<PAGE>
Filed Pursuant to Rule 424(b)(5)
Registration File No.: 333-51771
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED NOVEMBER 10, 1998
$1,688,900,000
(APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Depositor
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
CREDIT SUISSE FIRST BOSTON MORTGAGE FINANCE TRUST I
Mortgage Loan Sellers
---------------
Commercial Mortgage Pass-Through Certificates, Series 1998-C2
The trust fund will consist primarily of 217 fixed rate mortgage loans
(including a participation in a fixed rate mortgage loan) secured by first
liens on multifamily or commercial properties. The trust fund will issue
fifteen classes of certificates which will represent beneficial ownership
interests in the trust fund. See "Executive Summary" for a description of
the offered certificates. Only the following classes are offered by this
Prospectus Supplement:
<TABLE>
<CAPTION>
INITIAL APPROXIMATE
CERTIFICATE INITIAL ASSUMED RATED ASSUMED
BALANCE OR PASS- FINAL FINAL WEIGHTED
NOTIONAL THROUGH DISTRIBUTION DISTRIBUTION RATING AVERAGE
CLASS BALANCE RATE DATE DATE FITCH/ MOODY'S LIFE
- ------------------- ---------------- ------------ --------------- -------------- ---------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Class A-1 ......... 364,000,000 5.96% December 2007 Nov. 2030 AAA/AAA 5.6 years
Class A-2 ......... 979,400,000 6.30% November 2008 Nov. 2030 AAA/AAA 9.7 years
Class A-X ......... 1,919,275,079 0.99% June 2023 Nov. 2030 AAA/AAA 9.9 years
Class B ........... 105,600,000 6.59% November 2008 Nov. 2030 AA/Aa2 10.0 years
Class C ........... 105,600,000 6.84% November 2008 Nov. 2030 A/A2 10.0 years
Class D ........... 105,500,000 7.13% April 2010 Nov. 2030 BBB/Baa2 10.1 years
Class E ........... 28,800,000 7.13% January 2012 Nov. 2030 BBB-/Baa3 12.3 years
</TABLE>
The underwriter has agreed to purchase the offered certificates from the
depositor at a price of 108.13% of the initial principal balance thereof
plus accrued interest, if any, from November 11, 1998. The underwriter
proposes to offer the offered certificates from time to time for sale 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. For further information with respect to the plan of
distribution and any discounts, commissions or profits on resale that may be
deemed underwriting discounts or commissions, see "Underwriting" in this
Prospectus Supplement.
INVESTING IN THE CERTIFICATES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS" ON
PAGE S-28.
NEITHER THE OFFERED CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED
OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY. THE OFFERED
CERTIFICATES WILL REPRESENT INTERESTS IN THE TRUST FUND ONLY. THEY WILL NOT
REPRESENT INTERESTS IN OR OBLIGATIONS OF THE DEPOSITOR, ANY OF ITS AFFILIATES
OR ANY OTHER ENTITY.
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.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS
APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Delivery of the offered certificates will be made through The Depository Trust
Company, Cedel Bank, societe anonyme and the Euroclear System on or about
November 24, 1998, against payment in immediately available funds.
CREDIT SUISSE FIRST BOSTON
Prospectus Supplement dated November 20, 1998
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
----------------------------------------------------
Commercial Mortgage Pass-Through Certificates, Series 1998-C2
[MAP OF THE UNITED STATES OF AMERICA]
[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.]
Alaska 1 property $3,488,643 0.2% of total
Washington 4 properties $6,798,452 0.4% of total
Idaho 1 property $819,232 0.0% of total
Utah 1 property $3,496,226 0.2% of total
Montana 1 property $1,669,441 0.1% of total
Nebraska 3 properties $8,767,800 0.5% of total
Iowa 1 property $3,915,868 0.2% of total
Wyoming 1 property $1,497,770 0.1% of total
Missouri 4 properties $21,435,958 1.1% of total
Minnesota 1 property $1,697,487 0.1% of total
Illinois 4 properties $47,376,944 2.5% of total
Wisconsin 3 properties $5,777,505 0.3% of total
Vermont 2 properties $9,111,111 0.5% of total
New Hampshire 1 property $3,298,406 0.2% of total
Maine 1 property $2,485,162 0.1% of total
Oregon 2 properties $3,679,718 0.2% of total
Michigan 6 properties $27,948,738 1.5% of total
Indiana 3 properties $5,957,968 0.3% of total
Pennsylvania 3 properties $7,514,854 0.4% of total
Massachusetts 3 properties $20,318,537 1.1% of total
Ohio 14 properties $40,844,825 2.1% of total
Connecticut 2 properties $16,891,202 0.9% of total
Rhode Island 2 properties $4,922,100 0.3% of total
Nevada 3 properties $39,936,117 2.1% of total
New Jersey 25 properties $159,423,187 8.3% of total
New York 56 properties $287,965,787 15.0% of total
Delaware 2 properties $17,571,646 0.9% of total
Washington, DC 3 properties $120,983,134 6.3% of total
Maryland 16 properties $110,531,251 5.8% of total
Hawaii 2 properties $61,909,836 3.2% of total
West Virginia 1 property $8,156,595 0.4% of total
Virginia 8 properties $48,060,197 2.5% of total
California 62 properties $268,363,309 14.0% of total
Tennessee 3 properties $7,090,525 0.4% of total
North Carolina 8 properties $24,154,945 1.3% of total
Colorado 3 properties $3,788,710 0.2% of total
Arizona 2 properties $7,983,390 0.4% of total
New Mexico 4 properties $13,048,888 0.7% of total
Georgia 7 properties $20,682,023 1.1% of total
South Carolina 8 properties $9,122,132 0.5% of total
Oklahoma 2 properties $9,028,829 0.5% of total
Texas 29 properties $196,389,311 10.2% of total
Louisiana 7 properties $27,010,399 1.4% of total
Alabama 4 properties $21,516,880 1.1% of total
Florida 25 properties $117,426,836 6.1% of total
Kansas 5 properties $12,051,849 0.6% of total
Mississippi 4 properties $7,242,517 0.4% of total
Kentucky 9 properties $64,853,403 3.4% of total
U.S. Virgin Islands 1 property $5,278,249 0.3% of total
[PIE CHART]
[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.]
Unanchored Retail 2.4%
Single Tenant Retail 2.8%
Full Service Lodging 6.3%
Industrial 7.9%
Anchored Retail 12.1%
Credit Lease 13.5%
Multifamily 21.9%
Office 28.9%
Less than 2%
Limited Service Lodging 1.8%
Extended Stay 0.3%
Healthcare 1.0%
Special Purpose 0.6%
Mobile Home Park 0.6%
Self Storage 0.1%
[LEGEND]
[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]
<PAGE>
[Photograph of The Prada Building, a retail property.]
39. THE PRADA BUILDING,
Honolulu HI
[Photograph of 1133 Connecticut, an office complex.]
12. 1133 CONNECTICUT
Washington DC
[Photograph of 260-261 Madison Avenue, an office complex.]
6. 260-261 MADISON AVENUE
New York NY
[Photograph of Wexford Townhomes, a residential complex.]
10G. WEXFORD TOWNHOMES
Duncanville TX
[Photograph of L'Enfant Plaza-East Building, an office complex.]
5A. L'ENFANT PLAZA-EAST BUILDING
Washington DC
[Photograph of 180 Water Street, an office complex.]
2. 180 WATER STREET
New York NY
[Photograph of Trident Center, an office complex.]
7. TRIDENT CENTER
Los Angeles CA
[Photograph of Wyndham Greenspoint Hotel, a hotel.]
4B. WYNDHAM GREENSPOINT HOTEL
Houston TX
[Photograph of One Oxmoor Place, an office complex.]
1D. ONE OXMOOR PLACE
Louisville KY
[Photograph of Pearl Highlands Center, a shopping center.]
11. PEARL HIGHLANDS CENTER
Pearl City HI
[Photograph of 8484 Wilshire Boulevard, an office complex.]
17. 8484 WILSHIRE BOULEVARD
Beverly Hills CA
<PAGE>
[Photograph of 984 Sheridan Avenue, a residential complex.]
129. 984 SHERIDAN AVENUE
Bronx NY
[Photograph of Reico Distributors, an industrial property.]
14C. REICO DISTRIBUTORS
Elkridge MD
[Photograph of Accor-West Motel 6 #1185, a motel.]
35A. ACCOR-WESST MOTEL 6 #1185
Phoenix AZ
[Photograph of Courthouse Square Apartments, a residential complex.]
18. COURTHOUSE SQUARE APARTMENTS
Towson MD
[Photograph of Grand Union Morristown, a retail property.]
22B. GRAND UNION MORRISTOWN
Morristown VT
[Photograph of Agawam Stop & Shop, a retail property.]
50. AGAWAM STOP & SHOP
Agawam MA
[Photograph of of Nature's Edge Assisted Living
Facility, an assisted living facility.]
202. NATURE'S EDGE ASSISTED LIVING FACILITY
Port St. Lucie FL
[Photograph of Patrick Center, an office complex.]
3B. PATRICK CENTER
Frederick MD
[Photograph of Koll Corporate Plaza, a shopping center.]
9. KOLL CORPORATE PLAZA
Iselin NJ
[Photograph of UA Commerce Crossing, a residential complex.]
19B. UA COMMERCE CROSSING
Commerce Township MI
[Photograph of Villas at Vickery, a hotel.]
8B. VILLAS AT VICKERY
Dallas TX
<PAGE>
[Photograph of Town and Country Shopping Center, a shopping center.]
31. TOWN AND COUNTRY SHOPPING CENTER
Los Angeles CA
[Photograph of Irving Market Center, a shopping center.]
15A. IRVING MARKET CENTER
Irving TX
[Photograph of Walgreens Plaza, a shopping center.]
160. WALGREENS PLAZA
Wilton Manors FL
[Photograph of Sherwood Townhouses, a residential complex.]
212. SHERWOOD TOWNHOUSES
Ossining NY
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
WE PROVIDE INFORMATION TO YOU ABOUT THE OFFERED CERTIFICATES IN TWO
SEPARATE DOCUMENTS THAT PROGRESSIVELY PROVIDE MORE DETAIL: (A) THE ACCOMPANYING
PROSPECTUS, WHICH PROVIDES GENERAL INFORMATION, SOME OF WHICH MAY NOT APPLY TO
THE OFFERED CERTIFICATES AND (B) THIS PROSPECTUS SUPPLEMENT, WHICH DESCRIBES
THE SPECIFIC TERMS OF THE OFFERED CERTIFICATES. YOU SHOULD READ BOTH THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS BEFORE INVESTING IN ANY
OF THE OFFERED CERTIFICATES.
You should rely only on the information contained in this prospectus
supplement and accompanying prospectus. If the description of the offered
certificates in the prospectus and in this prospectus supplement varies, you
should rely on the information in this prospectus supplement.
This prospectus supplement is not an offer to sell these securities, and
is not soliciting an offer to buy these securities, in any state where the
offer or sale is not permitted.
The photographs of the mortgaged properties included in the prospectus
supplement are not representative of all the mortgaged properties or of any
particular type of mortgaged property.
The principal executive office of the depositor is Eleven Madison Avenue,
New York, New York 10010 and its telephone number is (212) 325-2000.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.
UNTIL 90 DAYS AFTER THE DATE OF THIS PROSPECTUS SUPPLEMENT, ALL DEALERS THAT
EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS
OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE
DEALER'S OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS AN UNDERWRITER AND
WITH RESPECT TO UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
S-2
<PAGE>
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
EXECUTIVE SUMMARY ........................... S-6
MORTGAGE LOAN EXECUTIVE SUMMARY S-9
REPORTING REQUIREMENTS ...................... S-10
SUMMARY OF PROSPECTUS SUPPLEMENT ............ S-11
The Parties ................................ S-11
Significant Dates and Periods ............ S-12
The Certificates ......................... S-13
Distributions ............................ S-14
The Mortgage Loans ....................... S-19
RISK FACTORS ................................ S-28
The Mortgage Loans ....................... S-28
The Offered Certificates ................. S-48
DESCRIPTION OF THE MORTGAGE LOANS S-53
General .................................. S-53
Security for the Mortgage Loans .......... S-55
Underwriting Standards ................... S-55
CERTAIN CHARACTERISTICS OF THE
MORTGAGE LOANS .............................. S-60
Credit Lease Loans ....................... S-60
Largest Mortgage Loans ................... S-61
Construction Loans ....................... S-85
Litigation ............................... S-85
Environmental Matters .................... S-86
Certain Terms and Conditions of the
Mortgage Loans ........................ S-87
Additional Mortgage Loan Information ..... S-98
Changes in Mortgage Loan
Characteristics ....................... S-114
DESCRIPTION OF THE OFFERED
CERTIFICATES ................................ S-115
General .................................. S-115
Book-Entry Registration and Definitive
Certificates .......................... S-116
Distributions ............................ S-119
Assumed Final Distribution Date;
Rated Final Distribution Date ......... S-129
Subordination; Allocation of Collateral
Support Deficits and Certificate
Deferred Interest ..................... S-129
PREPAYMENT AND YIELD
CONSIDERATIONS .............................. S-132
Yield .................................... S-132
Modeling Assumptions ..................... S-134
Yield on the Class A-X Certificates ...... S-134
Rated Final Distribution Date ............ S-135
Weighted Average Life of Offered
Certificates .......................... S-135
THE POOLING AND SERVICING
AGREEMENT ................................... S-144
General .................................. S-144
Assignment of the Mortgage Loans ......... S-144
Representations and Warranties;
Repurchase ............................ S-144
Servicing of the Mortgage Loans;
Collection of Payments ................ S-154
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Advances ................................. S-156
Appraisal Reductions ..................... S-158
Accounts ................................. S-160
Withdrawals from the Certificate
Account ............................... S-161
Enforcement of "Due-on-Sale" and
"Due-on-Encumbrance" Clauses .......... S-162
Inspections; Collection of Operating
Information ........................... S-163
Insurance Policies ....................... S-163
Evidence as to Compliance ................ S-164
Certain Matters Regarding the
Depositor, the Trustee, the Servicer
and the Special Servicer .............. S-164
Events of Default ........................ S-165
Rights Upon Event of Default ............. S-166
Amendment ................................ S-166
Voting Rights ............................ S-167
Realization Upon Mortgage Loans .......... S-168
Modifications ............................ S-171
Optional Termination ..................... S-172
The Trustee .............................. S-173
Certificate Registrar and Authenticating
Agent ................................. S-173
Duties of the Trustee .................... S-173
The Servicer ............................. S-173
Servicing Compensation and Payment of
Expenses .............................. S-174
The Special Servicer ..................... S-176
Servicer and Special Servicer Permitted
to Buy Certificates ................... S-176
Reports to Certificateholders; Available
Information ........................... S-177
USE OF PROCEEDS ............................. S-180
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES ................................ S-181
Tax Aspects of Yield Protection
Payments .............................. S-183
ERISA CONSIDERATIONS ........................ S-184
Senior Certificates ...................... S-184
Mezzanine Certificates ................... S-185
LEGAL INVESTMENT ............................ S-186
UNDERWRITING ................................ S-186
LEGAL MATTERS ............................... S-187
RATING ...................................... S-187
INDEX OF SIGNIFICANT DEFINITIONS ............ S-189
ANNEX A -- LOAN CHARACTERISTICS ............. A-1
ANNEX B -- CREDIT LEASE LOAN
CHARACTERISTICS ............................ B-1
ANNEX C -- CERTAIN CHARACTERISTICS
OF THE MULTIFAMILY
MORTGAGED PROPERTIES ........................ C-1
ANNEX D -- SERVICER REPORTS ................. D-1
ANNEX E -- GLOBAL CLEARANCE,
SETTLEMENT AND TAX
DOCUMENTATION PROCEDURES ................... E-1
</TABLE>
S-3
<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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
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
</TABLE>
S-4
<PAGE>
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
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 ........................ 49
Taxation of Holders of Residual Interest
Certificates .............................. 49
Excess Inclusions ............................ 51
Restrictions on Ownership and Transfer
of Residual Interest Certificates ......... 51
Administrative Matters ....................... 52
</TABLE>
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Tax Status as a Grantor Trust ................ 52
Miscellaneous Tax Aspects .................... 56
Tax Treatment of Foreign Investors ........... 56
STATE TAX CONSIDERATIONS ........................ 57
ERISA CONSIDERATIONS ............................ 57
Prohibited Transactions ...................... 58
Unrelated Business Taxable Income --
Residual Interests ........................ 59
LEGAL INVESTMENT ................................ 59
PLAN OF DISTRIBUTION ............................ 61
LEGAL MATTERS ................................... 62
INDEX OF DEFINED TERMS .......................... 63
</TABLE>
S-5
<PAGE>
EXECUTIVE SUMMARY
<TABLE>
<CAPTION>
- -------------------------------------------------------------
INITIAL % OF
CERTIFICATE AGGREGATE APPROXI-
BALANCE OR INITIAL MATE
NOTIONAL CERTIFICATE CREDIT
CLASS RATING(A) BALANCE(B) BALANCE SUPPORT
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
- -------------------------------------------------------------
OFFERED CERTIFICATES
A-1 AAA/AAA $ 364,000,000 18.97% 30.00%
- -------------------------------------------------------------
A-2 AAA/AAA $ 979,400,000 51.03% 30.00%
- -------------------------------------------------------------
A-X AAA/AAA $1,919,275,079 NAP NAP
- -------------------------------------------------------------
B AA/AA2 $ 105,600,000 5.50% 24.50%
- -------------------------------------------------------------
C A/A2 $ 105,600,000 5.50% 19.00%
- -------------------------------------------------------------
D BBB/Baa2 $ 105,500,000 5.50% 13.50%
- -------------------------------------------------------------
E BBB-/Baa3 $ 28,800,000 1.50% 12.00%
- -------------------------------------------------------------
PRIVATE CERTIFICATES (G)
- -------------------------------------------------------------
F BB/Ba2 $ 105,600,000 5.50% 6.50%
- -------------------------------------------------------------
G BB-/Ba3 $ 19,200,000 1.00% 5.50%
- -------------------------------------------------------------
H NR/B2 $ 47,900,000 2.50% 3.01%
- -------------------------------------------------------------
I B-/B3 $ 19,200,000 1.00% 2.00%
- -------------------------------------------------------------
J NR/NR $ 38,475,079 2.00% NAP
- -------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------
PASS- ASSUMED ASSUMED RATED
THROUGH WEIGHTED FINAL FINAL
RATE AS OF AVERAGE ASSUMED DISTRIBU- DISTRIBU-
CUT-OFF LIFE PRINCIPAL TION TION
CLASS DESCRIPTION DATE (YEARS)(C) WINDOW DATE(D) DATE(E)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OFFERED CERTIFICATES
- -----------------------------------------------------------------------------------------
Dec. November
A-1 Fixed 5.96% 5.6 12/98-12/07 2007 2030
- -----------------------------------------------------------------------------------------
Nov. November
A-2 Fixed 6.30% 9.7 12/07-11/08 2008 2030
- -----------------------------------------------------------------------------------------
(Component
Structure) June November
A-X Interest Only 0.99%(f) 9.9 12/98-6/23 2023 2030
- -----------------------------------------------------------------------------------------
Nov. November
B Fixed 6.59% 10.0 11/08-11/08 2008 2030
- -----------------------------------------------------------------------------------------
Nov. November
C Fixed 6.84% 10.0 11/08-11/08 2008 2030
- -----------------------------------------------------------------------------------------
April November
D Fixed 7.13% 10.1 11/08-4/10 2010 2030
- -----------------------------------------------------------------------------------------
Jan. November
E Fixed 7.13% 12.3 4/10-1/12 2012 2030
- -----------------------------------------------------------------------------------------
PRIVATE CERTIFICATES (G)
- -----------------------------------------------------------------------------------------
Lesser of
Fixed and
Weighted
Average Net
Mortgage July November
F Rate 6.75%(h) 14.5 1/12-7/14 2014 2030
- -----------------------------------------------------------------------------------------
Lesser of
Fixed and
Weighted
Average Net
Mortgage Aug. November
G Rate 6.75%(h) 16.2 7/14-8/15 2015 2030
- -----------------------------------------------------------------------------------------
Lesser of
Fixed and
Weighted
Average Net May November
H Mortgage 6.75%(h) 18.1 8/15-5/18 2018 2030
- -----------------------------------------------------------------------------------------
Lesser of
Fixed and
Weighted
Average Net
Mortgage March November
I Rate 6.75%(h) 20.0 5/18-3/19 2019 2030
- -----------------------------------------------------------------------------------------
Lesser of
Fixed and
Weighted
Average Net
Mortgage June November
J Rate 6.75%(h) 20.9 3/19-6/23 2023 2030
- -----------------------------------------------------------------------------------------
</TABLE>
- --------
(a) Ratings shown are those of Fitch IBCA, Inc. and Moody's Investors
Service, Inc., respectively. Classes marked "NR" will not be rated
by the applicable rating agency.
(b) The principal balance of any class may be changed by up to 5%.
(c) This is the average amount of time in years between the closing date
and the payment of each dollar of principal. See "Prepayment and
Yield
(footnotes continued on next page)
S-6
<PAGE>
Considerations -- Weighted Average Life of Offered Certificates." Because
the Class A-X Certificates do not have a principal balance and do not
receive principal distributions, the weighted average life of this class is
based on its notional amount, which will decrease as the principal balances
of the other classes decrease.
(d) This date was calculated assuming, among other things, that there
are no prepayments. There may be some prepayments.
(e) This date was set at two years after the related assumed final
distribution date.
(f) This pass-through rate will change from time to time based on the
weighted average of the component rates.
(g) Not offered hereby.
(h) This pass-through rate may change based on the weighted average net
mortgage rate.
S-7
<PAGE>
DIRECTED PRINCIPAL PAYMENT STRUCTURE
FOR THE CLASS A-1 AND CLASS A-2 CERTIFICATES1
<TABLE>
<S> <C> <C>
MORTGAGE LOANS PRINCIPAL PAYMENTS CERTIFICATES
-------------- ------------------ ------------
Group 1 Scheduled Payments Class A-1
101 Commercial Loans 96.9% Involuntary Prepayments
4 Multifamily Loans 3.1% Balloon Payments $364,000,000
$787,526,667 Voluntary Prepayments
Group 2 Scheduled Payments
43 Commercial Loans 65.1% Involuntary Prepayments Class A-2
69 Multifamily Loans 34.9%
$ 1,131,748,413 $979,400,000
Balloon Payments
Voluntary Prepayments
</TABLE>
- ----------
1 Applies only while the Class A-1, Class A-2 and Class B Certificates are
outstanding.
The directed payment structure illustrated above is intended to:
o direct balloon payments and voluntary prepayments of principal from
mortgage loans in loan group 2 to the Class A-2 Certificates while
outstanding; and
o distribute principal to the classes subordinate to the Class A-1 and
Class A-2 Certificates only after the Class A-1 and Class A-2
Certificates have been paid in full.
In addition, losses on the mortgage loans, irrespective of loan group,
will be allocated to the classes of certificates in reverse alphabetical order
and, in the event only the Class A-1 and Class A-2 Certificates remain
outstanding, losses will be allocated pro rata to the Class A-1 and Class A-2
Certificates.
S-8
<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) ........................................................... $1,919,275,079
Initial Balance of Loan Group 1 (1) ............................................... $ 787,526,667
Initial Balance of Loan Group 2 (1) ............................................... $1,131,748,413
Number of Mortgage Loans ........................................................... 217
Number of Mortgage Loans in Group 1 ............................................... 105
Number of Mortgage Loans in Group 2 ............................................... 112
Number of Mortgaged Properties ..................................................... 363
Average Mortgage Loan Balance ...................................................... $ 8,844,586
Maximum Mortgage Loan Principal Balance ............................................ $ 86,666,578
Minimum Mortgage Loan Principal Balance ............................................ $ 334,498
Weighted Average Mortgage Rate ..................................................... 7.462%
Range of Mortgage Rates ............................................................ 6.3447% - 9.40%
Weighted Average Remaining Term to the Earlier of Maturity or Anticipated
Repayment Date (months) ........................................................... 136
Range of Remaining Term to the Earlier of Maturity or Anticipated Repayment Date
(months) .......................................................................... 55 - 295
Weighted Average Remaining Amortization Term (months) (2) .......................... 327
Range of Amortization Terms (months) (2) ........................................... 180 - 360
Weighted Average DSCR (2)(3) ....................................................... 1.33 x
Range of DSCRs (2)(3) .............................................................. 1.06x - 2.53x
Weighted Average LTV (2)(3) ........................................................ 73%
Range of LTVs (2)(3) ............................................................... 28% - 92%
Weighted Average LTV at Earlier of Anticipated Repayment Date or Maturity (2)(3)(4) 62%
Percentage of Initial Pool Balance made up of:
ARD Loans ......................................................................... 84.9%
Fully Amortizing Loans (other than ARD Loans) ..................................... 8.6%
Balloon Loans ..................................................................... 6.6%
Multi-Property Loans .............................................................. 42.2%
Crossed Loans ..................................................................... 13.8%
Credit Lease Loans ................................................................ 13.5%
Number of Mortgage Loans Delinquent as of Cut-off Date ............................. 0
</TABLE>
- ----------
(1) The aggregate balance may be changed by up to 5%.
(2) See "Certain Characteristics of the Mortgage Loans -- Additional Mortgage
Loan Information."
(3) Excluding the credit lease loans.
(4) Excluding fully amortizing loans.
S-9
<PAGE>
REPORTING REQUIREMENTS
On each distribution date, the trustee will prepare a statement to
certificateholders and forward it to the following parties:
o each certificateholder;
o the depositor;
o the servicer;
o the special servicer;
o each rating agency;
o Bloomberg, L.P.;
o Trepp Group;
o Charter Research Corporation;
o Intex Solutions, Inc.; and
o if requested in writing, any potential investor.
Prior to each distribution date, the servicer will deliver to the trustee
the servicer reports described in Annex D. On each distribution date, the
trustee will deliver such reports to the following parties:
o each certificateholder;
o the depositor;
o the underwriter;
o each rating agency; and
o if requested in writing, any potential investor.
In addition, the trustee will also make available at its offices, upon
reasonable advance written notice and during normal business hours, the
following items to the extent it has received them:
o mortgaged property operating statements;
o rent rolls;
o retail sales information;
o mortgaged property inspection reports; and
o all modifications, waivers and amendments of a mortgage loan.
See "The Pooling and Servicing Agreement -- Reports to Certificateholders;
Available Information -- Other Information." A current report on form 8-K 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. If mortgage loans are removed
from the trust fund, the removal will be noted in the form 8-K. The form 8-K
will be available to purchasers and potential purchasers of the offered
certificates. You can obtain a copy of the statement to certificateholders and
certain other information from the trustee through its home page on the World
Wide Web. The website is located at "www.globaltrustservices.com." You can
obtain this information by facsimile by calling (212) 946-3471 and requesting
that such information be faxed to you.
S-10
<PAGE>
SUMMARY OF PROSPECTUS SUPPLEMENT
o This summary highlights selected information from this prospectus
supplement and does not contain all of the information that you need to
consider in making your investment decision.
o To understand all of the terms of the offered certificates, read carefully
this prospectus supplement and the accompanying prospectus.
o This summary provides an overview of certain information to aid your
understanding and is qualified by the full description presented in this
prospectus supplement and the accompanying prospectus.
o Unless otherwise stated, all percentages of the mortgage loans, or of any
specified group of mortgage loans, referred to in this prospectus
supplement are calculated using the aggregate cut-off date principal
balance.
o References to percentages of mortgaged properties are references to the
percentages of the initial pool balance represented by the aggregate
cut-off date principal balance of the related mortgage loans or, in the
case of multi-property loans, the amount allocated to each individual
property.
o Cross-collateralized loans are treated in this prospectus supplement as
one mortgage loan, except as otherwise indicated.
o All numerical information concerning the mortgage loans is provided on an
approximate basis.
o References to the mortgage loans will include the mortgage loan related to
the loan participation included in the trust fund.
THE PARTIES
DEPOSITOR Credit Suisse First Boston Mortgage Securities
Corp., a Delaware corporation and an affiliate
of the mortgage loan sellers and of the
underwriter. See "The Depositor" in the
prospectus.
SERVICER First Union National Bank, a national banking
association.
SPECIAL SERVICER Lennar Partners, Inc., a Florida corporation.
The special servicer will be responsible for
servicing and administering:
o mortgage loans that, in general, are in
default or as to which default is imminent;
and
o real estate owned by the trust.
The holders of greater than 50% of the
percentage interests of the controlling class,
will be entitled to remove the special
servicer and appoint a successor special
servicer subject to written confirmation from
each rating agency 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 controlling class will be the most
subordinate class of certificates then
outstanding which has 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).
S-11
<PAGE>
The special servicer will be permitted to
purchase any class of certificates. See "Risk
Factors -- The Offered Certificates -- If the
Servicer or Special Servicer Purchases
Certificates, a Conflict of Interest Could
Arise Between Its Duties and Its Interest in
the Certificates."
TRUSTEE The Chase Manhattan Bank, a New York banking
corporation. See "The Pooling and Servicing
Agreement -- The Trustee."
MORTGAGE LOAN SELLERS The Mortgage Loan Sellers are:
o Credit Suisse First Boston Mortgage
Capital LLC, a Delaware limited liability
company, an affiliate of the depositor and
the underwriter; and
o Credit Suisse First Boston Mortgage
Finance Trust I, a trust established
pursuant to a trust agreement among Credit
Suisse First Boston Mortgage Depositor I
Corporation, Credit Suisse First Boston
Mortgage I Corporation, both affiliates of
the depositor and the underwriter, and
Commonwealth Trust Company, as resident
trustee.
SIGNIFICANT DATES AND PERIODS
CUT-OFF DATE November 11, 1998.
CLOSING DATE On or about November 24, 1998.
DUE DATE The mortgage loans have the following due
dates:
<TABLE>
<CAPTION>
NUMBER OF % OF INITIAL
MORTGAGE LOANS POOL BALANCE DUE DATE
- ---------------- -------------- ---------
<S> <C> <C>
194 96.4% 11th
22 2.4% 6th
1 1.2% 1st
----- -----
217 100.0%
===== =====
</TABLE>
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 The close of business on the 11th day of the
month in which the distribution date occurs
or, if such 11th day is not a business day,
the business day immediately following such
11th day.
DISTRIBUTION DATE The 4th business day following the
determination date in each month, commencing
in December 1998. 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,
S-12
<PAGE>
North Carolina or Florida are authorized or
obligated by law, executive order or
governmental decree to close.
RECORD DATE The close of business on the last business day
of the month immediately preceding the month
in which the distribution date occurs.
INTEREST ACCRUAL PERIOD The period commencing on the 11th day of the
calendar month preceding the month in which
the distribution date occurs and ending on the
10th day of the month in which the
distribution date occurs. Each interest
accrual period is deemed to consist of 30
days.
ASSUMED FINAL DISTRIBUTION DATE For each class of certificates, the date set
forth on the cover page.
RATED FINAL DISTRIBUTION DATE For each class of certificates, the date set
forth on the cover page.
DUE PERIOD The period beginning on the day following the
determination date in the month immediately
preceding the month in which the distribution
date occurs and ending at the close of
business on the determination date of the
month in which the distribution date occurs.
THE CERTIFICATES
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 (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 and are not entitled to
receive distributions of principal. 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) immediately
prior to the distribution date.
THE PRIVATE CERTIFICATES (NOT The following certificates will also represent
beneficial OFFERED HEREBY) interests in the trust fund, but are not
hereby) offered
<TABLE>
<CAPTION>
INITIAL CERTIFICATE
CLASS BALANCE PASS-THROUGH RATE
- ----------- -------------------- ------------------
<S> <C> <C>
Class F $105,600,000 (1)
Class G 19,200,000 (1)
Class H 47,900,000 (1)
Class I 19,200,000 (1)
Class J 38,475,079 (1)
</TABLE>
- ----------
(1) This pass-through rate will equal the lesser of (a) 6.75% per annum and
(b) the weighted average net mortgage rate.
S-13
<PAGE>
DISTRIBUTIONS
INTEREST DISTRIBUTIONS Interest on the certificates will accrue on a
monthly basis. Prepayments and defaults may
reduce interest distributions. See
"Description of the Offered Certificates --
Distributions."
PRINCIPAL DISTRIBUTIONS Principal payments will be made on each class
as described under "Description of the Offered
Certificates -- Distributions."
PRIORITY OF DISTRIBUTIONS Distributions will be made on each
distribution date. Distributions of interest
and principal and allocations of losses are
set forth in the chart below. The priority of
each class of certificates for the payment of
interest and principal is illustrated in
descending order. Losses on the mortgage loans
will be applied to each class of certificates
in ascending order.
Class A-1,
Class A-2(1) and Class A-X(2)
Class B
Distributions of Class C Losses on the
Interest and Mortgage
Principal Loans
[arrow pointing down] Class D [arrow pointing up]
Class E
Private Certificates
- ----------
(1) Balloon payments and voluntary prepayments of principal on the mortgage
loans in loan group 2 will be directed first to the Class A-2 Certificates,
and then to the Class A-1 Certificates (if then outstanding), before they
are used to pay principal of other certificates. Otherwise, no principal
distributions will be made on the Class A-2 Certificates until the principal
balance of the Class A-1 Certificates is reduced to zero while the other
certificates are outstanding.
(2) Receives only interest distributions.
See "Description of the Offered Certificates
-- Distributions -- Priority of
Distributions."
OTHER DISTRIBUTIONS Distributions on the Class V Certificates and
the Class R Certificates are limited to the
following:
S-14
<PAGE>
o the Class V certificateholders will only
receive distributions of certain excess
interest on mortgage loans with a specified
anticipated repayment date which are not
paid in full as of such date (see "Summary
or Prospectus Supplement -- The Mortgage
Loans -- Loans with Anticipated Repayment
Dates" for a description of excess
interest); and
o the Class R certificateholders will only
receive a distribution after the regular
certificateholders have received all amounts
payable to them.
In addition, the holders of 100% of the Class
V Certificates may purchase any loan with an
anticipated repayment date on or after its
anticipated repayment date at the purchase
price specified herein and under the
circumstances described under "Certain
Characteristics of the Mortgage Loans --
Certain Terms and Conditions of the Mortgage
Loans." The Class V Certificates may not be
sold to an entity which owns an ownership
interest in a borrower under any of the
mortgage loans, except that Credit Suisse
First Boston Mortgage Capital LLC or an
affiliate thereof may own or purchase the
Class V Certificates.
ADVANCES The servicer is required to advance delinquent
principal and interest on the mortgage loans
so long as it determines that such advance is
recoverable. Such advances generally will
equal (a) the delinquent portion of the
monthly payment, less (i) the master servicing
fee and primary servicing fee and (ii) if
applicable, the related workout fee and (b)
with respect to one mortgage loan with
semi-annual due dates, one-month's interest in
each month between due dates. If a borrower
fails to pay amounts due on the maturity date
of the related mortgage loan, the servicer
will only advance the amount it would have
advanced on a delinquent monthly payment due
prior to the maturity date. In connection with
mortgage loans with anticipated repayment
dates, the servicer will not be permitted to
make any advance in respect of excess
interest. Any appraisal reduction amount will
reduce the amount of such advance that will be
made by the servicer. See "The Pooling and
Servicing Agreement -- Advances." If the
servicer fails to make a required advance, the
trustee will make such advance in each case
subject to a determination of recoverability.
See "The Pooling and Servicing Agreement --
Advances" and "-- Appraisal Reductions."
OPTIONAL TERMINATION The following parties will have the option to
purchase, at the purchase price specified
under "The Pooling and Servicing Agreement --
Representations and Warranties; Repurchase",
all of the mortgage loans and all other
property remaining in the trust fund on any
distribution
S-15
<PAGE>
date on which the aggregate stated principal
balance of the mortgage loans is less than 2%
of the initial pool balance:
o Credit Suisse First Boston Mortgage
Capital LLC;
o the special servicer;
o the holders of a majority of the
controlling class; and
o the servicer.
At such time, the trust will terminate and all
outstanding certificates will be retired, as
described in more detail herein. See "The
Pooling and Servicing Agreement -- Optional
Termination."
DENOMINATIONS The offered certificates will be issuable in
registered form, in the following
denominations:
<TABLE>
<CAPTION>
MULTIPLES IN
EXCESS OF INITIAL
INITIAL BALANCE BALANCE
----------------- ------------------
<S> <C> <C>
Offered certificates
(certificate balance,
excluding Class A-X
Certificates) .............. $ 10,000 $ 1,000
Class A-X Certificates
(notional balance) ......... $100,000 $10,000
</TABLE>
CLEARANCE AND SETTLEMENT The offered certificates will be issued in
book-entry form and will be evidenced by one
or more certificates registered in the name of
Cede & Co, as nominee of DTC. Persons
acquiring beneficial ownership interests in
the offered certificates may elect to hold
their book-entry certificate interests either
through DTC in the United States or through
Cedel Bank, societe anonyme or the Euroclear
System, in Europe. 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."
CERTAIN FEDERAL INCOME REMIC elections will be made with respect to
TAX CONSIDERATIONS segregated pools of assets of the trust. All
classes of the certificates (other than the
Class V, Class R and Class LR Certificates)
will represent ownership of "regular
interests" in a REMIC. Pertinent federal
income tax consequences of an investment in
the offered certificates include:
o Each class of offered certificates will
represent ownership of REMIC "regular
interests."
o The regular interests will be treated as
newly originated debt instruments for
federal income tax purposes.
o You will be required to report income on
your certificates in accordance with the
accrual method of accounting.
S-16
<PAGE>
o The Class A-X Certificates will, and one
or more other classes of offered
certificates may, be issued with original
issue discount.
o 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.
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. Prepayment premiums or yield
maintenance charges paid by the trust fund to
any class of offered certificates represent
amounts paid by the mortgagors pursuant to the
prepayment provisions of their respective
mortgage loan agreements, and will be treated
as received from a REMIC regular interest.
Yield protection payments, if applicable, will
be paid by the servicer in respect of certain
mortgage loans which do not provide for the
payment of prepayment premiums or yield
maintenance charges in respect of certain
prepayments, and will not be treated as
received from a REMIC regular interest.
See "Certain Federal Income Tax Consequences"
herein and in the prospectus.
ERISA CONSIDERATIONS The acquisition of an offered certificate by
an employee benefit plan or other plan or
arrangement subject to the Employee Retirement
Income Security Act of 1974, as amended, or to
section 4975 of the Internal Revenue Code of
1986, could, in some instances, result in a
prohibited transaction or other violation of
the fiduciary responsibility provisions of
such laws. It is anticipated that only the
following classes of offered certificates may
be acquired by such plans or arrangements and
by persons investing the assets of such plans
or arrangements, provided certain conditions
are met:
o Class A-l
o Class A-2
o Class A-X
In addition, it is anticipated that only the
following classes of offered certificates may
be acquired by insurance company general
accounts which contain assets of such plans or
arrangements, provided certain conditions are
met:
S-17
<PAGE>
o Class B
o Class C
o Class D
o Class E
Any fiduciary of such plans or arrangements
considering whether to purchase offered
certificates in any of these classes with
assets of or on behalf of such plans or
arrangements should consult with its counsel
regarding the applicability of the Employee
Retirement Income Security Act of 1974, as
amended, or to section 4975 of the Internal
Revenue Code of 1986, and the availability of
any exemptions from the prohibited transaction
provisions of such laws. 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 both, as
applicable, of the following rating agencies:
<TABLE>
<CAPTION>
FITCH MOODY'S
------- --------
<S> <C> <C>
Class A-1 AAA Aaa
Class A-2 AAA Aaa
Class A-X AAA Aaa
Class B AA Aa2
Class C A A2
Class D BBB Baa2
Class E BBB- Baa3
</TABLE>
The rated final distribution date for each
class of offered certificates is the
distribution date occurring in November 2030.
FOR A DESCRIPTION OF THE LIMITATIONS OF THE
RATINGS OF THE OFFERED CERTIFICATES, SEE
"RATINGS."
You should consider the following about a
security rating:
o it is not a recommendation to buy, sell or
hold securities;
o it may be subject to revision or
withdrawal at any time by the assigning
rating organization;
o it only addresses the likelihood of the
timely payment of interest and, except with
respect to the Class A-X Certificates, the
ultimate repayment of principal by the rated
final distribution date;
o it does not address the frequency of
prepayments (both voluntary and involuntary)
or the possibility that certificateholders
might suffer a lower than anticipated yield;
and
o it does not address the likelihood of
receipt of prepayment premiums, yield
maintenance charges, yield protection
payments or excess interest.
S-18
<PAGE>
See "Risk Factors," "Rating" 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. Consult your legal
advisor as to the appropriate characterization
of the offered certificates under any legal
investment restrictions applicable to you. See
"Legal Investment" herein and in the
prospectus.
THE MORTGAGE LOANS
GENERAL The trust fund will consist of 217 mortgage
loans divided between two groups, loan group 1
and loan group 2:
LOAN GROUP 1. Loan group 1 will consist of 105
commercial and multifamily mortgage loans,
representing 41.0% of the initial pool
balance.
o 3.1% of the mortgage loans in loan group 1
will be multifamily loans.
o 96.9% of the mortgage loans in loan group
1 will be commercial loans.
LOAN GROUP 2. Loan group 2 will consist of 112
commercial and multifamily mortgage loans,
representing 59.0% of the initial pool
balance.
o 34.9% of the mortgage loans in loan group
2 will be multifamily loans.
o 65.1% of the mortgage loans in loan group
2 will be commercial loans.
S-19
<PAGE>
GENERAL MORTGAGE LOAN CHARACTERISTICS
(AS OF THE CUT-OFF DATE, UNLESS OTHERWISE INDICATED)
<TABLE>
<CAPTION>
MORTGAGE
POOL
-------------------------
<S> <C>
Initial Balance (1) $1,919,275,079
Number of Mortgage Loans 217
Number of Mortgaged Properties 363
Average Mortgage Loan Balance $ 8,844,586
Maximum Mortgage Loan Balance $ 86,666,578
Minimum Mortgage Loan Balance $ 334,498
Weighted Average Mortgage Rate 7.462%
Range of Mortgage Rates 6.3447%-9.40%
Weighted Average Remaining Term to the Earlier of
Maturity or Anticipated Repayment Date (months) 136
Range of Remaining Term to the Earlier of Maturity
or Anticipated Repayment Date (months) 55-295
Weighted Average Remaining Amortization Term
(months) (2) 327
Range of Amortization Terms (months) (2) 180-360
Weighted Average Debt Service Coverage
Ratio (2)(3) 1.33 x
Range of Debt Service Coverage Ratios (2)(3) 1.06x-2.53x
Weighted Average Loan-to-Value Ratio (2)(3) 73%
Range of Loan-to-Value Ratios (2)(3) 28%-92%
Weighted Average Loan-to-Value Ratio at Earlier of
Anticipated Repayment Date or Maturity (2)(3)(4) 62%
Percentage of Initial Pool Balance made up of
Mortgage Loans with Anticipated Repayment
Dates 84.9%
Fully Amortizing Loans (other than Mortgage
Loans with Anticipated Repayment Dates) 8.6%
Balloon Loans 6.6%
Multi-Property Loans 42.2%
Crossed Loans 13.8%
Number of Mortgage Loans Delinquent as of Cut-off
Date 0
<CAPTION>
LOAN LOAN
GROUP 1 GROUP 2
----------------------- -------------------------
<S> <C> <C>
Initial Balance (1) $787,526,667 $1,131,748,413
Number of Mortgage Loans 105 112
Number of Mortgaged Properties 176 187
Average Mortgage Loan Balance $ 7,500,254 $ 10,104,897
Maximum Mortgage Loan Balance $ 74,961,792 $ 86,666,578
Minimum Mortgage Loan Balance $ 334,498 $ 560,000
Weighted Average Mortgage Rate 7.4651% 7.4596%
Range of Mortgage Rates 6.3447%-9.13% 6.71%-9.40%
Weighted Average Remaining Term to the Earlier of
Maturity or Anticipated Repayment Date (months) 163 118
Range of Remaining Term to the Earlier of Maturity
or Anticipated Repayment Date (months) 55-295 111-120
Weighted Average Remaining Amortization Term
(months) (2) 305 342
Range of Amortization Terms (months) (2) 180-360 240-360
Weighted Average Debt Service Coverage
Ratio (2)(3) 1.35x 1.32x
Range of Debt Service Coverage Ratios (2)(3) 1.06x-2.53x 1.15x-1.97x
Weighted Average Loan-to-Value Ratio (2)(3) 70% 74%
Range of Loan-to-Value Ratios (2)(3) 28%-92% 45%-88%
Weighted Average Loan-to-Value Ratio at Earlier of
Anticipated Repayment Date or Maturity (2)(3)(4) 56% 65%
Percentage of Initial Pool Balance made up of
Mortgage Loans with Anticipated Repayment
Dates 64.6% 99.0%
Fully Amortizing Loans (other than Mortgage
Loans with Anticipated Repayment Dates) 20.9% 0.0%
Balloon Loans 14.5% 1.0%
Multi-Property Loans 39.5% 44.1%
Crossed Loans 1.8% 22.2%
Number of Mortgage Loans Delinquent as of Cut-off
Date 0 0
</TABLE>
- ----------
(1) The aggregate balance may be changed by up to 5%.
(2) See "Certain Characteristics of the Mortgage Loans -- Additional Mortgage
Loan Information."
(3) Excluding the credit lease loans.
(4) Excluding fully amortizing loans.
<PAGE>
SECURITY FOR THE MORTGAGE LOANS Each mortgage loan is secured primarily by
one or more first priority mortgages, deeds of
trust, or other similar security instruments
on the borrower's fee or leasehold interest in
real property as set forth in the table below.
The mortgaged properties are used for
commercial or multifamily residential
purposes.
S-20
<PAGE>
<TABLE>
<CAPTION>
INTEREST OF % OF NUMBER OF
BORROWER INITIAL POOL MORTGAGED
ENCUMBERED BALANCE(1) PROPERTIES
- ------------------------------ -------------- -----------
<S> <C> <C>
Fee Simple Estate (2) 95.6% 352
Leasehold Estate 4.4% 11
----- ---
TOTAL 100.0% 363
===== ===
</TABLE>
- ----------
(1) Based on the principal balance of the mortgage loan or, for any
multi-property loan, the amount allocated to each individual 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.
LOANS WITH ANTICIPATED 166 mortgage loans representing 84.9% of the
REPAYMENT DATES initial pool balance specify an anticipated
repayment date. Such mortgage loans generally
have the following terms:
o a substantial amount of principal will be
outstanding at the anticipated repayment
date;
o the loan can be prepaid on the anticipated
repayment date without payment of any
prepayment premium; and
o a lockbox must be established on or prior
to the anticipated repayment date.
In addition, loans that are not repaid on the
anticipated repayment date:
o accrue interest at a higher rate after the
anticipated repayment date;
o apply all cash flow in excess of certain
specified expenses (including debt service
calculated at the initial interest rate and
operating expenses) to pay principal on such
mortgage loan; and
o apply all cash flow to pay accrued excess
interest after principal is paid in full.
See "Certain Characteristics of the Mortgage
Loans -- Certain Terms and Conditions of the
Mortgage Loans -- Excess Interest."
LOANS WITH CREDIT LEASES 40 mortgage loans representing 13.5% of the
initial pool balance are secured by credit
leases. A credit lease requires the tenant to
make payments in an amount sufficient to
satisfy debt service on the mortgage loan
subject to rent abatement and termination
rights, as more fully described below and as
set forth in Annex B. Such tenants or a
guarantor of the tenant's obligations have
credit ratings (including, in some instances,
unpublished
S-21
<PAGE>
shadow ratings) of "B-" (or the equivalent) or
higher by at least one nationally recognized
rating agency. The term of each credit lease
is at least as long as the term of the related
mortgage loan. There are three types of credit
leases, each of which is described below:
BOND-TYPE LEASES. Leases that are not subject
to termination by the tenant.
TRIPLE NET LEASES. Leases that are not subject
to termination or rent abatement unless one of
the following events occurs:
o specified casualties or condemnations; or
o the borrower fails to perform certain
obligations, including remediating
environmental conditions, enforcing certain
restrictions and covenants and complying
with applicable laws.
DOUBLE NET LEASES. Leases that are not subject
to termination or rent abatement unless one of
the following events occurs:
o specified casualties or condemnation; or
o the borrower fails to perform required
maintenance, repairs or replacements; or
o the borrower fails to perform certain
obligations, including remediating
environmental conditions, enforcing certain
restrictions and covenants and complying
with applicable laws.
If a tenant has the right to terminate because
of specified casualties or condemnation, the
trustee will be the beneficiary of one or more
non-cancelable lease enhancement insurance
policies. Such policies insure principal and,
subject to certain conditions, accrued
interest on the mortgage loan. In the case of
a credit lease balloon mortgage loan, the
borrower will maintain certain residual value
insurance policies which, in the event of a
default resulting from the failure to make a
balloon payment, insure the balloon payment.
See Annex B and "Certain Characteristics of
the Mortgage Loans -- Credit Lease Loans."
S-22
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
MORTGAGE CREDIT LEASE BY
TYPE OF CREDIT LEASE LOANS BALANCE
- -------------------------- ---------- ----------------
<S> <C> <C>
Bond-Type 31 80.1%
Triple Net 6 16.9
Double Net 3 3.0
-- -----
TOTAL 40 100.0%
== =====
</TABLE>
<TABLE>
<CAPTION>
TOTAL NOTE RATING*
CREDIT NAME AMOUNTS (S&P/MOODY'S)
- --------------------- --------------- --------------
<S> <C> <C>
Accor S.A. $106,262,923 BBB/NR
CVS 45,424,134 A-/A3
United Artists
Theater Circuit 23,302,898 B+/B1**
American Restaurant
Group 17,787,585 B**/B3**
Cinemark USA 14,388,230 BB-/Ba3
Regal Cinemas 13,473,026 BB-/Ba3**
Garden Ridge 10,627,254 NR/NR
Hoyt's Cinemas 7,943,633 BB/NR
Pamida 7,662,521 NR/NR
Rite Aid 6,480,640 BBB+/Baa1
Eckerd 2,781,678 A/NR
Office Depot 2,524,380 BBB-/NR
-------------
Total $258,658,902
=============
</TABLE>
- ----------
(*) Credit ratings are senior unsecured rating or issuer rating unless
otherwise noted.
(**) Credit ratings are senior secured ratings.
S-23
<PAGE>
CROSSED LOANS AND MULTI-PROPERTY LOANS AND RELATED BORROWER LOANS
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF INITIAL POOL
TYPE OF MORTGAGE LOAN MORTGAGE LOANS BALANCE
- ----------------------------------------------- ---------------- --------------
<S> <C> <C>
All multi-property loans 29 42.2%
All crossed loans 5 13.8%
Crossed loans and multi-property loans
which prohibit release of any related
mortgaged property 12 9.8%
Crossed loans and multi-property loans
which permit release of an individual
mortgaged property (1) 19 33.1%
Borrower is an affiliate of an entity which is
the borrower under another mortgage loan
in the trust, but such mortgage loans are
not cross-defaulted or cross-collateralized 73 26.2%
</TABLE>
- ----------
(1) Generally, these mortgage loans require (a) defeasance or prepayment of
125% of the outstanding balance or property release amount and (b) that
the debt service coverage ratio with respect to the remaining properties
is not less than the greater of (i) a specified debt service coverage
ratio and (ii) the debt service coverage ratio immediately prior to such
defeasance or prepayment.
CROSSED LOANS
<TABLE>
<CAPTION>
LOAN CUT-OFF DATE % OF INITIAL
NO. LOAN NAME PRINCIPAL BALANCE POOL BALANCE
- ------ -------------------------- ------------------- -------------
<S> <C> <C> <C>
1 Intell/Reichmann Portfolio
Note A $ 65,897,622
Note B 20,768,955
------------
Total ................. $ 86,666,578 4.5%
============
3 Butera Portfolio
Note A $ 75,285,374
Note B 7,585,634
------------
Total ................. $ 82,871,008 4.3%
============
4 Patriot American
Note A $ 41,370,451
Note B 40,199,107
------------
Total ................. $ 81,569,558 4.3%
============
53 Pamida
Pamida Montana #296 $ 1,669,441
Pamida Nebraska #113 1,630,467
Pamida Nebraska #155 1,525,168
Pamida Wyoming #291 1,497,770
Pamida Kansas #157 1,339,674
------------
Total ................. $ 7,662,521 0.4%
============
57 Best Buy
Best Buy - Canton, OH $ 3,630,703
Best Buy - Spartanburg, SC 3,015,203
------------
Total ................. $ 6,645,906 0.4%
------------ ----
TOTAL .................... $265,415,569 13.8%
============ ====
</TABLE>
S-24
<PAGE>
MORTGAGE LOANS SECURED BY MORE THAN ONE MORTGAGED PROPERTY
<TABLE>
<CAPTION>
NUMBER OF CUT-OFF DATE % OF INITIAL RELEASE
LOAN NO. LOAN NAME PROPERTIES PRINCIPAL BALANCE POOL BALANCE PRICE (1)
- ---------- --------------------------------------------- ------------ ------------------- -------------- ----------
<S> <C> <C> <C> <C> <C>
1 Intell/Reichmann Portfolio Summary 10 $ 86,666,578 4.5% 125%
3 Butera Portfolio Summary 14 82,871,008 4.3% 125%
4 Patriot American Summary 2 81,569,558 4.2% 125%
5 L'Enfant Plaza Summary 2 74,961,792 3.9% 125%
8 Thurman Multifamily Portfolio Summary 10 55,745,250 2.9% 125%
10 Pinstripe Multifamily Portfolio Summary 12 52,709,690 2.7% 125%
13 Garden Variety Apartments Portfolio Summary 2 44,088,900 2.3% 125%
14 Donatelli Portfolio Summary 4 41,540,422 2.2% None(2)
15 Camco Summary 3 36,953,806 1.9% None(2)
16 Accor-Texas Summary 6 30,176,866 1.6% None(2)
19 United Artists-5 Theaters Summary 5 23,302,898 1.2% 100%
21 Lipkin Portfolio Summary 10 19,716,966 1.0% 125%
22 Grand Union Summary 3 19,662,220 1.0% 125%
23 Accor-Florida Summary 4 19,143,664 1.0% None(2)
24 Summit Portfolio Summary 5 17,790,686 0.9% 125%
25 American Restaurant Group, Inc. Summary 8 17,787,585 0.9% None(2)
26 Accor-Midwest Summary 5 15,623,817 0.8% None(2)
29 Accor-East Summary 5 14,443,020 0.8% None(2)
32 Accor-Southeast Summary 4 13,763,265 0.7% None(2)
35 Accor-West Summary 3 13,112,290 0.7% None(2)
54 Bloomfield Multi Summary 13 7,438,145 0.4% 125%
56 Washington HUD Summary 4 6,798,452 0.4% 125%
59 U.S. Equities II Summary 13 6,514,620 0.3% 125%
69 Essex Portfolio Summary 2 5,328,399 0.3% 125%
76 East-West 4 LLC Summary 4 4,738,569 0.2% 100%
78 Jefferson Plaza Summary 2 4,591,080 0.2% None(2)
79 Bloomfield-Lex Summary 6 4,555,639 0.2% 125%
80 Carroll Pool Summary 3 4,498,950 0.2% None(2)
86 Westwood Portfolio Summary 6 4,201,726 0.2% 125%
-- ------------ ----
TOTAL 170 $810,295,862 42.2%
=== ============ ====
</TABLE>
- ----------
(1) The release price shown is the percentage of the property release amount
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) No release of an individual mortgaged property from the lien of the
related mortgage is allowed.
LOCKBOX TERMS 213 mortgage loans, representing 99.4% 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
paid into one of the following three types of
lockboxes, each of which is described below:
HARD LOCKBOX. Income is paid directly to a
lockbox account (or, with respect to
multifamily properties, collected and
deposited in such account by the manager of
the mortgaged property or, in the case of
hospitality properties, cash or
"over-the-counter" receipts will be deposited
into the lockbox account by the manager while
credit card receivables will be deposited
directly into a lockbox account) controlled by
the servicer on behalf of the trust fund;
S-25
<PAGE>
MODIFIED LOCKBOX. Income is paid to the
manager of the mortgaged properties, which
will deposit all sums collected into a lockbox
account on a regular basis; or
SPRINGING LOCKBOX. Income is collected by the
borrower unless 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 debt service
coverage ratio) occurs, and thereafter a hard
lockbox is put in place.
Each mortgage loan which has a lockbox is
identified on Annex A. Lockbox accounts will
not be assets of the trust fund. The mortgage
loans provide for such lockbox accounts as
follows:
<TABLE>
<CAPTION>
% OF INITIAL NUMBER OF
TYPE OF LOCKBOX POOL BALANCE MORTGAGE LOANS
- ----------------- -------------- ---------------
<S> <C> <C>
Hard 73.9% 90
Modified 3.6% 6
Springing 22.0% 117
None 0.6% 4
----- ---
TOTAL 100.0% 217
===== ===
</TABLE>
PREPAYMENT CHARACTERISTICS Each mortgage loan restricts voluntary
OF THE MORTGAGE LOANS prepayments in one or more of the following
ways:
o by prohibiting any prepayments for a
specified period of time after the mortgage
loan is originated;
o by requiring that any principal prepayment
made during a specified period of time be
accompanied by a yield maintenance charge;
and/or
o by imposing fees or premiums in connection
with full or partial principal prepayments
for a specified period of time.
Certain credit lease loans permit principal
prepayments to be made on any date after the
related lockout period with interest only up
to the date of prepayment. The remaining
mortgage loans generally provide that
principal prepayments may only be made:
o on a due date; or
o accompanied by interest through the next
due date.
Additional collateral loans may also require
partial principal prepayments during the
related lockout period. See "-- Additional
Collateral Loans" below.
As of the cut-off date, approximately 98.8% of
the mortgage loans by initial pool balance
were within their
S-26
<PAGE>
respective lockout periods, and the weighted
average of such lockout periods was 128
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 -- Yield may be Affected
by Prepayments and Defaults" and "Certain
Characteristics of the Mortgage Loans --
Certain Terms and Conditions of the Mortgage
Loans -- Prepayment Provisions" and "--
Property Releases."
DEFEASANCE 214 mortgage loans, representing 97.9% of the
initial pool balance, permit the borrower to
release 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) upon the pledge to the
trustee of certain noncallable U.S. government
obligations. Such U.S. government obligations
must provide for payments which approximate
scheduled interest and principal payments due
under the related mortgage note.
ADDITIONAL COLLATERAL LOANS 3 of the mortgage loans, representing 1.4% of
the initial pool balance, are also secured by
cash reserves or irrevocable letters of
credit. Such additional collateral will be
released to the borrower upon satisfaction by
the borrower of certain conditions including,
in certain cases, meeting certain debt service
coverage ratio levels and/or satisfying
certain leasing conditions. If such conditions
are not satisfied within the time periods
specified therefor, the related reserve or
credit enhancement amount may be applied to
partially prepay the related mortgage loan.
Such partial prepayment may not be required to
be accompanied by the payment of a prepayment
premium or yield maintenance charge. The
holders of any class of offered certificates
receiving any such prepayment will receive
certain yield protection payments. The
servicer will be required to advance such
yield protection payments to compensate such
holders for the absence of any such prepayment
premium or yield maintenance charge. The right
to receive yield protection payments will not
be treated as an interest in the REMIC. See
"Certain Federal Income Tax Consequences." See
"Description of the Offered Certificates --
Distributions -- Yield Protection Payments."
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.
S-27
<PAGE>
RISK FACTORS
You should consider, among other things, the following factors and the
factors under "Risk Factors" in the prospectus in connection with the purchase
of the offered certificates. Unless otherwise stated, all references to
percentages of the mortgage loans, or of any specified group of mortgage loans,
referred to in this prospectus supplement are calculated using the aggregate
cut-off date principal balance. References to percentages of mortgaged
properties are references to the percentages of the initial pool balance
represented by the aggregate cut-off date principal balance of the related
mortgage loans or, in the case of multi-property loans, the amount allocated to
each individual mortgaged property unless otherwise indicated. References to
the mortgage loans will include the mortgage loan related to the loan
participation in the trust fund. Cross-collateralized loans are treated in this
Prospectus Supplement as one mortgage loan, except as otherwise indicated. All
numerical information concerning the mortgage loans is provided on an
approximate basis.
THE MORTGAGE LOANS
COMMERCIAL AND MULTIFAMILY Commercial and multifamily lending is
LENDING IS SUBJECT TO SPECIAL generally thought to be riskier than
RISKS single-family residential lending because
larger loans are made to single borrowers or
groups of related borrowers.
The mortgage loans are secured by the
following income-producing property types:
o office properties;
o anchored and unanchored retail
properties;
o multifamily properties;
o hospitality properties;
o industrial properties;
o healthcare properties;
o mobile home parks;
o self-storage facilities; and
o other commercial properties.
REPAYMENT OF COMMERCIAL AND Repayment of loans secured by commercial and
MULTIFAMILY MORTGAGE LOANS multifamily properties typically depends on the
cash flow produced by such properties. The
ratio of net cash flow to debt service of a
loan secured by income-producing property is
an important measure of the risk of default on
such a loan.
Payment on each mortgage loan is dependent
primarily on:
o the net operating income of the related
mortgaged property; and
o with respect to balloon loans or mortgage
loans with anticipated repayment dates, the
market value of the related mortgaged
property (taking into account any adverse
effect of a foreclosure proceeding on such
market value) or the ability of the related
borrower to refinance the mortgage loan at
maturity (whether at scheduled maturity or,
in the event of a default under
S-28
<PAGE>
the mortgage loan, upon the acceleration of
such maturity) or on the anticipated
repayment date.
In general, if a mortgage loan has a
relatively high loan-to-value ratio or a
relatively low debt service coverage ratio, a
foreclosure sale is more likely to result in
proceeds insufficient to satisfy the
outstanding debt.
NONRECOURSE LOANS LIMIT REMEDIES The mortgage loans will not be an obligation
FOLLOWING BORROWER DEFAULT of, or be insured or guaranteed by:
o any governmental entity;
o any private mortgage insurer;
o the depositor;
o either mortgage loan seller;
o the servicer;
o the special servicer;
o the trustee; or
o any of their respective affiliates.
Each mortgage loan generally is a nonrecourse
loan. If there is a default (other than a
default resulting from voluntary bankruptcy,
fraud or willful misconduct), there will
generally only be recourse against the
specific properties and other assets that have
been pledged to secure such mortgage loan.
Even if a mortgage loan provides for recourse
to a borrower or its affiliates, it is
unlikely the trust fund will ultimately
recover any amounts not covered by the
mortgaged property. See "Certain
Characteristics of the Mortgage Loans."
CASH FLOWS AND PROPERTY Commercial and multifamily cash flows are
VALUES MAY BE VOLATILE volatile and may be insufficient to cover debt
service on the related mortgage loan at any
given time which may cause the value of a
property to decline. Cash flows and property
values generally affect:
o the ability to cover debt service;
o the ability to refinance the property;
o the ability to pay a mortgage loan in full
with sales proceeds; and
o the amount of proceeds recovered upon
foreclosure.
Cash flows and property values depend upon a
number of factors, including:
o national, regional and local economic
conditions;
o local real estate conditions, such as an
oversupply of space similar to the related
mortgaged property;
o changes or continued weakness in a
specific industry segment;
S-29
<PAGE>
o the nature of expenses:
o as a percentage of revenue;
o whether expenses are fixed or vary with
revenue; and
o the level of required capital
expenditures for proper maintenance and
demanded by tenants;
o demographic factors;
o changes required by retroactive building
or similar codes;
o capable management and adequate
maintenance;
o location;
o with respect to mortgaged properties with
uses subject to significant regulation,
changes in applicable laws;
o perceptions by prospective tenants and, if
applicable, their customers, of the safety,
convenience, services and attractiveness of
the property;
o the age, construction quality and design
of a particular property; and
o whether the mortgaged properties are
readily convertible to alternative uses.
PROPERTY MANAGEMENT IS The successful operation of a real estate
IMPORTANT TO THE project may depend on the performance and
SUCCESSFUL OPERATION viability of the property manager. Different
OF THE MORTGAGED PROPERTY property types require different levels of
property manager involvement. 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 generally responsible
for:
o operating the properties;
o providing building services;
o establishing and implementing the rental
structure;
o managing operating expenses;
o responding to changes in the local market;
and
o advising the borrower with respect to
maintenance and capital improvements.
Property managers may not always be in a
financial condition to fulfill their
management responsibilities. In addition,
certain of the mortgaged properties are
managed by affiliates of the applicable
borrower. If a mortgage loan is in default or
undergoing special servicing, such
relationship could disrupt the management of
the underlying property. This may adversely
affect cash flow, however, the mortgage loans
generally permit the lender to
S-30
<PAGE>
remove the property manager upon the
occurrence of one or more of the following:
o an event of default;
o a decline in cash flow below a specified
level; or
o the failure to satisfy some other
specified performance trigger.
RISKS ASSOCIATED WITH Lending on particular property types has
PARTICULAR PROPERTY particular risks. See "Certain Characteristics
TYPES of the Mortgage Loans -- Additional Mortgage
Loan Information." In addition to the factors
described under "-- Cash Flows and Property
Values May Be Volatile" above, cash flows and
the values of particular property types will
depend on the factors set forth below.
RISKS ASSOCIATED WITH 28.9% of the mortgage loans are secured by
OFFICE PROPERTIES office properties. The value and cash flow of
office properties will depend on the following
factors:
o the strength, stability, number and
quality of the tenants;
o the physical attributes and amenities of
the building in relation to competing
buildings;
o whether the area is a desirable business
location;
o local labor cost and quality, tax
environment (including tax benefits) and
quality of life issues such as schools and
cultural amenities;
o the financial condition of the owner; and
o access to transportation.
RISKS ASSOCIATED WITH 17.3% of the mortgage loans are secured by
RETAIL PROPERTIES retail properties. The value and cash flow of
retail properties will depend on the following
factors:
o the strength, stability, number and
quality of the tenants (a significant
component of the total rent paid by retail
tenants often is tied to a percentage of
gross sales);
o whether the mortgaged property is in a
desirable location;
o the physical attributes and amenities of
the building in relation to competing
buildings;
o competition from nontraditional sources
such as catalog retailers, home shopping
networks, electronic media shopping,
telemarketing and outlet centers; and
o whether a retail property is "anchored" or
"unanchored"; if "anchored," the strength,
stability, quality and continuous occupancy
of the "anchor" tenant are particularly
important factors.
S-31
<PAGE>
Retail properties that are "anchored" have
traditionally been perceived as less risky.
While there is no strict definition of an
"anchor," it is generally understood that a
retail "anchor" tenant is a tenant that is
proportionately larger in size and is vital in
attracting customers to the property. As used
herein, an "anchored property" means a
mortgaged 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.
The success of its anchor tenant is important
to a shopping center property. An anchor
tenant attracts and maintains other stores and
it generates consumer traffic. The failure of
one or more specified tenants, such as an
anchor tenant, to operate from its premises
may give certain tenants the right to
terminate or reduce rents under their leases.
Even if one were to continue to collect rent
from the anchor tenant that has vacated the
property (i.e., the anchor tenant "goes
dark"), such mortgaged property's revenues and
value may be adversely affected:
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF INITIAL POOL
RETAIL PROPERTY TYPE MORTGAGE PROPERTIES BALANCE
- ---------------------- --------------------- --------------
<S> <C> <C>
Anchored 29 12.1%
Unanchored 14 2.4
Single Tenant 12 2.8
-- ----
TOTAL 55 17.3%
== ====
</TABLE>
RISKS ASSOCIATED WITH 21.9% of the mortgage loans are secured by
MULTIFAMILY PROPERTIES multifamily properties. The value and cash
flow of a multifamily property will depend on
the following factors:
o the number of competing residential
developments in the local market (including
apartment buildings, manufactured housing
communities and site-built single family
homes);
o the physical attributes and amenities of
the building in relation to competing
buildings;
o the reputation of the multifamily
apartment building; and
o applicable state and local regulations
designed to protect tenants in connection
with evictions and rent increases.
Other factors that 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 include:
o local military base or factory closings;
o national and local politics, to the extent
they result in changes to rent
stabilization and rent control laws and
agreements; and
S-32
<PAGE>
o the level of mortgage interest rates to
the extent it encourages tenants to
purchase housing.
RISKS ASSOCIATED 8.3% of the mortgage loans are secured by
WITH HOSPITALITY hospitality properties. The value and cash
PROPERTIES flow of hospitality properties will depend on
the following factors:
o local, regional and national economic
conditions;
o the physical attributes and amenities of
the hotel in relation to competing hotels;
o the financial strength and capabilities of
the owner and operator of a hotel;
o travel patterns, which may be affected by
changes in energy prices, strikes,
relocation of highways, the construction of
additional highways and other factors;
o financial strength and public perception
of the franchise service mark and the
continued existence of the franchise
license agreement;
o competition from other hotels including
limited service hotels; and
o the continued existence of a liquor
license.
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. 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.
In the event of a foreclosure of a hospitality
property, a lender may be unable to remove a
franchisor that it desires to replace. Credit
Suisse First Boston Mortgage Capital LLC
generally has obtained agreements from the
franchisors 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
of such property.
RISKS ASSOCIATED WITH CREDIT 13.5% of the mortgage loans are secured by
LEASE LOANS credit lease obligations. See "Certain
Characteristics of the Mortgage Loans --
Credit Lease Loans" and "-- Construction
Loans." The performance of credit lease loans
will depend principally on the payment by the
related tenant or by the guarantor, if any, of
such monthly rental payments and other
payments due under the credit lease. In
reliance on the tenant's or guarantor's credit
rating, the credit lease loans were generally
underwritten to lower debt service coverage
ratios and/or higher loan-to-value ratios than
other mortgage loans.
S-33
<PAGE>
A downgrade in the credit rating of any of the
tenants and/or the guarantors may adversely
affect the rating of the offered certificates.
If a 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 that the special servicer will
be able to recover in full the amounts then
due under the credit lease loan.
RISKS ASSOCIATED WITH 7.9% of the mortgage loans are secured by
INDUSTRIAL industrial properties. The value and cash flow
PROPERTIES of industrial properties will depend on the
following factors:
o the quality of major tenants, especially
if occupied by a single tenant;
o aspects of building site design such as
clear heights, column spacing, zoning
restrictions, number of bays and bay
depths, divisibility, truck turning radius
and overall functions and accessibility;
o proximity to supply sources, labor and
customers and accessibility to rail lines,
major roadways and other distribution
channels; and
o the ability to adapt the mortgaged
property as an industry segment develops or
declines.
THE VALUE OF The improvements on certain mortgaged
PROPERTIES SECURING properties subject to credit leases,
CONSTRUCTION LOANS representing the security for 2.4% of the
IS DEPENDENT ON mortgage loans, were under
COMPLETION construction as of the cut-off date. The cost
of developing commercial properties may exceed
projections and construction may not be
completed on schedule, resulting in increased
construction costs. For each such mortgage
loan, the lender has obtained a completion
guaranty from CVS Corporation, the long-term
unsecured debt of which is rated "A3" by
Moody's Investors Services, Inc. and "A-" by
Standard & Poor's Rating Services. However, if
construction is not completed for any reason
and the completion guaranty is not honored,
the value of the related mortgaged property
could be substantially less than the value
utilized in calculating the loan-to-value
ratio for Annex B (i.e., an as-built,
stabilized value).
CASH FLOW AND The mortgaged properties with respect to 10.3%
VALUE OF SINGLE of the mortgage loans (other than the Credit
TENANT Lease Loans) are leased by a single tenant.
PROPERTIES DEPEND ON TENANT Income from and the market value of retail,
office and industrial mortgaged properties
occupied by a single tenant would be adversely
affected under the following circumstances:
o if space in such mortgaged properties were
vacated and could not be leased or relet on
terms comparable to the prior lease;
S-34
<PAGE>
o if the tenant were to become a debtor in a
bankruptcy case; and
o if tenant sales were to decline and rent
were based upon the volume of such sales.
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.
LARGER MORTGAGE Several of the mortgage loans have cut-off
LOANS MAY RESULT IN date principal balances
MORE SEVERE LOSSES that are substantially higher than the average
cut-off date principal balance. In general,
such concentrations can result in losses that
are more severe than would be the case if the
aggregate balance of such mortgage loans were
more evenly distributed among the mortgage
loans in such pool. The following chart lists
the ten largest mortgage loans:
TEN LARGEST MORTGAGE LOANS
<TABLE>
<CAPTION>
CUT-OFF DATE PERCENTAGE OF
LOAN NAME PRINCIPAL BALANCE INITIAL POOL BALANCE
- --------------------------------- ------------------- ---------------------
<S> <C> <C>
1 Intell/Reichmann Portfolio
Summary .................... $ 86,666,578 4.5%
2 Butera Portfolio Summary.... 82,871,008 4.3
3 Patriot American
Summary .................... 81,569,558 4.2
4 L'Enfant Plaza Summary ..... 74,961,792 3.9
5 180 Water Street ........... 74,957,136 3.9
6 260/261 Madison Avenue ..... 74,355,366 3.9
7 Trident Center ............. 60,000,000 3.1
8 Thurman Multifamily
Portfolio Summary .......... 55,745,250 2.9
9 Koll Corporate Plaza ....... 54,819,238 2.9
10 Pinstripe Multifamily
Portfolio Summary .......... 52,709,690 2.7
------------ ----
TOTAL ...................... $698,655,615 36.4%
============ ====
</TABLE>
MORTGAGE LOANS SECURED 42.2% of the mortgage loans are secured by
BY MULTIPLE PROPERTIES more than one mortgaged property. Securing a
MAY RESULT IN MORE SEVERE mortgage loan with multiple properties
LOSSES generally reduces the risk that the net
operating income generated by such properties
will not be sufficient to pay debt service and
result in defaults and ultimate losses.
However, properties securing cross-defaulted
and cross-collateralized mortgage loans
generally will be managed by the same managers
or affiliated managers or the same borrowers
or affiliated borrowers.
S-35
<PAGE>
MORTGAGE LOANS 26.2% of the mortgage loans were made to
SECURED BY AFFILIATED affiliated borrowers and are not
BORROWERS MAY RESULT cross-collateralized. Mortgage loans with
IN MORE SEVERE LOSSES the same borrower or related borrowers
pose risks. Some of these risks include:
o financial difficulty at one mortgaged
property, could cause the owner to defer
maintenance at another mortgaged property
in order to satisfy current expenses with
respect to the troubled mortgaged property;
and
o the owner could attempt to avert
foreclosure on one mortgaged property by
filing a bankruptcy petition that might
have the effect of interrupting monthly
payments for an indefinite period on all of
the related mortgage loans.
See "-- Enforceability of Cross-Collateralized
and Cross-Defaulted Mortgage Loans May be
Challenged" 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."
Each group of loans in the table set forth
below corresponds to a group of affiliated
borrowers (credit lease loans are not
included).
RELATED BORROWER LOANS
<TABLE>
<CAPTION>
CUT-OFF DATE % OF INITIAL
LOAN NO. LOAN NAME PRINCIPAL BALANCE POOL BALANCE
- ---------- ------------------------------------------- ------------------- -------------
<S> <C> <C> <C>
8 Thurman Multifamily Portfolio Summary $ 55,745,250
10 Pinstripe Multifamily Portfolio Summary 52,709,690
13 Garden Variety Apartments Portfolio Summary 44,088,900
------------
Total ................................... $152,543,840 7.9%
============
18 Courthouse Square Apartments $ 23,564,880
20 Ramblewood Village Apartments 22,220,441
28 English Village Apartments 15,222,781
85 Homestead Gardens Apartments 4,274,070
------------
Total ................................... $ 65,282,171 3.4%
============
62 PFI-Ignacio Gardens $ 6,228,111
88 PFI-Lincoln Villa 4,063,115
93 PFI-Northgate 3,862,209
111 PFI-Fairway 3,013,602
110 PFI-Creekside 3,039,590
133 PFI-Oak Hill Apartments 2,301,932
127 PFI-Ignacio Pines 2,478,850
156 PFI-Westview 2,036,056
170 PFI-Northern Apartments 1,829,152
159 PFI-Ignacio Hills III 2,006,070
190 PFI-Strawberry 1,430,337
193 PFI-Via Casitas 1,338,379
203 PFI-Country Club 1,120,480
197 PFI-Ignacio Hills I 1,284,404
214 PFI-Ignacio Hills IV 582,730
------------
Total ................................... $ 36,615,017 1.9%
============
</TABLE>
S-36
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF DATE % OF INITIAL
LOAN NO. LOAN NAME PRINCIPAL BALANCE POOL BALANCE
- ---------- -------------------------------- ------------------- --------------
<S> <C> <C> <C>
40 St. Landry Plaza Shopping Center $10,776,767
48 Island Walk Shopping Center 8,700,000
61 St. Charles Plaza 6,300,000
90 Edgewater Square 4,000,000
142 Belleair Bazaar 2,236,000
165 Citrus Plaza 1,930,000
-----------
Total ........................ $33,942,767 1.8%
===========
107 1270 Gerard Avenue $ 3,195,383
118 690 Gerard Avenue 2,740,000
121 2300 Grand Concourse 2,720,000
120 230 East 167th Street 2,720,000
140 215 Mount Hope Place 2,250,000
129 984 Sheridan Avenue 2,400,000
139 1210 Sherman Avenue 2,250,000
134 176 East 176th Street 2,300,000
178 1791 Grand Concourse 1,777,000
167 2908-10 Valentine Avenue 1,860,000
186 3031 Holland Avenue 1,548,000
185 3041 Holland Avenue 1,580,000
187 1240 Sherman Avenue 1,525,000
198 1945 Loring Place South 1,280,000
210 344 East 209th Street 855,000
213 2885 Briggs Avenue 680,000
215 116 Henwood Place 560,000
-----------
Total ........................ $32,240,383 1.7%
===========
52 Stirling Industrial Park $ 7,764,366
92 Commerce Security Center 3,981,726
98 Affordable Warehouses 3,683,096
163 7600 Medley Industrial Building 1,991,039
-----------
Total ........................ $17,420,228 0.9%
===========
45 1000 Sylvan Avenue $ 9,616,048
84 LG International Building 4,340,558
-----------
Total ........................ $13,956,606 0.7%
===========
54 Bloomfield Multi Summary $ 7,438,145
79 Bloomfield-Lex 4,555,639
-----------
Total ........................ $11,993,783 0.6%
===========
</TABLE>
S-37
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF DATE % OF INITIAL
LOAN NO. LOAN NAME PRINCIPAL BALANCE POOL BALANCE
- ---------- ----------------------------- ------------------- --------------
<S> <C> <C> <C>
89 Bayscene Mobilehome Park $ 4,035,586
81 Copacabana Mobile Home Park 4,442,095
149 Buena Park Manor MHP 2,144,931
-----------
Total ..................... $10,622,612 0.6%
===========
115 Bari Manor $ 2,883,445
141 Hudson View Estates 2,238,792
171 Sparta Green Townhouses 1,823,017
212 Sherwood Townhouses 696,624
-----------
Total ..................... $ 7,641,878 0.4%
===========
131 111 East 167th Street $ 2,396,503
153 2544 Valentine Avenue 2,096,970
169 2 Minerva Place 1,840,000
-----------
Total ..................... $ 6,333,473 0.3%
===========
104 Quality Inn-Nautilus $ 3,290,225
161 Best Western-Wright Patterson 1,994,076
-----------
Total ..................... $ 5,284,301 0.3%
===========
168 416-418 Knickerbocker $ 1,845,638
188 2174 Pelham Associates 1,496,463
-----------
Total ..................... $ 3,342,100 0.2%
===========
</TABLE>
ENFORCEABILITY OF 13.8% of the mortgage loans are
CROSS-COLLATERALIZED cross-collateralized and/or cross-defaulted
AND CROSS-DEFAULTED with other mortgage loans in the mortgage
MORTGAGE LOANS MAY pool. These arrangements attempt to reduce the
BE CHALLENGED risk that one mortgaged property may not
generate enough net operating income to pay
debt service. See "-- Mortgage Loans Secured
by Multiple Properties May Result in More
Severe Losses" and "-- Mortgage Loans Secured
by Affiliated Borrowers May Result in More
Severe Losses" above.
Cross-collateralization arrangements involving
more than one borrower could be challenged as
a fraudulent conveyance if:
o one of the borrowers were to become a
debtor in a bankruptcy case;
o such borrower did not receive fair
consideration or reasonably equivalent
value in exchange for allowing its
mortgaged property to be encumbered; and
o at the time the lien was granted, the
borrower was:
o insolvent;
o inadequately capitalized; or
o unable to pay its debts.
S-38
<PAGE>
OTHER FINANCING MAY AFFECT The mortgage loans generally prohibit
BORROWER'S PERFORMANCE OR borrowers from incurring any additional debt
INTERFERE WITH LENDER'S that is secured by the related mortgaged
RIGHTS UNDER MORTGAGE LOANS property. Generally, subject to certain
limitations relating to maximum amounts,
borrowers may incur unsecured trade and
operational debt in connection with the
ordinary operation and maintenance of the
related mortgaged property.
The existence of such other debt could:
o adversely affect the financial viability
of the borrowers;
o adversely affect the security interest of
the lender in the equipment or other assets
acquired through such financings;
o complicate bankruptcy proceedings; and
o delay foreclosure on the mortgaged
property.
The bankruptcy of a subordinate lender may
also delay foreclosure. See "Certain Legal
Aspects of the Mortgage Loans -- Secondary
Financing; Due-on-Encumbrance Provisions" in
the prospectus. Except for four mortgage loans
which represent 3.0% of the mortgage loans,
Credit Suisse First Boston Mortgage Capital
LLC has not permitted any additional debt to
be secured by a mortgaged property. All such
mortgage loans have standstill and
subordination agreements in place between the
related lenders.
Credit Suisse First Boston Mortgage Capital
LLC has made 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>
CUT-OFF DATE ORIGINAL
PRINCIPAL PRINCIPAL MEZZANINE CUT-OFF FORECLOSEABLE
BALANCE OF BALANCE OF LOAN DATE ON
LOAN MORTGAGE MEZZANINE MATURITY AGGREGATE MORTGAGED
NO. LOAN NAME LOAN LOAN DATE LTV (1) PROPERTY
- ------ --------------------------------------------- -------------- -------------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
1 Intell-Reichmann Portfolio Summary $ 86,666,578 $ 2,651,196 4/11/00 73.82% No
3 Butera Portfolio Summary 82,871,008 958,942 10/11/05 88.95% No
5 L'Enfant Plaza 74,961,792 2,500,000 9/11/05 66.44% No
6 260-261 Madison Avenue 74,355,366 10,000,000 12/31/00 64.89% No
8 Thurman Multifamily Portfolio Summary 55,745,250 2,346,865 11/11/08 83.11% No
10 Pinstripe Multifamily Portfolio Summary 52,709,690 1,941,932 11/11/08 80.98% No
13 Garden Variety Apartments Portfolio Summary 44,088,900 1,504,432 11/11/08 89.18% No
14 Donatelli Portfolio Summary 41,540,422 15,816,626 12/11/02 87.17% No
15 Camco Summary 36,953,806 4,200,000 10/11/05 95.04% No
89 Bayscene Mobilehome Park 4,035,586 924,282 4/11/03 95.38% No
------------ -----------
Total $553,928,398 $42,844,275
============ ===========
</TABLE>
- ----------
(1) The ratio of the sum of the cut-off date principal balance of the indicated
mortgage loan and related mezzanine debt as of origination to the value of
the related mortgaged property.
S-39
<PAGE>
Upon a default under a mezzanine loan, the
mezzanine loan lender would be entitled to
foreclose upon the equity in the related
borrower, 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. If the mezzanine loan lender
attempts to foreclose upon such pledged
equity, the obligor may file for bankruptcy. A
mezzanine loan may not be transferred to
another entity without the consent of the
servicer unless such entity satisfies certain
requirements set forth in the pooling and
servicing agreement.
No mezzanine loan 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 loan lender's
only 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.
A MORTGAGE LOAN SELLER AND/OR Credit Suisse First Boston Mortgage Capital
LLC AFFILIATES MAY HAVE and/or affiliates have acquired preferred
PREFERRED EQUITY equity interests in the borrowers with respect
INTEREST IN SOME BORROWERS to 11 of the mortgage loans representing 26.9%
of the mortgage loans, as set forth in the
following table:
PREFERRED EQUITY INVESTMENTS IN BORROWERS
<TABLE>
<CAPTION>
CUT-OFF DATE CUT-OFF DATE SCHEDULED FINAL
PRINCIPAL AMOUNT DISTRIBUTION
LOAN BALANCE OF OF EQUITY DATE OF
NO. LOAN NAME MORTGAGE LOAN INVESTMENT PREFERRED EQUITY (1)
- ------ --------------------------------------------- --------------- ------------------ ---------------------
<S> <C> <C> <C> <C>
1 Intell/Reichmann Portfolio Summary $ 86,666,578 $ 13,334,654 4/11/00
3 Butera Portfolio Summary 82,871,008 6,298,158 10/11/05
5 L'Enfant Plaza 74,961,792 45,400,000 9/11/05
8 Thurman Multifamily Portfolio Summary 55,745,250 2,644,337(2) 11/11/08
9 Koll Corporate Plaza 54,819,238 4,200,000 9/11/05
10 Pinstripe Multifamily Portfolio Summary 52,709,690 3,013,656(2) 11/11/08
13 Garden Variety Apartments Portfolio Summary 44,088,900 1,685,868(2) 11/11/08
18 Courthouse Square Apartments 23,564,880 3,025,631 6/11/08
20 Ramblewood Village Apartments 22,220,441 2,872,637 6/11/08
28 English Village Apartments 15,222,781 1,958,027 6/11/08
85 Homestead Gardens Apartments 4,274,070 590,201 6/11/08
------------ --------------
TOTAL $517,144,628 $ 85,023,169
============ ==============
</TABLE>
- ----------
(1) In accordance with the minimum payments due monthly.
(2) May be converted to a mezzanine loan at the option of the preferred
equity holder.
In general, with respect to each such
borrower, the preferred equity holder is
entitled to the following:
S-40
<PAGE>
o to receive certain preferred
distributions:
o prior to distributions being made to the
other partners or members;
o after all required monthly debt service
payments, reserve payments and other
payments under the related mortgage loan
are made;
o after any obligations to other creditors
have been satisfied when due; and
o after all monthly operating expenses
with respect to the related mortgaged
property have been paid.
o to terminate and replace the manager of
the related mortgaged property or
properties (or the managing member or
general partner of the borrower) upon:
o the occurrence of certain specified
breaches; or
o in some cases, if the debt service
coverage ratio falls below certain
levels.
o to approve the annual budget for the
mortgaged property; and
o to approve certain actions of the related
borrowers, including:
o certain transactions with affiliates;
o prepayment or refinancing of the related
mortgage loan;
o transfer of the related mortgaged
property;
o entry into or modification of
substantial leases; or
o improvement of the related mortgaged
properties.
ONE OF THE MORTGAGE LOAN Credit Suisse First Boston Mortgage Capital
SELLERS AND/OR CERTAIN LLC and/or certain officers of Credit Suisse
OFFICERS THEREOF OR THE First Boston Mortgage Capital LLC and the
UNDERWRITER MAY HAVE underwriter own equity interests in the
EQUITY INTERESTS IN SOME the borrowers with respect to 5 mortgage
BORROWERS loans representing 8.7% of the mortgage loans.
DECISIONS REGARDING If the trust fund were to acquire a mortgaged
FORECLOSURE WILL property pursuant to a foreclosure or delivery
BE AFFECTED BY TAX ON of a deed in lieu of foreclosure, the
CERTAIN INCOME special servicer would be required to retain
FROM OPERATION OF an independent contractor to operate and
FORECLOSURE manage the mortgaged property. Any net income
PROPERTY from such property other than qualifying
"rents from real property" will subject a
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. "Rents from real property"
does not include 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. See "The Pooling and Servicing
Agreement -- Realization Upon Mortgage Loans."
GEOGRAPHIC CONCENTRATION OF The concentration of mortgaged properties in a
MORTGAGED PROPERTIES SUBJECTS specific state or region will make the
THE TRUST FUND TO STATE OR performance of the pool of mortgage loans, as
REGIONAL CONDITIONS a whole, more sensitive to the following
S-41
<PAGE>
in the state or region where the borrowers and
the mortgaged properties are concentrated:
o economic conditions, including real estate
market conditions;
o changes in governmental rules and fiscal
policies;
o acts of God (which may result in uninsured
losses); and
o other factors which are beyond the control
of the borrowers.
The mortgaged properties are located in 47
states, the District of Columbia 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 of allocated loan amount) of
the mortgaged properties.
SIGNIFICANT GEOGRAPHIC CONCENTRATION OF MORTGAGED PROPERTIES
<TABLE>
<CAPTION>
NUMBER OF
% OF INITIAL POOL MORTGAGED
STATE BALANCE PROPERTIES
- ----------------- ------------------- -----------
<S> <C> <C>
New York 15.0% 56
California 14.0% 62
Texas 10.2% 29
New Jersey 8.3% 25
Washington DC 6.3% 3
Florida 6.1% 25
Maryland 5.8% 16
</TABLE>
SOME REMEDIES MAY NOT BE The mortgage loans generally contain
AVAILABLE FOLLOWING A "due-on-sale" and "due-on-encumbrance" clauses
MORTGAGE LOAN DEFAULT which 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 or its interest in the
mortgaged property in violation of the terms
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.
Each of the mortgage loans is secured by an
assignment of leases and rents from the
borrower, however, the borrower
S-42
<PAGE>
generally may collect rents for so long as
there is no default. As a result, the trust
fund's rights to such rents will be limited
because:
o the trust fund may not have a perfected
security interest in the rent payments
until the servicer collects them;
o the servicer may not be entitled to
collect the rent payments without court
action; and
o the bankruptcy of the related borrower
could limit the servicer's ability to
collect the rents.
See "Certain Legal Aspects of Mortgage Loans
-- Leases and Rents" in the prospectus.
ENVIRONMENTAL LAWS MAY Under various federal, state and local
AFFECT MORTGAGED PROPERTY environmental laws, ordinances and
CASH FLOW AND VALUE regulations, a current or previous owner or
operator of real property may be liable for
the costs of cleanup of environmental
contamination on, under, adjacent to or in
such property. Such laws often impose
liability whether or not the owner or operator
knew of, or was responsible for, the presence
of such contamination. The costs of any
required cleanup and the owner's liability for
these costs are generally not limited under
these laws and could exceed the value of the
property and/or the aggregate assets of the
owner. Contamination of a property may give
rise to a lien on the property to assure the
costs of cleanup. Such an environmental lien
may have priority over the lien of an existing
mortgage. In addition, the presence of
hazardous or toxic substances, or the failure
to properly clean up contamination on such
property, may adversely affect the owner's or
operator's ability to borrow using such
property as collateral.
Certain environmental laws impose liability
for releases of asbestos into the air. Third
parties may seek recovery from owners or
operators of real property for personal injury
associated with exposure to asbestos.
Environmental site assessments or studies have
been conducted with respect to substantially
all of the mortgaged properties within 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. It is possible that the environmental
site assessments did not reveal all
environmental liabilities or that there are
material environmental liabilities of which
neither the mortgage loan seller nor the
depositor are aware. It is also possible that
the environmental condition of the mortgaged
properties in the future could be affected by
tenants and occupants, or by third parties
unrelated to the borrowers. There can be no
assurance that any such environmental
S-43
<PAGE>
conditions will not have a material adverse
effect on the value or cash flow of the
related mortgaged property.
The borrowers agreed to establish and maintain
operations and maintenance programs, abatement
programs and/or environmental reserves in
cases where the environmental assessments
revealed:
o the existence of material amounts of
friable and/or non-friable asbestos;
o underground storage tanks that needed to
be replaced or removed;
o lead-based paint at certain of the
multifamily residential properties; or
o other adverse environmental conditions,
including polychlorinated biphenyls in
equipment, elevated radon levels or
contamination of soil and/or groundwater.
See "Certain Characteristics of the Mortgage
Loans -- Environmental Matters."
BALLOON LOANS AND MORTGAGE Balloon loans and mortgage loans with a
LOANS WITH ANTICIPATED specified anticipated repayment date involve a
REPAYMENT DATES INVOLVE greater risk to the lender than fully
GREATER RISK amortizing loans because in order to make the
balloon payment or pay the mortgage loan in
full on the anticipated repayment date, the
borrower will typically need either to
refinance the loan or to sell the related
mortgaged property at a price which will cover
such payment. The ability of a borrower to
refinance the related mortgage loan or sell
the related mortgaged property will depend on
the factors described above affecting property
value and cash flow. See "Risk Factors --
Balloon Payments" in the prospectus. The table
set forth below sets forth the amortization
characteristics of the mortgage loans:
AMORTIZATION CHARACTERISTICS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
% OF
INITIAL POOL NUMBER OF
TYPE OF LOAN BALANCE MORTGAGE LOANS
- ---------------------------------------- -------------- ---------------
<S> <C> <C>
Loans with Anticipated Repayment Dates 84.9% 166
Fully Amortizing Loans 8.6% 38
Balloon Loans 6.6% 13
----- ---
TOTAL 100.0% 217
===== ===
</TABLE>
ONE ACTION RULES MUST BE Several states (including California) have
COMPLIED WITH 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 special
servicer is required to obtain advice of
counsel prior to enforcing any of the trust
fund's rights under any of the mortgage loans
that include mortgaged properties where the
rule could be applicable. In the case of
either a
S-44
<PAGE>
cross-collateralized and cross-defaulted
mortgage loan or a multi-property loan, which
is secured by mortgaged properties located in
multiple states, the special servicer may be
required to foreclose first on properties
located in states where such "one action"
rules apply (and where non-judicial
foreclosure is permitted) before foreclosing
on properties located in states where judicial
foreclosure is the only permitted method of
foreclosure. See "Certain Legal Aspects of
Mortgage Loans -- Foreclosure" in the
prospectus.
LIMITATIONS OF APPRAISALS AND In general, appraisals are not guarantees, and
MARKET STUDIES may not be indicative, of present or future
value because:
o they represent the analysis and opinion of
the appraiser at or before the time the
mortgage loan is made;
o 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 mortgaged
property;
o appraisals seek to establish the amount a
typically motivated buyer would pay a
typically motivated seller and therefore,
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 "Certain Characteristics of
the Mortgage Loans" herein for illustrative
purposes only.
PROPERTY MANAGERS MAY The managers of the mortgaged properties and
EXPERIENCE CONFLICTS OF the borrowers may experience conflicts of
INTEREST IN MANAGING MULTIPLE interest in the management and/or ownership of
PROPERTIES such properties because:
o a substantial number of the mortgaged
properties are managed by property managers
affiliated with the respective borrowers;
o these property managers also may manage
and/or franchise additional properties,
including properties that may compete with
the mortgaged properties; and
o affiliates of the managers and/or the
borrowers, or the managers and/or the
borrowers themselves, also may own other
properties, including competing properties.
SERVICER AND THE SPECIAL The servicer and special servicer will service
SERVICER MAY EXPERIENCE loans other than those included in the trust
CONFLICTS OF INTEREST fund in the ordinary course of their business.
Such loans may include mortgage loans similar
to the mortgage loans in the trust fund. 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. Under the
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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.
LEASEHOLD INTERESTS ARE 4.4% of the mortgage loans are secured by
SUBJECT TO TERMS OF THE leasehold interests with respect to which the
GROUND LEASE 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.
Upon the bankruptcy of a lessor or a lessee
under a ground lease, the debtor entity has
the right to assume (i.e., continue) or reject
(i.e., terminate) the ground lease. Pursuant
to section 365(h) of the federal 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. In the event
of concurrent bankruptcy proceedings involving
the ground lessor and the ground
lessee/borrower, the ground lease could be
terminated.
CHANGES IN ZONING Due to changes in applicable building and
LAWS MAY AFFECT zoning ordinances and codes affecting certain
ABILITY TO REPAIR of the mortgaged properties which have come
OR RESTORE MORTGAGED into effect after the construction of such
PROPERTY properties, certain mortgaged properties may
not comply fully with current zoning laws
because of:
o density;
o use;
o parking;
o set-back requirements; or
o other building related conditions.
Such changes will not interfere with the
current use of the mortgaged property.
However, such changes may limit the ability of
the related borrower to rebuild the premises
"as is" in the event of a substantial casualty
loss which may adversely affect the ability of
the borrower to meet its mortgage loan
obligations from cash flow. Generally, all
mortgaged properties which no longer conform
to current zoning ordinances and codes require
the borrower to
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<PAGE>
maintain "law and ordinance" coverage which
will insure the increased cost of construction
to comply with current zoning ordinances and
codes. Insurance proceeds may not be
sufficient to pay off such mortgage loan in
full. In addition, if the mortgaged property
were to be repaired or restored in conformity
with then current law, its value could be less
than the remaining balance on the mortgage
loan and it may produce less revenue than
before such repair or restoration.
ENGINEERING REPORTS MAY The mortgaged properties were inspected by
NOT DISCOVER ALL REQUIRED engineering firms at the time the mortgage
REPAIRS AND REPLACEMENTS loans were originated (except for the
mortgaged properties where the improvements
were under construction) to assess:
o structure;
o exterior walls;
o roofing;
o interior construction;
o mechanical and electrical systems;
o general condition of the site; and
o buildings and other improvements located
on the mortgaged properties.
There can be no assurance that all conditions
requiring repair or replacement have been
identified in such inspections.
COMPLIANCE WITH AMERICANS WITH Under the Americans with Disabilities Act of
DISABILITIES ACT MAY RESULT IN 1990, all public accommodations are required
ADDITIONAL COSTS to meet certain federal requirements related
to access and use by disabled persons. To the
extent a mortgaged property does not comply
with the Americans with Disabilities Act of
1990, the related borrower may be required to
incur costs to comply with such law. In
addition, noncompliance could result in the
imposition of fines by the federal government
or an award of damages to private litigants.
NATURE OF A BORROWER'S There may be legal proceedings pending and,
LITIGATION MAY AFFECT from time to time, threatened against a
SUCH BORROWER FROM TIME borrower or its affiliates relating to the
TO TIME business of or arising out of the ordinary
course of business of such borrower and its
affiliates. There can be no assurance that
such litigation will not have a material
adverse effect on the distributions to
certificateholders. See "Certain
Characteristics of the Mortgage Loans --
Litigation."
CERTAIN LOANS MAY 3.5% of the mortgage loans may require the
REQUIRE PRINCIPAL related borrower to make partial prepayments
PAYDOWNS if certain conditions, including, in certain
cases, meeting certain debt service coverage
ratios and/or satisfying certain leasing
conditions, have not been satisfied. The
required
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<PAGE>
prepayment may need to be made during the
mortgage loan's lockout period and may not
include a prepayment premium or yield
maintenance charge. See "Risk Factors -- The
Offered Certificates -- Yield May be Affected
by Prepayments and Defaults" below. In
addition, if a portion of one of the mortgage
loans with a $41,540,422 principal balance
(Loan No. 14, the Donatelli Loan) is prepaid
as a result of a reversal on appeal of an
earlier court ruling with respect to the
validity of the transfer to the borrower of
one of the properties securing such mortgage
loan, such prepayment will not include a
prepayment premium or yield maintenance
charge. See "Certain Characteristics of the
Mortgage Loans -- Litigation." See "Prepayment
and Yield Considerations." The holders of any
class of offered certificates receiving any
such required prepayment will be entitled to
receive, only from the servicer and not from
assets of the trust fund, yield protection
payments to compensate such holders for the
absence of any such prepayment premium or
yield maintenance charge payments.
THE OFFERED CERTIFICATES
ONLY TRUST FUND ASSETS ARE If the assets of the trust fund are
AVAILABLE TO PAY CERTIFICATES insufficient to make payments on the offered
certificates, no other assets will be
available for payment of the deficiency.
YIELD MAY BE AFFECTED BY The yield to maturity on each class of
PREPAYMENTS AND DEFAULTS certificates will depend in part on the
following:
o the purchase price for the certificates;
o the rate and timing of voluntary and
involuntary principal prepayments
(including repurchases by a mortgage loan
seller for breaches of representation and
warranties);
o the rate and timing of delinquencies and
losses;
o interest shortfalls resulting from
prepayments; and
o the receipt and allocation of prepayment
premiums and/or yield maintenance charges.
The investment performance of the offered
certificates may be materially different from
what you expected if the assumptions you make
with respect to the factors listed above are
incorrect.
In general, if you purchase an offered
certificate at a premium and principal
distributions thereon (including voluntary and
involuntary prepayments) occur at a rate
faster than you anticipated at the time of
purchase, and no prepayment premiums or yield
maintenance charges are collected, your actual
yield to maturity may be lower than the yield
you assumed at the time of purchase.
Conversely, if you purchase an offered
certificate at a discount and
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<PAGE>
principal distributions thereon (including
voluntary and involuntary prepayments) occur
at a rate slower than that you assumed at the
time of purchase, your actual yield to
maturity may be lower than the yield you
assumed at the time of purchase.
In general, borrowers are less likely to
prepay if prevailing interest rates are at or
above the rates borne by such mortgage loans.
On the other hand, borrowers are more likely
to prepay if prevailing rates fall
significantly below the interest rates of the
mortgage loans. Borrowers are less likely to
prepay mortgage loans with lockout periods,
prepayment premium or yield maintenance charge
provisions, to the extent enforceable, than
otherwise identical mortgage loans without
such provisions, with shorter lockout periods
or with lower prepayment premiums or yield
maintenance charges.
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. Even if losses on the
mortgage loans are allocated to a particular
class of offered certificates, such losses may
affect the weighted average life and yield to
maturity of other certificates. Losses on the
mortgage loans, to the extent not allocated to
such class of offered certificates, may result
in a higher percentage ownership interest
evidenced by such certificates than would
otherwise have resulted absent such loss. The
consequent effect on the weighted average life
and yield to maturity of the offered
certificates will depend upon the
characteristics of the remaining mortgage
loans.
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 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, a
prepayment, there can be no assurance that a
court would not interpret such provisions as
requiring a prepayment premium or yield
maintenance charge which may be unenforceable
or usurious under applicable law. See
"Prepayment and Yield Considerations."
The yield to maturity on the Class A-X
Certificates will be extremely sensitive to
the prepayment and loss experience
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<PAGE>
on the mortgage loans. If you are an investor
in the Class A-X Certificates, you could fail
to fully recoup your initial investment in
circumstances of higher than anticipated rates
of principal prepayments or losses.
SERVICER'S RIGHT TO The servicer, the special servicer or the
RECEIVE INTEREST ON trustee, as applicable, will be entitled to
ADVANCES MAY RESULT IN receive interest on unreimbursed advances and
ADDITIONAL LOSSES TO THE unreimbursed servicing expenses. The right to
TRUST FUND 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. See "The Pooling and Servicing
Agreement -- Servicing Compensation and
Payment of Expenses."
IF THE SERVICER OR The servicer or special servicer or an
SPECIAL SERVICER affiliate thereof may purchase any class of
PURCHASES CERTIFICATES, certificates. It is anticipated that the
A CONFLICT OF INTEREST special servicer or an affiliate of the
COULD ARISE BETWEEN ITS special servicer will purchase all or a
DUTIES AND ITS INTEREST portion of the Class H, Class I and Class J
IN THE CERTIFICATES Certificates. However, there can be no
assurance that the special servicer or an
affiliate of the special servicer will
purchase any certificates. The purchase of
certificates by the servicer or special
servicer could cause a conflict between its
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.
SPECIAL SERVICER MAY BE The holders of a majority of the percentage
REMOVED BY CERTAIN INVESTORS interests of the controlling class (initially
WITHOUT CAUSE a portion of which may 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.
BOOK-ENTRY REGISTRATION OF Each class of offered certificates initially
THE CERTIFICATES MAY REQUIRE will be represented by one or more
YOU TO EXERCISE YOUR RIGHTS certificates registered in the name of Cede &
THROUGH DTC Co., as the nominee for The Depository Trust
Company (generally referred to as DTC), and
will not be registered in the names of the
related beneficial owners of certificates or
their nominees. As a result, unless and until
definitive certificates are issued, beneficial
owners of offered certificates will not be
recognized as "certificateholders" for certain
purposes. Therefore, until you are recognized
as a "certificateholder," you will be able to
exercise the rights of holders of certificates
only indirectly through DTC, and its
participating organizations. As a beneficial
owner holding a certificate through the
book-entry system, you will be entitled to
receive the reports described under "The
Pooling and Servicing
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<PAGE>
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 your beneficial ownership
interest in the offered certificates, you will
be entitled to receive, upon request in
writing, copies of monthly reports to
certificateholders from the trustee.
LACK OF SECONDARY There currently is no secondary market for the
MARKET FOR THE offered certificates. Although the underwriter
CERTIFICATES MAY has advised the depositor that it currently
ADVERSELY AFFECT intends to make a secondary market in the
THEIR MARKET VALUE offered certificates, it is 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 you 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 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.
COMPUTERIZED SYSTEMS The transition from the year 1999 to the year
MAY BE DISRUPTED BY 2000 may disrupt the ability of computerized
TRANSITION TO YEAR 2000 systems of the servicer, the special servicer,
the trustee, the borrower and other parties to
process information, including:
o the collection of payments on the mortgage
loans;
o the servicing of the mortgage loans; and
o the distributions on your certificates.
The servicer, the special servicer and the
trustee are currently modifying their computer
systems and applications. They are using their
best efforts to be year 2000 compliant by
August 31, 1999. If the servicer, the special
servicer or the trustee is unable to complete
such modifications by the year 2000 or if the
borrowers or other third parties are not year
2000 compliant, the ability of the servicer
and the special servicer or the trustee to
service the mortgage loans and make
distributions to the certificateholders,
respectively, may be materially and adversely
affected.
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<PAGE>
DTC has informed its participants and other
members of the financial community that it has
developed and is implementing a program so
that its systems, as the same relate to the
timely payment of distributions (including
principal and income payments) to
securityholders, book-entry deliveries, and
settlement of trades within DTC, continue to
function appropriately.
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<PAGE>
DESCRIPTION OF THE MORTGAGE LOANS
GENERAL
The Trust Fund (as defined herein) will consist primarily of 217
fixed-rate loans, including a participation (the "Water Street Participation")
in a fixed-rate loan, secured by 363 multifamily and commercial properties (the
"Mortgage Loans"). References to the Mortgage Loans will include the mortgage
loan related to the Water Street Participation. The Mortgage Loans will have an
aggregate Principal Balance of approximately $1,919,275,079 (the "Initial Pool
Balance") as of November 11, 1998 (the "Cut-off Date"), subject to a variance
of plus or minus 5%. For the purposes of this Prospectus Supplement, any
Crossed Loan or Multi-Property Loan (as defined herein) is considered to be one
Mortgage Loan. Any loans made to affiliated borrowers which are not
cross-collateralized are considered separate Mortgage Loans. For purposes of
describing the property type and geographic distribution of Mortgaged
Properties (as defined herein), Allocated Loan Amounts (as defined herein), 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 Loan Balance (as defined herein). 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 one or more notes (each, a "Mortgage
Note"), and secured by one or more mortgages, deeds of trust or other similar
security instruments (each, a "Mortgage"). References to Mortgage Note will
include the trust's participation interest in a note which evidences the Water
Street Loan. Each of the Mortgages creates a first lien on the interests of the
related borrower 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"), as set forth in the following table:
SECURITY FOR THE MORTGAGE LOANS
<TABLE>
<CAPTION>
NUMBER OF
INTEREST OF % OF INITIAL MORTGAGED
BORROWER ENCUMBERED POOL BALANCE(1) PROPERTIES
- ------------------------ ----------------- -----------
<S> <C> <C>
Fee Simple Estate(2) 95.6% 352
Leasehold 4.4% 11
----- ---
TOTAL 100.0% 363
===== ===
</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 subject to a ground lease 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.
Each Mortgaged Property consists of land improved by (i) an office
building (an "Office Property," and any Mortgage Loan secured thereby, an
"Office Loan"), (ii) a retail property (a "Retail Property," and any Mortgage
Loan secured thereby, a "Retail Loan"), (iii) an apartment building or complex
consisting of five or more rental units (a "Multifamily Property," and any
Mortgage Loan secured thereby, a "Multifamily Loan"), (iv) a full or limited
service or extended stay hotel/motel property (a "Hospitality Property" or
"Lodging Property," and any Mortgage Loan secured thereby, a "Hospitality Loan"
or "Lodging Loan"), (v) an industrial property (an "Industrial Property," and
any Mortgage Loan secured
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<PAGE>
thereby, an "Industrial Loan"), or (vi) 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 "Certain Characteristics of the
Mortgage Loans -- Additional Mortgage Loan Information -- Mortgaged Properties
by Property Type."
5 Mortgage Loans, representing approximately 13.8% of the Initial Pool
Balance are evidenced by two or more Mortgage Notes which are secured and
cross-collateralized by two or more Mortgaged Properties. See "Risk Factors --
The Mortgage Loans -- Mortgage Loans Secured by Multiple Properties May Result
in More Severe Losses."
29 Mortgage Loans, representing approximately 42.1% of the Initial Pool
Balance, are secured by two or more Mortgaged Properties, under a single
Mortgage Note by a single borrower. See "Risk Factors -- Mortgage Loans Secured
by Affiliated Borrowers May Result in More Severe Losses."
The Mortgage Loans comprise two separate groups, Loan Group 1 and Loan
Group 2 (each, a "Loan Group" and, collectively, the "Mortgage Pool"). Loan
Group 1 will consist of 105 Mortgage Loans, representing approximately 41.0% of
the Initial Pool Balance. Loan Group 2 will consist of 112 Mortgage Loans,
representing approximately 59.0% of the Initial Pool Balance. See Annex C --
"Certain Characteristics of the Multifamily Mortgaged Properties."
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, either Mortgage Loan Seller, the Servicer, the Special Servicer,
the Trustee (each, as defined herein) 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 voluntary bankruptcy, 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 "-- Underwriting Standards" below. Credit
Suisse First Boston Mortgage Securities Corp. (the "Depositor") will purchase
the Mortgage Loans (or the beneficial interest therein) to be included in the
Trust Fund on or before the date on which the Certificates (as defined herein)
are issued (the "Closing Date") from Credit Suisse First Boston Mortgage
Capital LLC (the "CSFB Mortgage Loan Seller") and Credit Suisse First Boston
Depositor I Corporation pursuant to two separate Mortgage Loan Purchase
Agreements (each, a "Mortgage Loan Purchase Agreement") to be dated as of the
Cut-off Date between the related Mortgage Loan Seller and the Depositor. The
CSFB Mortgage Loan Seller will be obligated (directly or pursuant to the
assignment of certain rights under a loan purchase agreement between the
Mortgage Loan Sellers) to repurchase a Mortgage Loan in the event of (i) a
breach of a representation or warranty of the related 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
certificates representing 100% beneficial interest in certain of the Mortgage
Loans, together with the Depositor's rights against the CSFB Mortgage Loan
Seller 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 (as defined herein). The
Trustee will liquidate Credit Suisse First Boston Mortgage Finance Trust I (the
"Trust Mortgage Loan Seller" and, together with the CSFB Mortgage Loan Seller,
the "Mortgage Loan Sellers"), the trust in which such Mortgage Loans were
deposited, and will own such Mortgage Loans directly. The Depositor will assign
the remaining Mortgage Loans, together with the Depositor's rights and remedies
against the CSFB Mortgage Loan Seller in respect of breaches of representations
or warranties regarding such Mortgage Loans, to the Trustee, for the benefit of
the Certificateholders, pursuant to the Pooling and Servicing Agreement. First
Union National Bank, 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
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<PAGE>
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 Mortgaged
Properties, each Mortgage Loan also is secured by an assignment 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, replacements of furniture, fixtures
and equipment and environmental remediation, real estate taxes, insurance
premiums and ground rents, deferred maintenance and/or scheduled capital
improvements, re-leasing reserves and seasonal working capital reserves.
Additionally, certain of the Credit Lease Loans (as defined herein) have the
benefit of Lease Enhancement Policies or Residual Value Policies (each as
defined herein). The Mortgage Loans generally provide for the indemnification
of the lender by the borrower (or related principals) for the presence of any
hazardous substances affecting the Mortgaged Property. In addition, Loan No.
123 (Office Depot-Dallas) and Loan No. 48 (Island Walk Shopping Center) are
covered by insurance policies 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 Mortgage,
such exceptions having been acceptable to the CSFB 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."
UNDERWRITING STANDARDS
All of the Mortgage Loans were underwritten by the CSFB Mortgage Loan
Seller. The CSFB Mortgage Loan Seller has implemented guidelines establishing
certain procedures with respect to underwriting mortgage loans. The 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, manufactured housing communities,
restaurants, self-storage facilities and health clubs 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 the CSFB Mortgage Loan Seller, the
CSFB Mortgage Loan Seller applied its general guidelines to the Mortgage 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 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
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.
Property Condition Assessments. Inspections of the related Mortgaged
Properties (other than with respect to New Store Loans (as defined herein))
were conducted by engineering firms prior to origination
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<PAGE>
of the Mortgage Loans. Such inspections generally were commissioned to assess
the structure, exterior walls, roofing, interior construction, 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 was
performed. The appraisals generally were performed by independent MAI
appraisers and indicated that at the time of the respective appraisals (or that
upon completion of the related New Store (as defined herein) with respect to
the related New Store Loan) the aggregate value of the related Mortgaged
Properties exceeded the original principal amount of each 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 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
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
either Mortgage Loan Seller make any representation as to the accuracy of such
information; provided, however, that, with respect to several of the 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 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 -- The Mortgage Loans -- Changes in Zoning
Laws May Affect Ability to Repair or Restore Mortgaged Property."
Property Management. Generally, for all Mortgage Loans (other than Credit
Lease Loans), a manager (which may be an employee or affiliate 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 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 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 (as defined herein) 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
- -- The Mortgage Loans -- Property Managers May Experience Conflicts of Interest
Managing Multiple Properties."
S-56
<PAGE>
Title Insurance Policy. Each borrower has provided, and the CSFB Mortgage
Loan Seller has obtained, a title insurance policy for each Mortgaged Property.
Each title insurance policy generally complies with the following requirements:
(i) the policy must be written by a title insurer licensed to do business in
the jurisdiction where the Mortgaged Property is located, (ii) the policy must
be in an amount equal to the original principal balance of the related Mortgage
Loan, (iii) the protection and benefits must run to the lender and its
successors and assigns, (iv) 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 (v) 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 the CSFB Mortgage Loan
Seller has reviewed, certificates of required insurance with respect to each
Mortgaged Property. Such insurance generally may include: (i) commercial
general liability insurance for bodily injury or death and property damage;
(ii) an "All Risk of Physical Loss" policy; (iii) if applicable, boiler and
machinery coverage; (iv) if the Mortgaged Property is located in a 100-year
flood zone, flood insurance; (v) if the Mortgaged Property is located in an
earthquake prone area, earthquake insurance; and (vi) such other coverage as
the CSFB Mortgage Loan Seller may require based on the specific characteristics
of the Mortgaged Property. In most instances, 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 (as
defined herein) 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. The CSFB Mortgage Loan Seller 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 99.9% of the borrowers are single
asset special purpose entities. In addition, in general, in connection with
each 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 the CSFB Mortgage Loan Seller has reviewed the
organizational documents of the borrower to verify compliance with such
requirement. The Chicago Borrower under the Patriot American Loan (each, as
defined herein) is treated as a single asset special purpose entity in this
Prospectus Supplement. Although the Chicago Borrower owns a 29.9299% limited
partnership interest in IHP Holdings Partnership, L.P., the Chicago Borrower is
not required to meet any capital calls and has no management rights, powers or
responsibilities.
Patriot American Hospitality, Inc. and Wyndham International, Inc.
(together, the "Patriot Companies") both affiliates of the Chicago Borrower and
the Greenspoint Borrower, reported in a Form 8-K filed in November 1998 for the
Patriot Companies that UBS AG, London Branch had asserted that the Patriot
Companies were in default under the terms of a contract relating to certain
forward equity transactions as a result of the Patriot Companies not delivering
certain cash collateral and not meeting a final settlement of such contract in
cash. The Patriot Companies have disputed this assertion. The Patriot Companies
also reported in such Form 8-K that NationsBanc Capital Corporation had
alleged the right to require a complete settlement of a similar forward equity
transaction. See "Certain Characteristics of the Mortgage Loans -- Largest
Mortgage Loans -- The Patriot American Loan."
DSCR and LTV Ratio. The CSFB Mortgage Loan Seller's underwriting standards
generally require, for all Mortgage Loans other than Credit Lease Loans, the
following minimum DSCR and LTV ratios (each as defined herein) for each of the
indicated property types:
S-57
<PAGE>
<TABLE>
<CAPTION>
DSCR LTV RATIO
PROPERTY TYPE GUIDELINE GUIDELINE
- ----------------------------------------------- ----------- -----------
<S> <C> <C>
Office 1.25x 75%
Anchored Retail 1.25x 80%
Unanchored Retail 1.25x 75%
Multifamily (excluding cooperative) 1.20x 80%
Cooperative
as cooperative 1.00x 60%
as rental 1.35x 70%
Industrial 1.25x 75%
Hospitality 1.35x 75%
Mobile home park 1.20x 80%
</TABLE>
The DSCR guidelines listed above are calculated based on Net Cash Flow (as
defined herein) at the time of origination. Therefore, the DSCR for each
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 Mortgage
Loans, but certain Mortgage Loans, as indicated on Annex A hereto, may deviate
from these guidelines. For Credit Lease Loans, the CSFB Mortgage Loan Seller's
underwriting standards generally require that the DSCR be no less than 1.00x
and the Leased LTV (as defined herein and set forth on Annex B) be no greater
than 100%.
Escrow Requirements. The CSFB Mortgage Loan Seller generally requires a
borrower to fund various escrows (each, an "Escrow Account") for items
including real estate taxes, insurance premiums, ground rent, replacement of
furniture, fixtures and equipment, environmental remediation, deferred
maintenance and/or scheduled capital improvements, seasonal working capital
(with respect to Hospitality Properties), capital expenditures, and tenant
improvements and re-leasing costs (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 the CSFB Mortgage Loan Seller 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 on an annual basis pursuant to a building condition
report prepared for the CSFB Mortgage Loan Seller or the following minimum
amounts:
<TABLE>
<CAPTION>
<S> <C>
Office $0.20 per square foot
Retail $0.15 per square foot
Multifamily (excluding cooperative) $250 per Unit
Industrial $0.15 per square foot
Hospitality 5% of gross revenues
Mobile home parks $50 per pad
</TABLE>
The actual reserve deposits for periodic replacement, capital expenditures and
furniture, fixtures and equipment (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, the CSFB Mortgage Loan Seller 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
S-58
<PAGE>
if the actual funded reserves under a Mortgage Loan are less than the foregoing
amounts, the CSFB Mortgage Loan Seller generally deducted such amounts from net
operating income when calculating Net Cash Flow.
Deferred Maintenance/Environmental Remediation -- An initial deposit, upon
funding of a 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.
Seasonal Working Capital -- An initial deposit, upon funding of a Mortgage
Loan, or monthly deposits, in each case generally based upon the anticipated
shortfall of operating income necessary to pay debt service and operating
expenses for the months in which occupancy of a Hospitality Property is below
that which is necessary to cover such costs.
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. The CSFB Mortgage Loan Seller's underwriting
criteria for a Credit Lease Loan generally depend on whether such Credit Lease
Loan is secured by a Bond-Type Lease, a Triple Net Lease or a Double Net Lease
(each, as defined herein).
<TABLE>
<CAPTION>
DSCR LTV RATIO
LEASE TYPE GUIDELINE GUIDELINE
- -------------- ----------- ----------
<S> <C> <C>
Bond-Type 1.00x 100%
Triple Net 1.02x 95%
Double Net 1.05x 90%
</TABLE>
Generally, when calculating the DSCR guidelines set forth above, the CSFB
Mortgage Loan Seller did not adjust the rental income payments in the manner
described herein with respect to the calculation of Net Cash Flow. In addition,
the CSFB Mortgage Loan Seller did not require the escrowing of amounts for real
estate taxes, insurance premiums, seasonal working capital, ground rents,
Capital Items, tenant improvements or leasing commissions for Bond-Type Leases.
The CSFB Mortgage Loan Seller did require, in many instances, the escrowing of
amounts for real estate taxes, insurance premiums, ground rents, Capital Items,
tenant improvements and/or leasing commissions for Double Net Leases and Triple
Net Leases. The actual DSCR and LTV Ratios (both "Leased Value" and "Dark
Value") for the Credit Lease Loans are set forth on Annex B hereto.
The CSFB Mortgage Loan Seller generally requires the borrower for each
Double Net Lease to fund an Escrow Account in an amount equal to 200% of the
annual anticipated cost to be incurred in connection with required maintenance,
repairs or replacements with respect to the related Credit Lease Property.
S-59
<PAGE>
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
CREDIT LEASE LOANS
40 Mortgage Loans, representing approximately 13.5% of the Initial Pool
Balance (the "Credit Lease Loans") are secured by assignments of leases and
rents on properties ("Credit Lease Properties") that are, in each case, subject
to a net lease obligation (a "Credit Lease") of a tenant (a "Tenant"), or net
lease obligations guaranteed by a guarantor (the "Guarantor") that possesses a
rating or unpublished shadow rating of "B-" (or the equivalent) or higher by
one or more of the Rating Agencies. See "Risk Factors -- The Mortgage Loans --
Risks Associated with Credit Lease Properties."
Each Credit Lease is either a Bond-Type Lease, a Triple Net Lease or a
Double Net Lease. Credit Leases with respect to 31 of the Credit Lease
Properties, which represent 10.8% of the Initial Pool Balance ("Bond-Type
Leases" or "Bondable Leases") have neither lease termination nor rent abatement
rights, and the Tenants thereunder are required, at their expense, to maintain
their Credit Lease Property in good order. Credit Leases with respect to 6 of
the Credit Lease Properties, which represent 2.3% of the Initial Pool Balance
("Triple Net Leases") have termination and abatement rights directly arising
from certain defined casualties or condemnation ("Casualty or Condemnation
Rights"), and may have 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").
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. Credit Leases with respect to 3 of the Credit Lease Properties,
which represent 0.4% of the Initial Pool Balance ("Double Net Leases") have
termination and abatement rights arising from a borrower's default relating to
its obligations under the Credit Leases to perform required maintenance,
repairs or replacements with respect to the related Credit Lease Property
("Maintenance Rights") as well as Casualty or Condemnation Rights, and may have
Additional Rights. If a 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 (as defined herein)
available to pay principal and interest to the Certificateholders.
With respect to each Credit Lease Loan not secured by the assignment of a
Bond-Type Lease, 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 events arising out of a
casualty to, or condemnation of, a Credit Lease Property issued by Chubb Custom
Insurance Company (the "Lease Enhancement Insurer"). As of the Cut-off Date,
the claims paying ability of the Lease Enhancement Insurer was rated "AAA" and
"Aa2" by S&P and Moody's (as defined herein), 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 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 certain limitations, accrued interest and therefore
is not required to pay any Prepayment Premium or Yield Maintenance Charge
(each, as defined herein) due thereunder or any amounts the related borrower is
obligated to pay thereunder to reimburse the Servicer or the Trustee for
outstanding Servicing Advances (as defined herein).
Each Credit Lease has a primary lease term (the "Primary Term") that
expires contemporaneously with or after the scheduled final maturity date of
the related Credit Lease Loan. The Credit Lease Loans, other than the Balloon
Payment Credit Lease Loans (as defined below), 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. Each Credit Lease generally provides that the related
Tenant must pay all real estate taxes levied or assessed against the related
Credit Lease Property and, except as discussed above
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<PAGE>
with respect to 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.
With respect to 33 Credit Lease Loans representing approximately 7.8% of
the Initial Pool Balance (the "Fully Amortizing Credit Lease Loans"), scheduled
monthly payments (the "Monthly Rental Payments") under each Credit Lease
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 Loan. 7 of the Credit Lease Loans, representing approximately 5.7%
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). 7 of the Balloon Payment Credit Lease Loans, representing
approximately 5.7% of the Initial Pool Balance, each have the benefit of a
non-cancellable 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 (as defined herein) 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 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 as received by the Tenant, except for ordinary wear and tear and
repairs required to be performed by the borrower.
6 Mortgage Loans representing approximately 5.5% of the Initial Pool
Balance are Credit Lease Loans for which Accor S.A. ("Accor") is the related
tenant or guarantor. These Credit Lease Loans are secured by 27 Mortgaged
Properties which are operated as "Motel 6" limited service hotels. Accor is a
global hospitality and travel group with activities in tourism, institutional
catering, vouchers and auto rental. Accor has approximately 130,000 employees
and operations in over 130 countries. Accor operates one of the world's largest
hotel networks ranging from limited service hotels to resort hotels and
including such brands as Sofitel, Ibis, Novotel, Formula 1 and Motel 6. Accor
also operates one of the world's largest service voucher programs with
approximately 10 million users on three continents, as well as operating one of
the largest business travel agency networks and Europe's largest car rental
operation. In its 1997 annual report, Accor reported revenues of FF 31.8
billion, a 12.3% increase from FF 28.3 billion in 1996. Reported earnings
before income tax, depreciation and amortization increased 21.0% to FF 5.4
billion in 1996.
In a 1998 mid-year report, Accor reported six month sales of FF 17.9
billion (an increase of 19.6% from the comparable period in 1997). Accor also
reported that net debt was reduced from FF 17.3 billion at December 31, 1997 to
FF 11.9 billion at June 30, 1998. Accor has a long-term issuer rating of "BBB"
by S&P.
LARGEST MORTGAGE LOANS
The ten largest Mortgage Loans by Initial Pool Balance are as follows:
The Intell-Reichmann Portfolio Loan
The Loan. The largest Mortgage Loan (the "Intell-Reichmann Portfolio
Loan") was originated by the CSFB Mortgage Loan Seller on May 19, 1998 and
August 4, 1998 and has an aggregate principal balance as of the Cut-off Date of
$86,666,577.55, which represents approximately 4.5% of the Initial Pool
Balance. The Intell-Reichmann Portfolio Loan consists of two pari passu notes
which are cross-collateralized and cross-defaulted. Note A has a principal
balance, as of the Cut-off Date, of $65,897,622.35 and Note B has a principal
balance, as of the Cut-off Date, of $20,768,955.20. Both Note A and Note B are
included in the Trust Fund. The Intell-Reichmann Portfolio Loan is secured by
first mortgages encumbering nine office buildings located in Kansas, Kentucky,
New York and New Jersey and
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<PAGE>
one shopping center in Kentucky (collectively, the "Intell-Reichmann Portfolio
Property"). The Intell-Reichmann Portfolio Loan was made to IPC Commercial
Properties, LLC (the "Intell-Reichmann Portfolio Borrower"), a Delaware limited
liability company.
<TABLE>
<CAPTION>
<S> <C>
Cut-off Date Principal
Balance: $ 86,666,578
Origination Date: August 4, 1998
($48,705,170 was originated
on May 19, 1998 and
consolidated)
Loan Type: ARD
Monthly Payment: Note A: $446,919
Note B: $140,856
Interest Rate: 7.155%
Amortization Term: 358 months
DSCR: 1.25 x
Cut-off Date LTV: 71.63%
Anticipated Repayment
Date: June 11, 2008
ARD Balance: $ 76,148,195
ARD LTV: 62.93%
Defeasance Period: Commencing two years
after the Closing Date
through 6 months prior to
ARD
Partial Defeasance: Yes (Release price of 125%
of Property Release
Amount)
Prepayment Lockout
Expiration: 6 months prior to ARD
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Borrower Special
Purpose Entity: Yes, with a managing
member that is a special
purpose entity with an
independent director and
a non-consolidation
opinion
Maturity Date: June 11, 2028
Number of Properties: 10
Total Square Feet: 1,218,718
Appraised Value: $121,000,000
Cut-off Date
Balance/SF: $71
Lock Box: Hard
</TABLE>
S-62
<PAGE>
Additional Mortgage Loan Information by Property. Certain information with
respect to each Mortgaged Property relating to the Intell-Reichmann Portfolio
Loan is set forth below:
<TABLE>
<CAPTION>
CUT-OFF
DATE
ALLOCATED
PROPERTY PROPERTY SQUARE YEAR BUILT/ FEE OR MAJOR LOAN
NAME LOCATION TYPE FEET RENOVATED LEASEHOLD TENANTS OCCUPANCY (1) AMOUNT
- --------------- ------------- ---------- --------- ------------- ----------- ------------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Edgewater Staten Office 255,257 1982 Fee Staten Island 89.92% $20,768,955
Plaza Island, University
NY Hospital, NYC
Police
Hurstbourne Louisville, Office 234,244 1982 Fee Deming, 90.00 15,956,972
Place KY Malone, Livesay,
et al., Dearborn
Systems &
Service
Intell-Sony Woodcliffe Office 123,000 1985 Fee Sony USA 100.00 14,621,661
Lake, NJ
One Oxmoor Louisville, Office 137,190 1989 Fee/ National City 98.00 9,547,477
Place KY Leasehold Processing,
Merrill Lynch,
Stored Value
Systems
Hurstbourne Louisville, Retail 112,357 1991 Fee Valu Discount, 96.20 7,344,213
Plaza KY Inc., Yucatan of
Louisville, Ltd.,
Walgreens
Hurstbourne Louisville, Office 102,460 1971 Fee Galen of KY, 100.00 6,209,199
Park KY Inc., NHL
Health Services,
Steeplechase Louisville, Office 76,666 1990 Fee Electronic 97.00 4,873,887
Place KY Systems, The
Future Now,
AIG -- New
Hampshire Ins.
Hunnington Louisville, Office 63,072 1998 Fee Aerotek, Inc., 86.33 3,204,748
Office Park KY Olsten Staffing
One Brittany Wichita, Office 56,913 1982 Fee Southwestern 95.51 2,069,733
KS Bell Yellow
Pages, Office of
Hearing and
Appeals,
Principal Mutual
Life Ins.
Two Brittany Wichita, Office 57,559 1985 Fee Lodgistix, Sprint 100.00 2,069,733
KS PCS, State Farm
Auto
- --------
(1) As of the most recently available rent roll
</TABLE>
The Borrower. The Intell-Reichmann 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
corporation, whose board contains an independent director. The principal of the
Intell-Reichmann Portfolio Borrower is Paul Reichmann, formerly a principal of
Olympia & York Developments Ltd. ("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.
S-63
<PAGE>
Certain additional information on the Intell-Reichmann Portfolio Loan is
set forth on Annex A hereto.
Property Management. The Intell-Reichmann Portfolio Property is managed by
IPC (U.S.) Management, Inc. (the "Intell-Reichmann Portfolio Manager"), an
affiliate of the Intell-Reichmann Portfolio Borrower pursuant to a management
agreement (the "Intell-Reichmann Portfolio Management Agreement") which
provides for a management fee of 4% of gross revenues which is subordinated to
payments under the Intell-Reichmann Portfolio Loan. The Intell-Reichmann
Portfolio Manager may be terminated (i) upon the occurrence of any default
under the Intell-Reichmann Portfolio Loan, (ii) in the event the DSCR for the
Intell-Reichmann Portfolio Loan shall be less than 1.05x, or (iii) upon the
occurrence of any default under the Intell-Reichmann Portfolio Management
Agreement.
Mezzanine Loan and Preferred Equity Interest. IPC Commercial Holdings,
LLC, the regular member of the Intell-Reichmann Portfolio Borrower, and two of
its affiliates are the borrowers (collectively, the "Intell-Reichmann Portfolio
Mezzanine Borrower") under a mezzanine loan with an aggregate principal balance
as of the Cut-off Date of $2,651,196 (the "Intell-Reichmann Portfolio Mezzanine
Loan") made by the CSFB Mortgage Loan Seller (in its capacity as mezzanine
lender, the "Intell-Reichmann Portfolio Mezzanine Lender") on May 19, 1998. The
Intell-Reichmann Portfolio Mezzanine Loan is secured by among other things, a
pledge of the regular membership interests in the Intell-Reichmann Portfolio
Borrower, the regular membership interests in the managing member of the
Intell-Reichmann Portfolio Borrower, and the stock of the managing member of
the managing member of the Intell-Reichmann Portfolio Borrower. The
Intell-Reichmann Portfolio Mezzanine Lender has agreed not to transfer its
interest in the Intell-Reichmann 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 then current ratings on the Certificates. The Intell-Reichmann
Portfolio Mezzanine Loan matures on April 11, 2000 and bears interest at a per
annum rate equal to LIBOR plus 2.5%.
The CSFB Mortgage Loan Seller owns a preferred equity interest (as such
holder, the "Intell-Reichmann Special Limited Partner") in the Intell-Reichmann
Portfolio Borrower having a Cut-off Date equity investment in the amount of
$13,334,654 (the "Intell-Reichmann Preferred Equity Interest"). The
Intell-Reichmann Special Limited Partner is entitled to receive preferred
monthly distributions at a yield equal to LIBOR plus 2.5% and is scheduled to
be redeemed in full on April 11, 2000. The Intell-Reichmann Special Limited
Partner has agreed not to transfer the Intell-Reichmann Preferred Equity
Interest 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 then current ratings on the
Certificates.
The Intell-Reichmann Portfolio Mezzanine Loan and the Intell-Reichmann
Preferred Equity Interest require monthly payments of interest and yield,
respectively, only, 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 Intell-Reichmann Portfolio Mezzanine Loan or a breach under
the preferred equity documents, all cash flow from the Intell-Reichmann
Portfolio Property remaining after payment of operating expenses and sums due
under the Intell-Reichmann Portfolio Loan will be applied to prepay such
principal and capital amounts.
The Intell-Reichmann Portfolio Mezzanine Lender and the Intell-Reichmann
Special Limited Partner each have certain approval rights over budgets and
significant leases and can terminate and replace the Intell-Reichmann Portfolio
Manager upon the occurrence of an event of default under the Intell-Reichmann
Portfolio Loan or a breach under the preferred equity documents, or if the debt
and yield service coverage ratio is less than 1.05x in the aggregate (including
debt service under the Intell-Reichmann Portfolio Loan). The Intell-Reichmann
Portfolio Mezzanine Lender and Intell-Reichmann Special Limited Partner each
have agreed not to take any such action with respect to the Intell-Reichmann
Portfolio Manager unless each Rating Agency confirms that such action would not
cause a withdrawal, qualification or downgrade of its then current ratings on
the Certificates. The rights
S-64
<PAGE>
of the Intell-Reichmann Portfolio Mezzanine Lender and the Intell-Reichmann
Special Limited Partner relating to budgeting, management and leases will be
exercised through the Intell-Reichmann Special Limited Partner, subject to the
consent of the Servicer to such exercise.
The Butera Portfolio Loan
The Loan. The second largest Mortgage Loan (the "Butera Portfolio Loan")
was originated by the CSFB Mortgage Loan Seller on August 28, 1998 and has an
aggregate principal balance as of the Cut-off Date of $82,871,007.99 which
represents approximately 4.3% of the Initial Pool Balance. The Butera Portfolio
Loan consists of two pari passu notes. Note A of the Butera Portfolio Loan has
a principal balance as of the Cut-off Date of $75,285,374.33 and Note B of the
Butera Portfolio Loan has a principal balance as of the Cut-off Date of
$7,585,633.66. Note A and Note B of the Butera Portfolio Loan are
cross-collateralized and cross-defaulted and both will be assets of the Trust
Fund. The Butera Portfolio Loan is secured by first mortgages encumbering
thirteen properties located in Maryland, and one property located in West
Virginia (collectively, the "Butera Portfolio Property").
<TABLE>
<S> <C>
Cut-off Date Principal
Balance: $ 82,871,008
Origination Date: August 28, 1998
Loan Type: ARD
Monthly Payment: Note A: $487,056
Note B: $49,075
Interest Rate: 6.71%
Amortization Term: 360 months
DSCR: 1.31x
Cut-off Date LTV: 81.57%
Anticipated Repayment
Date: September 11, 2008
ARD Balance: $ 71,824,702
ARD LTV: 70.69%
Defeasance Period: Commencing two years
after the Closing Date
through 60 days prior to
ARD
Partial Defeasance: Yes (Release price of
125% of Property Release
Amount)
Prepayment Lockout
Expiration: 60 days prior to ARD
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Borrower Special
Purpose Entity: Yes, as to all borrowers;
7 of 9 borrowers are
bankruptcy remote
entities with an
independent director
and a non-consolidation
opinion
Maturity Date: September 11, 2028
Number of Properties: 14
Total Square Feet: 1,367,656
Appraised Value: $101,600,000
Cut-off Date
Balance/SF: $61
Lock Box: Hard
</TABLE>
S-65
<PAGE>
Additional Mortgage Loan Information by Property. Certain information with
respect to each Mortgaged Property relating to the Butera Portfolio Loan is set
forth below:
<TABLE>
<CAPTION>
YEAR
PROPERTY PROPERTY SQUARE BUILT/
NAME LOCATION TYPE FEET RENOVATED
- ------------------- --------------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Girard Place Gaithersburg, Industrial 178,602 1994
MD
Patrick Center Frederick, Office 65,262 1987
MD
Deer Park Randallstown, Industrial 171,170 1997
MD
Girard Gaithersburg, Industrial 123,930 1997
Business MD
Center
Old Martinsburg, Retail 199,192 1988
Courthouse WV
Square
Wedgewood Frederick, Industrial 165,690 1998
Business Park MD
Georgia Pacific Frederick, Industrial 170,000 1997
MD
Gateway West Westminster, Industrial 82,757 1994
MD
Gateway Gaithersburg, Retail 44,307 1997
Center MD
Westpark Frederick, Office 28,990 1997
MD
Radtech Frederick, Office 40,042 1988
Building MD
Woodlands Largo, MD Office 36,887 1989
Business
Center
Microlog Germantown, Office 24,468 1986
MD
Thomas AAA Gaithersburg, Industrial 36,000 1997
MD
------------
(1) As of most recently available rent roll.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF DATE
PROPERTY FEE OR MAJOR ALLOCATED
NAME LEASEHOLD TENANTS OCCUPANCY (1) LOAN AMOUNT
- ------------------- ----------- ---------------------- --------------- -------------
<S> <C> <C> <C> <C>
Girard Place Fee Bohdan Associates, 99.50% $10,603,574
Hekimian
Laboratories, Inc.
Patrick Center Fee Miles & Stockbridge, 95.40 8,645,991
Merrill Lynch,
Legg Mason
Deer Park Fee Adult Day Care 93.90 8,401,293
of Maryland Inc.,
Mattei Compressors,
Inc., Raimonois
Girard Fee GE Capital 100.00 8,319,727
Business Information
Center Technology
Solutions,
New Wave
Technologies, Inc.
Old Fee RichFoods, Inc., 100.00 8,156,595
Courthouse U.S. Postal Office,
Square Schewel Furniture
Wedgewood Fee Kimmel Butera 100.00 7,585,634
Business Park Master Lease,
Capricorn
Pharma, Inc.,
Eagle Postal
Management
Georgia Pacific Fee American Records 100.00 7,340,936
Management,
Transtech
Famma Medical
Gateway West Fee County 100.00 6,525,276
Commissioners
of Carroll
County, Carroll
County Library
Gateway Fee E&B Inc., T/A 100.00 4,322,996
Center Barts Innerski,
Montgomery
County Auto
Parts Napa,
Perlmutter
Companies
Westpark Fee Social Security 87.40 2,936,374
Administration,
Battelle, Center
for Neuro Rehab
Radtech Fee Science 91.50 2,854,808
Building Applications
International
Corporation,
PATICO Electronics
Woodlands Fee Washington Data 100.00 2,773,242
Business Systems Inc., Jones
Center Communications
of Maryland, Inc.
Microlog Fee Microlog 100.00 2,283,847
Thomas AAA Fee Thomas AAA 100.00 2,120,715
Moving &
Storage Inc.
------------
(1) As of most recently available rent roll.
</TABLE>
S-66
<PAGE>
The Borrower. The Butera Portfolio Loan was made to (i) 6 limited
liability companies structured as single purpose, bankruptcy remote entities
with a single purpose, bankruptcy remote corporation as an independent manager,
(ii) a limited liability limited partnership (which is not bankruptcy remote),
(iii) a corporation structured as a single purpose, bankruptcy remote
corporation, whose board contains an independent director, and (iv) a general
partnership (which is not bankruptcy remote) (collectively, the "Butera
Portfolio Borrower").
Certain additional information on the Butera Portfolio Loan is set forth
on Annex A hereto.
Property Management. Thirteen Butera Portfolio Properties are managed by
Fitzgerald & Matan Property Management ("Fitzgerald"), which is not affiliated
with the Butera Portfolio Borrower, pursuant to management agreements which
provide for management fees of 4% to 5% of gross revenues, which are
subordinated to payments under the Butera Portfolio Loan and which may be
terminated (i) upon 30 days notice of any default under the Butera Portfolio
Loan or (ii) upon 60 days notice without cause. One of the Butera Portfolio
Properties is managed by Ross Management Company (the "Ross Manager") under a
management agreement which provides for payment of a management fee equal to
the greater of (x) $4,000 or (y) 5% of gross revenues from such property per
year plus additional fees for leasing and construction management services,
which are subordinated to payments under the Butera Portfolio Loan. The Ross
Manager is owned by Steven Ross who is a general partner of one of the Butera
Portfolio Borrowers. The Ross Manager may be terminated upon 30 days notice of
the occurrence of any default under the Butera Portfolio Loan.
Mezzanine Loan and Preferred Equity Interest. Butera Equity, LLC and
Kimmel Equity, LLC, (collectively the regular members or equity owners of the
Butera Portfolio Borrowers) are the borrowers (collectively, in such capacity,
the "Butera Portfolio Mezzanine Borrower") under a mezzanine loan with an
aggregate principal balance as of the Cut-off Date of $1,023,271 (the "Butera
Portfolio Mezzanine Loan") made by the CSFB Mortgage Loan Seller (in its
capacity as mezzanine lender, the "Butera Portfolio Mezzanine Lender") on
August 28, 1998. The Butera Portfolio Mezzanine Loan is secured by, among other
things, (i) a pledge of the stock of TRB, Inc., (ii) the general partnership
interests in Woodstone Assoc. and (iii) the stock of the special purpose
partners of Woodstone Assoc. The Butera Portfolio Mezzanine Lender has agreed
not to transfer its interest in the Butera 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 then current ratings on the Certificates. The
Butera Portfolio Mezzanine Loan matures on October 11, 2005 and bears interest
at a per annum rate (the "Butera Interest Rate") equal to the greater of (i)
LIBOR (as defined herein) plus 6.00% and (ii) 11.14%.
The CSFB Mortgage Loan Seller made a preferred equity investment (as such
holder, the "Butera Portfolio Special Member") in six of the entities which are
part of the Butera Portfolio Borrower (the "Butera Portfolio Preferred Equity
Issuers") having an initial equity investment in the amount of $6,298,158 (the
"Butera Portfolio Preferred Equity Interest"). The Butera Portfolio Special
Member is entitled to receive preferred monthly distributions at a yield equal
to the interest rate under the Butera Portfolio Loan, and the Butera Portfolio
Preferred Equity Interest is scheduled to be redeemed in full on October 11,
2005. The Butera Portfolio Mezzanine Borrower, as equity owners of the Butera
Portfolio Preferred Equity Issuers, have guaranteed the payments due on the
Butera Portfolio Preferred Equity Interest to the extent of certain
distributions they receive with respect to their membership interests in the
Butera Portfolio Preferred Equity Issuers.
The Butera Portfolio Mezzanine Loan and the Butera Portfolio Preferred
Equity Interest require monthly payments of principal and interest and capital
and yield, respectively, and will mature or be fully redeemed, as applicable,
on October 11, 2005. Upon the occurrence of an event of default under the
Butera Portfolio Mezzanine Loan or a breach under the preferred equity
documents, all cash flow from the Butera Portfolio Property remaining after
payment of operating expenses and sums due under the Butera Portfolio Loan will
be applied to repay such principal and capital amounts.
The Butera Portfolio Mezzanine Lender and the Butera Portfolio Special
Member each have certain approval rights over budgets and significant leases
and can terminate and replace Fitzgerald upon an event of default under the
Butera Portfolio Mezzanine Loan or a breach under the preferred equity
documents, or if the net operating income from the Butera Portfolio Property
falls below 85% of the net operating income as of the closing date of the
Butera Portfolio Loan. The Butera Portfolio Mezzanine Lender and the Butera
Portfolio Special Member have agreed that they will not take any such action
with
S-67
<PAGE>
respect to the Butera Portfolio Manager unless each Rating Agency confirms that
such action would not cause a withdrawal, qualification or downgrade of its
then current ratings on the Certificates. The rights of the Butera Portfolio
Special Member relating to budgeting, management and leases will be exercised
through the Butera Portfolio Mezzanine Lender and the Butera Portfolio Special
Member, subject to the consent of the Servicer to such exercise.
The Patriot American Loan
The Loan. The third largest Mortgage Loan (the "Patriot American Loan")
was originated by the CSFB Mortgage Loan Seller on October 16, 1998 and has a
principal balance as of the Cut-off Date of $81,569,558.00, which represents
approximately 4.3% of the Initial Pool Balance. The Patriot American Loan is
evidenced by four promissory notes, in the amounts of $22,000,000, $18,199,170,
$30,000,000 and $11,370,451, respectively, each of which has the same terms as
the others, except for principal balance. The aforementioned $22,000,000 and
$18,199,107 promissory notes are secured by a first priority lien encumbering
Wyndham Greenspoint Hotel, a hotel and conference center located in Houston,
Texas (the "Greenspoint Property"), and the $11,370,451 promissory note is
secured by a second lien encumbering the Greenspoint Property. The
aforementioned $30,000,000 and $11,370,451 promissory notes are secured by a
first priority lien encumbering the leasehold interest in the Chicago Embassy
Suites Hotel, a hotel located in Chicago, Illinois (the "Chicago Property"),
and the $18,199,107 promissory note is secured by a second lien encumbering the
Chicago Property (the Greenspoint Property and the Chicago Property are
collectively referred to as the "Patriot American Property"). The Patriot
American Loan was made to W-Greenspoint L.P. (the "Greenspoint Borrower") and
Chicago ES, LLC (the "Chicago Borrower"), a Delaware limited partnership and a
Delaware limited liability company, respectively. All of the aforementioned
notes are cross-defaulted but only the aforementioned $18,199,107 and
$11,370,451 notes are cross-collateralized. The aforementioned $30,000,000
promissory note is also secured by a pledge of the Chicago Borrower's 29.9299%
limited partnership interest in IHP Holdings Partnership, L.P., a party not
related to this transaction. The Chicago Borrower has no obligation to meet
capital calls and no management responsibilities with respect to IHP Holdings
Partnership, L.P.
<TABLE>
<CAPTION>
<S> <C>
Cut-off Date Principal
Balance: $ 81,569,558
Origination Date: October 16, 1998
Loan Type: ARD
Monthly Payment: $ 643,135
Interest Rate: 8.25%
Amortization Term: 300 months
DSCR: 1.41x
Cut-off Date LTV: 70.32%
Anticipated
Repayment Date: November 11, 2008
ARD Balance: $ 67,711,995
ARD LTV: 58.37%
Defeasance Period: Commencing two years
after Closing Date
through 3 months prior
to ARD
Partial Defeasance: Yes (Release price of
125% of Property
Release Amount)
Prepayment Lockout
Expiration: 3 months prior to ARD
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Borrower Special
Purpose Entity: Yes, with a general partner
or managing member that
is a special purpose entity
with an independent
director and a non-
consolidation opinion
Maturity Date: November 11, 2023
Number of Properties: 2
Total Number of
Units: 830
Appraised Value: $116,000,000
Cut-off Date
Balance/Unit: $ 98,277
Lock Box: Hard
</TABLE>
S-68
<PAGE>
Additional Mortgage Loan Information by Property. Certain information with
respect to the Patriot American Property is set forth below:
<TABLE>
<CAPTION>
CUT-OFF DATE
NUMBER YEAR ALLOCATED
PROPERTY PROPERTY OF BUILT/ FEE OR MAJOR LOAN
NAME LOCATION TYPE ROOMS RENOVATED LEASEHOLD TENANTS OCCUPANCY AMOUNT
- -------------------- ------------- --------------- -------- ----------- ----------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Chicago Embassy Chicago, IL Lodging, Full 358 1991 Leasehold n/a 83.60% $41,370,451
Suites Service
Wyndham Houston, TX Lodging, Full 472 1984 Fee n/a 68.00% $40,199,107
Greenspoint Hotel Service
</TABLE>
The Borrower. The Greenspoint Borrower and the Chicago Borrower have been
structured as single purpose, bankruptcy remote entities, whose general partner
or managing member are single purpose, bankruptcy remote corporations, the
boards of which contain an independent director. The Greenspoint Borrower and
the Chicago Borrower are subsidiaries of Patriot American Hospitality, Inc., a
NYSE listed real estate investment trust. Although the Chicago Borrower owns a
29.9299% limited partnership interest in IHP Holdings Partnership, L.P., the
Chicago Borrower is not required to meet capital calls, has no management
rights, powers or responsibilities, and is treated as a single asset special
purpose entity in this Prospectus Supplement.
Patriot American Hospitality, Inc. and Wyndham International, Inc.
(together, the "Patriot Companies") both affiliates of the Chicago Borrower and
the Greenspoint Borrower, reported in a Form 8-K filed in November 1998 for the
Patriot Companies that UBS AG, London Branch had asserted that the Patriot
Companies were in default under the terms of a contract relating to certain
forward equity transactions as a result of the Patriot Companies not delivering
certain cash collateral and not meeting a final settlement of such contract in
cash. The Patriot Companies have disputed this assertion. The Patriot Companies
also reported in such Form 8-K that NationsBanc Capital Corporation had
alleged the right to require a complete settlement of a similar forward equity
transaction.
Certain additional information on the Patriot American Loan and the
Patriot American Property is set forth on Annex A hereto.
Property Management. The Greenspoint Property is managed by Wyndham
Management Corporation (the "Greenspoint Manager") and the Chicago Property is
managed by PAH Management Corporation (the "Chicago Manager" and together with
the Greenspoint Manager, the "Patriot American Manager"), each of which is
affiliated with the Chicago Borrower and the Greenspoint Borrower, pursuant to
management agreements which provide for the payment to the Patriot American
Manager of management fees of not more than 3% of gross revenues, which are
subordinated to payments under the Patriot American Loan. The Chicago Property
is operated as an Embassy Suites hotel pursuant to a license agreement (the
"Chicago License Agreement") between the Chicago Manager and Promus Hotel
Corporation. The term of the Chicago License Agreement terminates on March 25,
2017, except in the event of a default under the Chicago License Agreement or
at the option of the Chicago Manager. The Patriot American Manager may be
terminated (i) upon an event of default under the Patriot American Loan, (ii)
if the DSCR for the Patriot American Loan falls below 1.10x or (iii) in the
event of a default by the Patriot American Manager under its respective
management agreement.
The Patriot American Operating Leases. The Greenspoint Property and the
Chicago Property are operated by ESC Greenspoint Lessee, L.P. (the "Operating
Lessee") pursuant to leases between the Greenspoint Borrower and the Chicago
Borrower, as applicable, as lessor, and the Operating Lessee, as lessee (the
"Operating Lease"), which provide for payments of base rent and percentage rent
to the Greenspoint Borrower and the Chicago Borrower, as applicable. The
Operating Lessee is a party to the deed of trust, or mortgage, as applicable,
assignment of leases and rents and cash management agreement executed and
delivered in connection with the Patriot American Loan for the purposes of
subjecting its
S-69
<PAGE>
interests in the Greenspoint Property and the Chicago Property to the lien of
the security instruments and assuring the performance of the Greenspoint
Borrower's and the Chicago Borrower's obligations under the applicable loan
documents which are the obligations of the Operating Lessee under the Operating
Lease. The Operating Lessee has been structured as a single purpose, bankruptcy
remote entity, whose general partner is a single purpose, bankruptcy remote
corporation, the board of which contains an independent director. The Operating
Lessee may not be terminated without the prior approval of the Servicer and
only with the Rating Agencies confirming that such action would not cause a
withdrawal, qualification or downgrade of the then existing ratings on the
Certificates. Upon the occurrence of a default under the Patriot American Loan,
the Servicer may terminate the Operating Lease.
The L'Enfant Loan
The Loan. The fourth largest Mortgage Loan (the "L'Enfant Loan") was
originated by the CSFB Mortgage Loan Seller on September 18, 1998. The L'Enfant
Loan consists of two notes. Note A of the L'Enfant Loan has a principal balance
as of the Cut-off Date of $74,961,791.67 which represents approximately 3.9% of
the Initial Pool Balance and Note B has a principal balance as of the Cut-off
Date of $74,961,791.67. Note B is not included in the Trust Fund. The Trustee
will be a party to an intercreditor agreement with the holder of Note B in
which the Trustee will be named as lead lender. All amounts received in respect
of the L'Enfant Loan will be allocated between Note A and Note B pro rata in
accordance with the amounts due thereunder. The Servicer will make all
servicing decisions with respect to the L'Enfant Loan and the Special Servicer
will specially service the L'Enfant Loan in the event it becomes a Specially
Serviced Mortgage Loan, in each case with a view toward maximizing recovery to
the holders of both Note A and Note B of the L'Enfant Loan. The L'Enfant Loan
is secured by a first priority lien encumbering three buildings located in
L'Enfant Plaza in Washington, D.C. (the "L'Enfant Property"). Note A and Note B
of the L'Enfant Loan are cross-collateralized and cross-defaulted. The L'Enfant
Loan was made to Potomac Creek Associates LP (the "L'Enfant Borrower"), a
Delaware limited partnership.
<TABLE>
<CAPTION>
<S> <C>
Cut-off Date Principal
Balance: Note A: $74,961,792
Origination Date: September 18, 1998
Loan Type: ARD
Monthly Payment: $ 531,625
Interest Rate: 7.64%
Amortization Term: 360 months
DSCR: 1.27x
Cut-off Date LTV: 66.34%
Anticipated
Repayment Date: October 11, 2008
ARD Balance: $ 66,499,435
ARD LTV: 58.85%
Defeasance Period: Commencing two years
after Closing Date
through 2 months prior
to ARD
Partial Defeasance: Yes (Release price of
125% of Property
Release Amount)
Prepayment Lockout
Expiration: 2 months prior to ARD
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Borrower Special
Purpose Entity: Yes, with a general partner
that is a special purpose
entity with an independent
director and a
non-consolidation opinion
Maturity Date: October 11, 2028
Property Type: Office/Hotel/Retail
Number of Properties: 2
Location of Property: Washington, DC
Appraised Value: $ 226,000,000
Square Feet/Number
of Rooms: 888,698/370
Year Built/Renovated: 1990
Cut-off Date
Balance/Unit: $67/SF (Office Component)
$42,134/Room (Hotel
Component)
Fee or Leasehold: Fee and Leasehold
Major Tenants: General Service
Administration; US Postal
Service; Smithsonian
Institution
Occupancy: 98% (Office Component)
76.40% (Hotel Component)
Lock Box: Hard
</TABLE>
S-70
<PAGE>
The Borrower. The L'Enfant Borrower has been structured as a single
purpose, bankruptcy remote entity, with a general partner which is a single
purpose, bankruptcy remote corporation, the board of which contains an
independent director. The principle of the L'Enfant Borrower is Sarakreek
Holdings N.V., a Netherlands corporation.
Certain additional information on the L'Enfant Loan and the L'Enfant
Property is set forth on Annex A hereto.
The Property. The L'Enfant Property consists of three buildings located in
Washington, D.C. The North Building, located at 400 10th Street SW, is an
8-story building which contains approximately 251,204 square feet of office
space, 23,205 square feet of commercial space consisting of two branch banks
and a full service gas station and 4,632 square feet of garage space. The North
Building was constructed in 1968 and renovated in 1990. The East Building,
located at 480 L'Enfant Plaza SW, contains the 370 room Lowes L'Enfant Plaza
Hotel as well as approximately 384,350 square feet of office space, 40,482
square feet of retail space and 45,010 square feet of storage space and a 343
space parking garage facility. The East Building was constructed in 1972 and
renovated in 1990. The Center Building, located at 420 10th Street SW, is
comprised of the Grand Plaza and four below grade levels, the first of which,
known as La Promenade, contains approximately 139,445 square feet of retail
space. Three additional below grade levels of parking which are linked to below
grade level parking located in the North Building contain a total of 1306
parking spaces. The Center Building was constructed in 1972 and renovated in
1990.
Property Management. The L'Enfant Property (excluding that portion of the
L'Enfant Property which is operated by the Hotel Manager) is managed by
Sarakreek Management Partners LLC (the "L'Enfant Manager") pursuant to a
management agreement. The management agreement provides for the payment to the
L'Enfant Manager of management fees of 4.25% of gross revenues, which are
subordinated to payments under the L'Enfant Loan. The L'Enfant Manager may be
terminated (i) upon an event of default under the L'Enfant Loan or the L'Enfant
Mezzanine Loan (as defined below), (ii) if the DSCR for the L'Enfant Loan falls
below 1.05x at any time prior to and including October 11, 2001 or below 1.10x
thereafter or (iii) in the event of a default by the L'Enfant Manager under the
management agreement. In addition, the portion of the L'Enfant Property which
is operated as a hotel is operated by Loews Hotels, Inc. (the "Hotel Manager")
pursuant to a management agreement (the "Hotel Management Agreement"), which
provides for a management fee determined on a sliding scale based on gross
operating profits. The Hotel Manager may be terminated only upon an event of
default under the Hotel Management Agreement.
Reserves. At the closing of the L'Enfant Loan, the L'Enfant Borrower
deposited $10,000,000 into a replacement escrow fund for capital expenditure
projects as set forth in the L'Enfant Loan documents. The L'Enfant Borrower is
also required, to the extent that the deposit balance falls below approximately
$420,000, to make monthly deposits into the replacement escrow fund and is
required to make deposits into the replacement escrow fund in the amount of 4%
of the gross revenues of the hotel. The L'Enfant Mortgage Loan documents
provide that any sums remaining in the replacement escrow fund following the
completion of such capital expenditure projects ("Excess Deposits") shall be
applied to pay down principal on the L'Enfant Mezzanine Loan. In addition, at
the closing of the L'Enfant Loan, the L'Enfant Borrower funded two tenant
improvement and leasing commission reserve accounts in the amount of $8,000,000
and $2,000,000, respectively. The L'Enfant Borrower is also required to make
monthly payments to such accounts in the amount of $83,333.33 until September
11, 2001 and $166,666.66 thereafter. Subject to certain financial conditions,
the CSFB Mortgage Loan Seller may (i) distribute Excess Deposits to the
L'Enfant Borrower, (ii) apply Excess Deposits to monthly deposit obligations
and/or (iii) pay down the L'Enfant Mezzanine Loan with Excess Deposits.
Mezzanine Loan and Preferred Equity Interest. Potomac Creek Associates LP
II, the limited partner of the L'Enfant Borrower, a Delaware limited
partnership, is the borrower (the "L'Enfant Mezzanine Borrower") under a
mezzanine loan with an aggregate principal balance as of the Cut-off Date of
$2,500,000 (the "L'Enfant Mezzanine Loan"), made by the CSFB Mortgage Loan
Seller (in its capacity as mezzanine lender, the "L'Enfant Mezzanine Lender")
on September 18, 1998. The L'Enfant Mezzanine Loan is secured by, among other
things, a pledge of the limited partnership interests in the L'Enfant
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<PAGE>
Borrower and the stock of the general partner of the L'Enfant Borrower. The
L'Enfant Mezzanine Lender has agreed not to transfer its interest in the
L'Enfant 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 then current
ratings on the Certificates. The L'Enfant Mezzanine Loan matures on September
12, 2005 and bears interest at a per annum rate equal to the greater of (i)
LIBOR plus 5.235% and (ii) 10.325%.
The CSFB Mortgage Loan Seller owns a preferred equity interest (as such
holder, the "L'Enfant Special Limited Partner") in the L'Enfant Borrower having
an initial equity investment in the amount of $45,400,000 (the "L'Enfant
Preferred Equity Interest"). The L'Enfant Special Limited Partner is entitled
to receive preferred monthly distributions at a yield equal to the greater of
(i) LIBOR plus 5.235% and (ii) 10.325% and is scheduled to be redeemed in full
on September 12, 2005. The L'Enfant Special Limited Partner has agreed not to
transfer the L'Enfant Preferred Equity Interest 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 then current ratings on the Certificates.
For the first three years of their respective terms, the L'Enfant
Mezzanine Loan and the L'Enfant Preferred Equity Interest require monthly
payments of interest and yield, respectively, only, and thereafter require
monthly payments of interest and yield, respectively, plus principal and
capital payments, respectively, equal to 75% of cash flow from the L'Enfant
Property after payment of certain expenses (including debt service and reserves
under the L'Enfant Loan). Upon the occurrence of an event of default under the
L'Enfant Mezzanine Loan or a breach under the preferred equity documents, all
cash flow from the L'Enfant Property remaining after payment of operating
expenses and debt service will be applied to prepay such principal and capital
amounts.
The L'Enfant Mezzanine Loan also requires quarterly payments of additional
interest equal to 30% of cash flow from the L'Enfant Property, net of payments
required to be made under the L'Enfant Loan, the L'Enfant Mezzanine Loan and
the L'Enfant Preferred Equity Interest. Upon the occurrence of a sale or
transfer of the L'Enfant Property, or upon the maturity date, among other
things, the L'Enfant Mezzanine Borrower is required to pay to the L'Enfant
Mezzanine Lender 30% of the proceeds of such sale or, on the occurrence of the
maturity date, approximately 30% of the appraised value of the L'Enfant
Property net of the sum of (i) the outstanding principal balances of the
L'Enfant Loan, the L'Enfant Mezzanine Loan, the L'Enfant Preferred Equity
Interest and (ii) $22,000,000.
The L'Enfant Mezzanine Lender and L'Enfant Special Limited Partner each
have certain approval rights over budgets and significant leases and can
terminate and replace the L'Enfant Manager upon an event of default under the
L'Enfant 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 (including debt service under the L'Enfant Loan). The
rights of the L'Enfant Mezzanine Lender and the L'Enfant Special Limited
Partner relating to budgeting, management and leases will be exercised through
the L'Enfant Special Limited Partner, subject to the consent of the Servicer to
such exercise.
The Water Street Loan
The Loan. The fifth largest Mortgage Loan (the "Water Street Loan") was
originated by the CSFB Mortgage Loan Seller on September 26, 1997. The Mortgage
Note which evidences the Water Street Loan consists of two tranches. Tranche A
of the Mortgage Note which evidences the Water Street Loan has a principal
balance, as of the Cut-off Date, of $74,948,322.49, which represents
approximately 3.9% of the Initial Pool Balance. Tranche B of the Mortgage Note
which evidences the Water Street Loan has an aggregate principal balance as of
the Closing Date of $5,802,657.00. Tranche B is not included in the Trust Fund.
Tranche A is secured by a first mortgage (the "Water Street Mortgage")
encumbering an office building located in New York, New York (the "Water Street
Property") which is not security for Tranche B. The Trustee will be a party to
a participation agreement with the holder of the obligations evidenced by
Tranche B in which the Trustee will be named as lead lender. All amounts
allocated between Tranche A and Tranche B will be paid pari passu. The Servicer
will make all servicing decisions with respect to the Water Street Loan and the
Special Servicer will specially service the Water Street Loan in the event it
becomes a Specially Serviced Mortgage Loan, in each case with a view toward
maximizing recovery to the
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<PAGE>
holders of both Tranche A and Tranche B. The Water Street Loan was made to 180
Water Street Associates, L.P., a Delaware limited partnership and 180 Water
Street Leasehold Interest, L.L.C., a New York limited liability company
(collectively, the "Water Street Borrower").
<TABLE>
<S> <C>
Cut-off Date Principal
Balance: Tranche A: $74,948,322
Origination Date: September 26, 1997
Loan Type: ARD
Monthly Payment: $ 525,302
Interest Rate: 8.00%
Amortization Term: 240 months
DSCR: 1.13x
Cut-off Date LTV: 74.21%
Anticipated Repayment
Date: July 11, 2013
ARD Balance: $42,564,472
ARD LTV: 42.14%
Defeasance Period: Commencing two years
after the Closing Date
through 6 months prior
to ARD
Partial Defeasance: No
Prepayment Lockout
Expiration: 6 months prior to ARD
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Borrower Special
Purpose Entity: Yes, with an independent
director and a non-consoli-
dation opinion
Maturity Date: July 11, 2018
Property Type: Office
Number of Properties: 1
Location of Property: New York, New York
Appraised Value: $101,000,000
Square Feet: 504,573
Year Built/Renovated: 1998
Cut-off Date
Balance/SF: $ 149
Fee or Leasehold: Fee
Major Tenants: City of New York
Occupancy: 100%
Lock Box: Hard
</TABLE>
The Borrower. Each of the entities which make up the Water Street Borrower
has been structured as a single purpose, bankruptcy remote entity, with, in the
case of 180 Water Street Associates, L.P., a single purpose, bankruptcy remote
general partner, the board of which contains an independent director and with,
in the case of 180 Water Street Leasehold Interest, L.L.C., a single purpose,
bankruptcy remote managing member, the board of which contains an independent
director. 180 Water Street Associates, L.P. is structured as a Delaware limited
partnership and 180 Water Street Leasehold Interest, L.L.C. is structured as a
New York limited liability company. The key principals of the Water Street
Borrower are Alfons and Leon Melohn. Alfons and Leon Melohn own and manage
approximately one million square feet of commercial office properties,
primarily located in New York City.
Certain additional information for the Water Street Loan and the Water
Street Property is set forth on Annex A hereto.
The Property. The Water Street Property is a 24 story office property
located at 180 Water Street in downtown Manhattan which was constructed in 1971
and renovated in 1998. The Water Street Property contains approximately 504,573
rentable square feet and is fully leased at a current rent of $16.79 per square
foot to the City of New York Department of Citywide Administrative Services
(the "Water Street Tenant"), an agency of the City of New York, the long term
unsecured debt obligations of which are rated "A3" by Moody's and "A-" by
Fitch.
<PAGE>
Property Management. The 180 Water Street Property is managed by 55th St.
A.L.M. Realty Corp. (the "Water Street Manager"), an affiliate of the Water
Street Borrower, under a management agreement which provides for payment to the
Water Street Manager of management fees equal to $75,000.00 per year, which are
subordinated to payments under the Water Street Loan. The Water Street Manager
may be terminated (i) upon the occurrence of any default under the Water Street
Loan or (ii) if, within 45 days of the end of any calendar quarter, the DSCR
for the Water Street Loan falls below 1.10x.
Reserves. In the event the Water Street Tenant exercises its option to
terminate its lease with respect to the Water Street Property (which
termination right may be exercised between June 15, 2013
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<PAGE>
and June 15, 2017 and between June 15, 2020 and June 15, 2023), the Water
Street Tenant is required to pay a termination fee based on a formula set forth
in the lease between the Water Street Borrower and the Water Street Tenant
which shall be deposited into a reserve account and applied towards tenant
improvement expenses and leasing commissions incurred by the Water Street
Borrower in connection with the reletting of the Water Street Property.
Tranche B. Tranche B is held by the CSFB Mortgage Loan Seller. Tranche B
is secured by a second mortgage on the Water Street Property and a pledge of
99% of the equity interest in the Water Street Borrower, such equity interest
constituting all of the equity interest in the Water Street Borrower other than
the 1% interest held by the general partner thereof and an assignment by the
Water Street Borrower of a separate and distinct portion of the rental stream
from the lease with the Water Street Tenant, the payments of which repay the
payments due under Tranche B. Tranche B of the Water Street Loan matures on
July 11, 2003, bears interest at a rate of 8.61% per annum and fully amortizes
prior to the stated maturity date thereof.
The 260-261 Madison Avenue Loan
The Loan. The sixth largest Mortgage Loan (the "260/261 Madison Avenue
Loan") was originated by the CSFB Mortgage Loan Seller on December 31, 1997 and
has an aggregate principal balance as of the Cut-off Date of $74,355,366.22,
which represents approximately 3.9% of the Initial Pool Balance. The 260/261
Madison Avenue Loan is secured by first mortgages encumbering two office
buildings located in New York, New York (collectively, the "260/261 Madison
Avenue Property"). The 260/261 Madison Avenue Loan was made to 260/261 Madison
Equities Corp., a New York corporation (the "260/261 Madison Avenue Borrower").
<TABLE>
<CAPTION>
<S> <C>
Cut-off Date Principal
Balance: $74,355,366
Origination Date: December 31, 1997
Loan Type: ARD
Monthly Payment: $ 523,366
Interest Rate: 7.275%
Amortization Term: 336 months
DSCR: 1.54 x
Cut-off Date LTV: 49.50%(1)
Anticipated Repayment
Date: February 11, 2008
ARD Balance: $63,887,199
ARD LTV: 40.70%
Defeasance Period: Commencing two years
after the Closing Date
through 6 months prior
to ARD
Partial Defeasance: No
Prepayment Lockout
Expiration: 6 months prior to ARD
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Borrower Special
Purpose Entity: Yes, with an independent
director and a non-consoli-
dation opinion
Maturity Date: January 11, 2026
Property Type: Office
Number of Properties: 1
Location of Property: New York, New York
Appraised Value: $130,000,000
Square Feet: 888,315
Year Built/Renovated: 1987
Cut-off Date
Balance/SF: $84
Fee or Leasehold: Fee
Major Tenants: NL Holding, K-III
and American
Kennel Club
Occupancy: 84.70%
Lock Box: Hard
</TABLE>
------------
(1) Assumes letter of credit drawn down to pay down loan.
<PAGE>
The Borrower. The 260/261 Madison Avenue Borrower has been structured as a
single purpose, bankruptcy remote entity, the board of which contains an
independent director. The 260/261 Madison Avenue Borrower is controlled by Zar
Realty. Zar Realty owns in excess of 4.3 million square feet of real
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<PAGE>
estate in New York City. Zar Realty's real estate activities extend
internationally with condominium developments in Acapulco, Mexico as well as
build-to-suit projects in Russia for multi-national corporations.
Certain additional information on the 260/261 Madison Avenue Loan is set
forth on Annex A hereto.
The Property. The 260/261 Madison Avenue Property consists of two office
buildings located at 260 and 261 Madison Avenue, New York, New York. 260
Madison Avenue is a 22-story office building which was constructed in 1953 and
renovated in 1987 and has net rentable area of approximately 517,918 square
feet and a garage containing approximately 55 spaces. 261 Madison Avenue is a
28-story office building which was constructed in 1953 and has net rentable
area of approximately 370,397 square feet and a garage containing approximately
80 spaces. Based on the 260/261 Madison Avenue Borrower's October 20, 1998 rent
rolls for the 260/261 Madison Avenue Property, 260/261 Madison Avenue was
approximately 84.7% occupied at an approximate average rent per square foot of
$29.94.
Certain Environmental Matters. The Phase I environmental site assessment
with respect to 260 Madison Avenue, New York, New York, performed in January
1998, noted that (i) the U.S. Environmental Protection Agency database listed
two prior and one current tenant as small quantity generators of hazardous
waste; (ii) the New York State Department of Environmental Conservation
database of Spills of Hazardous Substance lists the 260/261 Madison Avenue
Property for a spill of dielectric fluid from an underground transformer in
1995; (iii) drums of waste oil were present in each building which constitutes
the 260/261 Madison Avenue Property; and (iv) ACM was identified at 260 Madison
Avenue including acoustical plaster, pipe insulation, mud joint packing,
insulation, heating ventilation and air conditioning fabric, floor tiles and
mastic ranging from good to poor condition. The report recommends (and the
applicable loan documents require) that the ACM be either maintained under an
operation and maintenance program or completely removed from the property. The
cost to remove the ACM in poor condition and to conduct the required air
monitoring is approximately $350,000 and the cost of establishing the operation
and maintenance program is approximately $3,000. The assessment further
recommended the construction of secondary containment at a cost of $3,000. A
reserve of $445,000, which represents 125% of the estimated combined costs of
such remediation, was established as security for completion of this work.
Property Management. The 260/261 Madison Avenue Property is managed by ZAR
Realty Management Corp. (the "260/261 Madison Avenue Manager"), an affiliate of
the 260/261 Madison Avenue Borrower, pursuant to a management agreement (the
"260/261 Madison Avenue Management Agreement") which provides for a management
fee of 3% of gross revenues which are subordinated to payments under the
260/261 Madison Avenue Loan. The 260/261 Madison Avenue Manager may be
terminated (i) upon the occurrence of any default under the 260/261 Madison
Avenue Loan, or (ii) upon the occurrence of any default under the 260/261
Madison Avenue Management Agreement. In addition, in the event the DSCR for the
260/261 Madison Avenue Loan shall be less than 1.10x, the 260/261 Madison
Avenue Manager will only be reimbursed for overhead expenses and the fee
portion of the management fee will be accrued and be retained by the Lender as
additional collateral until such time as a DSCR of 1.10x is so achieved.
Letter of Credit. As additional security for the 260/261 Madison Avenue
Loan, the 260/261 Madison Avenue Borrower delivered a letter of credit from
Marine Midland Bank, N.A. in the amount of $10,000,000, which may be drawn (i)
upon the occurrence of an event of default under the 260/261 Madison Avenue
Loan, (ii) if the 260/261 Madison Avenue Borrower fails to deliver a renewal of
the letter of credit 30 days prior to the expiration of the letter of credit or
(iii) upon the occurrence of any action by the 260/261 Madison Avenue Borrower
or the institution that issued the letter of credit which may jeopardize the
right to draw on the letter of credit. The amount of the letter of credit is to
be reduced in minimum increments of $1,000,000 upon delivery to the lender of
an estoppel certificate satisfactory to lender, from tenants of certain space
at the 260/261 Madison Avenue Property confirming that such tenants' leases are
in full force and effect, that such tenants have accepted the space demised
thereunder and that such tenants' obligation to pay rent under such leases has
commenced and provided the DSCR for the 260/261 Madison Avenue Loan shall be
not less than 1.90x. For purposes of determining such DSCR, a 9.23% assumed
loan constant shall be used.
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<PAGE>
Reserves. At the closing of the 260/261 Madison Avenue Loan, the 260/261
Madison Avenue Borrower deposited $12,000,000 into two separate tenant
improvement and leasing commission reserve accounts to cover future tenant
improvement and leasing commission costs, $9,300,000 for certain space which
was vacant as of the date of closing of the 260/261 Madison Avenue Loan, and
$2,700,000 for future vacancies. Additionally, the 260/261 Madison Avenue
Borrower is required to deposit $208,333 per month for tenant improvements and
leasing commissions until the amount in such reserve account is equal to
$6,250,000. To the extent that the deposits in the tenant improvement and
leasing commission reserve fall below $6,250,000, the 260/261 Madison Avenue
Borrower shall be required to make periodic payments to such account until the
deposits in the account are equal to $6,250,000.
Mezzanine Loan. 260-261 Mezzanine Corp., a New York corporation (the
"260/261 Madison Avenue Mezzanine Borrower"), is the sole shareholder of the
260/261 Madison Avenue Borrower and the borrower under a Mezzanine Loan having
an aggregate principal balance as of the Cut-off Date of $10,000,000 (the
"260/261 Madison Avenue Mezzanine Loan") secured by all of the issued and
outstanding capital stock in the 260/261 Madison Avenue Borrower, made by the
CSFB Mortgage Loan Seller (in its capacity as mezzanine lender, the "260/261
Madison Avenue Mezzanine Lender") on November 6, 1998. The 260/261 Madison
Avenue Mezzanine Loan matures on December 31, 2000 and bears interest at a
variable per annum rate of 30-day LIBOR plus 4.5%. The 260/261 Madison Avenue
Mezzanine Borrower is required to make monthly payments of interest only prior
to maturity.
The 260/261 Madison Avenue Mezzanine Lender has the right to approve,
among other things, significant leases. Additionally, the 260/261 Madison
Avenue Mezzanine Lender can terminate and replace the 260/261 Madison Avenue
Manager upon the occurrence of an event of default under the 260/261 Madison
Avenue Mezzanine Loan. The 260/261 Madison Avenue Mezzanine Lender has agreed
not to take any such action with respect to the 260/261 Madison Avenue Manager
unless each Rating Agency confirms that such action would not cause a
withdrawal, qualification or downgrade of its then current ratings on the
Certificates. The exercise of such rights by the 260/261 Madison Avenue
Mezzanine Lender relating to management and leases is subject to the approval
of the Servicer, which has the right to override any objection by the 260/261
Madison Avenue Mezzanine Lender in such regard. In addition, the 260/261
Madison Avenue Mezzanine Lender has agreed not to transfer its interest in the
260/261 Madison Avenue 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
then current ratings on the Certificates.
The Trident Loan
The Loan. The seventh largest Mortgage Loan (the "Trident Loan") was
originated by the CSFB Mortgage Loan Seller on October 22, 1998 and has a
principal balance as of the Cut-off Date of $60,000,000.00, which represents
approximately 3.1% of the Initial Pool Balance. The Trident Loan is secured by
a first priority lien encumbering the Trident Center, an office building
located in Los Angeles, California (the "Trident Property"). The Trident Loan
was made to Trident Center L.P., a California limited partnership (the "Trident
Borrower").
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Cut-off Date Principal
Balance: $60,000,000
Origination Date: October 22, 1998
Loan Type: ARD
Monthly Payment: $ 449,854
Interest Rate: 7.665%
Amortization Term: 300 months
DSCR: 1.32 x
Cut-off Date LTV: 72.29%
Anticipated Repayment
Date: November 11, 2008
ARD Balance: $48,972,501
ARD LTV: 59.00%
Defeasance Period: Commencing two years
after the Closing Date
through 2 months prior
to ARD
Partial Defeasance: No
Prepayment Lockout
Expiration: 2 months prior to ARD
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Borrower Special
Purpose Entity: Yes, with a general partner
that is a special purpose
entity, with a corporate
member having an
independent director and a
non-consolidation opinion
Maturity Date: November 11, 2023
Property Type: Office
Number of Properties: 1
Location of Property: Los Angeles, CA
Appraised Value: $83,000,000
Square Feet: 312,933
Year Built/Renovated: 1983
Cut-off Date
Balance/SF: $192
Fee or Leasehold: Fee
Major Tenants: Manatt, Phelps & Phillips,
LLP; Mitchell, Silberberg &
Knupp LLP; Security First
Life Insurance Company
Occupancy: 100.00%
Lock Box: Hard
</TABLE>
The Borrower. The Trident Borrower has been structured as a single
purpose, bankruptcy remote entity, whose general partner is a single purpose,
bankruptcy remote limited liability company, a member of which is a corporation
whose board contains an independent director. The principals of the Trident
Borrower are the two law firms of Manatt, Phelps & Phillips, LLP and Mitchell,
Silberberg & Knupp LLP which are major tenants in the building.
Certain additional information on the Trident Loan and the Trident
Property is set forth on Annex A hereto.
The Property. The Trident Property is a ten-story, twin tower office
building, with a five level (two below grade) parking garage (with tennis
courts on roof), located at 11355-11377 West Olympic Boulevard, Los Angeles,
California in the West Los Angeles submarket. The Trident Property was
constructed in 1983. The Trident Property contains approximately 312,933 square
feet of commercial office space, and approximately 1,364 parking spaces. The
tenants are Manatt, Phelps & Phillips, LLP, Mitchell, Silberberg & Knupp LLP
and Security First Life Insurance Company (a subsidiary of Metropolitan Life
Insurance Company). Based on the Trident Borrower's January 31, 1998 rent roll,
the Trident Property was 100% occupied, at an average annual rental per square
foot of $32.18.
Property Management. The Trident Property is managed by the Trident
Borrower; there is no independent property manager. The Trident Borrower shall
not appoint a property manager without first obtaining the Servicer's consent.
Upon (i) the occurrence of an event of default, (ii) after the Anticipated
Repayment Date, or (iii) if the DSCR falls below 1.10x, the Servicer may
require the Trident Borrower to appoint an independent property manager, or, if
a property manager had previously been appointed by the Trident Borrower, to
replace such property manager with an independent property manager reasonably
satisfactory to the Servicer. Any property manager will be required to
subordinate its fee to the lien of the Mortgage.
Reserves. The Trident Property sustained some structural damage during a
1994 earthquake. As a result of the earthquake damage, the Trident Borrower is
required to perform certain repairs and
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<PAGE>
structural enhancements on the Trident Property having an estimated cost of
$7,800,000. The Mortgage Loan Seller has reserved $9,750,000 to cover the cost
of the earthquake repairs, which amount represents 125% of the estimated cost
of such repairs.
Contract for Sale/Potential Litigation. The Trident Borrower entered into
an Agreement of Purchase and Sale for the Trident Property dated July 14, 1998
(the "Sales Contract"), but the sale of the Trident Property was not completed.
The Trident Borrower alleges that the buyer under the Sales Contract defaulted,
whereas the buyer claims that the Trident Borrower defaulted and has demanded a
return of its $1,000,000 deposit (the "Deposit"), $700,000 of which is
currently held by Commonwealth Land Title Insurance Company and $300,000 of
which is currently held by the Trident Borrower. The Trident Borrower has
agreed that the Deposit shall not be released until either (i) the issuance of
a final, non-appealable court order denying the buyer's claim that the Trident
Borrower defaulted under the Sales Contract and authorizing the release of the
Deposit to the Trident Borrower, or (ii) the delivery of a written general
release of the Trident Borrower by the buyer, together with a joint instruction
letter executed by the buyer and the Trident Borrower authorizing the release
of the Deposit. To further protect against any such potential claim, the
Trident Borrower has deposited an additional $1,000,000 (the "Litigation
Escrow") with the CSFB Mortgage Loan Seller as additional collateral for the
Trident Loan, and has granted the CSFB Mortgage Loan Seller a security interest
therein, which Litigation Escrow shall only be disbursed as follows: (i) as set
forth in a joint instruction letter executed by buyer and the Trident Borrower,
(ii) to the Trident Borrower upon the Servicer's receipt of a final,
non-appealable court judgment that the Trident Borrower has not defaulted under
the Sales Contract or, in the alternative, proof satisfactory to the Servicer
that the buyer has not commenced an action seeking damages within one year from
the Closing Date, or (iii) to the Trident Borrower upon the delivery to the
Servicer of a written general release of the Trident Borrower by the buyer.
Moreover, the CSFB Mortgage Loan Seller received legal opinions from Manatt,
Phelps & Phillips, LLP and Mitchell, Silberberg & Knupp LLP generally opining
that the buyer's claims are without merit. In addition, the CSFB Mortgage Loan
Seller has obtained indemnity agreements from Trident Holdings LLC, Manatt,
Phelps & Phillips, LLP and Mitchell Silberberg & Knupp LLP (collectively, the
"Indemnitors"), which provide that, in the event the buyer obtains a final,
non-appealable judgment for damages against the Trident Borrower in excess of
the Litigation Escrow, the Indemnitors will pay such judgment.
The Thurman Portfolio Loan
The Loan. The eighth largest Mortgage Loan (the "Thurman Portfolio Loan")
was originated by the CSFB Mortgage Loan Seller on November 6, 1998 and has a
principal balance as of the Cut-off Date of $55,745,250.00, which represents
approximately 2.9% of the Initial Pool Balance. The Thurman Portfolio Loan is
secured by mortgages encumbering 10 multifamily apartment complexes located in
3 states (collectively, the "Thurman Portfolio Properties"). The Thurman
Portfolio Loan was made to 6 borrowers (the "Thurman Portfolio Borrowers") as
detailed below.
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Cut-off Date
Principal Balance: $55,745,250
Origination Date: November 6, 1998
Loan Type: ARD
Monthly Payment: $ 392,454
Interest Rate: 7.57%
Amortization Term: 360 months
DSCR: 1.20x
Cut-off Date LTV: 79.75%
Anticipated
Repayment Date: November 11, 2008
ARD Balance: $49,333,461
ARD LTV: 70.58%
Defeasance Period: Commencing two years
after Closing Date through
6 months prior to ARD
Partial Defeasance: Yes (Release price of 125%
of Property Release
Amount)
Prepayment Lockout
Expiration: 6 months prior to ARD
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Borrower Special
Purpose Entity: Yes, with an independent
director and a
non-consolidation opinion
Maturity Date: November 11, 2028
Number of Properties: 10
Number of Units: 3,015
Appraised Value: $69,900,000
Cut-off Date
Balance/Unit: $ 18,489
Lock Box: Hard
</TABLE>
Additional Mortgage Loan Information by Property. Certain information with
respect to each Mortgaged Property relating to the Thurman Portfolio Loan is
set forth below:
<TABLE>
<CAPTION>
CUT-OFF DATE
ALLOCATED
PROPERTY NO. OF YEAR BUILT/ FEE OR LOAN
NAME LOCATION PROPERTY TYPE UNITS RENOVATED LEASEHOLD OCCUPANCY (1) AMOUNT
------------------- -------------------- --------------- -------- ------------- ----------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
The Parks at
Maryland Las Vegas, NV Multifamily 380 1998 Fee 84.00% $11,962,500
Villas at Vickery Dallas, TX Multifamily 708 1998 Fee 91.00 8,772,500
Park Hill Miami, FL Multifamily 264 1997 Fee 91.00 7,975,000
The Woodlands
of Plano Plano, TX Multifamily 232 1998 Fee 97.00 6,539,500
Desert Sands Fort Worth, TX Multifamily 346 1997 Fee 97.00 4,944,500
Willows on
Hunnicut Dallas, TX Multifamily 208 1997 Fee 99.00 4,466,000
The Encore Houston, TX Multifamily 308 1998 Fee 97.00 3,509,000
Oakwood
Gardens Houston, TX Multifamily 200 1998 Fee 97.00 3,269,750
Turtle Creek Arlington, TX Multifamily 193 1998 Fee 92.00 2,392,500
Woodlawn Park St. Petersburg, FL Multifamily 176 1997 Fee 88.10 1,914,000
(1) As of most recently available rent roll.
</TABLE>
The Borrower. The Thurman Portfolio Borrowers are each a single purpose,
bankruptcy remote limited liability company or limited partnership. Each
Thurman Portfolio Borrower shares with each other Thurman Portfolio Borrower a
common single purpose, bankruptcy remote limited liability company (the
"Thurman Managing LLC") as its managing member or general partner. The Thurman
Managing LLC has as its managing member, a single purpose, bankruptcy remote
limited liability company, which has as its managing member a single purpose,
bankruptcy remote corporation, the board
S-79
<PAGE>
of which contains an independent director. A majority of the beneficial owners
of the Thurman Portfolio Borrower consist of affiliates of the CSFB Mortgage
Loan Seller and officers or employees of the CSFB Mortgage Loan Seller and/or
its affiliates. The Thurman Portfolio Borrowers share certain common ownership
interests with the Pinstripe Portfolio Borrower.
Certain additional information on the Thurman Portfolio Loan and the
Thurman Portfolio Properties is set forth on Annex A hereto.
Property Management. The Thurman Portfolio Properties are each managed by
Westdale Asset Management (the "Thurman Portfolio Manager"), which is not
affiliated with the Thurman Portfolio Borrowers, pursuant to separate
management agreements. Each management agreement provides for the payment to
the Thurman Portfolio Manager of management fees of 3.5% of gross revenues,
which are subordinated to payments under the Thurman Portfolio Loan. The
Thurman Portfolio Manager may be terminated (i) upon an event of default under
the Thurman Portfolio Loan or the Thurman Portfolio Mezzanine Loan (as defined
below) or a breach in respect of the Thurman Preferred Equity Interest (as
defined below), (ii) if the DSCR for the Thurman Portfolio Loan falls below
1.1x, or (iii) in the event of a default by the Thurman Portfolio Manager under
a management agreement.
Mezzanine Loan and Preferred Equity Interest. Thurman Permanent A-2, LLC,
a Delaware Limited Liability Company, (the "Thurman Portfolio Mezzanine
Borrower") is the (i) regular member of each entity comprising the Thurman
Portfolio Borrower that is a limited liability company and (ii) limited partner
of each entity comprising the Thurman Portfolio Borrower that is a limited
partnership and is the borrower under a mezzanine loan with an aggregate
principal balance as of the Cut-off Date of $2,346,865 (the "Thurman Portfolio
Mezzanine Loan"), which was made by the CSFB Mortgage Loan Seller (in its
capacity as mezzanine lender, the "Thurman Portfolio Mezzanine Lender") on
November 11, 1998. The Thurman Portfolio Mezzanine Loan is secured by, among
other things, a pledge of the regular membership interests and limited
partnership interests of the Thurman Portfolio Mezzanine Borrower in each
entity comprising the Thurman Portfolio Borrower and the managing membership
interest in the managing member of the Thurman Managing LLC. The Thurman
Portfolio Mezzanine Lender has agreed not to transfer the Thurman 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 then current ratings on
the Certificates. The Thurman Portfolio Mezzanine Loan matures on November 11,
2008 and bears interest at a per annum rate of LIBOR plus 8.5%.
The CSFB Mortgage Loan Seller owns a preferred equity interest (as such
holder, the "Thurman Portfolio Special Member") in the Thurman Portfolio
Mezzanine Borrower having an initial equity investment in the amount of
$2,644,337 (the "Thurman Preferred Equity Interest"). The Thurman Portfolio
Special Member is entitled to receive preferred monthly distributions at a
yield equal to LIBOR plus 8.5% and is scheduled to be redeemed in full on
November 11, 2008. The payments due on the Thurman Portfolio Preferred Equity
Interest are deemed "Guaranteed Payments" to the extent of certain
distributions made with respect to the regular membership interests in the
Thurman Portfolio Mezzanine Borrower. The Thurman Portfolio Special Member
agreed not to transfer the Thurman Preferred Equity Interest 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 then current ratings on the Certificates. The Thurman
Portfolio Special Member may, at its option, convert the Thurman Preferred
Equity Interest into a mezzanine loan.
Commencing on December 11, 1998, the Thurman Portfolio Mezzanine Loan and
the Thurman Portfolio Preferred Equity Interest requires monthly payments of
interest and yield, respectively, and principal and capital amounts,
respectively, such monthly principal and capital amount being equal to the
greater of (i) the principal portion of payments that would be due based on a
ten year amortization schedule at a floating interest rate of LIBOR plus 8.5%
and (ii) the receipt of a pro-rata portion of 75% of the excess cash flow of
the Thurman Portfolio Mezzanine Borrower. If the obligations due under the
Thurman Portfolio Mezzanine Loan and the Thurman Portfolio Preferred Equity
Interest have not been satisfied by November 11, 2008, a balloon payment of the
principal and capital amounts, respectively,
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outstanding shall be required on November 11, 2008. Upon the occurrence of an
event of default under the Thurman Portfolio Mezzanine Loan or a breach under
the preferred equity documents, all cash flow from the Thurman Portfolio
Property remaining after payment of operating expenses and sums due under the
Thurman Portfolio Loan will be applied to repay such principal and capital
amounts.
The Thurman Portfolio Mezzanine Lender and Thurman Portfolio Special
Member each have certain approval rights over budgets (after an event of
default) and significant leases and can terminate and replace the Thurman
Portfolio Manager upon an event of default under the Thurman 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 Thurman Portfolio Mezzanine Lender and the Thurman Portfolio
Special Member have agreed that they will not take any such action with respect
to the Thurman Portfolio Manager unless each Rating Agency confirms that such
action would not cause a withdrawal, qualification or downgrade of its then
current ratings on the Certificates. The rights of the Thurman Portfolio
Mezzanine Lender and the Thurman Portfolio Special Member relating to
budgeting, management and leases are to be exercised through the Thurman
Portfolio Special Member, subject to the consent of the Servicer to such
exercise.
The Koll Loan
The Loan. The ninth largest Mortgage Loan (the "Koll Loan") was originated
by the CSFB Mortgage Loan Seller on August 26, 1998 and has a principal balance
as of the Cut-off Date of $54,819,238.33, which represents approximately 2.9%
of the Initial Pool Balance. The Koll Loan is secured by a first mortgage (the
"Koll Mortgage") encumbering an office park property in Iselin, New Jersey (the
"Koll Property"). The Koll Loan was made to Corporate Plaza Associates LLC, a
New Jersey limited liability company (the "Koll Borrower").
<TABLE>
<CAPTION>
<S> <C>
Cut-off Date Principal
Balance: $54,819,238
Origination Date: August 26, 1998
Loan Type: ARD
Monthly Payment: $ 363,042
Interest Rate: 6.94%
Amortization Term: 360 months
DSCR: 1.26x
Cut-off Date LTV: 82.53%
Anticipated Repayment
Date: September 11, 2008
ARD Balance: $47,804,010
ARD LTV: 71.97%
Defeasance Period: Commencing two years
after the Closing Date
through 6 months prior to
ARD
Partial Defeasance: No
Prepayment Lockout
Expiration: 6 months prior to
ARD
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Borrower Special
Purpose Entity: Yes, with independent
co-managing members and
a non-consolidation
opinion
Maturity Date: September 11, 2028
Property Type: Office
Number of Properties: 1
Location of Property: Iselin, New Jersey
Appraised Value: $66,425,000
Square Feet: 610,253
Year Built/Renovated: 1984
Cut-off Date Balance/SF: $90
Fee or Leasehold: Fee
Major Tenants: Merial LLC, NCR
Corporation,
Metropolitan Life
Insurance Company
Occupancy: 91%
Lock Box: Hard
</TABLE>
<PAGE>
The Borrower. The Koll Borrower has been structured as a special purpose,
bankruptcy remote entity with two single purpose, bankruptcy remote co-managing
members. The primary sponsors of the Koll Borrower are Mark Karasick and
Emanuel Wolff. Karasick and Wolff have acquired, operated and invested in New
York area commercial properties for over twenty years.
Certain additional information on the Koll Loan and the Koll Property is
set forth on Annex A hereto.
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<PAGE>
The Property. The Koll Property consists of six, 4-story masonry office
buildings, with surface parking spaces for 2,417 cars, located in Woodbridge
Township, Middlesex County, New Jersey. The Koll Property was constructed in
1981 and renovated in 1984. The Koll Property contains approximately 610,253
rentable square feet of commercial office space, and 2,417 surface parking
spaces. The major tenants of the Koll Property are (i) Merial, LLC, (ii) NCR
Corporation and (iii) Metropolitan Life Insurance Company. Based on the Koll
Borrower's August 28, 1998 rent roll, the Koll Property was 91% occupied at an
average annual commercial rental per square foot of $19.13.
Property Management. The Koll Property is managed by Plaza Prop. Manager
Corp. (the "Koll Manager"), an affiliate of the Koll Borrower, pursuant to a
management agreement. The management agreement provides for the payment to the
Koll Manager of management fees equal to $300,000 per year, increased by
increases in the cost of living index, which fees are subordinated to payments
to be made under the Koll Loan. The Koll Manager may be terminated (i) upon the
occurrence of a default by the Koll Manager under the management agreement,
(ii) upon the occurrence of a default by the Koll Borrower under the Koll Loan,
(iii) under certain circumstances, if the DSCR falls below 1.15x, (iv) if the
Koll Manager becomes insolvent or (v) under certain circumstances, if NOI falls
below $4,818,211.00.
Reserves. At the closing of the Koll Loan, the Koll Borrower funded a
tenant improvement and leasing commission reserve in the amount of $1,250,000
for future tenant improvement and leasing commission costs. Commencing on
February 11, 2001, the Koll Borrower is required to make monthly payments of
$69,583.33 into the reserve. Up to $625,000 of the sums initially deposited
into the reserve shall be reserved to pay for tenant improvements in connection
with the renewal of the Merial, NCR Corporation and Metropolitan Life Insurance
Company leases, the tenant improvements and leasing commission reserves will be
released, subject to lender's approval, at the rate of $4.06/SF of renewed
space and $9.60/SF of replacement leases.
Preferred Equity Interest. PLR Holding Corp. (in such capacity, the "Koll
Special Member"), an affiliate of the CSFB Mortgage Loan Seller, owns a
preferred equity interest in the Koll Borrower (each, a "Koll Preferred Equity
Interest"), having an initial equity investment in the amount of $4,200,000.
The Koll Preferred Equity Interest accrues yield at a preferred rate of 10.085%
and is scheduled to be partially redeemed on a monthly basis, with a final
distribution scheduled to be made on September 11, 2005. The Koll Borrower, in
connection with its obligations to the Koll Special Member, has established a
preferred equity account in its name for the benefit of the Koll Special
Member. In addition, if the Koll Borrower redeems the Koll Preferred Equity
Interest prior to the aforesaid final distribution date, the Koll Borrower must
pay the Koll Special Member an early redemption premium.
The Koll Special Member has certain approval rights with respect to, among
other things, budgets, excess cash expenses and significant leases, and may
terminate the Koll Manager upon the occurrence of a breach under any of the
Koll Preferred Equity Interests or if the DSCR falls below certain thresholds,
provided certain conditions are first satisfied.
The Koll Special Member has the unilateral right, at any time, to make a
mezzanine loan to the regular members of the Koll Borrower and the equity
owners of each of the co-managing members of the Koll Borrower. Alternatively,
the Koll Special Member has the unilateral right, at any time, to make a second
mortgage loan to the Koll Borrower secured by a second priority mortgage lien
and security interest on and in the Koll Property. The lender of the mezzanine
loan or the second mortgage loan shall be the CSFB Mortgage Loan Seller, or its
designee. The economic terms of the mezzanine loan or the second mortgage loan,
as applicable, shall be as similar as is reasonably possible to the Koll
Borrower's economic obligations under its operating agreement with respect to
the redemption of membership units allocated to the Koll Special Member.
The Pinstripe Portfolio Loan
The Loan. The tenth largest Mortgage Loan (the "Pinstripe Portfolio Loan")
was originated by the CSFB Mortgage Loan Seller on November 6, 1998 and has a
principal balance as of the Cut-off Date of $52,709,690, which represents
approximately 2.7% of the Initial Pool Balance. The Pinstripe Portfolio Loan is
secured by first mortgages encumbering 12 multi-family apartment complexes
located in 5 states
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(collectively, the "Pinstripe Portfolio Properties"). The Pinstripe Portfolio
Loan was made to 3 borrowers (the "Pinstripe Portfolio Borrowers") as detailed
below.
<TABLE>
<CAPTION>
<S> <C>
Cut-off Date Principal
Balance: $52,709,690
Origination Date: November 6, 1998
Loan Type: ARD
Monthly Payment: $ 371,084
Interest Rate: 7.57%
Amortization Term: 360 months
DSCR: 1.20x
Cut-off Date LTV: 78.10%
Anticipated
Repayment
Date: November 11, 2008
ARD Balance: $46,647,050
ARD LTV: 69.12%
Defeasance Period: Commencing two years
after Closing Date through
6 months prior to ARD
Partial Defeasance: Yes (Release price of 125%
of Property Release
Amount)
Prepayment Lockout
Expiration: 6 months prior to ARD
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Borrower Special
Purpose Entity: Yes, with an independent
director and a
non-consolidation opinion
Maturity Date: November 11, 2028
Number of Properties: 12
Number of Units: 2,596
Appraised Value: $67,490,000
Cut-off Date
Balance/Unit: $ 20,304
Lock Box: Hard
</TABLE>
Additional Mortgage Loan Information by Property. Certain information with
respect to each Mortgaged Property relating to the Pinstripe Portfolio Loan is
set forth below:
<TABLE>
<CAPTION>
CUT-OFF DATE
ALLOCATED
PROPERTY NO. OF YEAR BUILT/ FEE OR LOAN
NAME LOCATION PROPERTY TYPE UNITS RENOVATED LEASEHOLD OCCUPANCY(1) AMOUNT
---------------- ------------------ --------------- -------- ------------- ----------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Covington Walk Decatur, GA Multifamily 216 1998 Fee 87.00% $7,341,400
Oak Tree Irving, TX Multifamily 206 1998 Fee 95.00 5,545,100
Sunridge Grand Prarie, TX Multifamily 332 1998 Fee 96.00 5,232,700
Stratford Oaks Houston, TX Multifamily 392 1998 Fee 94.00 4,998,400
Shadowtree Houston, TX Multifamily 428 1998 Fee 96.00 4,764,100
Briarwood Sacramento, CA Multifamily 160 1997 Fee 96.00 4,373,600
Wexford
Townhomes Duncansville, TX Multifamily 122 1998 Fee 100.00 4,217,400
Mediterranean
Gardens Albuquerque, NM Multifamily 180 1997 Fee 92.00 4,178,350
Azalea Richmond, VA Multifamily 156 1997 Fee 92.00 3,748,800
Canyon Point Albuquerque, NM Multifamily 136 1998 Fee 77.00 3,100,570
Canyon Ridge Albuquerque, NM Multifamily 124 1997 Fee 91.00 2,631,970
Toscana on
Skillman Dallas, TX Multifamily 144 1998 Fee 97.00 2,577,300
----------
(1) As of most recently available rent roll
</TABLE>
The Borrower. The Pinstripe Portfolio Borrowers are each a single purpose,
bankruptcy remote limited liability company or limited partnership. Each
Pinstripe Portfolio Borrower shares with each other Pinstripe Portfolio
Borrower a common single purpose, bankruptcy remote limited liability company
(the "Pinstripe Managing LLC") as its managing member or general partner. The
Pinstripe Managing LLC has
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<PAGE>
as its managing member, a single purpose, bankruptcy remote limited liability
company, which has as its managing member a single purpose, bankruptcy remote
corporation, whose board contains an independent director. A majority of the
beneficial owners of the Pinstripe Portfolio Borrower consist of affiliates of
the CSFB Mortgage Loan Seller and officers or employees of the CSFB Mortgage
Loan Seller and/or its affiliates. The Pinstripe Portfolio Borrowers share
certain common ownership interests with the Thurman Portfolio Borrower.
Certain additional information on the Pinstripe Portfolio Loan and the
Pinstripe Portfolio Properties is set forth on Annex A hereto.
Property Management. The Pinstripe Portfolio Properties are each managed
by Westdale Asset Management (the "Pinstripe Portfolio Manager"), which is not
affiliated with the Pinstripe Portfolio Borrowers, pursuant to separate
management agreements. Each management agreement provides for the payment to
the Pinstripe Portfolio Manager of management fees of 3.5% of gross revenues,
which are subordinated to payments under the Pinstripe Portfolio Loan. The
Pinstripe Portfolio Manager may be terminated (i) upon an event of default
under the Pinstripe Portfolio Loan or the Pinstripe Portfolio Mezzanine Loan
(as defined below) or a breach in respect of the Pinstripe Preferred Equity
Interest (as defined below), (ii) if the DSCR for the Pinstripe Portfolio Loan
falls below 1.1x, or (iii) in the event of a default by the Pinstripe Portfolio
Manager under a management agreement.
Mezzanine Loan and Preferred Equity Interest. Pinstripe Permanent B-2,
LLC, a Delaware Limited Liability Company (the "Pinstripe Portfolio Mezzanine
Borrower") is the (i) regular member of each entity comprising the Pinstripe
Portfolio Borrower that is a limited liability company and (ii) limited partner
of each entity comprising the Pinstripe Portfolio Borrower that is a limited
partnership and is the borrower under a mezzanine loan with an aggregate
principal balance as of the Cut-off Date of $1,941,932 (the "Pinstripe
Portfolio Mezzanine Loan"), which was made by the CSFB Mortgage Loan Seller (in
its capacity as mezzanine lender, the "Pinstripe Portfolio Mezzanine Lender")
on November 11, 1998. The Pinstripe Portfolio Mezzanine Loan is secured by,
among other things, a pledge of the regular membership interests and limited
partnership interests of the Pinstripe Portfolio Mezzanine Borrower in each
entity comprising the Pinstripe Portfolio Borrower and the managing membership
interest in the managing member of the Pinstripe Managing LLC. The Pinstripe
Portfolio Mezzanine Lender has agreed not to transfer the Pinstripe 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 then current ratings on
the Certificates. The Pinstripe Portfolio Mezzanine Loan matures on November
11, 2008 and bears interest at a per annum rate of the London inter-bank
offered rate ("LIBOR") plus 7.5%.
The CSFB Mortgage Loan Seller owns a preferred equity interest (as such
holder, the "Pinstripe Portfolio Special Member") in the Pinstripe Portfolio
Mezzanine Borrower having an initial equity investment in the amount of
$3,013,656 (the "Pinstripe Preferred Equity Interest"). The Pinstripe Portfolio
Special Member is entitled to receive preferred monthly distributions at a
yield equal to LIBOR plus 7.5% and is scheduled to be redeemed in full on
November 11, 2008. The payments due on the Pinstripe Portfolio Preferred Equity
Interest are deemed "Guaranteed Payments" to the extent of certain
distributions made with respect to the regular membership interests and limited
partnership interests in the Pinstripe Portfolio Mezzanine Borrower. The
Pinstripe Portfolio Special Member has agreed not to transfer the Pinstripe
Preferred Equity Interest 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 then current
ratings on the Certificates. The Pinstripe Portfolio Special Member may, at its
option, convert the Pinstripe Preferred Equity Interest into a mezzanine loan.
Commencing on December 11, 1998, the Pinstripe Portfolio Mezzanine Loan
and the Pinstripe Preferred Equity Interest require monthly payments of
interest and yield, respectively, and principal and capital amounts,
respectively, such monthly principal and capital amount being equal to the
greater of (i) the principal portion of payments that would be due based on a
ten year amortization schedule at a floating interest rate of LIBOR plus 7.5%
and (ii) the receipt of a pro-rata portion of 75% of the excess cash flow of
the Pinstripe Portfolio Mezzanine Borrower. If the obligations due under the
Pinstripe
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<PAGE>
Portfolio Mezzanine Loan and the Pinstripe Portfolio Preferred Equity Interest
have not been satisfied by November 11, 2008, a balloon payment of the
principal and capital amounts respectively outstanding shall be required on
November 11, 2008. Upon the occurrence of an event of default under the
Pinstripe Portfolio Mezzanine Loan or a breach under the preferred equity
documents, all cash flow from the Pinstripe Portfolio Properties remaining
after payment of operating expenses and sums due under the Pinstripe Portfolio
Loan will be applied to repay such principal and capital amounts.
The Pinstripe Portfolio Mezzanine Lender and Pinstripe Portfolio Special
Member each have certain approval rights over budgets (after an event of
default) and significant leases and can terminate and replace the Pinstripe
Portfolio Manager upon an event of default under the Pinstripe 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 Pinstripe Portfolio Mezzanine Lender and the Pinstripe Portfolio
Special Member has agreed that they will not take any such action with respect
to the Pinstripe Portfolio Manager unless each Rating Agency confirms that such
action would not cause a withdrawal, qualification or downgrade of its then
current ratings on the Certificates. The rights of the Pinstripe Portfolio
Mezzanine Lender and the Pinstripe Portfolio Special Member relating to
budgeting, management and leases are to be exercised through the Pinstripe
Portfolio Special Member, subject to the consent of the Servicer to such
exercise.
CONSTRUCTION LOANS
The improvements on certain Credit Lease Properties (representing the
security for 2.4% of the Mortgage Loans (based on Initial Pool Balance)) have
not yet been completed. All such Credit Lease Properties (each, a "New Store")
have been leased, or are subject to leases which are fully guaranteed, by CVS
Corporation or an affiliate thereof, pursuant to Bond-Type Leases and will be
operated as full-service drug stores. CVS Corporation, which is rated "A-" and
"A3" by S&P and Moody's, respectively, has entered into a completion guaranty
for each such Credit Lease Property, in which it guarantees completion of all
construction work within six months after the origination of the related
Mortgage Loan (the "Outside Completion Date"). In the event a New Store is not
completed by such Outside Completion Date, CVS Corporation may (i) extend the
Outside Completion Date by two months (three months if the failure to complete
the related New Store is due to force majeure) and make lease payments equal to
the related Monthly Payment, (ii) prepay the related Credit Lease Loan together
with a Yield Maintenance Charge (calculated with no spread to the applicable
U.S. Treasury yield) or (iii) substitute such New Store with a completed
property and enter into a lease for such substitute property upon the same
terms as the Credit Lease for the uncompleted New Store for which it has been
substituted. Any substitution of collateral for an uncompleted New Store will
require receipt from each Rating Agency of written confirmation that such
collateral substitution will not cause a downgrade, withdrawal or qualification
by such Rating Agency of its then current ratings on the Certificates.
LITIGATION
With respect to Loan No. 14 (the "Donatelli Loan"), which represents
approximately 2.2% of the Initial Pool Balance, an action (the "Donatelli
Action") was commenced against the owner of one of the Mortgaged Properties
that secures the Donatelli Loan (the "Plaza 500 Property") and against the CSFB
Mortgage Loan Seller. The Donatelli Action claims, among other things, that the
transfer of the Plaza 500 Property to the related borrower was invalid and that
the related Mortgage has not created a valid lien on the Plaza 500 Property.
The plaintiff in the Donatelli Action sought rescission of the transfer of
title to the Plaza 500 Property to the related borrower and cancellation of the
related Mortgage. The trial court ruled that the related borrower had not
improperly acquired title to the Plaza 500 Property and that the related
mortgage was not voidable. The plaintiff has appealed the trial court's ruling
and such appeal is pending before the Virginia Supreme Court. A claim has been
submitted to Lawyers Title Insurance Corporation, the title company insuring
the lien of the Mortgage on the Plaza 500 Property, and the title company has
indicated that it will pay the cost of defending this litigation. In the event
that the plaintiff is successful in its appeal, the CSFB Mortgage Loan Seller
believes that the title company which insured the lien of the Mortgage will be
liable under the terms of the title insurance policy. Lawyers Title
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<PAGE>
Insurance Corporation's senior unsecured debt is rated "A" by S&P. See "Certain
Terms and Conditions of the Mortgage Loans -- Mortgage Loans Which May Require
Principal Paydowns" for a discussion of the effect of any prepayment resulting
from an award from the title company.
ENVIRONMENTAL MATTERS
The information set forth in this prospectus supplement is based on
information contained in the environmental assessments described under
"Description of the Mortgage Loans -- Underwriting Standards." With respect to
Loan No. 40 (St. Landry Plaza Shopping Center), which represents approximately
0.6% of the Initial Pool Balance, the Phase I and Phase II environmental site
assessments performed in June 1998 noted (i) ground water contamination from a
dry-cleaner that was formerly located on the related Mortgaged Property, (ii)
minor chemical spillage from Quick Lube (one of the tenants of the related
Mortgaged Property) and (iii) suspect ACM. As a result, the report recommends
that bioremediation/bio-sparge be implemented to decrease the contamination
levels of the groundwater, followed by a risk-based assessment to obtain
closure from the regulatory agencies. In addition, the report recommended the
owners put in-place spill pallets to store chemicals relating to the Quick Lube
and the implementation of an operation and maintenance program. At closing, a
reserve for $300,575 was deposited into an environmental escrow account and
on-going payments of $9,062 per month for the next 24 months will be deposited
into the account, resulting in a total of $517,000, which is more than twice
the amount which is estimated will be required to remediate such environmental
issues.
With respect to Loan No. 87 (Cherry Hill Plaza), which represents
approximately 0.2% of the Initial Pool Balance, the Phase I and Phase II
environmental site assessment performed in October 1998 noted (i) groundwater
contamination on the related Mortgaged Property; (ii) minor spillage of new and
waste motor oils at Rao Tire Store (a tenant of the related Mortgaged
Property); (iii) soil contamination on the related Mortgaged Property; (iv) the
existence of presumed ACM; and (v) pollutants were detected in a water sample
at concentrations greater than Michigan drinking water criteria. The Phase II
environmental site assessment also recommended that the perchloroethylene
release be addressed in two steps: (i) performance of risk assessment with
additional testing and (ii) if warranted, preparation of a remedial plan and
performance of remedial action. At closing, a reserve for $500,000 representing
125% of the estimated cost of remediation was established.
With respect to Loan No. 123 (Office Depot-Dallas), which represents
approximately 0.1% of the Initial Pool Balance, soil samples taken in 1994
revealed the presence of volatile organic compounds ("VOCs"), indicating that
the related Mortgaged Property had been impacted by the operations of a former
on-site dry cleaning facility. Additionally, total petroleum hydrocarbons
("TPH") and benzene toluene ethylbenzene xylene ("BTEX") were detected in soil
samples, which appear to have been caused by offsite migration from a nearby
car wash facility. Analytical results for these soil samples were below action
limits established by the Texas Natural Resource Conservation Commission
("TRNCC"). The related borrower has worked with the TRNCC to obtain issuance of
a conditional certificate of completion for the property. Several monitoring
wells have been installed at the related Mortgaged Property to monitor the
extent to which VOCs, TPH and BTEX may have impacted the groundwater.
Groundwater sampling performed in June 1998 indicates a reduction in VOC
concentrations in groundwater, which are now well below detectable levels at
each monitoring well location, indicating that natural attenuation has
occurred, and that VOCs have not migrated offsite or impacted surrounding
properties. The CSFB Mortgage Loan Seller anticipates that TRNCC will issue a
final site closure certificate once two additional groundwater sampling events
have been performed. A secured creditor impaired property environmental
insurance policy issued by American International Specialty Lines Insurance
Company, a member company of American International Group, Inc. ("AIG"), which
is rated A++ by A.M. Best insures the lender in the aggregate amount of
$3,000,000 for cleanup costs at the property in the event that the related
borrower defaults on the related Mortgage Loan, or in the event that the lender
becomes directly liable for such cleanup costs or other third party claims.
With respect to Loan No. 48 (Island Walk Shopping Center), which
represents approximately 0.5% of the Initial Pool Balance, an active on-site
dry cleaning establishment has been identified by the Florida Department of
Environmental Protection ("FDEP") as having been impacted by dry cleaning
solvents
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and is considered by FDEP to be a contaminated site. The related Mortgaged
Property has been entered into a state-funded dry cleaning solvent cleanup
program and assigned a high priority, which makes it likely that the State of
Florida will assume the cost of assessment and cleanup. A secured creditor
impaired property environmental insurance policy issued by AIG, insures the
lender for the balance of the loan payments or cleanup costs, whichever is
less, at the related Mortgaged Property in the event that the related borrower
defaults on the related Mortgage Loan, or in the event that the lender becomes
directly liable for such cleanup costs or other third party claims.
For a description of environmental issues with respect to Loan No. 6
(260/261 Madison Avenue), which represents approximately 3.9% of the Initial
Pool Balance, see "Certain Characteristics of the Mortgage Loans -- Largest
Mortgage Loans -- The 260/261 Madison 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 194 Mortgage Loans (representing approximately 96.4% of the Initial
Pool Balance), the Due Date is the 11th day of each month, with respect to 22
Mortgage Loans (representing approximately 2.4% of the Initial Pool Balance),
the Due Date is the 6th day of each month and with respect to 1 Mortgage Loan
(representing approximately 1.2% of the Initial Pool Balance), the Due Date is
the 1st day of each month. No Mortgage Loan has a grace period for payment
defaults that extends beyond the related Determination Date (as defined
herein).
Mortgage Rates; Calculations of Interest. 25 Mortgage Loans, representing
4.9% 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 (or, in the case of Loan No. 19 (the "United
Artists Loan"), a constant semi-annual 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 herein). 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. 166 of the Mortgage Loans, representing 84.9% of the
Initial Pool Balance are Mortgage Loans (the "ARD Loans") which 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"). The
date on which such Mortgage Loan begins accruing Excess Interest is referred to
herein as the "Anticipated Repayment Date" or "ARD". 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 (as defined herein) controlled by the Servicer. From
S-87
<PAGE>
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 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 Certificates will have the option for up
to two months after the Anticipated Repayment Date for any ARD 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. 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
(as defined herein) at anytime that any Certificate is outstanding and (b)
would not cause the arrangement between the REMIC and the Class V
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. 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 are either Mortgage Loans that 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") or ARD Loans.
AMORTIZATION CHARACTERISTICS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
% OF INITIAL POOL NUMBER OF
TYPE OF LOAN BALANCE MORTGAGE LOANS
- ------------------------------------------ ------------------- ---------------
<S> <C> <C>
ARD Loans 84.9% 166
Fully Amortizing Loans (other than
ARD Loans) 8.6% 38
Balloon Mortgage Loans 6.6% 13
----- ---
TOTAL 100.0% 217
===== ===
</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/or (iii) by
imposing fees or premiums generally equal to a percentage of the then
outstanding
S-88
<PAGE>
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 Lockout Period (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 interest through
the next Due Date, on any date. 215 Mortgage Loans, representing approximately
98.5% of the Initial Pool Balance, specify a period of time (generally one to
six months) prior to the maturity date or Anticipated Repayment Date, as
applicable, of such Mortgage Notes during which there are no restrictions on
voluntary prepayments, and the remaining Mortgage Notes, representing
approximately 1.5% 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 Prepayments 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 "-- Mortgage Loans Which May
Require Principal Paydowns" and "Risk Factors -- The Offered Certificates --
Prepayments May Affect Your Yield."
The "Yield Maintenance Charge" for any Mortgage Loan providing for such a
charge generally will be equal to the greater of (i) a specified Prepayment
Premium and (ii) 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 (or, with respect to ARD Loans, the
Anticipated Repayment Date) of the Mortgage Loan being prepaid or 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.
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 Prepayment Assumptions (as defined
herein) and assumes a 0% CPR (as defined herein). See "Prepayment and Yield
Considerations -- Modeling Assumptions."
S-89
<PAGE>
MORTGAGE POOL
CALL PROTECTION ANALYSIS (1)
PERCENTAGE OF MORTGAGE POOL BY PREPAYMENT RESTRICTION ASSUMING NO PREPAYMENTS
<TABLE>
<CAPTION>
PREPAYMENT CURRENT 12 24 36 48
PREMIUM/RESTRICTION NOV-98 NOV-99 NOV-00 NOV-01 NOV-02
- --------------------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Lockout/Defeasance 98.8% 98.8% 98.8% 98.2% 97.9%
Yield Maintenance 1.2% 1.2% 1.2% 1.8% 1.8%
2% Premium 0.0% 0.0% 0.0% 0.0% 0.3%
1% Premium 0.0% 0.0% 0.0% 0.0% 0.0%
Open 0.0% 0.0% 0.0% 0.0% 0.0%
- ----- ----- ----- ----- ----- -----
TOTAL 100.0% 100.0% 100.0% 100.0% 100.0%
- ----- ----- ----- ----- ----- -----
Mortgage Pool Balance
(000s) $1,919,275 $1,898,610 $1,876,698 $1,853,065 $1,827,477
% of Cut-Off Date Balance 100.0% 98.9% 97.8% 96.6% 95.2%
<CAPTION>
PREPAYMENT 60 72 84 96 108 120
PREMIUM/RESTRICTION NOV-03 NOV-04 NOV-05 NOV-06 NOV-07 NOV-08
- --------------------------- -------------- -------------- -------------- -------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Lockout/Defeasance 97.9% 98.0% 98.1% 98.2% 86.3% 94.5%
Yield Maintenance 1.8% 1.8% 1.9% 1.8% 1.8% 5.5%
2% Premium 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
1% Premium 0.3% 0.0% 0.0% 0.0% 0.0% 0.0%
Open 0.0% 0.3% 0.0% 0.0% 11.9% 0.0%
- ----- ----- ----- ----- ----- ----- -----
TOTAL 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
- ----- ----- ----- ----- ----- ----- -----
Mortgage Pool Balance
(000s) $1,786,201 $1,755,312 $1,641,878 $1,607,005 $1,556,604 $281,333
% of Cut-Off Date Balance 93.1% 91.5% 85.5% 83.7% 81.1% 14.7%
</TABLE>
LOAN GROUP 1
CALL PROTECTION ANALYSIS (1)
PERCENTAGE OF LOAN GROUP 1 BY PREPAYMENT RESTRICTION ASSUMING NO PREPAYMENTS
<TABLE>
<CAPTION>
PREPAYMENT CURRENT 12 24 36 48
PREMIUM/RESTRICTION NOV-98 NOV-99 NOV-00 NOV-01 NOV-02
- -------------------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Lockout/Defeasance 97.0% 97.1% 97.1% 95.5% 94.9%
Yield Maintenance 3.0% 2.9% 2.9% 4.5% 4.5%
2% Premium 0.0% 0.0% 0.0% 0.0% 0.6%
1% Premium 0.0% 0.0% 0.0% 0.0% 0.0%
Open 0.0% 0.0% 0.0% 0.0% 0.0%
- ----- ----- ----- ----- ----- -----
TOTAL 100.0% 100.0% 100.0% 100.0% 100.0%
- ----- ----- ----- ----- ----- -----
Loan Group 1 Balance
(000s) $787,527 $777,830 $767,501 $756,601 $744,743
% of Loan Group 1 Cut-Off
Date Balance 100.0% 98.8% 97.5% 96.1% 94.6%
<CAPTION>
PREPAYMENT 60 72 84 96 108 120
PREMIUM/RESTRICTION NOV-03 NOV-04 NOV-05 NOV-06 NOV-07 NOV-08
- -------------------------- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Lockout/Defeasance 94.9% 94.9% 95.0% 95.0% 87.8% 94.5%
Yield Maintenance 4.5% 4.5% 5.0% 5.0% 5.0% 5.5%
2% Premium 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
1% Premium 0.6% 0.0% 0.0% 0.0% 0.0% 0.0%
Open 0.0% 0.6% 0.0% 0.0% 7.2% 0.0%
- ----- ----- ----- ----- ----- ----- -----
TOTAL 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
- ----- ----- ----- ----- ----- ----- -----
Loan Group 1 Balance
(000s) $718,271 $703,114 $606,875 $590,545 $560,139 $281,333
% of Loan Group 1 Cut-Off
Date Balance 91.2% 89.3% 77.1% 75.0% 71.1% 35.7%
</TABLE>
S-90
<PAGE>
LOAN GROUP 2
CALL PROTECTION ANALYSIS (1)
PERCENTAGE OF LOAN GROUP 2 BY PREPAYMENT RESTRICTION ASSUMING NO PREPAYMENTS
<TABLE>
<CAPTION>
PREPAYMENT CURRENT 12 24 36 48
PREMIUM/RESTRICTION NOV-98 NOV-99 NOV-00 NOV-01 NOV-02
- -------------------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Lockout/Defeasance 100.0% 100.0% 100.0% 100.0% 100.0%
Yield Maintenance 0.0% 0.0% 0.0% 0.0% 0.0%
2% Premium 0.0% 0.0% 0.0% 0.0% 0.0%
1% Premium 0.0% 0.0% 0.0% 0.0% 0.0%
Open 0.0% 0.0% 0.0% 0.0% 0.0%
- ----- ----- ----- ----- ----- -----
TOTAL 100.0% 100.0% 100.0% 100.0% 100.0%
- ----- ----- ----- ----- ----- -----
Loan Group 2 Balance
(000s) $1,131,748 $1,120,780 $1,109,196 $1,096,463 $1,082,734
% of Loan Group 2 Cut-Off
Date Balance 100.0% 99.0% 98.0% 96.9% 95.7%
<CAPTION>
PREPAYMENT 60 72 84 96 108 120
PREMIUM/RESTRICTION NOV-03 NOV-04 NOV-05 NOV-06 NOV-07 NOV-08
- -------------------------- -------------- -------------- -------------- -------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Lockout/Defeasance 100.0% 100.0% 100.0% 100.0% 85.4% 0.0%
Yield Maintenance 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
2% Premium 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
1% Premium 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Open 0.0% 0.0% 0.0% 0.0% 14.6% 0.0%
- ----- ----- ----- ----- ----- ----- ---
TOTAL 100.0% 100.0% 100.0% 100.0% 100.0% 0.0%
- ----- ----- ----- ----- ----- ----- ---
Loan Group 2 Balance
(000s) $1,067,930 $1,052,198 $1,035,003 $1,016,461 $996,465 $ --
% of Loan Group 2 Cut-Off
Date Balance 94.4% 93.0% 91.5% 89.8% 88.0% 0.0%
</TABLE>
- -------
(1) 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 may not be accompanied by payment of a Yield Maintenance
Charge or Prepayment Premium. Any such prepayment of an Additional Collateral
Loan to the extent the related Yield Maintenance Charge is not paid by the
borrower will be accompanied by a Yield Protection Payment. See "Certain
Characteristics of the Mortgage Loans -- Certain Terms and Conditions of the
Mortgage Loans -- Additional Collateral Loans."
S-91
<PAGE>
Prepayment Premiums and Yield Maintenance Charges are distributable as
described herein under "Description of the Offered Certificates --
Distributions -- 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 -- Yield May Be Affected by
Prepayments and Defaults."
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 lender 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 lender (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
S-92
<PAGE>
event of a partial prepayment resulting from the occurrence of a casualty or
condemnation, the constant Monthly Payment may be reduced based on the
remaining amortization period, the Mortgage Rate and the Original Principal
Loan Balance. In such event, no Prepayment Premium or Yield Maintenance Charge
would be required to be paid.
Defeasance. 214 of the Mortgage Loans, representing 97.9% 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 (i) pays on any
Due Date (the "Release Date") (A) all interest accrued and unpaid on the
principal balance of the Mortgage Note to and including the Release Date, (B)
all other sums, excluding scheduled interest or principal payments, due under
the Mortgage Loan, (C) 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 and (2) in
amounts equal to the scheduled payments due on such dates with respect to that
portion of the Note being defeased and (z) any costs and expenses incurred in
connection with the purchase of such U.S. government obligations and (ii)
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. Additionally, any Mortgage Loan which has a Defeasance Option
generally requires that the borrower deliver to the lender a letter from an
independent public accountant that confirms that the cash flow from such U.S.
government obligations will be sufficient to timely meet all scheduled loan
payments. 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 -- Yield May be Affected by Prepayments and Defaults."
Property Releases. 10 of the Multi-Property Loans and 2 of the Crossed
Loans, representing approximately 9.8% of the Initial Pool Balance, prohibit
the release of any related Mortgaged Property prior to payment in full of the
Mortgage Loan. 16 of the Multi-Property Loans representing approximately 20.0%
of the Initial Pool Balance and 3 of the Crossed Loans, representing 13.1% of
the Initial Pool Balance, permit a Mortgaged Property to be released from the
lien of the related Multi-Property Loan or Crossed Loan, as applicable, prior
to payment in full of the Mortgage Loan provided that, generally, 125% of the
applicable Property Release Amount (as defined herein) or outstanding Mortgage
Note amount, as applicable, be defeased or prepaid and that the DSCR with
respect to the remaining Mortgaged Properties after defeasance or prepayment,
as applicable, be no less than the greater of (i) a specified DSCR (generally
the DSCR at origination) and (ii) the DSCR immediately prior to such defeasance
or prepayment, as applicable.
S-93
<PAGE>
Lockboxes. 213 Mortgage Loans, representing approximately 99.44% 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 an account (or, in the case
of Multifamily Properties, such income will be collected and deposited into an
account by the manager and, in the case of Hospitality Properties, cash paid
"over-the-counter" will be deposited into an account by the manager) (such
account, a "Lockbox Account") controlled by the Servicer (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), 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 generally be administered
thereafter on the same terms as a Hard Lockbox. Each such Mortgage Loan is
identified on Annex A hereto as having a "Hard," "Modified" or "Springing"
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).
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 73.9% 90
Modified 3.6% 6
Springing 22.0% 117
None 0.6% 4
----- ---
TOTAL 100.0% 217
===== ===
</TABLE>
Escrows. Substantially all Mortgage Loans (excluding Mortgage Loans
secured by Bond-Type Leases) 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 (excluding
Credit Lease 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. 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. In addition, 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. See "Description of the Mortgage Loans
- -- Underwriting Standards."
Equity Investments by the CSFB Mortgage Loan Seller, its Affiliates and/or
Certain Officers Thereof. In general, with respect to certain borrowers, the
CSFB Mortgage Loan Seller and/or its affiliates (each, a "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 and any obligations to other creditors have been made
when due and all monthly operating expenses with respect to the related
Mortgaged Property have been paid.
Under the partnership agreement, operating agreement or similar agreement
relating to Mortgage Loans in which the Preferred Interest Holder holds a
preferred equity interest in the related borrower, the
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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 Mortgaged 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 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),
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 of such 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.
The CSFB Mortgage Loan Seller and/or certain officers of the CSFB Mortgage
Loan Seller and the Underwriter (as defined herein) own equity interests in the
borrowers with respect to Loan No. 8 (The Thurman Portfolio Loan), Loan No. 10
(The Pinstripe Portfolio Loan), Loan No. 13 (Garden Variety Apartments
Portfolio), Loan No. 41 (Garden Ridge) and Loan No. 77 (Alameda Office).
"Due-on-Sale" and "Due-on-Encumbrance" Provisions. The Mortgage Loans
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 (as defined
herein), whether to exercise any right the lender 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 lender 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 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
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assumption fee, if any, 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 -- Some Remedies May Not be
Available Following a Mortgage Loan Default," and "The Pooling and Servicing
Agreement -- Enforcement of `Due-on-Sale' and `Due-on-Encumbrance' Clauses."
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. 29 of
the Mortgage Loans (the "Multi-Property Loans"), representing 42.2% of the
Initial Pool Balance, are evidenced by one Mortgage Note and secured by more
than one Mortgaged Property. 5 of the Mortgage Loans (the "Crossed Loans"),
representing 13.8% of the Initial Pool Balance, are evidenced by more than one
Mortgage Note and are cross-collateralized with multiple Mortgaged Properties.
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 -- Enforceability of
Cross-Collateralized and Cross-Defaulted Mortgage Loans May be Challenged."
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 improvements located on the Mortgaged Property are 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 related 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 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 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
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<PAGE>
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 lender in order to protect its interests.
Mortgage Loans Which May Require Principal Paydowns. 3 Mortgage Loans (the
"Additional Collateral Loans"), representing approximately 1.4% 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
LOAN PROPERTY ADDITIONAL ADDITIONAL
NO. NAME COLLATERAL COLLATERAL RELEASE CONDITIONS
- ------ ------------------------------- ----------------- ---------------- ----------------------------
<S> <C> <C> <C> <C>
31 Town & Country Cash Collateral $ 2,800,000 Successful purchase of
ground lease by May 1,
1999; DSCR based on
current NOI of no less
than 1.05x; no event of
default
54 Bloomfield -- Vista del Monte Cash Collateral $ 221,258 Successful completion of
rehabilitation by
September 18, 1999;
DSCR based on trailing 6
month NOI of no less than
1.20x; no event of default
78 Jefferson Plaza Cash Collateral $ 354,658.34 American Radio System
must exercise extension
option and pay first three
months rent or their space
must be leased at no less
than $12.00/sf to another
tenant; no event of default
</TABLE>
In addition, as described under "-- Litigation" above, to the extent a
trial court's ruling in the Donatelli Action is reversed on appeal, the
Donatelli Loan may be subject to a partial prepayment which would not 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
only from the Servicer ("Yield Protection Payments") to compensate such holders
for the absence, if any, of such Prepayment Premium or Yield Maintenance Charge
payments. The Servicer will be required to advance such Yield Protection
Payments on the related Servicer Remittance Date and will be reimbursed
therefor, and paid interest thereon, by the CSFB Mortgage Loan Seller. See
"Description of the Offered Certificates -- Distributions -- Yield Protection
Payments" for a description of the Yield Protection Payments.
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<PAGE>
ADDITIONAL MORTGAGE LOAN INFORMATION
The following tables and Annex A, Annex B and Annex C hereto set forth
certain information with respect to the Mortgage Loans and Mortgaged
Properties. The statistics in the following tables and Annex A, Annex B and
Annex C were primarily derived from information provided to the Depositor by
the CSFB Mortgage Loan Seller, which information may have been obtained from
the borrowers without independent verification.
All numerical information relating to the Mortgage Loans, including all
numerical references and calculations in the following tables (except on the
cover hereof, in Annex A, Annex B, the tables entitled "Mortgage Notes",
"Executive Summary", "Mortgage Loan Executive Summary", "General Mortgage Loan
Characteristics" "Call Protection Analysis", "Sensitivity to Principal
Prepayments of the Pre-Tax Yields to Call of the Class A-X Certificates", the
tables set forth on pages S-137 through S-143 and any references to Mortgage
Loan Group 1 and Mortgage Loan Group 2) were prepared assuming Loan No. 2 (180
Water Street), has a Cut-off Date Stated Principal Balance of $74,957,136, Loan
No. 58 (Northpointe Shopping Center), has a Cut-off Date Stated Principal
Balance of $6,600,000 and Loan No. 125 (Portofino Beach Hotel), has a Cut-off
Date Stated Principal Balance of $2,493,107. The actual Cut-off Date Stated
Principal Balance of Loan No. 2 (180 Water Street) is $74,948,322, the actual
Cut-off Date Stated Principal Balance of Loan No. 58 (Northpointe Shopping
Center) is $6,597,114 and the actual Cut-off Date Stated Principal Balance of
Loan No. 125 (Portofino Beach Hotel) is $2,495,993.
For purposes of this Prospectus Supplement, including the tables herein
and Annex A, Annex B and Annex C:
(1) "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.
(2) "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 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.
(3) "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.
(4) "Annual Debt Service" means for any Mortgage Loan the annualized
Monthly Payment on such Mortgage Loan.
(5) "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.
(6) "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 lockbox agreements for application to payment
of principal and Excess Interest.
(7) "Cut-off Date Principal Balance/Unit" means the principal balance per
unit for multifamily, cooperatives, hotels, manufactured housing communities
and self storage or per square foot for substantially all other property types
as of the Cut-off Date.
(8) "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.
(9) "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
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<PAGE>
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.
(10) "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.
(11) "Lease Expiration Date" means the year in which a Tenant's lease is
scheduled to expire.
(12) "Leased LTV" for any Mortgage Loan means the LTV therefor calculated
based on the Leased Value.
(13) "Leased Value" for any Mortgage Loan means the Value of the related
Mortgaged Property with the related Credit Lease.
(14) "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.
(15) "Maturity Date/ARD 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 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.
(16) "Monthly Payment" means, for any Mortgage Loan other than the United
Artists 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") and, with respect to Loan No. 19
(the United Artists Loan), which pays semi-annually, one sixth of such payment.
Certain Credit Lease Loans set forth on Annex B provide for periodic increases
in the related Monthly Payments.
(17) "1996 NOI," "1997 NOI," and "1998 NOI" (which is for the period
ending as of the date specified in Annex A under 1998 Date) 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. 1996 NOI, 1997 NOI and 1998 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. 1996 NOI, 1997 NOI and 1998 NOI were not
necessarily determined in accordance with generally accepted accounting
principles. Moreover, 1996 NOI, 1997 NOI and 1998 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
CSFB Mortgage Loan Seller's underwriting standards.
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<PAGE>
(18) "1998 Date" means, if the applicable Mortgage Loan Seller obtained a
1998 operating statement, the date of such operating statement.
(19) "1998 Type" means, if the applicable Mortgage Loan Seller obtained a
1998 operating statement, whether such statement reflects an annualized number
or trailing twelve month number.
(20) "NAP" means not applicable and relates to the omission of Credit
Lease Loans in the calculation of LTV and DSCR.
(21) "Net Cash Flow" with respect to a given Mortgage Loan or Mortgaged
Property (other than Mortgage Loans relating to properties on which a
cooperative apartment building is located (each, a "Cooperative Property") or
Credit Lease Properties) means cash flow available for debt service, as
determined by the CSFB 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
certain Office Properties, Industrial Properties and Retail Properties,
determining current revenues from leases in place, (iii) in the case of
Cooperative Properties, Net Cash Flow generally equals net operating income at
such Cooperative Property estimated by the CSFB Mortgage Loan Seller, assuming
such Cooperative Property was operated as a multifamily rental property,
reduced by underwritten capital expenditures (See Annex A), (iv) in the case of
certain of the Hospitality Properties, assuming the occupancy rate was
generally the lesser of the actual occupancy rate and an occupancy rate of
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 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% of revenue 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, (ix) where such information
was made available to the CSFB Mortgage Loan Seller taking 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 CSFB
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.
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<PAGE>
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.
(22) "Net Lease" means "Credit Lease."
(23) "Occupancy" means the percentage of gross 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) "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.
(25) "Original Principal Loan Balance" means the principal balance of the
Mortgage Loan as of the date of origination.
(26) "Ownership Interest" means the real property interest which is
encumbered by the related Mortgage.
(27) "% of Total Square Feet" means the square feet leased to a Tenant as
a percentage of the gross square feet of the Mortgaged Property.
(28) "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.
(29) "Remaining Amortization Term" for each Mortgage Loan is the related
Original Amortization Term minus the related Seasoning.
(30) "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, including the period, if any, during which the Mortgage
Loan may be defeased. 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.
(31) "Remaining Lockout and YM" means the period ending on the later of
the last day of the Remaining Lockout and the first day on which the Mortgage
Loan may be prepaid without payment of a Yield Maintenance Charge.
(32) "Seasoning" means, with respect to any Mortgage Loan, the number of
months from and including the month in which the first Due Date occurs to and
including the month of the Cut-off Date.
(33) "Stated Maturity Date" means the maturity date of the Mortgage Loan
as stated in the related Mortgage Note or loan agreement.
(34) "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. With respect to Loan No. 1 (the Intell-Reichmann Loan) Tenant 1
in the Two Brittany Place property renewed its lease after the date of the
underwritten rent roll.
(35) "Units" and "Unit of Measure" mean the number of units, pads, rooms
or square footage with respect to the Mortgaged Property.
(36) "U/W NOI" or "Underwritten NOI" means Net Cash Flow before deducting
for Capital Items, tenant improvements and leasing commissions.
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<PAGE>
(37) "U/W Occupancy" means the occupancy rate used in determining Net Cash
Flow.
(38) "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.
(39) "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.
(40) "Year Built/Renovated" means the later of the year in which the
respective Mortgaged Property was built and/or most recently renovated.
Due to rounding, percentages in the following tables may not add to 100%
and amounts may not add to indicated total or subtotal.
For purposes of Annex A, the following footnotes apply:
(1) Loan No. 5 (L'Enfant Loan) had a capital expenditures Escrow Account
balance of $10,000,000 at origination. No additional payments are
required to be made into such Escrow Account until the balance therein
falls below $419,534, at which time ongoing deposits will be required in
an amount equal to the greater of $34,953 and the amount defined in the
required property condition report as needed for ongoing repairs and
maintenance.
(2) Loan No. 11 (Pearl Highlands) had a capital expenditures Escrow Account
balance of $500,000 at origination. No additional payments are required
to be made into such Escrow Account until the balance therein falls below
$500,000, at which time the borrower will be required to deposit the
greater of $10,000 and 1/6th of the amount of the shortfall until such
Escrow Account is replenished.
(3) Loan No. 216 (398 Third Avenue) had a capital expenditures Escrow Account
balance of $15,000 at origination. Monthly payments into such Escrow
Account will only be required to replenish such account if the amount on
deposit in the Escrow Account falls below $15,000.
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 CSFB Mortgage Loan Seller, which information may have been
obtained from the borrowers without independent verification.
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 Multi-Property Loan are based
upon the Allocated Loan Amount of the related Mortgaged Property. Crossed Loans
are treated as one Mortgage Loan in the tables below and in Annex A. 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-102
<PAGE>
MORTGAGE NOTES
<TABLE>
<CAPTION>
LOAN LOAN PROPERTY
NO. GROUP NAME
- ------ ------- ---------------------------------------------
<S> <C> <C>
1 2 Intell/Reichmann Portfolio Summary
3 2 Butera Portfolio Summary
4 2 Patriot American Summary
5 1 L'Enfant Plaza Summary
2 1 180 Water Street
6 2 260-261 Madison Avenue
7 2 Trident Center
8 2 Thurman Multifamily Portfolio Summary
9 2 Koll Corporate Plaza
10 2 Pinstripe Multifamily Portfolio Summary
11 1 Pearl Highlands Center
12 2 1133 Connecticut Avenue
13 2 Garden Variety Apartments Portfolio Summary
14 1 Donatelli Portfolio Summary
15 2 Camco Summary
16 1 Accor - Texas Summary
17 1 8484 Wilshire Boulevard
18 2 Courthouse Square Apartments
19 1 United Artists - 5 Theaters Summary
20 2 Ramblewood Village Apartments
21 1 Lipkin Portfolio Summary
22 2 Grand Union Summary
23 1 Accor - Florida Summary
24 2 Summit Portfolio Summary
25 1 American Restaurant Group, Inc. Summary
26 1 Accor - Midwest Summary
27 2 Ventana Canyon Apartments
28 2 English Village Apartments
29 1 Accor - East Summary
30 1 Cinemark - Austin
31 1 Town and Country Shopping Center
32 1 Accor - Southeast Summary
33 1 Regal Cinema
34 1 Southside Mall
35 1 Accor - West Summary
36 2 McKnight Place Extended Care
37 1 Tamarus I and II Apartments
38 2 Shaw's Shopping Center
39 1 The Prada Building
40 2 St. Landry Plaza Shopping Center
41 1 Garden Ridge
42 1 Jewelry Theatre Building
43 1 Holiday Inn - Farmington Hills
44 2 Whispering Palms-Viscaya Apart
45 1 1000 Sylvan Avenue
46 2 K-Mart Plaza
47 2 Lincoln Plaza Hotel
48 2 Island Walk Shopping Center
49 2 Forest Ridge Shopping Center
50 1 Agawan Stop & Shop
51 1 Hoyt's - Bellingham
52 2 Stirling Industrial Park
53 1 Pamida Summary
54 2 Bloomfield Multi Summary
55 2 Wendell Terrace
56 1 Washington HUD Summary
57 1 Best Buy Summary
<CAPTION>
CUT-OFF PRIMARY
LOAN BORROWER DATE MONTHLY MORTGAGE SERVICING
NO. NAME BALANCE PAYMENT RATE FEE RATE
- ------ ---------------------------------------------------- -------------- ---------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
1 IPC Commercial Properties, LLC $86,666,578 $ 587,774.49 7.1550% 0.05 %
3 Butera Properties, LLC 82,871,008 536,131.40 6.7100 0.05
4 W-Greenspoint LP & Chicago-ES LLC 81,569,558 643,135.00 8.2500 0.05
5 Potomac Creek Associates LP 74,961,792 531,625.00 7.6400 0.05
2 180 Water Street Associates, L.P. 74,948,322 525,302.00 8.0000 0.03
6 260/261 Madison Equities Corp. 74,355,366 523,365.58 7.2750 0.05
7 Trident Center, LP 60,000,000 449,854.20 7.6650 0.05
8 Thurman Multifamily Opportunities 55,745,250 392,454.37 7.5700 0.05
9 Corporate Plaza Associates LLC 54,819,238 363,041.52 6.9400 0.05
10 Multiple Single Purpose Bankruptcy Remote Entities 52,709,690 371,083.60 7.5700 0.05
11 Pearl Highlands Center Associates, LP 49,972,867 347,896.97 7.4500 0.05
12 Connecticut/DeSales Partnership 46,021,342 326,422.22 7.1500 0.05
13 Multiple Single Purpose Bankruptcy Remote Entities 44,088,900 310,392.03 7.5700 0.05
14 FPR Holdings Limited Partnership 41,540,422 285,741.77 7.2610 0.05
15 Midstar Properties, Ltd. 36,953,806 261,248.00 7.6000 0.05
16 Texas S9 LLC 30,176,866 210,546.08 6.6858 0.05
17 L. Flynt, LTD. -8484, Inc. 23,700,000 177,717.07 8.2300 0.05
18 Courthouse Square, LLC 23,564,880 164,373.86 7.4700 0.05
19 Theater Investors II, LLC 23,302,898 194,481.98 8.0880 0.05
20 Ramblewood Hill Properties, LLC 22,220,441 154,995.90 7.4700 0.05
21 MLP Associates, L.P. and Town & Country Associates 19,716,966 132,195.00 7.0500 0.05
22 First Mountain, L.P. et al 19,662,220 151,005.25 7.9200 0.05
23 Florida S9 LLC 19,143,664 132,574.50 6.6914 0.05
24 New Carsun Hills, L.P. 17,790,686 125,192.31 7.5600 0.05
25 ARG Properties I, LLC 17,787,585 148,997.77 8.7829 0.05
26 Midwest S9 LLC 15,623,817 108,522.92 6.6891 0.05
27 Ventana Canyon Partners, LLC 15,316,465 105,793.75 7.3700 0.05
28 English Village Associates LLC 15,222,781 106,184.60 7.4700 0.05
29 East S9 LLC 14,443,020 99,311.42 6.6966 0.05
30 Priciba Ey Trust XIII 14,388,230 119,259.91 7.8550 0.05
31 Third Fairfax, LLC 13,993,157 100,394.48 7.7600 0.05
32 Southeast S9 LLC 13,763,265 95,138.42 6.6927 0.05
33 Palm Beach Regal, L. P. 13,473,026 107,061.81 7.5984 0.05
34 South Williamson Developmemt Company of Kentucky L 13,243,338 94,516.67 7.7000 0.05
35 West S9 LLC 13,112,290 90,175.75 6.6965 0.05
36 McKnight Place Extended Care, L.L.C. 12,774,778 86,971.56 7.2100 0.04
37 Summit Las Vegas LLC 12,657,153 85,351.05 7.1200 0.05
38 Coral New Haven Associates II, LLC 12,493,327 87,401.81 7.5000 0.05
39 K Properties, Inc. 11,936,969 94,481.92 7.2000 0.05
40 St Landry Partners 10,776,767 74,488.67 7.2600 0.05
41 Garden Ridge Hilliard Delaware Business Trust 10,627,254 87,504.94 7.7189 0.05
42 The Jewelry Theatre Building, LLC 10,094,357 69,654.97 7.3600 0.05
43 Farmington Hills Motel Associates, LLC 9,979,093 73,704.09 7.4700 0.05
44 Wentwood Capital Fund V, L.P. 9,920,464 72,480.49 7.9500 0.05
45 1000 Sylvan Avenue Associates,LLC 9,616,048 64,493.59 7.0450 0.05
46 Goodrich Hazlet L.L.C. 9,281,232 62,624.44 7.1200 0.05
47 T.R.& B. Property, LLC 8,996,493 68,374.74 8.3700 0.05
48 Island Walk Shopping Center 8,700,000 60,832.00 7.5000 0.05
49 Asheville Forest Investors, LLC 8,050,000 58,228.50 7.8500 0.05
50 AGAWAM S&S Limited Partnership 7,984,278 54,411.41 7.2200 0.05
51 Intercontinental Bellingham Theater Delaware Busin 7,943,633 66,612.31 7.7063 0.05
52 Stirling Industrial Park, Joint Venture 7,764,366 54,137.62 6.8000 0.05
53 Pamida LLC 7,662,521 60,796.84 8.4449 0.05
54 Kaufman Bloomfield Properties LLC, et al 7,438,145 52,494.94 7.5900 0.04
55 Wendell Terrace Owners Corp. 7,000,000 46,102.01 6.9000 0.08
56 Chehalis Garden LLC 6,798,452 81,811.82 8.2000 0.05
57 Net 2 Canton LLC 6,645,906 47,764.43 7.1500 0.05
<CAPTION>
REMAINING
STATED ANTICIPATED LOCKOUT AND ANTICIPATED ORIGINAL
LOAN INTEREST MATURITY REPAYMENT REMAINING YIELD REMAINING AMORTIZATION
NO. CALC. DATE DATE LOCKOUT MAINTENANCE TERM TERM SEASONING
- ------ ------------------ ---------- ------------- ----------- ------------- ------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Actual/360 6/11/28 6/11/08 108 108 115 358 3
3 Actual/360 9/11/28 9/11/08 115 115 118 360 2
4 Actual/360 11/11/23 11/11/08 116 116 120 300 0
5 Actual/360 10/11/28 10/11/08 116 116 119 360 1
2 Actual/360 7/11/18 7/11/13 169 169 176 240 4
6 Actual/360 1/11/26 2/11/08 104 104 111 336 10
7 Actual/360 11/11/23 11/11/08 117 117 120 300 0
8 Actual/360 11/11/28 11/11/08 113 113 120 360 0
9 Actual/360 9/11/28 9/11/08 111 111 118 360 2
10 Actual/360 11/11/28 11/11/08 113 113 120 360 0
11 Actual/360 10/11/28 10/11/05 76 76 83 360 1
12 Actual/360 7/11/24 7/11/08 109 109 116 312 4
13 Actual/360 11/11/28 11/11/08 113 113 120 360 0
14 Actual/360 1/11/28 1/11/08 106 106 110 360 10
15 Actual/360 10/11/28 10/11/08 115 115 119 360 2
16 Actual/360 3/11/19 240 240 244 291 3
17 Actual/360 11/11/28 11/11/08 118 118 120 360 0
18 Actual/360 11/11/28 5/11/08 110 110 114 360 1
19 30/360 7/1/16 0 211 212 216 0
20 Actual/360 11/11/28 5/11/08 110 110 114 360 1
21 Actual/360 7/11/28 7/11/08 113 113 116 360 4
22 Actual/360 9/11/23 9/11/08 111 111 118 300 2
23 Actual/360 3/11/19 240 240 244 297 3
24 Actual/360 10/11/28 10/11/08 112 112 119 360 1
25 Actual/360 5/11/23 290 290 294 299 5
26 Actual/360 3/11/19 240 240 244 295 3
27 Actual/360 10/11/28 10/11/08 112 112 119 360 1
28 Actual/360 11/11/28 5/11/08 110 110 114 360 1
29 Actual/360 3/11/19 240 240 244 303 3
30 30/360 10/11/18 235 235 239 240 1
31 Actual/360 8/11/07 8/11/07 101 101 105 360 1
32 Actual/360 3/11/19 240 240 244 298 3
33 Actual/360 4/11/18 226 226 233 238 5
34 Actual/360 10/11/28 10/11/08 112 112 119 360 1
35 Actual/360 3/11/19 240 240 244 303 3
36 Actual/360 8/11/28 8/11/08 110 110 117 360 3
37 Actual/360 9/11/28 9/11/08 34 111 118 360 2
38 Actual/360 10/11/28 10/11/08 112 112 119 360 1
39 Actual/360 8/11/18 8/11/08 110 110 117 240 3
40 Actual/360 8/11/28 7/11/08 113 113 116 360 3
41 30/360 8/11/18 233 233 237 240 3
42 Actual/360 10/11/28 10/11/13 177 177 179 360 1
43 Actual/360 9/11/23 9/11/05 78 78 82 300 2
44 Actual/360 10/11/28 10/11/08 112 112 119 360 1
45 Actual/360 6/11/28 6/11/03 52 52 55 360 5
46 Actual/360 8/11/28 8/11/08 113 113 117 360 3
47 Actual/360 10/11/28 10/11/08 112 112 119 360 1
48 Actual/360 11/11/28 11/11/08 118 118 120 360 0
49 Actual/360 11/11/28 11/11/08 113 113 120 360 0
50 Actual/360 8/11/28 8/11/13 170 170 177 360 3
51 Actual/360 2/11/18 227 227 231 235 4
52 Actual/360 7/11/23 7/11/08 112 112 116 300 4
53 Actual/360 6/11/23 291 291 295 299 4
54 Actual/360 10/11/28 10/11/08 117 117 119 360 1
55 Actual/360 11/11/08 116 116 120 360 0
56 Actual/360 9/11/28 9/11/05 80 80 82 360 2
57 Actual/360 8/11/23 8/11/08 115 115 117 300 3
<CAPTION>
REMAINING FIRST
LOAN AMORTIZATION P&I
NO. TERM DATE
- ------ -------------- ----------
<S> <C> <C>
1 355 9/11/98
3 358 10/11/98
4 300 12/11/98
5 359 11/11/98
2 236 8/11/98
6 326 2/11/98
7 300 12/11/98
8 360 12/11/98
9 358 10/11/98
10 360 12/11/98
11 359 11/11/98
12 308 8/11/98
13 360 12/11/98
14 350 2/11/98
15 358 10/11/98
16 288 9/11/98
17 360 12/11/98
18 359 11/11/98
19 216 1/1/99
20 359 11/11/98
21 356 8/11/98
22 298 10/11/98
23 294 9/11/98
24 359 11/11/98
25 294 7/11/98
26 292 9/11/98
27 359 11/11/98
28 359 11/11/98
29 300 9/11/98
30 239 11/11/98
31 359 11/11/98
32 295 9/11/98
33 233 7/11/98
34 359 11/11/98
35 300 9/11/98
36 357 9/11/98
37 358 10/11/98
38 359 11/11/98
39 237 9/11/98
40 357 9/11/98
41 237 9/11/98
42 359 11/11/98
43 298 10/11/98
44 359 11/11/98
45 355 7/11/98
46 357 9/11/98
47 359 11/11/98
48 360 12/11/98
49 360 12/11/98
50 357 9/11/98
51 231 8/11/98
52 296 8/11/98
53 295 8/11/98
54 359 11/11/98
55 360 12/11/98
56 358 10/11/98
57 297 9/11/98
</TABLE>
S-103
<PAGE>
MORTGAGE NOTES
<TABLE>
<CAPTION>
LOAN LOAN PROPERTY
NO. GROUP NAME
- ------ ------- ----------------------------------
<S> <C> <C>
58 2 Northpointe Shopping Center
59 1 U.S. Equities II Summary
60 2 East 138th Street
61 2 St. Charles Plaza
62 2 PFI - Ignacio Gardens
63 2 State Farm Building
64 2 Time Warner Building
65 2 Sunset Plaza Shopping Center
66 2 Centro Plaza
67 2 Sherwood Forest dba Grand Oaks
68 1 Shoppes of Wilton Manor
69 1 Essex Portfolio Summary
70 2 Royal Dane Mall
71 1 29 John Street
72 2 Warrington Apartments
73 1 Plaza Diamond Bar
74 2 Rio Del Oro Racquet Club
75 2 Century Square Apartments
76 1 East-West 4 LLC Summary
77 1 Alameda Office
78 2 Jefferson Plaza Summary
79 2 Bloomfield - Lex
80 1 Carroll Pool Summary
81 2 Copacabana Mobile Home Park
82 1 Budgetel St. Charles
83 2 942 Hyde Park
84 1 LG International Building
85 2 Homestead Gardens Apartments
86 2 Westwood Portfolio Summary
87 2 Cherry Hill Plaza
88 2 PFI - Lincoln Villa
89 1 Bayscene Mobilehome Park
90 2 Edgewater Square
91 1 Economic Press Building
92 1 Commerce Security Center
93 2 PFI - Northgate
94 2 Derrer Field Estates Apartments
95 1 Cedarwood Valley Office Park
96 1 One Finderne Avenue
97 1 Best Western Chateau Suite Hotel
98 2 Affordable Warehouses
99 2 Burke-Lewis Apartments
100 1 Rite Aid - Burton
101 2 AMP Building
102 1 Holiday Inn Express
103 2 Anchorage Trade Center Building
104 1 Quality Inn - Nautilus
105 2 Rain Tree Plaza
106 1 Comfort Inn - Greensboro
107 2 1270 Gerard Avenue
108 1 Suburban Lodge of Baymeadows
109 1 Comfort Inn
110 2 PFI - Creekside
111 2 PFI - Fairway
112 1 Franklin Court
113 1 West Lancaster Plaza
114 1 733 Yonkers Avenue
<CAPTION>
CUT-OFF PRIMARY
LOAN BORROWER DATE MONTHLY MORTGAGE SERVICING INTEREST
NO. NAME BALANCE PAYMENT RATE FEE RATE CALC.
- ------ ---------------------------------------------------- ------------- --------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
58 HPI-FW West Partners Four L.P. $6,597,114 $ 48,750.92 8.0700% 0.05% Actual/360
59 U.S. Equities II, L.P. 6,514,620 56,105.35 7.3500 0.05 Actual/360
60 Rosgro Realty Co., L.P. 6,300,581 48,045.79 7.8500 0.05 Actual/360
61 St. Charles Partners L.P. 6,300,000 44,051.00 7.5000 0.05 Actual/360
62 Professional Investors Security Fund XVIII 6,228,111 45,330.54 7.9100 0.05 Actual/360
63 FFALS Associates 5,984,382 40,564.95 7.1600 0.05 Actual/360
64 RMAQ Realty, LLC 5,974,670 43,175.32 7.2000 0.05 Actual/360
65 Sunset Plaza Station LLC 5,783,844 38,237.61 6.9100 0.06 Actual/360
66 Lincoln Investors, LLC 5,612,164 39,756.33 7.0000 0.05 Actual/360
67 Brandon Sherwood Forest Associates, L.P. 5,600,000 41,090.82 8.0000 0.05 Actual/360
68 American Equities Ltd. No. 6 5,482,156 37,930.92 7.3600 0.05 Actual/360
69 Penn-Ohio Microtel LLC 5,328,399 39,258.05 7.4200 0.05 Actual/360
70 Royal Dane Mall Corp. 5,278,249 38,616.61 7.3400 0.05 Actual/360
71 29 John Street LLC 5,240,984 37,466.63 7.7100 0.05 Actual/360
72 Warrington Apartments, LLC 5,197,109 35,915.11 7.3750 0.05 Actual/360
73 Plaza Diamond Bar Partners, LLC 5,178,746 37,955.26 7.3600 0.05 Actual/360
74 Rio Del Oro Racquet Club, LLC 4,827,366 40,627.73 8.0200 0.05 Actual/360
75 Avenel Apartments, LTD 4,793,647 33,136.05 7.3700 0.05 Actual/360
76 East-West 4 LLC 4,738,569 36,288.00 8.4300 0.05 Actual/360
77 Alameda Medical Center, LLC 4,600,000 34,074.39 8.1000 0.05 Actual/360
78 Yoruk Properties, LLC 4,591,080 31,442.53 7.2700 0.05 Actual/360
79 11422-26 Tiara Street Limited Partnership, et al 4,555,639 32,151.57 7.5900 0.08 Actual/360
80 C & I Properties, L.L.C. 4,498,950 39,295.26 8.5700 0.10 Actual/360
81 Richard Hall, L.P. 4,442,095 31,389.75 7.5900 0.05 Actual/360
82 St. Charles Motel, LLC 4,417,462 36,412.45 8.9000 0.10 Actual/360
83 JTJ Development, LLC 4,390,626 32,144.46 7.3700 0.10 Actual/360
84 Cerritos Realty Associates, LLC 4,340,558 29,882.30 7.2200 0.05 Actual/360
85 Homestead Gardens LLC 4,274,070 29,813.24 7.4700 0.05 Actual/360
86 Linda Court, Inc. et al 4,201,726 28,634.01 7.2200 0.05 Actual/360
87 The Drake Tower Limited Partnership 4,098,160 30,084.35 8.0000 0.05 Actual/360
88 Professional Investors Security Fund XIII, LP 4,063,115 29,572.88 7.9100 0.05 Actual/360
89 Bayscene Associates, LLC 4,035,586 28,486.44 7.5600 0.05 Actual/360
90 Biloxi Partners LP 4,000,000 30,302.49 7.7840 0.05 Actual/360
91 E P Property, Inc. 3,996,282 29,585.67 7.5100 0.05 Actual/360
92 Commerce Security Center Partnership 3,981,726 27,762.88 6.8000 0.05 Actual/360
93 Professional Investors Security Fund IX, LP 3,862,209 28,110.61 7.9100 0.05 Actual/360
94 Graoch Associates #50 Limited Partnership 3,854,487 26,648.20 7.3600 0.05 Actual/360
95 CVOP Associates, LLC 3,832,454 26,117.48 7.2200 0.05 Actual/360
96 Finderne Associates 3,790,432 26,000.07 7.2800 0.05 Actual/360
97 Shelby L. Smith,Trustee,dba Chateau Suite Htl. of 3,730,683 27,687.78 7.4900 0.10 Actual/360
98 Affordable Warehouses 3,683,096 25,680.67 6.8000 0.05 Actual/360
99 Burke Lewis Apartments Associates, LLC 3,642,973 25,175.11 7.3750 0.05 Actual/360
100 R.A.C. Burton L.L.C. 3,560,238 24,382.80 6.4579 0.05 Actual/360
101 Chubb Branchburg L.L.C. 3,558,024 24,600.17 7.3800 0.05 Actual/360
102 Layton, LLC/Hospitality Investors, LLC Joint Ventu 3,496,226 24,359.00 6.8300 0.10 Actual/360
103 Bayview Commercial Building LLC 3,488,643 26,544.68 8.1700 0.05 Actual/360
104 South Royal Corporation 3,290,225 24,601.76 7.6000 0.10 Actual/360
105 Darla Raintree, LLC 3,228,459 23,318.93 7.8300 0.05 Actual/360
106 BPR Hospitality, Inc. 3,215,828 24,465.31 7.8000 0.05 Actual/360
107 North State Realty Associates, LLC 3,195,383 21,332.68 7.0200 0.05 Actual/360
108 Southeastern Lodges, LLC 3,144,317 24,794.09 8.2300 0.05 Actual/360
109 BLR Properties, Inc. 3,137,998 23,689.55 7.7000 0.05 Actual/360
110 Professional Investors Security Fund II 3,039,590 22,123.28 7.9100 0.05 Actual/360
111 Professional Investors Security Fund XIV, LP 3,013,602 21,934.13 7.9100 0.05 Actual/360
112 QXY Lido, LLC 2,998,789 22,601.30 8.2800 0.05 Actual/360
113 Commercial Properties, LLC 2,923,402 20,312.00 7.4300 0.05 Actual/360
114 733 Realty, LLC 2,898,018 19,612.19 7.0600 0.05 Actual/360
<CAPTION>
REMAINING
STATED ANTICIPATED LOCKOUT AND ANTICIPATED ORIGINAL REMAINING FIRST
LOAN MATURITY REPAYMENT REMAINING YIELD REMAINING AMORTIZATION AMORTIZATION P&I
NO. DATE DATE LOCKOUT MAINTENANCE TERM TERM SEASONING TERM DATE
- ------ ---------- ------------- ----------- ------------- ------------- -------------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
58 10/11/28 10/11/08 112 112 119 360 1 359 11/11/98
59 8/11/18 236 236 237 240 3 237 9/11/98
60 10/11/23 10/11/08 112 112 119 300 1 299 11/11/98
61 11/11/28 11/11/08 118 118 120 360 0 360 12/11/98
62 10/11/28 10/11/08 112 112 119 360 1 359 11/11/98
63 7/11/28 7/11/08 109 109 116 360 4 356 8/11/98
64 7/11/23 7/11/08 109 109 116 300 4 296 8/11/98
65 7/11/28 7/11/08 109 109 116 360 4 356 8/11/98
66 9/11/23 9/11/08 111 111 118 300 2 298 10/11/98
67 11/11/28 11/11/08 113 113 120 360 0 360 12/11/98
68 6/11/28 6/11/08 112 112 115 360 5 355 7/11/98
69 7/11/23 7/11/08 109 109 116 300 4 296 8/11/98
70 7/11/23 7/11/08 112 112 116 300 4 296 8/11/98
71 8/11/28 8/11/05 79 79 81 360 3 357 9/11/98
72 10/11/28 10/11/08 112 112 119 360 1 359 11/11/98
73 7/11/23 7/11/05 73 73 80 300 4 296 8/11/98
74 8/11/18 8/11/08 110 110 117 240 3 237 9/11/98
75 9/11/28 9/11/08 111 111 118 360 2 358 10/11/98
76 6/11/28 6/11/05 42 42 79 360 5 355 7/11/98
77 11/11/28 11/11/08 116 116 120 360 0 360 12/11/98
78 8/11/28 8/11/08 115 115 117 360 3 357 9/11/98
79 10/11/28 10/11/08 117 117 119 360 1 359 11/11/98
80 10/11/18 232 232 239 240 1 239 11/11/98
81 8/11/28 8/11/08 110 110 117 360 3 357 9/11/98
82 10/11/24 10/11/08 115 115 119 312 1 311 11/11/98
83 9/11/23 9/11/08 114 114 118 300 2 298 10/11/98
84 8/11/28 8/11/03 54 54 57 360 3 357 9/11/98
85 11/11/28 5/11/08 110 110 114 360 1 359 11/11/98
86 8/11/28 8/11/08 115 115 117 360 3 357 9/11/98
87 10/11/28 10/11/08 117 117 119 360 1 359 11/11/98
88 10/11/28 10/11/08 112 112 119 360 1 359 11/11/98
89 5/11/28 5/11/08 107 107 114 360 6 354 6/11/98
90 11/11/23 11/11/08 118 118 120 300 0 300 12/11/98
91 10/11/23 10/11/05 76 76 83 300 1 299 11/11/98
92 7/11/23 7/11/08 112 112 116 300 4 296 8/11/98
93 10/11/28 10/11/08 112 112 119 360 1 359 11/11/98
94 7/11/28 7/11/08 109 109 116 360 4 356 8/11/98
95 8/11/28 8/11/08 113 113 117 360 3 357 9/11/98
96 7/11/28 7/11/08 114 114 116 360 4 356 8/11/98
97 6/11/23 6/11/08 111 111 115 300 5 295 7/11/98
98 7/11/23 7/11/08 112 112 116 300 4 296 8/11/98
99 10/11/28 10/11/08 112 112 119 360 1 359 11/11/98
100 4/11/23 289 289 293 297 4 293 8/11/98
101 10/11/28 10/11/08 117 117 119 360 1 359 11/11/98
102 10/11/23 10/11/08 115 115 119 300 1 299 11/11/98
103 6/11/08 108 108 115 336 5 331 7/11/98
104 8/11/23 8/11/08 113 113 117 300 3 297 9/11/98
105 10/11/28 10/11/08 112 112 119 360 1 359 11/11/98
106 8/11/23 8/11/08 110 110 117 300 3 297 9/11/98
107 9/11/28 9/11/08 116 116 118 360 2 358 10/11/98
108 9/11/23 9/11/08 111 111 118 300 2 298 10/11/98
109 7/11/23 7/11/08 109 109 116 300 4 296 8/11/98
110 10/11/28 10/11/08 112 112 119 360 1 359 11/11/98
111 10/11/28 10/11/08 112 112 119 360 1 359 11/11/98
112 10/11/28 10/11/08 115 115 119 360 1 359 11/11/98
113 10/11/28 10/11/08 115 115 119 360 1 359 11/11/98
114 10/11/28 10/11/08 115 115 119 360 1 359 11/11/98
</TABLE>
S-104
<PAGE>
MORTGAGE NOTES
<TABLE>
<CAPTION>
LOAN LOAN PROPERTY
NO. GROUP NAME
- ------ ------- ---------------------------------------
<S> <C> <C>
115 2 Bari Manor
116 1 Eckerd's - Berwick #5923
117 1 244 West 39th Street
118 2 690 Gerard Avenue
119 2 Lake Pointe Apartments
121 2 2300 Grand Concourse
120 2 230 East 167th Street
122 1 CVS - Forest Hill
123 1 Office Depot - Dallas
124 1 8000 North Federal Highway
125 1 Portofino Beach Hotel
126 1 CVS - Auburn
127 2 PFI - Ignacio Pines
128 1 CVS - Montgomery
129 2 984 Sheridan Avenue
130 2 Shop Rite Center
131 2 111 East 167th Street
132 1 CVS - Cranston
133 2 PFI - Oak Hill Apartments
134 2 176 East 176th Street
135 1 CVS - Bessemer
136 2 2585-93 Grand Concourse
137 1 2899-2901 Third Avenue
138 1 CVS - Middlefield
140 2 215 Mount Hope Place
139 2 1210 Sherman Avenue
141 2 Hudson View Estates
142 1 Belleair Bazaar
143 2 Chateau Thierry Apartments
144 1 CVS - Colonial Heights
145 1 CVS - Augusta
146 1 Safeguard Self Storage
147 1 CVS - New Haven #6496
148 1 CVS - Huntersville
149 1 Buena Park Manor MHP
150 1 Comfort Inn - Petersburg
151 1 CVS - Ringgold
152 2 Continental Pak
153 2 2544 Valentine Avenue
154 1 CVS - Cleveland
155 1 CVS - Madison
156 2 PFI - Westview
157 1 CVS - Painesville
158 1 CVS - Pelzer
159 2 PFI - Ignacio Hills III
160 1 Walgreens Plaza
161 1 Best Western - Wright Patterson
162 2 Clarion Hotel
163 2 7600 Medley Industrial Building
164 1 CVS - Smyrna
165 1 Citrus Plaza
166 2 Cane Village/Indian Summer Apartments
167 2 2908-10 Valentine Avenue
168 1 416-418 Knickerbocker
169 2 2 Minerva Place
170 2 PFI - Northern Apartments
171 2 Sparta Green Townhouses
<CAPTION>
CUT-OFF PRIMARY
LOAN BORROWER DATE MONTHLY MORTGAGE SERVICING
NO. NAME BALANCE PAYMENT RATE FEE RATE
- ------ ---------------------------------------------------- ------------- --------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
115 Bari Manor Properties, Inc. $2,883,445 $ 20,113.11 7.4700% 0.05%
116 Berwick Mall LLC 2,781,678 19,131.33 6.3447 0.05
117 244 W. 39th St. Realty Inc. 2,759,884 19,968.59 7.2000 0.05
118 Berger Associates LLC 2,740,000 19,743.42 7.8100 0.05
119 Lake Pointe Apartment Homes, Inc. 2,736,597 19,417.06 7.6000 0.05
121 Karen Manor Associates LLC 2,720,000 19,599.31 7.8100 0.05
120 Sid-Jon Properties Associates, LLC 2,720,000 19,599.31 7.8100 0.05
122 Wilton Partners Forest Hill, LLC 2,671,964 14,952.13 6.5024 -
123 RIC Lovers Lane Trust 2,524,380 18,250.00 7.4678 0.05
124 North Federal Highway Associates, Ltd. 2,495,191 17,139.27 7.3000 0.05
125 PBH, LLC 2,495,993 18,257.05 7.9500 0.05
126 Court and Union, LLC 2,485,162 13,666.60 6.3828 -
127 Professional Investors Security Fund X, LP 2,478,850 18,042.01 7.9100 0.05
128 Mitchell Montgomery I, LLC 2,427,442 17,358.27 6.8100 -
129 N.J.Z. Company LLC 2,400,000 17,293.51 7.8100 0.05
130 Y.D.B. Shoprite L.C. 2,398,617 18,370.88 8.2200 0.05
131 Shara Associates LLC 2,396,503 15,935.04 6.9800 0.05
132 1178-1194 Pontiac Avenue LLC 2,373,332 13,261.20 6.4925 -
133 Professional Investors Security Fund XVII, LP 2,301,932 16,754.33 7.9100 0.05
134 Lynsey Associates, LLC 2,300,000 16,572.95 7.8100 0.05
135 CS-Bessemer, LLC 2,299,743 12,887.61 6.5122 -
136 Mandy Associates LLC 2,296,681 15,332.86 7.0200 0.05
137 D.H. Realty Holdings, LLC 2,273,396 18,549.45 8.6500 0.05
138 Middlefield OH Business Trust 2,251,091 12,818.66 6.6112 -
140 Drew Development Limited 2,250,000 16,212.67 7.8100 0.05
139 J.A.M. Associates LLC 2,250,000 16,212.67 7.8100 0.05
141 Hudson View Estates, Inc. 2,238,792 15,616.42 7.4700 0.05
142 Belleair Bazaar, LLC 2,236,000 16,072.00 7.7840 0.05
143 Hayne Boulevard Investments #1 2,215,063 15,889.32 7.1400 0.10
144 Colonial Heights VA Business Trust 2,213,198 12,301.14 6.4451 -
145 Augusta GA Business Trust 2,196,408 12,336.98 6.5173 -
146 Doraville Properties, LLC 2,175,519 16,195.18 7.5600 0.10
147 G.B. New Haven Developers LLC 2,173,888 12,187.12 6.5161 -
148 Huntersville NC Business Trust 2,172,174 12,089.29 6.4652 -
149 Buena Park Manor Associates, LLC 2,144,931 19,898.50 8.0100 0.05
150 AMIR, Inc. 2,143,220 18,077.24 8.0700 0.05
151 Ringgold GA Business Trust 2,116,349 11,684.20 6.3995 -
152 Continental & Deutsch Inc. and Continental Pak Cor 2,098,968 18,030.23 9.4000 0.05
153 Kelly Associates LLC 2,096,970 13,999.57 7.0200 0.05
154 Cleveland OH Business Trust 2,090,866 11,519.56 6.3965 -
155 Madison NC Business Trust 2,077,611 11,857.71 6.6271 -
156 Professional Investors Security Fund VI 2,036,056 14,819.18 7.9100 0.05
157 Painsville OH Business Trust 2,015,924 11,266.33 6.4814 -
158 CP Pelzer, LLC 2,012,127 11,324.13 6.5416 -
159 Professional Investors Security Fund III, LP 2,006,070 14,600.93 7.9100 0.05
160 Shopping Plaza at Wilton Manors, Ltd. 1,995,780 13,238.96 6.9500 0.05
161 Greene Management Corp. 1,994,076 14,910.16 7.6000 0.10
162 Ocean View Resort 1,991,585 16,091.07 8.4900 0.05
163 7600 Medley Warehouse Joint Venture 1,991,039 14,008.25 6.9000 0.05
164 Smyrna TN Business Trust 1,971,569 10,883.73 6.3975 -
165 Citrus Plaza Partners 1,930,000 13,872.00 7.7840 0.05
166 Indian Summer Apartments, Inc. 1,915,683 13,668.30 7.0800 0.12
167 Merry Associates LLC 1,860,000 13,402.47 7.8100 0.05
168 Nathan Cheney, Trustee F/B/O Elliot Cohen 1,845,638 13,364.93 7.1400 0.05
169 HAF Associates, LLC 1,840,000 13,258.36 7.8100 0.05
170 Professional Investors Security Fund V 1,829,152 13,313.25 7.9100 0.05
171 Sparta Brook Associates, L.P. 1,823,017 12,716.22 7.4700 0.05
<CAPTION>
REMAINING
STATED ANTICIPATED LOCKOUT AND ANTICIPATED ORIGINAL
LOAN INTEREST MATURITY REPAYMENT REMAINING YIELD REMAINING AMORTIZATION
NO. CALC. DATE DATE LOCKOUT MAINTENANCE TERM TERM SEASONING
- ------ ------------------ ---------- ------------- ----------- ------------- ------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
115 Actual/360 10/11/28 10/11/08 117 117 119 360 1
116 Actual/360 5/11/18 230 230 234 263 3
117 Actual/360 6/11/23 6/11/08 111 111 115 300 5
118 Actual/360 11/11/28 11/11/08 118 118 120 360 0
119 Actual/360 3/11/28 3/11/08 110 110 112 360 8
121 Actual/360 11/11/28 11/11/08 118 118 120 360 0
120 Actual/360 11/11/28 11/11/08 118 118 120 360 0
122 30/360 1/6/19 238 238 242 246 0
123 Actual/360 6/11/16 207 207 211 212 1
124 Actual/360 8/11/28 8/11/08 115 115 117 360 3
125 Actual/360 8/11/28 8/11/08 115 115 117 360 3
126 30/360 12/6/18 237 237 241 246 0
127 Actual/360 10/11/28 10/11/08 112 112 119 360 1
128 30/360 3/6/19 240 240 244 246 0
129 Actual/360 11/11/28 11/11/08 118 118 120 360 0
130 Actual/360 4/11/26 10/11/08 112 112 119 330 1
131 Actual/360 9/11/28 9/11/08 116 116 118 360 2
132 30/360 2/6/19 239 239 243 245 0
133 Actual/360 10/11/28 10/11/08 112 112 119 360 1
134 Actual/360 11/11/28 11/11/08 118 118 120 360 0
135 30/360 1/6/19 238 238 242 246 0
136 Actual/360 9/11/28 9/11/08 116 116 118 360 2
137 Actual/360 10/11/23 10/11/08 112 112 119 300 1
138 30/360 12/6/18 237 237 241 247 0
140 Actual/360 11/11/28 11/11/08 118 118 120 360 0
139 Actual/360 11/11/28 11/11/08 118 118 120 360 0
141 Actual/360 10/11/28 10/11/08 117 117 119 360 1
142 Actual/360 11/11/28 11/11/08 118 118 120 360 0
143 Actual/360 9/11/23 9/11/08 114 114 118 300 2
144 30/360 1/6/19 238 238 242 247 0
145 30/360 1/6/19 238 238 242 247 0
146 Actual/360 9/11/23 9/11/13 171 171 178 300 2
147 30/360 2/6/19 239 239 243 246 0
148 30/360 1/6/19 238 238 242 246 0
149 Actual/360 10/11/05 76 76 83 192 1
150 Actual/360 9/11/18 231 231 238 240 2
151 30/360 1/6/19 238 238 242 247 0
152 Actual/360 10/11/24 10/11/08 112 112 119 312 1
153 Actual/360 9/11/28 9/11/08 116 116 118 360 2
154 30/360 1/6/19 238 238 242 246 0
155 30/360 12/6/18 237 237 241 247 0
156 Actual/360 10/11/28 10/11/08 112 112 119 360 1
157 30/360 12/6/18 237 237 241 247 0
158 30/360 1/6/19 238 238 242 246 0
159 Actual/360 10/11/28 10/11/08 112 112 119 360 1
160 Actual/360 8/11/28 8/11/08 114 114 117 360 3
161 Actual/360 8/11/23 8/11/08 113 113 117 300 3
162 Actual/360 6/11/23 6/11/08 113 113 115 300 5
163 Actual/360 7/11/23 7/11/08 112 112 116 300 4
164 30/360 12/6/18 237 237 241 247 0
165 Actual/360 11/11/28 11/11/08 118 118 120 360 0
166 Actual/360 9/11/23 9/11/08 114 114 118 300 2
167 Actual/360 11/11/28 11/11/08 118 118 120 360 0
168 Actual/360 9/11/08 114 114 118 300 2
169 Actual/360 11/11/28 11/11/08 118 118 120 360 0
170 Actual/360 10/11/28 10/11/08 112 112 119 360 1
171 Actual/360 10/11/28 10/11/08 117 117 119 360 1
<CAPTION>
REMAINING FIRST
LOAN AMORTIZATION P&I
NO. TERM DATE
- ------ -------------- -----------
<S> <C> <C>
115 359 11/11/98
116 260 9/11/98
117 295 7/11/98
118 360 12/11/98
119 352 4/11/98
121 360 12/11/98
120 360 12/11/98
122 246 2/6/99
123 211 11/11/98
124 357 9/11/98
125 357 9/11/98
126 246 1/6/99
127 359 11/11/98
128 246 4/6/99
129 360 12/11/98
130 329 11/11/98
131 358 10/11/98
132 245 3/6/99
133 359 11/11/98
134 360 12/11/98
135 246 2/6/99
136 358 10/11/98
137 299 11/11/98
138 247 12/6/98
140 360 12/11/98
139 360 12/11/98
141 359 11/11/98
142 360 12/11/98
143 298 10/11/98
144 247 1/6/99
145 247 1/6/99
146 298 10/11/98
147 246 3/6/99
148 246 2/6/99
149 191 11/11/98
150 238 10/11/98
151 247 1/6/99
152 311 11/11/98
153 358 10/11/98
154 246 2/6/99
155 247 12/6/98
156 359 11/11/98
157 247 12/6/98
158 246 2/6/99
159 359 11/11/98
160 357 9/11/98
161 297 9/11/98
162 295 7/11/98
163 296 8/11/98
164 247 12/6/98
165 360 12/11/98
166 298 10/11/98
167 360 12/11/98
168 298 10/11/98
169 360 12/11/98
170 359 11/11/98
171 359 11/11/98
</TABLE>
S-105
<PAGE>
MORTGAGE NOTES
<TABLE>
<CAPTION>
LOAN LOAN PROPERTY BORROWER
NO. GROUP NAME NAME
- ------ ------- ---------------------------------------- -----------------------------------------------
<S> <C> <C> <C>
172 1 CVS - Owensboro Owensboro KY Business Trust
173 1 CVS - Barnwell Barnwell SC Business Trust
174 2 48 Hill Street BLW Hill St., LLC
175 1 Galaxy Hotel Bhagymalaxmi Inn Corp.
176 2 Elmwood Galleria Elmwood Corporation
177 1 CVS - Marysville Marysville OH Business Trust
178 2 1791 Grand Concourse Denpat Associates, LLC
179 2 2505 Olinville Avenue 2505 Olinville Avenue, LLC
180 1 Econo Lodge - Biloxi Krupalu Corporation
181 1 CVS - Bedford Bedford OH Business Trust
182 1 Ingram Park Plaza Shopping Center Ithaca - Ingram, LTD
183 1 Rite Aid - Detroit S.D.A., LLC
184 2 Powell Street Warehouses Powell Street Properties, Inc.
185 2 3041 Holland Avenue Micbry Associates, LLC
186 2 3031 Holland Avenue TREMM Associates LLC
187 2 1240 Sherman Avenue Deb-bie Realty Associates, LLC
188 1 2174 Pelham Associates 2174 Pelham Associates LLC
189 1 CVS - Cairo Cairo Associates LLC
190 2 PFI - Strawberry Professional Investors Security Fund VIII, LP
191 1 CVS - Hopewell Gustine Hopewell Associates, Ltd.
192 1 54-64 Broad Street Broad Street Realty Enterprises, LLC
193 2 PFI - Via Casitas Professional Investors Security Fund XI, LP
194 1 Best Western - Celebration Shivani, Inc.
195 1 Rite Aid - Dearborn Wyoming Diversey, LLC
196 1 Gateway Retail Center TYGOMT, LC
197 2 PFI - Ignacio Hills I Professional Investors Security Fund I
198 2 1945 Loring Place South Andrew Associates LLC
199 2 Three Pines Apartments Sycamore Canyon Corporation
200 1 363 Bloomfield Avenue The Phoenix Montclair Partnership, L.P.
201 2 Parker Plaza Shopping Center Parker Plaza-Greco Limited Liability Company
202 1 Nature's Edge Assisted Living Facility Robert Guimond and Joyce Guimond
203 2 PFI - Country Club Professional Investors Security Fund XV, LP
204 2 202 Industrial Loop 202 Realty Corporation
205 2 Stonegate Apartments Hilbert Properties II
206 1 1655 East 13th Street SV E. 13th St. LLC
207 2 Villa Serena Coolidge - Serena Equities, LLC
208 2 Lake Village Apartments 3750 Lake Avenue, Inc.
209 1 AeroPanel Building 661 Myrtle Property Company, Ltd. (L.P.)
210 2 344 East 209th Street Scott-Craig Associates LLC
211 2 2935 Holland Avenue Corey Associates, LLC
212 2 Sherwood Townhouses Dial Realty Management Corporation
213 2 2885 Briggs Avenue Ry-Boy Associates, LLC
214 2 PFI - Ignacio Hills IV Professional Investors Security Fund IV
215 2 116 Henwood Place L & D Realty Associates LLC
216 1 398 Third Avenue 398-3rd Avenue Realty Co.
217 1 SpinCycle 173 - Milwaukee Wentwood Investors Fund II, L.P.
<CAPTION>
CUT-OFF PRIMARY STATED ANTICIPATED
LOAN DATE MONTHLY MORTGAGE SERVICING INTEREST MATURITY REPAYMENT REMAINING
NO. BALANCE PAYMENT RATE FEE RATE CALC. DATE DATE LOCKOUT
- ------ ----------------- --------------- ------------ ----------- ------------------ ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
172 $ 1,814,530 $ 10,201.59 6.5343% - 30/360 1/6/19 238
173 1,805,561 9,942.34 6.3818 - 30/360 1/6/19 238
174 1,799,102 12,833.28 7.7000 0.05% Actual/360 10/11/28 10/11/08 112
175 1,797,417 15,246.92 8.1700 0.05 Actual/360 10/11/18 10/11/08 112
176 1,796,856 12,771.26 7.6500 0.05 Actual/360 8/11/28 8/11/08 110
177 1,785,062 10,028.65 6.5175 - 30/360 12/6/18 237
178 1,777,000 12,804.40 7.8100 0.05 Actual/360 11/11/28 11/11/08 118
179 1,735,000 12,501.77 7.8100 0.05 Actual/360 11/11/28 11/11/08 118
180 1,716,503 14,055.13 7.6500 0.05 Actual/360 8/11/18 8/11/08 110
181 1,623,093 8,920.68 6.3690 - 30/360 1/6/19 238
182 1,598,773 12,690.13 8.3200 0.05 Actual/360 10/11/23 10/11/08 112
183 1,598,697 12,291.67 6.9380 0.05 Actual/360 9/11/17 222
184 1,580,199 12,694.53 7.3000 0.12 Actual/360 4/11/18 4/11/08 106
185 1,580,000 11,384.89 7.8100 0.05 Actual/360 11/11/28 11/11/08 118
186 1,548,000 11,154.31 7.8100 0.05 Actual/360 11/11/28 11/11/08 118
187 1,525,000 10,988.58 7.8100 0.05 Actual/360 11/11/28 11/11/08 118
188 1,496,463 10,836.43 7.1400 0.05 Actual/360 9/11/08 114
189 1,444,114 8,091.29 6.5122 - 30/360 2/6/19 239
190 1,430,337 10,410.53 7.9100 0.05 Actual/360 10/11/28 10/11/08 112
191 1,402,926 7,733.41 6.4003 - 30/360 2/6/19 239
192 1,347,461 10,437.41 8.0200 0.05 Actual/360 9/11/23 9/11/08 111
193 1,338,379 9,741.23 7.9100 0.05 Actual/360 10/11/28 10/11/08 112
194 1,334,556 12,599.20 7.6100 0.05 Actual/360 7/11/13 169
195 1,321,705 9,863.60 6.6730 0.05 Actual/360 3/11/16 204
196 1,297,292 9,476.00 7.9300 0.05 Actual/360 7/11/28 7/11/08 114
197 1,284,404 9,348.38 7.9100 0.05 Actual/360 10/11/28 10/11/08 112
198 1,280,000 9,223.20 7.8100 0.05 Actual/360 11/11/28 11/11/08 118
199 1,255,595 8,442.13 7.0700 0.05 Actual/360 6/11/28 6/11/08 110
200 1,248,673 9,087.62 7.2100 0.05 Actual/360 10/11/23 10/11/08 112
201 1,198,882 8,867.89 7.5000 0.05 Actual/360 10/11/23 10/11/08 112
202 1,194,637 9,421.34 8.2000 0.12 Actual/360 6/11/23 6/11/08 111
203 1,120,480 8,155.28 7.9100 0.05 Actual/360 10/11/28 10/11/08 112
204 1,106,000 8,309.01 8.2500 0.05 Actual/360 11/11/28 11/11/08 113
205 1,047,473 7,298.66 7.4400 0.05 Actual/360 7/11/28 7/11/08 114
206 1,038,101 7,264.71 7.4900 0.05 Actual/360 8/11/28 8/11/08 113
207 999,068 7,389.91 7.5000 0.05 Actual/360 10/11/23 10/11/08 112
208 898,267 6,886.83 7.9000 0.05 Actual/360 9/11/08 111
209 873,730 7,373.40 8.1000 0.05 Actual/360 10/11/18 10/11/08 112
210 855,000 6,160.81 7.8100 0.05 Actual/360 11/11/28 11/11/08 118
211 825,000 5,944.64 7.8100 0.05 Actual/360 11/11/28 11/11/08 118
212 696,624 4,859.21 7.4700 0.05 Actual/360 10/11/28 10/11/08 117
213 680,000 4,899.83 7.8100 0.05 Actual/360 11/11/28 11/11/08 118
214 582,730 4,241.33 7.9100 0.05 Actual/360 10/11/28 10/11/08 112
215 560,000 4,035.15 7.8100 0.05 Actual/360 11/11/28 11/11/08 118
216 498,504 4,556.90 7.1200 0.05 Actual/360 10/11/13 175
217 334,498 2,841.19 9.1300 0.05 Actual/360 9/11/23 9/11/08 111
--------------
$1,919,275,079
==============
<CAPTION>
REMAINING
LOCKOUT AND ANTICIPATED ORIGINAL REMAINING FIRST
LOAN YIELD REMAINING AMORTIZATION AMORTIZATION P&I
NO. MAINTENANCE TERM TERM SEASONING TERM DATE
- ------ ------------- ------------- -------------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
172 238 242 245 0 245 3/6/99
173 238 242 247 0 247 1/6/99
174 112 119 360 1 359 11/11/98
175 112 119 240 1 239 11/11/98
176 110 117 360 3 357 9/11/98
177 237 241 247 0 247 12/6/98
178 118 120 360 0 360 12/11/98
179 118 120 360 0 360 12/11/98
180 110 117 240 3 237 9/11/98
181 238 242 247 0 247 1/6/99
182 112 119 300 1 299 11/11/98
183 222 226 228 2 226 10/11/98
184 106 113 240 7 233 5/11/98
185 118 120 360 0 360 12/11/98
186 118 120 360 0 360 12/11/98
187 118 120 360 0 360 12/11/98
188 114 118 300 2 298 10/11/98
189 239 243 246 0 246 3/6/99
190 112 119 360 1 359 11/11/98
191 239 243 245 0 245 3/6/99
192 111 118 300 2 298 10/11/98
193 112 119 360 1 359 11/11/98
194 169 176 180 4 176 8/11/98
195 204 208 213 5 208 7/11/98
196 114 116 360 4 356 8/11/98
197 112 119 360 1 359 11/11/98
198 118 120 360 0 360 12/11/98
199 110 115 360 5 355 7/11/98
200 112 119 300 1 299 11/11/98
201 112 119 300 1 299 11/11/98
202 111 115 300 5 295 7/11/98
203 112 119 360 1 359 11/11/98
204 113 120 360 0 360 12/11/98
205 114 116 360 4 356 8/11/98
206 113 117 360 3 357 9/11/98
207 112 119 300 1 299 11/11/98
208 111 118 300 2 298 10/11/98
209 112 119 240 1 239 11/11/98
210 118 120 360 0 360 12/11/98
211 118 120 360 0 360 12/11/98
212 117 119 360 1 359 11/11/98
213 118 120 360 0 360 12/11/98
214 112 119 360 1 359 11/11/98
215 118 120 360 0 360 12/11/98
216 175 179 180 1 179 11/11/98
217 111 118 300 2 298 10/11/98
</TABLE>
S-106
<PAGE>
RANGE OF DEBT SERVICE COVERAGE RATIOS
<TABLE>
<CAPTION>
RANGE OF PERCENT BY WEIGHTED WEIGHTED
DEBT SERVICE NUMBER OF CUT-OFF DATE CUT-OFF WEIGHTED AVERAGE AVERAGE WEIGHTED WEIGHTED
COVERAGE LOANS/LOAN PRINCIPAL PRINCIPAL AVERAGE REMAINING AMORTIZATION AVERAGE AVERAGE
RATIOS POOLS BALANCE BALANCE MORTGAGE RATE TERM (MOS.) TERM (MOS.) LTV (%) DSCR
- ---------------- ------------ ----------------- ------------ --------------- ------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1.00x - 1.09 1 $ 6,514,620 0.3% 7.350% 237 237 83% 1.06x
1.10x - 1.19 15 201,356,052 10.5 7.676 136 298 76 1.15
1.20x - 1.29 71 702,335,386 36.6 7.552 119 352 76 1.24
1.30x - 1.39 41 377,427,283 19.7 7.350 114 345 75 1.34
1.40x - 1.49 12 125,181,430 6.5 7.911 115 313 72 1.43
1.50x - 1.59 15 165,836,769 8.6 7.314 113 332 59 1.55
1.60x - 1.69 7 24,425,137 1.3 7.186 117 308 68 1.64
1.70x - 1.79 4 22,239,892 1.2 7.269 116 341 71 1.72
1.80x - 1.89 3 10,056,825 0.5 7.441 130 325 64 1.84
1.90x - 1.99 1 7,000,000 0.4 6.900 120 360 45 1.97
2.00x and over 7 18,251,598 1.0 7.278 123 285 57 2.19
Credit Lease 40 258,658,903 13.5 7.166 244 266 NAP NAP
-- -------------- ----- ----- --- --- ---- ----
TOTAL 217 $1,919,283,893 100.0% 7.462% 136 327 73% 1.33x
=== ============== ===== ===== === === ==== ====
</TABLE>
RANGE OF LOAN-TO-VALUE RATIOS
<TABLE>
<CAPTION>
PERCENT BY WEIGHTED WEIGHTED
RANGE OF NUMBER OF CUT-OFF DATE CUT-OFF WEIGHTED AVERAGE AVERAGE WEIGHTED WEIGHTED
LOAN TO VALUE LOANS/LOAN PRINCIPAL PRINCIPAL AVERAGE REMAINING AMORTIZATION AVERAGE AVERAGE
RATIOS POOLS BALANCE BALANCE MORTGAGE RATE TERM (MOS.) TERM (MOS.) LTV (%) DSCR
- --------------- ------------ ----------------- ------------ --------------- ------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
50% or less 5 $ 86,919,108 4.5% 7.258% 113 324 49% 1.61x
51% - 60% 5 14,613,838 0.8 7.220 118 323 56 1.82
61% - 70% 51 389,067,968 20.3 7.596 112 343 66 1.39
71% - 75% 41 481,096,841 25.1 7.648 126 308 72 1.29
76% - 80% 54 294,469,362 15.3 7.566 120 353 79 1.26
81% - 85% 15 323,419,113 16.9 7.207 122 356 82 1.28
86% - 90% 5 64,240,308 3.4 7.507 115 358 86 1.25
91% -100% 1 6,798,452 0.4 8.200 82 358 92 1.15
Credit Lease 40 258,658,903 13.5 7.166 244 266 NAP NAP
-- -------------- ----- ----- --- --- ---- ----
TOTAL 217 $1,919,283,893 100.0% 7.462% 136 327 73% 1.33x
=== ============== ===== ===== === === ==== ====
</TABLE>
RANGE OF LOAN-TO-VALUE RATIOS AT EARLIER OF ANTICIPATED REPAYMENT DATES OR
MATURITY
<TABLE>
<CAPTION>
PERCENT BY
RANGE OF NUMBER OF CUT-OFF DATE CUT-OFF WEIGHTED
LOAN TO VALUE LOANS/LOAN PRINCIPAL PRINCIPAL AVERAGE
RATIOS POOLS BALANCE BALANCE MORTGAGE RATE
- --------------- ------------ ----------------- ------------ ---------------
<S> <C> <C> <C> <C>
50% or less 22 $ 223,253,679 11.6% 7.555%
51% - 60% 45 481,282,074 25.1 7.710
61% - 70% 75 477,585,662 24.9 7.433
71% - 75% 29 407,464,814 21.2 7.321
76% - 80% 5 66,698,202 3.5 7.596
81% - 85% 1 4,340,558 0.2 7.220
Credit Lease 40 258,658,903 13.5 7.166
-- -------------- ----- -----
TOTAL 217 $1,919,283,893 100.0% 7.462%
=== ============== ===== =====
<CAPTION>
WEIGHTED WEIGHTED WEIGHTED
RANGE OF AVERAGE AVERAGE WEIGHTED WEIGHTED AVERAGE LTV
LOAN TO VALUE REMAINING AMORTIZATION AVERAGE AVERAGE AT ARD OR
RATIOS TERM (MOS.) TERM (MOS.) LTV (%) DSCR MATURITY (%)
- --------------- ------------- -------------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
50% or less 143 287 62% 1.42x 43%
51% - 60% 114 330 67 1.38 58
61% - 70% 117 345 75 1.30 65
71% - 75% 118 359 82 1.27 72
76% - 80% 115 358 87 1.25 76
81% - 85% 57 357 87 1.16 82
Credit Lease 244 266 NAP NAP NAP
--- --- ---- ----- ---
TOTAL 136 327 73% 1.33x 62%
=== === ==== ===== ===
</TABLE>
S-107
<PAGE>
MORTGAGED PROPERTIES BY GEOGRAPHIC LOCATION
<TABLE>
<CAPTION>
PERCENT WEIGHTED WEIGHTED
CUT-OFF BY CUT-OFF WEIGHTED AVERAGE AVERAGE WEIGHTED WEIGHTED
NUMBER OF DATE PRINCIPAL PRINCIPAL AVERAGE REMAINING AMORTIZATION AVERAGE AVERAGE
STATE PROPERTIES BALANCE BALANCE MORTGAGE RATE TERM (MOS.) TERM (MOS.) LTV (%) DSCR
- ---------------- ------------ ---------------- ------------ --------------- ------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alabama 4 $ 21,516,880 1.1% 7.344% 147 335 83% 1.22x
Alaska 1 3,488,643 .2 8.170 115 331 67 1.21
Arizona 2 7,983,390 .4 7.149 255 299 NAP NAP
California 62 268,363,309 14.0 7.778 130 335 73 1.28
Colorado 3 3,788,710 .2 8.039 192 297 66 1.47
Connecticut 2 16,891,202 .9 7.291 152 344 81 1.19
Delaware 2 17,571,646 .9 7.367 131 351 83 1.37
Florida 25 117,426,836 6.1 7.337 152 320 74 1.42
Georgia 7 20,682,023 1.1 7.469 183 283 77 1.31
Hawaii 2 61,909,836 3.2 7.402 90 335 65 1.35
Idaho 1 819,232 .0 8.570 239 239 68 1.24
Illinois 4 47,376,944 2.5 8.098 119 307 70 1.42
Indiana 3 5,957,968 .3 7.956 275 276 NAP NAP
Iowa 1 3,915,868 .2 6.689 244 292 NAP NAP
Kansas 5 12,051,849 .6 7.044 205 314 72 1.25
Kentucky 9 64,853,403 3.4 7.230 125 350 73 1.25
Louisiana 7 27,010,399 1.4 7.329 119 331 75 1.41
Maine 1 2,485,162 .1 6.383 241 246 NAP NAP
Maryland 16 110,531,251 5.8 6.988 123 348 81 1.35
Massachusetts 3 20,318,537 1.1 7.443 185 295 78 1.39
Michigan 6 27,948,738 1.5 7.514 163 276 71 1.40
Minnesota 1 1,697,487 .1 7.050 116 356 65 1.51
Mississippi 4 7,242,517 .4 7.609 123 292 70 1.37
Missouri 4 21,435,958 1.1 7.527 117 347 73 1.56
Montana 1 1,669,441 .1 8.445 295 295 NAP NAP
Nebraska 3 8,767,800 .5 7.520 182 297 62 1.65
Nevada 3 39,936,117 2.1 7.351 119 359 83 1.25
New Hampshire 1 3,298,406 .2 6.697 244 300 NAP NAP
New Jersey 25 159,423,187 8.3 7.208 112 355 77 1.32
New Mexico 4 13,048,888 .7 7.601 119 345 76 1.30
New York 56 287,965,787 15.0 7.600 131 313 67 1.34
North Carolina 8 24,154,945 1.3 7.236 185 305 83 1.43
Ohio 14 40,844,825 2.1 7.214 178 288 74 1.42
Oklahoma 2 9,028,829 .5 7.699 153 342 80 1.18
Oregon 2 3,679,718 .2 8.570 239 239 68 1.24
Pennsylvania 3 7,514,854 .4 6.832 183 273 74 1.52
Rhode Island 2 4,922,100 .3 6.598 244 273 NAP NAP
South Carolina 8 9,122,132 .5 6.914 199 261 75 1.24
Tennessee 3 7,090,525 .4 6.783 230 259 38 2.53
Texas 29 196,389,311 10.2 7.606 149 325 78 1.29
Utah 1 3,496,226 .2 6.830 119 299 58 2.20
Vermont 2 9,111,111 .5 7.672 144 298 69 1.23
Virgin Islands 1 5,278,249 .3 7.340 116 296 73 1.32
Virginia 8 48,060,197 2.5 7.243 132 334 65 1.53
Washington 4 6,798,452 .4 8.200 82 358 92 1.15
Washington DC 3 120,983,134 6.3 7.454 118 340 69 1.22
West Virginia 1 8,156,595 .4 6.710 118 358 82 1.31
Wisconsin 3 5,777,505 .3 7.262 174 321 74 1.36
Wyoming 1 1,497,770 .1 8.445 295 295 NAP NAP
-- -------------- ----- ----- --- --- ---- ----
TOTAL 363 $1,919,283,893 100.0% 7.462% 136 327 73% 1.33x
=== ============== ===== ===== === === ==== ====
</TABLE>
S-108
<PAGE>
YEAR BUILT OR RENOVATED
<TABLE>
<CAPTION>
PERCENT
CUT-OFF DATE BY CUT-OFF WEIGHTED
RANGE OF YEAR NUMBER OF PRINCIPAL PRINCIPAL AVERAGE
BUILT/RENOVATED PROPERTIES BALANCE BALANCE MORTGAGE RATE
- ----------------- ------------ ----------------- ------------ ---------------
<S> <C> <C> <C> <C>
Pre 1970 42 $ 105,409,770 5.5% 7.623%
1970 - 1974 19 87,947,975 4.6 7.546
1975 - 1979 13 32,997,601 1.7 7.271
1980 - 1984 27 220,472,224 11.5 7.376
1985 - 1987 24 193,796,773 10.1 7.307
1988 - 1990 31 236,916,000 12.3 7.422
1991 - 1993 25 162,256,333 8.5 7.721
1994 - 1998 182 879,487,216 45.8 7.460
--- -------------- ----- -----
TOTAL 363 $1,919,283,893 100.0% 7.462%
=== ============== ===== =====
</TABLE>
<TABLE>
<CAPTION>
WEIGHTED WEIGHTED
AVERAGE AVERAGE WEIGHTED WEIGHTED WEIGHTED
RANGE OF YEAR REMAINING AMORTIZATION AVERAGE AVERAGE AVERAGE YEAR
BUILT/RENOVATED TERM (MOS.) TERM (MOS.) LTV (%) DSCR BUILT/RENOVATED
- ----------------- ------------- -------------- ---------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Pre 1970 123 345 72% 1.34x 1949
1970 - 1974 117 349 67 1.43 1972
1975 - 1979 164 333 76 1.31 1977
1980 - 1984 129 330 75 1.29 1983
1985 - 1987 123 332 64 1.44 1986
1988 - 1990 118 342 72 1.29 1989
1991 - 1993 118 331 70 1.38 1992
1994 - 1998 152 316 77 1.30 1997
--- --- -- ---- ----
TOTAL 136 327 73% 1.33x 1989
=== === == ==== ====
</TABLE>
S-109
<PAGE>
MORTGAGED PROPERTIES BY PROPERTY TYPE
<TABLE>
<CAPTION>
CUT-OFF PERCENTAGE WEIGHTED
NUMBER DATE BY CUT-OFF AVERAGE
OF PRINCIPAL PRINCIPAL MORTGAGE
PROPERTY TYPE PROPERTIES BALANCE BALANCE RATE
- --------------- ------------ ----------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Office 38 $ 555,380,105 28.9% 7.433%
- --------------- -- -------------- ----- -----
Multifamily 121 419,932,543 21.9 7.579
- --------------- --- -------------- ----- -----
Retail Anchored 29 232,974,401 12.1 7.449
Single Tenant 12 53,077,598 2.8 7.460
Unanchored 14 45,911,642 2.4 7.489
* Retail 55 331,963,641 17.3 7.456
- --------------- --- -------------- ----- -----
Credit Lease 76 258,658,903 13.5 7.166
- --------------- --- -------------- ----- -----
Lodging Extended Stay 2 5,135,902 .3 8.331
Full Service 7 120,621,726 6.3 8.099
Limited Service 12 33,608,516 1.8 7.742
* Lodging 21 159,366,144 8.3 8.031
- --------------- --- -------------- ----- -----
Industrial 29 151,374,073 7.9 7.117
- --------------- --- -------------- ----- -----
Healthcare 5 18,468,365 1.0 7.605
- --------------- --- -------------- ----- -----
Other Self-Storage 1 2,175,519 .1 7.560
Special Purpose 14 11,341,986 .6 7.635
* Other 15 13,517,505 .7 7.623
- --------------- --- -------------- ----- -----
Mobile Home 3 10,622,612 .6 7.663
--- -------------- ----- -----
Park
- ---------------
TOTAL 363 $1,919,283,893 100.0% 7.462%
=== ============== ===== =====
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WEIGHTED
WEIGHTED WEIGHTED AVERAGE
AVERAGE AVERAGE WEIGHTED WEIGHTED LOAN WEIGHTED YEAR BUILT/
REMAINING AMORTIZATION AVERAGE AVERAGE PROPERTY PER AVERAGE RENOVATED
PROPERTY TYPE TERM (MOS.) TERM (MOS.) LTV (%) DSCR SIZE(1) SIZE OCCUP.(2) DATE
- --------------- ------------- -------------- ---------- ---------- ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Office 123 328 70% 1.29x 5,630,771 $ 99 95% 1987
- --------------- --- --- -- ---- --------- -------- -- ----
Multifamily 118 357 78 1.28 13,884 30,246 96 1986
- --------------- --- --- -- ---- --------- -------- -- ----
Retail 110 355 75 1.31 4,236,770 55 93 1990
126 298 70 1.30 625,698 85 100 1994
131 336 75 1.38 655,989 70 95 1992
* Retail 115 344 74 1.32 5,518,457 60 94 1991
- --------------- --- --- -- ---- --------- -------- --- ----
Credit Lease 244 266 NAP NAP 1,155,765 224 100 1993
- --------------- --- --- ---- ----- --------- -------- --- ----
Lodging 117 297 72 1.46 172 29,860 78 1995
117 312 70 1.40 1,769 68,186 73 1993
127 284 66 1.73 1,150 29,225 74 1993
* Lodging 119 305 69 1.48 3,091 51,558 73 1993
- --------------- --- --- ---- ----- --------- -------- --- ----
Industrial 113 342 73 1.44 3,973,150 38 99 1987
- --------------- --- --- ---- ----- --------- -------- --- ----
Healthcare 147 324 73 1.56 204 90,531 98 1995
- --------------- --- --- ---- ----- --------- -------- --- ----
Other 178 298 70 1.82 92,438 24 81 1973
186 237 75 1.26 79,082 143 100 1993
* Other 185 247 74 1.35 171,520 79 97 1989
- --------------- --- --- ---- ----- --------- -------- --- ----
Mobile Home 109 322 77 1.18 384 27,663 98 1961
--- --- ---- ----- --------- -------- --- ----
Park
- ---------------
TOTAL 136 327 73% 1.33x 94% 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-110
<PAGE>
RANGE OF CUT-OFF PRINCIPAL BALANCES
<TABLE>
<CAPTION>
CUT-OFF PERCENTAGE
NUMBER OF DATE CUT-OFF
RANGE OF CUT-OFF LOANS/LOAN PRINCIPAL PRINCIPAL
PRINCIPAL BALANCES POOLS BALANCE BALANCE
- ---------------------------- ------------ ----------------- ------------
<S> <C> <C> <C>
$500,000 or less 2 $ 833,001 .0%
$500,000+ -- 1,000,000 9 6,970,419 .4
$1,000,000+ -- 2,000,000 47 74,255,809 3.9
$2,000,000+ -- 3,000,000 48 113,989,341 5.9
$3,000,000+ -- 4,000,000 22 77,742,875 4.1
$4,000,000+ -- 5,000,000 16 70,868,651 3.7
$5,000,000+ -- 6,000,000 11 60,660,702 3.2
$6,000,000+ -- 7,000,000 8 52,387,669 2.7
$7,000,000+ -- 8,000,000 5 38,792,942 2.0
$8,000,000+ -- 9,000,000 3 25,746,493 1.3
$9,000,000+ -- 10,000,000 4 38,796,837 2.0
$10,000,000+ -- 15,000,000 14 177,776,931 9.3
$15,000,000+ -- 20,000,000 8 140,264,184 7.3
$20,000,000+ -- 30,000,000 4 92,788,220 4.8
$30,000,000+ -- 40,000,000 2 67,130,672 3.5
$40,000,000+ -- 50,000,000 4 181,623,531 9.5
$50,000,000+ -- 60,000,000 4 223,274,178 11.6
$70,000,000+ -- 80,000,000 3 224,274,293 11.7
$80,000,000+ -- 90,000,000 3 251,107,144 13.1
-- -------------- -----
TOTAL 217 $1,919,283,893 100.0%
=== ============== =====
<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 or less 7.927% 155 227 46% 1.74x
$500,000+ -- 1,000,000 7.788 119 328 74 1.33
$1,000,000+ -- 2,000,000 7.446 143 309 71 1.44
$2,000,000+ -- 3,000,000 7.330 163 307 73 1.33
$3,000,000+ -- 4,000,000 7.456 124 326 68 1.56
$4,000,000+ -- 5,000,000 7.792 119 335 74 1.32
$5,000,000+ -- 6,000,000 7.342 111 330 73 1.35
$6,000,000+ -- 7,000,000 7.610 129 329 74 1.33
$7,000,000+ -- 8,000,000 7.548 188 307 76 1.44
$8,000,000+ -- 9,000,000 7.913 120 360 78 1.25
$9,000,000+ -- 10,000,000 7.404 93 342 76 1.35
$10,000,000+ -- 15,000,000 7.307 175 310 79 1.29
$15,000,000+ -- 20,000,000 7.448 171 325 73 1.36
$20,000,000+ -- 30,000,000 7.819 140 323 76 1.33
$30,000,000+ -- 40,000,000 7.189 175 327 85 1.27
$40,000,000+ -- 50,000,000 7.360 107 344 71 1.33
$50,000,000+ -- 60,000,000 7.441 120 343 78 1.25
$70,000,000+ -- 80,000,000 7.639 136 313 63 1.31
$80,000,000+ -- 90,000,000 7.364 118 338 74 1.32
----- --- --- -- ----
TOTAL 7.462% 136 327 73% 1.33x
===== === === == ====
</TABLE>
<PAGE>
YEARS OF SCHEDULED MATURITY
<TABLE>
<CAPTION>
CUT-OFF PERCENTAGE WEIGHTED WEIGHTED WEIGHTED
YEARS OF NUMBER OF DATE CUT-OFF AVERAGE AVERAGE AVERAGE WEIGHTED WEIGHTED
SCHEDULED LOANS/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>
2005 1 $ 2,144,931 .1% 8.010% 83 191 73% 1.17x
2007 1 13,993,157 .7 7.760 105 359 75 1.16
2008 5 14,729,010 .8 7.316 118 335 58 1.66
2013 2 1,833,059 .1 7.477 177 177 35 2.41
2016 3 27,148,984 1.4 7.961 212 215 NAP NAP
2017 1 1,598,697 .1 6.938 226 226 NAP NAP
2018 21 172,646,349 9.0 7.719 195 245 73 1.17
2019 22 139,100,639 7.3 6.645 244 282 NAP NAP
2023 41 313,609,542 16.3 7.802 133 298 70 1.44
2024 3 52,537,772 2.7 7.387 116 308 74 1.17
2026 2 76,753,983 4.0 7.305 111 326 50 1.53
2028 115 1,103,187,769 57.5 7.428 116 358 76 1.30
--- -------------- ----- ----- --- --- ---- ----
TOTAL 217 $1,919,283,893 100.0% 7.462% 136 327 73% 1.33x
=== ============== ===== ===== === === ==== ====
</TABLE>
S-111
<PAGE>
RANGE OF REMAINING ANTICIPATED TERMS
<TABLE>
<CAPTION>
CUT-OFF PERCENT BY WEIGHTED
RANGE OF NUMBER OF DATE CUT-OFF AVERAGE
ANTICIPATED NOTES/LOAN PRINCIPAL PRINCIPAL MORTGAGE
REMAINING TERM POOLS BALANCE BALANCE RATE
- ----------------- ------------ ---------------- ------------ ----------
<S> <C> <C> <C> <C>
4+ -- 5 years 2 $ 13,956,606 .7% 7.099%
6+ -- 7 years 8 88,049,924 4.6 7.590
8+ -- 9 years 1 13,993,157 .7 7.760
9+ -- 10 years 157 1,434,424,164 74.7 7.478
14+ -- 15 years 6 97,044,349 5.1 7.850
17+ -- 18 years 3 27,148,984 1.4 7.961
18+ -- 19 years 1 1,598,697 .1 6.938
19+ -- 20 years 8 62,370,612 3.3 7.696
20+ -- 21 years 28 151,687,057 7.9 6.633
24+ -- 25 years 3 29,010,344 1.5 8.408
--- -------------- ----- -----
TOTAL 217 $1,919,283,893 100.0% 7.462%
=== ============== ===== =====
<CAPTION>
WEIGHTED WEIGHTED
AVERAGE WEIGHTED WEIGHTED AVERAGE
RANGE OF REMAINING AVERAGE WEIGHTED WEIGHTED AVERAGE REMAINING
ANTICIPATED TERM AMORTIZATION AVERAGE AVERAGE REMAINING LOCK-OUT +
REMAINING TERM (MOS.) TERM (MOS.) LTV (%) DSCR LOCK-OUT YIELD MAINT.
- ----------------- ----------- -------------- ---------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
4+ -- 5 years 56 356 74% 1.39x 53 53
6+ -- 7 years 82 341 68 1.35 75 75
8+ -- 9 years 105 359 75 1.16 101 101
9+ -- 10 years 118 341 73 1.34 112 112
14+ -- 15 years 177 273 74 1.22 171 171
17+ -- 18 years 212 215 NAP NAP 29 210
18+ -- 19 years 226 226 NAP NAP 222 222
19+ -- 20 years 236 237 76 1.16 231 231
20+ -- 21 years 243 280 NAP NAP 239 239
24+ -- 25 years 294 294 NAP NAP 290 290
--- --- ---- ----- --- ---
TOTAL 136 327 73% 1.33x 128 131
=== === ==== ===== === ===
</TABLE>
ANTICIPATED REPAYMENT BY YEAR
<TABLE>
<CAPTION>
WEIGHTED
CUT-OFF PERCENT WEIGHTED AVERAGE WEIGHTED
ANTICIPATED NUMBER OF DATE BY CUT-OFF AVERAGE REMAINING AVERAGE WEIGHTED WEIGHTED
REPAYMENT LOANS/ PRINCIPAL PRINCIPAL MORTGAGE TERM AMORTIZATION AVERAGE AVERAGE
BY YEAR LOAN POOLS BALANCE BALANCE RATE (MOS.) TERM (MOS.) LTV (%) DSCR
- ------------- ------------ ---------------- ------------ ---------- ----------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2003 2 $ 13,956,606 .7% 7.099% 56 356 74% 1.39x
2005 8 88,049,924 4.6 7.590 82 341 68 1.35
2007 1 13,993,157 .7 7.760 105 359 75 1.16
2008 157 1,434,424,164 74.7 7.478 118 341 73 1.34
2013 6 97,044,349 5.1 7.850 177 273 74 1.22
2016 3 27,148,984 1.4 7.961 212 215 NAP NAP
2017 1 1,598,697 .1 6.938 226 226 NAP NAP
2018 14 74,957,030 3.9 7.496 237 239 76 1.16
2019 22 139,100,639 7.3 6.645 244 282 NAP NAP
2023 3 29,010,344 1.5 8.408 294 294 NAP NAP
--- -------------- ----- ----- --- --- ---- ----
TOTAL 217 $1,919,283,893 100.0% 7.462% 136 327 73% 1.33x
=== ============== ===== ===== === === ==== ====
</TABLE>
The weighted average year of anticipated repayment is 2009.
S-112
<PAGE>
RANGE OF MORTGAGE RATES
<TABLE>
<CAPTION>
CUT-OFF PERCENTAGE WEIGHTED WEIGHTED WEIGHTED
NUMBER OF DATE CUT-OFF AVERAGE AVERAGE AVERAGE WEIGHTED WEIGHTED
RANGE 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% 43 $ 336,732,203 17.5% 6.725% 178 316 78% 1.39x
7.000% -- 7.499% 63 638,869,120 33.3 7.270 114 339 70 1.38
7.500% -- 7.999% 79 628,592,439 32.8 7.671 127 339 75 1.27
8.000% -- 8.499% 26 283,679,272 14.8 8.156 146 293 72 1.27
8.500% -- 8.999% 4 28,977,394 1.5 8.757 245 288 72 1.25
9.000% -- 9.499% 2 2,433,466 .1 9.363 119 309 67 1.48
-- -------------- ----- ----- --- --- -- ----
TOTAL 217 $1,919,283,893 100.0% 7.462% 136 327 73% 1.33x
=== ============== ===== ===== === === == ====
</TABLE>
RANGE OF REMAINING LOCK-OUT PLUS YIELD MAINTENANCE TERMS
<TABLE>
<CAPTION>
REMAINING
LOCK-OUT CUT-OFF PERCENT BY WEIGHTED
AND YIELD NUMBER OF DATE CUT-OFF AVERAGE
MAINTENANCE NOTES/LOAN PRINCIPAL PRINCIPAL MORTGAGE
PERIODS POOLS BALANCE BALANCE RATE
- ----------------- ------------ ---------------- ------------ ----------
<S> <C> <C> <C> <C>
3+ -- 4 years 1 $ 4,738,569 .3% 8.430%
4+ -- 5 years 2 13,956,606 .7 7.099
6+ -- 7 years 7 83,311,355 4.3 7.542
8+ -- 9 years 7 225,659,950 11.8 7.276
9+ -- 10 years 151 1,222,757,370 63.7 7.518
14+ -- 15 years 6 97,044,349 5.1 7.850
16+ -- 17 years 1 1,321,705 .1 6.673
17+ -- 18 years 2 25,827,279 1.4 8.027
18+ -- 19 years 3 23,015,356 1.2 7.590
19+ -- 20 years 34 192,641,009 10.0 6.865
24+ -- 25 years 3 29,010,344 1.5 8.408
--- -------------- ----- -----
TOTAL 217 $1,919,283,893 100.0% 7.462%
=== ============== ===== =====
<CAPTION>
WEIGHTED
REMAINING AVERAGE
LOCK-OUT WEIGHTED WEIGHTED WEIGHTED REMAINING
AND YIELD AVERAGE AVERAGE WEIGHTED WEIGHTED AVERAGE LOCK-OUT
MAINTENANCE REMAINING AMORTIZATION AVERAGE AVERAGE REMAINING +YIELD
PERIODS TERM (MOS.) TERM (MOS.) LTV (%) DSCR LOCK-OUT MAINT.
- ----------------- ------------- -------------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
3+ -- 4 years 79 355 76% 1.20x 42 42
4+ -- 5 years 56 356 74 1.39 53 53
6+ -- 7 years 82 340 68 1.36 77 77
8+ -- 9 years 112 344 63 1.40 106 106
9+ -- 10 years 118 341 75 1.32 113 113
14+ -- 15 years 177 273 74 1.22 171 171
16+ -- 17 years 208 208 NAP NAP 204 204
17+ -- 18 years 212 216 NAP NAP 20 211
18+ -- 19 years 232 232 NAP NAP 226 226
19+ -- 20 years 242 271 76 1.16 238 238
24+ -- 25 years 294 294 NAP NAP 290 290
--- --- ---- ----- --- ---
TOTAL 136 327 73% 1.33% 128 131
=== === ==== ===== === ===
</TABLE>
S-113
<PAGE>
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. In addition, prior to the issuance of the
Offered Certificates, a Mortgage Loan may be moved from one Loan Group to
another if the Depositor deems such adjustment appropriate. This may cause the
range of Mortgage Rates and maturities as well as the other characteristics of
the Mortgage Loans and Loan Groups 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 (the "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.
S-114
<PAGE>
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 a trust fund (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 (as defined herein), the
Interest Reserve Account and, if established, the REO Account; (iv) the rights
of the lender under all insurance policies with respect to the Mortgage Loans;
and (v) certain rights of the Depositor under the Mortgage Loan Purchase
Agreements 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-C2 (the "Certificates") will
consist of the following classes (each, a "Class"): (i) the Class A-1, Class
A-2 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
Certificates. The Mezzanine Certificates together with the Private Certificates
are referred to herein as the "Subordinate Certificates".
Only the Offered Certificates are offered hereby. The Class F, Class G,
Class H, Class I, Class J, Class V, Class R, and Class LR Certificates have not
been registered under the Securities Act of 1933, as amended (the "Securities
Act") 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 the Trust Fund. The Class A-X Certificates will not have a
Certificate Balance and no distributions of principal will be made thereon.
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) immediately prior to such
Distribution Date.
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 (as defined herein) actually allocated
to, such Class of Certificates on such Distribution Date and, except for the
purposes of determining Voting Rights (as defined herein) 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 (as defined herein)
and its Participants (as defined herein) 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
S-115
<PAGE>
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. ("Cede"). 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. The Offered Certificates will be initially issued through the
book-entry facilities of The Depository Trust Company ("DTC"), or through Cedel
Bank, societe anonyme ("CEDEL") or the Euroclear System ("Euroclear"), if they
are participants of such systems, or indirectly through organizations which are
participants in such systems. As to any such class of Offered Certificates, the
record holder of such Certificates will be DTC's nominee. CEDEL and Euroclear
will hold omnibus positions on behalf of their participants through customers'
securities accounts in CEDEL's and Euroclear's names on the books of their
respective depositories (the "Depositories"), which in turn will hold such
positions in customers' securities accounts in Depositories' names on the books
of DTC. DTC is a limited-purpose trust company organized under the 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 ("DTC
Participants" and, together with CEDEL and Euroclear participating
organizations, the "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.
Because of time zone differences, the securities account of a CEDEL
Participant or Euroclear Participant (each as defined below) as a result of a
transaction with a DTC Participant (other than a depository holding on behalf
of CEDEL or Euroclear) will be credited during the securities settlement
processing day (which must be a business day for CEDEL or Euroclear, as the
case may be) immediately following the DTC settlement date. Such credits or any
transactions in such securities settled during such processing will be reported
to the relevant Euroclear Participant or CEDEL Participant on such business
day. Cash received in CEDEL or Euroclear as a result of sales of securities by
or through a CEDEL Participant or Euroclear Participant to a DTC Participant
(other than the depository for CEDEL or Euroclear) will be received with value
on the DTC settlement date, but will be available in the relevant CEDEL or
Euroclear cash account only as of the business day following settlement in DTC.
S-116
<PAGE>
Transfers between Participants will occur in accordance with the rules,
regulations and procedures creating and affecting DTC and its operations (the
"Rules"). Transfers between CEDEL Participants or Euroclear Participants will
occur in accordance with their respective rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through CEDEL
Participants or Euroclear Participants, on the other, will be effected in DTC
in accordance with the Rules on behalf of the relevant European international
clearing system by the relevant Depositories; however, such cross-market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in such system in accordance
with its rules and procedures and within its established deadlines (European
time). The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to its
Depository to take action to effect final settlement on its behalf by
delivering or receiving securities in DTC, and making or receiving payment in
accordance with normal procedures for same day funds settlement applicable to
DTC. CEDEL Participants or Euroclear Participants may not deliver instructions
directly to the Depositories.
CEDEL, as a professional depository, holds securities for its
participating organizations ("CEDEL Participants") and facilitates the
clearance and settlement of securities transactions between CEDEL Participants
through electronic book-entry changes in accounts of CEDEL Participants,
thereby eliminating the need for physical movement of certificates. As a
professional depository, CEDEL is subject to regulation by the Luxembourg
Monetary Institute.
Euroclear was created to hold securities for participants of Euroclear
("Euroclear Participants") and to clear and settle transactions between
Euroclear Participants through simultaneous electronic book-entry delivery
against payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of securities and
cash. Euroclear is operated by the Brussels, Belgium office of Morgan Guaranty
Trust Company of New York (the "Euroclear Operator"), under contract with
Euroclear Clearance Systems S.C., a Belgian co-operative corporation (the
"Clearance Cooperative"). All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator, not the Clearance
Cooperative. The Clearance Cooperative establishes policies for Euroclear on
behalf of Euroclear Participants. The Euroclear Operator is the Belgian branch
of a New York banking corporation which is a member bank of the Federal Reserve
System. As such, it is regulated and examined by the Board of Governors of the
Federal Reserve System and the New York State Banking Department, as well as
the Belgian Banking Commission. Securities clearance accounts and cash accounts
with the Euroclear Operator are governed by the Terms and Conditions Governing
Use of Euroclear and the related Operating Procedures of the Euroclear System
and applicable Belgian law (collectively, the "Terms and Conditions"). The
Terms and Conditions govern transfers of securities and cash within Euroclear,
withdrawals of securities and cash from Euroclear, and receipts of payments
with respect to securities in Euroclear. All securities in Euroclear are held
on a fungible basis without attribution of specific certificates to specific
securities clearance accounts.
Purchases of Certificates under the DTC system ("Book-Entry Certificates")
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 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.
S-117
<PAGE>
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 holder of the Offered Certificates ("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 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; Available Information" below, Certificate Owners
will not be recognized by the Certificate Registrar (as defined herein), 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, DTC is required to make book-entry transfers of the
Offered Certificates among Participants 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
Underwriter, 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.
S-118
<PAGE>
Although DTC, CEDEL and Euroclear have agreed to the foregoing procedures
in order to facilitate transfers of the Offered Certificates among Participants
of DTC, CEDEL and Euroclear, they are under no obligation to perform or
continue to perform such procedures and such procedures may be discontinued at
any time.
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 (as defined herein) 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 4th Business Day (as
defined below) after the Determination Date commencing in December 1998 (each,
a "Distribution Date"). The "Determination Date" is the 11th day of the month
or, if such 11th day is not a Business Day, the Business Day immediately
following such 11th day. 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. A "Business Day" is any day other than a Saturday, a Sunday or any
day in which banking institutions in the States of New York, Texas, North
Carolina or Florida are authorized or obligated by law, executive order or
governmental decree to close. 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 December 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.
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
S-119
<PAGE>
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 one or more accounts (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 remitted to the Trustee by the Servicer, 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 (as defined herein) to the holders of
Offered Certificates 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
the holders of Offered Certificates 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
Distribution Account as of the business day preceding the related Servicer
Remittance Date (as defined herein) (including funds released from the Interest
Reserve Account (as defined herein) 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 (as defined herein);
(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 Distribution Account
that are due or reimbursable to (x) any person other than the
Certificateholders and (y) the Class V Certificates;
(iv) all Prepayment Premiums, Yield Maintenance Charges and Yield
Protection Payments;
(v) all net investment income on the funds in the Certificate Account and
certain other accounts;
(vi) all Withheld Amounts (as defined herein) relating to a subsequent
Distribution Date; and
(vii) all amounts deposited in the Certificate Account and Distribution
Account in error.
(b) all P&I Advances (as defined herein) 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
Certificates -- Accounts" in the Prospectus.
The Available Distribution Amount for each Loan Group is the portion of
the Available Distribution Amount, as defined in the preceding paragraph,
relating to the Mortgage Loans in that Loan Group.
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 (as defined herein).
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
S-120
<PAGE>
amount equal to the Monthly Interest Distribution 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 each Class of Offered Certificates on such date and subject to the
distribution priorities described below under "-- Priority of Distributions,"
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 (as defined herein) 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-1 Certificates, the Optimal Interest Distribution
Amount (as defined herein) for such Class for such Distribution Date, (B) from
the Available Distribution Amount for Loan Group 2, to the Class A-2
Certificates, the Optimal Interest Distribution Amount for such Class for such
Distribution Date, and (C) from the Available Distribution Amount for both Loan
Groups, 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 related Classes as described
above, the Available Distribution Amount for both Loan Groups 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-2 Certificates, in reduction of the Certificate
Balance thereof, until the Certificate Balance thereof has been reduced to
zero, an amount up to the A-2 Principal Distribution Amount for such
Distribution Date;
(iii) to the Class A-1 and Class A-2 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-1 Certificates, until the Certificate Balance
thereof has been reduced to zero; and
second, to the Class A-2 Certificates, until the Certificate Balance
thereof has been reduced to zero;
(iv) to the Class A-1 and Class A-2 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 (as defined
herein) 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 Distribution Amount (as
defined herein) 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;
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<PAGE>
(E) to the Class C Certificates, in reduction of the Certificate Balance
thereof, an amount up to the Remaining Principal Distribution 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 Distribution 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 Distribution 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 Distribution 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 Distribution 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 Distribution 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;
(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 Distribution Amount for
such Distribution Date until such Certificate Balance has been reduced to
zero;
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(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 Distribution 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-1, Class A-2 and Class A-X
Certificates, pro rata, in respect of interest; (ii) to the Class A-1 and Class
A-2 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-1 and Class A-2 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-2 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
voluntary principal prepayments.
"Class A-1 Pass-Through Rate": 5.96% per annum.
"Class A-2 Pass-Through Rate": 6.30% 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": 6.59% per annum.
"Class C Pass-Through Rate": 6.84% per annum.
"Class D Pass-Through Rate": 7.13% per annum.
"Class E Pass-Through Rate": 7.13% per annum.
"Class F Pass-Through Rate": As to any Distribution Date, a per annum rate
equal to the lesser of 6.75% per annum and the Weighted Average Net Mortgage
Rate for such Distribution Date.
"Class G Pass-Through Rate": As to any Distribution Date, a per annum rate
equal to the lesser of 6.75% per annum and the Weighted Average Net Mortgage
Rate for such Distribution Date.
"Class H Pass-Through Rate": As to any Distribution Date, a per annum rate
equal to the lesser of 6.75% per annum and the Weighted Average Net Mortgage
Rate for such Distribution Date.
"Class I Pass-Through Rate": As to any Distribution Date, a per annum rate
equal to the lesser of 6.75% per annum and the Weighted Average Net Mortgage
Rate for such Distribution Date.
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"Class J Pass-Through Rate": As to any Distribution Date, a per annum rate
equal to the lesser of 6.75% per annum and the Weighted Average Net Mortgage
Rate for such Distribution Date.
"Component Rate": As to each "Component," the rate set forth below with
respect thereto:
"Class A-1 Component": The amount, if any, by which the Weighted Average
Net Mortgage Rate for such Distribution Date exceeds the Class A-1 Pass-Through
Rate.
"Class A-2 Component": The amount, if any, by which the Weighted Average
Net Mortgage Rate for such Distribution Date exceeds the Class A-2 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.
"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.
"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. With respect to Loan No. 31 after the maturity date thereof, a rate of
2% per annum.
"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 Distribution 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 (as defined herein) and (y) certain
indemnification expenses of the Trust Fund and (ii) any allocations to such
Class of any Certificate Deferred Interest (as defined herein) for such
Distribution Date. As to any Distribution Date and the Class 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.
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"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 (as defined
herein) 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 (each as defined herein).
"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, plus, if such Mortgage Loan is set forth below, the related Servicing Fee
Reimbursement Rate (the rate used to calculate an additional amount payable by
the borrower and used to cover a portion of related servicing fees) set forth
below:
<TABLE>
<CAPTION>
PRIMARY
SERVICING FEE SERVICING FEE
LOAN NO. PROPERTY NAME RATE REIMBURSEMENT RATE
- ---------- ------------------------- --------------- -------------------
<S> <C> <C> <C>
18 Courthouse Square Apts 0.05% 0.05%
20 Ramblewood Village Apts 0.05% 0.05%
28 English Village Apts 0.05% 0.05%
85 Homestead Gardens Apts 0.05% 0.05%
</TABLE>
"Optimal Interest Distribution Amount": As to any Distribution Date and
any Class of Regular Certificates, the sum of the Monthly Interest Distribution
Amount and the Unpaid Interest Shortfall Amount (each as defined herein) for
such Class for such Distribution Date.
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<PAGE>
"Pass-Through Rate": As to each Class of Certificates, the rate set forth
below:
<TABLE>
<CAPTION>
<S> <C>
Class A-1: Class A-1 Pass-Through Rate
Class A-2: Class A-2 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, if applicable, the related 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 and which did not include a full month's interest, 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 Distribution 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 below
under "The Pooling and Servicing Agreement -- Servicing Compensation and
Payment of Expenses"), 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.
"Unscheduled Payments of Principal": Principal prepayments, Liquidation
Proceeds (as defined herein), insurance proceeds, condemnation awards and any
other unscheduled recoveries of principal.
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"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 (as defined
herein) 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 (each as
defined herein) 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 each
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-1, 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-1, 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 each 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-2 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.
On each 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
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Offered Certificates: to the Class A-1, 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-1, 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 (as defined herein) 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 each 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-2 Certificates, in 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) 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, or
Residual Certificates. Instead, after the Certificate Balances of the Class
A-1, Class A-2, 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 "Certain Characteristics
of the Mortgage Loans -- Certain Terms and Conditions 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 "Certain Characteristics 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 to the extent greater than the Yield
Maintenance Charge, if any, paid by the borrower. On such Distribution Date,
such Yield Protection Payments will be allocated 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 or the
Donatelli Loan in the same manner as Yield Maintenance Charges. 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. The Yield Protection Payment will equal the greater of (a)
1% of such distribution of principal and (b) the Yield Maintenance Charge
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calculated for such prepayment. 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 Characteristics of the
Mortgage Loans -- Certain Terms and Conditions of the Mortgage Loans --
Additional Collateral Loans" and "Certain Federal Income Tax Consequences."
Excess Interest. On each Distribution Date, Excess Interest collected
during the related Due Period will be distributed solely to the Class V
Certificates, 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 Certificates will have the right to
purchase ARD Loans on or after their related Anticipated Repayment Dates under
the circumstances described under "Certain Characteristics of the Mortgage
Loans -- Certain Terms and Conditions of the Mortgage Loans." The Class V
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>
ASSUMED FINAL
CLASS DESIGNATION DISTRIBUTION DATE
- ------------------- ------------------
<S> <C>
Class A-1 December 2007
Class A-2 November 2008
Class A-X June 2023
Class B November 2008
Class C November 2008
Class D April 2010
Class E January 2012
</TABLE>
The Assumed Final Distribution Dates set forth above were calculated based
on the Mortgage Loan Assumptions (as defined herein), including the assumptions
that there are no defaults, delinquencies or prepayments on the Mortgage Loans.
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 the Distribution Date in November 2030, which is the first Distribution
Date following the date that is two years after the latest Assumed Maturity
Date. 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
would fully amortize, 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
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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 required 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-1 and Class A-2 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 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 (as defined herein) (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
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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 Distribution 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 Distribution 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 (as defined herein) 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. 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" means, 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" means,
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 (as defined herein) due on such Due Date.
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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 Pass-Through Rate for the Class A-X
Certificates for any Distribution Date will be variable and will be based on
the Weighted Average Net Mortgage Rate for such Distribution Date. Accordingly,
the yield on the Class A-X Certificates will be particularly sensitive to
changes in the relative composition of the Mortgage Loans as a result of
scheduled amortization, voluntary prepayments, liquidations of Mortgage Loans
following default and repurchases of Mortgage Loans. Losses or payments of
principal on the Mortgage Loans with higher Mortgage Rates could result in a
reduction in the Weighted Average Net Mortgage Rate, thereby reducing the
Pass-Through Rate for the Class A-X Certificates. In addition, such
distributions in reduction of Certificate Balance may result from repurchases
by the CSFB 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 Certificateholders
as described herein under "Certain Characteristics 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 Interest."
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. The
Directing Certificateholder (as defined below) may 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.
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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 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
34 months to 291 months following the Cut-off Date. The weighted average
Lockout Period for the Mortgage Loans is approximately 128 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 "Certain
Characteristics 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
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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 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, (i) 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, and (ii) the columns headed "5% CPR", "10%
CPR", "15% CPR", and "25% CPR" assume that prepayments on the Mortgage Loans
are made at those levels of CPR following the expiration of any Lockout Period
and Yield Maintenance Period. 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 fifteenth day (each assumed to be a business day) of each month,
commencing in December 1998; (vi) the CSFB Mortgage Loan Seller does 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 (as defined herein) with
respect to the Mortgage Loans or the Trust Fund; (ix) none of the CSFB Mortgage
Loan Seller, 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 November 24, 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
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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.
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 November 11, 1998 to (but not including) November 24, 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>
6.15625% 10.802% 10.792% 10.783% 10.773% 10.753%
6.46875% 9.537% 9.527% 9.518% 9.508% 9.487%
6.78125% 8.368% 8.358% 8.348% 8.338% 8.317%
</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 the Distribution Date occurring in November
2030, which is 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
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repurchase or purchase of Mortgage Loans from the Trust Fund as described under
"The Pooling and Servicing Agreement -- Representations and Warranties;
Repurchase" and "-- 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
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.
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<PAGE>
CLASS A-X CERTIFICATES
PERCENTAGE OF INITIAL NOTIONAL BALANCE
OUTSTANDING AT THE RESPECTIVE CPRS SET FORTH BELOW
<TABLE>
<CAPTION>
DISTRIBUTION DATE 0% CPR 5% CPR 10% CPR 15% CPR 25% CPR
<S> <C> <C> <C> <C> <C>
Initial Percent 100 100 100 100 100
November 1999 99 99 99 99 99
November 2000 98 98 98 98 98
November 2001 97 97 97 97 97
November 2002 95 95 95 95 95
November 2003 93 93 93 93 93
November 2004 91 91 91 91 91
November 2005 86 86 86 86 86
November 2006 84 84 84 84 84
November 2007 81 81 81 81 81
November 2008 15 15 15 15 15
November 2009 14 14 14 14 14
November 2010 13 13 13 13 13
November 2011 12 12 12 12 12
November 2012 11 11 11 11 11
November 2013 7 7 7 7 7
November 2014 6 6 6 6 6
November 2015 5 5 5 5 5
November 2016 4 4 4 4 4
November 2017 3 3 3 3 3
November 2018 3 3 3 3 3
November 2019 0 0 0 0 0
November 2020 0 0 0 0 0
November 2021 0 0 0 0 0
November 2022 0 0 0 0 0
November 2023 0 0 0 0 0
Weighted Average Life
(in years)(1) 9.9 9.9 9.9 9.9 9.9
</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.
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<PAGE>
CLASS A-1 CERTIFICATES
PERCENTAGE OF INITIAL CERTIFICATE BALANCE
OUTSTANDING AT THE RESPECTIVE CPRS SET FORTH BELOW
<TABLE>
<CAPTION>
DISTRIBUTION DATE 0% CPR 5% CPR 10% CPR 15% CPR 25% CPR
<S> <C> <C> <C> <C> <C>
Initial Percent 100 100 100 100 100
November 1999 94 94 94 94 94
November 2000 88 88 88 88 88
November 2001 82 82 82 82 82
November 2002 75 75 75 75 75
November 2003 63 63 63 63 63
November 2004 55 55 55 55 54
November 2005 24 24 24 24 24
November 2006 14 14 14 14 14
November 2007 0 0 0 0 0
November 2008 0 0 0 0 0
November 2009 0 0 0 0 0
November 2010 0 0 0 0 0
November 2011 0 0 0 0 0
November 2012 0 0 0 0 0
November 2013 0 0 0 0 0
November 2014 0 0 0 0 0
November 2015 0 0 0 0 0
November 2016 0 0 0 0 0
November 2017 0 0 0 0 0
November 2018 0 0 0 0 0
November 2019 0 0 0 0 0
November 2020 0 0 0 0 0
November 2021 0 0 0 0 0
November 2022 0 0 0 0 0
November 2023 0 0 0 0 0
Weighted Average Life
(in years)(1) 5.6 5.5 5.5 5.5 5.5
</TABLE>
- ----------
(1) The weighted average life of the Class A-1 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).
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CLASS A-2 CERTIFICATES
PERCENTAGE OF INITIAL CERTIFICATE BALANCE
OUTSTANDING AT THE RESPECTIVE CPRS SET FORTH BELOW
<TABLE>
<CAPTION>
DISTRIBUTION DATE 0% CPR 5% CPR 10% CPR 15% CPR 25% CPR
<S> <C> <C> <C> <C> <C>
Initial Percent 100 100 100 100 100
November 1999 100 100 100 100 100
November 2000 100 100 100 100 100
November 2001 100 100 100 100 100
November 2002 100 100 100 100 100
November 2003 100 100 100 100 100
November 2004 100 100 100 100 100
November 2005 100 100 100 100 100
November 2006 100 100 100 100 100
November 2007 100 100 100 100 99
November 2008 0 0 0 0 0
November 2009 0 0 0 0 0
November 2010 0 0 0 0 0
November 2011 0 0 0 0 0
November 2012 0 0 0 0 0
November 2013 0 0 0 0 0
November 2014 0 0 0 0 0
November 2015 0 0 0 0 0
November 2016 0 0 0 0 0
November 2017 0 0 0 0 0
November 2018 0 0 0 0 0
November 2019 0 0 0 0 0
November 2020 0 0 0 0 0
November 2021 0 0 0 0 0
November 2022 0 0 0 0 0
November 2023 0 0 0 0 0
Weighted Average Life
(in years)(1) 9.7 9.7 9.7 9.7 9.7
</TABLE>
- ----------
(1) The weighted average life of the Class A-2 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-139
<PAGE>
CLASS B CERTIFICATES
PERCENTAGE OF INITIAL CERTIFICATE BALANCE
OUTSTANDING AT THE RESPECTIVE CPRS SET FORTH BELOW
<TABLE>
<CAPTION>
DISTRIBUTION DATE 0% CPR 5% CPR 10% CPR 15% CPR 25% CPR
<S> <C> <C> <C> <C> <C>
Initial Percent 100 100 100 100 100
November 1999 100 100 100 100 100
November 2000 100 100 100 100 100
November 2001 100 100 100 100 100
November 2002 100 100 100 100 100
November 2003 100 100 100 100 100
November 2004 100 100 100 100 100
November 2005 100 100 100 100 100
November 2006 100 100 100 100 100
November 2007 100 100 100 100 100
November 2008 0 0 0 0 0
November 2009 0 0 0 0 0
November 2010 0 0 0 0 0
November 2011 0 0 0 0 0
November 2012 0 0 0 0 0
November 2013 0 0 0 0 0
November 2014 0 0 0 0 0
November 2015 0 0 0 0 0
November 2016 0 0 0 0 0
November 2017 0 0 0 0 0
November 2018 0 0 0 0 0
November 2019 0 0 0 0 0
November 2020 0 0 0 0 0
November 2021 0 0 0 0 0
November 2022 0 0 0 0 0
November 2023 0 0 0 0 0
Weighted Average Life
(in years)(1) 10.0 10.0 10.0 10.0 10.0
</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-140
<PAGE>
CLASS C CERTIFICATES
PERCENTAGE OF INITIAL CERTIFICATE BALANCE
OUTSTANDING AT THE RESPECTIVE CPRS SET FORTH BELOW
<TABLE>
<CAPTION>
DISTRIBUTION DATE 0% CPR 5% CPR 10% CPR 15% CPR 25% CPR
<S> <C> <C> <C> <C> <C>
Initial Percent 100 100 100 100 100
November 1999 100 100 100 100 100
November 2000 100 100 100 100 100
November 2001 100 100 100 100 100
November 2002 100 100 100 100 100
November 2003 100 100 100 100 100
November 2004 100 100 100 100 100
November 2005 100 100 100 100 100
November 2006 100 100 100 100 100
November 2007 100 100 100 100 100
November 2008 0 0 0 0 0
November 2009 0 0 0 0 0
November 2010 0 0 0 0 0
November 2011 0 0 0 0 0
November 2012 0 0 0 0 0
November 2013 0 0 0 0 0
November 2014 0 0 0 0 0
November 2015 0 0 0 0 0
November 2016 0 0 0 0 0
November 2017 0 0 0 0 0
November 2018 0 0 0 0 0
November 2019 0 0 0 0 0
November 2020 0 0 0 0 0
November 2021 0 0 0 0 0
November 2022 0 0 0 0 0
November 2023 0 0 0 0 0
Weighted Average Life
(in years)(1) 10.0 10.0 10.0 10.0 10.0
</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-141
<PAGE>
CLASS D CERTIFICATES
PERCENTAGE OF INITIAL CERTIFICATE BALANCE
OUTSTANDING AT THE RESPECTIVE CPRS SET FORTH BELOW
<TABLE>
<CAPTION>
DISTRIBUTION DATE 0% CPR 5% CPR 10% CPR 15% CPR 25% CPR
<S> <C> <C> <C> <C> <C>
Initial Percent 100 100 100 100 100
November 1999 100 100 100 100 100
November 2000 100 100 100 100 100
November 2001 100 100 100 100 100
November 2002 100 100 100 100 100
November 2003 100 100 100 100 100
November 2004 100 100 100 100 100
November 2005 100 100 100 100 100
November 2006 100 100 100 100 100
November 2007 100 100 100 100 100
November 2008 21 21 21 21 21
November 2009 7 7 7 7 7
November 2010 0 0 0 0 0
November 2011 0 0 0 0 0
November 2012 0 0 0 0 0
November 2013 0 0 0 0 0
November 2014 0 0 0 0 0
November 2015 0 0 0 0 0
November 2016 0 0 0 0 0
November 2017 0 0 0 0 0
November 2018 0 0 0 0 0
November 2019 0 0 0 0 0
November 2020 0 0 0 0 0
November 2021 0 0 0 0 0
November 2022 0 0 0 0 0
November 2023 0 0 0 0 0
Weighted Average Life
(in years)(1) 10.1 10.1 10.1 10.1 10.1
</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-142
<PAGE>
CLASS E CERTIFICATES
PERCENTAGE OF INITIAL CERTIFICATE BALANCE
OUTSTANDING AT THE RESPECTIVE CPRS SET FORTH BELOW
<TABLE>
<CAPTION>
DISTRIBUTION DATE 0% CPR 5% CPR 10% CPR 15% CPR 25% CPR
<S> <C> <C> <C> <C> <C>
Initial Percent 100 100 100 100 100
November 1999 100 100 100 100 100
November 2000 100 100 100 100 100
November 2001 100 100 100 100 100
November 2002 100 100 100 100 100
November 2003 100 100 100 100 100
November 2004 100 100 100 100 100
November 2005 100 100 100 100 100
November 2006 100 100 100 100 100
November 2007 100 100 100 100 100
November 2008 100 100 100 100 100
November 2009 100 100 100 100 100
November 2010 67 67 67 67 67
November 2011 5 5 5 5 5
November 2012 0 0 0 0 0
November 2013 0 0 0 0 0
November 2014 0 0 0 0 0
November 2015 0 0 0 0 0
November 2016 0 0 0 0 0
November 2017 0 0 0 0 0
November 2018 0 0 0 0 0
November 2019 0 0 0 0 0
November 2020 0 0 0 0 0
November 2021 0 0 0 0 0
November 2022 0 0 0 0 0
November 2023 0 0 0 0 0
Weighted Average Life
(in years)(1) 12.3 12.3 12.3 12.3 12.3
</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-143
<PAGE>
THE POOLING AND SERVICING AGREEMENT
GENERAL
The Certificates will be issued pursuant to a Pooling and Servicing
Agreement to be dated as of November 11, 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 under "Reporting Requirements." 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; (ix) if
applicable, the original loan agreements; (x) the original lender's title
insurance policy (or marked commitments to insure); (xi) if applicable, the
original Lease Enhancement Policies and Residual Value Policies and (xii) with
respect to the Water Street Loan, the applicable participation documents. 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 CSFB Mortgage Loan Seller.
REPRESENTATIONS AND WARRANTIES; REPURCHASE
In the Pooling and Servicing Agreement, the Depositor will assign to the
Trustee for the benefit of the Certificateholders (i) the representations and
warranties made by the CSFB Mortgage Loan Seller to the Depositor in the
related Mortgage Loan Purchase Agreement and (ii) certain rights under a loan
purchase agreement between the Mortgage Loan Sellers assigned to the Depositor.
One or both of the Mortgage Loan Sellers (with respect to clauses (i), (ii),
(iii), (vi) and (x) below) and the CSFB Mortgage Loan Seller (with respect to
each other clause below) will represent and warrant, among other things, that
(subject to certain specified exceptions), 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;
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<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 CSFB 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 lender'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 CSFB 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 on the
fee or leasehold interest of the related borrower 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 CSFB
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,
S-145
<PAGE>
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; the premium for such policy was paid in full;
such policy was issued by a title insurance company licensed to issue
policies in the state in which the related Mortgaged Property is 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 CSFB
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 CSFB
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 CFSB
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 CFSB 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 CFSB 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 either 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 Mortgage Loan Seller, nor, to the CSFB Mortgage Loan
Seller's best knowledge, any Originator, committed any fraudulent acts
during the origination process of any Mortgage Loan it originated and to
the best of the CSFB 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;
S-146
<PAGE>
(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 lender under the Mortgage Loan and its 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 lender 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 CSFB 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
CSFB 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 was indicated
in any such report, funds sufficient to cure such findings have been
escrowed by the related borrower and held by the related mortgagee. To the
best of the CFSB 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 CSFB 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; and neither Mortgage Loan Seller has 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;
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<PAGE>
(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 CSFB 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;
(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 CSFB 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 CSFB 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 lender and that any such action without such consent is
not binding on the lender, 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 lender) 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 CFSB 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 lender 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 lender;
(H) A lender 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 lender 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 lender 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 lender;
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<PAGE>
(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 lender or a trustee appointed by it having the right
to hold and disburse such proceeds 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 lender as a result of any
casualty or partial condemnation, except to provide for an abatement of
the rent; and
(L) Provided that the lender 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 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 the related Mortgage Loan
Purchase Agreement;
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(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;
(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 CSFB 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 borrower, 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 the Depositor, each Credit Lease Loan fully
amortizes over its original term and there is no balloon payment of rent
due under any Credit Lease or a Residual Value Policy has been obtained;
(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;
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(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 condemnation, 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;
(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 and performance, not merely of collection;
(I) with respect to each Credit Lease for which the Tenant or
Guarantor is CVS Corporation, the Tenant shall take occupancy of the
premises demised under such Credit Lease as required in the related
Credit Lease, and the improvements which are required to be made under
such Credit Lease will be completed as required under the related Credit
Lease, subject to any applicable grace periods;
(J) to the CSFB Mortgage Loan 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 CSFB Mortgage Loan 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 CSFB Mortgage Loan 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 lender is entitled to notice of any event of default from the
Tenant under the Credit Leases;
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(N) each Tenant under a Credit Lease is required to make all rental
payments directly to the lender, its successors and assigns under the
related Credit Lease Loan;
(O) each Credit Lease Loan provides that the related Credit Lease
cannot be modified without the consent of the lender thereunder;
(P) each Credit Lease Loan has a DSCR equal to or greater than 1.00x;
and
(Q) each Credit Lease Loan that is a Balloon Loan will have an
outstanding principal balance equal to or less than 40% of the original
principal balance;
(xli) With respect to any Credit Lease Loan for which a Residual Value
Policy has been obtained:
(A) There is a Residual Value 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 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 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 Policy has been paid in full as of the
effective date of such policy;
(E) The Residual Value Policy cannot be terminated prior to the
termination date;
(F) The effective date for each related Credit Lease Loan on the
Residual Value 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 Mortgage Loan maturity or expiration of initial
lease term;
(I) The insured value shall always be greater than the amount R.V.I.
America Insurance Company will pay to the loss payee upon the
notification of a claim (i.e., 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 Policy cannot be amended at any time without
the consent of the lender;
(K) The Residual Value Policy will not contain borrower transfer
restriction; and
(L) The lease termination date does not occur prior to the policy
termination date or Mortgage Loan maturity date;
(xlii) To the knowledge of the CSFB 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;
(xliii) 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;
(xliv) 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;
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(xlv) All collateral for the Mortgage Loans is being transferred as part
of the Mortgage Loans;
(xlvi) Except in connection with Crossed Loans and Multi-Property Loans,
no Mortgage Loan requires the lender 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;
(xlvii) 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
lender (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;
(xlviii) 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;
(xlix) To the CSFB 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;
(l) 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;
(li) 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 Regulation (as defined herein) 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);
(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;
(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) 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
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misconduct or material misrepresentation by the related borrower and/or its
affiliates and 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
borrower thereunder shall be liable to the CSFB Mortgage Loan Seller for
any losses incurred by the CSFB 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;
and
(lv) If such Mortgage Loan is an 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 borrower 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 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.
If the CSFB 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 the CSFB Mortgage Loan Seller does not 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 the CSFB
Mortgage Loan Seller will be obligated 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, in general, accrued and unpaid interest on related Advances at
the Reimbursement Rate (as defined herein), and unpaid Servicing, Primary
Servicing and Special Servicing Fees (as defined herein) 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 or
warranties regarding the Mortgage Loans. The CSFB Mortgage Loan Seller will be
the sole warranting party in respect of the Mortgage Loans, and none of the
Depositor, the Servicer, the Special Servicer, the Trustee, the Underwriter or
any of their affiliates (other than the CSFB Mortgage Loan Seller) will be
obligated to repurchase any affected Mortgage Loan in connection with a Breach
if the CSFB Mortgage Loan Seller defaults on its obligation to do so and no
assurance can be given that the CSFB 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 a Mortgage Loan Seller regarding such Mortgage Loan will not be correct
in all material respects when made.
Any Defect or any Breach 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 CSFB Mortgage Loan Seller to purchase
the affected Mortgage Loan from the Trust Fund at the applicable Purchase Price
or in conformity with the related Mortgage Loan Purchase Agreement.
SERVICING OF THE MORTGAGE LOANS; COLLECTION OF PAYMENTS
The Servicer and the Special Servicer will service and administer the
Mortgage Loans (and, with respect to the Special Servicer, any REO Properties)
for which it is responsible on behalf of the Trust
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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, the
terms of the respective Mortgage Loans or Specially Serviced Mortgage Loans
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, in either case
exercising reasonable business judgment 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 Loans or Specially Serviced
Mortgage Loans, as applicable, 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 borrower 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; (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 or (E) the Servicer's or the Special Servicer's ownership,
servicing or management of any other mortgage loans or mortgaged properties
(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 Charge in connection with any delinquent Monthly
Payment or Balloon Payment with respect to any Mortgage Loan it is obligated to
service. 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, until the date on which principal and accrued
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interest (other than Excess Interest) has been paid in full. 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.
The improvements on certain Credit Lease Properties, representing the
security for 2.37% of the Mortgage Loans (based on Initial Pool Balance) (each,
a "New Store Loan"), have not yet been completed. CVS Corporation or an
affiliate thereof ("CVS") has agreed to lease each of such Credit Lease
Properties (each, a "New Store") pursuant to a Bond-Type Lease and will operate
such stores as full-service drug stores. The CSFB Mortgage Loan Seller
established a single construction loan servicing account for all of the New
Store Loans in connection with the origination thereof. The amount on deposit
in the construction loan servicing account relating to a New Store Loan is
generally equal to the sum of an amount for budgeted construction costs for the
related New Store, an amount for certain contingency costs and an amount
sufficient to pay interest on such New Store Loan for six months (the period
within which the tenant or the lease guarantor, CVS, has guaranteed completion
of such New Store). Pursuant to the terms of the Pooling and Servicing
Agreement, the Servicer will be obligated to: (i) administer draw requests from
the construction funding sub-account, (ii) obtain and review title insurance
policy date-down reports and forward copies of such reports to the Special
Servicer and CVS, (iii) compare the construction budget for the related New
Store to the prototype construction budget and the related appraised value and
(iv) prior to the final disbursement for the related New Store Loan, perform or
cause to be performed an inspection for the sole purpose of confirming that a
New Store has been built at the specified site. If the Servicer receives any
change order request that, as certified by CVS, when aggregated with all prior
change orders for such New Store Loan, would neither result in an aggregate
change of more than 10 percent in the construction budget nor result in the
prototype construction budget varying from the related appraisal by more than
10 percent, the Servicer will approve such change order. The Servicer may not
approve any other change orders except upon written instructions from the
Special Servicer. If the Servicer receives any draw request which would require
the advance of an amount greater than 110% of the funds available under a New
Store Loan after netting out required retainage and the construction period
interest reserve, the Servicer may not fund such draw request without receiving
written instructions from the Special Servicer. If the Servicer receives a
final draw request which would require the advance of an amount greater than
110% of the funds available in the related construction funding sub-account,
including any retainage amounts, the Servicer may not fund such final draw
request without receiving written instructions from the Special Servicer.
Pursuant to the terms of a sub-servicing agreement between the Servicer and a
sub-servicer (the "CVS Sub-Servicer") selected by the CSFB Mortgage Loan Seller
and CVS, the CVS Sub-Servicer will be delegated the responsibilities of the
Servicer with respect to the New Store Loans. After completion of a New Store,
the CVS Sub-Servicer will continue to administer and sub-service the related
New Store Loan. Both before and after the completion of a New Store, the fees
of the CVS Sub-Servicer will be separately paid by CVS and therefore no Primary
Servicing Fee is applicable with respect to such Mortgage Loans.
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 second following paragraph) the
aggregate of: (i) all Monthly Payments (in each case (x) net of any related
Servicing Fees and Primary Servicing Fees, (y) plus the amount, if any, by
which 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 the related sub-servicer) as of the
business day preceding such Servicer Remittance Date; (ii) in the case of each
Mortgage Loan delinquent in respect of its Balloon Payment as of the end of the
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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); and (iii) on the Servicer
Remittance Date in each month in which there is no Due Date for the United
Artists Loan, one-sixth of the interest portion of the Monthly Payment payable
with respect to such Mortgage Loan on the immediately succeeding Due Date
therefor. 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, other than a P&I Advance described
in clause (iii) of the preceding sentence, the Trustee is obligated to make
such required P&I Advance pursuant to the Pooling and Servicing Agreement. To
the extent the Servicer fails to make a P&I Advance described in such clause
(iii), such failure will constitute an Event of Default with respect to the
Servicer. If the successor Servicer does not agree to make a P&I Advance
described in such clause (iii), the Depositor will be obligated to make such
P&I Advance. No other party will be obligated to make such advance. Since
Monthly Payments on the United Artists Loan are due on January 1st and July 1st
of each year, while the Certificate distributions are made monthly, the
Available Distribution Amount for the Distribution Date in any other month will
not be sufficient to cover accrued interest on the Certificates even in the
absence of Mortgage Loan delinquencies if such P&I Advance is not made. Any
resulting interest shortfall will be allocated as described under "Description
of the Offered Certificates -- Subordination; Allocation of Collateral Support
Deficits and Certificate Deferred Interest. Any such shortfall will be carried
forward and will be covered on the Distribution Date immediately following a
Due Date for the United Artists Loan to the extent the required Monthly Payment
is received.
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 (as defined herein) 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
borrower 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 and to cover other similar costs and
expenses that are or may become a lien thereon. 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, as successor to the Servicer,
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 the CSFB Mortgage Loan Seller. 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
Statement to Certificateholders (as defined herein) 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" below.
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 (without regard to the application of any grace period) 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 for the
borrower of the related Mortgaged Property, (v) 60 days after a borrower
declares bankruptcy or becomes the subject of an undischarged and unstayed
decree or order for a bankruptcy proceeding and (vi) immediately after a
Mortgage Loan becomes an REO Loan; provided, however, that an Appraisal
Reduction Event shall not be deemed to occur at any time after 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
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 update of a prior 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 in respect of such Mortgage Loan and
interest thereon at the Reimbursement Rate and (C) all currently due and unpaid
real estate taxes and assessments, insurance policy 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
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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, and an internal valuation is not completed, by such date or if,
for any Mortgage Loan with a Stated Principal Balance of $2,000,000 or less,
the Special Servicer elects not to obtain an appraisal or perform an internal
valuation, 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 or the completion of such internal
valuation, the Special Servicer will be required to calculate and report to the
Servicer, and the Servicer will report to the Trustee, the Appraisal Reduction
taking into account such appraisal or internal valuation.
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" below.
With respect to each Specially Serviced Mortgage Loan as to which an
Appraisal Reduction Event has occurred (unless such Mortgage Loan has become a
Corrected Mortgage Loan (as defined herein) and has remained current for twelve
consecutive Monthly Payments (or, in the case of the United Artists Loan, two
consecutive Monthly Payments) and with respect to which no other Appraisal
Reduction Event has occurred and is continuing), the Special Servicer is
required, within 30 days of each anniversary of such Appraisal Reduction Event,
to order an appraisal (which may be an update of a prior appraisal) and, 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 Specially Serviced Mortgage Loan as to which an
Appraisal Reduction Event has occurred and that has become a Corrected Mortgage
Loan and has remained current for twelve consecutive Monthly Payments (or, in
the case of the United Artists Loan, two 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 (or such second Monthly Payment, as applicable), 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
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such appraisal or internal valuation, 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.
ACCOUNTS
Lockbox Accounts. With respect to 213 Mortgage Loans, which represent in
the aggregate 99.4% of the Initial Pool Balance, one or more accounts in the
name of the related borrower (which are the 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 lender 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 Date as
described herein and as provided in the Pooling and Servicing Agreement. See
"Description of the Offered Certificates -- Distributions."
Interest Reserve Account. The Servicer will establish on or before the
Closing Date and will maintain an Interest Reserve Account (the "Interest
Reserve Account") in the name of the Trustee for the benefit of the holders of
the Certificates. On the Servicer Remittance Date in each February and on the
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 at the related Mortgage Rate on the Stated Principal Balance of such
Mortgage Loan as of the Distribution Date occurring in the month preceding the
month in which such Servicer
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Remittance Date occurs, 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 (or, in the case of a leap year, in any 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.
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 federal or state chartered depository institution or trust
company the short term unsecured debt obligations or commercial paper of which
are rated at least "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 "AA-" by Fitch (if rated
by Fitch), 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 or trust company, 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, 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, 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 Servicer. Amounts on deposit in the Excess Interest
Distribution Account and 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 Account 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 (each as defined herein);
(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 in respect of
any Breach or Defect giving rise to a repurchase obligation of the CSFB
Mortgage Loan Seller, or the enforcement of such obligation, under the Mortgage
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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 borrower; 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 Special Servicer, the Depositor and their
respective directors, officers, employees and agents, any amounts payable
pursuant to 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 to the extent payable out of the Trust Fund and
(b) the cost of obtaining an REO Extension; (xii) to pay out of general
collections for any and all federal, state and local taxes imposed on any REMIC
or their assets or transactions together with incidental expenses; (xiii) to
reimburse the Servicer and the Special Servicer out of general collections for
expenses incurred by and reimbursable to each of them by the Trust Fund; (xiv)
to pay itself, the Special Servicer or the CSFB Mortgage Loan Seller, with
respect to each Mortgage Loan, if any, previously purchased pursuant to the
Pooling and Servicing Agreement, 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; (xvi) to clear
and terminate the Certificate Account at termination of the Pooling and
Servicing Agreement.
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, at
the lender's option, may) 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 lender
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 (i) not declaring
an event of default under the related Mortgage or (ii) 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 or the failure to grant such consent. If the Special Servicer determines
that (i) not declaring an event of default under the related Mortgage or (ii)
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 criteria or the Servicing
Standard 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
Mortgage Loans identified under the table entitled "Related Borrower Loans"
under "Risk Factors -- The Mortgage Loans" that, in each case, in the
aggregate, represents 5% or more of the aggregate outstanding principal balance
of all the Loans of Certificates at such time, the Special Servicer has
received written confirmation from each of the Rating Agencies that such
assumption 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"
below.
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, at the lender's option, may) become due and payable upon the
creation of any additional lien or other encumbrance on the related Mortgaged
Property or (b) require the consent of the related lender to the creation of
any such additional lien or other encumbrance on the related Mortgaged
Property. The Special Servicer will be required to enforce such
due-on-encumbrance clause 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
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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 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 December 1998 (or at such lesser frequency as each Rating
Agency shall have confirmed in writing to the Servicer will not result in a
downgrade, qualification or withdrawal of the then current ratings assigned to
any Class of Certificates); provided, however, that if the related Mortgage
Loan (i) has a DSCR of less than 1.0x and is a Specially Serviced Mortgage
Loan, (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 borrower to maintain, and if the borrower does not so maintain,
shall itself maintain to the extent available at commercially reasonable rates
(as determined by the Servicer or Special Servicer, as applicable, 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 but in any case, such amount so as to avoid the application of
any co-insurance clause. During all such times as the Mortgaged Property is
located in an area identified as a federally designated special flood hazard
area (if such flood insurance has been made available), the Servicer or the
Special Servicer, as applicable, will use its reasonable best efforts to cause
each borrower to maintain (to the extent required by the related Mortgage
Loan), and if the borrower 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), flood insurance policy in an amount equal to at least the
lesser of (i) the outstanding principal balance of the related Mortgage Loan,
(ii) the maximum amount of insurance which is available under the Flood
Disaster Protection Act of 1973, as amended and (iii) any amount required by
the related Mortgage Loan. 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
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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 Certified Public
Accountants, to furnish to the Trustee, the Depositor and the Rating Agencies
on or before April 30 of each year, beginning April 30, 1999, a statement to
the effect that such firm has examined the servicing operations of the
reporting person (or a portion thereof) 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 and Special
Servicer to deliver to the Trustee, the Depositor and the Rating Agencies on or
before April 30 of each year, beginning April 30, 1999, an officer's
certificate of the Servicer stating that, among other things, 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 such shorter period) or, if there has been a material
default, specifying each material default known to such officer, the nature and
status of such default 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 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
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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 or administrative 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, proceeding, hearing or examination as
it may deem necessary or desirable with respect to the enforcement and/or
protection of the rights and duties of the parties to the Pooling 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
amounts attributable to the Mortgage Loans on deposit in the Certificate
Account.
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 with or 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 4:00 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
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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 after the date on which
notice of such breach shall have been given; (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 such decree
or order shall have remained in force for 60 days; (vi) the Trustee shall have
received and forwarded to the Servicer or Special Servicer, as applicable,
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 and of
itself, 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, and the Trustee shall not have received subsequent
notice from the related Rating Agency (within 30 days) indicating that no such
downgrade, qualification or withdrawal will result (or that, if it has
resulted, it will be rescinded) and (vii) any failure by the Servicer or the
Special Servicer to satisfy its covenant in the Pooling and Servicing Agreement
with respect to "Year 2000" compliance.
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 written 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 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
downgrade, 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 suit, action or 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 to (i) cure any
ambiguity, (ii) 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) 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
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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) 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 a Lower-Tier REMIC or the Upper-Tier REMIC
(each as defined herein)) 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) make any other provisions with respect to
matters or questions arising under the Pooling and Servicing Agreement,
provided that such action will not, as evidenced by an opinion of counsel,
adversely affect in any material respect the interests of any Certificateholder
or (vi) 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% 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 or (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 entitled 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 a
Lower-Tier REMIC or the 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 ClassV 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 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
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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:
(a) such report indicates that (a) the Mortgaged Property is in
compliance with applicable environmental laws and regulations and (b) there
are no circumstances or conditions present at the Mortgaged Property for
which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any applicable environmental laws and
regulations; or
(b) 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 REO 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 three 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 three 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 a Lower-Tier REMIC or the Upper-Tier REMIC) to fail to qualify as a
REMIC for federal or applicable state tax purposes 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.
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Generally, neither 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."
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 policies or flood insurance 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 or more 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
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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 (or,
in the case of the United Artists Loan, through the Due Date following the date
on which it became current) (provided, in each case, that no additional event
of default is foreseeable in the reasonable judgment of the Special Servicer),
the Special Servicer will return the full 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 Certificateholders. 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 the 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.
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The "Directing Certificateholder" is the Controlling Class
Certificateholder selected by the Holders of more than 50% of the Percentage
Interests in the Controlling Class, by Certificate Balance, as certified by the
Certificate Registrar from time to time; provided, however, that until a
Directing Certificateholder is so selected or after receipt of a notice from
the Holders of more than 50% of the Percentage Interests in the Controlling
Class that a Directing Certificateholder is no longer designated, the
Controlling Class Certificateholder that beneficially owns the largest
aggregate Certificate Balance of the Controlling Class will be the Directing
Certificateholder.
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 (and,
in certain circumstances, the Servicer) to modify, waive or amend any term of a
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;
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) 7.212% 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 5% 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, among other things, 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.
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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 Distribution 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 (with a copy to the Servicer) 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 (and in any event within 10 Business Days). 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 prior request, at the offices of the Special Servicer.
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 CSFB
Mortgage Loan Seller, the Special Servicer, 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, the CSFB Mortgage Loan Seller will have the option to purchase all
of the assets of the Trust Fund. If the CSFB Mortgage Loan Seller does not
exercise such option within 60 days after it becomes exercisable by the CSFB
Mortgage Loan Seller, the Special Servicer may notify the CSFB Mortgage Loan
Seller and the Trustee of its intention to exercise such option, and if the
CSFB Mortgage Loan Seller does not exercise such option within ten Business
Days thereafter, the Special Servicer will be entitled to exercise such option.
If the Special Servicer does not exercise its option to purchase all of the
assets of the Trust Fund within 60 days after such option becomes exercisable,
the holder of a majority of the Percentage Interests in the Controlling Class
may notify the CSFB Mortgage Loan Seller, the Special Servicer and the Trustee
of its intention to exercise such option, and if neither the CSFB Mortgage Loan
Seller nor the Special Servicer exercises such option within ten Business Days,
the holder of a majority of the Percentage Interests in the Controlling Class
will be entitled to exercise such option. If the holder of 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 CSFB Mortgage Loan Seller, the holder of the Controlling Class, the
Special Servicer and the Trustee of its intention to exercise such option, and
if neither the CSFB Mortgage Loan Seller, the holders of the Controlling Class
nor the Special Servicer exercises 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) included in the Trust Fund and (ii)
the aggregate fair market value of all REO Properties, if any, 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 the CSFB Mortgage Loan Seller, the Special
Servicer, the holder 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
2% of the Initial Pool Balance.
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On the final Distribution Date, the aggregate amount paid by the CSFB
Mortgage Loan Seller, the Special Servicer, the holder 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 Certificates --
Accounts" in the Prospectus), will be applied generally as described above
under "Description of the Offered Certificates -- Distributions -- Priority of
Distributions."
THE TRUSTEE
The Chase Manhattan Bank will serve as Trustee under the Pooling and
Servicing Agreement pursuant to which the Certificates are being issued (in
such capacity, the "Trustee"). The Chase Manhattan Bank is a subsidiary of The
Chase Manhattan Corporation. The corporate trust office of the Trustee
responsible for administration of the Trust is located at 450 West 33rd Street,
New York, New York 10001, Attention: Structured Finance Services. As of
December 31, 1997, The Chase Manhattan Corporation had assets of approximately
$365 billion. 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 0.002% 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.
The information concerning the Trustee set forth herein has been provided
by the Trustee, and none of the Mortgage Loan Sellers, the Servicer, the
Special Servicer, the Depositor or the Underwriter makes any representation or
warranty as to the accuracy hereof.
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").
DUTIES OF THE TRUSTEE
If the Servicer fails to make a required Advance, the Trustee, as
successor to the Servicer, 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
First Union National Bank, in its capacity as servicer under the Pooling
and Servicing Agreement (in such capacity, the "Servicer"), will be responsible
for servicing the Mortgage Loans (other than Specially Serviced Mortgage Loans
and REO Properties). Although the Servicer is authorized to employ agents,
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including sub-servicers, to directly service the Mortgage Loans for which it is
responsible, the Servicer will remain liable for its servicing obligations
under the Pooling and Servicing Agreement. The Servicer is a wholly owned
subsidiary of First Union Corporation. The Servicer's principal servicing
offices are located at Charlotte Plaza, 23rd Floor, 201 South College Street,
Charlotte, North Carolina 28288-1075.
As of September 30, 1998, the Servicer and its affiliates were responsible
for servicing approximately 3,522 commercial and multifamily loans, totaling
approximately $16.6 billion in aggregate outstanding principal amounts,
including loans securitized in mortgage-backed securitization transactions.
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 Underwriter makes any representation or
warranty as to the accuracy thereof.
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 borrowers on Mortgage Loans that are not Specially Serviced
Mortgage Loans (but only to the extent of amounts then-due and payable) 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 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 and the Escrow Accounts
and to retain any interest to the extent such interest is not required to be
paid to the related borrowers. Additionally, the Servicer is entitled to all
fees received on or with respect to Mortgage Loan modifications for which the
Servicer is responsible, but only to the extent actually collected from the
related borrower and subject to certain other limitations. 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 CSFB 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.
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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 or by resignation),
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 (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 borrower and, except as otherwise
described below, with respect to any Specially Serviced Mortgage Loan or REO
Property as to which the Special Servicer receives any 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 CSFB 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, the purchase by the holders of
the Class V Certificates of any ARD Loan 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 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 to the extent already collected. 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.
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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 for any Mortgage Loan in excess of the
sum of (i) the Servicing Fee attributable to such 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 (in
such capacity, the "Special Servicer"). 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, Oregon and California. As of September 1, 1998, the Special Servicer
and its affiliates were managing a portfolio with an original asset count of
over 8,900 assets in most states with an original face value of over $30
billion, most of which are commercial real estate assets. Included in this
managed portfolio are $23.6 billion of commercial real estate assets
representing 44 securitization transactions, for which the Special Servicer is
the master 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 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 neither Mortgage Loan Seller, the
Trustee, the Depositor, the Servicer nor the Underwriter makes 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
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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
Underwriter, 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 Statements to Certificateholders only,
its fax service:
(a) A statement (a "Statement to Certificateholders") 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 and the aggregate unpaid principal balance of
the Mortgage Loans at the close of business on the related Distribution
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 an 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 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
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 and for which a final recovery determination
has been made, (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 Balance of each Class of Regular Certificates before
and after giving effect to the distributions made on such Distribution
Date, separately identifying any reduction in the aggregate Certificate
Balance or Notional Balance, as applicable, 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
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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 Servicing Fee, Primary Servicing Fee, Special Servicing Fee
and any other servicing compensation retained by 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 amount of
Servicing Advances and P&I Advances (net of reimbursed advances)
outstanding which have been made by the Servicer and the Special Servicer
during the related Due Period; 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) 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 "Certain
Characteristics 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 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 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 Underwriter, 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).
(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
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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, a description of (i) any Mortgage Loan that, as
of the Determination Date immediately preceding the preparation thereof, is
in jeopardy of becoming a Specially Serviced Mortgage Loan based on certain
objective criteria set forth in the Pooling and Servicing Agreement and
(ii) any New Store Loan as provided for in the Pooling and Servicing
Agreement.
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 the fourth business day 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 May
31 of each year, commencing with May 31, 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 delivers 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 on its website.
The Trustee is to deliver a copy of each Operating Statement Analysis
report that it receives from the Servicer and the Special Servicer to the
Depositor, the Underwriter 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 at the expense of the
requesting party.
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 Statement to Certificateholders and such
other information as may be required to enable 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 Certificates held by persons other than
holders exempted from the reporting requirements and information regarding the
expenses of the Trust Fund.
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Other Information. The Pooling and Servicing Agreement requires that the
Trustee make available at its offices, during normal business hours, upon
reasonable 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 Statements to Certificateholders 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 delivered to the
Trustee, (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 delivered to the Trustee, (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 delivered to the Trustee, 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 each month, to any interested party, the
Statement to Certificateholders and the Servicer Reports via the Trustee's
unrestricted electronic bulletin board at 800-204-2737. In addition, the
Trustee will also make Mortgage Loan information as presented in the CSSA100
format available each month to any Certificateholder, any Certificate Owner,
the Rating Agencies, the parties hereto or any other parties approved by the
Depositor via the Trustee's restricted electronic bulletin board at
713-216-2933.
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 (or the
beneficial interest therein).
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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 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 or more separate REMICs (the
"Upper-Tier REMIC" and the "Lower-Tier REMICs", 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. A 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"), (ii) the Class LR Certificates,
which will represent the sole class of residual interests in the Lower-Tier
REMICs. The Upper-Tier REMIC will hold Regular Interests of a Lower-Tier REMIC
and the Upper-Tier Distribution Account in which distributions thereon will be
deposited, and will issue the Class A-1, Class A-2, 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 Brown & Wood 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 REMICs. The Class V Certificates will
represent pro rata undivided beneficial interests in the portion of the Trust
Fund consisting of Excess Interest with respect to the Mortgage Loans, and each
such portion will be treated as a grantor trust for federal income tax
purposes.
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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 in their entirety if they have any potential entitlement
to Yield Protection Payments and may not be appropriate investments for other
REMICs. In addition, the Offered Certificates are not qualifying assets under
Section 7701(a)(19)(c) of the Code to any material extent.
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 Certificates will be issued with original issue discount and
the Class A-1, Class A-2, Class B, Class C, Class D and Class E Certificates
will be issued at a premium. Yield Maintenance Charges and Prepayment Premiums
received by Certificateholders generally will be treated as additional ordinary
income in respect of their corresponding class of REMIC regular interests.
Nevertheless, authority exists for treating such payments as received in
respect of a sale or exchange and subject to capital gain treatment.
Prospective Certificateholders should consult their tax advisors with respect
to the treatment of Yield Maintenance Charges and Prepayment Premiums for
federal income tax purposes. 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."
No representation is made as to the rate, if any, at which the Mortgage Loans
will prepay.
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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.
TAX ASPECTS OF YIELD PROTECTION PAYMENTS
General. Although unclear, for federal income tax purposes, the Trustee
intends to treat a Certificateholder's right to receive Yield Protection
Payments as a notional principal contract 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
their right to receive Yield Protection Payments 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 a relatively
nominal portion of the purchase price for the Offered Certificates will be
wholly allocable to such Certificates' right to receive Yield Protection
Payments. However, this allocation will not be binding on the IRS, which may
choose to allocate a larger amount of the purchase price to the right to
receive Yield Protection Payments. A portion of the purchase price in respect
of the Offered Certificates will be allocable to the rights of each Class of
Certificates to receive Yield Protection Payments, and such portion will be
treated as a floor premium (the "Floor Premium"). 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 right to receive Yield Protection Payments (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. Yield Protection 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 to
receive Yield Protection Payments 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 would require that a Certificateholder recognize
gain or loss from termination of the right to receive Yield Protection Payments
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, that is subject to Title I of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or to 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 subject
to the requirements imposed by ERISA, Section 4975 of the Code or any Similar
Law, as described in the Prospectus under "ERISA Considerations." 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 the Underwriter an individual
prohibited transaction exemption, Prohibited Transaction Exemption ("PTE")
89-90, 54 Fed. Reg. 42597 (Oct. 17, 1989) 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
Underwriter. 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 Underwriter, 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 ("S&P"), 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 Underwriter 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.
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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 any 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 Underwriter, 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 Underwriter believes 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
Underwriter 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 Underwriter 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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<PAGE>
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 in which 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 under Sections I and III of PTE 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 ERISA, Section 4975 of
the Code or any Similar Law and will not subject the Depositor, the Trustee,
the Servicer, the Special Servicer, the Underwriter 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 Underwriter 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: (i) the source
of funds used to purchase such Certificate is an "insurance company general
account" (as such term is defined in PTE 95-60) and (ii) the conditions set
forth in Sections I and III of PTE 95-60 have been satisfied as of 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
Under the terms and conditions set forth in the underwriting agreement
dated November 20, 1998 between the Depositor and Credit Suisse First Boston
Corporation (the "Underwriter"), all of the Offered Certificates will be
purchased upon issuance from the Depositor by the Underwriter. The Underwriting
Agreement provides that the obligations of the Underwriter are subject to
certain conditions precedent and that the Underwriter will be obligated to
purchase all the Offered Certificates offered hereby if any are purchased.
The Underwriter is an affiliate of the Depositor. Proceeds to the
Depositor from the sale of the Offered Certificates will be approximately
108.13% 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.
The Underwriter has advised the Depositor that it proposes to offer the
Offered Certificates for sale from time to time in one or more transactions
(which may include block transactions), in negotiated
S-186
<PAGE>
transactions or otherwise, or a combination of such methods of sale, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. The Underwriter 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 Underwriter and/or the purchasers of the
Offered Certificates for whom they may act as agents. In connection with the
sale of the Offered Certificates, the Underwriter may be deemed to have
received compensation from the Depositor in the form of underwriting discounts,
and the Underwriter may also receive commissions from the purchasers of the
Offered Certificates for whom it may act as agent. The Underwriter and any
dealers that participate with the Underwriter in the distribution of the
Offered Certificates may be deemed to be underwriters, and any discounts or
commissions received by them and any profit on the resale of the Offered
Certificates by them may be deemed to be underwriting discounts or commissions.
The Offered Certificates are a new issue of securities with no established
trading market. The Depositor also has been advised by the Underwriter that the
Underwriter currently intends to make a market in the Offered Certificates;
however, the Underwriter does 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 -- Lack of Secondary Market for the
Certificates May Adversely Affect their Market Value."
The Depositor has agreed to indemnify the Underwriter against certain
liabilities, including civil liabilities under the Securities Act, or
contribute to payments which the Underwriter may be required to make in respect
thereof. The CSFB 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
Underwriter by Brown & Wood LLP, New York, New York. Certain legal matters will
be passed upon for the Depositor by Cadwalader, Wickersham & Taft, New York,
New York.
RATING
It is a condition to the issuance of the Offered Certificates that they
receive the following credit ratings from one or both, as applicable, of Fitch
IBCA, Inc. ("Fitch") and Moody's Investors Service, Inc. ("Moody's" and,
together with Fitch, the "Rating Agencies"):
<TABLE>
<CAPTION>
FITCH MOODY'S
------- --------
<S> <C> <C>
Class A-1 AAA Aaa
Class A-2 AAA Aaa
Class A-X AAA Aaa
Class B AA Aa2
Class C A A2
Class D BBB Baa2
Class E BBB-- Baa3
</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
borrowers, 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
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<PAGE>
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-188
<PAGE>
INDEX OF SIGNIFICANT DEFINITIONS
<TABLE>
<CAPTION>
<S> <C>
% of Total Square Feet .............. S-101
0% CPR .............................. S-134
5% CPR .............................. S-134
10% CPR ............................. S-134
15% CPR ............................. S-134
25% CPR ............................. S-134
1996 NOI ............................ S-99
1997 NOI ............................ S-99
1998 NOI ............................ S-99
260/261 Madison Avenue Borrower S-74
260/261 Madison Avenue Loan ......... S-74
260/261 Madison Avenue
Management Agreement ............. S-75
260/261 Madison Avenue Manager ...... S-75
260/261 Madison Avenue
Mezzanine Borrower ............... S-76
260/261 Madison Avenue
Mezzanine Lender ................. S-76
260/261 Madison Avenue
Mezzanine Loan ................... S-76
260/261 Madison Avenue Property ..... S-74
30/360 .............................. S-87, S-99
A
A-2 Principal Distribution Amount S-123
Accor ............................... S-61
Act/360 ............................. S-99
Actual Ongoing Capital Item
Deposits ......................... S-98
Actual/360 .......................... S-87
Additional Collateral Loans ......... S-97
Additional Rights ................... S-60
Advances ............................ S-157
AIG ................................. S-86
Allocated Loan Amount ............... S-98
Anchor Tenant ....................... S-98
Annual Debt Service ................. S-98
Anticipated Remaining Term .......... S-98
Anticipated Repayment Date .......... S-87, S-98
Appraisal Reduction ................. S-158
Appraisal Reduction Amount .......... S-159
Appraisal Reduction Event ........... S-158
ARD Loans ........................... S-87
Asset Status Report ................. S-170
Assumed Final Distribution Date ..... S-129
Assumed Maturity Date ............... S-129
Assumed Scheduled Payment ........... S-157
Audit Program ....................... S-164
Authenticating Agent ................ S-173
Available Distribution Amount ....... S-120
B
Balloon Loans ....................... S-88
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Balloon Payment ..................... S-88
Balloon Payment Credit Lease
Loans ............................ S-61
Base Interest Fraction .............. S-128
Bondable Leases ..................... S-60
Bond-Type Leases .................... S-60
Book-Entry Certificates ............. S-117
Breach .............................. S-154
BTEX ................................ S-86
Business Day ........................ S-119
Butera Interest Rate ................ S-67
Butera Portfolio Borrower ........... S-67
Butera Portfolio Loan ............... S-65
Butera Portfolio Mezzanine
Borrower ......................... S-67
Butera Portfolio Mezzanine Lender S-67
Butera Portfolio Mezzanine Loan ..... S-67
Butera Portfolio Preferred Equity
Interest ......................... S-67
Butera Portfolio Preferred Equity
Issuers .......................... S-67
Butera Portfolio Property ........... S-65
Butera Portfolio Special Member ..... S-67
C
Capital Items ....................... S-58
Cash Collateral Accounts ............ S-160
Casualty or Condemnation Rights ..... S-60
Cede ................................ S-116
CEDEL ............................... S-116
CEDEL Participants .................. S-117
Certificate Account ................. S-119, S-160
Certificate Balance ................. S-115
Certificate Deferred Interest ....... S-131
Certificate Owner ................... S-117
Certificate Registrar ............... S-173
Certificateholder ................... S-118
Certificates ........................ S-115
Chicago Borrower .................... S-68
Chicago License Agreement ........... S-69
Chicago Manager ..................... S-69
Chicago Property .................... S-68
Class ............................... S-115
Class A-1 Pass-Through Rate ......... S-123
Class A-2 Pass-Through Rate ......... S-123
Class A-X Pass-Through Rate ......... S-123
Class B Pass-Through Rate ........... S-123
Class C Pass-Through Rate ........... S-123
Class D Pass-Through Rate ........... S-123
Class E Pass-Through Rate ........... S-123
Class F Pass-Through Rate ........... S-123
Class G Pass-Through Rate ........... S-123
</TABLE>
S-189
<PAGE>
<TABLE>
<S> <C>
Class H Pass-Through Rate ............... S-123
Class I Pass-Through Rate ............... S-123
Class J Pass-Through Rate ............... S-124
Clearance Cooperative ................... S-117
Closing Date ............................ S-54
CMBS .................................... S-176
Code .................................... S-181
Collateral Substitution Deposit ......... S-93
Collateral Support Deficit .............. S-130
Commission .............................. S-114
Component ............................... S-124
Component Rate .......................... S-124
Constant Prepayment Rate ................ S-134
Controlling Class ....................... S-170
Controlling Class Certificateholder ..... S-170
Cooperative Property .................... S-100
Corrected Mortgage Loan ................. S-170
CPR ..................................... S-134
Credit Lease ............................ S-60, S-101
Credit Lease Loans ...................... S-60
Credit Lease Properties ................. S-60
Crossed Loans ........................... S-96
CSFB Mortgage Loan Seller ............... S-54
Cut-off Date ............................ S-53
Cut-off Date Principal Balance .......... S-102
Cut-off Date Principal Balance/Unit S-98
Cut-off Date Principal Loan
Balance .............................. S-98
CVS ..................................... S-156
CVS Sub-Servicer ........................ S-156
D
Dark Value .............................. S-59
DCR ..................................... S-184
Debt Service Coverage Ratio ............. S-98
Defeasance Lockout Period ............... S-93
Defeasance Option ....................... S-93
Defect .................................. S-144
Definitive Certificates ................. S-119
Department .............................. S-184
Deposit ................................. S-78
Depositor ............................... S-54
Depositories ............................ S-116
Direct Participants ..................... S-116
Directing Certificateholder ............. S-171
Distribution Account .................... S-120, S-160
Donatelli Action ........................ S-85
Donatelli Loan .......................... S-85
Double Net Leases ....................... S-60
DSCR .................................... S-98
DTC ..................................... S-116
DTC Participants ........................ S-116
Due Date ................................ S-87
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Due Period .............................. S-120
E
Eligible Bank ........................... S-161
ERISA ................................... S-184
Escrow Account .......................... S-58
Euroclear ............................... S-116
Euroclear Operator ...................... S-117
Euroclear Participants .................. S-117
Events of Default ....................... S-165
Excess Cash Flow ........................ S-88
Excess Deposits ......................... S-71
Excess Interest ......................... S-87
Excess Interest Distribution
Account .............................. S-161
Excess Rate ............................. S-124
Exemption ............................... S-184
F
FDEP .................................... S-86
Final Recovery Determination ............ S-177
First P&I Date .......................... S-99
Fitch ................................... S-187
Floor Premium ........................... S-183
Form 8-K ................................ S-114
Fully Amortizing Credit Lease
Loans ................................ S-61
Fully Amortizing Loans .................. S-88
G
Greenspoint Borrower .................... S-68
Greenspoint Manager ..................... S-69
Greenspoint Property .................... S-68
Guaranteed Payments ..................... S-84
Guarantor ............................... S-60
H
Hard Lockbox ............................ S-94
Hospitality Loan ........................ S-53
Hospitality Property .................... S-53
Hotel Management Agreement .............. S-71
Hotel Manager ........................... S-71
I
Indemnitors ............................. S-78
Indirect Participants ................... S-116
Industrial Loan ......................... S-54
Industrial Property ..................... S-53
Initial Pool Balance .................... S-53
Intell-Reichmann Portfolio
Borrower ............................. S-62
Intell-Reichmann Portfolio Loan ......... S-61
Intell-Reichmann Portfolio
Management Agreement ................. S-64
Intell-Reichmann Portfolio
Manager .............................. S-64
Intell-Reichmann Portfolio
Mezzanine Borrower ................... S-64
</TABLE>
S-190
<PAGE>
<TABLE>
<S> <C>
Intell-Reichmann Portfolio
Mezzanine Lender .................... S-64
Intell-Reichmann Portfolio
Mezzanine Loan ...................... S-64
Intell-Reichmann Portfolio
Property ............................ S-62
Intell-Reichmann Preferred Equity
Interest ............................ S-64
Intell-Reichmann Special Limited
Partner ............................. S-64
Interest Accrual Period ................ S-124
Interest Calc. ......................... S-99
Interest Reserve Account ............... S-160
Interest Shortfall Amount .............. S-124
IRS .................................... S-168
K
Koll Borrower .......................... S-81
Koll Loan .............................. S-81
Koll Manager ........................... S-82
Koll Mortgage .......................... S-81
Koll Preferred Equity Interest ......... S-82
Koll Property .......................... S-81
Koll Special Member .................... S-82
L
Lease Enhancement Insurer .............. S-60
Lease Enhancement Policies ............. S-60
Lease Expiration Date .................. S-99
Leased LTV ............................. S-99
Leased Value ........................... S-59, S-99
L'Enfant Borrower ...................... S-70
L'Enfant Loan .......................... S-70
L'Enfant Manager ....................... S-71
L'Enfant Mezzanine Borrower ............ S-71
L'Enfant Mezzanine Lender .............. S-71
L'Enfant Mezzanine Loan ................ S-71
L'Enfant Preferred Equity Interest ..... S-72
L'Enfant Property ...................... S-70
L'Enfant Special Limited Partner ....... S-72
LIBOR .................................. S-84
Liquidation Fee ........................ S-175
Liquidation Fee Rate ................... S-175
Liquidation Proceeds ................... S-175
Litigation Escrow ...................... S-78
LNR .................................... S-176
Loan Group ............................. S-54
Loan to Value Ratio .................... S-99
Lockbox Account ........................ S-94
Lockout Period ......................... S-88
Lodging Loan ........................... S-53
Lodging Property ....................... S-53
Lower-Tier Regular Interests ........... S-181
Lower-Tier REMICs ...................... S-181
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
LTV .................................... S-99
M
Maintenance Rights ..................... S-60
Maturity Date/ARD LTV .................. S-99
Mezzanine Certificates ................. S-115
Modified Lockbox ....................... S-94
Monthly Interest Distribution
Amount .............................. S-124
Monthly Payment ........................ S-87, S-99
Monthly Rental Payments ................ S-61
Moody's ................................ S-187
Mortgage ............................... S-53
Mortgage Deferred Interest ............. S-131
Mortgage File .......................... S-144
Mortgage Interest Accrual Period ....... S-125
Mortgage Loan Assumptions .............. S-134
Mortgage Loan Purchase
Agreement ........................... S-54
Mortgage Loan Sellers .................. S-54
Mortgage Loans ......................... S-53
Mortgage Note .......................... S-53
Mortgage Pass-Through Rate ............. S-125
Mortgage Pool .......................... S-54
Mortgage Rate .......................... S-87
Mortgaged Properties ................... S-53
Multifamily Loan ....................... S-53
Multifamily Property ................... S-53
Multi-Property Loans ................... S-96
N
NAP .................................... S-100
Net Cash Flow .......................... S-100
Net Lease .............................. S-101
Net Mortgage Pass-Through Rate ......... S-125
Net Mortgage Rate ...................... S-125
New Store .............................. S-156
New Store Loan ......................... S-156
Nonrecoverable Advance ................. S-158
Notional Balance ....................... S-115
O
Occupancy .............................. S-101
Occupancy Period ....................... S-101
Offered Certificates ................... S-115
Office Loan ............................ S-53
Office Property ........................ S-53
OID Regulations ........................ S-181
Olympia & York ......................... S-63
Open ................................... S-89
Operating Lease ........................ S-69
Operating Lessee ....................... S-69
Operating Statement Analysis ........... S-179
Optimal Interest Distribution
Amount .............................. S-125
</TABLE>
S-191
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Original Amortization Term .............. S-101
Original Principal Loan Balance ......... S-101
Other Loan .............................. S-54
Other Property .......................... S-54
Outside Completion Date ................. S-85
P
Participants ............................ S-116
Pass-Through Rate ....................... S-126
Patriot American Loan ................... S-68
Patriot American Manager ................ S-69
Patriot American Property ............... S-68
Penalty Charges ......................... S-174
Percentage Interest ..................... S-115
Permitted Investments ................... S-161
P&I Advance ............................. S-156
Pinstripe Managing LLC .................. S-83
Pinstripe Portfolio Borrowers ........... S-83
Pinstripe Portfolio Loan ................ S-82
Pinstripe Portfolio Manager ............. S-84
Pinstripe Portfolio Mezzanine
Borrower ............................. S-84
Pinstripe Portfolio Mezzanine
Lender ............................... S-84
Pinstripe Portfolio Mezzanine Loan S-84
Pinstripe Portfolio Properties .......... S-83
Pinstripe Portfolio Special Member S-84
Pinstripe Preferred Equity Interest ..... S-84
Plan .................................... S-184
Plaza 500 Property ...................... S-85
Pooling and Servicing Agreement ......... S-144
Preferred Interest Holder ............... S-94
Premium ................................. S-89
Prepayment Interest Excess .............. S-126
Prepayment Interest Shortfall ........... S-126
Prepayment Premium Period ............... S-89
Prepayment Premiums ..................... S-89
Primary Servicing Fee ................... S-174
Primary Servicing Fee Rate .............. S-174
Primary Term ............................ S-60
Prime Rate .............................. S-158
Principal Distribution Amount ........... S-126
Private Certificates .................... S-115
Property Release Amount ................. S-101
PTE ..................................... S-184
Purchase Price .......................... S-154
R
Rated Final Distribution Date ........... S-129
Rating Agencies ......................... S-187
Record Date ............................. S-119
Reduction Rate .......................... S-159
Regular Certificates .................... S-115, S-181
Reimbursement Rate ...................... S-158
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Related Proceeds ........................ S-158
Release Date ............................ S-93
Remaining Amortization Term ............. S-101
Remaining Lockout ....................... S-101
Remaining Lockout and YM ................ S-101
Remaining Principal Distribution
Amount ............................... S-126
REMIC ................................... S-181
REMIC Regulations ....................... S-181
REO Loan ................................ S-127
REO Property ............................ S-115, S-170
Required Prepayment ..................... S-97
Residual Certificates ................... S-115
Residual Value Policy ................... S-61
Restricted Group ........................ S-185
Retail Loan ............................. S-53
Retail Property ......................... S-53
Rev ..................................... S-99
Revised Rate ............................ S-87
Ross Manager ............................ S-67
Rules ................................... S-117
S
Sales Contract .......................... S-78
Seasoning ............................... S-101
Securities Act .......................... S-115
Seller-Servicer ......................... S-155
Seller-Servicer Agreement ............... S-155
Senior Certificates ..................... S-115
Servicer ................................ S-173
Servicer Remittance Date ................ S-156
Servicing Advances ...................... S-157
Servicing Fee ........................... S-174
Servicing Fee Rate ...................... S-174
Servicing Standard ...................... S-155
Similar Law ............................. S-184
single-purpose entity ................... S-150
S&P ..................................... S-184
Special Servicer ........................ S-176
Special Servicing Fee ................... S-175
Special Servicing Fee Rate .............. S-175
Springing Lockbox ....................... S-94
Stated Maturity Date .................... S-101
Stated Principal Balance ................ S-127
Statements to Certificateholders ........ S-177
Subordinate Certificates ................ S-115
Swap Regulations ........................ S-183
T
Tenant .................................. S-60, S-101
Tenant 1 ................................ S-101
Tenant 2 ................................ S-101
Tenant 3 ................................ S-101
Terms and Conditions .................... S-117
</TABLE>
S-192
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Thurman Managing LLC ................. S-79
Thurman Portfolio Borrowers .......... S-78
Thurman Portfolio Loan ............... S-78
Thurman Portfolio Manager ............ S-80
Thurman Portfolio Mezzanine
Lender ............................ S-80
Thurman Portfolio Mezzanine Loan S-80
Thurman Portfolio Properties ......... S-78
Thurman Portfolio Special Member S-80
Thurman Preferred Equity Interest S-80
TPH .................................. S-86
Treasury Regulations ................. S-181
Trident Borrower ..................... S-76
Trident Loan ......................... S-76
Trident Property ..................... S-76
Triple Net Leases .................... S-60
TRNCC ................................ S-86
Trust Fund ........................... S-115
Trust Mortgage Loan Seller ........... S-54
Trust REMICs ......................... S-181
Trustee .............................. S-173
Trustee Fee .......................... S-173
Trustee Fee Rate ..................... S-173
U
Uncovered Prepayment Interest
Shortfall ......................... S-176
Uncovered Prepayment Interest
Shortfall Amount .................. S-126
Underwriter .......................... S-186
Underwritten NOI ..................... S-101
Unit of Measure ...................... S-101
United Artists Loan .................. S-157
Units ................................ S-101
Unpaid Interest Shortfall Amount ..... S-126
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Unscheduled Payments of Principal S-126
Upper-Tier REMIC ..................... S-181
USAP ................................. S-164
U/W NOI .............................. S-101
U/W Occupancy ........................ S-102
U/W Rev .............................. S-99
V
Value ................................ S-102
VOCs ................................. S-86
Voting Rights ........................ S-167
W
Water Street Borrower ................ S-73
Water Street Loan .................... S-72
Water Street Manager ................. S-73
Water Street Mortgage ................ S-72
Water Street Participation ........... S-53
Water Street Property ................ S-72
Water Street Tenant .................. S-73
Weighted Average DSCR ................ S-102
Weighted Average LTV ................. S-102
Weighted Average Net Mortgage
Rate .............................. S-127
Withheld Amounts ..................... S-161
Workout Fee .......................... S-175
Workout Fee Rate ..................... S-175
Y
Year Built/Renovated ................. S-102
Yield Maintenance Charge ............. S-89
Yield Maintenance Period ............. S-88
Yield Protection Payments ............ S-97
Yield Rate ........................... S-89
YM ................................... S-89
</TABLE>
S-193
<PAGE>
Annex A
Loan Characteristics
<TABLE>
<CAPTION>
LOAN CONTROL CSFB LOAN
# # CONTROL # GROUP PROPERTY NAME ADDRESS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 001 005 2 Intell/Reichmann Portfolio Summary Various Addresses
1 001A 005H 2 Edgewater Plaza One Edgewater Plaza
1 001B 005E 2 Hurstbourne Place 9300 Shelbyville Road
1 001C 005I 2 Intell Tice Boulevard-SONY 123 Tice Boulevard
1 001D 005J 2 One Oxmoor Place 101 Bullitt Lane
- ------------------------------------------------------------------------------------------------------------------------------------
1 001E 005G 2 Hurstbourne Plaza 101-315 Whittington Parkway
1 001F 005F 2 Hurstbourne Park Office Building 9200 Shelbyville Road
1 001G 005D 2 Steeplechase Place 9410 Bunsen Parkway
1 001H 005A 2 Hunnington Office Park 9420 Bunsen Parkway
1 001I 005C 2 Two Brittany Place 1938 North Woodlawn Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
1 001J 005B 2 One Brittany Place 2024 North Woodlawn Avenue
2 002 006 1 180 Water Street 180 Water Street
3 003 007 2 Butera Portfolio Summary Various Addresses
3 003A 007A 2 Girard Place 602, 620, 630 and 640 East Diamond Avenue
3 003B 007B 2 Patrick Center 30 West Patrick Street
- ------------------------------------------------------------------------------------------------------------------------------------
3 003C 007C 2 Deer Park Center 9631-9637 Liberty Road
3 003D 007D 2 Girard Business Center 200-220 Girard Street and 504 East
Diamond Avenue
3 003E 007E 2 Old Courthouse Square 1291 Edwin Miller Boulevard
3 003F 007F 2 Wedgewood Business Park 6900 English Muffin Way
3 003G 007G 2 Georgia Pacific 4451 Georgia Pacific Boulevard
- ------------------------------------------------------------------------------------------------------------------------------------
3 003H 007H 2 Gateway West 115 & 125 Airport Drive and 1135 Business
Parkway South
3 003I 007I 2 Gateway Center 807 - 831 Russell Avenue
3 003J 007J 2 Westpark 10 North Jefferson Street
3 003K 007K 2 Radtech Building 15 Workmans Mill Court
3 003L 007L 2 Woodlands Business Center 9315 Largo Drive West
- ------------------------------------------------------------------------------------------------------------------------------------
3 003M 007M 2 Microlog 20270 Golden Rod Lane
3 003N 007N 2 Thomas AAA 7561 Lindbergh Drive
4 004 008 2 Patriot American Summary Various Addresses
4 004A 008A 2 Chicago Embassy Suites 600 North State Street
4 004B 008B 2 Wyndham Greenspoint Hotel 12400 Greenspoint Drive
- ------------------------------------------------------------------------------------------------------------------------------------
5 005 010 1 L'Enfant Plaza Summary Various Addresses
5 005A 010A 1 L'Enfant Plaza - East Building 990 L'Enfant Plaza SW
5 005B 010B 1 Loews L'Enfant Plaza Hotel 480 L'Enfant Plaza, SW
6 006 011 2 260-261 Madison Avenue 260-261 Madison Avenue
7 007 012 2 Trident Center 11355 West Olympic Boulevard
- ------------------------------------------------------------------------------------------------------------------------------------
8 008 002 2 Thurman Multifamily Portfolio Summary Various Addresses
8 008A 002J 2 The Parks at Maryland Apartments 1161 Lulu Avenue
8 008B 002F 2 Villas at Vickery 7001 Fair Oaks Drive
8 008C 002B 2 Park Hill Apartments 7235 S.W. 94th Place
8 008D 002D 2 The Woodlands of Plano Apartments 1370 Rigsbee Drive
- ------------------------------------------------------------------------------------------------------------------------------------
8 008E 002H 2 Desert Sands Apartments 5709 Belknap Street
8 008F 002E 2 Willows on Hunnicut Apartments 7526 Hunnicut Road
8 008G 002C 2 The Encore Apartments 7255 Corporate Drive
8 008H 002A 2 Oakwood Gardens Apartments 5625 Antoine Drive
8 008I 002G 2 Turtle Creek Apartments 2005 South Cooper Street
- ------------------------------------------------------------------------------------------------------------------------------------
8 008J 002I 2 Woodlawn Park Apartments 1626 18th Avenue North
9 009 013 2 Koll Corporate Plaza 485 Route 1
10 010 003 2 Pinstripe Multifamily Portfolio Summary Various Addresses
10 010A 003B 2 Covington Walk Apartments 4565 Covington Highway
10 010B 003C 2 Oak Tree Apartments 2877 Walnut Hill Lane
- ------------------------------------------------------------------------------------------------------------------------------------
10 010C 003L 2 Sunridge Apartments 145 East Pioneer Parkway
10 010D 003J 2 Stradford Oaks Apartments 4000 Watonga Blvd.
10 010E 003K 2 Shadowtree Apartments 9475 Roark Road
10 010F 003I 2 Briarwood Apartments 7326 Stockton Boulevard
10 010G 003R 2 Wexford Townhomes 600 Wembley Circle
- ------------------------------------------------------------------------------------------------------------------------------------
10 010H 003H 2 Mediterranean Gardens Apartments 3958 Montgomery Blvd., NE
10 010I 003A 2 Azalea Apartments 764 Windomere Avenue
10 010J 003E 2 Canyon Point Apartments 301 Western Skies Drive, SE
10 010K 003D 2 Canyon Ridge Apartments 200 Figueroa Drive, NE
10 010L 003Q 2 Toscana On Skillman Apartments 6854 Skillman Street
- ------------------------------------------------------------------------------------------------------------------------------------
11 011 014 1 Pearl Highlands Center 1000 Kamehameha Highway
12 012 015 2 1133 Connecticut Avenue 1133 Connecticut Avenue, NW
13 013 004 2 Garden Variety Apartments Portfolio Summary Various Addresses
13 013A 004E 2 Harbor Island Apartments 433 Buena Vista Avenue
13 013B 004A 2 Ski Lodge I Apartments 108 Ski Lodge Drive
- ------------------------------------------------------------------------------------------------------------------------------------
14 014 016 1 Donatelli Portfolio Summary Various Addresses
14 014A 016D 1 Plaza 500 6295 Edsall Road
14 014B 016B 1 Van Buren Office Center 250 Exchange Place & 510-520 Herndon Parkway
14 014C 016C 1 Reico Distributors 6600 Business Parkway
14 014D 016A 1 Standard Warehouse 13129 Airpark Drive
- ------------------------------------------------------------------------------------------------------------------------------------
15 015 018 2 Camco Summary Various Addresses
15 015A 018B 2 Irving Market Center 3903-4033 West Highway 183
15 015B 018A 2 North Hills Village 7651-7655 Highway 26
15 015C 018C 2 Northeast Business Park 8200-8216 Northeast Parkway
16 016 019 1 Accor - Texas Summary Various Addresses
- ------------------------------------------------------------------------------------------------------------------------------------
16 016A 019E 1 Accor - Texas Motel 6 #1122 211 North Pecos La Trinidad Street
16 016B 019D 1 Accor - Texas Motel 6 #1121 2550 North Central Expressway
16 016C 019B 1 Accor - Texas Motel 6 #298 909 66th Street
16 016D 019F 1 Accor - Texas Motel 6 #1208 16500 Interstate Highway, 10 W
16 016E 019C 1 Accor - Texas Motel 6 #362 2327 Texas Avenue South
- ------------------------------------------------------------------------------------------------------------------------------------
16 016F 019A 1 Accor - Texas Motel 6 #229 311 North Bryant
17 017 020 1 8484 Wilshire Boulevard 8484 Wilshire Boulevard
18 018 021 2 Courthouse Square Apartments 804 Mockingbird Lane
19 019 273 1 United Artists - 5 Theaters Summary Various Addresses
19 019A 273B 1 UA Snowden Square 9161 Commerce Center Drive
- ------------------------------------------------------------------------------------------------------------------------------------
19 019B 273C 1 UA Commerce Crossing 3330 Spring Vale Drive
19 019C 273D 1 UA Cinemas 8 at Southlake 6795 Green Industrial Way
19 019D 273E 1 UA Shannon 8 4600 Jonesboro Road
19 019E 273A 1 UA Berkeley Cinema 7 2274 Shattuck Avenue
20 020 022 2 Ramblewood Village Apartments 601A Country Club Parkway
- ------------------------------------------------------------------------------------------------------------------------------------
21 021 024 1 Lipkin Portfolio Summary Various Addresses
21 021A 024I 1 Town & Country Shopping Center NWC Fruitville Rd & Beneva Road
21 021B 024H 1 Southgate Shopping Center 2018 South Philo Road
21 021C 024G 1 O'Fallon Square 20 O'Fallon Square
21 021D 024A 1 Crossroads Plaza State Route 25 and Gypsy Lane
- ------------------------------------------------------------------------------------------------------------------------------------
21 021E 024E 1 Independence Square 16200 East Highway 24
21 021F 024J 1 Steger K-Mart 3231 Chicago Road
21 021G 024C 1 Summit Plaza 300 Summit Drive
21 021H 024F 1 K-Mart Plaza 4300 Xylon Avenue
21 021I 024D 1 Grady Plaza Shopping Center 740 15th Street
- ------------------------------------------------------------------------------------------------------------------------------------
21 021J 024B 1 K-Mart Plaza 1401 Memorial Parkway N.W.
22 022 023 2 Grand Union Summary Various Addresses
22 022A 023A 2 Grand Union - Valatie 2827 Route 9
22 022B 023C 2 Grand Union - Morristown Route 100/ Stafford Avenue
22 022C 023B 2 Grand Union - Tannersville Route 23A/Leach Lane
- ------------------------------------------------------------------------------------------------------------------------------------
23 023 025 1 Accor - Florida Summary Various Addresses
23 023A 025A 1 Accor - Florida Motel 6 #436 7455 West Irlo Bronson Memorial Highway
23 023B 025B 1 Accor - Florida Motel 6 #483 333 East Fowler Avenue
23 023C 025C 1 Accor - Florida Motel 6 #677 3120 U.S. Highway 98 North
23 023D 025D 1 Accor - Florida Motel 6 #1191 2738 North Monroe
- ------------------------------------------------------------------------------------------------------------------------------------
24 024 026 2 Summit Portfolio Summary Various Addresses
24 024A 026A 2 97 Sunfield Avenue 97 Sunfield Avenue
24 024B 026D 2 105 Raider Boulevard 105 Raider Boulevard
24 024C 026E 2 700 Federal Boulevard 700 Federal Boulevard
24 024D 026C 2 87 Sunfield Avenue 87 Sunfield Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
24 024E 026B 2 503 Newfield Avenue 503 Newfield Avenue
25 025 028 1 American Restaurant Group, Inc. Summary Various Addresses
25 025A 028G 1 Stuart Anderson's Black Angus 139 W. Thousand Oaks Boulevard
25 025B 028F 1 Stuart Anderson's Black Angus 1011 Blossom Hill Road
25 025C 028D 1 Stuart Anderson's Black Angus 101 East Bay State Street
- ------------------------------------------------------------------------------------------------------------------------------------
25 025D 028C 1 Stuart Anderson's Black Angus 1625 Watt Avenue
25 025E 028H 1 Stuart Anderson's Cattle Company 1704 Shadeland Avenue
25 025F 028E 1 Stuart Anderson's Cattle Company 7853 South U.S. Highway 31
25 025G 028A 1 Stuart Anderson's Black Angus 5259 West Indian School Road
25 025H 028B 1 Stuart Anderson's Black Angus 6875 South Broadway
- ------------------------------------------------------------------------------------------------------------------------------------
26 026 029 1 Accor - Midwest Summary Various Addresses
26 026A 029B 1 Accor - Midwest Motel 6 #1153 3032 S. Expressway Street
26 026B 029A 1 Accor - Midwest Motel 6 #1195 1224 Wannamaker Road SW
26 026C 029C 1 Accor - Midwest Motel 6 #1077 635 West Diamond Drive
26 026D 029D 1 Accor - Midwest Motel 6 #1173 1754 Thierer Road
- ------------------------------------------------------------------------------------------------------------------------------------
26 026E 029E 1 Accor - Midwest Motel 6 #1236 4981 North Harrison Street
27 027 030 2 Ventana Canyon Apartments 1250 American Pacific Drive
28 028 031 2 English Village Apartments 15 Fox Hall
29 029 032 1 Accor - East Summary Various Addresses
29 029A 032A 1 Accor - East Motel 6 #1063 269 Flanders Road
- ------------------------------------------------------------------------------------------------------------------------------------
29 029B 032C 1 Accor - East Motel 6 #1062 2 Progress Avenue
29 029C 032D 1 Accor - East Motel 6 #1219 249 J.T. Connell Highway
29 029D 032B 1 Accor - East Motel 6 #403 1200 West Avenue / S. Highway 9
29 029E 032E 1 Accor - East Motel 6 #1058 1254 Putney Road
30 030 033 1 Cinemark - Austin 5501 Interstate Highway 35 South
- ------------------------------------------------------------------------------------------------------------------------------------
31 031 034 1 Town and Country Shopping Center 6302-6360 W. Third St/ 300-370 S.
Fairfax Ave./ 347 Ogden Dr
32 032 036 1 Accor - Southeast Summary Various Addresses
32 032A 036A 1 Accor - Southeast Motel 6 #1068 605 South Regional Road
32 032B 036D 1 Accor - Southeast Motel 6 #459 1321 Sycamore View
32 032C 036C 1 Accor - Southeast Motel 6 #496 7937 Dream Street
- ------------------------------------------------------------------------------------------------------------------------------------
32 032D 036B 1 Accor - Southeast Motel 6 #1234 1408 Sandhills Boulevard
33 033 037 1 Regal Cinema 103 State Road 7
34 034 038 1 Southside Mall 275 Mall Road
35 035 039 1 Accor - West Summary Various Addresses
35 035A 039A 1 Accor - West Motel 6 #1185 8152 N. Black Canyon
- ------------------------------------------------------------------------------------------------------------------------------------
35 035B 039C 1 Accor - West Motel 6 #1043 7407 Elsie Avenue
35 035C 039B 1 Accor - West Motel 6 #675 2040 North Preisker Lane
36 036 041 2 McKnight Place Extended Care Two McKnight Place
37 037 042 1 Tamarus I and II Apartments 4255 Tamarus St
38 038 043 2 Shaw's Shopping Center 134-200 Walley Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
39 039 044 1 The Prada Building 2174 Kalakana Avenue
40 040 046 2 St. Landry Plaza Shopping Center I-49 & Heather Drive
41 041 047 1 Garden Ridge 3599 Park Mill Run Drive
42 042 048 1 Jewelry Theatre Building 411 West Seventh Street
43 043 050 1 Holiday Inn - Farmington Hills 38123 West Ten Mile Road
- ------------------------------------------------------------------------------------------------------------------------------------
44 044 079 2 Whispering Palms-Viscaya Apart 5800 University Blvd. West
45 045 051 1 1000 Sylvan Avenue 1000 Sylvan Avenue
46 046 052 2 K-Mart Plaza 3010-3070 Highway 35 South
47 047 053 2 Lincoln Plaza Hotel 123 South Lincoln Avenue
48 048 055 2 Island Walk Shopping Center 1525 Sadler Road
- ------------------------------------------------------------------------------------------------------------------------------------
49 049 266 2 Forest Ridge Shopping Center 1636 Henderson Road (US Highway 25)
50 050 056 1 Agawan Stop & Shop 1282 Springfield Street
51 051 058 1 Hoyt's - Bellingham 259 Hartford Avenue (Charles River Center)
52 052 060 2 Stirling Industrial Park 1200-1340 Stirling Road
53 053 999 1 Pamida Summary Various Addresses
- ------------------------------------------------------------------------------------------------------------------------------------
53 053A 215 1 Pamida Montana #296 1600 U.S. Highway 2
53 053B 216 1 Pamida Nebraska #113 110 Pony Express Road
53 053C 223 1 Pamida Nebraska #155 East State Highway 8 & Hartley St.
53 053D 224 1 Pamida Wyoming #291 205 Boyd Avenue
53 053E 235 1 Pamida Kansas #157 821 West Crawford Street
- ------------------------------------------------------------------------------------------------------------------------------------
54 054 061 2 Bloomfield Multi Summary Various Addresses
54 054A 061L 2 13815-25 Victory Blvd. 13815-25 Victory Blvd.
54 054B 061G 2 14023-27 Oxnard Street 14023-27 Oxnard Street
54 054C 061I 2 14706 Dickens Street 14706 Dickens Street
54 054D 061M 2 15405 Vanowen Street 15405 Vanowen Street
- ------------------------------------------------------------------------------------------------------------------------------------
54 054E 061K 2 4437-39 Vista Del Monte 4437-39 Vista Del Monte
54 054F 061C 2 11564-11604 Sylvan Street 11564-11604 Sylvan Street
54 054G 061B 2 10745 Hortense Avenue 10745 Hortense Avenue
54 054H 061E 2 250 S. Reno Street 250 S. Reno Street
54 054I 061F 2 256 S. Rampart Street 256 S. Rampart Street
- ------------------------------------------------------------------------------------------------------------------------------------
54 054J 061J 2 5722-28 Elmer Ave 5722-28 Elmer Ave
54 054K 061H 2 7340 Variel Avenue 7340 Variel Avenue
54 054L 061D 2 1132 N. Cahuenga 1132 N. Cahuenga
54 054M 061A 2 5714-18 Elmer 5714-18 Elmer Ave
55 055 065 2 Wendell Terrace 20 Wendall Street
- ------------------------------------------------------------------------------------------------------------------------------------
56 056 067 1 Washington HUD Summary Various Addresses
56 056A 067B 1 McKinley Terrace 809 East Wright Avenue
56 056B 067A 1 Meadow Park Garden Court 5602 Hanna Pierce Road West
56 056C 067N 1 Chehalis Manor Apartments 300 South Market Boulevard
56 056D 067D 1 Kennewick Garden Court Apartments 955 West 5th Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
57 057 888 1 Best Buy Summary Various Addresses
57 057A 119 1 Best Buy - Canton, OH 4831 Whipple Avenue NW
57 057B 136 1 Best Buy - Spartanburg, SC 399 Peachwood Centre Drive
58 058 069 2 Northpointe Shopping Center 2402-2414 East Shawnee Avenue
59 059 070 1 U.S. Equities II Summary Various Addresses
- ------------------------------------------------------------------------------------------------------------------------------------
59 059A 070L 1 U.S. Post Office - Rincon 503 Northridge
59 059B 070C 1 U.S. Post Office - Chapin 1249 Chapin Road
59 059C 070D 1 U.S. Post Office - China Grove 200 South Bostian Street
59 059D 070J 1 U.S. Post Office - Lyman 12490 Greenville Highway
59 059E 070E 1 U.S. Post Office - Dallas 3151 Dallas Highshoals Hwy.
- ------------------------------------------------------------------------------------------------------------------------------------
59 059F 070B 1 U.S. Post Office - Carrollton 15108 Carrollton Blvd.
59 059G 070G 1 U.S. Post Office - Grand Isle Highway 1 at Lamanche de Nantes
59 059H 070M 1 U.S. Post Office - West Union 190 S. Highway 11
59 059I 070K 1 U.S. Post Office - Nesbit 600 Old Highway 51
59 059J 070I 1 U.S. Post Office - Little Mountain US 76 & Wheelland Road
- ------------------------------------------------------------------------------------------------------------------------------------
59 059K 070A 1 U.S. Post Office - Barneveld 117 Remsen Road
59 059L 070F 1 U.S. Post Office - East Berne 873 Helderberg Trail
59 059M 070H 1 U.S. Post Office - Jonesville 3912 Furman Fendley Highway (US-176)
60 060 071 2 East 138th Street 430 - 440 & 428 - 446 East 138th Street
61 061 068 2 St. Charles Plaza 3100 U.S. Highway 90
- ------------------------------------------------------------------------------------------------------------------------------------
62 062 075 2 PFI - Ignacio Gardens 420 Alameda Del Prado
63 063 077 2 State Farm Building 100 Haul Road
64 064 078 2 Time Warner Building 25-20 Brooklyn Queens Expressway
65 065 082 2 Sunset Plaza Shopping Center 18463 North US Highway 41
66 066 084 2 Centro Plaza 400 North 48th Street
- ------------------------------------------------------------------------------------------------------------------------------------
67 067 270 2 Sherwood Forest dba Grand Oaks 10103 Sherwood Lane
68 068 086 1 Shoppes of Wilton Manor 2228-2292 Wilton Drive
69 069 087 1 Essex Portfolio Summary Various Addresses
69 069A 087A 1 Erie Microtel Inn 8100 Peach Street
69 069B 087B 1 Youngstown Microtel Inn 7393 South Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
70 070 088 2 Royal Dane Mall 26 Dronningens Gade
71 071 089 1 29 John Street 29 John Street
72 072 268 2 Warrington Apartments 775 Post Street
73 073 090 1 Plaza Diamond Bar 1900-2040 South Brea Canyon Road
74 074 092 2 Rio Del Oro Racquet Club 119 Scripps Drive
- ------------------------------------------------------------------------------------------------------------------------------------
75 075 093 2 Century Square Apartments 3401 Red River Street
76 076 095 1 East-West 4 LLC Summary Various Addresses
76 076A 095A 1 312 East 93rd Street 312 East 93rd Street
76 076B 095D 1 237 West 18th Street 237 West 18th Street
76 076C 095B 1 349 East 51st Street 349 East 51st Street
- ------------------------------------------------------------------------------------------------------------------------------------
76 076D 095C 1 450 West 50th Street 450 West 50th Street
77 077 097 1 Alameda Office 2417 Central Avenue
78 078 098 2 Jefferson Plaza Summary Various Addresses
78 078A 098B 2 South Winton Court 3136 South Winton Court
78 078B 098A 2 Jefferson Plaza 376 Jefferson Road
- ------------------------------------------------------------------------------------------------------------------------------------
79 079 080 2 Bloomfield - Lex Various Addresses
79 079A 080E 2 20615 Vanowen Street 20615 Vanowen Street
79 079B 080C 2 7410 Woodman Street 7410 Woodman Street
79 079C 080F 2 11422-26 & 11442 Tiara Street 11422-26 & 11442 Tiara Street
79 079D 080D 2 248 S. Occidental Blvd. 248 S. Occidental Blvd.
- ------------------------------------------------------------------------------------------------------------------------------------
79 079E 080B 2 15202-222 Victory Blvd. 15202-222 Victory Blvd.
79 079F 080A 2 5611 Fulcher Avenue 5611 Fulcher Avenue
80 080 099 1 Carroll Pool Summary Various Addresses
80 080A 099B 1 Dorian Place 375 N. Dorian Way
80 080B 099A 1 Wellsprings Assisted Living Facility 2104 W. Idaho Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
80 080C 099C 1 Indianhead Residential Care Facility 590 W. Indianhead Road
81 081 265 2 Copacabana Mobile Home Park 2717 Arrow Highway
82 082 100 1 Budgetel St. Charles 1425 South 5th Street
83 083 101 2 942 Hyde Park 942 Hyde Park
84 084 102 1 LG International Building 13013 East 166th Street & 13012 Moore Street
- ------------------------------------------------------------------------------------------------------------------------------------
85 085 104 2 Homestead Gardens Apartments Wall Road
86 086 105 2 Westwood Portfolio Summary Various Addresses
86 086A 105E 2 Hampton West Apartments 157 Third Avenue
86 086B 105B 2 Sturbridge Commons 345 Kinderkamack Road
86 086C 105D 2 Sutton Place West Apartments 57 Crest Street
- ------------------------------------------------------------------------------------------------------------------------------------
86 086D 105C 2 Linda Court Apartments 110 Elm Street
86 086E 105A 2 James Court Apartments 120 Fairview Avenue
86 086F 105F 2 Stratford Apartments 195 Third Avenue
87 087 106 2 Cherry Hill Plaza 27359 Cherry Hill Road
88 088 110 2 PFI - Lincoln Villa 1825 Lincoln Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
89 089 107 1 Bayscene Mobilehome Park 100 Woodlawn Ave.
90 090 096 2 Edgewater Square 2650 Pass Road
91 091 108 1 Economic Press Building 12 Daniel Road
92 092 109 1 Commerce Security Center 1533-1717 SW 1st Way
93 093 111 2 PFI - Northgate 825 Las Gallinas Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
94 094 112 2 Derrer Field Estates Apartments 3473 Derrer Hill Drive
95 095 113 1 Cedarwood Valley Office Park 1725-1765 Merriman Road
96 096 116 1 One Finderne Avenue 1 Finderne Avenue
97 097 117 1 Best Western Chateau Suite Hotel 201 Lake Drive
98 098 118 2 Affordable Warehouses NW 29th Street and NW 21st Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
99 099 267 2 Burke-Lewis Apartments 776 Bush Street
100 100 122 1 Rite Aid - Burton G-4007 South Saginaw Road and Bristol Road
101 101 123 2 AMP Building 59-61 Chubb Way
102 102 124 1 Holiday Inn Express 1695 Woodland Park Drive
103 103 125 2 Anchorage Trade Center Building 619 East Warehouse Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
104 104 128 1 Quality Inn - Nautilus 1538 Cape Coral Parkway
105 105 129 2 Rain Tree Plaza 4300 South Padre Island Drive
106 106 130 1 Comfort Inn - Greensboro 2001 Veasley Road
107 107 131 2 1270 Gerard Avenue 1270 Gerard Avenue
108 108 133 1 Suburban Lodge of Baymeadows 8285 Phillips Highway
- ------------------------------------------------------------------------------------------------------------------------------------
109 109 134 1 Comfort Inn 4312 Cerrillos Road
110 110 135 2 PFI - Creekside 2575 Sir Francis Drake Blvd.
111 111 132 2 PFI - Fairway 1000 Ignacio Blvd
112 112 137 1 Franklin Court 2700 East Foothill Blvd
113 113 139 1 West Lancaster Plaza 2733-2849 West Avenue "L"
- ------------------------------------------------------------------------------------------------------------------------------------
114 114 140 1 733 Yonkers Avenue 733 Yonkers Avenue
115 115 142 2 Bari Manor 31 Old Post Road South
116 116 144 1 Eckerd's - Berwick #5923 401 West Front Street
117 117 145 1 244 West 39th Street 244 West 39th Street
118 118 143 2 690 Gerard Avenue 690 Gerard Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
119 119 147 2 Lake Pointe Apartments 1100 Grand Avenue
120 120 148 2 230 East 167th Street 230 East 167th Street
121 121 146 2 2300 Grand Concourse 2300 Grand Concourse
122 122 149 1 CVS - Forest Hill 5001-5011 Forest Hill Avenue
123 123 160 1 Office Depot - Dallas 5111 Greenville Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
124 124 154 1 8000 North Federal Highway 8000 North Federal Highway
125 125 155 1 Portofino Beach Hotel 2304-2306 W Oceanfront
126 126 156 1 CVS - Auburn Court Street at Union Street
127 127 158 2 PFI - Ignacio Pines 195 Los Robles
128 128 159 1 CVS - Montgomery 10 Coliseum Boulevard
- ------------------------------------------------------------------------------------------------------------------------------------
129 129 157 2 984 Sheridan Avenue 984 Sheridan Avenue
130 130 162 2 Shop Rite Center 775 NW 119th Street
131 131 163 2 111 East 167th Street 111 East 167th Street
132 132 164 1 CVS - Cranston 1178-1194 Pontiac Avenue
133 133 152 2 PFI - Oak Hill Apartments 216 Marin Street
- ------------------------------------------------------------------------------------------------------------------------------------
134 134 168 2 176 East 176th Street 176 East 176th Street
135 135 166 1 CVS - Bessemer 831 - 9th Avenue North
136 136 167 2 2585-93 Grand Concourse 2585-93 Grand Concourse
137 137 170 1 2899-2901 Third Avenue 2899-2901 Third Avenue
138 138 169 1 CVS - Middlefield 15925-15935 W. High Street
- ------------------------------------------------------------------------------------------------------------------------------------
139 139 161 2 1210 Sherman Avenue 1210 Sherman Avenue
140 140 153 2 215 Mount Hope Place 215 Mount Hope Place
141 141 165 2 Hudson View Estates 2 Lake View Drive
142 142 173 1 Belleair Bazaar 2901-2989 West Bay Drive
143 143 171 2 Chateau Thierry Apartments 10500 Hayne Boulevard
- ------------------------------------------------------------------------------------------------------------------------------------
144 144 172 1 CVS - Colonial Heights U.S. Rte 1/301 (Colonial Heights Blvd)
145 145 175 1 CVS - Augusta 3527 Old Petersburg Road
146 146 176 1 Safeguard Self Storage 3134 Chestnut Drive
147 147 177 1 CVS - New Haven #6496 Hartzell Road & U.S. 930
148 148 178 1 CVS - Huntersville Sam Furr Road and NC Highway 73
- ------------------------------------------------------------------------------------------------------------------------------------
149 149 272 1 Buena Park Manor MHP 7142 Orangethorpe Avenue
150 150 179 1 Comfort Inn - Petersburg 11974 South Crater Road
151 151 180 1 CVS - Ringgold US Highway 41 & Highway 151
152 152 181 2 Continental Pak 75 Onderdonk Avenue
153 153 183 2 2544 Valentine Avenue 2544 Valentine Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
154 154 184 1 CVS - Cleveland 6301 Harvard Avenue
155 155 186 1 CVS - Madison 717 Highway Street
156 156 185 2 PFI - Westview 125 Nova Albion Way
157 157 188 1 CVS - Painesville Route 20 at Palmer
158 158 189 1 CVS - Pelzer SC Highway 8
- ------------------------------------------------------------------------------------------------------------------------------------
159 159 211 2 PFI - Ignacio Hills III 401 Ignacio Boulevard
160 160 191 1 Walgreens Plaza 2785-2845 North Andrews Avenue
161 161 193 1 Best Western - Wright Patterson 800 North Broad Street
162 162 195 2 Clarion Hotel 34734 Pacific Coast Highway
163 163 194 2 7600 Medley Industrial Building 7600-7650 N.W. 69th Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
164 164 197 1 CVS - Smyrna Sam Ridley Parkway
165 165 199 1 Citrus Plaza 230 US Highway 41
166 166 200 2 Cane Village/Indian Summer Apartments 100 Melrose Avenue
167 167 198 2 2908-10 Valentine Avenue 2908-10 Valentine Avenue
168 168 202 1 416-418 Knickerbocker 416-418 Knickerbocker Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
169 169 196 2 2 Minerva Place 2 Minerva Place
170 170 201 2 PFI - Northern Apartments 507 Northern Avenue
171 171 203 2 Sparta Green Townhouses 111 South Highland Avenue
172 172 204 1 CVS - Owensboro 3311 KY Highway 54
173 173 205 1 CVS - Barnwell Dunbarton Street
- ------------------------------------------------------------------------------------------------------------------------------------
174 174 207 2 48 Hill Street 48 Hill Street
175 175 206 1 Galaxy Hotel 860 Pennsylvania Avenue
176 176 208 2 Elmwood Galleria 77 West Elmwood Drive
177 177 209 1 CVS - Marysville 969 West Fifth Street
178 178 182 2 1791 Grand Concourse 1791 Grand Concourse
- ------------------------------------------------------------------------------------------------------------------------------------
179 179 187 2 2505 Olinville Avenue 2505 Olinville Avenue
180 180 212 1 Econo Lodge - Biloxi 1776 Beach Boulevard
181 181 217 1 CVS - Bedford SWC Northfield and Solon Rds.
182 182 220 1 Ingram Park Plaza Shopping Center 6151 NW Loop 410
183 183 221 1 Rite Aid - Detroit 19160 Greenfield Road
- ------------------------------------------------------------------------------------------------------------------------------------
184 184 222 2 Powell Street Warehouses 5725 Powell Street
185 185 218 2 3041 Holland Avenue 3041 Holland Avenue
186 186 214 2 3031 Holland Avenue 3031 Holland Avenue
187 187 219 2 1240 Sherman Avenue 1240 Sherman Avenue
188 188 226 1 2174 Pelham Associates 2174-2180 White Plains Road
- ------------------------------------------------------------------------------------------------------------------------------------
189 189 227 1 CVS - Cairo Routes 23B and 32
190 190 229 2 PFI - Strawberry 11 South Knoll Drive
191 191 228 1 CVS - Hopewell Gringo-South Heights Road/Laurel Road
192 192 233 1 54-64 Broad Street 54-64 Broad Street
193 193 236 2 PFI - Via Casitas 140 Lower Via Casitas
- ------------------------------------------------------------------------------------------------------------------------------------
194 194 234 1 Best Western - Celebration 724 Madison Street
195 195 237 1 Rite Aid - Dearborn 7630 Wyoming Avenue
196 196 239 1 Gateway Retail Center 7100 Gateway Blvd. East
197 197 246 2 PFI - Ignacio Hills I 475 Ignacio Boulevard
198 198 230 2 1945 Loring Place South 1945 Loring Place South
- ------------------------------------------------------------------------------------------------------------------------------------
199 199 240 2 Three Pines Apartments 6222 Lewis Avenue
200 200 241 1 363 Bloomfield Avenue 363 Bloomfield Avenue
201 201 248 2 Parker Plaza Shopping Center 10401-10465 South Parker Road
202 202 243 1 Nature's Edge Assisted Living Facility 699 NW Airoso Boulevard
203 203 244 2 PFI - Country Club 980 Ignacio Boulevard
- ------------------------------------------------------------------------------------------------------------------------------------
204 204 245 2 202 Industrial Loop 202 Industrial Loop
205 205 249 2 Stonegate Apartments 747 N. Azusa Avenue
206 206 250 1 1655 East 13th Street 1655 East 13th Street
207 207 251 2 Villa Serena 1380 and 1390 Moline Street
208 208 271 2 Lake Village Apartments 3700 Lake Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
209 209 255 1 AeroPanel Building 661 Myrtle Avenue
210 210 253 2 344 East 209th Street 344 East 209th Street
211 211 254 2 2935 Holland Avenue 2935 Holland Avenue
212 212 258 2 Sherwood Townhouses 7 Sherwood Avenue
213 213 256 2 2885 Briggs Avenue 2885 Briggs Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
214 214 260 2 PFI - Ignacio Hills IV 551 Ignacio Boulevard
215 215 259 2 116 Henwood Place 116 Henwood Place
216 216 261 1 398 Third Avenue 398 Third Avenue
217 217 263 1 SpinCycle 173 - Milwaukee 2239 W. National Avenue
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL
PRINCIPAL
LOAN
CITY STATE ZIP CODE PROPERTY TYPE BALANCE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Various Cities Various Various Office 86,909,466
Staten Island NY 10309 Office
Louisville KY 40222 Office
Woodcliff Lake NJ 07675 Office
Louisville KY 40222 Office
- ---------------------------------------------------------------------------------------------------------------------------
Louisville KY 40223 Retail, Anchored
Louisville KY 40223 Office
Louisville KY 40220 Office
Louisville KY 40222 Office
Wichita KS 67208 Office
- ---------------------------------------------------------------------------------------------------------------------------
Wichita KS 67206 Office
New York NY 10038 Office 75,000,000
Various Cities Various Various Industrial 83,000,000
Gaithersburg MD 20877 Industrial
Frederick MD 21701 Office
- ---------------------------------------------------------------------------------------------------------------------------
Randallstown MD 21133 Industrial
Gaithersburg MD 20877 Industrial
Martinsburg WV 25401 Retail, Anchored
Frederick MD 21701 Industrial
Frederick MD 21704 Industrial
- ---------------------------------------------------------------------------------------------------------------------------
Westminster MD 21157 Industrial
Gaithersburg MD 20877 Retail, Unanchored
Frederick MD 21701 Office
Frederick MD 21701 Office
Largo MD 20785 Office
- ---------------------------------------------------------------------------------------------------------------------------
Germantown MD 20876 Office
Gaithersburg MD 20879 Industrial
Various Cities Various Various Lodging, Full Service 81,569,558
Chicago IL 60610 Lodging, Full Service
Houston TX 77060 Lodging, Full Service
- ---------------------------------------------------------------------------------------------------------------------------
Various Cities Various Various Office 75,000,000
Washington DC 20024 Office
Washington DC 20024 Lodging, Full Service
New York NY 10016 Office 75,000,000
Los Angeles CA 90064 Office 60,000,000
- ---------------------------------------------------------------------------------------------------------------------------
Various Cities Various Various Multifamily 55,745,250
Las Vegas NV 89119 Multifamily
Dallas TX 75231 Multifamily
Miami FL 33173 Multifamily
Plano TX 75074 Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
Fort Worth TX Multifamily
Dallas TX 75227 Multifamily
Houston TX 77036 Multifamily
Houston TX 77091 Multifamily
Arlington TX 76010 Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
St. Petersburg FL 33713 Multifamily
Iselin NJ 08830 Office 54,900,000
Various Cities Various Various Multifamily 52,709,690
Decatur GA 30035 Multifamily
Irving TX 75038 Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
Grand Prairie TX 75051 Multifamily
Houston TX 77092 Multifamily
Houston TX 77099 Multifamily
Sacramento CA 95823 Multifamily
Duncanville TX 75055 Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
Albuquerque NM 87109 Multifamily
Richmond VA 23227 Multifamily
Albuquerque NM 87123 Multifamily
Albuquerque NM 87109 Multifamily
Dallas TX 75231 Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
Pearl City, Island of Oahu HI 96782 Retail, Anchored 50,000,000
Washington DC 20036 Office 46,200,000
Various Cities Various Various Multifamily 44,088,900
Alameda CA 94501 Multifamily
Birmingham AL 35209 Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
Various Cities Various Various Industrial 41,841,021
Alexandria VA 22312 Industrial
Herndon VA 20170 Office
Elkridge MD 21227 Industrial
Elkwood VA 20170 Industrial
- ---------------------------------------------------------------------------------------------------------------------------
Various Cities Various Various Retail, Anchored 37,000,000
Irving TX Retail, Anchored
North Richland Hills TX 76180 Retail, Anchored
North Richland Hills TX 76180 Industrial
Various Cities Various Various Credit Lease 30,291,596
- ---------------------------------------------------------------------------------------------------------------------------
San Antonio TX 78207 Credit Lease
Plano TX 75074 Credit Lease
Lubbock TX 79412 Credit Lease
San Antonio TX 78257 Credit Lease
College Station TX 77840 Credit Lease
- ---------------------------------------------------------------------------------------------------------------------------
San Angelo TX 76901 Credit Lease
Beverly Hills CA 90211 Office 23,700,000
Towson MD 21286 Multifamily 23,577,591
Various Cities Various Various Credit Lease 23,302,898
Columbia MD 21045 Credit Lease
- ---------------------------------------------------------------------------------------------------------------------------
Commerce Township MI 48322 Credit Lease
Morrow GA 30260 Credit Lease
Union City GA 30291 Credit Lease
Berkeley CA 94704 Credit Lease
Mount Laurel NJ 08054 Multifamily 22,232,427
- ---------------------------------------------------------------------------------------------------------------------------
Various Cities Various Various Retail 19,770,000
Sarasota FL 33577 Retail, Anchored
Urbana IL 61801 Retail, Anchored
O'Fallon MO 63366 Retail, Anchored
Bowling Green OH 43402 Retail, Anchored
- ---------------------------------------------------------------------------------------------------------------------------
Independence MO 64056 Retail, Anchored
Steger IL 60475 Retail, Single Tenant
Lockport IL 60441 Retail, Anchored
New Hope MN 55428 Retail, Single Tenant
Yazoo City MS 39194 Retail, Anchored
- ---------------------------------------------------------------------------------------------------------------------------
Huntsville AL 35816 Retail, Single Tenant
Various Cities Various Various Retail, Single Tenant 19,700,000
Valatie NY 12184 Retail, Single Tenant
Morristown VT 05661 Retail, Single Tenant
Tannersville NY 12485 Retail, Single Tenant
- ---------------------------------------------------------------------------------------------------------------------------
Various Cities Various Various Credit Lease 19,213,232
Kissimmee FL 34747 Credit Lease
Tampa FL 33612 Credit Lease
Lakeland FL 33805 Credit Lease
Tallahassee FL 32303 Credit Lease
- ---------------------------------------------------------------------------------------------------------------------------
Various Cities Various Various Industrial 17,800,000
Edison NJ 08837 Industrial
Hillsborough NJ 08502 Office
Carteret NJ 07008 Office
Edison NJ 08837 Industrial
- ---------------------------------------------------------------------------------------------------------------------------
Edison NJ 08837 Industrial
Various Cities Various Various Credit Lease 17,866,864
Thousand Oaks CA 91360 Credit Lease
San Jose CA 95123 Credit Lease
Alhambra CA 91801 Credit Lease
- ---------------------------------------------------------------------------------------------------------------------------
Sacramento CA 95864 Credit Lease
Indianapolis IN 46219 Credit Lease
Indianapolis IN 46227 Credit Lease
Phoenix AZ 85031 Credit Lease
Littleton CO 80122 Credit Lease
- ---------------------------------------------------------------------------------------------------------------------------
Various Cities Various Various Credit Lease 15,681,646
Council Bluffs IA 51501 Credit Lease
Topeka KS 66604 Credit Lease
Salina KS 67401 Credit Lease
Madison WI 53704 Credit Lease
- ---------------------------------------------------------------------------------------------------------------------------
Shawnee OK 74801 Credit Lease
Henderson NV 89014 Multifamily 15,325,000
Mill Creek Hundred DE 19711 Multifamily 15,230,992
Various Cities Various Various Credit Lease 14,493,210
Niantic CT 06357 Credit Lease
- ---------------------------------------------------------------------------------------------------------------------------
Nashua NH 03062 Credit Lease
Newport RI 02840 Credit Lease
Wilmington DE 19720 Credit Lease
Brattleboro VT 05301 Credit Lease
Austin TX 75231 Credit Lease 14,413,144
- ---------------------------------------------------------------------------------------------------------------------------
Los Angeles CA 90048 Retail, Anchored 14,000,000
Various Cities Various Various Credit Lease 13,812,715
Greensboro NC 27408 Credit Lease
Memphis TN 38134 Credit Lease
Florence KY 41042 Credit Lease
- ---------------------------------------------------------------------------------------------------------------------------
Aberdeen (Pinehurst) NC 28315 Credit Lease
Village of Royal Palm Beach FL 33411 Credit Lease 13,571,358
South Williamson KY 41503 Retail, Anchored 13,250,000
Various Cities Various Various Credit Lease 13,157,902
Phoenix AZ 85051 Credit Lease
- ---------------------------------------------------------------------------------------------------------------------------
Sacramento CA 95828 Credit Lease
Santa Maria CA 93454 Credit Lease
St. Louis MO 63124 Nursing Home 12,800,000
Las Vegas NV 81166 Multifamily 12,675,000
New Haven CT 06511 Retail, Anchored 12,500,000
- ---------------------------------------------------------------------------------------------------------------------------
Honolulu HI 96815 Retail, Single Tenant 12,000,000
Opelousas LA 70570 Retail, Anchored 10,800,000
Hilliard OH 43026 Credit Lease 10,683,961
Los Angeles CA 90014 Retail, Unanchored 10,100,000
Farmington MI 48335 Lodging, Full Service 10,000,000
- ---------------------------------------------------------------------------------------------------------------------------
Jacksonville FL 32216 Multifamily 9,925,000
Englewood Cliffs NJ 07632 Office 9,650,000
Hazlet NJ 07730 Retail, Anchored 9,300,000
Monterey Park CA 91755 Lodging, Full Service 9,000,000
Fernandina Beach FL 32034 Retail, Anchored 8,700,000
- ---------------------------------------------------------------------------------------------------------------------------
Asheville NC 28803 Retail, Anchored 8,050,000
Agawam MA 01030 Retail, Single Tenant 8,000,000
Bellingham MA 02019 Credit Lease 7,999,990
Dania FL 33004 Industrial 7,800,000
Various Cities Various Various Credit Lease 7,684,218
- ---------------------------------------------------------------------------------------------------------------------------
Libby MT 59923 Credit Lease 1,674,168
Ogallala NE 69153 Credit Lease 1,635,084
Superior NE 68978 Credit Lease 1,529,487
Newcastle WY 82701 Credit Lease 1,502,011
Clay Center KS 67432 Credit Lease 1,343,468
- ---------------------------------------------------------------------------------------------------------------------------
Various Cities Various Various Multifamily 7,442,000
Van Nuys CA 91436 Multifamily
Van Nuys CA 91401 Multifamily
Sherman Oaks CA 91423 Multifamily
Van Nuys CA 91406 Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
Sherman Oaks CA 91436 Multifamily
North Hollywood CA 91601 Multifamily
North Hollywood CA 91436 Multifamily
Los Angeles CA 90057 Multifamily
Los Angeles CA 91436 Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
North Hollywood CA 91601 Multifamily
Canoga Park CA 91303 Multifamily
Hollywood CA 91436 Multifamily
North Hollywood CA 91601 Multifamily
Hempstead NY 11550 Multifamily 7,000,000
- ---------------------------------------------------------------------------------------------------------------------------
Various Cities Various Various Multifamily 6,900,000
Tacoma WA 98404 Multifamily
Tacoma WA 98467 Multifamily
Chehalis WA 98532 Multifamily
Kennewick WA 99336 Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
Various Cities Various Various Retail, Single Tenant 6,667,500
Canton OH 44718 Retail, Single Tenant 3,642,500
Spartanburg SC 29301 Retail, Single Tenant 3,025,000
Muskogee OK 74403 Retail, Anchored 6,600,000
Various Cities Various Various Special Purpose 6,560,000
- ---------------------------------------------------------------------------------------------------------------------------
Rincon GA 31326 Special Purpose
Chapin SC Special Purpose
China Grove NC 28023 Special Purpose
Lyman SC 29365 Special Purpose
Dallas NC 28034 Special Purpose
- ---------------------------------------------------------------------------------------------------------------------------
Carrollton VA 23314 Special Purpose
Grand Isle LA 70358 Special Purpose
West Union SC 29696 Special Purpose
Nesbit MS 38651 Special Purpose
Little Mountain SC 29075 Special Purpose
- ---------------------------------------------------------------------------------------------------------------------------
Barneveld NY 13304 Special Purpose
East Berne NY 12059 Special Purpose
Jonesville SC 29353 Special Purpose
Bronx NY 10454 Multifamily 6,306,000
Luling LA 70070 Retail, Anchored 6,300,000
- ---------------------------------------------------------------------------------------------------------------------------
Novato CA 94949 Multifamily 6,231,000
Wayne NJ 07470 Industrial 6,000,000
Woodside NY 11377 Industrial 6,000,000
Lutz FL 33549 Retail, Anchored 5,800,000
Lincoln NE 68504 Retail, Anchored 5,625,000
- ---------------------------------------------------------------------------------------------------------------------------
Riverview FL 33569 Multifamily 5,600,000
Wilton Manors FL 33305 Retail, Unanchored 5,500,000
Various Cities Various Various Lodging, Limited Service 5,350,000
Erie PA 16509 Lodging, Limited Service
Boardman OH 44512 Lodging, Limited Service
- ---------------------------------------------------------------------------------------------------------------------------
St. Thomas VI 00802 Retail, Unanchored 5,300,000
New York NY 10038 Office 5,250,000
San Francisco CA 94109 Multifamily 5,200,000
Diamond Bar CA 91765 Office 5,200,000
Sacramento CA 95825 Special Purpose 4,850,000
- ---------------------------------------------------------------------------------------------------------------------------
Austin TX 78705 Multifamily 4,800,000
Various Cities Various Various Multifamily 4,750,000
New York NY 10028 Multifamily
New York NY 10011 Multifamily
New York NY 10019 Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
New York NY 10019 Multifamily
Alameda CA 94501 Medical Office 4,600,000
Various Cities Various Various Retail 4,600,000
Henrietta NY 14623 Office
Henrietta NY 14623 Retail, Unanchored
- ---------------------------------------------------------------------------------------------------------------------------
Various Cities Various Various Multifamily 4,558,000
Canoga Park CA 91306 Multifamily
Van Nuys CA 91405 Multifamily
North Hollywood CA 91601 Multifamily
Los Angeles CA 90057 Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
Van Nuys CA 91411 Multifamily
North Hollywood CA 91436 Multifamily
Various Cities Various Various Assisted Living Facility 4,505,000
Ontario OR 97914 Assisted Living Facility
Ontario OR 97914 Assisted Living Facility
- ---------------------------------------------------------------------------------------------------------------------------
Weiser ID 83672 Nursing Home
LaVerne CA 91750 Mobile Home Park 4,450,000
St. Charles MO 63301 Lodging, Limited Service 4,420,000
Boston MA 02136 Retail, Anchored 4,400,000
Cerritos CA 90701 Industrial 4,350,000
- ---------------------------------------------------------------------------------------------------------------------------
Spring Lake Heights NJ 07762 Multifamily 4,276,375
Various Cities Various Various Multifamily 4,210,000
Westwood NJ 07675 Multifamily
Westwood Borough NJ 07675 Office
Westwood Borough NJ 07675 Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
Westwood NJ 07676 Multifamily
Westwood Borough NJ 07675 Multifamily
Westwood NJ 07675 Multifamily
Inkster MI 48141 Retail, Anchored 4,100,000
San Rafael CA 94901 Multifamily 4,065,000
- ---------------------------------------------------------------------------------------------------------------------------
Chula Vista CA 91910 Mobile Home Park 4,050,238
Biloxi MS 39531 Retail, Unanchored 4,000,000
Fairfield NJ 07004 Industrial 4,000,000
Deerfield Beach FL 33064 Industrial 4,000,000
San Rafael CA 94903 Multifamily 3,864,000
- ---------------------------------------------------------------------------------------------------------------------------
Columbus OH 43204 Multifamily 3,864,000
Akron OH 44313 Office 3,840,000
Bridgewater NJ 08807 Industrial 3,800,000
Shreveport LA 71101 Lodging, Limited Service 3,750,000
Oakland Park FL 33311 Industrial 3,700,000
- ---------------------------------------------------------------------------------------------------------------------------
San Francisco CA 94102 Multifamily 3,645,000
Burton MI Credit Lease 3,578,954
Branchburg NJ 08876 Industrial 3,560,000
Layton UT 84041 Lodging, Limited Service 3,500,000
Anchorage AK 99501 Industrial 3,500,000
- ---------------------------------------------------------------------------------------------------------------------------
Cape Coral FL 33904 Lodging, Limited Service 3,300,000
Corpus Christi TX 78411 Retail, Unanchored 3,230,000
Greensboro NC 27407 Lodging, Limited Service 3,225,000
New York NY 10452 Multifamily 3,200,000
Jacksonville FL 32256 Lodging, Extended Stay 3,150,000
- ---------------------------------------------------------------------------------------------------------------------------
Santa Fe NM 87505 Lodging, Limited Service 3,150,000
Fairfax CA 94939 Multifamily 3,041,000
Novato CA 94949 Multifamily 3,015,000
Pasadena CA 91107 Office 3,000,000
Lancaster CA 93536 Retail, Anchored 2,925,000
- ---------------------------------------------------------------------------------------------------------------------------
Yonkers NY 10704 Office 2,900,000
Croton-on-Hudson NY 10520 Multifamily 2,885,000
Berwick PA 18603 Credit Lease 2,793,838
New York NY 10018 Office 2,775,000
Bronx NY 10451 Multifamily 2,740,000
- ---------------------------------------------------------------------------------------------------------------------------
Schofield WI 54476 Multifamily 2,750,000
Bronx NY 10456 Multifamily 2,720,000
Bronx NY 10458 Multifamily 2,720,000
Richmond VA 23225 Credit Lease 2,673,833
Dallas TX 75206 Credit Lease 2,526,384
- ---------------------------------------------------------------------------------------------------------------------------
Boca Raton FL 33434 Office 2,500,000
Newport Beach CA 92663 Lodging, Full Service 2,500,000
Auburn ME 04210 Credit Lease 2,487,366
Novato CA 94949 Multifamily 2,480,000
Montgomery AL 36109 Credit Lease 2,428,261
- ---------------------------------------------------------------------------------------------------------------------------
Bronx NY 10456 Multifamily 2,400,000
North Miami FL 33168 Retail, Anchored 2,400,000
Bronx NY 10452 Multifamily 2,400,000
Cranston RI 02920 Credit Lease 2,374,166
San Rafael CA 94901 Multifamily 2,303,000
- ---------------------------------------------------------------------------------------------------------------------------
Bronx NY 10457 Multifamily 2,300,000
Bessemer AL 35020 Credit Lease 2,301,350
Bronx NY 10468 Multifamily 2,300,000
Bronx NY 10455 Retail, Unanchored 2,275,000
Middlefield OH 44062 Credit Lease 2,253,543
- ---------------------------------------------------------------------------------------------------------------------------
Bronx NY 10456 Multifamily 2,250,000
Bronx NY 10457 Multifamily 2,250,000
Peekskill NY 10566 Multifamily 2,240,000
Belleair Bluffs FL 33770 Retail, Unanchored 2,236,000
New Orleans LA 70127 Multifamily 2,220,000
- ---------------------------------------------------------------------------------------------------------------------------
Colonial Heights VA 23834 Credit Lease 2,215,236
Augusta GA 30907 Credit Lease 2,198,416
Doraville GA 30130 Self-Storage 2,180,000
New Haven IN 46774 Credit Lease 2,175,024
Huntersville NC 28078 Credit Lease 2,173,698
- ---------------------------------------------------------------------------------------------------------------------------
Buena Park CA 90621 Mobile Home Park 2,150,000
Petersburg VA 23805 Lodging, Limited Service 2,150,000
Ringgold GA 30736 Credit Lease 2,118,307
Ridgewood NY 11385 Industrial 2,100,000
New York NY 10458 Multifamily 2,100,000
- ---------------------------------------------------------------------------------------------------------------------------
Cleveland OH 44124 Credit Lease 2,092,344
Madison NC 27025 Credit Lease 2,079,870
San Rafael CA 94903 Multifamily 2,037,000
Painesville OH 44077 Credit Lease 2,018,150
Pelzer SC 29669 Credit Lease 2,013,530
- ---------------------------------------------------------------------------------------------------------------------------
Novato CA 94949 Multifamily 2,007,000
Wilton Manors FL 33311 Retail, Anchored 2,000,000
Fairborn OH 45324 Lodging, Full Service 2,000,000
Capistrano Beach CA 92624 Lodging, Extended Stay 2,000,000
Medley FL 33166 Industrial 2,000,000
- ---------------------------------------------------------------------------------------------------------------------------
Smyrna TN 37167 Credit Lease 1,973,764
Inverness FL 36250 Retail, Anchored 1,930,000
Natchitoches LA 71457 Multifamily 1,920,000
Bronx NY 10458 Multifamily 1,860,000
Brooklyn NY 11237 Retail, Single Tenant 1,850,000
- ---------------------------------------------------------------------------------------------------------------------------
Bronx NY 10468 Multifamily 1,840,000
Mill Valley CA 94941 Multifamily 1,830,000
Ossining NY 10562 Multifamily 1,824,000
Owensboro KY 42301 Credit Lease 1,815,483
Barnwell SC 29812 Credit Lease 1,807,234
- ---------------------------------------------------------------------------------------------------------------------------
Bloomfield NJ 07003 Multifamily 1,800,000
Brooklyn NY 11207 Lodging, Limited Service 1,800,000
Centerville OH 45459 Office 1,800,000
Marysville OH 43040 Credit Lease 1,787,026
Bronx NY 10453 Multifamily 1,777,000
- ---------------------------------------------------------------------------------------------------------------------------
Bronx NY 10467 Multifamily 1,735,000
Biloxi MS 39531 Lodging, Limited Service 1,725,000
Bedford OH 44146 Credit Lease 1,624,600
San Antonio TX 78238 Retail, Unanchored 1,600,000
Detroit MI 48235 Credit Lease 1,604,436
- ---------------------------------------------------------------------------------------------------------------------------
Jefferson Parish LA 70115 Industrial 1,600,000
Bronx NY 10467 Multifamily 1,580,000
Bronx NY 10467 Multifamily 1,548,000
Bronx NY 10456 Multifamily 1,525,000
Bronx NY 10462 Retail, Unanchored 1,500,000
- ---------------------------------------------------------------------------------------------------------------------------
Cairo NY 12413 Credit Lease 1,444,868
Mill Valley CA 94941 Multifamily 1,431,000
Hopewell PA 15001 Credit Lease 1,403,424
Elizabeth NJ 07201 Office 1,350,000
Greenbrae CA 94904 Multifamily 1,339,000
- ---------------------------------------------------------------------------------------------------------------------------
Shelbyville TN 37160 Lodging, Limited Service 1,350,000
Dearborn MI 48120 Credit Lease 1,333,342
El Paso TX 79915 Retail, Unanchored 1,300,000
Novato CA 94949 Multifamily 1,285,000
Bronx NY 10453 Multifamily 1,280,000
- ---------------------------------------------------------------------------------------------------------------------------
Toledo OH 43612 Multifamily 1,260,000
Montclair NJ 07042 Retail, Unanchored 1,250,000
Parker CO 80134 Retail, Unanchored 1,200,000
Port St. Lucie FL 34983 Assisted Living Facility 1,200,000
Novato CA 94949 Multifamily 1,121,000
- ---------------------------------------------------------------------------------------------------------------------------
Staten Island NY 10309 Industrial 1,106,000
West Covina CA 91791 Multifamily 1,050,000
Brooklyn NY 11235 Medical Office 1,040,000
Aurora CO 80909 Multifamily 1,000,000
Rochester NY 14612 Multifamily 900,000
- ---------------------------------------------------------------------------------------------------------------------------
Boonton NJ 07005 Industrial 875,000
Bronx NY 10467 Multifamily 855,000
Bronx NY 10467 Multifamily 825,000
Ossining NY 10562 Multifamily 697,000
Bronx NY 10458 Multifamily 680,000
- ---------------------------------------------------------------------------------------------------------------------------
Novato CA 94949 Multifamily 583,000
Bronx NY 10453 Multifamily 560,000
New York NY 10016 Multifamily 499,995
Milwaukee WI 53204 Retail, Single Tenant 335,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF DATE CUT-OFF
PRINCIPAL LOAN DATE PRINCIPAL
BALANCE BALANCE/UNIT 1996 NOI 1997 NOI 1998 NOI 1998 DATE 1998 TYPE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
86,666,578 71 6,144,738 10,494,309
20,768,955 81 1,579,282
15,956,972 68 2,013,395 2,383,252
14,621,661 119 1,835,120
9,547,477 70 1,182,286 1,224,603
- ------------------------------------------------------------------------------------------------------------------------------------
7,344,213 65 971,999 1,045,707
6,209,198 61 542,243 650,078
4,873,887 64 644,595 748,825
3,204,748 51 312,754 346,993
2,069,733 36 165,101 301,178
- ------------------------------------------------------------------------------------------------------------------------------------
2,069,733 36 312,365 379,271
74,948,322 149
82,871,008 61
10,603,574 59 1,114,145 1,317,108
8,645,991 132 695,410 605,693
- ------------------------------------------------------------------------------------------------------------------------------------
8,401,293 49 703,712 749,208
8,319,727 67 991,705 1,014,522 11/30/97 Annualized
8,156,595 41 929,385 1,022,661
7,585,634 46
7,340,936 43 619,334 6/30/98 Annualized
- ------------------------------------------------------------------------------------------------------------------------------------
6,525,276 79 659,439 684,667
4,322,995 98
2,936,374 101 87,664 244,638 6/30/98 Trailing 12
2,854,808 71 124,917 259,790
2,773,242 74 163,376 205,647
- ------------------------------------------------------------------------------------------------------------------------------------
2,283,847 93
2,120,715 59
81,569,558 98,277 11,303,801 13,062,570 13,356,121
41,370,451 115,560 5,657,139 6,457,731 7,779,091 7/31/98 Trailing 12
40,199,107 85,168 5,646,662 6,604,839 5,577,030 7/31/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
74,961,792 8,957,607 10,079,375 11,383,612
59,372,393 67 7,181,712 7,814,165 8,963,413 6/30/98 Trailing 12
15,589,399 42,134 1,775,895 2,265,210 2,420,199 6/30/98 Trailing 12
74,355,366 84 9,794,970 7,803,271 6/30/98 Annualized
60,000,000 192 9,216,180 8,413,150 8,675,092 8/31/98 Annualized
- ------------------------------------------------------------------------------------------------------------------------------------
55,745,250 18,489 1,156,989 5,836,226 6,144,591
11,962,500 31,480 1,340,870 1,138,284 9/30/98 Trailing 12
8,772,500 12,391 419,551 929,036 9/30/98 Trailing 12
7,975,000 30,208 905,758 918,223 9/30/98 Trailing 12
6,539,500 28,188 782,427 876,363 9/30/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
4,944,500 14,290 521,084 652,211 580,815 9/30/98 Trailing 12
4,466,000 21,471 534,126 608,343 9/30/98 Trailing 12
3,509,000 11,393 374,771 125,235 158,619 9/30/98 Trailing 12
3,269,750 16,349 608,218 404,452 9/30/98 Trailing 12
2,392,500 12,396 261,134 249,273 233,589 9/30/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
1,914,000 10,875 218,557 296,867 9/30/98 Trailing 12
54,819,238 90 4,192,957
52,709,690 20,304 1,987,806 6,017,615 5,333,197
7,341,400 33,988 1,151,091 875,581 9/30/98 Trailing 12
5,545,100 26,918 630,845 628,837 9/1/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
5,232,700 15,761 663,780 689,301 9/30/98 Trailing 12
4,998,400 12,751 452,680 499,896 396,450 9/30/98 Trailing 12
4,764,100 11,131 564,773 595,646 509,094 9/30/98 Trailing 12
4,373,600 27,335 376,004 400,169 9/30/98 Trailing 12
4,217,400 34,569 525,232 481,198 9/30/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
4,178,350 23,213 328,543 308,901 9/30/98 Trailing 12
3,748,800 24,031 446,622 577,388 416,928 9/30/98 Trailing 12
3,100,570 22,798 368,747 231,743 136,665 9/30/98 Trailing 12
2,631,970 21,226 275,042 226,723 9/1/98 Trailing 12
2,577,300 17,898 154,984 162,405 263,350 9/30/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
49,972,867 122 4,563,079 5,480,957 6,120,213 7/31/98 Trailing 12
46,021,342 263 4,719,742 5,031,083 8/31/98 Annualized
44,088,900 35,019 1,956,013 3,919,626 4,457,025
28,409,100 46,194 2,040,143 2,796,491 9/30/98 Trailing 12
15,679,800 24,348 1,956,013 1,879,483 1,660,534 9/30/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
41,540,422 45 6,384,531 6,439,176 6,658,551
25,252,536 51 3,988,566 4,112,412 4,231,201 8/31/98 Annualized
8,585,862 80 710,783 946,565 1,175,167 8/31/98 Annualized
4,861,113 28 924,648 931,259 789,792 8/31/98 Annualized
2,840,910 19 760,534 448,940 462,391 8/31/98 Annualized
- ------------------------------------------------------------------------------------------------------------------------------------
36,953,806 68 3,852,533 3,542,808 3,254,303
18,775,606 78 2,120,685 1,791,864 1,494,588 5/22/98 Annualized
15,105,828 80 1,440,495 1,450,879 1,449,979 5/22/98 Annualized
3,072,372 26 291,353 300,065 309,736 5/22/98 Annualized
30,176,866 40,076
- ------------------------------------------------------------------------------------------------------------------------------------
7,754,121 65,713
5,778,549 48,971
5,531,602 31,076
4,494,427 36,540
3,704,198 33,675
- ------------------------------------------------------------------------------------------------------------------------------------
2,913,969 27,490
23,700,000 116 2,234,576 2,247,152 2,356,321 8/31/98 Trailing 12
23,564,880 44,800 2,064,551 2,384,612 2,440,820 3/31/98 Trailing 12
23,302,898 115
7,390,845 139
- ------------------------------------------------------------------------------------------------------------------------------------
7,390,845 120
2,956,338 99
2,782,436 93
2,782,436 98
22,220,441 44,088 2,058,650 2,225,059 2,324,484 3/31/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
19,716,966 19 3,084,785 3,167,160
3,329,686 25 516,019 527,875
2,350,367 42 310,037 344,257
2,317,723 25 360,634 373,428
2,089,215 15 373,485 378,239
- ------------------------------------------------------------------------------------------------------------------------------------
1,925,995 14 291,507 285,171
1,860,707 21 303,747 313,262
1,795,419 18 247,025 291,921
1,697,487 15 278,411 313,827
1,240,471 16 221,505 168,454
- ------------------------------------------------------------------------------------------------------------------------------------
1,109,895 11 182,415 170,726
19,662,220 140 2,273,733 2,439,362
8,426,666 116 1,026,667 1,061,941
7,262,005 155 846,921 927,309
3,973,550 183 400,145 450,112
- ------------------------------------------------------------------------------------------------------------------------------------
19,143,664 36,604
6,149,778 41,553
5,257,068 35,047
4,513,144 36,396
3,223,674 31,918
- ------------------------------------------------------------------------------------------------------------------------------------
17,790,686 48 2,206,469 2,082,815 2,051,686
7,067,770 37 802,987 944,660 955,782 6/30/98 Trailing 12
3,811,052 76 528,865 328,293 179,600 6/30/98 Trailing 12
3,741,761 367 498,119 502,253 559,348 6/30/98 Trailing 12
2,251,986 27 242,872 204,814 242,528 6/30/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
918,117 24 133,626 102,795 114,428 6/30/98 Trailing 12
17,787,585 217
3,085,110 237
2,680,189 262
2,651,266 273
- ------------------------------------------------------------------------------------------------------------------------------------
2,265,627 236
1,937,834 201
1,846,245 188
1,730,554 160
1,590,760 173
- ------------------------------------------------------------------------------------------------------------------------------------
15,623,817 37,922
3,915,868 46,617
3,767,164 41,397
2,805,546 34,214
2,706,410 29,741
- ------------------------------------------------------------------------------------------------------------------------------------
2,428,829 37,950
15,316,465 61,760 975,876 6/30/98 Annualized
15,222,781 36,770 1,380,776 1,572,895 1,603,174 3/31/98 Trailing 12
14,443,020 33,824
4,397,875 47,289
- ------------------------------------------------------------------------------------------------------------------------------------
3,298,406 41,752
2,548,768 33,536
2,348,865 19,574
1,849,106 31,341
14,388,230 201
- ------------------------------------------------------------------------------------------------------------------------------------
13,993,157 55 1,589,517 1,503,292 1,596,831 7/31/98 Annualized
13,763,265 35,842
4,879,884 39,039
3,784,400 37,844
2,659,039 33,659
- ------------------------------------------------------------------------------------------------------------------------------------
2,439,942 30,499
13,473,026 177
13,243,338 47 1,720,668 1,625,412 1,710,295 9/30/98 Trailing 12
13,112,290 33,882
6,252,836 44,034
- ------------------------------------------------------------------------------------------------------------------------------------
3,733,036 31,370
3,126,418 24,813
12,774,778 165,906 1,783,069 1,777,736 1,996,983 6/30/98 Trailing 12
12,657,153 41,499 1,044,970 1,038,350 1,227,960 4/30/98 Annualized
12,493,327 161
- ------------------------------------------------------------------------------------------------------------------------------------
11,936,969 2,044 1,159,261 1,942,760 6/30/98 Trailing 12
10,776,767 49 1,370,389 1,371,364 1,382,608 4/30/98 Trailing 12
10,627,254 68
10,094,357 142 995,396 1,157,512 1,160,516 4/30/98 Trailing 12
9,979,093 38,381 1,546,404 1,622,699 1,623,333 6/30/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
9,920,464 22,144 803,338 776,722 973,276 7/31/98 Annualized
9,616,048 169 1,824,000 1,824,000 1,396,500 3/31/98 Annualized
9,281,232 45 1,170,335 991,194 1,048,153 6/30/98 Annualized
8,996,493 62,045 1,281,866 1,470,786
8,700,000 42 996,332 1,040,049 1,060,071 8/31/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
8,050,000 49 455,613 830,281
7,984,278 120 861,261 868,792 912,220 3/31/98 Annualized
7,943,633 150
7,764,366 25 580,552 1,247,935 1,230,142 8/31/98 Annualized
7,662,521 36
- ------------------------------------------------------------------------------------------------------------------------------------
1,669,441 40
1,630,467 38
1,525,168 36
1,497,770 36
1,339,674 32
- ------------------------------------------------------------------------------------------------------------------------------------
7,438,145 34,596 801,968 819,029 834,779
1,034,093 94,008 101,600 114,687 114,985 7/31/98 Trailing 12
903,814 22,595 116,002 118,993 117,618 7/31/98 Trailing 12
830,532 75,503 102,178 97,931 98,011 7/31/98 Trailing 12
614,756 20,492 96,893 93,633 98,940 7/31/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
614,756 68,306
602,543 33,475 76,648 74,197 74,079 7/31/98 Trailing 12
578,115 41,294 57,982 59,293 54,205 7/31/98 Trailing 12
569,973 25,908 65,213 62,216 70,196 7/31/98 Trailing 12
537,403 33,588 62,347 62,003 60,448 7/31/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
350,126 35,013 34,929 36,134 40,115 7/31/98 Trailing 12
297,200 27,018 37,133 38,686 40,800 7/31/98 Trailing 12
260,559 17,371 28,573 33,976 32,704 7/31/98 Trailing 12
244,274 30,534 22,470 27,280 32,678 7/31/98 Trailing 12
7,000,000 29,289 619,313 483,974
- ------------------------------------------------------------------------------------------------------------------------------------
6,798,452 29,178 1,146,606 1,177,842 1,188,026
2,706,536 25,295 529,110 532,016 539,326 6/30/98 Annualized
2,041,370 30,930 306,986 331,364 332,447 6/30/98 Annualized
1,408,316 42,676 172,408 184,398 179,308 6/30/98 Annualized
642,229 23,786 138,102 130,064 136,945 6/30/98 Annualized
- ------------------------------------------------------------------------------------------------------------------------------------
6,645,906 72
3,630,703 78
3,015,203 66
6,597,114 37 748,673 783,077 797,433 10/19/98 Trailing 12
6,514,620 109 452,416 50,034
- ------------------------------------------------------------------------------------------------------------------------------------
1,113,573 135
957,666 145
687,473 93 68,040
636,424 125 70,410
632,033 95 71,553
- ------------------------------------------------------------------------------------------------------------------------------------
603,706 119 50,034
492,005 146 54,960
288,923 70 40,787
285,542 103 35,512
249,820 61 41,385
- ------------------------------------------------------------------------------------------------------------------------------------
210,304 104 24,400
200,742 133 23,225
156,409 51 22,144
6,300,581 42,571 777,867 746,440
6,300,000 44 842,512 824,016 821,197 8/31/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
6,228,111 64,876 479,078 919,604 959,467 8/31/98 Trailing 12
5,984,382 61 900,595 905,273
5,974,670 51 779,571 703,260
5,783,844 44 621,780 631,625 600,009 4/30/98 Annualized
5,612,164 48 580,654 770,309
- ------------------------------------------------------------------------------------------------------------------------------------
5,600,000 27,723 535,138 7/31/98 Annualized
5,482,156 75 31,288 5,262 257,530 8/31/98 Annualized
5,328,399 27,608 892,578 903,333 859,484
3,330,249 32,973 525,181 569,922 610,710 8/31/98 Annualized
1,998,150 21,719 367,397 333,411 248,774 8/31/98 Annualized
- ------------------------------------------------------------------------------------------------------------------------------------
5,278,249 265 565,247 539,501
5,240,984 75 289,161 636,143
5,197,109 57,746 472,537 545,624 511,492 9/30/98 Trailing 12
5,178,746 79 630,194 618,386 887,680 7/31/98 Annualized
4,827,366 253 795,277 832,246 965,428 8/31/98 Annualized
- ------------------------------------------------------------------------------------------------------------------------------------
4,793,647 34,487 617,501 634,277 581,782 6/30/98 Annualized
4,738,569 58,501 300,679 299,379
1,450,972 50,034 88,914 77,397
1,328,785 63,275 99,199 92,088
1,328,785 63,275 86,750 84,506
- ------------------------------------------------------------------------------------------------------------------------------------
630,027 63,003 25,816 45,388
4,600,000 185
4,591,080 42 488,682 460,201
2,435,134 50 329,517 371,047
2,155,946 36 159,165 89,154
- ------------------------------------------------------------------------------------------------------------------------------------
4,555,639 28,833 572,551 571,398 591,602
1,096,152 43,846 139,376 137,316 142,717 7/31/98 Trailing 12
971,766 22,599 114,238 115,671 120,516 7/31/98 Trailing 12
761,865 25,395 87,075 84,195 90,716 7/31/98 Trailing 12
637,478 30,356 84,551 83,647 84,204 7/31/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
629,704 31,485 79,440 80,887 84,362 7/31/98 Trailing 12
458,674 24,141 67,871 69,682 69,087 7/31/98 Trailing 12
4,498,950 47,861 560,871 709,668 687,654
2,133,417 47,409 230,168 289,260 305,066 8/31/98 Trailing 12
1,546,301 48,322 221,607 277,302 253,181 8/31/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
819,232 48,190 109,096 143,106 129,407 8/31/98 Trailing 12
4,442,095 25,677 270,261 330,005 378,342 8/31/98 Annualized
4,417,462 31,330 577,713 529,642 682,672 8/31/98 Trailing 12
4,390,626 99 345,129 6/30/98 Trailing 12
4,340,558 47 (153,055) (131,178)
- ------------------------------------------------------------------------------------------------------------------------------------
4,274,070 44,522 381,651 479,432 455,480 7/31/98 Annualized
4,201,726 358 459,182 549,600
1,183,585 59,179 139,819 156,964
961,663 82 94,738 124,659
961,663 56,568 100,163 108,344
- ------------------------------------------------------------------------------------------------------------------------------------
466,037 51,782 65,054 70,666
369,870 52,839 36,265 46,079
258,909 51,782 23,143 42,888
4,098,160 35 489,695 513,441 479,968 8/31/98 Trailing 12
4,063,115 63,486 355,915 426,749 454,706 8/31/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
4,035,586 32,028 420,230 393,435 396,940 8/31/98 Trailing 12
4,000,000 32 621,866 612,971 661,365 8/31/98 Trailing 12
3,996,282 39 51,170 110,921 176,690 3/31/98 Trailing 12
3,981,726 22 666,178 779,707 663,628 8/31/98 Annualized
3,862,209 78,821 353,117 371,967 404,877 8/31/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
3,854,487 25,526 414,306 463,919 436,572 5/30/98 Trailing 12
3,832,454 46 503,619 540,616 593,566 5/31/98 Annualized
3,790,432 17 316,101 883,917 711,850 6/30/98 Annualized
3,730,683 36,220 1,087,260 999,852 966,422 6/30/98 Trailing 12
3,683,096 19 603,493 634,109 578,541 8/31/98 Annualized
- ------------------------------------------------------------------------------------------------------------------------------------
3,642,973 59,721 317,782 361,187 372,870 9/30/98 Annualized
3,560,238 318
3,558,024 66 419,522 399,812 417,198 6/30/98 Annualized
3,496,226 34,277 743,974 856,022 7/31/98 Trailing 12
3,488,643 35 664,379 459,093 447,403 7/31/98 Annualized
- ------------------------------------------------------------------------------------------------------------------------------------
3,290,225 23,009 480,298 483,416 693,427 6/30/98 Trailing 12
3,228,459 45 444,168 450,807
3,215,828 26,145 468,268 703,749 765,869 5/31/98 Trailing 12
3,195,383 29,315 345,755 369,829 406,198 5/31/98 Annualized
3,144,317 22,785 547,775 547,070 7/31/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
3,137,998 37,807 345,976 471,858 525,161 5/31/98 Trailing 12
3,039,590 63,325 267,980 290,869 322,613 8/31/98 Trailing 12
3,013,602 55,807 272,320 337,746 348,912 8/31/98 Trailing 12
2,998,789 70 325,786 322,176 402,362 7/31/98 Trailing 12
2,923,402 37 734,674 792,000 3/31/98 Annualized
- ------------------------------------------------------------------------------------------------------------------------------------
2,898,018 62 226,788 318,341
2,883,445 35,164 341,238 340,087 290,852 7/31/98 Trailing 12
2,781,678 198
2,759,884 59 437,826 439,319
2,740,000 35,584 283,845 299,640 320,308 7/31/98 Annualized
- ------------------------------------------------------------------------------------------------------------------------------------
2,736,597 38,008 294,860 304,095 8/31/98 Annualized
2,720,000 34,872 286,296 286,034 311,173 7/31/98 Annualized
2,720,000 35,325 315,696 304,064 314,128 7/31/98 Annualized
2,671,964 264
2,524,380 83
- ------------------------------------------------------------------------------------------------------------------------------------
2,495,191 92
2,495,993 166,400 321,769 436,028 516,820 3/31/98 Trailing 12
2,485,162 245
2,478,850 63,560 198,363 242,206 266,867 8/31/98 Trailing 12
2,427,442 240
- ------------------------------------------------------------------------------------------------------------------------------------
2,400,000 31,169 222,297 252,726 267,624 7/31/98 Annualized
2,398,617 50 308,774 45,013 276,508 7/31/98 Annualized
2,396,503 35,243 256,054 271,617 290,337 5/31/98 Annualized
2,373,332 234
2,301,932 65,769 240,601 267,138 286,163 8/31/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
2,300,000 37,705 236,774 241,409 262,804 7/31/98 Annualized
2,299,743 227
2,296,681 31,461 255,149 276,433 283,586 5/31/98 Annualized
2,273,396 228
2,251,091 222
- ------------------------------------------------------------------------------------------------------------------------------------
2,250,000 40,179 227,032 253,351 273,427 7/31/98 Trailing 12
2,250,000 31,250 236,942 257,342 275,225 7/31/98 Annualized
2,238,792 31,532 248,580 240,114 249,247 7/31/98 Trailing 12
2,236,000 58 250,193 282,556 288,419 8/31/98 Trailing 12
2,215,063 16,781 245,729 271,088 310,993 7/31/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
2,213,198 219
2,196,408 217
2,175,519 24 354,025 339,922 358,284 6/30/98 Trailing 12
2,173,888 215
2,172,174 215
- ------------------------------------------------------------------------------------------------------------------------------------
2,144,931 25,234 305,049 295,044 291,141 7/31/98 Annualized
2,143,220 22,325 295,230 310,122
2,116,349 209
2,098,968 30
2,096,970 29,125 217,686 248,837 281,093 5/31/98 Annualized
- ------------------------------------------------------------------------------------------------------------------------------------
2,090,866 207
2,077,611 205
2,036,056 72,716 199,649 195,701 214,545 8/31/98 Trailing 12
2,015,924 199
2,012,127 199
- ------------------------------------------------------------------------------------------------------------------------------------
2,006,070 66,869 179,575 190,158 218,312 8/31/98 Annualized
1,995,780 74 207,519 178,637
1,994,076 13,383 278,241 430,224 6/30/98 Trailing 12
1,991,585 58,576 288,769 285,236 408,290 8/31/98 Annualized
1,991,039 16 356,083 369,306 358,853 3/31/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
1,971,569 195
1,930,000 34 310,986 311,766 334,529 8/31/98 Trailing 12
1,915,683 19,955 123,921 186,185 250,800 7/31/98 Annualized
1,860,000 34,444 183,841 194,322 220,966 8/1/98 Annualized
1,845,638 252 29,357 47,427
- ------------------------------------------------------------------------------------------------------------------------------------
1,840,000 36,800 181,691 203,931 214,766 7/31/98 Annualized
1,829,152 70,352 167,952 181,405 184,594 8/31/98 Trailing 12
1,823,017 42,396 233,276 230,316 231,742 7/31/98 Trailing 12
1,814,530 179
1,805,561 178
- ------------------------------------------------------------------------------------------------------------------------------------
1,799,102 28,557 259,390 188,223 216,343 7/31/98 Trailing 12
1,797,417 31,534 449,139 519,678 493,231 2/28/98 Trailing 12
1,796,856 71 227,419 228,407 207,490 5/29/98 Annualized
1,785,062 176
1,777,000 27,338 200,789 202,610 209,812 7/31/98 Annualized
- ------------------------------------------------------------------------------------------------------------------------------------
1,735,000 35,408 195,331 209,218 220,301 7/31/98 Annualized
1,716,503 33,657 356,003 344,014 328,769 2/28/98 Trailing 12
1,623,093 160
1,598,773 38 134,653 238,034 245,203 8/31/98 Trailing 12
1,598,697 143
- ------------------------------------------------------------------------------------------------------------------------------------
1,580,199 18 203,775 204,750
1,580,000 28,727 163,687 163,836 179,282 7/31/98 Annualized
1,548,000 28,145 165,097
1,525,000 26,293 170,663 168,789 179,202 7/31/98 Annualized
1,496,463 162 236,171 247,844
- ------------------------------------------------------------------------------------------------------------------------------------
1,444,114 143
1,430,337 68,111 117,229 131,497 150,827 8/31/98 Trailing 12
1,402,926 139
1,347,461 69 185,537 225,025 257,176 7/31/98 Annualized
1,338,379 70,441 121,809 132,868 148,822 8/31/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
1,334,556 23,010 445,352 477,627 429,823 7/31/98 Annualized
1,321,705 121
1,297,292 29 204,995 230,605 298,095 4/30/98 Annualized
1,284,404 64,220 122,388 125,757 144,547 8/31/98 Trailing 12
1,280,000 30,476 135,762 144,293 148,841 7/31/98 Annualized
- ------------------------------------------------------------------------------------------------------------------------------------
1,255,595 24,146 170,488 158,860 137,917 7/31/98 Annualized
1,248,673 86 198,468 179,997
1,198,882 36 182,137 194,666
1,194,637 36,201 245,074 176,110 3/31/98 Trailing 12
1,120,480 62,249 118,024 123,164 129,104 8/31/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
1,106,000 77
1,047,473 27,565 129,121
1,038,101 136 138,860 9/4/98 Annualized
999,068 20,814 91,252 109,694 127,561 8/31/98 Trailing 12
898,267 18,714 107,766 124,701 125,774 7/31/98 Trailing 12
- ------------------------------------------------------------------------------------------------------------------------------------
873,730 31 114,692 143,137 143,735 8/31/98 Trailing 12
855,000 26,719 87,207 96,980 101,349 7/31/98 Annualized
825,000 31,731 85,185 86,478 101,359 7/31/98 Annualized
696,624 31,665 103,860 94,443 99,913 7/31/98 Trailing 12
680,000 32,381 70,659 73,978 87,472 7/31/98 Annualized
- ------------------------------------------------------------------------------------------------------------------------------------
582,730 58,273 46,866 51,020 60,101 8/31/98 Trailing 12
560,000 18,667 51,296 62,295 72,433 7/31/98 Annualized
498,504 29,324 83,456 80,236
334,498 58
<PAGE>
ANNUAL
U/W NET DEBT
U/W NOI 1996 REV 1997 REV 1998 REV U/W REV CASH FLOW SERVICE
- -----------------------------------------------------------------------------------------------------------------------------------
10,968,267 10,437,006 16,525,180 17,562,816 8,849,705 7,053,294
2,279,293 3,212,673 4,288,264 1,704,294
2,211,083 3,252,034 3,601,313 3,420,040 1,790,187
1,752,046 1,845,000 1,835,340 1,528,878
1,082,485 2,106,777 2,220,346 2,061,826 869,841
- -----------------------------------------------------------------------------------------------------------------------------------
1,050,048 1,232,788 1,275,067 1,320,157 938,454
762,088 1,052,732 1,219,092 1,378,940 593,647
708,324 990,386 1,109,750 1,072,413 573,543
523,972 574,381 614,093 803,186 429,364
308,392 539,346 691,435 714,330 219,176
- -----------------------------------------------------------------------------------------------------------------------------------
290,536 688,562 736,411 668,320 202,321
7,248,163 8,481,674 7,147,248 6,303,624
9,373,405 7,747,164 6,896,663 2,354,420 12,445,763 8,409,823 6,433,577
1,177,004 1,549,735 1,563,663 1,516,993 1,034,792
990,674 1,247,547 1,028,673 1,454,532 912,278
- -----------------------------------------------------------------------------------------------------------------------------------
936,338 877,851 947,015 1,149,686 814,468
903,939 1,224,701 1,200,214 1,194,334 778,965
1,139,181 1,232,132 1,339,060 1,436,391 1,000,505
859,966 1,014,248 802,254
773,241 694,902 928,087 714,027
- -----------------------------------------------------------------------------------------------------------------------------------
724,607 887,593 907,329 938,823 655,483
444,597 593,449 415,877
289,069 206,274 459,304 492,758 255,690
302,651 215,306 343,329 394,223 266,714
332,497 512,299 561,320 610,040 293,789
- -----------------------------------------------------------------------------------------------------------------------------------
277,166 442,341 258,662
222,475 279,858 206,319
12,959,284 37,461,135 41,059,477 42,673,844 41,914,410 10,863,564 7,717,620
6,998,693 18,396,811 19,925,844 21,528,417 19,826,649 6,007,361
5,960,591 19,064,324 21,133,633 21,145,427 22,087,761 4,856,203
- -----------------------------------------------------------------------------------------------------------------------------------
9,456,881 24,027,857 24,636,260 26,221,173 24,198,838 8,085,519 6,379,500
7,307,369 13,554,284 13,571,905 14,671,995 12,865,999 6,502,649
2,149,512 10,473,573 11,064,355 11,549,178 11,332,839 1,582,870
11,910,549 19,453,829 16,661,201 23,062,889 9,659,470 6,280,387
7,688,447 12,198,396 11,522,454 12,054,665 10,898,717 7,139,453 5,398,250
- -----------------------------------------------------------------------------------------------------------------------------------
6,386,894 3,291,047 14,124,419 14,937,713 15,159,212 5,631,611 4,709,452
1,129,836 2,477,549 2,241,824 2,241,504 1,034,836
932,928 2,116,082 2,883,759 2,879,137 755,928
819,101 1,764,821 1,823,949 1,718,139 753,101
909,301 1,512,437 1,600,555 1,621,593 850,373
- -----------------------------------------------------------------------------------------------------------------------------------
636,775 1,199,923 1,433,329 1,250,931 1,318,344 550,275
581,715 1,054,948 1,124,595 1,087,541 529,715
365,768 1,203,642 957,957 1,111,549 1,323,889 288,768
458,898 1,077,790 1,135,413 1,185,629 408,898
239,180 887,482 938,190 973,102 975,861 190,325
- -----------------------------------------------------------------------------------------------------------------------------------
313,392 791,316 792,036 807,575 269,392
6,474,403 8,362,551 10,624,477 5,475,114 4,356,498
5,986,745 5,464,201 12,790,479 13,136,630 13,641,103 5,333,317 4,453,003
894,161 1,607,862 1,533,114 1,535,485 840,161
657,655 1,327,742 1,379,634 1,381,263 606,155
- -----------------------------------------------------------------------------------------------------------------------------------
758,895 1,371,292 1,454,163 1,512,532 675,895
578,235 1,648,027 1,490,244 1,622,280 1,793,820 480,235
654,146 1,580,439 1,539,991 1,561,580 1,712,353 547,146
438,276 814,890 869,128 903,272 398,276
496,262 902,212 911,142 919,129 465,762
- -----------------------------------------------------------------------------------------------------------------------------------
276,366 853,541 959,096 893,063 231,366
399,554 908,042 1,049,333 926,800 912,028 359,150
255,664 749,637 576,148 597,279 685,822 221,664
266,748 619,401 623,506 652,926 235,748
310,783 578,056 637,823 698,908 739,410 271,759
- -----------------------------------------------------------------------------------------------------------------------------------
5,943,986 8,534,519 9,185,154 9,878,607 10,010,265 5,784,629 4,174,764
4,907,378 6,774,234 7,087,343 6,949,620 4,511,632 3,917,067
4,768,275 3,182,253 7,250,396 7,907,543 8,205,305 4,453,775 3,724,704
2,892,216 4,143,759 4,914,323 4,958,532 2,738,466
1,876,059 3,182,253 3,106,637 2,993,220 3,246,773 1,715,309
- -----------------------------------------------------------------------------------------------------------------------------------
6,249,230 8,304,382 8,287,221 8,789,512 8,223,859 5,421,026 3,428,901
3,783,454 5,194,730 5,215,295 5,434,563 4,951,128 3,244,590
1,247,691 1,280,378 1,501,380 1,908,659 1,846,558 1,106,205
740,918 1,024,383 1,096,757 925,121 894,683 659,650
477,167 804,891 473,789 521,169 531,490 410,581
- -----------------------------------------------------------------------------------------------------------------------------------
4,376,455 5,158,698 4,725,431 4,464,505 5,674,766 3,988,626 3,134,976
2,208,103 2,922,789 2,508,443 2,216,499 2,944,513 2,038,881
1,809,150 1,867,506 1,852,891 1,863,477 2,246,063 1,648,713
359,202 368,403 364,097 384,529 484,190 301,032
2,526,553
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
2,915,128 4,438,126 4,448,181 4,616,065 5,251,873 2,637,660 2,132,605
2,742,574 4,038,994 4,293,112 4,342,362 4,573,720 2,611,074 1,972,486
2,333,784
- -----------------------------------------------------------------------------------------------------------------------------------
2,604,892 4,264,482 4,411,773 4,513,490 4,757,078 2,478,892 1,859,951
- -----------------------------------------------------------------------------------------------------------------------------------
2,940,960 4,643,153 4,958,263 4,206,915 2,387,569 1,586,340
468,058 702,644 716,958 650,752 370,406
331,431 431,547 469,130 458,404 280,088
350,282 474,165 493,998 474,840 273,356
334,717 529,186 566,247 529,166 268,377
- -----------------------------------------------------------------------------------------------------------------------------------
287,912 457,621 454,413 465,903 244,965
282,443 442,724 566,998 291,611 269,291
258,906 452,928 483,729 451,738 191,806
279,806 571,861 598,690 309,230 262,482
191,839 276,004 296,942 276,333 136,232
- -----------------------------------------------------------------------------------------------------------------------------------
155,566 304,473 311,158 298,938 90,566
2,312,801 2,825,000 2,825,000 2,384,331 2,224,719 1,812,063
1,111,582 1,206,275 1,206,275 1,145,961 1,066,374
820,316 1,045,250 1,045,250 845,687 791,039
380,903 573,475 573,475 392,683 367,306
- -----------------------------------------------------------------------------------------------------------------------------------
1,590,894
- -----------------------------------------------------------------------------------------------------------------------------------
2,373,468 3,265,553 3,215,890 3,171,713 3,370,173 2,087,046 1,502,308
998,597 1,173,386 1,273,814 1,293,310 1,297,652 881,646
507,345 855,532 698,394 565,235 874,625 414,272
485,845 671,697 686,144 749,259 655,637 471,389
254,348 351,261 350,061 357,998 342,775 213,055
- -----------------------------------------------------------------------------------------------------------------------------------
127,333 213,677 207,477 205,911 199,484 106,684
1,787,973
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
1,302,275
- -----------------------------------------------------------------------------------------------------------------------------------
1,673,623 1,612,985 2,346,725 1,624,023 1,269,525
1,716,464 2,722,490 2,940,156 2,967,218 3,071,156 1,612,964 1,274,215
1,191,737
- -----------------------------------------------------------------------------------------------------------------------------------
1,431,119
- -----------------------------------------------------------------------------------------------------------------------------------
1,456,854 2,405,982 2,353,562 2,302,601 2,461,494 1,397,614 1,204,734
1,141,661
- -----------------------------------------------------------------------------------------------------------------------------------
1,284,742
1,619,194 2,567,246 2,474,385 2,482,897 2,463,934 1,416,795 1,134,200
1,082,109
- -----------------------------------------------------------------------------------------------------------------------------------
1,807,724 5,545,754 5,990,951 6,293,401 6,212,492 1,777,474 1,043,659
1,360,411 1,877,175 1,903,490 1,990,751 2,104,406 1,284,161 1,024,213
1,287,106 1,603,271 1,253,327 1,048,822
- -----------------------------------------------------------------------------------------------------------------------------------
1,422,432 1,168,839 1,942,760 1,466,424 1,330,747 1,133,783
1,284,154 1,484,217 1,481,994 1,489,442 1,448,695 1,144,767 893,864
1,050,059
1,246,332 1,510,463 1,667,451 1,682,143 1,785,755 1,141,092 835,860
1,572,114 4,884,010 4,989,420 5,020,096 5,020,096 1,321,109 884,449
- -----------------------------------------------------------------------------------------------------------------------------------
1,156,457 2,082,989 2,165,959 2,112,634 2,339,246 1,041,321 869,766
1,164,833 2,635,638 2,470,466 1,791,331 1,877,036 1,153,449 773,923
1,082,826 1,700,222 1,596,140 1,642,578 1,697,084 919,080 751,493
1,220,343 2,913,107 2,840,085 2,840,085 1,078,339 820,497
998,731 1,202,019 1,253,136 1,272,739 1,277,670 914,829 729,984
- -----------------------------------------------------------------------------------------------------------------------------------
912,879 683,225 968,168 1,090,654 822,563 698,742
954,151 1,196,711 1,155,673 1,212,996 1,221,747 944,172 652,937
799,348
1,209,754 881,137 1,812,847 1,734,525 1,765,834 1,060,842 649,651
729,562
- -----------------------------------------------------------------------------------------------------------------------------------
158,950
155,240
145,214
142,605
127,553
- -----------------------------------------------------------------------------------------------------------------------------------
839,354 1,226,134 1,257,561 1,268,304 1,346,659 771,615 629,939
106,917 136,214 144,787 144,622 145,688 102,892
112,236 179,276 184,880 183,603 182,660 99,813
79,717 115,164 111,770 112,004 102,496 76,967
94,734 151,576 155,030 155,694 153,941 85,100
- -----------------------------------------------------------------------------------------------------------------------------------
62,616 89,520 60,366
66,795 112,494 114,468 114,906 111,902 60,691
51,881 94,844 98,147 94,761 95,611 47,181
62,021 118,972 117,349 125,798 124,860 55,487
58,065 106,445 105,568 108,114 109,606 52,579
- -----------------------------------------------------------------------------------------------------------------------------------
41,200 55,298 60,764 61,956 63,407 38,256
40,039 62,100 64,306 64,162 63,902 36,446
32,193 54,439 58,715 56,652 57,738 27,493
30,940 39,312 41,777 46,032 45,328 28,344
1,148,446 1,771,711 1,809,805 2,425,620 1,088,696 553,224
- -----------------------------------------------------------------------------------------------------------------------------------
1,190,402 1,724,047 1,756,684 1,736,628 1,775,867 1,125,295 981,742
545,892 750,670 768,290 760,027 785,126 519,142
336,247 528,746 541,550 533,305 542,505 315,655
174,721 237,234 242,648 242,328 239,992 166,041
133,542 207,397 204,196 200,968 208,244 124,457
- -----------------------------------------------------------------------------------------------------------------------------------
792,489 817,000 772,641 573,173
428,497 441,750 415,519 313,128
363,992 375,250 357,122 260,045
748,126 1,035,230 1,072,165 1,088,502 1,069,628 691,876 585,011
722,748 483,854 50,980 824,235 712,994 673,264
- -----------------------------------------------------------------------------------------------------------------------------------
114,814 121,001 113,576
102,837 110,035 101,847
73,742 69,827 84,478 72,630
68,776 72,000 82,193 68,012
69,780 73,125 80,859 68,787
- -----------------------------------------------------------------------------------------------------------------------------------
64,388 50,980 72,039 63,624
54,765 59,800 59,800 54,170
39,716 48,500 48,500 38,937
31,861 39,092 36,526 31,302
34,099 45,000 45,000 33,408
- -----------------------------------------------------------------------------------------------------------------------------------
23,829 24,960 27,723 23,411
22,453 23,550 28,081 22,194
21,688 28,000 28,000 21,096
781,100 1,361,158 1,363,322 1,406,836 741,317 576,549
759,061 980,037 969,665 958,271 949,538 692,193 528,612
- -----------------------------------------------------------------------------------------------------------------------------------
727,556 898,697 1,271,965 1,330,279 1,091,978 696,388 543,966
757,265 937,356 937,969 795,208 646,336 486,779
696,741 1,097,572 1,053,706 1,061,302 665,471 518,104
698,777 876,208 893,467 819,624 952,675 614,116 458,851
878,297 1,098,332 1,118,174 1,156,781 787,867 477,076
- -----------------------------------------------------------------------------------------------------------------------------------
656,678 1,075,368 1,156,478 597,438 493,090
686,549 217,675 275,875 690,134 1,005,167 606,321 455,171
821,560 2,145,676 2,109,039 2,071,889 2,065,503 718,286 471,097
566,416 1,174,978 1,211,978 1,265,784 1,259,365 503,448
255,144 970,698 897,061 806,105 806,138 214,838
- -----------------------------------------------------------------------------------------------------------------------------------
681,049 902,984 836,949 980,073 612,604 463,399
715,465 1,010,533 1,213,489 1,317,540 544,415 449,600
608,537 772,975 834,987 844,123 931,949 586,037 430,981
654,465 1,064,587 1,084,387 1,106,114 1,109,654 569,854 455,463
812,438 1,949,867 2,104,064 2,420,175 2,291,147 743,704 487,533
- -----------------------------------------------------------------------------------------------------------------------------------
639,213 861,951 880,885 891,274 938,250 597,196 397,633
544,221 646,920 655,518 866,444 523,931 435,456
159,908 196,895 192,226 272,373 152,658
152,082 181,436 197,999 238,830 146,832
156,153 184,580 173,771 238,015 150,903
- -----------------------------------------------------------------------------------------------------------------------------------
76,078 84,009 91,522 117,226 73,538
530,014 714,562 502,604 408,893
908,696 868,472 828,302 1,320,479 709,028 377,310
502,936 561,995 585,023 742,334 398,239
405,760 306,477 243,279 578,145 310,789
- -----------------------------------------------------------------------------------------------------------------------------------
530,491 910,926 903,011 930,862 905,790 475,944 385,819
122,862 209,520 195,822 213,208 201,553 113,398
113,459 202,636 203,338 205,147 203,437 98,648
87,955 146,044 147,093 153,361 156,486 77,868
73,730 136,677 137,237 135,911 133,205 66,057
- -----------------------------------------------------------------------------------------------------------------------------------
71,117 111,175 113,590 115,501 107,949 64,986
61,368 104,874 105,931 107,734 103,160 54,987
623,240 1,937,790 2,073,166 2,032,836 2,003,554 584,927 471,543
291,096 809,216 887,750 897,015 869,758 275,475
211,833 683,693 709,369 676,693 674,668 199,902
- -----------------------------------------------------------------------------------------------------------------------------------
120,311 444,881 476,047 459,128 459,128 109,550
464,727 635,478 657,432 701,361 819,720 456,077 376,677
629,017 2,013,485 2,017,894 1,922,646 1,922,646 532,885 436,949
519,680 470,555 692,825 495,151 385,734
464,577 621,809 414,970 358,588
- -----------------------------------------------------------------------------------------------------------------------------------
495,940 893,125 930,929 954,475 955,668 471,940 357,759
492,057 734,463 779,026 744,170 462,783 343,608
141,313 196,582 207,290 200,630 136,313
106,903 169,510 186,842 176,256 92,319
109,717 155,910 165,058 163,160 105,467
- -----------------------------------------------------------------------------------------------------------------------------------
65,207 101,621 98,824 97,844 62,957
38,426 61,281 64,199 59,498 36,486
30,491 49,559 56,813 46,782 29,241
539,248 696,741 674,319 806,621 755,585 427,905 361,012
473,833 591,108 653,419 665,876 691,326 457,833 354,875
- -----------------------------------------------------------------------------------------------------------------------------------
397,514 667,789 671,771 679,912 674,656 391,214 341,837
545,509 734,222 722,469 770,059 704,147 482,166 363,630
549,321 609,096 609,096 609,096 1,012,090 483,335 355,028
839,885 982,234 1,115,278 1,101,939 1,214,532 765,679 333,155
440,942 544,223 567,786 593,806 629,907 425,573 337,327
- -----------------------------------------------------------------------------------------------------------------------------------
431,684 787,835 786,541 755,975 794,595 393,934 319,778
619,675 873,565 918,720 955,126 992,004 428,980 313,410
614,623 422,520 1,046,355 849,027 754,807 541,483 312,001
800,041 2,834,165 2,816,172 2,741,991 2,530,515 673,516 332,253
613,344 827,141 933,938 957,236 970,003 535,235 308,168
- -----------------------------------------------------------------------------------------------------------------------------------
404,885 502,646 540,991 571,569 605,314 389,635 302,101
292,594
444,914 561,086 539,150 585,114 579,019 403,686 295,202
730,907 1,744,732 1,957,774 1,750,904 643,362 292,308
465,474 998,005 775,205 767,052 782,151 385,874 318,536
- -----------------------------------------------------------------------------------------------------------------------------------
617,082 1,346,150 1,452,766 1,683,663 1,683,663 532,899 295,221
442,464 596,274 606,249 636,566 394,974 279,827
715,297 1,360,493 1,379,189 1,416,199 1,416,172 644,514 293,584
389,414 677,245 720,473 758,412 731,489 354,105 255,992
429,640 1,103,463 1,151,346 1,034,193 377,931 297,529
- -----------------------------------------------------------------------------------------------------------------------------------
525,329 1,061,941 1,265,320 1,371,896 1,371,784 456,740 284,275
354,619 467,778 483,948 500,405 528,297 342,619 265,479
374,009 489,117 534,557 551,312 592,221 360,509 263,210
382,064 526,758 559,854 665,408 661,928 332,484 271,216
375,027 1,058,186 1,079,144 622,832 312,850 243,744
- -----------------------------------------------------------------------------------------------------------------------------------
428,553 591,952 668,398 726,612 372,675 235,346
312,047 678,708 684,450 686,896 660,115 290,974 241,357
229,576
365,335 607,024 606,338 550,659 275,113 239,623
328,307 534,999 554,951 574,836 586,699 304,990 236,921
- -----------------------------------------------------------------------------------------------------------------------------------
337,395 505,802 510,017 547,403 320,178 233,005
317,469 550,066 567,389 594,420 596,738 296,757 235,192
311,943 567,584 591,233 605,290 621,381 291,853 235,192
179,426
219,000
- -----------------------------------------------------------------------------------------------------------------------------------
321,023 474,762 286,192 205,671
422,334 1,067,629 1,182,523 1,209,903 1,209,683 361,850 219,085
163,999
275,223 359,618 407,535 421,407 433,549 263,776 216,504
208,299
- -----------------------------------------------------------------------------------------------------------------------------------
279,705 488,443 512,561 528,607 537,701 256,952 207,522
317,609 405,011 142,430 401,444 440,642 273,716 220,451
302,574 522,794 543,817 557,662 576,000 283,074 191,220
159,134
257,409 400,030 418,333 453,121 415,014 248,659 201,052
- -----------------------------------------------------------------------------------------------------------------------------------
269,089 450,470 474,554 490,431 498,056 251,813 198,875
154,651
280,087 502,681 532,640 549,684 541,658 261,615 183,994
307,495 441,987 292,346 222,593
153,824
- -----------------------------------------------------------------------------------------------------------------------------------
261,747 434,789 460,204 472,565 471,455 244,800 194,552
277,748 483,785 510,406 529,690 536,952 257,100 194,552
276,461 601,966 604,623 604,745 582,809 254,734 187,397
295,224 381,641 405,198 413,170 447,898 262,429 192,864
297,292 569,383 576,777 593,491 593,510 261,388 190,672
- -----------------------------------------------------------------------------------------------------------------------------------
147,614
148,044
378,199 546,746 538,891 542,624 583,873 354,199 194,342
146,245
145,071
- -----------------------------------------------------------------------------------------------------------------------------------
283,880 498,342 495,683 510,660 509,128 279,630 238,782
331,261 962,309 1,097,908 1,090,678 278,372 216,927
140,210
363,237 396,019 329,734 216,363
285,759 436,015 468,412 496,874 507,773 263,335 167,995
- -----------------------------------------------------------------------------------------------------------------------------------
138,235
142,293
228,165 313,805 305,360 318,762 342,500 221,165 177,830
135,196
135,890
- -----------------------------------------------------------------------------------------------------------------------------------
215,009 305,539 313,131 331,318 331,538 207,509 175,211
243,689 299,762 283,444 350,192 228,193 158,868
422,085 1,075,783 1,269,940 1,269,940 358,588 178,922
380,252 526,026 560,850 854,689 854,689 337,518 193,093
319,381 487,785 495,099 482,190 458,354 276,213 168,099
- -----------------------------------------------------------------------------------------------------------------------------------
130,605
308,422 396,227 383,811 408,620 411,736 272,515 166,464
283,853 448,576 504,707 514,797 521,565 255,053 164,020
224,547 354,884 366,680 382,562 387,817 209,882 160,830
253,321 35,000 52,920 270,750 238,590 160,379
- -----------------------------------------------------------------------------------------------------------------------------------
228,938 350,826 364,066 383,736 391,935 214,592 159,100
219,290 277,092 287,869 294,596 328,419 212,790 159,759
199,573 467,302 469,258 469,077 454,133 188,436 152,595
122,419
119,308
- -----------------------------------------------------------------------------------------------------------------------------------
232,189 394,778 362,462 388,613 401,839 209,383 153,999
345,177 1,047,248 1,209,726 1,187,124 1,072,666 291,544 182,963
223,411 377,255 374,335 366,609 369,713 185,734 153,255
120,344
213,964 407,595 429,257 432,101 450,681 194,312 153,653
- -----------------------------------------------------------------------------------------------------------------------------------
217,489 333,888 347,485 363,435 375,125 202,450 150,021
275,797 778,484 772,617 769,150 758,169 237,890 168,662
107,048
232,173 242,542 350,747 352,547 339,623 187,009 152,282
147,500
- -----------------------------------------------------------------------------------------------------------------------------------
218,618 291,294 277,719 289,747 189,487 152,334
185,615 343,032 358,985 369,063 376,925 171,811 136,619
183,125 356,379 374,071 167,886 133,852
193,537 366,992 375,289 384,254 392,963 169,309 131,863
229,543 313,495 310,297 319,290 212,728 130,037
- -----------------------------------------------------------------------------------------------------------------------------------
97,095
166,150 216,281 233,886 245,907 260,730 160,900 124,926
92,801
221,918 247,389 286,783 318,916 295,840 189,996 125,249
155,604 216,076 225,337 238,252 249,125 150,854 116,895
- -----------------------------------------------------------------------------------------------------------------------------------
429,251 869,315 925,358 957,209 925,358 382,984 151,190
118,363
212,257 316,986 354,300 358,965 340,567 167,836 113,712
140,895 199,568 201,360 209,906 211,895 135,895 112,181
152,445 276,325 286,781 293,282 302,094 139,225 110,678
- -----------------------------------------------------------------------------------------------------------------------------------
162,008 262,300 249,045 246,798 270,702 149,008 101,306
151,111 267,355 260,029 231,424 140,151 109,051
212,612 275,865 298,627 313,748 167,956 106,415
155,517 529,329 638,343 589,950 149,817 113,056
120,544 194,816 202,886 210,140 207,276 116,044 97,863
- -----------------------------------------------------------------------------------------------------------------------------------
132,429 149,720 119,534 99,708
153,225 207,143 232,847 137,274 87,584
128,393 162,840 154,688 116,412 87,177
133,321 204,458 223,365 241,992 244,926 119,065 88,679
120,801 278,547 281,603 275,673 287,873 108,801 82,642
- -----------------------------------------------------------------------------------------------------------------------------------
146,946 267,591 272,707 272,148 284,641 133,205 88,481
111,288 189,834 191,980 202,634 209,462 102,934 73,930
98,970 163,803 169,976 184,608 183,296 87,872 71,336
79,395 235,786 236,405 236,218 224,655 73,895 58,311
87,324 152,294 159,313 166,767 167,708 80,740 58,798
- -----------------------------------------------------------------------------------------------------------------------------------
64,648 92,010 88,448 93,750 100,299 62,148 50,896
71,113 163,078 171,310 179,652 179,282 60,605 48,422
117,716 159,119 168,807 208,076 113,316 54,683
48,025 64,717 42,507 34,094
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATED ANTICIPATED ANTICIPATED ORIGINAL
MORTGAGE INTEREST MATURITY REPAYMENT REMAINING AMORT REMAINING
DSCR RATE CALC. DATE DATE TERM TERM LOCKOUT
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1.25 7.1550 Actual / 360 6/11/28 6/11/08 115 358 108
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
1.13 8.0000 Actual / 360 7/11/18 7/11/13 176 240 169
1.31 6.7100 Actual / 360 9/11/28 9/11/08 118 360 115
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
1.41 8.2500 Actual / 360 11/11/23 11/11/08 120 300 116
- -------------------------------------------------------------------------------------------------------------------------------
1.27 7.6400 Actual / 360 10/11/28 10/11/08 119 360 116
1.54 7.2750 Actual / 360 1/11/26 2/11/08 111 336 104
1.32 7.6650 Actual / 360 11/11/23 11/11/08 120 300 117
- -------------------------------------------------------------------------------------------------------------------------------
1.20 7.5700 Actual / 360 11/11/28 11/11/08 120 360 113
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
1.26 6.9400 Actual / 360 9/11/28 9/11/08 118 360 111
1.20 7.5700 Actual / 360 11/11/28 11/11/08 120 360 113
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
1.39 7.4500 Actual / 360 10/11/28 10/11/05 83 360 76
1.15 7.1500 Actual / 360 7/11/24 7/11/08 116 312 109
1.20 7.5700 Actual / 360 11/11/28 11/11/08 120 360 113
- -------------------------------------------------------------------------------------------------------------------------------
1.58 7.2610 Actual / 360 1/11/28 1/11/08 110 360 106
- -------------------------------------------------------------------------------------------------------------------------------
1.27 7.6000 Actual / 360 10/11/28 10/11/08 119 360 115
6.6858 Actual / 360 3/11/19 291 240
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
1.24 8.2300 Actual / 360 11/11/28 11/11/08 120 360 118
1.32 7.4700 Actual / 360 11/11/28 5/11/08 114 360 110
8.0880 30 / 360 7/1/16 216 0
- -------------------------------------------------------------------------------------------------------------------------------
1.33 7.4700 Actual / 360 11/11/28 5/11/08 114 360 110
- -------------------------------------------------------------------------------------------------------------------------------
1.51 7.0500 Actual / 360 7/11/28 7/11/08 116 360 113
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
1.23 7.9200 Actual / 360 9/11/23 9/11/08 118 300 111
- -------------------------------------------------------------------------------------------------------------------------------
6.6914 Actual / 360 3/11/19 297 240
- -------------------------------------------------------------------------------------------------------------------------------
1.39 7.5600 Actual / 360 10/11/28 10/11/08 119 360 112
- -------------------------------------------------------------------------------------------------------------------------------
8.7829 Actual / 360 5/11/23 299 290
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
6.6891 Actual / 360 3/11/19 295 240
- -------------------------------------------------------------------------------------------------------------------------------
1.28 7.3700 Actual / 360 10/11/28 10/11/08 119 360 112
1.27 7.4700 Actual / 360 11/11/28 5/11/08 114 360 110
6.6966 Actual / 360 3/11/19 303 240
- -------------------------------------------------------------------------------------------------------------------------------
7.8550 30 / 360 10/11/18 240 235
- -------------------------------------------------------------------------------------------------------------------------------
1.16 7.7600 Actual / 360 8/11/07 8/11/07 360 101
6.6927 Actual / 360 3/11/19 298 240
- -------------------------------------------------------------------------------------------------------------------------------
7.5984 Actual / 360 4/11/18 238 226
1.25 7.7000 Actual / 360 10/11/28 10/11/08 119 360 112
6.6965 Actual / 360 3/11/19 303 240
- -------------------------------------------------------------------------------------------------------------------------------
1.70 7.2100 Actual / 360 8/11/28 8/11/08 117 360 110
1.25 7.1200 Actual / 360 9/11/28 9/11/08 118 360 34
1.19 7.5000 Actual / 360 10/11/28 10/11/08 119 360 112
- -------------------------------------------------------------------------------------------------------------------------------
1.17 7.2000 Actual / 360 8/11/18 8/11/08 117 240 110
1.28 7.2600 Actual / 360 8/11/28 7/11/08 116 360 113
7.7189 30 / 360 8/11/18 240 233
1.37 7.3600 Actual / 360 10/11/28 10/11/13 179 360 177
1.49 7.4700 Actual / 360 9/11/23 9/11/05 82 300 78
- -------------------------------------------------------------------------------------------------------------------------------
1.20 7.9500 Actual / 360 10/11/28 10/11/08 119 360 112
1.49 7.0450 Actual / 360 6/11/28 6/11/03 55 360 52
1.22 7.1200 Actual / 360 8/11/28 8/11/08 117 360 113
1.31 8.3700 Actual / 360 10/11/28 10/11/08 119 360 112
1.25 7.5000 Actual / 360 11/11/28 11/11/08 120 360 118
- -------------------------------------------------------------------------------------------------------------------------------
1.18 7.8500 Actual / 360 11/11/28 11/11/08 120 360 113
1.45 7.2200 Actual / 360 8/11/28 8/11/13 177 360 170
7.7063 Actual / 360 2/11/18 235 227
1.63 6.8000 Actual / 360 7/11/23 7/11/08 116 300 112
8.4449 Actual / 360 6/11/23 299 291
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
1.22 7.5900 Actual / 360 10/11/28 10/11/08 119 360 117
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
1.97 6.9000 Actual / 360 11/11/08 360 116
- -------------------------------------------------------------------------------------------------------------------------------
1.15 8.2000 Actual / 360 9/11/28 9/11/05 82 360 80
- -------------------------------------------------------------------------------------------------------------------------------
1.35 7.1500 Actual / 360 8/11/23 8/11/08 117 300 115
1.33 7.1500 Actual / 360 8/11/23 8/11/08 117 300 115
1.37 7.1500 Actual / 360 8/11/23 8/11/08 117 300 115
1.18 8.0700 Actual / 360 10/11/28 10/11/08 119 360 112
1.06 7.3500 Actual / 360 8/11/18 240 236
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
1.29 7.8500 Actual / 360 10/11/23 10/11/08 119 300 112
1.31 7.5000 Actual / 360 11/11/28 11/11/08 120 360 118
- -------------------------------------------------------------------------------------------------------------------------------
1.28 7.9100 Actual / 360 10/11/28 10/11/08 119 360 112
1.33 7.1600 Actual / 360 7/11/28 7/11/08 116 360 109
1.28 7.2000 Actual / 360 7/11/23 7/11/08 116 300 109
1.34 6.9100 Actual / 360 7/11/28 7/11/08 116 360 109
1.65 7.0000 Actual / 360 9/11/23 9/11/08 118 300 111
- -------------------------------------------------------------------------------------------------------------------------------
1.21 8.0000 Actual / 360 11/11/28 11/11/08 120 360 113
1.33 7.3600 Actual / 360 6/11/28 6/11/08 115 360 112
1.52 7.4200 Actual / 360 7/11/23 7/11/08 116 300 109
- -------------------------------------------------------------------------------------------------------------------------------
1.32 7.3400 Actual / 360 7/11/23 7/11/08 116 300 112
1.21 7.7100 Actual / 360 8/11/28 8/11/05 81 360 79
1.36 7.3750 Actual / 360 10/11/28 10/11/08 119 360 112
1.25 7.3600 Actual / 360 7/11/23 7/11/05 80 300 73
1.53 8.0200 Actual / 360 8/11/18 8/11/08 117 240 110
- -------------------------------------------------------------------------------------------------------------------------------
1.50 7.3700 Actual / 360 9/11/28 9/11/08 118 360 111
1.20 8.4300 Actual / 360 6/11/28 6/11/05 79 360 42
- -------------------------------------------------------------------------------------------------------------------------------
1.23 8.1000 Actual / 360 11/11/28 11/11/08 120 360 116
1.88 7.2700 Actual / 360 8/11/28 8/11/08 117 360 115
- -------------------------------------------------------------------------------------------------------------------------------
1.23 7.5900 Actual / 360 10/11/28 10/11/08 119 360 117
- -------------------------------------------------------------------------------------------------------------------------------
1.24 8.5700 Actual / 360 10/11/18 240 232
- -------------------------------------------------------------------------------------------------------------------------------
1.21 7.5900 Actual / 360 8/11/28 8/11/08 117 360 110
1.22 8.9000 Actual / 360 10/11/24 10/11/08 119 312 115
1.28 7.3700 Actual / 360 9/11/23 9/11/08 118 300 114
1.16 7.2200 Actual / 360 8/11/28 8/11/03 57 360 54
- -------------------------------------------------------------------------------------------------------------------------------
1.32 7.4700 Actual / 360 11/11/28 5/11/08 114 360 110
1.35 7.2200 Actual / 360 8/11/28 8/11/08 117 360 115
- -------------------------------------------------------------------------------------------------------------------------------
1.19 8.0000 Actual / 360 10/11/28 10/11/08 119 360 117
1.29 7.9100 Actual / 360 10/11/28 10/11/08 119 360 112
- -------------------------------------------------------------------------------------------------------------------------------
1.14 7.5600 Actual / 360 5/11/28 5/11/08 114 360 107
1.33 7.7840 Actual / 360 11/11/23 11/11/08 120 300 118
1.36 7.5100 Actual / 360 10/11/23 10/11/05 83 300 76
2.30 6.8000 Actual / 360 7/11/23 7/11/08 116 300 112
1.26 7.9100 Actual / 360 10/11/28 10/11/08 119 360 112
- -------------------------------------------------------------------------------------------------------------------------------
1.23 7.3600 Actual / 360 7/11/28 7/11/08 116 360 109
1.37 7.2200 Actual / 360 8/11/28 8/11/08 117 360 113
1.74 7.2800 Actual / 360 7/11/28 7/11/08 116 360 114
2.03 7.4900 Actual / 360 6/11/23 6/11/08 115 300 111
1.74 6.8000 Actual / 360 7/11/23 7/11/08 116 300 112
- -------------------------------------------------------------------------------------------------------------------------------
1.29 7.3750 Actual / 360 10/11/28 10/11/08 119 360 112
6.4579 Actual / 360 4/11/23 297 289
1.37 7.3800 Actual / 360 10/11/28 10/11/08 119 360 117
2.20 6.8300 Actual / 360 10/11/23 10/11/08 119 300 115
1.21 8.1700 Actual / 360 6/11/08 336 108
- -------------------------------------------------------------------------------------------------------------------------------
1.81 7.6000 Actual / 360 8/11/23 8/11/08 117 300 113
1.41 7.8300 Actual / 360 10/11/28 10/11/08 119 360 112
2.20 7.8000 Actual / 360 8/11/23 8/11/08 117 300 110
1.38 7.0200 Actual / 360 9/11/28 9/11/08 118 360 116
1.27 8.2300 Actual / 360 9/11/23 9/11/08 118 300 111
- -------------------------------------------------------------------------------------------------------------------------------
1.61 7.7000 Actual / 360 7/11/23 7/11/08 116 300 109
1.29 7.9100 Actual / 360 10/11/28 10/11/08 119 360 112
1.37 7.9100 Actual / 360 10/11/28 10/11/08 119 360 112
1.23 8.2800 Actual / 360 10/11/28 10/11/08 119 360 115
1.28 7.4300 Actual / 360 10/11/28 10/11/08 119 360 115
- -------------------------------------------------------------------------------------------------------------------------------
1.58 7.0600 Actual / 360 10/11/28 10/11/08 119 360 115
1.21 7.4700 Actual / 360 10/11/28 10/11/08 119 360 117
6.3447 Actual / 360 5/11/18 263 230
1.15 7.2000 Actual / 360 6/11/23 6/11/08 115 300 111
1.29 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
- -------------------------------------------------------------------------------------------------------------------------------
1.37 7.6000 Actual / 360 3/11/28 3/11/08 112 360 110
1.26 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
1.24 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
6.5024 30 / 360 1/6/19 246 238
7.4678 Actual / 360 6/11/16 212 207
- -------------------------------------------------------------------------------------------------------------------------------
1.39 7.3000 Actual / 360 8/11/28 8/11/08 117 360 115
1.65 7.9500 Actual / 360 8/11/28 8/11/08 117 360 115
6.3828 30 / 360 12/6/18 246 237
1.22 7.9100 Actual / 360 10/11/28 10/11/08 119 360 112
6.8100 30 / 360 3/6/19 246 240
- -------------------------------------------------------------------------------------------------------------------------------
1.24 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
1.24 8.2200 Actual / 360 4/11/26 10/11/08 119 330 112
1.48 6.9800 Actual / 360 9/11/28 9/11/08 118 360 116
6.4925 30 / 360 2/6/19 245 239
1.24 7.9100 Actual / 360 10/11/28 10/11/08 119 360 112
- -------------------------------------------------------------------------------------------------------------------------------
1.27 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
6.5122 30 / 360 1/6/19 246 238
1.42 7.0200 Actual / 360 9/11/28 9/11/08 118 360 116
1.31 8.6500 Actual / 360 10/11/23 10/11/08 119 300 112
6.6112 30 / 360 12/6/18 247 237
- -------------------------------------------------------------------------------------------------------------------------------
1.26 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
1.32 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
1.36 7.4700 Actual / 360 10/11/28 10/11/08 119 360 117
1.36 7.7840 Actual / 360 11/11/28 11/11/08 120 360 118
1.37 7.1400 Actual / 360 9/11/23 9/11/08 118 300 114
- -------------------------------------------------------------------------------------------------------------------------------
6.4451 30 / 360 1/6/19 247 238
6.5173 30 / 360 1/6/19 247 238
1.82 7.5600 Actual / 360 9/11/23 9/11/13 178 300 171
6.5161 30 / 360 2/6/19 246 239
6.4652 30 / 360 1/6/19 246 238
- -------------------------------------------------------------------------------------------------------------------------------
1.17 8.0100 Actual / 360 10/11/05 192 76
1.28 8.0700 Actual / 360 9/11/18 240 231
6.3995 30 / 360 1/6/19 247 238
1.52 9.4000 Actual / 360 10/11/24 10/11/08 119 312 112
1.57 7.0200 Actual / 360 9/11/28 9/11/08 118 360 116
- -------------------------------------------------------------------------------------------------------------------------------
6.3965 30 / 360 1/6/19 246 238
6.6271 30 / 360 12/6/18 247 237
1.24 7.9100 Actual / 360 10/11/28 10/11/08 119 360 112
6.4814 30 / 360 12/6/18 247 237
6.5416 30 / 360 1/6/19 246 238
- -------------------------------------------------------------------------------------------------------------------------------
1.18 7.9100 Actual / 360 10/11/28 10/11/08 119 360 112
1.44 6.9500 Actual / 360 8/11/28 8/11/08 117 360 114
2.00 7.6000 Actual / 360 8/11/23 8/11/08 117 300 113
1.75 8.4900 Actual / 360 6/11/23 6/11/08 115 300 113
1.64 6.9000 Actual / 360 7/11/23 7/11/08 116 300 112
- -------------------------------------------------------------------------------------------------------------------------------
6.3975 30 / 360 12/6/18 247 237
1.64 7.7840 Actual / 360 11/11/28 11/11/08 120 360 118
1.56 7.0800 Actual / 360 9/11/23 9/11/08 118 300 114
1.30 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
1.49 7.1400 Actual / 360 9/11/08 300 114
- -------------------------------------------------------------------------------------------------------------------------------
1.35 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
1.33 7.9100 Actual / 360 10/11/28 10/11/08 119 360 112
1.23 7.4700 Actual / 360 10/11/28 10/11/08 119 360 117
6.5343 30 / 360 1/6/19 245 238
6.3818 30 / 360 1/6/19 247 238
- -------------------------------------------------------------------------------------------------------------------------------
1.36 7.7000 Actual / 360 10/11/28 10/11/08 119 360 112
1.59 8.1700 Actual / 360 10/11/18 10/11/08 119 240 112
1.21 7.6500 Actual / 360 8/11/28 8/11/08 117 360 110
6.5175 30 / 360 12/6/18 247 237
1.26 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
- -------------------------------------------------------------------------------------------------------------------------------
1.35 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
1.41 7.6500 Actual / 360 8/11/18 8/11/08 117 240 110
6.3690 30 / 360 1/6/19 247 238
1.23 8.3200 Actual / 360 10/11/23 10/11/08 119 300 112
6.9380 Actual / 360 9/11/17 228 222
- -------------------------------------------------------------------------------------------------------------------------------
1.24 7.3000 Actual / 360 4/11/18 4/11/08 113 240 106
1.26 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
1.25 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
1.28 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
1.64 7.1400 Actual / 360 9/11/08 300 114
- -------------------------------------------------------------------------------------------------------------------------------
6.5122 30 / 360 2/6/19 246 239
1.29 7.9100 Actual / 360 10/11/28 10/11/08 119 360 112
6.4003 30 / 360 2/6/19 245 239
1.52 8.0200 Actual / 360 9/11/23 9/11/08 118 300 111
1.29 7.9100 Actual / 360 10/11/28 10/11/08 119 360 112
- -------------------------------------------------------------------------------------------------------------------------------
2.53 7.6100 Actual / 360 7/11/13 180 169
6.6730 Actual / 360 3/11/16 213 204
1.48 7.9300 Actual / 360 7/11/28 7/11/08 116 360 114
1.21 7.9100 Actual / 360 10/11/28 10/11/08 119 360 112
1.26 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
- -------------------------------------------------------------------------------------------------------------------------------
1.47 7.0700 Actual / 360 6/11/28 6/11/08 115 360 110
1.29 7.2100 Actual / 360 10/11/23 10/11/08 119 300 112
1.58 7.5000 Actual / 360 10/11/23 10/11/08 119 300 112
1.33 8.2000 Actual / 360 6/11/23 6/11/08 115 300 111
1.19 7.9100 Actual / 360 10/11/28 10/11/08 119 360 112
- -------------------------------------------------------------------------------------------------------------------------------
1.20 8.2500 Actual / 360 11/11/28 11/11/08 120 360 113
1.57 7.4400 Actual / 360 7/11/28 7/11/08 116 360 114
1.34 7.4900 Actual / 360 8/11/28 8/11/08 117 360 113
1.34 7.5000 Actual / 360 10/11/23 10/11/08 119 300 112
1.32 7.9000 Actual / 360 9/11/08 300 111
- -------------------------------------------------------------------------------------------------------------------------------
1.51 8.1000 Actual / 360 10/11/18 10/11/08 119 240 112
1.39 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
1.23 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
1.27 7.4700 Actual / 360 10/11/28 10/11/08 119 360 117
1.37 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
- -------------------------------------------------------------------------------------------------------------------------------
1.22 7.9100 Actual / 360 10/11/28 10/11/08 119 360 112
1.25 7.8100 Actual / 360 11/11/28 11/11/08 120 360 118
2.07 7.1200 Actual / 360 10/11/13 180 175
1.25 9.1300 Actual / 360 9/11/23 9/11/08 118 300 111
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
REMAINING ANTICIPATED
LOCKOUT REPAYMENT
AND YM VALUE LTV DATE LTV LOCKBOX OWNERSHIP
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
108 121,000,000 72 63 Hard
22,300,000 Fee Simple
23,900,000 Fee Simple
21,900,000 Fee Simple
14,300,000 Both Fee Simple and Leasehold
- ----------------------------------------------------------------------------------------------------------------------------------
11,000,000 Fee Simple
9,300,000 Fee Simple
7,300,000 Fee Simple
4,800,000 Fee Simple
3,100,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
3,100,000 Fee Simple
169 101,000,000 74 42 Hard Fee Simple
115 101,600,000 82 71 Hard
13,000,000 Fee Simple
10,600,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
10,300,000 Fee Simple
10,200,000 Fee Simple
10,000,000 Fee Simple
9,300,000 Fee Simple
9,000,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
8,000,000 Fee Simple
5,300,000 Fee Simple
3,600,000 Fee Simple
3,500,000 Fee Simple
3,400,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
2,800,000 Fee Simple
2,600,000 Fee Simple
116 116,000,000 70 58 Hard
62,000,000 Leasehold
54,000,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
116 226,000,000 66 58 Hard
179,000,000 Both Fee Simple and Leasehold
47,000,000 Both Fee Simple and Leasehold
104 130,000,000 50 41 Hard Fee Simple
117 83,000,000 72 59 Hard Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
113 69,900,000 80 71 Hard
15,000,000 Fee Simple
11,000,000 Fee Simple
10,000,000 Fee Simple
8,200,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
6,200,000 Fee Simple
5,600,000 Fee Simple
4,400,000 Fee Simple
4,100,000 Fee Simple
3,000,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
2,400,000 Fee Simple
111 66,425,000 83 72 Hard Fee Simple
113 67,490,000 78 69 Hard
9,400,000 Fee Simple
7,100,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
6,700,000 Fee Simple
6,400,000 Fee Simple
6,100,000 Fee Simple
5,600,000 Fee Simple
5,400,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
5,350,000 Fee Simple
4,800,000 Fee Simple
3,970,000 Fee Simple
3,370,000 Fee Simple
3,300,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
76 78,000,000 64 59 Hard Fee Simple
109 62,500,000 74 61 Hard Fee Simple
113 52,300,000 84 75 Hard
33,700,000 Fee Simple
18,600,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
106 65,800,000 63 56 Modified
40,000,000 Fee Simple
13,600,000 Fee Simple
7,700,000 Fee Simple
4,500,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
115 43,300,000 85 76 Hard
22,000,000 Fee Simple
17,700,000 Fee Simple
3,600,000 Fee Simple
240 30,550,000 Hard
- ----------------------------------------------------------------------------------------------------------------------------------
7,850,000 Fee Simple
5,850,000 Fee Simple
5,600,000 Fee Simple
4,550,000 Fee Simple
3,750,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
2,950,000 Fee Simple
118 37,000,000 64 58 Hard Fee Simple
110 28,500,000 83 74 Hard Fee Simple
211 26,800,000 Hard
8,500,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
8,500,000 Fee Simple
3,400,000 Fee Simple
3,200,000 Fee Simple
3,200,000 Fee Simple
110 27,250,000 82 73 Hard Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
113 30,200,000 65 57 Springing
5,100,000 Fee Simple
3,600,000 Fee Simple
3,550,000 Fee Simple
3,200,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
2,950,000 Fee Simple
2,850,000 Fee Simple
2,750,000 Fee Simple
2,600,000 Fee Simple
1,900,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
1,700,000 Both Fee Simple and Leasehold
111 28,700,000 69 56 Hard
12,300,000 Fee Simple
10,600,000 Fee Simple
5,800,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
240 19,300,000 Hard
6,200,000 Fee Simple
5,300,000 Fee Simple
4,550,000 Fee Simple
3,250,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
112 25,675,000 69 61 Hard
10,200,000 Fee Simple
5,500,000 Fee Simple
5,400,000 Fee Simple
3,250,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
1,325,000 Fee Simple
290 18,450,000 Hard
3,200,000 Fee Simple
2,780,000 Fee Simple
2,750,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
2,350,000 Fee Simple
2,010,000 Fee Simple
1,915,000 Fee Simple
1,795,000 Fee Simple
1,650,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
240 15,760,000 Hard
3,950,000 Fee Simple
3,800,000 Fee Simple
2,830,000 Fee Simple
2,730,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
2,450,000 Fee Simple
112 19,110,000 80 71 Springing Fee Simple
110 18,250,000 83 74 Hard Fee Simple
240 14,450,000 Hard
4,400,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
3,300,000 Fee Simple
2,550,000 Fee Simple
2,350,000 Fee Simple
1,850,000 Fee Simple
235 15,000,000 Hard Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
101 18,700,000 75 68 Hard Leasehold
240 13,820,000 Hard
4,900,000 Fee Simple
3,800,000 Fee Simple
2,670,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
2,450,000 Fee Simple
226 13,500,000 Hard Fee Simple
112 17,000,000 78 69 Hard Fee Simple
240 14,050,000 Hard
6,700,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
4,000,000 Fee Simple
3,350,000 Fee Simple
110 17,070,000 75 66 Springing Fee Simple
111 14,350,000 88 77 Springing Fee Simple
112 15,400,000 81 72 Hard Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
110 17,000,000 70 48 Hard Fee Simple
113 13,500,000 80 69 Hard Fee Simple
233 13,100,000 Hard Fee Simple
177 12,300,000 82 64 Springing Fee Simple
78 13,750,000 73 64 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
112 12,000,000 83 74 Springing Fee Simple
52 14,000,000 69 65 Modified Fee Simple
113 11,800,000 79 69 Springing Fee Simple
112 13,300,000 68 62 Springing Fee Simple
118 10,600,000 82 73 Hard Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
113 9,350,000 86 77 Springing Fee Simple
170 10,200,000 78 61 Springing Fee Simple
227 7,600,000 Hard Leasehold
112 11,400,000 68 54 Springing Fee Simple
291 7,700,000 Hard Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
1,700,000 Fee Simple
1,700,000 Fee Simple
1,500,000 Fee Simple
1,500,000 Fee Simple
1,300,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
117 9,135,000 81 72 Springing
1,270,000 Fee Simple
1,110,000 Fee Simple
1,020,000 Fee Simple
755,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
755,000 Fee Simple
740,000 Fee Simple
710,000 Fee Simple
700,000 Fee Simple
660,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
430,000 Fee Simple
365,000 Fee Simple
320,000 Fee Simple
300,000 Fee Simple
116 15,440,000 45 39 None Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
80 7,410,000 92 77 Hard
2,950,000 Fee Simple
2,225,000 Fee Simple
1,535,000 Fee Simple
700,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
115 9,550,000 70 56 Springing Fee Simple
115 5,150,000 71 57 Springing Fee Simple
115 4,400,000 69 55 Springing Fee Simple
112 8,250,000 80 72 Springing Leasehold
236 7,890,000 83 Springing
- ----------------------------------------------------------------------------------------------------------------------------------
1,190,000 Fee Simple
1,070,000 Fee Simple
805,000 Fee Simple
750,000 Fee Simple
755,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
675,000 Fee Simple
590,000 Fee Simple
505,000 Fee Simple
335,000 Fee Simple
465,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
260,000 Leasehold
250,000 Leasehold
240,000 Fee Simple
112 8,100,000 78 64 Springing Fee Simple
118 7,850,000 80 71 Hard Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
112 10,040,000 62 55 Springing Fee Simple
109 7,500,000 80 70 Hard Fee Simple
109 7,500,000 80 64 Modified Fee Simple
109 7,300,000 79 69 Hard Fee Simple
111 9,000,000 62 50 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
113 7,200,000 78 70 Hard Fee Simple
112 7,300,000 75 66 Springing Fee Simple
109 7,200,000 74 60 Springing
4,500,000 Fee Simple
2,700,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
112 7,200,000 73 60 Modified Fee Simple
79 8,500,000 62 58 Springing Fee Simple
112 7,800,000 67 59 Springing Fee Simple
73 7,200,000 72 64 Springing Fee Simple
110 7,400,000 65 46 Springing Both Fee Simple and Leasehold
- ----------------------------------------------------------------------------------------------------------------------------------
111 6,100,000 79 69 Springing Fee Simple
42 6,205,000 76 72 Hard
1,900,000 Fee Simple
1,740,000 Fee Simple
1,740,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
825,000 Fee Simple
116 5,800,000 79 71 Hard Fee Simple
115 7,400,000 62 55 Modified
3,925,000 Fee Simple
3,475,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
117 5,860,000 78 69 Springing
1,410,000 Fee Simple
1,250,000 Fee Simple
980,000 Fee Simple
820,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
810,000 Fee Simple
590,000 Fee Simple
232 6,590,000 68 Springing
3,125,000 Fee Simple
2,265,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
1,200,000 Fee Simple
110 5,750,000 77 69 Hard Fee Simple
115 5,800,000 76 66 Hard Fee Simple
114 5,600,000 78 64 Hard Fee Simple
54 5,000,000 87 82 Hard Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
110 5,600,000 76 68 Hard Fee Simple
115 5,680,000 74 65 Springing
1,600,000 Fee Simple
1,300,000 Fee Simple
1,300,000 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
630,000 Fee Simple
500,000 Fee Simple
350,000 Fee Simple
117 6,250,000 66 59 Springing Fee Simple
112 6,730,000 60 54 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
107 5,200,000 78 69 Hard Fee Simple
118 5,800,000 69 56 Hard Fee Simple
76 6,000,000 67 59 Springing Fee Simple
112 6,750,000 59 47 Springing Fee Simple
112 5,280,000 73 65 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
109 4,800,000 80 71 Springing Fee Simple
113 4,900,000 78 69 Hard Fee Simple
114 5,700,000 67 59 Springing Fee Simple
111 7,900,000 47 39 Springing Leasehold
112 5,900,000 62 50 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
112 5,100,000 71 63 Springing Fee Simple
289 3,600,000 Hard Fee Simple
117 4,500,000 79 70 Springing Fee Simple
115 6,000,000 58 46 Springing Fee Simple
108 5,200,000 67 59 Springing Leasehold
- ----------------------------------------------------------------------------------------------------------------------------------
113 5,360,000 61 50 Hard Fee Simple
112 4,075,000 79 71 Springing Fee Simple
110 4,300,000 75 61 Springing Fee Simple
116 4,000,000 80 70 Springing Fee Simple
111 4,375,000 72 60 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
109 4,400,000 71 59 Springing Fee Simple
112 4,500,000 68 60 Springing Fee Simple
112 5,680,000 53 47 Springing Fee Simple
115 4,000,000 75 68 Springing Fee Simple
115 5,500,000 53 47 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
115 4,500,000 64 56 Springing Fee Simple
117 3,950,000 73 64 Springing Fee Simple
230 2,900,000 Hard Fee Simple
111 3,700,000 75 60 Springing Fee Simple
118 3,425,000 80 71 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
110 3,700,000 74 66 Springing Fee Simple
118 3,400,000 80 71 Springing Fee Simple
118 3,500,000 78 69 Springing Fee Simple
238 2,810,000 Hard Fee Simple
207 2,600,000 Hard Leasehold
- ----------------------------------------------------------------------------------------------------------------------------------
115 3,415,000 73 64 Springing Fee Simple
115 3,450,000 72 65 Hard Fee Simple
237 2,480,000 Hard Fee Simple
112 3,900,000 64 57 Springing Fee Simple
240 2,410,000 Hard Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
118 3,000,000 80 71 Springing Fee Simple
112 3,200,000 75 65 Springing Fee Simple
116 3,100,000 77 67 Springing Fee Simple
239 2,790,000 Hard Fee Simple
112 3,550,000 65 58 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
118 2,900,000 79 71 Springing Fee Simple
238 2,330,000 Hard Fee Simple
116 2,900,000 79 69 Springing Fee Simple
112 3,250,000 70 59 Springing Fee Simple
237 2,260,000 Hard Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
118 2,850,000 79 70 Springing Fee Simple
118 2,900,000 78 69 Springing Fee Simple
117 2,550,000 88 78 Springing Fee Simple
118 2,950,000 76 67 Hard Fee Simple
114 2,775,000 80 64 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
238 2,240,000 Hard Fee Simple
238 2,215,000 Hard Fee Simple
171 3,100,000 70 46 Springing Fee Simple
239 2,190,000 Hard Fee Simple
238 2,200,000 Hard Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
76 2,940,000 73 53 Hard Leasehold
231 3,000,000 71 Springing Fee Simple
238 2,140,000 Hard Fee Simple
112 3,200,000 66 57 Springing Both Fee Simple and Leasehold
116 2,700,000 78 68 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
238 2,100,000 Hard Fee Simple
237 2,250,000 Hard Fee Simple
112 3,050,000 67 60 Springing Fee Simple
237 2,030,000 Hard Fee Simple
238 2,090,000 Hard Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
112 3,000,000 67 60 Springing Fee Simple
114 2,500,000 80 70 Hard Fee Simple
113 3,300,000 60 49 Hard Fee Simple
113 2,755,000 72 61 Springing Fee Simple
112 2,850,000 70 56 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
237 1,980,000 Hard Fee Simple
118 2,800,000 69 61 Hard Fee Simple
114 2,400,000 80 64 Springing Fee Simple
118 2,400,000 78 69 Springing Fee Simple
114 2,600,000 71 56 None Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
118 2,300,000 80 71 Springing Fee Simple
112 2,900,000 63 56 Springing Fee Simple
117 2,300,000 79 70 Springing Fee Simple
238 1,840,000 Hard Fee Simple
238 1,840,000 Hard Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
112 2,300,000 78 69 Springing Fee Simple
112 2,900,000 62 44 Springing Fee Simple
110 2,380,000 76 67 Springing Fee Simple
237 1,810,000 Hard Fee Simple
118 2,300,000 77 69 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
118 2,300,000 75 67 Springing Fee Simple
110 2,300,000 75 52 Springing Fee Simple
238 1,630,000 Hard Fee Simple
112 2,200,000 73 61 Springing Fee Simple
222 1,700,000 Hard Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
106 2,350,000 67 47 Springing Fee Simple
118 2,000,000 79 70 Springing Fee Simple
118 2,000,000 77 69 Springing Fee Simple
118 2,100,000 73 65 Springing Fee Simple
114 2,350,000 64 51 None Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
239 1,620,000 Hard Fee Simple
112 2,300,000 62 56 Springing Fee Simple
239 1,410,000 Hard Leasehold
111 1,800,000 75 62 Springing Fee Simple
112 2,050,000 65 58 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
169 3,550,000 38 Springing Fee Simple
204 1,600,000 Hard Fee Simple
114 1,950,000 67 60 Springing Fee Simple
112 1,900,000 68 60 Springing Fee Simple
118 1,620,000 79 70 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
110 1,600,000 78 69 Springing Fee Simple
112 1,750,000 71 57 Springing Fee Simple
112 2,200,000 54 44 Springing Fee Simple
111 1,750,000 68 57 Modified Fee Simple
112 1,800,000 62 56 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
113 1,475,000 75 67 Springing Fee Simple
114 1,425,000 74 65 Springing Fee Simple
113 1,400,000 74 66 Hard Fee Simple
112 1,250,000 80 65 Springing Fee Simple
111 1,125,000 80 66 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
112 1,140,000 77 54 Springing Fee Simple
118 1,230,000 70 62 Springing
118 1,040,000 79 71 Springing Fee Simple
117 960,000 73 64 Springing Fee Simple
118 980,000 69 62 Springing Fee Simple
- ----------------------------------------------------------------------------------------------------------------------------------
112 900,000 65 58 Springing Fee Simple
118 800,000 70 62 Springing Fee Simple
175 1,800,000 28 None Fee Simple
111 450,000 74 63 Hard Fee Simple
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
YEAR BUILT YEAR RENOVATED UNIT UNIT OF MEASURE OCCUPANCY OCCUPANCY PERIOD
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1,218,718 Sq Ft
1919 1982 255,257 Sq Ft 90% 5/1/98
1982 234,244 Sq Ft 90% 5/1/98
1985 123,000 Sq Ft 100% 5/1/98
1989 137,190 Sq Ft 98% 5/1/98
- ------------------------------------------------------------------------------------------------------------------------------
1971 1991 112,357 Sq Ft 96% 5/1/98
1971 102,460 Sq Ft 100% 5/1/98
1990 76,666 Sq Ft 97% 5/1/98
1987 1998 63,072 Sq Ft 86% 5/1/98
1985 57,559 Sq Ft 100% 5/1/98
- ------------------------------------------------------------------------------------------------------------------------------
1982 56,913 Sq Ft 96% 5/1/98
1971 1998 504,573 Sq Ft 100% 6/25/97
1,367,656 Sq Ft
1994 178,602 Sq Ft 100% 10/21/98
1987 65,262 Sq Ft 95% 10/21/98
- ------------------------------------------------------------------------------------------------------------------------------
1997 171,170 Sq Ft 94% 8/30/98
1989 1997 123,930 Sq Ft 100% 10/21/98
1988 199,192 Sq Ft 100% 10/21/98
1998 165,690 Sq Ft 100% 8/11/98
1997 170,000 Sq Ft 100% 8/11/98
- ------------------------------------------------------------------------------------------------------------------------------
1994 82,757 Sq Ft 100% 8/30/98
1997 44,307 Sq Ft 100% 10/21/98
1989 1997 28,990 Sq Ft 87% 8/11/98
1988 40,042 Sq Ft 92% 8/30/98
1989 37,246 Sq Ft 100% 10/21/98
- ------------------------------------------------------------------------------------------------------------------------------
1986 24,468 Sq Ft 100% 8/11/98
1997 36,000 Sq Ft 100% 10/21/98
830 Rooms
1991 358 Rooms 84% 7/31/98
1984 1998 472 Rooms 69% 7/31/98
- ------------------------------------------------------------------------------------------------------------------------------
888,698 Sq Ft
1972 1990 888,698 Sq Ft 98% 8/11/98
1973 1990 370 Rooms 76% 6/30/98
1953 1987 888,315 Sq Ft 85% 10/20/98
1983 312,933 Sq Ft 100% 1/31/98
- ------------------------------------------------------------------------------------------------------------------------------
3,015 Units
1968 1998 380 Units 84% 10/1/98
1978 1998 708 Units 91% 10/1/98
1969 1997 264 Units 91% 10/1/98
1966 1998 232 Units 97% 10/1/98
- ------------------------------------------------------------------------------------------------------------------------------
1984 1997 346 Units 97% 10/1/98
1973 1997 208 Units 99% 10/1/98
1978 1998 308 Units 97% 10/1/98
1972 1998 200 Units 97% 10/1/98
1968 1998 193 Units 92% 10/1/98
- ------------------------------------------------------------------------------------------------------------------------------
1947 1997 176 Units 88% 10/1/98
1984 610,253 Sq Ft 91% 8/28/98
2,596 Units
1972 1998 216 Units 87% 10/1/98
1972 1998 206 Units 95% 10/1/98
- ------------------------------------------------------------------------------------------------------------------------------
1984 1998 332 Units 96% 10/1/98
1974 1998 392 Units 94% 10/1/98
1979 1998 428 Units 96% 10/1/98
1984 1997 160 Units 96% 10/1/98
1985 1998 122 Units 100% 10/1/98
- ------------------------------------------------------------------------------------------------------------------------------
1972 1997 180 Units 92% 10/1/98
1968 1997 156 Units 92% 10/1/98
1976 1997 136 Units 77% 10/1/98
1978 1997 124 Units 91% 10/1/98
1970 1997 144 Units 97% 10/1/98
- ------------------------------------------------------------------------------------------------------------------------------
1993 410,206 Sq Ft 79% 9/24/98
1988 174,769 Sq Ft 100% 9/8/98
1,259 Units
1965 1997 615 Units 93% 10/1/98
1971 1998 644 Units 93% 10/1/98
- ------------------------------------------------------------------------------------------------------------------------------
927,652 Sq Ft
1973 497,870 Sq Ft 100% 12/23/97
1985 107,182 Sq Ft 100% 12/23/97
1994 172,200 Sq Ft 100% 12/23/97
1989 150,400 Sq Ft 100% 12/23/97
- ------------------------------------------------------------------------------------------------------------------------------
547,217 Sq Ft
1987 242,021 Sq Ft 91% 4/17/98
1988 188,856 Sq Ft 97% 4/17/98
1986 116,340 Sq Ft 94% 4/17/98
753 Rooms
- ------------------------------------------------------------------------------------------------------------------------------
1983 118 Rooms 100% 9/30/98
1982 118 Rooms 100% 9/30/98
1979 178 Rooms 100% 9/30/98
1991 123 Rooms 100% 9/30/98
1979 110 Rooms 100% 9/30/98
- ------------------------------------------------------------------------------------------------------------------------------
1980 106 Rooms 100% 9/30/98
1972 205,167 Sq Ft 94% 10/1/98
1969 1997 526 Units 94% 5/8/98
202,991 Sq Ft
1998 53,000 Sq Ft 100% 10/23/98
- ------------------------------------------------------------------------------------------------------------------------------
1998 61,585 Sq Ft 100% 10/23/98
1983 29,953 Sq Ft 100% 10/21/98
1983 29,953 Sq Ft 100% 10/23/98
1931 1985 28,500 Sq Ft 100% 10/23/98
1974 1997 504 Units 97% 4/15/98
- ------------------------------------------------------------------------------------------------------------------------------
1,039,222 Sq Ft
1978 134,805 Sq Ft 100% 8/31/98
1982 1996 55,531 Sq Ft 100% 8/31/98
1980 91,061 Sq Ft 100% 8/31/98
1976 1991 135,187 Sq Ft 96% 8/31/98
- ------------------------------------------------------------------------------------------------------------------------------
1972 134,634 Sq Ft 95% 8/31/98
1980 1997 87,678 Sq Ft 100% 8/31/98
1973 1997 100,838 Sq Ft 97% 8/31/98
1972 115,492 Sq Ft 100% 8/31/98
1976 79,996 Sq Ft 100% 8/31/98
- ------------------------------------------------------------------------------------------------------------------------------
1970 104,000 Sq Ft 100% 8/31/98
140,932 Sq Ft
1994 72,332 Sq Ft 100% 8/31/98
1995 46,844 Sq Ft 100% 8/31/98
1995 21,756 Sq Ft 100% 8/31/98
- ------------------------------------------------------------------------------------------------------------------------------
523 Rooms
1983 1994 148 Rooms 100% 9/30/98
1985 1998 150 Rooms 100% 9/30/98
1987 124 Rooms 100% 9/30/98
1985 1998 101 Rooms 100% 9/30/98
- ------------------------------------------------------------------------------------------------------------------------------
373,455 Sq Ft
1989 191,925 Sq Ft 100% 7/16/98
1989 50,084 Sq Ft 93% 7/16/98
1970 10,193 Sq Ft 100% 7/16/98
1915 1966 83,000 Sq Ft 100% 7/16/98
- ------------------------------------------------------------------------------------------------------------------------------
1965 38,253 Sq Ft 100% 7/16/98
81,960 Sq Ft
1978 1991 13,000 Sq Ft 100% 5/11/98
1985 1994 10,215 Sq Ft 100% 5/11/98
1984 1994 9,700 Sq Ft 100% 5/11/98
- ------------------------------------------------------------------------------------------------------------------------------
1983 1995 9,584 Sq Ft 100% 5/11/98
1984 1995 9,639 Sq Ft 100% 5/11/98
1985 1996 9,822 Sq Ft 100% 5/11/98
1982 10,800 Sq Ft 100% 5/11/98
1982 1994 9,200 Sq Ft 100% 5/11/98
- ------------------------------------------------------------------------------------------------------------------------------
412 Rooms
1985 84 Rooms 100% 9/30/98
1987 1994 91 Rooms 100% 9/30/98
1979 82 Rooms 100% 9/30/98
1983 1994 91 Rooms 100% 9/30/98
- ------------------------------------------------------------------------------------------------------------------------------
1986 64 Rooms 100% 9/30/98
1998 248 Units 98% 6/20/98
1975 1997 414 Units 97% 4/15/98
427 Rooms
1963 93 Rooms 100% 9/30/98
- ------------------------------------------------------------------------------------------------------------------------------
1973 1995 79 Rooms 100% 9/30/98
1988 76 Rooms 100% 9/30/98
1982 1997 120 Rooms 100% 9/30/98
1970 1998 59 Rooms 100% 9/30/98
1998 71,449 Sq Ft 100% 10/9/98
- ------------------------------------------------------------------------------------------------------------------------------
1965 1994 252,714 Sq Ft 100% 8/21/98
384 Rooms
1985 1998 125 Rooms 100% 9/30/98
1985 1997 100 Rooms 100% 9/30/98
1985 1997 79 Rooms 100% 9/30/98
- ------------------------------------------------------------------------------------------------------------------------------
1988 1998 80 Rooms 100% 9/30/98
1998 76,315 Sq Ft 100% 5/12/98
1981 1986 282,051 Sq Ft 95% 9/3/98
387 Rooms
1982 1995 142 Rooms 100% 9/30/98
- ------------------------------------------------------------------------------------------------------------------------------
1985 1997 119 Rooms 100% 9/30/98
1987 1998 126 Rooms 100% 9/30/98
1995 77 Beds 100% 4/30/98
1979 1997 305 Units 94% 6/7/98
1998 77,398 Sq Ft 95% 9/21/98
- ------------------------------------------------------------------------------------------------------------------------------
1995 1997 5,840 Sq Ft 100% 6/1/98
1980 1991 221,508 Sq Ft 100% 7/1/98
1994 155,979 Sq Ft 100% 5/6/98
1921 1998 71,117 Sq Ft 89% 7/1/98
1971 1996 260 Rooms 60% 9/2/98
- ------------------------------------------------------------------------------------------------------------------------------
1976 448 Units 97% 9/10/98
1989 56,920 Sq Ft 100% 8/5/98
1969 204,832 Sq Ft 100% 9/11/98
1984 145 Rooms 61% 6/30/98
1987 1995 209,216 Sq Ft 99% 10/9/98
- ------------------------------------------------------------------------------------------------------------------------------
1988 164,672 Sq Ft 100% 10/1/98
1994 66,525 Sq Ft 100% 7/30/98
1998 53,045 Sq Ft 100% 6/26/98
1980 1997 306,000 Sq Ft 97% 9/28/98
210,728 Sq Ft
- ------------------------------------------------------------------------------------------------------------------------------
1990 41,828 Sq Ft 100% 6/30/98
1995 42,455 Sq Ft 100% 6/30/98
1996 42,456 Sq Ft 100% 6/30/98
1990 41,533 Sq Ft 100% 5/19/98
1996 42,456 Sq Ft 100% 6/30/98
- ------------------------------------------------------------------------------------------------------------------------------
215 Units
1988 11 Units 95% 5/1/98
1957 1985 40 Units 95% 6/14/98
1961 1996 11 Units 91% 6/15/98
1960 1994 30 Units 95% 6/15/98
- ------------------------------------------------------------------------------------------------------------------------------
1936 1998 9 Units 95% 6/14/98
1961 1995 18 Units 90% 6/15/98
1963 1995 14 Units 93% 6/15/98
1960 1996 22 Units 95% 6/15/98
1992 16 Units 93% 6/15/98
- ------------------------------------------------------------------------------------------------------------------------------
1960 1997 10 Units 100% 6/15/98
1961 1985 11 Units 91% 6/15/98
1991 15 Units 100% 6/15/98
1956 1997 8 Units 100% 6/15/98
1965 239 Units 100% 7/29/98
- ------------------------------------------------------------------------------------------------------------------------------
233 Units
1981 107 Units 93% 7/21/98
1981 66 Units 100% 7/20/98
1980 33 Units 100% 7/20/98
1981 27 Units 100% 7/20/98
- ------------------------------------------------------------------------------------------------------------------------------
92,150 Sq Ft
1995 46,350 Sq Ft 100% 6/17/98
1995 45,800 Sq Ft 100% 6/25/98
1991 178,031 Sq Ft 100% 8/6/98
60,007 Sq Ft
- ------------------------------------------------------------------------------------------------------------------------------
1997 8,256 Sq Ft 100% 2/20/98
1997 6,602 Sq Ft 100% 2/20/98
1996 7,414 Sq Ft 100% 2/20/98
1996 5,090 Sq Ft 100% 2/20/98
1995 6,620 Sq Ft 100% 2/20/98
- ------------------------------------------------------------------------------------------------------------------------------
1997 5,090 Sq Ft 100% 2/20/98
1995 3,360 Sq Ft 100% 2/20/98
1995 4,101 Sq Ft 100% 2/20/98
1995 2,761 Sq Ft 100% 2/20/98
1995 4,101 Sq Ft 100% 2/20/98
- ------------------------------------------------------------------------------------------------------------------------------
1995 2,015 Sq Ft 100% 2/20/98
1995 1,507 Sq Ft 100% 2/20/98
1995 3,090 Sq Ft 100% 2/20/98
1932 148 Units 99% 8/1/98
1981 143,217 Sq Ft 93% 10/9/98
- ------------------------------------------------------------------------------------------------------------------------------
1971 1996 96 Units 100% 9/30/98
1988 98,025 Sq Ft 100% 6/1/98
1950 1986 117,000 Sq Ft 100% 6/9/98
1977 1992 130,091 Sq Ft 95% 8/3/98
1986 1994 116,288 Sq Ft 94% 5/8/98
- ------------------------------------------------------------------------------------------------------------------------------
1984 1998 202 Units 88% 10/4/98
1983 1997 72,935 Sq Ft 99% 9/29/98
193 Rooms
1993 101 Rooms 87% 12/31/97
1993 92 Rooms 68% 12/31/97
- ------------------------------------------------------------------------------------------------------------------------------
1820 1986 19,935 Sq Ft 94% 5/26/98
1906 1981 69,514 Sq Ft 95% 7/8/98
1913 1998 90 Units 94% 10/1/98
1980 1994 65,192 Sq Ft 100% 7/31/98
1988 19,075 Sq Ft 100% 3/30/98
- ------------------------------------------------------------------------------------------------------------------------------
1971 139 Units 99% 9/17/98
81 Units
1925 1990 29 Units 100% 6/1/98
1930 1997 21 Units 100% 5/15/98
1901 1998 21 Units 100% 5/1/98
- ------------------------------------------------------------------------------------------------------------------------------
1910 1998 10 Units 100% 5/1/98
1900 1997 24,904 Sq Ft 95% 9/24/98
108,354 Sq Ft
1988 49,000 Sq Ft 100% 7/1/98
1989 59,354 Sq Ft 88% 7/1/98
- ------------------------------------------------------------------------------------------------------------------------------
158 Units
1988 25 Units 100% 6/15/98
1965 1988 43 Units 100% 6/15/98
1958 1980 30 Units 93% 5/31/98
1962 1991 21 Units 100% 6/15/98
- ------------------------------------------------------------------------------------------------------------------------------
1947 1978 20 Units 100% 6/15/98
1964 1981 19 Units 100% 6/15/98
94 Units
1995 45 Units 97% 9/30/98
1993 32 Units 96% 9/1/98
- ------------------------------------------------------------------------------------------------------------------------------
1991 17 Beds 71% 9/1/98
1960 173 Pads 98% 7/1/98
1971 1993 141 Rooms 72% 8/31/98
1990 1997 44,552 Sq Ft 93% 9/8/98
1978 1994 92,000 Sq Ft 100% 5/18/98
- ------------------------------------------------------------------------------------------------------------------------------
1967 1997 96 Units 99% 10/1/98
11,738 Units
1976 20 Units 100% 6/1/98
1984 11,680 Sq Ft 100% 6/1/98
1983 17 Units 100% 6/1/98
- ------------------------------------------------------------------------------------------------------------------------------
1977 9 Units 100% 6/1/98
1978 7 Units 100% 7/1/98
1976 5 Units 80% 6/1/98
1976 1998 116,259 Sq Ft 82% 9/3/98
1963 1994 64 Units 100% 9/30/98
- ------------------------------------------------------------------------------------------------------------------------------
1962 126 Pads 99% 3/31/98
1981 124,665 Sq Ft 100% 9/1/98
1969 1989 101,516 Sq Ft 100% 8/5/98
1987 182,465 Sq Ft 97% 9/28/98
1963 49 Units 100% 9/8/98
- ------------------------------------------------------------------------------------------------------------------------------
1989 151 Units 87% 8/20/98
1986 83,713 Sq Ft 98% 7/21/98
1945 225,600 Sq Ft 100% 7/8/98
1975 1987 103 Rooms 82% 6/30/98
1974 194,742 Sq Ft 100% 9/28/98
- ------------------------------------------------------------------------------------------------------------------------------
1911 1998 61 Units 100% 9/30/98
1998 11,180 Sq Ft 100% 4/15/98
1978 1998 54,247 Sq Ft 100% 6/11/98
1996 102 Rooms 84% 7/1/98
1975 1986 99,180 Sq Ft 81% 4/1/98
- ------------------------------------------------------------------------------------------------------------------------------
1983 1998 143 Rooms 55% 6/30/98
1956 1984 71,869 Sq Ft 92% 8/13/98
1983 1997 123 Rooms 56% 12/31/97
1927 1991 109 Units 97% 8/11/98
1997 138 Rooms 90% 3/23/98
- ------------------------------------------------------------------------------------------------------------------------------
1997 83 Rooms 88% 1/1/98
1960 48 Units 100% 9/30/98
1967 1996 54 Units 100% 9/30/98
1991 42,591 Sq Ft 99% 7/28/98
1985 79,652 Sq Ft 86% 8/1/98
- ------------------------------------------------------------------------------------------------------------------------------
1971 1997 46,384 Sq Ft 100% 9/14/98
1962 82 Units 100% 9/1/98
1998 14,055 Sq Ft 100% 6/1/98
1927 47,100 Sq Ft 100% 5/1/98
1936 77 Units 99% 8/19/98
- ------------------------------------------------------------------------------------------------------------------------------
1989 72 Units 99% 8/31/98
1940 78 Units 99% 8/19/98
1940 77 Units 99% 8/19/98
1998 10,125 Sq Ft 100% 6/24/98
1997 30,367 Sq Ft 100% 6/1/98
- ------------------------------------------------------------------------------------------------------------------------------
1984 1998 27,000 Sq Ft 100% 7/30/98
1906 1986 15 Rooms 60% 5/7/98
1998 10,125 Sq Ft 100% 6/4/98
1963 39 Units 100% 8/31/98
1998 10,125 Sq Ft 100% 9/3/98
- ------------------------------------------------------------------------------------------------------------------------------
1928 77 Units 96% 8/19/98
1955 1998 47,994 Sq Ft 100% 10/12/98
1936 1998 68 Units 100% 8/11/98
1998 10,125 Sq Ft 100% 8/14/98
1975 35 Units 100% 8/31/98
- ------------------------------------------------------------------------------------------------------------------------------
1936 61 Units 99% 8/19/98
1998 10,125 Sq Ft 100% 6/18/98
1917 1997 73 Units 99% 7/2/98
1925 1996 9,950 Sq Ft 100% 10/7/98
1998 10,125 Sq Ft 100% 4/29/98
- ------------------------------------------------------------------------------------------------------------------------------
1938 56 Units 100% 8/19/98
1938 72 Units 98% 8/19/98
1974 71 Units 100% 9/1/98
1969 1993 38,569 Sq Ft 91% 10/9/98
1981 1998 132 Units 100% 7/28/98
- ------------------------------------------------------------------------------------------------------------------------------
1998 10,125 Sq Ft 100% 5/19/98
1998 10,125 Sq Ft 100% 6/10/98
1973 92,438 Sq Ft 81% 6/30/98
1998 10,125 Sq Ft 100% 7/22/98
1998 10,125 Sq Ft 100% 6/19/98
- ------------------------------------------------------------------------------------------------------------------------------
1962 85 Pads 94% 8/21/98
1988 1993 96 Rooms 64% 12/31/97
1998 10,125 Sq Ft 100% 5/22/98
1950 70,000 Sq Ft 100% 9/29/98
1920 1997 72 Units 97% 8/11/98
- ------------------------------------------------------------------------------------------------------------------------------
1998 10,125 Sq Ft 100% 6/17/98
1998 10,125 Sq Ft 100% 4/30/98
1962 28 Units 100% 9/30/98
1998 10,125 Sq Ft 100% 5/5/98
1998 10,125 Sq Ft 100% 6/10/98
- ------------------------------------------------------------------------------------------------------------------------------
1974 30 Units 100% 8/31/98
1968 1993 27,049 Sq Ft 100% 9/10/98
1972 1998 149 Rooms 50% 6/30/98
1993 34 Rooms 58% 12/31/97
1970 123,045 Sq Ft 87% 9/28/98
- ------------------------------------------------------------------------------------------------------------------------------
1998 10,125 Sq Ft 100% 4/17/98
1973 1988 56,562 Sq Ft 95% 10/9/98
1974 96 Units 94% 6/9/98
1930 54 Units 98% 8/19/98
1928 1997 7,311 Sq Ft 100% 8/31/98
- ------------------------------------------------------------------------------------------------------------------------------
1938 50 Units 98% 8/19/98
1962 26 Units 96% 8/31/98
1974 43 Units 100% 9/1/98
1998 10,125 Sq Ft 100% 7/17/98
1998 10,125 Sq Ft 100% 5/27/98
- ------------------------------------------------------------------------------------------------------------------------------
1929 63 Units 98% 8/5/98
1989 57 Rooms 84% 12/31/97
1990 1994 25,441 Sq Ft 100% 6/1/98
1998 10,125 Sq Ft 100% 4/26/98
1940 65 Units 98% 8/19/98
- ------------------------------------------------------------------------------------------------------------------------------
1938 49 Units 94% 9/23/98
1983 51 Rooms 76% 2/28/98
1998 10,125 Sq Ft 100% 5/26/98
1985 41,607 Sq Ft 94% 9/30/98
1998 11,180 Sq Ft 100% 8/24/98
- ------------------------------------------------------------------------------------------------------------------------------
1974 1996 88,243 Sq Ft 100% 3/11/98
1933 55 Units 98% 8/19/98
1928 55 Units 98% 8/19/98
1927 58 Units 98% 8/19/98
1938 1995 9,250 Sq Ft 100% 8/31/98
- ------------------------------------------------------------------------------------------------------------------------------
1998 10,125 Sq Ft 100% 8/7/98
1962 21 Units 100% 8/31/98
1998 10,125 Sq Ft 100% 8/21/98
1890 19,526 Sq Ft 100% 8/21/98
1964 19 Units 100% 8/31/98
- ------------------------------------------------------------------------------------------------------------------------------
1993 58 Rooms 66% 6/24/98
1996 10,880 Sq Ft 100% 5/13/98
1980 1992 44,487 Sq Ft 100% 5/28/98
1974 20 Units 100% 9/18/98
1929 42 Units 98% 8/19/98
- ------------------------------------------------------------------------------------------------------------------------------
1976 52 Units 94% 7/1/98
1905 1988 14,580 Sq Ft 100% 8/7/98
1983 33,364 Sq Ft 98% 9/25/98
1996 33 Units 96% 5/13/98
1972 18 Units 100% 8/31/98
- ------------------------------------------------------------------------------------------------------------------------------
1998 14,450 Sq Ft 100% 10/1/98
1960 1997 38 Units 95% 5/20/98
1997 7,640 Sq Ft 100% 9/4/98
1973 1997 48 Units 98% 9/28/98
1963 1997 48 Units 92% 8/1/98
- ------------------------------------------------------------------------------------------------------------------------------
1926 1998 28,500 Sq Ft 100% 9/28/98
1929 32 Units 100% 8/19/98
1929 26 Units 100% 10/7/98
1974 22 Units 100% 9/1/98
1929 21 Units 100% 8/19/98
- ------------------------------------------------------------------------------------------------------------------------------
1974 10 Units 100% 9/4/98
1940 30 Units 100% 8/19/98
1895 17 Units 100% 1/1/98
1990 1998 5,770 Sq Ft 100% 9/1/98
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ACTUAL ONGOING LEASE
U/W CAPITAL ITEMS % OF EXPIRATION
OCCUPANCY DEPOSITS TENANT 1 TOTAL SF DATE 1
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
0.20
93% Staten Island University Hosp 11 7/31/99
86%
95% SONY USA 100 5/31/04
90% National City Processing 16 7/29/08
- ----------------------------------------------------------------------------------------------------------------------------
95% Valu Discount, Inc. 25 11/30/00
90% Galen of KY, Inc 14 6/30/02
90% Electronic Systems 45 5/31/01
86%
90% Lodgistix 40 1/31/98
- ----------------------------------------------------------------------------------------------------------------------------
90% Southwestern Bell Yellow Pages 27 9/30/99
100% 0.25 The City of New York 100 7/7/18
0.18
94% Bohdan Associates 35 7/31/99
95% Miles & Stockbridge 18 12/31/04
- ----------------------------------------------------------------------------------------------------------------------------
94%
94% GE Capital Information Tech. 34 2/28/00
95% United States Postal Service 22 8/31/10
95% Kimmel-Butera Master Lease 63 7/31/00
95% American Records Management 47 7/31/06
- ----------------------------------------------------------------------------------------------------------------------------
93% County Commissioners of Carrol 26 8/31/05
95% Montgomery Cty Auto Parts Napa 28 7/31/12
87% Social Security Administration 22 2/28/08
93% Science Applications Int'l 66 12/31/11
95% Jones Communications of MD 49 10/31/01
- ----------------------------------------------------------------------------------------------------------------------------
93% Microlog Corporation 100 12/31/99
94% Thomas AAA Moving & Storage 100 9/30/09
5%
77% 5%
69% 5%
- ----------------------------------------------------------------------------------------------------------------------------
(1)
94% General Service Administration 54 6/30/01
75%
82% 0.20
96% 0.20 Manatt Phelps 37 11/30/13
- ----------------------------------------------------------------------------------------------------------------------------
250
80%
84%
78%
94%
- ----------------------------------------------------------------------------------------------------------------------------
92%
90%
90%
94%
82%
- ----------------------------------------------------------------------------------------------------------------------------
83%
91% 0.22 Merial 23 9/30/01
250
82%
91%
- ----------------------------------------------------------------------------------------------------------------------------
94%
88%
90%
86%
95%
- ----------------------------------------------------------------------------------------------------------------------------
73%
82%
77%
83%
91%
- ----------------------------------------------------------------------------------------------------------------------------
80% (2) Wal-Mart Stores (Sam's Club) 43 7/18/13
95% 0.20 Winthrop, Stimson, Putnam & R 31 1/1/04
250
84%
89%
- ----------------------------------------------------------------------------------------------------------------------------
0.19
93% Wilson Bro. 25 2/28/10
94% Fibertek 24 7/30/01
92% REICO Distributors 100 12/31/04
95% Standard Corporation 100 12/31/99
- ----------------------------------------------------------------------------------------------------------------------------
0.17
92% Best Buy 18 7/31/13
97% Wicke's Furniture 26 1/31/03
94% Southwest Airpro 19 4/13/01
- ----------------------------------------------------------------------------------------------------------------------------
100%
100%
100%
100%
100%
- ----------------------------------------------------------------------------------------------------------------------------
100%
94% 0.20 L. Flynt Ltd. 41 7/31/10
95% 251
100%
- ----------------------------------------------------------------------------------------------------------------------------
100%
100%
100%
100%
95% 250
- ----------------------------------------------------------------------------------------------------------------------------
0.14
95% K-Mart 62 11/30/03
95% Jerry's 1 GA 79 3/31/07
95% K-Mart 91 11/30/05
99% K-Mart 65 11/1/12
- ----------------------------------------------------------------------------------------------------------------------------
100% K-Mart 87 3/31/10
95% K-Mart 100 11/30/10
98% K-Mart 54 6/30/04
95% K-Mart 100 6/30/12
95% Heilig-Meyers Furniture 28 2/28/06
- ----------------------------------------------------------------------------------------------------------------------------
96% K-Mart 100 11/30/10
0.20
95% Grand Union - Valatie 100 6/8/25
81% Grand Union Morristown 100 6/6/25
68% Grand Union - Tannerville 100 6/6/25
- ----------------------------------------------------------------------------------------------------------------------------
100%
100%
100%
100%
- ----------------------------------------------------------------------------------------------------------------------------
0.27
95% New Jersey Convention Center 69 12/31/01
94% Excerpta Medica Inc. 50 2/29/00
95% Insurance Auto Auctions 86 2/28/07
95% Crest Foam Corporation 100 6/30/02
- ----------------------------------------------------------------------------------------------------------------------------
95% Delaware Valley Wholesale Flor 35 5/31/00
100%
100%
100%
- ----------------------------------------------------------------------------------------------------------------------------
100%
100%
100%
100%
100%
- ----------------------------------------------------------------------------------------------------------------------------
100%
100%
100%
100%
- ----------------------------------------------------------------------------------------------------------------------------
100%
94% 250
95% 250
100%
- ----------------------------------------------------------------------------------------------------------------------------
100%
100%
100%
100%
100%
- ----------------------------------------------------------------------------------------------------------------------------
96% 0.15 K-Mart Corporation 55 4/30/03
100%
100%
100%
- ----------------------------------------------------------------------------------------------------------------------------
100%
100%
96% 0.18 K-Mart 31 9/30/06
100%
- ----------------------------------------------------------------------------------------------------------------------------
100%
100%
95% 330
94% 250
96% 0.15 Shaw Supermarket 72 6/30/18
- ----------------------------------------------------------------------------------------------------------------------------
93% 0.15 PD Boutiques Hawaii, Inc. 100 12/31/05
97% 0.15 Wal-Mart 55 6/18/11
100%
89% 0.22 Burger King 14 8/1/03
60% 4%
- ----------------------------------------------------------------------------------------------------------------------------
95% 250
95% 0.21 LG Group 100 5/1/08
95% 0.23 Kmart Corporation 44 9/30/99
66% 7%
99% 0.25 K-Mart #7613 41 4/30/12
- ----------------------------------------------------------------------------------------------------------------------------
95% 0.15 Wal-Mart 50 4/22/08
100% 0.15 Stop & Shop 100 1/7/14
100%
95% 0.20
- ----------------------------------------------------------------------------------------------------------------------------
100%
100%
100%
100%
100%
- ----------------------------------------------------------------------------------------------------------------------------
271
93%
90%
91%
90%
- ----------------------------------------------------------------------------------------------------------------------------
95%
90%
93%
93%
93%
- ----------------------------------------------------------------------------------------------------------------------------
93%
90%
93%
93%
95%
- ----------------------------------------------------------------------------------------------------------------------------
250
93%
95%
95%
93%
- ----------------------------------------------------------------------------------------------------------------------------
95% Best Buy Co., Inc., #286 100 2/26/18
95% Best Buy Co., Inc. #294 100 2/26/18
98% 0.17 Wal-Mart 65 1/31/10
0.18
- ----------------------------------------------------------------------------------------------------------------------------
100% United States Postal Service 100 6/5/17
100% United States Postal Service 100 2/20/17
100% United States Postal Service 100 2/18/17
100% United States Postal Service 100 8/29/15
100% United States Postal Service 100 2/1/16
- ----------------------------------------------------------------------------------------------------------------------------
100% United States Postal Service 100 3/29/17
100% United States Postal Service 100 8/16/15
100% United States Postal Service 100 9/1/10
100% United States Postal Service 100 10/31/15
100% United States Postal Service 100 10/20/10
- ----------------------------------------------------------------------------------------------------------------------------
100% United States Postal Service 100 4/14/14
100% United States Postal Service 100 8/1/15
100% United States Postal Service 100 9/1/10
95% 269
92% 0.15 K-Mart 35 5/31/03
- ----------------------------------------------------------------------------------------------------------------------------
95% 50
95% 0.20 State Farm Insurance Company 100 5/31/03
100% 0.10 Time Warner Entertainment Inc 83 12/31/05
97% 0.17 Winn-Dixie Stores, Inc. 35 2/26/12
95% 0.10 Best Buy 52 7/31/09
- ----------------------------------------------------------------------------------------------------------------------------
88% 250
95% 0.15 Poverello Center 22 11/30/01
75%
60%
- ----------------------------------------------------------------------------------------------------------------------------
93% 0.31
93% 0.25
94% 200
95% 0.20 Chuck E. Cheese (Retail) 14 7/31/02
96% 2.64
- ----------------------------------------------------------------------------------------------------------------------------
95% 300
250
97%
97%
97%
- ----------------------------------------------------------------------------------------------------------------------------
97%
95% 0.20 Alameda Medical Group, Inc. 35 3/31/09
0.20
95% American Radio Systems 26 11/1/98
88% Mattress World 23 6/30/03
- ----------------------------------------------------------------------------------------------------------------------------
295
93%
90%
93%
93%
- ----------------------------------------------------------------------------------------------------------------------------
93%
93%
381
95%
95%
- ----------------------------------------------------------------------------------------------------------------------------
74%
95% 50
72%
93% 0.19 America's Food Basket 46 8/31/07
95% 0.20 LG Group 100 8/1/08
- ----------------------------------------------------------------------------------------------------------------------------
95% 250
326
90%
90% Irwin Schneidmill,CPA 25 10/31/98
89%
- ----------------------------------------------------------------------------------------------------------------------------
95%
81%
81% State Farm Insurance 16 5/31/99
77% 0.14 FoodMax Supermarket 16 7/31/01
95% 75
- ----------------------------------------------------------------------------------------------------------------------------
96% 50
90% 0.16 Woolworth's (sub/Amer Thrift) 49 1/31/01
93% 0.20 The Economic Press 100 8/30/10
95% 0.20
95% 314
- ----------------------------------------------------------------------------------------------------------------------------
88% 250
95% 0.20 Crain Communications 25 2/28/01
95% 0.20 Brook Warehousing Corporation 97 10/31/01
75% 4%
95% 0.20
- ----------------------------------------------------------------------------------------------------------------------------
95% 221
100%
92% AMP Incorporated 100 12/31/02
75% 3%
73% 0.20 ARCO 68 1/1/08
- ----------------------------------------------------------------------------------------------------------------------------
55% 4%
89% 0.17 Carter Green Furniture, Inc. 29 12/31/04
56% 5%
95% 276
80% 6%
- ----------------------------------------------------------------------------------------------------------------------------
75% 5%
95% 185
95% 235
90% 0.20 Zahorick 21 9/30/99
58% 0.15 Thrifty Drug Store (Rite-Aid) 23 5/31/04
- ----------------------------------------------------------------------------------------------------------------------------
95% Novick Edelstein 30 9/30/03
95% 257
100%
91% 0.25 Renee Portier 14 1/1/02
96% 303
- ----------------------------------------------------------------------------------------------------------------------------
95% 239
96% 266
96% 261
100%
100%
- ----------------------------------------------------------------------------------------------------------------------------
95% 0.24 Westmark Group Holdings (off) 100 5/30/08
57%
100%
95% 294
100%
- ----------------------------------------------------------------------------------------------------------------------------
96% 295
93% 0.15 Autozone 51 12/31/08
95% 287
100%
95% 224
- ----------------------------------------------------------------------------------------------------------------------------
96% 288
100%
95% 250
95% 0.25 Third Ave Ret Hldg (Freddie's) 34 12/31/13
100%
- ----------------------------------------------------------------------------------------------------------------------------
96% 303
96% 287
95% 306
94% 0.24 Lady of America Fitness 12 12/31/01
91% 250
- ----------------------------------------------------------------------------------------------------------------------------
100%
100%
80% 0.26
100%
100%
- ----------------------------------------------------------------------------------------------------------------------------
95% 50
64%
100%
93% 0.20
95% 258
- ----------------------------------------------------------------------------------------------------------------------------
100%
100%
95% 249
100%
100%
- ----------------------------------------------------------------------------------------------------------------------------
95% 233
98% 0.15 Walgreen's 54 6/30/12
48% 5%
65%
88% 0.20 Jefferson Smurfit Corp. 33 9/30/99
- ----------------------------------------------------------------------------------------------------------------------------
100%
95% 0.24 Sav-A-Lot (Moran Foods, Inc.) 28 1/31/00
95% 300
96% 272
95% Duane Reade 100 9/30/12
- ----------------------------------------------------------------------------------------------------------------------------
96% 287
95% 236
95% 259
100%
100%
- ----------------------------------------------------------------------------------------------------------------------------
95% 370
75% 7%
95% Elmwood Corporation/Lease Mana 30 4/30/10
100%
96% 302
- ----------------------------------------------------------------------------------------------------------------------------
96% 307
75% 7%
100%
90% Royal Furniture 22 9/30/99
100%
- ----------------------------------------------------------------------------------------------------------------------------
93% 0.20 U. S. Postal Service 60 10/7/01
96% 251
96% 277
96% 418
95% Dress Barn, Inc. 32 12/31/02
- ----------------------------------------------------------------------------------------------------------------------------
100%
95% 231
100%
93% 0.33 Dollar Store 53 6/30/06
95% 256
- ----------------------------------------------------------------------------------------------------------------------------
66% 5%
100%
95% 0.15 Texas Dept. of Human Services 37 12/31/02
95% 243
96% 315
- ----------------------------------------------------------------------------------------------------------------------------
92% 250
91% West Coast Video 49 8/31/02
92% Core Knowledge Institute 44 6/30/99
95% 250
95% 244
- ----------------------------------------------------------------------------------------------------------------------------
95% MAACO Auto Painting & Bodywork 55 9/30/13
95% 250
95% Amerimed (PL-East Realty Corp) 50 1/31/08
95%
92% 250
- ----------------------------------------------------------------------------------------------------------------------------
91% AeroPanel Corporation 44 10/31/08
96% 261
96% 427
95% 250
96% 314
- ----------------------------------------------------------------------------------------------------------------------------
95% 486
96% 350
95% (3) McAdams Liquor Inc. 21 6/30/08
95% SpinCycle Inc 100 8/27/08
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LEASE LEASE
% OF EXPIRATION % OF EXPIRATION
TENANT 2 TOTAL SF DATE 2 TENANT 3 TOTAL SF DATE 3
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Merrill Lynch 11 1/31/02 Stored Value Systems 10 12/31/02
- ------------------------------------------------------------------------------------------------------------------------------
Yucatan of Louisville, Ltd. 1/ 14 7/31/03 Walgreens 11 5/31/10
NHL Health Services 13 9/30/01
The Future Now (XL Con) 16 8/31/00 AIG - New Hampshire Ins. 18 10/31/00
- ------------------------------------------------------------------------------------------------------------------------------
Office of Hearing and Appeals 13 1/18/06
Hekimian Laboratories, Inc. 27 8/31/03
Merrill Lynch 12 7/30/07
- ------------------------------------------------------------------------------------------------------------------------------
New Wave Technologies, Inc. 12 4/30/03
Richfoods, Inc. (Food 4 Less) 22 9/30/03 Schewel Furniture 17 4/30/06
Capricorn Pharma, Inc. 25 6/30/08 Eagle Design & Management, Inc 11 6/30/03
Transtech 35 7/31/05
- ------------------------------------------------------------------------------------------------------------------------------
Carroll County Library 17 6/30/03 State of MD Dept of Econ/Empl 11 1/31/99
E & B, Inc. T/A Barts Inner S 11 3/31/05
Battelle 17 10/31/02 Center for Neuro Rehab. 11 8/31/00
Washington Data Systems, Inc. 20 5/31/99
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Mitchell, Silbert 36 11/30/13 Security First 23 11/30/13
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NCR Corporation 12 9/30/02
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Signature Theatres 12 4/30/17
Filene's Basement, Inc. 18 1/31/09
- ------------------------------------------------------------------------------------------------------------------------------
DIA-General Service Admin 14 9/9/99
Oracle 19 4/30/02 Hyundai 18 10/20/01
- ------------------------------------------------------------------------------------------------------------------------------
Ross 12 2/15/08 Mardel Christian Bookstore 12 7/31/08
Best Buy Co. 19 3/31/08 Cinemark 15 2/23/00
National Foam 10 8/31/99
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Uptons, Inc. 30 11/30/03
Dollar General Store 11 10/31/02
Churchill Super Market, Inc. 21 7/31/99
- ------------------------------------------------------------------------------------------------------------------------------
Sterk's Super Foods 35 5/30/06
Mississippi Baptist Medical 25 5/31/00 Sunflower Supermarket 25 4/30/00
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
SuperCom, Inc. 30 1/31/03
Gynetics 19 12/15/02
- ------------------------------------------------------------------------------------------------------------------------------
Gerrard and Company, Inc. 35 6/30/00 American Playgrounds, Inc. 15 4/30/99
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Lucky Stores, Inc. 15 3/31/02
- ------------------------------------------------------------------------------------------------------------------------------
Kroger 12 2/28/01 Ira A. Watson's Co. 11 3/31/01
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Delchamps Supermarket 20 1/31/06
- ------------------------------------------------------------------------------------------------------------------------------
Pathmark [Supermarket General] 25 10/31/06
Publix Supermarkets 26 4/29/07 Beall's #063 17 4/30/11
- ------------------------------------------------------------------------------------------------------------------------------
SPS Payment 24 7/31/07
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Associated Wholesale grocers 17 11/30/10
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Delchamps 23 8/31/02 Rite Aid 13 9/30/02
- ------------------------------------------------------------------------------------------------------------------------------
Art-Tech Decorating Inc 17 1/31/99
Walgreen Corp. Store #2488 11 8/31/42
T.J. Maxx 21 1/31/03
- ------------------------------------------------------------------------------------------------------------------------------
Social Security Offices 21 4/30/08 Better Bodies of Ft. Lauder 15 10/31/02
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Javelin 15 6/1/03 Telecomp Inc. 10 12/3/01
Bill's Carpet Center 15 5/31/01 Goodwill Fashions 11 12/31/02
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
CVS Pharmacy 20 1/31/05
- ------------------------------------------------------------------------------------------------------------------------------
Galitsis & Bovino MTM 16 Robert McGuirl 14 7/31/99
- ------------------------------------------------------------------------------------------------------------------------------
CVS Drug Store 12 8/31/15
- ------------------------------------------------------------------------------------------------------------------------------
Delchamps (sub/Cowboy Mahoney) 23 3/31/01 Rite-Aid 12 3/31/01
- ------------------------------------------------------------------------------------------------------------------------------
Brockman, Coats Gedelian 16 11/30/99 Westco Group 14 6/30/00
- ------------------------------------------------------------------------------------------------------------------------------
Alaska Computer Essentials 13 3/31/03
- ------------------------------------------------------------------------------------------------------------------------------
Ashley Home Center 18 12/31/03 Social Security Administration 17 3/31/04
- ------------------------------------------------------------------------------------------------------------------------------
Pacer/Infotec 21 9/30/03 Infotec 19 9/30/03
16 Movies West 17 12/20/99
- ------------------------------------------------------------------------------------------------------------------------------
Smith Buss & Jacobs 15 11/30/07
Formal Fabrics 12 1/1/02
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Westmark Group Holdings (WH) 19 5/31/08
- ------------------------------------------------------------------------------------------------------------------------------
Eckerd Drug Store 22 7/31/01
- ------------------------------------------------------------------------------------------------------------------------------
Jesse B. Munoz, M.D. 33 7/31/99
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Digital Direct T.V., Inc. 30 12/31/01
Med-X Incorporated 25 5/31/99 Jefferson Smurfit 17 9/30/99
- ------------------------------------------------------------------------------------------------------------------------------
Rexall Drugs 18 6/30/06 Movie Gallery 11 8/31/01
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity Mortgage 17 3/31/99 Ohio Bar Title Company 10 2/28/00
- ------------------------------------------------------------------------------------------------------------------------------
Fortune Cookie Restaurant 18 4/30/03 Schoolocker Teacher Supply 16 12/31/01
- ------------------------------------------------------------------------------------------------------------------------------
ACI Glass 23 9/20/99
Kentucky Fried Chicken 20 12/31/01 Design 4 U, Inc. 14 7/31/02
- ------------------------------------------------------------------------------------------------------------------------------
Mannings 17 4/30/00
- ------------------------------------------------------------------------------------------------------------------------------
Popular Mattress Company 27 12/1/12 Justin Boot Company 20 12/1/99
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Interglobe Communications 45 5/31/00
Allhealth (PL-East Realty) 50 7/31/08
- ------------------------------------------------------------------------------------------------------------------------------
Instrument Specialties Co.Inc. 32 10/31/08 M&S Computer Products, Inc. 24 12/31/05
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Annex B
Credit Lease Loan Characteristics
<TABLE>
<CAPTION>
CSFB
LOAN # CONTROL # CONTROL # PROPERTY NAME/LOCATION TENANT/LEASE GUARANTOR
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
16 16 19 Accor - Texas Portfolio Accor, S.A.
16 016A 019E Accor Motel 6 #1122 - San Antonio, TX Accor, S.A.
16 016B 019D Accor Motel 6 #1121 - Plano,TX Accor, S.A.
16 016C 019B Accor Motel 6 #298 - Lubbock, TX Accor, S.A.
16 016D 019F Accor Motel 6 #1208 - San Antonio, TX Accor, S.A.
- -----------------------------------------------------------------------------------------------------------------------------------
16 016E 019C Accor Motel 6 #362 - College Station, TX Accor, S.A.
16 016F 019A Accor Motel 6 #229 - San Angelo, TX Accor, S.A.
23 23 25 Accor - Florida Portfolio Accor, S.A.
23 023A 025A Accor Motel 6 #436 - Kissimmee, FL Accor, S.A.
23 023B 025B Accor Motel 6 #483 - Tampa, FL Accor, S.A.
- -----------------------------------------------------------------------------------------------------------------------------------
23 023C 025C Accor Motel 6 #677 - Lakeland, FL Accor, S.A.
23 023D 025D Accor Motel 6 #1191 - Tallahassee, FL Accor, S.A.
26 26 29 Accor - Midwest Portfolio Accor, S.A.
26 026A 029B Accor - Motel 6 #1153 - Council Bluffs, IA Accor, S.A.
26 026B 029A Accor - Motel 6 #1195 - Topeka, KS Accor, S.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26 026C 029C Accor - Motel 6 #1077 - Salina, KS Accor, S.A.
26 026D 029D Accor Motel 6 #1173 - Madison, WI Accor, S.A.
26 026E 029E Accor Motel 6 #1236 - Shawnee, OK Accor, S.A.
29 29 32 Accor - East Portfolio Accor, S.A.
29 029A 032A Accor Motel 6 #1063 - Niantic, CT Accor, S.A.
- -----------------------------------------------------------------------------------------------------------------------------------
29 029B 032C Accor Motel 6 #1062 - Nashua, NH Accor, S.A.
29 029C 032D Accor Motel 6 #1219 - Newport, RI Accor, S.A.
29 029D 032B Accor Motel 6 #403 - New Castle, DE Accor, S.A.
29 029E 032E Accor Motel 6 #1058 - Brattleboro, VT Accor, S.A.
32 32 36 Accor - Southeast Portfolio Accor, S.A.
- -----------------------------------------------------------------------------------------------------------------------------------
32 032A 036A Accor Motel 6 #1068 - Greensboro, NC Accor, S.A.
32 032B 036D Accor Motel 6 #459 - Memphis, TN Accor, S.A.
32 032C 036C Accor Motel 6 #496 - Florence, KY Accor, S.A.
32 032D 036B Accor Motel 6 #1234 - Aberdeen, NC Accor, S.A.
35 35 39 Accor - West Portfolio Accor, S.A.
- -----------------------------------------------------------------------------------------------------------------------------------
35 035A 039A Accor Motel 6 #1185 - Phoenix, AZ Accor, S.A.
35 035B 039C Accor Motel 6 #1043 - Sacramento, CA Accor, S.A.
35 035C 039B Accor Motel 6 #675 - Santa Maria, CA Accor, S.A.
25 25 28 American Restaurant Group, Inc. Summary American Restaurant Group, Inc
25 025A 028G American Restaurant Group - Thousand Oaks, CA American Restaurant Group, Inc
- -----------------------------------------------------------------------------------------------------------------------------------
25 025B 028F American Restaurant Group - San Jose, CA American Restaurant Group, Inc
25 025C 028D American Restaurant Group - Alhambra, CA American Restaurant Group, Inc
25 025D 028C American Restaurant Group - Sacramento, CA American Restaurant Group, Inc
25 025E 028H American Restaurant Group - US 31, Indianapolis, IN American Restaurant Group, Inc
25 025F 028E American Restaurant Group - Indianapolis, IN American Restaurant Group, Inc
- -----------------------------------------------------------------------------------------------------------------------------------
25 025G 028A American Restaurant Group - Phoenix, AZ American Restaurant Group, Inc
25 025H 028B American Restaurant Group - Littleton, CO American Restaurant Group, Inc
30 30 33 Cinemark - Austin, TX Cinemark USA, Inc.
122 122 149 CVS - Forest Hill, VA (6) CVS Corporation
126 126 156 CVS - Auburn, ME (6) CVS Corporation
- -----------------------------------------------------------------------------------------------------------------------------------
128 128 159 CVS - Montgomery, AL (6) CVS Corporation
132 132 164 CVS - Cranston, RI (6) CVS Corporation
135 135 166 CVS - Bessemer, AL (6) CVS Corporation
138 138 169 CVS - Middlefield, OH (6) CVS Corporation
144 144 172 CVS - Colonial Heights, VA (6) CVS Corporation
- -----------------------------------------------------------------------------------------------------------------------------------
145 145 175 CVS - Augusta, GA (6) CVS Corporation
147 147 177 CVS - New Haven, IN (6) CVS Corporation
148 148 178 CVS - Huntersville, NC (6) CVS Corporation
151 151 180 CVS - Ringgold, GA (6) CVS Corporation
154 154 184 CVS - Cleveland, OH (6) CVS Corporation
- -----------------------------------------------------------------------------------------------------------------------------------
155 155 186 CVS - Madison, NC (6) CVS Corporation
157 157 188 CVS - Painesville, OH (6) CVS Corporation
158 158 189 CVS - Pelzer, SC (6) CVS Corporation
164 164 197 CVS - Smyrna, TN (6) CVS Corporation
172 172 204 CVS - Owensboro, KY (6) CVS Corporation
- -----------------------------------------------------------------------------------------------------------------------------------
173 173 205 CVS - Barnwell, SC (6) CVS Corporation
177 177 209 CVS - Marysville, OH (6) CVS Corporation
181 181 217 CVS - Bedford, OH (6) CVS Corporation
189 189 227 CVS - Cairo, NY (6) CVS Corporation
191 191 228 CVS - Hopewell, PA (6) CVS Corporation
- -----------------------------------------------------------------------------------------------------------------------------------
116 116 144 Eckerd (Fay's) - Berwick, PA Eckerd Corporation
41 41 47 Garden Ridge - Hilliard, OH Garden Ridge Corporation
51 51 58 Hoyts Cinemas - Bellingham, MA Hoyts Cinemas Limited
123 123 160 Office Depot - Dallas, TX Office Depot, Inc.
53 53 999 Pamida Summary Pamida, Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
53 053A 215 Pamida #296 - Libby, MO Pamida, Inc.
53 053B 216 Pamida #113 - Ogallala, NE Pamida, Inc.
53 053C 223 Pamida #155 - Superior, NE Pamida, Inc.
53 053D 224 Pamida #291 - Newcastle, WY Pamida, Inc.
53 053E 235 Pamida #157 - Clay Center, KS Pamida, Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
33 33 37 Regal Cinemas - Palm Beach, FL Regal Cinemas, Inc.
100 100 122 Rite Aid - Burton, MI Rite Aid Corporation
183 183 221 Rite Aid - Detroit, MI Rite Aid Corporation
195 195 237 Rite Aid - Dearborn, MI Rite Aid Corporation
19 19 273 United Artists - 5 Theater Portfolio (5) United Artists Theatre Circuit, Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
19 019A 273B UA Snowden Square - Columbia, MD United Artists Theatre Circuit, Inc.
19 019B 273C UA Commerce Crossing - Commerce Township, MI United Artists Theatre Circuit, Inc.
19 019C 273D UA Cinemas 8 at Southlake - Morrow, GA United Artists Theatre Circuit, Inc.
19 019D 273E UA Shannon 8 - Union City, GA United Artists Theatre Circuit, Inc.
19 019E 273A UA Cinema 7 - Berkeley, CA United Artists Theatre Circuit, Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CUT OFF
DATE
PRINCIPAL LEASED LEASED
PROPERTY TYPE MOODY'S (1) S&P (1) LEASE TYPE BALANCE VALUE (2) LTV
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Lodging BBB Bondable Lease 30,176,866 30,550,000 99
Lodging BBB Bondable Lease 7,754,121 7,850,000 99
Lodging BBB Bondable Lease 5,778,549 5,850,000 99
Lodging BBB Bondable Lease 5,531,602 5,600,000 99
Lodging BBB Bondable Lease 4,494,427 4,550,000 99
- ----------------------------------------------------------------------------------------------------------------------------------
Lodging BBB Bondable Lease 3,704,198 3,750,000 99
Lodging BBB Bondable Lease 2,913,969 2,950,000 99
Lodging BBB Bondable Lease 19,143,664 19,300,000 99
Lodging BBB Bondable Lease 6,149,778 6,200,000 99
Lodging BBB Bondable Lease 5,257,068 5,300,000 99
- ----------------------------------------------------------------------------------------------------------------------------------
Lodging BBB Bondable Lease 4,513,144 4,550,000 99
Lodging BBB Bondable Lease 3,223,674 3,250,000 99
Lodging BBB Bondable Lease 15,623,817 15,760,000 99
Lodging BBB Bondable Lease 3,915,868 3,950,000 99
Lodging BBB Bondable Lease 3,767,164 3,800,000 99
- ----------------------------------------------------------------------------------------------------------------------------------
Lodging BBB Bondable Lease 2,805,546 2,830,000 99
Lodging BBB Bondable Lease 2,706,410 2,730,000 99
Lodging BBB Bondable Lease 2,428,829 2,450,000 99
Lodging BBB Bondable Lease 14,443,020 14,450,000 100
Lodging BBB Bondable Lease 4,397,875 4,400,000 100
- ----------------------------------------------------------------------------------------------------------------------------------
Lodging BBB Bondable Lease 3,298,406 3,300,000 100
Lodging BBB Bondable Lease 2,548,768 2,550,000 100
Lodging BBB Bondable Lease 2,348,865 2,350,000 100
Lodging BBB Bondable Lease 1,849,106 1,850,000 100
Lodging BBB Bondable Lease 13,763,265 13,820,000 100
- ----------------------------------------------------------------------------------------------------------------------------------
Lodging BBB Bondable Lease 4,879,884 4,900,000 100
Lodging BBB Bondable Lease 3,784,400 3,800,000 100
Lodging BBB Bondable Lease 2,659,039 2,670,000 100
Lodging BBB Bondable Lease 2,439,942 2,450,000 100
Lodging BBB Bondable Lease 13,112,290 14,050,000 93
- ----------------------------------------------------------------------------------------------------------------------------------
Lodging BBB Bondable Lease 6,252,836 6,700,000 93
Lodging BBB Bondable Lease 3,733,036 4,000,000 93
Lodging BBB Bondable Lease 3,126,418 3,350,000 93
Food Service B3* B* Bondable Lease 17,787,585 18,450,000 96
Food Service B3* B* Bondable Lease 3,085,110 3,200,000 96
- ----------------------------------------------------------------------------------------------------------------------------------
Food Service B3* B* Bondable Lease 2,680,189 2,780,000 96
Food Service B3* B* Bondable Lease 2,651,266 2,750,000 96
Food Service B3* B* Bondable Lease 2,265,627 2,350,000 96
Food Service B3* B* Bondable Lease 1,937,834 2,010,000 96
Food Service B3* B* Bondable Lease 1,846,245 1,915,000 96
- ----------------------------------------------------------------------------------------------------------------------------------
Food Service B3* B* Bondable Lease 1,730,554 1,795,000 96
Food Service B3* B* Bondable Lease 1,590,760 1,650,000 96
Entertainment Ba3 BB- Bondable Lease 14,388,230 15,000,000 96
Drug A3 A- Bondable Lease 2,671,964 2,810,000 95
Drug A3 A- Bondable Lease 2,485,162 2,480,000 100
- ----------------------------------------------------------------------------------------------------------------------------------
Drug A3 A- Bondable Lease 2,427,442 2,410,000 101
Drug A3 A- Bondable Lease 2,373,332 2,790,000 85
Drug A3 A- Bondable Lease 2,299,743 2,330,000 99
Drug A3 A- Bondable Lease 2,251,091 2,260,000 100
Drug A3 A- Bondable Lease 2,213,198 2,240,000 99
- ----------------------------------------------------------------------------------------------------------------------------------
Drug A3 A- Bondable Lease 2,196,408 2,215,000 99
Drug A3 A- Bondable Lease 2,173,888 2,190,000 99
Drug A3 A- Bondable Lease 2,172,174 2,200,000 99
Drug A3 A- Bondable Lease 2,116,349 2,140,000 99
Drug A3 A- Bondable Lease 2,090,866 2,100,000 100
- ----------------------------------------------------------------------------------------------------------------------------------
Drug A3 A- Bondable Lease 2,077,611 2,250,000 92
Drug A3 A- Bondable Lease 2,015,924 2,030,000 99
Drug A3 A- Bondable Lease 2,012,127 2,090,000 96
Drug A3 A- Bondable Lease 1,971,569 1,980,000 100
Drug A3 A- Bondable Lease 1,814,530 1,840,000 99
- ----------------------------------------------------------------------------------------------------------------------------------
Drug A3 A- Bondable Lease 1,805,561 1,840,000 98
Drug A3 A- Bondable Lease 1,785,062 1,810,000 99
Drug A3 A- Bondable Lease 1,623,093 1,630,000 100
Drug A3 A- Bondable Lease 1,444,114 1,620,000 89
Drug A3 A- Bondable Lease 1,402,926 1,410,000 99
- ----------------------------------------------------------------------------------------------------------------------------------
Drug A Double Net Lease 2,781,678 2,900,000 96
Consumer Products Triple Net Lease 10,627,254 13,100,000 81
Entertainment BB Triple Net Lease 7,943,633 7,600,000 105
Office Products BBB- Triple Net Lease 2,524,380 2,600,000 97
Discount Merchandise Store NAP 7,662,521 7,700,000 100
- ----------------------------------------------------------------------------------------------------------------------------------
Discount Merchandise Store Triple Net Lease 1,669,441 1,700,000 100
Discount Merchandise Store Triple Net Lease 1,630,467 1,700,000 100
Discount Merchandise Store Triple Net Lease 1,525,168 1,500,000 100
Discount Merchandise Store Triple Net Lease 1,497,770 1,500,000 100
Discount Merchandise Store Triple Net Lease 1,339,674 1,300,000 100
- ----------------------------------------------------------------------------------------------------------------------------------
Entertainment Ba3* BB- Triple Net Lease 13,473,026 13,500,000 100
Drug Baa1 BBB+ Double Net Lease 3,560,238 3,600,000 99
Drug Baa1 BBB+ Triple Net Lease 1,598,697 1,700,000 94
Drug Baa1 BBB+ Double Net Lease 1,321,705 1,600,000 83
Entertainment B1* B+ Bondable Lease 23,302,898 26,800,000 87
- ----------------------------------------------------------------------------------------------------------------------------------
Entertainment B1* B+ Bondable Lease 7,390,845 8,500,000 87
Entertainment B1* B+ Bondable Lease 7,390,845 8,500,000 87
Entertainment B1* B+ Bondable Lease 2,956,338 3,400,000 87
Entertainment B1* B+ Bondable Lease 2,782,436 3,200,000 87
Entertainment B1* B+ Bondable Lease 2,782,436 3,200,000 87
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF
STATED EXPIRATION OF CUT-OFF DATE DATE
DARK DARK BALLOON MATURITY PRIMARY LEASE ANNUAL DEBT ANNUAL
VALUE (3) LTV AMOUNT DATE TERM SERVICE NET RENT
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
24,900,000 121 9,261,900 3/11/19 3/31/19 2,526,553 2,526,553
6,300,000 121
4,300,000 121
4,700,000 121
3,900,000 121
- ----------------------------------------------------------------------------------------------------------------------------------
3,200,000 121
2,500,000 121
15,600,000 123 6,432,900 3/11/19 3/31/19 1,590,894 1,590,894
5,000,000 123
4,400,000 123
- ----------------------------------------------------------------------------------------------------------------------------------
3,600,000 123
2,600,000 123
13,150,000 119 5,067,600 3/11/19 3/31/19 1,302,275 1,302,275
3,400,000 119
3,040,000 119
- ----------------------------------------------------------------------------------------------------------------------------------
2,290,000 119
2,220,000 119
2,200,000 119
13,000,000 111 5,252,100 3/11/19 3/31/19 1,191,737 1,191,737
3,300,000 111
- ----------------------------------------------------------------------------------------------------------------------------------
3,100,000 111
2,400,000 111
2,700,000 111
1,500,000 111
11,760,000 117 4,723,200 3/11/19 3/31/19 1,141,661 1,141,661
- ----------------------------------------------------------------------------------------------------------------------------------
3,970,000 117
3,340,000 117
2,500,000 117
1,950,000 117
11,990,000 109 4,760,100 3/11/19 3/31/19 1,082,109 1,160,039
- ----------------------------------------------------------------------------------------------------------------------------------
5,400,000 109
3,260,000 109
3,330,000 109
15,290,000 116 5/11/23 6/1/23 1,787,973 1,866,330
2,900,000 116
- ----------------------------------------------------------------------------------------------------------------------------------
2,360,000 116
2,470,000 116
1,960,000 116
1,500,000 116
1,475,000 116
- ----------------------------------------------------------------------------------------------------------------------------------
1,475,000 116
1,150,000 116
13,000,000 111 10/11/18 10/11/18 1,431,119 1,431,119
2,000,000 134 1/6/19 1/31/19 179,426 179,426
1,900,000 131 12/6/18 1/31/19 163,999 163,999
- ----------------------------------------------------------------------------------------------------------------------------------
1,960,000 124 3/6/19 1/31/20 170,265 170,265
2,240,000 106 2/6/19 1/31/19 159,134 159,134
1,850,000 124 1/6/19 1/31/19 154,651 154,651
1,800,000 125 12/6/18 1/31/19 153,824 153,824
1,930,000 115 1/6/19 1/31/19 147,614 147,614
- ----------------------------------------------------------------------------------------------------------------------------------
1,800,000 122 1/6/19 1/31/19 148,044 148,044
1,750,000 124 2/6/19 1/31/20 146,245 146,245
1,840,000 118 1/6/19 1/31/19 145,071 145,071
1,700,000 124 1/6/19 1/31/19 140,210 140,210
1,750,000 119 1/6/19 1/31/19 138,235 138,235
- ----------------------------------------------------------------------------------------------------------------------------------
1,740,000 119 12/6/18 1/31/19 142,293 142,293
1,750,000 115 12/6/18 1/31/19 135,196 135,196
1,630,000 123 1/6/19 1/31/19 135,890 135,890
1,650,000 119 12/6/18 1/31/19 130,605 130,605
1,600,000 113 1/6/19 1/31/19 122,419 122,419
- ----------------------------------------------------------------------------------------------------------------------------------
1,540,000 117 1/6/19 1/31/19 119,308 119,308
1,440,000 124 12/6/18 1/31/19 120,344 120,344
1,390,000 117 1/6/19 1/31/19 107,048 107,048
1,530,000 94 2/6/19 1/31/19 97,095 97,095
1,120,000 125 2/6/19 1/1/20 92,801 92,801
- ----------------------------------------------------------------------------------------------------------------------------------
2,300,000 121 505,000 5/11/18 5/31/18 229,576 235,198
8,900,000 119 8/11/18 8/31/20 1,050,059 1,050,059
6,100,000 130 2/11/18 2/28/18 799,348 799,348
2,000,000 126 6/11/16 6/29/16 219,000 220,000
5,900,000 130
- ----------------------------------------------------------------------------------------------------------------------------------
1,300,000 130 6/11/23 6/30/23 158,950 162,000
1,400,000 130 6/11/23 6/30/23 155,240 158,218
1,100,000 130 6/11/23 6/30/23 145,214 148,000
1,100,000 130 6/11/23 6/30/23 142,605 145,341
1,000,000 130 6/11/23 6/30/23 127,553 130,000
- ----------------------------------------------------------------------------------------------------------------------------------
10,700,000 126 4/11/18 4/30/18 1,284,742 1,284,742
2,800,000 127 4/11/23 4/30/23 292,594 299,235
1,400,000 114 9/11/17 10/12/17 147,500 147,500
1,300,000 102 3/11/16 3/24/16 118,363 125,000
24,200,000 96 7/1/16 8/7/17 2,333,784 2,699,742
- ----------------------------------------------------------------------------------------------------------------------------------
8,300,000 96
9,600,000 96
2,100,000 96
2,600,000 96
1,600,000 96
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST STEP FIRST STEP
DATE ANNUAL FIRST STEP DATE ANNUAL FIRST
DSCR DEBT SERVICE DEBT SERVICE NET RENT STEP DSCR
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1.00
- -------------------------------------------------------------------------------------------------
1.00
- -------------------------------------------------------------------------------------------------
1.00
- -------------------------------------------------------------------------------------------------
1.00
- -------------------------------------------------------------------------------------------------
1.00
- -------------------------------------------------------------------------------------------------
1.07
- -------------------------------------------------------------------------------------------------
1.04
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
1.00
1.00 2/6/99 223,656 223,656 1.00
1.00 1/6/99 206,013 206,004 1.00
- -------------------------------------------------------------------------------------------------
1.00 4/6/99 208,299 208,299 1.00
1.00 3/6/99 198,462 221,952 1.12
1.00 2/6/99 192,655 192,655 1.00
1.00 12/6/98 189,628 189,629 1.00
1.00 1/6/99 183,864 183,864 1.00
- -------------------------------------------------------------------------------------------------
1.00 1/6/99 183,562 183,562 1.00
1.00 3/6/99 182,138 182,138 1.00
1.00 2/6/99 181,136 181,136 1.00
1.00 1/6/99 175,155 175,155 1.00
1.00 2/6/99 173,369 173,369 1.00
- -------------------------------------------------------------------------------------------------
1.00 12/6/98 175,244 175,244 1.00
1.00 12/6/98 168,011 168,011 1.00
1.00 2/6/99 168,969 168,969 1.00
1.00 12/6/98 163,176 163,177 1.00
1.00 3/6/99 152,493 152,494 1.00
- -------------------------------------------------------------------------------------------------
1.00 1/6/99 149,214 149,214 1.00
1.00 12/6/98 149,214 149,215 1.00
1.00 1/6/99 133,992 133,992 1.00
1.00 3/6/99 120,956 120,956 1.00
1.00 3/6/99 116,425 116,426 1.00
- -------------------------------------------------------------------------------------------------
1.02 6/11/03 236,604 242,226 1.02
1.00
1.00
1.00 7/11/02 252,000 253,000 1.00
- -------------------------------------------------------------------------------------------------
1.02 7/11/03 162,129 165,240 1.02
1.02 7/11/03 158,344 161,382 1.02
1.02 7/11/03 148,118 150,960 1.02
1.02 7/11/03 145,457 148,248 1.02
1.02 7/11/03 130,104 132,600 1.02
- -------------------------------------------------------------------------------------------------
1.00 5/11/03 1,303,917 1,303,917 1.00
1.02
1.00 11/11/02 152,500 152,500 1.00
1.06 4/11/01 126,523 133,160 1.05
1.16 1/1/02 2,433,435 2,834,582 1.16
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SECOND STEP SECOND STEP SECOND STEP THIRD STEP THIRD STEP
DATE OF ANNUAL DEBT ANNUAL NET SECOND STEP DATE OF ANNUAL DEBT
DEBT SEVICE SERVICE RENT DSCR (4) DEBT SERVICE SERVICE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
2/6/04 237,076 237,076 1.00 2/6/09 251,300
1/6/04 218,374 218,374 1.00 1/6/09 231,477
- -----------------------------------------------------------------------------------------------------------------
4/6/04 220,797 220,797 1.00 4/6/09 234,045
3/6/04 210,370 233,860 1.11 3/6/09 222,992
2/6/04 204,214 204,214 1.00 2/6/09 216,467
11/6/03 201,006 201,006 1.00 11/6/08 213,067
12/6/03 194,896 194,896 1.00 12/6/08 206,590
- -----------------------------------------------------------------------------------------------------------------
12/6/03 194,576 194,576 1.00 12/6/08 206,250
3/6/04 193,067 193,067 1.00 3/6/09 204,651
1/6/04 192,004 192,004 1.00 1/6/09 203,524
12/6/03 185,665 185,665 1.00 12/6/08 196,805
1/6/04 183,771 183,771 1.00 1/6/09 194,797
- -----------------------------------------------------------------------------------------------------------------
11/6/03 185,758 185,758 1.00 11/6/08 196,904
11/6/03 178,091 178,091 1.00 11/6/08 188,777
2/6/04 179,107 179,107 1.00 2/6/09 189,854
11/6/03 172,967 172,967 1.00 11/6/08 183,345
2/6/04 161,643 161,643 1.00 2/6/09 171,342
- -----------------------------------------------------------------------------------------------------------------
12/6/03 158,167 158,167 1.00 12/6/08 167,657
11/6/03 158,167 158,167 1.00 11/6/08 167,657
12/6/03 142,032 142,032 1.00 12/6/08 150,554
3/6/04 128,213 128,213 1.00 3/6/09 135,906
3/6/04 123,411 123,411 1.00 3/6/09 130,816
- -----------------------------------------------------------------------------------------------------------------
6/11/08 243,631 249,253 1.02 6/11/13 250,659
7/11/07 289,950 290,950 1.00 7/11/12 333,592
- -----------------------------------------------------------------------------------------------------------------
7/11/08 165,372 168,545 1.02 7/11/13 168,679
7/11/08 161,511 164,610 1.02 7/11/13 164,742
7/11/08 151,080 153,979 1.02 7/11/13 154,102
7/11/08 148,367 151,213 1.02 7/11/13 151,334
7/11/08 132,706 135,252 1.02 7/11/13 135,360
- -----------------------------------------------------------------------------------------------------------------
5/11/08 1,399,793 1,399,793 1.00 5/11/13 1,480,329
11/11/07 157,500 157,500 1.00 11/11/12 162,500
4/11/06 134,683 141,320 1.05 4/11/11 142,843
1/1/07 2,571,545 2,976,554 1.16 1/1/12 2,711,095
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THIRD STEP FOURTH STEP FOURTH STEP FOURTH STEP
ANNUAL NET THIRD STEP DATE OF ANNUAL DEBT ANNUAL NET FOURTH STEP
RENT DSCR (4) DEBT SERVICE SERVICE RENT DATE DSCR (4)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
251,300 1.00 2/6/14 266,378 266,378 1.00
231,477 1.00 1/6/14 245,365 245,365 1.00
- --------------------------------------------------------------------------------------------------------------------------------
234,045 1.00 4/6/14 248,088 248,088 1.00
247,495 1.11 3/6/14 236,371 261,887 1.11
216,467 1.00 2/6/14 229,455 229,455 1.00
213,067 1.00 11/6/13 225,851 225,851 1.00
206,590 1.00 12/6/13 218,985 218,986 1.00
- --------------------------------------------------------------------------------------------------------------------------------
206,250 1.00 12/6/13 218,625 218,625 1.00
204,651 1.00 3/6/14 216,930 216,930 1.00
203,524 1.00 1/6/14 215,736 215,736 1.00
196,805 1.00 12/6/13 208,613 208,613 1.00
194,798 1.00 1/6/14 206,485 206,486 1.00
- --------------------------------------------------------------------------------------------------------------------------------
196,904 1.00 11/6/13 208,718 208,718 1.00
188,777 1.00 11/6/13 200,104 200,104 1.00
189,854 1.00 2/6/14 201,245 201,245 1.00
183,345 1.00 11/6/13 194,346 194,346 1.00
171,342 1.00 2/6/14 181,622 181,622 1.00
- --------------------------------------------------------------------------------------------------------------------------------
167,657 1.00 12/6/13 177,717 177,717 1.00
167,658 1.00 11/6/13 177,717 177,717 1.00
150,554 1.00 12/6/13 159,587 159,587 1.00
135,906 1.00 3/6/14 144,060 144,060 1.00
130,816 1.00 3/6/14 138,665 138,665 1.00
- --------------------------------------------------------------------------------------------------------------------------------
256,281 1.02
334,592 1.00 6/11/16 322,439 323,439 1.00
- --------------------------------------------------------------------------------------------------------------------------------
171,916 1.02 7/11/18 172,053 175,354 1.02
167,902 1.02 7/11/18 168,036 171,260 1.02
157,059 1.02 7/11/18 157,184 160,200 1.02
154,237 1.02 7/11/18 154,361 157,322 1.02
137,957 1.02 7/11/18 138,067 140,716 1.02
- --------------------------------------------------------------------------------------------------------------------------------
1,480,329 1.00
162,500 1.00
149,480 1.05 3/11/16 110,588 149,480 1.35
3,125,108 1.15
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Tenant/ Lease Guarantor Ratings are senior unsecured rating or issuer
rating unless otherwise noted.
(2) Leased Value represents the Value of the Mortgaged Property as encumbered
by the related Credit Lease.
(3) Dark Value represents the Value of the Mortgaged Property assuming the
Mortgaged Property is vacant and not encumbered by the related Credit Lease.
(4) The DSCR shown is the DSCR taking into account the increase in the Annual
Net Rent and Annual Debt Service on the related Step Date of Debt Service.
(5) United Artists' Rent and the Debt Service under the related loan are paid
semiannually.
(6) Cut-Off Date Annual Net Rent for the CVS loans represent a funded reserve,
equal to the Cut-Off Date Annual Debt Service, to be used for interest payments
during construction.
* Credit Rating is Senior Secured Rating.
<PAGE>
ANNEX C
CERTAIN CHARACTERISTICS OF THE MULTIFAMILY MORTGAGED PROPERTIES
<TABLE>
<CAPTION>
LOAN CONTROL LOAN CUT-OFF DATE
# NUMBER ID PROPERTY NAME BALANCE PROPERTY COUNTY
- -------- ---------- ------- --------------------------------------------- ------------- ----------------------
<S> <C> <C> <C> <C> <C>
8 008 002 Thurman Multifamily Portfolio Summary $55,745,250 Various Counties
8 008A 002J The Parks at Maryland Apartments Clark
8 008B 002F Villas at Vickery Dallas
8 008C 002B Park Hill Apartments Dade
8 008D 002D The Woodlands of Plano Apartments Collin
- --------------------------------------------------------------------------------------------------------------
8 008E 002H Desert Sands Apartments Tarrant
8 008F 002E Willows on Hunnicut Apartments Dallas
8 008G 002C The Encore Apartments Harris
8 008H 002A Oakwood Gardens Apartments Harris
8 008I 002G Turtle Creek Apartments Tarrant
- --------------------------------------------------------------------------------------------------------------
8 008J 002I Woodlawn Park Apartments Hillsborough
10 010 003 Pinstripe Multifamily Portfolio Summary $52,709,690 Various Counties
10 010A 003B Covington Walk Apartments Decatur
10 010B 003C Oak Tree Apartments Dallas
10 010C 003L Sunridge Apartments Dallas
- --------------------------------------------------------------------------------------------------------------
10 010D 003J Stradford Oaks Apartments Harris
10 010E 003K Shadowtree Apartments Harris
10 010F 003I Briarwood Apartments Sacramento
10 010G 003R Wexford Townhomes Dallas
10 010H 003H Mediterranean Gardens Apartments Bernalillo
- --------------------------------------------------------------------------------------------------------------
10 010I 003A Azalea Apartments Henrico
10 010J 003E Canyon Point Apartments Bernalillo
10 010K 003D Canyon Ridge Apartments Bernalillo
10 010L 003Q Toscana On Skillman Apartments Dallas
13 013 004 Garden Variety Apartments Portfolio Summary $44,088,900 Various Counties
- --------------------------------------------------------------------------------------------------------------
13 013A 004E Harbor Island Apartments Alameda
13 013B 004A Ski Lodge I Apartments Jefferson
18 018 021 Courthouse Square Apartments $23,564,880 Baltimore
20 020 022 Ramblewood Village Apartments $22,220,441 Burlington
27 027 030 Ventana Canyon Apartments $15,316,465 Clark
- --------------------------------------------------------------------------------------------------------------
28 028 031 English Village Apartments $15,222,781 New Castle County
37 037 042 Tamarus I and II Apartments $12,657,153 Clark
44 044 079 Whispering Palms-Viscaya Apart $9,920,464 Duvall
54 054 061 Bloomfield Multi Summary $7,438,145 Los Angeles
54 054A 061L 13815-25 Victory Blvd. Los Angeles
- --------------------------------------------------------------------------------------------------------------
54 054B 061G 14023-27 Oxnard Street Los Angeles
54 054C 061I 14706 Dickens Street Los Angeles
54 054D 061M 15405 Vanowen Street Los Angeles
54 054E 061K 4437-39 Vista Del Monte Los Angeles
54 054F 061C 11564-11604 Sylvan Street Los Angeles
- --------------------------------------------------------------------------------------------------------------
54 054G 061B 10745 Hortense Avenue Los Angeles
54 054H 061E 250 S. Reno Street Los Angeles
54 054I 061F 256 S. Rampart Street Los Angeles
54 054J 061J 5722-28 Elmer Ave Los Angeles
54 054K 061H 7340 Variel Avenue Los Angeles
- --------------------------------------------------------------------------------------------------------------
54 054L 061D 1132 N. Cahuenga Los Angeles
54 054M 061A 5714-18 Elmer Los Angeles
55 055 065 Wendell Terrace $7,000,000 Nassau
56 056 067 Washington HUD Summary $6,798,452 Various Counties
56 056A 067B McKinley Terrace Pierce County
- --------------------------------------------------------------------------------------------------------------
56 056B 067A Meadow Park Garden Court Pierce
56 056C 067N Chehalis Manor Apartments Lewis
56 056D 067D Kennewick Garden Court Apartments Benton County
60 060 071 East 138th Street $6,300,581 Bronx
62 062 075 PFI - Ignacio Gardens $6,228,111 Marin
- --------------------------------------------------------------------------------------------------------------
67 067 270 Sherwood Forest dba Grand Oaks $5,600,000 Hillsborough
72 072 268 Warrington Apartments $5,197,109 San Francisco County
75 075 093 Century Square Apartments $4,793,647 Travis
76 076 095 East-West 4 LLC Summary $4,738,569 New York
76 076A 095A 312 East 93rd Street New York
- --------------------------------------------------------------------------------------------------------------
76 076B 095D 237 West 18th Street New York
76 076C 095B 349 East 51st Street New York
76 076D 095C 450 West 50th Street New York
79 079 080 Bloomfield - Lex Summary $4,555,639 Los Angeles
79 079A 080E 20615 Vanowen Street Los Angeles
- --------------------------------------------------------------------------------------------------------------
79 079B 080C 7410 Woodman Street Los Angeles
79 079C 080F 11422-26 & 11442 Tiara Street Los Angeles
79 079D 080D 248 S. Occidental Blvd. Los Angeles
79 079E 080B 15202-222 Victory Blvd. Los Angeles
79 079F 080A 5611 Fulcher Avenue Los Angeles
- --------------------------------------------------------------------------------------------------------------
85 085 104 Homestead Gardens Apartments $4,274,070 Monmouth
86 086 105 Westwood Portfolio Summary $4,201,726 Bergen
86 086A 105E Hampton West Apartments Bergen
86 086C 105D Sutton Place West Apartments Bergen
86 086D 105C Linda Court Apartments Bergen
- --------------------------------------------------------------------------------------------------------------
86 086E 105A James Court Apartments Bergen
86 086F 105F Stratford Apartments Bergen
88 088 110 PFI - Lincoln Villa $4,063,115 Marin
93 093 111 PFI - Northgate $3,862,209 Marin
94 094 112 Derrer Field Estates Apartments $3,854,487 Franklin
- --------------------------------------------------------------------------------------------------------------
99 099 267 Burke-Lewis Apartments $3,642,973 San Francisco
107 107 131 1270 Gerard Avenue $3,195,383 Bronx
<PAGE>
110 110 135 PFI - Creekside $3,039,590 Marin
111 111 132 PFI - Fairway $3,013,602 Marin
115 115 142 Bari Manor $2,883,445 Westchester
- --------------------------------------------------------------------------------------------------------------
118 118 143 690 Gerard Avenue $2,740,000 Bronx
119 119 147 Lake Pointe Apartments $2,736,597 Marathon
120 120 148 230 East 167th Street $2,720,000 Bronx
121 121 146 2300 Grand Concourse $2,720,000 Bronx
127 127 158 PFI - Ignacio Pines $2,478,850 Marin
- --------------------------------------------------------------------------------------------------------------
129 129 157 984 Sheridan Avenue $2,400,000 Bronx
131 131 163 111 East 167th Street $2,396,503 Bronx
133 133 152 PFI - Oak Hill Apartments $2,301,932 Marin
134 134 168 176 East 176th Street $2,300,000 Bronx
136 136 167 2585-93 Grand Concourse $2,296,681 Bronx
- --------------------------------------------------------------------------------------------------------------
139 139 161 1210 Sherman Avenue $2,250,000 Bronx
140 140 153 215 Mount Hope Place $2,250,000 Bronx
141 141 165 Hudson View Estates $2,238,792 Westchester
143 143 171 Chateau Thierry Apartments $2,215,063 Orleans Parrish
153 153 183 2544 Valentine Avenue $2,096,970 Bronx
- --------------------------------------------------------------------------------------------------------------
156 156 185 PFI - Westview $2,036,056 Marin
159 159 211 PFI - Ignacio Hills III $2,006,070 Marin
166 166 200 Cane Village/Indian Summer Apartments $1,915,683 Natchitoches Parish
167 167 198 2908-10 Valentine Avenue $1,860,000 Bronx
169 169 196 2 Minerva Place $1,840,000 Bronx
- --------------------------------------------------------------------------------------------------------------
170 170 201 PFI - Northern Apartments $1,829,152 Marin
171 171 203 Sparta Green Townhouses $1,823,017 Westchester
174 174 207 48 Hill Street $1,799,102 Essex
178 178 182 1791 Grand Concourse $1,777,000 Bronx
179 179 187 2505 Olinville Avenue $1,735,000 Bronx
- --------------------------------------------------------------------------------------------------------------
185 185 218 3041 Holland Avenue $1,580,000 Bronx
186 186 214 3031 Holland Avenue $1,548,000 Bronx
187 187 219 1240 Sherman Avenue $1,525,000 Bronx
190 190 229 PFI - Strawberry $1,430,337 Marin
193 193 236 PFI - Via Casitas $1,338,379 Marin
- --------------------------------------------------------------------------------------------------------------
197 197 246 PFI - Ignacio Hills I $1,284,404 Marin
198 198 230 1945 Loring Place South $1,280,000 Bronx
199 199 240 Three Pines Apartments $1,255,595 Lucas
203 203 244 PFI - Country Club $1,120,480 Marin
205 205 249 Stonegate Apartments $1,047,473 Los Angeles
- --------------------------------------------------------------------------------------------------------------
207 207 251 Villa Serena $999,068 Adams
208 208 271 Lake Village Apartments $898,267 Monroe
210 210 253 344 East 209th Street $855,000 Bronx
211 211 254 2935 Holland Avenue $825,000 Bronx
212 212 258 Sherwood Townhouses $696,624 Westchester
- --------------------------------------------------------------------------------------------------------------
213 213 256 2885 Briggs Avenue $680,000 Bronx
214 214 260 PFI - Ignacio Hills IV $582,730 Marin
215 215 259 116 Henwood Place $560,000 Bronx
216 216 261 398 Third Avenue $498,504 New York
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STUDIOS 1 BEDROOMS 2 BEDROOMS 3 BEDROOMS 4 BEDROOMS
--------------- ---------------- ---------------- --------------- ----------------
WTD WTD WTD WTD WTD
AVG AVG AVG AVG AVG
UTILITIES TOTAL RENT/ RENT/ RENT/ RENT/ RENT/
TENANT PAYS ELEVATORS UNITS UNITS MONTH UNITS MONTH UNITS MONTH UNITS MONTH UNITS MONTH
- ------------------------------- --------- ---------------- ---------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3,015
Electricity Only No 380 - - 84 495 248 572 48 695 - -
Electricity Only No 708 - - 601 381 95 579 8 647 2 850
Electricity Only No 264 - - 100 598 164 699 - - - -
Electricity/Gas No 232 - - 40 495 132 588 60 690 - -
- -----------------------------------------------------------------------------------------------------------------------------
Electricity Only No 346 114 295 228 346 4 510 - - - -
Electricity Only No 208 - - 68 400 140 500 - - - -
Electricity Only No 308 - - 228 359 48 440 32 595 - -
Electricity Only No 200 - - 36 409 150 520 14 659 - -
No Utilities No 193 48 364 62 418 75 579 8 685 - -
- -----------------------------------------------------------------------------------------------------------------------------
No Utilities No 176 - - 44 400 132 470 - - - -
2,596
Electricity Only No 216 - - - - 106 675 110 700 - -
Electricity Only No 206 - - 60 469 90 641 56 766 - -
Electricity Only No 332 - - 184 360 148 432 - - - -
- -----------------------------------------------------------------------------------------------------------------------------
Electricity Only No 392 - - 104 340 240 439 48 595 - -
Electricity Only No 428 - - 328 335 100 485 - - - -
Electricity/Gas No 160 - - 50 490 110 550 - - - -
Electricity Only No 122 - - 22 605 100 681 - - - -
Electricity Only No 180 - - 108 485 72 603 - - - -
- -----------------------------------------------------------------------------------------------------------------------------
Electricity Only No 156 - - 26 460 86 570 44 720 - -
Electricity Only No 136 - - 40 435 56 530 40 640 - -
Electricity Only No 124 - - 28 448 76 515 20 615 - -
Electricity Only No 144 - - 52 420 84 528 8 630 - -
1,259
- -----------------------------------------------------------------------------------------------------------------------------
Electricity/Gas Yes 615 6 1,299 22 721 487 994 100 1,855 - -
All Utilities No 644 41 225 340 389 263 543 - - - -
Electricity Only No 526 - - 177 691 298 795 51 871 - -
Electricity Only No 504 - - 319 748 129 870 28 1,023 28 1,077
Electricity/Gas No 248 - - 56 680 168 805 24 975 - -
- -----------------------------------------------------------------------------------------------------------------------------
Electricity Only No 414 - - 126 585 284 650 3 810 1 1,110
Electricity/Gas No 305 44 475 140 560 121 663 - - - -
No Utilities No 448 - - 226 393 206 516 16 630 - -
215
Electricity/Gas No 11 - - - - - - 3 1,082 8 1,189
- -----------------------------------------------------------------------------------------------------------------------------
No Utilities No 40 - - 40 419 - - - - - -
Electricity/Gas No 11 - - 4 710 7 904 - - - -
Electricity/Gas No 30 - - 28 454 2 650 - - - -
Electricity/Gas No 9 - - 6 750 3 1,050 - - - -
Electricity/Gas No 18 - - 5 495 11 572 2 763 - -
- -----------------------------------------------------------------------------------------------------------------------------
Electricity/Gas No 14 - - 7 527 6 676 1 800 - -
Electricity/Gas No 22 - - 19 481 3 567 - - - -
Electricity/Gas Yes 16 - - - - 16 628 - - - -
Electricity/Gas No 10 - - 2 475 8 600 - - - -
Electricity/Gas No 11 - - 9 484 2 650 - - - -
- -----------------------------------------------------------------------------------------------------------------------------
No Utilities No 15 - - 15 345 - - - - - -
Electricity/Gas No 8 - - 8 481 - - - - - -
No Utilities Yes 239 - - - - - - - - - -
233
No Utilities Yes 107 - - 107 649 - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------
No Utilities No 66 - - - - 51 692 15 778 - -
No Utilities No 33 16 636 17 636 - - - - - -
No Utilities No 27 - - 27 686 - - - - - -
Electricity/Gas No 148 - - 99 631 25 739 24 835 - -
Electricity/Gas No 96 - - - - 96 1,079 - - - -
- -----------------------------------------------------------------------------------------------------------------------------
All Utilities No 202 24 417 127 510 51 625 - - - -
Electricity/Gas Yes 90 26 512 30 1,250 30 1,700 4 1,775 - -
No Utilities No 139 35 470 100 615 4 845 - - - -
81
No Utilities No 29 11 706 - - 16 865 - - - -
- -----------------------------------------------------------------------------------------------------------------------------
No Utilities No 21 1 2,300 20 911 - - - - - -
No Utilities No 21 - - 20 897 - - - - - -
No Utilities No 10 - - - - 10 1,007 - - - -
158 - - - - - - - - - -
Electricity/Gas Yes 25 - - 12 622 13 805 - - - -
- -----------------------------------------------------------------------------------------------------------------------------
Water/Electricity Yes 43 22 369 15 468 6 542 - - - -
Electricity/Gas No 30 - - 17 423 13 521 - - - -
Electricity/Gas Yes 21 - - 19 529 1 750 1 1,075 - -
Electricity/Gas No 20 - - 20 480 - - - - - -
Electricity/Gas No 19 - - 17 448 2 538 - - - -
- -----------------------------------------------------------------------------------------------------------------------------
Electricity Only No 96 - - 80 868 16 935 - - - -
11,738
All Utilities No 20 - - 19 852 - - - - - -
All Utilities No 17 - - 17 844 - - - - - -
Electricity Only No 9 - - 9 914 - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------
All Utilities No 7 - - 7 750 - - - - - -
Electricity/Gas No 5 - - 4 615 - - - - - -
Electricity Only Yes 64 4 735 51 975 9 1,295 - - - -
Electricity Only No 49 - - 19 950 23 1,150 7 1,358 - -
Water/Electricity No 151 - - 48 417 103 476 - - - -
- -----------------------------------------------------------------------------------------------------------------------------
Water/Electricity Yes 61 50 970 11 1,330 - - - - - -
All Utilities Yes 109 7 500 76 575 14 650 12 750 - -
<PAGE>
No Utilities No 48 1 - 20 - 27 - - - - -
Electricity/Gas No 54 - - 33 881 21 1,035 - - - -
Electricity/Gas No 82 - - 43 630 38 750 1 765 - -
- -----------------------------------------------------------------------------------------------------------------------------
No Utilities Yes 77 2 500 34 600 29 675 12 775 - -
Electricity/Gas Yes 72 - - 24 534 48 624 - - - -
Electricity/Gas Yes 78 11 932 42 575 25 825 - - - -
Electricity/Gas Yes 77 8 1,433 12 513 28 582 29 690 - -
Electricity/Gas Yes 39 - - 3 870 36 963 - - - -
- -----------------------------------------------------------------------------------------------------------------------------
Electricity/Gas Yes 77 6 467 37 559 28 663 6 761 - -
All Utilities Yes 68 12 450 39 600 17 775 - - - -
Electricity Only Yes 35 - - 11 911 24 1,057 - - - -
Electricity/Gas Yes 61 1 550 11 586 36 681 12 798 - -
Electricity/Gas No 73 1 500 2 519 35 663 17 611 18 706
- -----------------------------------------------------------------------------------------------------------------------------
Electricity/Gas Yes 56 8 500 22 600 17 675 - - 1 815
Electricity/Gas Yes 72 2 425 29 558 41 722 - - - -
Electricity Only No 71 - - 46 673 22 779 3 787 - -
All Utilities No 132 - - 48 365 84 435 - - - -
Electricity/Gas No 72 7 500 30 575 24 650 10 750 1 800
- -----------------------------------------------------------------------------------------------------------------------------
Electricity Only No 28 - - 10 901 15 1,102 3 1,309 - -
Electricity Only No 30 - - 10 891 20 994 - - - -
Electricity Only No 96 - - 32 395 64 475 - - - -
No Utilities No 54 - - 25 585 29 657 - - - -
No Utilities Yes 50 6 550 14 625 14 675 16 800 - -
- -----------------------------------------------------------------------------------------------------------------------------
Electricity Only No 26 - - 12 913 14 1,203 - - - -
Electricity Only No 43 - - 15 769 28 983 - - - -
Electricity Only Yes 63 1 - 62 562 - - - - - -
Electricity/Gas Yes 65 11 500 47 625 6 675 1 775 - -
Electricity/Gas Yes 49 - - 31 620 13 753 5 714 - -
- -----------------------------------------------------------------------------------------------------------------------------
Electricity/Gas No 55 1 575 44 650 10 700 - - - -
All Utilities Yes 55 2 575 43 587 10 636 - - - -
Electricity Only Yes 58 5 434 27 552 15 612 11 715 - -
Electricity Only No 21 - - 10 966 11 1,181 - - - -
Electricity/Gas Yes 19 - - 14 1,028 4 1,284 1 1,950 - -
- -----------------------------------------------------------------------------------------------------------------------------
Electricity Only No 20 - - 10 860 10 994 - - - -
Electricity/Gas Yes 42 1 550 23 570 12 657 6 777 - -
Electricity Only No 52 - - 28 431 24 493 - - - -
Electricity Only No 18 - - 6 868 12 1,087 - - - -
All Utilities No 38 - - 33 525 5 650 - - - -
- -----------------------------------------------------------------------------------------------------------------------------
All Utilities No 48 - - 24 395 24 495 - - - -
Electricity Only No 48 - - 32 472 16 620 - - - -
Electricity/Gas No 32 5 550 20 625 7 675 - - - -
Electricity/Gas Yes 26 5 492 17 618 4 738 - - - -
Electricity Only No 22 - - 12 786 10 995 - - - -
- -----------------------------------------------------------------------------------------------------------------------------
Electricity/Gas No 21 1 1,750 11 562 5 785 4 825 - -
Electricity Only No 10 - - 10 873 - - - - - -
Electricity/Gas Yes 30 14 500 16 625 - - - - - -
No Utilities No 17 5 499 12 730 - - - - - -
</TABLE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
ANNEX D
Credit Suisse First Boston
Commercial Mortgage Pass-Through Certificates, Series 1998-C2
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-C2
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>
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-C2
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>
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-C2
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-C2
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>
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-C2
REO STATUS REPORT
as of ________
<TABLE>
<CAPTION>
S63 (a) (b) (c)
-------- ---- --------- --------- --------
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>
(d) (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-C2
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-C2
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-C2
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 | 1996 | 1997 | 1998 | 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 | 1996 | 1997 | 1998 | 98 TRAILING**| 1998-BASE | 1998-1997 |
Statement Classification | BASE LINE | NORMALIZED | NORMALIZED | NORMALIZED | AS OF / /98 | 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 | | |
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
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: | |
-------------------------------------------------------------------------------------------------
</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 borrowers 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 cash flow
Hotel: 1) Room Revenue 2) Food/Beverage Nursing Home: 1) Private 2) Medicaid
3) Medicare
Income: Comment
Expenses: Comment
Capital Items: Comment
(1) Used in the Comparative Financial Status Report
<PAGE>
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<PAGE>
ANNEX E
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered Credit
Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through
Certificates, Series 1998-C2 (the "Global Securities") will be available only
in book-entry form. Investors in the Global Securities may hold such Global
Securities through any of DTC, CEDEL or Euroclear. The Global Securities will
be tradeable as home market instruments in both the European and U.S. domestic
markets. Initial settlement and all secondary trades will settle in same day
funds. Capitalized terms used but not defined in this Annex E have the meanings
assigned to them in the Prospectus Supplement and the Prospectus.
Secondary market trading between investors holding Global Securities
through CEDEL and Euroclear will be conducted in the ordinary way in accordance
with their normal rules and operating procedures and in accordance with
conventional eurobond practice (i.e., seven calendar day settlement). Secondary
market trading between investors holding Global Securities through DTC will be
conducted according to the rules and procedures applicable to U.S. corporate
debt obligations.
Secondary cross-market trading between CEDEL or Euroclear and DTC
Participants holding Certificates will be effected on a
delivery-against-payment basis through the respective Depositories of CEDEL and
Euroclear (in such capacity) and as DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be subject
to U.S. withholding taxes unless such holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing organizations
or their participants.
INITIAL SETTLEMENT
All Global Securities will be held in book-entry form by DTC in the name
of Cede & Co. as nominee of DTC. Investors' interests in the Global Securities
will be represented through financial institutions acting on their behalf as
direct and indirect Participants in DTC. As a result, CEDEL and Euroclear will
hold positions on behalf of their participants through their respective
Depositories, which in turn will hold such positions in accounts as DTC
Participants.
Investors electing to hold their Global Securities through DTC will follow
the settlement practices applicable to similar issues of pass-through
certificates. Investors' securities custody accounts will be credited with
their holdings against payment in same-day funds on the settlement date.
Investors electing to hold their Global Securities through CEDEL or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no "lock-up" or restricted period. Global Securities will be credited to
the securities custody accounts on the settlement date against payments in
same-day funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to similar issues
of pass-through certificates in same-day funds.
Trading between CEDEL and/or Euroclear Participants. Secondary market
trading between CEDEL Participants or Euroclear Participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
Trading between DTC seller and CEDEL or Euroclear purchaser. When Global
Securities are to be transferred from the account of a DTC Participant to the
account of a CEDEL Participant or a Euroclear Participant, the purchaser will
send instructions to CEDEL or Euroclear through a CEDEL Participant
E-1
<PAGE>
or Euroclear Participant at least one business day prior to settlement. CEDEL
or Euroclear will instruct the respective Depository, as the case may be, to
receive the Global Securities against payment. Payment will include interest
accrued on the Global Securities from and including the last coupon payment
date to and excluding the settlement date. Payment will then be made by the
respective Depository to the DTC Participant's account against delivery of the
Global Securities. After settlement has been completed, the Global Securities
will be credited to the respective clearing system and by the clearing system,
in accordance with its usual procedures, to the CEDEL Participant's or
Euroclear Participant's account. The Global Securities credit will appear the
next day (European time) and the cash debit will be back-valued to, and the
interest on the Global Securities will accrue from, the value date (which would
be the preceding day when settlement occurred in New York). If settlement is
not completed on the intended value date (i.e., the trade fails), the CEDEL or
Euroclear cash debit will be valued instead as of the actual settlement date.
CEDEL Participants and Euroclear Participants will need to make available
to the respective clearing systems the funds necessary to process same-day
funds settlement. The most direct means of doing so is to pre-position funds
for settlement, either from cash on hand or existing lines of credit, as they
would for any settlement occurring within CEDEL or Euroclear. Under this
approach, they may take on credit exposure to CEDEL or Euroclear until the
Global Securities are credited to their accounts one day later.
As an alternative, if CEDEL or Euroclear has extended a line of credit to
them, CEDEL Participants or Euroclear Participants can elect not to
pre-position funds and allow that credit line to be drawn upon the finance
settlement. Under this procedure, CEDEL Participants or Euroclear Participants
purchasing Global Securities would incur overdraft charges for one day,
assuming they cleared the overdraft when the Global Securities were credited to
their accounts. However, interest on the Global Securities would accrue from
the value date. Therefore, in many cases the investment income on the Global
Securities earned during that one day period may substantially reduce or offset
the amount of such overdraft charges, although this result will depend on each
CEDEL Participant's or Euroclear Participant's particular cost of funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities to
the respective Depository for the benefit of CEDEL Participants or Euroclear
Participants. The sale proceeds will be available to the DTC seller on the
settlement date. Thus, to the DTC Participant a cross-market transaction will
settle no differently than a trade between two DTC Participants.
Trading between CEDEL or Euroclear seller and DTC purchaser. Due to time
zone differences in their favor, CEDEL Participants and Euroclear Participants
may employ their customary procedures for transactions in which Global
Securities are to be transferred by the respective clearing system, through the
respective Depository, to a DTC Participant. The seller will send instructions
to CEDEL or Euroclear through a CEDEL Participant or Euroclear Participant at
least one business day prior to settlement. In these cases, CEDEL or Euroclear
will instruct the respective Depository, as appropriate, to deliver the bonds
to the DTC Participant's account against payment. Payment will include interest
accrued on the Global Securities from and including the last coupon payment
date to and excluding the settlement date. The payment will then be reflected
in the account of the CEDEL Participant or Euroclear Participant the following
day, and receipt of the cash proceeds in the CEDEL Participant's or Euroclear
Participant's account would be back-valued to the value date (which would be
the preceding day, when settlement occurred in New York). Should the CEDEL
Participant or Euroclear Participant have a line of credit with its respective
clearing system and elect to be in debit in anticipation of receipt of the sale
proceeds in its account, the back-valuation will extinguish any overdraft
charges incurred over that one-day period. If settlement is not completed on
the intended value date (i.e., the trade fails), receipt of the cash proceeds
in the CEDEL Participant's or Euroclear Participant's account would instead be
valued as of the actual settlement date. Finally, day traders that use CEDEL or
Euroclear and that purchase Global Securities from DTC Participants for
delivery to CEDEL Participants or Euroclear Participants should note that these
trades would automatically fail on the sale side unless affirmative action were
taken. At least three techniques should be readily available to eliminate this
potential problem:
E-2
<PAGE>
(a) borrowing through CEDEL or Euroclear for one day (until the purchase
side of the day trade is reflected in their CEDEL or Euroclear accounts) in
accordance with the clearing system's customary procedures;
(b) borrowing the Global Securities in the U.S. from a DTC Participant no
later than one day prior to settlement, which would give the Global Securities
sufficient time to be reflected in their CEDEL or Euroclear account in order to
settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the trade so
that the value date for the purchase from the DTC Participant is at least one
day prior to the value date for the sale to the CEDEL Participant or Euroclear
Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A Certificate Owner of Global Securities holding securities through CEDEL
or Euroclear (or through DTC if the holder has an address outside the U.S.)
will be subject to the 30% U S. withholding tax that generally applies to
payments of interest (including original issue discount) on registered debt
issued by U.S. Persons (as defined below), unless (i) each clearing system,
bank or other financial institution that holds customers' securities in the
ordinary course of its trade or business in the chain of intermediaries between
such Certificate Owner and the U.S. entity required to withhold tax complies
with applicable certification requirements and (ii) such Certificate Owner
takes one of the following steps to obtain an exemption or reduced tax rate:
Exemption for non-U.S. Persons (Form W-8). Certificate Owners that are
non-U.S. Persons can obtain a complete exemption from the withholding tax by
filing a signed Form W-8 (Certificate of Foreign Status). If the information
shown on Form W-8 changes, a new Form W-8 must be filed within 30 days of such
change.
Exemption for non-U.S. Persons with effectively connected income (Form
4224). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its conduct
of a trade or business in the United States can obtain an exemption from the
withholding tax by filing Form 4224 (Exemption from Withholding of Tax on
Income Effectively Connected with the Conduct of a Trade or Business in the
United States).
Exemption or reduced rate for non-U.S. Persons resident in treaty
countries (Form 1001). Non-U.S. Persons that are Certificate Owners residing in
a country that has a tax treaty with the United States can obtain an exemption
or reduced tax rate (depending on the treaty terms) by filing Form 1001
(Ownership, Exemption or Reduced Rate Certificate). If the treaty provides only
for a reduced rate, withholding tax will be imposed at that rate unless the
filer alternatively files Form W-8. Form 1001 may be filed by the Certificate
Owner or his agent.
Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a complete
exemption from the withholding tax by filing Form W-9 (Payer's Request for
Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The Certificate Owner of a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, his agent,
files by submitting the appropriate form to the person through whom it holds
(the clearing agency, in the case of persons holding directly on the books of
the clearing agency). Form W-8 and Form 1001 are effective for three calendar
years and Form 4224 is effective for one calendar year.
The term "U.S. Person" means (i) a citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws of the
United States, any state thereof or the District of Columbia, (iii) an estate
the income of which is includable in gross income for United States tax
purposes, regardless of its source or (iv) a trust if a court within the United
States is able to exercise primary supervision of the administration of the
trust and one or more United States persons have the authority to control all
substantial decisions of the trust.
This summary does not deal with all aspects of U.S. Federal income tax
withholding that may be relevant to foreign holders of the Global Securities.
Investors are advised to consult their own tax advisors for specific tax advice
concerning their holding and disposing of the Global Securities.
E-3
<PAGE>
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<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 November 10, 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.
4
<PAGE>
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.
On December 30, 1997, the Internal Revenue Service (the "IRS") issued
final regulations (the "Amortizable Bond Premium Regulations") dealing with
amortizable bond premium. These regulations specifically do not apply to
prepayable debt instruments subject to Code Section 1272(a)(6). Absent further
guidance from the IRS, the Trustee intends to account for amortizable bond
premium in the manner described above. Prospective purchasers of the Regular
Interest Certificates should consult their tax advisors regarding the possible
application of the Amortizable Bond Premium Regulations.
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
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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
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
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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 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
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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 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.
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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 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
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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.
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
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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 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.
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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.
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.
For tax years beginning after August 5, 1997, the Taxpayer Relief Act of 1997
may allow use of the Cash Flow Bond Method with respect to the Stripped
Certificates and other Pass-Through Certificates because it provides that such
method applies to any pool of debt instruments the yield on which may be
affected by prepayments. 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
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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).
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.
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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
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, 1999, 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
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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 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.
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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 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
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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.
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
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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 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).
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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.
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
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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.
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<PAGE>
INDEX OF DEFINED TERMS
<TABLE>
<S> <C>
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
</TABLE>
63
<PAGE>
<TABLE>
<S> <C>
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 ......... 55
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 ......................... 61
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
</TABLE>
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<TABLE>
<S> <C>
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 ....................................... 56
Title VIII ................................ 40
Trust Fund ................................ Cover, 11
Trustee ................................... 16
Trustee/Master Servicer Fee ............... 52
U
Unaffiliated Seller ....................... 20
Underwriters .............................. 61
Underwriter's Exemption ................... 59
U.S. Person ............................... 43
V
Voting Rights ............................. 10, 26
</TABLE>
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This diskette contains one spreadsheet file that can be put on a
user-specified hard drive or network drive. The file "CS98C2F.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.
