plan
which is qualified under Section 401(a) of the Code and exempt from taxation
under Section 501(a) of the Code is, however, subject to the prohibited
transaction rules set forth in Section 503 of the Code.
Investments by ERISA Plans are subject to ERISA's general fiduciary
requirements, including the requirement of investment prudence and
diversification and the requirement that investments be made in accordance
with the documents governing the ERISA Plan. Before investing in a
Certificate, an ERISA Plan fiduciary should consider, among other factors,
whether to do so is appropriate in view of the overall investment policy and
liquidity needs of the ERISA Plan. Such fiduciary should especially consider
the sensitivity of the investments to the rate of principal payments
(including prepayments) on the Mortgage Loans, as discussed in the Prospectus
Supplement related to a Series.
Based on the holding of the United States Supreme Court in John Hancock
Mutual Life Ins. Co. v. Harris Trust and Savings Bank, 510 U.S. 86 (1993),
the assets of Plan may include assets held in the general account of an
insurance company. Before investing in a Certificate, an insurance company
should consider the effects of such holding on an investment of its general
accounts and the potential applicability of ERISA and Section 4975 of the
Code.
PROHIBITED TRANSACTIONS
Section 406 of ERISA and Section 4975 of the Code prohibit parties in
interest with respect to ERISA Plans and Code Plans from engaging in certain
transactions involving such Plans or "plan assets" of such Plans unless a
statutory or administrative exemption applies to the transaction. Section
4975 of the Code and Sections 502(i) and 502(l) of ERISA provide for the
imposition of certain excise taxes and civil penalties on certain persons
that engage or participate in such prohibited transactions. The Depositor,
the Master Servicer, any Special Servicer or the Trustee or certain
affiliates thereof may be considered or may become parties in interest with
respect to an investing Plan. If so, the acquisition or holding of
Certificates by, on behalf of or with "plan assets" of such Plan may be
considered to give rise to a "prohibited transaction" within the meaning of
ERISA and/or the Section 4975 of Code unless an administrative exemption
described below or some other exemption is available.
Special caution should be exercised before "plan assets" of a Plan are
used to purchase a Certificate if, with respect to such assets, the
Depositor, the Master Servicer, any Special Servicer or the Trustee or
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an affiliate thereof either (a) has investment discretion with respect to the
investment of such assets, or (b) has authority or responsibility to give, or
regularly gives investment advice with respect to such assets for a fee and
pursuant to an agreement or understanding that such advice will serve as a
primary basis for investment decisions with respect to such assets and that
such advice will be based on the particular investment needs of the Plan.
Further, if the assets included in a Trust Fund were deemed to constitute
"plan assets," a Plan's investment in the Certificates may be deemed to
constitute a delegation, under ERISA, of the duty to manage plan assets by
the fiduciary deciding to invest in the Certificates, and certain
transactions involved in the operation of the Trust Fund may be deemed to
constitute prohibited transactions under ERISA and/or Section 4975 of the
Code. Neither ERISA nor Section 4975 of the Code defines the term "plan
assets."
The United States Department of Labor (the "Department") has issued
regulations (the "Regulations") concerning whether or not a Plan's assets
would be deemed to include an interest in the underlying assets of an entity
(such as the Trust Fund), for purposes of the reporting and disclosure and
general fiduciary responsibility provisions of ERISA and the prohibited
transaction provisions of ERISA and Section 4975 of the Code, if the Plan
acquires an "equity interest" (such as a Certificate) in such an entity.
Certain exceptions are provided in the Regulations whereby an investing
Plan's assets would be deemed merely to include its interest in the
Certificates instead of being deemed to include an interest in the assets of
the Trust Fund. However, it cannot be predicted in advance, nor can there be
a continuing assurance whether such exceptions may be met, because of the
factual nature of certain of the rules set forth in the Regulations. For
example, one of the exceptions in the Regulations states that the underlying
assets of an entity will not be considered "plan assets" if less than 25% of
the value of each class of equity interests is held by "benefit plan
investors," which are defined as ERISA Plans, Code Plans, and employee
benefit plans not subject to ERISA (for example, governmental plans), but
this exemption is tested immediately after each acquisition of an equity
interest in the entity whether upon initial issuance or in the secondary
market.
Pursuant to the Regulations, if the assets of the Trust Fund were deemed
to be "plan assets" by reason of the investment of assets of a Plan in any
Certificates, the "plan assets" of such Plan would include an undivided
interest in the Mortgage Loans, the mortgages underlying the Mortgage Loans
and any other assets held in the Trust Fund. Therefore, because the Mortgage
Loans and other assets held in the Trust Fund may be deemed to be "plan
assets" of each Plan that purchases Certificates, in the absence of an
exemption, the purchase, sale or holding of Certificates of any Series or
Class by or with "plan assets" of a Plan may result in a prohibited
transaction and the imposition of civil penalties or excise taxes.
Depending on the relevant facts and circumstances, certain prohibited
transaction exemptions may apply to the purchase, sale or holding of
Certificates of any Series or Class by a Plan, for example, Prohibited
Transaction Class Exemption ("PTCE") 96-23, which exempts certain
transactions effected on behalf of a plan by an "in-house asset manager";
95-60, which exempts certain transactions with insurance company general
accounts; PTCE 91-38 (formerly PTCE 80-51), which exempts certain
transactions between bank collective investment funds and parties in
interest; PTCE 90-1 (formerly PTCE 78-19), which exempts certain transactions
between insurance company pooled separate accounts and parties in interest;
or PTCE 84-14, which exempts certain transactions effected on behalf of a
plan by a "qualified professional asset manager." Also, the Department has
issued administrative exemptions from application of certain prohibited
transaction restrictions of ERISA and Section 4975 of the Code to most
underwriters of mortgage-backed securities (each, an "Underwriter's
Exemption"). Such an Underwriter's Exemption can only apply to
mortgage-backed securities which, among other conditions, are sold in an
offering with respect to which such underwriter serves as the sole or a
managing underwriter, or as a selling or placement agent. If such an
Underwriter's Exemption might be applicable to a Series of Certificates, the
related Prospectus Supplement will refer to such possibility.
Any fiduciary or other Plan investor (which could include an insurance
company investing general accounts assets) who proposes to invest "plan
assets" of a Plan in Certificates of any Series or Class should consult with
its counsel with respect to the potential consequences under ERISA and
Section 4975 of the Code of any such acquisition and ownership of such
Certificates.
58
<PAGE>
UNRELATED BUSINESS TAXABLE INCOME -- RESIDUAL INTERESTS
The purchase of a Certificate evidencing an interest in the Residual
Interest in a Series that is treated as a REMIC by any employee benefit or
other plan that is exempt from taxation under Code Section 501(a), including
most varieties of Plans, may give rise to "unrelated business taxable income"
as described in Code Sections 511-515 and 860E. Further, prior to the
purchase of an interest in a Residual Interest, a prospective transferee may
be required to provide an affidavit to a transferor that it is not, nor is it
purchasing an interest in a Residual Interest on behalf of, a "Disqualified
Organization," which term as defined above includes certain tax-exempt
entities not subject to Code Section 511, such as certain governmental plans,
as discussed above under "CERTAIN FEDERAL INCOME TAX CONSEQUENCES -- Taxation
of Holders of Residual Interest Certificates" and "--Restrictions on
Ownership and Transfer of Residual Interest Certificates."
Due to the complexity of these rules and the penalties imposed upon
Persons involved in prohibited transactions, it is particularly important
that individuals responsible for investment decisions with respect to Plans
consult with their counsel regarding the consequences under ERISA and/or
Section 4975 of the Code of their acquisitions and ownership of Certificates.
The sale of Certificates to a Plan is in no respect a representation by
the Depositor or the applicable underwriter that such investment meets all
relevant legal requirements with respect to investments by Plans generally or
any particular Plan, or that such investment is appropriate for Plans
generally or any particular Plan.
LEGAL INVESTMENT
The Prospectus Supplement for each Series will identify those Classes of
Certificates, if any, which constitute "mortgage related securities" for
purposes of the Secondary Mortgage Market Enhancement Act of 1984 (the
"Enhancement Act").
Such Classes will constitute "mortgage related securities" for so long as
they (i) are rated in one of the two highest rating categories by at least
one nationally recognized statistical rating organization and (ii) are part
of a Series evidencing interests in a trust fund consisting of loans
originated by certain types of originators as specified in the Enhancement
Act (the "SMMEA Certificates"). As "mortgage related securities," the SMMEA
Certificates will constitute legal investments for persons, trusts,
corporations, partnerships, associations, business trusts and business
entities (including, but not limited to, state-chartered savings banks,
commercial banks, savings and loan associations and insurance companies, as
well as trustees and state government employee retirement systems) created
pursuant to or existing under the laws of the United States or of any state
(including the District of Columbia and Puerto Rico) whose authorized
investments are subject to state regulation to the same extent that, under
applicable law, obligations issued by or guaranteed as to principal and
interest by the United States or any agency or instrumentality thereof
constitute legal investments for such entities. Pursuant to the Enhancement
Act, a number of states enacted legislation, on or before the October 3, 1991
cutoff for such enactments, limiting to varying extents the ability of
certain entities (in particular, insurance companies) to invest in mortgage
related securities, in most cases by requiring the affected investors to rely
solely upon existing state law, and not the Enhancement Act. Pursuant to
Section 347 of the Riegle Community Development and Regulatory Improvement
Act of 1994, which amended the definition of "mortgage related security" to
include, in relevant part, certificates satisfying the rating and qualified
originator requirements for "mortgage related securities," but evidencing
interests in a trust fund consisting, in whole or in part, of first liens on
one or more parcels of real estate upon which are located one or more
commercial structures, states were authorized to enact legislation, on or
before September 23, 2001, specifically referring to Section 347 and
prohibiting or restricting the purchase, holding or investment by
state-regulated entities in such types of certificates. Accordingly, the
investors affected by such legislation when and if enacted, will be
authorized to invest in SMMEA Certificates only to the extent provided in
such legislation.
The Enhancement Act also amended the legal investment authority of
federally chartered depository institutions as follows: federal savings and
loan associations and federal savings banks may invest in, sell or otherwise
deal with, mortgage related securities without limitation as to the
percentage of their assets
59
<PAGE>
represented thereby, 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 set forth in 12 U.S.C. Section 24 (Seventh), subject in
each case to such regulations as the applicable federal regulatory authority
may prescribe. In this connection, effective December 31, 1996, the Office of
the Comptroller of the Currency (the "OCC") has 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 any such bank's capital and surplus (but
subject to compliance with certain general standards concerning "safety and
soundness" and retention of credit information in 12 C.F.R. Section 1.5),
certain "Type IV securities," defined in 12 C.F.R. Section 1.2(l) to include
certain "commercial mortgage-related securities" and "residential
mortgage-related securities." As so defined, "commercial mortgage-related
security" and "residential mortgage-related security" mean, in relevant part,
"mortgage related security" within the meaning of the Enhancement Act,
provided that, in the case of a "commercial mortgage-related security," it
"represents ownership of a promissory note or certificate of interest or
participation that is directly secured by a first lien on one or more parcels
of real estate upon which one or more commercial structures are located and
that is fully secured by interests in a pool of loans to numerous obligors."
In the absence of any rule or administrative interpretation by the OCC
defining the term "numerous obligors," no representation is made as to
whether any Class of Certificates will qualify as "commercial
mortgaged-related securities," and thus as "Type IV securities," for
investment by national banks. Federal credit unions should review the NCUA
Letter to Credit Unions No. 96, as modified by Letter to Credit Unions No.
108, which includes guidelines to assist federal credit unions in making
investment decisions for mortgage related securities. The NCUA has adopted
rules, codified as 12 C.F.R. Section Section 703.5(f) through (k), which
prohibit federal credit unions from investing in certain mortgage related
securities (including securities such as certain Series, Classes or
subclasses of Certificates), except under limited circumstances.
All depository institutions considering an investment in the Certificates
should review the Supervisory Policy Statement on Securities Activities dated
January 28, 1992, as revised April 15, 1994 (the "Policy Statement") of the
Federal Financial Institutions Examination Council. The Policy Statement,
which has been adopted by the Board of Governors of the Federal Reserve
System, the FDIC, the Comptroller of the Currency and the Office of Thrift
Supervision and by the NCUA (with certain modifications) prohibits depository
institutions from investing in certain "high-risk" mortgage securities
(including securities such as certain Series, Classes or subclasses of
Certificates), except under limited circumstances, and sets forth certain
investment practices deemed to be unsuitable for regulated institutions.
Institutions whose investment activities are subject to regulation by
federal or state authorities should review rules, policies and guidelines
adopted from time to time by such authorities before purchasing any SMMEA
Certificates, as SMMEA Certificates may be deemed unsuitable investments, or
may otherwise be restricted, under such rules, policies or guidelines (in
certain instances irrespective of the Enhancement Act).
The foregoing does not take into consideration the applicability of
statutes, rules, regulations, orders, guidelines or agreements generally
governing investments made by a particular investor, including, but not
limited to, "prudent investor" provisions, percentage-of-assets limits,
provisions which may restrict or prohibit investment in securities which are
not "interest bearing" or "income-paying," and provisions which may restrict
or prohibit investments in securities which are issued in book-entry form.
Investors should consult with their own legal advisers in determining
whether, and to what extent, SMMEA Certificates constitute legal investments
for such investors.
Other Classes of Certificates will not constitute "mortgage related
securities" under the Enhancement Act (the "Non-SMMEA Certificates"). The
appropriate characterization of the Non-SMMEA Certificates under various
legal investment restrictions, and thus the ability of investors subject to
these restrictions to purchase Non-SMMEA Certificates, may be subject to
significant interpretive uncertainties. All investors whose investment
authority is subject to legal restrictions should consult their own legal
advisers to determine whether, and to what extent, the Non-SMMEA Certificates
will constitute legal investments for them.
60
<PAGE>
Except as to the status of SMMEA Certificates identified in the Prospectus
Supplement for a Series as "mortgage related securities" under the
Enhancement Act, the Depositor will make no representation as to the proper
characterization of the Certificates for legal investment or financial
institution regulatory purposes, or as to the ability of particular investors
to purchase Certificates under applicable legal investment restrictions. The
uncertainties described above (and any unfavorable future determinations
concerning legal investment or financial institution regulatory
characteristics of the Certificates) may adversely affect the liquidity of
the Certificates.
PLAN OF DISTRIBUTION
Each Series of Certificates offered hereby and by means of the related
Prospectus Supplements may be sold directly by the Depositor or may be
offered through Credit Suisse First Boston Corporation, an affiliate of the
Depositor, or underwriting syndicates represented by Credit Suisse First
Boston Corporation (the "Underwriters"). The Prospectus Supplement with
respect to each such Series of Certificates will set forth the terms of the
offering of such Series of Certificates, including the name or names of the
Underwriters, the proceeds to the Depositor, and either the initial public
offering price, the discounts and commissions to the Underwriters and any
discounts or concessions allowed or reallowed to certain dealers, or the
method by which the price at which the Underwriters will sell such
Certificates will be determined.
Unless otherwise specified in the related Prospectus Supplement, the
Underwriters will be obligated to purchase all of the Certificates of a
Series described in the related Prospectus Supplement with respect to such
Series if any such Certificates are purchased. The Certificates may be
acquired by the Underwriters for their own account and may be resold from
time to time in one or more transactions, including negotiated transactions,
at a fixed public offering price or at varying prices determined at the time
of sale.
If specified in the applicable Prospectus Supplement, the Depositor will
authorize Underwriters or other persons acting as the Depositor's agents to
solicit offers by certain institutions to purchase the Certificates from the
Depositor pursuant to contracts providing for payment and delivery on a
future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but in all
cases such institutions must be approved by the Depositor. The obligation of
any purchaser under any such contract will be subject to the condition that
the purchase of the offered Certificates shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is
subject. The Underwriters and such other agents will not have any
responsibility in respect of the validity or performance of such contracts.
The Depositor may also sell the Certificates offered hereby by means of
the related Prospectus Supplements from time to time in negotiated
transactions or otherwise, at prices determined at the time of sale. The
Depositor may effect such transactions by selling Certificates to or through
dealers, and such dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from the Depositor and any
purchasers of Certificates for whom they may act as agents.
The place and time of delivery for each Series of Certificates offered
hereby and by means of the related Prospectus Supplement will be set forth in
the Prospectus Supplement with respect to such Series.
LEGAL MATTERS
Certain legal matters relating to the Certificates offered hereby will be
passed upon for the Depositor and for the Underwriters by Brown & Wood LLP,
One World Trade Center, New York, New York 10048; Cadwalader, Wickersham &
Taft, 100 Maiden Lane, New York, New York 10038; or Orrick, Herrington &
Sutcliffe LLP, 666 Fifth Avenue, New York, New York 10103-0001, as specified
in the related Prospectus Supplement.
61
<PAGE>
INDEX OF DEFINED TERMS
1986 Act 47
A
Accrual Certificates 5
Act 2
ADA 42
Agreement 11
Asset Conservation Act 34
B
Balloon Mortgage Loans 7
Bankruptcy Code 33
Borrower 17
C
Cash Flow Bond Method 54
CERCLA 9, 34
Certificateholders 10, 12
Certificates Cover, 11
Classes Cover
Closing Date 18
Code 15
Code Plans 57
Collection Account 13
Commission 2
Compound Interest Certificates 44
Contingent Regulations 46
Covered Trust 8
CSFBMC 11
Cut-Off Date 13
D
Debt Service Reduction 37
Deficient Valuation 37
Deleted Mortgage Loans 21
Department 58
Depositor Cover
Disqualified Organization 51, 59
Distribution Account 13
Distribution Date 12
DTC 10
E
Enhancement 27
Enhancement Act 59
ERISA 57
ERISA Plans 57
Escrow Account 22
Event of Default 26
F
FHA 19
FHLMC 12
FNMA 12
Form 8-K 18
62
<PAGE>
G
Garn-St Germain Act 38
GNMA 12
H
Holders 12
HUD 19
I
Installment Contracts 17
Insurance Proceeds 13
Interest Weighted Certificate 45
Interest Weighted Stripped Certificate 54
IRS 44, 46
L
L/C Bank 28
L/C Percentage 28
Lease 40
Lessee 40
Liquidation Proceeds 13
M
Master Servicer 22
Master Servicer Remittance Date 13
Mortgage Interest Rate 21
Mortgage Loan 17
Mortgage Loan File 18
Mortgage Loan Groups 18
Mortgage Loan Schedule 18
Mortgage Loans Cover
Mortgage Pool Cover, 11
Mortgaged Property 17
Mortgages 17
Multiple Variable Rate 45
N
NCUA 40
New Withholding Regulations 56
Nonresidents 56
Non-SMMEA Certificates 60
Note 17
O
OCC 60
OID 44
OID Regulations 44
Outstanding Balance 37
P
Pass-Through Certificates 52
Pass-Through Rate 2
Permitted Investments 14
Plans 57
Policy Statement 60
Prepayment Assumption 44
Prepayment Premium 13
Property Protection Expenses 13
63
<PAGE>
PTCE 58
R
Rating Agency 11
Ratio Strip Certificates 54
RCRA 35
Registration Statement 2
Regular Interest Certificates 44
Regular Interests 43
Regulations 58
Relief Act 39
REMIC Cover
REMIC Regulations 51
REO Account 13
REO Property 13
Reserve Fund 28
Residual Interest Certificate 49
Residual Interests 43
S
Senior Certificates 27
Series Cover
Servicing Fee 24
Simple Interest Loans 17
Single Variable Rate 44
SMMEA Certificates 59
Special Servicer 22
Specially Serviced Mortgage Loans 22
Stripped Certificates 52
Subordinate Certificates 27
Substitute Mortgage Loans 21
T
TIN 55
Title VIII 40
Trust Fund Cover, 11
Trustee 16
Trustee/Master Servicer Fee 52
U
Unaffiliated Seller 20
Underwriters 61
Underwriter's Exemption 58
U.S. Person 43
V
Voting Rights 10, 26
64
<PAGE>
This diskette contains one spreadsheet file that can be put on a
user-specified hard drive or network drive. The file "CSFB98C1.XLS" is a
Microsoft Excel(1), Version 5.0 spreadsheet. The file provides, in electronic
format, a worksheet consisting of certain loan level information shown in ANNEX
A and ANNEX B of the Prospectus Supplement, a worksheet consisting of the table
"Mortgage Notes" in the Prospectus Supplement and ANNEX C thereto.
Open the file as you would normally open any spreadsheet in Microsoft
Excel. After the file is opened, a securities law legend will be displayed.
READ THE LEGEND CAREFULLY. To view the ANNEX A and ANNEX B data in the
Microsoft Excel file, open the worksheet labeled "Annex A" or "Annex B",
respectively. To view the "Mortgage Notes" data, open the worksheet labeled
"Mortgage Notes." To view the Annex C data, open the worksheet labeled "Annex
C".
- ----------
(1) Microsoft Excel is a registered trademark of Microsoft Corporation.
<PAGE>
===============================================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
DEPOSITOR, THE MORTGAGE LOAN SELLERS OR THE UNDERWRITERS. THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
AN IMPLICATION THAT THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE DEPOSITOR OR THE MORTGAGE LOAN SELLERS SINCE SUCH DATE.
-----------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
PROSPECTUS SUPPLEMENT
Reports to Certificateholders ......................... S-4
Executive Summary ..................................... S-5
Mortgage Loan Executive Summary ....................... S-6
Summary of Prospectus Supplement ...................... S-9
Risk Factors .......................................... S-29
Description of the Mortgage Loans ..................... S-63
Description of the Offered Certificates ............... S-125
Prepayment and Yield Considerations ................... S-141
The Pooling and Servicing Agreement ................... S-153
Use of Proceeds ....................................... S-187
Certain Federal Income Tax Consequences ............... S-187
ERISA Considerations .................................. S-191
Legal Investment ...................................... S-193
Underwriting .......................................... S-193
Legal Matters ......................................... S-194
Rating ................................................ S-195
Loan Characteristics .................................. Annex A
Credit Lease Loan Characteristics ..................... Annex B
Certain Information Regarding the Loan Group 2
Mortgage Loans ...................................... Annex C
Servicer Reports ...................................... Annex D
PROSPECTUS
Prospectus Supplement ................................. 2
Additional Information ................................ 2
Incorporation of Certain Information by Reference ..... 3
Risk Factors .......................................... 4
The Depositor ......................................... 11
Use of Proceeds ....................................... 11
Description of Certificates ........................... 11
The Mortgage Pools .................................... 17
Servicing of the Mortgage Loans ....................... 22
Enhancement ........................................... 27
Certain Legal Aspects of the Mortgage Loans ........... 29
Certain Federal Income Tax Consequences ............... 43
State Tax Considerations .............................. 57
ERISA Considerations .................................. 57
Legal Investment ...................................... 59
Plan of Distribution .................................. 61
Legal Matters ......................................... 61
</TABLE>
UNTIL 90 DAYS AFTER THE DATE OF THIS PROSPECTUS SUPPLEMENT, ALL DEALERS
EFFECTING TRANSACTIONS IN THE OFFERED CERTIFICATES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER THE PROSPECTUS
SUPPLEMENT AND A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS
TO DELIVER A PROSPECTUS SUPPLEMENT AND THE PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
===============================================================================
===============================================================================
CREDIT SUISSE FIRST BOSTON
MORTGAGE SECURITIES CORP.
Depositor
CREDIT SUISSE FIRST BOSTON
MORTGAGE CAPITAL LLC
and
PAINE WEBBER REAL ESTATE
SECURITIES INC.
Mortgage Loan Sellers
$
(Approximate)
Credit Suisse First Boston
Mortgage Securities Corp.
Commercial Mortgage
Pass-Through Certificates,
Series 1998-C1
$ (approximate) Class A-1A Certificates
$ (approximate) Class A-1B Certificates
$ (approximate) Class A-2MF Certificates
$ (approximate) Class A-X Certificates
$ (approximate) Class B Certificates
$ (approximate) Class C Certificates
$ (approximate) Class D Certificates
$ (approximate) Class E Certificates
PROSPECTUS SUPPLEMENT
CREDIT SUISSE FIRST BOSTON
PAINEWEBBER INCORPORATED
JUNE , 1998
===============================================================================
