<PAGE>
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER 12, 1999
$1,047,200,000
(APPROXIMATE)
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-C1
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Depositor
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
MORGAN STANLEY MORTGAGE CAPITAL INC.
Mortgage Loan Sellers
---------------
The trust fund will issue twenty classes of certificates, eight classes of which
are being offered, as listed below. The trust fund will pay interest and/or
principal monthly on the fourth business day following the 11th day of each
month, or if the 11th day is not a business day, the next business day. The
first payment of interest and/or principal will be made on November 18, 1999.
The offered certificates represent obligations of the trust fund only and do not
represent obligations of or interests in Credit Suisse First Boston Mortgage
Securities Corp. or any of its affiliates.
INVESTING IN THE CERTIFICATES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
ON PAGE S-24 OF THIS PROSPECTUS SUPPLEMENT.
<TABLE>
<CAPTION>
INITIAL APPROXIMATE ASSUMED
CERTIFICATE INITIAL ASSUMED RATED WEIGHTED
BALANCE OR PASS- FINAL FINAL AVERAGE
NOTIONAL THROUGH DISTRIBUTION DISTRIBUTION RATING LIFE
CLASS BALANCE(+ OR - 5%) RATE DATE DATE DCR/FITCH/MOODY'S (YEARS)
- ------------------- -------------------- ------------- ---------------- ---------------- ------------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Class A-1 ......... $ 199,500,000 6.91% January 2008 September 2041 AAA/AAA/Aaa 5.70
Class A-2 ......... $ 660,500,000 7.29% September 2009 September 2041 AAA/AAA/Aaa 9.40
Class A-X ......... $1,170,108,234 0.90% March 2019 September 2041 AAA/AAA/Aaa 9.13
Class B ........... $ 52,600,000 7.53% September 2009 September 2041 AA/AA/Aa2 9.85
Class C ........... $ 58,500,000 7.94% September 2009 September 2041 A/A/A2 9.85
Class D ........... $ 14,700,000 8.10% September 2009 September 2041 A-/A-/A3 9.85
Class E ........... $ 40,900,000 8.18% September 2009 September 2041 BBB/BBB/Baa2 9.85
Class F ........... $ 20,500,000 8.18% September 2009 September 2041 BBB-/BBB-/Baa3 9.85
</TABLE>
The underwriters have agreed to purchase the offered certificates from the
depositor at a price of 104.98% of the initial principal balance of the offered
certificates plus accrued interest, if any, from October 11, 1999. The
underwriters propose 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.
Delivery of the offered certificates, in book-entry form only, will be made on
or about November 10, 1999.
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.
-----------------------
Joint Book-Running Managers
CREDIT SUISSE FIRST BOSTON MORGAN STANLEY DEAN WITTER
The date of this Prospectus Supplement is November 4, 1999.
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
----------------------------------------------------
Commercial Mortgage Pass-Through Certificates, Series 1999-C1
[A graphic was omitted that consisted of a map of the United States that
illustrated the number of properties in each state and their respective
percentage of the Initial Pool Balance by state and a pie chart that indicated
the percentage of the types of properties in the Initial Pool Balance.]
IDAHO
1 property
$3,538,619
0.3% of total
UTAH
1 property
$6,689,444
0.6% of total
SOUTH DAKOTA
1 property
$2,393,088
0.2% of total
MISSOURI
4 properties
$29,898,309
2.5% of total
MINNESOTA
2 properties
$23,109,325
1.9% of total
ILLINOIS
5 properties
$15,518,796
1.3% of total
WISCONSIN
1 property
$9,343,927
0.8% of total
INDIANA
6 properties
$30,876,066
2.6% of total
OHIO
3 properties
$9,599,114
0.8% of total
PENNSYLVANIA
3 properties
$33,376,878
2.8% of total
MASSACHUSETTS
6 properties
$55,087,558
4.6% of total
CONNECTICUT
9 properties
$4,609,346
0.4% of total
NEW YORK
22 properties
$251,732,951
21.2% of total
NEW JERSEY
8 properties
$37,367,315
3.1% of total
<PAGE>
MARYLAND
3 properties
$13,635,251
1.1% of total
WASHINGTON, DC
2 properties
$41,002,306
3.5% of total
VIRGINIA
1 property
$9,491,226
0.8% of total
WEST VIRGINIA
1 property
$6,993,787
0.6% of toal
TENNESSEE
1 property
$2,247,460
0.2% of total
NORTH CAROLINA
4 properties
$15,736,942
1.3% of total
GEORGIA
4 properties
$12,436,780
1.0% of total
SOUTH CAROLINA
2 properties
$3,626,107
0.3% of total
FLORIDA
11 properties
$102,758,714
8.7% of total
PUERTO RICO
1 property
$38,774,229
3.3% of total
KENTUCKY
1 property
$3,997,256
0.3% of total
MISSISSIPPI
1 property
$1,499,030
0.1% of total
ARKANSAS
1 property
$632,896
0.1% of total
TEXAS
13 properties
$43,498,766
3.7% of total
<PAGE>
NEW MEXICO
2 properties
$7,755,877
0.7% of total
ARIZONA
7 properties
$20,031,455
1.7% of total
COLORADO
8 properties
$55,804,753
4.7% of total
CALIFORNIA
48 properties
$214,766,958
18.1% of total
NEVADA
2 properties
$808,010
0.1% of total
OREGON
1 property
$10,942,638
0.9% of total
WASHINGTON
6 properties
$67,548,276
5.7% of total
LESS THAN 3%
Unanchored Retail 2.8%
Extended Stay Lodging 2.4%
Special Purpose 2.3%
Self-Storage 1.5%
Manufactured Housing Communities 0.2%
CREDIT LEASE 3.4%
LIMITED SERVICE LODGING 3.6%
COOPERATIVE 3.9%
FULL SERVICE LODGING 4.2%
MIXED USE 6.3%
INDUSTRIAL 6.6%
MULTIFAMILY
15.1%
OFFICE
29.9%
ANCHORED RETAIL
17.9%
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>
[A graphic was omitted that consisted of photographs of the following
properties:]
10. HOLIDAY INN-BROADWAY
New York NY
12. BLUE HILLS OFFICE PARK
Canton MA
5. TALLAHASSEE MALL
Tallahassee FL
18. CENTURY CENTRE I
San Mateo CA
1. EXCHANGE APARTMENTS
New York NY
<PAGE>
[A graphic was omitted that consisted of photographs of the following
properties:]
4. SELIG-AIRBORNE BUILDING
Seattle WA
36. WILSHIRE WESTWOOD APARTMENTS
Los Angeles CA
46. LYNNWOOD CORPORATE CENTER
Lynnwood WA
8. L'ENFANT PLAZA
Washington DC
26. SEMINOLE MALL
Seminole FL
13. 150 WILLIAM STREET
New York 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.
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 FEBRUARY 5, 2000 (90 DAYS AFTER THE COMMENCEMENT OF THE OFFERING),
ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. THIS IS IN ADDITION TO A DEALER'S
OBLIGATION TO DELIVER A PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING 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-5
MORTGAGE LOAN EXECUTIVE
SUMMARY .................................. S-6
REPORTING REQUIREMENTS ...................... S-7
SUMMARY OF PROSPECTUS
SUPPLEMENT ............................... S-8
RISK FACTORS ................................ S-24
DESCRIPTION OF THE MORTGAGE
LOANS .................................... S-46
General .................................. S-46
Security for the Mortgage Loans .......... S-48
The Mortgage Loan Sellers ................ S-48
CSFB Underwriting Standards .............. S-48
Morgan Stanley Mortgage Capital Inc.
Underwriting Standards ................ S-52
CERTAIN CHARACTERISTICS OF THE
MORTGAGE LOANS ........................... S-54
Credit Lease Loans ....................... S-54
Multiple Note Loans ...................... S-54
Significant Mortgage Loans ............... S-55
Environmental Matters .................... S-79
Certain Terms and Conditions of the
Mortgage Loans ........................ S-79
Additional Mortgage Loan Information ..... S-88
Changes in Mortgage Loan
Characteristics ....................... S-106
DESCRIPTION OF THE OFFERED
CERTIFICATES ............................. S-107
General .................................. S-107
Book-Entry Registration and Definitive
Certificates .......................... S-108
Distributions ............................ S-111
Assumed Final Distribution Date; Rated
Final Distribution Date ............... S-122
Subordination; Allocation of Collateral
Support Deficits and Certificate
Deferred Interest ..................... S-122
PREPAYMENT AND YIELD
CONSIDERATIONS ........................... S-124
Yield .................................... S-124
Modeling Assumptions ..................... S-126
Yield on the Class A-X Certificates ...... S-127
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Rated Final Distribution Date ............ S-128
Weighted Average Life of Offered
Certificates .......................... S-128
THE POOLING AND SERVICING
AGREEMENT ................................ S-138
General .................................. S-138
Assignment of the Mortgage Loans ......... S-138
Representations and Warranties;
Repurchase ............................ S-138
Servicing of the Mortgage Loans;
Collection of Payments ................ S-141
Advances ................................. S-143
Appraisal Reductions ..................... S-144
Accounts ................................. S-146
Withdrawals from the Collection
Account ............................... S-148
Enforcement of "Due-on-Sale" and
"Due-on-Encumbrance" Clauses .......... S-148
Inspections; Collection of Operating
Information ........................... S-149
Insurance Policies ....................... S-150
Evidence as to Compliance ................ S-151
Certain Matters Regarding the
Depositor, the Trustee, the Servicer
and the Special Servicer .............. S-151
Events of Default ........................ S-152
Rights Upon Event of Default ............. S-153
Amendment ................................ S-154
Voting Rights ............................ S-155
Realization Upon Mortgage Loans .......... S-155
Modifications ............................ S-158
Optional Termination ..................... S-160
The Trustee .............................. S-160
Certificate Administrator ................ S-161
Administration Fee and Payment of
Expenses .............................. S-161
Duties of the Trustee .................... S-161
The Servicer ............................. S-162
Servicing Compensation and Payment of
Expenses .............................. S-162
The Special Servicer ..................... S-164
</TABLE>
S-3
<PAGE>
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Servicer and Special Servicer Permitted
to Buy Certificates ................. S-165
Reports to Certificateholders; Available
Information ......................... S-165
CERTAIN LEGAL ASPECTS OF MORTGAGE
LOANS FOR MORTGAGED PROPERTIES
LOCATED IN NEW YORK, CALIFORNIA,
FLORIDA AND WASHINGTON ................. S-169
New York ............................... S-169
California ............................. S-170
Florida ................................ S-170
Washington ............................. S-170
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES ........................... S-171
ERISA CONSIDERATIONS ...................... S-173
Senior Certificates .................... S-173
Mezzanine Certificates ................. S-175
</TABLE>
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
LEGAL INVESTMENT .......................... S-175
USE OF PROCEEDS ........................... S-176
UNDERWRITING .............................. S-176
LEGAL MATTERS ............................. S-177
RATING .................................... S-177
INDEX OF SIGNIFICANT DEFINITIONS .......... S-179
ANNEX A --LOAN
CHARACTERISTICS ........................ A-1
ANNEX B --COLLATERAL AND
STRUCTURAL TERM SHEET .................. B-1
ANNEX C --SERVICER REPORTS ................ C-1
ANNEX D --CERTIFICATE
ADMINISTRATOR REPORTS .................. D-1
ANNEX E --GLOBAL CLEARANCE,
SETTLEMENT AND
TAX DOCUMENTATION
PROCEDURES ............................. E-1
</TABLE>
S-4
<PAGE>
EXECUTIVE SUMMARY
<TABLE>
<CAPTION>
APPROXI-
MATE
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/Aaa $ 199,500,000 17.05% 26.50%
A-2 AAA/AAA/Aaa $ 660,500,000 56.45% 26.50%
A-X AAA/AAA/Aaa $1,170,108,234 NAP NAP
B AA/AA/Aa2 $ 52,600,000 4.50% 22.00%
C A/A/A2 $ 58,500,000 5.00% 17.00%
D A-/A-/A3 $ 14,700,000 1.25% 15.75%
E BBB/BBB/Baa2 $ 40,900,000 3.50% 12.25%
F BBB-/BBB-/Baa3 $ 20,500,000 1.75% 10.50%
PRIVATE CERTIFICATES (H)
G NR/BB+/NR $ 32,200,000 2.75% 7.75%
H NR/BB/NR $ 23,400,000 2.00% 5.75%
J NR/BB-/NR $ 11,700,000 1.00% 4.75%
K NR/B+/NR $ 11,700,000 1.00% 3.75%
L NR/NR/B2 $ 15,800,000 1.35% 2.40%
M NR/NR/B3 $ 9,300,000 0.80% 1.60%
N NR/CCC/NR $ 7,100,000 0.60% 1.00%
O NR/NR/NR $ 11,708,234 1.00% 0.00%
<CAPTION>
ASSUMED ASSUMED RATED
INITIAL WEIGHTED FINAL FINAL
PASS- AVERAGE ASSUMED DISTRIBU- DISTRIBU-
THROUGH LIFE PRINCIPAL TION TION
CLASS DESCRIPTION RATE (YEARS)(C) WINDOW DATE(D) DATE(E)
<S> <C> <C> <C> <C> <C> <C>
OFFER
CERTIFI
11/99-01/
A-1 Fixed 6.91% 5.70 08 Jan. 2008 Sept. 2041
01/08-09/
A-2 Fixed 7.29% 9.40 09 Sept. 2009 Sept. 2041
(Component
Structure) 11/99-03/
A-X Interest Only 0.90%(f) 9.13 19 Mar. 2019 Sept. 2041
09/09-09/
B Fixed 7.53% 9.85 09 Sept. 2009 Sept. 2041
Weighted
Average Net
Mortgage Rate 09/09-09/
C minus 0.24% 7.94%(g) 9.85 09 Sept. 2009 Sept. 2041
Weighted
Average Net
Mortgage Rate 09/09-09/
D minus 0.08% 8.10%(g) 9.85 09 Sept. 2009 Sept. 2041
Weighted
Average Net 09/09-09/
E Mortgage Rate 8.18%(g) 9.85 09 Sept. 2009 Sept. 2041
Weighted
Average Net 09/09-09/
F Mortgage Rate 8.18%(g) 9.85 09 Sept. 2009 Sept. 2041
PRIVATE CERTIFICATES (H)
Lesser of Fixed
and Weighted
Average Net 09/09-10/
G Mortgage Rate 6.91%(g) 9.90 09 Oct. 2009 Sept. 2041
Lesser of Fixed
and Weighted
Average Net 10/09-10/
H Mortgage Rate 6.91%(g) 9.93 09 Oct. 2009 Sept. 2041
Lesser of Fixed
and Weighted
Average Net 10/09-10/
J Mortgage Rate 6.91%(g) 9.93 09 Oct. 2009 Sept. 2041
Lesser of Fixed
and Weighted
Average Net 10/09-09/
K Mortgage Rate 6.91%(g) 10.02 10 Sept. 2010 Sept. 2041
Lesser of Fixed
and Weighted
Average Net 09/10-09/
L Mortgage Rate 6.91%(g) 12.89 13 Sept. 2013 Sept. 2041
Lesser of Fixed
and Weighted
Average Net 09/13-07/
M Mortgage Rate 6.91%(g) 15.43 17 July 2017 Sept. 2041
Lesser of Fixed
and Weighted
Average Net 07/17-03/
N Mortgage Rate 6.91%(g) 18.93 19 Mar. 2019 Sept. 2041
Lesser of Fixed
and Weighted
Average Net 03/19-03/
O Mortgage Rate 6.91%(g) 19.35 19 Mar. 2019
N/A
</TABLE>
- --------
(a) Ratings shown are those of Duff & Phelps Credit Rating Co., Fitch
IBCA, Inc. and/or 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. 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 voluntary or involuntary prepayments. There may be some
voluntary and/or involuntary prepayments.
(e) This date was set at two years after the latest maturity date of any
mortgage loan which is not a balloon loan or, for any balloon loan,
the date upon which it would be deemed to mature in accordance with
its original amortization schedule absent its balloon payment.
(f) This pass-through rate will change from time to time based on the
weighted average of the component rates.
(g) This pass-through rate may change based on the weighted average net
mortgage rate.
(h) Not offered hereby.
S-5
<PAGE>
MORTGAGE LOAN EXECUTIVE SUMMARY
GENERAL MORTGAGE LOAN CHARACTERISTICS
(AS OF THE CUT-OFF DATE, UNLESS OTHERWISE INDICATED)
<TABLE>
<S> <C>
Initial Pool Balance (1) ........................................................... $1,187,129,449
Number of Mortgage Loans ........................................................... 153
Mortgage Loan Seller:
Credit Suisse First Boston Mortgage Capital LLC ................................... 86.47%
Morgan Stanley Mortgage Capital Inc. .............................................. 13.53%
Number of Mortgaged Properties ..................................................... 192
Average Mortgage Loan Balance ...................................................... $ 7,759,016
Highest Mortgage Loan Principal Balance ............................................ $ 58,000,000
Lowest Mortgage Loan Principal Balance ............................................. $ 234,627
Weighted Average Mortgage Rate ..................................................... 8.041%
Range of Mortgage Rates ............................................................ 6.684% - 10.220%
Weighted Average Remaining Term to the Earlier of Maturity or Anticipated
Repayment Date (months) ........................................................... 119
Range of Remaining Term to the Earlier of Maturity or Anticipated Repayment Date
(months) .......................................................................... 70 - 233
Weighted Average Remaining Amortization Term (months) .............................. 335
Range of Amortization Terms (months) ............................................... 120 - 480
Weighted Average Debt Service Coverage Ratio (2) ................................... 1.41 x
Range of Debt Service Coverage Ratios (2) .......................................... 1.13x - 4.67x
Weighted Average Loan-to-Value Ratio (2) ........................................... 67%
Range of Loan-to-Value Ratios (2) .................................................. 18.7% - 79.6%
Weighted Average Loan-to-Value Ratio at the Earlier of Anticipated Repayment Date or
Maturity (2)(3) ................................................................... 59%
Percentage of Initial Pool Balance made up of:
Anticipated Repayment Date Loans .................................................. 77.07%
Fully Amortizing Loans (other than Anticipated Repayment Date Loans) .............. 1.11%
Balloon Loans ..................................................................... 21.82%
Multi-Property Loans .............................................................. 16.83%
Crossed Loans ..................................................................... 9.38%
Credit Lease Loans ................................................................ 3.39%
</TABLE>
- --------
(1) The aggregate balance may be changed by up to 5%.
(2) Excluding two mortgage loans, which are secured by credit leases.
(3) Excluding fully amortizing loans (other than Anticipated Repayment Date
Loans).
S-6
<PAGE>
REPORTING REQUIREMENTS
On each distribution date, the certificate administrator will prepare a
statement to holders of the certificates and will make available or, upon
request, forward it to the following parties:
o each certificateholder;
o the depositor;
o the servicer;
o the special servicer;
o the trustee;
o each underwriter;
o each rating agency;
o Bloomberg, L.P.;
o Trepp Group;
o Charter Research Corporation;
o Intex Solutions, Inc.;
o any other party upon the direction of the depositor; and
o if requested in writing, any potential investor.
Prior to each distribution date, the servicer will deliver to the
certificate administrator the servicer reports described in Annex C, which are
in the form of the standard information package of the Commercial Mortgage
Securities Association. On each distribution date, the certificate
administrator will make available or, upon request, forward such reports to the
following parties:
o each certificateholder;
o the depositor;
o the trustee;
o each underwriter;
o each rating agency; and
o if requested in writing, any potential investor.
In addition, the servicer 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; and
o mortgaged property inspection reports.
In addition, the custodian will make copies of all modifications, waivers
and amendments of each mortgage loan available at its offices, upon reasonable
advance written notice and during normal business hours.
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
certificate administrator through its home page on the World Wide Web. The
website will initially be located at www.ctslink.com/cmbs. You can obtain this
information by facsimile by calling (301) 815-6610 and requesting that such
information be faxed to you.
S-7
<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, carefully read
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 All numerical information concerning the mortgage loans is provided on an
approximate basis.
THE PARTIES
DEPOSITOR Credit Suisse First Boston Mortgage Securities
Corp., a Delaware corporation and an affiliate
of one of the mortgage loan sellers and of one
of the underwriters.
SERVICER Wells Fargo Bank, National Association, 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).
The special servicer will be permitted to
purchase certificates.
TRUSTEE The Chase Manhattan Bank, a New York banking
corporation.
CERTIFICATE ADMINISTRATOR
AND CUSTODIAN Norwest Bank Minnesota, National Association,
a national banking association.
S-8
<PAGE>
MORTGAGE LOAN SELLERS o Credit Suisse First Boston Mortgage
Capital LLC, a Delaware limited liability
company and an affiliate of the depositor and
one of the underwriters, will sell to the
depositor 130 mortgage loans, which includes
one pari passu participation interest in a
mortgage loan, collectively representing 86.5%
of the initial pool balance; and
o Morgan Stanley Mortgage Capital Inc., a
New York corporation and an affiliate of
one of the underwriters, will sell to the
depositor 23 mortgage loans, representing
13.5% of the initial pool balance.
SIGNIFICANT DATES AND PERIODS
CUT-OFF DATE October 11, 1999.
CLOSING DATE On or about November 10, 1999.
DUE DATE The dates on which monthly installments of
principal and interest are due on the mortgage
loans are the following:
<TABLE>
<CAPTION>
NUMBER OF % OF INITIAL
MORTGAGE LOANS POOL BALANCE DUE DATE
- ---------------- -------------- ---------
<S> <C> <C>
64 19.2% 1st
89 80.8% 11th
-- -----
153 100.0%
=== =====
</TABLE>
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 November 1999. 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, California, Maryland, Minnesota 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. The
record date for the first distribution date is
the closing date.
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.
S-9
<PAGE>
RATED FINAL DISTRIBUTION DATE The distribution date occurring in September
2041.
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 below, subject, in the case of each such
certificate balance or notional balance, to a
permitted variance of plus or minus 5%.
<TABLE>
<CAPTION>
INITIAL CERTIFICATE
BALANCE OR INITIAL
CLASS NOTIONAL BALANCE PASS-THROUGH RATE
- ------------- -------------------- ------------------
<S> <C> <C>
Class A-1 $ 199,500,000 6.91
Class A-2 $ 660,500,000 7.29
Class A-X $1,170,108,234 0.90
Class B $ 52,600,000 7.53
Class C $ 58,500,000 7.94(1)
Class D $ 14,700,000 8.10(2)
Class E $ 40,900,000 8.18(3)
Class F $ 20,500,000 8.18(3)
</TABLE>
----------
(1) This pass-through rate will equal the
weighted average net mortgage rate minus
0.24%.
(2) The pass-through rate will equal the
weighted average net mortgage rate minus
0.08%.
(3) The pass-through rate will equal the
weighted average net mortgage rate.
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.
S-10
<PAGE>
THE PRIVATE CERTIFICATES The following certificates will also represent
(NOT OFFERED HEREBY) beneficial interests in the trust fund, but are
not offered hereby:
<TABLE>
<CAPTION>
INITIAL INITIAL
CLASS CERTIFICATE BALANCE PASS-THROUGH RATE
- ----------- --------------------- ------------------
<S> <C> <C>
Class G $32,200,000 6.91(1)
Class H $23,400,000 6.91(1)
Class J $11,700,000 6.91(1)
Class K $11,700,000 6.91(1)
Class L $15,800,000 6.91(1)
Class M $ 9,300,000 6.91(1)
Class N $ 7,100,000 6.91(1)
Class O $11,708,234 6.91(1)
</TABLE>
----------
(1) This pass-through rate will equal the
lesser of (a) 6.91% per annum and (b)
the weighted average net mortgage rate.
DISTRIBUTIONS
DISTRIBUTIONS Funds available for distribution from the
mortgage loans will be distributed on each
distribution date, net of specified trust
expenses (including servicing fees,
administration fees and related compensation).
INTEREST DISTRIBUTIONS Interest on the certificates will accrue on a
monthly basis. Interest will accrue with
respect to the certificates on the basis of a
360-day year consisting of twelve 30-day
months. Prepayments and defaults may reduce
interest distributions.
PRINCIPAL DISTRIBUTIONS The amount of principal required to be
distributed to the classes entitled to
principal on a particular distribution date
will, in general, be equal to:
o the principal portion of all scheduled
payments, other than balloon payments,
which are received or advanced during the
related due period;
o all principal prepayments and the principal
portion of balloon payments received during
the related due period;
o the principal portion of other collections
on the mortgage loans received during the
related due period including liquidation
proceeds, condemnation proceeds, insurance
proceeds and income on "real estate owned"
property; and
o the principal portion of proceeds of
mortgage loan repurchases received during
the related due period.
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.
S-11
<PAGE>
[GRAPHIC OMITTED]
- ----------
(1) Receives only interest distributions.
PREPAYMENT PREMIUMS The manner in which any prepayment premiums
and yield maintenance charges received during
a particular due period will be allocated to
the Class A-X Certificates, on the one hand,
and the class or classes of certificates
entitled to principal, on the other hand, is
described in "Description of the Offered
Certificates -- Distributions" in this
prospectus supplement.
OTHER DISTRIBUTIONS Distributions on the Class V-1 Certificates,
Class V-2 Certificates and Class R
Certificates are limited to the following:
o the Class V-1 and Class V-2
certificateholders will only receive
distributions of excess interest (i.e.,
interest accrued at a rate higher than the
related initial mortgage rate of the
mortgage loan) on the mortgage loans that
have specified anticipated repayment dates
and which are not paid in full as of such
date; and
o the Class R and Class LR certificateholders
will only receive a distribution after the
other certificateholders have received all
amounts payable to them.
The holders of 100% of the Class V-1
Certificates may purchase any loan sold by
Credit Suisse First Boston Mortgage Capital
LLC with an anticipated repayment date on or
after its anticipated repayment date at the
purchase price specified herein (generally
equal to the unpaid principal balance thereof
and all accrued and unpaid interest thereon)
and under the circumstances described in this
prospectus supplement. The Class V-1
Certificates may not be sold to an
S-12
<PAGE>
entity that owns an ownership interest in a
borrower under any of the mortgage loans sold
by Credit Suisse First Boston Mortgage Capital
LLC except that Credit Suisse First Boston
Mortgage Capital LLC or an affiliate thereof
may own or purchase the Class V-1
Certificates.
The holders of 100% of the Class V-2
Certificates may purchase any loan sold by
Morgan Stanley Mortgage Capital Inc. with an
anticipated repayment date on or after its
anticipated repayment date at the purchase
price specified herein (generally equal to the
unpaid principal balance thereof and all
accrued and unpaid interest thereon) and under
the circumstances described in this prospectus
supplement. The Class V-2 Certificates may not
be sold to an entity that owns an ownership
interest in a borrower under any of the
mortgage loans sold by Morgan Stanley Mortgage
Capital Inc. except Morgan Stanley Mortgage
Capital Inc. or an affiliate thereof may own
or purchase the Class V-2 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 the delinquent portion of the monthly
payment, less
o the servicing fee and primary servicing fee,
and
o if applicable, the related workout fee.
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. If the servicer fails to make a
required advance, the trustee will make such
advance in each case subject to a
determination of recoverability.
OPTIONAL TERMINATION The following parties will each (in turn,
according to the order such parties are listed
below) have the option to purchase all of the
mortgage loans and all other property
remaining in the trust fund on any
distribution date on which the aggregate
stated principal balance of the mortgage loans
is less than 1.00% of the initial pool
balance:
o Credit Suisse First Boston Mortgage Capital
LLC;
o Morgan Stanley Mortgage Capital Inc.;
o the special servicer;
S-13
<PAGE>
o the holders of a majority of the controlling
class; and
o the servicer.
In the event that any such party exercises
this option, the trust will terminate and all
outstanding certificates will be retired, as
described in more detail in this prospectus
supplement.
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) .............. $ 25,000 $1
Class A-X Certificates
(notional balance) ......... $100,000 $1
</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
Cedelbank 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.
CERTAIN FEDERAL INCOME TAX REMIC elections will be made with respect to
CONSIDERATIONS two segregated pools of assets of the trust,
referred to as the "Lower-Tier REMIC" and the
"Upper-Tier REMIC." All classes of the
certificates (other than the Class V-1, Class
V-2, Class R and Class LR Certificates) will
represent ownership of "regular interests" in
the Upper-Tier REMIC, and the offered
certificates will also represent the right to
receive certain yield protection payments as
described in "Summary of Prospectus Supplement
-- The Mortgage Loans -- Additional Collateral
Loans." 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.
o The Class A-X Certificates will, and one
or more other classes of offered
certificates may, be issued with original
issue discount.
S-14
<PAGE>
o Prepayment premiums and yield maintenance
charges on the mortgage loans and yield
protection payments allocable to the
offered certificates may be ordinary income
to the related certificateholders as such
amounts accrue.
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-1
o Class A-2
o Class A-X
In addition, it is anticipated that 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:
o Class B
o Class C
o Class D
o Class E
o Class F
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.
S-15
<PAGE>
RATINGS It is a condition to the issuance of the
offered certificates that they receive the
following credit ratings from any or all of
the following rating agencies:
<TABLE>
<CAPTION>
DUFF &
PHELPS MOODY'S
CREDIT FITCH INVESTORS
RATING CO. IBCA, INC. SERVICE, INC.
------------ ------------ --------------
<S> <C> <C> <C>
Class A-1 AAA AAA Aaa
Class A-2 AAA AAA Aaa
Class A-X AAA AAA Aaa
Class B AA AA Aa2
Class C A A A2
Class D A- A- A3
Class E BBB BBB Baa2
Class F BBB- BBB- Baa3
</TABLE>
The rated final distribution date for each
class of offered certificates is the
distribution date occurring in September 2041.
FOR A DESCRIPTION OF THE LIMITATIONS OF THE
RATINGS OF THE OFFERED CERTIFICATES, SEE
"RATING."
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
voluntary and involuntary prepayments 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, default interest,
yield protection payments or excess
interest.
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.
S-16
<PAGE>
THE MORTGAGE LOANS
GENERAL The trust fund will consist of 153 multifamily
and commercial mortgage loans, including one
pari passu participation interest in a mortgage
loan, having the following general
characteristics:
GENERAL MORTGAGE LOAN CHARACTERISTICS
(AS OF THE CUT-OFF DATE, UNLESS OTHERWISE INDICATED)
<TABLE>
<S> <C>
Initial Pool Balance (1) $1,187,129,449
Number of Mortgage Loans 153
Mortgage Loan Seller:
Credit Suisse First Boston Mortgage Capital LLC 86.47%
Morgan Stanley Mortgage Capital Inc. 13.53%
Number of Mortgaged Properties 192
Average Mortgage Loan Balance $ 7,759,016
Highest Mortgage Loan Balance $ 58,000,000
Lowest Mortgage Loan Balance $ 234,627
Weighted Average Mortgage Rate 8.041%
Range of Mortgage Rates 6.684-10.220%
Weighted Average Remaining Term to the Earlier of Maturity or Anticipated
Repayment Date (months) 119
Range or Remaining Term to the Earlier of Maturity or Anticipated Repayment
Date (months) 70-233
Weighted Average Remaining Amortization Term (months) 335
Range of Amortization Terms (months) 120-480
Weighted Average Debt Service Coverage Ratio (2) 1.41x
Range of Debt Service Coverage Ratios (2) 1.13x-4.67x
Weighted Average Loan-to-Value Ratio (2) 67%
Range of Loan-to-Value Ratios (2) 18.7-79.6%
Weighted Average Loan-to-Value Ratio at the Earlier of Anticipated Repayment
Date or Maturity (2)(3) 59%
Percentage of Initial Pool Balance made up of:
Anticipated Repayment Date Loans 77.07%
Fully Amortizing Loans (other than Anticipated Repayment Date Loans) 1.11%
Balloon Loans 21.82%
Multi-Property Loans 16.83%
Crossed Loans 9.38%
Credit Lease Loans 3.39%
</TABLE>
- ----------
(1) The aggregate balance may be changed by up to 5%.
(2) Excluding the two credit lease loans.
(3) Excluding fully amortizing loans (other than Anticipated Repayment Date
Loans).
S-17
<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.
<TABLE>
<CAPTION>
INTEREST OF % OF NUMBER OF
BORROWER INITIAL POOL MORTGAGED
ENCUMBERED BALANCE(1) PROPERTIES
- ------------------------------ -------------- -----------
<S> <C> <C>
Fee Simple Estate (2) 88.4% 185
Leasehold Estate 11.6% 7
----- ---
TOTAL 100.0% 192
===== ===
</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 80 mortgage loans representing 77.07% 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 or after 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 principal and
interest (calculated at the initial
interest rate on the amortized principal
balance and the initial amortization
schedule) and operating expenses, to
amortize the mortgage loan until paid in
full; and
o apply all cash flow to pay accrued excess
interest after principal is paid in full.
LOANS REPRESENTED BY Two of the mortgage loans, representing
MULTIPLE NOTES 8.02% of the initial pool balance, are
secured by mortgages on properties which also
secure other loans not included in this trust
fund. The L'Enfant Plaza property secures two
pari passu notes. One note was included in one
of the depositor's prior rated securitizations
and the other note underlies the L'Enfant
S-18
<PAGE>
participation, which is included in this trust
fund. Both notes secured by the L'Enfant Plaza
property will be serviced by First Union
National Bank, as servicer, and/or Lennar
Partners, Inc., as special servicer, under the
pooling and servicing agreement relating to
such other securitization. The mortgage loan
underlying the L'Enfant participation is pari
passu with the other L'Enfant loan. The
interest in the L'Enfant participation outside
of this trust fund will initially be held by
Credit Suisse First Boston Mortgage Capital
LLC.
Both the mortgage loan known as Exchange
Apartments and the other mortgage loan secured
by the Exchange Apartments property may be
primarily serviced by a servicer appointed by
the holder of such other mortgage loan under
the supervision of the servicer of this trust
fund, but will be specially serviced by the
special servicer of this trust fund. The other
Exchange Apartments mortgage loan will
initially be held by Credit Suisse First
Boston Mortgage Capital LLC and may be
transferred only to institutional transferees
permitted under the related loan documents.
The Exchange Apartments mortgage loan included
in this trust fund is, upon default, senior to
the other Exchange Apartments mortgage loan.
LOAN SECURED BY CREDIT LEASES Two cross-collateralized mortgage loans,
representing 3.39% of the initial pool
balance, are secured by credit leases of the
related mortgaged properties to the same
credit tenant. Both credit leases require the
tenant to make payments in an amount
sufficient to satisfy debt service (but not
including the balloon payment) on the related
mortgage loan, subject to the right of the
tenant to offer to purchase or substitute the
mortgaged property, upon the occurrence of
specified major casualties or condemnation,
whereupon the credit tenant is required to
substitute an alternative property or offer to
purchase the mortgaged property, as described
herein under "Certain Characteristics of the
Mortgage Loans -- Credit Lease Loans." The
obligations of Universal Commercial Credit
Leasing V, Inc. under the credit leases are
guaranteed by ACCOR S.A., which has a long
term debt rating of "BBB" with a negative
outlook by Standard & Poor's Ratings Services.
The term of each credit lease is at least as
long as the term of the mortgage loan.
Because payments due under the related credit
leases will not be sufficient to pay the
balloon payment of such mortgage loans at
their maturity dates, the borrowers will
maintain residual value insurance policies
which, in the event of a default resulting
from the failure to make a balloon payment,
insures that proceeds of liquidation of the
related mortgaged properties will be
sufficient to satisfy the balloon payment. The
premiums on the residual value insurance
policies were paid in full at the origination
of the loans.
S-19
<PAGE>
CROSSED LOANS AND MULTI-PROPERTY LOANS AND RELATED BORROWER LOANS
<TABLE>
<CAPTION>
NUMBER OF % OF INITIAL
TYPE OF MORTGAGE LOAN MORTGAGE LOANS POOL BALANCE
- ----------------------------------------------------- ---------------- -------------
<S> <C> <C>
All multi-property loans 14 16.8%
All crossed loans 10 9.4%
Crossed loans and multi-property loans which
prohibit release of any related mortgaged property 6 2.3%
Crossed loans and multi-property loans which permit
release of an individual mortgaged property (1)(2) 14 17.1%
Borrower is under common ownership with an entity
which is the borrower under another mortgage loan
in the trust, but such mortgage loans are not
cross-defaulted or cross-collateralized(3) 20 12.5%
</TABLE>
- ----------
(1) Generally, these mortgage loans require (a) a defeasance or prepayment
(in an amount equal to a percentage of the related property release
amount, as described in the succeeding tables entitled "Crossed Loans"
and "Mortgage Loans Secured by More than One Mortgaged Property") 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) in most cases, the debt service coverage ratio
immediately prior to such defeasance or prepayment.
(2) The ACCOR Loans are included in this category. For more information, see
the table entitled "Crossed Loans" below.
(3) See "Risk Factors -- Mortgage Loans to Related Borrowers May Result in
More Severe Losses on Your Certificates."
CROSSED LOANS
<TABLE>
<CAPTION>
CUT-OFF DATE % OF INITIAL RELEASE
LOAN NO. LOAN NAME PRINCIPAL BALANCE POOL BALANCE PRICE (1)
- ---------- ----------------------------------- ------------------- -------------- ------------
<S> <C> <C> <C> <C>
2 Selig Loans -- Third and Broad $ 25,471,293 2.2% 125%
3 Selig Loans -- 3131 Elliot Building 14,733,395 1.2% 125%
4 Selig Loans -- Airborne Building 10,887,729 0.9% 125%
------------ ---
Total ............................. $ 51,092,418 4.3%
============ ===
6 ACCOR Loans -- Mountain $ 26,263,337 2.2% N/A (2)
7 ACCOR Loans - California North 14,018,721 1.2% N/A (2)
------------ ---
Total ............................. $ 40,282,058 3.4%
============ ===
21 Capetown Plaza Shopping Center $ 11,954,130 1.0% (3)
22 Lewis County Mall 5,016,270 0.4% (3)
23 Tampa Shopping Center 2,219,207 0.2% (3)
------------ ---
Total ............................. $ 19,189,607 1.6%
============ ===
137 Betty Jane Apartments $ 401,251 0.03% 120%
138 Poolside Apartments 393,821 0.03% 120%
------------ ----
Total ............................. $ 795,073 0.07%
============ ====
TOTAL $111,359,157 9.4%
============ ====
</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) The mortgage loan permits the related tenant to purchase individual
mortgaged properties (and obtain the release of the related lien) only in
the event of a major casualty or condemnation or if any mortgaged
property becomes economically obsolete for an amount sufficient to
purchase defeasance collateral to defease the related portion of the
mortgage loan.
(3) Each mortgage secures all obligations under all three mortgage loans and
no release of an individual mortgaged property from the lien of the
related mortgage is allowed.
S-20
<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>
14 Hotel Union Square/Diva Summary 2 $ 29,332,251 2.47% 125%
15 White Lodging Indiana Summary 5 27,938,200 2.35% 125%
6 ACCOR Loans -- Mountain 6 26,263,337 2.21% N/A (2)
17 Sunset Ridge & Sunset Peak Apartments
Summary 2 25,482,959 2.15% 120%
27 Fairfield Suites & Courtyard by Marriott
Summary 2 17,000,000 1.43% 125%
31 Suburban Lodge Summary 5 14,652,229 1.23% 125%
7 ACCOR Loans -- California North 5 14,018,721 1.18% N/A (2)
33 K.V. Properties Inc. Summary 5 12,708,740 1.07% 125%
39 Muscarelle Portfolio Summary 2 10,193,400 0.86% 125%
41 Frassetto Properties Summary 4 9,851,093 0.83% 125%
70 Mladen Portfolio Summary 8 4,096,194 0.35% 125%
83 Pacella Park Summary 2 3,316,498 0.28% None (3)
94 Murray's Discount Auto Store Summary 3 2,584,132 0.22% None (3)
100 Blockbuster Video/Scotty's Home Summary 2 2,298,607 0.19% None (3)
- ------------ -----
TOTAL 53 $199,736,361 16.83%
== ============ =====
</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) The mortgage loan permits the related tenant to purchase individual
mortgaged properties (and obtain the release of the related lien) only in
the event of a major casualty or condemnation or if any mortgaged
property becomes economically obsolete for an amount sufficient to
purchase defeasance collateral to defease the related portion of the
mortgage loan.
(3) No release of an individual mortgaged property from the lien of the
related mortgage is allowed.
LOCKBOX TERMS Eighty-three mortgage loans, representing
80.80% 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 to a lockbox
account controlled by the servicer on behalf
of the trust fund, except that with respect to
multifamily properties, income is collected
and deposited in the lockbox account by the
manager of the mortgaged property and, with
respect to hospitality properties, cash or
"over-the-counter" receipts are deposited into
the lockbox account by the manager, while
credit card receivables will be deposited
directly into a lockbox account;
MODIFIED LOCKBOX. Income is paid to the
manager of the mortgaged properties, other
than multifamily properties, which will
deposit all sums collected into a lockbox
account on a regular basis; or
SPRINGING LOCKBOX. Income is collected by the
borrower until the occurrence of a triggering
event, following which a
S-21
<PAGE>
hard lockbox is put in place. Examples of
triggering events include:
o a failure to pay the related mortgage loan
in full on or before the related
anticipated repayment date; or
o a decline, by more than a specified
amount, in the net operating income of the
related mortgaged property; or
o a failure to meet a specified debt service
coverage ratio.
Each mortgage loan that 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 44.4% 33
Modified 0% 0
Springing 36.4% 50
None 19.2% 70
----- --
TOTAL 100.0% 153
===== ===
</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 voluntary prepayments
for a specified period of time after the
mortgage loan is originated;
o by requiring that any voluntary 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 voluntary principal
prepayments for a specified period of time.
The 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.
As of the cut-off date, approximately 99.5% of
the mortgage loans by initial pool balance
were within their respective lockout periods,
and the weighted average of such lockout
and/or defeasance periods was 110 months.
DEFEASANCE One hundred twelve mortgage loans,
representing 93.7% of the initial pool
balance, permit the borrower to obtain the
release of the related mortgaged property, or,
in the case of any crossed loan and most of
the multi-property loans, one or more of the
related mortgaged properties, from the lien of
the related mortgage(s) upon the pledge to the
trustee of
S-22
<PAGE>
certain noncallable U.S. government
obligations. The U.S. government obligations
must provide for payments which equal or
exceed scheduled interest and principal
payments due under the related mortgage note.
ADDITIONAL COLLATERAL LOANS Three mortgage loans, representing 2.4% of the
initial pool balance, are also secured by cash
reserves or irrevocable letters of credit. The
additional collateral will be released to the
borrower upon satisfaction by the borrower of
certain conditions including, in some cases,
meeting debt service coverage ratio levels
and/or satisfying leasing conditions within
the time periods specified. If these
conditions are not satisfied within such
specified time periods, the related reserve or
credit enhancement amount may be applied to
partially prepay the related mortgage loan.
The loan documents relating to such mortgage
loans require the payment of a yield
maintenance charge in connection with any such
partial prepayment. With respect to two of
these mortgage loans, in the event the related
borrowers do not pay the required yield
maintenance charges in connection with such a
partial prepayment, the holders of any class
of offered certificates receiving any such
prepayment will receive a yield protection
payment equal to the greater of 1% of the
related distribution of principal and the
present value of the remaining scheduled
payments of principal and interest being
prepaid, discounted at a rate equivalent to
the yield for U.S. Treasury securities of
comparable maturity. The yield protection
payment will be paid by the servicer (who will
have a right of reimbursement from the related
mortgage loan seller, Credit Suisse First
Boston Mortgage Capital LLC) to compensate the
holders for the absence or shortfall in the
amount of any prepayment premium or yield
maintenance charge paid by the borrower. The
right to receive yield protection payments
will not be treated as an interest in the
REMIC but in a portion of the trust fund
treated as a grantor trust for federal income
tax purposes. No yield protection payment will
be made with respect to any such prepayment on
the remaining additional collateral mortgage
loan. See "Certain Characteristics of the
Mortgage Loans -- Certain Terms and Conditions
of the Mortgage Loans -- Mortgage Loans which
May Require Principal Paydowns."
RISK FACTORS See "Risk Factors" immediately following this
"Summary of Prospectus Supplement" for a
discussion of the material risks in connection
with the purchase of the offered certificates.
S-23
<PAGE>
RISK FACTORS
The risks and uncertainties described below in addition to those risks
described in the prospectus under "Risk Factors" summarize the material risks
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 of the
mortgage pool or specified group, as applicable. 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. All
numerical information concerning the mortgage loans is provided on an
approximate basis.
RISKS RELATED TO THE MORTGAGE LOANS
COMMERCIAL AND MULTIFAMILY Commercial and multifamily lending is
LENDING SUBJECTS YOUR generally thought to be riskier than
INVESTMENT TO SPECIAL 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 cooperative properties
(i) residential and
(ii) mixed commercial;
o manufactured housing communities;
o self-storage facilities;
o parking facilities; and
o other commercial properties.
There are additional factors in connection
with commercial and multifamily lending, not
present in connection with single-family
residential lending, which could adversely
affect the economic performance of the
mortgaged properties. Any one of these
additional factors, discussed in more detail
in this prospectus supplement, could result in
a reduction in the level of cash flow from the
mortgaged properties that are required to
ensure timely payment on your certificates.
YOUR SOURCE OF REPAYMENT ON Repayment of loans secured by commercial and
YOUR CERTIFICATES IS LIMITED multifamily properties typically depends on
TO PAYMENTS UNDER THE the cash flow produced by such properties.
COMMERCIAL AND MULTIFAMILY The ratio of net cash flow to debt service of
MORTGAGE LOANS a loan secured by an 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
S-24
<PAGE>
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 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.
YOUR INVESTMENT IS NOT INSURED The mortgage loans will not be an obligation
OR GUARANTEED 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;
o the certificate administrator;
o custodian; or
o any of their respective affiliates.
Except for certain of the mortgage loans, 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.
THE REPAYMENT OF A COMMERCIAL Commercial and multifamily cash flows are
MORTGAGE LOAN IS DEPENDENT volatile and may be insufficient to cover
ON THE CASH FLOW PRODUCED debt service on the related mortgage loan at
BY THE PROPERTY WHICH CAN any given time which may cause the value of a
BE VOLATILE AND property to decline. Cash flows and property
INSUFFICIENT TO values generally affect:
ALLOW TIMELY PAYMENT
ON YOUR CERTIFICATES
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.
S-25
<PAGE>
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;
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
improvements 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 IMPORTANT The successful operation of a real estate
TO THE SUCCESSFUL OPERATION OF project depends on the performance and
THE MORTGAGED PROPERTY viability of the property manager. The
property manager is generally responsible for:
o operating the properties and 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.
Properties deriving revenues primarily from
short-term sources, such as hotels,
self-storage facilities and nursing homes,
generally are more management intensive than
properties leased to creditworthy tenants
under long-term leases.
A good property manager, by controlling costs,
providing necessary services to tenants and by
overseeing and performing maintenance or
improvements on the properties, can
S-26
<PAGE>
improve cash flow, reduce vacancy, leasing and
repair costs and preserve building value. On
the other hand, management errors can, in some
cases, impair short-term cash flow and the
long-term viability of an income-producing
property.
We make no representation or warranty as to
the skills of any present or future property
managers. Furthermore, we cannot assure you
that the property managers will be in a
financial condition to fulfill their
management responsibilities throughout the
terms of their respective management
agreements. 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,
this relationship could disrupt the management
of the underlying property. This may adversely
affect cash flow; however, these mortgage
loans generally permit the lender to 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 OFFICE Thirty-three office properties secure
PROPERTIES 29.9% of the initial pool balance. A number
of factors may adversely affect the value and
successful operation of an office property.
Some of these factors include:
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, including local labor cost and
quality, access to transportation, tax
environment, including tax benefits, and
quality of life issues such as schools and
cultural amenities; and
o the financial condition of the owner.
RISKS ASSOCIATED WITH RETAIL Forty-two retail properties secure
PROPERTIES 20.7% of the initial pool balance. A number
of factors may adversely affect the value and
successful operation of a retail property.
Some of these factors include:
o the strength, stability, number and
quality of the tenants;
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
S-27
<PAGE>
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.
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 property adjacent to the
mortgaged property, or in which any tenant
occupies more than 20,000 square feet. The
presence or absence of an "anchor store" in a
shopping center is important because anchor
stores play a key role in generating customer
traffic and making a center desirable for
other tenants.
The failure of one or more specified tenants,
such as an anchor tenant, to operate from its
premises may give other tenants on the
property the right to terminate or reduce
rents under their leases.
With respect to one or more Mortgage Loans, an
anchor tenant has ceased to operate from its
premises. See the footnotes to Annex A under
"Certain Characteristics of the Mortgage Loans
-- Additional Mortgage Loan Information." Even
if one were to continue to collect rent from
the anchor tenant that has vacated the
property, the mortgaged property's revenues
and value may be adversely affected.
The following table describes the mortgaged
properties and their retail property type:
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF INITIAL POOL
RETAIL PROPERTY TYPE MORTGAGED PROPERTIES BALANCE
- ---------------------- ---------------------- --------------
<S> <C> <C>
Anchored 29 17.9%
Unanchored 13 2.8
-- ----
TOTAL 42 20.7%
== ====
</TABLE>
RISKS ASSOCIATED WITH MULTIFAMILY Fifty-one multifamily properties secure 15.1%
PROPERTIES of the initial pool balance. A
number of factors may adversely affect the
value and successful operation of a
multifamily property. Some of these factors
include:
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 property's reputation;
S-28
<PAGE>
o applicable state and local regulations
designed to protect tenants in connection
with evictions and rent increases;
o local factory or other large employer
closings;
o the level of mortgage interest rates to
the extent it encourages tenants to
purchase housing; and
o compliance and continuance of government
housing rental subsidy programs to which a
few of the mortgaged properties are
subject.
RISKS ASSOCIATED WITH Eighteen hospitality properties secure 10.1%
HOSPITALITY PROPERTIES of the initial pool balance. A number of
factors may adversely affect the value and
successful operation of a hospitality property.
Some of these factors include:
o local, regional and national economic
conditions which may limit the amount that
can be charged for a room and reduce
occupancy levels;
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 the 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 seasonal nature of occupancy;
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.
Because hotel rooms generally are rented for
short periods of time, the financial
performance of hotels tends to be affected by
adverse economic conditions and competition
more quickly than other types of commercial
properties.
In the event of a foreclosure of a hospitality
property, there are additional risks which
could have an effect on the continuing
operations and profitability of the property.
For example, it is unlikely that the trustee,
servicer or special servicer or any purchaser
in a foreclosure sale would be entitled to the
rights under the liquor license for the
hospitality property. The party purchasing the
property 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 addition, there can be no
assurance that, in the event of a foreclosure
of a mortgage loan secured by a hospitality
property, the rights
S-29
<PAGE>
under any related franchise agreement would be
transferable to the trustee, servicer, special
servicer or purchaser of such property.
RISKS ASSOCIATED WITH Sixteen industrial properties secure 6.6% of
INDUSTRIAL PROPERTIES the initial pool balance. A number of factors
may adversely affect the value and successful
operation of an industrial property. Some of
these factors include:
o the quality of major tenants, especially
if the property is 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.
RISKS ASSOCIATED WITH Ten cooperative properties secure 3.94% of the
COOPERATIVE PROPERTIES initial pool balance. A cooperative building
and the land under the building is owned or
leased by a non-profit cooperative corporation.
The cooperative owns all the units in the
building and all common areas. Its tenants own
stock, shares or membership certificates in the
corporation. This ownership entitles the
tenant-stockholders to proprietary leases or
occupancy agreements which confer exclusive
rights to occupy specific units. Generally, the
tenant-stockholders make monthly maintenance
payments which represent their share of the
cooperative corporation's mortgage loan, real
property taxes, maintenance and other expenses,
less any income the corporation may receive.
These payments are in addition to any payments
of principal and interest the
tenant-stockholder may be required to make on
any loans secured by its shares in the
cooperative.
A number of factors may adversely affect the
value and successful operation of a
cooperative property. Some of these factors
include:
o the ability of tenants to remain in a
cooperative property after its conversion
from a rental property, at below market
rents and subject to applicable rent
control and stabilization laws;
o the primary dependence of a borrower upon
maintenance payments, any rental income
from units or commercial areas and proceeds
from the sale of units to meet debt service
obligations;
o the initial concentration of shares
relating to occupied rental units of the
sponsor, owner or investor after conversion
from rental housing, which may result in an
S-30
<PAGE>
inability to meet debt service obligations
on the corporation's mortgage loan if the
sponsor, owner or investor is unable to
make the required maintenance payments;
o a borrower may fail to qualify for
favorable tax treatment as a "cooperative
housing corporation" each year, which may
reduce the value of the collateral securing
the related mortgage loan; and
o upon foreclosure, in the event a
cooperative property becomes a rental
property, units could be subject to certain
rent control, stabilization and tenants'
rights laws, at below market rents, which
may affect marketability and sale price.
RISKS ASSOCIATED WITH EXTENDED Seven hospitality properties that are
STAY PROPERTIES extended stay properties secure
2.4% of the initial pool balance. Extended
stay facilities generally rent rooms for
significant periods of time at lower rates
than those charged to overnight and short-term
guests, and the client base for such
facilities may be more limited than for
hospitality properties which rent rooms for
short periods of time. In addition, the
financial performance of such facilities tends
to be affected by adverse economic conditions
and other factors which adversely affect the
economic performance of hotels generally.
RISKS ASSOCIATED WITH CERTAIN Certain mortgage loans are secured by
SPECIAL USE PROPERTY TYPES manufactured housing community properties,
self-storage facilities and parking facilities.
The economic performance of each such "special
use" property type is subject to unique risks,
not generally present in more traditional
commercial mortgage lending. No such property
type accounts for more than 2.3% of the initial
pool balance.
RELIANCE ON A SINGLE TENANT Twenty mortgaged properties securing
INCREASES THE RISK THAT 10.9% of the initial pool balance, other than
CASH FLOW WILL BE mortgaged properties subject to credit
INTERRUPTED leases, are leased by a single tenant.
Reliance on a single tenant may increase the
risk that cash flow will be interrupted, which
will adversely affect the ability of a
borrower to repay the mortgage loan.
LOSSES ON LARGER LOANS MAY Several of the mortgage loans or groups of
ADVERSELY AFFECT PAYMENT cross-collateralized mortgage loans have
ON YOUR CERTIFICATES cut-off date principal balances 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 the pool. The following chart lists
the ten largest mortgage loans or groups of
cross- collateralized mortgage loans.
S-31
<PAGE>
TEN LARGEST MORTGAGE LOANS
<TABLE>
<CAPTION>
CUT-OFF DATE % OF
LOAN NAME PRINCIPAL BALANCE INITIAL POOL BALANCE
- ------------------------------ ------------------- ---------------------
<S> <C> <C>
Exchange Apartments ........ $ 58,000,000 4.9%
The Selig Loans ............ 51,092,418 4.3
Tallahassee Mall ........... 47,937,104 4.0
The ACCOR Loans ............ 40,282,058 3.4
Hato Rey Tower ............. 38,774,229 3.3
L'Enfant Plaza ............. 37,204,671 3.1
Holiday Inn - Broadway ..... 36,000,000 3.0
Scholastic Building ........ 33,965,600 2.9
Blue Hills Office Park ..... 33,149,000 2.8
150 William Street ......... 29,440,579 2.5
------------ ----
TOTAL ...................... $405,845,659 34.2%
============ ====
</TABLE>
MORTGAGE LOANS TO RELATED BORROWERS Twenty of the mortgage loans, representing
12.5% of the MAY RESULT IN MORE SEVERE LOSSES
ON initial pool balance, were made to
borrowers under common YOUR CERTIFICATES
ownership and are not cross-collateralized.
Mortgage loans with 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.
In addition to the mortgage loans described in
the chart below, there are five groups of
mortgage loans, which five groups comprise a
total of eleven mortgage loans, which were
made to borrowers under common ownership and
are not cross-collateralized. Such mortgage
loans total in the aggregate not more than
2.0% of the initial pool balance.
RELATED BORROWER LOANS
<TABLE>
<CAPTION>
CUT-OFF DATE % OF INITIAL
LOAN NO. PROPERTY NAME PRINCIPAL BALANCE POOL BALANCE
- ---------- -------------------------------- ------------------- -------------
<S> <C> <C> <C>
5 Tallahassee Mall $47,937,104
34 Periwinkle Place Shopping Center 12,632,054
-----------
Total .......................... $60,569,158 5.1%
===========
15 White Lodging Summary $27,938,200
64 Courtyard by Marriott 4,975,737
-----------
Total .......................... $32,913,937 2.8%
===========
38 Town and Country Office Park $10,463,154
60 Crestview Office 5,444,060
-----------
Total .......................... $15,907,214 1.3%
===========
</TABLE>
S-32
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF DATE % OF INITIAL
LOAN NO. PROPERTY NAME PRINCIPAL BALANCE POOL BALANCE
- ---------- ------------------------- ------------------- --------------
<S> <C> <C> <C>
51 Gateway East & West $ 7,245,489
78 Embassy Apartments 3,797,636
80 Southern Medical Building 3,791,615
-----------
Total ................... $14,834,740 1.3%
===========
</TABLE>
ENFORCEABILITY OF Ten of the mortgage loans, representing
CROSS-COLLATERALIZED 9.4% of the initial pool balance, are
AND CROSS-DEFAULTED MORTGAGE cross-collateralized and cross-defaulted
LOANS MAY BE CHALLENGED with other mortgage loans in the mortgage pool.
These arrangements attempt to reduce the risk
that one mortgaged property may not generate
enough net operating income to pay debt
service.
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, or were to
become subject to an action brought by one
or more of its creditors outside 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.
A BORROWER'S OTHER LOANS MAY Other than as described in the succeeding
REDUCE THE CASH FLOW AVAILABLE paragraph, the mortgage loans generally
TO OPERATE AND MAINTAIN THE prohibit borrowers from incurring any
MORTGAGED PROPERTY OR additional debt that is secured by the related
INTERFERE WITH LENDER'S RIGHTS mortgaged property. However, subject, in most
UNDER THE MORTGAGE LOANS WHICH cases, to certain limitations relating to
MAY ADVERSELY AFFECT PAYMENTS maximum amounts, borrowers generally may incur
ON YOUR CERTIFICATES 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 by reducing the cash flow
available to the borrowers to operate and
maintain the mortgaged property;
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 borrowers under three mortgage loans,
identified on Annex A hereto as Grand Cove 1
Apartments, The Westhampton Bath & Tennis Club
and Ansley North Coopera-
S-33
<PAGE>
tive, Inc. (all of which are secured by
cooperative properties), which collectively
represent 0.9% of the initial pool balance,
have granted subordinate liens on the
properties related to such loans to secure
subordinate indebtedness on such properties in
the amounts of $600,000, $800,000 and
$258,100, respectively. There is a
subordination agreement in place between the
trustee and the lender holding the existing
subordinate indebtedness on Ansley North
Cooperative, Inc., The Westhampton Bath &
Tennis Club and Grand Cove 1 Apartments. The
borrowers under three other mortgage loans
(all of which are secured by cooperative
properties), which collectively represent 0.5%
of the initial pool balance, are also
permitted to incur a limited amount of
indebtedness secured by the related mortgaged
properties. It is a condition to the
incurrence of any future secured subordinate
indebtedness on these mortgage loans that: (i)
the aggregate LTV of such loans be below
certain thresholds (generally 50%); (ii) the
interest rates applicable to such additional
loans not be greater than the interest rates
on the related mortgage loans; and (iii) that
subordination and standstill agreements be put
in place between the trustee and the related
lenders.
A MEZZANINE LOAN TO A BORROWER The borrowers under four mortgage loans,
OR BORROWER'S PARENT OR A representing 9.2% of the initial pool balance
PREFERRED EQUITY FINANCING (the three cross-collateralized mortgage loans
RELATED TO A BORROWER known as the Selig Loans and the mortgage
MAY ADVERSELY AFFECT PAYMENTS loan known as Exchange Apartments), have
ON YOUR CERTIFICATES informed the related mortgage loan seller
that the equity in such borrowers has been
pledged to secure mezzanine loans from lenders
not affiliated with either mortgage loan
seller. See "Certain Characteristics of the
Mortgage Loans -- Significant Mortgage Loans
-- The Selig Loans" and "-- The Exchange
Apartments Loan" in this prospectus
supplement. In addition, the borrowers under
the mortgage loan which is known as Union
Square/Diva Summary, which has a cut-off date
principal balance of $29,332,251, has informed
the related mortgage loan seller that the
equity in such borrower has been pledged,
along with other collateral not securing any
mortgage loans in this trust fund, to secure
mezzanine debt to a lender which is not
affiliated with the related mortgage loan
seller in the amount of $12,033,322.
In addition, Credit Suisse First Boston
Mortgage Capital LLC is the lender under a
mezzanine loan to the parent of the borrower
under the mortgage loan known as L'Enfant
Plaza, which has a cut-off date principal
balance of $2,500,000 and represents 3.1% of
the initial pool balance. Credit Suisse First
Boston Mortgage Capital LLC also holds a
preferred equity interest in the borrower
under such mortgage loan. See "Certain
Characteristics of the Mortgage Loans --
Significant Mortgage Loans -- The L'Enfant
Participation" in this prospectus supplement.
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
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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 and 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 preferred equity holder may be entitled to
receive certain preferred distributions prior
to distributions being made to the other
partners or members from funds remaining after
all required monthly debt service payments,
reserve payments and other payments under the
related mortgage loan are made, any
obligations to other creditors have been
satisfied when due and all monthly operating
expenses with respect to the related mortgaged
property have been paid.
Additionally, a preferred equity holder may be
entitled to (i) terminate and replace the
manager of the related mortgaged property or
properties (or the managing member or general
partner of the borrower) upon the occurrence
of certain specified breaches or, in some
cases, if the debt service coverage ratio
falls below certain levels and (ii) approve
various significant decisions made by the
borrowers.
THE OPERATION OF THE MORTGAGED If the trust fund were to acquire a mortgaged
PROPERTY UPON FORECLOSURE OF property pursuant to a foreclosure or delivery
THE MORTGAGE LOAN MAY AFFECT of a deed in lieu of foreclosure, the special
THE TAX STATUS OF THE TRUST servicer would be required to retain an
FUND AND ADVERSELY AFFECT independent contractor to operate and manage
THE CERTIFICATES the mortgaged property. Among other things, the
independent contractor would not be permitted
to perform construction work on the mortgaged
property unless that construction generally was
at least 10% complete at the time default on
the mortgage loan became imminent. In addition,
any net income from such property other than
qualifying "rents from real property" would
subject the lower-tier REMIC to federal and
possibly state or local tax on such income at
the highest marginal federal corporate tax rate
(currently 35%), thereby reducing net proceeds
available for distribution to
certificateholders. "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.
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GEOGRAPHIC CONCENTRATION OF THE The concentration of mortgaged properties in a
MORTGAGED PROPERTIES MAY specific state or region will make the
ADVERSELY AFFECT PAYMENT ON performance of the pool of mortgage loans, as
YOUR CERTIFICATES a whole, more sensitive to the following 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 33
states, the District of Columbia and Puerto
Rico. The table below sets forth the states in
which a significant percentage of the
mortgaged properties are located. 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 CONCENTRATIONS OF MORTGAGED PROPERTIES
<TABLE>
<CAPTION>
NUMBER OF
% OF INITIAL POOL MORTGAGED
STATE BALANCE PROPERTIES
- --------------------- ------------------- -----------
<S> <C> <C>
New York 21.2% 22
California 18.1% 48
Florida 8.7% 11
Washington 5.7% 6
</TABLE>
SOME REMEDIES MAY NOT BE The mortgage loans contain "due-on-sale" and
AVAILABLE FOLLOWING A "due-on-encumbrance" clauses which permit
MORTGAGE LOAN DEFAULT 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
a 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, which assignment may be contained
within the mortgage document. However, in many
cases, the borrower 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:
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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.
ENVIRONMENTAL LAWS MAY ADVERSELY Under various federal and state laws, a
AFFECT MORTGAGED PROPERTY CASH current or previous owner or operator of
FLOW real property may be liable for the costs
of cleanup of environmental contamination on,
under, in, or emanating from the 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, and
govern the responsibility for the removal,
encapsulation or disturbance of asbestos
containing materials ("ACM") when the ACMs are
in poor condition or when a property with ACMs
undergoes renovation or demolition. Certain
laws impose liability for lead-based paint,
lead in drinking water, elevated radon gas
inside buildings, and releases of
polychlorinated biphenyl compounds ("PCBs").
Third parties may also seek recovery from
owners or operators of real property for
personal injury associated with exposure to
asbestos, lead, radon, and PCBs.
As described herein under "Certain
Characteristics of the Mortgage Loans -- CSFB
Underwriting Standards -- Environmental
Assessments" and "-- Morgan Stanley Mortgage
Capital Inc. Underwriting Standards --
Environmental Assessments," no assessment,
study or updated database search 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 sellers 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
conditions will not have a material
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<PAGE>
adverse effect on the value or cash flow of
the related mortgaged property. With respect
to all of the 24 mortgaged properties as to
which environmental site assessments were not
conducted (which represents 1.2% of the
initial pool balance), Credit Suisse First
Boston Mortgage Capital LLC obtained an
insurance policy from Commerce and Industry
Insurance Co. against losses and expenses
relating to certain environmental
contamination which is discovered on such
mortgaged properties. Commerce and Industry
Insurance Co., which is a member company of
American International Group, Inc., is rated
"AAA" by Standard & Poor's Ratings Services.
The borrowers generally 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 PCBs in equipment, elevated radon
levels or contamination of soil and/or
groundwater.
ONE ACTION RULES MAY LIMIT Several states, including California, have
REMEDIES 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 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.
APPRAISALS AND MARKET STUDIES In connection with the origination or
MAY INACCURATELY REFLECT THE acquisition of each of the mortgage
VALUE OF THE MORTGAGED loans, the related mortgaged property was
PROPERTIES appraised by an independent appraiser.
In general, appraisals are not guarantees, and
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
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<PAGE>
appraiser used the same general approach
to, and the same method of, appraising the
mortgaged property; and
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.
PROPERTY MANAGERS MAY EXPERIENCE The managers of the mortgaged properties and
CONFLICTS OF INTEREST IN the borrowers may experience conflicts of
MANAGING MULTIPLE PROPERTIES interest in the management and/or ownership of
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
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
SERVICER MAY EXPERIENCE service loans other than those included in the
CONFLICTS OF INTEREST trust fund in the ordinary course of their
businesses. These 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 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 SUBJECT Seven of the mortgage loans, representing
TO TERMS OF THE GROUND LEASE 11.6% of the initial pool balance, are
primarily secured by leasehold interests with
respect to which the related owner of the fee
estate has not mortgaged such fee estate as
security for the related mortgage loan. For the
purposes of this prospectus supplement, 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.
Upon the bankruptcy of a lessor or a lessee
under a ground lease, the debtor entity has
the right to continue or terminate the ground
lease. Pursuant to section 365(h) of the
federal
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<PAGE>
bankruptcy code, a ground lessee whose ground
lease is terminated 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 of the ground lease,
including any renewals, 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 LAWS MAY Due to changes in applicable building and
AFFECT ABILITY TO REPAIR zoning ordinances and codes affecting certain
OR RESTORE MORTGAGED of the mortgaged properties which have
PROPERTY come into effect after the construction of
such 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 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 NOT Substantially all of the mortgaged
DISCOVER ALL REQUIRED REPAIRS properties, by aggregate principal balance,
AND REPLACEMENTS were inspected by engineering firms at the time
the mortgage loans were originated or acquired
to assess:
o structure;
o exterior walls;
o roofing;
o interior construction;
o mechanical and electrical systems;
o general condition of the site; and
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<PAGE>
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.
LITIGATION ARISING OUT OF There may be legal proceedings pending and,
ORDINARY COURSE OF BUSINESS from time to time, threatened against a
MAY AFFECT THE TIMING AND/OR borrower or its affiliates relating to
PAYMENT ON YOUR CERTIFICATES the 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.
CERTAIN LOANS MAY REQUIRE Three of the mortgage loans, representing
PRINCIPAL PAYDOWNS WHICH 2.4% of the initial pool balance, may require
MAY REDUCE THE YIELD the related borrower to make partial
ON YOUR CERTIFICATES prepayments 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 prepayment may need to be made
during the mortgage loan's lockout period and
may not be accompanied by a yield maintenance
payment from the borrower. With respect to
prepayments on two such mortgage loans, 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. No yield
protection payment will be made with respect to
any prepayment on the remaining additional
collateral loan. See "Certain Characteristics
of the Mortgage Loans -- Certain Terms and
Conditions of the Mortgage Loans -- Mortgage
Loans which May Require Principal Paydowns."
RISKS RELATED TO THE OFFERED CERTIFICATES
THE TRUST FUND'S ASSETS MAY BE If the assets of the trust fund are
INSUFFICIENT TO ALLOW FOR insufficient to make payments on the
REPAYMENT IN FULL ON YOUR offered certificates, no other assets will be
CERTIFICATES available for payment of the deficiency.
PREPAYMENTS AND DEFAULTS MAY The yield to maturity on each class of
REDUCE THE YIELD ON YOUR certificates will depend in part on the
CERTIFICATES following:
o the purchase price for the certificates;
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<PAGE>
o the rate and timing of voluntary and
involuntary principal prepayments
(including repurchases by a mortgage loan
seller for breaches of representations 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 on the certificate, 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
principal distributions on the certificate,
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
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<PAGE>
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.
THE YIELD TO MATURITY ON THE CLASS A-X
CERTIFICATES WILL BE EXTREMELY SENSITIVE TO
THE PREPAYMENT AND LOSS EXPERIENCE 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 RECEIVE The servicer or the trustee, as applicable,
INTEREST ON ADVANCES MAY will be entitled to receive interest on
RESULT IN ADDITIONAL unreimbursed advances and unreimbursed
LOSSES TO THE TRUST FUND servicing expenses. This interest will
generally accrue from the date on which the
related advance is made or the related expense
is incurred through the date of reimbursement.
The right to receive such payments of interest
is senior to the rights of certificateholders
to receive distributions on the offered
certificates and, consequently, may result in
losses being allocated to the offered
certificates that would not have resulted
absent the accrual of such interest.
IF THE SERVICER OR SPECIAL The servicer or special servicer or an
SERVICER PURCHASES affiliate thereof may purchase any class of
CERTIFICATES, A CONFLICT certificates. It is anticipated that the
OF INTEREST COULD ARISE special servicer or an affiliate of the
BETWEEN ITS DUTIES special servicer will purchase all or a portion
AND ITS INTERESTS IN THE of the Class G, Class H, Class J, Class K,
CERTIFICATES Class L, Class M, Class N and Class O
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 interests of the controlling class (initially
INVESTORS 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,
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and appoint a successor special servicer
chosen by such holders without the consent of
the holders of any other certificates, the
trustee, the certificate administrator or the
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 THE Each class of offered certificates initially
CERTIFICATES MAY REQUIRE YOU TO will be represented by one or more
EXERCISE YOUR RIGHTS THROUGH DTC certificates registered in the name of Cede &
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 Agreement -- Reports to
Certificateholders; Available Information" and
notices only through the facilities of DTC and
its respective participants or from the
certificate administrator, if you have
certified to the certificate administrator that
you are a beneficial owner of offered
certificates (using the form annexed to the
pooling and servicing agreement). Upon
presentation of evidence satisfactory to the
certificate administrator 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 certificate
administrator.
YOU MAY BE BOUND BY THE ACTIONS In some circumstances, the consent or
OF OTHER CERTIFICATEHOLDERS approval of the holders of a specified
percentage of the certificates will be required
to direct, consent to or approve certain
actions, including amending the pooling and
servicing agreement. In these cases, this
consent or approval will be sufficient to bind
all holders of certificates.
LACK OF A SECONDARY MARKET FOR There currently is no secondary market for
THE CERTIFICATES MAY MAKE IT the offered certificates. Although the
DIFFICULT FOR CERTIFICATES MAY underwriters have advised the depositor that
MAKE IT DIFFICULT YOU TO RESELL they currently intend to make a secondary
YOUR CERTIFICATES market in the offered certificates, they are
under no obligation to do so. Accordingly,
there can be no assurance that a secondary
market for the offered certificates will
develop. Moreover, if a secondary market does
develop, there can be no assurance that it will
provide 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
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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.
COMPUTERIZED SYSTEMS MAY BE The transition from the year 1999 to the year
DISRUPTED BY TRANSITION TO YEAR 2000 may disrupt the ability of computerized
2000 WHICH MAY ADVERSELY AFFECT systems of the servicer, the special servicer,
PAYMENT ON YOUR CERTIFICATES the certificate administrator, 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.
If the servicer, the special servicer, the
certificate administrator, the trustee, DTC,
the borrowers or other third parties are not
year 2000 compliant, the ability of the
servicer and the special servicer, the
certificate administrator or the trustee to
service the mortgage loans and make
distributions to the certificateholders, as
the case may be, may be materially and
adversely affected.
Additionally, no independent investigation of
the computer systems of any borrower or any
tenant of a mortgaged property has been
completed. The operation of a borrower or a
tenant at a mortgaged property may be
dependent upon computer systems that are not
fully year 2000 compliant. In such case,
disruptions could occur in the borrower's
collection of rents and other income from such
mortgaged property, potentially resulting in
disruptions in the borrower's required
payments due in connection with such mortgage
loan.
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<PAGE>
DESCRIPTION OF THE MORTGAGE LOANS
GENERAL
The Trust Fund (as defined herein) will consist primarily of 153 fixed
rate loans, including a pari passu participation (the "L'Enfant Participation")
in a fixed rate loan, secured by 192 multifamily and commercial properties (the
"Mortgage Loans"). References to the Mortgage Loans and Mortgage Notes will
include the L'Enfant Participation. The Mortgage Loans will have an aggregate
principal balance of approximately $1,187,129,449 (the "Initial Pool Balance")
as of October 11, 1999 (the "Cut-off Date"), subject to a variance of plus or
minus 5%. For the purposes of this Prospectus Supplement, any Multi-Property
Loan (as defined herein) is considered to be one Mortgage Loan. Any loans made
to affiliated borrowers 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 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"). 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) 88.4% 185
Leasehold 11.6% 7
----- ---
TOTAL 100.0% 192
===== ===
</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 a
"Lodging Property," and any Mortgage Loan secured thereby, a "Hospitality Loan"
or a "Lodging Loan"), (v) an industrial property (an "Industrial Property," and
any Mortgage Loan secured thereby, an "Industrial Loan"), (vi) a residential
cooperative property (a "Residential Cooperative Property," and any Mortgage
Loan secured thereby, a "Residential Cooperative Loan"), (vii) a mixed
commercial cooperative property (a "Mixed Commercial Cooperative Property," and
any Mortgage Loan secured thereby, a "Mixed Commercial Cooperative Loan"),
(viii) mixed use properties (each, a "Mixed
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<PAGE>
Use Property" and any Mortgage Loan secured thereby, a "Mixed Use Loan") or
(ix) certain other properties, including but not limited to, self-storage
facilities, manufactured housing communities and parking facilities (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."
Ten Mortgage Loans, representing approximately 9.4% 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.
Fourteen Mortgage Loans, representing approximately 16.8% of the Initial
Pool Balance, are secured by two or more Mortgaged Properties, under a single
Mortgage Note by a single borrower.
Twenty Mortgage Loans, representing approximately 12.5% of the Initial
Pool Balance, which are not cross-collateralized, are loans to borrowers which
are under common ownership. See "Risk Factors -- Risks Related to the Mortgage
Loans -- Mortgage Loans to Related Borrowers May Result in More Severe Losses
on your Certificates."
None of the Mortgage Loans is insured or guaranteed by the United States,
any governmental agency or instrumentality, any private mortgage insurer or by
the Depositor, the Mortgage Loan Sellers, the Servicer, the Special Servicer,
the Certificate Administrator, the Custodian, 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.
Credit Suisse First Boston Mortgage Securities Corp. (the "Depositor")
will purchase the Mortgage Loans 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 either Credit Suisse First Boston Mortgage Capital LLC (the "CSFB
Mortgage Loan Seller") or Morgan Stanley Mortgage Capital Inc. (the "MS
Mortgage Loan Seller" and, collectively with the CSFB Mortgage Loan Seller, the
"Mortgage Loan Sellers"), 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 Loans (as defined below) were generally underwritten in
accordance with the underwriting criteria described under "-- CSFB Underwriting
Standards" below. The MS Mortgage Loans (as defined below) were generally
underwritten in accordance with the underwriting criteria described under "--
Morgan Stanley Mortgage Capital Inc. Underwriting Standards" below. The
Mortgage Loans which will be sold to the Depositor by the CSFB Mortgage Loan
Seller (the "CSFB Mortgage Loans") were originated or purchased by the CSFB
Mortgage Loan Seller. The Mortgage Loans which will be sold to the Depositor by
the MS Mortgage Loan Seller (the "MS Mortgage Loans") were originated or
purchased by the MS Mortgage Loan Seller. The Mortgage Loan Sellers are selling
the Mortgage Loans 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.
The Servicer will service the Mortgage Loans (other than the L'Enfant
Participation) pursuant to the Pooling and Servicing Agreement. The L'Enfant
Participation will be serviced by First Union National Bank, as servicer of the
1998-C2 Securitization, pursuant to the pooling and servicing agreement for the
1998-C2 Securitization.
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<PAGE>
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, the Credit Lease Loans (as defined herein) have the benefit of
Residual Value Policies (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, 28 Mortgaged Properties securing Mortgage
Loans representing 1.45% of the Initial Pool Balance, are covered by a blanket
insurance policy insuring against certain losses due to environmental
contamination. In addition, one Mortgaged Property securing a Mortgage Loan
representing 1.40% of the Initial Pool Balance, is covered by an insurance
policy insuring against certain environmental-related losses.
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 related Mortgage Loan Seller, as applicable, 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."
THE MORTGAGE LOAN SELLERS
Credit Suisse First Boston Mortgage Capital LLC
One hundred thirty Mortgage Loans, representing 86.5% of the Initial Pool
Balance, were sold to the Depositor by the CSFB Mortgage Loan Seller. The CSFB
Mortgage Loan Seller is a subsidiary of Credit Suisse First Boston, Inc.,
formed as a Delaware limited liability company to originate and acquire loans
secured by mortgages on commercial and multifamily real estate. Each of the
Mortgage Loans sold by the CSFB Mortgage Loan Seller to the Depositor was
purchased or originated by the CSFB Mortgage Loan Seller and underwritten or
re-underwritten by the CSFB Mortgage Loan Seller's underwriters. The principal
office of the CSFB Mortgage Loan Seller is located at 11 Madison Avenue, New
York, New York 10010. Its telephone number is (212) 325-2000.
Morgan Stanley Mortgage Capital Inc.
Twenty-three Mortgage Loans, representing 13.5% of the Initial Pool
Balance, were sold to the Depositor by the MS Mortgage Loan Seller. The MS
Mortgage Loan Seller is a subsidiary of Morgan Stanley & Co., Inc. formed as a
New York corporation to originate and acquire loans secured by mortgages on
commercial and multifamily real estate. Each of the MS Mortgage Loans sold by
the MS Mortgage Loan Seller to the Depositor was purchased or originated by the
MS Mortgage Loan Seller and underwritten by MS Mortgage Loan Seller
underwriters. The principal office of the MS Mortgage Loan Seller is located at
1585 Broadway, New York, New York 10036. Its telephone number is (212)
761-4700.
CSFB UNDERWRITING STANDARDS
General. One hundred thirty Mortgage Loans, representing 86.5% of the
Initial Pool Balance, were underwritten or re-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 CSFB 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,
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<PAGE>
restaurants and parking facilities were originated utilizing prudent
underwriting practices for mortgage loans secured by similar mortgaged
properties and may differ from the standards described below. With respect to
the Mortgage Loans which were acquired by 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, in
some cases without independent investigation. In some instances, one or more
provisions of the guidelines were waived or modified where it was determined
not to adversely affect the Mortgage Loans in any material respect. The
underwriting standards for the 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. An environmental site assessment was performed
with respect to each Mortgaged Property relating to a CSFB Mortgage Loan
generally within the twelve-month period preceding the origination of the
related CSFB Mortgage Loan. With respect to 28 Mortgaged Properties,
representing 1.67% of the aggregate Cut-off Date Principal Balance of the CSFB
Mortgage Loans, in lieu of performing an environmental assessment, the CSFB
Mortgage Loan Seller has obtained an insurance policy (i) indemnifying the
lender in an amount up to the outstanding principal balance of each related
Mortgage Loan for losses resulting from environmental contamination of the
related Mortgaged Properties and (ii) insuring the lender for clean-up costs,
among other things, of certain environmental contamination discovered on the
related Mortgaged Properties. In all cases, the environmental site assessment
was a "Phase I" environmental assessment, generally performed in accordance
with industry practice. In general, the environmental assessments contained no
recommendations for further significant environmental remediation efforts
which, if not undertaken, would have a material adverse effect on the related
Mortgage Loan. However, in certain cases, the assessment disclosed the
existence of or potential for adverse environmental conditions, generally the
result of the activities of identified tenants, adjacent property owners or
previous owners of the Mortgaged Property. In substantially all cases in which
material environmental risks were identified, the related borrowers were
required to establish operations and maintenance plans, monitor the Mortgaged
Property, abate or remediate the condition and/or provide additional security
such as letters of credit, indemnities, environmental damage insurance or
reserves. 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. See "Risk Factors -- Risks
Related to The Mortgage Loans -- Environmental Laws May Adversely Affect
Mortgaged Property Cashflow" in this prospectus supplement.
Property Condition Assessments. Inspections of substantially all of the
related Mortgaged Properties were conducted by engineering firms prior to
origination of the CSFB 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. With respect to 51
Mortgaged Properties, representing 53.3% of the aggregate Cut-off Date
Principal Balance of the CSFB Mortgage Loans, capital improvement or deferred
maintenance reserves were established to cover the cost of such repairs or
replacements.
Appraisals. An appraisal of each of the Mortgaged Properties relating to
the CSFB Mortgage Loans was performed. The appraisals generally were performed
by independent MAI appraisers and indicated that at the time of the respective
appraisals the aggregate value of the related Mortgaged Properties exceeded the
original principal amount of each 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
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<PAGE>
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 or
purchase of the CSFB 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 CSFB Mortgage Loans secured by Office Properties, Industrial Properties,
Retail Properties or Mixed Use Properties, a selection of major tenant leases.
In underwriting each CSFB Mortgage Loan, income and operating information
provided by the related borrower was examined by the originator of the CSFB
Mortgage Loan; provided, however, that, with respect to several of the CSFB
Mortgage Loans, the originator thereof or the related borrower engaged
independent accountants to review or perform certain procedures to verify such
information. Neither the Depositor nor the CSFB Mortgage Loan Seller makes any
representation as to the accuracy of such information.
Zoning and Building Code Compliance. The borrowers under the CSFB Mortgage
Loans generally have represented under the related Mortgage or loan agreement
and, 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, 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 -- Risks Related to the Mortgage
Loans -- Changes in Zoning Laws May Affect Ability To Repair or Restore
Mortgaged Property."
Seismic Review Process. In general, the underwriting guidelines applicable
to the origination of the CSFB Mortgage Loans required that prospective
borrowers seeking loans secured by properties located in California and other
areas thought to be prone to earthquake risk obtain a seismic engineering
report of the building and, based thereon and on certain statistical
information, an estimate of probable maximum loss ("PML"), that is, an estimate
of the loss that the property would sustain in a "worst case" earthquake
scenario. Generally, any proposed loan (i) which has an original principal
balance greater than $20,000,000 and as to which the property was estimated to
have a PML in excess of 15% of the estimated replacement cost of the
improvements or (ii) which has an original principal balance less than or equal
to $20,000,000 as to which the property was estimated to have a PML in excess
of 20% of the estimated replacement cost of the improvements would be
conditioned on receipt of satisfactory earthquake insurance. With respect to
all of the CSFB Mortgage Loans that had original principal balances of more
than $20,000,000 and that have a PML in excess of 15%, the borrowers obtained
earthquake insurance. With respect to substantially all of the CSFB Mortgage
Loans that have a PML in excess of 20%, the borrower obtained earthquake
insurance or, with respect to two such Mortgage Loans, the CSFB Mortgage Loan
Seller obtained a lenders' contingent earthquake insurance policy which insures
against losses caused by earthquakes in the amount in excess of the 20% up to
the PML as determined at origination.
Property Management. Generally, for CSFB Mortgage Loans (other than the
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 CSFB Mortgage Loan in connection with the origination of the
related Mortgage Loan. In most cases, amounts payable to the manager are
subordinated to payments required under 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. With respect to Mortgage Loans which represent 5% or
more of the aggregate outstanding principal balance of all of the Mortgage
Loans, no change in a manager may be effected by the Special Servicer unless
the Rating
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Agencies (as defined herein) have confirmed in writing that such change will
not, in and of itself, 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 -- Risks Related to the Mortgage
Loans -- Property Managers May Experience Conflicts of Interest in Managing
Multiple Properties."
Title Insurance Policy. Each borrower has provided, and the CSFB Mortgage
Loan Seller has obtained, a title insurance policy for each Mortgaged Property
relating to the CSFB Mortgage Loans. 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 relating to the CSFB Mortgage Loans. 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 and is subject to
substantial earthquake risk, 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. The borrowers under 96.7% of the CSFB Mortgage
Loans, by Cut-off Date Principal Balance, are single asset special purpose
entities; for purposes of the foregoing statement, each Residential Cooperative
Loan and Mixed Commercial Cooperative Loan was assumed to be a single asset
special purpose entity. In addition, in general, in connection with each CSFB
Mortgage Loan with an original principal balance in excess of $20 million and
the Credit Lease Loans, each borrower was required to be organized as a
bankruptcy-remote entity, a substantive non-consolidation opinion of counsel
was required to be delivered relating to such borrower and the CSFB Mortgage
Loan Seller has reviewed the organizational documents of the borrower to verify
compliance with such requirement.
DSCR and LTV Ratio. The CSFB Mortgage Loan Seller's underwriting standards
generally require, for all Mortgage Loans, minimum DSCR and LTV ratios for each
property type. The DSCR and LTV ratio for each CSFB Mortgage Loan is set forth
on Annex A hereto.
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 certain 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:
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<PAGE>
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 are required.
Taxes and Insurance -- One hundred fourteen Mortgage Loans, representing
98.5% of the aggregate Cut-off Date Principal Balance of the CSFB Mortgage
Loans, have reserves for taxes. One hundred six Mortgage Loans, representing
95.0% of the aggregate Cut-off Date Principal Balance of the CSFB Mortgage
Loans, have reserves for 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 are required.
Capital Item Reserves -- Eighty-seven Mortgage Loans, representing 84.8%
of the aggregate Cut-off Date Principal Balance of the CSFB Mortgage Loans,
have ongoing reserves for Capital Items (as defined below). Typically, deposits
based on the amount recommended on an annual basis pursuant to a property
condition report prepared for the CSFB Mortgage Loan Seller. The actual ongoing
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 -- Fifty-three
Mortgage Loans, representing 86.1% of the aggregate Cut-off Date Principal
Balance of the CSFB Mortgage Loans which are secured by Retail Properties,
Office Properties, Mixed Use Properties and Industrial Properties, have
up-front and/or ongoing reserves for tenant improvement and leasing
commissions. Typically, deposits are 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 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 property 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 the Credit
Lease Loans will be paid entirely from the rent due from the Tenant at the
related Credit Lease Property. The CSFB Mortgage Loan Seller generally requires
a DSCR of 1.00x and an as-leased LTV of 100%. When calculating the DSCR
guidelines with respect to the Credit Lease Loans, 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.
MORGAN STANLEY MORTGAGE CAPITAL INC. UNDERWRITING STANDARDS
General. Twenty-three Mortgage Loans, representing 13.5% of the Initial
Pool Balance, were underwritten by the MS Mortgage Loan Seller. The MS Mortgage
Loan Seller has implemented guidelines establishing certain procedures with
respect to underwriting mortgage loans. The MS Mortgage Loans generally were
originated in accordance with such guidelines.
Appraisals. In connection with the origination of the MS Mortgage Loans,
each related Mortgaged Property was appraised by an independent appraiser who,
generally, was a member of the Appraisal Institute. All such appraisals
complied with the real estate appraisal regulations issued jointly by the
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federal bank regulatory agencies under the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, as amended. In general, those appraisals
represent the analysis and opinion of the person performing the appraisal and
are not guarantees of, and may not be indicative of, present or future value.
There can be no assurance that another person would not have arrived at a
different valuation, even if such person used the same general approach to and
same method of valuing the property. Moreover, such appraisals sought to
establish the amount a typically motivated buyer would pay a typically
motivated seller. Such amount could be significantly higher than the amount
obtained from the sale of a Mortgaged Property under a distress or liquidation
sale. Information regarding the values of the Mortgaged Properties is presented
herein for illustrative purposes only.
Environmental Assessments. An environmental site assessment was performed
with respect to each Mortgaged Property generally within the twelve-month
period preceding the origination of the related MS Mortgage Loan. In all cases,
the environmental site assessment was a "Phase I" environmental assessment,
generally performed in accordance with industry practice. In general, the
environmental assessments contained no recommendations for further significant
environmental remediation efforts which, if not undertaken, would have a
material adverse effect on the related Mortgage Loan. However, in certain
cases, the assessment disclosed the existence of or potential for adverse
environmental conditions, generally the result of the activities of identified
tenants, adjacent property owners or previous owners of the Mortgaged Property.
In certain of such cases, the related borrowers were required to establish
operations and maintenance plans, monitor the Mortgaged Property, abate or
remediate the condition and/or provide additional security such as letters of
credit, environmental damage insurance or reserves. See "Risk Factors -- Risks
Related to The Mortgaged Loans -- Environmental Laws May Adversely Affect
Mortgaged Property Cash Flow" in this prospectus supplement.
Property Condition Assessments. The Mortgaged Properties were inspected in
connection with the origination of the related MS Mortgage Loan by a
representative of the MS Mortgage Loan Seller or by a third party professional
engaged by MS Mortgage Loan Seller. Furthermore, in each case, a licensed
engineer or consultant inspected the related Mortgaged Property in connection
with the origination of the related MS Mortgage Loan to assess the structure,
exterior walls, roofing, interior structure and mechanical and electrical
systems. In certain cases where material deficiencies were noted in such
reports, the related borrower was required to establish reserves for
replacement or repair or remediate the deficiency.
Seismic Review Process. In general, the underwriting guidelines applicable
to the origination of the MS Mortgage Loans required that prospective borrowers
seeking loans secured by properties located in California and areas of other
states where seismic risk is deemed material obtain a seismic engineering
report of the building and, based thereon and on certain statistical
information, an estimate of PML in an earthquake scenario. Generally, any of
the MS Mortgage Loans as to which the property was estimated to have a PML in
excess of 20% of the estimated replacement cost would either be subject to a
lower loan-to-value limit at origination, be conditioned on seismic upgrading
(or appropriate reserves or letter of credit for retrofitting), be conditioned
on satisfactory earthquake insurance or be declined.
Zoning and Building Code Compliance. The MS Mortgage Loan Seller took
steps to establish that the use and operation of the Mortgaged Properties that
represent security for MS Mortgage Loans were, at their respective dates of
origination, in compliance in all material respects with applicable zoning,
land-use and similar laws and ordinances, but no assurance can be made that
such steps revealed all possible violations. Evidence of such compliance may
have been in the form of legal opinions, confirmations from government
officials, title insurance endorsements, survey endorsements and/or
representations by the related borrower contained in the related loan
documents. Violations may exist at any particular Mortgaged Property, but the
MS Mortgage Loan Seller has informed the Depositor that it does not consider
any such violations known to it to be material.
S-53
<PAGE>
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
CREDIT LEASE LOANS
Two Mortgage Loans to affiliated borrowers, representing approximately
3.4% of the Initial Pool Balance (the "Credit Lease Loans") are secured by fee
mortgages and 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 Universal Commercial Credit Leasing V, Inc. (the "ACCOR
Credit Tenant" or the "Tenant") which is guaranteed by ACCOR S.A., a French
corporation ("ACCOR" or the "Guarantor"). ACCOR possesses a long term debt
rating of "BBB" with a negative outlook by S&P.
Except with respect to specified major casualties or in the event of a
condemnation which generally renders the related Credit Lease Property
unsuitable for restoration for continued use and occupancy in the Tenant's
business, neither of the Credit Leases provides the ACCOR Credit Tenant with
lease termination or rent abatement rights, and the ACCOR Credit Tenant is
required, at its expense, to maintain the Credit Lease Properties in good
repair. Upon the occurrence of a major casualty or condemnation of the Credit
Lease Property, the Tenant is required either to offer to purchase the related
Credit Lease Property for an amount at least equal to the Allocated Loan Amount
for such property or substitute a replacement property of equal or greater
value.
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 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. The borrowers under the Credit Lease Loans are
single-purpose, bankruptcy-remote entities. Each Credit Lease provides that the
Tenant must pay all real estate taxes levied or assessed against the related
Credit Lease Property and all charges for utility services, insurance and other
operating expenses incurred in connection with the operation of such Credit
Lease Property.
The Credit Lease Loans are not fully amortizing and require the payment of
Balloon Payments at maturity. Each Credit Lease Loan has the benefit of a
non-cancelable residual value insurance policy (a "Residual Value Policy") from
R.V.I. America Insurance Company, which had a claims paying rating of "AA-" by
DCR (as defined herein), "A" by Fitch (as defined herein), and "A" by S&P as of
the Cut-off Date. R.V.I. America Insurance Company is not rated by Moody's. 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 each Credit Lease, the Tenant is obligated to
surrender the related 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.
See "-- Significant Mortgage Loans -- The ACCOR Loans" below.
MULTIPLE NOTE LOANS
The Mortgage Loan identified on Annex A as Exchange Apartments (the
"Exchange Apartments Loan"), which represents 4.9% of the Initial Pool Balance,
is represented by a note which is one of two notes issued by the related
borrower, each secured by a first lien on the related Mortgaged Property. The
two notes together are referred to herein as the "Exchange Apartments Whole
Loan." The note which is an asset of the Trust Fund is referred to herein as
the "Exchange Apartments Trust Fund Note." The note in which the Trust Fund
owns no interest is referred to herein as the "Exchange Apartments Other Note."
In the event of losses on the Exchange Apartments Whole Loan, the Exchange
Apartments Other Note will be subordinate to the Exchange Apartments Trust Fund
Note. For additional important information relating to the Exchange Apartments
Loan, including the ownership of the Exchange
S-54
<PAGE>
Apartments Other Note and the servicing of the Exchange Apartments Loan, see
"-- Significant Mortgage Loans -- The Exchange Apartments Loan" and "The
Pooling and Servicing Agreement -- Servicing of the Mortgage Loans; Collection
of Payments" in this Prospectus Supplement.
The L'Enfant Participation, which represents 3.1% of the Initial Pool
Balance, is a participation in a note which is one of two pari passu notes
issued by the related borrower and secured by the related Mortgaged Property.
The two notes are collectively referred to herein as the "L'Enfant Whole Loan."
The note in which the Trust Fund owns a participation interest is referred to
herein as the "L'Enfant Trust Fund Note." The note in which the Trust Fund owns
no interest is referred to herein as the "L'Enfant Other Note." A pari passu
participation interest in the L'Enfant Trust Fund Note is being deposited in
this Trust Fund and the L'Enfant Other Note has been deposited in a
securitization sponsored by the Depositor known as Credit Suisse First Boston
Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates,
Series 1998-C2 (the "1998-C2 Securitization"). For additional important
information relating to the L`Enfant Whole Loan, including the servicing of the
L'Enfant Participation, see "-- Significant Mortgage Loans -- The L'Enfant
Participation" and "The Pooling and Servicing Agreement -- Servicing of the
Mortgage Loans; Collection of Payments" in this Prospectus Supplement.
Unless otherwise specified, references in this Prospectus Supplement to
the Exchange Apartments Loan and the L'Enfant Participation (as well as general
references to the Mortgage Loans insofar as such references describe the
Exchange Apartments Loan or the L'Enfant Participation) refer only to the
portion of the Whole Loan and the related Trust Fund Note deposited in this
Trust Fund. Proceeds and losses will be applied between the Trust Fund Note and
the related Other Note as described herein under "-- Significant Mortgage Loans
- -- The Exchange Apartments Loan" and "-- The L'Enfant Participation."
SIGNIFICANT MORTGAGE LOANS
Set forth below is a description of certain of the significant Mortgage
Loans and the related Mortgaged Property or Mortgaged Properties.
S-55
<PAGE>
EXCHANGE APARTMENTS
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE(1): ORIGINAL CUT-OFF DATE
----------- -------------
$58,000,000 $58,000,000
ORIGINATION DATE(2): December 23, 1997
INTEREST RATE: 7.75%
AMORTIZATION TERM: Interest only until February 2000;
then 336 Months
ARD: January 11, 2008
ARD BALANCE: $52,247,291
HYPERAMORTIZATION: After the ARD, interest rate
increases by 2.00% to 9.75% and a pro rata
portion of all excess cash flow is used to
reduce outstanding principal balance; the
additional 2% interest is deferred
until principal balance is zero
MATURITY DATE: January 11, 2027
BORROWER (SPECIAL
PURPOSE ENTITY): Broad Street LLC; managing member is
a special purpose entity, the board of
which contains an independent director; a
non-consolidation opinion was
obtained in connection with origination
CALL PROTECTION: Two-year prepayment lockout from the
date of securitization with U.S.
Treasury defeasance thereafter until six
months prior to the ARD
CUT-OFF DATE
LOAN PER SQUARE
FOOT(1): $142
LOAN PER UNIT(1): $168,116
UP-FRONT RESERVES(3): TI & LC: $150,000
ONGOING RESERVES: CapEx (per year): $69,000/$200 per
unit
TI & LC (per year)(3): $20,609/$.94
per sq. ft.
Real Estate Taxes &
Insurance Reserve: Yes(4)
LOCKBOX: Springing
MEZZANINE LOAN AND
PREFERRED EQUITY
INTEREST: Yes (see below)
</TABLE>
<PAGE>
PROPERTY INFORMATION
<TABLE>
<S> <C>
SINGLE ASSET/PORTFOLIO: Single asset
PROPERTY TYPE: Multifamily
LOCATION: New York, New York
YEAR BUILT/RENOVATED: 1902/1997
OCCUPANCY(5): 97%
COLLATERAL: One 21-story, 345 unit
Manhattan apartment building
(with 21,840 sq. ft. of retail
space)
FEE OR LEASEHOLD: Fee
SQUARE FOOTAGE (NRSF): 409,890
NUMBER OF UNITS: 345
PROPERTY MANAGEMENT: The Argo Corporation
1998 NET OPERATING INCOME: $7,861,360
UNDERWRITTEN NET CASH FLOW: $7,535,021
APPRAISED VALUE: $126,000,000
CUT-OFF DATE LTV(1): 46.0%
ARD LTV(1)(6): 41.5%
UNDERWRITTEN DSCR(1)(7)(8): 1.48x
</TABLE>
(1) For the Exchange Apartments Note A only.
(2) Six existing notes in the aggregate original principal amount of
$75,000,000 were consolidated on December 23, 1997. The consolidated note
was split into the Exchange Apartments Note A and Exchange Apartments
Note B on October 8, 1999.
(3) Tenant improvement and leasing commission reserves on retail space only.
(4) The Exchange Apartments Borrower is required to make monthly payments
into a tax and insurance escrow fund in an amount sufficient to
accumulate funds needed to pay (i) all taxes prior to their respective
due dates and (ii) insurance premiums prior to the expiration thereof.
(5) Residential occupancy based on the August 1999 rent roll.
(6) The ARD LTV takes into account the effect on the appraised value of the
related Mortgaged Property of the partial expiration of a tax abatement
on the Exchange Apartments Property.
(7) The Exchange Apartments Note A would have an underwritten debt service
coverage ratio on a net cash flow basis of 1.86x, if the calculations
were based on actual taxes (taking into account the tax abatement
described below) and inclusive of the $392,000 of annual income from a
signed lease for a portion of the Exchange Apartment Property's retail
space. The 1.48x underwritten debt service coverage presented includes
the actual total tax expense projected to be incurred during the
amortization term averaged over the number of years in the amortization
term and does not include income from the retail space.
(8) Calculated based on the amortizing debt service payments.
S-56
<PAGE>
THE EXCHANGE APARTMENTS LOAN
The Loan. The largest Mortgage Loan (the "Exchange Apartments Loan") was
originated by the CSFB Mortgage Loan Seller on December 23, 1997. The Exchange
Apartments Loan is evidenced by a note (the "Exchange Apartments Note A"),
which is one of two notes issued by the Exchange Apartments Borrower and
secured by the Exchange Apartments Property. The other note (the "Exchange
Apartments Note B") is not included in the Trust Fund and will initially be
retained by the CSFB Mortgage Loan Seller or an affiliate. The Exchange
Apartments Note A and the Exchange Apartments Note B are collectively referred
to herein as the "Exchange Apartments Whole Loan." The Exchange Apartments Note
B has a principal balance as of the Cut-off Date of $17,000,000.
All amounts received in respect of the Exchange Apartments Whole Loan will
be paid pro rata to the holders of the Exchange Apartments Note A and the
Exchange Apartments Note B unless there is an acceleration of the loan, at
which time such amounts will be allocated to the Exchange Apartments Note A
until the Exchange Apartments Note A is paid in full prior to being allocated
to the Exchange Apartments Note B. The Exchange Apartments Whole Loan may be
primarily serviced by a servicer appointed by the holder of the Exchange
Apartments Note B under the supervision of the Servicer and in accordance with
the provisions of the Pooling and Servicing Agreement. In the event that the
Exchange Apartments Loan becomes a Specially Serviced Mortgage Loan, the holder
of the Exchange Apartments Note B will have the right, for a period of 30 days
following the date on which such loan becomes a Specially Serviced Mortgage
Loan, to purchase the Exchange Apartments Note A from the Trust Fund at a price
equal to the Purchase Price, together with an amount equal to a specified yield
maintenance premium.
The Exchange Apartments Whole Loan is secured by a first priority lien
encumbering an apartment building located in New York, New York (the "Exchange
Apartments Property").
The Borrower. The Exchange Apartments Loan was made to Broad Street LLC
(the "Exchange Apartments Borrower"), a New York limited liability company. The
principals of the Exchange Apartments Borrower are Sonny Kahn, Russell Galbut
and Bruce Menin (collectively, the "Exchange Apartments Principals"). The
Exchange Apartments Principals are also the principals of Crescent Heights
Investments, one of the largest condominium conversion specialists in the
United States.
Certain additional information on the Exchange Apartments Loan and the
Exchange Apartments Property is set forth on Annex A hereto.
The Property. The Exchange Apartments Property consists of a 21-story
apartment building located at 25 Broad Street, New York, New York which was
constructed in 1902 and renovated in 1997. The building has 345 apartment
units, with a net rentable area of approximately 388,050 square feet. In
addition, there is approximately 21,840 square feet of retail space, of which
12,407 square feet is currently being renovated by an affiliate of the Exchange
Apartments Borrower for which a tenant is under lease and scheduled to open in
February 2000.
Tax Abatement. The Exchange Apartments Property is currently subject to a
tax abatement and a tax exemption under Section 421(g) of the New York State
Real Property Tax Law, under which real estate taxes payable with respect to
the improvements on the Exchange Apartments Property are 100% abated in each
year through 2005. Currently, taxes are payable for the current year with
respect to the property net of improvements, in the amount of approximately
$89,000 per annum. Beginning in 2006, such abatement will be reduced by 20% per
year for the ensuing 6 years.
Property Management. The Exchange Apartments Property is managed by The
Argo Corporation (the "Exchange Apartments Manager") pursuant to a management
agreement. The management agreement provides for the payment to the Exchange
Apartments Manager of management fees of 1.5% of gross revenues, which are
subordinated to payments under the Exchange Apartments Loan.
Mezzanine Loan. The Exchange Apartments Borrower is the borrower (the
"Exchange Apartments Mezzanine Loan Borrower") under a loan with an aggregate
principal balance as of the Cut-off Date of $6,000,000 (the "Exchange
Apartments Mezzanine Loan"), made by the Union Planters Bank, N.A. (the
"Exchange Apartments Mezzanine Lender"). The Exchange Apartments Mezzanine Loan
is secured by a pledge of 99% of the membership interests of the Exchange
Apartments Principals in the Exchange Apartments Borrower and is guaranteed by
Sonny Kahn and Russell Galbut. The Exchange Apartments Mezzanine Lender has
agreed not to transfer its interest in the Exchange Apartments Mezzanine Loan
to any entity other than certain permitted institutional transferees unless
each Rating Agency confirms that such
S-57
<PAGE>
transfer would not cause a withdrawal, qualification or downgrade of its then
current ratings on the Certificates. The Exchange Apartments Mezzanine Loan
matures on September 1, 2002 and bears interest at a per annum rate equal to
the prime rate plus 1%. As of the Cut-off Date, the aggregate LTV of the
Exchange Apartments Whole Loan and the Exchange Apartments Mezzanine Loan was
64.3%.
The Exchange Apartments Mezzanine Lender is entitled to cure any default
under the Exchange Apartments Loan within 10 business days following the
expiration of any cure period or within five business days after notice of any
payment default.
Additional Indebtedness. The Exchange Apartments Note B is secured by the
Exchange Apartments Property and is subordinate to the Exchange Apartments Note
A. See "-- The Loan" above.
S-58
<PAGE>
SELIG LOANS
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE(1): ORIGINAL CUT-OFF DATE
----------- --------------------
$51,150,000 $51,092,418
ORIGINATION DATE: April 27, 1999
INTEREST RATE: 7.99%
AMORTIZATION: 360 Months
ARD: May 11, 2009
ARD BALANCE(1): $45,936,007
HYPERAMORTIZATION: After the ARD, interest rate increases by
2.00% to 9.99% and all excess cash flow is
used to reduce outstanding principal
balance; the additional 2% interest is
deferred until principal balance is zero
MATURITY DATE: May 11, 2029
BORROWERS (SPECIAL
PURPOSE ENTITIES): Selig Real Estate Holdings Thirteen, LLC,
Selig Real Estate Holdings Fourteen, LLC
and Selig Real Estate Holdings Fifteen, LLC;
each has a managing member that is a special
purpose, bankruptcy remote entity, the board
of which includes an independent director;
non-consolidation opinions were obtained in
connection with origination
CALL PROTECTION: Two-year prepayment lockout from the date
of securitization with U.S. Treasury
defeasance thereafter until two months prior
to the ARD
CUT-OFF DATE
LOAN PER
SQUARE FOOT(1): $82
UP-FRONT RESERVES: Deferred Maintenance
Reserve: $ 25,388
Environmental Reserve: $ 1,875
TI & LC: $ 510,000
Per SF
--------------------
ONGOING RESERVES: CapEx (per year): $124,078 $0.20
TI & LC (per year): $880,000 $1.42
Real Estate Taxes &
Insurance Reserve(2): Yes
LOCKBOX: Hard
CROSS COLLATERALIZATION/
CROSS DEFAULT: Yes
PARTIAL DEFEASANCE: Yes; Release price of 125% of Property
Release Amount
MEZZANINE LOAN: Yes (see below)
</TABLE>
<PAGE>
PROPERTY INFORMATION
<TABLE>
<S> <C> <C> <C> <C>
SINGLE ASSET/
PORTFOLIO: Portfolio of 3 assets
PROPERTY TYPE: Office
LOCATION: Seattle, Washington area
YEAR BUILT: Third and Broad 1982
3131 Elliot Building 1986
Airborne Building 1984
OCCUPANCY(1)(3): 95%
COLLATERAL: Three office properties totaling 620,831
square feet
FEE OR LEASEHOLD: Fee
MAJOR % OF
PROPERTY TENANTS NRSF GLA EXPIRATION
- ------------------------- ----------- ---- ------ -------
Third and Broad Active
Voice
Corporation 130,441 50.6% 7/10/09
Muzak, Ltd. 43,324 16.8% 1/15/05
3131 Elliot Building Airborne
Freight
Corporation 129,505 70.0% 11/30/04
Emeritus
Corporation 26,871 14.5% 6/30/06
Airborne Building Airborne
Freight
Corporation 177,917 100% 11/30/04
SQUARE FOOTAGE(1): 620,831
PROPERTY
MANAGEMENT: Martin Selig Real Estate
1998 NET OPERATING
INCOME(1): $6,117,264
UNDERWRITTEN NET
CASH FLOW(1): $5,560,246
APPRAISED VALUE(1): $97,200,000
CUT-OFF DATE LTV(1): 52.6%
ARD LTV(1): 47.3%
UNDERWRITTEN
DSCR(1): 1.24x
</TABLE>
(1) For the Selig Loans in the aggregate.
(2) The Selig Borrowers are required to make monthly payments into a tax and
insurance escrow fund in an amount sufficient to accumulate funds needed
to pay (i) all taxes prior to their respective due dates and (ii)
insurance premiums prior to the expiration thereof.
(3) Based on the August/September 1999 rent rolls.
S-59
<PAGE>
THE SELIG LOANS
The Loans. Three cross-collateralized and cross-defaulted loans (the
"Selig Loans") collectively constitute the second largest concentration in the
Trust Fund. Each Selig Loan was made to a separate special purpose entity. The
Selig Loans were originated by the CSFB Mortgage Loan Seller on April 27, 1999.
The Selig Loans are secured by Mortgages encumbering the fee interests in three
office buildings (each, a "Selig Property" and collectively, the "Selig
Properties") located in the Seattle, Washington area.
The Borrowers. The Selig Loans were made to three borrowers (collectively,
the "Selig Borrowers"), each of which is a Washington limited liability
company. The principal of the Selig Borrower is Martin Selig (the "Selig
Principal"). The Selig Principal is the founder and sole proprietor of Martin
Selig Real Estate, one of the largest commercial real estate developers in the
Pacific Northwest.
Certain additional information on the Selig Loans and the Selig Properties
is set forth on Annex A hereto.
The Properties. The Selig Properties consist of three buildings located in
the Seattle, Washington area. The 3131 Elliot Building is a seven-story office
building and has a net rentable area of approximately 185,001 square feet. The
Airborne Building is an eight-story office building and has a net rentable area
of approximately 177,917 square feet. The Third and Broad property is a
six-story office building and has a net rentable area of approximately 257,913
square feet. Based on the Selig Borrowers' August/September 1999 rent rolls for
the Selig Properties, the Selig Properties had an approximate average rent per
square foot of $14.20.
Property Management. The Selig Properties are managed by Martin Selig Real
Estate (the "Selig Manager"), an affiliate of the Selig Borrowers, pursuant to
a management agreement. The management agreement provides for the payment to
the Selig Manager of management fees of 3% of gross revenues, which are
subordinated to payments under the Selig Loans. The Selig Manager may be
terminated (i) upon an event of default under the Selig Loans or the Selig
Mezzanine Loan (as defined below) or (ii) in the event of a default by the
Selig Manager under the management agreement. In the event the Trustee
terminates the Selig Manager, it is required to select a replacement manager
from a list agreed upon by the Selig Mezzanine Lender (as defined below).
Mezzanine Loan. Selig Real Estate Holdings Twelve, L.L.C., the regular
member of each of the Selig Borrowers and certain affiliates of the Selig
Principal, are the borrowers (collectively, the "Selig Mezzanine Borrower")
under a mezzanine loan with an aggregate principal balance as of the Cut-off
Date of $23,100,000 (the "Selig Mezzanine Loan"), made by Starwood Financial
Trust, a Maryland real estate investment trust (the "Selig Mezzanine Lender")
on April 27, 1999. The Selig Mezzanine Loan is secured by a pledge of the
regular membership interests in each of the Selig Borrowers and by the equity
of certain other special purpose real estate borrowers (the "Other Equity
Collateral"). As of the Cut-off Date, the aggregate LTV of the Selig Loan and
the Selig Mezzanine Loan (allocating a portion of the Selig Mezzanine Loan
based upon the respective appraised values of the Selig Properties and the
Other Equity Collateral) was 63.1%. The Selig Mezzanine Lender has agreed not
to transfer its interest in the Selig 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 Selig Mezzanine Loan matures
on April 27, 2004 and bears interest at a per annum rate equal to 15%. The
Selig Mezzanine Loan fully amortizes by its maturity date.
The Selig Mezzanine Loan requires payments of principal, including 75%
(the "Sweep Percentage") of the excess cash flow from each of the Selig
Properties after payment of certain expenses (including debt service and
reserves under the Selig Loans and certain loans to affiliates of the Selig
Borrowers). Following reduction of the outstanding principal balance of the
Selig Mezzanine Loan to $10,000,000, provided no event of default exists under
the Selig Mezzanine Loan and the DSCR is at least 1.2x, the Sweep Percentage
will be reduced to 50%. Furthermore, until such time as certain post-closing
obligations with respect to the Selig Mezzanine Loan are satisfied, the Sweep
Percentage is equal to 80%.
The Selig Mezzanine Lender is entitled to cure any default under the Selig
Loans within the cure period for such default or within two business days after
notice of any payment default.
Litigation. The Selig Borrower is involved in a dispute with Diamond
Parking, Inc. (the "Parking Operator") which operates a parking lot on the
Selig Properties, relating to the right to operate the parking facilities. The
Trustee has the right to require the Selig Borrower to escrow on a monthly
basis the amount that the Trustee determines is necessary to pay the Parking
Operator all sums owed the Parking Operator. The Selig Borrowers and the
Parking Operator are currently in settlement negotiations and no funds have
been escrowed to date in respect of this dispute.
S-60
<PAGE>
TALLAHASSEE MALL
<TABLE>
<S> <C> <C>
LOAN INFORMATION
PRINCIPAL BALANCE: ORIGINAL CUT-OFF DATE
----------- --------------------
$48,000,000 $47,937,104
ORIGINATION DATE: July 1, 1999
INTEREST RATE: 8.60%
AMORTIZATION: 360 Months
ARD: July 11, 2009
ARD BALANCE: $43,551,339
HYPERAMORTIZATION: After the ARD, interest rate increases by
2.00% to 10.60% and all excess cash flow
is used to reduce outstanding principal
balance; the additional 2% interest is
deferred until principal balance is zero
MATURITY DATE: July 11, 2029
BORROWER (SPECIAL
PURPOSE ENTITY): Tallahassee Mall Partners, Ltd.; managing
general partner is a special purpose,
bankruptcy remote corporation, the board
of which includes an independent director;
a non-consolidation opinion was obtained
in connection with origination
CALL PROTECTION: Two-year prepayment lockout from the
date of securitization with U.S. Treasury
defeasance thereafter until two months
prior to the ARD
CUT-OFF DATE
LOAN PER SQUARE
FOOT: $49
UP-FRONT RESERVES: Deferred
Maintenance: $195,500
Environmental approximately
Escrow(1): $290,000
Ground Lease
Reserve: $36,667
TI & LC(2): $1,535,620
Roof Repair
Reserve(3): $875,000
Per SF
------
ONGOING RESERVES: CapEx (per year): $146,100 $0.15
Real Estate Taxes &
Insurance Reserve(4): Yes
TI & LC(2): Yes
Ground Lease
Reserve:(5) Yes
LOCKBOX: Hard
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO: Single asset
PROPERTY TYPE: Anchored Retail
LOCATION: Tallahassee, FL
YEAR BUILT/RENOVATED: 1971/1996
OCCUPANCY(6): 96%
COLLATERAL: Leasehold mortgage on a regional
mall
FEE OR LEASEHOLD: Leasehold
GROUND LEASE(7): The Property is subject to a ground
lease which expires on February 28,
2044; one 20 year extension option
LEASE
MAJOR TENANTS NRSF % OF GLA EXPIRATION
- ---------------------------- --------- ---------- --------
Dillard's 203,660 20.9% 01/31/03
Parisian 114,869 11.8% 05/31/07
Burlington Coat Factory(8) 101,888 10.5% 03/31/02
AMC Theater 69,213 7.1% 09/30/16
Goody's 66,110 6.8% 01/31/02
SQUARE FOOTAGE: 973,973
PROPERTY MANAGEMENT: Jones Lang LaSalle Americas, Inc.
1998 NET OPERATING
INCOME: $3,700,054
UNDERWRITTEN NET CASH
FLOW: $5,153,369
APPRAISED VALUE: $68,400,000
CUT-OFF DATE LTV: 70.1%
ARD LTV: 63.7%
UNDERWRITTEN DSCR: 1.15x
</TABLE>
(1) See "-- Certain Environmental Matters" below.
(2) The leasing reserve fund established at closing must be maintained at
$300,000 during the term of the Tallahassee Mall Loan. If such reserve
falls below $300,000, the Tallahassee Mall Borrower must escrow monthly
the lesser of $30,000 or the amount required to replenish the reserve to
the $300,000 level.
(3) The Tallahassee Mall Borrower funded an initial $875,000 roof repair
reserve fund at closing and is required to fund $3,700 monthly until the
reserve reaches $1,097,000 (125% of the estimated cost of the roof repair)
or until all roof repairs indicated in the engineer's report are
completed.
(4) The Tallahassee Mall Borrower is required to make monthly payments into a
tax and insurance escrow fund in an amount sufficient to accumulate funds
needed to pay (i) all taxes prior to their respective due dates and (ii)
insurance premiums prior to the expiration thereof.
(5) The Tallahassee Mall Borrower is required to escrow monthly one-twelfth
of annual ground rent.
(6) Based on the July 1999 rent roll.
(7) See "Risk Factors -- Risk Related to the Mortgage Loans -- Leasehold
Interests Are Subject to the Terms of the Ground Lease" in this
Prospectus Supplement for a discussion of certain matters associated with
ground leases.
(8) It is anticipated that Burlington Coat Factory will be in occupancy by
December 1, 1999. See "-- The Property" below.
S-61
<PAGE>
THE TALLAHASSEE MALL LOAN
The Loan. The third largest Mortgage Loan (the "Tallahassee Mall Loan")
was originated by the CSFB Mortgage Loan Seller on July 1, 1999. The
Tallahassee Mall Loan is secured by a first priority lien encumbering a
leasehold interest in certain land located in Tallahassee, Florida and the fee
interest in one building located thereon (the "Tallahassee Mall Property").
The Borrower. The Tallahassee Mall Loan was made to Tallahassee Mall
Partners, Ltd. (the "Tallahassee Mall Borrower"), a Florida limited
partnership. The principal of the Tallahassee Mall Borrower is Gregory R.
Greenfield (the "Tallahassee Mall Principal"). The Tallahassee Mall Principal
and its affiliates have managed and leased more than 41 million square feet of
retail space.
Certain additional information on the Tallahassee Mall Loan and the
Tallahassee Mall Property is set forth on Annex A hereto.
The Property. The Tallahassee Mall Property consists of one retail mall
building located at the intersection of John Knox Road and U.S. Route 27 in
Tallahassee, Florida. The mall, which was constructed in 1971 and renovated in
1996, varies from one-story to two-stories in height and has a net rentable
area of approximately 973,973 square feet. Based on the Tallahassee Mall
Borrower's October 1999 rent rolls for the Tallahassee Mall Property and its
1998 year end sales figures,
the Tallahassee Mall Property had an approximate average rent per square foot
of $18.50 and in-line tenant occupancy cost of 9%.
As of the Cut-off Date, Burlington Coat Factory Warehouse Corporation
("Burlington"), an anchor tenant, was completing the renovation of its space
and was not yet in occupancy. It is anticipated that Burlington will be in
occupancy by December 1, 1999. Burlington acquired its lease of space in the
Tallahassee Mall Property at the auction of such lease by the predecessor
tenant, which auction was conducted as part of a bankruptcy proceeding relating
to such predecessor tenant. The order of the bankruptcy court approving
assignment of such lease by the bankrupt predecessor tenant to Burlington
provides that Burlington is required to commence operations on or about January
1, 2000, which may be extended if Burlington has used reasonable efforts to
commence operations. The Tallahassee Mall Borrower's lease agreement with
Parisian, Inc. ("Parisian"), another anchor tenant, provides that in the event
that Burlington fails to open for business by the date required pursuant to the
aforesaid court order (which includes court approved extensions), Parisian is
entitled to assert certain claims, including reduction in rent, against the
Tallahassee Mall Borrower relating to the breach of co-tenancy requirements set
forth in Parisian's lease, which claims, if successfully made by Parisian,
would have an adverse impact on the rental income generated by the Tallahassee
Mall Property.
Certain Environmental Matters. The Phase I environmental site assessment
with respect to the Tallahassee Mall Property performed by Earth Tech, Inc.,
dated May 10, 1999, in connection with the Tallahassee Mall Borrower's
financing of the Tallahassee Mall Property, noted soil and groundwater
contamination relating to a gasoline station formerly located on the
Tallahassee Mall Property. The report recommends (and the applicable loan
documents require) remediation of the contamination. At the origination of the
Tallahassee Mall Loan, an environmental reserve was assigned to the lender
which represented 125% of the estimated cost to cure the above-referenced
environmental concerns. As of the Cut-off Date, approximately $290,000 remained
in the environmental escrow fund.
Property Management. The Tallahassee Mall Property is managed by Jones
Lang LaSalle Americas, Inc., a Maryland corporation (the "Tallahassee Mall
Manager"), pursuant to a management agreement. The management agreement
generally provides for the payment to the Tallahassee Mall Manager of
management fees of 3.0% of gross revenues. The Tallahassee Mall Manager may be
terminated (i) upon an event of default under the Tallahassee Mall Loan, (ii)
if the DSCR for the Tallahassee Mall Loan falls below 1.05x or (iii) in the
event of a default by the Tallahassee Mall Manager under the management
agreement. The Tallahassee Mall Borrower has also entered into an advisory
agreement with Gregory Greenfield & Associates, Ltd., a Florida limited
partnership and an affiliate of the Tallahassee Mall Principal, which provides
for payment of an annual advisory fee equal to 0.45% of the appraised value of
the Tallahassee Mall Property.
S-62
<PAGE>
ACCOR LOANS
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE(1): ORIGINAL CUT-OFF DATE
----------- -------------
$40,986,486 $40,282,058
ORIGINATION DATE: July 20, 1998
INTEREST RATE:
California North 6.721%
Mountain 6.684%
AMORTIZATION:
California North 337 Months
Mountain 290 Months
BALLOON PAYMENT(1)(2): $15,055,200
HYPERAMORTIZATION: Not Applicable
MATURITY DATE: March 11, 2019
BORROWER (SPECIAL
PURPOSE ENTITIES): California North S9, LLC and
Mountain
S9, LLC; each has a managing
member that is a special purpose,
bankruptcy remote entity, the board of
which contains an independent
director; non-consolidation opinions were
obtained in connection with origination
CALL PROTECTION: Two-year prepayment lockout from the
date of securitization with U.S. Treasury
defeasance thereafter until three months
prior to the maturity
CUT-OFF DATE
LOAN PER ROOM(1): $32,910
LOCKBOX: Hard
CROSS COLLATERALIZATION/
CROSS DEFAULT: Yes
CREDIT: ACCOR, S.A. (rated BBB by S&P
with a negative outlook)
PARTIAL RELEASE: In the event of a major
casualty or condemnation or if any
mortgaged property becomes economically
obsolete,as described below under "--
Release and Substitution of Properties"
COMPANY DESCRIPTION: ACCOR is a global hospitality
and travel group with over 3,000
hotels and with activities in tourism,
institutional catering, service vouchers and
auto rental
</TABLE>
<PAGE>
PROPERTY INFORMATION
<TABLE>
<S> <C> <C>
SINGLE ASSET/PORTFOLIO: Portfolio of 11 Motel 6
Properties
PROPERTY TYPE: Credit Lease
COLLATERAL: Two bondable master leases
secured by first mortgage
liens on two pools consisting of
11
Motel 6 Hotels
FEE OR LEASEHOLD: Fee
YEAR BUILT/
PROPERTY RENOVATED NO. OF UNITS
- ------------------------------------ ----------- -------------
Victorville, CA 1986/1997 62
Turlock, CA 1978/1998 101
Pittsburg, CA 1980/1996 174
Mojave, CA 1986/1997 121
Big Bear Lake, CA 1981/1997 121
Fort Collins, CO 1978/1997 126
Wheat Ridge, CO 1980/1999 92
Coeur D'Alene, ID 1978/1997 109
Santa Rosa, NM 1978/1998 90
Raton, NM 1977/1999 103
Woods Cross, UT 1990/NA 125
NUMBER OF ROOMS: 1,224(1)
PROPERTY MANAGEMENT: Universal Commercial
Credit V, Inc.
UNDERWRITTEN LEASE
PAYMENT(1): $3,366,237
APPRAISED VALUE (AS LEASED)(1): $40,840,000
APPRAISED VALUE (AS DARK)(1): $34,160,000
CUT-OFF DATE LTV (AS LEASED): Not Applicable
CUT-OFF DATE LTV (AS DARK)(1): 118.0%
UNDERWRITTEN DSCR: Not Applicable
</TABLE>
(1) For the ACCOR Loans in the aggregate
(2) The ACCOR Loans do not fully amortize over the term. The Balloon Payment
due at maturity is fully insured with a residual value insurance policy
provided by R.V.I. America Insurance Company. See "-- Residual Value
Insurance Policy" below.
S-63
<PAGE>
THE ACCOR LOANS
The Loan. Two cross-collateralized and cross-defaulted loans
(collectively, the "ACCOR Loans") collectively constitute the fourth largest
concentration in the Trust Fund. The ACCOR Loans were originated by the CSFB
Mortgage Loan Seller on July 20, 1998. The ACCOR Loans are secured by mortgages
encumbering the fee interests in 11 hotel properties (each, an "ACCOR Credit
Lease Property" and collectively, the "ACCOR Credit Lease Properties") and
assignments of leases and rents on the ACCOR Credit Lease Properties (which are
guaranteed by ACCOR).
The Borrowers. The ACCOR Loans were made to California North S9 LLC and to
Mountain S9 LLC (collectively, the "ACCOR Credit Lease Borrowers"), each of
which is a Delaware limited liability company. Each of the ACCOR Credit Lease
Borrowers leases property to an indirect subsidiary of ACCOR. The principal of
the ACCOR Credit Lease Borrowers is Barry B. Scherr. Mr. Scherr is a principal
of the Sundar Corporation, an active market participant in credit tenant
property financing, which has been involved in numerous sale/leaseback
transactions.
Certain additional information on the ACCOR Loans and the ACCOR Credit
Lease Properties is set forth on Annex A hereto.
The Properties. The ACCOR Loans are secured by 11 ACCOR Credit Lease
Properties located in California, Colorado, Idaho, New Mexico and Utah. Each
ACCOR Credit Lease Property is improved by a Motel 6 hotel.
The Credit Leases, the Tenant and the Subtenant. The Tenant under the
ACCOR Credit Leases is Universal Commercial Credit Leasing V, Inc. (the "ACCOR
Credit Tenant"), a Delaware corporation and indirect subsidiary of ACCOR, S.A.,
a French corporation ("ACCOR"). The ACCOR Credit Tenant has subleased each of
the ACCOR Credit Lease Properties to Motel 6. The obligations of the ACCOR
Credit Tenant under the ACCOR Loans are unconditionally guaranteed by ACCOR.
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, and also
operates one of the largest business travel agency networks and Europe's
largest car rental operation. In its 1998 annual report, ACCOR reported
revenues of 5.623 billion euros. Reported earnings before income tax,
depreciation and amortization were reported at 949 million euros in 1998.
In a 1999 mid-year report, ACCOR reported six-month sales of 2.854 billion
euros (an increase of 4.4% from the comparable period in 1998). ACCOR also
reported that net debt increased from 1.834 billion euros at December 31, 1998
to 2.439 billion euros at June 30, 1999. ACCOR has a long-term issuer rating of
"BBB" with a negative outlook by S&P.
The ACCOR Credit Lease Properties have been leased by the ACCOR Credit
Lease Borrowers under separate lease agreements (the "ACCOR Credit Leases").
See "Certain Characteristics of the Mortgage Loans -- Credit Lease Loans" in
this Prospectus Supplement.
Residual Value Insurance Policy. The ACCOR Loans have the benefit of
non-cancelable residual value insurance policies (each, a "Residual Value
Policy") from R.V.I. America Insurance Company, which had a claims paying
rating of "AA-" by DCR, "A" by Fitch and "A" by S&P as of the Cut-off Date.
R.V.I. America Insurance Company is not rated by Moody's. The Residual Value
Policies insure the ACCOR Credit Lease 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 premiums on the Residual Value Policies
were paid in full at the origination of the Credit Lease Loans.
Property Management. The loan documents do not require the ACCOR Credit
Lease Borrower to maintain a property manager for the ACCOR Credit Lease
Properties.
Release and Substitution of Properties. Releases and substitutions of
ACCOR Credit Lease Properties may occur in connection with (i) a major casualty
or condemnation of an ACCOR Credit Lease Property or (ii) after July 2003,
economic obsolescence of an ACCOR Credit Lease Property. In such event, the
ACCOR Credit Tenant is required either to offer to purchase the related ACCOR
Credit Lease Property for an amount sufficient to purchase defeasance
collateral to defease a portion of the ACCOR Loan equal to the allocated loan
amount for such property or substitute a replacement property of equal or
greater value. Each release or substitution will be subject to certain
conditions including confirmation by the Rating Agencies that such release or
substitution would not cause a downgrade, qualification or withdrawal of the
then-current ratings assigned to any Class of Certificates.
S-64
<PAGE>
Furthermore, provided no event of default has occurred, at any time after
July 2003, under each ACCOR Credit Lease, the ACCOR Credit Tenant has the right
to substitute up to two mortgaged properties, provided the substituted property
has a fair market value at least equal to that of the replaced property,
subject to approval by the borrower, which approval may not be unreasonably
withheld. Each such substitution will additionally be subject to certain
conditions, including confirmation by the Rating Agencies that such
substitution would not cause a downgrade, qualification or withdrawal of the
then-current rating assigned to any Class of Certificates. The ACCOR Credit
Tenant also has an option to purchase all (but not less than all) the ACCOR
Credit Lease Properties related to either of the ACCOR Loans during certain
specified periods during the primary term of the Credit Leases for an amount
sufficient to purchase defeasance collateral to defease in full the related
Mortgage Loan.
S-65
<PAGE>
HATO REY TOWER
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE: ORIGINAL CUT-OFF DATE
------------- ---------------------
$38,800,000 $38,774,229
ORIGINATION DATE: September 13, 1999
INTEREST RATE: 8.05%
AMORTIZATION: 360 Months
ARD: September 11, 2009
ARD BALANCE: $34,745,284
HYPERAMORTIZATION: After the ARD, interest rate increases by
2.00% to 10.05% and all excess cash flow
is used to reduce outstanding principal
balance; the additional 2% interest is
deferred until principal balance is zero
MATURITY DATE: September 11, 2029
BORROWER (SPECIAL
PURPOSE ENTITY): Apollo Hato Rey, L.P.; general partner is
a special purpose, bankruptcy remote
corporation, the board of which contains
an independent director; a non-
consolidation opinion was obtained in
connection with origination
CALL PROTECTION: Two-year prepayment lockout from the
date of securitization with U.S. Treasury
defeasance thereafter until two months
prior to the ARD
CUT-OFF DATE
LOAN PER SQUARE FOOT: $112
UP-FRONT RESERVES: Deferred
Maintenance(1): $ 667,083
Other(2): $ 3,663,000
Per SF
------
ONGOING RESERVES: CapEx (per year): $87,562 $0.25
TI & LC (per year): $340,469 $0.98
Real Estate Taxes &
Insurance Reserve(3): Yes
LOCKBOX: Hard
</TABLE>
<PAGE>
PROPERTY INFORMATION
<TABLE>
<S> <C> <C> <C>
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Office
LOCATION: San Juan, Puerto Rico
YEAR BUILT: 1972
OCCUPANCY(4): 98%
COLLATERAL: One 23-story, 346,231 square
foot
office property (with ancillary
730 space parking garage)
FEE OR LEASEHOLD: Fee
% OF LEASE
MAJOR TENANTS NRSF GLA EXPIRATION
- -------------------------------- -------- ------ -------
Banco Popular
de Puerto Rico(5) 55,529 16.0% 6/30/05
Banco de Desarrollo
Economico 42,984 12.4% 5/31/01
Axtmayer Adsuar
Muniz & Goyco 27,863 8.1% 8/31/04
SQUARE FOOTAGE: 346,231
PROPERTY MANAGEMENT: Insignia Commercial Group, Inc.
1998 NET OPERATING INCOME: $4,967,425
UNDERWRITTEN NET CASH FLOW: $4,292,362
APPRAISED VALUE: $52,500,000
CUT-OFF DATE LTV: 73.9%
ARD LTV: 66.2%
UNDERWRITTEN DSCR: 1.25x
</TABLE>
(1) The deferred maintenance reserve is required to fund certain repairs,
including the replacement of certain ventilation and air conditioning
systems and the repaving of the parking facilities at the Hato Rey Tower
Property.
(2) At closing a leasing achievement reserve was established of $3,663,000
which will be released upon lease extensions or renewals for certain
tenants and/or upon delivery of qualified substitute leases.
(3) The Hato Rey Tower Borrower is required to make monthly payments into a
tax and insurance escrow fund in an amount sufficient to accumulate funds
needed to pay (i) all taxes prior to their respective due dates and (ii)
insurance premiums prior to the expiration thereof.
(4) Based on the September 1999 rent roll.
(5) Banco Popular de Puerto Rico has the right to terminate its lease every
two years during the term thereof.
S-66
<PAGE>
THE HATO REY TOWER LOAN
The Loan. The fifth largest Mortgage Loan (the "Hato Rey Tower Loan") was
originated by the CSFB Mortgage Loan Seller on September 13, 1999. The Hato Rey
Tower Loan is secured by a first priority lien encumbering one office building
located in San Juan, Puerto Rico (the "Hato Rey Tower Property").
The Borrower. The Hato Rey Loan was made to Apollo Hato Rey, L.P. (the
"Hato Rey Tower Borrower"), a Delaware limited partnership. The key principals
of the Hato Rey Tower Borrower are Apollo Real Estate Investment Fund III,
L.P., a Delaware limited partnership, and First Americas Partners LLC, a New
York limited liability company.
Certain additional information on the Hato Rey Tower Loan and the Hato Rey
Tower Property is set forth on Annex A hereto.
The Property. The Hato Rey Tower Property consists of one 23-story office
building and an associated 730 space parking facility located at 268 Munoz
Rivera Avenue in San Juan, Puerto Rico. The Hato Rey Tower Property was
constructed in 1972 and has net rentable area of approximately 346,231 square
feet. Based on the Hato Rey Tower Borrower's September 1, 1999 rent rolls for
the Hato Rey Tower Property, the Hato Rey Tower Property had an approximate
average rent per square foot of $19.46. The Department of Transportation and
Public Works is constructing an elevated mass transit system called Urban
Train, which is anticipated to pass along Sotomayor Street, which is adjacent
to the Hato Rey Tower Property.
Property Management. The Hato Rey Tower Property is managed by Insignia
Commercial Group, Inc. (the "Hato Rey Tower Property Manager") pursuant to a
management agreement. The management agreement generally provides for the
payment to the Hato Rey Tower Property Manager of management fees of 3% of
gross revenues, which are subordinated to payments under the Hato Rey Tower
Loan. The Hato Rey Tower Property Manager is also the Borrower's exclusive
leasing agent for the Hato Rey Tower Property under the terms of the management
agreement, which provides for a market-rate schedule of leasing commissions.
The Hato Rey Tower Property Manager may be terminated as managing and leasing
agent (i) upon an event of default under the Hato Rey Tower Loan, (ii) if the
DSCR for the Hato Rey Tower Loan falls below 1.20x at any quarter end for the
trailing twelve-month period ending at such quarter end, or (iii) in the event
of a default by the Hato Rey Tower Property Manager under the management
agreement.
S-67
<PAGE>
L'ENFANT PLAZA
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE(1): ORIGINAL CUT-OFF DATE
----------- -------------
$37,500,000 $37,204,671
ORIGINATION DATE: September 18, 1998
INTEREST RATE: 7.64%
AMORTIZATION: 360 Months
ARD: October 11, 2008
ARD BALANCE(1): $33,249,718
HYPERAMORTIZATION: After the ARD, interest rate increases by
2.00% to 9.64% and a pro rata portion of
all excess cash flow is used to reduce
outstanding principal balance; the
additional 2% interest is deferred until
principal balance is zero
MATURITY DATE: October 11, 2028
BORROWER (SPECIAL
PURPOSE ENTITY): Potomac Creek Associates, L.P.; general
partner is a single purpose, bankruptcy
remote entity, the board of which
contains an independent director; a
non-consolidation opinion was obtained
in connection with origination
CALL PROTECTION: Two-year prepayment lockout from the
date of securitization with U.S. Treasury
defeasance thereafter until two months
prior to the ARD
CUT-OFF DATE
LOAN PER UNIT(9): $133 Per Square Foot on Office Component
$83,660 Per Room on Hotel Component
UP-FRONT RESERVES: CapEx(2): $10,000,000
Large Lease Escrow
Fund(3): $ 8,000,000
Small Lease Escrow
Fund(3): $ 2,000,000
ONGOING RESERVES: CapEx(2): Yes
Monthly Large Lease
Escrow Fund (per
annum)(3)(5): $ 1,000,000
Monthly Small Lease
Escrow Fund (per
annum)(3)(6): $ 2,000,000
Real Estate Taxes &
Insurance(4): Yes
LOCKBOX: Hard
MEZZANINE LOAN AND
PREFERRED EQUITY
INTEREST: Yes (see below)
PARTIAL DEFEASANCE: Yes (Release price of 125% of Property
Release Amount).
</TABLE>
<PAGE>
PROPERTY INFORMATION
<TABLE>
<S> <C> <C> <C>
SINGLE ASSET/PORTFOLIO: Portfolio of 3 mixed use
buildings
PROPERTY TYPE: Mixed Use
LOCATION: Washington, DC
YEAR BUILT/RENOVATED: L'Enfant -- North
Building (400
10th Street SW) 1968/1990
L'Enfant -- East
Building (480
L'Enfant Plaza SW) 1972/1990
L'Enfant -- Center
Building (420 10th
Street SW) 1972/1990
OCCUPANCY(7): 97% (Office Component)
81% (Hotel Component)
COLLATERAL: Secured by one office property
(consisting of three buildings)
and one hotel property
FEE OR LEASEHOLD: Fee and Leasehold(8)
% OF LEASE
MAJOR TENANTS (OFFICE) NRSF GLA EXPIRATION
- ----------------------------- --------- ---- ---------
General Service
Administration 287,179 32.3% 06/30/01
US Postal Service 139,270 15.7% 06/11/08
SQUARE FOOTAGE (OFFICE): 889,438
NUMBER OF ROOMS (HOTEL): 370
PROPERTY MANAGEMENT: Sarakreek Management Partners
LLC (Office Portion)
Loews Hotel, Inc. (Hotel
Portion)
1998 NET OPERATING
INCOME(9): $20,289,597
UNDERWRITTEN NET CASH
FLOW(9): $17,748,918
APPRAISED VALUE: $226,000,000
CUT-OFF DATE LTV(9): 65.9%
ARD LTV(9): 58.9%
UNDERWRITTEN DSCR(9): 1.39x
</TABLE>
(1) For L'Enfant Participation only.
(2) 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 in an amount equal to the greater of (i)
$34,953 per month, and (ii) the amount per month required for the
maintenance and repair of the L'Enfant Property as determined by an
engineering report reasonably satisfactory to the CSFB Mortgage Loan
Seller. As of the Cut-off Date, $4,699,302 was on deposit in the capital
expenditure reserve.
(3) As of the Cut-off Date, an aggregate of $5,023,923 was on deposit in such
accounts.
(4) The L'Enfant Borrower is required to make monthly payments into a tax and
insurance escrow fund in an amount sufficient to accumulate funds needed
to pay (i) all taxes prior to their respective due dates and (ii)
insurance premiums prior to the expiration thereof.
(5) The L'Enfant Borrower is required to fund such account monthly until
September 11, 2001.
(6) The L'Enfant Borrower is required to fund such account monthly commencing
on October 11, 2001.
(7) Based on the August 1999 rent roll for the office component and on the
L'Enfant Borrower's operating statement dated August 31, 1999 for the
hotel component.
(8) The L'Enfant Borrower has a lease with the District of Columbia
Redevelopment Land Agency for the portion of space over and under a
street that runs through the L'Enfant Property; such lease expires in
2064.
(9) Applies to L'Enfant Whole Loan.
S-68
<PAGE>
THE L'ENFANT PARTICIPATION
The Participation. The sixth largest Mortgage Loan is a 50% participation
(the "L'Enfant Participation") in a mortgage note ("L'Enfant Note B") which
represents a portion of a mortgage loan (the "L'Enfant Whole Loan") which was
originated by the CSFB Mortgage Loan Seller on September 18, 1998. The L'Enfant
Whole Loan, including L'Enfant Note B, is secured by a first priority lien
encumbering three buildings located in L'Enfant Plaza in Washington, D.C. (the
"L'Enfant Property"). The L'Enfant Whole Loan consists of Note A ("L'Enfant
Note A") and L'Enfant Note B. L'Enfant Note A has a principal balance as of the
Cut-off Date of $74,409,342 and L'Enfant Note B has a principal balance as of
the Cut-off Date of $37,204,671. Neither the L'Enfant Note A nor the
participation in the remaining 50% of L'Enfant Note B is included in the Trust
Fund. Such remaining 50% participation in the L'Enfant Note B will initially be
retained by the CSFB Mortgage Loan Seller or an affiliate of the CSFB Mortgage
Loan Seller. L'Enfant Note A is held by the trustee of the Depositor's
Commercial Mortgage Pass-Through Certificates, Series 1998-C2 (the "1998-C2
Securitization"). The trustee of the 1998 C-2 Securitization is Norwest Bank
Minnesota, National Association, which will also act as Certificate
Administrator. The L'Enfant Note B is subject to an intercreditor agreement
(the "L'Enfant Intercreditor Agreement") with the trustee of the 1998-C2
Securitization in which the holder of the L'Enfant Note B is named as co-lender
and the trustee of the 1998-C2 Securitization is named as lead lender. All
amounts received in respect of the L'Enfant Participation will be allocated
between L'Enfant Note A and L'Enfant Note B pro rata in accordance with the
amounts due thereunder. The servicer of the 1998-C2 Securitization will make
all servicing decisions with respect to the L'Enfant Note B, including the
L'Enfant Participation, and the special servicer of the 1998-C2 Securitization
(which is currently Lennar Partners, Inc., the initial Special Servicer) will
specially service L'Enfant Note B, including the L'Enfant Participation, in the
event it becomes a Specially Serviced Mortgage Loan, in each case with a view
toward maximizing recovery to the Certificateholders and the holders of
L'Enfant Note A and L'Enfant Note B. The L'Enfant Intercreditor Agreement
requires that all amounts due under the L'Enfant Note B be paid to the Trustee,
as holder of the L'Enfant Note B (except that the servicer or special servicer
of the 1998-C2 securitization is entitled to retain a ratable portion of
amounts owed such servicer or special servicer on account of property advances
and special servicing fees relating to the L'Enfant Whole Loan). The
participation agreement pursuant to which the L'Enfant Participation was
created provides that the Trustee will allocate amounts received on account of
the L'Enfant Note B among the Trust and the holder of the remaining 50%
participation in the L'Enfant Note B. L'Enfant Note A and L'Enfant Note B are
cross-collateralized and cross-defaulted.
The Borrower. The L'Enfant Whole Loan was made to Potomac Creek Associates
LP (the "L'Enfant Borrower"), a Delaware limited partnership. The principal of
the L'Enfant Borrower is Sarakreek Holdings N.V., a publicly traded Netherlands
corporation that holds interests in commercial real estate in the United
States.
Certain additional information on the L'Enfant Participation 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 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 East Building contains the 370 room
Loews 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 Center Building 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.
Property Management. The L'Enfant Property (excluding that portion of the
L'Enfant Property which is operated by the Hotel Manager (as defined below)) 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 Whole Loan, including the L'Enfant
Participation. The L'Enfant Manager may be terminated (i) upon an event of
default under the L'Enfant Whole Loan or the L'Enfant Mezzanine Loan (as
defined below), (ii) if the DSCR for the L'Enfant Whole 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.
S-69
<PAGE>
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 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) 10.235%. As of the Cut-off Date, the aggregate LTV of the
L'Enfant Participation and the L'Enfant Mezzanine Loan was 67%.
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) 10.235% 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 Participation). 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 Participation, 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 Participation, 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 Whole 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 L'Enfant Mezzanine Lender is entitled to cure any default under the
L'Enfant Whole Loan within the cure period for such default or within two days
after notice of any payment default.
S-70
<PAGE>
HOLIDAY INN -- BROADWAY
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE ORIGINAL CUT-OFF DATE
----------- --------------------
$36,000,000 $35,962,109
ORIGINATION DATE: October 27, 1998
INTEREST RATE: 8.50%
AMORTIZATION: 300 Months
ARD: September 11, 2009
ARD BALANCE: $30,035,151
HYPERAMORTIZATION: After the ARD, interest rate increases by
2.00% to 10.50% and all excess cash flow
is used to reduce outstanding principal
balance; the additional 2% is deferred
until principal balance is zero
MATURITY DATE: September 11, 2024
BORROWER (SPECIAL
PURPOSE ENTITY): Herald Hotel Associates, L.P.; general
partner is a special purpose, bankruptcy
remote entity, the board of which
contains an independent director; a
non-consolidation opinion was obtained
in connection with origination
CALL PROTECTION: Two-year prepayment lockout from the
date of securitization with U.S. Treasury
defeasance thereafter until three months
prior to the ARD
CUT-OFF DATE
LOAN PER ROOM: $67,797
UP-FRONT RESERVES: Ground Lease
Reserve: $ 148,000
FF&E Reserve: $ 140,150
Per Unit
--------
ONGOING RESERVES: CapEx (per year): $6,300 $11.84
Real Estate Taxes &
Insurance Reserve(1): Yes
Ground Lease
Reserve(2): Yes
FF&E Reserve(3): Yes
LOCKBOX: Springing
ADDITIONAL
INDEBTEDNESS(4): Indebtedness to an affiliate
</TABLE>
<PAGE>
PROPERTY INFORMATION
<TABLE>
<S> <C>
SINGLE ASSET/PORTFOLIO: Single asset
PROPERTY TYPE: Hotel
LOCATION: New York, New York
YEAR BUILT/RENOVATED: 1898/1998
OCCUPANCY(5): 76%
COLLATERAL: Leasehold mortgage on one 18
story, 531 room hotel property.
FEE OR LEASEHOLD: Leasehold
GROUND LEASE(6): Subject to a ground lease that
expires September 22, 2088
NUMBER OF ROOMS: 531
PROPERTY MANAGEMENT: Thurcon Properties, Ltd
1998 NET OPERATING INCOME: $3,702,429
UNDERWRITTEN NET CASH FLOW: $6,735,830
APPRAISED VALUE: $82,000,000
APPRAISED VALUE PER ROOM: $154,426
CUT-OFF DATE LTV: 43.9%
ARD LTV: 36.7%
UNDERWRITTEN DSCR: 1.92x
</TABLE>
(1) The Holiday Inn -- Broadway Borrower is required to make monthly payments
into a tax and insurance escrow fund in an amount sufficient to
accumulate funds needed to pay (i) all taxes prior to their respective
due dates and (ii) insurance premiums prior to the expiration thereof.
(2) The Holiday Inn -- Broadway Borrower is required to escrow monthly
one-twelfth of the annual ground rent.
(3) The Holiday Inn -- Broadway Borrower is required to fund FF&E reserves
monthly in the amount of 3.0% of the gross revenues of the hotel in the
first year and in the amount of 4.0% of the gross revenues of the hotel
thereafter.
(4) A non-interest bearing unsecured loan from affiliates in an amount of
$3,059,290, subject to a subordination and standstill agreement. See "--
Additional Indebtedness" below.
(5) According to the Broadway Holiday Inn Borrower's operating statement
dated July 31, 1999.
(6) See "Risk Factors -- Risks Related to the Mortgage Loans -- Leasehold
Interests are subject to the Terms of the Ground Lease" in this
Prospectus Supplement for a discussion of certain matters associated with
ground leases.
S-71
<PAGE>
THE HOLIDAY INN -- BROADWAY LOAN
The Loan. The seventh largest Mortgage Loan (the "Holiday Inn -- Broadway
Loan") was originated by the CSFB Mortgage Loan Seller on October 27, 1998. The
Holiday Inn -- Broadway Loan has a principal balance as of the Cut-off Date of
$36,000,000, which represents approximately 3.0% of the Initial Pool Balance.
The Holiday Inn -- Broadway Loan is secured by a first priority lien
encumbering a leasehold interest in one building located in New York, New York
(the " Holiday Inn -- Broadway Property").
The Borrower. The Holiday Inn -- Broadway Loan was made to Herald Hotel
Associates, L.P. (the "Holiday Inn -- Broadway Borrower"), a New York limited
partnership. The principal of the Broadway Holiday Inn Borrower is Harold
Thurman, a New York area real estate developer.
Certain additional information on the Holiday Inn -- Broadway Loan and the
Holiday Inn -- Broadway Property is set forth on Annex A hereto.
The Property. The Holiday Inn -- Broadway Property consists of a hotel
building located at 1260 Broadway, New York, New York. The Holiday Inn --
Broadway Property is an 18-story 531 room hotel. Based on the Holiday Inn --
Broadway Borrower's July 31, 1999 financial statements for the Holiday Inn --
Broadway Property, the Holiday Inn -- Broadway Property had an approximate
average rent per room of $151.12.
Property Management. The Holiday Inn -- Broadway Property is managed by
Thurcon Properties, Ltd. (the " Holiday Inn -- Broadway Manager") pursuant to a
management agreement. The management agreement provides for the payment to the
Holiday Inn -- Broadway Manager of management fees of 5% of gross revenues,
which are subordinated to payments under the Holiday Inn -- Broadway Loan. The
Holiday Inn -- Broadway Manager may be terminated (i) upon an event of default
under the Holiday Inn -- Broadway Loan, (ii) in the event of a default by the
Holiday Inn -- Broadway Manager under the management agreement, or (iii) if the
DSCR for the Holiday Inn -- Broadway Loan falls below 1.15x at any time after
April 2000, provided that the Holiday Inn -- Broadway Manager may not be
terminated if the Holiday Inn -- Broadway Manager defeases in part the
outstanding principal balance of the Holiday Inn -- Broadway Loan by delivery
of sufficient defeasance collateral in accordance with the terms of the Holiday
Inn -- Broadway Loan Documents such that after such defeasance the DSCR is
restored to a level of at least 1.25x.
The Holiday Inn -- Broadway Property is operated as a Holiday Inn
(Registered Trademark) pursuant to a License Agreement (the " Holiday Inn --
Broadway License Agreement"), dated June 26, 1996, with Holiday Inns
Franchising Inc. (the "Holiday Inn -- Broadway Licensor"). The Holiday Inn --
Broadway License Agreement has a term of 20 years. Pursuant to the Holiday Inn
- -- Broadway License Agreement, the Holiday Inn -- Broadway Borrower is required
to pay the Holiday Inn -- Broadway Licensor a royalty of 5% of gross revenues,
a marketing contribution of 1.5% of gross revenues, a reservation contribution
of 1% of gross revenues, a monthly reservation fee of $6.43 per room and
various other fees.
Additional Indebtedness. The Holiday Inn -- Broadway Borrower is the
obligor under an unsecured subordinate loan (the " Holiday Inn -- Broadway
Subordinate Loan") from its affiliates representing advances for construction
costs and working capital. The Holiday Inn -- Broadway Subordinate Loan is for
$3,059,290 and is non-interest bearing and is not payable until the Holiday Inn
- -- Broadway Loan has been paid in full. The Holiday Inn -- Broadway Subordinate
Loan is fully subordinate to the Holiday Inn -- Broadway Loan. A subordination
and standstill agreement is in place between the subordinate lender and the
holder of the Holiday Inn -- Broadway Loan.
S-72
<PAGE>
SCHOLASTIC BUILDING
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE: ORIGINAL CUT-OFF DATE
----------- -------------
$34,000,000 $33,965,600
ORIGINATION DATE: August 4, 1999
INTEREST RATE: 8.38%
AMORTIZATION: 360 Months
ARD: August 11, 2009
ARD BALANCE: $30,688,510
HYPERAMORTIZATION: After the ARD, interest rate increases
by 2.00% to 10.38% and all excess cash
flow is used to reduce outstanding principal
balance; the additional 2% interest is
deferred until principal balance is
zero
MATURITY DATE: August 11, 2029
BORROWER (SPECIAL
PURPOSE ENTITY): ISE 555 Broadway, LLC; non-managing
member is a single purpose, bankruptcy
remote entity, the board of which
contains an independent director; a
non-consolidation opinion was obtained
in connection with origination
CALL PROTECTION: Two-year prepayment lockout from the
date of securitization with U.S.
Treasury defeasance thereafter until one month
prior to the ARD
CUT-OFF DATE
LOAN PER SQUARE FOOT: $151
UP-FRONT RESERVES: Deferred
Maintenance: $ 28,750
Environmental
Reserve: $ 3,750
ONGOING RESERVES: CapEx (per year)(1): No
TI & LC(1): No
Real Estate Taxes &
Insurance Reserve(2): Yes
LOCKBOX: Hard
</TABLE>
<PAGE>
PROPERTY INFORMATION
<TABLE>
<S> <C> <C> <C>
SINGLE ASSET/PORTFOLIO: Single asset
PROPERTY TYPE: Office
LOCATION: New York, New York
YEAR BUILT/RENOVATED: 1889/1990
OCCUPANCY: 100%
COLLATERAL: One 12-story, 225,000
square foot office property
FEE OR LEASEHOLD: Fee
% OF LEASE
MAJOR TENANTS NRSF GLA EXPIRATION
- ---------------------------- --------- ---- -------
Scholastic, Inc. 221,000 98.2% 7/31/29
SQUARE FOOTAGE: 225,000
PROPERTY MANAGEMENT: CB Richard Ellis, Inc.
1998 NET OPERATING
INCOME: $3,915,932
UNDERWRITTEN NET
CASH FLOW: $4,632,600
APPRAISED VALUE: $44,000,000
CUT-OFF DATE LTV: 77.2%
ARD LTV: 69.8%
UNDERWRITTEN DSCR: 1.49x
</TABLE>
(1) No funds for tenant improvements, leasing commissions, or replacements
and repairs are escrowed. If Scholastic's long term rating falls below
BBB, it is required to deposit approximately $455,000 per annum to a cash
collateral account as a tenant improvements, leasing commission, and
repair and replacement reserve. Commencing on the ARD, the Scholastic
Building Borrower is required to deposit approximately $26,000 per month
into a cash collateral account to fund the Scholastic Building Borrower's
obligation to make a work allowance payment of $1.75 million to
Scholastic on July 1, 2014.
(2) The Scholastic Building Borrower is required to make monthly payments
into a tax and insurance escrow fund in an amount sufficient to
accumulate funds needed to pay (i) all taxes prior to their respective
due dates and (ii) insurance premiums prior to the expiration thereof.
S-73
<PAGE>
THE SCHOLASTIC BUILDING LOAN
The Loan. The eighth largest Mortgage Loan (the "Scholastic Building
Loan") was originated by the CSFB Mortgage Loan Seller on August 4, 1999. The
Scholastic Building Loan is secured by a first priority lien encumbering one
office building with ancillary retail use in New York, New York (the
"Scholastic Building Property").
The Borrower. The Scholastic Building Loan was made to ISE 555 Broadway,
LLC, a New York limited liability company (the "Scholastic Building Borrower").
The principal of the Scholastic Building Borrower is Hikonobu Ise who is the
principal of Ise America, Inc., one of the largest egg producers in the world.
Certain additional information on the Scholastic Building Loan and the
Scholastic Building Property is set forth on Annex A hereto.
The Property. The Scholastic Building Property consists of one office
building located at 555 Broadway in New York, New York. The Scholastic Building
Property is a 12-story office building and has net rentable area of
approximately 225,000 rentable square feet and is substantially fully leased at
an initial annual lease rent per square foot of $19 pursuant to a 30-year
triple net lease to Scholastic, Inc. ("Scholastic"), a wholly-owned principal
operating subsidiary of Scholastic Corp. the long term senior unsecured debt
obligations of which are rated "BBB" with a negative outlook by S&P and "Baa2"
by Moody's. Scholastic Corp. guarantees the obligations of Scholastic under the
related lease.
Property Management. The Property is managed by CB Richard Ellis, Inc.
(the "Scholastic Building Property Manager") pursuant to a management agreement
with Scholastic. The management agreement provides for the payment to the
Scholastic Building Property Manager of management fees of $6,833.34 per month
(with periodic increases). The Scholastic lease is a triple net lease and
provides that as long as Scholastic occupies 102,500 square feet of office
space at the Scholastic Building Property and maintains a senior long term debt
credit rating of at least "BB+" by S&P, Scholastic is required to retain the
Scholastic Building Property Manager or another property manager meeting
specified requirements. If at any time Scholastic does not maintain the
required occupancy level or credit rating, the Scholastic Building Borrower may
replace the Scholastic Building Manager (a "Substitute Manager"). Under the
Scholastic Building Loan documents, the Scholastic Building Borrower is
permitted to exercise its right to replace the property manager only at the
direction of the Servicer and provided that (a) the Substitute Manager's fee is
(i) subordinate to the payments under the Scholastic Building Loan and (ii)
less than or equal to 2% of the then-current fixed rent under Scholastic's
lease, and (b) the Substitute Manager may be terminated (i) upon an event of
default under the Scholastic Building Loan, (ii) if the Scholastic Building
Loan DSCR falls below 1.10x or (iii) upon any event of default by the
Substitute Manager under its management agreement.
S-74
<PAGE>
BLUE HILLS OFFICE PARK
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE: ORIGINAL CUT-OFF DATE
----------- ---------------------
$33,149,000 $33,149,000
ORIGINATION DATE: September 14, 1999
INTEREST RATE: 8.49%
AMORTIZATION: 360 Months
ARD: October 11, 2009
ARD BALANCE: $29,994,367
HYPERAMORTIZATION: After the ARD, interest rate increases by
2.00% to 10.49% and all excess cash flow
is used to reduce outstanding principal
balance; the additional 2% interest is
deferred until principal balance is zero
MATURITY DATE: October 11, 2029
BORROWER (SPECIAL
PURPOSE ENTITY): Blue Hills Office Park LLC; single
member and a non-member manager,
each of which is a special purpose,
bankruptcy remote entity, the board of
which contains an independent director; a
non-consolidation opinion was obtained
in connection with origination
CALL PROTECTION: Two-year prepayment lockout from the
date of securitization with U.S. Treasury
defeasance thereafter until six months
prior to the ARD
CUT-OFF DATE
LOAN PER SQUARE FOOT: $121
UP-FRONT RESERVES: TI & LC: $125,000
Per Unit
--------
ONGOING RESERVES: CapEx (per year): $54,773 $0.20
TI & LC (per year)(1): Yes
Real Estate Taxes &
Insurance Reserve(2): Yes
LOCKBOX: Hard
</TABLE>
<PAGE>
PROPERTY INFORMATION
<TABLE>
<S> <C> <C> <C>
SINGLE ASSET/PORTFOLIO: Single asset
PROPERTY TYPE: Office
LOCATION: Canton, MA
YEAR BUILT/RENOVATED: 1970/1985
OCCUPANCY: 100%
COLLATERAL: One 273,863 square foot office
property
FEE OR LEASEHOLD: Fee
% OF LEASE
MAJOR TENANT NRSF NRA EXPIRATION(3)
- ---------------------------- --------- -- -------------
Bank Boston N.A.(4) 263,245 96% July 31, 2004
SQUARE FOOTAGE: 273,863
PROPERTY MANAGEMENT: Fineberg Management, Inc.
1998 NET OPERATING
INCOME: $4,020,488
UNDERWRITTEN NET CASH
FLOW: $3,667,346
APPRAISED VALUE: $42,000,000
CUT-OFF DATE LTV: 78.9%
ARD LTV: 71.4%
UNDERWRITTEN DSCR: 1.20x
</TABLE>
(1) A base leasing escrow reserve is funded at $119,135 per annum and a cash
flow leasing escrow is funded to the extent of excess cash flow after
payment of debt service, required reserves and operating expenses (to a
maximum of $630,864 per annum) subject to a maximum on both reserve
accounts of $4.25 million. The Blue Hills Borrower is entitled to a
release of funds from both reserves subject to meeting certain criteria,
including investment grade leases that extend three years beyond the ARD
and a DSCR for the Blue Hills Loan of at least 1.20x.
(2) The Blue Hills Borrower is required to make monthly payments into an
insurance escrow fund and quarterly payments into a tax escrow fund in an
amount sufficient to accumulate funds needed to pay (i) all taxes prior
to their respective due dates and (ii) insurance premiums prior to the
expiration thereof.
(3) Lease is triple net and has a five-year extension option at 90% of fair
market rental value.
(4) Bank Boston N.A. is rated A+ by DCR and A by S&P. Bank Boston N.A. is not
rated by Fitch or Moody's.
S-75
<PAGE>
THE BLUE HILLS LOAN
The Loan. The ninth largest Mortgage Loan (the "Blue Hills Loan") was
originated by the CSFB Mortgage Loan Seller on September 14, 1999. The Blue
Hills Loan is secured by a first priority lien encumbering one office building
located in Canton, Massachusetts (the "Blue Hills Property").
The Borrower. The Blue Hills Loan was made to Blue Hills Park LLC (the
"Blue Hills Borrower"), a Delaware limited liability company. The key
principals of the Blue Hills Borrower are Gerald Fineberg and William
Langelier. In 1973, Mr. Langelier founded the Langelier Company, Inc., which
specializes in providing equity capital for developers of subsidized
multifamily housing projects. Mr. Fineberg (the principal of the Fineberg
Companies) has been active in the ownership and management of commercial real
estate properties since the 1960's.
Certain additional information on the Blue Hills Loan and the Blue Hills
Property is set forth on Annex A hereto.
The Property. The Blue Hills Property consists of one office building
located at 150 Royall Street, Canton, Massachusetts. The Blue Hills Property is
a two-story office building which was constructed in 1970 and renovated in 1985
and has a net rentable area of approximately 273,863 square feet. Based on the
Blue Hills Borrower's September 1999 rent roll, the Blue Hills Property is
fully occupied at an approximate average rent per square foot of $15.30
pursuant to a triple net lease to Bank Boston N.A. which expires on July 31,
2004.
Property Management. The Blue Hills Property is managed by Fineberg
Management, Inc. (the "Blue Hills Manager") pursuant to a management agreement.
The management agreement provides for the payment to the Blue Hills Manager of
management fees of up to 5% of base rent, which are subordinated to the
payments under the Blue Hills Loan. The Blue Hills Manager may be terminated
upon the occurrence of an event of default under the Blue Hills Loan.
S-76
<PAGE>
150 WILLIAM STREET
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE: ORIGINAL CUT-OFF DATE
----------- --------------------
$30,000,000 $29,440,579
ORIGINATION DATE: May 15, 1998
INTEREST RATE: 7.175%
AMORTIZATION: 300 Months
ARD: June 11, 2008
ARD BALANCE: $24,133,242
HYPERAMORTIZATION: After the ARD, interest rate increases by
2.00% to 9.175% and all excess cash flow
is used to reduce outstanding principal
balance; the additional 2% interest is
deferred until principal balance is zero
MATURITY DATE: June 11, 2023
BORROWER (SPECIAL
PURPOSE ENTITY): 150 William Street Associates L.P.;
general partner is a single purpose,
bankruptcy remote entity, the board of
which contains an independent director;
a non-consolidation opinion was obtained
in connection with the origination
CALL PROTECTION: Two-year prepayment lockout from the
date of securitization with U.S. Treasury
defeasance thereafter until four months
prior to the ARD
CUT-OFF DATE
LOAN PER SQUARE FOOT: $62
Per SF
------
ONGOING RESERVES: TI & LC (per year): $480,000 $1.16
Real Estate Taxes &
Insurance Reserve: Yes(1)
LOCKBOX: Springing
</TABLE>
<PAGE>
PROPERTY INFORMATION
<TABLE>
<S> <C>
SINGLE ASSET/PORTFOLIO: Single asset
PROPERTY TYPE: Office
LOCATION: New York, NY
YEAR BUILT/RENOVATED: 1927/1998
OCCUPANCY(2): 98%
COLLATERAL: One 19-story, 477,572 square
foot office property (with
ancillary retail space).
</TABLE>
<TABLE>
<CAPTION>
LEASE
MAJOR TENANTS NRSF % OF GLA EXPIRATION
- ------------------- --------- ---------- -----------
<S> <C> <C> <C>
The City of
New York -
Children's
Services
Administration 418,434 87.6% 09/30/08
The City of
New York -
Office of Court
Administration 15,000 3.1% 02/28/01
Strand II
Corp. 13,992 2.9% 08/31/06
</TABLE>
<TABLE>
<S> <C>
SQUARE FOOTAGE (NRSF): 477,572
PROPERTY MANAGEMENT: Braun Management, Inc.
1998 NET OPERATING INCOME(3): $1,177,594
UNDERWRITTEN NET CASH FLOW: $3,102,994
APPRAISED VALUE: $40,700,000
CUT-OFF DATE LTV: 72.3%
ARD LTV: 59.3%
UNDERWRITTEN DSCR: 1.20x
</TABLE>
(1) The 150 William Street Borrower is required to make monthly payments into
a tax and insurance escrow fund in an amount sufficient to accumulate
funds needed to pay (i) all taxes prior to their respective due dates and
(ii) insurance premiums prior to the expiration thereof.
(2) Based on August 1999 rent roll.
(3) The property underwent a $6,000,000 renovation during 1997 and 1998,
resulting in occupancy increasing from 44.5% in December 1997 to 98% in
August 1999.
S-77
<PAGE>
THE 150 WILLIAM STREET LOAN
The Loan. The tenth largest Mortgage Loan (the "150 William Street Loan")
was originated by the CSFB Mortgage Loan Seller on May 15, 1998. The 150
William Street Loan is secured by a first priority lien encumbering one
building located in New York, New York (the "150 William Street Property").
The Borrower. The 150 William Street Loan was made to 150 William Street
Associates L.P. (the "150 William Street Borrower"), a New York limited
partnership. The principal of the 150 William Street Borrower is Moses Marx, a
real estate investor with substantial real estate holdings in New York City.
Certain additional information on the 150 William Street Loan and the 150
William Street Property is set forth on Annex A hereto.
The Property. The 150 William Street Property consists of one office
building located at 150 William Street, New York, New York. The 150 William
Street Property is a 19-story office building and has net rentable area of
approximately 477,572 rentable square feet. Based on the August 1999 Borrower's
rent rolls for the 150 William Street Property, the 150 William Street Property
had an approximate average rent per square foot of $17.00.
Property Management. The 150 William Street Property is managed by Braun
Management Inc., (the "150 William Street Manager"), an affiliate of the 150
William Street Borrower. The management agreement provides for a payment to the
150 William Street Manager of 4% of gross revenues, which are subordinated to
payments under the 150 William Street Loan. The 150 William Street Manager may
be terminated upon the occurrence of an event of default under the 150 William
Street Loan and the Servicer may require the appointment of an independent
property manager, reasonably satisfactory to Servicer. If the DSCR for the 150
William Street Loan falls below 1.15x, the 150 William Street Manager will not
be entitled to receive a management fee until the DSCR is 1.15x or greater for
two consecutive months.
S-78
<PAGE>
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 -- CSFB Underwriting Standards" and "--
Morgan Stanley Mortgage Capital Inc. Underwriting Standards."
With respect to the Mortgage Loan identified on Annex A as Investor's
Business Daily (the "Investor's Business Daily Loan"), which represents 1.3% of
the Initial Pool Balance, Phase I and Phase II environmental site assessments
by Environmental Partners, Inc. ("EPI") were completed on the related property
(the "Investor's Business Daily Property") in July 1999. EPI recommended that
twelve drums that likely contain ink be properly disposed of. An escrow was
established at closing in an amount equaling 125% of the estimated cost to
verify the contents of the drums and to remove them from the Investor's
Business Daily Property. EPI's Phase II sampling identified contamination
apparently emanating from an area of the Investor's Business Daily Property at
which underground storage tanks had previously been located. EPI indicated that
certain inaccessible areas of the Investor's Business Daily Property had not
been sampled, and that further sampling may be required to completely delineate
the extent and type of any contamination present. EPI further indicated that if
additional sampling establishes that contamination levels are not higher than
past samples, there is the possibility that no cleanup would be required. The
borrower under the Investor's Business Daily Loan (the "Investor's Business
Daily Borrower") has received an indemnity (the "Indemnification") from the
previous owner of the Investor's Business Daily Property, Citicorp North
America, Inc. The Indemnification indemnifies and holds harmless the Investor's
Business Daily Borrower from any costs, liabilities, claims, lawsuits and
expenses arising out of the existence of the substances described in the Phase
I and Phase II assessments. The Indemnification runs to the benefit of the CSFB
Mortgage Loan Seller and its successors in connection with any securitization
of the Investor's Business Daily Loan.
With respect to all of the 28 Mortgaged Properties as to which no
environmental site assessments meeting the CSFB Mortgage Loan Seller's
underwriting standards were conducted (which represents 1.45% of the Initial
Pool Balance), the CSFB Mortgage Loan Seller obtained a blanket insurance
policy from Commerce and Industry Insurance Co. ("CII") against losses and
expenses relating to certain environmental contamination which is discovered on
such mortgaged properties. CII, which is a member company of American
International Group, Inc., is rated "AAA" by S&P. In addition, one Mortgaged
Property securing a Mortgage Loan representing 1.4% of the Initial Pool
Balance, is covered by an insurance policy insuring against certain
environmental-related losses.
Certain environmental matters relating to the Tallahassee Mall Loan are
set forth under "-- Significant Mortgage Loans -- The Tallahassee Mall Loan."
CERTAIN TERMS AND CONDITIONS OF THE MORTGAGE LOANS
General. For a detailed presentation of the characteristics of the
Mortgage Loans on a loan-by-loan basis, see Annex A hereto.
All numerical information relating to the Mortgage Loans, including all
numerical references and calculations contained in this section and in the
tables herein under "--Additional Mortgage Loan Information" (but not including
the information on the cover hereof, in Annex A, in the table contained herein
under "--Additional Mortgage Loan Information" entitled "Mortgage Notes," in
the table contained herein under "Prepayment and Yield Considerations" entitled
"Sensitivity to Principal Prepayments of the Pre-Tax Yields to Call of the
Class A-X Certificates" and in the tables set forth on pages S-130 through
S-137 hereof) were prepared assuming (i) that the Trust Fund includes a certain
mortgage loan (the "Deleted Loan") that will not be included in the Trust Fund
and (ii) that Loan No. 10 (Holiday Inn Broadway) has a Cut-off Date Principal
Balance of $36,000,000 (rather than its actual Cut-off Date Principal Balance
of $35,962,109.12). Therefore, certain information in this Prospectus
Supplement concerning the characteristics of the Mortgage Loans conflicts with
information in Annex A and elsewhere in this Prospectus Supplement. The Deleted
Loan has a principal balance of $16,983,325, is secured by an anchored retail
mortgage property and has a hard lockbox.
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 89 Mortgage Loans (representing approximately 80.8% of the Initial
Pool Balance), the Due Date is the 11th day of each month, and with respect to
64 Mortgage Loans (representing approximately 19.2% 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).
S-79
<PAGE>
Mortgage Rates; Calculations of Interest. Nine Mortgage Loans,
representing 2.25% 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 the Credit Lease Loans) generally requires the
related borrower to make a constant monthly payment of principal and interest
(each, a "Monthly Payment") that is calculated based on the related Mortgage
Rate, the amortization schedule for such Mortgage Loan and the initial
principal balance thereof and assumes that such Mortgage Loan accrues interest
on a 30/360 basis. As used herein, the term "Mortgage Rate" refers to the rate
at which interest accrues on an ARD Loan (as defined below) prior to its
Anticipated Repayment Date. The Credit Lease Loans provide for the payment of
principal and interest based on a specified schedule set forth in the related
Mortgage Notes.
Excess Interest. Eighty of the Mortgage Loans, representing 77.07% 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, such Mortgage Loans
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
2.00%, 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 (other than with respect to the
L'Enfant Participation) following the Anticipated Repayment Date. From and
after the Anticipated Repayment Date, the related borrower generally will be
required to apply all monthly cash flow from the related Mortgaged Property to
pay the following amounts in the following order of priority: (i) required
payments to the tax and insurance escrow fund and any ground lease escrow fund,
(ii) payment of monthly debt service, (iii) payments to any other required
escrow funds, (iv) payment of operating expenses pursuant to the terms of an
annual budget approved by the Servicer, (v) payment of approved extraordinary
operating expenses or capital expenses not set forth in the approved annual
budget or allotted for in any escrow fund, (vi) principal on the Mortgage Loan
until such principal is paid in full and (vii) Excess Interest. The cash flow
from the Mortgaged Property securing an ARD Loan after payments of items (i)
through (v) above is referred to herein as "Excess Cash Flow." As described
below, each ARD Loan generally provides that the related borrower is prohibited
from prepaying the Mortgage Loan until one to six months prior to the
Anticipated Repayment Date but, upon the commencement of such period, may
prepay the loan, in whole or in part, without payment of a Prepayment Premium
or Yield Maintenance Charge. The Anticipated Repayment Date for each ARD Loan
is listed in Annex A.
The holder of 100% of the Class V-1 Certificates will have the option for
up to two months after the Anticipated Repayment Date for any CSFB Mortgage
Loan which is an ARD Loan, and the holder of 100% of the Class V-2 Certificates
will have the option for up to two months after the Anticipated Repayment Date
for any MS Mortgage Loan which is an ARD Loan, in each case, 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 Trust Fund and the Class V-1 Certificateholders or
Class V-2 Certificateholders, as applicable, 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
S-80
<PAGE>
amounts due and payable (each such payment, a "Balloon Payment") on their
respective maturity dates, unless previously prepaid. The remaining Mortgage
Loans are either (i) 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 (ii) 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 77.07% 80
Fully Amortizing Loans (other
than ARD Loans) 1.11% 4
Balloon Loans 21.82% 69
------ --
TOTAL 100.0% 153
====== ===
</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 voluntary 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 principal balance of such Mortgage Loan
("Prepayment Premiums") in connection with full or partial voluntary principal
prepayments for a specified period of time after the expiration of the related
Lockout Period and any Yield Maintenance 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. One hundred fifty-two Mortgage Loans,
representing approximately 99.43% 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 one remaining Mortgage Note,
representing approximately 0.57% of the Initial Pool Balance, permits voluntary
prepayment, with no restrictions or penalties, within 48 months before the
related maturity date. 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
"Risk Factors -- Risks Related to the Mortgage Loans -- Certain Loans May
Require Principal Paydowns which May Reduce the Yield on Your Certificates" and
"-- Risks Related to The Offered Certificates -- Prepayments and Defaults May
Reduce the Yield on Your Certificates."
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.
Greater detail on specific yield maintenance formulas relating to some of
the Mortgage Loans is provided in Annex A.
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, will select a comparable publication to determine the Yield Rate
with respect to Mortgage Loans.
S-81
<PAGE>
The following table sets forth for the Distribution Date in each indicated
month the percentage of the aggregate Stated Principal Balance of all Mortgage
Loans expected to be outstanding (after giving effect to scheduled principal
payments for the Due Date relating to such Distribution Date) with respect to
which (i) a Lockout Period is in effect, (ii) a prepayment must be accompanied
by (A) a Yield Maintenance Charge, (B) a prepayment penalty equal to the
greater of a Yield Maintenance Charge ("YM" on such table) or a Prepayment
Premium ("Premium" on such table) (the percentage used in calculating which
Prepayment Premium is also set forth in such table) or (C) a Prepayment Premium
(the percentage used in calculating which Prepayment Premium is also set forth
in such table) or (iii) no Lockout Period, Yield Maintenance Period or
Prepayment Premium Period is applicable ("Open" on such table). The following
table was prepared on the basis of the Prepayment Assumptions (as defined
herein) and assumes a 0% CPR (as defined herein). See "Prepayment and Yield
Considerations -- Modeling Assumptions."
S-82
<PAGE>
CALL PROTECTION ANALYSIS(1)
PERCENTAGE OF MORTGAGE POOL BY PREPAYMENT RESTRICTION ASSUMING NO PREPAYMENTS
<TABLE>
<CAPTION>
PREPAYMENT CURRENT 12 24 36 48
PREMIUM/RESTRICTION OCT-99 OCT-00 OCT-01 OCT-02 OCT-03
- --------------------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Lockout/Defeasance 99.5% 99.5% 98.8% 97.5% 96.5%
Greater of Yield
Maintenance and 1% 0.5% 0.5% 1.2% 2.5% 3.5%
5% Penalty 0.0% 0.0% 0.0% 0.0% 0.0%
4% Penalty 0.0% 0.0% 0.0% 0.0% 0.0%
3% Penalty 0.0% 0.0% 0.0% 0.0% 0.0%
2% Penalty 0.0% 0.0% 0.0% 0.0% 0.0%
1% Penalty 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) $1,187,129 $1,176,106 $1,163,761 $1,150,382 $1,135,883
% of Cut-off Date Balance 100.0% 99.1% 98.0% 96.9% 95.7%
<CAPTION>
PREPAYMENT 60 72 84 96 108 120
PREMIUM/RESTRICTION OCT-04 OCT-05 OCT-06 OCT-07 OCT-08 OCT-09
- --------------------------- -------------- -------------- -------------- -------------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Lockout/Defeasance 95.2% 95.4% 95.0% 89.9% 91.2% 45.4%
Greater of Yield
Maintenance and 1% 4.6% 3.9% 4.4% 3.9% 0.7% 6.4%
5% Penalty 0.0% 0.0% 0.0% 0.1% 0.7% 0.0%
4% Penalty 0.0% 0.0% 0.0% 0.0% 0.1% 7.5%
3% Penalty 0.0% 0.0% 0.0% 0.0% 0.0% 1.2%
2% Penalty 0.1% 0.1% 0.0% 0.0% 0.0% 0.0%
1% Penalty 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Open 0.0% 0.6% 0.6% 6.1% 7.2% 39.5%
----- ----- ----- ----- ----- -----
TOTAL 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== ===== =====
Mortgage Pool Balance
(000s) $1,120,429 $1,095,520 $1,064,673 $1,045,210 $838,285 $76,185
% of Cut-off Date Balance 94.4% 92.3% 89.7% 88.0% 70.6% 6.4%
</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 the Additional Collateral Loans
identified on Annex A as East Norriton Crossing and Kirkwood Landing
Apartments, 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-83
<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 -- Default Interest Prepayment Charges and
Prepayment" in the Prospectus.
None of the Depositor or the Mortgage Loan Sellers 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 -- Risks Related to the Offered Certificates -- Prepayments
And Defaults May Reduce The Yield On Your Certificates."
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 the time period specified in the related loan documents to a state no
less valuable or useful than it was prior to the condemnation or casualty, or
would meet a debt service coverage test, (ii) after a restoration the Mortgaged
Property would adequately secure the outstanding balance of the Mortgage Note
and (iii) no event of default under such Mortgage Loan has occurred or is
continuing, the proceeds or award may be applied by the borrower to the costs
of repairing or replacing the Mortgaged Property.
A limited number of Mortgage Loans provide that if casualty or
condemnation proceeds are above a specified amount, the borrower will be
permitted to supplement such proceeds with an amount sufficient to prepay the
entire principal balance of the Mortgage Loan. Certain Mortgage Loans provide
that, in the event of a partial prepayment resulting from the occurrence of a
casualty or condemnation, the constant Monthly Payment may be reduced 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. One hundred twelve of the Mortgage Loans, representing 93.7%
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 generally (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
S-84
<PAGE>
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 (as
defined herein) 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. The
Servicer may establish a special purpose trust to hold all such U.S. government
obligations.
In certain of the Mortgage Loans which contain a Defeasance Option, a
successor borrower 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 in such cases, 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 -- Risks Related
to the Offered Certificates -- Prepayments and Defaults May Reduce the Yield on
Your Certificates."
Property Releases. Three of the Multi-Property Loans and three of the
Crossed Loans, representing approximately 2.3% of the Initial Pool Balance, do
not provide for the release of any related Mortgaged Property prior to payment
in full of the Mortgage Loan. Nine of the Multi-Property Loans representing
approximately 12.7% of the Initial Pool Balance and 5 of the Crossed Loans,
representing 4.4% 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, is 120% to 125% of the applicable Property Release Amount or
outstanding principal balance, 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.
Lockboxes. Eighty-three Mortgage Loans, representing approximately 80.8%
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 or, with respect to
the Multiple Note Loans, the holder or servicer of the related Other Note (a
"Hard Lockbox"), (ii) paid to the manager of the Mortgaged Properties, other
than multifamily properties, which will deposit all sums collected into a
Lockbox Account on a regular basis (a "Modified Lockbox") or (iii) collected by
the borrower until such time (if any) as a triggering event (such as the
failure to pay the related Mortgage Loan in full on or before the related
Anticipated Repayment Date or a decline, by more than a specified amount, in
the net operating income of the related Mortgaged Property and/or a failure to
meet a specified DSCR) occurs, at which time all rents derived from the related
Mortgaged Property generally will be 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
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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 44.4% 33
Modified 0% 0
Springing 36.4% 50
None 19.2% 70
----- --
TOTAL 100.0% 153
===== ===
</TABLE>
Escrows. Substantially all Mortgage Loans (excluding the Credit Lease
Loans) provide for monthly escrows to cover property taxes and insurance
premiums on the Mortgaged Properties. The Mortgage Loans secured by leasehold
interests generally also provide for escrows to make ground lease payments.
Substantially all of the Mortgage Loans (excluding the Credit Lease Loans), by
aggregate Cut-off Date Principal Balance, require up front and/or monthly
funding of escrows for one or more of the following: 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, or if 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 material deficiencies identified by the engineering report issued in
connection with origination or in certain cases, the related borrower was
required to repair or remediate the deficiency. See "Description of the
Mortgage Loans -- CSFB Underwriting Standards" and "-- Morgan Stanley Mortgage
Capital Inc. Underwriting Standards" in this Prospectus Supplement.
Equity Investments by the CSFB Mortgage Loan Seller. With respect to the
borrower under the L'Enfant Participation, the CSFB Mortgage Loan Seller (the
"Preferred Interest Holder") is entitled to receive certain preferred
distributions prior to distributions being made to the other partners. 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 L'Enfant Whole Loan and any obligations to other creditors
have been made when due and all monthly operating expenses with respect to the
related Mortgaged Properties have been paid. See "-- Significant Mortgage Loans
- -- The L'Enfant Participation" in this Prospectus Supplement.
"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 or, in some cases, a smaller fee set
forth in the related Mortgage Loan, 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 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 -- Risks Related to 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" in this Prospectus Supplement. 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
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<PAGE>
upon the occurrence of certain events. The Mortgage Loans with a Cut-off Date
Principal Balance in excess of $20 million and certain other Mortgage Loans
generally 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. Fourteen of the Mortgage Loans (the "Multi-Property Loans"),
representing 16.8% of the Initial Pool Balance, are evidenced by one Mortgage
Note and secured by more than one Mortgaged Property. 10 of the Mortgage Loans
(the "Crossed Loans"), representing 9.4% 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 individual Mortgages recorded with respect to
certain Crossed Loans with properties in such states may secure an amount less
than the aggregate of the applicable initial principal balance of the
applicable Crossed Loans, and, in the case of one Mortgage Loan, representing
0.19% of the Initial Pool Balance, the related mortgage secures an amount equal
to the initial principal balance of such Mortgage Loan. For the same reason,
the Mortgages with respect to certain Multi-Property Loans may secure only 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 -- Risks Related to the
Mortgage Loans -- Enforceability of Cross- Collateralized and Cross-Defaulted
Mortgage Loans May Be Challenged" in this Prospectus Supplement.
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 least of (i) the principal balance of the related
Mortgage Loan, (ii) 100% of the full replacement cost of the improvements and
equipment without deduction for physical depreciation and (iii) the minimum
amount necessary to avoid the operation of co-insurance provisions that would
otherwise reduce the amount that the insurer is required to pay, 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 and subject to material earthquake
risk have been either subject to seismic upgrade (or appropriate reserves or a
letter of credit established for retrofitting), are subject to a lower
loan-to-value limit or 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. In addition, the CSFB
Mortgage Loan Seller has obtained a lenders' contingent earthquake insurance
policy for 2 Mortgage Loans with a PML of above 20% of the value of the related
Mortgaged Properties which insures the lender for losses caused by earthquakes
in the amount in excess of the 20% up to the PML as determined at origination.
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 generally 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 amount generally equal to the greatest of (A) the
projected gross revenues from operations of the Mortgaged Property, (B) the
projected operating expense (including debt service) for the maintenance and
operation of the Mortgaged Property, and (C) in an amount satisfying other
similar standards, in any such case, for a period of 6 or 12 months or a
specified longer period (depending on the related Mortgage Loan Seller), (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.
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<PAGE>
Mortgage Loans which May Require Principal Paydowns. Three Mortgage Loans
(the "Additional Collateral Loans"), representing approximately 2.4% of the
Initial Pool Balance, are additionally secured by cash reserves or irrevocable
letters of credit that will be released to the related borrowers upon
satisfaction by the borrower of certain leasing-related conditions including,
in certain cases, achievement of certain DSCRs and/or satisfying leasing
conditions within time periods prior to loan maturity. 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.
ADDITIONAL COLLATERAL LOANS
<TABLE>
<CAPTION>
BORROWER
REQUIRED
TYPE OF AMOUNT OF TO PAY
LOAN MORTGAGE PROPERTY ADDITIONAL ADDITIONAL PREPAYMENT
NO. LOAN SELLER NAME COLLATERAL COLLATERAL RELEASE CONDITIONS CONSIDERATION
- ------ --------------- --------------- ------------------ ------------ ---------------------------------------- --------------
<S> <C> <C> <C> <C> <C> <C>
32 CSFB Mortgage East Norriton Cash Collateral $1,187,000 By September 1, 2000, Buca Yield
Loan Seller Crossing Restaurants Inc. (or an acceptable Maintenance
replacement tenant) must take Charge
occupancy and commence payment of
rent.
46 MS Mortgage Lynnwood Letter of Credit $1,000,000 By January 27, 2000, (i) the property Yield
Loan Seller Corporate achieves a minimum gross rental Maintenance
Center income of $997,550 under leases Charge
having an average term of 4-5 years
and paying at least $14.00 net and (ii)
achieves a DSCR of 1.25x.(1)
50 CSFB Mortgage Kirkwood Cash Collateral $ 450,000 By January 11, 2001, (i) the property Yield
Loan Seller Landing achieves a DSCR of 1.25x based on Maintenance
Apartments trailing four months using the actual Charge
constant, and (ii) the property
achieves a DSCR of 1.00x based on
trailing four months using a 9.66%
constant.
</TABLE>
- --------
(1) To the knowledge of the MS Mortgage Loan Seller, the release conditions
described above have not been achieved.
With respect to any Required Prepayment on any of the Additional
Collateral Loans, the related borrowers are required to pay the prepayment
consideration specified in the table above. The holders of the Class A-X
Certificates and any Class of Offered Certificates receiving any such
prepayment will be entitled to receive payments collected from the borrower,
and, with respect to prepayments on the Additional Collateral Loans known as
East Norriton Crossing and Kirkwood Landing Apartments, if not collected from
the borrower, from the Servicer ("Yield Protection Payments") to compensate
such holders for the absence, if any, of such prepayment consideration. 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. With respect to the Additional
Collateral Loan identified on Annex A hereto as Lynnwood Corporate Center, no
such Yield Protection Payment will be paid.
ADDITIONAL MORTGAGE LOAN INFORMATION
The following tables and Annex A hereto set forth certain information with
respect to the Mortgage Loans and Mortgaged Properties. The statistics in the
following tables and Annex A were primarily derived from information provided
to the Depositor by the Mortgage Loan Sellers, which information may have been
obtained from the borrowers without independent verification.
For purposes of this Prospectus Supplement, including the tables herein
and Annex A:
(1) "Actual Ongoing Capital Items Deposits" means the dollars per Unit or
percentage of revenues required to be deposited in Escrow Accounts annually
and, in certain cases, until a maximum reserve balance is achieved, under the
related Mortgage Loan with respect to Capital Items.
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<PAGE>
(2) "Allocated Loan Amount" means, for each Mortgaged Property relating to
a Multi-Property Loan, 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 adjoining 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. For purposes of determining U/W Net Cash
Flow DSCR and U/W NOI DSCR with respect to the Multiple Note Loans, DSCR was
calculated giving effect to the debt service for the related Other Note.
(5) "Anticipated Remaining Term" means the term of the Mortgage Loan from
the Cut-off Date to 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, room or pad for multifamily, cooperatives, hotels and manufactured
housing communities 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 U/W Net Cash Flow for the related Mortgaged Property,
divided by (b) the Annual Debt Service for such Mortgage Loan. The calculation
of DSCR may differ from the calculation of the debt service coverage ratios
referred to under "-- Description of the Mortgage Loans -- CSFB Underwriting
Standards" and "-- MS 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. The DSCR for
the Exchange Place Mortgage Loan is calculated only with respect to the
Exchange Place Note A and, with respect to the L'Enfant Participation, is
calculated based on the L'Enfant Whole Loan.
(10) "Insurance Escrowed" indicates, with respect to properties which are
insured under individual property insurance policies, whether a reserve was
established at closing or during the term of such Mortgage Loan to cover the
premium payable thereon.
(11) "Interest Calc." means the method by which interest accrues on the
related Mortgage Loan. "30/360" means interest is calculated on the basis of a
360-day year consisting of twelve 30-day months. "Actual/360" means interest is
calculated on the basis of a 360-day year and the actual number of days elapsed
in each interest accrual period.
(12) "Lease Expiration Date" means the year in which a Tenant's lease is
scheduled to expire.
(13) "Loan to Value Ratio," "LTV" or "Cut-off Date 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. The LTV for
the Exchange Place Mortgage Loan is calculated only with respect to the
Exchange Place Note A and, with respect to the L'Enfant Participation, is
calculated based on the L'Enfant Whole Loan.
(14) "LTV at ARD or Maturity" or "Anticipated Repayment Date LTV" or "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
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<PAGE>
particular Mortgaged Property has not or will not decline from the appraised
value. With respect to the Exchange Apartments Loan, the ARD LTV takes into
account the effect on the appraised value of the related Mortgaged Property of
the expiration of the tax abatement on such Mortgaged Property.
(15) "Monthly Payment" means the constant monthly payment set forth in the
related Mortgage Note as being due in October 1999 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").
(16) "1997 NOI," "1998 NOI" and "Most Recent NOI" (which is for the period
ending as of the date specified in Annex A under Most Recent Date) is the net
operating income for a Mortgaged Property as established by information
provided by the borrowers or appraised, 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. 1997 NOI, 1998 NOI and Most
Recent 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 or appraiser 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. 1997 NOI, 1998 NOI and Most Recent
NOI were not necessarily determined in accordance with generally accepted
accounting principles. Moreover, 1997 NOI, 1998 NOI and Most Recent 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
underwriting standards of the applicable Mortgage Loan Seller.
(17) "Most Recent Date" means, if the applicable Mortgage Loan Seller
obtained the Most Recent operating statement available for calendar year 1999
or portion thereof, the date of such operating statement.
(18) "Most Recent Type" means, if the applicable Mortgage Loan Seller
obtained the Most Recent operating statement available, whether such statement
reflects an annualized number or trailing twelve month number.
(19) "NAP" means not applicable and relates to either the omission of the
Credit Lease Loans in the calculation of LTV and DSCR or the omission of Mixed
Use Properties in the calculation of loan amount per unit.
(20) "Net Cash Flow" or "U/W 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 applicable Mortgage Loan Seller based on
borrower-supplied information or appraisal for a recent period that is
generally calendar year 1998 or the most recent twelve-month period preceding
the origination date. U/W 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
applicable Mortgage Loan Seller, assuming such Cooperative Property was
operated as a rental property, reduced by underwritten capital expenditures,
(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 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 greater of (A) actual vacancy and (B) 5%, 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 4% to 5% of revenue for Hospitality Property, 4% of revenue
for multi-tenant commercial and multifamily Mortgage Loans and 3% of revenue
for single-tenant net leased Mortgage Loans other than the Credit Lease Loans
(ix) making a 4% to 5% 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), (ix) where
such information was made available to the applicable 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
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<PAGE>
Property were greater than actual expenses, (xii) subtracting from net
operating income reserves for actual ongoing 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 the Credit
Lease Loans generally equals annual net rent.
Net Cash Flow reflects the calculations and adjustments used by the
applicable 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 ongoing Capital
Items and tenant improvement and leasing commission reserves but under the
related Mortgage Loan the borrower is not required to fund Escrow Accounts for
such purposes.
Reletting costs and capital expenditures are crucial to the operation of
commercial and multifamily properties. Each investor should make its own
assessment of the level of reletting costs and capital expenditures of the
Mortgaged Properties, and the consequent effect of such costs and expenditures
on the actual net operating income, Net Cash Flow and DSCRs of the Mortgage
Loans. No representation is made as to the future net cash flow of the
Mortgaged Properties, nor is Net Cash Flow set forth herein intended to
represent such future net cash flow.
(21) "Net Lease" means Credit Lease.
(22) "Occupancy" means the percentage of gross leasable area, rooms,
units, pads, 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.
(23) "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.
(24) "Original Principal Loan Balance" means the principal balance of the
Mortgage Loan as of the date of origination.
(25) "Ownership Interest" means the real property interest which is
encumbered by the related Mortgage.
(26) "% of Total Square Feet" or "% of Total SF" means the square feet
leased to a Tenant as a percentage of the gross square feet of the Mortgaged
Property.
(27) "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.
(28) "Real Estate Taxes Escrowed" indicates whether a reserve was
established at closing or during the term of such Mortgage Loan to cover
property taxes.
(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) "Remaining Lockout and YM and Penalties" means the period ending on
the later of the last day of the Remaining Lockout and YM and the first day on
which the Mortgage Loan may be prepaid without payment of any penalty.
S-91
<PAGE>
(33) "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.
(34) "Stated Maturity Date" means the maturity date of the Mortgage Loan
as stated in the related Mortgage Note or loan agreement.
(35) "Tenant Improvement and Leasing Commission Reserve Upfront," "Tenant
Improvement and Leasing Commission Reserve Ongoing" indicates whether a reserve
was established at closing or during the term of such Mortgage Loan to cover
certain anticipated leasing commission and/or tenant improvement costs which
might be associated with the re-leasing of the space occupied by tenants whose
leases expire within the term of such Mortgage Loan, and, in certain cases,
until a maximum reserve balance is achieved. The reserves may be in the form of
cash or letters of credit from investment grade entities.
(36) "Tenant 1," "Tenant 2" and "Tenant 3" (each, a "Tenant") mean, with
respect to Office Properties, Industrial Properties, Mixed Use 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.
(37) "Units" and "Unit of Measure" mean the number of units, pads, rooms
or square footage with respect to the Mortgaged Property.
(38) "U/W NOI" or "Underwritten NOI" means Net Cash Flow before deducting
for Capital Items, tenant improvements and leasing commissions.
(39) "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.
(40) "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.
(41) "Year Built" means the year in which the respective Mortgaged
Property was built.
(42) "Year Renovated" means the year in which the respective Mortgaged
Property was 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.
S-92
<PAGE>
For purposes of Annex A, the following footnotes apply:
(1) The L'Enfant Participation 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) With respect to the Murray's Discount Auto Store Summary Loan, Net Cash
Flow and historical financial information is provided on a combined basis
in the Murray's Discount Auto Store Summary line item for Murray's
Discount Auto Store -- 6319 S. Western Avenue, Murray's Discount Auto
Store -- 55 E. 111th Street and Murray's Discount Auto Store -- 4719
Cottage Grove.
(3) The Lynwood Corporate Center Loan is an Additional Collateral Loan. The
additional collateral for the loan consists of a $1,000,000 letter of
credit. See "Certain Characteristics of the Mortgage Loans -- Certain
Terms and Conditions of the Mortgage Loans -- Additional Collateral
Loans". The DSCR and Net Cash Flow identified in Annex A for such loan
includes lease up of certain expansion space at the property. As of the
Cut-off Date, such lease up had not occurred.
(4) The Lewis County Mall Property contains a vacant anchor space totaling
approximately 19,924 square feet. The vacant space was formerly occupied
by a JC Penney department store.
(5) An additional cash holdback account, which currently totals $592,194,
including accrued interest, collateralizes the Lewis County Mall Loan.
Such cash account may be released in whole or in part to the borrower
when certain vacant space is leased and a DSCR of at least 1.25x is
achieved for a consecutive 12-month period, so long as a maximum LTV of
75% is maintained. There is no required release date associated with this
additional collateral.
(6) The Seminole Mall Property contains an Upton's anchor store of
approximately 60,000 square feet. Upton's management has informed the
related mortgage loan borrower that it intends to close all Upton's
stores nationwide, including the store located on the Mortgaged Property.
(7) With respect to the Capetown Plaza Shopping Center Loan, the second
largest tenant space of approximately 36,600 square feet is leased to
Purity Supreme, and subleased to the existing tenant, Filene's Basement.
Filene's Basement filed for Chapter 11 protection from creditors in
August 1999.
(8) An additional cash holdback account, which currently totals $275,000,
collateralizes the Shops at the Bluffs Loan. Such cash account may be
released to the borrower when a DSCR of 1.25x is achieved for a trailing
12-month period. There is no required release date associated with this
additional collateral.
(9) With respect to the East Norriton Crossing Mortgage Loan and the Kirkwood
Mortgage Loan, DSCR was calculated assuming that the related additional
collateral reserves were applied to reduce the initial principal balances
thereof and that the related required debt service payments were
re-calculated based upon such reduced principal balances.
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 for the
purpose of calculating DSCR and LTV. 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-93
<PAGE>
<TABLE>
<CAPTION>
Cut-off
Loan Property Borrower Date
No. Name Name Balance
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 Exchange Apartments Broad Street LLC $58,000,000.00
5 Tallahassee Mall Tallahassee Mall Partners, Ltd. 47,937,104.45
8 Hato Rey Tower Apollo Hato Rey, L.P. 38,774,229.10
9 L'Enfant Plaza Potomac Creek Associates LP 37,204,670.69
10 Holiday Inn - Broadway Herald Hotel Associates, L.P. 35,962,109.12
11 Scholastic Building Ise 555 Broadway, LLC 33,965,599.81
12 Blue Hills Office Park Blue Hills Office Park LLC 33,149,000.00
13 150 William Street 150 William Street Associates L.P. 29,440,579.47
14 Hotel Union Square/Diva Summary Personality Hotels II, Inc. 29,332,250.85
15 White Lodging Summary Hotel Properties, LLC 27,938,199.65
16 SunPark Airpark - St.Louis Airpark St. Louis LLC 26,976,629.68
6 Accor - Mountain Summary Mountain S9, LLC 26,263,337.04
17 Sunset Ridge & Sunset Peak Apartments Summary WSV Denver Limited Partnership 25,482,959.38
2 Selig - Third and Broad Selig Real Estate Holdings Thirteen, L.L.C. 25,471,293.65
18 Century Centre I AB 5, Inc. 25,470,362.51
19 401 North Broad Street Benlo LLC 19,888,550.79
20 Kings Village Corp. Kings Village Corp. 19,693,942.86
24 Midway Shopping Center RK Midway LLC 17,482,834.40
25 Shops at the Bluffs ACG-Shops at the Bluffs Investors LLC 17,250,000.00
26 Seminole Mall Bluff Retail Associates L.P. 17,100,545.99
27 Fairfield Suites & Courtyard by Marriott Summary Dana Suites/Bell Hospitality, LLC 17,000,000.00
29 Cathedral Building Cathedral Building LLC 16,983,230.11
30 Investor's Business Daily Building 12655, LLC 15,783,654.52
3 Selig - 3131 Elliot Building Selig Real Estate Holdings Fifteen, L.L.C. 14,733,395.34
31 Suburban Lodge Summary SLAM Properties I, LLC 14,652,229.11
7 Accor - California North Summary California North S9, LLC 14,018,721.15
32 East Norriton Crossing East Norriton Shopping Center Associates, L.P. 12,792,149.51
33 K.V. Properties Inc Summary K. V. Property Co. 12,708,740.21
34 Periwinkle Place Shopping Center Periwinkle Place Partners, Ltd. 12,632,053.82
35 West Valley Medical Center West Valley Medical Center, Ltd. 12,454,221.26
36 Wilshire Westwood Apartments 10530-40 Wilshire Boulevard, LLC 12,214,232.17
21 Capetown Plaza Shopping Center Cape, LLC 11,954,129.62
37 Cornelius Pass Business Park Cornelius Pass Business Park, L.L.C. 10,942,637.85
4 Selig - Airborne Building Selig Real Estate Holdings Fourteen, L.L.C. 10,887,729.43
38 Town and Country Office Park Town and Country Partners 10,463,154.41
39 Muscarelle Portfolio Summary JLM Park Ridge, LLC and JLM Lyndhurst, LLC 10,193,400.27
40 IBM Corporate Center Parsippany Corporate Center, LLC 9,963,585.96
41 Frassetto Properties Summary 6-11 High Point Dr., L.L.C.; 707-709 Executive Blv 9,851,092.68
42 Easton Commons Plaza Shopping Center ECP Shopping Center, Ltd. 9,768,689.98
43 The Vinegar Factory (Eli's Market) 1411 Third LLC 9,763,065.58
44 Holiday Inn & Suites - Bristol Trammell Hotel Investments, L.L.C. 9,491,225.50
45 Vilter Manufacturing Center Joseph F. Dentice Industrial Property, L.L.C. et a 9,343,927.00
46 Lynnwood Corporate Center SAVI Ranch Investments, LLC 8,491,630.26
47 Design Center Industrial Park Design Center, LLC 7,955,776.96
48 LaSalle Atrium 401 Properties Limited Partnership 7,740,517.99
49 Meridian Place Apartments CEK of Leon County, LTD 7,725,428.77
50 Kirkwood Landing Apartments Kirkwood Landing, LLC 7,591,806.26
51 Gateway East & West 6188 Oxon Hill Limited Partnership and Lucardi, L. 7,245,489.10
52 Kanawha Mall Kanawha Mall LLC 6,993,787.38
53 Saf Keep Self Storage Merritt Two, L.P. 6,746,508.94
54 Binnings Building S & D Building Enterprises, Inc. 6,542,073.51
55 Commercial Park West Realmark - Commercial, L.L.C. 5,996,030.98
56 Sea Crest at Amagansett Corp. Sea Crest at Amagansett Corp. 5,738,989.15
57 Park Glen West Business Ctr Klodt Business Centers, LLC 5,626,490.85
58 Barrington Heights Apartments Chapelwood Apartments Limited Partnership 5,591,484.53
59 Stop and Store Self Storage SHS Holding Corp. 5,463,681.96
60 Crestview Office Crestview Partners 5,444,059.97
61 Grand Cove I Apartments Grand Cove I Apartment Corporation 5,310,150.94
62 Eagle Food Center Ocampo Morris, L.L.C. 5,194,146.16
22 Lewis County Mall Chehalis, LLC 5,016,269.93
63 Pinewood Square Shopping Center Limetree Properties, L.P. 4,996,939.69
64 Courtyard by Marriott CTY-Brand, LLC 4,975,737.12
65 Forest Lane Apartments 1998 Forest Lane, L.P. 4,850,000.00
66 Greenfield Station Apartments Graoch Associates #64 Limited Partnership 4,623,112.73
67 92 State Street Farlow Limited Partnership 4,570,735.60
68 Hill Castle Apartments Martin A. Gaehwiler, Sr. & Martin A. Gaehwiler, Jr 4,432,669.70
69 Redwood City Office Building EIC Investment Corporation $4,319,369.67
70 2855 Telegraph Avenue Office Building Telegraph Avenue Company, LLC 4,164,400.49
71 Mladen Portfolio Summary Eternal Enterprises, Inc. 4,096,194.25
72 Twin Peaks Square Shopping Center Crossroads Twin Peaks LLC 3,997,321.53
73 Countrybrook Estates Realmark - Countrybrook, L.L.C. 3,997,255.57
74 1674 Broadway ELO Management LLC 3,989,543.30
75 Wells Cargo Self Storage Chapman Storage, L.P. 3,987,591.43
76 Oasis Apartments Martin A. Gaehwiler, Sr. and Martin A. Gaehwiler, 3,940,150.93
77 Crown Meadows Shopping Center Culebra - Crown Meadows, LTD. 3,821,086.50
78 Embassy Apartments 1613 Harvard Limited Partnership 3,797,635.67
79 Sandy Ridge Apartments Country Gardens, Ltd. 3,791,987.28
80 Southern Medical Building Paul, LLC, Lor-Dev Associates, LLC, & KBK Associat 3,791,615.37
81 The Westhampton Bath & Tennis Club The Westhampton Bath and Tennis Club Owners Corp. 3,717,533.56
82 Candlewick Townhomes Love Apartment Communities-Brownsville, A Limited 3,341,143.02
83 Ocean Beach Resort, Ltd. Ocean Beach Resort, Ltd. 3,338,837.58
84 Pacella Park Summary Equity Industrial Limited Partnership VII, et al 3,316,498.17
85 Quality Inn-Sea Oatel VDT, LLC 3,247,389.66
86 St. George Medical Center St. George Investors, LLC 3,094,878.98
87 Ocean Park Centinela Office Building Ocean Park Centinela, LLC 3,039,269.06
88 Surf Club at Montauk Corp. Surf Club at Montauk Corp. 3,001,400.62
89 Ambiance Townhomes Rich & Rich Associates, L.P. 2,997,920.75
90 Britannia Business Center Research Drive Associates, LLC 2,984,836.75
91 Northwest Corporate Park Bear Properties, LLC 2,947,956.98
92 Super 8 Motel Columbine Corporation 2,937,865.90
93 Scandia-Hemman Apartments Scandia-Hemman Associates, LLC 2,874,797.70
94 Orchard Square Office Park Mid-Atlantic Realty Trust 2,598,146.37
95 Murray's Discount Auto Store Summary Area Wide Murray's LLC 2,584,131.50
96 Holiday Plaza Holiday Plaza, LLC 2,547,861.99
97 Lakeside Shopping Center Vermillion F&H Limited Partnership 2,497,613.30
98 Palm Desert Business Center Cook St. Office, LLC 2,490,956.47
99 Port Royal Motel Cooperative Port Royal Owners Corp. 2,487,642.32
100 The Meadows Square Mall C Squared, L.L.C. 2,393,088.16
101 Civic Center Office Building One Rancho Pacific Center, LLC 2,389,745.79
102 Blockbuster Video / Scotty's Home Summary F & H Properties Limited Partnership 2,298,606.66
103 17290 Preston Road Office Building W D Office Partners, LP 2,297,594.01
104 Mid-Towne Mobile Terrace Sunsan K, LLC 2,291,513.56
105 Engler Block Engler Block, LLC 2,272,970.78
106 Bellevue Tower Apartments Bellevue Tower, LLC 2,247,460.31
23 Tampa Shopping Plaza TPA, LLC 2,219,207.29
107 East Mountain Medical Center Columbia GBG, L.L.C. 2,097,194.56
108 Sierra Elm Shopping Center Sierra Elm Shopping Center Associates, LLC 1,768,096.91
109 Valerio Capri Apartments 14360 Valerio Street Apartments, LLC 1,628,934.84
110 Gotham Bar & Grill 12/12 Realty Associates LLC 1,597,517.91
111 Mission Hills Village Plaza Mission Hills Plaza LLC 1,587,009.93
112 Clarksdale Commons Shopping Center Clarksdale Commons Shopping Center LLC 1,499,029.73
113 King Plaza King Plaza, LLC 1,496,582.06
114 Goodwill Building F & B Properties, LLC 1,399,162.29
115 Country Village Apartments Lotus Properties, L.C. 1,358,425.33
116 12 West 32nd Street Tenants Corp. 12 West 32nd Street Tenants Corp. 1,290,257.10
117 4711 Callan Blvd Apartments Yoke S. Chin and Nelly D. Chin 1,263,632.14
118 Forest Crossing Medical Building Forest Crossing Associates IV, Ltd. 1,191,175.44
119 Devonwood Apartments Devonwood, LLC. 1,123,954.01
120 11825 Owners Corp. 11825 Owners Corp. 1,096,296.83
121 Indian Harbor Self Storage Beachside Mini-Storage, LLC 1,093,329.82
122 Ansley North Cooperative, Inc. Ansley North Cooperative, Inc. 1,065,694.47
123 West 8th Street Apartments The 2971 West 8th Street Partnership 1,059,390.14
124 All Seasons Mini Storage All Seasons Storage, LLC 1,046,423.92
125 330 East Jericho Turnpike DWGG Realty Corp. 1,043,399.35
126 Sequoia Apartments Nancy Lenhart 977,362.61
127 Broadmill Apts J. Mathews Trust, Ray Mathews and Joan Mathews 973,849.32
128 West Wood Village Apts Richard Simpson, Bonnelyn Simpson and Matthew Krum 969,926.74
129 Chick Hampton Office Building Marjorie Bekaert Thomas 949,447.75
130 Cambrick On The Park Condominiums Hill on Park Lane Partners, L.P. 844,457.99
131 287 South 6th Avenue Richard K. Hoertig and Gary H. Hoertig Living Trus 840,605.40
132 Metro Centre California Leveraged Equity Acquisition Realty Fun 837,172.07
133 350 Pleasant Street Warren Friedrich 792,843.58
134 Eckerd's Pittsburgh Developers, Ltd. 696,177.79
135 Azadgan Center Gholamreza Azadgan and Shahla Azadgan $688,167.16
136 Jeanne Estates Apartments Jeanne Estates Apartments, Inc. 632,896.40
137 Starburst Apartments 7655 Starburst, Inc. 594,930.78
138 Josephine Apartments Manh Van Luong and Ngat Thi Le, Husband and Wife 518,938.66
139 Valley View Apartments ROI Valley View LLC 513,151.81
140 1011-1019 Ocean Front Walk Tramco Management Co., LLC 494,961.08
141 2555 "D" Street Roy E. Payne and Paula K. Payne 464,451.96
142 Tempe Manor Apts John P. Kobierowski 444,932.75
143 Sophia Warehouse Vanair Co. 422,476.98
144 Betty Jane Apartments Steckline Family, LLC 401,251.99
145 Desert Winds Apartments Janning Chan and Wendy Chan 401,251.98
146 Poolside Apartments Steckline Family, LLC 393,821.38
147 Clark Apartments 4102 Clark, LLC 372,479.10
148 1327 2nd Street Sandra J. Motley 347,718.00
149 Crown Apartments James E. Bennett and Karen S. Bennett 343,557.76
150 Park Place-Fradin Park Place Investments, LLC 339,543.32
151 Gladstone & Benton Apartments Robert L. House 276,229.48
152 Country Manor Janning Chan and Wendy Chan 241,494.23
153 Homestead Inn Apartments Pamela M. Anderson and Valerie S. Palla 234,626.63
------------------
$ 1,170,108,234.11
==================
<CAPTION>
<PAGE>
Primary Stated Anticipated
Loan Monthly Mortgage Servicing Interest Maturity Repayment Remaining
No. Payment Rate Fee Rate Calc. Date Date Lockout
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 423,247.00 7.7500% 0.1000% Actual / 360 1/11/27 1/11/08 92
5 372,486.00 8.6000 0.0500 Actual / 360 7/11/29 7/11/09 114
8 286,054.23 8.0500 0.0500 Actual / 360 9/11/29 9/11/09 116
9 265,812.50 7.6400 0.0100 Actual / 360 10/11/28 10/11/08 105
10 292,890.88 8.5000 0.0500 Actual / 360 9/11/24 9/11/09 115
11 258,544.57 8.3800 0.0500 Actual / 360 8/11/29 8/11/09 116
12 254,652.24 8.4900 0.0500 Actual / 360 10/11/29 10/11/09 113
13 215,395.00 7.1750 0.0500 Actual / 360 6/11/23 6/11/08 99
14 201,989.58 7.2200 0.0700 Actual / 360 5/1/28 5/1/08 99
15 209,678.14 7.5400 0.0500 Actual / 360 8/11/24 8/11/09 115
16 229,920.32 9.1800 0.0500 Actual / 360 9/11/24 9/11/09 115
6 186,548.00 6.6839 0.0500 Actual / 360 3/11/19 229
17 187,465.62 8.0200 0.0500 Actual / 360 9/11/29 9/11/09 115
2 186,932.23 7.9900 0.0500 Actual / 360 5/11/29 5/11/09 112
18 184,804.21 7.8700 0.0500 Actual / 360 8/11/29 8/11/09 113
19 156,553.38 8.7500 0.0500 Actual / 360 9/11/29 9/11/09 112
20 154,627.97 9.0500 0.5490 Actual / 360 9/11/09 115
24 134,435.86 8.4900 0.0500 Actual / 360 8/11/29 8/11/09 114
25 125,134.34 7.8800 0.0500 Actual / 360 10/1/09 116
26 119,089.33 7.4000 0.0500 Actual / 360 2/1/09 108
27 125,628.50 7.5000 0.0500 Actual / 360 11/11/24 10/11/09 117
29 130,354.02 8.4700 0.0500 Actual / 360 8/11/29 8/11/09 113
30 122,995.48 8.1000 0.0300 Actual / 360 9/11/24 9/11/09 115
3 108,127.47 7.9900 0.0500 Actual / 360 5/11/29 5/11/09 112
31 116,532.92 8.2500 0.0500 Actual / 360 1/1/09 107
7 93,949.25 6.7213 0.0500 Actual / 360 3/11/19 229
32 97,877.16 8.4400 0.0500 Actual / 360 9/11/29 9/11/09 116
33 101,664.55 8.4100 0.0600 Actual / 360 9/11/24 9/11/09 112
34 95,926.00 8.3500 0.0500 Actual / 360 7/11/29 7/11/09 114
35 93,557.05 8.2100 0.0500 Actual / 360 3/11/29 3/11/09 111
36 87,760.50 7.7500 0.0500 Actual / 360 5/11/29 5/11/09 108
21 87,604.19 7.2500 0.0500 Actual / 360 10/1/08 104
37 80,270.90 7.9900 0.0500 Actual / 360 9/11/29 9/11/09 114
4 79,904.37 7.9900 0.0500 Actual / 360 5/11/29 5/11/09 112
38 76,314.57 7.9000 0.0500 Actual / 360 4/11/29 4/11/09 107
39 83,099.73 9.0000 0.0500 Actual / 360 12/11/27 9/11/09 112
40 74,986.00 8.2300 0.0500 Actual / 360 3/11/29 3/11/09 109
41 74,452.87 7.7000 0.0500 Actual / 360 5/11/24 5/11/09 108
42 73,024.40 8.1900 0.0500 Actual / 360 9/11/29 9/11/09 116
43 73,996.71 7.5150 0.0500 Actual / 360 1/11/23 1/11/08 96
44 78,362.00 8.7900 0.0500 Actual / 360 9/11/24 9/11/09 112
45 69,653.00 8.1600 0.0500 Actual / 360 9/11/29 9/11/09 112
46 58,065.88 7.1700 0.0500 Actual / 360 8/1/05 22
47 58,701.17 8.0000 0.0500 Actual / 360 1/1/09 107
48 56,961.64 7.2580 0.0500 Actual / 360 7/1/08 45
49 54,774.45 7.6300 0.0600 Actual / 360 8/11/29 8/11/09 111
50 56,562.86 8.1500 0.0500 Actual / 360 8/11/29 8/11/09 116
51 55,079.65 8.3700 0.0500 Actual / 360 9/11/29 9/11/09 115
52 58,887.62 9.0300 0.0500 Actual / 360 9/11/24 9/11/06 76
53 52,916.10 7.9700 0.0500 Actual / 360 4/1/09 65
54 51,950.48 8.8400 0.0500 Actual / 360 7/11/29 7/11/06 79
55 44,319.02 8.0700 0.0500 Actual / 360 9/11/29 9/11/09 112
56 47,792.24 7.6700 0.0600 Actual / 360 3/1/09 109
57 38,855.54 7.2780 0.0500 Actual / 360 9/1/13 76
58 38,075.49 7.0400 0.0500 30 / 360 12/1/07 0
59 42,449.89 8.0000 0.0500 Actual / 360 3/1/09 109
60 40,408.88 8.1100 0.0500 Actual / 360 8/11/29 8/11/09 114
61 35,672.83 6.9300 0.0600 30 / 360 3/1/13 100
62 38,119.51 7.9900 0.0500 Actual / 360 8/11/29 8/11/09 114
22 34,518.12 7.2500 0.0500 Actual / 360 10/1/08 104
63 38,268.64 8.4500 0.0500 Actual / 360 9/11/29 9/11/09 112
64 37,897.84 7.7900 0.0500 Actual / 360 5/11/24 5/11/09 112
65 36,983.39 8.4100 0.0500 Actual / 360 10/11/29 10/11/09 118
66 32,195.66 7.4000 0.0500 Actual / 360 2/11/29 2/11/09 105
67 31,849.47 7.4000 0.0500 Actual / 360 1/11/29 1/11/09 109
68 32,526.31 7.2500 0.0500 Actual / 360 9/1/08 34
69 $33,624.02 8.6200% 0.0500% Actual / 360 7/11/29 7/11/09 110
70 31,834.18 7.7900 0.0500 Actual / 360 2/1/09 105
71 33,735.75 8.7600 0.0500 Actual / 360 9/11/24 9/11/09 115
72 29,378.47 8.0100 0.0500 Actual / 360 9/11/29 9/11/09 112
73 29,044.43 7.8900 0.0500 Actual / 360 9/11/29 9/11/09 112
74 40,856.70 9.1200 0.0500 Actual / 360 9/11/14 9/11/14 175
75 30,666.71 7.8500 0.0500 Actual / 360 1/1/09 107
76 28,912.27 7.2500 0.0500 Actual / 360 9/1/08 34
77 28,978.32 8.3400 0.0500 Actual / 360 8/11/29 8/11/09 111
78 28,869.33 8.3700 0.0500 Actual / 360 9/11/29 9/11/09 115
79 28,574.85 8.2600 0.0500 Actual / 360 6/11/29 6/11/09 113
80 28,120.00 8.0900 0.0500 Actual / 360 6/11/29 6/11/09 112
81 38,619.68 8.1700 0.0600 30 / 360 11/1/12 11/1/12 96
82 24,311.64 7.9000 0.0500 Actual / 360 8/11/29 8/11/09 111
83 24,815.05 8.1000 0.0600 30 / 360 5/1/09 111
84 24,895.39 8.2300 0.0500 Actual / 360 8/11/09 114
85 28,678.05 9.6250 0.0500 Actual / 360 10/11/24 10/11/09 113
86 25,297.17 8.6600 0.0500 Actual / 360 8/11/24 8/11/09 111
87 22,146.38 7.8900 0.0500 Actual / 360 4/1/09 110
88 44,710.98 8.6300 0.0600 30 / 360 6/1/07 6/1/07 55
89 21,679.25 7.8400 0.0500 Actual / 360 9/11/29 9/11/09 112
90 22,012.94 8.0000 0.0500 Actual / 360 2/1/09 108
91 20,670.55 6.7200 0.0500 30 / 360 9/1/08 35
92 27,173.10 10.2200 0.0500 Actual / 360 9/11/24 9/11/09 115
93 21,027.01 7.8750 0.0500 Actual / 360 8/1/08 34
94 18,536.96 7.7000 0.0500 Actual / 360 9/11/29 9/11/09 112
95 18,392.69 7.5800 0.0500 Actual / 360 7/11/08 101
96 22,049.26 9.3700 0.0500 Actual / 360 9/11/24 9/11/09 112
97 20,282.53 8.5900 0.0500 Actual / 360 9/11/24 9/11/09 115
98 19,711.25 8.2500 0.0500 Actual / 360 6/11/24 7/11/09 115
99 25,684.89 9.2200 0.0600 Actual / 360 8/1/14 8/1/14 174
100 17,276.89 7.8000 0.0500 Actual / 360 5/1/09 111
101 19,018.75 8.1120 0.0500 Actual / 360 11/1/08 49
102 17,685.01 8.5000 0.0500 Actual / 360 9/11/29 9/11/09 115
103 17,295.30 8.2600 0.0500 Actual / 360 8/1/09 114
104 17,980.92 8.1500 0.0500 Actual / 360 6/1/09 112
105 19,091.72 9.0000 0.0500 Actual / 360 9/11/24 9/11/09 112
106 16,478.34 7.9800 0.0500 Actual / 360 8/11/29 8/11/09 114
23 16,263.15 7.2500 0.0500 Actual / 360 10/1/08 104
107 16,206.75 8.5400 0.0500 Actual / 360 7/11/29 7/11/09 115
108 13,185.60 8.1600 0.0500 Actual / 360 8/11/29 8/11/09 114
109 12,108.41 8.1300 0.1200 Actual / 360 9/11/29 9/11/09 117
110 14,108.76 8.7200 0.0500 Actual / 360 9/11/19 9/11/09 112
111 12,053.14 8.3600 0.0500 Actual / 360 9/11/29 9/11/09 112
112 11,195.27 8.1800 0.0500 Actual / 360 9/11/29 9/11/09 115
113 11,012.50 8.0000 0.0500 Actual / 360 6/11/29 6/11/09 109
114 10,824.38 8.5600 0.0500 Actual / 360 9/11/29 9/11/09 115
115 10,916.45 8.3750 0.0500 Actual / 360 1/1/09 51
116 8,778.46 7.0500 0.0600 Actual / 360 12/11/28 12/11/08 106
117 9,355.50 8.0000 0.0500 Actual / 360 7/1/08 45
118 8,493.52 7.6250 0.0500 Actual / 360 11/1/08 49
119 9,249.12 8.7500 0.0500 Actual / 360 9/11/09 115
120 6,955.92 7.1500 0.0600 30 / 360 12/11/38 12/11/08 106
121 8,798.27 8.4200 0.0500 Actual / 360 3/1/09 109
122 8,812.94 9.0800 0.0600 30 / 360 1/1/12 86
123 8,339.03 8.7500 0.0500 Actual / 360 9/11/09 115
124 8,490.29 8.5500 0.0500 Actual / 360 6/1/09 112
125 8,213.15 8.7500 0.0500 Actual / 360 9/11/29 9/11/09 117
126 7,969.34 8.5000 0.0500 Actual / 360 7/1/09 45
127 7,840.72 8.3750 0.0500 Actual / 360 11/1/08 49
128 7,324.85 8.2500 0.0500 Actual / 360 1/1/09 51
129 7,439.75 8.7000 0.0500 Actual / 360 9/11/09 112
130 6,311.23 8.1250 0.0500 Actual / 360 11/1/08 49
131 6,560.44 8.0000 0.0500 Actual / 360 11/1/08 49
132 6,458.87 8.5000 0.0500 Actual / 360 3/1/09 109
133 5,593.72 7.5000 0.0500 Actual / 360 9/1/08 34
134 5,320.51 8.3750 0.0500 Actual / 360 12/1/08 50
135 $5,764.73 8.8750% 0.0500% Actual / 360 12/1/08 50
136 4,913.36 8.5000 0.0500 30 / 360 7/1/08 32
137 4,780.93 8.3750 0.0500 Actual / 360 1/1/08 51
138 3,872.12 8.1250 0.0500 Actual / 360 2/1/09 52
139 4,074.29 8.2900 0.0500 Actual / 360 6/11/09 109
140 4,026.14 8.5000 0.0500 Actual / 360 11/1/08 49
141 3,471.17 8.1250 0.0500 Actual / 360 11/1/08 36
142 3,642.48 8.3750 0.0500 Actual / 360 11/1/08 49
143 3,267.88 8.5000 0.0500 Actual / 360 11/1/08 49
144 3,227.12 8.3750 0.0500 Actual / 360 12/1/08 50
145 3,227.12 8.3750 0.0500 Actual / 360 12/1/08 37
146 3,167.36 8.3750 0.0500 Actual / 360 12/1/08 50
147 2,751.62 8.0000 0.0500 Actual / 360 11/1/08 36
148 2,598.74 8.1250 0.0500 Actual / 360 11/1/08 36
149 2,927.54 8.0000 0.0500 Actual / 360 11/1/08 36
150 2,761.93 8.5000 0.0500 Actual / 360 11/1/08 49
151 2,342.03 8.0000 0.0500 Actual / 360 2/1/09 39
152 1,942.25 8.3750 0.0500 Actual / 360 12/1/08 37
153 1,752.29 8.1250 0.0500 Actual / 360 12/1/08 37
<PAGE>
<CAPTION>
Remaining
Remaining Lockout
Lockout and and Yield Anticipated Original Remaining First
Loan Yield Maintenance Remaining Amortization Season- Amortization P&I
No. Maintenance and Penalties Term Term ing Term Date
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 92 92 99 336 21 336 2/11/00
5 114 114 117 360 3 357 8/11/99
8 116 116 119 360 1 359 10/11/99
9 105 105 108 360 12 348 11/11/98
10 115 115 119 300 11 299 10/11/99
11 116 116 118 360 2 358 9/11/99
12 113 113 120 360 0 360 11/11/99
13 99 99 104 300 16 284 7/11/98
14 99 99 103 360 17 343 6/1/98
15 115 115 118 300 2 298 9/11/99
16 115 115 119 300 1 299 10/11/99
6 229 229 233 290 14 276 9/11/98
17 115 115 119 360 1 359 10/11/99
2 112 112 115 360 5 358 9/11/99
18 113 113 118 360 2 358 9/11/99
19 112 112 119 360 1 359 10/11/99
20 115 115 119 480 1 479 10/11/99
24 114 114 118 360 2 358 9/11/99
25 116 116 120 360 0 360 11/1/99
26 108 108 112 360 8 352 3/1/99
27 117 117 120 300 14 300 11/11/99
29 113 113 118 360 2 358 9/11/99
30 115 115 119 300 1 299 10/11/99
3 112 112 115 360 5 358 9/11/99
31 107 107 111 300 9 291 2/1/99
7 229 229 233 337 14 323 9/11/98
32 116 116 119 360 1 359 10/11/99
33 112 112 119 300 1 299 10/11/99
34 114 114 117 360 3 357 8/11/99
35 111 111 113 360 7 353 4/11/99
36 108 108 115 360 5 355 6/11/99
21 104 104 108 300 12 288 11/1/98
37 114 114 119 360 1 359 10/11/99
4 112 112 115 360 5 358 9/11/99
38 107 107 114 360 6 354 5/11/99
39 112 112 119 339 1 338 10/11/99
40 109 109 113 360 7 353 4/11/99
41 108 108 115 300 5 295 6/11/99
42 116 116 119 360 1 359 10/11/99
43 96 96 99 300 21 279 2/11/98
44 112 112 119 300 1 299 10/11/99
45 112 112 119 360 1 359 10/11/99
46 63 63 70 360 14 346 9/1/98
47 107 107 111 360 9 351 2/1/99
48 101 101 105 300 15 285 8/1/98
49 111 111 118 360 2 358 9/11/99
50 116 116 118 360 2 358 9/11/99
51 115 115 119 360 1 359 10/11/99
52 76 76 83 300 1 299 10/11/99
53 65 65 114 287 4 283 7/1/99
54 79 79 81 360 3 357 8/11/99
55 112 112 119 360 1 359 10/11/99
56 109 109 113 240 7 233 4/1/99
57 163 163 167 360 13 347 10/1/98
58 91 91 98 360 22 338 1/1/98
59 109 109 113 300 7 293 4/1/99
60 114 114 118 360 2 358 9/11/99
61 100 157 161 360 19 341 4/1/98
62 114 114 118 360 2 358 9/11/99
22 104 104 108 360 12 348 11/1/98
63 112 112 119 360 1 359 10/11/99
64 112 112 115 300 17 295 6/11/99
65 118 118 120 360 0 360 11/11/99
66 105 105 112 360 8 352 3/11/99
67 109 109 111 360 9 351 2/11/99
68 100 100 107 300 13 287 10/1/98
69 110 110 117 360 3 357 8/11/99
70 105 105 112 300 8 292 3/1/99
71 115 115 119 300 1 299 10/11/99
72 112 112 119 360 1 359 10/11/99
73 112 112 119 360 1 359 10/11/99
74 175 175 179 180 1 179 10/11/99
75 107 107 111 300 9 291 2/1/99
76 100 100 107 300 13 287 10/1/98
77 111 111 118 360 2 358 9/11/99
78 115 115 119 360 1 359 10/11/99
79 113 113 116 360 4 356 7/11/99
80 112 112 116 360 4 356 7/11/99
81 96 153 157 180 23 157 12/1/97
82 111 111 118 360 2 358 9/11/99
83 111 111 115 360 5 355 6/1/99
84 114 114 118 360 2 358 9/11/99
85 113 113 120 300 1 299 10/11/99
86 111 111 118 300 2 298 9/11/99
87 110 110 114 360 6 354 5/1/99
88 55 88 92 120 28 92 7/1/97
89 112 112 119 360 1 359 10/11/99
90 108 108 112 360 8 352 3/1/99
91 100 100 107 300 13 287 10/1/98
92 115 115 119 300 1 299 10/11/99
93 99 99 106 360 14 346 9/1/98
94 112 112 119 360 1 359 10/11/99
95 101 101 105 360 15 345 8/11/98
96 112 112 119 300 1 299 10/11/99
97 115 115 119 300 1 299 10/11/99
98 115 115 117 300 4 296 7/11/99
99 174 174 178 180 2 178 9/1/99
100 111 111 115 360 5 355 6/1/99
101 105 105 109 300 11 289 12/1/98
102 115 115 119 360 1 359 10/11/99
103 114 114 118 360 2 358 9/1/99
104 112 112 116 300 4 296 7/1/99
105 112 112 119 300 1 299 10/11/99
106 114 114 118 360 2 358 9/11/99
23 104 104 108 300 12 288 11/1/98
107 115 115 117 360 3 357 8/11/99
108 114 114 118 360 2 358 9/11/99
109 117 117 119 360 1 359 10/11/99
110 112 112 119 240 1 239 10/11/99
111 112 112 119 360 1 359 10/11/99
112 115 115 119 360 1 359 10/11/99
113 109 109 116 360 4 356 7/11/99
114 115 115 119 360 1 359 10/11/99
115 107 107 111 300 9 291 2/1/99
116 106 106 110 360 9 351 2/11/99
117 101 101 105 360 15 345 8/1/98
118 105 105 109 360 11 349 12/1/98
119 115 115 119 300 1 299 10/11/99
120 106 106 110 480 9 471 2/11/99
121 109 109 113 300 7 293 4/1/99
122 86 143 147 360 33 327 2/1/97
123 115 115 119 360 1 359 10/11/99
124 112 112 116 300 4 296 7/1/99
125 117 117 119 360 1 359 10/11/99
126 113 113 117 290 3 287 8/1/99
127 105 105 109 300 11 289 12/1/98
128 107 107 111 360 9 351 2/1/99
129 112 112 119 360 1 359 10/11/99
130 105 105 109 360 11 349 12/1/98
131 105 105 109 300 11 289 12/1/98
132 109 109 113 360 7 353 4/1/99
133 100 100 107 360 13 347 10/1/98
134 106 106 110 360 10 350 1/1/99
135 106 106 110 300 10 290 1/1/99
136 98 98 105 360 15 345 8/1/98
137 95 95 99 300 9 291 2/1/99
138 108 108 112 360 8 352 3/1/99
139 109 109 116 300 4 296 7/11/99
140 105 105 109 300 11 289 12/1/98
141 102 102 109 360 11 349 12/1/98
142 105 105 109 285 11 274 12/1/98
143 105 105 109 360 11 349 12/1/98
144 106 106 110 300 10 290 1/1/99
145 103 103 110 300 10 290 1/1/99
146 106 106 110 300 10 290 1/1/99
147 102 102 109 360 11 349 12/1/98
148 102 102 109 360 11 349 12/1/98
149 102 102 109 240 11 229 12/1/98
150 105 105 109 300 11 289 12/1/98
151 105 105 112 240 8 232 3/1/99
152 103 103 110 300 10 290 1/1/99
153 103 103 110 360 10 350 1/1/99
</TABLE>
<PAGE>
RANGE OF DEBT SERVICE COVERAGE RATIOS
<TABLE>
<CAPTION>
WEIGHTED
PERCENT BY WEIGHTED AVERAGE WEIGHTED
RANGE OF DEBT NUMBER OF CUT-OFF DATE CUT-OFF AVERAGE REMAINING AVERAGE WEIGHTED WEIGHTED
SERVICE LOANS/LOAN PRINCIPAL PRINCIPAL MORTGAGE TERM AMORTIZATION AVERAGE AVERAGE
COVERAGE RATIOS POOLS BALANCE BALANCE RATE (MOS.) TERM (MOS.) LTV (%) DSCR
- -------------------- ------------ ----------------- ------------ ---------- ----------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1.10x - 1.19 ....... 6 $ 75,591,574 6.4% 8.529% 114 355 71% 1.16x
1.20x - 1.29 ....... 50 448,464,655 37.8 8.120 116 341 72 1.24
1.30x - 1.39 ....... 33 217,101,940 18.3 7.988 114 335 70 1.34
1.40x - 1.49 ....... 15 138,678,145 11.7 7.870 106 334 62 1.47
1.50x - 1.59 ....... 14 82,744,307 7.0 8.219 117 323 60 1.54
1.60x - 1.69 ....... 7 23,278,709 2.0 8.130 116 333 67 1.63
1.70x - 1.79 ....... 12 58,949,495 5.0 8.165 117 363 57 1.75
1.80x - 1.89 ....... 1 5,463,682 .5 8.000 113 293 57 1.84
1.90x - 1.99 ....... 5 79,480,703 6.7 8.022 119 306 54 1.96
2.00x and over ..... 8 17,094,181 1.4 7.753 126 308 39 2.70
Credit Lease ....... 2 40,282,058 3.4 6.697 233 292 NAP NAP
-------------- ---- ----- --- --- -- -----
TOTAL .............. 153 $1,187,129,449 100.0% 8.041% 119 335 67% 1.41x
==============
</TABLE>
RANGE OF LOAN-TO-VALUE RATIOS
<TABLE>
<CAPTION>
WEIGHTED
PERCENT BY WEIGHTED AVERAGE WEIGHTED
NUMBER OF CUT-OFF DATE CUT-OFF AVERAGE REMAINING AVERAGE WEIGHTED WEIGHTED
RANGE OF LOAN LOANS/LOAN PRINCIPAL PRINCIPAL MORTGAGE TERM AMORTIZATION AVERAGE AVERAGE
TO VALUE RATIOS POOLS BALANCE BALANCE RATE (MOS.) TERM (MOS.) LTV (%) DSCR
- -------------------- ------------ ----------------- ------------ ---------- ----------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
50% or less ........ 12 $ 138,790,031 11.7% 8.114% 114 317 44% 1.75x
51% - 60% .......... 16 117,107,552 9.9 8.217 117 350 54 1.45
61% - 70% .......... 39 261,752,787 22.0 7.991 114 327 65 1.50
71% - 75% .......... 53 348,910,854 29.4 8.022 113 338 73 1.28
76% - 80% .......... 31 280,286,168 23.6 8.196 118 348 78 1.30
Credit Lease ....... 2 40,282,058 3.4 6.697 233 292 NAP NAP
-------------- ---- ----- --- --- -- ----
TOTAL .............. 153 $1,187,129,449 100.0% 8.041% 119 335 67% 1.41x
==============
</TABLE>
S-97
<PAGE>
RANGE OF LOAN-TO-VALUE RATIOS AT ANTICIPATED REPAYMENT DATES OR MATURITY
<TABLE>
<CAPTION>
PERCENT BY WEIGHTED
RANGE OF NUMBER OF CUT-OFF AVERAGE
LOAN TO VALUE LOANS/LOAN CUT-OFF DATE PRINCIPAL MORTGAGE
RATIOS POOLS PRINCIPAL BALANCE BALANCE RATE
- ---------------------- ------------ ------------------- ------------ ----------
<S> <C> <C> <C> <C>
50% or less .......... 26 $ 263,371,645 22.2% 8.028%
51% - 60% ............ 37 261,331,880 22.0 8.008
61% - 70% ............ 73 501,926,449 42.3 8.101
71% - 75% ............ 15 120,217,417 10.1 8.344
Credit Lease ......... 2 40,282,058 3.4 6.697
-------------- ---- -----
TOTAL ................ 153 $1,187,129,449 100.0% 8.041%
==============
<CAPTION>
WEIGHTED
AVERAGE
WEIGHTED WEIGHTED LTV AT
RANGE OF AVERAGE AVERAGE WEIGHTED WEIGHTED ARD OR
LOAN TO VALUE REMAINING AMORTIZATION AVERAGE AVERAGE MATURITY
RATIOS TERM (MOS.) TERM (MOS.) LTV (%) DSCR (%)
- ---------------------- ------------- -------------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
50% or less .......... 115 318 49% 1.65x 43%
51% - 60% ............ 112 333 65 1.44 57
61% - 70% ............ 115 343 74 1.31 65
71% - 75% ............ 117 359 79 1.23 71
Credit Lease ......... 233 292 NAP NAP NAP
--- --- -- ---- ----
TOTAL ................ 119 335 67% 1.41x 59%
</TABLE>
S-98
<PAGE>
MORTGAGED PROPERTIES BY GEOGRAPHIC LOCATION
<TABLE>
<CAPTION>
PERCENT BY
CUT-OFF
NUMBER OF CUT-OFF DATE PRINCIPAL
STATE PROPERTIES PRINCIPAL BALANCE BALANCE
- ------------------------ ------------ ------------------- ------------
<S> <C> <C> <C>
Arizona ................ 7 $ 20,031,455 1.7%
Arkansas ............... 1 632,896 .1
California ............. 48 214,766,958 18.1
Colorado ............... 8 55,804,753 4.7
Connecticut ............ 9 4,609,346 .4
Florida ................ 11 102,758,714 8.7
Georgia ................ 4 12,436,780 1.0
Idaho .................. 1 3,538,619 .3
Illinois ............... 5 15,518,796 1.3
Indiana ................ 6 30,876,066 2.6
Kentucky ............... 1 3,997,256 .3
Maryland ............... 3 13,635,251 1.1
Massachusetts .......... 6 55,087,558 4.6
Minnesota .............. 2 23,109,325 1.9
Mississippi ............ 1 1,499,030 .1
Missouri ............... 4 29,898,309 2.5
Nevada ................. 2 808,010 .1
New Jersey ............. 8 37,367,315 3.1
New Mexico ............. 2 7,755,877 .7
New York ............... 22 251,732,951 21.2
North Carolina ......... 4 15,736,942 1.3
Ohio ................... 3 9,599,114 .8
Oregon ................. 1 10,942,638 .9
Pennsylvania ........... 3 33,376,878 2.8
Puerto Rico ............ 1 38,774,229 3.3
South Carolina ......... 2 3,626,107 .3
South Dakota ........... 1 2,393,088 .2
Tennessee .............. 1 2,247,460 .2
Texas .................. 13 43,498,766 3.7
Utah ................... 1 6,689,444 .6
Virginia ............... 1 9,491,226 .8
Washington ............. 6 67,548,276 5.7
Washington DC .......... 2 41,002,306 3.5
West Virginia .......... 1 6,993,787 .6
Wisconsin .............. 1 9,343,927 .8
-- -------------- ----
TOTAL .................. 192 $1,187,129,449 100.0%
==============
<PAGE>
<CAPTION>
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE WEIGHTED WEIGHTED
MORTGAGE REMAINING AMORTIZATION AVERAGE AVERAGE
STATE RATE TERM (MOS.) TERM (MOS.) LTV (%) DSCR
- ------------------------ ---------- ------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Arizona ................ 7.626% 118 301 64% 1.72x
Arkansas ............... 8.500 105 345 74 1.52
California ............. 7.872 122 333 70 1.38
Colorado ............... 7.783 136 346 76 1.29
Connecticut ............ 8.708 119 299 78 1.60
Florida ................ 8.238 114 351 74 1.25
Georgia ................ 7.777 108 315 67 1.48
Idaho .................. 6.684 233 276 NAP NAP
Illinois ............... 7.557 109 319 74 1.36
Indiana ................ 7.795 118 298 63 1.95
Kentucky ............... 7.890 119 359 64 1.70
Maryland ............... 8.164 118 358 74 1.38
Massachusetts .......... 8.117 116 343 76 1.27
Minnesota .............. 8.195 130 355 79 1.24
Mississippi ............ 8.180 119 359 75 1.35
Missouri ............... 9.141 119 299 68 1.29
Nevada ................. 8.072 109 298 67 1.28
New Jersey ............. 8.157 122 339 65 1.47
New Mexico ............. 6.684 233 276 NAP NAP
New York ............... 8.106 113 325 58 1.56
North Carolina ......... 8.505 119 346 64 1.69
Ohio ................... 7.929 114 322 68 1.40
Oregon ................. 7.990 119 359 75 1.21
Pennsylvania ........... 8.623 119 359 54 1.47
Puerto Rico ............ 8.050 119 359 74 1.25
South Carolina ......... 8.368 113 309 61 1.38
South Dakota ........... 7.800 115 355 73 1.27
Tennessee .............. 7.980 118 358 66 1.79
Texas .................. 8.189 117 348 75 1.28
Utah ................... 6.684 233 276 NAP NAP
Virginia ............... 8.790 119 299 67 1.53
Washington ............. 7.777 108 353 54 1.25
Washington DC .......... 7.708 109 349 67 1.39
West Virginia .......... 9.030 83 299 74 1.32
Wisconsin .............. 8.160 119 359 65 1.23
----- --- --- -- ----
TOTAL .................. 8.041% 119 335 67% 1.41x
</TABLE>
S-99
<PAGE>
YEAR BUILT OR RENOVATED
<TABLE>
<CAPTION>
PERCENT BY WEIGHTED
RANGE OF CUT-OFF AVERAGE
YEAR BUILT/ NUMBER OF CUT-OFF DATE PRINCIPAL MORTGAGE
RENOVATED PROPERTIES PRINCIPAL BALANCE BALANCE RATE
- ----------------- ------------ ------------------- ------------ ----------
<S> <C> <C> <C> <C>
Pre 1970 ........ 13 $ 34,333,039 2.9% 8.680%
1970 - 1974 ..... 7 24,803,616 2.1 7.959
1975 - 1979 ..... 2 7,755,877 .7 6.684
1980 - 1984 ..... 13 68,585,808 5.8 8.066
1985 - 1987 ..... 20 144,634,465 12.2 8.070
1988 - 1990 ..... 21 186,536,505 15.7 8.076
1991 - 1994 ..... 14 66,510,063 5.6 8.284
1995 - 1997 ..... 52 327,809,732 27.6 7.928
1998 - 1999 ..... 50 326,160,347 27.5 8.039
-- -------------- ---- -----
TOTAL ........... 192 $1,187,129,449 100.0% 8.041%
==============
<CAPTION>
WEIGHTED WEIGHTED WEIGHTED
RANGE OF AVERAGE AVERAGE WEIGHTED WEIGHTED AVERAGE
YEAR BUILT/ REMAINING AMORTIZATION AVERAGE AVERAGE YEAR BUILT/
RENOVATED TERM (MOS.) TERM (MOS.) LTV (%) DSCR RENOVATED (%)
- ----------------- ------------- -------------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Pre 1970 ........ 118 418 57% 1.78x 1965
1970 - 1974 ..... 114 342 69 1.32 1973
1975 - 1979 ..... 233 276 NAP NAP 1977
1980 - 1984 ..... 119 316 54 1.45 1983
1985 - 1987 ..... 119 348 73 1.29 1985
1988 - 1990 ..... 121 343 71 1.39 1989
1991 - 1994 ..... 117 325 73 1.30 1993
1995 - 1997 ..... 119 330 64 1.43 1996
1998 - 1999 ..... 116 328 66 1.44 1998
--- --- -- ---- ----
TOTAL ........... 119 335 67% 1.41x 1992
</TABLE>
S-100
<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 33 $ 355,372,711 29.9% 8.080%
- --------------- -- -------------- ---- -----
Retail Anchored 29 212,030,669 17.9 8.181
Unanchored 13 33,784,648 2.8 8.462
Retail Total 42 245,815,317 20.7 8.220
- --------------- -- -------------- ---- -----
Multifamily 51 178,770,749 15.1 7.874
- --------------- -- -------------- ---- -----
Lodging Extended Stay 7 27,908,936 2.4 7.913
Full Service 3 49,481,173 4.2 8.596
Limited Service 8 42,842,486 3.6 7.895
Lodging Total 18 120,232,595 10.1 8.188
- --------------- -- -------------- ---- -----
Industrial 16 77,816,897 6.6 8.068
- --------------- -- -------------- ---- -----
Mixed Use 4 74,492,699 6.3 7.513
- --------------- -- -------------- ---- -----
Cooperative Mixed Commercial 2 2,386,554 0.2 7.096
Residential 8 44,354,192 3.7 8.454
Cooperative Total 10 46,740,745 3.9 8.385
- ---------------------------------- -- -------------- ---- -----
Credit Lease 11 40,282,058 3.4 6.697
- --------------- -- -------------- ---- -----
Other MHC (3) 1 2,291,514 0.2 8.150
Self-Storage 5 18,337,536 1.5 8.013
Special Purpose 1 26,976,630 2.3 9.180
Other Total 7 47,605,679 4.0 8.681
- --------------- -- -------------- ---- -----
Total 192 $1,187,129,449 100.0% 8.041%
=============== === ============== ===== =====
<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 115 345 68% 1.33x 4,889,401 $ 73 96% 1989
- --------------- --- --- -- ---- --------- -------- -- ----
Retail 115 343 74 1.25 3,685,197 58 94 1994
117 341 74 1.33 316,124 107 96 1986
Retail Total 115 342 74 1.26 4,001,321 61 95 1993
- --------------- --- --- -- ---- --------- -------- -- ----
Multifamily 110 342 65 1.43 4,572 39,101 96 1995
- --------------- --- --- -- ---- --------- -------- -- ----
Lodging 114 294 61 1.65 874 31,932 83 1996
120 303 51 1.80 757 60,094 52 1997
119 299 64 1.83 893 47,976 71 1997
Lodging Total 118 299 58 1.78 2,524 47,636 74 1997
- --------------- --- --- -- ---- --------- -------- -- ----
Industrial 118 332 72 1.31 1,863,955 42 99 1992
- --------------- --- --- -- ---- --------- -------- -- ----
Mixed Use 106 346 67 1.44 NAP NAP 85 1993
- --------------- --- --- -- ---- --------- -------- -- ----
Cooperative 110 406 30 3.52 73,154 33 100 1982
128 348 48 1.94 1,326 33,450 100 1976
Cooperative 127 351 47 2.02 74,480 628 100 1977
- --------------- --- --- -- ---- --------- -------- --- ----
Total
- ---------------
Credit Lease 233 292 NAP NAP 1,224 32,910 100 1990
- --------------- --- --- -- ---- --------- -------- --- ----
Other 116 296 74 1.35 80 28,644 100 1965
113 289 69 1.49 369,847 50 94 1995
119 299 67 1.27 3,270 8,250 NAP 1998
Other Total 117 295 68 1.36 373,197 NAP NAP 1995
- --------------- --- --- -- ---- --------- -------- ------- ----
Total 119 335 67% 1.41x 90% 1992
=============== === === == ==== ========== ==== ====
</TABLE>
- -------
(1) Property Size refers to total leasable square feet with respect to
retail, office and industrial/warehouse properties and self-storage
properties, number of units with respect to multifamily properties and
the manufactured housing communities, 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.
(3) Manufactured Housing Communities.
S-101
<PAGE>
RANGE OF CUT-OFF PRINCIPAL BALANCES
<TABLE>
<CAPTION>
NUMBER CUT-OFF PERCENTAGE
OF LOANS/ DATE CUT-OFF
RANGE OF CUT-OFF LOAN PRINCIPAL PRINCIPAL
PRINCIPAL BALANCES POOLS BALANCE BALANCE
- ---------------------------------- ----------- ----------------- ------------
<S> <C> <C> <C>
$500,000 or less.................. 14 $ 5,178,797 .4%
$500,000+ - 1,000,000............. 14 10,829,928 .9
$ 1,000,000+ - 2,000,000.......... 18 23,608,312 2.0
$ 2,000,000+ - 3,000,000.......... 20 50,457,111 4.3
$ 3,000,000+ - 4,000,000.......... 17 61,211,138 5.2
$ 4,000,000+ - 5,000,000.......... 9 41,029,159 3.5
$ 5,000,000+ - 6,000,000.......... 9 49,381,304 4.2
$ 6,000,000+ - 7,000,000.......... 3 20,282,370 1.7
$ 7,000,000+ - 8,000,000.......... 5 38,259,019 3.2
$ 8,000,000+ - 9,000,000.......... 1 8,491,630 .7
$ 9,000,000+ - 10,000,000......... 6 58,181,587 4.9
$10,000,000+ - 15,000,000......... 13 160,646,794 13.5
$15,000,000+ - 20,000,000......... 9 158,166,084 13.3
$20,000,000+ - 30,000,000......... 8 216,375,612 18.2
$30,000,000+ - 40,000,000......... 5 179,093,500 15.1
$40,000,000+ - 50,000,000......... 1 47,937,104 4.0
$50,000,000+ - 60,000,000......... 1 58,000,000 4.9
-- -------------- ----
TOTAL ............................ 153 $1,187,129,449 100.0%
==============
<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.................. 8.283% 109 302 65% 1.65x
$500,000+ - 1,000,000............. 8.324 111 325 69 1.46
$ 1,000,000+ - 2,000,000......... 8.245 117 340 67 1.68
$ 2,000,000+ - 3,000,000......... 8.243 118 319 69 1.42
$ 3,000,000+ - 4,000,000......... 8.242 122 306 64 1.52
$ 4,000,000+ - 5,000,000......... 7.982 115 329 71 1.55
$ 5,000,000+ - 6,000,000......... 7.599 124 330 62 1.66
$ 6,000,000+ - 7,000,000......... 8.616 93 312 75 1.26
$ 7,000,000+ - 8,000,000......... 7.875 114 342 77 1.31
$ 8,000,000+ - 9,000,000......... 7.170 70 346 72 1.32
$ 9,000,000+ - 10,000,000......... 8.094 114 324 70 1.31
$10,000,000+ - 15,000,000......... 8.002 126 337 68 1.30
$15,000,000+ - 20,000,000......... 8.261 118 361 67 1.41
$20,000,000+ - 30,000,000......... 7.696 128 321 67 1.40
$30,000,000+ - 40,000,000......... 8.199 117 345 68 1.45
$40,000,000+ - 50,000,000......... 8.600 117 357 70 1.15
$50,000,000+ - 60,000,000......... 7.750 99 336 46 1.48
----- --- --- -- ----
TOTAL ............................ 8.041% 119 335 67% 1.41x
</TABLE>
YEARS OF SCHEDULED MATURITY
<TABLE>
<CAPTION>
NUMBER CUT-OFF PERCENTAGE WEIGHTED WEIGHTED WEIGHTED
YEARS OF OF LOANS/ DATE CUT-OFF AVERAGE AVERAGE AVERAGE WEIGHTED WEIGHTED
SCHEDULED LOAN PRINCIPAL PRINCIPAL MORTGAGE REMAINING AMORTIZATION AVERAGE AVERAGE
MATURITY POOLS BALANCE BALANCE RATE TERM (MOS.) TERM (MOS.) LTV (%) DSCR
- --------------- ----------- ----------------- ------------ ---------- ------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2005 .......... 1 $ 8,491,630 .7% 7.170% 70 346 72% 1.32x
2007 .......... 2 8,592,885 .7 7.595 96 252 58 1.78
2008 .......... 33 59,520,881 5.0 7.515 107 305 71 1.34
2009 .......... 29 133,139,057 11.2 8.112 115 347 66 1.48
2012 .......... 2 4,783,228 .4 8.373 155 195 55 1.53
2013 .......... 2 10,936,642 .9 7.109 164 344 58 2.02
2014 .......... 2 6,477,186 .5 9.158 179 179 49 1.53
2019 .......... 3 41,879,576 3.5 6.774 229 290 57 1.33
2023 .......... 2 39,203,645 3.3 7.260 103 283 71 1.26
2024 .......... 18 190,904,798 16.1 8.371 118 299 64 1.61
2027 .......... 2 68,193,400 5.7 7.937 102 336 50 1.44
2028 .......... 3 67,827,179 5.7 7.447 106 346 65 1.47
2029 .......... 53 546,083,047 46.0 8.232 117 358 71 1.31
2038 .......... 1 1,096,297 .1 7.150 110 471 23 4.67
-- -------------- ---- ----- --- --- -- ----
TOTAL ......... 153 $1,187,129,449 100.0% 8.041% 119 335 67% 1.41x
==============
</TABLE>
S-102
<PAGE>
RANGE OF REMAINING ANTICIPATED TERMS
<TABLE>
<CAPTION>
RANGE OF CUT-OFF PERCENTAGE WEIGHTED
ANTICIPATED NUMBER OF DATE CUT-OFF AVERAGE
REMAINING NOTES/ PRINCIPAL PRINCIPAL MORTGAGE
TERM LOAN POOLS BALANCE BALANCE RATE
- ------------------------ ------------ ----------------- ------------ ----------
<S> <C> <C> <C> <C>
5+ - 6 years ........... 1 $ 8,491,630 .7% 7.170%
6+ - 7 years ........... 2 13,535,861 1.1 8.938
7+ - 8 years ........... 1 3,001,401 .3 8.630
8+ - 9 years ........... 19 216,326,186 18.2 7.461
9+ - 10 years .......... 121 847,295,259 71.4 8.228
10+ - 11 years ......... 1 36,000,000 3.0 8.500
12+ - 13 years ......... 1 1,065,694 .1 9.080
13+ - 14 years ......... 3 14,654,175 1.2 7.378
14+ - 15 years ......... 2 6,477,186 .5 9.158
19+ - 20 years ......... 2 40,282,058 3.4 6.697
--- -------------- ---- -----
TOTAL .................. 153 $1,187,129,449 100.0% 8.041%
==============
<CAPTION>
WEIGHTED
RANGE OF WEIGHTED WEIGHTED WEIGHTED AVERAGE
ANTICIPATED AVERAGE AVERAGE WEIGHTED WEIGHTED AVERAGE REMAINING
REMAINING REMAINING AMORTIZATION AVERAGE AVERAGE REMAINING LOCK-OUT +
TERM TERM (MOS.) TERM (MOS.) LTV (%) DSCR LOCK-OUT YIELDMAINT.
- ------------------------ ------------- -------------- ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
5+ - 6 years ........... 70 346 72% 1.32x 22 63
6+ - 7 years ........... 82 327 76 1.23 77 77
7+ - 8 years ........... 92 92 28 2.33 55 55
8+ - 9 years ........... 103 322 63 1.39 89 98
9+ - 10 years .......... 117 345 69 1.39 111 113
10+ - 11 years ......... 121 300 44 1.94 117 117
12+ - 13 years ......... 147 327 74 2.21 86 86
13+ - 14 years ......... 162 297 56 1.85 90 123
14+ - 15 years ......... 179 179 49 1.53 175 175
19+ - 20 years ......... 233 292 NAP NAP 229 229
--- --- -- ---- --- ---
TOTAL .................. 119 335 67% 1.41x 110 114
</TABLE>
S-103
<PAGE>
ANTICIPATED REPAYMENT BY YEAR
<TABLE>
<CAPTION>
NUMBER CUT-OFF PERCENT BY WEIGHTED WEIGHTED WEIGHTED
ANTICIPATED OF LOANS/ DATE CUT-OFF AVERAGE AVERAGE AVERAGE WEIGHTED WEIGHTED
REPAYMENT LOAN PRINCIPAL PRINCIPAL MORTGAGE REMAINING AMORTIZATION AVERAGE AVERAGE
BY YEAR POOLS BALANCE BALANCE RATE TERM (MOS.) TERM (MOS.) LTV (%) DSCR
- --------------- ----------- ----------------- ------------ ---------- ------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2005 .......... 1 $ 8,491,630 .7% 7.170% 70 346 72% 1.32x
2006 .......... 2 13,535,861 1.1 8.938 82 327 76 1.23
2007 .......... 2 8,592,885 .7 7.595 96 252 58 1.78
2008 .......... 40 225,648,001 19.0 7.509 104 322 63 1.42
2009 .......... 100 868,381,959 73.1 8.243 117 343 68 1.40
2012 .......... 2 4,783,228 .4 8.373 155 195 55 1.53
2013 .......... 2 10,936,642 .9 7.109 164 344 58 2.02
2014 .......... 2 6,477,186 .5 9.158 179 179 49 1.53
2019 .......... 2 40,282,058 3.4 6.697 233 292 NAP NAP
--- -------------- ---- ----- --- --- -- ----
TOTAL ......... 153 $1,187,129,449 100.0% 8.041% 119 335 67% 1.41x
==============
</TABLE>
- ----------
The weighted average year of anticipated repayment is 2009.
RANGE OF MORTGAGE RATES
<TABLE>
<CAPTION>
CUT-OFF PERCENTAGE
NUMBER OF DATE CUT-OFF
RANGE OF LOANS/ PRINCIPAL PRINCIPAL
MORTGAGE RATES LOAN POOLS BALANCE BALANCE
- --------------------------- ------------ ----------------- ------------
<S> <C> <C> <C>
6.000% - 6.999% ........... 4 $ 48,540,166 4.1%
7.000% - 7.499% ........... 16 142,466,330 12.0
7.500% - 7.999% ........... 32 353,779,867 29.8
8.000% - 8.499% ........... 64 406,060,271 34.2
8.500% - 8.999% ........... 26 153,876,087 13.0
9.000% - 9.499% ........... 9 76,221,473 6.4
9.500% - 9.999% ........... 1 3,247,390 .3
10.000% - 10.999% ......... 1 2,937,866 .2
-- -------------- ----
TOTAL ..................... 153 $1,187,129,449 100.0%
==============
<CAPTION>
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE WEIGHTED WEIGHTED
RANGE OF MORTGAGE REMAINING AMORTIZATION AVERAGE AVERAGE
MORTGAGE RATES RATE TERM (MOS.) TERM (MOS.) LTV (%) DSCR
- --------------------------- ---------- ------------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
6.000% - 6.999% ........... 6.724% 217 297 47% 2.26x
7.000% - 7.499% ........... 7.242 106 322 71 1.39
7.500% - 7.999% ........... 7.775 112 336 63 1.45
8.000% - 8.499% ........... 8.262 118 346 73 1.33
8.500% - 8.999% ........... 8.625 116 328 59 1.48
9.000% - 9.499% ........... 9.106 121 341 63 1.43
9.500% - 9.999% ........... 9.625 120 299 65 1.65
10.000% - 10.999% ......... 10.220 119 299 70 1.52
------ --- --- -- ----
TOTAL ..................... 8.041% 119 335 67% 1.41x
</TABLE>
S-104
<PAGE>
RANGE OF REMAINING LOCK-OUT PLUS YIELD MAINTENANCE TERMS
<TABLE>
<CAPTION>
REMAINING
LOCK-OUT CUT-OFF PERCENTAGE WEIGHTED
AND YIELD NUMBER OF DATE CUT-OFF AVERAGE
MAINTENANCE NOTES/ PRINCIPAL PRINCIPAL MORTGAGE
PERIODS LOAN POOLS BALANCE BALANCE RATE
- ------------------------ ------------ ----------------- ------------ ----------
<S> <C> <C> <C> <C>
4+ - 5 years ........... 1 $ 3,001,401 .3% 8.630%
5+ - 6 years ........... 2 15,238,139 1.3 7.524
6+ - 7 years ........... 2 13,535,861 1.1 8.938
7+ - 8 years ........... 6 78,732,709 6.6 7.713
8+ - 9 years ........... 52 253,720,649 21.4 7.548
9+ - 10 years .......... 85 770,514,957 64.9 8.296
13+ - 14 years ......... 1 5,626,491 .5 7.278
14+ - 15 years ......... 2 6,477,186 .5 9.158
19+ - 20 years ......... 2 40,282,058 3.4 6.697
-- -------------- ---- -----
TOTAL .................. 153 $1,187,129,449 100.0% 8.041%
==============
<CAPTION>
REMAINING WEIGHTED
LOCK-OUT WEIGHTED WEIGHTED WEIGHTED AVERAGE
AND YIELD AVERAGE AVERAGE WEIGHTED WEIGHTED AVERAGE REMAINING
MAINTENANCE REMAINING AMORTIZATION AVERAGE AVERAGE REMAINING LOCK-OUT +
PERIODS TERM (MOS.) TERM (MOS.) LTV (%) DSCR LOCK-OUT YIELD MAINT.
- ------------------------ ------------- -------------- ---------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
4+ - 5 years ........... 92 92 28% 2.33x 55 55
5+ - 6 years ........... 89 318 73 1.32 41 64
6+ - 7 years ........... 82 327 76 1.23 77 77
7+ - 8 years ........... 102 320 51 1.48 86 93
8+ - 9 years ........... 110 324 68 1.42 94 104
9+ - 10 years .......... 118 345 68 1.40 114 114
13+ - 14 years ......... 167 347 79 1.37 76 163
14+ - 15 years ......... 179 179 49 1.53 175 175
19+ - 20 years ......... 233 292 NAP NAP 229 229
--- --- -- ---- --- ---
TOTAL .................. 119 335 67% 1.41x 110 114
</TABLE>
S-105
<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. This may cause the range of Mortgage Rates and
maturities as well as the other characteristics of the Mortgage Loans to vary
from those described herein.
A Current Report on Form 8-K (the "Form 8-K") will be available to
purchasers of the Offered Certificates and will be filed by the Depositor,
together with the Pooling and Servicing Agreement with the Securities and
Exchange Commission (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-106
<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 Collection 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, Finova or Finova Capital, as applicable,
regarding the Mortgage Loans.
The Credit Suisse First Boston Mortgage Securities Corp., Commercial
Mortgage Pass-Through Certificates, Series 1999-C1 (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, Class E and Class F Certificates (collectively,
the "Mezzanine Certificates" and, together with the Senior Certificates, the
"Offered Certificates"), (iii) the Class G, Class H, Class J, Class K, Class L,
Class M, Class N and Class O Certificates (collectively, the "Private
Certificates" and, together with the Offered Certificates, the "Regular
Certificates"), (iv) the Class R and Class LR Certificates (together, the
"Residual Certificates") and (v) the Class V-1 and Class V-2 Certificates. 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 G, Class H,
Class J, Class K, Class L, Class M, Class N, Class O, Class V-1, Class V-2,
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 $25,000
initial Certificate Balance and integral multiples of $1 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 $1 in excess thereof. A
single additional Class A-X Certificate may be issued in a denomination of
authorized
S-107
<PAGE>
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 the amount of such excess. The "Percentage Interest" evidenced
by any Regular Certificate is equal to the initial denomination thereof as of
the Closing Date, divided by the initial Certificate Balance or Notional
Balance of the Class to which it belongs.
The Offered Certificates will initially be represented by one or more
global Certificates registered in the name of the nominee of DTC. The Depositor
has been informed by DTC that DTC's nominee will be Cede & Co. No Certificate
Owner will be entitled to receive a Definitive Certificate representing its
interest in such Class, except as set forth below under "-- Book-Entry
Registration and Definitive Certificates." Unless and until Definitive
Certificates are issued, all references to actions by holders of the Offered
Certificates will refer to actions taken by DTC upon instructions received from
Certificate Owners through its Participants, and all references herein to
payments, notices, reports and statements to holders of the Offered
Certificates will refer to payments, notices, reports and statements to DTC or
Cede & Co., as the registered holder of the Offered Certificates, for
distribution to Certificate Owners through its Participants in accordance with
DTC procedures.
Until Definitive Certificates are issued, interests in any Class of
Offered Certificates will be transferred only on the book-entry records of DTC
and its Participants.
BOOK-ENTRY REGISTRATION AND DEFINITIVE CERTIFICATES
General. The Offered Certificates will be initially issued through the
book-entry facilities of The Depository Trust Company ("DTC"), or through
Cedelbank ("Cedelbank") 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. Cedelbank and
Euroclear will hold omnibus positions on behalf of their participants through
customers' securities accounts in Cedelbank'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 Cedelbank 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.
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 continue to function appropriately to provide timely payment of
distributions, including principal and income payments, to securityholders,
book-entry deliveries and settlement of trades within DTC.
Because of time zone differences, the securities account of a Cedelbank
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 Cedelbank or Euroclear) will be credited during the securities settlement
processing day (which must be a business day for Cedelbank 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 Cedelbank Participant on
S-108
<PAGE>
such business day. Cash received in Cedelbank or Euroclear as a result of sales
of securities by or through a Cedelbank Participant or Euroclear Participant to
a DTC Participant (other than the depository for Cedelbank or Euroclear) will
be received with value on the DTC settlement date, but will be available in the
relevant Cedelbank or Euroclear cash account only as of the business day
following settlement in DTC. For additional information regarding clearance and
settlement procedures for the Offered Certificates and for information with
respect to tax documentation procedures relating to the Offered Certificates,
see Annex E hereto.
Transfers between Participants will occur in accordance with the rules,
regulations and procedures creating and affecting DTC and its operations (the
"Rules"). Transfers between Cedelbank 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 Cedelbank
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 Depository; 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. Cedelbank Participants or Euroclear Participants may not deliver
instructions directly to the Depositories.
Cedelbank, as a professional depository, holds securities for its
participating organizations ("Cedelbank Participants") and facilitates the
clearance and settlement of securities transactions between Cedelbank
Participants through electronic book-entry changes in accounts of Cedelbank
Participants, thereby eliminating the need for physical movement of
certificates. As a professional depository, Cedelbank 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
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the Direct or Indirect Participant through which each Certificate Owner entered
into the transaction. Transfers of ownership interest in the Book-Entry
Certificates are to be accomplished by entries made on the books of
Participants acting on behalf of Certificate Owners. Certificate Owners will
not receive certificates representing their ownership interests in the
Book-Entry Certificates, except in the event that use of the book-entry system
for the Book-Entry Certificates of any series is discontinued as described
below.
DTC has no knowledge of the actual Certificate Owners of the Book-Entry
Certificates; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Certificates are credited, which may or may
not be the Certificate Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Certificate Owners will be governed
by arrangements among them, subject to any statutory or regulatory requirements
as may be in effect from time to time.
Distributions on the Book-Entry Certificates will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the related Distribution
Date in accordance with their respective holdings shown on DTC's records unless
DTC has reason to believe that it will not receive payment on such date.
Disbursement of such distributions by Participants to Certificate Owners will
be governed by standing instructions and customary practices, as is the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of each such Participant (and
not of DTC, the Depositor or any Trustee, Certificate Administrator 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 (the "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 Participants 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
Participants and Indirect Participants. In addition, Certificate Owners will
receive all distributions of principal and of interest on the Offered
Certificates from the Certificate Administrator through DTC and its Direct
Participants 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
Certificate Administrator, 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 Participants 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
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Certificates. Direct Participants and Indirect Participants with which
Certificate Owners have accounts with respect to the Offered Certificates
similarly are required to make book-entry transfers and receive and transmit
such distributions on behalf of their respective Certificate Owners.
Accordingly, although Certificate Owners will not possess physical certificates
evidencing their interests in the Offered Certificates, the Rules provide a
mechanism by which Certificate Owners, through their Direct and Indirect
Participants, will receive distributions and will be able to transfer their
interests in the Offered Certificates.
None of the Depositor, the Servicer, the Certificate Registrar, the
Underwriters, the Special Servicer, the Certificate Administrator 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.
Although DTC, Cedelbank and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of the Offered Certificates among
Participants of DTC, Cedelbank 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 Certificate Administrator 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 advises the Certificate Administrator that the Trustee has
determined that Definitive Certificates are required because the Trustee has
instituted or has been directed to institute 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 any of the events described in the preceding sentence, the Certificate
Administrator 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 Certificate Administrator, 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 Certificate Administrator, to the extent of available funds, on the 4th
Business Day (as defined below) after the Determination Date in each month
commencing in November 1999 (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, California, Maryland, Minnesota 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 November 1999 will be the Closing Date. Each such distribution
will
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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 Certificate
Administrator 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 will establish and maintain, or cause to be established and
maintained, one or more accounts (collectively, the "Collection Account") as
described in the Pooling and Servicing Agreement. The Servicer is required to
deposit in the Collection Account on a daily basis (and in no event later than
the Business Day following receipt in available funds) all payments and
collections due after the Cut-off Date and other amounts received or advanced
with respect to the Mortgage Loans (including, without limitation, insurance
and condemnation proceeds and liquidation proceeds), and will be permitted to
make withdrawals therefrom as set forth in the Pooling and Servicing Agreement.
The Certificate Administrator will establish and maintain one or more
accounts (the "Distribution Account") in the name of the Certificate
Administrator and for the benefit of the Certificateholders. On each
Distribution Date, the Certificate Administrator will apply amounts on deposit
in the Distribution Account (which will include all funds that were remitted by
the Servicer from the Collection Account plus, among other things, any P&I
Advances remitted to the Certificate Administrator by the Servicer, or, if
applicable, the Trustee, less applicable fees and amounts, if any,
distributable to the Residual 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
Certificates as described herein. Each of the Collection 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 Collection Account as of the
Business Day preceding the related Servicer Remittance Date (as defined herein),
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 that are due or reimbursable to (x) any person other than
the Certificateholders and (y) the Class V-1 or Class V-2 Certificates,
(iv) all Prepayment Premiums, Yield Maintenance Charges and Yield
Protection Payments,
(v) all net investment income on the funds in the Collection 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 Collection Account in error;
(b) all P&I Advances made with respect to such Distribution Date by the
Servicer or the Trustee, as applicable, with respect to the Mortgage Loans (net
of certain amounts that are due or reimbursable to persons other than the
Certificateholders); and
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(c) all funds released from the Interest Reserve Account (as defined
herein) for distribution on such Distribution Date. See "Description of the
Certificates -- Accounts" in the Prospectus.
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 Pass-Through Rate applicable to each Class of
Offered Certificates for any Distribution Date will equal the rates per annum
specified below under "-- Definitions." 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 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 all prior distributions on such
Distribution Date made in accordance with the distribution priorities described
below under "-- Priority of Distributions," the Classes of Offered Certificates
(other than the Class A-X Certificates) will be entitled to distributions of
principal sequentially as described below (until the Certificate Balance of
each 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, unless the principal
balances of the Private Certificates and the Mezzanine Certificates have been
reduced to zero by the allocation of Collateral Support Deficits, the
Certificate Administrator 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, to Class A-1, Class A-2 and Class A-X Certificates, pro
rata, up to the Optimal Interest Distribution Amounts for such Classes for such
Distribution Date;
(ii) 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, 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;
(iii) 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
(iv) to the Mezzanine Certificates and Private Certificates, in the
following order of priority:
(A) to the Class B Certificates, in respect of interest, up to 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;
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(C) to the Class B Certificates, until all amounts of Collateral Support
Deficit previously allocated to the Class B Certificates, but not
previously reimbursed, have been reimbursed in full;
(D) to the Class C Certificates, in respect of interest, up to the
Optimal Interest Distribution Amount for such Class for such Distribution
Date;
(E) to the Class C Certificates, in reduction of the Certificate Balance
thereof, an amount up to the Remaining Principal 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, up to 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, up to 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, up to 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, up to 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, up to 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;
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(V) to the Class J Certificates, in respect of interest, up to the
Optimal Interest Distribution Amount for such Class for such Distribution
Date;
(W) 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;
(X) 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;
(Y) to the Class K Certificates, in respect of interest, up to the
Optimal Interest Distribution Amount for such Class for such Distribution
Date;
(Z) to the Class K 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 K Certificates, until all amounts of Collateral
Support Deficit previously allocated to the Class K Certificates, but not
previously reimbursed, have been reimbursed in full;
(BB) to the Class L Certificates, in respect of interest, up to the
Optimal Interest Distribution Amount for such Class for such Distribution
Date;
(CC) to the Class L 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;
(DD) to the Class L Certificates, until all amounts of Collateral
Support Deficit previously allocated to the Class L Certificates, but not
previously reimbursed, have been reimbursed in full;
(EE) to the Class M Certificates, in respect of interest, up to the
Optimal Interest Distribution Amount for such Class for such Distribution
Date;
(FF) to the Class M Certificates, in reduction of the Certificate
Principal Balance thereof, an amount up to the Remaining Principal
Distribution Amount for such Distribution Date until such Certificate
Balance has been reduced to zero;
(GG) to the Class M Certificates, until all amounts of Collateral
Support Deficit previously allocated to the Class M Certificates, but not
previously reimbursed, have been reimbursed in full;
(HH) to the Class N Certificates, in respect of interest, up to the
Optimal Interest Distribution Amount for such Class on such Distribution
Date;
(II) to the Class N 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;
(JJ) to the Class N Certificates, until all amounts of Collateral
Support Deficit previously allocated to the Class N Certificates, but not
previously reimbursed, have been reimbursed in full;
(KK) to the Class O Certificates, in respect of interest, up to the
Optimal Interest Distribution Amount for such Class for such Distribution
Date;
(LL) to the Class O 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;
(MM) to the Class O Certificates, until all amounts of Collateral
Support Deficit previously allocated to the Class O Certificates, but not
previously reimbursed, have been reimbursed in full; and
(NN) to the Class R and Class LR Certificates, any remaining amounts in
the Upper-Tier REMIC and the Lower-Tier REMIC, respectively.
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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 by the application of
Collateral Support Deficits thereto, the Certificate Administrator 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
"Class A-1 Pass-Through Rate": 6.91% per annum.
"Class A-2 Pass-Through Rate": 7.29% 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": 7.53% per annum.
"Class C Pass-Through Rate": As to any Distribution Date, a per annum rate
equal to the Weighted Average Net Mortgage Rate for such Distribution Date
minus 0.24%.
"Class D Pass-Through Rate": As to any Distribution Date, a per annum rate
equal to the Weighted Average Net Mortgage Rate for such Distribution Date
minus 0.08%.
"Class E Pass-Through Rate": As to any Distribution Date, the Weighted
Average Net Mortgage Rate for such Distribution Date.
"Class F Pass-Through Rate": As to any Distribution Date, 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 6.91% 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 6.91% per annum and the Weighted Average Net Mortgage
Rate for such Distribution Date.
"Class J Pass-Through Rate": As to any Distribution Date, a per annum rate
equal to the lesser of 6.91% per annum and the Weighted Average Net Mortgage
Rate for such Distribution Date.
"Class K Pass-Through Rate": As to any Distribution Date, a per annum rate
equal to the lesser of 6.91% per annum and the Weighted Average Net Mortgage
Rate for such Distribution Date.
"Class L Pass-Through Rate": As to any Distribution Date, a per annum rate
equal to the lesser of 6.91% per annum and the Weighted Average Net Mortgage
Rate for such Distribution Date.
"Class M Pass-Through Rate": As to any Distribution Date, a per annum rate
equal to the lesser of 6.91% per annum and the Weighted Average Net Mortgage
Rate for such Distribution Date.
"Class N Pass-Through Rate": As to any Distribution Date, a per annum rate
equal to the lesser of 6.91% per annum and the Weighted Average Net Mortgage
Rate for such Distribution Date.
"Class O Pass-Through Rate": As to any Distribution Date, a per annum rate
equal to the lesser of 6.91% per annum and the Weighted Average Net Mortgage
Rate for such Distribution Date.
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"Component Rate": As to each Class of Regular Certificates, the rate set
forth below with respect thereto:
"Class A-1 Component Rate": 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 Rate": 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 Rate": 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 Rate": 0.24%.
"Class D Component Rate": 0.08%.
"Class E Component Rate": Zero.
"Class F Component Rate": Zero.
"Class G Component Rate": 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 Rate": 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 J Component Rate": 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.
"Class K Component Rate": The amount, if any, by which the Weighted
Average Net Mortgage Rate for such Distribution Date exceeds the Class K
Pass-Through Rate for such Distribution Date.
"Class L Component Rate": The amount, if any, by which the Weighted
Average Net Mortgage Rate for such Distribution Date exceeds the Class L
Pass-Through Rate for such Distribution Date.
"Class M Component Rate": The amount, if any, by which the Weighted
Average Net Mortgage Rate for such Distribution Date exceeds the Class M
Pass-Through Rate for such Distribution Date.
"Class N Component Rate": The amount, if any, by which the Weighted
Average Net Mortgage Rate for such Distribution Date exceeds the Class N
Pass-Through Rate for such Distribution Date.
"Class O Component Rate": The amount, if any, by which the Weighted
Average Net Mortgage Rate for such Distribution Date exceeds the Class O
Pass-Through Rate for such Distribution Date.
"Excess Rate": With respect to each ARD Loan after the related Anticipated
Repayment Date, the excess of the Revised Rate thereof over the Mortgage Rate
thereof.
"Interest Accrual Period": As to any Distribution Date, the period
commencing on the 11th day of the calendar month preceding the month in which
such Distribution Date occurs and ending on the 10th day of the month in which
such Distribution Date occurs. Each Interest Accrual Period is deemed to
consist of 30 days.
"Interest Shortfall Amount": As to any Distribution Date and any Class of
Regular Certificates, the amount, if any, by which the amount distributed on
such Class on such Distribution Date in respect of interest is less than the
related Optimal Interest Distribution Amount.
"Monthly Interest 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
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the related Interest Accrual Period at the Class A-X Pass-Through Rate on the
Notional Balance as of such Distribution Date, reduced by such Class's share of
(x) the Uncovered Prepayment Interest Shortfall Amount and (y) certain
indemnification expenses of the Trust Fund, in each case for such Distribution
Date.
"Mortgage Interest Accrual Period": With respect to any Mortgage Loan, the
period during which interest accrues pursuant to the related Mortgage Note.
"Mortgage Pass-Through Rate": With respect to any Mortgage Loan that
provides for calculations of interest based on twelve months of 30 days each
for any Mortgage Interest Accrual Period, the Net Mortgage Rate (as defined
herein) thereof. With respect to any Mortgage Loan that provides for interest
accrual on an Actual/360 basis, (a) for any Mortgage Interest Accrual Period
relating to an Interest Accrual Period beginning in any January, February,
April, June, September and November and any December occurring in a year
immediately preceding any year that is not a leap year, the Net Mortgage Rate
thereof and (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 related Servicing
Fee Rate and the Administration 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.
"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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"Pass-Through Rate": As to each Class of Certificates, the rate set forth
below:
<TABLE>
<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 J: Class J Pass-Through Rate
Class K: Class K Pass-Through Rate
Class L: Class L Pass-Through Rate
Class M: Class M Pass-Through Rate
Class N: Class N Pass-Through Rate
Class O: Class O Pass-Through Rate
</TABLE>
"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 Certificates 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.
"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.
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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 will 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 Administration 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 during the related Due Period
will be distributed as follows by the Certificate Administrator to the holders
of the following Classes of Regular Certificates: to the Class A-1, Class A-2,
Class B, Class C, Class D, Class E and Class F 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 A-2, Class B,
Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class
L, Class M, Class N and Class O Certificates on such Distribution Date, (b) 25%
and (c) the total amount of Prepayment Premiums collected during the related
Due Period. Any Prepayment Premiums 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 during the
related Due Period will be distributed by the Certificate Administrator to the
following Classes of Offered Certificates: to the Class A-1, Class A-2, Class
B, Class C, Class D, Class E and Class F 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 A-2, Class B,
Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class
L, Class M, Class N and Class O 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 collected on such principal prepayment during the related
Due Period. Any Yield Maintenance Charges 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
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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 will 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 will equal zero.
No Prepayment Premiums or Yield Maintenance Charges will be distributed to
holders of the Class G, Class H, Class J, Class K, Class L, Class M, Class N,
Class O, Class V-1, Class V-2 or Residual Certificates. Instead, after the
Certificate Balances of the Class A-1, Class A-2, Class B, Class C, Class D,
Class E and Class F 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 -- Default Interest Prepayment Charges and Prepayment" in
the Prospectus regarding the enforceability of Yield Maintenance Charges and
Prepayment Premiums.
Yield Protection Payments. In connection with any Required Prepayment of
the two Additional Collateral Loans which are CSFB Mortgage Loans (as described
above under "-- Mortgage Loans Which May Require Principal Paydowns"), 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 Charges, if any, paid by the
related borrowers. 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 such Additional Collateral Loans in the same proportion as Yield
Maintenance Charges. Such Yield Protection Payments are intended to compensate
such Classes for the absence or insufficiency of Prepayment Premiums or Yield
Maintenance Charges paid in connection with such a Required Prepayment on such
Additional Collateral Loans. The Yield Protection Payment will equal the
greater of (a) 1% of such distribution of principal and (b) the Yield
Maintenance Charge 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 based on their
relative fair market values. 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 in respect of the CSFB Mortgage Loans and MS
Mortgage Loans will be distributed solely to the Class V-1 and Class V-2
Certificates, respectively, to the extent set forth in the Pooling and
Servicing Agreement, and will not be available for distribution to holders of
the Offered Certificates. The holders of the Class V-1 and Class V-2
Certificates will have the right to purchase CSFB Mortgage Loans that are ARD
Loans or MS Mortgage Loans that are ARD Loans, respectively, in each case, 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-1 and Class V-2 Certificates
are not entitled to any other distributions of interest, principal, Prepayment
Premiums or Yield Maintenance Charges.
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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 will in each case be as
follows:
<TABLE>
<CAPTION>
ASSUMED FINAL
CLASS DESIGNATION DISTRIBUTION DATE
- ------------------- ------------------
<S> <C>
Class A-1 January 2008
Class A-2 September 2009
Class A-X March 2019
Class B September 2009
Class C September 2009
Class D September 2009
Class E September 2009
Class F September 2009
</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 September 2041, 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 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, Class E and Class F Certificates of the full amount of
interest payable in respect of such Classes of
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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 any 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 and
Certificate Deferred Interest 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 Certificate Administrator 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
Certificate Administrator will be required to allocate any such Collateral
Support Deficit among the respective Classes of Certificates as follows: to the
Class O, Class N, Class M, Class L, Class K, Class J, 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," 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 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 Deficits 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
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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 amount of
interest distributable monthly on 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 F Certificates, third, to the
Class E Certificates, fourth, to the Class D Certificates, fifth, to the Class
C Certificates and sixth, 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.
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 a Mortgage Loan Seller due to missing or defective documentation or by a
Mortgage Loan Seller, Finova or Finova Capital for
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breaches of representations and warranties with respect to the Mortgage Loans
as described herein under "The Pooling and Servicing Agreement --
Representations and Warranties; Repurchase," purchases of the Mortgage Loans in
the manner described herein under "The Pooling and Servicing Agreement --
Optional Termination" or purchases of ARD Loans by Class V-1 or Class V-2
Certificateholders as described herein under "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
actually received or covered by an Advance. 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 maturity date of the related Mortgage Loan has been
effected. The rate of payments (including voluntary and involuntary
prepayments) on pools of Mortgage Loans is influenced by a variety of economic,
demographic, geographic, social, tax, legal and other factors, including the
level of mortgage interest rates and the rate at which borrowers default on
their mortgage loans.
The timing of changes in the rate of prepayment on the Mortgage Loans may
significantly affect the actual yield to maturity experienced by an investor
even if the average rate of principal payments 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 and/or Defeasance
Periods ranging from 22 months to 229 months following the Cut-off Date. The
weighted average Lockout and/or Defeasance Period for the Mortgage Loans is
approximately 110 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" in
this Prospectus Supplement.
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
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<PAGE>
Mortgage Loans will be prepaid on that date or any date prior to maturity.
Additional Collateral Loans may require principal prepayments during the
related Lockout Periods without payment of a Prepayment Premium or Yield
Maintenance Charge. 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. There can be no assurance that any distribution of
Prepayment Premiums, Yield Maintenance Charges or any Yield Protection Payments
advanced by the Servicer in connection with the mandatory prepayment of an
Additional Collateral Loan will be sufficient to offset any negative effect on
yield.
Conversely, slower rates of prepayments on the Mortgage Loans, and
therefore of amounts distributable in reduction of principal balance of the
Offered Certificates entitled to distributions of principal, may coincide with
periods of high prevailing interest rates. During such periods, the amount of
principal distributions resulting from prepayments available to an investor in
such Certificates for reinvestment at such high prevailing interest rates may
be relatively small.
The effective yield to holders of Offered Certificates will be lower than
the yield otherwise produced by the applicable Pass-Through Rate and purchase
prices because while interest is generally required to be paid by the borrower
on a specified day between the first day and the eleventh day of each month,
the distribution of such interest will not be made until the Distribution Date
occurring in such month, and principal paid on any Distribution Date will not
bear interest during the period after the interest is paid and before the
Distribution Date occurs. Additionally, as described under "Description of the
Offered Certificates -- Distributions" herein, if the portion of the Available
Distribution Amount distributable in respect of interest on any Class of
Offered Certificates on any Distribution Date is less than the amount of
interest required to be paid to the holders of such Class, the shortfall will
be distributable to holders of such Class of Certificates on subsequent
Distribution Dates, to the extent of Available Funds on such Distribution
Dates. Any such shortfall will not bear interest, however, and will therefore
negatively affect the yield to maturity of such Class of Certificates for so
long as it is outstanding.
MODELING ASSUMPTIONS
Prepayments on mortgage loans may be measured by a prepayment standard or
model. The model used in this Prospectus Supplement is the "Constant Prepayment
Rate" or "CPR" model. The CPR 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 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.
S-126
<PAGE>
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 November, 1999; (vi) the
Mortgage Loan Sellers, Finova and Finova Capital do not repurchase any Mortgage
Loan as described under "The Pooling and Servicing Agreement -- Representations
and Warranties; Repurchase"; (vii) there are no delinquencies or defaults with
respect to, and no modifications, waivers or amendments of the terms of, the
Mortgage Loans; (viii) there are no Collateral Support Deficits, Certificate
Deferred Interest or Appraisal Reduction Amounts (as defined herein) with
respect to the Mortgage Loans or the Trust Fund; (ix) none of the Mortgage Loan
Sellers, the Controlling Class or the Servicer exercises the right to cause the
early termination of the Trust Fund; (x) the Servicing Fee Rate, Administration
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 5, 1999.
YIELD ON THE CLASS A-X CERTIFICATES
The yield-to-call on the Class A-X Certificates will be extremely
sensitive to the rate and timing of principal payments (including prepayments,
defaults and liquidations) and principal losses on the Mortgage Loans, which
may fluctuate significantly from time to time, and to other factors set forth
herein, including the timing of the exercise, if any, of the optional
termination right. Investors should fully consider the associated risks,
including the risk that a rapid rate of principal payments or principal losses
on the Mortgage Loans could result in the failure by investors in the Class A-X
Certificates to fully recoup their initial investments.
The table below indicates the sensitivity of the pre-tax corporate bond
equivalent yields-to-call of the Class A-X Certificates at various prices and
constant prepayment rates. The yields set forth in the table were calculated by
determining the monthly discount rates that, when applied to the assumed stream
of cash flows to be paid on the Class A-X Certificates, would cause the
discounted present value of such assumed stream of cash flows to equal the
assumed purchase prices plus accrued interest of such Class of Certificates and
converting such monthly rates to corporate bond equivalent rates. Such
calculations do not take into account variations that may occur in the interest
rates at which investors may be able to reinvest funds received by them as
distributions on the Class A-X Certificates and consequently do not purport to
reflect the return on any investment in such Class of Certificates when such
reinvestment rates are considered.
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 October 11, 1999 to (but not including) November 10, 1999. Such table
assumes that no Prepayment Premiums or Yield Maintenance Charges are
distributed to the Class A-X Certificates in connection with any prepayment.
S-127
<PAGE>
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>
4.31250% 10.521% 10.447% 10.381% 10.321% 10.215%
4.34375% 10.327% 10.253% 10.187% 10.127% 10.021%
4.37500% 10.136% 10.062% 9.995% 9.935% 9.829%
</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 September
2041, 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 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
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<PAGE>
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.
S-129
<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
October 2000 99 99 99 99 99
October 2001 98 98 98 98 98
October 2002 97 97 97 97 97
October 2003 96 96 96 96 96
October 2004 94 94 94 94 94
October 2005 92 92 92 92 92
October 2006 90 90 90 89 89
October 2007 88 88 88 87 87
October 2008 70 70 70 70 70
October 2009 4 4 4 4 4
October 2010 4 4 4 4 3
October 2011 4 3 3 3 3
October 2012 3 3 3 3 3
October 2013 2 2 2 2 2
October 2014 2 2 2 2 2
October 2015 2 2 2 2 2
October 2016 2 2 2 2 2
October 2017 2 2 2 2 2
October 2018 1 1 1 1 1
October 2019 0 0 0 0 0
Weighted Average Life (in years)(1) 9.1 9.1 9.1 9.1 9.1
</TABLE>
- ----------
(1) The weighted average life of the Class A-X Certificates is determined by
(i) multiplying the amount of each distribution in reduction of Notional
Balance of such Class by the number of years from the Closing Date to the
related Distribution Date, (ii) adding the results and (iii) dividing the
sum by the aggregate distributions in reduction of Notional Balance
referred to in clause (i). The weighted average life data presented above
for the Class A-X Certificates is for illustrative purposes only, as the
Class A-X Certificates are not entitled to any distributions of
principal.
S-130
<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
October 2000 95 95 95 95 95
October 2001 88 88 88 88 88
October 2002 82 82 82 82 82
October 2003 74 74 74 74 74
October 2004 67 67 67 67 67
October 2005 54 54 54 54 54
October 2006 39 39 38 38 38
October 2007 29 28 27 27 25
October 2008 0 0 0 0 0
October 2009 0 0 0 0 0
October 2010 0 0 0 0 0
October 2011 0 0 0 0 0
October 2012 0 0 0 0 0
October 2013 0 0 0 0 0
October 2014 0 0 0 0 0
October 2015 0 0 0 0 0
October 2016 0 0 0 0 0
October 2017 0 0 0 0 0
October 2018 0 0 0 0 0
October 2019 0 0 0 0 0
Weighted Average Life (in years)(1) 5.7 5.7 5.7 5.7 5.7
</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).
S-131
<PAGE>
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
October 2000 100 100 100 100 100
October 2001 100 100 100 100 100
October 2002 100 100 100 100 100
October 2003 100 100 100 100 100
October 2004 100 100 100 100 100
October 2005 100 100 100 100 100
October 2006 100 100 100 100 100
October 2007 100 100 100 100 100
October 2008 78 77 77 77 76
October 2009 0 0 0 0 0
October 2010 0 0 0 0 0
October 2011 0 0 0 0 0
October 2012 0 0 0 0 0
October 2013 0 0 0 0 0
October 2014 0 0 0 0 0
October 2015 0 0 0 0 0
October 2016 0 0 0 0 0
October 2017 0 0 0 0 0
October 2018 0 0 0 0 0
October 2019 0 0 0 0 0
Weighted Average Life (in years)(1) 9.4 9.4 9.4 9.4 9.4
</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-132
<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
October 2000 100 100 100 100 100
October 2001 100 100 100 100 100
October 2002 100 100 100 100 100
October 2003 100 100 100 100 100
October 2004 100 100 100 100 100
October 2005 100 100 100 100 100
October 2006 100 100 100 100 100
October 2007 100 100 100 100 100
October 2008 100 100 100 100 100
October 2009 0 0 0 0 0
October 2010 0 0 0 0 0
October 2011 0 0 0 0 0
October 2012 0 0 0 0 0
October 2013 0 0 0 0 0
October 2014 0 0 0 0 0
October 2015 0 0 0 0 0
October 2016 0 0 0 0 0
October 2017 0 0 0 0 0
October 2018 0 0 0 0 0
October 2019 0 0 0 0 0
Weighted Average Life (in years)(1) 9.8 9.8 9.8 9.8 9.8
</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-133
<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
October 2000 100 100 100 100 100
October 2001 100 100 100 100 100
October 2002 100 100 100 100 100
October 2003 100 100 100 100 100
October 2004 100 100 100 100 100
October 2005 100 100 100 100 100
October 2006 100 100 100 100 100
October 2007 100 100 100 100 100
October 2008 100 100 100 100 100
October 2009 0 0 0 0 0
October 2010 0 0 0 0 0
October 2011 0 0 0 0 0
October 2012 0 0 0 0 0
October 2013 0 0 0 0 0
October 2014 0 0 0 0 0
October 2015 0 0 0 0 0
October 2016 0 0 0 0 0
October 2017 0 0 0 0 0
October 2018 0 0 0 0 0
October 2019 0 0 0 0 0
Weighted Average Life (in years)(1) 9.8 9.8 9.8 9.8 9.8
</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).
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<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
October 2000 100 100 100 100 100
October 2001 100 100 100 100 100
October 2002 100 100 100 100 100
October 2003 100 100 100 100 100
October 2004 100 100 100 100 100
October 2005 100 100 100 100 100
October 2006 100 100 100 100 100
October 2007 100 100 100 100 100
October 2008 100 100 100 100 100
October 2009 0 0 0 0 0
October 2010 0 0 0 0 0
October 2011 0 0 0 0 0
October 2012 0 0 0 0 0
October 2013 0 0 0 0 0
October 2014 0 0 0 0 0
October 2015 0 0 0 0 0
October 2016 0 0 0 0 0
October 2017 0 0 0 0 0
October 2018 0 0 0 0 0
October 2019 0 0 0 0 0
Weighted Average Life (in years)(1) 9.8 9.8 9.8 9.8 9.8
</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-135
<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
October 2000 100 100 100 100 100
October 2001 100 100 100 100 100
October 2002 100 100 100 100 100
October 2003 100 100 100 100 100
October 2004 100 100 100 100 100
October 2005 100 100 100 100 100
October 2006 100 100 100 100 100
October 2007 100 100 100 100 100
October 2008 100 100 100 100 100
October 2009 0 0 0 0 0
October 2010 0 0 0 0 0
October 2011 0 0 0 0 0
October 2012 0 0 0 0 0
October 2013 0 0 0 0 0
October 2014 0 0 0 0 0
October 2015 0 0 0 0 0
October 2016 0 0 0 0 0
October 2017 0 0 0 0 0
October 2018 0 0 0 0 0
October 2019 0 0 0 0 0
Weighted Average Life (in years)(1) 9.8 9.8 9.8 9.8 9.8
</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).
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<PAGE>
CLASS F 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
October 2000 100 100 100 100 100
October 2001 100 100 100 100 100
October 2002 100 100 100 100 100
October 2003 100 100 100 100 100
October 2004 100 100 100 100 100
October 2005 100 100 100 100 100
October 2006 100 100 100 100 100
October 2007 100 100 100 100 100
October 2008 100 100 100 100 100
October 2009 0 0 0 0 0
October 2010 0 0 0 0 0
October 2011 0 0 0 0 0
October 2012 0 0 0 0 0
October 2013 0 0 0 0 0
October 2014 0 0 0 0 0
October 2015 0 0 0 0 0
October 2016 0 0 0 0 0
October 2017 0 0 0 0 0
October 2018 0 0 0 0 0
October 2019 0 0 0 0 0
Weighted Average Life (in years)(1) 9.8 9.8 9.8 9.8 9.8
</TABLE>
- ----------
(1) The weighted average life of the Class F 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-137
<PAGE>
THE POOLING AND SERVICING AGREEMENT
GENERAL
The Certificates will be issued pursuant to a Pooling and Servicing
Agreement to be dated as of October 11, 1999 (the "Pooling and Servicing
Agreement"), by and among the Depositor, the Servicer, the Special Servicer,
the Trustee and the Certificate Administrator.
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 Certificate
Administrator 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 Certificate Administrator's discretion, payment of a reasonable fee
for any expenses. The Pooling and Servicing Agreement will also be made
available by the Certificate Administrator 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 Certificate Administrator
as Custodian, 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; (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) and (xi) if applicable, the
original Residual Value Policies, (xii) with respect to the L'Enfant
Participation, the applicable participation documents and the co-lender
agreement and (xiii) with respect to the Exchange Apartments Loan, the
applicable intercreditor agreement. The Certificate Administrator, as
Custodian, will hold such documents on behalf of the Trustee for the benefit of
the holders of the Certificates. The Certificate Administrator, as Custodian,
is obligated to review the documents described in items (i) through (iv), (vi)
through (viii) and (x) above for each Mortgage Loan and report any missing
documents or certain types of defects therein (in each such case, a "Defect" in
the related Mortgage File) within 90 days after the Closing Date to the
Depositor, the Servicer, the Special Servicer and the applicable Mortgage Loan
Seller as set forth and subject to the terms of the Pooling and Servicing
Agreement.
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 each of the Mortgage Loan Sellers to the Depositor in the
Mortgage Loan Purchase Agreements and (ii) the representations and warranties
made by FINOVA Realty Capital, Inc. ("Finova") and FINOVA Capital Corporation
("Finova Capital") to the MS Mortgage Loan Seller with respect to the Mortgage
Loans sold by Finova and FINOVA Commercial Mortgage Loan Owner Trust 1998-1
("Finova Owner Trust") to the MS Mortgage Loan Seller (the "Finova Loans")
which will be assigned by the MS Mortgage Loan Seller to the Depositor in the
related Mortgage Loan Purchase Agreement. The CSFB Mortgage Loan Seller will
make representations and warranties as of the Closing Date (unless otherwise
specified) with respect to 86.5% of the Mortgage Loans. The MS Mortgage Loan
Seller will make representations and warranties as of the Closing Date (unless
otherwise specified) with respect to 5.9% of the Mortgage Loans. With respect
to
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3.8% of the Mortgage Loans, the Trustee will receive the assignment of certain
of the representations and warranties made by Finova to the MS Mortgage Loan
Seller as of July 8, 1999, the date on which the MS Mortgage Loan Seller
acquired such Mortgage Loans from Finova. With respect to 3.7% of the Mortgage
Loans, the Trustee will receive the assignment of certain of the
representations and warranties made by Finova Capital to the MS Mortgage Loan
Seller as of July 8, 1999, the date on which the MS Mortgage Loan Seller
acquired such Mortgage Loans from Finova Owner Trust. Subject to certain
specified exceptions, the representations and warranties of the CSFB Mortgage
Loan Seller, the MS Mortgage Loan Seller, Finova and Finova Capital generally
include the following:
(1) the information set forth in the schedule of the Mortgage Loans
attached to the related Mortgage Loan Purchase Agreement is true and
correct in all material respects;
(2) such seller owned the Mortgage Loan free and clear of any and all
pledges, liens and/or other encumbrances;
(3) no scheduled payment of principal and interest under the Mortgage
Loan was 30 days or more past due as of the Cut-off Date, and the Mortgage
Loan has not been 30 days or more delinquent in the twelve-month period
immediately preceding the Cut-off Date;
(4) the related Mortgage constitutes a valid and, subject to certain
creditors' rights exceptions, enforceable first priority mortgage lien
(subject to certain permitted encumbrances) upon the related Mortgaged
Property;
(5) the assignment of the related Mortgage in favor of the Trustee
constitutes a legal, valid and binding assignment;
(6) the related assignment of leases establishes and creates a valid
and, subject to certain creditors' rights exceptions, enforceable first
priority lien (subject to certain permitted encumbrances) in the related
borrower's interest in all leases of the Mortgaged Property;
(7) the Mortgage has not been satisfied, canceled, rescinded or
subordinated in whole or in material part, and the related Mortgaged
Property has not been released from the lien of such Mortgage, in whole or
in material part;
(8) except as set forth in a property inspection report or engineering
report prepared in connection with the origination of the Mortgage Loan,
the related Mortgaged Property is, to the seller's knowledge, free and
clear of any material damage that would materially and adversely affect its
value as security for the Mortgage Loan (normal wear and tear excepted) or
reserves have been established to remediate such damage;
(9) to the seller's knowledge, there is no proceeding pending for the
condemnation of all or any material portion of any Mortgaged Property;
(10) the related Mortgaged Property is covered by an American Land Title
Association (or an equivalent form of) lender's title insurance policy or a
marked-up title insurance commitment (on which the required premium has
been paid) which evidences such title insurance policy that insures that
the related Mortgage is a valid, first priority lien on such Mortgaged
Property, subject only to the exceptions stated therein;
(11) the proceeds of the Mortgage Loan have been fully disbursed and
there is no obligation for future advances with respect thereto;
(12) an environmental site assessment was performed with respect to the
Mortgaged Property in connection with the origination of the related
Mortgage Loan, a report of each such assessment has been delivered to the
Depositor, and such seller has no knowledge of any material and adverse
environmental condition or circumstance affecting such Mortgaged Property
that was not disclosed in such report;
(13) each Mortgage Note, Mortgage and other agreement that evidences or
secures the Mortgage Loan is, subject to certain creditors' rights
exceptions and other exceptions of general
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application, the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms, and there is no valid defense,
counterclaim or right of offset or rescission available to the related
borrower with respect to such Mortgage Note, Mortgage or other agreement;
(14) the related Mortgaged Property is, and is required pursuant to the
related Mortgage to be, insured by casualty and liability insurance
policies of a type specified in the related Mortgage Loan Purchase
Agreement;
(15) other than as set forth below, there are no delinquent or unpaid
taxes, assessments or other outstanding charges affecting the related
Mortgaged Property that are or may become a lien of priority equal to or
higher than the lien of the related Mortgage;
(16) the related borrower is not, to such seller's knowledge, a debtor in
any state or federal bankruptcy or insolvency proceeding;
(17) the related Mortgaged Property consists of the related borrower's
fee simple estate in real estate or, if the related Mortgage encumbers the
interest of a borrower as a lessee under a ground lease of the Mortgaged
Property (a) such ground lease or a memorandum thereof has been or will be
duly recorded and permits the interest of the lessee thereunder to be
encumbered by the related Mortgage; (b) the borrower's interest in such
ground lease is assignable upon notice to, but without the consent of, the
lessor thereunder; (c) such ground lease is in full force and effect and,
to the knowledge of the seller, no material default has occurred
thereunder; (d) such ground lease, or an estoppel letter related thereto,
requires the lessor under such ground lease to give notice of any default
by the lessee to the holder of the Mortgage (provided any required notice
of the lien is given to lessor); (e) the holder of the Mortgage is
permitted a reasonable opportunity (including, where necessary, sufficient
time to gain possession of the interest of the lessee under such ground
lease) to cure any default under such ground lease, which is curable after
the receipt of notice of any such default, before the lessor thereunder may
terminate such ground lease; and (f) such ground lease has an original term
(including any extension options set forth therein) which extends not less
than ten years beyond the scheduled maturity date of the Mortgage Loan;
(18) the Mortgage Loan is not cross-collateralized or cross-defaulted
with any loan other than one or more other Mortgage Loans;
(19) no Mortgage requires the holder thereof to release all or any
material portion of the related Mortgaged Property from the lien thereof
except upon payment in full of the Mortgage Loan or defeasance, or in
certain cases, upon (a) the satisfaction of certain legal and underwriting
requirements and (b) except where the portion of the Mortgaged Property
permitted to be released was not considered by the seller in underwriting
the Mortgage Loan, the payment of a release price and prepayment
consideration in connection therewith; and
(20) to such seller's knowledge, there exists no material default,
breach, violation or event of acceleration (and no event which, with the
passage of time or the giving of notice, or both, would constitute any of
the foregoing) under the related Mortgage Note or Mortgage in any such case
to the extent the same materially and adversely affects the value of the
Mortgage Loan and the related Mortgaged Property.
The Borrower under the Mortgage Loan identified on Annex A as Loan Number
95, representing approximately 0.2% of the Initial Pool Balance, is currently
less than 30 days delinquent in payment of its real estate taxes. The Borrower
timely paid a portion of its current real estate taxes but has disputed a
recent increase in the amount of approximately $36,000. The Mortgaged Property
securing the Mortgage Loan is 100% leased to a single tenant that is
responsible under the terms of its lease for the payment of all real estate
taxes.
If a Mortgage Loan Seller has been notified of a Defect in any Mortgage
File or if a Mortgage Loan Seller, Finova or Finova Capital, as applicable, has
been notified of a breach of any of the foregoing representations and
warranties (a "Breach"), which, in either case, materially and adversely
affects the value of any Mortgage Loan or the interests of the
Certificateholders therein, and if such Mortgage Loan
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Seller does not cure such Defect or such Mortgage Loan Seller, Finova or Finova
Capital, as applicable, does not cure such Breach, in each case within a period
of 90 days following the earlier of its receipt of such notice or its discovery
of the Defect or Breach, then such Mortgage Loan Seller, in the case of a
Defect, or such Mortgage Loan Seller, Finova or Finova Capital, in the case of
a Breach, 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 (which includes unpaid Servicing Fees and
Primary Servicing Fees), (iii) all related unreimbursed Servicing Advances
plus, in general, accrued and unpaid interest on related Advances at the
Reimbursement Rate (as defined herein) and (iv) all reasonable out-of-pocket
expenses reasonably incurred or to be incurred by the Servicer, the Special
Servicer, the Depositor, the Certificate Administrator 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, Finova's or
Finova Capital's representations or warranties regarding the Mortgage Loans.
The related Mortgage Loan Seller, Finova or Finova Capital, as applicable, will
be the sole warranting party in respect of the Mortgage Loans, and none of the
Depositor, the Servicer, the Special Servicer, the Certificate Administrator,
the Custodian, the Trustee, the Underwriters or any of their affiliates will be
obligated to repurchase any affected Mortgage Loan in connection with a Breach
if a Mortgage Loan Seller, Finova or Finova Capital defaults on its obligation
to do so and no assurance can be given that the Mortgage Loan Sellers will
fulfill such obligation. However, the Depositor will not include any Mortgage
Loan in the Trust Fund if anything has come to the Depositor's attention prior
to the Closing Date that causes it to believe that the representations and
warranties made by the related Mortgage Loan Seller regarding such Mortgage
Loan will not be correct in all material respects when made (subject to any
exceptions stated in the related mortgage loan purchase agreement). The
repurchase obligation of the CSFB Mortgage Loan Seller with respect to the CSFB
Mortgage Loans will be guaranteed by Credit Suisse First Boston, acting through
its Cayman Branch ("CSFB Cayman"). CSFB Cayman will not guarantee the
repurchase obligations of the MS Mortgage Loan Seller, Finova or Finova
Capital.
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 related Mortgage Loan Seller, Finova
or Finova Capital, as applicable, 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
(subject to the servicing and special servicing of the L'Enfant Participation
by the servicer and special servicer of the L'Enfant Participation, as
described below) for which it is responsible on behalf of the Trust Fund and in
the best interests of and for the benefit of the Certificateholders (as
determined by the Servicer or the Special Servicer, as the case may be, in its
good faith and reasonable judgment), in accordance with applicable law, 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, in the case of the L'Enfant Participation and the
Exchange Apartments Loan, the related participation agreement and/or co-lender
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
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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 "Primary
Servicing Agreement") with certain primary servicers (each, a "Primary
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 Primary
Servicing Agreement. The Primary Servicing Agreement provides that the Primary
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 subservicers, 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 negligent disregard of
obligations or duties under the Pooling and Servicing Agreement. Under the
Pooling and Servicing Agreement and the Primary Servicing Agreement, the
Servicer is primarily liable to the Trust Fund for the servicing of Mortgage
Loans by the Primary Servicers and each Primary Servicer has agreed to
indemnify the Servicer for any liability that the Servicer may incur as a
result of the Primary Servicer's failure to perform its obligations under the
Primary Servicing 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. 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 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.
First Union National Bank, as servicer of the L'Enfant Other Note
(collectively with the Exchange Apartments Other Note, the "Other Notes"), will
service the L'Enfant Whole Loan (collectively with the Exchange Apartments
Whole Loan, the "Whole Loans"). The L'Enfant Whole Loan will be specially
serviced by the special servicer under the pooling and servicing agreement for
the 1998-C2 Securitization, which will initially be Lennar Partners, Inc.
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For a period of 30 days following the date on which the Exchange
Apartments Loan becomes a Specially Serviced Mortgage Loan, the holder of the
Exchange Apartments Other Note will have the right to purchase the Exchange
Apartments Trust Fund Note (collectively with the L'Enfant Trust Fund Note, the
"Trust Fund Notes") from the Trust Fund at a price equal to the Purchase Price,
together with a specified yield maintenance premium.
The servicer of the L'Enfant Other Note will be required to make all
Servicing Advances with respect to the L'Enfant Whole Loan and will be entitled
to immediate reimbursement from the Servicer for its allocable share of such
Servicing Advance. If such allocable pro rata share is not immediately
reimbursed by the Servicer, such amount can be netted from amounts collected on
the L'Enfant Whole Loan and otherwise payable to the Trustee. The Servicer will
be required to make P&I Advances with respect to the amounts due on the
Exchange Apartments Trust Fund Note and the L'Enfant Trust Fund Note. See "The
Pooling and Servicing Agreement -- Advances" in this Prospectus Supplement.
The servicer of each Other Note will be required to service the related
Whole Loan for the benefit of the Trust Fund and the holder of the related
Other Note with a view to maximizing recovery to both holders. The Special
Servicer will be required to specially service the Exchange Apartments Whole
Loan pursuant to the Pooling and Servicing Agreement. The special servicer of
the 1998-C2 Securitization will be required to specially service the L'Enfant
Whole Loan for the benefit of the Trust Fund and the trustee of the 1998-C2
Securitization.
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
Collection 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 net of any related
Servicing Fees, Primary Servicing Fees and Workout Fees), 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; and (ii) in the case of each Mortgage Loan delinquent
in respect of its Balloon Payment as of the end of the related Due Period
(including any REO Loan as to which the Balloon Payment would have been past
due), an amount (the "Assumed Scheduled Payment") equal to the sum of (a) the
principal portion of the Monthly Payment that would have been due on such
Mortgage Loan on the related Due Date based on the constant payment required by
the related Mortgage Note or the original amortization schedule thereof (as
calculated with interest at the related Mortgage Rate), if applicable, assuming
such Balloon Payment had not become due, after giving effect to any
modification of such Mortgage Loan, and (b) interest on the Stated Principal
Balance of such Mortgage Loan at the applicable Net Mortgage Rate (net of
interest at the Servicing Fee Rate). The Servicer's obligations to make P&I
Advances in respect of any Mortgage Loan or REO Property will continue through
liquidation of such Mortgage Loan or disposition of such REO Property, as the
case may be. To the extent the Servicer fails to make a P&I Advance that it is
required to make under the Pooling and Servicing Agreement, the Trustee is
obligated to make such required P&I Advance pursuant to the Pooling and
Servicing Agreement.
With respect to 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 (as defined
herein) 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
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payment due and owing during the extension period is less than the scheduled
monthly payment in effect prior to such modifications, 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) 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 P&I Advance that it is required to make under the Pooling and
Servicing Agreement the Trustee will make such required P&I Advance pursuant to
the Pooling and Servicing Agreement, but in any event no later than on the
related Distribution Date. To the extent that the Servicer fails to make a
Servicing Advance that it is required to make under the Pooling and Servicing
Agreement and a responsible officer of the Trustee has been notified in writing
of such failure, the Trustee will make such Servicing Advance pursuant to the
Pooling and Servicing Agreement no later than one Business Day following the
Servicer's failure to make such Servicing Advance. 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 or portion thereof 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 or portion thereof that it so
determines to be a Nonrecoverable Advance out of general funds on deposit in
the Collection Account. The Servicer will not be entitled to recover Advances
made to pay Yield Protection Payments from collections on Mortgage Loans, but
will 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 Collection 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" will 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) 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
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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 (or, with respect to
the L'Enfant Participation, the pro rata portion of the Mortgaged Property
allocable to such participation) 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 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 Certificate Administrator, 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 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 Certificate
Administrator and the Servicer the amount of the
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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, and with
respect to which no other Appraisal Reduction Event has occurred and is
continuing, the Special Servicer may, within 30 days after the date of such
twelfth Monthly Payment, order an appraisal (which may be an update of a prior
appraisal) or, with respect to any Mortgage Loan with an outstanding principal
balance less than $2,000,000, perform an internal valuation or obtain an
appraisal (which may be an update of a prior appraisal), the cost of which is
required to be paid by the Servicer as a Servicing Advance recoverable from the
Trust Fund. Based upon such appraisal or internal valuation, the Special
Servicer is required to redetermine and report to the Certificate Administrator
and the Servicer the amount of the Appraisal Reduction with respect to such
Mortgage Loan, and such redetermined Appraisal Reduction will replace the prior
Appraisal Reduction with respect to such Mortgage Loan.
ACCOUNTS
Lockbox Accounts. With respect to 83 Mortgage Loans, which represent in
the aggregate 80.8% 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). 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.
Collection Account. The Servicer will establish and maintain a segregated
account (the "Collection 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 Collection Account for application towards the Monthly
Payment, net of Servicing Fees and Primary Servicing Fees and other amounts due
the Servicer or applicable Primary Servicer and not required to be deposited
into the Collection Account. The Servicer will also deposit into the Collection
Account within one Business Day of receipt all other payments in respect of the
Mortgage
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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 Primary Servicer and not required to be deposited into the
Collection Account.
Distribution Account. The Certificate Administrator will establish and
maintain one or more segregated accounts (collectively, the "Distribution
Account") in the name of the Certificate Administrator for the benefit of the
holders of Certificates. With respect to each Distribution Date, the Servicer
will deliver to the Certificate Administrator for deposit into the Distribution
Account, to the extent of funds on deposit in the Collection Account on the
Servicer Remittance Date, the Available Distribution Amount. 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 is
required to 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 Servicer 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 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
January and February, if any, and deposit such amount (excluding any net
investment income thereon) into the Distribution Account.
Excess Interest Distribution Account. The Certificate Administrator also
will establish and maintain one or more segregated accounts (collectively, the
"Excess Interest Distribution Account"), each in the name of the Certificate
Administrator for the benefit of the holders of the Certificates.
Account Requirements. The Cash Collateral Accounts, Collection 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 Certificate Administrator (or the Servicer on behalf of the
Certificate Administrator) on behalf of the holders of Certificates and the
Servicer will be authorized to make withdrawals from the Cash Collateral
Accounts, the Collection Account and the Interest Reserve Account. Each of the
Cash Collateral Account, Collection Account, any REO Account, the Interest
Reserve Account, the Escrow Accounts and the Excess Interest Distribution
Account will be (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, "F-1+" by Fitch (if rated by Fitch) and "D-1" by DCR (each,
as defined herein) 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
"Aa2" by Moody's, "AA" by Fitch (if rated by Fitch) and "A" by DCR) or (B) as
to which the Certificate Administrator has received written confirmation from
each of the Rating Agencies that holding funds in such account would not, in
and of itself, cause any Rating Agency to qualify, withdraw or downgrade any of
its then current ratings on the Certificates, (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 (iii) 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
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assigned to the Certificates (an "Eligible Bank"). Amounts on deposit in the
Collection 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 Collection 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 Account will remain uninvested.
WITHDRAWALS FROM THE COLLECTION ACCOUNT
The Servicer may make withdrawals from the Collection 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 Certificate
Administrator 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 to pay
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, the Trustee or, with
respect to the L'Enfant Participation, the holder or servicer of the related
Other Note, 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, the Certificate Administrator, the Custodian
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 either Mortgage Loan Seller, Finova or Finova Capital, or the
enforcement of such obligation, under the related Mortgage Loan Purchase
Agreement; (viii) to pay itself, as additional servicing compensation, any net
investment earnings and Penalty Charges on Mortgage Loans (other than Specially
Serviced Mortgage Loans), but only to the extent collected from the related
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 Collection 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 extension from the Internal Revenue Service for the sale of any
REO Loan; (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, either Mortgage Loan Seller, Finova or Finova Capital, 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; and (xvi) to
clear and terminate the Collection Account at termination of the Pooling and
Servicing Agreement; provided, that in the case of clauses (iii), (iv), (v) and
(vi), the Trustee will have priority with respect to any such reimbursement.
ENFORCEMENT OF "DUE-ON-SALE" AND "DUE-ON-ENCUMBRANCE" CLAUSES
The Mortgage Loans contain provisions in the nature of "due-on-sale" or
assumption clauses, which by their terms (a) provide that the Mortgage Loans
will (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 (including
transfer of a direct or indirect controlling interest in a borrower (i.e.,
voting control or 49% economic interest in the aggregate)) or (b) provide that
the Mortgage Loans may be assumed with, among other conditions, the consent of
the related lender in connection with any such sale or other transfer. The
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Special Servicer will be required to enforce any such due-on-sale clause or
refuse to consent to such assumption, 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 (or an equal recovery, provided the other
conditions for an assumption or waiver of a due-on-sale clause, if any, are
met) 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 (or an equal recovery, provided the other conditions for an
assumption or waiver of a due-on-sale clause, if any, are met), 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 -- Risks Related to the Mortgage Loans" that, in each case,
in the aggregate, (A) represents 5% or more of the aggregate outstanding
principal balance of all of the Mortgage Loans at such time or (B) is one of
the ten largest Mortgage Loans by outstanding principal balance of all of the
Mortgage Loans 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 (the conditions described in
clauses (a) and (b) of this sentence are referred to herein as the "Assumption
Conditions"). Mortgage Loans described in clause (b) above are referred to
herein as "Significant Mortgage Loans." The Special Servicer shall be required
to provide notice to the Rating Agencies of the assumption of any Mortgage Loan
or transfer of a direct or indirect controlling interest in the borrower under
a Mortgage Loan which, in each case, is not a Significant Mortgage Loan. 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 Special Servicer will provide notice to the Rating Agencies of any
waiver of any due-on-sale clause in the event that Rating Agency confirmation
is not required for such waiver.
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 related to a Mortgage Loan 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 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" 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 cause to be
performed (at its own expense), physical inspections of each Mortgaged Property
(other than the Mortgaged Properties relating to the L'Enfant Participation) 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
(A) with a Stated Principal Balance of which is $2,500,000
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or more or 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--Risks Related to the Mortgage Loans" that, in each case,
in the aggregate, represents 2.0% or more of the aggregate outstanding
principal balance of all of the Mortgage Loans at such time, at least once
every 12 months and (B) with a Stated Principal Balance that is less than
$2,500,000 and that is not a Mortgage Loan, part of a group of Crossed Loans
identified under the table entitled "Related Borrower Loans" under "Risk
Factors--Risks Related to the Mortgage Loans" that, in each case, in the
aggregate, represents 2.0% or more of the aggregate outstanding principal
balance of all the Mortgage Loans at such time, at least once every 24 months,
in each case commencing in December 1999 (or at such lesser frequency as each
Rating Agency shall have confirmed in writing to the Servicer will not, in and
of itself, 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 is required to
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, is required to prepare a written
report of each such inspection describing the condition of the Mortgaged
Property.
Notwithstanding the foregoing, with respect to the Credit Lease Loans, the
Servicer (or, if such Credit Lease Loan is a Specially Serviced Mortgage Loan,
the Special Servicer) will perform (at its own expense), or cause to be
performed (at its own expense), physical inspections of each Credit Lease
Property at least once (i) every 36 months, if the related Tenant or Guarantor
has a published rating of not less than "BBB," (ii) every 24 months if (A) the
related Tenant or Guarantor has a published rating between "BB+" and "BB" or
(B) no published rating is publicly available for the related Tenant and (iii)
every 12 months if (A) the related Tenant or Guarantor has a published rating
of less than "BB" or (B) no published rating is publicly available for the
related Tenant or Guarantor and such Credit Lease Loan represents 2% or more of
the aggregate Initial Pool Balance. In the event the published rating for any
Tenant or Guarantor is downgraded by any Rating Agency by one or more rating
increment (i.e., "AA" to "A" or "BBB" to "B") and no inspection has been
performed due to a ratings downgrade in the preceding 12 months for the related
Credit Lease Property, then in each such instance, the Servicer is required to
cause all of the Credit Lease Properties leased to such Tenant to be inspected
as soon as reasonably practicable.
Most of the Mortgages obligate the related borrower to deliver quarterly,
and substantially 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, is
required to 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 and with no deduction for physical depreciation.
Additionally, under the terms of the related Mortgage Loan documents, each
borrower is required to maintain business interruption insurance which covers a
period of not less than six months. 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
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each borrower to maintain (to the extent required by the related Mortgage
Loan), and if the borrower does not so maintain, is required to itself maintain
to the extent available at commercially reasonable rates (as determined by the
Servicer or the Special Servicer, as applicable, in accordance with the
Servicing Standard), a flood insurance policy in an amount 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
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 is required to 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 15 of each year, beginning April 15, 2000, 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 15 of each year, beginning April 15, 2000, 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
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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, the Certificate Administrator, the
Depositor or any affiliate, director, officer, employee or agent of any of them
will be under any liability to the Trust Fund, the other parties thereto 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
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
negligent disregard of such obligations and duties. The Pooling and Servicing
Agreement will also provide that the Servicer, the Special Servicer, the
Trustee, the Certificate Administrator, the Depositor 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 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. Additionally,
the Pooling and Servicing Agreement will provide that neither the Servicer nor
the Special Servicer nor any director, officer, employee or agent of either
will be under any liability for, nor be responsible for, any action or decision
by the servicer, special servicer or trustee of the Series 1998-C2
Securitization in servicing the L'Enfant Participation, and the Servicer and
the Special Servicer and, any such director, officer, employee or agent will be
indemnified and held harmless for any loss, liability or expense incurred in
connection therewith.
In addition, the Pooling and Servicing Agreement will provide that none of
the Servicer, the Special Servicer, the Trustee, the Certificate Administrator,
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 Certificate Administrator, 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 Certificate Administrator or the Depositor,
as the case may be, will be entitled to reimbursement from amounts attributable
to the Mortgage Loans on deposit in the Collection 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 and errors and omissions policy 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, in and of itself, resulted in a withdrawal,
downgrade or
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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) (A) any failure by the Servicer to make any remittance
required to be made by the Servicer (including any P&I Advances) by 5:00 p.m.
on the Servicer Remittance Date, which is not cured by 10:00 a.m. on the
Distribution Date and (B) any failure by the Servicer to make any required
Servicing Advance within the time specified in the Pooling and Servicing
Agreement; (ii) any failure by the Special Servicer to deposit into the REO
Account, or to remit to the Servicer for deposit in the Collection Account, any
such remittance required to be made by the Special Servicer on the day such
remittance is required to be made under the Pooling and Servicing Agreement;
(iii) any failure by the Servicer or the Special Servicer duly to observe or
perform in any material respect any of its other covenants or obligations under
the Pooling and Servicing Agreement, which failure continues unremedied for
thirty days (or fifteen days for payment of premiums on any insurance policies
or 60 days so long as such Servicer is in good faith diligently pursuing such
obligation) after written notice thereof has been given to the Servicer or the
Special Servicer, as the case may be, by any other party to the Pooling and
Servicing Agreement, or to the Servicer or the Special Servicer, the Depositor
and the Trustee, by Certificateholders of any Class, evidencing, as to such
Class, Percentage Interests aggregating not less than 25%; (iv) any breach by
the Servicer or Special Servicer of a representation or warranty contained in
the Pooling and Servicing Agreement which materially and adversely affects the
interests of the Certificates and continues unremedied for thirty days 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.
Upon receipt of confirmation in writing by any of the Rating Agencies that
failure to remove the Servicer will, in and of itself, cause a downgrade,
qualification or withdrawal of the then-current ratings assigned to any Class
of Certificates (a "Termination Event"), the Servicer will have the ability to
deliver proposed bid materials to the Certificate Administrator and the
Certificate Administrator will solicit bids for the rights to service the
Mortgage Loans under the Pooling and Servicing Agreement from at least three
persons qualified thereunder to act as successor Servicer (or, if three
qualified persons cannot be located, then from as many persons as can be
located and are qualified). Upon the assignment and acceptance of the servicing
rights under the Pooling and Servicing Agreement to and by a qualified bidder,
the Certificate Administrator will remit to the terminated Servicer the net
proceeds of the bid of the successor Servicer, as described in the Pooling and
Servicing Agreement.
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 and with respect to an Event of
Default pursuant to clause
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(vi) above, the Trustee will be required, to terminate all of the rights
(except for any rights related to unpaid servicing compensation or unreimbursed
Advances or, in the case of termination of the Servicer, its rights to the
Assignable Primary Servicing Fee (each as defined herein)) and obligations of
the defaulting party as Servicer or Special Servicer, as applicable, under the
Pooling and Servicing Agreement, whereupon the Trustee, subject to the bid
procedure described above, 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
the same compensation arrangements as the terminated party (except that the
Trustee will not be entitled to receive the Assignable Primary Servicing Fee).
If the Trustee is unwilling or unable so to act or is not approved by each
Rating Agency, it may, subject to the bid procedure described above (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, in and of itself,
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 on behalf of the Trustee 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 any mistake therein or to 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 Collection Account, the
Distribution Account or the REO Account, provided that (A) the Servicer
Remittance Date shall not be later than the related Distribution Date, (B) such
change would not adversely affect in any material respect the interests of any
Certificateholder, as evidenced by an opinion of counsel (at the expense of the
party requesting the amendment) and (C) such change would not result in the
downgrading, qualification or withdrawal of the then current ratings assigned
to any Class of Certificates by any Rating Agency, as evidenced by a letter
from each Rating Agency, (iv) modify, eliminate or add to any of its provisions
(A) to such extent as shall be necessary to maintain the qualification of the
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
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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 662/3% 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
either REMIC constituted by the Trust Fund or cause the 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") will be allocated among the respective Classes of
Certificateholders as follows: (i) 2% in the case of the Class A-X
Certificates, and (ii) in the case of any other Class of Certificates (other
than the Class V-1, Class V-2 and Residual Certificates), a percentage equal to
the product of 98% and a fraction, the numerator of which is the aggregate
Certificate Balance of such Class, in each case, determined as of the
Distribution Date immediately preceding such date of determination, and the
denominator of which is equal to the aggregate Certificate Balance of all
Classes of Certificates, each determined as of the Distribution Date
immediately preceding such date of determination. None of the Class V-1, Class
V-2 or Residual Certificates will be entitled to any Voting Rights. For
purposes of determining Voting Rights, the Certificate Balance of any Class
shall be deemed reduced by allocation of Collateral Support Deficit to such
Class. Voting Rights allocated to a Class of Certificateholders shall be
allocated among such Certificateholders in proportion to the Percentage
Interests evidenced by their respective Certificates. Solely for the purposes
of the taking of any action under the Pooling and Servicing Agreement with
respect to an event of default of the Servicer, the Special Servicer or the
Trustee, the taking of any vote pursuant to the Pooling and Servicing Agreement
with respect to the rights, obligations or liabilities of the Servicer, Trustee
or Special Servicer, or the giving of any consent or waiver with respect to the
rights, obligations or liabilities of the Servicer, Trustee or Special Servicer
pursuant to the Pooling and Servicing Agreement, any Certificate beneficially
owned by the Servicer, Trustee or Special Servicer, as the case may be, or any
affiliate thereof, will be deemed not to be outstanding and the Voting Rights
to which it is entitled will not be taken into account in determining whether
the requisite percentage of Voting Rights necessary to take any such action or
vote or effect any such consent or waiver has been obtained; provided, however,
that the foregoing will not apply if the Servicer, Trustee or Special Servicer,
as the case may be, and/or their affiliates, owns the entire Class of each
Class affected by such action, vote, consent or waiver.
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
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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 (other than the L'Enfant Participation) as to which a specified number of
scheduled payments are delinquent. In addition, the Special Servicer may offer
to sell any defaulted Mortgage Loan (other than the L'Enfant Participation) 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 prior to the close of the third calendar year beginning after the year
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 such longer period will not result in the imposition of taxes on
"prohibited transactions" on either REMIC constituted by the Trust Fund or
cause the 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.
Generally, neither the Lower-Tier REMIC nor the Upper-Tier REMIC will be
taxed on income received with respect to a Mortgaged Property acquired by the
Trust Fund to the extent that it constitutes "rents from real property," within
the meaning of Code Section 856(c)(3)(A) and Treasury regulations thereunder.
"Rents from real property" include fixed rents and rents based on the receipts
or sales of a tenant but do not include the portion of any rental based on the
net income or profit of any tenant or sub-tenant. No determination has been
made whether rent on any of the Mortgaged Properties meets this requirement.
"Rents from real property" include charges for services customarily furnished
or rendered in connection with the rental of real property, whether or not the
charges are separately stated. Services furnished to the tenants of a
particular building will be considered as customary if, in the geographic
market in which the building is located, tenants in buildings which are of
similar class are customarily
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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 Lower-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" in this Prospectus Supplement. With respect to
an REO Property relating to the L'Enfant Participation, compliance with the
foregoing two paragraphs depends on the actions of the special servicer of the
related Other Note, which is also required to comply with the foregoing two
paragraphs.
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 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
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Mortgage Loans that have become REO Properties are referred to herein as the
"Specially Serviced Mortgage Loans." The Servicer will have no responsibility
for the performance by the Special Servicer of its duties under the Pooling and
Servicing Agreement.
If any Specially Serviced Mortgage Loan, in accordance with its original
terms or as modified in accordance with the Pooling and Servicing Agreement,
becomes a performing Mortgage Loan for three consecutive Monthly Payments
(provided, 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 is
required to 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 is
required to 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 is required to implement the same. If the majority of
Certificateholders reject the Asset Status Report, the Special Servicer is
required to 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 within ten
Business Days 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 Certificate Administrator 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);
provided that for this purpose the Class N and Class O Certificates will be
considered to be one Class. For purposes of determining the identity of the
Controlling Class, the Certificate Balance of each Class will 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 N and Class
O Certificates.
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.
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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
Certificate Administrator and (y) such modification, waiver or amendment does
not result in a tax being imposed on the Trust Fund or cause either 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 for more than three one-year periods or 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)
7.64% 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.
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).
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The Special Servicer will notify the Servicer and the Certificate
Administrator of any modification, waiver or amendment of any term of any
Mortgage Loan and must deliver to the Certificate Administrator (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 MS 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 MS Mortgage Loan Seller may notify the CSFB Mortgage
Loan Seller, the Special Servicer 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 MS Mortgage Loan Seller will be
entitled to exercise such option. If the MS Mortgage Loan Seller does not
exercise its option to purchase all of the assets of the Trust Fund within 60
days after such option becomes exercisable, the Special Servicer may notify the
CSFB Mortgage Loan Seller, the MS Mortgage Loan Seller and the Trustee of its
intention to exercise such option, and if neither the CSFB Mortgage Loan Seller
nor the MS Mortgage Loan Seller exercises such option within ten Business Days,
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 MS Mortgage Loan Seller, the Special Servicer
and the Trustee of its intention to exercise such option, and if none of the
CSFB Mortgage Loan Seller, the MS Mortgage Loan Seller or 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
MS Mortgage Loan Seller, the holder of the Controlling Class, the Special
Servicer and the Trustee of its intention to exercise such option, and if none
of the CSFB Mortgage Loan Seller, the MS 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
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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 1.00% of the Initial Pool Balance.
On the final Distribution Date, the aggregate amount paid by the CSFB
Mortgage Loan Seller, the MS 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 Collection 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, a New York banking corporation, will serve as
Trustee under the Pooling and Servicing Agreement pursuant to which the
Certificates are being issued (in such capacity, the "Trustee"). The corporate
trust office of the Trustee responsible for administration of the Trust is
located at 450 West 33rd Street, 14th Floor, New York, New York 10001,
Attention: Structured Finance. As of June 30, 1999, the Trustee had assets of
approximately $391 billion.
As compensation for its services, the Trustee will receive a portion of
the Administration Fee (as defined below).
The information concerning the Trustee set forth herein has been provided
by the Trustee, and none of the CSFB Mortgage Loan Seller, the MS Mortgage Loan
Seller, the Certificate Administrator, the Servicer, the Special Servicer, the
Depositor or the Underwriters makes any representation or warranty as to the
accuracy hereof.
CERTIFICATE ADMINISTRATOR
Norwest Bank Minnesota, National Association, a national banking
association ("Norwest"), with an address at 11000 Broken Land Parkway,
Columbia, Maryland 21044-3562, Attention: Corporate Trust Services
(CMBS)--Credit Suisse First Boston Mortgage Securities Corp., Commercial
Mortgage Pass-Through Certificates, Series 1999-C1, will act as paying agent,
as registrar for purposes of recording and otherwise providing for the
registration of the Certificates and of transfers and exchanges of the
Definitive Certificates, if issued, as authenticating agent of the Certificates
and as custodian of the loan files (in its capacity as custodian, the
"Custodian" and in its capacity as paying agent, certificate registrar,
authentication agent and custodian, the "Certificate Administrator"). Norwest
is a wholly-owned subsidiary of Wells Fargo & Company and an affiliate of the
Servicer. All requests relating to the transfer or exchange of Certificates
should be directed to the Certificate Administrator's office at Norwest Center,
Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479-0113,
Attention: Corporate Trust Services (CMBS)--Credit Suisse First Boston Mortgage
Securities Corp., Commercial Mortgage Pass-Through Certificates, Series
1999-C1. Pursuant to the Pooling and Servicing Agreement, Norwest will have the
right to resign, and in certain circumstances may be removed, as Certificate
Administrator.
As compensation for its services, the Certificate Administrator will
receive a portion of the Administration Fee.
ADMINISTRATION FEE AND PAYMENT OF EXPENSES
As compensation for the performance of their duties, the Trustee, the
Certificate Administrator and the Custodian will be paid fees which, in the
aggregate, are referred to herein as the "Administration Fee." The
Administration Fee will be payable monthly on a loan-by-loan basis and will
accrue at a rate (the "Administration Fee Rate") equal to .0028% 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, the Certificate Administrator and the Custodian will be
entitled to recover from the Trust Fund all reasonable unanticipated expenses
and disbursements incurred or made by such
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party in accordance with any of the provisions of the Pooling and Servicing
Agreement, but not including expenses incurred in the ordinary course of
performing their duties under the Pooling and Servicing Agreement, and not
including any such expense, disbursement or advance as may arise from their
willful misconduct, negligence or bad faith.
DUTIES OF THE TRUSTEE
If the Servicer fails to make a required Advance, the Trustee is required
to make such Advance, provided that the Trustee shall not be obligated to make
any Nonrecoverable Advance. The Trustee will 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
Wells Fargo Bank, National Association ("Wells Fargo"), 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, 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. With
respect to the Multiple Note Loans, the holder of the related Other Note, or a
servicer on its behalf, will service the Whole Loan. See "Certain
Characteristics of the Mortgage Loans--Multiple Note Loans" and "-- Servicing
of the Mortgage Loans; Collection of Payments" in this Prospectus Supplement.
The Servicer's principal servicing offices are located at 555 Montgomery
Street, San Francisco, California 94104.
As of September 30, 1999, Wells Fargo was responsible for servicing for
third parties approximately 1,600 commercial and multifamily loans, totaling
approximately $9.1 billion in aggregate outstanding principal amounts,
including loans securitized in mortgage-backed securitization transactions.
Wells Fargo & Company is the holding company for the Servicer. Wells Fargo
& Company files reports with the Securities and Exchange Commission that are
required under the Securities Exchange Act of 1934, as amended. Such reports
include information regarding the Servicer and may be obtained at the website
maintained by the Securities and Exchange Commission at http://www.sec.gov.
The information concerning Wells Fargo set forth herein has been provided
by the Servicer, and none of the Mortgage Loan Sellers, the Special Servicer,
the Depositor, the Trustee or the Underwriters makes any representation or
warranty as to the accuracy thereof.
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 .05% 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 (including any REO Loans and Specially Serviced
Mortgage Loans). The Servicer and certain Primary 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
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Primary Servicer, the fee set forth in the related Primary Servicing Agreement.
The Servicer will be permitted to assign its Primary Servicing Fee (the
"Assignable Primary Servicing Fee") to any third party. The Assignable Primary
Servicing Fee will be payable to Wells Fargo or its assignee, regardless of
whether Wells Fargo continues to be the servicer under the Pooling and
Servicing Agreement or a primary servicer of any Mortgage Loan. 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 Primary Servicing Agreement, in no event will
the Servicer or any Primary Servicer be entitled to retain a servicing fee from
the amount of any P&I Advance. 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 that all amounts then
due and payable with respect to such Mortgage Loan, other than interest on
outstanding Advances, have been paid) 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 is required to 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 Collection 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 commercially
reasonable 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 is also entitled to receive all Prepayment Interest
Excesses as additional servicing compensation unless such Prepayment Interest
Excess results from the Servicer accepting a voluntary prepayment with respect
to a Mortgage Loan and waiving a right under such Mortgage Loan to collect
interest thereon through the Due Date following the date of prepayment.
The principal compensation to be paid to the Special Servicer in respect
of its special servicing activities will be the Special Servicing Fee, the
Workout Fee and the Liquidation Fee. The "Special Servicing Fee" will accrue
with respect to each Specially Serviced Mortgage Loan at a rate equal to 0.25%
per annum (the "Special Servicing Fee Rate") on the basis of the same principal
amount and for the same period respecting which any related interest payment
due or deemed due on such Specially Serviced Mortgage Loan is computed, and
will be payable monthly from the Trust Fund. A "Workout Fee" will in general be
payable with respect to each Corrected Mortgage Loan. As to each Corrected
Mortgage Loan, the Workout Fee will be payable out of, and will be calculated
by application of a "Workout Fee Rate" of (i) 1.0% for any Mortgage Loan with a
Stated Principal Balance of less than $10,000,000, (ii) 0.75% for any Mortgage
Loan with a Stated Principal Balance equal to or greater than $10,000,000 but
less than $20,000,000 and (iii) 0.5% for any Mortgage Loan with a Stated
Principal Balance equal to or greater than $20,000,000, to each collection of
interest and principal (including scheduled payments, prepayments, Balloon
Payments and payments at maturity) received on such Mortgage Loan for so long
as it remains a Corrected Mortgage Loan. The Workout Fee with respect to any
Corrected Mortgage Loan will cease to be payable if such loan again becomes a
Specially Serviced Mortgage Loan; provided that a new Workout Fee will become
payable if and when such Mortgage Loan again becomes a Corrected Mortgage Loan.
If the Special Servicer is terminated (other than for cause or by resignation),
it will 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),
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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 (net of expenses) 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 related Mortgage Loan Seller, Finova or
Finova Capital, as applicable, 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-1 or Class V-2 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 commercially reasonable 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.
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 the Monthly Interest Distribution
Amounts thereof (calculated without regard to any Uncovered Prepayment Interest
Shortfall Amounts). 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.
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"Prepayment Interest Excess" means, 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 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.
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"). With respect to the L'Enfant
Participation, if the L'Enfant Participation becomes a Specially Serviced
Mortgage Loan, Lennar Partners, Inc., in its capacity as the special servicer
for the 1998-C2 Securitization will service the L'Enfant Participation in
accordance with the 1998-C2 Securitization pooling and servicing agreement for
so long as it is being specially serviced. See "Certain Characteristics of the
Mortgage Loans -- Significant Mortgage Loans -- The L'Enfant Participation" in
this Prospectus Supplement. 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 May 1999, the Special Servicer and its affiliates were
managing a portfolio with an original asset count of over 12,000 assets in most
states with an original face value of over $53 billion, most of which are
commercial real estate assets. Included in this managed portfolio are $40
billion of commercial real estate assets representing 53 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 none of Mortgage Loan Seller, the
Trustee, the Depositor, the Servicer or the Underwriters 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 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
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disproportionate effect on one or more Classes of Certificates. Pursuant to the
Pooling and Servicing Agreement, the Servicer or Special Servicer are required
to 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
Certificate Administrator Reports. Based solely on information provided in
monthly reports prepared by the Servicer and the Special Servicer regarding the
Mortgage Loans (which may also publish such reports on the Internet), and
delivered to the Certificate Administrator, the Certificate Administrator will
make available and, upon request, forward on each Distribution Date to each
Certificateholder, the Depositor, the Trustee and any of its designees, the
Servicer, the Special Servicer, the Underwriters, each Rating Agency,
Bloomberg, L.P., the Trepp Group, Charter Research Corporation and Intex
Solutions, Inc. and, if requested in writing, any potential investors in the
Certificates, all of which will be made available electronically to any
interested party via the Certificate Administrator's website and, with respect
to the Statement 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 30-59 days, (B) delinquent 60-89 days, (C) delinquent
90 days or more (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 either Mortgage Loan Seller, Finova or Finova Capital 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 loan-by-loan basis) paid during the related Due Period and the
aggregate amount of any Prepayment
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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 or
the Trustee 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 Certificate Administrator) 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 Certificate Administrator will provide Certificateholders with a
written copy of such report upon written request.
Servicer Reports. The Servicer is required to deliver to the Certificate
Administrator on the Business Day prior to each Distribution Date, and the
Certificate Administrator is required to make available, or, upon request,
forward to each Certificateholder, the Depositor, the Trustee, the
Underwriters, each Rating Agency and, if requested in writing, any potential
investor in the Certificates, on each Distribution Date, the following eight
reports, in the form of the Commercial Mortgage Securities Association standard
information package, all of which will be made available electronically via the
Certificate Administrator's website:
(a) A "Comparative Financial Status Report," in the form set forth in
Annex C, 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 C,
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 C, 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
C, setting forth, among other things, as of the close of business on the
Determination Date immediately preceding the preparation of such report,
the aggregate amount of Liquidation Proceeds, both for the related Due
Period and historically, set forth on a Mortgage Loan-by-Mortgage Loan
basis.
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(e) An "REO Status Report," in the form set forth in Annex C, 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 C, setting
forth, among other things, a description of 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.
(g) Annually, on or before May 31 of each year, commencing with May 31,
2000, with respect to each Mortgaged Property and REO Property, an
"Operating Statement Analysis Report" together with copies of the operating
statements and rent rolls (but only to the extent the related borrower
delivers such information to the Servicer or Special Servicer), as
applicable for such Mortgaged Property or REO Property as of the end of the
preceding calendar year. To the extent delivery is required in the related
Mortgage Loan, 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.
(h) Within thirty days of receipt by the Servicer (or within ten days of
receipt from the Special Servicer with respect to any Specially Serviced
Mortgage Loan or REO Property) of annual operating statements, if any, with
respect to any Mortgaged Property or REO Property, an "NOI Adjustment
Worksheet" for such Mortgaged Property (with the annual operating
statements attached thereto as an exhibit), presenting the computations
made in accordance with the methodology described in the Pooling and
Servicing Agreement to "normalize" the full year net operating income and
debt service coverage numbers used by the Servicer in the other reports
referenced above.
The reports described in clauses (a), (f), (g) and (h) above are
collectively referred to as the "Restricted Reports." The reports described in
clauses (b), (c), (d) and (e) above are collectively referred as the
"Unrestricted Reports." 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, the Certificate
Administrator 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, the Certificate
Administrator or the Trustee, as applicable. Upon written request, the
Certificate Administrator will make hard copies of such reports available to
the Certificateholders at the expense of the requesting party.
In addition, within a reasonable period of time after the end of each
calendar year, the Certificate Administrator is required to make available and,
upon request, 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
Certificate Administrator 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.
Other Information. The Pooling and Servicing Agreement requires that the
Trustee (except with respect to item (vi) below which will be made available by
the Custodian and with respect to items (iv) and (v) below which will be made
available by the Servicer) make available at its offices, during normal
business hours, upon not less than 10 Business Days' prior written notice, for
review by any
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Certificateholder, the Depositor, the Trustee, 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 Certificate Administrator, (v) the
most recent annual operating statements, rent rolls (to the extent such rent
rolls have been made available by the related borrower) and/or lease summaries
and retail "sales information," if any, collected by or on behalf of the
Servicer or the Special Servicer with respect to each Mortgaged Property, (vi)
any and all modifications, waivers and amendments of the terms of a Mortgage
Loan entered into by the Servicer and/or the Special Servicer delivered to the
Certificate Administrator, and (vii) any and all officers' certificates and
other evidence delivered to the Trustee to support the Servicer's 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, Custodian or
Servicer, as applicable, upon written request; however, the Trustee, Custodian
and Servicer, as applicable, will be permitted to require payment of a sum
sufficient to cover the reasonable costs and expenses of providing such copies.
The Certificate Administrator will make available each month, to any
interested party, the Statement to Certificateholders, the Unrestricted
Servicer Reports and certain Mortgage Loan information as presented in the
CMSA100 format via the Certificate Administrator's website.
The Certificate Administrator will also make available each month the
Restricted Servicer Reports, via its website with the use of a password. The
password will be given out by the Certificate Administrator, upon request, to
each Certificateholder, each of the parties to the Pooling and Servicing
Agreement, each of the Rating Agencies, each of the Underwriters, any party
that identifies itself to the Certificate Administrator as a beneficial owner
or prospective purchaser of a Certificate by delivering an investor
certification (the form of which is available on the Certificate
Administrator's website and also attached as an exhibit to the Pooling and
Servicing Agreement) and any other person upon the direction of the Depositor.
The Certificate Administrator will make no representations or warranties
as to the accuracy or completeness of any report, document or other information
made available on its website and will assume no responsibility therefor. In
addition, the Certificate Administrator may disclaim responsibility for any
information distributed by the Certificate Administrator for which it is not
the original source. For assistance with the Certificate Administrator's
website, investors may call (301) 815-6600.
In connection with providing access to the Certificate Administrator's
website, the Certificate Administrator may require registration and the
acceptance of a disclaimer. None of the Certificate Administrator, the Trustee,
the Servicer or the Special Servicer will be liable for the dissemination of
information in accordance herewith and with the Pooling and Servicing
Agreement.
Other Information Available via the Certificate Administrator's
Website. Parties to whom the Certificate Administrator issues a password may
request additional information regarding the performance of the Mortgage Loans
from the Certificate Administrator by directing inquiries by e-mail through the
Certificate Administrator's website. The Certificate Administrator will post
responses to investor inquiries in the "Investor Q&A Forum" section of its
website within the time specified in the Pooling and Servicing Agreement (or
indicate the time within which a response will be provided). Parties to whom
the Certificate Administrator issues a password may obtain through the
Certificate Administrator's website a listing of certain "special events" (as
specified in the Pooling and Servicing Agreement) and certain updates on
Mortgage Loan performance and other financial information concerning the Trust
Fund, as specified in the Pooling and Servicing Agreement.
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CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS FOR MORTGAGED PROPERTIES
LOCATED IN NEW YORK, CALIFORNIA, FLORIDA AND WASHINGTON
The following discussion contains summaries of certain legal aspects of
the Mortgage Loans or portions of Mortgage Loans secured by parcels in New York
(approximately 22.2% of the Initial Pool Balance), California (approximately
18.1% of the Initial Pool Balance), Florida (approximately 8.7% of the Initial
Pool Balance) and Washington (approximately 5.7% of the Initial Pool Balance),
which are general in nature. The summaries do not purport to be complete and
are qualified in their entirety by reference to the applicable federal and
state laws governing the Mortgage Loans.
NEW YORK
Mortgage loans in New York are generally secured by mortgages on the
related real estate. Foreclosure of a mortgage is usually accomplished in
judicial proceedings. After an action for foreclosure is commenced, and if the
lender secures a ruling that is entitled to foreclosure ordinarily by motion
for summary judgment, the court then appoints a referee to compute the amount
owed together with certain costs, expenses and legal fees of the action. The
lender then moves to confirm the referee's report and enter a final judgment of
foreclosure and sale. Public notice of the foreclosure sale, including the
amount of the judgment, is given for a statutory period of time, after which
the mortgaged real estate is sold by a referee at public auction. There is no
right of redemption after the foreclosure sale. In certain circumstances,
deficiency judgments may be obtained. Under mortgages containing a statutorily
sanctioned covenant, the lender has a right to have a receiver appointed
without notice and without regard to the adequacy of the mortgaged real estate
as security for the amount owed.
CALIFORNIA
Mortgage Loans in California generally are secured by deeds of trust on
the related real estate. Foreclosure of a deed of trust in California may be
accomplished by a non-judicial trustee's sale under a specific provision in the
deed of trust or by judicial foreclosure. Public notice of either the trustee's
sale or the judgment of foreclosure is given for a statutory period of time
after which the mortgaged real estate may be sold by the Trustee, if foreclosed
pursuant to the Trustee's power of sale, or by court appointed sheriff under a
judicial foreclosure. Following a judicial foreclosure sale, the borrower or
its successor in interest may, for a period of up to one year, redeem the
property. California's "one action" rule requires the lender to exhaust the
security afforded under the deed of trust by foreclosure in an attempt to
satisfy the full debt before bringing a personal action (if otherwise
permitted) against the borrower for recovery of the debt, except in certain
cases involving environmentally impaired real property. California case law has
held that acts such as an offset of an unpledged account constitute violations
of such statutes. Violations of such statutes may result in the loss of some or
all of the security under the loan. Other statutory provisions in California
limit any deficiency judgment (if otherwise permitted) against the borrower
following a judicial sale to the excess of the outstanding debt over the
greater of (i) the fair market value of the property at the time of the public
sale and (ii) the amount of the winning bid in the foreclosure. Further, under
California law, once a property has been sold pursuant to a power-of-sale
clause contained in a deed of trust, the lender is precluded from seeking a
deficiency judgment from the borrower or, under certain circumstances,
guarantors. California statutory provisions regarding assignments of rents and
leases require that a lender whose loan is secured by such an assignment must
exercise a remedy with respect to rents as authorized by statute in order to
establish its right to receive the rents after an event of default. Among the
remedies authorized by statute is the lender's right to have a receiver
appointed under certain circumstances.
FLORIDA
Mortgage loans involving real property in Florida are secured by mortgages
and foreclosures are accomplished by judicial foreclosure. There is no power of
sale in Florida. After an action for foreclosure is commenced and the lender
secures a judgment, the final judgment will provide that the property be sold
at a public sale at the courthouse if the full amount of the judgment is not
paid prior to the scheduled sale. Generally, the foreclosure sale must occur no
earlier than twenty (20) (but not more than thirty-five (35))
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days after the judgment is entered. During this period, a notice of sale must
be published twice in the county in which the property is located. There is no
right of redemption after the foreclosure sale. Florida does not have a "one
action rule" or "anti-deficiency legislation." Subsequent to a foreclosure
sale, however, a lender may be required to prove the value of the property sold
as of the date of foreclosure in order to recover a deficiency. In certain
circumstances, the lender may have a receiver appointed.
WASHINGTON
In Washington, it is most common to foreclose a deed of trust by a
non-judicial trustee's sale. Non-judicial foreclosure is available only if the
property is not used principally for agricultural purposes, either at the time
the deed of trust is granted or at the time of foreclosure. The non-judicial
foreclosure process requires a preliminary 30-day notice of default and a
subsequent 90-day notice of sale. The notice of sale must be posted on the
premises and published twice in a local newspaper. The trustee's sale cannot be
held sooner than 190 days after the date of default.
Washington has a "one action" rule that prohibits non-judicial foreclosure
during the pendency of any action that seeks satisfaction of an obligation
secured by the deed of trust, with the exception of actions for the appointment
of a receiver or to enforce any other lien or security interest granted to
secure the obligation secured by the deed of trust.
Non-judicial foreclosure has the effect of satisfying the entire
obligation secured by the deed of trust, including any cross-collateralized
obligations and any obligations of the grantor contained in separate documents
that are the "substantial equivalent" of obligations secured by the deed of
trust. Limited exceptions to the "anti-deficiency" rule allow post-foreclosure
actions against the grantor within one year after the date of foreclosure to
collect misapplied rents, insurance or condemnation proceeds, or to recover for
waste committed against the property.
In Washington, a lender may elect to foreclose a deed of trust judicially
as a mortgage and preserve the right to a deficiency judgment against the
grantor. There is a one-year redemption period from the date of sale following
a judicial foreclosure. The redemption period may be reduced to eight months if
the foreclosure complaint waives any deficiency judgment against the grantor.
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
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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 the rights of the Offered Certificates to receive Yield Protection
Payments, including the collateral pledged to secure the payment of such
obligation (such portion of the Trust Fund, the "Trust REMICs"), as two
separate REMICs (the "Upper-Tier REMIC" and the "Lower-Tier REMIC,"
respectively) within the meaning of Code Section 860D. The reserve accounts,
the Lockbox Accounts and the Cash Collateral Accounts will be treated as
beneficially owned by the respective borrowers for federal income tax purposes.
The Lower-Tier REMIC will hold the Mortgage Loans (exclusive of Excess
Interest), proceeds therefrom, the Collection Account, the Distribution
Account, the Interest Reserve Account and any REO Property, and will issue (i)
certain uncertificated classes of regular interests (the "Lower-Tier Regular
Interests") and (ii) the Class LR Certificates, which will represent the sole
class of residual interests in the Lower-Tier REMIC. The Upper-Tier REMIC will
hold regular interests of the Lower-Tier REMIC and the Upper-Tier Distribution
Account in which distributions thereon will be deposited, and will issue the
regular interests represented by 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 J, Class K, Class
L, Class M, Class N and Class O 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 U.S.
Department of the Treasury ("Treasury Regulations") thereunder, in the opinion
of Cadwalader, Wickersham & Taft, the Upper-Tier REMIC and the Lower-Tier REMIC
will each qualify as a separate REMIC and the portion of the Trust Fund
consisting of Excess Interest, and the rights of the Offered Certificates to
receive Yield Protection Payments will be treated as a grantor trust for
federal income tax purposes. References in this discussion to the "REMIC" will,
unless the context dictates otherwise, refer to each of the Upper-Tier REMIC
and the Lower-Tier REMIC. The Class V-1 and Class V-2 Certificates will
represent pro rata undivided beneficial interests in the portion of the Trust
Fund consisting of Excess Interest with respect to the CSFB Mortgage Loans and
the MS Mortgage Loans, respectively. 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 qualifying assets under Section 7701(a)(19)(C) of the Code only to the
extent of the percentage of the aggregate pool balance from time to time
represented by the Mortgage Loans secured by Multifamily Properties,
Residential Cooperative Properties and Manufactured Housing Community
Properties.
The regular interests represented by the Offered Certificates generally
will be treated as newly originated debt instruments for federal income tax
purposes. Beneficial owners of the Offered Certificates will be required to
report income on such regular interests in accordance with the accrual method
of accounting. Based on expected issue prices allocable to the regular
interests represented by the Offered Certificates, it is anticipated that the
Class A-X and Class F Certificates will be issued with original issue discount,
the Class E Certificates will be issued with de minimis original issue discount
and the Class A-1, Class A-2, Class B, Class C and Class D 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 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.
The federal income tax treatment of Yield Protection Payments is unclear
in certain respects. Yield Protection Payments may be treated as ordinary
income as such amounts actually become due, less any
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portion of a Certificateholder's basis allocable thereto, in which event any
unrecovered basis may be treated as an ordinary loss. It is possible, although
unlikely, that such income should be accrued at an earlier time or that such
basis could be recovered periodically prior to the receipt of such income. On
the other hand, Yield Protection Payments may be treated as capital gain under
Section 1234A of the Code, less any basis related thereto, and any unrecovered
basis may be treated as a capital loss. Although not free from doubt, the
Issuer believes that the value of the Yield Protection Payments as of the
Closing Date is negligible. Investors should consult their own tax advisors as
to the federal income tax treatment of Yield Protection Payments. Investors who
are Non-U.S. Persons should, in particular, consider the eligibility of Yield
Protection Payments for exemption from 30% U.S. withholding tax.
See "Certain Federal Income Tax Consequences -- REMIC Certificates --
Taxation of REMIC Regular Certificates" in the Prospectus.
The manner in which income should be accrued on the Class A-X Certificates
is unclear. The Certificate Administrator, 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.
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, a State or the District of Columbia, or is
a foreign estate or trust, see "Certain Federal Income Tax Consequences --
REMIC Certificates -- Taxation of Certain Foreign Investors" in the Prospectus.
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
S-173
<PAGE>
CSFB an individual prohibited transaction exemption, Prohibited Transaction
Exemption ("PTE") 89-90, 54 Fed. Reg. 42597 (Oct. 17, 1989) and has granted
Morgan Stanley an individual prohibited transaction exemption, PTE 90-24, 55
Fed. Reg. 20548 (May 24, 1990), each as amended by PTE 97-34, 62 Fed. Reg.
39021 (July 21, 1997) (either such exemption, the "Exemption"), for certain
mortgage-backed and asset-backed certificates underwritten, in whole or in
part, by CSFB. The Exemption might be applicable to the initial purchase, the
holding, and the subsequent resale by a Plan of certain certificates, such as
the Senior Certificates, underwritten by CSFB or Morgan Stanley, 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,
Fitch or 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 CSFB or Morgan Stanley
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.
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
S-174
<PAGE>
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 and at least fifty percent of the aggregate interest in
the trust is acquired by persons independent of the Restricted Group; (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 Underwriters, the
Trustee, the Servicer, any obligor with respect to Mortgage Loans included in
the Trust Fund constituting more than five percent of the aggregate unamortized
principal balance of the assets in the Trust Fund, or any affiliate of such
parties (the "Restricted Group").
CSFB 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 CSFB or which
it cannot control, such as those relating to the circumstances of the Plan
purchaser or the Plan fiduciary making the decision to purchase any such Class
of Certificates. However, before purchasing a Senior Certificate, a fiduciary
of a Plan should make its own determination as to the availability of the
exemptive relief provided by the Exemption or the availability of any other
prohibited transaction exemptions, and whether the conditions of any such
exemption will be applicable to the Senior Certificates. A fiduciary of a Plan
that is a governmental Plan should make its own determination as to the need
for and the availability of any exemptive relief under any Similar Law.
Any fiduciary of a Plan considering whether to purchase a Senior
Certificate should also carefully review with its own legal advisors the
applicability of the fiduciary duty and prohibited transaction provisions of
ERISA and the Code to such investment. See "ERISA Considerations" in the
Prospectus.
The sale of Senior Certificates to a Plan is in no respect a
representation by the Depositor or the Underwriters that this investment meets
all relevant legal requirements with respect to investments by Plans generally
or any particular Plan, or that this investment is appropriate for Plans
generally or any particular Plan.
MEZZANINE CERTIFICATES
Under current law, the purchase and holding of Mezzanine Certificates by
or on behalf of any Plan may result in a non-exempt prohibited transaction
under ERISA and Section 4975 of the Code or any 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 Underwriters or the Certificate Registrar to any
obligation or liability (including obligations or liabilities under ERISA,
Section 4975 of the Code or any Similar Law) in addition to those set forth in
the Pooling and Servicing Agreement. Such opinion of counsel shall not be an
expense of the Depositor, the Trustee, the Servicer, the Special Servicer, the
Trust Fund, the Underwriters or the Certificate Registrar. In addition, so long
as the Mezzanine Certificates are registered in the name of Cede & Co., as
nominee of
S-175
<PAGE>
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, the Certificate
Administrator, the Custodian 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.
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.
UNDERWRITING
Under the terms and conditions set forth in the underwriting agreement
dated November 5, 1999 among the Depositor, Credit Suisse First Boston
Corporation ("CSFB"), an affiliate of the Depositor, and Morgan Stanley & Co.
Incorporated ("Morgan Stanley" and, collectively with CSFB, the
"Underwriters"), the Depositor has agreed to sell to the Underwriters the
following respective principal amounts of the Offered Certificates:
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL NOTIONAL
AMOUNT OF AMOUNT OF BALANCE OF
CLASS A-1 CLASS A-2 CLASS A-X
UNDERWRITER CERTIFICATES CERTIFICATES CERTIFICATES
- --------------------- -------------- -------------- -----------------
<S> <C> <C> <C>
Credit Suisse First
Boston Corporation $124,687,500 $412,812,500 $ 731,317,646
Morgan Stanley & Co.
Incorporated $ 74,812,500 $247,687,500 $ 438,790,588
------------ ------------ --------------
Total $199,500,000 $660,500,000 $1,170,108,234
============ ============ ==============
<CAPTION>
PRINCIPAL PRINCIPAL PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF AMOUNT OF AMOUNT OF AMOUNT OF
CLASS B CLASS C CLASS D CLASS E CLASS F
UNDERWRITER CERTIFICATES CERTIFICATES CERTIFICATES CERTIFICATES CERTIFICATES
- --------------------- -------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Credit Suisse First
Boston Corporation $32,875,000 $36,562,500 $ 9,187,500 $25,562,500 $12,812,500
Morgan Stanley & Co.
Incorporated $19,725,000 $21,937,500 $ 5,512,500 $15,337,500 $ 7,687,500
----------- ----------- ----------- ----------- -----------
Total $52,600,000 $58,500,000 $14,700,000 $40,900,000 $20,500,000
=========== =========== =========== =========== ===========
</TABLE>
The Underwriting Agreement will provide that the underwriters are
obligated to purchase all of the Offered Certificates if any are purchased. The
Underwriting Agreement further provides that if an Underwriter defaults, the
purchase commitments of the non-defaulting Underwriter may be increased or the
offering of the Offered Certificates may be terminated.
<PAGE>
CSFB and Morgan Stanley will be joint book-running managers.
Proceeds to the Depositor from the sale of the Offered Certificates will
be approximately 104.98% 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 Depositor estimates that its
out-of-pocket expenses for this offering will be approximately $1,120,600.
S-176
<PAGE>
The Underwriters have advised the Depositor that they propose to offer the
Offered Certificates for sale from time to time in one or more transactions
(which may include block transactions), in negotiated 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 Underwriters may effect such transactions
by selling the Offered Certificates to or through dealers, and such dealers may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Underwriters 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 Underwriters may be deemed to have received
compensation from the Depositor in the form of underwriting discounts, and the
Underwriters may also receive commissions from the purchasers of the Offered
Certificates for whom they may act as agent. The Underwriters and any dealers
that participate with the Underwriters in the distribution of the Offered
Certificates may be deemed to be underwriters, and any 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 Underwriters that
the Underwriters currently intend to make a market in the Offered Certificates;
however, the Underwriters do not have any obligation to do so, any market
making may be discontinued at any time and there can be no assurance that an
active public market for the Offered Certificates will develop. See "Risk
Factors--Risks Related to the Offered Certificates -- Lack of a Secondary
Market for the Certificates May Make It Difficult for You To Resell Your
Certificates."
The Depositor has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act, or
contribute to payments which the Underwriters may be required to make in
respect thereof. The Mortgage Loan Sellers have agreed to indemnify the
Depositor with respect to certain liabilities, including certain civil
liabilities under the Securities Act, relating to the Mortgage Loans.
LEGAL MATTERS
Certain legal matters will be passed upon for the Depositor, the
Underwriters and the CSFB Mortgage Loan Seller by Cadwalader, Wickersham &
Taft, New York, New York. Certain legal matters will be passed upon for the MS
Mortgage Loan Seller by Latham & Watkins, New York, New York.
RATING
It is a condition to the issuance of the Offered Certificates that they
receive the following credit ratings from any or all, as applicable, of Duff &
Phelps Credit Rating Co. ("DCR"), Fitch IBCA, Inc. ("Fitch") and Moody's
Investors Service, Inc. ("Moody's" and, together with DCR and Fitch, the
"Rating Agencies"):
<TABLE>
<CAPTION>
DCR FITCH MOODY'S
------ ------- --------
<S> <C> <C> <C>
Class A-1 AAA AAA Aaa
Class A-2 AAA AAA Aaa
Class A-X AAA AAA Aaa
Class B AA AA Aa2
Class C A A A2
Class D A- A- A3
Class E BBB BBB Baa2
Class F BBB- 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
S-177
<PAGE>
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 mortgage
pass-through certificates do not address the likelihood of receipt of
Prepayment Premiums, Yield Maintenance Charges, Yield Protection Payments,
default interest 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. The
Notional Balance upon which interest is calculated on the Class A-X
Certificates will be reduced by the occurrence of prepayments, whether
voluntary or involuntary. The rating does not address the timing or magnitude
of reductions of such Notional Balance, but only the obligation to pay interest
timely on the Notional Balance as so reduced from time to time. Accordingly,
the ratings of the Class A-X Certificates should be evaluated independently
from similar ratings on other types of securities. With respect to the Credit
Lease Loans, a downgrade in the credit rating of the related Tenants and/or the
Guarantor 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-178
<PAGE>
INDEX OF SIGNIFICANT DEFINITIONS
<TABLE>
<S> <C>
%
% of Total SF ........................ S-91
% of Total Square Feet ............... S-91
1
150 William Street Borrower .......... S-78
150 William Street Loan .............. S-78
150 William Street Manager ........... S-78
150 William Street Property .......... S-78
1997 NOI ............................. S-90
1998 NOI ............................. S-90
1998-C2 Securitization ............... S-55, S-69
3
30/360 ............................... S-80, S-89
A
ACCOR ................................ S-54, S-64
ACCOR Credit Lease Borrowers ......... S-64
ACCOR Credit Lease Properties ........ S-64
ACCOR Credit Lease Property .......... S-64
ACCOR Credit Leases .................. S-64
ACCOR Credit Tenant .................. S-54, S-64
ACCOR Loans .......................... S-64
ACM .................................. S-37
Actual Ongoing Capital Items
Deposits .......................... S-88
Actual/360 ........................... S-80, S-89
Additional Collateral Loans .......... S-88
Administration Fee. .................. S-161
Administration Fee Rate .............. S-161
Advances ............................. S-143
Allocated Loan Amount ................ S-89
Anchor Tenant ........................ S-89
anchored property .................... S-28
Annual Debt Service .................. S-89
Anticipated Remaining Term ........... S-89
Anticipated Repayment Date ........... S-80, S-89
Anticipated Repayment Date LTV ....... S-89
Appraisal Reduction .................. S-144
Appraisal Reduction Amount ........... S-145
Appraisal Reduction Event ............ S-144
ARD .................................. S-80
ARD Loans ............................ S-80
ARD LTV .............................. S-89
Asset Status Report .................. S-157
Assignable Primary Servicing Fee ..... S-162
Assumed Final Distribution Date ...... S-122
Assumed Maturity Date ................ S-122
Assumed Scheduled Payment ............ S-143
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Assumption Conditions ................ S-149
Audit Program ........................ S-151
Available Distribution Amount ........ S-112
B
Balloon Loans ........................ S-80
Balloon Payment ...................... S-81
Base Interest Fraction ............... S-120
Blue Hills Borrower .................. S-76
Blue Hills Loan ...................... S-76
Blue Hills Manager ................... S-76
Blue Hills Property .................. S-76
Book-Entry Certificates .............. S-109
Breach ............................... S-140
Burlington ........................... S-62
Business Day ......................... S-111
C
Capital Items ........................ S-52
Cash Collateral Accounts ............. S-146
Cedelbank ............................ S-108
Cedelbank Participants ............... S-109
Certain Federal Income Tax
Consequences ...................... S-154
Certificate Administrator ............ S-161
Certificate Balance .................. S-107
Certificate Deferred Interest ........ S-124
Certificate Owner .................... S-109
Certificateholder .................... S-110
Certificates ......................... S-107
CII .................................. S-79
Class M Component Rate ............... S-117
Class M Pass-Through Rate ............ S-116
Class N Component Rate ............... S-117
Class N Pass-Through Rate ............ S-116
Class O Component Rate ............... S-117
Class O Pass-Through Rate ............ S-116
Class ................................ S-107
Class A-1 Component Rate ............. S-117
Class A-1 Pass-Through Rate .......... S-116
Class A-2 Component Rate ............. S-117
Class A-2 Pass-Through Rate .......... S-116
Class A-X Pass-Through Rate .......... S-116
Class B Component Rate ............... S-117
Class B Pass-Through Rate ............ S-116
Class C Component Rate ............... S-117
Class C Pass-Through Rate ............ S-116
Class D Component Rate ............... S-117
Class D Pass-Through Rate ............ S-116
Class E Component Rate ............... S-117
</TABLE>
S-179
<PAGE>
<TABLE>
<S> <C>
Class E Pass-Through Rate ............... S-116
Class F Component Rate .................. S-117
Class F Pass-Through Rate ............... S-116
Class G Component Rate .................. S-117
Class G Pass-Through Rate ............... S-116
Class H Component Rate .................. S-117
Class H Pass-Through Rate ............... S-116
Class J Component Rate .................. S-117
Class J Pass-Through Rate ............... S-116
Class K Component Rate .................. S-117
Class K Pass-Through Rate ............... S-116
Class L Component Rate .................. S-117
Class L Pass-Through Rate ............... S-116
Clearance Cooperative ................... S-109
Closing Date ............................ S-47
CMBS .................................... S-165
Code .................................... S-171
Collateral Substitution Deposit ......... S-84
Collateral Support Deficit .............. S-123
Collection Account ...................... S-112, S-146
Commission .............................. S-106
Comparative Financial Status
Report ............................... S-167
Component Rate .......................... S-117
Constant Prepayment Rate ................ S-126
Controlling Class ....................... S-158
Controlling Class Certificateholder ..... S-158
Cooperative Property .................... S-90
Corrected Mortgage Loan ................. S-157
CPR ..................................... S-126
Credit Lease ............................ S-54
Credit Lease Loans ...................... S-54
Credit Lease Properties ................. S-54
Crossed Loans ........................... S-87
CSFB .................................... S-176
CSFB Cayman ............................. S-141
CSFB Mortgage Loan Seller ............... S-47
CSFB Mortgage Loans ..................... S-47
Custodian ............................... S-161
Cut-off Date ............................ S-46
Cut-off Date LTV ........................ S-89
Cut-off Date Principal Balance .......... S-93
Cut-off Date Principal Balance/Unit S-89
Cut-off Date Principal Loan
Balance .............................. S-89
D
DCR ..................................... S-177
Debt Service Coverage Ratio ............. S-89
Defeasance Lockout Period ............... S-84
Defeasance Option ....................... S-84
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Defect .................................. S-138
Definitive Certificates ................. S-111
Delinquent Loan Status Report ........... S-167
Department .............................. S-173
Depositor ............................... S-47
Depositories ............................ S-108
Determination Date ...................... S-111
Direct Participants ..................... S-108
Directing Certificateholder ............. S-158
Distribution Account .................... S-112, S-146
Distribution Date ....................... S-111
DSCR .................................... S-89
DTC ..................................... S-108
DTC Participants ........................ S-108
Due Date ................................ S-79
Due Period .............................. S-113
E
Eligible Bank ........................... S-147
EPI ..................................... S-79
ERISA ................................... S-173
Escrow Account .......................... S-51
Euroclear ............................... S-108
Euroclear Operator ...................... S-109
Euroclear Participants .................. S-109
Events of Default ....................... S-152
Excess Cash Flow ........................ S-80
Excess Interest ......................... S-80
Excess Interest Distribution
Account .............................. S-147
Excess Rate ............................. S-117
Exchange Apartments Borrower ............ S-57
Exchange Apartments Loan ................ S-54, S-57
Exchange Apartments Manager ............. S-57
Exchange Apartments Mezzanine
Lender ............................... S-57
Exchange Apartments Mezzanine
Loan ................................. S-57
Exchange Apartments Mezzanine
Loan Borrower ........................ S-57
Exchange Apartments Note A .............. S-57
Exchange Apartments Note B .............. S-57
Exchange Apartments Other Note .......... S-54
Exchange Apartments Principals .......... S-57
Exchange Apartments Property ............ S-57
Exchange Apartments Trust Fund
Note ................................. S-54
Exchange Apartments Whole Loan S-54, S-57
Exemption ............................... S-173
F
Final Recovery Determination ............ S-166
</TABLE>
S-180
<PAGE>
<TABLE>
<S> <C>
Finova ................................. S-138
Finova Capital ......................... S-138
Finova Loans ........................... S-138
Finova Owner Trust ..................... S-138
First P&I Date ......................... S-90
Fitch .................................. S-177
Form 8-K ............................... S-106
Fully Amortizing Loans ................. S-81
G
Global Securities ...................... E-1
Guarantor .............................. S-54
H
Hard Lockbox ........................... S-85
Hato Rey Tower Borrower ................ S-67
Hato Rey Tower Loan .................... S-67
Hato Rey Tower Property ................ S-67
Hato Rey Tower Property Manager S-67
Historical Loan Modification
Report .............................. S-167
Historical Loss Estimate Report ........ S-167
Holiday Inn -- Broadway Borrower S-72
Holiday Inn -- Broadway License
Agreement ........................... S-72
Holiday Inn -- Broadway Licensor ....... S-72
Holiday Inn -- Broadway Loan ........... S-72
Holiday Inn -- Broadway Manager ........ S-72
Holiday Inn -- Broadway Property ....... S-72
Holiday Inn -- Broadway
Subordinate Loan .................... S-72
Hospitality Loan ....................... S-46
Hospitality Property ................... S-46
Hotel Management Agreement ............. S-69
Hotel Manager .......................... S-69
I
Indemnification ........................ S-79
Indirect Participants .................. S-108
Industrial Loan ........................ S-46
Industrial Property .................... S-46
Initial Pool Balance ................... S-46
Insurance Escrowed ..................... S-89
Interest Accrual Period ................ S-117
Interest Calc. ......................... S-89
Interest Reserve Account ............... S-147
Interest Shortfall Amount .............. S-117
Investor's Business Daily Borrower S-79
Investor's Business Daily Loan ......... S-79
Investor's Business Daily Property ..... S-79
IRS .................................... S-156
L
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Lease Expiration Date .................. S-89
L'Enfant Borrower ...................... S-69
L'Enfant Intercreditor Agreement ....... S-69
L'Enfant Manager ....................... S-69
L'Enfant Mezzanine Borrower ............ S-70
L'Enfant Mezzanine Lender .............. S-70
L'Enfant Mezzanine Loan ................ S-70
L'Enfant Note A ........................ S-69
L'Enfant Note B ........................ S-69
L'Enfant Other Note .................... S-55
L'Enfant Participation ................. S-46, S-69
L'Enfant Preferred Equity Interest ..... S-70
L'Enfant Property ...................... S-69
L'Enfant Special Limited Partner ....... S-70
L'Enfant Trust Fund Note. .............. S-55
L'Enfant Whole Loan .................... S-55, S-69
Liquidation Fee ........................ S-163
Liquidation Fee Rate ................... S-163
Liquidation Proceeds ................... S-163
LNR .................................... S-164
Loan to Value Ratio .................... S-89
Lockbox Account ........................ S-85
Lockout Period ......................... S-81
Lodging Loan ........................... S-46
Lodging Property ....................... S-46
Lower-Tier Regular Interests ........... S-171
Lower-Tier REMIC ....................... S-14, S-171
LTV .................................... S-89
LTV at ARD or Maturity ................. S-89
M
Mezzanine Certificates ................. S-107
Mixed Commercial Cooperative
Loan ................................ S-46
Mixed Commercial Cooperative
Property ............................ S-46
Mixed Use Loan ......................... S-47
Mixed Use Property ..................... S-46
Modified Lockbox ....................... S-85
Monthly Interest Distribution
Amount .............................. S-117
Monthly Payment ........................ S-80, S-90
Moody's ................................ S-177
Mortgage ............................... S-46
Mortgage Deferred Interest ............. S-124
Mortgage File .......................... S-138
Mortgage Interest Accrual Period ....... S-118
Mortgage Loan .......................... S-120
Mortgage Loan Assumptions .............. S-127
Mortgage Loan Purchase
Agreement ........................... S-47
</TABLE>
S-181
<PAGE>
<TABLE>
<S> <C>
Mortgage Loan Sellers ............... S-47
Mortgage Loans ...................... S-46
Mortgage Note ....................... S-46
Mortgage Pass-Through Rate .......... S-118
Mortgage Rate ....................... S-80
Mortgaged Properties ................ S-46
Most Recent Date .................... S-90
Most Recent NOI ..................... S-90
Most Recent Type .................... S-90
MS Mortgage Loan Seller ............. S-47
MS Mortgage Loans ................... S-47
Multifamily Loan .................... S-46
Multifamily Property ................ S-46
Multi-Property Loans ................ S-87
N
NAP ................................. S-90
Net Cash Flow ....................... S-90
net income from foreclosure
property ......................... S-156
Net Lease ........................... S-91
Net Mortgage Pass-Through Rate ...... S-118
Net Mortgage Rate ................... S-118
New Regulations ..................... E-3
NOI Adjustment Worksheet ............ S-168
Nonrecoverable Advance .............. S-144
Norwest ............................. S-161
Notional Balance .................... S-107
O
Occupancy ........................... S-91
Occupancy Period .................... S-91
Offered Certificates ................ S-107
Office Loan ......................... S-46
Office Property ..................... S-46
OID Regulations ..................... S-171
Open ................................ S-82
Operating Statement Analysis
Report ........................... S-168
Optimal Interest Distribution
Amount ........................... S-118
Original Amortization Term .......... S-91
Original Principal Loan Balance ..... S-91
Other Equity Collateral ............. S-60
Other Loan .......................... S-47
Other Notes ......................... S-142
Other Property ...................... S-47
Ownership Interest .................. S-91
P
Parisian ............................ S-62
Parking Operator .................... S-60
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Participants ........................ S-108
Pass-Through Rate ................... S-119
PCBs ................................ S-37
Penalty Charges ..................... S-163
Percentage Interest ................. S-108
Permitted Investments ............... S-147
P&I Advance ......................... S-143
Plan ................................ S-173
PML ................................. S-50
Pooling and Servicing Agreement ..... S-138
Preferred Interest Holder ........... S-86
Premium ............................. S-82
Prepayment Assumptions .............. S-127
Prepayment Date ..................... A-5
Prepayment Interest Excess .......... S-164
Prepayment Interest Shortfall ....... S-119
Prepayment Premium Period ........... S-81
Prepayment Premiums ................. S-81
Primary Servicer .................... S-142
Primary Servicing Agreement ......... S-142
Primary Servicing Fee ............... S-162
Primary Servicing Fee Rate .......... S-162
Primary Term ........................ S-54
Prime Rate .......................... S-144
Principal Distribution Amount ....... S-119
Private Certificates ................ S-107
Property Release Amount ............. S-91
PTE ................................. S-173
Purchase Price ...................... S-140
R
Rated Final Distribution Date ....... S-122
Rating Agencies ..................... S-177
Real Estate Taxes Escrowed .......... S-91
Record Date ......................... S-111
Reduction Rate ...................... S-145
Regular Certificates ................ S-107, S-172
Reimbursement Rate .................. S-144
Related Proceeds .................... S-144
Release Date ........................ S-84
Remaining Amortization Term ......... S-91
Remaining Lockout ................... S-91
Remaining Lockout and YM ............ S-91
Remaining Lockout and YM and
Penalties ........................ S-91
Remaining Principal Distribution
Amount ........................... S-119
REMIC ............................... S-172
REMIC Regulations ................... S-171
Rents from real property ............ S-35, S-156
REO Loan ............................ S-120
</TABLE>
S-182
<PAGE>
<TABLE>
<S> <C>
REO Property ......................... S-107, S-157
REO Status Report .................... S-167
Reporting Requirements ............... S-138
Required Prepayment .................. S-88
Residential Cooperative Loan ......... S-46
Residential Cooperative Property ..... S-46
Residual Certificates ................ S-107
Residual Value Policy ................ S-54, S-64
Restricted Group ..................... S-174
Restricted Reports ................... S-168
Retail Loan .......................... S-46
Retail Property ...................... S-46
Rev .................................. S-90
Revised Rate ......................... S-80
Rules ................................ S-109
S
Scholastic ........................... S-74
Scholastic Building Borrower ......... S-74
Scholastic Building Loan ............. S-74
Scholastic Building Property ......... S-74
Scholastic Building Property
Manager ........................... S-74
Seasoning ............................ S-92
Securities Act ....................... S-107
Selig Borrowers ...................... S-60
Selig Loans .......................... S-60
Selig Manager ........................ S-60
Selig Mezzanine Borrower ............. S-60
Selig Mezzanine Lender ............... S-60
Selig Mezzanine Loan ................. S-60
Selig Principal ...................... S-60
Selig Properties ..................... S-60
Selig Property ....................... S-60
Senior Certificates .................. S-107
Servicer ............................. S-162
Servicer Remittance Date ............. S-143
Servicer Watch List .................. S-167
Servicing Advances ................... S-143
Servicing Fee ........................ S-162
Servicing Fee Rate ................... S-162
Servicing Standard ................... S-142
Significant Mortgage Loans ........... S-149
Similar Law .......................... S-173
S&P .................................. S-174
Special Servicer ..................... S-165
Special Servicing Fee ................ S-163
Special Servicing Fee Rate ........... S-163
Specially Serviced Mortgage Loans S-157
Springing Lockbox .................... S-85
Stated Maturity Date ................. S-92
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Stated Principal Balance ............. S-120
Statement to Certificateholders ...... S-166
Subordinate Certificates ............. S-107
Substitute Manager ................... S-74
Sweep Percentage ..................... S-60
T
Tallahassee Mall Borrower ............ S-62
Tallahassee Mall Loan ................ S-62
Tallahassee Mall Manager ............. S-62
Tallahassee Mall Principal ........... S-62
Tallahassee Mall Property ............ S-62
Tenant ............................... S-54, S-92
Tenant 1 ............................. S-92
Tenant 2 ............................. S-92
Tenant 3 ............................. S-92
Tenant Improvement and Leasing
Commission Reserve Ongoing ........ S-92
Tenant Improvement and Leasing
Commission Reserve Upfront ........ S-92
Termination Event .................... S-153
Terms and Conditions ................. S-109
Treasury Regulations ................. S-172
Trust Fund ........................... S-107
Trust Fund Notes ..................... S-142
Trust REMICs ......................... S-171
Trustee .............................. S-161
U
Uncovered Prepayment Interest
Shortfall ......................... S-164
Uncovered Prepayment Interest
Shortfall Amount .................. S-119
Underwriters ......................... S-176
Underwritten NOI ..................... S-92
Unit of Measure ...................... S-92
Units ................................ S-92
Unpaid Interest Shortfall Amount ..... S-119
Unrestricted Reports ................. S-168
Unscheduled Payments of Principal S-119
Upper-Tier REMIC ..................... S-14, S-171
USAP ................................. S-151
U/W Net Cash Flow .................... S-90
U/W NOI .............................. S-92
U/W Rev .............................. S-90
V
Value ................................ S-92
Voting Rights ........................ S-155
W
Weighted Average DSCR ................ S-92
Weighted Average LTV ................. S-92
</TABLE>
S-183
<PAGE>
<TABLE>
<S> <C>
Weighted Average Net Mortgage
Rate ........................... S-119
Wells Fargo ....................... S-162
Whole Loans ....................... S-142
Withheld Amounts .................. S-147
Workout Fee ....................... S-163
Workout Fee Rate .................. S-163
Y
</TABLE>
<TABLE>
<S> <C>
Year Built ........................ S-92
Year Renovated .................... S-92
Yield Maintenance Charge .......... S-81
Yield Maintenance Period .......... S-81
Yield Protection Payments ......... S-88
Yield Rate ........................ S-81
YM ................................ S-82
</TABLE>
S-184
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
<TABLE>
<CAPTION>
CSFB
CONTROL CONTROL
LOAN # # # LOANS PROPERTY NAME
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 001 1 CSFB Exchange Apartments
2 002 507 CSFB Selig - Third and Broad
3 003 508 CSFB Selig - 3131 Elliot Building
4 004 509 CSFB Selig - Airborne Building
5 005 30 CSFB Tallahassee Mall
6 006 3 CSFB Accor - Mountain Summary
- -----------------------------------------------------------------------------------------------------
6 006A 9 CSFB Accor - Mountain Motel 6 #1205
6 006B 7 CSFB Accor - Mountain Motel 6 #293
6 006C 4 CSFB Accor - Mountain Motel 6 #279
6 006D 8 CSFB Accor - Mountain Motel 6 #1016
6 006E 6 CSFB Accor - Mountain Motel 6 #273
- -----------------------------------------------------------------------------------------------------
6 006F 5 CSFB Accor - Mountain Motel 6 #267
7 007 10 CSFB Accor - California North Summary
7 007A 11 CSFB Accor - California North Motel 6 #318
7 007B 12 CSFB Accor - California North Motel 6 #359
7 007C 13 CSFB Accor - California North Motel 6 #287
- -----------------------------------------------------------------------------------------------------
7 007D 14 CSFB Accor - California North Motel 6 #369
7 007E 15 CSFB Accor - California North Motel 6 #106
8 008 31 CSFB Hato Rey Tower
9 009 32 CSFB L'Enfant Plaza
10 010 35 CSFB Holiday Inn - Broadway
- -----------------------------------------------------------------------------------------------------
11 011 36 CSFB Scholastic Building
12 012 500 CSFB Blue Hills Office Park
13 013 37 CSFB 150 William Street
14 014 800 MSMC Hotel Union Square/Diva Summary
14 014A 801 MSMC Hotel Union Square
- -----------------------------------------------------------------------------------------------------
14 014B 802 MSMC Hotel Diva
15 015 41 CSFB White Lodging Summary
15 015A 42 CSFB Residence Inn - Indianapolis
15 015B 43 CSFB Courtyard - Indianapolis
15 015C 44 CSFB Residence Inn - Hammond
- -----------------------------------------------------------------------------------------------------
15 015D 45 CSFB Courtyard - Hammond
15 015E 46 CSFB Fairfield Inn - Hammond
16 016 38 CSFB SunPark Airpark - St.Louis
17 017 40 CSFB Sunset Ridge & Sunset Peak Apartments Summary
17 017A 511 CSFB Sunset Ridge Apartments
- -----------------------------------------------------------------------------------------------------
17 017B 512 CSFB Sunset Peak Apartments
18 018 39 CSFB Century Centre I
19 019 501 CSFB 401 North Broad Street
20 020 62 CSFB Kings Village Corp.
21 021 803 MSMC Capetown Plaza Shopping Center
- -----------------------------------------------------------------------------------------------------
22 022 804 MSMC Lewis County Mall
23 023 805 MSMC Tampa Shopping Plaza
24 024 63 CSFB Midway Shopping Center
25 025 806 MSMC Shops at the Bluffs
26 026 807 MSMC Seminole Mall
- -----------------------------------------------------------------------------------------------------
27 027 67 CSFB Fairfield Suites & Courtyard by Marriott Summary
27 027A 68 CSFB Courtyard by Marriott - Scottsdale
27 027B 69 CSFB Fairfield Suites
29 029 66 CSFB Cathedral Building
- -----------------------------------------------------------------------------------------------------
30 030 72 CSFB Investor's Business Daily Building
31 031 808 MSMC Suburban Lodge Summary
31 031A 809 MSMC Suburban Lodge - Dallas
31 031B 810 MSMC Suburban Lodge - Roswell
31 031C 811 MSMC Suburban Lodge - Greenville
- -----------------------------------------------------------------------------------------------------
31 031D 812 MSMC Suburban Lodge - Dayton
31 031E 813 MSMC Suburban Lodge - Forest Park
32 032 80 CSFB East Norriton Crossing
33 033 50 CSFB K.V. Properties Inc Summary
33 033A 52 CSFB Market Place #6 - Long Beach Value Plus Retail Center
- -----------------------------------------------------------------------------------------------------
33 033B 54 CSFB K.V. Property Co.- Compton
33 033C 55 CSFB Market Place #7 - Long Beach 1
33 033D 56 CSFB Market Place #12 - Value Plus Food Warehouse
33 033E 53 CSFB Market Place #9 - Long Beach 2
34 034 79 CSFB Periwinkle Place Shopping Center
- -----------------------------------------------------------------------------------------------------
35 035 81 CSFB West Valley Medical Center
36 036 82 CSFB Wilshire Westwood Apartments
37 037 89 CSFB Cornelius Pass Business Park
38 038 90 CSFB Town and Country Office Park
- -----------------------------------------------------------------------------------------------------
39 039 100 CSFB Muscarelle Portfolio Summary
39 039A 101 CSFB 1201 Valley Brook
39 039B 102 CSFB Park Ridge Marriott Ground Lease
40 040 93 CSFB IBM Corporate Center
41 041 94 CSFB Frassetto Properties Summary
41 041A 96 CSFB 11 High Point Drive
- -----------------------------------------------------------------------------------------------------
41 041B 97 CSFB 707 Executive Drive
41 041C 98 CSFB 709 Executive Drive
41 041D 95 CSFB 6 Highpoint Drive
42 042 91 CSFB Easton Commons Plaza Shopping Center
43 043 99 CSFB The Vinegar Factory (Eli's Market)
- -----------------------------------------------------------------------------------------------------
44 044 103 CSFB Holiday Inn & Suites - Bristol
45 045 104 CSFB Vilter Manufacturing Center
46 046 814 MSMC Lynnwood Corporate Center
47 047 815 MSMC Design Center Industrial Park
48 048 109 CSFB LaSalle Atrium
- -----------------------------------------------------------------------------------------------------
49 049 110 CSFB Meridian Place Apartments
50 050 115 CSFB Kirkwood Landing Apartments
51 051 113 CSFB Gateway East & West
52 052 116 CSFB Kanawha Mall
53 053 816 MSMC Saf Keep Self Storage
- -----------------------------------------------------------------------------------------------------
54 054 117 CSFB Binnings Building
55 055 111 CSFB Commercial Park West
56 056 120 CSFB Sea Crest at Amagansett Corp.
57 057 121 CSFB Park Glen West Business Ctr
58 058 817 MSMC Barrington Heights Apartments
- -----------------------------------------------------------------------------------------------------
59 059 818 MSMC Stop and Store Self Storage
60 060 122 CSFB Crestview Office
61 061 123 CSFB Grand Cove I Apartments
62 062 124 CSFB Eagle Food Center
63 063 137 CSFB Pinewood Square Shopping Center
- -----------------------------------------------------------------------------------------------------
64 064 138 CSFB Courtyard by Marriott
65 065 515 CSFB Forest Lane Apartments
66 066 139 CSFB Greenfield Station Apartments
67 067 140 CSFB 92 State Street
68 068 142 CSFB Hill Castle Apartments
- -----------------------------------------------------------------------------------------------------
69 069 143 CSFB Redwood City Office Building
70 070 819 MSMC 2855 Telegraph Avenue Office Building
71 071 127 CSFB Mladen Portfolio Summary
71 071A 135 CSFB 56 Webster Street
71 071B 132 CSFB 270 Laurel Street
- -----------------------------------------------------------------------------------------------------
71 071C 134 CSFB 117-145 South Marshall Street
71 071D 128 CSFB 154-160A Collins Street
71 071E 130 CSFB 243-255 Laurel Street
71 071F 129 CSFB 21 Evergreen Avenue
71 071G 133 CSFB 360 Laurel Street
- -----------------------------------------------------------------------------------------------------
71 071H 131 CSFB 252 Laurel Street
72 072 147 CSFB Twin Peaks Square Shopping Center
73 073 148 CSFB Countrybrook Estates
74 074 146 CSFB 1674 Broadway
75 075 820 MSMC Wells Cargo Self Storage
- -----------------------------------------------------------------------------------------------------
76 076 149 CSFB Oasis Apartments
77 077 150 CSFB Crown Meadows Shopping Center
78 078 151 CSFB Embassy Apartments
79 079 152 CSFB Sandy Ridge Apartments
80 080 153 CSFB Southern Medical Building
- -----------------------------------------------------------------------------------------------------
81 081 154 CSFB The Westhampton Bath & Tennis Club
82 082 165 CSFB Candlewick Townhomes
83 083 166 CSFB Ocean Beach Resort, Ltd.
84 084 167 CSFB Pacella Park Summary
84 084A 168 CSFB 21 Pacella Park Drive
- -----------------------------------------------------------------------------------------------------
84 084B 169 CSFB 35 Pacella Park Drive
85 085 502 CSFB Quality Inn-Sea Oatel
86 086 170 CSFB St. George Medical Center
87 087 821 MSMC Ocean Park Centinela Office Building
88 088 172 CSFB Surf Club at Montauk Corp.
- -----------------------------------------------------------------------------------------------------
89 089 164 CSFB Ambiance Townhomes
90 090 822 MSMC Britannia Business Center
91 091 823 MSMC Northwest Corporate Park
92 092 177 CSFB Super 8 Motel
93 093 178 CSFB Scandia-Hemman Apartments
- -----------------------------------------------------------------------------------------------------
94 094 180 CSFB Orchard Square Office Park
95 095 824 MSMC Murray's Discount Auto Store Summary
95 095A 824A MSMC Murray's Discount Auto Store
95 095B 824B MSMC Murray's Discount Auto Store
95 095C 824C MSMC Murray's Discount Auto Store
- -----------------------------------------------------------------------------------------------------
96 096 182 CSFB Holiday Plaza
97 097 184 CSFB Lakeside Shopping Center
98 098 185 CSFB Palm Desert Business Center
99 099 183 CSFB Port Royal Motel Cooperative
100 100 825 MSMC The Meadows Square Mall
- -----------------------------------------------------------------------------------------------------
101 101 186 CSFB Civic Center Office Building
102 102 187 CSFB Blockbuster Video / Scotty's Home Summary
102 102A 188 CSFB Scotty's Home Improvement Store
102 102B 189 CSFB Blockbuster Video
103 103 826 MSMC 17290 Preston Road Office Building
- -----------------------------------------------------------------------------------------------------
104 104 827 MSMC Mid-Towne Mobile Terrace
105 105 181 CSFB Engler Block
106 106 190 CSFB Bellevue Tower Apartments
107 107 193 CSFB East Mountain Medical Center
108 108 200 CSFB Sierra Elm Shopping Center
- -----------------------------------------------------------------------------------------------------
109 109 205 CSFB Valerio Capri Apartments
110 110 206 CSFB Gotham Bar & Grill
111 111 202 CSFB Mission Hills Village Plaza
112 112 208 CSFB Clarksdale Commons Shopping Center
113 113 209 CSFB King Plaza
- -----------------------------------------------------------------------------------------------------
114 114 211 CSFB Goodwill Building
115 115 212 CSFB Country Village Apartments
116 116 214 CSFB 12 West 32nd Street Tenants Corp.
117 117 215 CSFB 4711 Callan Blvd Apartments
118 118 220 CSFB Forest Crossing Medical Building
- -----------------------------------------------------------------------------------------------------
119 119 217 CSFB Devonwood Apartments
120 120 221 CSFB 11825 Owners Corp.
121 121 828 MSMC Indian Harbor Self Storage
122 122 222 CSFB Ansley North Cooperative, Inc.
123 123 223 CSFB West 8th Street Apartments
- -----------------------------------------------------------------------------------------------------
124 124 829 MSMC All Seasons Mini Storage
125 125 224 CSFB 330 East Jericho Turnpike
126 126 513 CSFB Sequoia Apartments
127 127 227 CSFB Broadmill Apts
128 128 228 CSFB West Wood Village Apts
- -----------------------------------------------------------------------------------------------------
129 129 229 CSFB Chick Hampton Office Building
130 130 230 CSFB Cambrick On The Park Condominiums
131 131 231 CSFB 287 South 6th Avenue
132 132 232 CSFB Metro Centre
133 133 234 CSFB 350 Pleasant Street
- -----------------------------------------------------------------------------------------------------
134 134 235 CSFB Eckerd's Pittsburgh
135 135 236 CSFB Azadgan Center
136 136 237 CSFB Jeanne Estates Apartments
137 137 238 CSFB Starburst Apartments
138 138 240 CSFB Josephine Apartments
- -----------------------------------------------------------------------------------------------------
139 139 241 CSFB Valley View Apartments
140 140 242 CSFB 1011-1019 Ocean Front Walk
141 141 243 CSFB 2555 "D" Street
142 142 244 CSFB Tempe Manor Apts
143 143 245 CSFB Sophia Warehouse
- -----------------------------------------------------------------------------------------------------
144 144 248 CSFB Betty Jane Apartments
145 145 247 CSFB Desert Winds Apartments
146 146 249 CSFB Poolside Apartments
147 147 250 CSFB Clark Apartments
148 148 251 CSFB 1327 2nd Street
- -----------------------------------------------------------------------------------------------------
149 149 252 CSFB Crown Apartments
150 150 254 CSFB Park Place-Fradin
151 151 514 CSFB Gladstone & Benton Apartments
152 152 259 CSFB Country Manor
153 153 260 CSFB Homestead Inn Apartments
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CSFB
CONTROL CONTROL
LOAN # # # ADDRESS CITY
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 001 1 25 Broad Street New York
2 002 507 2901 Third Avenue Seattle
3 003 508 3131 Elliot Avenue Seattle
4 004 509 3101 Western Avenue Seattle
5 005 30 2415 North Monroe Street Tallahassee
6 006 3 Various Various
- --------------------------------------------------------------------------------------------------------------------------
6 006A 9 2433 So. 800 West Woods Cross
6 006B 7 3900 E. Mulberry Fort Collins
6 006C 4 1600 Cedar Street Raton
6 006D 8 9920 West 49th Avenue Wheat Ridge
6 006E 6 3400 Will Rodgers Drive Santa Rosa
- --------------------------------------------------------------------------------------------------------------------------
6 006F 5 416 West Appleway Avenue Coeur D'Alene
7 007 10 Various Various
7 007A 11 2101 Loveridge Road Pittsburg
7 007B 12 16958 State Route 58 Mojave
7 007C 13 250 South Walnut Road Turlock
- --------------------------------------------------------------------------------------------------------------------------
7 007D 14 42899 Big Bear Boulevard Big Bear Lake
7 007E 15 16901 Stoddard Wells Road Victorville
8 008 31 268 Munoz Rivera Avenue San Juan
9 009 32 470-490 L'Enfant Plaza SW/955 L'Enfant Plaza SW Washington
10 010 35 1260 Broadway New York
- --------------------------------------------------------------------------------------------------------------------------
11 011 36 555 Broadway New York
12 012 500 150 Royall Street Canton
13 013 37 150 William Street New York
14 014 800 Various San Francisco
14 014A 801 114 Powell Street San Francisco
- --------------------------------------------------------------------------------------------------------------------------
14 014B 802 440 Geary Street San Francisco
15 015 41 Various Various
15 015A 42 350 West New York Street Indianapolis
15 015B 43 320 North Senate Avenue Indianapolis
15 015C 44 7740 Corinne Drive Hammond
- --------------------------------------------------------------------------------------------------------------------------
15 015D 45 7730 Corinne Drive Hammond
15 015E 46 7720 Corinne Drive Hammond
16 016 38 4607 Airflight Drive Edmundson
17 017 40 Various Various
17 017A 511 8300 Sheridan Boulevard Westminster
- --------------------------------------------------------------------------------------------------------------------------
17 017B 512 475 East Russell Boulevard Thornton
18 018 39 1450 Fashion Island Boulevard San Mateo
19 019 501 401 North Broad Street Philadelphia
20 020 62 1270/1275 E. 51st St; 1199/1200 E. 53rd St; 1165 E. 54th St Brooklyn
21 021 803 790 Iyanough Road Hyannis
- --------------------------------------------------------------------------------------------------------------------------
22 022 804 151 N.E. Hampe Way Chehalis
23 023 805 8207-8325 North Florida Ave. Tampa
24 024 63 1460-1576 West University Avenue St. Paul
25 025 806 3610 & 3650 Austin Bluffs Pkwy&4284 N. Academy Blvd. Colorado Springs
26 026 807 8050 113th Street North Seminole
- --------------------------------------------------------------------------------------------------------------------------
27 027 67 Various Various
27 027A 68 17010 N Scottsdale Road Phoenix
27 027B 69 17020 N Scottsdale Road Phoenix
29 029 66 1100 J Street Sacramento
- --------------------------------------------------------------------------------------------------------------------------
30 030 72 12655 Beatrice Avenue Los Angeles
31 031 808 Various Various
31 031A 809 9355 Forest Lane Dallas
31 031B 810 1175 Hembree Road Roswell
31 031C 811 408-Mauldin Road Greenville
- --------------------------------------------------------------------------------------------------------------------------
31 031D 812 8981 Kingsridge Drive Dayton
31 031E 813 363 Forest Parkway Forest Park
32 032 80 DeKalb Pike (Rte 202) and Germantown Pike East Norriton
33 033 50 Various Various
33 033A 52 14103 Ramona Boulevard Baldwin Park
- --------------------------------------------------------------------------------------------------------------------------
33 033B 54 420 S. Long Beach Boulevard Compton
33 033C 55 2038 East 10th Street Long Beach
33 033D 56 4308 East Slauson Avenue Maywood
33 033E 53 421 Pacific Avenue Long Beach
34 034 79 2075 Periwinkle Way Sanibel
- --------------------------------------------------------------------------------------------------------------------------
35 035 81 5353 and 5363 Balboa Boulevard Encino
36 036 82 10530 and 10540 Wilshire Boulevard Los Angeles
37 037 89 2000 NW Cornelius Pass Road Hillsboro
38 038 90 702-1078 Town and Country Road Orange
- --------------------------------------------------------------------------------------------------------------------------
39 039 100 Various Various
39 039A 101 1201 Valley Brook Avenue Lyndhurst
39 039B 102 300 Brae Boulevard Park Ridge
40 040 93 34 Maple Avenue Parsippany
41 041 94 Various Various
41 041A 96 11 High Point Drive Wayne Township
- --------------------------------------------------------------------------------------------------------------------------
41 041B 97 707 Executive Drive Clarkstown
41 041C 98 709 Executive Drive Clarkstown
41 041D 95 6 Highpoint Drive Wayne Township
42 042 91 8470-8590 Highway 6 North Houston
43 043 99 1411 Third Avenue New York
- --------------------------------------------------------------------------------------------------------------------------
44 044 103 3005 Linden Drive Bristol
45 045 104 5555 South Packard Avenue Cudahy
46 046 814 19401 40th Avenue West Lynnwood
47 047 815 3445 Winton Place Henreitta
48 048 109 401 S. LaSalle Street Chicago
- --------------------------------------------------------------------------------------------------------------------------
49 049 110 2000 North Meridian Road Tallahassee
50 050 115 9850 South Kirkwood Houston
51 051 113 6188 and 6192 Oxon Hill Road Oxon Hill
52 052 116 163 Kanawha Mall Charleston
53 053 816 655 3rd Street Oakland
- --------------------------------------------------------------------------------------------------------------------------
54 054 117 3000 NW 125th Street Miami
55 055 111 2300 and 2327 Englert Drive and 4915 Prospectus Drive Durham
56 056 120 Montauk Highway and Navahoe Lane Amagansett
57 057 121 4700 and 4800 Park Glen Road St. Louis Park
58 058 817 3028 Chamblee-Tucker Road Chamblee
- --------------------------------------------------------------------------------------------------------------------------
59 059 818 1700 Shore Parkway Brooklyn
60 060 122 3111 North Tustin Avenue Orange
61 061 123 100 - 200 Grand Cove Way Edgewater
62 062 124 1414 North Division Street (State Hwy 47) Morris
63 063 137 Royall Avenue and Spence Avenue Goldsboro
- --------------------------------------------------------------------------------------------------------------------------
64 064 138 10152 Palm River Road Brandon
65 065 515 9660 Forest Lane Dallas
66 066 139 700 Keswick Circle Trotwood
67 067 140 92 State Street Boston
68 068 142 1431 Jackson Street Oakland
- --------------------------------------------------------------------------------------------------------------------------
69 069 143 2055-2075 Woodside Road Redwood City
70 070 819 2855 Telegraph Avenue Berkeley
71 071 127 Various Various
71 071A 135 56 Webster Street Hartford
71 071B 132 270 Laurel Street Hartford
- --------------------------------------------------------------------------------------------------------------------------
71 071C 134 117-145 South Marshall Street Hartford
71 071D 128 154-160A Collins Street Hartford
71 071E 130 243-255 Laurel Street Hartford
71 071F 129 21 Evergreen Avenue Hartford
71 071G 133 360 Laurel Street Hartford
- --------------------------------------------------------------------------------------------------------------------------
71 071H 131 252 Laurel Street Hartford
72 072 147 800 South Hover Road Longmont
73 073 148 1718 Bridgeview Lane Louisville
74 074 146 1674 Broadway New York
75 075 820 224 North McPherson Road Orange
- --------------------------------------------------------------------------------------------------------------------------
76 076 149 351 Turk Street San Francisco
77 077 150 7614 & 7616 Culebra Road San Antonio
78 078 151 1613 Harvard Street, N.W. Washington
79 079 152 175 Pennsgrove-Auburn Road Carney's Point
80 080 153 9131 Piscataway Road Clinton
- --------------------------------------------------------------------------------------------------------------------------
81 081 154 231 Dune Road Westhampton Beach
82 082 165 1155 Paredes Line Road City of Brownsville
83 083 166 108 South Emerson Avenue Montauk
84 084 167 Various Various
84 084A 168 21 Pacella Park Drive Randolph
- --------------------------------------------------------------------------------------------------------------------------
84 084B 169 35 Pacella Park Drive Randolph
85 085 502 7123 South Virginia Dare Trail Nags Head
86 086 170 6620 Coyle Avenue Carmichael
87 087 821 3435 Ocean Park Boulevard Santa Monica
88 088 172 Surfside Place Montauk
- --------------------------------------------------------------------------------------------------------------------------
89 089 164 13210 Old Richmond Road Houston
90 090 822 3043-3075 Research Drive Richmond
91 091 823 800 & 808 Fidalgo St. & 780 S. Michigan St. Seattle
92 092 177 52825 U.S.-31 North South Bend
93 093 178 411 Gibbsboro Road Lindenwold
- --------------------------------------------------------------------------------------------------------------------------
94 094 180 1212 York Road Lutherville
95 095 824 Various Chicago
95 095A 824A 6319 S. Western Avenue Chicago
95 095B 824B 55 E. 111th Street Chicago
95 095C 824C 4719 Cottage Grove Chicago
- --------------------------------------------------------------------------------------------------------------------------
96 096 182 1424-1430 Richmond Avenue Staten Island
97 097 184 4453 Liberty Avenue Vermillion
98 098 185 41-865 Boardwalk Palm Desert
99 099 183 16 Navy Road Montauk
100 100 825 3801 W. 34th Street Sioux Falls
- --------------------------------------------------------------------------------------------------------------------------
101 101 186 8300 Utica Avenue Rancho Cucamonga
102 102 187 Various Various
102 102A 188 333 State Road 19 North Palatka
102 102B 189 142 Malabar Road SW Palm Bay
103 103 826 17290 Preston Road Dallas
- --------------------------------------------------------------------------------------------------------------------------
104 104 827 1117 Baldwin Street Salinas
105 105 181 1335 W. Highway 76 Branson
106 106 190 305 South Bellevue Boulevard Memphis
107 107 193 780 South Main Street Great Barrington
108 108 200 431 - 455 Grass Valley Highway Auburn
- --------------------------------------------------------------------------------------------------------------------------
109 109 205 14360 Valerio Street Van Nuys
110 110 206 12 East 12th Street New York
111 111 202 15501-15535 Devonshire Street Mission Hills
112 112 208 820-844 S. State Street Clarksdale
113 113 209 3025 Waughtown Street Winston-Salem
- --------------------------------------------------------------------------------------------------------------------------
114 114 211 1700 Fillmore Street San Francisco
115 115 212 975 Sheldon Road Channelview
116 116 214 12-14 West 32nd Street New York
117 117 215 4711 Callan Blvd Daly City
118 118 220 9100 Forest Crossing Drive The Woodlands
- --------------------------------------------------------------------------------------------------------------------------
119 119 217 5108 Brentwood Stair Road Fort Worth
120 120 221 118 East 25th Street New York
121 121 828 136-140 Tomahawk Drive Indian Harbor Beach
122 122 222 1705 Monroe Drive N.E. Atlanta
123 123 223 2971 West 8th Street Los Angeles
- --------------------------------------------------------------------------------------------------------------------------
124 124 829 800 North "K" Street Needles
125 125 224 330 East Jericho Turnpike Smithtown
126 126 513 15188 - 15212 Sequoia Avenue Hesperia
127 127 227 109 E. Broadway Road Tempe
128 128 228 201 North Garden Ave. Sierra Vista
- --------------------------------------------------------------------------------------------------------------------------
129 129 229 One Chick Springs Road Greenville
130 130 230 4016 McKinney Avenue Dallas
131 131 231 287 South 6th Avenue City of Industry
132 132 232 1940 Garnet Avenue San Diego
133 133 234 350 Pleasant Street Grass Valley
- --------------------------------------------------------------------------------------------------------------------------
134 134 235 1915-1921 East Carson Street Pittsburgh
135 135 236 2610-2614 East Pacific Coast Highway Corona Del Mar
136 136 237 5201 Spradling Avenue Ft. Smith
137 137 238 7655 Moonmist Drive Houston
138 138 240 12722-12738 Josephine Street Garden Grove
- --------------------------------------------------------------------------------------------------------------------------
139 139 241 209 Wolcott Street & 26-32 Farragut Street Waterbury
140 140 242 1011-1019 Ocean Front Walk Los Angeles
141 141 243 2555 "D" Street Sparks
142 142 244 1403 East 8th Street Tempe
143 143 245 7100 Sophia Avenue Van Nuys
- --------------------------------------------------------------------------------------------------------------------------
144 144 248 11762-11792 E. 16th Avenue Aurora
145 145 247 21420-30 N. 23rd Ave. Phoenix
146 146 249 1702 Paris Street Aurora
147 147 250 4102-10 Clark Avenue Kansas City
148 148 251 1327 2nd Street Livermore
- --------------------------------------------------------------------------------------------------------------------------
149 149 252 475 and 485 Linden Street Reno
150 150 254 18600-18604 Ventura Boulevard Los Angeles
151 151 514 534 Gladstone & 524 Benton Kansas City
152 152 259 16801 North 26th Street Phoenix
153 153 260 276 Seventh Avenue Northeast St. Petersburg
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CSFB
CONTROL CONTROL
LOAN # # # STATE ZIP CODE PROPERTY TYPE SUB PROPERTY TYPE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 001 1 NY 10004 Multifamily
2 002 507 WA 98121 Office
3 003 508 WA 98121 Office
4 004 509 WA 98121 Office
5 005 30 FL 32303 Retail Retail, Anchored
6 006 3 CO Various Credit Lease
- --------------------------------------------------------------------------------------------------------------------------
6 006A 9 UT 84087 Credit Lease
6 006B 7 CO 80524 Credit Lease
6 006C 4 NM 57740 Credit Lease
6 006D 8 CO 80033 Credit Lease
6 006E 6 NM 88453 Credit Lease
- --------------------------------------------------------------------------------------------------------------------------
6 006F 5 ID 83814 Credit Lease
7 007 10 CA Various Credit Lease
7 007A 11 CA 94565 Credit Lease
7 007B 12 CA 93501 Credit Lease
7 007C 13 CA 95380 Credit Lease
- --------------------------------------------------------------------------------------------------------------------------
7 007D 14 CA 92315 Credit Lease
7 007E 15 CA 92392 Credit Lease
8 008 31 PR 00918 Office
9 009 32 DC 20024 Mixed Use Office, Hotel, Retail
10 010 35 NY 10001 Lodging Lodging, Full Service
- --------------------------------------------------------------------------------------------------------------------------
11 011 36 NY 10012 Office
12 012 500 MA 02021 Office
13 013 37 NY 10038 Office
14 014 800 CA 94103 Mixed Use Lodging, Retail
14 014A 801 CA 94103 Mixed Use Lodging, Retail
- --------------------------------------------------------------------------------------------------------------------------
14 014B 802 CA 94103 Mixed Use Lodging, Retail
15 015 41 IN Various Lodging Lodging
15 015A 42 IN 46204 Lodging Lodging, Extended Stay
15 015B 43 IN 46204 Lodging Lodging, Limited Service
15 015C 44 IN 46323 Lodging Lodging, Extended Stay
- --------------------------------------------------------------------------------------------------------------------------
15 015D 45 IN 46323 Lodging Lodging, Limited Service
15 015E 46 IN 46323 Lodging Lodging, Limited Service
16 016 38 MO 63134 Other Special Purpose
17 017 40 CO Various Multifamily
17 017A 511 CO 80003 Multifamily
- --------------------------------------------------------------------------------------------------------------------------
17 017B 512 CO 80229 Multifamily
18 018 39 CA 94404 Office
19 019 501 PA 19123 Office
20 020 62 NY 11234 Cooperative Residential
21 021 803 MA 02601 Retail Retail, Anchored
- --------------------------------------------------------------------------------------------------------------------------
22 022 804 WA 98532 Retail Retail, Anchored
23 023 805 FL 33604 Retail Retail, Anchored
24 024 63 MN 55104 Retail Retail, Anchored
25 025 806 CO 80918 Retail Retail, Anchored
26 026 807 FL 33772 Retail Retail, Anchored
- --------------------------------------------------------------------------------------------------------------------------
27 027 67 AZ Various Lodging Lodging, Limited Service
27 027A 68 AZ 85255 Lodging Lodging, Limited Service
27 027B 69 AZ 85255 Lodging Lodging, Limited Service
29 029 66 CA 95814 Office
- --------------------------------------------------------------------------------------------------------------------------
30 030 72 CA 90066 Industrial
31 031 808 Various Various Lodging Lodging, Extended Stay
31 031A 809 TX 75243 Lodging Lodging, Extended Stay
31 031B 810 GA 30076 Lodging Lodging, Extended Stay
31 031C 811 SC 29605 Lodging Lodging, Extended Stay
- --------------------------------------------------------------------------------------------------------------------------
31 031D 812 OH 45458 Lodging Lodging, Extended Stay
31 031E 813 GA 30297 Lodging Lodging, Extended Stay
32 032 80 PA 19401 Retail Retail, Anchored
33 033 50 CA Various Retail Retail
33 033A 52 CA 91706 Retail Retail, Anchored
- --------------------------------------------------------------------------------------------------------------------------
33 033B 54 CA 90221 Retail Retail, Unanchored
33 033C 55 CA 90804 Retail Retail, Anchored
33 033D 56 CA 90270 Retail Retail, Anchored
33 033E 53 CA 90802 Retail Retail, Anchored
34 034 79 FL 33957 Retail Retail, Unanchored
- --------------------------------------------------------------------------------------------------------------------------
35 035 81 CA 91316 Office
36 036 82 CA 90068 Multifamily
37 037 89 OR 97124 Industrial
38 038 90 CA 92868 Office
- --------------------------------------------------------------------------------------------------------------------------
39 039 100 NJ Various Industrial
39 039A 101 NJ 07071 Industrial
39 039B 102 NJ 07656 Lodging Lodging, Full Service
40 040 93 NJ 07058 Office
41 041 94 NJ Various Industrial
41 041A 96 NJ 07470 Industrial
- --------------------------------------------------------------------------------------------------------------------------
41 041B 97 NY 10989 Industrial
41 041C 98 NY 10989 Industrial
41 041D 95 NJ 07470 Industrial
42 042 91 TX 77095 Retail Retail, Anchored
43 043 99 NY 10028 Retail Retail, Anchored
- --------------------------------------------------------------------------------------------------------------------------
44 044 103 VA 24202 Lodging Lodging, Full Service
45 045 104 WI 53110 Industrial
46 046 814 WA 98036 Office
47 047 815 NY 14623 Mixed Use Office, Industrial, Retail
48 048 109 IL 60605 Office
- --------------------------------------------------------------------------------------------------------------------------
49 049 110 FL 32303 Multifamily
50 050 115 TX 77099 Multifamily
51 051 113 MD 20745 Office
52 052 116 WV 25387 Retail Retail, Anchored
53 053 816 CA 94607 Self Storage
- --------------------------------------------------------------------------------------------------------------------------
54 054 117 FL 33167 Industrial
55 055 111 NC 27713 Industrial
56 056 120 NY 11930 Cooperative Residential
57 057 121 MN 55416 Industrial
58 058 817 GA 30341 Multifamily
- --------------------------------------------------------------------------------------------------------------------------
59 059 818 NY 11214 Self Storage
60 060 122 CA 92865 Office
61 061 123 NJ 07020 Cooperative Residential
62 062 124 IL 60450 Retail Retail, Anchored
63 063 137 NC 27534 Retail Retail, Anchored
- --------------------------------------------------------------------------------------------------------------------------
64 064 138 FL 33619 Lodging Lodging, Limited Service
65 065 515 TX 75243 Multifamily
66 066 139 OH 45426 Multifamily
67 067 140 MA 02109 Office
68 068 142 CA 94612 Multifamily
- --------------------------------------------------------------------------------------------------------------------------
69 069 143 CA 94062 Office
70 070 819 CA 94704 Office
71 071 127 CT Various Multifamily
71 071A 135 CT 06105 Multifamily
71 071B 132 CT 06105 Multifamily
- --------------------------------------------------------------------------------------------------------------------------
71 071C 134 CT 06105 Multifamily
71 071D 128 CT 06105 Multifamily
71 071E 130 CT 06105 Multifamily
71 071F 129 CT 06105 Multifamily
71 071G 133 CT 06105 Multifamily
- --------------------------------------------------------------------------------------------------------------------------
71 071H 131 CT 06105 Multifamily
72 072 147 CO 80501 Retail Retail, Anchored
73 073 148 KY 40242 Multifamily
74 074 146 NY 10019 Office
75 075 820 CA 92869 Self Storage
- --------------------------------------------------------------------------------------------------------------------------
76 076 149 CA 94102 Multifamily
77 077 150 TX 78251 Retail Retail, Unanchored
78 078 151 DC 20009 Multifamily
79 079 152 NJ 08069 Multifamily
80 080 153 MD 20735 Office
- --------------------------------------------------------------------------------------------------------------------------
81 081 154 NY 11978 Cooperative Residential
82 082 165 TX 78521 Multifamily
83 083 166 NY 11954 Cooperative Residential
84 084 167 MA Various Industrial
84 084A 168 MA 02368 Industrial
- --------------------------------------------------------------------------------------------------------------------------
84 084B 169 MA 02368 Industrial
85 085 502 NC 27959 Lodging Lodging, Limited Service
86 086 170 CA 95608 Office
87 087 821 CA 90405 Office
88 088 172 NY 11954 Cooperative Residential
- --------------------------------------------------------------------------------------------------------------------------
89 089 164 TX 77083 Multifamily
90 090 822 CA 95806 Office
91 091 823 WA 98108 Industrial
92 092 177 IN 46637 Lodging Lodging, Limited Service
93 093 178 NJ 08021 Multifamily
- --------------------------------------------------------------------------------------------------------------------------
94 094 180 MD 21093 Office
95 095 824 IL Various Retail Retail, Anchored
95 095A 824A IL 60616 Retail Retail, Anchored
95 095B 824B IL 60628 Retail Retail, Anchored
95 095C 824C IL 60615 Retail Retail, Anchored
- --------------------------------------------------------------------------------------------------------------------------
96 096 182 NY 10314 Retail Retail, Unanchored
97 097 184 OH 44089 Retail Retail, Anchored
98 098 185 CA 92211 Office
99 099 183 NY 11954 Cooperative Residential
100 100 825 SD 57106 Retail Retail, Unanchored
- --------------------------------------------------------------------------------------------------------------------------
101 101 186 CA 91730 Office
102 102 187 FL Various Retail Retail, Anchored
102 102A 188 FL 32178 Retail Retail, Anchored
102 102B 189 FL 32908 Retail Retail, Anchored
103 103 826 TX 75252 Office
- --------------------------------------------------------------------------------------------------------------------------
104 104 827 CA 93908 Manufactured Housing Community
105 105 181 MO 65616 Retail Retail, Unanchored
106 106 190 TN 38104 Multifamily
107 107 193 MA 01230 Office
108 108 200 CA 95603 Retail Retail, Unanchored
- --------------------------------------------------------------------------------------------------------------------------
109 109 205 CA 91405 Multifamily
110 110 206 NY 10003 Retail Retail, Anchored
111 111 202 CA 91345 Retail Retail, Unanchored
112 112 208 MS 38614 Retail Retail, Anchored
113 113 209 NC 27107 Retail Retail, Anchored
- --------------------------------------------------------------------------------------------------------------------------
114 114 211 CA 94115 Retail Retail, Unanchored
115 115 212 TX 77530 Multifamily
116 116 214 NY 10001 Cooperative Mixed Commercial
117 117 215 CA 94015 Multifamily
118 118 220 TX 77381 Office
- --------------------------------------------------------------------------------------------------------------------------
119 119 217 TX 76112 Multifamily
120 120 221 NY 10010 Cooperative Mixed Commercial
121 121 828 FL 32937 Self Storage
122 122 222 GA 30324 Cooperative Residential
123 123 223 CA 90005 Multifamily
- --------------------------------------------------------------------------------------------------------------------------
124 124 829 CA 92363 Self Storage
125 125 224 NY 90804 Retail Retail, Unanchored
126 126 513 CA 92345 Multifamily
127 127 227 AZ 85282 Multifamily
128 128 228 AZ 85635 Multifamily
- --------------------------------------------------------------------------------------------------------------------------
129 129 229 SC 29609 Office
130 130 230 TX 75204 Multifamily
131 131 231 CA 91746 Industrial
132 132 232 CA 92109 Office
133 133 234 CA 95945 Multifamily
- --------------------------------------------------------------------------------------------------------------------------
134 134 235 PA 15203 Retail Retail, Anchored
135 135 236 CA 92625 Retail Retail, Unanchored
136 136 237 AR 72904 Multifamily
137 137 238 TX 77036 Multifamily
138 138 240 CA 92841 Multifamily
- --------------------------------------------------------------------------------------------------------------------------
139 139 241 CT 06705 Multifamily
140 140 242 CA 90291 Retail Retail, Unanchored
141 141 243 NV 89431 Multifamily
142 142 244 AZ 85281 Multifamily
143 143 245 CA 91406 Industrial
- --------------------------------------------------------------------------------------------------------------------------
144 144 248 CO 80010 Multifamily
145 145 247 AZ 85027 Multifamily
146 146 249 CO 80010 Multifamily
147 147 250 MO 64111 Multifamily
148 148 251 CA 94550 Multifamily
- --------------------------------------------------------------------------------------------------------------------------
149 149 252 NV 89502 Multifamily
150 150 254 CA 91356 Retail Retail, Unanchored
151 151 514 MO 64124 Multifamily
152 152 259 AZ 85032 Multifamily
153 153 260 FL 33701 Multifamily
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CSFB CUT-OFF DATE CUT-OFF DATE
CONTROL CONTROL ORIGINAL PRINCIPAL PRINCIPAL LOAN PRINCIPAL
LOAN # # # LOAN BALANCE BALANCE BALANCE/UNIT 1997 NOI
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 001 1 58,000,000 58,000,000 168,116
2 002 507 25,500,000 25,471,294 99 2,951,456
3 003 508 14,750,000 14,733,395 80 1,722,794
4 004 509 10,900,000 10,887,729 61 1,402,968
5 005 30 48,000,000 47,937,104 49 2,849,681
6 006 3 26,775,758 26,263,337 40,718
- ------------------------------------------------------------------------------------------------------------------------------------
6 006A 9 6,689,444 53,516
6 006B 7 4,546,883 36,086
6 006C 4 4,120,309 40,003
6 006D 8 3,732,516 40,571
6 006E 6 3,635,567 40,395
- ------------------------------------------------------------------------------------------------------------------------------------
6 006F 5 3,538,619 32,464
7 007 10 14,210,728 14,018,721 24,212
7 007A 11 3,925,242 22,559
7 007B 12 3,313,516 27,384
7 007C 13 3,288,027 32,555
- ------------------------------------------------------------------------------------------------------------------------------------
7 007D 14 2,650,813 21,908
7 007E 15 841,123 13,567
8 008 31 38,800,000 38,774,229 112 (2,579,787)
9 009 32 37,500,000 37,204,671 133/83,660 20,158,751
10 010 35 36,000,000 35,962,109 67,725
- ------------------------------------------------------------------------------------------------------------------------------------
11 011 36 34,000,000 33,965,600 151 4,047,944
12 012 500 33,149,000 33,149,000 121 4,061,594
13 013 37 30,000,000 29,440,579 62 221,579
14 014 800 29,698,120 29,332,251 118,275 3,831,893
14 014A 801 18,820,708 143,670 2,095,191
- ------------------------------------------------------------------------------------------------------------------------------------
14 014B 802 10,511,543 89,842 1,736,702
15 015 41 28,000,000 27,938,200 54,567
15 015A 42 8,982,348 68,568
15 015B 43 7,433,667 59,949
15 015C 44 4,274,359 54,799
- ------------------------------------------------------------------------------------------------------------------------------------
15 015D 45 3,840,728 45,185
15 015E 46 3,407,098 36,246
16 016 38 27,000,000 26,976,630 8,250 4,012,966
17 017 40 25,500,000 25,482,959 54,920
17 017A 511 16,988,640 60,674
- ------------------------------------------------------------------------------------------------------------------------------------
17 017B 512 8,494,320 46,165
18 018 39 25,500,000 25,470,363 247 1,525,406
19 019 501 19,900,000 19,888,551 15 1,753,512
20 020 62 19,700,000 19,693,943 25,677 1,316,098
21 021 803 12,120,000 11,954,130 51 1,403,681
- ------------------------------------------------------------------------------------------------------------------------------------
22 022 804 5,060,000 5,016,270 37 679,215
23 023 805 2,250,000 2,219,207 15 277,813
24 024 63 17,500,000 17,482,834 59 1,850,533
25 025 806 17,250,000 17,250,000 63 1,767,753
26 026 807 17,200,000 17,100,546 40 1,590,966
- ------------------------------------------------------------------------------------------------------------------------------------
27 027 67 17,000,000 17,000,000 61,594
27 027A 68 10,274,725 67,155
27 027B 69 6,725,275 54,677
29 029 66 17,000,000 16,983,230 126 2,150,033
- ------------------------------------------------------------------------------------------------------------------------------------
30 030 72 15,800,000 15,783,655 87
31 031 808 14,780,000 14,652,229 22,033
31 031A 809 3,717,582 25,817
31 031B 810 3,469,743 25,513 542,920
31 031C 811 2,676,659 20,590 385,580
- ------------------------------------------------------------------------------------------------------------------------------------
31 031D 812 2,478,388 19,212 19,826
31 031E 813 2,309,857 18,332 508,151
32 032 80 12,800,000 12,792,150 106
33 033 50 12,721,250 12,708,740 72 1,705,195
33 033A 52 4,687,886 96 675,541
- ------------------------------------------------------------------------------------------------------------------------------------
33 033B 54 2,797,247 66 234,996
33 033C 55 2,191,593 64 310,575
33 033D 56 1,823,205 64 335,997
33 033E 53 1,208,810 53 148,086
34 034 79 12,650,000 12,632,054 307 1,506,698
- ------------------------------------------------------------------------------------------------------------------------------------
35 035 81 12,500,000 12,454,221 127 1,291,851
36 036 82 12,250,000 12,214,232 152,678 (494,001)
37 037 89 10,950,000 10,942,638 47
38 038 90 10,500,000 10,463,154 57 521,606
- ------------------------------------------------------------------------------------------------------------------------------------
39 039 100 10,200,000 10,193,400 57 886,301
39 039A 101 6,203,452 34 886,301
39 039B 102 3,989,948
40 040 93 10,000,000 9,963,586 77 915,401
41 041 94 9,900,000 9,851,093 50 1,109,408
41 041A 96 3,309,351 50 253,214
- ------------------------------------------------------------------------------------------------------------------------------------
41 041B 97 2,424,292 46 330,572
41 041C 98 2,193,407 46 264,274
41 041D 95 1,924,042 64 261,348
42 042 91 9,775,000 9,768,690 58 1,033,732
43 043 99 10,000,000 9,763,066 257
- ------------------------------------------------------------------------------------------------------------------------------------
44 044 103 9,500,000 9,491,226 41,997
45 045 104 9,350,000 9,343,927 22
46 046 814 8,580,000 8,491,630 114 931,020
47 047 815 8,000,000 7,955,777 40 1,372,110
48 048 109 7,875,000 7,740,518 53 905,835
- ------------------------------------------------------------------------------------------------------------------------------------
49 049 110 7,735,000 7,725,429 33,299 863,322
50 050 115 7,600,000 7,591,806 27,114 691,542
51 051 113 7,250,000 7,245,489 64 1,041,178
52 052 116 7,000,000 6,993,787 44 1,058,000
53 053 816 6,850,000 6,746,509 69 337,987
- ------------------------------------------------------------------------------------------------------------------------------------
54 054 117 6,550,000 6,542,074 36
55 055 111 6,000,000 5,996,031 44 1,076,007
56 056 120 5,810,000 5,738,989 77,554 777,882
57 057 121 5,680,000 5,626,491 44 687,447
58 058 817 5,700,000 5,591,485 30,892 670,248
- ------------------------------------------------------------------------------------------------------------------------------------
59 059 818 5,500,000 5,463,682 58 640,536
60 060 122 5,450,000 5,444,060 93 413,421
61 061 123 5,400,000 5,310,151 50,096 547,382
62 062 124 5,200,000 5,194,146 100
63 063 137 5,000,000 4,996,940 44 536,476
- ------------------------------------------------------------------------------------------------------------------------------------
64 064 138 5,000,000 4,975,737 55,286
65 065 515 4,850,000 4,850,000 23,206 408,306
66 066 139 4,650,000 4,623,113 20,639 502,753
67 067 140 4,600,000 4,570,736 189 824,090
68 068 142 4,500,000 4,432,670 27,532
- ------------------------------------------------------------------------------------------------------------------------------------
69 069 143 4,325,000 4,319,370 162 540,126
70 070 819 4,200,000 4,164,400 57 857,386
71 071 127 4,100,000 4,096,194 15,060
71 071A 135 221,844 13,865
71 071B 132 1,109,221 14,221
- ------------------------------------------------------------------------------------------------------------------------------------
71 071C 134 871,531 20,268
71 071D 128 586,302 14,300
71 071E 130 459,534 13,516
71 071F 129 308,997 12,875
71 071G 133 301,074 16,726
- ------------------------------------------------------------------------------------------------------------------------------------
71 071H 131 237,690 13,205
72 072 147 4,000,000 3,997,322 52 166,462
73 073 148 4,000,000 3,997,256 16,655 427,797
74 074 146 4,000,000 3,989,543 82 555,709
75 075 820 4,025,000 3,987,591 59 29,613
- ------------------------------------------------------------------------------------------------------------------------------------
76 076 149 4,000,000 3,940,151 16,983 509,873
77 077 150 3,825,000 3,821,087 73
78 078 151 3,800,000 3,797,636 49,969 404,794
79 079 152 3,800,000 3,791,987 17,555 449,778
80 080 153 3,800,000 3,791,615 63 529,959
- ------------------------------------------------------------------------------------------------------------------------------------
81 081 154 4,000,000 3,717,534 36,807 797,234
82 082 165 3,345,000 3,341,143 25,312 444,542
83 083 166 3,350,000 3,338,838 41,735 297,607
84 084 167 3,320,000 3,316,498 36 79,729
84 084A 168 2,349,186 32
- ------------------------------------------------------------------------------------------------------------------------------------
84 084B 169 967,312 50 79,729
85 085 502 3,250,000 3,247,390 28,738 632,170
86 086 170 3,100,000 3,094,879 67 341,413
87 087 821 3,050,000 3,039,269 124 382,151
88 088 172 3,586,000 3,001,401 32,624 681,740
- ------------------------------------------------------------------------------------------------------------------------------------
89 089 164 3,000,000 2,997,921 29,979 282,637
90 090 822 3,000,000 2,984,837 30 516,235
91 091 823 3,000,000 2,947,957 38 423,344
92 092 177 2,940,000 2,937,866 26,467 532,680
93 093 178 2,900,000 2,874,798 19,424
- ------------------------------------------------------------------------------------------------------------------------------------
94 094 180 2,600,000 2,598,146 93 408,935
95 095 824 2,610,000 2,584,132 82 271,477
95 095A 824A 886,357 84
95 095B 824B 886,357 81
95 095C 824C 811,417 81
- ------------------------------------------------------------------------------------------------------------------------------------
96 096 182 2,550,000 2,547,862 113 422,157
97 097 184 2,500,000 2,497,613 42 364,172
98 098 185 2,500,000 2,490,956 64 324,139
99 099 183 2,500,000 2,487,642 43,643 221,378
100 100 825 2,400,000 2,393,088 72 230,254
- ------------------------------------------------------------------------------------------------------------------------------------
101 101 186 2,415,000 2,389,746 69 6,240
102 102 187 2,300,000 2,298,607 44 334,188
102 102A 188 1,554,940 34 225,000
102 102B 189 743,667 114 109,188
103 103 826 2,300,000 2,297,594 83 246,039
- ------------------------------------------------------------------------------------------------------------------------------------
104 104 827 2,300,000 2,291,514 28,644 306,170
105 105 181 2,275,000 2,272,971 57 458,760
106 106 190 2,250,000 2,247,460 19,046 226,023
107 107 193 2,100,000 2,097,195 131
108 108 200 1,770,000 1,768,097 82 245,226
- ------------------------------------------------------------------------------------------------------------------------------------
109 109 205 1,630,000 1,628,935 33,936 178,982
110 110 206 1,600,000 1,597,518 296 195,954
111 111 202 1,588,000 1,587,010 90 167,254
112 112 208 1,500,000 1,499,030 76
113 113 209 1,500,000 1,496,582 18 31,357
- ------------------------------------------------------------------------------------------------------------------------------------
114 114 211 1,400,000 1,399,162 231 171,814
115 115 212 1,370,000 1,358,425 18,357
116 116 214 1,300,000 1,290,257 41 189,595
117 117 215 1,275,000 1,263,632 54,941 98,792
118 118 220 1,200,000 1,191,175 107
- ------------------------------------------------------------------------------------------------------------------------------------
119 119 217 1,125,000 1,123,954 15,189 85,330
120 120 221 1,100,000 1,096,297 27 159,982
121 121 828 1,100,000 1,093,330 27 171,211
122 122 222 1,087,500 1,065,694 21,749 171,311
123 123 223 1,060,000 1,059,390 16,051
- ------------------------------------------------------------------------------------------------------------------------------------
124 124 829 1,050,000 1,046,424 15 181,223
125 125 224 1,044,000 1,043,399 52 83,104
126 126 513 980,000 977,363 32,579
127 127 227 984,000 973,849 24,346 173,634
128 128 228 975,000 969,927 10,318 117,840
- ------------------------------------------------------------------------------------------------------------------------------------
129 129 229 950,000 949,448 26 123,583
130 130 230 850,000 844,458 25,590 67,074
131 131 231 850,000 840,605 27 107,690
132 132 232 840,000 837,172 50
133 133 234 800,000 792,844 29,365 113,501
- ------------------------------------------------------------------------------------------------------------------------------------
134 134 235 700,000 696,178 82 85,730
135 135 236 694,000 688,167 144
136 136 237 639,000 632,896 10,208 99,969
137 137 238 600,000 594,931 13,521 84,901
138 138 240 521,500 518,939 57,660 69,882
- ------------------------------------------------------------------------------------------------------------------------------------
139 139 241 515,000 513,152 18,327 64,298
140 140 242 500,000 494,961 47 195,714
141 141 243 467,500 464,452 29,028 64,171
142 142 244 450,000 444,933 22,247 46,339
143 143 245 425,000 422,477 42 (20,238)
- ------------------------------------------------------------------------------------------------------------------------------------
144 144 248 405,000 401,252 16,719 53,766
145 145 247 405,000 401,252 14,330
146 146 249 397,500 393,821 17,901 56,500
147 147 250 375,000 372,479 18,624 58,535
148 148 251 350,000 347,718 43,465
- ------------------------------------------------------------------------------------------------------------------------------------
149 149 252 350,000 343,558 16,360
150 150 254 343,000 339,543 100 68,723
151 151 514 280,000 276,229 9,525
152 152 259 243,750 241,494 17,250 30,050
153 153 260 236,000 234,627 29,328
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CSFB MOST MOST
CONTROL CONTROL RECENT RECENT
LOAN # # # 1998 NOI MOST RECENT NOI DATE TYPE U/W NOI
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 001 1 7,861,360 8,840,371 6/30/99 Annualized 7,604,021
2 002 507 2,902,577 3,173,489 8/31/99 Trailing 12 3,072,176
3 003 508 1,805,866 1,954,015 8/31/99 Trailing 12 1,877,562
4 004 509 1,408,821 1,424,599 6/30/99 Trailing 12 1,379,725
5 005 30 3,700,054 4,588,173 6/30/99 Trailing 12 5,595,223
6 006 3 2,238,846
- --------------------------------------------------------------------------------------------------------------------------------
6 006A 9 567,538
6 006B 7 388,476
6 006C 4 352,746
6 006D 8 317,842
6 006E 6 309,632
- --------------------------------------------------------------------------------------------------------------------------------
6 006F 5 302,612
7 007 10 1,127,391
7 007A 11 314,417
7 007B 12 265,768
7 007C 13 263,437
- --------------------------------------------------------------------------------------------------------------------------------
7 007D 14 213,682
7 007E 15 70,087
8 008 31 4,967,425 5,166,077 6/30/99 Trailing 12 4,720,002
9 009 32 20,289,597 21,642,073 6/30/99 Trailing 12 20,545,938
10 010 35 3,702,429 8,996,084 7/31/99 Annualized 7,892,744
- --------------------------------------------------------------------------------------------------------------------------------
11 011 36 3,915,932 3,770,907 6/30/99 Trailing 12 4,632,600
12 012 500 4,020,488 3,970,354 5/31/99 Trailing 12 3,841,253
13 013 37 1,177,594 653,712 3/31/99 Annualized 3,826,153
14 014 800 4,694,275 4,605,937 4,016,123
14 014A 801 2,713,947 2,785,098 4/30/99 Trailing 12 2,430,302
- --------------------------------------------------------------------------------------------------------------------------------
14 014B 802 1,980,328 1,820,839 4/30/99 Trailing 12 1,585,821
15 015 41 5,297,560 5,686,355 5,670,852
15 015A 42 1,641,547 1,672,031 7/16/99 Trailing 12 1,679,114
15 015B 43 1,447,358 1,460,434 7/16/99 Trailing 12 1,457,539
15 015C 44 666,817 1,018,131 7/16/99 Trailing 12 1,018,269
- --------------------------------------------------------------------------------------------------------------------------------
15 015D 45 830,516 847,850 7/16/99 Trailing 12 837,314
15 015E 46 711,322 687,909 7/16/99 Trailing 12 678,616
16 016 38 3,753,905 3,696,725 5/31/99 Trailing 12 3,666,737
17 017 40 1,132,911 2,718,149 2,944,005
17 017A 511 1,025,513 1,805,805 8/31/99 Annualized 1,976,755
- --------------------------------------------------------------------------------------------------------------------------------
17 017B 512 107,398 912,344 8/31/99 Annualized 967,250
18 018 39 1,157,497 2,043,486 6/30/99 Trailing 12 3,070,275
19 019 501 2,683,230 3,125,010 4/30/99 Trailing 12 3,782,204
20 020 62 874,992 3,441,911
21 021 803 1,398,494 1,390,309
- --------------------------------------------------------------------------------------------------------------------------------
22 022 804 559,176 395,679
23 023 805 328,953 361,979
24 024 63 2,015,023 1,878,716 3/31/99 Trailing 12 2,031,610
25 025 806 1,901,981 1,860,898 2/28/99 Trailing 12 2,031,758
26 026 807 1,848,002 5/31/99 Trailing 12 2,019,953
- --------------------------------------------------------------------------------------------------------------------------------
27 027 67 2,671,198 2,980,233
27 027A 68 1,723,559 9/30/99 Trailing 12 1,954,324
27 027B 69 947,639 8/31/99 Trailing 12 1,025,909
29 029 66 980,986 1,610,537 4/30/99 Trailing 12 2,153,719
- --------------------------------------------------------------------------------------------------------------------------------
30 030 72 2,043,870
31 031 808 2,621,407 2,434,861 2,071,171
31 031A 809 554,509 459,946 4/30/99 Trailing 12 413,024
31 031B 810 682,208 674,673 4/30/99 Trailing 12 529,213
31 031C 811 535,080 480,202 4/30/99 Trailing 12 403,850
- --------------------------------------------------------------------------------------------------------------------------------
31 031D 812 460,100 481,019 4/30/99 Trailing 12 394,924
31 031E 813 389,510 339,021 4/30/99 Trailing 12 330,160
32 032 80 1,456,682
33 033 50 1,945,608 1,935,203 1,688,572
33 033A 52 707,932 645,311 6/30/99 Annualized 600,393
- --------------------------------------------------------------------------------------------------------------------------------
33 033B 54 360,021 490,424 6/30/99 Annualized 349,025
33 033C 55 346,123 287,024 6/30/99 Annualized 337,994
33 033D 56 365,724 356,643 6/30/99 Annualized 259,436
33 033E 53 165,808 155,801 6/30/99 Annualized 141,724
34 034 79 1,431,136 1,431,744 4/30/99 Trailing 12 1,477,281
- --------------------------------------------------------------------------------------------------------------------------------
35 035 81 1,706,160 1,737,980
36 036 82 35,959 848,186 7/31/99 Annualized 1,725,100
37 037 89 719,512 1,070,123 5/31/99 Annualized 1,320,448
38 038 90 1,199,207 1,389,549
- --------------------------------------------------------------------------------------------------------------------------------
39 039 100 1,348,917 1,333,678 1,299,175
39 039A 101 943,075 864,503 6/30/99 Trailing 12 830,000
39 039B 102 405,842 469,175 6/30/99 Trailing 12 469,175
40 040 93 1,360,270 1,411,235
41 041 94 1,283,037 1,194,086 1,287,951
41 041A 96 468,294 456,841 3/31/99 Annualized 426,769
- --------------------------------------------------------------------------------------------------------------------------------
41 041B 97 214,251 205,848 3/31/99 Annualized 315,858
41 041C 98 357,627 278,605 3/31/99 Annualized 322,469
41 041D 95 242,865 252,792 3/31/99 Annualized 222,855
42 042 91 1,161,188 1,247,429 6/30/99 Trailing 12 1,167,321
43 043 99 1,321,377
- --------------------------------------------------------------------------------------------------------------------------------
44 044 103 1,536,822 1,848,505 7/31/99 Trailing 12 1,632,466
45 045 104 1,239,771
46 046 814 1,062,842 934,081 7/31/99 Trailing 12 1,008,149
47 047 815 1,234,309 1,148,679
48 048 109 1,095,991 1,262,468
- --------------------------------------------------------------------------------------------------------------------------------
49 049 110 880,494 973,375 5/31/99 Trailing 12 939,440
50 050 115 812,047 777,597 6/30/99 Annualized 819,653
51 051 113 885,482 819,322 6/30/99 Trailing 12 913,360
52 052 116 960,000 1,025,510 5/31/99 Annualized 1,029,520
53 053 816 708,070 873,900 4/30/99 Annualized 861,358
- --------------------------------------------------------------------------------------------------------------------------------
54 054 117 722,157
55 055 111 1,007,276 1,072,431 6/30/99 Trailing 12 1,211,218
56 056 120 750,251 1,028,462
57 057 121 803,670 825,771 3/31/99 Annualized 780,537
58 058 817 458,843 550,609 7/31/99 Trailing 12 723,959
- --------------------------------------------------------------------------------------------------------------------------------
59 059 818 906,217 977,456 4/30/99 Trailing 12 952,471
60 060 122 680,548 724,064
61 061 123 525,290 493,150 7/31/99 Annualized 1,188,600
62 062 124 621,300 621,300 8/1/99 Trailing 12 608,498
63 063 137 627,339 693,756 6/30/99 Trailing 12 634,989
- --------------------------------------------------------------------------------------------------------------------------------
64 064 138 1,164,885 1,215,519 4/30/99 Annualized 1,021,835
65 065 515 522,507 7/31/99 Annualized 604,951
66 066 139 580,194 511,759 6/30/99 Annualized 659,585
67 067 140 693,588 767,992
68 068 142 343,531 830,471 3/31/99 Annualized 559,374
- --------------------------------------------------------------------------------------------------------------------------------
69 069 143 504,452 560,054 3/31/99 Trailing 12 589,540
70 070 819 723,839 779,596
71 071 127 715,143 741,877 724,184
71 071A 135 48,532 51,521 6/30/99 Trailing 12 48,396
71 071B 132 206,666 214,924 6/30/99 Trailing 12 192,347
- --------------------------------------------------------------------------------------------------------------------------------
71 071C 134 104,065 115,517 6/30/99 Trailing 12 155,004
71 071D 128 102,029 106,222 6/30/99 Trailing 12 98,711
71 071E 130 84,416 82,842 6/30/99 Trailing 12 73,524
71 071F 129 71,662 68,816 6/30/99 Trailing 12 62,419
71 071G 133 50,916 55,925 6/30/99 Trailing 12 54,878
- --------------------------------------------------------------------------------------------------------------------------------
71 071H 131 46,857 46,110 6/30/99 Trailing 12 38,905
72 072 147 92,937 417,095 7/31/99 Annualized 542,252
73 073 148 547,650 652,747 6/30/99 Trailing 12 652,105
74 074 146 654,278 664,412 5/31/99 Trailing 12 800,096
75 075 820 394,949 463,549 3/31/99 Trailing 12 469,384
- --------------------------------------------------------------------------------------------------------------------------------
76 076 149 522,002 619,462 3/31/99 Annualized 490,232
77 077 150 192,887 419,597 5/31/99 Annualized 470,001
78 078 151 416,651 420,941 7/31/99 Trailing 12 483,990
79 079 152 471,595 479,598 3/1/99 Trailing 12 569,732
80 080 153 574,600 568,576 6/30/99 Trailing 12 566,344
- --------------------------------------------------------------------------------------------------------------------------------
81 081 154 624,753 642,698
82 082 165 443,075 446,359 1/31/99 Trailing 12 425,640
83 083 166 299,981 296,233 7/31/99 Annualized 811,446
84 084 167 92,717 426,027
84 084A 168 306,615
- --------------------------------------------------------------------------------------------------------------------------------
84 084B 169 92,717 119,412
85 085 502 634,230 665,817 5/31/99 Trailing 12 655,945
86 086 170 395,915 426,907 5/31/99 Trailing 12 497,895
87 087 821 397,211 400,232 1/31/99 Trailing 12 379,358
88 088 172 640,030 1,275,135
- --------------------------------------------------------------------------------------------------------------------------------
89 089 164 316,584 362,419 7/31/99 Trailing 12 377,313
90 090 822 687,792 569,736
91 091 823 412,134 386,329 6/30/99 Annualized 417,241
92 092 177 545,177 669,119 5/31/99 Trailing 12 559,966
93 093 178 288,570 395,010 8/31/99 Annualized 366,296
- --------------------------------------------------------------------------------------------------------------------------------
94 094 180 400,732 422,850 6/30/99 Annualized 393,930
95 095 824 364,272 322,489
95 095A 824A
95 095B 824B
95 095C 824C
- --------------------------------------------------------------------------------------------------------------------------------
96 096 182 196,526 202,979 4/30/99 Trailing 12 348,659
97 097 184 299,708 320,678 6/30/99 Annualized 333,208
98 098 185 342,757 359,277 3/31/99 Annualized 431,258
99 099 183 206,668 487,922
100 100 825 317,029 308,019 3/31/99 Trailing 12 285,130
- --------------------------------------------------------------------------------------------------------------------------------
101 101 186 110,957 388,110
102 102 187 225,000 97,500 302,774
102 102A 188 225,000 215,540
102 102B 189 97,500 6/30/99 Trailing 12 87,234
103 103 826 295,672 302,723
- --------------------------------------------------------------------------------------------------------------------------------
104 104 827 330,195 328,943 3/31/99 Trailing 12 293,213
105 105 181 430,027 388,936 6/30/99 Annualized 394,227
106 106 190 351,938 349,936 6/30/99 Trailing 12 383,292
107 107 193 266,271
108 108 200 260,056 199,121 6/30/99 Annualized 244,589
- --------------------------------------------------------------------------------------------------------------------------------
109 109 205 210,502 211,229 5/31/99 Trailing 12 211,368
110 110 206 256,570 233,811
111 111 202 223,285 218,348 3/31/99 Annualized 198,635
112 112 208 191,478
113 113 209 214,802 325,911
- --------------------------------------------------------------------------------------------------------------------------------
114 114 211 196,826 196,826 2/28/99 Trailing 12 180,592
115 115 212 214,757 238,592
116 116 214 74,032 225,987 7/31/99 Annualized 314,087
117 117 215 145,882 181,228 3/31/99 Annualized 141,214
118 118 220 121,379 144,908
- --------------------------------------------------------------------------------------------------------------------------------
119 119 217 107,603 186,648 6/30/99 Annualized 175,501
120 120 221 157,512 59,949 7/31/99 Annualized 449,803
121 121 828 175,624 194,202 3/31/99 Trailing 12 181,754
122 122 222 206,186 246,408
123 123 223 150,861 176,349 6/30/99 Trailing 12 135,695
- --------------------------------------------------------------------------------------------------------------------------------
124 124 829 181,151 186,847 3/31/99 Trailing 12 167,462
125 125 224 104,269 87,610 6/30/99 Annualized 148,423
126 126 513 132,097 210,849 3/31/99 Annualized 130,391
127 127 227 94,573 61,035 3/31/99 Annualized 143,755
128 128 228 145,477 178,239 5/28/99 Annualized 180,182
- --------------------------------------------------------------------------------------------------------------------------------
129 129 229 151,209 152,946 4/30/99 Trailing 12 161,296
130 130 230 107,235 137,266
131 131 231 112,983
132 132 232 93,092 127,120
133 133 234 115,899 95,246 4/30/99 Annualized 106,231
- --------------------------------------------------------------------------------------------------------------------------------
134 134 235 80,207 78,483
135 135 236 96,359
136 136 237 85,028 104,901
137 137 238 76,133 91,822 4/30/99 Annualized 98,395
138 138 240 76,717 68,295
- --------------------------------------------------------------------------------------------------------------------------------
139 139 241 88,695 75,644 6/30/99 Annualized 91,319
140 140 242 219,773 201,864
141 141 243 62,870 59,974 4/30/99 Annualized 54,256
142 142 244 52,591 79,463 3/31/99 Annualized 64,784
143 143 245 43,941 56,093
- --------------------------------------------------------------------------------------------------------------------------------
144 144 248 83,204 74,163
145 145 247 61,076 68,907 4/30/99 Annualized 67,546
146 146 249 73,750 96,592 3/31/99 Annualized 70,477
147 147 250 48,495 44,564
148 148 251 34,650 61,572 7/31/99 Annualized 40,590
- --------------------------------------------------------------------------------------------------------------------------------
149 149 252 62,541 53,509
150 150 254 46,379 38,668 5/31/99 Annualized 47,265
151 151 514 64,597 21,996 3/31/99 Annualized 54,041
152 152 259 38,634 40,850 4/30/99 Annualized 35,255
153 153 260 26,737 33,536 3/31/99 Annualized 29,068
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CSFB
CONTROL CONTROL U/W NET CASH
LOAN # # # 1997 REV 1998 REV MOST RECENT REV U/W REV FLOW
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 001 1 10,476,545 10,877,750 11,761,501 7,535,021
2 002 507 4,389,510 4,353,032 4,622,916 4,668,509 2,711,871
3 003 508 2,891,482 3,019,534 3,120,418 3,114,051 1,627,196
4 004 509 2,300,009 2,365,592 2,370,645 2,368,035 1,221,179
5 005 30 6,030,823 7,081,917 8,025,709 8,958,776 5,153,369
6 006 3 2,238,846 2,238,846
- --------------------------------------------------------------------------------------------------------------------------------
6 006A 9 567,538 567,538
6 006B 7 388,476 388,476
6 006C 4 352,746 352,746
6 006D 8 317,842 317,842
6 006E 6 309,632 309,632
- --------------------------------------------------------------------------------------------------------------------------------
6 006F 5 302,612 302,612
7 007 10 1,127,391 1,127,391
7 007A 11 314,417 314,417
7 007B 12 265,768 265,768
7 007C 13 263,437 263,437
- --------------------------------------------------------------------------------------------------------------------------------
7 007D 14 213,682 213,682
7 007E 15 70,087 70,087
8 008 31 7,990 7,645,204 7,903,185 7,561,011 4,292,362
9 009 32 49,272,520 50,897,161 52,420,421 50,294,002 17,748,918
10 010 35 8,241,206 23,127,698 23,127,698 6,735,830
- --------------------------------------------------------------------------------------------------------------------------------
11 011 36 5,632,132 5,470,906 5,391,530 6,324,038 4,632,600
12 012 500 6,367,174 6,400,293 6,410,177 6,371,220 3,667,346
13 013 37 4,472,312 5,817,469 9,311,264 8,725,029 3,102,994
14 014 800 9,119,430 9,975,686 9,930,986 9,984,834 3,674,448
14 014A 801 4,532,963 5,298,706 5,422,901 5,487,084 2,260,829
- --------------------------------------------------------------------------------------------------------------------------------
14 014B 802 4,586,467 4,676,980 4,508,085 4,497,750 1,413,619
15 015 41 12,622,086 13,381,547 13,372,526 5,002,226
15 015A 42 3,637,446 3,854,972 3,848,442 1,486,692
15 015B 43 3,318,348 3,365,035 3,364,281 1,289,325
15 015C 44 1,825,797 2,210,443 2,210,581 907,740
- --------------------------------------------------------------------------------------------------------------------------------
15 015D 45 2,077,505 2,207,748 2,206,617 726,983
15 015E 46 1,762,990 1,743,349 1,742,605 591,486
16 016 38 6,220,780 5,942,199 5,962,586 5,941,056 3,503,237
17 017 40 2,865,589 4,336,085 4,680,674 2,851,205
17 017A 511 2,020,262 2,742,245 3,000,948 1,920,755
- --------------------------------------------------------------------------------------------------------------------------------
17 017B 512 845,327 1,593,840 1,679,726 930,450
18 018 39 2,415,148 2,241,905 3,169,602 4,247,839 2,887,217
19 019 501 7,533,657 9,370,653 9,758,695 10,906,667 2,939,835
20 020 62 5,175,540 4,871,995 7,134,032 3,250,161
21 021 803 1,946,166 2,015,262 2,015,262 1,318,736
- --------------------------------------------------------------------------------------------------------------------------------
22 022 804 979,978 878,992 712,108 396,351
23 023 805 506,941 530,098 519,321 301,895
24 024 63 3,031,204 3,200,668 3,061,834 3,300,347 1,934,921
25 025 806 2,641,137 2,797,829 2,736,606 2,886,965 1,886,161
26 026 807 2,881,390 3,042,524 3,164,316 1,849,311
- --------------------------------------------------------------------------------------------------------------------------------
27 027 67 6,808,335 6,808,335 2,639,817
27 027A 68 4,312,827 4,312,827 1,738,683
27 027B 69 2,495,508 2,495,508 901,134
29 029 66 3,211,739 1,963,905 2,744,449 3,217,971 1,969,337
- --------------------------------------------------------------------------------------------------------------------------------
30 030 72 2,387,802 1,861,355
31 031 808 5,444,252 5,359,674 4,958,559 1,872,827
31 031A 809 1,198,973 1,168,948 1,123,718 368,075
31 031B 810 1,026,596 1,271,899 1,273,823 1,086,498 485,751
31 031C 811 915,297 1,059,717 1,017,318 922,633 366,945
- --------------------------------------------------------------------------------------------------------------------------------
31 031D 812 126,563 1,026,266 1,062,188 988,313 355,392
31 031E 813 1,019,204 887,397 837,397 837,397 296,664
32 032 80 2,411,316 1,425,666
33 033 50 2,173,855 2,369,525 2,187,105 2,268,521 1,609,195
33 033A 52 783,854 830,546 765,813 824,916 576,386
- --------------------------------------------------------------------------------------------------------------------------------
33 033B 54 391,233 474,408 555,996 482,812 317,962
33 033C 55 374,883 396,017 317,596 404,462 326,533
33 033D 56 443,885 473,499 356,643 380,040 255,185
33 033E 53 180,000 195,055 191,057 176,291 133,129
34 034 79 1,965,839 1,906,561 1,937,964 2,033,892 1,438,317
- --------------------------------------------------------------------------------------------------------------------------------
35 035 81 1,951,769 2,377,811 2,413,795 1,487,794
36 036 82 488,258 1,727,253 2,391,093 1,705,100
37 037 89 921,571 1,414,012 1,659,542 1,167,092
38 038 90 1,456,519 2,200,551 2,387,468 1,191,791
- --------------------------------------------------------------------------------------------------------------------------------
39 039 100 902,700 1,374,400 1,360,000 1,560,144 1,223,979
39 039A 101 902,700 968,558 890,825 1,090,969 754,804
39 039B 102 405,842 469,175 469,175 469,175
40 040 93 1,498,850 1,777,669 2,106,121 1,070,689
41 041 94 1,634,416 1,777,548 1,859,008 1,833,452 1,140,127
41 041A 96 382,577 583,867 582,947 554,674 371,502
- --------------------------------------------------------------------------------------------------------------------------------
41 041B 97 483,222 371,113 456,282 489,644 281,600
41 041C 98 417,065 500,266 485,723 478,371 287,481
41 041D 95 351,552 322,302 334,056 310,763 199,544
42 042 91 1,770,320 1,896,983 1,966,100 1,871,280 1,057,299
43 043 99 1,496,780 1,270,617
- --------------------------------------------------------------------------------------------------------------------------------
44 044 103 4,576,356 4,946,062 4,936,340 1,435,012
45 045 104 1,278,114 1,031,828
46 046 814 1,283,294 1,344,206 1,293,449 1,486,442 922,291
47 047 815 2,170,966 2,016,097 1,947,525 977,833
48 048 109 2,182,293 2,545,500 2,602,475 968,656
- --------------------------------------------------------------------------------------------------------------------------------
49 049 110 1,489,960 1,512,748 1,644,109 1,618,187 881,440
50 050 115 1,427,061 1,456,243 1,517,024 1,526,548 749,653
51 051 113 1,738,896 1,598,337 1,475,216 1,627,717 821,732
52 052 116 1,976,000 1,870,000 2,005,390 1,937,731 932,115
53 053 816 815,264 1,291,308 1,412,898 1,406,214 846,611
- --------------------------------------------------------------------------------------------------------------------------------
54 054 117 969,285 703,757
55 055 111 1,533,972 1,464,488 1,543,025 1,710,029 1,034,008
56 056 120 1,127,484 1,087,400 1,799,840 1,009,962
57 057 121 1,176,933 1,192,231 1,200,034 1,187,160 638,470
58 058 817 1,255,854 1,049,997 1,149,507 1,346,976 678,709
- --------------------------------------------------------------------------------------------------------------------------------
59 059 818 1,119,187 1,396,440 1,511,818 1,591,654 938,408
60 060 122 801,672 1,056,751 1,107,986 630,139
61 061 123 1,222,333 1,221,730 1,222,786 2,000,664 1,162,100
62 062 124 621,300 621,300 627,318 569,943
63 063 137 624,608 718,100 693,756 726,428 588,859
- --------------------------------------------------------------------------------------------------------------------------------
64 064 138 2,645,013 2,829,447 2,492,643 897,203
65 065 515 945,531 1,067,700 1,131,812 552,701
66 066 139 1,042,453 1,076,899 977,594 1,185,835 603,585
67 067 140 1,101,131 1,009,645 1,076,688 728,761
68 068 142 865,630 1,078,366 1,085,996 519,124
- --------------------------------------------------------------------------------------------------------------------------------
69 069 143 734,768 739,076 783,595 833,505 527,408
70 070 819 1,409,723 1,332,559 1,458,962 657,594
71 071 127 1,342,726 1,390,232 1,366,815 639,078
71 071A 135 80,450 82,829 77,306 43,956
71 071B 132 355,700 364,617 347,559 171,185
- --------------------------------------------------------------------------------------------------------------------------------
71 071C 134 218,914 235,700 270,843 136,433
71 071D 128 209,314 215,800 205,646 85,895
71 071E 130 171,200 168,767 158,975 62,916
71 071F 129 124,286 128,000 121,653 55,219
71 071G 133 102,100 109,858 104,206 49,256
- --------------------------------------------------------------------------------------------------------------------------------
71 071H 131 80,762 84,661 80,627 34,218
72 072 147 242,802 229,970 578,109 689,992 513,165
73 073 148 1,096,046 1,178,390 1,262,086 1,303,856 592,105
74 074 146 1,122,136 1,281,499 1,312,505 1,556,542 743,463
75 075 820 73,225 645,805 686,123 731,407 464,011
- --------------------------------------------------------------------------------------------------------------------------------
76 076 149 1,018,350 1,086,068 1,099,087 1,086,588 432,232
77 077 150 279,254 514,982 577,084 445,231
78 078 151 733,261 754,311 773,557 836,487 464,990
79 079 152 1,168,506 1,170,518 1,183,906 1,294,752 504,359
80 080 153 945,639 985,610 982,173 987,698 502,993
- --------------------------------------------------------------------------------------------------------------------------------
81 081 154 1,579,924 1,371,691 1,624,932 617,448
82 082 165 773,921 775,946 777,382 757,772 391,785
83 083 166 608,391 606,151 659,941 1,438,691 791,446
84 084 167 174,886 181,525 577,530 368,767
84 084A 168 375,617 272,039
- --------------------------------------------------------------------------------------------------------------------------------
84 084B 169 174,886 181,525 201,913 96,728
85 085 502 1,618,016 1,702,916 1,748,795 1,748,344 568,528
86 086 170 589,018 644,523 667,687 759,305 435,742
87 087 821 458,960 471,722 475,210 465,964 353,219
88 088 172 1,116,253 1,084,238 2,244,679 1,252,135
- --------------------------------------------------------------------------------------------------------------------------------
89 089 164 685,139 728,798 761,731 777,464 352,313
90 090 822 773,031 959,003 841,010 460,738
91 091 823 506,695 497,274 500,646 515,342 361,255
92 092 177 1,130,083 1,164,957 1,299,831 1,299,831 494,974
93 093 178 822,761 884,704 882,533 329,296
- --------------------------------------------------------------------------------------------------------------------------------
94 094 180 506,043 529,185 568,090 523,564 358,489
95 095 824 339,014 464,814 437,629 309,921
95 095A 824A
95 095B 824B
95 095C 824C
- --------------------------------------------------------------------------------------------------------------------------------
96 096 182 563,462 373,987 387,983 524,649 322,193
97 097 184 513,087 449,486 487,242 492,809 287,915
98 098 185 453,286 463,711 489,748 567,719 387,477
99 099 183 402,855 424,969 712,866 473,672
100 100 825 302,174 445,908 450,495 406,474 263,445
- --------------------------------------------------------------------------------------------------------------------------------
101 101 186 90,348 214,095 498,031 294,059
102 102 187 347,688 238,500 97,500 420,742 281,188
102 102A 188 238,500 238,500 309,912 199,447
102 102B 189 109,188 97,500 110,830 81,741
103 103 826 426,130 458,114 495,927 268,693
- --------------------------------------------------------------------------------------------------------------------------------
104 104 827 408,172 432,593 436,980 432,914 289,213
105 105 181 584,340 552,207 517,860 523,503 342,834
106 106 190 604,707 677,661 675,119 712,126 353,792
107 107 193 333,104 247,709
108 108 200 303,618 318,670 326,879 310,134 220,167
- --------------------------------------------------------------------------------------------------------------------------------
109 109 205 293,798 318,183 335,192 342,544 198,720
110 110 206 265,150 329,875 330,749 224,419
111 111 202 223,278 285,616 280,722 268,510 183,154
112 112 208 241,841 181,019
113 113 209 113,544 312,738 441,507 286,093
- --------------------------------------------------------------------------------------------------------------------------------
114 114 211 189,288 215,059 215,059 202,601 175,163
115 115 212 356,256 403,777 212,692
116 116 214 489,822 496,794 483,634 641,712 267,957
117 117 215 185,625 201,976 234,648 215,430 135,464
118 118 220 127,654 227,624 130,305
- --------------------------------------------------------------------------------------------------------------------------------
119 119 217 263,008 314,118 399,198 394,442 157,001
120 120 221 425,281 435,076 402,925 779,200 389,515
121 121 828 239,498 245,240 263,247 263,247 175,674
122 122 222 336,486 356,405 415,791 234,158
123 123 223 294,934 294,390 284,911 119,195
- --------------------------------------------------------------------------------------------------------------------------------
124 124 829 228,918 237,084 242,780 237,413 156,924
125 125 224 155,335 166,779 191,922 227,915 123,048
126 126 513 185,456 243,519 198,720 122,891
127 127 227 258,324 198,763 228,577 266,478 133,755
128 128 228 413,245 427,259 452,946 486,678 156,682
- --------------------------------------------------------------------------------------------------------------------------------
129 129 229 281,831 314,458 318,560 345,676 133,628
130 130 230 184,113 174,751 245,787 129,016
131 131 231 122,240 132,376 101,548
132 132 232 130,652 178,956 100,189
133 133 234 175,401 166,470 158,430 180,120 99,481
- --------------------------------------------------------------------------------------------------------------------------------
134 134 235 106,000 106,000 107,501 77,213
135 135 236 117,926 88,749
136 136 237 174,658 190,456 190,194 89,401
137 137 238 266,683 263,946 262,812 287,774 87,395
138 138 240 91,200 95,700 90,915 65,595
- --------------------------------------------------------------------------------------------------------------------------------
139 139 241 146,808 152,140 152,333 166,543 84,319
140 140 242 250,000 299,435 275,652 190,907
141 141 243 86,038 86,596 87,213 83,790 50,256
142 142 244 79,790 83,365 106,726 106,602 59,784
143 143 245 86,710 89,754 85,230 50,772
- --------------------------------------------------------------------------------------------------------------------------------
144 144 248 97,610 117,450 111,053 66,963
145 145 247 101,927 106,677 111,864 60,546
146 146 249 106,251 119,567 124,212 121,140 63,877
147 147 250 93,340 92,554 93,776 39,564
148 148 251 56,500 66,729 65,835 38,590
- --------------------------------------------------------------------------------------------------------------------------------
149 149 252 96,552 97,242 48,259
150 150 254 74,905 57,014 58,680 63,555 43,851
151 151 514 99,813 80,900 95,893 46,791
152 152 259 58,131 57,296 59,757 58,563 31,755
153 153 260 49,581 52,441 52,452 27,068
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CSFB
CONTROL CONTROL ANNUAL DEBT MORTGAGE
LOAN # # # SERVICE DSCR RATE INTEREST CALC.
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 001 1 5,078,964 1.48 7.7500 Actual / 360
2 002 507 2,243,187 1.24 7.9900 Actual / 360
3 003 508 1,297,530 1.24 7.9900 Actual / 360
4 004 509 958,852 1.24 7.9900 Actual / 360
5 005 30 4,469,832 1.15 8.6000 Actual / 360
6 006 3 2,238,576 NAP 6.6839 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
6 006A 9
6 006B 7
6 006C 4
6 006D 8
6 006E 6
- ----------------------------------------------------------------------------------------------------------------------
6 006F 5
7 007 10 1,127,391 NAP 6.7213 Actual / 360
7 007A 11
7 007B 12
7 007C 13
- ----------------------------------------------------------------------------------------------------------------------
7 007D 14
7 007E 15
8 008 31 3,432,651 1.25 8.0500 Actual / 360
9 009 32 3,189,750 1.39 7.6400 Actual / 360
10 010 35 3,514,691 1.92 8.5000 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
11 011 36 3,102,535 1.49 8.3800 Actual / 360
12 012 500 3,055,827 1.20 8.4900 Actual / 360
13 013 37 2,584,740 1.20 7.1750 Actual / 360
14 014 800 2,423,875 1.52 7.2200 Actual / 360
14 014A 801 1,555,252
- ----------------------------------------------------------------------------------------------------------------------
14 014B 802 868,623
15 015 41 2,516,138 1.99 7.5400 Actual / 360
15 015A 42
15 015B 43
15 015C 44
- ----------------------------------------------------------------------------------------------------------------------
15 015D 45
15 015E 46
16 016 38 2,759,044 1.27 9.1800 Actual / 360
17 017 40 2,249,587 1.27 8.0200 Actual / 360
17 017A 511
- ----------------------------------------------------------------------------------------------------------------------
17 017B 512
18 018 39 2,217,651 1.30 7.8700 Actual / 360
19 019 501 1,878,641 1.56 8.7500 Actual / 360
20 020 62 1,855,536 1.75 9.0500 Actual / 360
21 021 803 1,051,250 1.21 7.2500 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
22 022 804 414,217 1.21 7.2500 Actual / 360
23 023 805 195,158 1.21 7.2500 Actual / 360
24 024 63 1,613,230 1.20 8.4900 Actual / 360
25 025 806 1,501,612 1.26 7.8800 Actual / 360
26 026 807 1,429,072 1.29 7.4000 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
27 027 67 1,507,542 1.75 7.5000 Actual / 360
27 027A 68
27 027B 69
29 029 66 1,564,248 1.26 8.4700 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
30 030 72 1,475,946 1.26 8.1000 Actual / 360
31 031 808 1,398,395 1.34 8.2500 Actual / 360
31 031A 809 354,803
31 031B 810 331,149
31 031C 811 255,458
- ----------------------------------------------------------------------------------------------------------------------
31 031D 812 236,535
31 031E 813 220,451
32 032 80 1,174,526 1.34 8.4400 Actual / 360
33 033 50 1,219,975 1.32 8.4100 Actual / 360
33 033A 52
- ----------------------------------------------------------------------------------------------------------------------
33 033B 54
33 033C 55
33 033D 56
33 033E 53
34 034 79 1,151,112 1.25 8.3500 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
35 035 81 1,122,685 1.33 8.2100 Actual / 360
36 036 82 1,053,126 1.62 7.7500 Actual / 360
37 037 89 963,251 1.21 7.9900 Actual / 360
38 038 90 915,775 1.30 7.9000 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
39 039 100 997,197 1.23 9.0000 Actual / 360
39 039A 101
39 039B 102
40 040 93 899,832 1.19 8.2300 Actual / 360
41 041 94 893,434 1.28 7.7000 Actual / 360
41 041A 96
- ----------------------------------------------------------------------------------------------------------------------
41 041B 97
41 041C 98
41 041D 95
42 042 91 876,293 1.21 8.1900 Actual / 360
43 043 99 887,961 1.43 7.5150 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
44 044 103 940,344 1.53 8.7900 Actual / 360
45 045 104 835,836 1.23 8.1600 Actual / 360
46 046 814 696,791 1.32 7.1700 Actual / 360
47 047 815 704,414 1.39 8.0000 Actual / 360
48 048 109 683,540 1.42 7.2580 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
49 049 110 657,293 1.34 7.6300 Actual / 360
50 050 115 678,754 1.17 8.1500 Actual / 360
51 051 113 660,956 1.24 8.3700 Actual / 360
52 052 116 706,651 1.32 9.0300 Actual / 360
53 053 816 634,993 1.33 7.9700 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
54 054 117 623,406 1.13 8.8400 Actual / 360
55 055 111 531,828 1.94 8.0700 Actual / 360
56 056 120 573,507 1.76 7.6700 Actual / 360
57 057 121 466,266 1.37 7.2780 Actual / 360
58 058 817 456,906 1.49 7.0400 30 / 360
- ----------------------------------------------------------------------------------------------------------------------
59 059 818 509,399 1.84 8.0000 Actual / 360
60 060 122 484,907 1.30 8.1100 Actual / 360
61 061 123 428,074 2.71 6.9300 30 / 360
62 062 124 457,434 1.25 7.9900 Actual / 360
63 063 137 459,224 1.28 8.4500 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
64 064 138 454,774 1.97 7.7900 Actual / 360
65 065 515 443,801 1.25 8.4100 Actual / 360
66 066 139 386,348 1.56 7.4000 Actual / 360
67 067 140 382,194 1.91 7.4000 Actual / 360
68 068 142 390,316 1.33 7.2500 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
69 069 143 403,488 1.31 8.6200 Actual / 360
70 070 819 382,010 1.72 7.7900 Actual / 360
71 071 127 404,829 1.58 8.7600 Actual / 360
71 071A 135
71 071B 132
- ----------------------------------------------------------------------------------------------------------------------
71 071C 134
71 071D 128
71 071E 130
71 071F 129
71 071G 133
- ----------------------------------------------------------------------------------------------------------------------
71 071H 131
72 072 147 352,542 1.46 8.0100 Actual / 360
73 073 148 348,533 1.70 7.8900 Actual / 360
74 074 146 490,280 1.52 9.1200 Actual / 360
75 075 820 368,001 1.26 7.8500 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
76 076 149 346,947 1.25 7.2500 Actual / 360
77 077 150 347,740 1.28 8.3400 Actual / 360
78 078 151 346,432 1.34 8.3700 Actual / 360
79 079 152 342,898 1.47 8.2600 Actual / 360
80 080 153 337,440 1.49 8.0900 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
81 081 154 463,436 1.33 8.1700 30 / 360
82 082 165 291,740 1.34 7.9000 Actual / 360
83 083 166 297,781 2.66 8.1000 30 / 360
84 084 167 298,745 1.23 8.2300 Actual / 360
84 084A 168
- ----------------------------------------------------------------------------------------------------------------------
84 084B 169
85 085 502 344,137 1.65 9.6250 Actual / 360
86 086 170 303,566 1.44 8.6600 Actual / 360
87 087 821 265,757 1.33 7.8900 Actual / 360
88 088 172 536,532 2.33 8.6300 30 / 360
- ----------------------------------------------------------------------------------------------------------------------
89 089 164 260,151 1.35 7.8400 Actual / 360
90 090 822 264,155 1.74 8.0000 Actual / 360
91 091 823 248,047 1.46 6.7200 30 / 360
92 092 177 326,077 1.52 10.2200 Actual / 360
93 093 178 252,324 1.31 7.8750 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
94 094 180 222,444 1.61 7.7000 Actual / 360
95 095 824 220,712 1.40 7.5800 Actual / 360
95 095A 824A
95 095B 824B
95 095C 824C
- ----------------------------------------------------------------------------------------------------------------------
96 096 182 264,591 1.22 9.3700 Actual / 360
97 097 184 243,390 1.18 8.5900 Actual / 360
98 098 185 236,535 1.64 8.2500 Actual / 360
99 099 183 308,219 1.54 9.2200 Actual / 360
100 100 825 207,323 1.27 7.8000 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
101 101 186 228,225 1.29 8.1120 Actual / 360
102 102 187 212,220 1.32 8.5000 Actual / 360
102 102A 188
102 102B 189
103 103 826 207,544 1.29 8.2600 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
104 104 827 215,771 1.34 8.1500 Actual / 360
105 105 181 229,101 1.50 9.0000 Actual / 360
106 106 190 197,740 1.79 7.9800 Actual / 360
107 107 193 194,481 1.27 8.5400 Actual / 360
108 108 200 158,227 1.39 8.1600 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
109 109 205 145,301 1.37 8.1300 Actual / 360
110 110 206 169,305 1.33 8.7200 Actual / 360
111 111 202 144,638 1.27 8.3600 Actual / 360
112 112 208 134,343 1.35 8.1800 Actual / 360
113 113 209 132,150 2.16 8.0000 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
114 114 211 129,893 1.35 8.5600 Actual / 360
115 115 212 130,997 1.62 8.3750 Actual / 360
116 116 214 105,342 2.54 7.0500 Actual / 360
117 117 215 112,266 1.21 8.0000 Actual / 360
118 118 220 101,922 1.28 7.6250 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
119 119 217 110,989 1.41 8.7500 Actual / 360
120 120 221 83,471 4.67 7.1500 30 / 360
121 121 828 105,579 1.66 8.4200 Actual / 360
122 122 222 105,755 2.21 9.0800 30 / 360
123 123 223 100,068 1.19 8.7500 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
124 124 829 101,883 1.54 8.5500 Actual / 360
125 125 224 98,558 1.25 8.7500 Actual / 360
126 126 513 95,632 1.29 8.5000 Actual / 360
127 127 227 94,089 1.42 8.3750 Actual / 360
128 128 228 87,898 1.78 8.2500 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
129 129 229 89,277 1.50 8.7000 Actual / 360
130 130 230 75,735 1.70 8.1250 Actual / 360
131 131 231 78,725 1.29 8.0000 Actual / 360
132 132 232 77,506 1.29 8.5000 Actual / 360
133 133 234 67,125 1.48 7.5000 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
134 134 235 63,846 1.21 8.3750 Actual / 360
135 135 236 69,177 1.28 8.8750 Actual / 360
136 136 237 58,960 1.52 8.5000 30 / 360
137 137 238 57,371 1.52 8.3750 Actual / 360
138 138 240 46,465 1.41 8.1250 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
139 139 241 48,891 1.72 8.2900 Actual / 360
140 140 242 48,314 3.95 8.5000 Actual / 360
141 141 243 41,654 1.21 8.1250 Actual / 360
142 142 244 43,710 1.37 8.3750 Actual / 360
143 143 245 39,215 1.29 8.5000 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
144 144 248 38,725 1.71 8.3750 Actual / 360
145 145 247 38,725 1.56 8.3750 Actual / 360
146 146 249 38,008 1.71 8.3750 Actual / 360
147 147 250 33,019 1.20 8.0000 Actual / 360
148 148 251 31,185 1.24 8.1250 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
149 149 252 35,130 1.37 8.0000 Actual / 360
150 150 254 33,143 1.32 8.5000 Actual / 360
151 151 514 28,104 1.66 8.0000 Actual / 360
152 152 259 23,307 1.36 8.3750 Actual / 360
153 153 260 21,027 1.29 8.1250 Actual / 360
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CSFB STATED
CONTROL CONTROL MATURITY ANTICIPATED ANTICIPATED ORIGINAL
LOAN # # # DATE REPAYMENT DATE REMAINING TERM AMORT TERM
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 001 1 1/11/27 1/11/08 99 336
2 002 507 5/11/29 5/11/09 115 360
3 003 508 5/11/29 5/11/09 115 360
4 004 509 5/11/29 5/11/09 115 360
5 005 30 7/11/29 7/11/09 117 360
6 006 3 3/11/19 233 290
- -----------------------------------------------------------------------------------------------------------------------------------
6 006A 9
6 006B 7
6 006C 4
6 006D 8
6 006E 6
- -----------------------------------------------------------------------------------------------------------------------------------
6 006F 5
7 007 10 3/11/19 233 337
7 007A 11
7 007B 12
7 007C 13
- -----------------------------------------------------------------------------------------------------------------------------------
7 007D 14
7 007E 15
8 008 31 9/11/29 9/11/09 119 360
9 009 32 10/11/28 10/11/08 108 360
10 010 35 9/11/24 9/11/09 119 300
- -----------------------------------------------------------------------------------------------------------------------------------
11 011 36 8/11/29 8/11/09 118 360
12 012 500 10/11/29 10/11/09 120 360
13 013 37 6/11/23 6/11/08 104 300
14 014 800 5/1/28 5/1/08 103 360
14 014A 801
- -----------------------------------------------------------------------------------------------------------------------------------
14 014B 802
15 015 41 8/11/24 8/11/09 118 300
15 015A 42
15 015B 43
15 015C 44
- -----------------------------------------------------------------------------------------------------------------------------------
15 015D 45
15 015E 46
16 016 38 9/11/24 9/11/09 119 300
17 017 40 9/11/29 9/11/09 119 360
17 017A 511
- -----------------------------------------------------------------------------------------------------------------------------------
17 017B 512
18 018 39 8/11/29 8/11/09 118 360
19 019 501 9/11/29 9/11/09 119 360
20 020 62 9/11/09 119 480
21 021 803 10/1/08 108 300
- -----------------------------------------------------------------------------------------------------------------------------------
22 022 804 10/1/08 108 360
23 023 805 10/1/08 108 300
24 024 63 8/11/29 8/11/09 118 360
25 025 806 10/1/09 120 360
26 026 807 2/1/09 112 360
- -----------------------------------------------------------------------------------------------------------------------------------
27 027 67 11/11/24 10/11/09 120 300
27 027A 68
27 027B 69
29 029 66 8/11/29 8/11/09 118 360
- -----------------------------------------------------------------------------------------------------------------------------------
30 030 72 9/11/24 9/11/09 119 300
31 031 808 1/1/09 111 300
31 031A 809
31 031B 810
31 031C 811
- -----------------------------------------------------------------------------------------------------------------------------------
31 031D 812
31 031E 813
32 032 80 9/11/29 9/11/09 119 360
33 033 50 9/11/24 9/11/09 119 300
33 033A 52
- -----------------------------------------------------------------------------------------------------------------------------------
33 033B 54
33 033C 55
33 033D 56
33 033E 53
34 034 79 7/11/29 7/11/09 117 360
- -----------------------------------------------------------------------------------------------------------------------------------
35 035 81 3/11/29 3/11/09 113 360
36 036 82 5/11/29 5/11/09 115 360
37 037 89 9/11/29 9/11/09 119 360
38 038 90 4/11/29 4/11/09 114 360
- -----------------------------------------------------------------------------------------------------------------------------------
39 039 100 12/11/27 9/11/09 119 339
39 039A 101
39 039B 102
40 040 93 3/11/29 3/11/09 113 360
41 041 94 5/11/24 5/11/09 115 300
41 041A 96
- -----------------------------------------------------------------------------------------------------------------------------------
41 041B 97
41 041C 98
41 041D 95
42 042 91 9/11/29 9/11/09 119 360
43 043 99 1/11/23 1/11/08 99 300
- -----------------------------------------------------------------------------------------------------------------------------------
44 044 103 9/11/24 9/11/09 119 300
45 045 104 9/11/29 9/11/09 119 360
46 046 814 8/1/05 70 360
47 047 815 1/1/09 111 360
48 048 109 7/1/08 105 300
- -----------------------------------------------------------------------------------------------------------------------------------
49 049 110 8/11/29 8/11/09 118 360
50 050 115 8/11/29 8/11/09 118 360
51 051 113 9/11/29 9/11/09 119 360
52 052 116 9/11/24 9/11/06 83 300
53 053 816 4/1/09 114 287
- -----------------------------------------------------------------------------------------------------------------------------------
54 054 117 7/11/29 7/11/06 81 360
55 055 111 9/11/29 9/11/09 119 360
56 056 120 3/1/09 113 240
57 057 121 9/1/13 167 360
58 058 817 12/1/07 98 360
- -----------------------------------------------------------------------------------------------------------------------------------
59 059 818 3/1/09 113 300
60 060 122 8/11/29 8/11/09 118 360
61 061 123 3/1/13 161 360
62 062 124 8/11/29 8/11/09 118 360
63 063 137 9/11/29 9/11/09 119 360
- -----------------------------------------------------------------------------------------------------------------------------------
64 064 138 5/11/24 5/11/09 115 300
65 065 515 10/11/29 10/11/09 120 360
66 066 139 2/11/29 2/11/09 112 360
67 067 140 1/11/29 1/11/09 111 360
68 068 142 9/1/08 107 300
- -----------------------------------------------------------------------------------------------------------------------------------
69 069 143 7/11/29 7/11/09 117 360
70 070 819 2/1/09 112 300
71 071 127 9/11/24 9/11/09 119 300
71 071A 135
71 071B 132
- -----------------------------------------------------------------------------------------------------------------------------------
71 071C 134
71 071D 128
71 071E 130
71 071F 129
71 071G 133
- -----------------------------------------------------------------------------------------------------------------------------------
71 071H 131
72 072 147 9/11/29 9/11/09 119 360
73 073 148 9/11/29 9/11/09 119 360
74 074 146 9/11/14 9/11/14 179 180
75 075 820 1/1/09 111 300
- -----------------------------------------------------------------------------------------------------------------------------------
76 076 149 9/1/08 107 300
77 077 150 8/11/29 8/11/09 118 360
78 078 151 9/11/29 9/11/09 119 360
79 079 152 6/11/29 6/11/09 116 360
80 080 153 6/11/29 6/11/09 116 360
- -----------------------------------------------------------------------------------------------------------------------------------
81 081 154 11/1/12 11/1/12 157 180
82 082 165 8/11/29 8/11/09 118 360
83 083 166 5/1/09 115 360
84 084 167 8/11/09 118 360
84 084A 168
- -----------------------------------------------------------------------------------------------------------------------------------
84 084B 169
85 085 502 10/11/24 10/11/09 120 300
86 086 170 8/11/24 8/11/09 118 300
87 087 821 4/1/09 114 360
88 088 172 6/1/07 6/1/07 92 120
- -----------------------------------------------------------------------------------------------------------------------------------
89 089 164 9/11/29 9/11/09 119 360
90 090 822 2/1/09 112 360
91 091 823 9/1/08 107 300
92 092 177 9/11/24 9/11/09 119 300
93 093 178 8/1/08 106 360
- -----------------------------------------------------------------------------------------------------------------------------------
94 094 180 9/11/29 9/11/09 119 360
95 095 824 7/11/08 105 360
95 095A 824A
95 095B 824B
95 095C 824C
- -----------------------------------------------------------------------------------------------------------------------------------
96 096 182 9/11/24 9/11/09 119 300
97 097 184 9/11/24 9/11/09 119 300
98 098 185 6/11/24 7/11/09 117 300
99 099 183 8/1/14 8/1/14 178 180
100 100 825 5/1/09 115 360
- -----------------------------------------------------------------------------------------------------------------------------------
101 101 186 11/1/08 109 300
102 102 187 9/11/29 9/11/09 119 360
102 102A 188
102 102B 189
103 103 826 8/1/09 118 360
- -----------------------------------------------------------------------------------------------------------------------------------
104 104 827 6/1/09 116 300
105 105 181 9/11/24 9/11/09 119 300
106 106 190 8/11/29 8/11/09 118 360
107 107 193 7/11/29 7/11/09 117 360
108 108 200 8/11/29 8/11/09 118 360
- -----------------------------------------------------------------------------------------------------------------------------------
109 109 205 9/11/29 9/11/09 119 360
110 110 206 9/11/19 9/11/09 119 240
111 111 202 9/11/29 9/11/09 119 360
112 112 208 9/11/29 9/11/09 119 360
113 113 209 6/11/29 6/11/09 116 360
- -----------------------------------------------------------------------------------------------------------------------------------
114 114 211 9/11/29 9/11/09 119 360
115 115 212 1/1/09 111 300
116 116 214 12/11/28 12/11/08 110 360
117 117 215 7/1/08 105 360
118 118 220 11/1/08 109 360
- -----------------------------------------------------------------------------------------------------------------------------------
119 119 217 9/11/09 119 300
120 120 221 12/11/38 12/11/08 110 480
121 121 828 3/1/09 113 300
122 122 222 1/1/12 147 360
123 123 223 9/11/09 119 360
- -----------------------------------------------------------------------------------------------------------------------------------
124 124 829 6/1/09 116 300
125 125 224 9/11/29 9/11/09 119 360
126 126 513 7/1/09 117 290
127 127 227 11/1/08 109 300
128 128 228 1/1/09 111 360
- -----------------------------------------------------------------------------------------------------------------------------------
129 129 229 9/11/09 119 360
130 130 230 11/1/08 109 360
131 131 231 11/1/08 109 300
132 132 232 3/1/09 113 360
133 133 234 9/1/08 107 360
- -----------------------------------------------------------------------------------------------------------------------------------
134 134 235 12/1/08 110 360
135 135 236 12/1/08 110 300
136 136 237 7/1/08 105 360
137 137 238 1/1/08 99 300
138 138 240 2/1/09 112 360
- -----------------------------------------------------------------------------------------------------------------------------------
139 139 241 6/11/09 116 300
140 140 242 11/1/08 109 300
141 141 243 11/1/08 109 360
142 142 244 11/1/08 109 285
143 143 245 11/1/08 109 360
- -----------------------------------------------------------------------------------------------------------------------------------
144 144 248 12/1/08 110 300
145 145 247 12/1/08 110 300
146 146 249 12/1/08 110 300
147 147 250 11/1/08 109 360
148 148 251 11/1/08 109 360
- -----------------------------------------------------------------------------------------------------------------------------------
149 149 252 11/1/08 109 240
150 150 254 11/1/08 109 300
151 151 514 2/1/09 112 240
152 152 259 12/1/08 110 300
153 153 260 12/1/08 110 360
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
REMAINING
CSFB REMAINING LOCKOUT AND
CONTROL CONTROL REMAINING LOCKOUT YM AND PENALTY
LOAN # # # LOCKOUT AND YM PENALTIES YM CODE CODE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 001 1 92 92 92
2 002 507 112 112 112
3 003 508 112 112 112
4 004 509 112 112 112
5 005 30 114 114 114
6 006 3 229 229 229
- ------------------------------------------------------------------------------------------------------------------------------------
6 006A 9
6 006B 7
6 006C 4
6 006D 8
6 006E 6
- ------------------------------------------------------------------------------------------------------------------------------------
6 006F 5
7 007 10 229 229 229
7 007A 11
7 007B 12
7 007C 13
- ------------------------------------------------------------------------------------------------------------------------------------
7 007D 14
7 007E 15
8 008 31 116 116 116
9 009 32 105 105 105
10 010 35 115 115 115
- ------------------------------------------------------------------------------------------------------------------------------------
11 011 36 116 116 116
12 012 500 113 113 113
13 013 37 99 99 99
14 014 800 99 99 99
14 014A 801
- ------------------------------------------------------------------------------------------------------------------------------------
14 014B 802
15 015 41 115 115 115
15 015A 42
15 015B 43
15 015C 44
- ------------------------------------------------------------------------------------------------------------------------------------
15 015D 45
15 015E 46
16 016 38 115 115 115
17 017 40 115 115 115
17 017A 511
- ------------------------------------------------------------------------------------------------------------------------------------
17 017B 512
18 018 39 113 113 113
19 019 501 112 112 112
20 020 62 115 115 115
21 021 803 104 104 104
- ------------------------------------------------------------------------------------------------------------------------------------
22 022 804 104 104 104
23 023 805 104 104 104
24 024 63 114 114 114
25 025 806 116 116 116
26 026 807 108 108 108
- ------------------------------------------------------------------------------------------------------------------------------------
27 027 67 117 117 117
27 027A 68
27 027B 69
29 029 66 113 113 113
- ------------------------------------------------------------------------------------------------------------------------------------
30 030 72 115 115 115
31 031 808 107 107 107
31 031A 809
31 031B 810
31 031C 811
- ------------------------------------------------------------------------------------------------------------------------------------
31 031D 812
31 031E 813
32 032 80 116 116 116
33 033 50 112 112 112
33 033A 52
- ------------------------------------------------------------------------------------------------------------------------------------
33 033B 54
33 033C 55
33 033D 56
33 033E 53
34 034 79 114 114 114
- ------------------------------------------------------------------------------------------------------------------------------------
35 035 81 111 111 111
36 036 82 108 108 108
37 037 89 114 114 114
38 038 90 107 107 107
- ------------------------------------------------------------------------------------------------------------------------------------
39 039 100 112 112 112
39 039A 101
39 039B 102
40 040 93 109 109 109
41 041 94 108 108 108
41 041A 96
- ------------------------------------------------------------------------------------------------------------------------------------
41 041B 97
41 041C 98
41 041D 95
42 042 91 116 116 116
43 043 99 96 96 96
- ------------------------------------------------------------------------------------------------------------------------------------
44 044 103 112 112 112
45 045 104 112 112 112
46 046 814 22 63 63 F
47 047 815 107 107 107
48 048 109 45 101 101 C
- ------------------------------------------------------------------------------------------------------------------------------------
49 049 110 111 111 111
50 050 115 116 116 116
51 051 113 115 115 115
52 052 116 76 76 76
53 053 816 65 65 65
- ------------------------------------------------------------------------------------------------------------------------------------
54 054 117 79 79 79
55 055 111 112 112 112
56 056 120 109 109 109
57 057 121 76 163 163 C
58 058 817 0 91 91 D
- ------------------------------------------------------------------------------------------------------------------------------------
59 059 818 109 109 109
60 060 122 114 114 114
61 061 123 100 100 157 A
62 062 124 114 114 114
63 063 137 112 112 112
- ------------------------------------------------------------------------------------------------------------------------------------
64 064 138 112 112 112
65 065 515 118 118 118
66 066 139 105 105 105
67 067 140 109 109 109
68 068 142 34 100 100 B
- ------------------------------------------------------------------------------------------------------------------------------------
69 069 143 110 110 110
70 070 819 105 105 105
71 071 127 115 115 115
71 071A 135
71 071B 132
- ------------------------------------------------------------------------------------------------------------------------------------
71 071C 134
71 071D 128
71 071E 130
71 071F 129
71 071G 133
- ------------------------------------------------------------------------------------------------------------------------------------
71 071H 131
72 072 147 112 112 112
73 073 148 112 112 112
74 074 146 175 175 175
75 075 820 107 107 107
- ------------------------------------------------------------------------------------------------------------------------------------
76 076 149 34 100 100 B
77 077 150 111 111 111
78 078 151 115 115 115
79 079 152 113 113 113
80 080 153 112 112 112
- ------------------------------------------------------------------------------------------------------------------------------------
81 081 154 96 96 153 A
82 082 165 111 111 111
83 083 166 111 111 111
84 084 167 114 114 114
84 084A 168
- ------------------------------------------------------------------------------------------------------------------------------------
84 084B 169
85 085 502 113 113 113
86 086 170 111 111 111
87 087 821 110 110 110
88 088 172 55 55 88 B
- ------------------------------------------------------------------------------------------------------------------------------------
89 089 164 112 112 112
90 090 822 108 108 108
91 091 823 35 100 100 E
92 092 177 115 115 115
93 093 178 34 99 99 B
- ------------------------------------------------------------------------------------------------------------------------------------
94 094 180 112 112 112
95 095 824 101 101 101
95 095A 824A
95 095B 824B
95 095C 824C
- ------------------------------------------------------------------------------------------------------------------------------------
96 096 182 112 112 112
97 097 184 115 115 115
98 098 185 115 115 115
99 099 183 174 174 174
100 100 825 111 111 111
- ------------------------------------------------------------------------------------------------------------------------------------
101 101 186 49 105 105 A
102 102 187 115 115 115
102 102A 188
102 102B 189
103 103 826 114 114 114
- ------------------------------------------------------------------------------------------------------------------------------------
104 104 827 112 112 112
105 105 181 112 112 112
106 106 190 114 114 114
107 107 193 115 115 115
108 108 200 114 114 114
- ------------------------------------------------------------------------------------------------------------------------------------
109 109 205 117 117 117
110 110 206 112 112 112
111 111 202 112 112 112
112 112 208 115 115 115
113 113 209 109 109 109
- ------------------------------------------------------------------------------------------------------------------------------------
114 114 211 115 115 115
115 115 212 51 107 107 A
116 116 214 106 106 106
117 117 215 45 101 101 A
118 118 220 49 105 105 C
- ------------------------------------------------------------------------------------------------------------------------------------
119 119 217 115 115 115
120 120 221 106 106 106
121 121 828 109 109 109
122 122 222 86 86 143 A
123 123 223 115 115 115
- ------------------------------------------------------------------------------------------------------------------------------------
124 124 829 112 112 112
125 125 224 117 117 117
126 126 513 45 113 113 B
127 127 227 49 105 105 A
128 128 228 51 107 107 A
- ------------------------------------------------------------------------------------------------------------------------------------
129 129 229 112 112 112
130 130 230 49 105 105 A
131 131 231 49 105 105 A
132 132 232 109 109 109
133 133 234 34 100 100 B
- ------------------------------------------------------------------------------------------------------------------------------------
134 134 235 50 106 106 A
135 135 236 50 106 106 A
136 136 237 32 98 98 B
137 137 238 51 95 95 A
138 138 240 52 108 108 A
- ------------------------------------------------------------------------------------------------------------------------------------
139 139 241 109 109 109
140 140 242 49 105 105 A
141 141 243 36 102 102 B
142 142 244 49 105 105 A
143 143 245 49 105 105 A
- ------------------------------------------------------------------------------------------------------------------------------------
144 144 248 50 106 106 A
145 145 247 37 103 103 B
146 146 249 50 106 106 A
147 147 250 36 102 102 B
148 148 251 36 102 102 B
- ------------------------------------------------------------------------------------------------------------------------------------
149 149 252 36 102 102 B
150 150 254 49 105 105 A
151 151 514 39 105 105 B
152 152 259 37 103 103 B
153 153 260 37 103 103 B
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CSFB ANTICIPATED
CONTROL CONTROL REPAYMENT
LOAN # # # VALUE LTV DATE LTV LOCKBOX OWNERSHIP
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 001 1 126,000,000 46 41 Springing Fee
2 002 507 38,000,000 53 47 Hard Fee
3 003 508 28,200,000 53 47 Hard Fee
4 004 509 31,000,000 53 47 Hard Fee
5 005 30 68,400,000 70 64 Hard Leasehold
6 006 3 27,090,000 NAP NAP Hard
- ------------------------------------------------------------------------------------------------------------------------------------
6 006A 9 6,900,000 Fee
6 006B 7 4,690,000 Fee
6 006C 4 4,250,000 Fee
6 006D 8 3,850,000 Fee
6 006E 6 3,750,000 Fee
- ------------------------------------------------------------------------------------------------------------------------------------
6 006F 5 3,650,000 Fee
7 007 10 13,750,000 NAP NAP Hard
7 007A 11 3,850,000 Fee
7 007B 12 3,250,000 Fee
7 007C 13 3,225,000 Fee
- ------------------------------------------------------------------------------------------------------------------------------------
7 007D 14 2,600,000 Fee
7 007E 15 825,000 Fee
8 008 31 52,500,000 74 66 Hard Fee
9 009 32 226,000,000 66 59 Hard Both Fee Simple and Leasehold
10 010 35 82,000,000 44 37 Springing Leasehold
- ------------------------------------------------------------------------------------------------------------------------------------
11 011 36 44,000,000 77 70 Hard Fee
12 012 500 42,000,000 79 71 Hard Fee
13 013 37 40,700,000 72 59 Springing Fee
14 014 800 44,700,000 66 58 Springing
14 014A 801 25,800,000 Fee
- ------------------------------------------------------------------------------------------------------------------------------------
14 014B 802 18,900,000 Fee
15 015 41 45,100,000 62 50 Springing
15 015A 42 14,500,000 Fee
15 015B 43 12,000,000 Fee
15 015C 44 6,900,000 Fee
- ------------------------------------------------------------------------------------------------------------------------------------
15 015D 45 6,200,000 Fee
15 015E 46 5,500,000 Fee
16 016 38 40,000,000 67 57 Hard Fee
17 017 40 33,000,000 77 69 Hard
17 017A 511 22,000,000 Fee
- ------------------------------------------------------------------------------------------------------------------------------------
17 017B 512 11,000,000 Fee
18 018 39 34,000,000 75 67 Springing Fee
19 019 501 50,000,000 40 36 Springing Leasehold
20 020 62 37,500,000 53 51 None Fee
21 021 803 16,500,000 72 60 None Leasehold
- ------------------------------------------------------------------------------------------------------------------------------------
22 022 804 7,000,000 72 60 None Fee
23 023 805 3,000,000 72 60 None Fee
24 024 63 22,000,000 79 72 Springing Fee
25 025 806 23,000,000 75 67 None Fee
26 026 807 22,000,000 78 69 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
27 027 67 27,300,000 62 51 Hard
27 027A 68 16,500,000 Fee
27 027B 69 10,800,000 Fee
29 029 66 23,000,000 74 67 Springing Fee
- ------------------------------------------------------------------------------------------------------------------------------------
30 030 72 21,000,000 75 62 Springing Fee
31 031 808 24,550,000 60 50 None
31 031A 809 5,700,000 Fee
31 031B 810 5,575,000 Fee
31 031C 811 4,100,000 Fee
- ------------------------------------------------------------------------------------------------------------------------------------
31 031D 812 4,875,000 Fee
31 031E 813 4,300,000 Fee
32 032 80 15,200,000 76 68 Hard Leasehold
33 033 50 16,830,000 76 63 Springing
33 033A 52 6,200,000 Fee
- ------------------------------------------------------------------------------------------------------------------------------------
33 033B 54 3,820,000 Fee
33 033C 55 2,810,000 Fee
33 033D 56 2,300,000 Fee
33 033E 53 1,700,000 Both Fee Simple and Leasehold
34 034 79 16,100,000 78 71 Hard Fee
- ------------------------------------------------------------------------------------------------------------------------------------
35 035 81 17,500,000 71 64 Hard Fee
36 036 82 18,100,000 67 60 Hard Fee
37 037 89 14,600,000 75 67 Hard Fee
38 038 90 16,800,000 62 56 Hard Fee
- ------------------------------------------------------------------------------------------------------------------------------------
39 039 100 14,460,000 70 63 Hard
39 039A 101 8,800,000 Fee
39 039B 102 5,660,000 Fee
40 040 93 15,200,000 66 59 Hard Fee
41 041 94 12,800,000 77 63 Springing
41 041A 96 4,300,000 Fee
- ------------------------------------------------------------------------------------------------------------------------------------
41 041B 97 3,150,000 Fee
41 041C 98 2,850,000 Fee
41 041D 95 2,500,000 Fee
42 042 91 12,500,000 78 70 Springing Fee
43 043 99 14,400,000 68 56 Springing Fee
- ------------------------------------------------------------------------------------------------------------------------------------
44 044 103 14,100,000 67 57 Springing Fee
45 045 104 14,400,000 65 58 Hard Fee
46 046 814 11,725,000 72 68 None Fee
47 047 815 10,700,000 74 67 None Fee
48 048 109 10,500,000 74 61 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
49 049 110 9,700,000 80 71 Springing Fee
50 050 115 9,050,000 79 70 Springing Fee
51 051 113 9,200,000 79 71 Springing Fee
52 052 116 9,500,000 74 67 Hard Fee
53 053 816 9,120,000 74 60 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
54 054 117 8,280,000 79 75 Hard Fee
55 055 111 11,400,000 53 47 Springing Fee
56 056 120 11,300,000 51 35 None Fee
57 057 121 7,100,000 79 62 None Fee
58 058 817 7,600,000 74 64 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
59 059 818 9,600,000 57 47 None Leasehold
60 060 122 8,950,000 61 55 Springing Fee
61 061 123 14,750,000 36 27 None Fee
62 062 124 6,900,000 75 67 Springing Fee
63 063 137 6,400,000 78 71 Springing Fee
- ------------------------------------------------------------------------------------------------------------------------------------
64 064 138 7,200,000 69 57 Springing Fee
65 065 515 6,450,000 75 68 Springing Fee
66 066 139 6,200,000 75 66 Springing Fee
67 067 140 6,000,000 76 68 Springing Fee
68 068 142 6,000,000 74 60 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
69 069 143 6,650,000 65 59 Springing Fee
70 070 819 8,400,000 50 41 None Fee
71 071 127 5,170,000 79 67 Springing
71 071A 135 280,000 Fee
71 071B 132 1,400,000 Fee
- ------------------------------------------------------------------------------------------------------------------------------------
71 071C 134 1,100,000 Fee
71 071D 128 740,000 Fee
71 071E 130 580,000 Fee
71 071F 129 390,000 Fee
71 071G 133 380,000 Fee
- ------------------------------------------------------------------------------------------------------------------------------------
71 071H 131 300,000 Fee
72 072 147 5,740,000 70 62 Springing Fee
73 073 148 6,200,000 64 58 Springing Fee
74 074 146 7,600,000 52 Springing Leasehold
75 075 820 5,400,000 74 61 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
76 076 149 6,720,000 59 48 None Fee
77 077 150 4,830,000 79 71 Springing Fee
78 078 151 5,000,000 76 69 Springing Fee
79 079 152 5,400,000 70 63 Springing Fee
80 080 153 5,200,000 73 66 Springing Fee
- ------------------------------------------------------------------------------------------------------------------------------------
81 081 154 7,500,000 50 None Fee
82 082 165 4,235,000 79 70 Springing Fee
83 083 166 7,600,000 44 39 None Fee
84 084 167 4,800,000 69 62 None
84 084A 168 3,400,000 Fee
- ------------------------------------------------------------------------------------------------------------------------------------
84 084B 169 1,400,000 Fee
85 085 502 5,000,000 65 56 Springing Fee
86 086 170 4,800,000 64 54 Springing Fee
87 087 821 4,200,000 72 65 None Fee
88 088 172 10,700,000 28 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
89 089 164 3,800,000 79 70 Springing Fee
90 090 822 5,800,000 51 46 None Fee
91 091 823 4,400,000 67 53 None Fee
92 092 177 4,200,000 70 61 Hard Fee
93 093 178 4,000,000 72 65 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
94 094 180 4,100,000 63 56 Springing Fee
95 095 824 3,500,000 74 66 None
95 095A 824A 1,200,000 Fee
95 095B 824B 1,200,000 Fee
95 095C 824C 1,100,000 Fee
- ------------------------------------------------------------------------------------------------------------------------------------
96 096 182 3,400,000 75 64 Hard Fee
97 097 184 3,800,000 66 55 Springing Fee
98 098 185 3,550,000 70 58 Springing Fee
99 099 183 5,600,000 44 None Fee
100 100 825 3,300,000 73 65 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
101 101 186 3,306,000 72 59 None Fee
102 102 187 3,400,000 68 61 Hard
102 102A 188 2,300,000 Fee
102 102B 189 1,100,000 Fee
103 103 826 3,000,000 77 69 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
104 104 827 3,100,000 74 61 None Fee
105 105 181 3,300,000 69 58 Springing Fee
106 106 190 3,400,000 66 59 Springing Fee
107 107 193 2,900,000 72 66 Hard Fee
108 108 200 2,425,000 73 66 Springing Fee
- ------------------------------------------------------------------------------------------------------------------------------------
109 109 205 2,050,000 79 71 Springing Fee
110 110 206 2,800,000 57 41 Hard Fee
111 111 202 2,300,000 69 62 Springing Fee
112 112 208 2,011,000 75 67 Springing Fee
113 113 209 2,400,000 62 56 Hard Fee
- ------------------------------------------------------------------------------------------------------------------------------------
114 114 211 1,990,000 70 64 Springing Fee
115 115 212 2,050,000 66 56 None Fee
116 116 214 3,600,000 36 31 Springing Fee
117 117 215 1,700,000 74 67 None Fee
118 118 220 1,650,000 72 64 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
119 119 217 1,500,000 75 63 None Fee
120 120 221 4,740,000 23 22 Springing Fee
121 121 828 1,625,000 67 57 None Fee
122 122 222 1,450,000 74 60 None Fee
123 123 223 1,350,000 78 71 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
124 124 829 1,400,000 75 63 None Fee
125 125 224 1,500,000 70 63 Hard Fee
126 126 513 1,230,000 79 65 None Fee
127 127 227 1,250,000 78 66 None Fee
128 128 228 1,310,000 74 67 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
129 129 229 1,500,000 63 58 None Fee
130 130 230 1,600,000 53 48 None Fee
131 131 231 1,250,000 67 56 None Fee
132 132 232 1,300,000 64 59 None Fee
133 133 234 1,100,000 72 64 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
134 134 235 1,022,000 68 62 None Fee
135 135 236 925,000 74 63 None Fee
136 136 237 852,000 74 66 None Fee
137 137 238 945,000 63 54 None Fee
138 138 240 760,000 68 62 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
139 139 241 750,000 68 57 None Fee
140 140 242 2,650,000 19 16 None Fee
141 141 243 640,000 73 66 None Fee
142 142 244 600,000 74 61 None Fee
143 143 245 740,000 57 52 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
144 144 248 540,000 74 62 None Fee
145 145 247 540,000 74 62 None Fee
146 146 249 530,000 74 62 None Fee
147 147 250 500,000 75 67 None Fee
148 148 251 590,000 59 53 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
149 149 252 575,000 60 43 None Fee
150 150 254 550,000 62 52 None Fee
151 151 514 380,000 73 52 None Fee
152 152 259 325,000 74 62 None Fee
153 153 260 295,000 80 72 None Fee
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CSFB
CONTROL CONTROL YEAR YEAR UNIT OF
LOAN # # # BUILT RENOVATED UNIT MEASURE OCCUPANCY
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 001 1 1902 1995 345 Units 97
2 002 507 1982 257,913 Sq Ft 100
3 003 508 1986 185,001 Sq Ft 98
4 004 509 1984 177,917 Sq Ft 100
5 005 30 1971 1996 973,973 Sq Ft 96
6 006 3 645 Rooms
- ----------------------------------------------------------------------------------------------------------------------------------
6 006A 9 1990 125 Rooms 100
6 006B 7 1978 1997 126 Rooms 100
6 006C 4 1977 103 Rooms 100
6 006D 8 1980 92 Rooms 100
6 006E 6 1978 90 Rooms 100
- ----------------------------------------------------------------------------------------------------------------------------------
6 006F 5 1978 1997 109 Rooms 100
7 007 10 579 Rooms
7 007A 11 1980 1996 174 Rooms 100
7 007B 12 1986 1997 121 Rooms 100
7 007C 13 1978 1998 101 Rooms 100
- ----------------------------------------------------------------------------------------------------------------------------------
7 007D 14 1981 1997 121 Rooms 100
7 007E 15 1986 1997 62 Rooms 100
8 008 31 1988 346,231 Sq Ft 98
9 009 32 1972 1990 889,438/370 Sq Ft/Rooms 93
10 010 35 1898 1998 531 Rooms 72
- ----------------------------------------------------------------------------------------------------------------------------------
11 011 36 1889 1990 225,000 Sq Ft 100
12 012 500 1970 1985 273,863 Sq Ft 100
13 013 37 1927 1998 477,572 Sq Ft 98
14 014 800 248/14,585 Rooms/Sq Ft
14 014A 801 1908 1998 131/9,870 Rooms/Sq Ft 75
- ----------------------------------------------------------------------------------------------------------------------------------
14 014B 802 1912 1996 117/4,715 Rooms/Sq Ft 68
15 015 41 512 Rooms
15 015A 42 1997 131 Rooms 80
15 015B 43 1997 124 Rooms 74
15 015C 44 1997 78 Rooms 78
- ----------------------------------------------------------------------------------------------------------------------------------
15 015D 45 1997 85 Rooms 71
15 015E 46 1997 94 Rooms 71
16 016 38 1986 1998 3,270 Spaces
17 017 40 464 Units
17 017A 511 1972 1998 280 Units 95
- ----------------------------------------------------------------------------------------------------------------------------------
17 017B 512 1973 1998 184 Units 96
18 018 39 1985 103,072 Sq Ft 100
19 019 501 1930 1999 1,293,000 Sq Ft 76
20 020 62 1966 767 Units 100
21 021 803 1973 1995 232,792 Sq Ft 100
- ----------------------------------------------------------------------------------------------------------------------------------
22 022 804 1974 1992 135,647 Sq Ft 77
23 023 805 1969 1997 150,210 Sq Ft 96
24 024 63 1959 1989 294,421 Sq Ft 93
25 025 806 1974 1996 272,474 Sq Ft 90
26 026 807 1965 1998 426,604 Sq Ft 96
- ----------------------------------------------------------------------------------------------------------------------------------
27 027 67 276 Rooms
27 027A 68 1998 153 Rooms 71
27 027B 69 1998 123 Rooms 68
29 029 66 1980 1997 134,425 Sq Ft 94
- ----------------------------------------------------------------------------------------------------------------------------------
30 030 72 1975 1992 180,808 Sq Ft 100
31 031 808 665 Rooms
31 031A 809 1997 144 Rooms 83
31 031B 810 1996 136 Rooms 94
31 031C 811 1993 130 Rooms 88
- ----------------------------------------------------------------------------------------------------------------------------------
31 031D 812 1997 129 Rooms 86
31 031E 813 1988 126 Rooms 78
32 032 80 1999 121,067 Sq Ft 100
33 033 50 176,722 Sq Ft
33 033A 52 1956 1993 48,851 Sq Ft 94
- ----------------------------------------------------------------------------------------------------------------------------------
33 033B 54 1996 1996 42,205 Sq Ft 86
33 033C 55 1965 1989 34,326 Sq Ft 84
33 033D 56 1993 28,340 Sq Ft 100
33 033E 53 1965 1990 23,000 Sq Ft 100
34 034 79 1985 41,092 Sq Ft 94
- ----------------------------------------------------------------------------------------------------------------------------------
35 035 81 1968 1998 98,088 Sq Ft 88
36 036 82 1953 1998 80 Units 96
37 037 89 1999 231,810 Sq Ft 97
38 038 90 1974 184,248 Sq Ft 92
- ----------------------------------------------------------------------------------------------------------------------------------
39 039 100 180,000 Sq Ft
39 039A 101 1970 1992 180,000 Sq Ft 100
39 039B 102 1987 -
40 040 93 1976 1997 129,293 Sq Ft 98
41 041 94 197,080 Sq Ft
41 041A 96 1986 65,563 Sq Ft 100
- ----------------------------------------------------------------------------------------------------------------------------------
41 041B 97 1987 53,128 Sq Ft 100
41 041C 98 1987 48,206 Sq Ft 100
41 041D 95 1986 30,183 Sq Ft 91
42 042 91 1985 168,922 Sq Ft 88
43 043 99 1926 1996 38,000 Sq Ft 100
- ----------------------------------------------------------------------------------------------------------------------------------
44 044 103 1997 226 Rooms 47
45 045 104 1952 1995 415,884 Sq Ft 100
46 046 814 1988 1999 74,208 Sq Ft 96
47 047 815 1972 1988 198,658 Sq Ft 95
48 048 109 1914 1985 145,015 Sq Ft 95
- ----------------------------------------------------------------------------------------------------------------------------------
49 049 110 1972 1999 232 Units 95
50 050 115 1981 1999 280 Units 98
51 051 113 1972 113,537 Sq Ft 88
52 052 116 1984 158,671 Sq Ft 66
53 053 816 1996 98,273 Sq Ft 98
- ----------------------------------------------------------------------------------------------------------------------------------
54 054 117 1990 184,000 Sq Ft 100
55 055 111 1987 1997 136,489 Sq Ft 100
56 056 120 1956 1983 74 Units 100
57 057 121 1985 127,336 Sq Ft 96
58 058 817 1970 1995 181 Units 91
- ----------------------------------------------------------------------------------------------------------------------------------
59 059 818 1992 1998 93,756 Sq Ft 95
60 060 122 1987 58,367 Sq Ft 100
61 061 123 1988 106 Units 97
62 062 124 1997 51,762 Sq Ft 100
63 063 137 1988 113,674 Sq Ft 98
- ----------------------------------------------------------------------------------------------------------------------------------
64 064 138 1997 90 Rooms 83
65 065 515 1974 1998 209 Units 96
66 066 139 1972 1992 224 Units 85
67 067 140 1891 1986 24,202 Sq Ft 100
68 068 142 1928 1998 161 Units 96
- ----------------------------------------------------------------------------------------------------------------------------------
69 069 143 1979 1990 26,695 Sq Ft 100
70 070 819 1961 1996 73,222 Sq Ft 97
71 071 127 272 Units
71 071A 135 1967 1997 16 Units 94
71 071B 132 1970 1999 78 Units 94
- ----------------------------------------------------------------------------------------------------------------------------------
71 071C 134 1970 1999 43 Units 93
71 071D 128 1928 1999 41 Units 95
71 071E 130 1962 1999 34 Units 97
71 071F 129 1958 1999 24 Units 100
71 071G 133 1912 1998 18 Units 100
- ----------------------------------------------------------------------------------------------------------------------------------
71 071H 131 1965 1999 18 Units 94
72 072 147 1999 77,010 Sq Ft 84
73 073 148 1970 1997 240 Units 89
74 074 146 1921 1990 48,941 Sq Ft 100
75 075 820 1996 67,032 Sq Ft 87
- ----------------------------------------------------------------------------------------------------------------------------------
76 076 149 1928 1988 232 Units 100
77 077 150 1986 1998 52,585 Sq Ft 94
78 078 151 1923 1987 76 Units 99
79 079 152 1972 1995 216 Units 88
80 080 153 1972 1995 60,472 Sq Ft 85
- ----------------------------------------------------------------------------------------------------------------------------------
81 081 154 1956 1999 101 Units 100
82 082 165 1978 1999 132 Units 99
83 083 166 1966 80 Units 100
84 084 167 92,955 Sq Ft
84 084A 168 1974 1999 73,567 Sq Ft 100
- ----------------------------------------------------------------------------------------------------------------------------------
84 084B 169 1970 1994 19,388 Sq Ft 100
85 085 502 1960 1998 113 Rooms 58
86 086 170 1967 1992 46,039 Sq Ft 85
87 087 821 1986 24,543 Sq Ft 98
88 088 172 1983 92 Units 100
- ----------------------------------------------------------------------------------------------------------------------------------
89 089 164 1983 100 Units 98
90 090 822 1988 98,187 Sq Ft 85
91 091 823 1972 76,693 Sq Ft 88
92 092 177 1975 1995 111 Rooms 62
93 093 178 1971 1998 148 Units 95
- ----------------------------------------------------------------------------------------------------------------------------------
94 094 180 1986 1998 27,959 Sq Ft 84
95 095 824 31,420 Sq Ft 100
95 095A 824A 1997 10,500 Sq Ft 100
95 095B 824B 1997 10,920 Sq Ft 100
95 095C 824C 1996 10,000 Sq Ft 100
- ----------------------------------------------------------------------------------------------------------------------------------
96 096 182 1988 22,628 Sq Ft 100
97 097 184 1983 60,013 Sq Ft 100
98 098 185 1989 38,747 Sq Ft 97
99 099 183 1983 1984 57 Units 100
100 100 825 1996 33,361 Sq Ft 100
- ----------------------------------------------------------------------------------------------------------------------------------
101 101 186 1986 34,864 Sq Ft 96
102 102 187 52,480 Sq Ft
102 102A 188 1995 45,980 Sq Ft 100
102 102B 189 1995 6,500 Sq Ft 100
103 103 826 1986 1999 27,791 Sq Ft 95
- ----------------------------------------------------------------------------------------------------------------------------------
104 104 827 1965 80 Pads 100
105 105 181 1993 1993 40,166 Sq Ft 100
106 106 190 1968 118 Units 99
107 107 193 1999 16,000 Sq Ft 100
108 108 200 1963 21,682 Sq Ft 100
- ----------------------------------------------------------------------------------------------------------------------------------
109 109 205 1964 48 Units 100
110 110 206 1907 1984 5,390 Sq Ft 100
111 111 202 1986 17,680 Sq Ft 100
112 112 208 1998 19,600 Sq Ft 100
113 113 209 1972 1997 83,400 Sq Ft 100
- ----------------------------------------------------------------------------------------------------------------------------------
114 114 211 1913 1996 6,044 Sq Ft 100
115 115 212 1970 1998 74 Units 96
116 116 214 1908 1982 31,855 Sq Ft 100
117 117 215 1972 23 Units 96
118 118 220 1998 11,123 Sq Ft 100
- ----------------------------------------------------------------------------------------------------------------------------------
119 119 217 1966 1998 74 Units 96
120 120 221 1929 1981 41,299 Sq Ft 100
121 121 828 1972 40,536 Sq Ft 83
122 122 222 1958 1995 49 Units 98
123 123 223 1921 1998 66 Units 98
- ----------------------------------------------------------------------------------------------------------------------------------
124 124 829 1985 1992 70,250 Sq Ft 96
125 125 224 1959 19,947 Sq Ft 93
126 126 513 1987 1998 30 Units 97
127 127 227 1964 1998 40 Units 100
128 128 228 1965 1998 94 Units 89
- ----------------------------------------------------------------------------------------------------------------------------------
129 129 229 1973 36,996 Sq Ft 94
130 130 230 1985 33 Units 88
131 131 231 1973 30,924 Sq Ft 100
132 132 232 1983 1997 16,870 Sq Ft 100
133 133 234 1981 27 Units 100
- ----------------------------------------------------------------------------------------------------------------------------------
134 134 235 1989 8,468 Sq Ft 100
135 135 236 1946 1992 4,783 Sq Ft 100
136 136 237 1973 1996 62 Units 95
137 137 238 1964 1998 44 Units 89
138 138 240 1964 1998 9 Units 100
- ----------------------------------------------------------------------------------------------------------------------------------
139 139 241 1988 28 Units 96
140 140 242 1921 10,554 Sq Ft 100
141 141 243 1978 1997 16 Units 100
142 142 244 1960 1998 20 Units 100
143 143 245 1990 9,976 Sq Ft 100
- ----------------------------------------------------------------------------------------------------------------------------------
144 144 248 1962 24 Units 96
145 145 247 1984 1991 28 Units 100
146 146 249 1959 22 Units 95
147 147 250 1959 1996 20 Units 100
148 148 251 1952 8 Units 100
- ----------------------------------------------------------------------------------------------------------------------------------
149 149 252 1965 21 Units 100
150 150 254 1954 3,397 Sq Ft 100
151 151 514 1920 1998 29 Units 100
152 152 259 1980 1991 14 Units 100
153 153 260 1925 1995 8 Units 100
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CSFB REAL ESTATE
CONTROL CONTROL OCCUPANCY TAXES INSURANCE TI/LC
LOAN # # # PERIOD ESCROWED ESCROWED TI/LC UPFRONT ONGOING
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 001 1 8/19/99 Y Y Y Y
2 002 507 8/26/99 Y Y Y
3 003 508 9/27/99 Y Y Y Y
4 004 509 8/26/99 Y Y Y Y
5 005 30 7/1/99 Y Y Y
6 006 3
- ---------------------------------------------------------------------------------------------------------------------------------
6 006A 9 7/20/98
6 006B 7 7/20/98
6 006C 4 7/20/98
6 006D 8 7/20/98
6 006E 6 7/20/98
- ---------------------------------------------------------------------------------------------------------------------------------
6 006F 5 7/20/98
7 007 10
7 007A 11 7/20/98
7 007B 12 7/20/98
7 007C 13 7/20/98
- ---------------------------------------------------------------------------------------------------------------------------------
7 007D 14 7/20/98
7 007E 15 7/20/98
8 008 31 9/2/99 Y Y Y Y
9 009 32 6/30/99 Y Y Y Y
10 010 35 5/31/99 Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
11 011 36 1/8/99 Y Y
12 012 500 8/1/99 Y Y Y Y
13 013 37 8/31/99 Y Y Y
14 014 800 Y Y
14 014A 801 4/30/99 Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
14 014B 802 4/30/99 Y Y
15 015 41 Y Y
15 015A 42 7/16/99
15 015B 43 7/16/99
15 015C 44 7/16/99
- ---------------------------------------------------------------------------------------------------------------------------------
15 015D 45 7/16/99
15 015E 46 7/16/99
16 016 38 Y Y
17 017 40 Y Y
17 017A 511 9/7/99
- ---------------------------------------------------------------------------------------------------------------------------------
17 017B 512 9/7/99
18 018 39 8/30/99 Y Y Y
19 019 501 6/1/99 Y Y Y Y
20 020 62 9/1/99 Y Y
21 021 803 5/1/99 Y Y Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
22 022 804 5/1/99 Y Y Y Y
23 023 805 5/1/99 Y Y Y
24 024 63 6/29/99 Y Y Y
25 025 806 7/1/99 Y Y Y
26 026 807 5/31/99 Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
27 027 67 Y Y
27 027A 68 7/1/98
27 027B 69 7/1/99
29 029 66 7/1/99 Y Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
30 030 72 7/7/99 Y Y Y
31 031 808 Y Y
31 031A 809 12/31/98 Y Y
31 031B 810 12/31/98 Y Y
31 031C 811 12/31/98 Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
31 031D 812 12/31/98 Y Y
31 031E 813 12/31/98 Y Y
32 032 80 8/10/99 Y Y Y
33 033 50 Y Y
33 033A 52 6/30/99
- ---------------------------------------------------------------------------------------------------------------------------------
33 033B 54 6/30/99
33 033C 55 6/30/99
33 033D 56 7/22/99
33 033E 53 7/22/99
34 034 79 7/5/99 Y Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
35 035 81 8/1/99 Y Y Y
36 036 82 7/27/99 Y Y
37 037 89 8/2/99 Y Y
38 038 90 8/11/99 Y Y Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
39 039 100 Y Y Y
39 039A 101 8/1/99
39 039B 102
40 040 93 8/25/99 Y Y Y Y
41 041 94 Y Y
41 041A 96 4/8/99
- ---------------------------------------------------------------------------------------------------------------------------------
41 041B 97 4/8/99
41 041C 98 4/8/99
41 041D 95 4/8/99
42 042 91 8/25/99 Y Y Y
43 043 99 9/30/98 Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
44 044 103 7/31/99 Y Y
45 045 104 8/12/99 Y Y Y
46 046 814 8/23/99 Y Y
47 047 815 4/1/99 Y Y Y
48 048 109 5/31/99 Y Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
49 049 110 7/1/99 Y Y
50 050 115 9/9/99 Y Y
51 051 113 9/1/99 Y Y Y Y
52 052 116 6/30/99 Y Y Y Y
53 053 816 5/14/99 Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
54 054 117 6/22/99 Y Y
55 055 111 9/1/99 Y Y Y
56 056 120 2/4/99 Y
57 057 121 3/31/99 Y Y Y
58 058 817 7/31/99 Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
59 059 818 6/1/99 Y Y
60 060 122 7/12/99 Y Y Y
61 061 123 1/31/98 Y
62 062 124 7/27/99
63 063 137 8/9/99 Y Y Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
64 064 138 4/30/99 Y Y
65 065 515 9/7/99 Y Y
66 066 139 6/21/99 Y Y
67 067 140 12/1/98 Y Y Y Y
68 068 142 8/23/99 Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
69 069 143 4/21/99 Y Y Y Y
70 070 819 6/18/99 Y Y Y Y
71 071 127 Y Y Y Y
71 071A 135 7/22/99
71 071B 132 7/22/99
- ---------------------------------------------------------------------------------------------------------------------------------
71 071C 134 7/22/99
71 071D 128 7/22/99
71 071E 130 7/22/99
71 071F 129 7/22/99
71 071G 133 7/22/99
- ---------------------------------------------------------------------------------------------------------------------------------
71 071H 131 7/22/99
72 072 147 8/27/99 Y Y Y
73 073 148 8/12/99 Y Y
74 074 146 7/12/99 Y Y Y
75 075 820 4/30/99 Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
76 076 149 9/2/99 Y Y
77 077 150 5/1/99 Y Y Y
78 078 151 8/1/99 Y Y
79 079 152 5/11/99 Y Y
80 080 153 3/1/99 Y Y Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
81 081 154 9/1/98 Y
82 082 165 7/15/99 Y Y
83 083 166 4/15/99 Y
84 084 167 Y Y Y Y
84 084A 168 7/1/99
- ---------------------------------------------------------------------------------------------------------------------------------
84 084B 169 7/1/99
85 085 502 12/31/98 Y Y
86 086 170 6/18/99 Y Y Y Y
87 087 821 6/1/99 Y Y Y
88 088 172 9/1/98 Y
- ---------------------------------------------------------------------------------------------------------------------------------
89 089 164 8/24/99 Y Y
90 090 822 6/17/99 Y Y Y
91 091 823 6/29/99 Y Y
92 092 177 5/16/99 Y Y
93 093 178 9/3/99 Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
94 094 180 8/4/99 Y Y Y
95 095 824 3/1/98 Y Y
95 095A 824A 3/1/98
95 095B 824B 3/1/98
95 095C 824C 3/1/98
- ---------------------------------------------------------------------------------------------------------------------------------
96 096 182 8/1/99 Y Y Y
97 097 184 8/24/99 Y Y Y
98 098 185 7/27/99 Y Y Y Y
99 099 183 6/30/99 Y
100 100 825 4/19/99 Y Y Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
101 101 186 3/31/99 Y Y
102 102 187 Y Y Y Y
102 102A 188 8/9/99
102 102B 189 10/1/98
103 103 826 7/6/99 Y Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
104 104 827 2/1/99 Y Y
105 105 181 9/1/99 Y Y Y Y
106 106 190 6/29/99 Y Y
107 107 193 5/19/99 Y Y
108 108 200 7/8/99 Y Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
109 109 205 6/30/99 Y Y
110 110 206 8/11/99 Y Y Y Y
111 111 202 7/15/99 Y Y Y Y
112 112 208 7/16/99 Y Y Y
113 113 209 4/1/99 Y Y Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
114 114 211 7/23/99 Y Y Y
115 115 212 3/31/99
116 116 214 9/15/99 Y Y
117 117 215 3/2/98
118 118 220 9/21/98 Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
119 119 217 8/30/99 Y Y
120 120 221 12/3/98 Y Y
121 121 828 1/18/99 Y Y
122 122 222 5/31/99 Y
123 123 223 6/29/99 Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
124 124 829 4/29/99 Y Y
125 125 224 8/1/99 Y Y Y Y
126 126 513 4/1/99 Y Y
127 127 227 5/31/99 Y Y
128 128 228 12/1/98 Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
129 129 229 7/1/99 Y Y Y
130 130 230 6/9/99
131 131 231 8/1/98
132 132 232 1/1/99
133 133 234 4/30/99 Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
134 134 235 8/17/98
135 135 236 6/1/99 Y
136 136 237 7/1/99 Y Y
137 137 238 2/11/99
138 138 240 12/1/98
- ---------------------------------------------------------------------------------------------------------------------------------
139 139 241 7/27/99 Y Y
140 140 242 3/31/99
141 141 243 4/12/99 Y Y
142 142 244 4/11/99
143 143 245 3/10/99
- ---------------------------------------------------------------------------------------------------------------------------------
144 144 248 1/31/99 Y Y
145 145 247 5/4/99 Y Y
146 146 249 3/1/99 Y Y
147 147 250 2/1/99 Y Y
148 148 251 7/1/99 Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
149 149 252 4/17/99 Y Y
150 150 254 10/13/98
151 151 514 4/16/99 Y Y
152 152 259 5/4/99 Y Y
153 153 260 4/26/99 Y Y
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ACTUAL
ONGOING
CSFB TI/LC TI/LC CAPITAL % OF
CONTROL CONTROL UPFRONT ONGOING ITEMS TOTAL
LOAN # # # BALANCE PAYMENT DEPOSITS TENANT 1 SF
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 001 1 150,000 1,717 200.00
2 002 507 51,333 0.20 Active Voice 51
3 003 508 200,000 30,000 0.20 Airborne Freight 70
4 004 509 310,000 28,000 0.20 Airborne Freight 100
5 005 30 1,535,620 0.15 Dillard's Gayfers Stores 21
6 006 3
- ------------------------------------------------------------------------------------------------------------------------------
6 006A 9
6 006B 7
6 006C 4
6 006D 8
6 006E 6
- ------------------------------------------------------------------------------------------------------------------------------
6 006F 5
7 007 10
7 007A 11
7 007B 12
7 007C 13
- ------------------------------------------------------------------------------------------------------------------------------
7 007D 14
7 007E 15
8 008 31 28,238 28,372 0.25 Banco Popular de Puerto Rico 16
9 009 32 10,000,000 83,333 1.20 General Service Administration 32
10 010 35 4%
- ------------------------------------------------------------------------------------------------------------------------------
11 011 36 Scholastic, Inc. 98
12 012 500 125,000 62,500 0.20 Bank of Boston 96
13 013 37 40,000 NYC-Admin. for Children Srvcs 88
14 014 800 1,216.89
14 014A 801 Tad's Steakhouse 40
- ------------------------------------------------------------------------------------------------------------------------------
14 014B 802 California Pizza Kitchen 74
15 015 41 5%
15 015A 42
15 015B 43
15 015C 44
- ------------------------------------------------------------------------------------------------------------------------------
15 015D 45
15 015E 46
16 016 38 50.00
17 017 40 200.00
17 017A 511
- ------------------------------------------------------------------------------------------------------------------------------
17 017B 512
18 018 39 390,360 0.25 Visa International Service 76
19 019 501 1,750,000 23,907 0.20 Sungard 27
20 020 62
21 021 803 150,000 7,104 0.17 K-Mart 41
- ------------------------------------------------------------------------------------------------------------------------------
22 022 804 747,610 4,169 0.15 Sears Roebuck 28
23 023 805 4,142 0.15 K-Mart 77
24 024 63 4,377 0.15 Rainbow Foods 23
25 025 806 8,275 0.15 King Soopers 22
26 026 807 22,000 0.15 K-Mart 24
- ------------------------------------------------------------------------------------------------------------------------------
27 027 67 5%
27 027A 68
27 027B 69
29 029 66 20,000 0.20 Legislative Counsel Bureau 75
- ------------------------------------------------------------------------------------------------------------------------------
30 030 72 8,588 0.43 Data Analysis Inc. 100
31 031 808 4%
31 031A 809
31 031B 810
31 031C 811
- ------------------------------------------------------------------------------------------------------------------------------
31 031D 812
31 031E 813
32 032 80 1,905 0.15 Genuardi's Super Markets Inc. 49
33 033 50 0.23
33 033A 52 Value Plus Food Warehouse 60
- ------------------------------------------------------------------------------------------------------------------------------
33 033B 54 Top Value Market 55
33 033C 55 Top Value Supermarket 66
33 033D 56 Value Plus Food Warehouse 100
33 033E 53 Top Value Supermarket 100
34 034 79 1,000 0.21 Chico's 9
- ------------------------------------------------------------------------------------------------------------------------------
35 035 81 450,000 0.29 Cedars-Sinai 12
36 036 82 300.00
37 037 89 0.20 Electron International, Inc. 3
38 038 90 125,000 5,000 0.20 Genzyme Corporation 7
- ------------------------------------------------------------------------------------------------------------------------------
39 039 100 3,250 0.20
39 039A 101 BANY Distribution Services 100
39 039B 102
40 040 93 762,500 12,500 0.20 IBM 59
41 041 94 8,083 0.10
41 041A 96 Omnipoint Communications 77
- ------------------------------------------------------------------------------------------------------------------------------
41 041B 97 Direct Power/Uniway Marketing 28
41 041C 98 Scholastic Book Fairs 52
41 041D 95 Wasino Corp 81
42 042 91 7,167 0.16 Kroger 27
43 043 99 0.16 EBAR Tenant Corp (Eli's) 100
- ------------------------------------------------------------------------------------------------------------------------------
44 044 103 4%
45 045 104 3,500 0.20 Vilter Manufacturing Corp. 100
46 046 814 - GTE Directory Services 34
47 047 815 9,892 0.18 VP Supply 38
48 048 109 12,451 0.29 O'Connor & Company 19
- ------------------------------------------------------------------------------------------------------------------------------
49 049 110 250.00
50 050 115 249.99
51 051 113 5,743 5,972 0.10 Dr. David G. O'Neal 7
52 052 116 159,426 9,426 0.24 Elder-Beerman 26
53 053 816 -
- ------------------------------------------------------------------------------------------------------------------------------
54 054 117 Binnings Building Products 100
55 055 111 11,057 0.38 PBM Graphics Inc. 15
56 056 120
57 057 121 7,527 0.28 FedEx 29
58 058 817 250.00
- ------------------------------------------------------------------------------------------------------------------------------
59 059 818 0.15
60 060 122 6,854 0.20 Regional Center of Orange Co. 15
61 061 123
62 062 124 Eagle Food Centers, Inc. 100
63 063 137 2,329 2,329 0.16 Wal-Mart 72
- ------------------------------------------------------------------------------------------------------------------------------
64 064 138 5%
65 065 515 250.00
66 066 139 250.00
67 067 140 3,344 3,344 0.26 Gargill, Sassoon & Rudolph 36
68 068 142
- ------------------------------------------------------------------------------------------------------------------------------
69 069 143 3,434 0.21 Net Object 23
70 070 819 200,000 9,296 0.22 Pathmakers, Inc 18
71 071 127 6,888 6,888 303.87
71 071A 135
71 071B 132
- ------------------------------------------------------------------------------------------------------------------------------
71 071C 134
71 071D 128
71 071E 130
71 071F 129
71 071G 133
- ------------------------------------------------------------------------------------------------------------------------------
71 071H 131
72 072 147 20,000 0.17 Hobby Lobby Stores, Inc. 58
73 073 148 250.00
74 074 146 46,221 0.21 Touchscreen Media Group 9
75 075 820 0.15
- ------------------------------------------------------------------------------------------------------------------------------
76 076 149
77 077 150 1,367 0.16 Warm Springs Rehabilitation 20
78 078 151 250.00
79 079 152 151.50
80 080 153 3,500 292 0.28 Drs. Wener, Boyle & Associates 8
- ------------------------------------------------------------------------------------------------------------------------------
81 081 154
82 082 165 256.48
83 083 166
84 084 167 35,000 3,455 0.17
84 084A 168 Congress Flooring Corp. 100
- ------------------------------------------------------------------------------------------------------------------------------
84 084B 169 The May Institute 64
85 085 502 5%
86 086 170 107,673 3,837 0.20 Book Store 9
87 087 821 75,000 0.37 National Financial Sys. 8
88 088 172
- ------------------------------------------------------------------------------------------------------------------------------
89 089 164 250.00
90 090 822 7,062 0.22 Bay Area Home Tech 13
91 091 823 - Airborne Freight 52
92 092 177 5%
93 093 178
- ------------------------------------------------------------------------------------------------------------------------------
94 094 180 100,000 0.20 Specialty Care Network 22
95 095 824 0.15
95 095A 824A Murray's Discount Auto Store 100
95 095B 824B Murray's Discount Auto Store 100
95 095C 824C Murray's Discount Auto Store 100
- ------------------------------------------------------------------------------------------------------------------------------
96 096 182 1,822 0.15 Richmond Home Need Service,Inc 42
97 097 184 1,383 0.25 Rini-Rego d/b/a Giant Eagle 70
98 098 185 50,000 2,958 0.21 Keith Companies 13
99 099 183
100 100 825 1,320 1,320 0.15 Michael's Crafts 53
- ------------------------------------------------------------------------------------------------------------------------------
101 101 186 1.14 Rancho Pacific Development 27
102 102 187 1,526 1,526 0.15
102 102A 188 Scotty's Home Improvement 100
102 102B 189 Blockbuster Video 100
103 103 826 2,316 0.20 Oasis Car Wash, Inc. 32
- ------------------------------------------------------------------------------------------------------------------------------
104 104 827 30.00
105 105 181 1,339 1,339 0.43 Sneakers 9
106 106 190 260.33
107 107 193 0.20 Commonwealth Health Management 100
108 108 200 833 0.08 Warehouse Paint 29
- ------------------------------------------------------------------------------------------------------------------------------
109 109 205 263.51
110 110 206 404 404 0.79 Gotham Bar & Grill 100
111 111 202 10,000 1,000 0.28 Buon Gusto Ristorante 18
112 112 208 973 0.15 Blockbuster Video 20
113 113 209 15,300 3,300 Surplus Wheel & Tire 40
- ------------------------------------------------------------------------------------------------------------------------------
114 114 211 833 0.20 Goodwill Industries 97
115 115 212
116 116 214 Jin Go Gae, Inc. 9
117 117 215
118 118 220 0.18 Onecare Health Industries, Inc 59
- ------------------------------------------------------------------------------------------------------------------------------
119 119 217 250.00
120 120 221 Steven Dubler 8
121 121 828 0.15
122 122 222
123 123 223 250.00
- ------------------------------------------------------------------------------------------------------------------------------
124 124 829 -
125 125 224 12,349 1,849 0.16 Las Vegas Select 14
126 126 513
127 127 227
128 128 228
- ------------------------------------------------------------------------------------------------------------------------------
129 129 229 25,000 0.31 Greenville School - Myotherapy 5
130 130 230
131 131 231 0.39 Hogebuilt, Inc. 67
132 132 232 AutoFushion 35
133 133 234
- ------------------------------------------------------------------------------------------------------------------------------
134 134 235 J.C. Penny Co., Inc. 100
135 135 236 276 Jin Kwon d/b/a Tae Kwon Do 29
136 136 237
137 137 238
138 138 240
- ------------------------------------------------------------------------------------------------------------------------------
139 139 241 250.29
140 140 242 Olio (Charlie White) 18
141 141 243
142 142 244
143 143 245 Galaxy Marketing 51
- ------------------------------------------------------------------------------------------------------------------------------
144 144 248 300.00
145 145 247
146 146 249 300.00
147 147 250
148 148 251
- ------------------------------------------------------------------------------------------------------------------------------
149 149 252
150 150 254 Judy Harris/Floral Creations 69
151 151 514 137.93
152 152 259 250.00
153 153 260
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CSFB % OF LEASE
CONTROL CONTROL LEASE EXPIRATION TOTAL EXPIRATION
LOAN # # # DATE 1 TENANT 2 SF DATE 2
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 001 1 -
2 002 507 Jul-09 Muzak Ltd. 17 Jan-05
3 003 508 Nov-04 Emeritus Corporation 15 Jun-06
4 004 509 Nov-04
5 005 30 Jan-03 Goody's/Service Merchandise 12 Jan-02
6 006 3
- --------------------------------------------------------------------------------------------------------------------------
6 006A 9
6 006B 7
6 006C 4
6 006D 8
6 006E 6
- --------------------------------------------------------------------------------------------------------------------------
6 006F 5
7 007 10
7 007A 11
7 007B 12
7 007C 13
- --------------------------------------------------------------------------------------------------------------------------
7 007D 14
7 007E 15
8 008 31 Jun-05 Banco de Desarrollo Economico 12 May-01
9 009 32 Jun-01 Smithsonian 20 Apr-03
10 010 35
- --------------------------------------------------------------------------------------------------------------------------
11 011 36 Jul-29
12 012 500 Jul-04 The Seilers Corporation 1 Sep-99
13 013 37 Sep-08 NYC-Office of Court Admin. 3 Feb-01
14 014 800
14 014A 801 Dec-01 Carmen's Tacqueria 12 Dec-02
- --------------------------------------------------------------------------------------------------------------------------
14 014B 802 Jun-01 Starbuck's Corp. 26 Jun-07
15 015 41
15 015A 42
15 015B 43
15 015C 44
- --------------------------------------------------------------------------------------------------------------------------
15 015D 45
15 015E 46
16 016 38
17 017 40
17 017A 511
- --------------------------------------------------------------------------------------------------------------------------
17 017B 512
18 018 39 Dec-04 IMS Health Incorporated 12 Nov-00
19 019 501 Dec-04 North American 9 Sep-15
20 020 62
21 021 803 Mar-03 Purity Supreme (Filene's Basement) 16 Jun-03
- --------------------------------------------------------------------------------------------------------------------------
22 022 804 Oct-04 Rite-Aid 25 Oct-04
23 023 805 Oct-08 Eckerd Drugs 7 Oct-03
24 024 63 May-00 Bowl Rite, Inc. 12 Jan-08
25 025 806 Mar-09 24 Hour Fitness 16 Feb-14
26 026 807 Oct-12 Upton's 14 Feb-01
- --------------------------------------------------------------------------------------------------------------------------
27 027 67
27 027A 68
27 027B 69
29 029 66 Jun-07 Employment Training Panel 18 Nov-02
- --------------------------------------------------------------------------------------------------------------------------
30 030 72 Aug-19
31 031 808
31 031A 809
31 031B 810
31 031C 811
- --------------------------------------------------------------------------------------------------------------------------
31 031D 812
31 031E 813
32 032 80 Feb-19 Staples Inc. 21 Mar-14
33 033 50
33 033A 52 Aug-14 Chief Auto Parts 16 Sep-00
- --------------------------------------------------------------------------------------------------------------------------
33 033B 54 Aug-08 Chief Auto Parts 14 Dec-01
33 033C 55 Aug-14 Express Auto Insurance 9 Dec-01
33 033D 56 Aug-14
33 033E 53 Aug-14
34 034 79 Jun-04 Congress Jewelers 7 Apr-04
- --------------------------------------------------------------------------------------------------------------------------
35 035 81 Sep-07 CMI 6 Nov-12
36 036 82
37 037 89 Oct-99 Sunset Office Outfit 3 May-01
38 038 90 Dec-05 Pacific West Realtors 6 Nov-99
- --------------------------------------------------------------------------------------------------------------------------
39 039 100
39 039A 101 Jan-06
39 039B 102
40 040 93 Apr-02 Ceridian (Mini-Data Service) 18 Dec-00
41 041 94
41 041A 96 Oct-04
- --------------------------------------------------------------------------------------------------------------------------
41 041B 97 Jun-05 Global Protein Foods 25 Mar-01
41 041C 98 Jun-02 Vinten, Inc. 48 May-04
41 041D 95 Dec-00 Benefit Solutions 9 Jun-01
42 042 91 Feb-06 Loews Theater 24 Dec-05
43 043 99 Nov-22
- --------------------------------------------------------------------------------------------------------------------------
44 044 103
45 045 104 Jul-16
46 046 814 Nov-00 Centra Benefits 25 Jun-04
47 047 815 Dec-13 Maynards Electric 19 Dec-13
48 048 109 Sep-01 General Services Admin. 6 Jul-05
- --------------------------------------------------------------------------------------------------------------------------
49 049 110
50 050 115
51 051 113 Feb-09 Faith Services 7 Aug-02
52 052 116 Dec-33 Deb Shop 4 Jan-00
53 053 816
- --------------------------------------------------------------------------------------------------------------------------
54 054 117 Dec-08
55 055 111 Mar-01 Acurex/Arcadis 11 Apr-03
56 056 120
57 057 121 Nov-00 Video Age, Inc. 11 Jul-01
58 058 817
- --------------------------------------------------------------------------------------------------------------------------
59 059 818
60 060 122 Oct-02 Chase Manhattan Mortgage 8 Apr-02
61 061 123
62 062 124 May-24
63 063 137 Jan-08 Fashion Bug 7 Jan-04
- --------------------------------------------------------------------------------------------------------------------------
64 064 138
65 065 515
66 066 139
67 067 140 Dec-09 US Trust 8 Jan-03
68 068 142
- --------------------------------------------------------------------------------------------------------------------------
69 069 143 Sep-00 EIC Investment 19 Dec-04
70 070 819 Nov-02 Spectrum Center 13 Jan-01
71 071 127
71 071A 135
71 071B 132
- --------------------------------------------------------------------------------------------------------------------------
71 071C 134
71 071D 128
71 071E 130
71 071F 129
71 071G 133
- --------------------------------------------------------------------------------------------------------------------------
71 071H 131
72 072 147 Feb-19 Souper Salad 6 Sep-08
73 073 148
74 074 146 May-04 Wearwolf Group Inc. 9 Oct-02
75 075 820
- --------------------------------------------------------------------------------------------------------------------------
76 076 149
77 077 150 Nov-03 Gonzaba Medical Group 15 Sep-01
78 078 151
79 079 152
80 080 153 Aug-00 O. Duane Ragland, M.D., P.C. 8 May-02
- --------------------------------------------------------------------------------------------------------------------------
81 081 154
82 082 165
83 083 166
84 084 167
84 084A 168 Jul-06
- --------------------------------------------------------------------------------------------------------------------------
84 084B 169 Jun-01 Bright Horizons Centers 36 Apr-08
85 085 502
86 086 170 Aug-99 Dr. Lewis S. Bliss 5 Nov-02
87 087 821 Apr-00 John Armer 7 Jul-01
88 088 172
- --------------------------------------------------------------------------------------------------------------------------
89 089 164
90 090 822 Sep-00 MicroDisplay Corporation 13 Oct-01
91 091 823 Mar-05 McGraw-Hill 16 Aug-04
92 092 177
93 093 178
- --------------------------------------------------------------------------------------------------------------------------
94 094 180 Mar-03 Mady & Mules, P.A. 12 Jul-00
95 095 824
95 095A 824A Aug-11
95 095B 824B Feb-11
95 095C 824C Feb-10
- --------------------------------------------------------------------------------------------------------------------------
96 096 182 Jun-09 Miggy's Supermarket 21 Jan-05
97 097 184 May-03 Family Dollar 11 Dec-04
98 098 185 Aug-01 Loma Linda University 7 Oct-03
99 099 183
100 100 825 Feb-06 Country School 13 Feb-00
- --------------------------------------------------------------------------------------------------------------------------
101 101 186 Aug-01 Northern Pacific Funding 11 Sep-01
102 102 187
102 102A 188 Mar-16
102 102B 189 Oct-05
103 103 826 Jun-04 Parss Printing 8 Jun-02
- --------------------------------------------------------------------------------------------------------------------------
104 104 827
105 105 181 Jan-03 Unique Impressions 9 Jan-01
106 106 190
107 107 193 Apr-14
108 108 200 Jan-04 Kinko's, Inc. 20 Jun-01
- --------------------------------------------------------------------------------------------------------------------------
109 109 205
110 110 206 Jun-12
111 111 202 May-05 AMI Spas 14 May-00
112 112 208 Apr-04 It's Fashion 16 Jan-04
113 113 209 May-12 5 Star Supermarket 33 Sep-99
- --------------------------------------------------------------------------------------------------------------------------
114 114 211 Feb-07 Bank of America ATM 3 Jan-04
115 115 212
116 116 214 Apr-26 Furniture Rental Associates 8 Aug-04
117 117 215
118 118 220 May-03 W. Bryon Setterfield, D.D.S. 23 Jul-08
- --------------------------------------------------------------------------------------------------------------------------
119 119 217
120 120 221 Aug-04 Nitza From 8 Aug-04
121 121 828
122 122 222
123 123 223
- --------------------------------------------------------------------------------------------------------------------------
124 124 829
125 125 224 Apr-09 Parkville LTD 12
126 126 513
127 127 227
128 128 228
- --------------------------------------------------------------------------------------------------------------------------
129 129 229 May-00 SCP&A 4 Sep-99
130 130 230
131 131 231 Jun-03 Lima Trucking 33 Mar-00
132 132 232 Feb-01 Internet Axis Group 14 Sep-00
133 133 234
- --------------------------------------------------------------------------------------------------------------------------
134 134 235 May-10
135 135 236 Jun-02 Di Gennaro Deli 28 Mar-01
136 136 237
137 137 238
138 138 240
- --------------------------------------------------------------------------------------------------------------------------
139 139 241
140 140 242 Aug-03 Life's Fashion 17 Jun-99
141 141 243
142 142 244
143 143 245 Jul-00 Image 2000 49 Oct-99
- --------------------------------------------------------------------------------------------------------------------------
144 144 248
145 145 247
146 146 249
147 147 250
148 148 251
- --------------------------------------------------------------------------------------------------------------------------
149 149 252
150 150 254 Feb-01 Mark Lewis/Body & Sol Swimwear 31 Nov-00
151 151 514
152 152 259
153 153 260
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CSFB % OF LEASE
CONTROL CONTROL TOTAL EXPIRATION
LOAN # # # TENANT 3 SF DATE 3
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 001 1 -
2 002 507 Ben Bridges Jewelers 13 Aug-02
3 003 508 Brems Eastman 4 Mar-02
4 004 509
5 005 30 Burlington 12 May-07
6 006 3
- ---------------------------------------------------------------------------------------------------------
6 006A 9
6 006B 7
6 006C 4
6 006D 8
6 006E 6
- ---------------------------------------------------------------------------------------------------------
6 006F 5
7 007 10
7 007A 11
7 007B 12
7 007C 13
- ---------------------------------------------------------------------------------------------------------
7 007D 14
7 007E 15
8 008 31 Axtmayer Adsuar Muniz & Goyco 8 Aug-04
9 009 32 US Postal Service 16 Jun-08
10 010 35
- ---------------------------------------------------------------------------------------------------------
11 011 36
12 012 500
13 013 37 Strand II Corp. 3 Aug-06
14 014 800
14 014A 801 The Body Shop 10 Dec-05
- ---------------------------------------------------------------------------------------------------------
14 014B 802
15 015 41
15 015A 42
15 015B 43
15 015C 44
- ---------------------------------------------------------------------------------------------------------
15 015D 45
15 015E 46
16 016 38
17 017 40
17 017A 511
- ---------------------------------------------------------------------------------------------------------
17 017B 512
18 018 39 Mercer Global Advisor 4 Sep-01
19 019 501 Taig 4 Dec-03
20 020 62
21 021 803 Tweeter Etc. 7 Dec-00
- ---------------------------------------------------------------------------------------------------------
22 022 804 Maurice's 5 Jan-00
23 023 805 B & L/Home Choice 3 Aug-02
24 024 63 Office Max 9 Jun-05
25 025 806 Hancock Fabrics 9 Dec-08
26 026 807 Publix Supermarket 11 Dec-17
- ---------------------------------------------------------------------------------------------------------
27 027 67
27 027A 68
27 027B 69
29 029 66
- ---------------------------------------------------------------------------------------------------------
30 030 72
31 031 808
31 031A 809 -
31 031B 810 -
31 031C 811 -
- ---------------------------------------------------------------------------------------------------------
31 031D 812 -
31 031E 813 -
32 032 80 Montgomery Pharmacy 9 Apr-14
33 033 50
33 033A 52 S&S Discount Store 4 Jun-00
- ---------------------------------------------------------------------------------------------------------
33 033B 54 Compton Discount Store 9 Mar-01
33 033C 55 Water & Pager Store 3 May-02
33 033D 56
33 033E 53
34 034 79 Pandora's Box 6
- ---------------------------------------------------------------------------------------------------------
35 035 81 Valley Pediatric Medical Group 5 Mar-03
36 036 82
37 037 89 United Pipe 3 Jan-03
38 038 90 State of California 6 Mar-04
- ---------------------------------------------------------------------------------------------------------
39 039 100
39 039A 101
39 039B 102
40 040 93 Pitney Bowes 16 Apr-06
41 041 94
41 041A 96
- ---------------------------------------------------------------------------------------------------------
41 041B 97 Aremco Products 23 Oct-08
41 041C 98
41 041D 95 Vacant Space 9
42 042 91 Eckerd Drug 5 Nov-05
43 043 99
- ---------------------------------------------------------------------------------------------------------
44 044 103
45 045 104
46 046 814 Pacific Medical Center 10 May-11
47 047 815 First American RE Tax 6 Feb-02
48 048 109
- ---------------------------------------------------------------------------------------------------------
49 049 110
50 050 115
51 051 113 Drs. Mintz & Pincus 6 Dec-05
52 052 116 Power Play 4 Nov-05
53 053 816 -
- ---------------------------------------------------------------------------------------------------------
54 054 117
55 055 111 Intelligent Info Systems 9 Mar-03
56 056 120
57 057 121 Reflection Printing, Inc. 10 Feb-03
58 058 817 -
- ---------------------------------------------------------------------------------------------------------
59 059 818 -
60 060 122 LaSalle National Bank 7 Aug-02
61 061 123
62 062 124
63 063 137 Dollar Tree Stores 3 Aug-01
- ---------------------------------------------------------------------------------------------------------
64 064 138
65 065 515
66 066 139
67 067 140
68 068 142
- ---------------------------------------------------------------------------------------------------------
69 069 143 Net Object 16 Sep-00
70 070 819 Alta Bates Medical Resources 10 Mar-00
71 071 127
71 071A 135
71 071B 132
- ---------------------------------------------------------------------------------------------------------
71 071C 134
71 071D 128
71 071E 130
71 071F 129
71 071G 133
- ---------------------------------------------------------------------------------------------------------
71 071H 131
72 072 147 Hobby Town USA 6 Jul-01
73 073 148
74 074 146
75 075 820 -
- ---------------------------------------------------------------------------------------------------------
76 076 149
77 077 150 7616, Ltd. 14 Jun-03
78 078 151
79 079 152
80 080 153 William J. Oetgen, M.D. 5 Jan-01
- ---------------------------------------------------------------------------------------------------------
81 081 154
82 082 165
83 083 166
84 084 167
84 084A 168
- ---------------------------------------------------------------------------------------------------------
84 084B 169
85 085 502
86 086 170 Dr. Adams 5 Nov-02
87 087 821 Vincent Kelly & Assoc. 7 Oct-99
88 088 172
- ---------------------------------------------------------------------------------------------------------
89 089 164
90 090 822 Serological Research 11 Mar-08
91 091 823 AuBeta Technology 12 Aug-03
92 092 177
93 093 178
- ---------------------------------------------------------------------------------------------------------
94 094 180 Millman Search Group 12 Jul-00
95 095 824
95 095A 824A
95 095B 824B
95 095C 824C
- ---------------------------------------------------------------------------------------------------------
96 096 182 D.M. Kumar Bernard 12 Jul-03
97 097 184 Broadway Video 7
98 098 185 Desert Video, Inc. 6 Jun-00
99 099 183
100 100 825 Royal Palace 9 Jun-06
- ---------------------------------------------------------------------------------------------------------
101 101 186 Jetton & Associates 10 Jun-00
102 102 187
102 102A 188
102 102B 189
103 103 826 Secobra, Inc. 8 Jan-02
- ---------------------------------------------------------------------------------------------------------
104 104 827 -
105 105 181 Engler Wood Carvings 7 Jan-01
106 106 190
107 107 193
108 108 200 Sav On Cleaners 12 Jul-03
- ---------------------------------------------------------------------------------------------------------
109 109 205
110 110 206
111 111 202 Jim Dandy Cleaners 14 Jul-03
112 112 208 Fortune Cookie Restaurant 15 Aug-04
113 113 209 Salvage & Surplus 11 Sep-02
- ---------------------------------------------------------------------------------------------------------
114 114 211
115 115 212
116 116 214 Associated Engineering 8 Aug-99
117 117 215
118 118 220 Billie Callier, M.ED. 17 Jul-08
- ---------------------------------------------------------------------------------------------------------
119 119 217
120 120 221 John & Charles O'Malley 8 Aug-99
121 121 828 -
122 122 222
123 123 223
- ---------------------------------------------------------------------------------------------------------
124 124 829 -
125 125 224 Advanced Hair Creations 12 Apr-09
126 126 513
127 127 227
128 128 228
- ---------------------------------------------------------------------------------------------------------
129 129 229 David Richardson Photography 4 Apr-01
130 130 230
131 131 231
132 132 232 J. Stephen Burke 11 Aug-03
133 133 234
- ---------------------------------------------------------------------------------------------------------
134 134 235
135 135 236 Saruk Rugs Gallery & Antiques 25 Oct-10
136 136 237
137 137 238
138 138 240
- ---------------------------------------------------------------------------------------------------------
139 139 241
140 140 242 Mr. No Poster Shop(Yong B. No) 14 Dec-98
141 141 243
142 142 244
143 143 245
- ---------------------------------------------------------------------------------------------------------
144 144 248
145 145 247
146 146 249
147 147 250
148 148 251
- ---------------------------------------------------------------------------------------------------------
149 149 252
150 150 254 Tarzana Newstand - Jan-03
151 151 514
152 152 259
153 153 260
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
FOOTNOTES TO APPENDIX A
YIELD MAINTENANCE FORMULAS
The following are summaries of yield maintenance provisions, or formulas,
contained in the related Mortgage Note for certain of the Mortgage Loans. There
are six unique yield maintenance formulas represented by the Mortgage Loans,
each labeled as "A," "B," "C," "D," "E" and "F." Each Mortgage Loan, which
provides for a yield maintenance formula, references the applicable formula
printed below in the column titled "YM Formula."
A The borrower may not prepay any principal of the Mortgage Note, except that
after the Lockout Date, the borrower may prepay the outstanding principal
of the Mortgage Loan, upon not less than 30 days' nor more than 60 days'
prior written notice to the lender, in full, but not in part, upon the
payment of a Prepayment Fee. The "Prepayment Fee" means the greater of (i)
1% of the amount prepaid and (ii) a prepayment premium equal to the product
of (A) the Average Interest Loss (Monthly) and (B) the number of months
from the date of prepayment to the maturity date (with any fraction of a
month counted as a month), discounted to present value at the Discount Rate
over a period equal to one half of the number of months specified in this
item (ii)(B).
"Average Interest Loss (Monthly)" means the amount determined by dividing
the product of the Average Principal Amount and the Fixed Lost Rate by 12.
"Average Principal Amount" means the amount equal to either (i) one half of
the sum of (A) the amount of principal being prepaid and (B) the Balloon
Payment or (ii) the amount of principal being prepaid, if such amount is
less than the Balloon Payment.
"Discount Rate" means the rate per annum equal to the yield to maturity of
Treasury Obligations determined on the date of prepayment.
"Fixed Loss Rate" means the rate per annum equal to the percentage, if any,
by which (i) the interest rate on the Mortgage Note exceeds (ii) the yield
to maturity of Treasury Obligations determined on the date of prepayment.
"Treasury Obligations" means U.S. Treasury debt obligations having a
maturity date nearest the maturity date of the Mortgage Loan.
The maturity date and yield to maturity of Treasury Obligations will be
determined by the lender based on the quotations published in The Wall
Street Journal or other comparable sources.
The Mortgage Loan will be open to prepayment without premium during the
last 90 days of its term, upon not less than 30 days' nor more than 60
days' prior written notice to the lender, without payment of the Prepayment
Fee.
B No prepayment is permitted prior to the end of the lockout period. If
prepayment is made on or after such date, the borrower is required to pay a
prepayment premium equal to the greater of
(i) 1.000% of the unpaid principal balance of the Mortgage Note; or
(ii) the product obtained by multiplying (A) the amount of principal being
prepaid, by (B) the excess (if any) of the Monthly Note Rate over the
Assumed Reinvestment Rate, by (C) the Present Value Factor.
"Monthly Note Rate" means one-twelfth of the annual interest rate of the
Mortgage Note, expressed as a decimal calculated to five digits.
"Prepayment Date" means in the case of a voluntary prepayment, the date on
which the prepayment is made; in any other case, the date on which lender
accelerates the unpaid principal balance of the Mortgage Note.
"Assumed Reinvestment Rate" means one-twelfth of the yield rate as of the
date five business days before the prepayment date, on the Treasury
Security, as reported in The Wall Street Journal, expressed as a decimal
calculated to five digits. In the event that no yield is published on the
A-4
<PAGE>
applicable date for the Treasury Security used to determine the Assumed
Reinvestment Rate, the lender will select non-callable Treasury Security
maturing in the same year as the Treasury Security specified above with the
lowest yield published in The Wall Street Journal as of the applicable
date. If the publication of such yield rates in The Wall Street Journal is
discontinued for any reason, the lender will select a security with a
comparable rate and term to the Treasury Security used to determine the
Assumed Reinvestment Rate.
"Treasury Security" means the U.S. Treasury security specified in the
Mortgage Loan documents.
"Present Value Factor" means the factor that discounts to present value the
costs resulting to the lender from the difference in interest rates during
the months remaining in the Yield Maintenance Period, using the Assumed
Reinvestment Rate as the discount rate, with monthly compounding, expressed
numerically as follows:
1-( 1 )n
-------
1 + ARR
--------------
ARR
n = number of months remaining in Yield Maintenance Period
ARR = Assumed Reinvestment Rate
If the prepayment is made no more than 180 days before the Maturity Date, there
will be no prepayment premium due.
C The Mortgage Note may not be prepaid in whole or in part (except with
respect to the application of casualty or condemnation proceeds) prior to
the expiration of the Lockout Period. At anytime thereafter, provided no
event of default exists, the principal balance of the Mortgage Note may be
prepaid, in whole but not in part (except with respect to the application
of casualty or condemnation proceeds), on any scheduled payment date under
the Mortgage Note upon not less than 30 days prior written notice to the
lender specifying the scheduled payment date on which prepayment is to be
made (the "Prepayment Date") and upon payment of (a) a prepayment
consideration in an amount equal to the greater of (i) 1% of the
outstanding principal balance of the Mortgage Note at the time of
prepayment, or (ii) the present value as of the Prepayment Date of the
remaining scheduled payments of principal and interest from the Prepayment
Date through the Maturity Date (including any balloon payment) determined
by discounting such payments at the Discount Rate less the amount of
principal being prepaid.
"Discount Rate" means the rate which, when compounded monthly, is
equivalent to the Treasury Rate (as hereinafter defined), when compounded
semi-annually.
"Treasury Rate" means the yield calculated by the linear interpolation of
the yields, as reported in Federal Reserve Statistical Release
H.15-Selected Interest Rates under the heading "U.S. Government
Securities/Treasury Constant Maturities" for the week ending prior to the
Prepayment Date, of U.S. Treasury constant maturities with maturity dates
(one longer and one shorter) most nearly approximating the Maturity Date or
the monthly equivalent of such rate. (In the event Release H.15 is no
longer published, the lender will select a comparable publication to
determine the Treasury Rate.)
The borrower may prepay the entire principal balance of the Mortgage Note
on any scheduled payment date during the three months up to and including
the Maturity Date without any fee.
D Provided no Event of Default exists, the principal balance of this Note may
be prepaid, in whole but not in part (except with respect to the
application of casualty or condemnation proceeds), on any scheduled payment
date under this Note upon not less than thirty (30) days prior written
notice to Payee specifying the scheduled payment date on which prepayment
is to be made (the "Prepayment
A-5
<PAGE>
Date") and upon payment of (a) interest accrued and unpaid on the principal
balance of this Note to and including the Prepayment Date, (b) all other
sums then due under this Note, and the other Loan Documents, and (c) a
prepayment consideration in an amount equal to the greater of (i) one
percent (1%) of the outstanding principal balance of this Note at the time
of prepayment, or (ii) the present value as of the Prepayment Date of the
remaining scheduled payments of principal and interest from the Prepayment
Date through the Maturity Date (including any amount of principal and
interest that would have been payable had the Note been paid in full on the
Maturity Date) determined by discounting such payments at the Discount Rate
(as hereinafter defined) less the amount of principal being prepaid. The
term "Discount Rate" means the rate which, when compounded monthly, is
equivalent to the Treasury Rate when compounded semi-annually. The term
"Treasury Rate" means the yield calculated by the linear interpolation of
the yields, as reported in Federal Reserve Statistical Release
H.15-Selected Interest Rates under the heading "U.S. Government
Securities/Treasury Constant Maturities" for the week ending prior to the
Prepayment Date, of U.S. Treasury constant maturities with maturity dates
(one longer and one shorter) most nearly approximating the Maturity Date.
(In the event Release H.15 is no longer published, Payee shall select a
comparable publication to determine the Treasury Rate.)
E The principal balance of this Note may not be prepaid in whole or in part
(except with respect to the application of casualty or condemnation
proceeds) prior to the Fifth Loan Year (as hereinafter defined). During the
Fifth Loan Year or at anytime thereafter, provided no Event of Default
exists, the principal balance of this Note may be prepaid, in whole but not
in part (except with respect to the application of casualty or condemnation
proceeds), on any scheduled payment date under this Note upon not less than
thirty (30) days prior written notice to Payee specifying the scheduled
payment date on which prepayment is to be made (the "Prepayment Date") and
upon payment of (a) interest accrued and unpaid on the principal balance of
this Note to and including the Prepayment Date, (b) all other sums then due
under this Note, and the other Loan Documents, and (c) a prepayment
consideration in an amount equal to the greater of (i) one percent (1%) of
the outstanding principal balance of this Note at the time of prepayment,
or (ii) the present value as of the Prepayment Date of the remaining
scheduled payments of principal and interest from the Prepayment Date
through the Maturity Date (including any amount of principal and interest
that would have been payable had the Note been paid in full on the Maturity
Date) determined by discounting such payments at the Discount Rate (as
hereinafter defined) less the amount of principal being prepaid. The term
"Discount Rate" means the rate which, when compounded monthly, is
equivalent to the Treasury Rate (as hereinafter defined), when compounded
semi-annually. The term "Treasury Rate" means the yield calculated by the
linear interpolation of the yields, as reported in Federal Reserve
Statistical Release H.15-Selected Interest Rates under the heading "U.S.
Government Securities/Treasury Constant Maturities" for the week ending
prior to the Prepayment Date, of U.S. Treasury constant maturities with
maturity dates (one longer and one shorter) most nearly approximating the
Maturity Date. (In the event Release H.15 is no longer published, Payee
shall select a comparable publication to determine the Treasury Rate.)
F The principal balance of this Note may not be prepaid in whole or in part
(except with respect to the application of casualty or condemnation
proceeds) prior to the fourth (4th) Loan Year (as hereinafter defined).
During the fourth (4th) Loan Year or at anytime thereafter, provided no
Event of Default exists, the principal balance of this Note may be prepaid,
in whole but not in part (except with respect to the application of
casualty or condemnation proceeds), on any scheduled payment date under
this Note upon not less than thirty (30) days prior written notice to Payee
specifying the scheduled payment date on which prepayment is to be made
(the "Prepayment Date") and upon payment of (a) interest accrued and unpaid
on the principal balance of this Note to and including the Prepayment Date,
(b) all other sums then due under this Note, and the other Loan Documents,
and (c) a prepayment consideration in an amount equal to the greater of (i)
one percent (1%) of the outstanding principal balance of this Note at the
time of prepayment, or (ii) the present value as of the Prepayment Date of
the remaining scheduled payments of principal and interest from the
Prepayment Date though the Maturity Date (including any amount of principal
and interest that would have been payable had the Note been paid in full on
the Maturity Date) determined by
A-6
<PAGE>
discounting such payments at the Discount Rate (as hereinafter defined)
less the amount of principal being prepaid. The term "Discount Rate" means
the rate which, when compounded monthly, is equivalent to the Treasury Rate
(as hereinafter defined), when compounded semi-annually. The term "Treasury
Rate" means the yield calculated by the linear interpolation of the yields,
as reported in Federal Reserve Statistical Release H.15-Selected Interest
Rates under the heading "U.S. Government Securities/Treasury Constant
Maturities" for the week ending prior to the Prepayment Date, of U.S.
Treasury constant maturities with maturity dates (one longer and one
shorter) most nearly approximating the Maturity Date. (In the event Release
H.15 is no longer published, Payee shall select a comparable publication to
determine the Treasury Rate.)
PREPAYMENT PENALTY FORMULAS
A 5% penalty for 12 months, then 4% penalty for the next 12 months, then 3%
penalty for the next 12 months, then 2% penalty for the next 12 months,
then 1% penalty for 9 months.
B 2% penalty for 33 months.
A-7
<PAGE>
ANNEX B
[GRAPHIC OMITTED]
October 12, 1999
CMBS NEW ISSUE
COLLATERAL AND STRUCTURAL TERM SHEET
$1.17 BILLION (APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999 - C1
----------------------------------------------
EXPECTED PRICING DATE: WEEK OF NOVEMBER 1, 1999
----------------------------------------------
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
AS DEPOSITOR
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC &
MORGAN STANLEY MORTGAGE CAPITAL INC.
AS MORTGAGE LOAN SELLER
CREDIT SUISSE FIRST BOSTON CORPORATION &
MORGAN STANLEY & CO. INCORPORATED
AS CO-LEAD MANAGERS AND JOINT BOOKRUNNERS
-------------
CREDIT SUISSE FIRST BOSTON MORGAN STANLEY DEAN WITTER
- --------------------------------------------------------------------------------
Under no circumstances shall the information presented hereby constitute an
offer to sell or the solicitation of an offer to buy any security, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
for an exemption from such registration under the securities laws of such
jurisdiction. You have requested that Credit Suisse First Boston Corporation
("CSFB") and Morgan Stanley & Co. Incorporated ("MS") provide to you
information in connection with your considering the purchase of certain
securities described herein. The attached information is being provided to you
for informative purposes only in response to your specific request. The
information contained herein has been compiled by CSFB and MS from sources that
CSFB and MS believe to be reasonably reliable. However, CSFB and MS make no
representation or warranty as to the accuracy or completeness of such
information and you must make your own determination as to whether the
information is appropriate and responsive to your request. Any investment
decision with respect to the securities described herein should be made solely
on the results of your own due diligence with respect to the securities
referred to herein and only upon your review of the prospectus and prospectus
supplement. This information may not be delivered by you to any other person
without CSFB's and MS's prior written consent. CSFB and MS may from time to
time perform investment banking services for or solicit investment banking
business from any company named in the information herein. CSFB and MS and/or
their employees may from time to time have a long or short position in any
security discussed herein.
- --------------------------------------------------------------------------------
B-1
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
$1,170,108,234 (APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999 - C1
I. ISSUE CHARACTERISTICS
<TABLE>
<S> <C>
ISSUE TYPE: Public: Classes A-1, A-2, A-X, B, C, D, E and F
Rule 144A: Classes G, H, J, K, L, M, N and O
OFFERED SECURITIES: Classes A-1, A-2, A-X, B, C, D, E and F, totaling $1,062,400,000
PASS-THROUGH STRUCTURE: Senior/Subordinate, Sequential Pay, Pass-Through Certificates
COLLATERAL: Pool of 153 fixed rate commercial and multifamily mortgage loans,
including 1 participation, totaling $1,187,129,449
SELLERS: Credit Suisse First Boston Mortgage Capital LLC and
Morgan Stanley Mortgage Capital Inc.
CO-LEAD MANAGERS AND Credit Suisse First Boston Corporation and
JOINT BOOKRUNNERS: Morgan Stanley & Co. Incorporated
MASTER SERVICER: Wells Fargo Bank, National Association, a national banking
association
SPECIAL SERVICER: Lennar Partners, Inc.
CERTIFICATE ADMINISTRATOR: Norwest Bank Minnesota, National Association, a national banking
association
TRUSTEE: The Chase Manhattan Bank, a New York banking corporation
CUT-OFF DATE: October 11, 1999
EXPECTED PRICING DATE: Week of November 1, 1999
EXPECTED CLOSING DATE: On or about November 5, 1999
DISTRIBUTION DATE: The fourth business day after the eleventh day of the month
(or the following business day) commencing November 18, 1999
MINIMUM DENOMINATIONS: $100,000 (notional) for A-X Certificates and in additional multiples
of $1; $25,000 for all other Certificates and in additional multiples
of $1
SETTLEMENT TERMS: DTC, Euroclear and Cedelbank, same day funds, with accrued
interest
ERISA: Classes A-1, A-2 and A-X Certificates are expected to be ERISA
eligible
SMMEA: No Class of Certificates is SMMEA eligible
RISK FACTORS: THE CERTIFICATES INVOLVE A DEGREE OF RISK AND MAY
NOT BE SUITABLE FOR ALL INVESTORS. SEE THE "RISK
FACTORS" SECTION OF THE PROSPECTUS SUPPLEMENT
AND THE "RISK FACTORS" SECTION OF THE PROSPECTUS
</TABLE>
- --------------------------------------------------------------------------------
Under no circumstances shall the information presented hereby constitute an
offer to sell or the solicitation of an offer to buy any security, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
for an exemption from such registration under the securities laws of such
jurisdiction. You have requested that Credit Suisse First Boston Corporation
("CSFB") and Morgan Stanley & Co. Incorporated ("MS") provide to you nformation
in connection with your considering the purchase of certain securities described
herein. The attached information is being provided to you for informative
purposes only in response to your specific request. The information contained
herein has been compiled by CSFB and MS from sources that CSFB and MS believe to
be reasonably reliable. However, CSFB and MS make no representation or warranty
as to the accuracy or completeness of such information and you must make your
own determination as to whether the information is appropriate and responsive to
your request. Any investment decision with respect to the securities described
herein should be made solely on the results of your own due diligence with
respect to the securities referred to herein and only upon your review of the
prospectus and prospectus supplement. This information may not be delivered by
you to any other person without CSFB's and MS's prior written consent. CSFB and
MS may from time to time perform investment banking services for or solicit
investment banking business from any company named in the information herein.
CSFB and MS and/or their employees may from time to time have a long or short
position in any security discussed herein.
- --------------------------------------------------------------------------------
B-2
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
$1,170,108,234 (APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999 - C1
II. TRANSACTION FEATURES
LOAN POOL:
o 153 commercial and multifamily mortgage loans, including 1
participation, totaling approximately $1.19 billion
o Average Cut-off Date principal balance is approximately $7.76
million
o Mortgage loans are secured by 192 properties
o Three largest loans total approximately $157.0 million
representing 13% of initial pool balance
o Ten largest loans total approximately $405.8 million
representing 34% of initial pool balance
MORTGAGE LOAN SELLERS:
o Credit Suisse First Boston Mortgage Capital LLC (86% of initial
pool balance)
o Morgan Stanley Mortgage Capital Inc. (14% of initial pool
balance)
CREDIT STATISTICS:
o Weighted average debt service coverage ratio of 1.41x
o Weighted average loan-to-value of 67%
o Weighted average balloon/ARD loan-to-value of 59%
PROPERTY TYPES:
o Office: 29.9%
o Retail: 20.7%
o Multifamily: 15.1%
o Hospitality: 10.1%
o Industrial: 6.6%
o Mixed Use: 6.3%
o Cooperative: 3.9%
- --------------------------------------------------------------------------------
Under no circumstances shall the information presented hereby constitute an
offer to sell or the solicitation of an offer to buy any security, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
for an exemption from such registration under the securities laws of such
jurisdiction. You have requested that Credit Suisse First Boston Corporation
("CSFB") and Morgan Stanley & Co. Incorporated ("MS") provide to you
information in connection with your considering the purchase of certain
securities described herein. The attached information is being provided to you
for informative purposes only in response to your specific request. The
information contained herein has been compiled by CSFB and MS from sources that
CSFB and MS believe to be reasonably reliable. However, CSFB and MS make no
representation or warranty as to the accuracy or completeness of such
information and you must make your own determination as to whether the
information is appropriate and responsive to your request. Any investment
decision with respect to the securities described herein should be made solely
on the results of your own due diligence with respect to the securities
referred to herein and only upon your review of the prospectus and prospectus
supplement. This information may not be delivered by you to any other person
without CSFB's and MS's prior written consent. CSFB and MS may from time to
time perform investment banking services for or solicit investment banking
business from any company named in the information herein. CSFB and MS and/or
their employees may from time to time have a long or short position in any
security discussed herein.
- --------------------------------------------------------------------------------
B-3
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
$1,170,108,234 (APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999 - C1
GEOGRAPHIC DISTRIBUTION:
<TABLE>
<S> <C>
o New York: 21.2%
o California: 18.1%
o Florida: 8.7%
o Washington: 5.7%
o 29 other states plus the District of Columbia and Puerto Rico
</TABLE>
CALL PROTECTION:
o 99.5% subject to lockout/defeasance
o 0.5% subject to yield maintenance
o 0% subject to either fixed penalties or open to prepayment
RESERVES(1):
o 82.6% of the mortgage loans secured by office, retail,
industrial and mixed use properties have upfront and/or collected
tenant improvement/leasing commission escrow requirements
o 85.3% of the mortgage loans have upfront and/or collected
replacement reserve/FF&E escrow requirements
o 94.2% of the mortgage loans have insurance escrow requirements
o 98.7% of the mortgage loans have tax escrow requirements
COLLATERAL INFORMATION UPDATES:
o Certificateholder reports are expected to be available on the
world wide web at the Certificate Administrator's website
www.ctslink.com/cmbs.com and will include:
o Updated loan information; and
o Detailed payment and delinquency information
o The Servicer will provide updated property operating and
occupancy information to certificateholders, via the Certificate
Administrator's website at www.ctslink.com/cmbs.com
BOND INFORMATION:
o Bond cashflows are expected to be modeled by:
o TREPP (via Bloomberg);
o CONQUEST at www.cmbs.com; and
o INTEX
LEHMAN AGGREGATE BOND INDEX:
o It is expected that this transaction will be included in the
Lehman Aggregate Bond Index
- -----------
(1) excluding credit lease loans
- --------------------------------------------------------------------------------
Under no circumstances shall the information presented hereby constitute an
offer to sell or the solicitation of an offer to buy any security, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
for an exemption from such registration under the securities laws of such
jurisdiction. You have requested that Credit Suisse First Boston Corporation
("CSFB") and Morgan Stanley & Co. Incorporated ("MS") provide to you
information in connection with your considering the purchase of certain
securities described herein. The attached information is being provided to you
for informative purposes only in response to your specific request. The
information contained herein has been compiled by CSFB and MS from sources that
CSFB and MS believe to be reasonably reliable. However, CSFB and MS make no
representation or warranty as to the accuracy or completeness of such
information and you must make your own determination as to whether the
information is appropriate and responsive to your request. Any investment
decision with respect to the securities described herein should be made solely
on the results of your own due diligence with respect to the securities
referred to herein and only upon your review of the prospectus and prospectus
supplement. This information may not be delivered by you to any other person
without CSFB's and MS's prior written consent. CSFB and MS may from time to
time perform investment banking services for or solicit investment banking
business from any company named in the information herein. CSFB and MS and/or
their employees may from time to time have a long or short position in any
security discussed herein.
- --------------------------------------------------------------------------------
B-4
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
$1,170,108,234 (APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999 - C1
III. EXECUTIVE SUMMARY
<TABLE>
<CAPTION>
APPROXI-
MATE
% OF
AGGRE-
INITIAL GATE
CERTIFICATE INITIAL APPROXI-
BALANCE OR CERTIFI- MATE
NOTIONAL CATE CREDIT
CLASS RATING(a) BALANCE(b) BALANCE SUPPORT
<S> <C> <C> <C> <C>
OFFERED CERTIFICATES
A-1 AAA/AAA/Aaa $ 199,500,000 17.05% 26.50%
A-2 AAA/AAA/Aaa $ 660,500,000 56.45% 26.50%
A-X AAA/AAA/Aaa $1,170,108,234 NAP NAP
B AA/AA/Aa2 $ 52,600,000 4.50% 22.00%
C A/A/A2 $ 58,500,000 5.00% 17.00%
D A-/A-/A3 $ 14,700,000 1.25% 15.75%
E BBB/BBB/Baa2 $ 40,900,000 3.50% 12.25%
F BBB-/BBB-/Baa3 $ 20,500,000 1.75% 10.50%
PRIVATE CERTIFICATES (h)
G NR/BB+/NR $ 32,200,000 2.75% 7.75%
H NR/BB/NR $ 23,400,000 2.00% 5.75%
J NR/BB-/NR $ 11,700,000 1.00% 4.75%
K NR/B+/NR $ 11,700,000 1.00% 3.75%
L NR/NR/B2 $ 15,800,000 1.35% 2.40%
M NR/NR/B3 $ 9,300,000 0.80% 1.60%
N NR/CCC/NR $ 7,100,000 0.60% 1.00%
O NR/NR/NR $ 11,708,234 1.00% 0.00%
<CAPTION>
ASSUMED ASSUMED RATED
INITIAL WEIGHTED FINAL FINAL
PASS- AVERAGE ASSUMED DISTRIBU- DISTRIBU-
THROUGH LIFE PRINCIPAL TION TION
CLASS DESCRIPTION RATE (YEARS)(c) WINDOW DATE(d) DATE(e)
<S> <C> <C> <C> <C> <C> <C>
OFFER
CERTIFI
A-1 Fixed 6.91% 5.70 11/99-01/08 Jan. 2008 Sept. 2041
A-2 Fixed 7.29% 9.40 01/08-09/09 Sept. 2009 Sept. 2041
(Component Structure)
A-X Interest Only 0.90%(f) 9.13 11/99-03/19 Mar. 2019 Sept. 2041
B Fixed 7.53% 9.85 09/09-09/09 Sept. 2009 Sept. 2041
Weighted Average Net
C Mortgage Rate minus 0.24% 7.94%(g) 9.85 09/09-09/09 Sept. 2009 Sept. 2041
Weighted Average Net
D Mortgage Rate minus 0.08% 8.10%(g) 9.85 09/09-09/09 Sept. 2009 Sept. 2041
Weighted Average Net
E Mortgage Rate 8.18%(g) 9.85 09/09-09/09 Sept. 2009 Sept. 2041
Weighted Average Net
F Mortgage Rate 8.18%(g) 9.85 09/09-09/09 Sept. 2009 Sept. 2041
PRIVATE CERTIFICATES (h)
Lesser of Fixed and Weighted
G Average Net Mortgage Rate 6.91%(g) 9.90 09/09-10/09 Oct. 2009 Sept. 2041
Lesser of Fixed and Weighted
H Average Net Mortgage Rate 6.91%(g) 9.93 10/09-10/09 Oct. 2009 Sept. 2041
Lesser of Fixed and Weighted
J Average Net Mortgage Rate 6.91%(g) 9.93 10/09-10/09 Oct. 2009 Sept. 2041
Lesser of Fixed and Weighted
K Average Net Mortgage Rate 6.91%(g) 10.02 10/09-09/10 Sept. 2010 Sept. 2041
Lesser of Fixed and Weighted
L Average Net Mortgage Rate 6.91%(g) 12.89 09/10-09/13 Sept. 2013 Sept. 2041
Lesser of Fixed and Weighted
M Average Net Mortgage Rate 6.91%(g) 15.43 09/13-07/17 July 2017 Sept. 2041
Lesser of Fixed and Weighted
N Average Net Mortgage Rate 6.91%(g) 18.93 07/17-03/19 Mar. 2019 Sept. 2041
Lesser of Fixed and Weighted
O Average Net Mortgage Rate 6.91%(g) 19.35 03/19-03/19 Mar. 2019 N/A
</TABLE>
- ---------
(a) Ratings shown are those of Duff & Phelps Credit Rating Co., Fitch
IBCA, Inc. and/or 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. 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 voluntary or involuntary prepayments. There may be some
voluntary and/or involuntary prepayments.
(e) This date was set at two years after the latest maturity date of any
mortgage loan which is not a balloon loan or, for any balloon loan,
the date upon which it would be deemed to mature in accordance with
its original amortization schedule absent its balloon payment.
(f) This pass-through rate will change from time to time based on the
weighted average of the component rates.
(g) This pass-through rate may change based on the weighted average net
mortgage rate.
(h) Not offered hereby.
- --------------------------------------------------------------------------------
Under no circumstances shall the information presented hereby constitute an
offer to sell or the solicitation of an offer to buy any security, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
for an exemption from such registration under the securities laws of such
jurisdiction. You have requested that Credit Suisse First Boston Corporation
("CSFB") and Morgan Stanley & Co. Incorporated ("MS") provide to you
information in connection with your considering the purchase of certain
securities described herein. The attached information is being provided to you
for informative purposes only in response to your specific request. The
information contained herein has been compiled by CSFB and MS from sources that
CSFB and MS believe to be reasonably reliable. However, CSFB and MS make no
representation or warranty as to the accuracy or completeness of such
information and you must make your own determination as to whether the
information is appropriate and responsive to your request. Any investment
decision with respect to the securities described herein should be made solely
on the results of your own due diligence with respect to the securities
referred to herein and only upon your review of the prospectus and prospectus
supplement. This information may not be delivered by you to any other person
without CSFB's and MS's prior written consent. CSFB and MS may from time to
time perform investment banking services for or solicit investment banking
business from any company named in the information herein. CSFB and MS and/or
their employees may from time to time have a long or short position in any
security discussed herein.
- --------------------------------------------------------------------------------
B-5
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
$1,170,108,234 (APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999 - C1
IV. PREPAYMENT PREMIUM ALLOCATION
FIXED PREPAYMENT PREMIUMS:
o Fixed prepayment premiums will be distributed on each
Distribution Date as follows:
o 25% will be distributed to the Classes A-1, A-2, B, C, D, E
and F Certificates, based upon the amount of principal
distributed, if any, to such class to the aggregate amount of
principal distributable on all classes of Certificates; and
o 75% will be distributed to the Class A-X Certificates
YIELD MAINTENANCE PREPAYMENT PREMIUMS:
o Yield maintenance prepayment premiums will be distributed on
each Distribution Date as follows:
o A portion (based on the Base Interest Fraction described below)
will be delivered to the Classes A-1, A-2, B, C, D, E and/or F
Certificates, pro rata, based upon the amount of principal
distributed, if any, to such class to the aggregate amount of
principal distributable on all classes of Certificates; and
o The remainder will be distributed to the Class A-X Certificates
o With respect to each class of Certificates, if any, the "Base
Interest Fraction" is a fraction having:
o A numerator equal to the excess, if any, of the pass-through
rate on such class of Certificates over the discount rate used
in calculating the yield maintenance charge; and
o A denominator equal to the excess, if any, of the mortgage rate
of the prepaid loan over such discount rate
- --------------------------------------------------------------------------------
Under no circumstances shall the information presented hereby constitute an
offer to sell or the solicitation of an offer to buy any security, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
for an exemption from such registration under the securities laws of such
jurisdiction. You have requested that Credit Suisse First Boston Corporation
("CSFB") and Morgan Stanley & Co. Incorporated ("MS") provide to you
information in connection with your considering the purchase of certain
securities described herein. The attached information is being provided to you
for informative purposes only in response to your specific request. The
information contained herein has been compiled by CSFB and MS from sources that
CSFB and MS believe to be reasonably reliable. However, CSFB and MS make no
representation or warranty as to the accuracy or completeness of such
information and you must make your own determination as to whether the
information is appropriate and responsive to your request. Any investment
decision with respect to the securities described herein should be made solely
on the results of your own due diligence with respect to the securities
referred to herein and only upon your review of the prospectus and prospectus
supplement. This information may not be delivered by you to any other person
without CSFB's and MS's prior written consent. CSFB and MS may from time to
time perform investment banking services for or solicit investment banking
business from any company named in the information herein. CSFB and MS and/or
their employees may from time to time have a long or short position in any
security discussed herein.
- --------------------------------------------------------------------------------
B-6
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
$1,170,108,234 (APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999 - C1
YIELD MAINTENANCE PREPAYMENT PREMIUM EXAMPLE:
o The following is an example of the yield maintenance prepayment
premium described above based on the information contained herein
and the following assumptions:
o Two classes of Certificates: Classes A-1 and A-X
o The characteristics of the mortgage loan being prepaid are
as follows:
--Mortgage rate: 8.0%
--The discount rate is equal to 5.75%
--The Class A-1 pass-through rate is equal to 7.00%
<TABLE>
<CAPTION>
CLASS A-1 CLASS A-X
METHOD CERTIFICATES CERTIFICATES
- ------------------------------------------------- -------------------- -----------------------
<S> <C> <C>
(Class A- 1 Pass Through Rate - Yield Rate) (7.00% - 5.75%) (100.00% - 55.56%)
- ------------------------------------------------- ---------------
(Mortgage Rate - Yield Rate) (8.00% - 5.75%)
Prepayment Premium Allocation 55.56% 44.44%
</TABLE>
- --------------------------------------------------------------------------------
Under no circumstances shall the information presented hereby constitute an
offer to sell or the solicitation of an offer to buy any security, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
for an exemption from such registration under the securities laws of such
jurisdiction. You have requested that Credit Suisse First Boston Corporation
("CSFB") and Morgan Stanley & Co. Incorporated ("MS") provide to you
information in connection with your considering the purchase of certain
securities described herein. The attached information is being provided to you
for informative purposes only in response to your specific request. The
information contained herein has been compiled by CSFB and MS from sources that
CSFB and MS believe to be reasonably reliable. However, CSFB and MS make no
representation or warranty as to the accuracy or completeness of such
information and you must make your own determination as to whether the
information is appropriate and responsive to your request. Any investment
decision with respect to the securities described herein should be made solely
on the results of your own due diligence with respect to the securities
referred to herein and only upon your review of the prospectus and prospectus
supplement. This information may not be delivered by you to any other person
without CSFB's and MS's prior written consent. CSFB and MS may from time to
time perform investment banking services for or solicit investment banking
business from any company named in the information herein. CSFB and MS and/or
their employees may from time to time have a long or short position in any
security discussed herein.
- --------------------------------------------------------------------------------
B-7
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
$1,170,108,234 (APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999 - C1
V. ADDITIONAL DEAL FEATURES
PREPAYMENT INTEREST SHORTFALLS:
o Any prepayment interest shortfalls that are not offset by the
master servicing fee and investment interest accrued on such
prepayments from the date of prepayment will be allocated pro
rata to each class of Certificates in proportion to the amount of
interest accrued on such class on such Distribution Date
CONTROLLING CLASS:
o The most subordinate class of Certificates then outstanding that
has a principal balance at least equal to 25% of the initial
principal balance of such class; or
o If no such class exists, the most subordinate class then
outstanding
o 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
SPECIAL SERVICER/LOAN MODIFICATIONS:
o The Special Servicer will be responsible for servicing loans
that, in general, are in default or are in imminent default and
for administering REO properties. The Special Servicer may (if in
the sole good faith reasonable judgement of the Special Servicer
believes such action would maximize the recovery to the holders
of the Certificates on a present value basis):
o Modify such loans (with certain limitations); and
o Extend the date on which any balloon payment is scheduled to
be due
o Generally, the Special Servicer will be permitted to modify,
waive or amend any term of a non-defaulted loan, provided such
modification, waiver or amendment will not:
o Affect the amount or timing of any payments under the loan;
o Affect the obligation of the borrower to pay a prepayment
premium or yield maintenance prepayment premium or permit a
prepayment during a lockout period;
o Result in a release of the lien of the related mortgage on
any material portion of the mortgaged property without a
corresponding principal prepayment; or
o Materially impair the security for the loan or reduce the
likelihood of timely payment of amounts due thereon
- --------------------------------------------------------------------------------
Under no circumstances shall the information presented hereby constitute an
offer to sell or the solicitation of an offer to buy any security, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
for an exemption from such registration under the securities laws of such
jurisdiction. You have requested that Credit Suisse First Boston Corporation
("CSFB") and Morgan Stanley & Co. Incorporated ("MS") provide to you
information in connection with your considering the purchase of certain
securities described herein. The attached information is being provided to you
for informative purposes only in response to your specific request. The
information contained herein has been compiled by CSFB and MS from sources that
CSFB and MS believe to be reasonably reliable. However, CSFB and MS make no
representation or warranty as to the accuracy or completeness of such
information and you must make your own determination as to whether the
information is appropriate and responsive to your request. Any investment
decision with respect to the securities described herein should be made solely
on the results of your own due diligence with respect to the securities
referred to herein and only upon your review of the prospectus and prospectus
supplement. This information may not be delivered by you to any other person
without CSFB's and MS's prior written consent. CSFB and MS may from time to
time perform investment banking services for or solicit investment banking
business from any company named in the information herein. CSFB and MS and/or
their employees may from time to time have a long or short position in any
security discussed herein.
- --------------------------------------------------------------------------------
B-8
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
$1,170,108,234 (APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999 - C1
PRINCIPAL & INTEREST ADVANCES:
o The Master Servicer will generally be required to advance
delinquent scheduled payments of principal and interest on the
mortgage loans (excluding any balloon payments, default interest
or excess interest) and other required amounts through
liquidation, subject to a determination of recoverability
OPTIONAL TERMINATION:
o At any time the Trust Fund balance is equal to or less than
1.00% of the original Trust Fund balance, the Trust Fund may be
terminated and the Certificates retired at the option of:
o The mortgage loan sellers; or, if they decline,
o The Special Servicer; or, if it declines,
o The majority holder of the Controlling Class; or, if it
declines,
o The Servicer
ADDITIONAL INVESTOR REPORTING:
o This transaction introduces two new features to enhance investor
reporting through the use of the Certificate Administrator's
website, located at www.ctslink.com/cmbs:
o The Investor Q&A Forum. After accessing the Certificate
Administrator's website, investors will be able to e-mail
questions regarding the mortgage loans to the Certificate
Administrator and the Certificate Administrator will contact
the servicer and special servicer to obtain responses,
generally within two business days. Questions and answers will
be posted in the Q&A Forum so that all investors have access
to the information presented.
o Special Events Reports. The servicer will post notices of
certain "special events" for the top 10 loans in the pool.
This information is intended to supplement the information in
the distribution date statements and provide information about
major events in a more timely manner.
- --------------------------------------------------------------------------------
Under no circumstances shall the information presented hereby constitute an
offer to sell or the solicitation of an offer to buy any security, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
for an exemption from such registration under the securities laws of such
jurisdiction. You have requested that Credit Suisse First Boston Corporation
("CSFB") and Morgan Stanley & Co. Incorporated ("MS") provide to you
information in connection with your considering the purchase of certain
securities described herein. The attached information is being provided to you
for informative purposes only in response to your specific request. The
information contained herein has been compiled by CSFB and MS from sources that
CSFB and MS believe to be reasonably reliable. However, CSFB and MS make no
representation or warranty as to the accuracy or completeness of such
information and you must make your own determination as to whether the
information is appropriate and responsive to your request. Any investment
decision with respect to the securities described herein should be made solely
on the results of your own due diligence with respect to the securities
referred to herein and only upon your review of the prospectus and prospectus
supplement. This information may not be delivered by you to any other person
without CSFB's and MS's prior written consent. CSFB and MS may from time to
time perform investment banking services for or solicit investment banking
business from any company named in the information herein. CSFB and MS and/or
their employees may from time to time have a long or short position in any
security discussed herein.
- --------------------------------------------------------------------------------
B-9
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
$1,170,108,234 (APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999 - C1
LOCATION -- % BY INITIAL POOL BALANCE
[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.]
IDAHO
1 property
$3,538,619
0.3% of total
UTAH
1 property
$6,689,444
0.6% of total
SOUTH DAKOTA
1 property
$2,393,088
0.2% of total
MISSOURI
4 properties
$29,898,309
2.5% of total
MINNESOTA
2 properties
$23,109,325
1.9% of total
ILLINOIS
5 properties
$15,518,796
1.3% of total
WISCONSIN
1 property
$9,343,927
0.8% of total
INDIANA
6 properties
$30,876,066
2.6% of total
OHIO
3 properties
$9,599,114
0.8% of total
PENNSYLVANIA
3 properties
$33,376,878
2.8% of total
MASSACHUSETTS
6 properties
$55,087,558
4.6% of total
CONNECTICUT
9 properties
$4,609,346
0.4% of total
NEW YORK
22 properties
$251,732,951
21.2% of total
NEW JERSEY
8 properties
$37,367,315
3.1% of total
MARYLAND
3 properties
$13,635,251
1.1% of total
WASHINGTON, DC
2 properties
$41,002,306
3.5% of total
VIRGINIA
1 property
$9,491,226
0.8% of total
WEST VIRGINIA
1 property
$6,993,787
0.6% of toal
TENNESSEE
1 property
$2,247,460
0.2% of total
NORTH CAROLINA
4 properties
$15,736,942
1.3% of total
GEORGIA
4 properties
$12,436,780
1.0% of total
SOUTH CAROLINA
2 properties
$3,626,107
0.3% of total
FLORIDA
11 properties
$102,758,714
8.7% of total
PUERTO RICO
1 property
$38,774,229
3.3% of total
KENTUCKY
1 property
$3,997,256
0.3% of total
MISSISSIPPI
1 property
$1,499,030
0.1% of total
ARKANSAS
1 property
$632,896
0.1% of total
TEXAS
13 properties
$43,498,766
3.7% of total
NEW MEXICO
2 properties
$7,755,877
0.7% of total
ARIZONA
7 properties
$20,031,455
1.7% of total
COLORADO
8 properties
$55,804,753
4.7% of total
CALIFORNIA
48 properties
$214,766,958
18.1% of total
NEVADA
2 properties
$808,010
0.1% of total
OREGON
1 property
$10,942,638
0.9% of total
WASHINGTON
6 properties
$67,548,276
5.7% of total
Less than 1.00% of Cut-Off Date Allocated Loan Amount [ ]
1.00 - 5.99% of Cut-Off Date Allocated Loan Amount [ ]
6.00 - 9.99% of Cut-Off Date Allocated Loan Amount [ ]
Greater than 9.99% of Cut-Off Date Allocated Loan Amount [ ]
- --------------------------------------------------------------------------------
Under no circumstances shall the information presented hereby constitute an
offer to sell or the solicitation of an offer to buy any security, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
for an exemption from such registration under the securities laws of such
jurisdiction. You have requested that Credit Suisse First Boston Corporation
("CSFB") and Morgan Stanley & Co. Incorporated ("MS") provide to you
information in connection with your considering the purchase of certain
securities described herein. The attached information is being provided to you
for informative purposes only in response to your specific request. The
information contained herein has been compiled by CSFB and MS from sources that
CSFB and MS believe to be reasonably reliable. However, CSFB and MS make no
representation or warranty as to the accuracy or completeness of such
information and you must make your own determination as to whether the
information is appropriate and responsive to your request. Any investment
decision with respect to the securities described herein should be made solely
on the results of your own due diligence with respect to the securities
referred to herein and only upon your review of the prospectus and prospectus
supplement. This information may not be delivered by you to any other person
without CSFB's and MS's prior written consent. CSFB and MS may from time to
time perform investment banking services for or solicit investment banking
business from any company named in the information herein. CSFB and MS and/or
their employees may from time to time have a long or short position in any
security discussed herein.
- --------------------------------------------------------------------------------
B-10
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
$1,170,108,234 (APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999 - C1
PROPERTY TYPE -- % BY INITIAL POOL BALANCE
[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.]
LESS THAN 3%
Unanchored Retail 2.8%
Extended Stay Lodging 2.4%
Special Purpose 2.3%
Self-Storage 1.5%
Manufactured Housing Communities 0.2%
CREDIT LEASE 3.4%
LIMITED SERVICE LODGING 3.6%
COOPERATIVE 3.9%
FULL SERVICE LODGING 4.2%
MIXED USE 6.3%
INDUSTRIAL 6.6%
MULTIFAMILY
15.1%
OFFICE
29.9%
ANCHORED RETAIL
17.9%
- --------------------------------------------------------------------------------
Under no circumstances shall the information presented hereby constitute an
offer to sell or the solicitation of an offer to buy any security, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
for an exemption from such registration under the securities laws of such
jurisdiction. You have requested that Credit Suisse First Boston Corporation
("CSFB") and Morgan Stanley & Co. Incorporated ("MS") provide to you
information in connection with your considering the purchase of certain
securities described herein. The attached information is being provided to you
for informative purposes only in response to your specific request. The
information contained herein has been compiled by CSFB and MS from sources that
CSFB and MS believe to be reasonably reliable. However, CSFB and MS make no
representation or warranty as to the accuracy or completeness of such
information and you must make your own determination as to whether the
information is appropriate and responsive to your request. Any investment
decision with respect to the securities described herein should be made solely
on the results of your own due diligence with respect to the securities
referred to herein and only upon your review of the prospectus and prospectus
supplement. This information may not be delivered by you to any other person
without CSFB's and MS's prior written consent. CSFB and MS may from time to
time perform investment banking services for or solicit investment banking
business from any company named in the information herein. CSFB and MS and/or
their employees may from time to time have a long or short position in any
security discussed herein.
- --------------------------------------------------------------------------------
B-11
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
$1,170,108,234 (APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999 - C1
MORTGAGE LOAN, CREDIT AND CALL PROTECTION BY PROPERTY TYPE
<TABLE>
<CAPTION>
CUT-OFF % OF WTD. AVG. WTD. AVG.
DATE INITIAL REMAINING REMAINING RATIO OF
PRINCIPAL POOL WTD. AVG. WTD. AVG. WTD. AVG. LO & YM TERM LO & YM
PROPERTY TYPE BALANCE BALANCE COUPON DSCR LTV (MOS) (MOS) TO TERM
- --------------- ----------------- --------- ----------- ----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Office $ 355,372,711 29.9% 8.080% 1.33x 68% 111 115 96.5%
Retail $ 245,815,317 20.7% 8.220% 1.26x 74% 111 115 96.5%
Multifamily $ 178,770,749 15.1% 7.874% 1.43x 65% 104 110 94.5%
Hospitality $ 120,232,595 10.1% 8.188% 1.78x 58% 114 118 96.6%
Industrial $ 77,816,897 6.6% 8.068% 1.31x 72% 113 118 95.8%
Mixed Use $ 74,492,699 6.3% 7.513% 1.44x 67% 103 106 97.2%
Cooperative $ 46,740,745 3.9% 8.385% 2.02x 47% 109 127 85.8%
Credit Lease $ 40,282,058 3.4% 6.697% N/A N/A 229 233 98.3%
Other $ 47,605,679 4.0% 8.681% 1.36x 68% 106 117 90.6%
-------------- ---- ----- ---- -- --- --- ----
TOTAL/AVG $1,187,129,449 100.0% 8.041% 1.41x 67% 114 119 95.8%
============== ===== ===== ==== == === === ====
</TABLE>
- --------------------------------------------------------------------------------
Under no circumstances shall the information presented hereby constitute an
offer to sell or the solicitation of an offer to buy any security, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
for an exemption from such registration under the securities laws of such
jurisdiction. You have requested that Credit Suisse First Boston Corporation
("CSFB") and Morgan Stanley & Co. Incorporated ("MS") provide to you
information in connection with your considering the purchase of certain
securities described herein. The attached information is being provided to you
for informative purposes only in response to your specific request. The
information contained herein has been compiled by CSFB and MS from sources that
CSFB and MS believe to be reasonably reliable. However, CSFB and MS make no
representation or warranty as to the accuracy or completeness of such
information and you must make your own determination as to whether the
information is appropriate and responsive to your request. Any investment
decision with respect to the securities described herein should be made solely
on the results of your own due diligence with respect to the securities
referred to herein and only upon your review of the prospectus and prospectus
supplement. This information may not be delivered by you to any other person
without CSFB's and MS's prior written consent. CSFB and MS may from time to
time perform investment banking services for or solicit investment banking
business from any company named in the information herein. CSFB and MS and/or
their employees may from time to time have a long or short position in any
security discussed herein.
- --------------------------------------------------------------------------------
B-12
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
$1,170,108,234 (APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999 - C1
INTEREST PAYMENTS AND PRINCIPAL WINDOWS
[A graphic was omitted that consisted of a horizontal bar graph illustrating the
interest payments and principal windows of each class of certificates.]
Note: The Class A-1, A-2 and A-X certificates will be paid interest on a pro
rata basis.
The above analysis is based on the maturity assumptions and a 0% CPR as
described in the Prospectus Supplement.
- --------------------------------------------------------------------------------
Under no circumstances shall the information presented hereby constitute an
offer to sell or the solicitation of an offer to buy any security, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
for an exemption from such registration under the securities laws of such
jurisdiction. You have requested that Credit Suisse First Boston Corporation
("CSFB") and Morgan Stanley & Co. Incorporated ("MS") provide to you
information in connection with your considering the purchase of certain
securities described herein. The attached information is being provided to you
for informative purposes only in response to your specific request. The
information contained herein has been compiled by CSFB and MS from sources that
CSFB and MS believe to be reasonably reliable. However, CSFB and MS make no
representation or warranty as to the accuracy or completeness of such
information and you must make your own determination as to whether the
information is appropriate and responsive to your request. Any investment
decision with respect to the securities described herein should be made solely
on the results of your own due diligence with respect to the securities
referred to herein and only upon your review of the prospectus and prospectus
supplement. This information may not be delivered by you to any other person
without CSFB's and MS's prior written consent. CSFB and MS may from time to
time perform investment banking services for or solicit investment banking
business from any company named in the information herein. CSFB and MS and/or
their employees may from time to time have a long or short position in any
security discussed herein.
- --------------------------------------------------------------------------------
B-13
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
$1,170,108,234 (APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999 - C1
CALL PROTECTION BY PREPAYMENT RESTRICTION CATEGORIES
[A graphic was omitted that consisted of a vertical bar graph that demonstrated
the call protection by prepayment restriction categories.]
Note: Any unplotted amounts are assumed zero; may not add up to 100% due to
rounding
- --------------------------------------------------------------------------------
Under no circumstances shall the information presented hereby constitute an
offer to sell or the solicitation of an offer to buy any security, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
for an exemption from such registration under the securities laws of such
jurisdiction. You have requested that Credit Suisse First Boston Corporation
("CSFB") and Morgan Stanley & Co. Incorporated ("MS") provide to you
information in connection with your considering the purchase of certain
securities described herein. The attached information is being provided to you
for informative purposes only in response to your specific request. The
information contained herein has been compiled by CSFB and MS from sources that
CSFB and MS believe to be reasonably reliable. However, CSFB and MS make no
representation or warranty as to the accuracy or completeness of such
information and you must make your own determination as to whether the
information is appropriate and responsive to your request. Any investment
decision with respect to the securities described herein should be made solely
on the results of your own due diligence with respect to the securities
referred to herein and only upon your review of the prospectus and prospectus
supplement. This information may not be delivered by you to any other person
without CSFB's and MS's prior written consent. CSFB and MS may from time to
time perform investment banking services for or solicit investment banking
business from any company named in the information herein. CSFB and MS and/or
their employees may from time to time have a long or short position in any
security discussed herein.
- --------------------------------------------------------------------------------
B-14
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
$1,170,108,234 (APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999 - C1
TOP TEN LOANS SUMMARY
<TABLE>
<CAPTION>
CUT-OFF DATE
PROPERTY PRINCIPAL
PROPERTY NAME TYPE PROPERTY LOCATION BALANCE
- ------------------------ -------------- ----------------------- --------------
<S> <C> <C> <C>
Exchange Apartments Multifamily New York, New York $58,000,000
Selig Loans Office Seattle, Washington $51,092,418
Tallahassee Mall Retail Tallahassee, Florida $47,937,104
ACCOR Loans Credit Lease Various Cities $40,282,058
Hato Rey Tower Office San Juan, Puerto Rico $38,774,229
L'Enfant Plaza Mixed Use Washington, DC $37,204,671
Holiday Inn-Broadway Lodging New York, New York $36,000,000
Scholastic Building Office New York, New York $33,965,600
Blue Hills Office Park Office Canton, Massachusetts $33,149,000
150 William Street Office New York, New York $29,440,579
<CAPTION>
% OF LOAN PER
INITIAL UNITS/ UNIT/
POOL SQUARE SQUARE
PROPERTY NAME BALANCE FOOT FOOT DSCR LTV
- ------------------------ --------- ---------------- -------------- ------- ------
<S> <C> <C> <C> <C> <C>
Exchange Apartments 4.9% 345 $168,116 1.48x 46.0%
Selig Loans 4.3% 620,831 $ 82 1.24x 52.6%
Tallahassee Mall 4.0% 973,973 $ 49 1.15x 70.1%
ACCOR Loans 3.4% 1,224 $ 32,910 N/A N/A
Hato Rey Tower 3.3% 346,231 $ 112 1.25x 73.9%
L'Enfant Plaza 3.1% 889,438(1) $ 133(1) 1.39x 65.9%
Holiday Inn-Broadway 3.0% 531 $ 67,797 1.94x 43.9%
Scholastic Building 2.9% 225,000 $ 151 1.49x 77.2%
Blue Hills Office Park 2.8% 273,863 $ 121 1.20x 78.9%
150 William Street 2.5% 477,572 $ 62 1.20x 72.3%
</TABLE>
- -----------
(1) Reflects office square footage and the allocated loan per square foot for
the office space. The hotel has 370 rooms and an allocated loan balance
per room of $83,660.
- --------------------------------------------------------------------------------
Under no circumstances shall the information presented hereby constitute an
offer to sell or the solicitation of an offer to buy any security, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
for an exemption from such registration under the securities laws of such
jurisdiction. You have requested that Credit Suisse First Boston Corporation
("CSFB") and Morgan Stanley & Co. Incorporated ("MS") provide to you
information in connection with your considering the purchase of certain
securities described herein. The attached information is being provided to you
for informative purposes only in response to your specific request. The
information contained herein has been compiled by CSFB and MS from sources that
CSFB and MS believe to be reasonably reliable. However, CSFB and MS make no
representation or warranty as to the accuracy or completeness of such
information and you must make your own determination as to whether the
information is appropriate and responsive to your request. Any investment
decision with respect to the securities described herein should be made solely
on the results of your own due diligence with respect to the securities
referred to herein and only upon your review of the prospectus and prospectus
supplement. This information may not be delivered by you to any other person
without CSFB's and MS's prior written consent. CSFB and MS may from time to
time perform investment banking services for or solicit investment banking
business from any company named in the information herein. CSFB and MS and/or
their employees may from time to time have a long or short position in any
security discussed herein.
- --------------------------------------------------------------------------------
B-15
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
EXCHANGE APARTMENTS
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE(1): ORIGINAL CUT-OFF DATE
----------- -------------
$58,000,000 $58,000,000
ORIGINATION DATE(2): December 23, 1997
INTEREST RATE: 7.75%
AMORTIZATION TERM: Interest only until February 2000; then 336
Months
ARD: January 11, 2008
ARD BALANCE: $52,247,291
HYPERAMORTIZATION: After the ARD, interest rate increases by
2.00% to 9.75% and a pro rata portion of
all excess cash flow is used to reduce
outstanding principal balance; the
additional 2% interest is deferred until
principal balance is zero
MATURITY DATE: January 11, 2027
BORROWER (SPECIAL
PURPOSE ENTITY): Broad Street LLC; managing member is a
special purpose entity, the board of which
contains an independent director; a
non-consolidation opinion was obtained in
connection with origination
CALL PROTECTION: Two-year prepayment lockout from the
date of securitization with U.S. Treasury
defeasance thereafter until six months
prior to the ARD
CUT-OFF DATE
LOAN PER SQUARE
FOOT(1): $ 142
LOAN PER UNIT(1): $ 168,116
UP-FRONT RESERVES(3): TI & LC: $150,000
ONGOING RESERVES: CapEx (per year): $69,000/$200 per unit
TI & LC (per year)(3): $20,609/$.94 per sq.ft.
Real Estate Taxes &
Insurance Reserve: Yes(4)
LOCKBOX: Springing
MEZZANINE LOAN AND Yes; $6,000,000 mezzanine loan at an
PREFERRED EQUITY interest rate of Prime plus 1%; subject
INTEREST: to subordination and intercreditor
agreement
</TABLE>
PROPERTY INFORMATION
<TABLE>
<S> <C>
SINGLE ASSET/PORTFOLIO: Single asset
PROPERTY TYPE: Multifamily
LOCATION: New York, New York
YEAR BUILT/RENOVATED: 1902/1997
OCCUPANCY(5): 97%
COLLATERAL: One 21-story, 345 unit
Manhattan apartment building
(with 21,840 sq. ft. of retail
space)
FEE OR LEASEHOLD: Fee
SQUARE FOOTAGE (NRSF): 409,890
NUMBER OF UNITS: 345
PROPERTY MANAGEMENT: The Argo Corporation
1998 NET OPERATING INCOME: $ 7,861,360
UNDERWRITTEN NET CASH FLOW: $ 7,535,021
APPRAISED VALUE: $126,000,000
CUT-OFF DATE LTV(1): 46.0%
ARD LTV(1)(6): 41.5%
UNDERWRITTEN DSCR(1)(7)(8): 1.48x
</TABLE>
(1) For the Exchange Apartments Note A only.
(2) Six existing notes in the aggregate original principal amount of
$75,000,000 were consolidated on December 23, 1997. The consolidated note
was split into the Exchange Apartments Note A and Exchange Apartments
Note B on October 8, 1999.
(3) Tenant improvement and leasing commission reserves on retail space only.
(4) The Exchange Apartments Borrower is required to make monthly payments
into a tax and insurance escrow fund in an amount sufficient to
accumulate funds needed to pay (i) all taxes prior to their respective
due dates and (ii) insurance premiums prior to the expiration thereof.
(5) Residential occupancy based on the August 1999 rent roll.
(6) The ARD LTV takes into account the effect on the appraised value of the
related Mortgaged Property of the partial expiration of a tax abatement
on the Exchange Apartments Property.
(7) The Exchange Apartments Note A would have an underwritten debt service
coverage ratio on a net cash flow basis of 1.86x, if the calculations
were based on actual taxes (taking into account an applicable tax
abatement) and inclusive of the $392,000 of annual income from a signed
lease for a portion of the Exchange Apartment Property's retail space.
The 1.48x underwritten debt service coverage presented includes the
actual total tax expense projected to be incurred during the amortization
term averaged over the number of years in the amortization term and does
not include income from the retail space.
(8) Calculated based on the amortizing debt service payments.
B-16
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
SELIG LOANS
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE(1): ORIGINAL CUT-OFF DATE
----------- --------------------
$51,150,000 $51,092,418
ORIGINATION DATE: April 27, 1999
INTEREST RATE: 7.99%
AMORTIZATION: 360 Months
ARD: May 11, 2009
ARD BALANCE(1): $45,936,007
HYPERAMORTIZATION: After the ARD, interest rate increases by
2.00% to 9.99% and all excess cash flow is
used to reduce outstanding principal
balance; the additional 2% interest is
deferred until principal balance is zero
MATURITY DATE: May 11, 2029
BORROWERS (SPECIAL
PURPOSE ENTITIES): Selig Real Estate Holdings Thirteen, LLC,
Selig Real Estate Holdings Fourteen, LLC
and Selig Real Estate Holdings Fifteen, LLC;
each has a managing member that is a special
purpose, bankruptcy remote entity, the board
of which includes an independent director;
non-consolidation opinions were obtained in
connection with origination
CALL PROTECTION: Two-year prepayment lockout from the date
of securitization with U.S. Treasury
defeasance thereafter until two months prior
to the ARD
CUT-OFF DATE
LOAN PER
SQUARE FOOT(1): $82
UP-FRONT RESERVES: Deferred Maintenance
Reserve: $ 25,388
Environmental Reserve: $ 1,875
TI & LC: $ 510,000
Per SF
--------------------
ONGOING RESERVES: CapEx (per year): $124,078 $0.20
TI & LC (per year): $880,000 $1.42
Real Estate Taxes &
Insurance Reserve(2): Yes
LOCKBOX: Hard
CROSS COLLATERALIZATION/
CROSS DEFAULT: Yes
PARTIAL DEFEASANCE: Yes; Release price of 125% of Property
Release Amount
MEZZANINE LOAN: Yes; $23,100,000 mezzanine loan at an
interest rate of 15%; subject to
subordination and intercreditor
agreement(4)
</TABLE>
PROPERTY INFORMATION
<TABLE>
<S> <C> <C> <C> <C>
SINGLE ASSET/
PORTFOLIO: Portfolio of 3 assets
PROPERTY TYPE: Office
LOCATION: Seattle, Washington area
YEAR BUILT: Third and Broad 1982
3131 Elliot Building 1986
Airborne Building 1984
OCCUPANCY(1)(3): 95%
COLLATERAL: Three office properties totaling 620,831
square feet
FEE OR LEASEHOLD: Fee
MAJOR % OF
PROPERTY TENANTS NRSF GLA EXPIRATION
- ------------------------- ----------- ---- ------ -------
Third and Broad Active
Voice
Corporation 130,441 50.6% 7/10/09
Muzak, Ltd. 43,324 16.8% 1/15/05
3131 Elliot Building Airborne
Freight
Corporation 129,505 70.0% 11/30/04
Emeritus
Corporation 26,871 14.5% 6/30/06
Airborne Building Airborne
Freight
Corporation 177,917 100% 11/30/04
SQUARE FOOTAGE(1): 620,831
PROPERTY
MANAGEMENT: Martin Selig Real Estate
1998 NET OPERATING
INCOME(1): $6,117,264
UNDERWRITTEN NET
CASH FLOW(1): $5,560,246
APPRAISED VALUE(1): $97,200,000
CUT-OFF DATE LTV(1): 52.6%
ARD LTV(1): 47.3%
UNDERWRITTEN
DSCR(1): 1.24x
</TABLE>
(1) For the Selig Loans in the aggregate.
(2) The Selig Borrowers are required to make monthly payments into a tax and
insurance escrow fund in an amount sufficient to accumulate funds needed
to pay (i) all taxes prior to their respective due dates and (ii)
insurance premiums prior to the expiration thereof.
(3) Based on the August/September 1999 rent rolls.
(4) Such mezzanine loan is also secured by equity in entities owning other
properties.
B-17
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
TALLAHASSEE MALL
<TABLE>
<S> <C> <C>
LOAN INFORMATION
PRINCIPAL BALANCE: ORIGINAL CUT-OFF DATE
----------- --------------------
$48,000,000 $47,937,104
ORIGINATION DATE: July 1, 1999
INTEREST RATE: 8.60%
AMORTIZATION: 360 Months
ARD: July 11, 2009
ARD BALANCE: $43,551,339
HYPERAMORTIZATION: After the ARD, interest rate increases by
2.00% to 10.60% and all excess cash flow
is used to reduce outstanding principal
balance; the additional 2% interest is
deferred until principal balance is zero
MATURITY DATE: July 11, 2029
BORROWER (SPECIAL
PURPOSE ENTITY): Tallahassee Mall Partners, Ltd.; managing
general partner is a special purpose,
bankruptcy remote corporation, the board
of which includes an independent director;
a non-consolidation opinion was obtained
in connection with origination
CALL PROTECTION: Two-year prepayment lockout from the
date of securitization with U.S. Treasury
defeasance thereafter until two months
prior to the ARD
CUT-OFF DATE
LOAN PER SQUARE
FOOT: $49
UP-FRONT RESERVES: Deferred
Maintenance: $ 195,500
Environmental approximately
Escrow: $ 290,000
Ground Lease
Reserve: $ 36,667
TI & LC(1): $ 1,535,620
Roof Repair
Reserve(2): $ 875,000
Per SF
--------------------
ONGOING RESERVES: CapEx (per year): $146,100 $0.15
Real Estate Taxes &
Insurance Reserve(3): Yes
TI & LC(1): Yes
Ground Lease
Reserve:(4) Yes
LOCKBOX: Hard
</TABLE>
<TABLE>
<S> <C> <C> <C>
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO: Single asset
PROPERTY TYPE: Anchored Retail
LOCATION: Tallahassee, FL
YEAR BUILT/RENOVATED: 1971/1996
OCCUPANCY(5): 96%
COLLATERAL: Leasehold mortgage on a regional
mall
FEE OR LEASEHOLD: Leasehold
GROUND LEASE: The Property is subject to a
ground
lease which expires on February
28,
2044; one 20 year extension
option
LEASE
MAJOR TENANTS NRSF % OF GLA EXPIRATION
- ---------------------------- --------- ---------- --------
Dillard's 203,660 20.9% 01/31/03
Parisian 114,869 11.8% 05/31/07
Burlington Coat Factory(6) 101,888 10.5% 03/31/02
AMC Theater 69,213 7.1% 09/30/16
Goody's 66,110 6.8% 01/31/02
SQUARE FOOTAGE: 973,973
PROPERTY MANAGEMENT: Jones Lang LaSalle Americas, Inc.
1998 NET OPERATING
INCOME: $3,700,054
UNDERWRITTEN NET CASH
FLOW: $5,153,369
APPRAISED VALUE: $68,400,000
CUT-OFF DATE LTV: 70.1%
ARD LTV: 63.7%
UNDERWRITTEN DSCR: 1.15x
</TABLE>
(1) The leasing reserve fund established at closing must be maintained at
$300,000 during the term of the Tallahassee Mall Loan. If such reserve
falls below $300,000, the Tallahassee Mall Borrower must escrow monthly
the lesser of $30,000 or the amount required to replenish the reserve to
the $300,000 level.
(2) The Tallahassee Mall Borrower funded an initial
$875,000 roof repair reserve fund at closing and is required to fund
$3,700 monthly until the reserve reaches $1,097,000 (125% of the
estimated cost of the roof repair) or until all roof repairs indicated in
the engineer's report are completed.
(3) The Tallahassee Mall Borrower is required to make monthly payments into a
tax and insurance escrow fund in an amount sufficient to accumulate funds
needed to pay (i) all taxes prior to their respective due dates and (ii)
insurance premiums prior to the expiration thereof.
(4) The Tallahassee Mall Borrower is required to escrow monthly one-twelfth
of annual ground rent.
(5) Based on the July 1999 rent roll.
(6) It is anticipated that Burlington Coat Factory will be in occupancy by
December 1, 1999.
B-18
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
ACCOR LOANS
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE(1): ORIGINAL CUT-OFF DATE
----------- -------------
$40,986,486 $40,282,058
ORIGINATION DATE: July 20, 1998
INTEREST RATE:
California North 6.721%
Mountain 6.684%
AMORTIZATION:
California North 337 Months
Mountain 290 Months
BALLOON PAYMENT(1)(2): $15,055,200
MATURITY DATE: March 11, 2019
BORROWER (SPECIAL
PURPOSE ENTITIES): California North S9, LLC and
Mountainz S9, LLC; each has a managing
member that is a special purpose,
bankruptcy remote entity, the board of
which contains an independent
director; non-consolidation opinions
were obtained in connection with
origination
CALL PROTECTION: Two-year prepayment lockout
from the date of securitization
with U.S. Treasury
defeasance thereafter until
three months prior to the maturity
CUT-OFF DATE
LOAN PER ROOM(1): $32,910
LOCKBOX: Hard
CROSS COLLATERALIZATION/
CROSS DEFAULT: Yes
CREDIT: ACCOR, S.A. (rated BBB by S&P
with a negative outlook)
PARTIAL RELEASE: In the event of a major
casualty or condemnation or if any
mortgaged property becomes economically
obsolete
COMPANY DESCRIPTION: ACCOR is a global hospitality
and travel group with over 3,000
hotels and with activities in tourism,
institutional catering, service vouchers
and auto rental
</TABLE>
PROPERTY INFORMATION
<TABLE>
<S> <C> <C>
SINGLE ASSET/PORTFOLIO: Portfolio of 11 Motel 6
Properties
PROPERTY TYPE: Credit Lease
COLLATERAL: Two bondable master leases
secured by first mortgage
liens on two pools consisting
of 11 Motel 6 Hotels
FEE OR LEASEHOLD: Fee
YEAR BUILT/
PROPERTY RENOVATED NO. OF UNITS
- ------------------------------------ ----------- -------------
Victorville, CA 1986/1997 62
Turlock, CA 1978/1998 101
Pittsburg, CA 1980/1996 174
Mojave, CA 1986/1997 121
Big Bear Lake, CA 1981/1997 121
Fort Collins, CO 1978/1997 126
Wheat Ridge, CO 1980/1999 92
Coeur D'Alene, ID 1978/1997 109
Santa Rosa, NM 1978/1998 90
Raton, NM 1977/1999 103
Woods Cross, UT 1990/NA 125
NUMBER OF ROOMS(1): 1,224
PROPERTY MANAGEMENT: Universal Commercial
Credit V, Inc.
UNDERWRITTEN LEASE
PAYMENT(1): $3,366,237
APPRAISED VALUE (AS LEASED)(1): $40,840,000
APPRAISED VALUE (AS DARK)(1): $34,160,000
CUT-OFF DATE LTV (AS DARK)(1): 118.0%
</TABLE>
(1) For the ACCOR Loans in the aggregate.
(2) The ACCOR Loans do not fully amortize over the term. The Balloon Payment
due at maturity is fully insured with a residual value insurance policy
provided by R.V.I. America Insurance Company.
B-19
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
HATO REY TOWER
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE: ORIGINAL CUT-OFF DATE
------------- ---------------------
$38,800,000 $38,774,229
ORIGINATION DATE: September 13, 1999
INTEREST RATE: 8.05%
AMORTIZATION: 360
ARD: September 11, 2009
ARD BALANCE: $34,745,284
HYPERAMORTIZATION: After the ARD, interest rate increases by
2.00% to 10.05% and all excess cash flow
is used to reduce outstanding principal
balance; the additional 2% interest is
deferred until principal balance is zero
MATURITY DATE: September 11, 2029
BORROWER (SPECIAL
PURPOSE ENTITY): Apollo Hato Rey, L.P.; general partner is
a special purpose, bankruptcy remote
corporation, the board of which contains
an independent director; a non-
consolidation opinion was obtained in
connection with origination
CALL PROTECTION: Two-year prepayment lockout from the
date of securitization with U.S. Treasury
defeasance thereafter until two months
prior to the ARD
CUT-OFF DATE
LOAN PER SQUARE FOOT: $112
UP-FRONT RESERVES: Deferred
Maintenance(1): $ 667,083
Other(2): $ 3,663,000
Per SF
---------------------
ONGOING RESERVES: CapEx (per year): $87,562 $0.25
TI & LC (per year): $340,469 $0.98
Real Estate Taxes &
Insurance Reserve(3): Yes
LOCKBOX: Hard
</TABLE>
PROPERTY INFORMATION
<TABLE>
<S> <C> <C> <C>
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Office
LOCATION: San Juan, Puerto Rico
YEAR BUILT: 1972
OCCUPANCY(4): 98%
COLLATERAL: One 23-story, 346,231 square
foot office property (with
ancillary 730 space parking
garage)
FEE OR LEASEHOLD: Fee
% OF LEASE
MAJOR TENANTS NRSF GLA EXPIRATION
- -------------------------------- -------- ------ -------
Banco Popular
de Puerto Rico(5) 55,529 16.0% 6/30/05
Banco de Desarrollo
Economico 42,984 12.4% 5/31/01
Axtmayer Adsuar
Muniz & Goyco 27,863 8.1% 8/31/04
SQUARE FOOTAGE: 346,231
PROPERTY MANAGEMENT: Insignia Commercial Group, Inc.
1998 NET OPERATING INCOME: $4,967,425
UNDERWRITTEN NET CASH FLOW: $4,292,362
APPRAISED VALUE: $52,500,000
CUT-OFF DATE LTV: 73.9%
ARD LTV: 66.2%
UNDERWRITTEN DSCR: 1.25x
</TABLE>
(1) The deferred maintenance reserve is required to fund certain repairs,
including the replacement of certain ventilation and air conditioning
systems and the repaving of the parking facilities at the Hato Rey Tower
Property.
(2) At closing a leasing achievement reserve was established of $3,663,000
which will be released upon lease extensions or renewals for certain
tenants and/or upon delivery of qualified substitute leases.
(3) The Hato Rey Tower Borrower is required to make monthly payments into a
tax and insurance escrow fund in an amount sufficient to accumulate funds
needed to pay (i) all taxes prior to their respective due dates and (ii)
insurance premiums prior to the expiration thereof.
(4) Based on the September 1999 rent roll.
(5) Banco Popular de Puerto Rico has the right to terminate its lease every
two years during the term thereof.
B-20
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
L'ENFANT PLAZA
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE(1): ORIGINAL CUT-OFF DATE
----------- -------------
$37,500,000 $37,204,671
ORIGINATION DATE: September 18, 1998
INTEREST RATE: 7.64%
AMORTIZATION: 360 Months
ARD: October 11, 2008
ARD BALANCE(1): $33,249,718
HYPERAMORTIZATION: After the ARD, interest rate increases by
2.00% to 9.64% and a pro rata portion of
all excess cash flow is used to reduce
outstanding principal balance; the
additional 2% interest is deferred until
principal balance is zero
MATURITY DATE: October 11, 2028
BORROWER (SPECIAL
PURPOSE ENTITY): Potomac Creek Associates, L.P.; general
partner is a single purpose, bankruptcy
remote entity, the board of which
contains an independent director; a
non-consolidation opinion was obtained
in connection with origination
CALL PROTECTION: Two-year prepayment lockout from the
date of securitization with U.S. Treasury
defeasance thereafter until two months
prior to the ARD
CUT-OFF DATE
LOAN PER UNIT(9): $133 Per Square Foot (Office)
$83,660 Per Room (Hotel)
UP-FRONT RESERVES: CapEx(2): $10,000,000
Large Lease Escrow
Fund(3): $ 8,000,000
Small Lease Escrow
Fund(3): $ 2,000,000
ONGOING RESERVES: CapEx(2): Yes
Monthly Large Lease
Escrow Fund (per
annum)(3)(5): $ 1,000,000
Monthly Small Lease
Escrow Fund (per
annum)(3)(6): $ 2,000,000
Real Estate Taxes &
Insurance(4): Yes
LOCKBOX: Hard
MEZZANINE LOAN AND Yes; $2,500,000 mezzanine loan and
PREFERRED EQUITY $45,400,000 equity investment with an
INTEREST: interest rate and yield at the greater of
LIBOR plus 5.235% and 10.325%,
subject to subordination and
intercreditor agreement
PARTIAL DEFEASANCE: Yes (Release price of 125% of Property
Release Amount).
</TABLE>
PROPERTY INFORMATION
<TABLE>
<S> <C> <C> <C>
SINGLE ASSET/PORTFOLIO: Portfolio of 3 mixed use
buildings
PROPERTY TYPE: Mixed Use
LOCATION: Washington, DC
YEAR BUILT/RENOVATED: L'Enfant -- North
Building (400
10th Street SW) 1968/1990
L'Enfant -- East
Building (480
L'Enfant Plaza 1972/1990
SW)
L'Enfant --
Center
Building (420
10th
Street SW) 1972/1990
OCCUPANCY(7): 97% (Office)
81% (Hotel)
COLLATERAL: Secured by one office property
(consisting of three
buildings) and one hotel property
FEE OR LEASEHOLD(8): Fee and Leasehold(8)
% OF LEASE
MAJOR TENANTS (OFFICE) NRSF GLA EXPIRATION
- ----------------------------- --------- ---- ---------
General Service
Administration 287,179 32.3% 06/30/01
US Postal Service 139,270 15.7% 06/11/08
SQUARE FOOTAGE (OFFICE): 889,438
NUMBER OF ROOMS (HOTEL): 370
PROPERTY MANAGEMENT: Sarakreek Management
Partners LLC (Office)
Loews Hotel, Inc. (Hotel)
1998 NET OPERATING
INCOME(9): $20,289,597
UNDERWRITTEN NET CASH
FLOW(9): $17,748,918
APPRAISED VALUE: $226,000,000
CUT-OFF DATE LTV(9): 65.9%
ARD LTV(9): 58.9%
UNDERWRITTEN DSCR(9): 1.39x
</TABLE>
(1) For L'Enfant Participation only.
(2) 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 an amount equal to the greater of (i) $34,953
per month, and (ii) the amount per month required for the maintenance and
repair of the L'Enfant Property as determined by an engineering report
reasonably satisfactory to the CSFB Mortgage Loan Seller. As of the
Cut-off Date, $4,699,302 was on deposit in the capital expenditure
reserve.
(3) As of the Cut-off Date, an aggregate of $5,023,923 was on
deposit in such accounts.
(4) The L'Enfant Borrower is required to make monthly payments into a tax and
insurance escrow fund in an amount sufficient to accumulate funds needed
to pay (i) all taxes prior to their respective due dates and (ii)
insurance premiums prior to the expiration thereof.
(5) The L'Enfant Borrower is required to fund such account monthly until
September 11, 2001.
(6) The L'Enfant Borrower is required to fund such account monthly commencing
on October 11, 2001.
(7) Based on the August 1999 rent roll for the office component and on the
L'Enfant Borrower's operating statement dated August 31, 1999 for the
hotel component.
(8) The L'Enfant Borrower has a lease with the District of Columbia
Redevelopment Land Agency for the portion of space over and under a
street that runs through the L'Enfant Property; such lease expires in
2064.
(9) Applies to L'Enfant Whole Loan.
B-21
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
HOLIDAY INN -- BROADWAY
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE ORIGINAL CUT-OFF DATE
----------- --------------------
$36,000,000 $35,962,109
ORIGINATION DATE: October 27, 1998
INTEREST RATE: 8.50%
AMORTIZATION: 300 months
ARD: September 11, 2009
ARD BALANCE: $30,035,151
HYPERAMORTIZATION: After the ARD, interest rate increases by
2.00% to 10.50% and all excess cash flow
is used to reduce outstanding principal
balance; the additional 2% is deferred
until principal balance is zero
MATURITY DATE: September 11, 2024
BORROWER (SPECIAL
PURPOSE ENTITY): Herald Hotel Associates, L.P.; general
partner is a special purpose, bankruptcy
remote entity, the board of which
contains an independent director; a
non-consolidation opinion was obtained
in connection with origination
CALL PROTECTION: Two-year prepayment lockout from the
date of securitization with U.S. Treasury
defeasance thereafter until three months
prior to the ARD
CUT-OFF DATE
LOAN PER ROOM: $67,797
UP-FRONT RESERVES: Ground Lease
Reserve: $ 148,000
FF&E Reserve: $ 140,150
Per Unit
--------------------
ONGOING RESERVES: CapEx (per year): $6,300 $11.84
Real Estate Taxes &
Insurance Reserve(1): Yes
Ground Lease
Reserve(2): Yes
FF&E Reserve(3): Yes
LOCKBOX: Springing
ADDITIONAL
INDEBTEDNESS(4): Indebtedness to an affiliate
</TABLE>
PROPERTY INFORMATION
<TABLE>
<S> <C>
SINGLE ASSET/PORTFOLIO: Single asset
PROPERTY TYPE: Hotel
LOCATION: New York, New York
YEAR BUILT/RENOVATED: 1898/1998
OCCUPANCY(5): 76%
COLLATERAL: Leasehold mortgage on one 18
story, 531 room hotel property
FEE OR LEASEHOLD: Leasehold
GROUND LEASE: Subject to a ground lease that
expires September 22, 2088
NUMBER OF ROOMS: 531
PROPERTY MANAGEMENT: Thurcon Properties, Ltd
1998 NET OPERATING INCOME: $ 3,702,429
UNDERWRITTEN NET CASH FLOW: $ 6,735,830
APPRAISED VALUE: $82,000,000
APPRAISED VALUE PER ROOM: $ 154,426
CUT-OFF DATE LTV: 43.9%
ARD LTV: 36.7%
UNDERWRITTEN DSCR: 1.92x
</TABLE>
(1) The Holiday Inn -- Broadway Borrower is required to make monthly payments
into a tax and insurance escrow fund in an amount sufficient to
accumulate funds needed to pay (i) all taxes prior to their respective
due dates and (ii) insurance premiums prior to the expiration thereof.
(2) The Holiday Inn -- Broadway Borrower is required to escrow monthly
one-twelfth of the annual ground rent.
<PAGE>
(3) The Holiday Inn -- Broadway Borrower is required to fund FF&E reserves
monthly in the amount of 3.0% of the gross revenues of the hotel in the
first year and in the amount of 4.0% of the gross revenues of the hotel
thereafter.
(4) A non-interest bearing unsecured loan from affiliates in an amount of
$3,059,290, subject to a subordination and standstill agreement.
(5) According to the Broadway Holiday Inn Borrower's operating statement
dated July 31, 1999.
B-22
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
SCHOLASTIC BUILDING
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE: ORIGINAL CUT-OFF DATE
----------- -------------
$34,000,000 $33,965,600
ORIGINATION DATE: August 4, 1999
INTEREST RATE: 8.38%
AMORTIZATION: 360 Months
ARD: August 11, 2009
ARD BALANCE: $30,688,510
HYPERAMORTIZATION: After the ARD, interest rate increases
by 2.00% to 10.38% and all excess cash
flow is used to reduce outstanding principal
balance; the additional 2% interest is
deferred until principal balance is
zero
MATURITY DATE: August 11, 2029
BORROWER (SPECIAL
PURPOSE ENTITY): ISE 555 Broadway, LLC; non-managing
member is a single purpose, bankruptcy
remote entity, the board of which
contains an independent director; a
non-consolidation opinion was obtained
in connection with origination
CALL PROTECTION: Two-year prepayment lockout from the
date of securitization with U.S.
Treasury defeasance thereafter until one month
prior to the ARD
CUT-OFF DATE
LOAN PER SQUARE FOOT: $151
UP-FRONT RESERVES: Deferred
Maintenance: $ 28,750
Environmental
Reserve: $ 3,750
ONGOING RESERVES: CapEx (per year)(1): No
TI & LC(1): No
Real Estate Taxes &
Insurance Reserve(2): Yes
LOCKBOX: Hard
</TABLE>
PROPERTY INFORMATION
<TABLE>
<S> <C> <C> <C>
SINGLE ASSET/PORTFOLIO: Single asset
PROPERTY TYPE: Office
LOCATION: New York, New York
YEAR BUILT/RENOVATED: 1889/1990
OCCUPANCY: 100%
COLLATERAL: One 12-story, 225,000
square foot office property
FEE OR LEASEHOLD: Fee
% OF LEASE
MAJOR TENANTS NRSF GLA EXPIRATION
- ---------------------------- --------- ---- -------
Scholastic, Inc. 221,000 98.2% 7/31/29
SQUARE FOOTAGE: 225,000
PROPERTY MANAGEMENT: CB Richard Ellis, Inc.
1998 NET OPERATING
INCOME: $3,915,932
UNDERWRITTEN NET
CASH FLOW: $4,632,600
APPRAISED VALUE: $44,000,000
CUT-OFF DATE LTV: 77.2%
ARD LTV: 69.8%
UNDERWRITTEN DSCR: 1.49x
</TABLE>
(1) No funds for tenant improvements, leasing commissions, or replacements
and repairs are escrowed. If Scholastic's long term rating falls below
BBB, it is required to deposit approximately $455,000 per annum to a cash
collateral account as a tenant improvements, leasing commission, and
repair and replacement reserve. Commencing on the ARD, the Scholastic
Building Borrower is required to deposit approximately $26,000 per month
into a cash collateral account to fund the Scholastic Building Borrower's
obligation to make a work allowance payment of $1.75 million to
Scholastic on July 1, 2014.
<PAGE>
(2) The Scholastic Building Borrower is required to make monthly payments
into a tax and insurance escrow fund in an amount sufficient to
accumulate funds needed to pay (i) all taxes prior to their respective
due dates and (ii) insurance premiums prior to the expiration thereof.
B-23
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
BLUE HILLS OFFICE PARK
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE: ORIGINAL CUT-OFF DATE
----------- ---------------------
$33,149,000 $33,149,000
ORIGINATION DATE: September 14, 1999
INTEREST RATE: 8.49%
AMORTIZATION: 360 Months
ARD: October 11, 2009
ARD BALANCE: $29,994,367
HYPERAMORTIZATION: After the ARD, interest rate increases by
2.00% to 10.49% and all excess cash flow
is used to reduce outstanding principal
balance; the additional 2% interest is
deferred until principal balance is zero
MATURITY DATE: October 11, 2029
BORROWER (SPECIAL
PURPOSE ENTITY): Blue Hills Office Park LLC; single
member and a non-member manager,
each of which is a special purpose,
bankruptcy remote entity, the board of
which contains an independent director; a
non-consolidation opinion was obtained
in connection with origination
CALL PROTECTION: Two-year prepayment lockout from the
date of securitization with U.S. Treasury
defeasance thereafter until six months
prior to the ARD
CUT-OFF DATE
LOAN PER SQUARE FOOT: $121
UP-FRONT RESERVES: TI & LC: $ 125,000
Per Unit
--------
ONGOING RESERVES: CapEx (per year): $54,773 $0.20
TI & LC (per year)(1): Yes
Real Estate Taxes &
Insurance Reserve(2): Yes
LOCKBOX: Hard
</TABLE>
PROPERTY INFORMATION
<TABLE>
<S> <C> <C> <C>
SINGLE ASSET/PORTFOLIO: Single asset
PROPERTY TYPE: Office
LOCATION: Canton, MA
YEAR BUILT/RENOVATED: 1970/1985
OCCUPANCY: 100%
COLLATERAL: One 273,863 square foot office
property
FEE OR LEASEHOLD: Fee
% OF LEASE
MAJOR TENANT NRSF NRA EXPIRATION(3)
- ---------------------------- --------- -- -------------
Bank Boston N.A.(4) 263,245 96% July 31, 2004
SQUARE FOOTAGE: 273,863
PROPERTY MANAGEMENT: Fineberg Management, Inc.
1998 NET OPERATING
INCOME: $4,020,488
UNDERWRITTEN NET CASH
FLOW: $3,667,346
APPRAISED VALUE: $42,000,000
CUT-OFF DATE LTV: 78.9%
ARD LTV: 71.4%
UNDERWRITTEN DSCR: 1.20x
</TABLE>
(1) A base leasing escrow reserve is funded at $119,135 per annum and a cash
flow leasing escrow is funded to the extent of excess cash flow after
payment of debt service, required reserves and operating expenses (to a
maximum of $630,864 per annum) subject to a maximum on both reserve
accounts of $4.25 million. The Blue Hills Borrower is entitled to a
release of funds from both reserves subject to meeting certain criteria,
including investment grade leases that extend three years beyond the ARD
and a DSCR for the Blue Hills Loan of at least 1.20x.
(2) The Blue Hills Borrower is required to make monthly payments into an
insurance escrow fund and quarterly payments into a tax escrow fund in an
amount sufficient to accumulate funds needed to pay (i) all taxes prior
to their respective due dates and (ii) insurance premiums prior to the
expiration thereof.
(3) Lease is triple net and has a five-year extension option at 90% of fair
market rental value.
(4) Bank Boston N.A. is rated A+ by DCR and A by S&P. Bank Boston N.A. is not
rated by Fitch or Moody's.
B-24
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
150 WILLIAM STREET
LOAN INFORMATION
<TABLE>
<S> <C> <C>
PRINCIPAL BALANCE: ORIGINAL CUT-OFF DATE
----------- --------------------
$30,000,000 $29,440,579
ORIGINATION DATE: May 15, 1998
INTEREST RATE: 7.175%
AMORTIZATION: 300 Months
ARD: June 11, 2008
ARD BALANCE: $24,133,242
HYPERAMORTIZATION: After the ARD, interest rate increases by
2.00% to 9.175% and all excess cash flow
is used to reduce outstanding principal
balance; the additional 2% interest is
deferred until principal balance is zero
MATURITY DATE: June 11, 2023
BORROWER (SPECIAL
PURPOSE ENTITY): 150 William Street Associates L.P.;
general partner is a single purpose,
bankruptcy remote entity, the board of
which contains an independent director;
a non-consolidation opinion was obtained
in connection with the origination
CALL PROTECTION: Two-year prepayment lockout from the
date of securitization with U.S. Treasury
defeasance thereafter until four months
prior to the ARD
CUT-OFF DATE
LOAN PER SQUARE FOOT: $62
Per SF
------
ONGOING RESERVES: TI & LC (per year): $480,000 $1.16
Real Estate Taxes &
Insurance Reserve(1): Yes
LOCKBOX: Springing
</TABLE>
PROPERTY INFORMATION
<TABLE>
<S> <C>
SINGLE ASSET/PORTFOLIO: Single asset
PROPERTY TYPE: Office
LOCATION: New York, NY
YEAR BUILT/RENOVATED: 1927/1998
OCCUPANCY(2): 98%
COLLATERAL: One 19-story, 477,572 square
foot office property (with
ancillary retail space)
</TABLE>
<TABLE>
<CAPTION>
LEASE
MAJOR TENANTS NRSF % OF GLA EXPIRATION
- ------------------- --------- ---------- -----------
<S> <C> <C> <C>
The City of
New York -
Children's
Services
Administration 418,434 87.6% 09/30/08
The City of
New York -
Office of Court
Administration 15,000 3.1% 02/28/01
Strand II
Corp. 13,992 2.9% 08/31/06
</TABLE>
<TABLE>
<S> <C>
SQUARE FOOTAGE (NRSF): 477,572
PROPERTY MANAGEMENT: Braun Management, Inc.
1998 NET OPERATING INCOME(3): $ 1,177,594
UNDERWRITTEN NET CASH FLOW: $ 3,102,994
APPRAISED VALUE: $40,700,000
CUT-OFF DATE LTV: 72.3%
ARD LTV: 59.3%
UNDERWRITTEN DSCR: 1.20x
</TABLE>
(1) The 150 William Street Borrower is required to make monthly payments into
a tax and insurance escrow fund in an amount sufficient to accumulate
funds needed to pay (i) all taxes prior to their respective due dates and
(ii) insurance premiums prior to the expiration thereof.
(2) Based on August 1999 rent roll.
(3) The property underwent a $6,000,000 renovation during 1997 and 1998,
resulting in occupancy increasing from 44.5% in December 1997 to 98% in
August 1999.
B-25
<PAGE>
[GRAPHIC OMITTED]
October 12, 1999
$1,170,108,234 (APPROXIMATE)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999 - C1
COLLATERAL SUMMARY
Run Date: 10/11/99 03.54.45
Cut-off Balance: 1,187,129,449
Date of Balances: 10/01/99
Loan Count: 153
Avg Balance: 7,759,016
Max Balance: 58,000,000
Min Balance: 234,627
Gross WAC: 8.041
Seasoning (Yrs): .55
Rem Term (Yrs): 9.90
- ------------------------------------------
Curr Gross Coupon Count Pct
- ----------------- ----- ---
6.00% - 6.99% 4 4.09
7.00% - 7.49% 16 12.00
7.50% - 7.99% 32 29.80
8.00% - 8.49% 64 34.21
8.50% - 8.99% 26 12.96
9.00% - 9.49% 9 6.42
9.50% - 9.99% 1 .27
10.00% - 10.99% 1 .25
Wtd Avg. Current Coupon 8.041
- ------------------------------------------
Curr Balance (000) Count Pct
- ------------------ ----- ---
$ 500 or less 14 .44
$ 500+ - 1,000 14 .91
$ 1,000+ - 2,000 18 1.99
$ 2,000+ - 3,000 20 4.25
$ 3,000+ - 4,000 17 5.16
$ 4,000+ - 5,000 9 3.46
$ 5,000+ - 7,500 13 6.48
$ 7,500+ - 10,000 11 8.23
$10,000+ - 15,000 13 13.53
$15,000+ - 20,000 9 13.32
$20,000+ - 30,000 8 18.23
$30,000+ - 40,000 5 15.09
$40,000+ - 50,000 1 4.04
$50,000+ - 75,000 1 4.89
Avg Curr Balance: $7,759,016
- ------------------------------------------
Top 3 Loans: 13.2
- ------------------------------------------
Top 10 Loans: 34.2
- ------------------------------------------
Orig Amort Term Count Pct
- --------------- ----- ---
7+ - 10 years 1 .25
10+ - 15 years 3 .86
15+ - 20 years 4 .67
20+ - 25 years 51 28.74
25+ - 30 years 92 67.72
30+ - 40 years 2 1.75
Wtd Avg. Orig Amort Term: 28.33
- ------------------------------------------
Seasoning Term Count Pct
- -------------- ----- ---
12 Mos or less 132 85.78
1+ - 2 years 19 13.88
2+ - 3 years 2 .34
Wtd Avg. Seas Term: .55
- ------------------------------------------
Remaining Term Count Pct
- -------------- ----- ---
5+ - 7 years 3 1.86
7+ - 10 years 141 89.85
10+ - 15 years 7 4.90
15+ - 20 years 2 3.39
Wtd Avg. Remaining Term 9.90
Antic Repay Term for Hyper Am
- ------------------------------------------
Loan Type Count Pct
- --------- ----- ---
Fixed Rate 153 100.00
- ------------------------------------------
Amort Type Count Pct
- ---------- ----- ---
Balloon 69 21.82
Full Am 4 1.11
Hyper Am 80 77.07
- ------------------------------------------
LTV Count Pct
- --- ----- ---
50.00% OR LESS 12 11.69
50.01% - 60.00 16 9.87
60.01% - 70.00 39 22.05
70.01% - 75.00 53 29.39
75.01% - 80.00 31 23.61
Credit Lease 2 3.70
Wtd Avg. LTV: 66.86
- ------------------------------------------
UW DSCR Count Pct
- ------- ----- ---
1.10x - 1.19 6 6.37
1.20x - 1.24 23 19.19
1.25x - 1.29 27 18.59
1.30x - 1.39 33 18.29
1.40x - 1.49 15 11.68
1.50x - 1.99 39 21.05
2.00x and over 8 1.44
Credit Lease 2 3.39
Wtd Avg. DSCR: 1.41
- ------------------------------------------
Universe Count Pct
- -------- ----- ---
CSFB 130 86.47
MS 23 13.53
- ------------------------------------------
Property Type Pr Cnt Pct
- ------------------ ------ ---
Office 33 29.94
Retail 42 20.71
Multifamily 51 15.06
Lodging 18 10.13
Industrial 16 6.56
Mixed Use 4 6.28
Cooperative 10 3.94
Credit Lease 11 3.39
Other 1 2.27
Self Storage 5 1.55
Mobile Home Park 1 .19
TOTAL 192 100.00
- ------------------------------------------
Location > 1% Pr Cnt Pct
- ------------- ------ ---
New York 22 21.21
California 48 18.09
Florida 11 8.66
Washington 6 5.69
Colorado 8 4.70
Massachusetts 6 4.64
Texas 13 3.66
Washington DC 2 3.45
Puerto Rico 1 3.27
New Jersey 8 3.15
Pennsylvania 3 2.81
Indiana 6 2.60
Missouri 4 2.52
Minnesota 2 1.95
Arizona 7 1.69
North Carolina 4 1.33
Illinois 5 1.31
Maryland 3 1.15
Georgia 4 1.05
- ------------------------------------------
- --------------------------------------------------------------------------------
Under no circumstances shall the information presented hereby constitute an
offer to sell or the solicitation of an offer to buy any security, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
for an exemption from such registration under the securities laws of such
jurisdiction. You have requested that Credit Suisse First Boston Corporation
("CSFB") and Morgan Stanley & Co. Incorporated ("MS") provide to you
information in connection with your considering the purchase of certain
securities described herein. The attached information is being provided to you
for informative purposes only in response to your specific request. The
information contained herein has been compiled by CSFB and MS from sources that
CSFB and MS believe to be reasonably reliable. However, CSFB and MS make no
representation or warranty as to the accuracy or completeness of such
information and you must make your own determination as to whether the
information is appropriate and responsive to your request. Any investment
decision with respect to the securities described herein should be made solely
on the results of your own due diligence with respect to the securities
referred to herein and only upon your review of the prospectus and prospectus
supplement. This information may not be delivered by you to any other person
without CSFB's and MS's prior written consent. CSFB and MS may from time to
time perform investment banking services for or solicit investment banking
business from any company named in the information herein. CSFB and MS and/or
their employees may from time to time have a long or short position in any
security discussed herein.
- --------------------------------------------------------------------------------
B-26
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-C1
COMPARATIVE FINANCIAL STATUS REPORT
AS OF ____________________
<TABLE>
<CAPTION>
S4 S57 S58 P7 P8 P57 S72 S69 S70 S83 S84
- ---------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------
ORIGINAL UNDERWRITING
INFORMATION
---------------------------------------------------
BASIS YEAR
-----------
LAST CURRENT
PROPERTY ALLOCATED PAID ALLOCATED FINANCIAL
PROSPECTUS INSPECT LOAN THRU DEBT INFO AS OF % TOTAL $ (1)
ID CITY STATE DATE AMOUNT DATE SERVICE DATE OCC REVENUE NCF DSCR
- ---------- ------- ------- -------- --------- ---- --------- ----------- ----- ------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
yy/mm yy/mm
List all properties currently in deal with or without information largest to smallest loan
This report should reflect the information provided in the CSSA Property and Loan file
Total: $ $ WA $ $ WA
<CAPTION>
P65 P64 P59 P94 P95 P58 P57 P52 P92 P93
- ----------- ----------- ---------- ----------- ---------- ---------- ----------- ----------- ----------- -----------
2ND PRECEDING ANNUAL OPERATING PRECEDING ANNUAL OPERATING
INFORMATION INFORMATION
------------------------------------------------ --------------------------------------------------------------
AS OF ______________ NORMALIZED AS OF _______________ NORMALIZED
FINANCIAL FINANCIAL
INFO AS OF % TOTAL $ (1) INFO AS OF % TOTAL $ (1)
DATE OCC REVENUE NCF DSCR DATE OCC REVENUE NCF DSCR
- ----------- --------- -------- --------- ------- ---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
yy/mm yy/mm
List all properties currently in deal with or without information largest to smallest loan
This report should reflect the information provided in the CSSA Property and Loan file
WA $ $ WA WA $ $ WA
<CAPTION>
P72 P73 P66 P96 P97 (2)
- ------------ ----------- ---------- ----------- ----------- ----------- ------------ ------------ -----------
MOST RECENT FINANCIAL NET CHANGE
INFORMATION
- ------------------------------------------------------------------------------ -------------------------------------------
NORMALIZED OR ACTUAL PRECEDING & BASIS
- -------------------------------------- -------------------------------------------
%
FS START FS END % TOTAL $ (1) % TOTAL (1)
DATE DATE OCC REVENUE NCF DSCR OCC REVENUE DSCR
- ----------- --------- ---------- ---------- --------- ---------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
yy/mm yy/mm
List all properties currently in deal with or without information largest to smallest loan
This report should reflect the information provided in the CSSA Property and Loan file
WA $ $ WA WA $ WA
(1) DSCR should match to Operating Statement and is normally calculated using NCF/Debt Service times the allocated loan percentage.
(2) Net change should compare the latest year to the underwriting year
</TABLE>
C-1
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-C1
DELINQUENT LOAN STATUS REPORT
AS OF ____________________
<TABLE>
<CAPTION>
S4 S55 S61 S57 S58 S62 OR S63 P8 P7 P37
- ---------- ----------- ----------- ----------- ------------ ------------ ----------- ----------- -------------
(a) (b)
----------- -------------
SHORT NAME SCHEDULED TOTAL P&I
PROSPECTUS (WHEN PROPERTY SQ FT OR PAID THRU PRINCIPAL ADVANCES TO
ID APPROPRIATE) TYPE CITY STATE UNITS DATE BALANCE DATE
- ---------- ------------ ---------- -------- ------------ ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LOANS IN FORECLOSURE AND NOT REO
90 + DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
Current & at Special Servicer
<CAPTION>
P39 P38 P25 P10 P11 P58 OR P73 P92 OR P96 P93 OR P97
- ----------- ----------- ------------- ------------- ------------- ----------- ------------ ----------- ------------
(c) (d) (c)=a+b+c+d
- ----------- ----------- -------------
OTHER
TOTAL ADVANCES CURRENT
EXPENSES TO (TAXES & TOTAL MONTHLY CURRENT MATURITY LTM NCF LTM DSCR
DATE ESCR0W) EXPOSURE P&I INTEREST RATE DATE DATE LTM NCF (NCF)
- ----------- ----------- ------------ ------------ ------------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LOANS IN FORECLOSURE AND NOT REO
90 + DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
Current & at Special Servicer
FCL - Foreclosure
LTM - Latest 12 Months either Last Normalized Annual, Trailing 12 months or normalized YTD
*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 special servicer - to be provided by a third party.
</TABLE>
C-2
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-C1
DELINQUENT LOAN STATUS REPORT
AS OF ____________________
<TABLE>
<CAPTION>
S4 S55 S61 S57 S58 P74 P75
- ---------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
(f)=P38/P81 (g)=(90*f)-c
------------ ------------
APPRAISAL
SHORT NAME VALUE USING BPO OR LESS USING
PROSPECTUS (WHEN PROPERTY NOI & CAP VALUATION INTERNAL 90% APPR. OR
ID APPROPRIATE) TYPE CITY STATE RATE DATE VALUE** BPO(f)
- ---------- ------------ ----------- --------- --------- ----------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LOANS IN FORECLOSURE AND NOT REO
90 + DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
Current & at Special Servicer
<CAPTION>
P35 P77 P79 P42 P82 P76
- ------------ ----------- ------------- ------------- ------------- ------------ --------------
TOTAL
APPRAISAL EXPECTED
REDUCTION TRANSFER RESOLUTION FCL START FCL SALE WORKOUT
REALIZED DATE DATE DATE DATE STRATEGY COMMENTS
- ------------ ----------- ------------- ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
LOANS IN FORECLOSURE AND NOT REO
90 + DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
Current & at Special Servicer
FCL - Foreclosure
LTM - Latest 12 Months either Last Normalized Annual, Trailing 12 months or normalized YTD
*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 special servicer - to be provided by a third party.
</TABLE>
C-3
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-C1
HISTORICAL LOAN MODIFICATION REPORT
AS OF ____________________
<TABLE>
<CAPTION>
S4 S57 S58 P49 P48 P7* P7* P50*
- ----------- ------------ ------------- ------------- ------------- ------------ ------------ ------------ -------------
BALANCE
MOD/ EXTENSION WHEN SENT BALANCE AT THE
PROSPECTUS EXTENSION PER DOCS OR EFFECT TO SPECIAL EFFECTIVE DATE OF
ID CITY STATE FLAG SERVICER DATE SERVICER REHABILITATION OLD RATE
- ----------- ------------ ----------- ----------- ------------ --------- ----------- ----------------- ---------
<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:
<CAPTION>
P50* P25* P25* P11* P11* P47
- ---------- ---------- ----------- ---------- ----------- ------------ ------------ ----------- ------------ ----------
(2) EST.
FUTURE
TOTAL # INTEREST LOSS
# MTHS MTHS FOR (1) REALIZED TO TRUST $
FOR RATE NEW OLD NEW OLD NEW CHANGE OF LOSS TO (RATE
CHANGE RATE P&I P&I MATURITY MATURITY MOD TRUST $ REDUCTION) COMMENT
- ---------- ---------- --------- --------- ---------- -------- ---------- ----------- --------------- --------
<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:
*The information in these columns is from a particular point in time and should not change on this report once assigned.
Future modifications done on the same loan are additions to the report.
(1) Actual principal loss taken by bonds
(1) Expected future loss due to a rate reduction. This is just an estimate calculated at the time of the modification.
</TABLE>
C-4
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-C1
HISTORICAL LOSS ESTIMATE REPORT (REO-SOLD OR DISCOUNTED PAYOFF)
AS OF ____________________
<TABLE>
<CAPTION>
S4 S55 S61 S57 S58 P45/P7 P75
- ----------- ----------- ------------- ------------ --------------- --------------- ---------- ------------
(c)=b/a (a)
--------------- ----------
RECEIVED LATGEST EFFECT
SHORT NAME FROM APPRAISAL OR DATE OF
PROSPECTUS (WHEN PROPERTY LIQUIDA- BROKERS LIQUIDA-
ID APPROPRIATE) TYPE CITY STATE TION OPINIONS TION
- ----------- ------------ ------------- ---------- ------------ --------------- ------------ ---------
<S> <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:
(b) Servicing Fee Expense is the work out fee charged by the special servicer
<CAPTION>
P45 P7 P37 P39+P38
- ----------- ------------ ------------- --------------- -------------- -------------- ------------ -------------
(b) (d) (e) (f) (g) (h) (i)=d-(f+g+h) (k)=i-e
- ----------- ------------ ------------- --------------- -------------- -------------- ------------ -------------
NET AMT SERVICING
SALES RECEIVED SCHEDULED TOTAL P&I TOTAL FEES ACTUAL LOSSES
PRICE FROM SALE BALANCE ADVANCED EXPENSES EXPENSE NET PROCEEDS PASSED THRU
- ----------- ------------ ------------- --------------- -------------- -------------- ------------- --------------
<S> <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:
(b) Servicing Fee Expense is the work out fee charged by the special servicer
<CAPTION>
(m) (n)=k+m (o)=n/e
- ------------ -------------- --------------- --------------- --------------------
DATE MINOR
LOSS ADJ LOSS % OF
PASSED MINOR ADJ PASSED TOTAL LOSS WITH SCHEDULED
THRU TO TRUST THRU ADJUSTMENT BALANCE
- ------------ -------------- --------------- --------------- --------------------
<S> <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:
(b) Servicing Fee Expense is the work out fee charged by the special servicer
</TABLE>
C-5
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-C1
REO STATUS REPORT
AS OF ---------------------
<TABLE>
<CAPTION>
S4 S55 S61 S57 S58 S62 OR P8 P7 P37 P39 P38
S63 (a) (b) (c)
SHORT NAME PAID ALLOCATED LOAN OTHER
PROSPECTUS (WHEN PROPERTY SQ FT OR THRU AMOUNT OR TOTAL P&I TOTAL ADVANCES
ID APPROPRIATE) TYPE CITY STATE UNITS DATE SCHEDULED LOAN ADVANCES EXPENSES (TAXES &
BALANCE TO DATE TO DATE ESCROW)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REOs that are more than one loan should use the Allocated Loan Amount and prorate all advances and expenses.
(1) Use the following codes: App. - Appraisal, BPO - Brokers Opinion, Int - Internal Value
</TABLE>
P25 P11 P58 OR P73 P93 OR P97
(e)=a+b+c+d (k)
CURRENT
TOTAL MONTHLY MATURITY LTM NCF LTM DSCR
EXPOSURE P&I DATE DATE (NCF)
REOs that are more than one loan should use the Allocated Loan Amount and
prorate all advances and expenses.
(1) Use the following codes: App. - Appraisal, BPO - Brokers Opinion, Int -
Internal Value
C-6
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-C1
REO STATUS REPORT
AS OF -------------------
<TABLE>
<CAPTION>
S4 S55 S61 S57 S58 P74 P75
(f)=(k/j) (g)
APPRAISAL
SHORT NAME VALUE BPO OR APPRAISAL
PROSPECTUS (WHEN PROPERTY CITY STATE VALUATION USING NOI INTERNAL BPO OR
ID APPROPRIATE) TYPE DATE &CAP VALUE INTERNAL
RATE SOURCE** VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REOs that are more than one loan should use the Allocated Loan Amount and prorate all advances and expenses.
(1) Use the following codes: App. - Appraisal, BPO - Brokers Opinion, Int - Internal Value
P35 P77 P82 P79
(h)=(.90*g)-e
TOTAL REO PENDING
LOSS USING APPRAISAL TRANSFER ACQUISITION RESOLUTION COMMENTS
90% APPR. OR REDUCTION DATE DATE DATE
BPO(f) REALIZED
<S> <C> <C> <C> <C> <C>
REOs that are more than one loan should use the Allocated Loan Amount and prorate all advances and expenses.
(1) Use the following codes: App. - Appraisal, BPO - Brokers Opinion, Int - Internal Value
</TABLE>
C-7
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-C1
SERVICER WATCH LIST
AS OF -------------------
<TABLE>
<CAPTION>
S4 S55 S61 S57 S58 P7 P8 P11 P93 P97
PRECEEDING MOST
PROSPECTUS SHORT NAME PROPERTY SCHEDULED PAID FISCAL YR RECENT COMMENT/ACTION TO BE TAKEN
ID (WHEN TYPE CITY STATE LOAN THRU MATURITY DSCR DSCR
APPROPRIATE) BALANCE DATE DATE NCF NCF
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
List all loans on watch list and reason sorted in descending balance order.
Should not include loans that are specially serviced
Total: $
</TABLE>
C-8
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-C1
OPERATING STATEMENT ANALYSIS REPORT
AS OF -------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
PROPERTY OVERVIEW
Prospectus Loan ID
Sch Bal/Paid to Date/Allocated %
Property Name
Property Type
Property Address, City, State
Net Rentable Square Feet
Year Built/Year Renovated
Year of Operations Underwriting 1994 1995 1996 Trailing
Occupancy Rate*
Average Rental Rate
*Occupancy rates are year end or the ending date of the financial statement for the period.
INCOME No. of Mos.
Number of Mos. Prior year Current Yr.
Period Ended Underwriting 1994 1995 1996 97 Trailing** 1996-Base 1996-1995
Statement Classificaation Base List Normalized Normalized Normalized as of / /97 Variance Variance
Rental Income (Category 1)
Rental Income (Category 2)
Rental Income (Category 3)
Pass Through/Escalations
Other Income
Effective 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 Expenses
Advertising & Marketing
Professional Fees
Other Expenses
Ground Rent
Total Operating Expenses $0.00 $0.00 $0.00 $0.00 $0.00 % %
Operating Expense Rate
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
DSCR: (NOI/Debt Service)
(1)DSCR:(after reserves/Cap exp.)
Source of Financial Data:
(i.e. operating statements, financial statements, tax return, other)
</TABLE>
Notes and Assumptions:
- --------------------------------------------------------------------------------
The years shown above will roll always showing a three year history. 1996 is the
current year financials; 1995 is the prior year financials.
This report may vary depending on the property type and because of the way
information may vary in each 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 cashflow
Hotel: 1) Room Revenue 2) Food/Beverage Nursing Home: 1)Private 2) Medicaid
3) Medicare
INCOME: COMMENT
EXPENSE: COMMENT
CAPITAL ITEMS: COMMENT
(1) Used in the Comparative Financial Status Report
C-9
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-C1
FORM OF NOI ADJUSTMENT WORKSHEET FOR "YEAR"
AS OF -------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
PROPERTY OVERVIEW
LB Control Number
Current Balance/Paid to Date
Property Name
Property Type
Property Address, City, State
Net Rentable Square Feet
Year Built/Year Renovated
Year of Operations BORROWER ADJUSTMENT NORMALIZED
Occupancy Rate*
Average Rental Rate
* Occupancy rates are year end or the ending date of the financial statement for the period.
INCOME:
Number of Mos. Annualized "Year"
Period Ended Borrower Adjustment Normalized
Statement Classification Actual
Rental Income (Category 1)
Rental Income (Category 2)
Rental Income (Category 3)
Pass Through/Escalations
Other Income
Effective Gross Income $0.00 $0.00 $0.00
Normalized - Full year financial statements that have been reviewed by the Servicer.
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
Operating Expense Ratio
Net Operating Income $0.00 $0.00 $0.00
Leasing Commissions
Tenant Improvements
Replacement Reserve
Total Capital Items $0.00 $0.00 $0.00
N.O.I. After Capital Items $0.00 $0.00 $0.00
Debt Service (per Servicer) $0.00 $0.00 $0.00
Cash Flow after debt service $0.00 $0.00 $0.00
(1)DSCR: (NOI/Debt Service)
DSCR: (after reserves/Cap exp.)
Source of Financial Data:
(i.e. operating statements, financial statements, tax return, other)
</TABLE>
Notes and Assumptions:
- --------------------------------------------------------------------------------
This report should be completed by the Servicer for any "Normalization" of
the Borrower's numbers.
The "Normalized" column is used in the Operating Statement Analysis Report.
This report may vary depending on the property type and because of the way
information may vary in each borrower's statement.
INCOME: COMMENTS
EXPENSE: COMMENTS
CAPITAL ITEMS: COMMENTS
(1) Used in the Comparative Financial Report.
C-10
<PAGE>
<TABLE>
<CAPTION>
ANNEX D
[A graphic was omitted
from the top of each page
of this Annex that consisted
of the corporate logo of ------------------------------------------
Norwest Bank Minnesota, For Additional Information, please contact
National Association.] CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. Leslie Gaskill
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (212) 515-5254
NORWEST BANK MINNESOTA, N.A. SERIES 1999-C1 Reports Available on the World Wide Web
CORPORATE TRUST SERVICES @ www.ctslink.com/cmbs
3 NEW YORK PLAZA, 15TH FLOOR ------------------------------------------
NEW YORK, NY 10004 PAYMENT DATE: 11/18/1999
RECORD DATE: 10/29/1999
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION DATE STATEMENT
TABLE OF CONTENTS
======================================================================
STATEMENT SECTIONS PAGE(S)
------------------ -------
<S> <C>
Certificate Distribution Detail 2
Certificate Factor Detail 3
Reconciliation Detail 4
Other Required Information 5
Ratings Detail 6
Current Mortgage Loan and Property Stratification Tables 7 - 9
Mortgage Loan Detail 10
Principal Prepayment Detail 11
Historical Detail 12
Delinquency Loan Detail 13
Specially Serviced Loan Detail 14 - 15
Modified Loan Detail 16
Liquidated Loan Detail 17
======================================================================
UNDERWRITER UNDERWRITER SERVICER SPECIAL SERVICER
============================== ================================= ================================= ==============================
Credit Suisse First Boston Morgan Stanley & Co. Incorporated Wells Fargo Bank, National Lennar Partners, Inc.
Corporation 1585 Broadway Association 700 N.W. 107th Avenue
Eleven Madison Avenue New York, NY 10036 555 Montgomery Street, 17th Floor Miami, FL 33172
New York, NY 10010-3629 San Francisco, CA 94111
Contact: General Information
Contact: Louise Fogarty Number Contact: Stewart McAdams Contact: Steve Bruha
Phone Number: (212) 325-3507 Phone Number: (212) 761-4700 Phone Number: (415) 396-7208 Phone Number: (305) 229-6614
============================== ================================= ================================= ==============================
This report has been compiled from information provided to Norwest by various third parties, which may include the Servicer, Master
Servicer, Special Servicer and others. Norwest has not independently confirmed the accuracy of information received from these third
parties and assumes no duty to do so. Norwest expressly disclaims any responsibility for the accuracy or completeness of information
furnished by third parties.
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A. Page 1 of 17
</TABLE>
D-1
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------
For Additional Information, please contact
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. Leslie Gaskill
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (212) 515-5254
NORWEST BANK MINNESOTA, N.A. SERIES 1999-C1 Reports Available on the World Wide Web
CORPORATE TRUST SERVICES @ www.ctslink.com/cmbs
3 NEW YORK PLAZA, 15TH FLOOR ------------------------------------------
NEW YORK, NY 10004 PAYMENT DATE: 11/18/1999
RECORD DATE: 10/29/1999
- ------------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE DISTRIBUTION DETAIL
====================================================================================================================================
Collateral
Support
Pass- Deficit Current
Through Original Beginning Principal Interest Prepayment Allocation/ Total Ending Subordination
Class CUSIP Rate Balance Balance Distribution Distribution Penalties (Reimb) Distribution Balance Level (1)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A-1 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
A-2 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
B 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
C 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
D 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
E 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
F 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
G 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
H 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
I 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
J 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
K 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
V-1 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
V-2 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
LR 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
R 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
====================================================================================================================================
Totals 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
====================================================================================================================================
==============================================================================================
Pass- Original Beginning Ending
Through Notional Notional Interest Prepayment Total Notional
Class CUSIP Rate Amount Amount Distribution Penalties Distribution Amount
==============================================================================================
A-X 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
==============================================================================================
(1) Calculated by taking (A) the sum of the ending certificate balance of all classes less (B) the sum of (i) the ending certificate
balance of the designated class and (ii) the ending certificate balance of all classes which are not subordinate to the designated
class and dividing the result by (A).
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A. Page 2 of 17
</TABLE>
D-2
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------
For Additional Information, please contact
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. Leslie Gaskill
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (212) 515-5254
NORWEST BANK MINNESOTA, N.A. SERIES 1999-C1 Reports Available on the World Wide Web
CORPORATE TRUST SERVICES @ www.ctslink.com/cmbs
3 NEW YORK PLAZA, 15TH FLOOR ------------------------------------------
NEW YORK, NY 10004 PAYMENT DATE: 11/18/1999
RECORD DATE: 10/29/1999
- ------------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE FACTOR DETAIL
==============================================================================================================================
Collateral Support
Beginning Principal Interest Prepayment Deficit Ending
Class CUSIP Balance Distribution Distribution Penalties Allocation/(Reimb) Balance
==============================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
A-1 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
A-2 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
B 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
C 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
D 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
E 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
F 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
G 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
H 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
I 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
J 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
K 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
V-1 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
V-2 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
LR 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
R 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
==============================================================================================================================
====================================================================================
Beginning Ending
Notional Interest Prepayment Notional
Class CUSIP Amount Distribution Penalties Amount
====================================================================================
A-X 0.00000000 0.00000000 0.00000000 0.00000000
====================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N. A. Page 3 of 17
</TABLE>
D-3
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------
For Additional Information, please contact
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. Leslie Gaskill
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (212) 515-5254
NORWEST BANK MINNESOTA, N.A. SERIES 1999-C1 Reports Available on the World Wide Web
CORPORATE TRUST SERVICES @ www.ctslink.com/cmbs
3 NEW YORK PLAZA, 15TH FLOOR ------------------------------------------
NEW YORK, NY 10004 PAYMENT DATE: 11/18/1999
RECORD DATE: 10/29/1999
- ------------------------------------------------------------------------------------------------------------------------------------
RECONCILIATION DETAIL
ADVANCE SUMMARY SERVICING FEE BREAKDOWNS
<S> <C> <C> <C>
P & I Advances Outstanding 0.00 Current Period Accrued Servicing Fees 0.00
Property Protection Advances Outstanding 0.00 Less Delinquent Servicing Fees 0.00
Plus Additional Servicing Fees 0.00
Reimbursement for Interest on Advances 0.00 Less Reductions to Servicing Fees 0.00
paid from general collections Plus Servicing Fees for Delinquent Payments Received 0.00
Plus Adjustments for Prior Servicing Calculation 0.00
Total Servicing Fees Collected 0.00
CERTIFICATE INTEREST RECONCILIATION
====================================================================================================================================
Uncovered Certificate Unpaid Optimal
Accrued Prepayment Deferred Interest Interest Interest Appraisal
Certificate Interest Indemnification Interest Shortfall Distribution Shortfall Interest Reduction
Class Interest Shortfall Expenses Amount Amount Amount Amount Distribution Amount
====================================================================================================================================
A-1 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-2 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-X 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
C 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
D 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
E 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
F 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
G 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
H 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
I 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
J 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
K 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
V-1 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
V-2 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
====================================================================================================================================
Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A. Page 4 of 17
</TABLE>
D-4
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------
For Additional Information, please contact
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. Leslie Gaskill
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (212) 515-5254
NORWEST BANK MINNESOTA, N.A. SERIES 1999-C1 Reports Available on the World Wide Web
CORPORATE TRUST SERVICES @ www.ctslink.com/cmbs
3 NEW YORK PLAZA, 15TH FLOOR ------------------------------------------
NEW YORK, NY 10004 PAYMENT DATE: 11/18/1999
RECORD DATE: 10/29/1999
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER REQUIRED INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
|
Available Distribution Amount 0.00 | Appraisal Reductions
| =============================================
| Appraisal Date Appraisal
Aggregate Number of Outstanding Loans 0 | Loan Reduction Reduction
Aggregate Unpaid Principal Balance of Loans 0.00 | Number Effected Effected
Aggregate Stated Principal Balance of Loans 0.00 | =============================================
|
| NONE
Aggregate Amount of Servicing Fee 0.00 |
Aggregate Amount of Seller Servicing Fee 0.00 |
Aggregate Amount of Special Servicing Fee 0.00 |
Aggregate Amount of Trustee Fee 0.00 |
|
Specially Serviced Loans not Delinquent |
|
Number of Outstanding Loans 0 |
|
Aggregate Unpaid Principal Balance 0.00 |
|
Interest Reserve Account |
|
Deposits 0.00 |
|
Withdrawals 0.00 |
|
|
| =============================================
| TOTAL
| =============================================
|
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A. Page 5 of 17
</TABLE>
D-5
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------
For Additional Information, please contact
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. Leslie Gaskill
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (212) 515-5254
NORWEST BANK MINNESOTA, N.A. SERIES 1999-C1 Reports Available on the World Wide Web
CORPORATE TRUST SERVICES @ www.ctslink.com/cmbs
3 NEW YORK PLAZA, 15TH FLOOR ------------------------------------------
NEW YORK, NY 10004 PAYMENT DATE: 11/18/1999
RECORD DATE: 10/29/1999
- ------------------------------------------------------------------------------------------------------------------------------------
RATINGS DETAIL
=============================================================================
Original Ratings Current Ratings (1)
Class CUSIP --------------------------- ---------------------------
DCR Fitch Moody's S&P DCR Moody's Fitch S&P
=============================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A-1
A-2
A-X
B
C
D
E
F
G
H
I
J
K
=============================================================================
NR - Designates that the class was not rated by the above agency at the time of original issuance.
X - Designates that the above rating agency did not rate any classes in this transaction at the time of
original issuance.
N/A - Data not available this period.
1) For any class not rated at the time of original issuance by any particular rating agency, no request has been made
subsequent to issuance to obtain rating information, if any, from such rating agency. The current ratings were obtained
directly from the applicable rating agency within 30 days of the payment date listed above. The ratings may have changed
since they were obtained. Because the ratings may have changed, you may want to obtain current ratings directly from the
rating agencies.
Duff & Phelps Credit Rating Co. Fitch IBCA, Inc. Moody's Investors Service Standard & Poor's Rating Services
55 East Monroe Street One State Street Plaza 99 Church Street 26 Broadway
Chicago, Illinois 60603 New York, New York 10004 New York, New York 10007 New York, New York 10004
(312) 368-3100 (212) 908-0500 (212) 553-0300 (212) 208-8000
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A. Page 6 of 17
</TABLE>
D-6
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------
For Additional Information, please contact
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. Leslie Gaskill
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (212) 515-5254
NORWEST BANK MINNESOTA, N.A. SERIES 1999-C1 Reports Available on the World Wide Web
CORPORATE TRUST SERVICES @ www.ctslink.com/cmbs
3 NEW YORK PLAZA, 15TH FLOOR ------------------------------------------
NEW YORK, NY 10004 PAYMENT DATE: 11/18/1999
RECORD DATE: 10/29/1999
- ------------------------------------------------------------------------------------------------------------------------------------
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
SCHEDULED BALANCE STATE (3)
========================================================= ======================================================
% of % of
Scheduled # of Scheduled Agg. WAM Weighted # of Scheduled Agg. WAM Weighted
Balance Loans Balance Bal. (2) WAC Avg DSCR (1) State Props. Balance Bal. (2) WAC Avg DSCR (1)
========================================================= ======================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
======================================================
Totals
======================================================
=========================================================
Totals
=========================================================
See footnotes on last page of this section.
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A. Page 7 of 17
</TABLE>
D-7
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------
For Additional Information, please contact
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. Leslie Gaskill
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (212) 515-5254
NORWEST BANK MINNESOTA, N.A. SERIES 1999-C1 Reports Available on the World Wide Web
CORPORATE TRUST SERVICES @ www.ctslink.com/cmbs
3 NEW YORK PLAZA, 15TH FLOOR ------------------------------------------
NEW YORK, NY 10004 PAYMENT DATE: 11/18/1999
RECORD DATE: 10/29/1999
- ------------------------------------------------------------------------------------------------------------------------------------
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
DEBT SERVICE COVERAGE RATIO PROPERTY TYPE (3)
=============================================================== ===============================================================
% of Weighted % of Weighted
Debt Service # of Scheduled Agg. WAM Avg Property # of Scheduled Agg. WAM Avg
Coverage Ratio Loans Balance Bal. (2) WAC DSCR (1) Type Props. Balance Bal. (2) WAC DSCR (1)
=============================================================== ===============================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
=============================================================== ===============================================================
Totals Totals
=============================================================== ===============================================================
NOTE RATE SEASONING
=============================================================== ===============================================================
% of Weighted % of Weighted
Note # of Scheduled Agg. WAM Avg # of Scheduled Agg. WAM Avg
Rate Loans Balance Bal. (2) WAC DSCR (1) Seasoning Loans Balance Bal. (2) WAC DSCR (1)
=============================================================== ===============================================================
=============================================================== ===============================================================
Totals Totals
=============================================================== ===============================================================
See footnotes on last page of this section.
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A. Page 8 of 17
</TABLE>
D-8
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------
For Additional Information, please contact
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. Leslie Gaskill
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (212) 515-5254
NORWEST BANK MINNESOTA, N.A. SERIES 1999-C1 Reports Available on the World Wide Web
CORPORATE TRUST SERVICES @ www.ctslink.com/cmbs
3 NEW YORK PLAZA, 15TH FLOOR ------------------------------------------
NEW YORK, NY 10004 PAYMENT DATE: 11/18/1999
RECORD DATE: 10/29/1999
- ------------------------------------------------------------------------------------------------------------------------------------
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
ANTICIPATED REMAINING TERM (ARD AND BALLOON LOANS) REMAINING STATED TERM (FULLY AMORTIZING LOANS)
=============================================================== ===============================================================
Anticipated % of Weighted Remaining % of Weighted
Remaining # of Scheduled Agg. WAM Avg Stated # of Scheduled Agg. WAM Avg
Term (2) Loans Balance Bal. (2) WAC DSCR (1) Term Loans Balance Bal. (2) WAC DSCR (1)
=============================================================== ===============================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
=============================================================== ===============================================================
Totals Totals
=============================================================== ===============================================================
REMAINING AMORTIZATION TERM (ARD AND BALLOON LOANS) AGE OF MOST RECENT NOI
=============================================================== ===============================================================
Remaining % of Weighted % of Weighted
Amortization # of Scheduled Agg. WAM Avg Age of Most # of Scheduled Agg. WAM Avg
Term Loans Balance Bal. (2) WAC DSCR (1) Recent NOI Loans Balance Bal. (2) WAC DSCR (1)
=============================================================== ===============================================================
=============================================================== ===============================================================
Totals Totals
=============================================================== ===============================================================
(1) Debt Service Coverage Ratios are updated periodically as new NOI figures become available from borrowers on an asset level. In
all cases the most current DSCR provided by the Servicer is used. To the extent that no DSCR is provided by the Servicer,
information from the offering document is used. The Trustee makes no representations as to the accuracy of the data provided by the
borrower for this calculation.
(2) Anticipated Remaining Term and WAM are each calculated based upon the term from the current month to the earlier of the
Anticipated Repayment Date, if applicable, and the maturity date.
(3) Data in this table was calculated by allocating pro- rata the current loan information to the properties based upon the Cut- off
Date Balance of the related mortgage loan as disclosed in the offering document.
Note: (i) "Scheduled Balance" has the meaning assigned thereto in the CMSA Standard Information Package.
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A. Page 9 of 17
</TABLE>
D-9
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------
For Additional Information, please contact
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. Leslie Gaskill
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (212) 515-5254
NORWEST BANK MINNESOTA, N.A. SERIES 1999-C1 Reports Available on the World Wide Web
CORPORATE TRUST SERVICES @ www.ctslink.com/cmbs
3 NEW YORK PLAZA, 15TH FLOOR ------------------------------------------
NEW YORK, NY 10004 PAYMENT DATE: 11/18/1999
RECORD DATE: 10/29/1999
- ------------------------------------------------------------------------------------------------------------------------------------
MORTGAGE LOAN DETAIL
===========================================================================================================================
Anticipated Neg. Beginning
Loan Property Interest Principal Gross Repayment Maturity Amort Scheduled
Number ODCR Type (1) City State Payment Payment Coupon Date Date (Y/N) Balance
===========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
===========================================================================================================================
TOTALS
===========================================================================================================================
============================================================
Ending Paid Appraisal Appraisal Res. Mod.
Scheduled Thru Reduction Reduction Strat. Code
Balance Date Date Amount (2) (3)
============================================================
============================================================
============================================================
(1) Property Type Code (2) Resolution Strategy Code (3) Modification Code
---------------------- ---------------------------- ---------------------
MF - Multi-Family OF - Office 1 - Modification 6 - DPO 10 - Deed In Lieu Of 1 - Maturity Date
RT - Retail MU - Mixed Use 2 - Foreclosure 7 - REO Foreclosure Extension
HC - Health Care LO - Lodging 3 - Bankruptcy 8 - Resolved 11 - Full Payoff 2 - Amortization Change
IN - Industrial SS - Self Storage 4 - Extension 9 - Pending Return 12 - Reps and Warranties 3 - Principal Write-Off
WH - Warehouse OT - Other 5 - Note Sale to Master Servicer 13 - Other or TBD 4 - Combination
MH - Mobile Home Park
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A. Page 10 of 17
</TABLE>
D-10
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------
For Additional Information, please contact
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. Leslie Gaskill
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (212) 515-5254
NORWEST BANK MINNESOTA, N.A. SERIES 1999-C1 Reports Available on the World Wide Web
CORPORATE TRUST SERVICES @ www.ctslink.com/cmbs
3 NEW YORK PLAZA, 15TH FLOOR ------------------------------------------
NEW YORK, NY 10004 PAYMENT DATE: 11/18/1999
RECORD DATE: 10/29/1999
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL PREPAYMENT DETAIL
================================================================================================================================
Offering
Document Principal Prepayment Amount Prepayment Penalties
Loan Cross- ----------------------------------- ------------------------------------------------------------------------
Number Reference Payoff Amount Curtailment Amount Prepayment Premium Yield Protection Payment Yield Maintenance Charge
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
================================================================================================================================
Totals
================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A. Page 11 of 17
</TABLE>
D-11
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------
For Additional Information, please contact
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. Leslie Gaskill
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (212) 515-5254
NORWEST BANK MINNESOTA, N.A. SERIES 1999-C1 Reports Available on the World Wide Web
CORPORATE TRUST SERVICES @ www.ctslink.com/cmbs
3 NEW YORK PLAZA, 15TH FLOOR ------------------------------------------
NEW YORK, NY 10004 PAYMENT DATE: 11/18/1999
RECORD DATE: 10/29/1999
- ------------------------------------------------------------------------------------------------------------------------------------
HISTORICAL DETAIL
====================================================================================================================================
Delinquencies Prepayments Rate and Maturities
- ------------------------------------------------------------------------------------ ---------------------- ----------------------
90 Days
Distribution 30-59 Days 60-89 Days or More Foreclosure REO Modifications Curtailments Payoff Next Weighted Avg.
Date # Balance # Balance # Balance # Balance # Balance # Balance # Amount # Amount Coupon Remit WAM
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
Note: Foreclosure and REO Totals are excluded from the delinquencies aging categories.
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A. Page 12 of 17
</TABLE>
D-12
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------
For Additional Information, please contact
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. Leslie Gaskill
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (212) 515-5254
NORWEST BANK MINNESOTA, N.A. SERIES 1999-C1 Reports Available on the World Wide Web
CORPORATE TRUST SERVICES @ www.ctslink.com/cmbs
3 NEW YORK PLAZA, 15TH FLOOR ------------------------------------------
NEW YORK, NY 10004 PAYMENT DATE: 11/18/1999
RECORD DATE: 10/29/1999
- ------------------------------------------------------------------------------------------------------------------------------------
DELINQUENCY LOAN DETAIL
====================================================================================================================================
Offering
Document # of Paid Current Outstanding Status of Resolution Servicing
Loan Cross- Months Through P & I P & I Mortgage Strategy Transfer
Number Reference Delinq. Date Advances Advances** Loan (1) Code (2) Date
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
Totals
====================================================================================================================================
=============================================================================
Current Outstanding
Foreclosure Servicing Servicing Bankruptcy REO
Date Advances Advances Date Date
=============================================================================
=============================================================================
=============================================================================
(1) Status of Mortgage Loan (2) Resolution Strategy Code
--------------------------- ----------------------------
1 - Modification 6 - DPO 10 - Deed In Lieu Of 1 - Modification 7 - REO
2 - Foreclosure 7 - REO Foreclosure 2 - Foreclosure 8 - Resolved
3 - Bankruptcy 8 - Resolved 11 - Full Payoff 3 - Bankruptcy 9 - Pending Return
4 - Extension 9 - Pending Return 12 - Reps and Warranties 4 - Extension to Master Servicer
5 - Note Sale to Master Servicer 13 - Other or TBD 5 - Note Sale 10 - Deed In Lieu Of
6 - DPO Foreclosure
** Outstanding P & I Advances include the current period advance
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A. Page 13 of 17
</TABLE>
D-13
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------
For Additional Information, please contact
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. Leslie Gaskill
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (212) 515-5254
NORWEST BANK MINNESOTA, N.A. SERIES 1999-C1 Reports Available on the World Wide Web
CORPORATE TRUST SERVICES @ www.ctslink.com/cmbs
3 NEW YORK PLAZA, 15TH FLOOR ------------------------------------------
NEW YORK, NY 10004 PAYMENT DATE: 11/18/1999
RECORD DATE: 10/29/1999
- ------------------------------------------------------------------------------------------------------------------------------------
SPECIALLY SERVICED LOAN DETAIL - PART 1
===================================================================================================================================
Offering
Document Servicing Resolution
Distribution Loan Cross- Transfer Strategy Scheduled Property Interest Actual
Date Number Reference Date Code (1) Balance Type (2) State Rate Balance
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
===================================================================================================================================
=============================================================
Net Remaining
Operating NOI Note Maturity Amortization
Income Date DSCR Date Date Term
=============================================================
=============================================================
(1) Resolution Strategy Code (2) Property Type Code
---------------------------- ----------------------
1 - Modification 7 - REO MF - Multi-Family OF - Office
2 - Foreclosure 8 - Resolved RT - Retail MU - Mixed Use
3 - Bankruptcy 9 - Pending Return HC - Health Care LO - Lodging
4 - Extension to Master Servicer IN - Industrial SS - Self Storage
5 - Note Sale 10 - Deed In Lieu Of WH - Warehouse OT - Other
6 - DPO Foreclosure MH - Mobile Home Park
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A. Page 14 of 17
</TABLE>
D-14
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------
For Additional Information, please contact
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. Leslie Gaskill
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (212) 515-5254
NORWEST BANK MINNESOTA, N.A. SERIES 1999-C1 Reports Available on the World Wide Web
CORPORATE TRUST SERVICES @ www.ctslink.com/cmbs
3 NEW YORK PLAZA, 15TH FLOOR ------------------------------------------
NEW YORK, NY 10004 PAYMENT DATE: 11/18/1999
RECORD DATE: 10/29/1999
- ------------------------------------------------------------------------------------------------------------------------------------
SPECIALLY SERVICED LOAN DETAIL - PART 2
====================================================================================================================================
Offering
Document Resolution Site Other REO
Distribution Loan Cross- Strategy Inspection Phase 1 Appraisal Appraisal Property
Date Number Reference Code (1) Date Date Date Value Revenue Comment
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
(1) Resolution Strategy Code
----------------------------
1 - Modification 6 - DPO 10 - Deed In Lieu Of
2 - Foreclosure 7 - REO Foreclosure
3 - Bankruptcy 8 - Resolved 11 - Full Payoff
4 - Extension 9 - Pending Return 12 - Reps and Warranties
5 - Note Sale to Master Servicer 13 - Other or TBD
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A. Page 15 of 17
</TABLE>
D-15
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------
For Additional Information, please contact
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. Leslie Gaskill
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (212) 515-5254
NORWEST BANK MINNESOTA, N.A. SERIES 1999-C1 Reports Available on the World Wide Web
CORPORATE TRUST SERVICES @ www.ctslink.com/cmbs
3 NEW YORK PLAZA, 15TH FLOOR ------------------------------------------
NEW YORK, NY 10004 PAYMENT DATE: 11/18/1999
RECORD DATE: 10/29/1999
- ------------------------------------------------------------------------------------------------------------------------------------
MODIFIED LOAN DETAIL
====================================================================================================================================
Offering
Loan Document Pre-Modification
Number Cross-Reference Balance Modification Date Modification Description
====================================================================================================================================
<S> <C> <C> <C> <C>
====================================================================================================================================
Total
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A. Page 16 of 17
</TABLE>
D-16
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------
For Additional Information, please contact
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. Leslie Gaskill
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (212) 515-5254
NORWEST BANK MINNESOTA, N.A. SERIES 1999-C1 Reports Available on the World Wide Web
CORPORATE TRUST SERVICES @ www.ctslink.com/cmbs
3 NEW YORK PLAZA, 15TH FLOOR ------------------------------------------
NEW YORK, NY 10004 PAYMENT DATE: 11/18/1999
RECORD DATE: 10/29/1999
- ------------------------------------------------------------------------------------------------------------------------------------
LIQUIDATED LOAN DETAIL
=================================================================================================================================
Gross
Proceeds
Final Recovery Offering as a % of Aggregate
Loan Determination Document Appraisal Appraisal Actual Gross Actual Liquidation
Number Date Cross-Reference Date Value Balance Proceeds Balance Expenses*
=================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
=================================================================================================================================
Current Total
=================================================================================================================================
Cumulative Total
=================================================================================================================================
===========================================================
Net
Net Proceeds Repurchased
Liquidation as a % of Realized by Seller
Proceeds Actual Balance Loss (Y/N)
===========================================================
===========================================================
===========================================================
===========================================================
* Aggregate liquidation expenses also include outstanding P & I advances and unpaid fees (servicing, trustee, etc.).
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A. Page 17 of 17
</TABLE>
D-17
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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 1999-C1 (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, Cedelbank or Euroclear. The Global Securities
will be tradable as home market instruments in both the European and U.S.
domestic markets. Initial settlement and all secondary trades will settle in
same day funds. 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 Cedelbank 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 Cedelbank or Euroclear and DTC
Participants holding Certificates will be effected on a
delivery-against-payment basis through the respective Depositories of Cedelbank
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, Cedelbank 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 Cedelbank 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 Cedelbank and/or Euroclear Participants. Secondary market
trading between Cedelbank Participants or Euroclear Participants will be
settled using the procedures applicable to conventional eurobonds in same-day
funds.
Trading between DTC seller and Cedelbank or Euroclear purchaser. When
Global Securities are to be transferred from the account of a DTC Participant
to the account of a Cedelbank Participant or a Euroclear Participant, the
purchaser will send instructions to Cedelbank or Euroclear through a
E-1
<PAGE>
Cedelbank Participant or Euroclear Participant at least one business day prior
to settlement. Cedelbank 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 Cedelbank
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 Cedelbank or Euroclear cash debit will be valued instead as of the actual
settlement date.
Cedelbank 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 Cedelbank or Euroclear. Under
this approach, they may take on credit exposure to Cedelbank or Euroclear until
the Global Securities are credited to their accounts one day later.
As an alternative, if Cedelbank or Euroclear has extended a line of credit
to them, Cedelbank 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, Cedelbank 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 Cedelbank 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 Cedelbank 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 Cedelbank or Euroclear seller and DTC purchaser. Due to
time zone differences in their favor, Cedelbank 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 Cedelbank or Euroclear through a Cedelbank Participant or
Euroclear Participant at least one business day prior to settlement. In these
cases, Cedelbank 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 Cedelbank
Participant or Euroclear Participant the following day, and receipt of the cash
proceeds in the Cedelbank 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 Cedelbank 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 Cedelbank
Participant's or Euroclear Participant's account would instead be valued as of
the actual settlement date. Finally, day traders that use Cedelbank or
Euroclear and that purchase Global Securities from DTC Participants for
delivery to Cedelbank 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 Cedelbank or Euroclear for one day (until the
purchase side of the day trade is reflected in their Cedelbank 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 Cedelbank 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 Cedelbank Participant or
Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A Certificate Owner of Global Securities holding securities through
Cedelbank 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). Except as provided below, Form W-8 and Form 1001 are
effective for three calendar years and Form 4224 is effective for one calendar
year.
Final withholding regulations (the "New Regulations") effective January 1,
2001 affect the documentation required from non-U.S. Persons having validly
existing IRS Forms, such as IRS Form W-8, 1001 or 4224. The New Regulations
replace a number of current tax certification forms (including IRS Forms W-9,
1001 and 4224, as discussed above) with a new series of IRS Forms W-8 and
generally standardize the period of time for which withholding agents can rely
on such forms (although certain of the new forms may remain valid indefinitely
if the beneficial owner provides a United States taxpayer identification number
and the information on the form does not change). Existing forms and statements
will remain valid until the earlier of their expiration or December 31, 2000.
E-3
<PAGE>
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 includible 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-4
<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 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 ("MBS") 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 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 COM- MISSION 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 October 12, 1999.
<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 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, as amended, 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.
1
<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, as
amended, 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.
2
<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.
3
<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, failure to
perform a cleanup required for 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 become 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 participated 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 CERTIFICATES
Holders of Residual Certificates will be required to report on their
federal income tax returns as ordinary income their pro rata share of the
taxable income of the 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 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
Certificates may be limited in their ability to deduct servicing fees and other
expenses of the REMIC. In addition, Residual Certificates are subject to
certain restrictions on transfer. Because of the special tax treatment of
Residual 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,
or may be negative. 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.
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.
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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 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
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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 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
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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
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.
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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; (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;
(vii) 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;
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(viii) 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;
(ix) 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
(x) 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. 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
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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 ("MBS"). Each
such mortgage loan, Installment Contract, participation interest or MBS 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 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 required 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. Recent amendments to CERCLA attempt to address
the judicial inconsistency by listing permissible actions that may be
undertaken by a lender holding security in a contaminated facility without
exceeding the bounds of the secured-creditor exemption subject to certain
conditions. In addition, under the amendments, a lender continues to be
protected from CERCLA liability as an "owner or operator" after foreclosure as
long as it seeks to divest itself of the facility at the earliest practicable
commercially reasonable time on commercially reasonable terms, taking into
account market conditions and legal and regulatory requirements. However, the
protections afforded lenders under the amendments are themselves subject to
terms and conditions that have not been clarified by the courts. Moreover, the
CERCLA secured-creditor exemption does not necessarily affect the potential for
liability in actions under other federal or state laws which may impose
liability on "owners or operators" but do not incorporate the secured-creditor
exemption.
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.
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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.
RIGHTS OF REDEMPTION
The purposes of a foreclosure action are to enable the mortgagee to
realize upon its security and to bar the mortgagor, and all persons who have an
interest in the property which is subordinate to the mortgage being foreclosed,
from exercise of their "equity of redemption." The doctrine of equity of
redemption provides that, until the property covered by a mortgage has been
sold in accordance with a properly conducted foreclosure and foreclosure sale,
those having an interest which is subordinate to that of the foreclosing
mortgagee have an equity of redemption and may redeem the property by paying
the entire debt with interest. In addition, in some states, when a foreclosure
action has been commenced, the redeeming party must pay certain costs of such
action. Those having an equity of redemption must generally be made parties and
joined in the foreclosure proceeding in order for their equity of redemption to
be cut off and terminated.
The equity of redemption is generally a common-law (non-statutory) right
which exists prior to completion of the foreclosure, is not waivable by the
mortgagor, must be exercised prior to foreclosure sale and should be
distinguished from the post-sale statutory rights of redemption. In some
states, after sale pursuant to a deed of trust or foreclosure of a mortgage,
the mortgagor and foreclosed junior lienors are given a statutory period in
which to redeem the property from the foreclosure sale. In some states,
statutory redemption may occur only upon payment of the foreclosure sale price.
In other states, redemption may be authorized if the former mortgagor 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
exercise of a right of redemption would defeat the title of any purchaser from
a foreclosure sale or sale under a deed of trust. Consequently, the practical
effect of the redemption right is to force the lender to maintain the property
and pay the expenses of ownership until the redemption period has expired. In
some states, a post-sale statutory right of redemption may exist following a
judicial foreclosure, but not following a trustee's sale under a deed of trust.
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Under the REMIC Regulations currently in effect, property acquired by
foreclosure generally must not be held beyond the close of the third calendar
year following the year of acquisition. With respect to a series of
Certificates for which an election is made to qualify the Trust Fund or a part
thereof as a REMIC, the Agreement will permit foreclosed property to be held
beyond the close of such third calendar year if the Trustee receives (i) an
extension from the Internal Revenue Service or (ii) an opinion of counsel to
the effect that holding such property for such period is permissible under the
REMIC Regulations.
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.
Mortgage Loans may be secured by a mortgage on a ground lease. Leasehold
mortgages are subject to certain risks not associated with mortgage loans
secured by the fee estate of the mortgagor. The most significant of these risks
is that the ground lease creating the leasehold estate could terminate, leaving
the leasehold mortgagee without its security. The ground lease may terminate
if, among other reasons, the ground lessee breaches or defaults in its
obligations under the ground lease or there is a bankruptcy of the ground
lessee or the ground lessor. This risk may be minimized if the ground lease
contains certain provisions protective of the mortgagee, but the ground leases
that secure Mortgage Loans may not contain some of these protective provisions,
and mortgages may not contain the other protections discussed in the next
paragraph. Protective ground lease provisions include the right of the
leasehold mortgagee to receive notices from the ground lessor of any defaults
by the mortgagor; the right to cure such defaults, with adequate cure periods;
if a default is not susceptible of cure by the leasehold mortgagee, the right
to acquire the leasehold estate through foreclosure or otherwise; the ability
of the ground lease to be assigned to and by the leasehold mortgagee or
purchaser at a foreclosure sale and for the concomitant release of the ground
lessee's liabilities thereunder; and the right of the leasehold mortgagee to
enter into a new ground lease with the ground lessor on the same terms and
conditions as the old ground lease in the event of a termination thereof.
In addition to the foregoing protections, a leasehold mortgagee may
require that the ground lease or leasehold mortgage prohibit the ground lessee
from treating the ground lease as terminated in the event of the ground
lessor's bankruptcy and rejection of the ground lease by the trustee for the
debtor-ground lessor. As further protection, a leasehold mortgage may provide
for the assignment of the debtor-ground lessee's right to reject a lease
pursuant to Section 365 of the Bankruptcy Reform Act of 1978, as amended (11
U.S.C.) (the "Bankruptcy Code"), although the enforceability of such clause has
not been established. Without the protections described in the foregoing
paragraph, a leasehold mortgagee may lose the
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collateral securing its leasehold mortgage. In addition, terms and conditions
of a leasehold mortgage are subject to the terms and conditions of the ground
lease. Although certain rights given to a ground lessee can be limited by the
terms of a leasehold mortgage, the rights of a ground lessee or a leasehold
mortgagee with respect to, among other things, insurance, casualty and
condemnation will be governed by the provisions of the ground lease.
BANKRUPTCY LAWS
The Bankruptcy Code and related state laws may interfere with or affect
the ability of a lender to realize upon collateral and/or to enforce a
deficiency judgment. For example, under the Bankruptcy Code, virtually all
actions (including foreclosure actions and deficiency judgment proceedings) are
automatically stayed upon the filing of the bankruptcy petition, and, usually,
no interest or principal payments are made during the course of the bankruptcy
case. The delay and the consequences thereof caused by such automatic stay can
be significant. Also, under the Bankruptcy Code, the filing of a petition in
bankruptcy by or on behalf of a junior lienor may stay the senior lender from
taking action to foreclose out such junior lien.
Under the Bankruptcy Code, provided certain substantive and procedural
safeguards for the lender are met, the amount and terms of a mortgage 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 amount of lender's security interest) pursuant to a confirmed plan or
lien avoidance proceeding, thus leaving the lender a general unsecured creditor
for the difference between such value and the outstanding balance of the loan.
Other modifications may include the modification or denial of enforceability of
due-on-sale or due-on-encumbrance clauses, the reduction in the amount of each
scheduled 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 courts with federal bankruptcy
jurisdiction 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 federal bankruptcy law, a
bankruptcy court may permit a debtor through its rehabilitative 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.
The Bankruptcy Code has been amended to provide that a lender's perfected
pre-petition security interest in leases, rents and hotel revenues continues in
the post-petition leases, rents and hotel revenues, unless a bankruptcy court
orders to the contrary "based on the equities of the case." Thus, unless a
court orders otherwise, revenues from a Mortgaged Property generated after the
date the bankruptcy petition is filed will constitute "cash collateral" under
the Bankruptcy Code. Debtors may only use cash collateral upon obtaining the
lender's consent or a prior court order finding that the lender's interest in
the Mortgaged Properties and the cash collateral is "adequately protected" as
such term is defined and interpreted under the Bankruptcy Code. It should be
noted, however, that the court may find that the lender has no security
interest in either pre-petition or post-petition revenues if the court finds
that the loan documents do not contain language covering accounts, room rents,
or other forms of personalty necessary for a security interest to attach to
hotel revenues.
To the extent that a mortgagor's ability to make payment on a mortgage
loan is dependent on its receipt of payments of rent 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 commencement of a bankruptcy proceeding in which the
lessee is the debtor results in a stay in bankruptcy against the commencement
or continuation of any state court proceeding for past due rent, for
accelerated rent, for damages or for a summary eviction order with respect to a
default under the lease that occurred prior to the filing of the lessee's
petition.
In addition, the Bankruptcy Code generally provides that a trustee or
debtor-in-possession may, subject to approval of the court, (a) assume the
lease and retain it or assign it to a third party or (b) reject
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the lease. If the lease is assumed, the trustee or debtor in possession (or
assignee, if applicable) must cure any defaults under the lease, compensate the
lessor for its losses and provide the lessor with "adequate assurance" of
future performance. Such remedies may be insufficient, 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. 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. In addition, pursuant to Section
502(b)(6) of the Bankruptcy Code, a lessor's damages for lease rejection in
respect of future rent installments are limited to the rent reserved by the
lease, without acceleration, for the greater of one year, or 15%, not to exceed
three years, of the remaining term of the lease.
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.
A trustee in bankruptcy, in some cases, may be entitled to collect its
costs and expenses in preserving or selling the mortgaged property ahead of
payment to the lender. In certain circumstances, a debtor in bankruptcy may
have the power to grant liens senior to the lien of a mortgage, and analogous
state statutes and general principles of equity may also provide a mortgagor
with means to halt a foreclosure proceeding or sale and to force a
restructuring of a mortgage loan on terms a lender would not otherwise accept.
Moreover, the laws of certain states also give priority to certain tax liens
over the lien of a mortgage or deed of trust. Under the Bankruptcy Code, if the
court finds that actions of the mortgagee have been unreasonable, the lien of
the related mortgage may be subordinated to the claims of unsecured creditors.
Pursuant to the federal doctrine of "substantive consolidation" or to the
(predominantly state law) doctrine of "piercing the corporate veil," a
bankruptcy court, in the exercise of its equitable powers, also has the
authority to order that the assets and liabilities of a related entity be
consolidated with those of an entity before it. Thus, property ostensibly the
property of one entity may be determined to be the property of a different
entity in bankruptcy, the automatic stay applicable to the first bankrupt
entity extended to the second and the rights of creditors of the second entity
impaired in the fashion set forth above in the discussion of ordinary
bankruptcy principles. Depending on facts and circumstances not wholly in
existence at the time a loan is originated or transferred to the Trust Fund,
the application of any of these doctrines to one or more of the mortgagors in
the context of the bankruptcy of one or more of their affiliates could result
in material impairment of the rights of the Certificateholders. For each
mortgagor that is described as a "special purpose entity," "single purpose
entity" or "bankruptcy-remote entity" in the Prospectus Supplement, the
activities that may be conducted by such mortgagor and its ability to incur
debt are restricted by the applicable Mortgage or the organizational documents
of such mortgagor in such manner as is intended to make the likelihood of a
bankruptcy proceeding being commenced by or against such mortgagor remote, and
such mortgagor has been organized and is designed to operate in a manner such
that its separate existence should be respected notwithstanding a bankruptcy
proceeding in respect of one or more affiliated entities of such mortgagor.
However, the Depositor makes no representation as to the likelihood of the
institution of a bankruptcy proceeding by or in respect of any mortgagor or the
likelihood that the separate existence of any mortgagor would be respected if
there were to be a bankruptcy proceeding in respect of any affiliated entity of
a mortgagor.
ENFORCEABILITY OF CERTAIN PROVISIONS
Default Interest Prepayment Charges and Prepayment
Forms of notes and mortgages used by lenders may contain provisions
obligating the mortgagor to pay a late charge or additional interest if
payments are not timely made, and in some circumstances may provide for
prepayment fees or yield maintenance penalties if the obligation is paid prior
to maturity or prohibit such prepayment for a specified period. In certain
states, there are or may be specific limitations upon the late charges which a
lender may collect from a mortgagor for delinquent payments. Certain
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states also limit the amounts that a lender may collect from a mortgagor as an
additional charge if the loan is prepaid. The enforceability, under the laws of
a number of states of provisions providing for prepayment fees or penalties
upon, or prohibition of, an involuntary prepayment is unclear, and no assurance
can be given that, at the time a Prepayment Premium is required to be made on a
Mortgage Loan in connection with an involuntary prepayment, the obligation to
make such payment, or the provisions of any such prohibition, will be
enforceable under applicable state law. The absence of a restraint on
prepayment, particularly with respect to Mortgage Loans having higher Mortgage
Rates, may increase the likelihood of refinancing or other early retirements of
the Mortgage Loans.
Due-on-Sale Provisions
Certain of the Mortgage Loans may contain due-on-sale clauses. These
clauses generally provide that the lender may accelerate the maturity of the
loan if the mortgagor sells or otherwise transfers the mortgaged property.
Certain of these clauses may provide that, upon an attempted breach thereof by
the mortgagor of an otherwise non-recourse loan, the mortgager becomes
personally liable for the mortgage debt. The enforceability of due-on-sale
clauses has been the subject of legislation or litigation in many states and,
in some cases, the enforceability of these clauses was limited or denied.
However, with respect to certain loans the Garn-St Germain Depository
Institutions Act of 1982 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 limited
exceptions. Unless otherwise provided in the related Prospectus Supplement, a
Master Servicer, on behalf of the Trust Fund, will determine whether to
exercise any right the Trustee may have as mortgagee to accelerate payment of
any such Mortgage Loan or to withhold its consent to any transfer or further
encumbrance in accordance with the general servicing standard described herein
under "Description of the Agreements--Collection and Other Servicing
Procedures."
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
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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.
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
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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
Mortgages that encumber income-producing property often contain an
assignment of rents and leases, pursuant to which the mortgagor assigns its
right, title and interest as landlord under each lease and the income derived
therefrom to the lender, while the mortgagor retains a revocable license to
collect the rents for so long as there is no unremedied default. If the
mortgagor defaults and such default is not remedied by the mortgagor within the
cure period, if any, the license terminates and the lender is entitled to
collect the rents. Local law may require that the lender take possession of the
property and/or obtain a court-appointed receiver before becoming entitled to
collect the rents. In most States, hotel and motel room rates are considered
accounts receivable under the Uniform Commercial Code ("UCC"); generally these
rates are either assigned by the mortgagor, which remains entitled to collect
such rates absent a default, or pledged by the mortgagor, as security for the
loans. In general, the lender must file financing statements in order to
perfect its security interest in the rates and must file continuation
statements, generally every five years, to maintain perfection of such security
interest. Even if the lender's security interest in room rates is perfected
under the UCC, the lender will generally be required to commence a foreclosure
or otherwise take possession of the property in order to collect the room rates
after a default. Even after a foreclosure, the potential rent payments from the
property may be less than the periodic payments that had been due under the
mortgage. For instance, the net income that would otherwise be generated from
the property may be less than the amount that would have been needed to service
the mortgage debt if the leases on the property are at below-market rents, or
as the result of excessive maintenance, repair or other obligations which a
lender succeeds to as landlord.
PERSONALTY
Certain types of Mortgaged Properties, such as hotels, motels and
industrial plants, are likely to derive a significant part of their value from
personal property which does not constitute "fixtures" under applicable state
real property law, and hence, would not be subject to the lien of a mortgage.
Such property is generally pledged or assigned as security to the lender under
the UCC. In order to perfect its security interest therein, the lender
generally must file UCC financing statements and, to maintain perfection of
such security interest, file continuation statements generally every five
years.
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
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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.
FORFEITURES IN DRUG AND RICO PROCEEDINGS
Federal law provides that property owned by persons convicted of
drug-related crimes or of criminal violations of the Racketeer Influenced and
Corrupt Organizations ("RICO") statute can be seized by the government if the
property was used in, or purchased with the proceeds of, such crimes. Under
procedures contained in the Comprehensive Crime Control Act of 1984 (the "Crime
Control Act"), the government may seize the property even before conviction.
The government must publish notice of the forfeiture proceeding and may give
notice to all parties "known to have an alleged interest in the property,"
including the holders of mortgage loans.
A lender may avoid forfeiture of its interest in the property if it
establishes that: (i) its mortgage was executed and recorded before commission
of the crime upon which the forfeiture is based, or (ii) the lender was, at the
time of execution of the mortgage, "reasonably without cause to believe" that
the property was used in, or purchased with the proceeds of, illegal drug or
RICO activities.
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 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,
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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
The following represents the opinion of Brown & Wood LLP, Cadwalader,
Wickersham & Taft or Orrick, Herrington & Sutcliffe (as specified in the
related Prospectus Supplement) as to the matters discussed herein. The
following is a general discussion of the anticipated material federal income
tax consequences of the purchase, ownership and disposition of Certificates.
The discussion below does not purport to address all federal income tax
consequences that may be applicable to particular categories of investors, some
of which may be subject to special rules. The authorities on which this
discussion is based are subject to change or differing interpretations, and any
such change or interpretation could apply retroactively. This discussion
reflects the applicable provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), as well as regulations (the "REMIC Regulations")
promulgated by the U.S. Department of Treasury (the "Treasury"). Investors
should consult their own tax advisors in determining the federal, state, local
and other tax consequences to them of the purchase, ownership and disposition
of Certificates.
For purposes of this discussion, where the applicable Prospectus
Supplement provides for a fixed retained yield with respect to the Mortgage
Loans underlying a Series of Certificates, references to the Mortgage will be
deemed to refer to that portion of the Mortgage Loans held by the Trust Fund
which does not include the retained interest. References to a "holder" or
"Certificateholder" in this discussion generally mean the beneficial owner of a
Certificate.
REMIC CERTIFICATES
GENERAL
With respect to a particular Series of Certificates, an election may be
made to treat the Trust Fund or one or more segregated pools of assets therein
as one or more REMICs within the meaning of Code Section 860D. A Trust Fund or
a portion thereof as to which a REMIC election will be made will be referred to
as a "REMIC Pool". For purposes of this discussion, Certificates of a Series as
to which one or more REMIC elections are made are referred to as "REMIC
Certificates" and will consist of one or more Classes of "REMIC Regular
Certificates" and one Class of "Residual Certificates" in the case of each
REMIC Pool. Qualification as a REMIC requires ongoing compliance with certain
conditions. With respect to each Series of REMIC Certificates, Brown & Wood
LLP, Cadwalader, Wickersham & Taft or Orrick, Herrington & Sutcliffe (as
specified in the related Prospectus Supplement), tax counsel to the Depositor,
has advised the Depositor that in the firm's opinion, assuming (i) the making
of such an election, (ii) compliance with the Agreement and (iii) compliance
with any changes in the law, including any amendments to the Code or applicable
Treasury regulations thereunder, each REMIC Pool will qualify as a REMIC. In
such case, the REMIC Regular Certificates will be considered to be "regular
interests" in the REMIC Pool and generally will be treated for federal income
tax purposes as if they were newly originated debt instruments, and the
Residual Certificates will be considered to be "residual interests" in the
REMIC Pool. The Prospectus Supplement for each Series of Certificates will
indicate whether one or more REMIC elections with respect to the related Trust
Fund will be made, in which event references to "REMIC" or "REMIC Pool" herein
shall be deemed to refer to each such REMIC Pool. If so specified in the
applicable Prospectus Supplement, the portion of a Trust Fund as to which a
REMIC election is not made may be treated as a grantor trust for federal income
tax purposes. See "--Grantor Trust Certificates."
STATUS OF REMIC CERTIFICATES
REMIC Certificates held by a domestic building and loan association will
constitute "a regular or residual interest in a REMIC" within the meaning of
Code Section 7701(a)(19)(C)(xi) but only in the same proportion that the assets
of the REMIC Pool would be treated as "loans . . . secured by an interest in
real property which is . . . residential real property" (such as single family
or multifamily properties, but not commercial properties) within the meaning of
Code Section 7701(a)(19)(C)(v) or as other assets described in Code Section
7701(a)(19)(C), and otherwise will not qualify for such treatment. REMIC
Certificates held by a real estate investment trust will constitute "real
estate assets" within the meaning
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of Code Section 856(c)(4)(A), and interest on the REMIC Regular Certificates
and income with respect to Residual 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) in the same
proportion that, for both purposes, the assets of the REMIC Pool would be so
treated. If at all times 95% or more of the assets of the REMIC Pool qualify
for each of the foregoing respective treatments, the REMIC Certificates will
qualify for the corresponding status in their entirety. For purposes of Code
Section 856(c)(4)(A), payments of principal and interest on the Mortgage Loans
that are reinvested pending distribution to holders of REMIC Certificates
qualify for such treatment. Where two or more REMIC Pools are a part of a
tiered structure they will be treated as one REMIC for purposes of the tests
described above respecting asset ownership of more or less than 95%. In
addition, if the assets of the REMIC include buy-down Mortgage Loans, it is
possible that the percentage of such assets constituting "qualifying real
property loans" or "loans . . . secured by an interest in real property" for
purposes of Code Section 7701(a)(19)(C)(v), respectively, may be required to be
reduced by the amount of the related buy-down funds. Except as provided in the
applicable Prospectus Supplement with respect to a Series, REMIC Regular
Certificates will represent "qualified mortgages," within the meaning of Code
Section 860G(a)(3), for other REMICs and "permitted assets," within the meaning
of Code Section 860L(c), for financial asset securitization investment trusts.
REMIC Certificates held by a regulated investment company will not constitute
"Government securities" within the meaning of Code Section 851(b)(4)(A)(i).
REMIC Certificates held by certain financial institutions will constitute an
"evidence of indebtedness" within the meaning of Code Section 582(c)(1). The
Small Business Job Protection Act of 1996 (the "SBJPA of 1996") repealed the
reserve method for bad debts of domestic building and loan associations and
mutual savings banks, and thus has eliminated the asset category of "qualifying
real property loans" in former Code Section 593(d) for taxable years beginning
after December 31, 1995. The requirement in the SBJPA of 1996 that such
institutions must "recapture" a portion of their existing bad debt reserves is
suspended if a certain portion of their assets are maintained in "residential
loans" under Code Section 7701(a)(19)(C)(v), but only if such loans were made
to acquire, construct or improve the related real property and not for the
purpose of refinancing. However, no effort will be made to identify the portion
of the Mortgage Loans of any Series meeting this requirement, and no
representation is made in this regard.
QUALIFICATION AS A REMIC
In order for the REMIC Pool to qualify as a REMIC, there must be ongoing
compliance on the part of the REMIC Pool with the requirements set forth in the
Code. The REMIC Pool must fulfill an asset test, which requires that no more
than a de minimis portion of the assets of the REMIC Pool, as of the close of
the third calendar month beginning after the "Startup Day" (which for purposes
of this discussion is the date of issuance of the REMIC Certificates) and at
all times thereafter, may consist of assets other than "qualified mortgages"
and "permitted investments." The REMIC Regulations provide a safe harbor
pursuant to which the de minimis requirement is met if at all times the
aggregate adjusted basis of the nonqualified assets is less than 1% of the
aggregate adjusted basis of all the REMIC Pool's assets. An entity that fails
to meet the safe harbor may nevertheless demonstrate that it holds no more than
a de minimis amount of nonqualified assets. A REMIC also must provide
"reasonable arrangements" to prevent its residual interest from being held by
"disqualified organizations" and must furnish applicable tax information to
transferors or agents that violate this requirement. See "--Taxation of
Residual Certificates--Tax-Related Restrictions on Transfer of Residual
Certificates--Disqualified Organizations."
A qualified mortgage is any obligation that is principally secured by an
interest in real property and that is either transferred to the REMIC Pool on
the Startup Day or is purchased by the REMIC Pool within a three-month period
thereafter pursuant to a fixed price contract in effect on the Startup Day.
Qualified mortgages include whole mortgage loans, such as the Mortgage Loans,
certificates of beneficial interest in a grantor trust that holds mortgage
loans, such as MBS, regular interests in another REMIC, such as MBS in a trust
as to which a REMIC election has been made, loans secured by timeshare
interests and loans secured by shares held by a tenant stockholder in a
cooperative housing corporation, provided, in general, (i) the fair market
value of the real property security (including buildings and structural
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components thereof) is at least 80% of the principal balance of the related
Mortgage Loan or mortgage loan underlying the Mortgage Certificate either at
origination or as of the Startup Day (an original loan-to-value ratio of not
more than 125% with respect to the real property security) or (ii)
substantially all the proceeds of the Mortgage Loan or the underlying mortgage
loan were used to acquire, improve or protect an interest in real property
that, at the origination date, was the only security for the Mortgage Loan or
underlying mortgage loan. If the Mortgage Loan has been substantially modified
other than in connection with a default or reasonably foreseeable default, it
must meet the loan-to-value test in (i) of the preceding sentence as of the
date of the last such modification). A qualified mortgage includes a qualified
replacement mortgage, which is any property that would have been treated as a
qualified mortgage if it were transferred to the REMIC Pool on the Startup Day
and that is received either (i) in exchange for any qualified mortgage within a
three-month period thereafter or (ii) in exchange for a "defective obligation"
within a two-year period thereafter. A "defective obligation" includes (i) a
mortgage in default or as to which default is reasonably foreseeable, (ii) a
mortgage as to which a customary representation or warranty made at the time of
transfer to the REMIC Pool has been breached, (iii) a mortgage that was
fraudulently procured by the mortgagor, and (iv) a mortgage that was not in
fact principally secured by real property (but only if such mortgage is
disposed of within 90 days of discovery). A Mortgage Loan that is "defective"
as described in clause (iv) that is not sold or, if within two years of the
Startup Day, exchanged, within 90 days of discovery, ceases to be a qualified
mortgage after such 90-day period.
The REMIC Regulations provide that obligations secured by interests in
manufactured housing which qualify as "single family residences" within the
meaning of Code Section 25(e)(10) may be treated as "qualified mortgages" of a
REMIC. Under Code Section 25(e)(10), the term "single family residence"
includes any manufactured home which has a minimum of 400 square feet of living
space and a minimum width in excess of 102 inches and which is of a kind
customarily used at a fixed location. With respect to each Series with respect
to which Installment Contracts are included in a REMIC Pool, the Depositor will
represent and warrant that each of the manufactured homes securing the
Installment Contracts meets this definition of "single family residence."
Permitted investments include cash flow investments, qualified reserve
assets and foreclosure property. A cash flow investment is an investment,
earning a return in the nature of interest, of amounts received on or with
respect to qualified mortgages for a temporary period, not exceeding 13 months,
until the next scheduled distribution to holders of interests in the REMIC
Pool. A qualified reserve asset is any intangible property held for investment
that is part of any reasonably required reserve maintained by the REMIC Pool to
provide for payments of expenses of the REMIC Pool or amounts due on the
regular or residual interests in the event of defaults (including
delinquencies) on the qualified mortgages, lower than expected reinvestment
returns, prepayment interest shortfalls and certain other contingencies. The
reserve fund will be disqualified if more than 30% of the gross income from the
assets in such fund for the year is derived from the sale or other disposition
of property held for less than three months, unless required to prevent a
default on the regular interests caused by a default on one or more qualified
mortgages. A reserve fund must be reduced "promptly and appropriately" as
payments on the Mortgage Loans are received. Foreclosure property is real
property acquired by the REMIC Pool in connection with the default or imminent
default of a qualified mortgage and generally not held beyond the close of the
third calendar year after the year of acquisition, subject to an extension
granted by the Internal Revenue Service (the "IRS").
In addition to the foregoing requirements, the various interests in a
REMIC Pool also must meet certain requirements. All of the interests in a REMIC
Pool must be either of the following: (i) one or more classes of regular
interests or (ii) a single class of residual interests on which distributions,
if any, are made pro rata. A regular interest is an interest in a REMIC Pool
that is issued on the Startup Day with fixed terms, is designated as a regular
interest, and unconditionally entitles the holder to receive a specified
principal amount (or other similar amount), and provides that interest payments
(or other similar amounts), if any, at or before maturity either are payable
based on a fixed rate or a qualified variable rate, or consist of a specified,
nonvarying portion of the interest payments on qualified mortgages. Such a
specified portion may consist of a fixed number of basis points, a fixed
percentage of the total
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interest, or a fixed or qualified variable or inverse variable rate on some or
all of the qualified mortgages minus a different fixed or qualified variable
rate. The specified principal amount of a regular interest that provides for
interest payments consisting of a specified, nonvarying portion of interest
payments on qualified mortgages may be zero. A residual interest is an interest
in a REMIC Pool other than a regular interest that is issued on the Startup Day
and that is designated as a residual interest. An interest in a REMIC Pool may
be treated as a regular interest even if payments of principal with respect to
such interest are subordinated to payments on other regular interests or the
residual interest in the REMIC Pool, and are dependent on the absence of
defaults or delinquencies on qualified mortgages or permitted investments,
lower than reasonably expected returns on permitted investments, unanticipated
expenses incurred by the REMIC Pool or prepayment interest shortfalls.
Accordingly, the REMIC Regular Certificates of a Series will constitute one or
more classes of regular interests, and the Residual Certificates with respect
to that Series will constitute a single class of residual interests on which
distributions are made pro rata.
If an entity, such as the REMIC Pool, fails to comply with one or more of
the ongoing requirements of the Code for REMIC status during any taxable year,
the Code provides that the entity will not be treated as a REMIC for such year
and thereafter. In this event, an entity with multiple classes of ownership
interests may be treated as a separate association taxable as a corporation
under Treasury regulations, and the REMIC Regular Certificates may be treated
as equity interests therein. The Code, however, authorizes the Treasury
Department to issue regulations that address situations where failure to meet
one or more of the requirements for REMIC status occurs inadvertently and in
good faith, and disqualification of the REMIC Pool would occur absent
regulatory relief. Investors should be aware, however, that the Conference
Committee Report to the Tax Reform Act of 1986 (the "1986 Act") indicates that
the relief may be accompanied by sanctions, such as the imposition of a
corporate tax on all or a portion of the REMIC Pool's income for the period of
time in which the requirements for REMIC status are not satisfied.
TAXATION OF REMIC REGULAR CERTIFICATES
General
In general, interest, original issue discount and market discount on a
REMIC Regular Certificate will be treated as ordinary income to a holder of the
REMIC Regular Certificate (the "Regular Certificateholder") as they accrue, and
principal payments on a REMIC Regular Certificate will be treated as a return
of capital to the extent of the Regular Certificateholder's basis in the REMIC
Regular Certificate allocable thereto. Regular Certificateholders must use the
accrual method of accounting with regard to REMIC Regular Certificates,
regardless of the method of accounting otherwise used by such Regular
Certificateholders.
Original Issue Discount
Compound Interest Certificates will be, and other Classes of REMIC Regular
Certificates may be, issued with "original issue discount" within the meaning
of Code Section 1273(a). Holders of any Class of REMIC Regular Certificates
having original issue discount generally must include original issue discount
in ordinary income for federal income tax purposes as it accrues, in accordance
with the constant yield method that takes into account the compounding of
interest, in advance of receipt of the cash attributable to such income. The
following discussion is based in part on temporary and final Treasury
regulations issued on February 2, 1994 (the "OID Regulations"), as amended on
June 14, 1996, under Code Sections 1271 through 1273 and 1275 and in part on
the provisions of the 1986 Act. Regular Certificateholders should be aware,
however, that the OID Regulations do not adequately address certain issues
relevant to prepayable securities, such as the REMIC Regular Certificates. To
the extent such issues are not addressed in such regulations, the Depositor
intends to apply the methodology described in the Conference Committee Report
to the 1986 Act. No assurance can be provided that the IRS will not take a
different position as to those matters not currently addressed by the OID
Regulations. Moreover, the OID Regulations include an anti-abuse rule allowing
the IRS to apply or depart from the OID Regulations where necessary or
appropriate to ensure a reasonable tax result in light of the applicable
statutory provisions. A tax result will not be considered unreasonable under
the anti-abuse rule in the
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absence of a substantial effect on the present value of a taxpayer's tax
liability. Investors are advised to consult their own tax advisors as to the
discussion herein and the appropriate method for reporting interest and
original issue discount with respect to the REMIC Regular Certificates.
Each REMIC Regular Certificate will be treated as a single installment
obligation for purposes of determining the original issue discount includible
in a Regular Certificateholder's income. The total amount of original issue
discount on a REMIC Regular Certificate is the excess of the "stated redemption
price at maturity" of the REMIC Regular Certificate over its "issue price." The
issue price of a Class of REMIC Regular Certificates offered pursuant to this
Prospectus generally is the first price at which a substantial amount of REMIC
Regular Certificates of that Class is sold to the public (excluding bond
houses, brokers and underwriters). Although unclear under the OID Regulations,
it is anticipated that the Trustee will treat the issue price of a Class as to
which there is no substantial sale as of the issue date or that is retained by
the Depositor as the fair market value of that Class as of the issue date. The
issue price of a REMIC Regular Certificate also includes the amount paid by an
initial Regular Certificateholder for accrued interest that relates to a period
prior to the issue date of the REMIC Regular Certificate, unless the Regular
Certificateholder elects on its federal income tax return to exclude such
amount from the issue price and to recover it on the first Distribution Date.
The stated redemption price at maturity of a REMIC Regular Certificate always
includes the original principal amount of the REMIC Regular Certificate, but
generally will not include distributions of stated interest if such interest
distributions constitute "qualified stated interest." Under the OID
Regulations, qualified stated interest generally means interest payable at a
single fixed rate or a qualified variable rate (as described below) provided
that such interest payments are unconditionally payable at intervals of one
year or less during the entire term of the REMIC Regular Certificate. It is
possible that the REMIC Regular Certificates will not be unconditionally
payable because they have no default remedy. However, because the underlying
mortgage loans have default remedies, it is anticipated that, except as
provided in the following three sentences, the Trustee will treat interest on
the REMIC Regular Certificates as qualified stated interest. Distributions of
interest on a Compound Interest Certificate, or on other REMIC Regular
Certificates with respect to which deferred interest will accrue, will not
constitute qualified stated interest, in which case the stated redemption price
at maturity of such REMIC Regular Certificates includes all distributions of
interest as well as principal thereon. Likewise, the Depositor intends to treat
an "interest only" class, or a class on which interest is substantially
disproportionate to its principal amount (a so-called "super-premium" class) as
having no qualified stated interest. Where the interval between the issue date
and the first Distribution Date on a REMIC Regular Certificate is shorter than
the interval between subsequent Distribution Dates, the interest attributable
to the additional days will be included in the stated redemption price at
maturity.
Under a de minimis rule, original issue discount on a REMIC Regular
Certificate will be considered to be zero if such original issue discount is
less than 0.25% of the stated redemption price at maturity of the REMIC Regular
Certificate multiplied by the weighted average maturity of the REMIC Regular
Certificate. For this purpose, the weighted average maturity of the REMIC
Regular Certificate is computed as the sum of the amounts determined by
multiplying the number of full years (i.e., rounding down partial years) from
the issue date until each distribution is scheduled to be made by a fraction,
the numerator of which is the amount of each distribution included in the
stated redemption price at maturity of the REMIC Regular Certificate and the
denominator of which is the stated redemption price at maturity of the REMIC
Regular Certificate. The Conference Committee Report to the 1986 Act provides
that the schedule of such distributions should be determined in accordance with
the assumed rate of prepayment of the Mortgage Loans (the "Prepayment
Assumption") and the anticipated reinvestment rate, if any, relating to the
REMIC Regular Certificates. The Prepayment Assumption with respect to a Series
of REMIC Regular Certificates will be set forth in the related Prospectus
Supplement. Holders generally must report de minimis OID pro rata as principal
payments are received, and such income will be capital gain if the REMIC
Regular Certificate is held as a capital asset. However, under the OID
Regulations, Regular Certificateholders may elect to accrue all de minimis
original issue discount as well as market discount and market premium under the
constant yield method. See "--Election to Treat All Interest Under the Constant
Yield Method."
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A Regular Certificateholder generally must include in gross income for any
taxable year the sum of the "daily portions," as defined below, of the original
issue discount on the REMIC Regular Certificate accrued during an accrual
period for each day on which it holds the REMIC Regular Certificate, including
the date of purchase but excluding the date of disposition. The Depositor will
treat the monthly period ending on the day before each Distribution Date as the
accrual period. With respect to each REMIC Regular Certificate, a calculation
will be made of the original issue discount that accrues during each successive
full accrual period (or shorter period from the date of original issue) that
ends on the day before the related Distribution Date on the REMIC Regular
Certificate. The Conference Committee Report to the 1986 Act states that the
rate of accrual of original issue discount is intended to be based on the
Prepayment Assumption. The original issue discount accruing in a full accrual
period would be the excess, if any, of (i) the sum of (a) the present value of
all of the remaining distributions to be made on the REMIC Regular Certificate
as of the end of that accrual period that are included in the REMIC Regular
Certificate's stated redemption price at maturity and (b) the distributions
made on the REMIC Regular Certificate during the accrual period that are
included in the REMIC Regular Certificate's stated redemption price at
maturity, over (ii) the adjusted issue price of the REMIC Regular Certificate
at the beginning of the accrual period. The present value of the remaining
distributions referred to in the preceding sentence is calculated based on (i)
the yield to maturity of the REMIC Regular Certificate at the issue date, (ii)
events (including actual prepayments) that have occurred prior to the end of
the accrual period and (iii) the Prepayment Assumption. For these purposes, the
adjusted issue price of a REMIC Regular Certificate at the beginning of any
accrual period equals the issue price of the REMIC Regular Certificate,
increased by the aggregate amount of original issue discount with respect to
the REMIC Regular Certificate that accrued in all prior accrual periods and
reduced by the amount of distributions included in the REMIC Regular
Certificate's stated redemption price at maturity that were made on the REMIC
Regular Certificate in such prior periods. The original issue discount accruing
during any accrual period (as determined in this paragraph) will then be
divided by the number of days in the period to determine the daily portion of
original issue discount for each day in the period. With respect to an initial
accrual period shorter than a full accrual period, the daily portions of
original issue discount must be determined according to an appropriate
allocation under any reasonable method.
Under the method described above, the daily portions of original issue
discount required to be included in income by a Regular Certificateholder
generally will increase to take into account prepayments on the REMIC Regular
Certificates as a result of prepayments on the Mortgage Loans that exceed the
Prepayment Assumption, and generally will decrease (but not below zero for any
period) if the prepayments are slower than the Prepayment Assumption. An
increase in prepayments on the Mortgage Loans with respect to a Series of REMIC
Regular Certificates can result in both a change in the priority of principal
payments with respect to certain Classes of REMIC Regular Certificates and
either an increase or decrease in the daily portions of original issue discount
with respect to such REMIC Regular Certificates.
Acquisition Premium
A purchaser of a REMIC Regular Certificate at a price greater than its
adjusted issue price but less than its stated redemption price at maturity will
be required to include in gross income the daily portions of the original issue
discount on the REMIC Regular Certificate reduced pro rata by a fraction, the
numerator of which is the excess of its purchase price over such adjusted issue
price and the denominator of which is the excess of the remaining stated
redemption price at maturity over the adjusted issue price. Alternatively, such
a subsequent purchaser may elect to treat all such acquisition premium under
the constant yield method, as described below under the heading "--Election to
Treat All Interest Under the Constant Yield Method."
Variable Rate REMIC Regular Certificates
REMIC Regular Certificates may provide for interest based on a variable
rate. Under the OID Regulations, interest is treated as payable at a variable
rate if, generally, (i) the issue price does not exceed the original principal
balance by more than a specified amount and (ii) the interest compounds or is
payable at least annually at current values of (a) one or more "qualified
floating rates," (b) a single fixed
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rate and one or more qualified floating rates, (c) a single "objective rate" or
(d) a single fixed rate and a single objective rate that is a "qualified
inverse floating rate." A floating rate is a qualified floating rate if
variations in the rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds, where such rate is subject to a
fixed multiple that is greater than 0.65 but not more than 1.35. Such rate may
also be increased or decreased by a fixed spread or subject to a fixed cap or
floor, or a cap or floor that is not reasonably expected as of the issue date
to affect the yield of the instrument significantly. An objective rate is any
rate (other than a qualified floating rate) that is determined using a single
fixed formula and that is based on objective financial or economic information,
provided that such information is not (i) within the control of the issuer or a
related party or (ii) unique to the circumstances of the issuer or a related
party. A qualified inverse floating rate is a rate equal to a fixed rate minus
a qualified floating rate that inversely reflects contemporaneous variations in
the cost of newly borrowed funds; an inverse floating rate that is not a
qualified inverse floating rate may nevertheless be an objective rate. A Class
of REMIC Regular Certificates may be issued under this Prospectus that does not
have a variable rate under the foregoing rules, for example, a Class that bears
different rates at different times during the period it is outstanding such
that it is considered significantly "front-loaded" or "back-loaded" within the
meaning of the OID Regulations. It is possible that such a Class may be
considered to bear "contingent interest" within the meaning of the OID
Regulations. The OID Regulations, as they relate to the treatment of contingent
interest rate by their terms not applicable to REMIC Regular Certificates.
However, if final regulations dealing with contingent interest with respect to
REMIC Regular Certificates apply the same principles as the OID Regulations,
such regulations may lead to different timing of income inclusion that would be
the case under the OID Regulations. Furthermore, application of such principles
could lead to the characterization of gain on the sale of contingent interest
REMIC Regular Certificates as ordinary income. Investors should consult their
tax advisors regarding the appropriate treatment of any REMIC Regular
Certificate that does not pay interest at a fixed rate or variable rate as
described in this paragraph.
Under the REMIC Regulations, a REMIC Regular Certificate (i) bearing a
rate that qualifies as a variable rate under the OID Regulations that is tied
to current values of a variable rate (or the highest, lowest or average of two
or more variable rates, including a rate based on the average cost of funds of
one or more financial institutions), or a positive or negative multiple of such
a rate (plus or minus a specified number of basis points), or that represents a
weighted average of rates on some or all of the Mortgage Loans, including such
a rate that is subject to one or more caps or floors, or (ii) bearing one or
more such variable rates for one or more periods or one or more fixed rates for
one or more periods, and a different variable rate or fixed rate for other
periods qualifies as a regular interest in a REMIC. Accordingly, unless
otherwise indicated in the applicable Prospectus Supplement, it is anticipated
that the Trustee will treat REMIC Regular Certificates that qualify as regular
interests under this rule in the same manner as obligations bearing a variable
rate for original issue discount reporting purposes.
The amount of original issue discount with respect to a REMIC Regular
Certificate bearing a variable rate of interest will accrue in the manner
described above under "Original Issue Discount" with the yield to maturity and
future payments on such REMIC Regular Certificate generally to be determined by
assuming that interest will be payable for the life of the REMIC Regular
Certificate based on the initial rate (or, if different, the value of the
applicable variable rate as of the pricing date) for the relevant Class. Unless
otherwise specified in the applicable Prospectus Supplement, the Depositor
intends to treat such variable interest as qualified stated interest, other
than variable interest on an interest-only or super-premium Class, which will
be treated as non-qualified stated interest includible in the stated redemption
price at maturity. Ordinary income reportable for any period will be adjusted
based on subsequent changes in the applicable interest rate index.
Although unclear under the OID Regulations, the Depositor intends to treat
REMIC Regular Certificates bearing an interest rate that is a weighted average
of the net interest rates on Mortgage Loans or MBS having fixed or adjustable
rates, as having qualified stated interest. In the case of adjustable rate
Mortgage Loans, the applicable index used to compute interest on the Mortgage
Loans in effect on the pricing date (or possibly the issue date) will be deemed
to be in effect beginning with the period in which
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the first weighted average adjustment date occurring after the issue date
occurs. Adjustments will be made in each accrual period either increasing or
decreasing the amount or ordinary income reportable to reflect the actual
Pass-Through Rate on the REMIC Regular Certificates.
Deferred Interest
Under the OID Regulations, all interest on a REMIC Regular Certificate as
to which there may be Deferred Interest is includible in the stated redemption
price at maturity thereof. Accordingly, any Deferred Interest that accrues with
respect to a Class of REMIC Regular Certificates may constitute income to the
holders of such REMIC Regular Certificates prior to the time distributions of
cash with respect to such Deferred Interest are made.
Market Discount
A purchaser of a REMIC Regular Certificate also may be subject to the
market discount rules of Code Section 1276 through 1278. Under these Code
sections and the principles applied by the OID Regulations in the context of
original issue discount, "market discount" is the amount by which the
purchaser's original basis in the REMIC Regular Certificate (i) is exceeded by
the then-current principal amount of the REMIC Regular Certificate or (ii) in
the case of a REMIC Regular Certificate having original issue discount, is
exceeded by the adjusted issue price of such REMIC Regular Certificate at the
time of purchase. Such purchaser generally will be required to recognize
ordinary income to the extent of accrued market discount on such REMIC Regular
Certificate as distributions includible in the stated redemption price at
maturity thereof are received, in an amount not exceeding any such
distribution. Such market discount would accrue in a manner to be provided in
Treasury regulations and should take into account the Prepayment Assumption.
The Conference Committee Report to the 1986 Act provides that until such
regulations are issued, such market discount would accrue either (i) on the
basis of a constant interest rate or (ii) in the ratio of stated interest
allocable to the relevant period to the sum of the interest for such period
plus the remaining interest as of the end of such period, or in the case of a
REMIC Regular Certificate issued with original issue discount, in the ratio of
original issue discount accrued for the relevant period to the sum of the
original issue discount accrued for such period plus the remaining original
issue discount as of the end of such period. Such purchaser also generally will
be required to treat a portion of any gain on a sale or exchange of the REMIC
Regular Certificate as ordinary income to the extent of the market discount
accrued to the date of disposition under one of the foregoing methods, less any
accrued market discount previously reported as ordinary income as partial
distributions in reduction of the stated redemption price at maturity were
received. Such purchaser will be required to defer deduction of a portion of
the excess of the interest paid or accrued on indebtedness incurred to purchase
or carry a REMIC Regular Certificate over the interest distributable thereon.
The deferred portion of such interest expense in any taxable year generally
will not exceed the accrued market discount on the REMIC Regular Certificate
for such year. Any such deferred interest expense is, in general, allowed as a
deduction not later than the year in which the related market discount income
is recognized or the REMIC Regular Certificate is disposed of. As an
alternative to the inclusion of market discount in income on the foregoing
basis, the Regular Certificateholder may elect to include market discount in
income currently as it accrues on all market discount instruments acquired by
such Regular Certificateholder in that taxable year or thereafter, in which
case the interest deferral rule will not apply. See "--Election to Treat All
Interest Under the Constant Yield Method" below regarding an alternative manner
in which such election may be deemed to be made.
Market discount with respect to a REMIC Regular Certificate will be
considered to be zero if such market discount is less than 0.25% of the
remaining stated redemption price at maturity of such REMIC Regular Certificate
multiplied by the weighted average maturity of the REMIC Regular Certificate
(determined as described above in the third paragraph under "--Original Issue
Discount") remaining after the date of purchase. It appears that de minimis
market discount would be reported in a manner similar to de minimis original
issue discount. See "--Original Issue Discount" above. Treasury regulations
implementing the market discount rules have not yet been issued, and therefore
investors should consult their own tax advisors regarding the application of
these rules. Investors should also consult Revenue Procedure 92-67 concerning
the elections to include market discount in income currently and to accrue
market discount on the basis of the constant yield method.
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Premium
A REMIC Regular Certificate purchased at a cost greater than its remaining
stated redemption price at maturity generally is considered to be purchased at
a premium. If the Regular Certificateholder holds such REMIC Regular
Certificate as a "capital asset" within the meaning of Code Section 1221, the
Regular Certificateholder may elect under Code Section 171 to amortize such
premium under the constant yield method. Treasury regulations issued under Code
Section 171 do not by their terms apply to REMIC Regular Certificates, which
are prepayable based on prepayments on the underlying Mortgage Loans. However,
the Conference Committee Report to the 1986 Act indicates a Congressional
intent that the same rules that will apply to the accrual of market discount on
installment obligations will also apply to amortizing bond premium under Code
Section 171 on installment obligations such as the REMIC Regular Certificates,
although it is unclear whether the alternatives to the constant yield method
described above under "--Market Discount" are available. Amortizable bond
premium will be treated as an offset to interest income on a REMIC Regular
Certificate rather than as a separate deduction item. See "--Election to Treat
All Interest Under the Constant Yield Method" below regarding an alternative
manner in which the Code Section 171 election may be deemed to be made.
Election to Treat All Interest Under the Constant Yield Method
A holder of a debt instrument such as a REMIC Regular Certificate may
elect to treat all interest that accrues on the instrument using the constant
yield method, with none of the interest being treated as qualified stated
interest. For purposes of applying the constant yield method to a debt
instrument subject to such an election, (i) "interest" includes stated
interest, original issue discount, de minimis original issue discount, market
discount and de minimis market discount, as adjusted by any amortizable bond
premium or acquisition premium and (ii) the debt instrument is treated as if
the instrument were issued on the holder's acquisition date in the amount of
the holder's adjusted basis immediately after acquisition. It is unclear
whether, for this purpose, the initial Prepayment Assumption would continue to
apply or if a new prepayment assumption as of the date of the holder's
acquisition would apply. A holder generally may make such an election on an
instrument by instrument basis or for a class or group of debt instruments.
However, if the holder makes such an election with respect to a debt instrument
with amortizable bond premium or with market discount, the holder is deemed to
have made elections to amortize bond premium or to report market discount
income currently as it accrues under the constant yield method, respectively,
for all debt instruments acquired by the holder in the same taxable year or
thereafter. The election is made on the holder's federal income tax return for
the year in which the debt instrument is acquired and is irrevocable except
with the approval of the IRS. Investors should consult their own tax advisors
regarding the advisability of making such an election.
Sale or Exchange of REMIC Regular Certificates
If a Regular Certificateholder sells or exchanges a REMIC Regular
Certificate, the Regular Certificateholder will recognize gain or loss equal to
the difference, if any, between the amount received and its adjusted basis in
the REMIC Regular Certificate. The adjusted basis of a REMIC Regular
Certificate generally will equal the cost of the REMIC Regular Certificate to
the seller, increased by any original issue discount or market discount
previously included in the seller's gross income with respect to the REMIC
Regular Certificate and reduced by amounts included in the stated redemption
price at maturity of the REMIC Regular Certificate that were previously
received by the seller, by any amortized premium and by any recognized losses.
Except as described above with respect to market discount, and except as
provided in this paragraph, any gain or loss on the sale or exchange of a REMIC
Regular Certificate realized by an investor who holds the REMIC Regular
Certificate as a capital asset will be capital gain or loss and will be
long-term or short-term depending on whether the REMIC Regular Certificate has
been held for the long-term capital gain holding period (currently more than
one year). Such gain will be treated as ordinary income (i) if a REMIC Regular
Certificate is held as part of a "conversion transaction" as defined in Code
Section 1258(c), up to the amount of interest that would have accrued on the
Regular Certificateholder's net investment in the conversion transaction at
120% of the appropriate applicable Federal rate under Code Section 1274(d) in
effect at the time the taxpayer entered into the transaction minus any amount
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previously treated as ordinary income with respect to any prior distribution of
property that was held as a part of such transaction, (ii) in the case of a
non-corporate taxpayer, to the extent such taxpayer has made an election under
Code Section 163(d)(4) to have net capital gains taxed as investment income at
ordinary rates, or (iii) to the extent that such gain does not exceed the
excess, if any, of (a) the amount that would have been includible in the gross
income of the holder if its yield on such REMIC Regular Certificate were 110%
of the applicable Federal rate as of the date of purchase, over (b) the amount
of income actually includible in the gross income of such holder with respect
to the REMIC Regular Certificate. In addition, gain or loss recognized from the
sale of a REMIC Regular Certificate by certain banks or thrift institutions
will be treated as ordinary income or loss pursuant to Code Section 582(c).
Generally, short-term capital gains of certain non-corporate taxpayers are
subject to the same tax rate as the ordinary income of such taxpayers (39.6%)
for property held for not more than one year, and long-term capital gains of
such taxpayers are subject to a maximum tax rate of 20% for property held for
more than one year. The maximum tax rate for corporations is the same with
respect to both ordinary income and capital gains.
Treatment of Losses
Holders of REMIC Regular Certificates will be required to report income
with respect to REMIC Regular Certificates on the accrual method of accounting,
without giving effect to delays or reductions in distributions attributable to
defaults or delinquencies on the Mortgage Loans allocable to a particular class
of REMIC Regular Certificates, except to the extent it can be established that
such losses are uncollectible. Accordingly, the holder of a REMIC Regular
Certificate may have income, or may incur a diminution in cash flow as a result
of a default or delinquency, but may not be able to take a deduction (subject
to the discussion below) for the corresponding loss until a subsequent taxable
year. To the extent the rules of Code Section 166 regarding bad debts are
applicable, it appears that holders of REMIC Regular Certificates that are
corporations or that otherwise hold the REMIC Regular Certificates in
connection with a trade or business should in general be allowed to deduct as
an ordinary loss any such loss sustained during the taxable year on account of
any such REMIC Regular Certificates becoming wholly or partially worthless, and
that, in general, holders of REMIC Regular Certificates that are not
corporations and do not hold the REMIC Regular Certificates in connection with
a trade or business will be allowed to deduct as a short-term capital loss any
loss with respect to principal sustained during the taxable year on account of
a portion of any class or subclass of such REMIC Regular Certificates becoming
wholly worthless. Although the matter is not free from doubt, non-corporate
holders of REMIC Regular Certificates should be allowed a bad debt deduction at
such time as the principal balance of any class or subclass of such REMIC
Regular Certificates is reduced to reflect losses resulting from any liquidated
Mortgage Loans. The IRS, however, could take the position that non-corporate
holders will be allowed a bad debt deduction to reflect such losses only after
all Mortgage Loans remaining in the Trust Fund have been liquidated or such
class of REMIC Regular Certificates has been otherwise retired. The IRS could
also assert that losses on the REMIC Regular Certificates are deductible based
on some other method that may defer such deductions for all holders, such as
reducing future cash flow for purposes of computing original issue discount.
This may have the effect of creating "negative" original issue discount which
would be deductible only against future positive original issue discount or
otherwise upon termination of the Class. Holders of REMIC Regular Certificates
are urged to consult their own tax advisors regarding the appropriate timing,
amount and character of any loss sustained with respect to such REMIC Regular
Certificates. While losses attributable to interest previously reported as
income should be deductible as ordinary losses by both corporate and
non-corporate holders the IRS may take the position that losses attributable to
accrued original issue discount may only be deducted as capital losses in the
case of non-corporate holders who do not hold REMIC Regular Certificates in
connection with a trade or business. Special loss rules are applicable to banks
and thrift institutions, including rules regarding reserves for bad debts. Such
taxpayers are advised to consult their tax advisors regarding the treatment of
losses on REMIC Regular Certificates.
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TAXATION OF RESIDUAL CERTIFICATES
Taxation of REMIC Income
Generally, the "daily portions" of REMIC taxable income or net loss will
be includible as ordinary income or loss in determining the federal taxable
income of holders of Residual Certificates ("Residual Certificateholders"), and
will not be taxed separately to the REMIC Pool. The daily portions of REMIC
taxable income or net loss of a Residual Certificateholder are determined by
allocating the REMIC Pool's taxable income or net loss for each calendar
quarter ratably to each day in such quarter and by allocating such daily
portion among the Residual Certificateholders in proportion to their respective
holdings of Residual Certificates in the REMIC Pool on such day. REMIC taxable
income is generally determined in the same manner as the taxable income of an
individual using the accrual method of accounting, except that (i) the
limitations on deductibility of investment interest expense and expenses for
the production of income do not apply, (ii) all bad loans will be deductible as
business bad debts and (iii) the limitation on the deductibility of interest
and expenses related to tax-exempt income will apply. The REMIC Pool's gross
income includes interest, original issue discount income and market discount
income, if any, on the Mortgage Loans (reduced by amortization of any premium
on the Mortgage Loans), plus issue premium on the Regular Certificates, plus
income on reinvestment of cash flows and reserve assets, plus any cancellation
of indebtedness income upon allocation of realized losses to the REMIC Regular
Certificates. The REMIC Pool's deductions include interest and original issue
discount expense on the REMIC Regular Certificates, servicing fees on the
Mortgage Loans, other administrative expenses of the REMIC Pool and realized
losses on the Mortgage Loans. The requirement that Residual Certificateholders
report their pro rata share of taxable income or net loss of the REMIC Pool
will continue until there are no Certificates of any class of the related
Series outstanding.
The taxable income recognized by a Residual Certificateholder in any
taxable year will be affected by, among other factors, the relationship between
the timing of recognition of interest and original issue discount or market
discount income or amortization of premium with respect to the Mortgage Loans,
on the one hand, and the timing of deductions for interest (including original
issue discount) on the REMIC Regular Certificates, on the other hand. In the
event that an interest in the Mortgage Loans is acquired by the REMIC Pool at a
discount, and one or more of such Mortgage Loans is prepaid, the Residual
Certificateholder may recognize taxable income without being entitled to
receive a corresponding amount of cash because (i) the prepayment may be used
in whole or in part to make distributions in reduction of principal on the
REMIC Regular Certificates and (ii) the discount on the Mortgage Loans which is
includible in income may exceed the deduction allowed upon such distributions
on those REMIC Regular Certificates on account of any unaccrued original issue
discount relating to those REMIC Regular Certificates. When there is more than
one class of REMIC Regular Certificates that distributes principal
sequentially, this mismatching of income and deductions is particularly likely
to occur in the early years following issuance of the REMIC Regular
Certificates when distributions in reduction of principal are being made in
respect of earlier classes of REMIC Regular Certificates to the extent that
such classes are not issued with substantial discount. If taxable income
attributable to such a mismatching is realized, in general, losses would be
allowed in later years as distributions on the later classes of REMIC Regular
Certificates are made. Taxable income may also be greater in earlier years than
in later years as a result of the fact that interest expense deductions,
expressed as a percentage of the outstanding principal amount of such a Series
of REMIC Regular Certificates, may increase over time as distributions in
reduction of principal are made on the lower yielding classes of REMIC Regular
Certificates, whereas to the extent that the REMIC Pool includes fixed rate
Mortgage Loans, interest income with respect to any given Mortgage Loan will
remain constant over time as a percentage of the outstanding principal amount
of that loan. Consequently, Residual Certificateholders must have sufficient
other sources of cash to pay any federal, state or local income taxes due as a
result of such mismatching or unrelated deductions against which to offset such
income, subject to the discussion of "excess inclusions" below under
"--Limitations on Offset or Exemption of REMIC Income." In the case of tiered
REMICs, such mismatching of income and deductions may fall disproportionately
or entirely on one class of Residual Certificates than on the other class or
classes of Residual Certificates. The timing of such mismatching of income and
deductions described in this paragraph, if present with respect to a Series of
Certificates, may
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have a significant adverse effect upon the affected Residual
Certificateholder's after-tax rate of return. In addition, a Residual
Certificateholder's taxable income during certain periods may exceed the income
reflected by such Residual Certificateholder for such periods in accordance
with generally accepted accounting principles. Investors should consult their
own accountants concerning the accounting treatment of their investment in
Residual Certificates.
Basis and Losses
The amount of any net loss of the REMIC Pool that may be taken into
account by the Residual Certificateholder is limited to the adjusted basis of
the Residual Certificate as of the close of the quarter (or time of disposition
of the Residual Certificate if earlier), determined without taking into account
the net loss for the quarter. The initial adjusted basis of a purchaser of a
Residual Certificate is the amount paid for such Residual Certificate. Such
adjusted basis will be increased by the amount of taxable income of the REMIC
Pool reportable by the Residual Certificateholder and will be decreased (but
not below zero), first, by a cash distribution from the REMIC Pool and, second,
by the amount of loss of the REMIC Pool reportable by the Residual
Certificateholder. Any loss that is disallowed on account of this limitation
may be carried over indefinitely with respect to the Residual Certificateholder
as to whom such loss was disallowed and may be used by such Residual
Certificateholder only to offset any income generated by the same REMIC Pool.
A Residual Certificateholder will not be permitted to amortize directly
the cost of its Residual Certificate as an offset to its share of the taxable
income of the related REMIC Pool. However, that taxable income will not include
cash received by the REMIC Pool that represents a recovery of the REMIC Pool's
basis in its assets. Such recovery of basis by the REMIC Pool will have the
effect of amortization of the issue price of the Residual Certificates over
their life. However, in view of the possible acceleration of the income of
Residual Certificateholders described above under "--Taxation of REMIC Income,"
the period of time over which such issue price is effectively amortized may be
longer than the economic life of the Residual Certificates.
A Residual Certificate may have a negative value if the net present value
of anticipated tax liabilities exceeds the present value of anticipated cash
flows. The REMIC Regulations appear to treat the issue price of such a residual
interest as zero rather than such negative amount for purposes of determining
the REMIC Pool's basis in its assets. The preamble to the REMIC Regulations
states that the IRS may provide future guidance on the proper tax treatment of
payments made by a transferor of such a residual interest to induce the
transferee to acquire the interest, and Residual Certificateholders should
consult their own tax advisors in this regard.
Further, to the extent that the initial adjusted basis of a Residual
Certificateholder (other than an original holder) in the Residual Certificate
is greater that the corresponding portion of the REMIC Pool's basis in the
Mortgage Loans, the Residual Certificateholder will not recover a portion of
such basis until termination of the REMIC Pool unless future Treasury
regulations provide for periodic adjustments to the REMIC income otherwise
reportable by such holder. The REMIC Regulations currently in effect do not so
provide. See "Treatment of Certain Items of REMIC Income and Expense--Market
Discount" below regarding the basis of Mortgage Loans to the REMIC Pool and
"--Sale or Exchange of a Residual Certificate" below regarding possible
treatment of a loss upon termination of the REMIC Pool as a capital loss.
Treatment of Certain Items of REMIC Income and Expense
Although the Depositor intends to compute REMIC income and expense in
accordance with the Code and applicable regulations, the authorities regarding
the determination of specific items of income and expense are subject to
differing interpretations. The Depositor makes no representation as to the
specific method that it will use for reporting income with respect to the
Mortgage Loans and expenses with respect to the REMIC Regular Certificates, and
different methods could result in different timing of reporting of taxable
income or net loss to Residual Certificateholders or differences in capital
gain versus ordinary income.
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Original Issue Discount and Premium. Generally, the REMIC Pool's
deductions for original issue discount and inclusion in income of issue premium
amortization will be determined in the same manner as original issue discount
income and premium amortization on REMIC Regular Certificates as described
above under "Taxation of REMIC Regular Certificates--Original Issue Discount"
and "--Variable Rate REMIC Regular Certificates," without regard to the de
minimis rule described therein and "-- Premium."
Deferred Interest. Any Deferred Interest that accrues with respect to any
adjustable rate Mortgage Loans held by the REMIC Pool will constitute income to
the REMIC Pool and will be treated in a manner similar to the Deferred Interest
that accrues with respect to REMIC Regular Certificates as described above
under "Taxation of REMIC Regular Certificates--Deferred Interest."
Market Discount. The REMIC Pool will have market discount income in
respect of Mortgage Loans if, in general, the basis of the REMIC Pool allocable
to such Mortgage Loans is exceeded by their unpaid principal balances. The
REMIC Pool's basis in such Mortgage Loans is generally the fair market value of
the Mortgage Loans immediately after the transfer thereof to the REMIC Pool.
The REMIC Regulations provide that such basis is equal in the aggregate to the
issue prices of all regular and residual interests in the REMIC Pool (or the
fair market value thereof at the Closing Date, in the case of a retained
Class). In respect of Mortgage Loans that have market discount to which Code
Section 1276 applies, the accrued portion of such market discount would be
recognized currently as an item of ordinary income in a manner similar to
original issue discount. Market discount income generally should accrue in the
manner described above under "Taxation of REMIC Regular Certificates--Market
Discount."
Premium. Generally, if the basis of the REMIC Pool in the Mortgage Loans
exceeds the unpaid principal balances thereof, the REMIC Pool will be
considered to have acquired such Mortgage Loans at a premium equal to the
amount of such excess. As stated above, the REMIC Pool's basis in Mortgage
Loans is the fair market value of the Mortgage Loans, based on the aggregate of
the issue prices (or the fair market value of retained Classes) of the regular
and residual interests in the REMIC Pool immediately after the transfer thereof
to the REMIC Pool. In a manner analogous to the discussion above under
"Taxation of REMIC Regular Certificates--Premium," a REMIC Pool that holds a
Mortgage Loan as a capital asset under Code Section 1221 may elect under Code
Section 171 to amortize premium on whole mortgage loans or mortgage loans
underlying MBS that were originated after September 27, 1985 or on Agency
Securities, or private mortgage-backed securities that are REMIC regular
interests under the constant yield method. Amortizable bond premium will be
treated as an offset to interest income on the Mortgage Loans, rather than as a
separate deduction item. To the extent that the mortgagors with respect to the
Mortgage Loans are individuals, Code Section 171 will not be available for
premium on Mortgage Loans (including underlying mortgage loans) originated on
or prior to September 27, 1985. Premium with respect to such Mortgage Loans may
be deductible in accordance with a reasonable method regularly employed by the
holder thereof. The allocation of such premium pro rata among principal
payments should be considered a reasonable method; however, the IRS may argue
that such premium should be allocated in a different manner, such as allocating
such premium entirely to the final payment of principal.
Limitations on Offset or Exemption of REMIC Income
A portion or all of the REMIC taxable income includible in determining the
federal income tax liability of a Residual Certificateholder will be subject to
special treatment. That portion, referred to as the "excess inclusion," is
equal to the excess of REMIC taxable income for the calendar quarter allocable
to a Residual Certificate over the daily accruals for such quarterly period of
(i) 120% of the long-term applicable Federal rate that would have applied to
the Residual Certificate (if it were a debt instrument) on the Startup Day
under Code Section 1274(d), multiplied by (ii) the adjusted issue price of such
Residual Certificate at the beginning of such quarterly period. For this
purpose, the adjusted issue price of a Residual Certificate at the beginning of
a quarter is the issue price of the Residual Certificate, plus the amount of
such daily accruals of REMIC income described in this paragraph for all prior
quarters, decreased by any distributions made with respect to such Residual
Certificate prior to the beginning of such quarterly period. Accordingly, the
portion of the REMIC Pool's taxable income that will be treated as excess
inclusions will be a larger portion of such income as the adjusted issue price
of the Residual Certificates diminishes.
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The portion of a Residual Certificateholder's REMIC taxable income
consisting of the excess inclusions generally may not be offset by other
deductions, including net operating loss carryforwards, on such Residual
Certificateholder's return. However, net operating loss carryovers are
determined without regard to excess inclusion income. Further, if the Residual
Certificateholder is an organization subject to the tax on unrelated business
income imposed by Code Section 511, the Residual Certificateholder's excess
inclusions will be treated as unrelated business taxable income of such
Residual Certificateholder for purposes of Code Section 511. In addition, REMIC
taxable income is subject to 30% withholding tax with respect to certain
persons who are not U.S. Persons (as defined below under "Tax-Related
Restrictions on Transfer of Residual Certificates--Foreign Investors"), and the
portion thereof attributable to excess inclusions is not eligible for any
reduction in the rate of withholding tax (by treaty or otherwise). See
"Taxation of Certain Foreign Investors--Residual Certificates" below. Finally,
if a real estate investment trust or a regulated investment company owns a
Residual Certificate, a portion (allocated under Treasury regulations yet to be
issued) of dividends paid by the real estate investment trust or a regulated
investment company could not be offset by net operating losses of its
shareholders, would constitute unrelated business taxable income for tax-exempt
shareholders, and would be ineligible for reduction of withholding to certain
persons who are not U.S. Persons. The SBJPA of 1996 has eliminated the special
rule permitting Section 593 institutions ("thrift institutions") to use net
operating losses and other allowable deductions to offset their excess
inclusion income from Residual Certificates that have "significant value"
within the meaning of the REMIC Regulations, effective for taxable years
beginning after December 31, 1995, except with respect to Residual Certificates
continuously held by thrift institutions since November 1, 1995.
In addition, the SBJPA of 1996 provides three rules for determining the
effect of excess inclusions on the alternative minimum taxable income of a
Residual Certificateholder. First, alternative minimum taxable income for a
Residual Certificateholder is determined without regard to the special rule,
discussed above, that taxable income cannot be less than excess inclusions.
Second, a Residual Certificateholder's alternative minimum taxable income for a
taxable year cannot be less than the excess inclusions for the year. Third, the
amount of any alternative minimum tax net operating loss deduction must be
computed without regard to any excess inclusions. These rules are effective for
taxable years beginning after December 31, 1986, unless a Residual
Certificateholder elects to have such rules apply only to taxable years
beginning after August 20, 1996.
Tax-Related Restrictions on Transfer of Residual Certificates
Disqualified Organizations. If any legal or beneficial interest in a
Residual Certificate is transferred to a Disqualified Organization (as defined
below), a tax would be imposed in an amount equal to the product of (i) the
present value of the total anticipated excess inclusions with respect to such
Residual Certificate for periods after the transfer and (ii) the highest
marginal federal income tax rate applicable to corporations. The REMIC
Regulations provide that the anticipated excess inclusions are based on actual
prepayment experience to the date of the transfer and projected payments based
on the Prepayment Assumption. The present value rate equals the applicable
Federal rate under Code Section 1274(d) as of the date of the transfer for a
term ending with the last calendar quarter in which excess inclusions are
expected to accrue. Such a tax generally would be imposed on the transferor of
the Residual Certificate, except that where such transfer is through an agent
(including a broker, nominee or other middleman) for a Disqualified
Organization, the tax would instead be imposed on such agent. However, a
transferor of a Residual Certificate would in no event be liable for such tax
with respect to a transfer if the transferee furnishes to the transferor an
affidavit that the transferee is not a Disqualified Organization and, as of the
time of the transfer, the transferor does not have actual knowledge that such
affidavit is false. The tax also may be waived by the Treasury Department if
the Disqualified Organization promptly disposes of the residual interest and
the transferor pays income tax at the highest corporate rate on the excess
inclusions for the period the Residual Certificate is actually held by the
Disqualified Organization.
In addition, if a Pass-Through Entity (as defined below) has excess
inclusion income with respect to a Residual Certificate during a taxable year
and a Disqualified Organization is the record holder of an equity interest in
such entity, then a tax is imposed on such entity equal to the product of (i)
the amount
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of excess inclusions on the Residual Certificate that are allocable to the
interest in the Pass-Through Entity during the period such interest is held by
such Disqualified Organization, and (ii) the highest marginal federal corporate
income tax rate. Such tax would be deductible from the ordinary gross income of
the Pass-Through Entity for the taxable year. The Pass-Through Entity would not
be liable for such tax if it has received an affidavit from such record holder
that it is not a Disqualified Organization or stating such holder's taxpayer
identification number and, during the period such person is the record holder
of the Residual Certificate, the Pass-Through Entity does not have actual
knowledge that such affidavit is false.
For taxable years beginning on or after January 1, 1998, if an "electing
large partnership" holds a Residual Certificate, all interests in the electing
large partnership are treated as held by Disqualified Organizations for
purposes of the tax imposed upon a Pass-Through Entity by Section 860E(c) of
the Code. An exception to this tax, otherwise available to a Pass-Through
Entity that is furnished certain affidavits by record holders of interests in
the entity and that does not know such affidavits are false, is not available
to an electing large partnership.
For these purposes, (i) "Disqualified Organization" means the United
States, any state or political subdivision thereof, any foreign government, any
international organization, any agency or instrumentality of any of the
foregoing (provided, that such term does not include an instrumentality if all
of its activities are subject to tax and a majority of its board of directors
is not selected by any such governmental entity), any cooperative organization
furnishing electric energy or providing telephone service to persons in rural
areas as described in Code Section 1381(a)(2)(C), and any organization (other
than a farmers' cooperative described in Code Section 521) that is exempt from
taxation under the Code unless such organization is subject to the tax on
unrelated business income imposed by Code Section 511, (ii) "Pass-Through
Entity" means any regulated investment company, real estate investment trust,
common trust fund, partnership, trust or estate and certain corporations
operating on a cooperative basis and (iii) an "electing large partnership"
means any partnership having more than 100 members during the preceding tax
year (other than certain service partnerships and commodity pools), which elect
to apply simplified reporting provisions under the Code. Except as may be
provided in Treasury regulations, any person holding an interest in a
Pass-Through Entity as a nominee for another will, with respect to such
interest, be treated as a Pass-Through Entity.
The Agreement with respect to a Series of Certificates will provide that
no legal or beneficial interest in a Residual Certificate may be transferred
unless (i) the proposed transferee provides to the transferor and the Trustee
an affidavit providing its taxpayer identification number and stating that such
transferee is the beneficial owner of the Residual Certificate, is not a
Disqualified Organization and is not purchasing such Residual Certificates on
behalf of a Disqualified Organization (i.e., as a broker, nominee or middleman
thereof), and (ii) the transferor provides a statement in writing to the
Depositor and the Trustee that it has no actual knowledge that such affidavit
is false. Moreover, the Agreement will provide that any attempted or purported
transfer in violation of these transfer restrictions will be null and void and
will vest no rights in any purported transferee. Each Residual Certificate with
respect to a Series will bear a legend referring to such restrictions on
transfer, and each Residual Certificateholder will be deemed to have agreed, as
a condition of ownership thereof, to any amendments to the related Agreement
required under the Code or applicable Treasury regulations to effectuate the
foregoing restrictions. Information necessary to compute an applicable excise
tax must be furnished to the IRS and to the requesting party within 60 days of
the request, and the Depositor or the Trustee may charge a fee for computing
and providing such information.
Noneconomic Residual Interests. The REMIC Regulations would disregard
certain transfers of Residual Certificates, in which case the transferor would
continue to be treated as the owner of the Residual Certificates and thus would
continue to be subject to tax on its allocable portion of the net income of the
REMIC Pool. Under the REMIC Regulations, a transfer of a "noneconomic residual
interest" (as defined below) to a Residual Certificateholder (other than a
Residual Certificateholder who is not a U.S. Person, as defined below under
"--Foreign Investors") is disregarded for all federal income tax purposes if a
significant purpose of the transferor is to impede the assessment or collection
of tax. A residual interest in a REMIC (including a residual interest with a
positive value at issuance) is a
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"noneconomic residual interest" unless, at the time of the transfer, (i) the
present value of the expected future distributions on the residual interest at
least equals the product of the present value of the anticipated excess
inclusions and the highest corporate income tax rate in effect 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 taxes accrue on the anticipated excess inclusions in an amount sufficient
to satisfy the accrued taxes. The anticipated excess inclusions and the present
value rate are determined in the same manner as set forth above under
"--Disqualified Organizations." The REMIC Regulations explain that a
significant purpose to impede the assessment or collection of tax exists if the
transferor, at the time of the transfer, either knew or should have known that
the transferee would be unwilling or unable to pay taxes due on its share of
the taxable income of the REMIC. A safe harbor is provided if (i) the
transferor conducted, at the time of the transfer, a reasonable investigation
of the financial condition of the transferee and found that the transferee
historically had paid its debts as they came due and found no significant
evidence to indicate that the transferee would not continue to pay its debts as
they came due in the future, and (ii) the transferee represents to the
transferor that it understands that, as the holder of the noneconomic residual
interest, the transferee may incur tax liabilities in excess of cash flows
generated by the interest and that the transferee intends to pay taxes
associated with holding the residual interest as they become due. The Agreement
with respect to each Series of Certificates will require the transferee of a
Residual Certificate to certify to the matters in the preceding sentence as
part of the affidavit described above under the heading "Disqualified
Organizations." The transferor must have no actual knowledge or reason to know
that such statements are false.
Foreign Investors. The REMIC Regulations provide that the transfer of a
Residual Certificate that has "tax avoidance potential" to a "foreign person"
will be disregarded for all federal tax purposes. This rule appears intended to
apply to a transferee who is not a U.S. Person (as defined below), unless such
transferee's income is effectively connected with the conduct of a trade or
business within the United States. A Residual Certificate is deemed to have tax
avoidance potential unless, at the time of the transfer, (i) the future value
of expected distributions equals at least 30% of the anticipated excess
inclusions after the transfer, and (ii) the transferor reasonably expects that
the transferee will receive sufficient distributions from the REMIC Pool at or
after the time at which the excess inclusions accrue and prior to the end of
the next succeeding taxable year for the accumulated withholding tax liability
to be paid. If the non-U.S. Person transfers the Residual Certificate back to a
U.S. Person, the transfer will be disregarded and the foreign transferor will
continue to be treated as the owner unless arrangements are made so that the
transfer does not have the effect of allowing the transferor to avoid tax on
accrued excess inclusions.
The Prospectus Supplement relating to a Series of Certificates may provide
that a Residual Certificate may not be purchased by or transferred to any
person that is not a U.S. Person or may describe the circumstances and
restrictions pursuant to which such a transfer may be made. The term "U.S.
Person" means a citizen or resident of the United States, a corporation or
partnership created or organized in or under the laws of the United States, any
state or the District of Columbia (unless, in the case of a partnership,
regulations are adopted that provide otherwise), including any entity treated
as a corporation or partnership for federal income tax purposes, an estate that
is subject to U.S. federal income tax regardless of the source of its income or
a trust if a court within the United States is able to exercise primary
supervision over the administration of such trust, and one or more such U.S.
Persons have the authority to control all substantial decisions of such trust
(or, to the extent provided in applicable Treasury regulations, certain trusts
in existence on August 20, 1996 which are eligible to elect to be treated as
U.S. Persons).
Sale or Exchange of a Residual Certificate
Upon the sale or exchange of a Residual Certificate, the Residual
Certificateholder will recognize gain or loss equal to the excess, if any, of
the amount realized over the adjusted basis (as described above under "Taxation
of Residual Certificates--Basis and Losses") of such Residual Certificateholder
in such Residual Certificate at the time of the sale or exchange. In addition
to reporting the taxable income of the REMIC Pool, a Residual Certificateholder
will have taxable income to the extent that any cash distribution to it from
the REMIC Pool exceeds such adjusted basis on that Distribution Date. Such
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income will be treated as gain from the sale or exchange of the Residual
Certificate. It is possible that the termination of the REMIC Pool may be
treated as a sale or exchange of a Residual Certificateholder's Residual
Certificate, in which case, if the Residual Certificateholder has an adjusted
basis in such Residual Certificateholder's Residual Certificate remaining when
its interest in the REMIC Pool terminates, and if such Residual
Certificateholder holds such Residual Certificate as a capital asset under Code
Section 1221, then such Residual Certificateholder will recognize a capital
loss at that time in the amount of such remaining adjusted basis.
Any gain on the sale of a Residual Certificate will be treated as ordinary
income (i) if a Residual Certificate is held as part of a "conversion
transaction" as defined in Code Section 1258(c), up to the amount of interest
that would have accrued on the Residual Certificateholder's net investment in
the conversion transaction at 120% of the appropriate applicable Federal rate
in effect at the time the taxpayer entered into the transaction minus any
amount previously treated as ordinary income with respect to any prior
disposition of property that was held as a part of such transaction or (ii) in
the case of a non-corporate taxpayer, to the extent such taxpayer has made an
election under Code Section 163(d)(4) to have net capital gains taxed as
investment income at ordinary income rates. In addition, gain or loss
recognized from the sale of a Residual Certificate by certain banks or thrift
institutions will be treated as ordinary income or loss pursuant to Code
Section 582(c).
The Conference Committee Report to the 1986 Act provides that, except as
provided in Treasury regulations yet to be issued, the wash sale rules of Code
Section 1091 will apply to dispositions of Residual Certificates where the
seller of the Residual Certificate, during the period beginning six months
before the sale or disposition of the Residual Certificate and ending six
months after such sale or disposition, acquires (or enters into any other
transaction that results in the application of Section 1091) any residual
interest in any REMIC or any interest in a "taxable mortgage pool" (such as a
non-REMIC owner trust) that is economically comparable to a Residual
Certificate.
Mark to Market Regulations
Prospective purchasers of the Residual Certificates should also be aware
that IRS has promulgated final regulations (the "Mark to Market Regulations")
under Code Section 475 relating to the requirement that a securities dealer
mark to market securities held for sale to customers. The Mark to Market
Regulations provide that a Residual Certificate is not treated as a security
and thus may not be marked to market. The Mark to Market Regulations apply to
all Residual Certificates acquired on or after January 4, 1995.
TAXES THAT MAY BE IMPOSED ON THE REMIC POOL
Prohibited Transactions
Income from certain transactions by the REMIC Pool, called prohibited
transactions, will not be part of the calculation of income or loss includible
in the federal income tax returns of Residual Certificateholders, but rather
will be taxed directly to the REMIC Pool at a 100% rate. Prohibited
transactions generally include (i) the disposition of a qualified mortgage
other than for (a) substitution within two years of the Startup Day for a
defective (including a defaulted) obligation (or repurchase in lieu of
substitution of a defective (including a defaulted) obligation at any time) or
for any qualified mortgage within three months of the Startup Day, (b)
foreclosure, default or imminent default of a qualified mortgage, (c)
bankruptcy or insolvency of the REMIC Pool or (d) a qualified (complete)
liquidation, (ii) the receipt of income from assets that are not the type of
mortgages or investments that the REMIC Pool is permitted to hold, (iii) the
receipt of compensation for services or (iv) the receipt of gain from
disposition of cash flow investments other than pursuant to a qualified
liquidation. Notwithstanding (i) and (iv), it is not a prohibited transaction
to sell REMIC Pool property to prevent a default on REMIC Regular Certificates
as a result of a default on qualified mortgages or to facilitate a clean-up
call (generally, an optional termination to save administrative costs when no
more than a small percentage of the Certificates is outstanding). The REMIC
Regulations indicate that the modification of a Mortgage
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Loan generally will not be treated as a disposition if it is occasioned by a
default or reasonably foreseeable default, an assumption of the Mortgage Loan,
the waiver of a due-on-sale or due-on-encumbrance clause or the conversion of
an interest rate by a mortgagor pursuant to the terms of a convertible
adjustable rate Mortgage Loan.
Contributions to the REMIC Pool After the Startup Day
In general, the REMIC Pool will be subject to a tax at a 100% rate on the
value of any property contributed to the REMIC Pool after the Startup Day.
Exceptions are provided for cash contributions to the REMIC Pool (i) during the
three months following the Startup Day, (ii) made to a qualified reserve fund
by a Residual Certificateholder, (iii) in the nature of a guarantee, (iv) made
to facilitate a qualified liquidation or clean-up call and (v) as otherwise
permitted in Treasury regulations yet to be issued.
Net Income from Foreclosure Property
The REMIC Pool will be subject to federal income tax at the highest
corporate rate on "net income from foreclosure property," determined by
reference to the rules applicable to real estate investment trusts. Generally,
property acquired by deed in lieu of foreclosure would be treated as
"foreclosure property" for a period not exceeding the close of the third
calendar year beginning after the year in which the REMIC Pool acquired such
property, with a possible extension. Net income from foreclosure property
generally means gain from the sale of a foreclosure property that is inventory
property and gross income from foreclosure property other than qualifying rents
and other qualifying income for a real estate investment trust.
It is not anticipated that the REMIC Pool will receive income or
contributions subject to tax under the preceding three paragraphs, except as
described in the applicable Prospectus Supplement with respect to net income
from foreclosure property on a commercial or multifamily residential property
that secured a Mortgage Loan. In addition, unless otherwise disclosed in the
applicable Prospectus Supplement, it is not anticipated that any material state
income or franchise tax will be imposed on a REMIC Pool.
Liquidation of the REMIC Pool
If a REMIC Pool adopts a plan of complete liquidation, within the meaning
of Code Section 860F(a)(4)(A)(i), which may be accomplished by designating in
the REMIC Pool's final tax return a date on which such adoption is deemed to
occur, and sells all of its assets (other than cash) within a 90-day period
beginning on the date of the adoption of the plan of liquidation, the REMIC
Pool will not be subject to the prohibited transaction rules on the sale of its
assets, provided that the REMIC Pool credits or distributes in liquidation all
of the sale proceeds plus its cash (other than amounts retained to meet claims)
to holders of REMIC Regular Certificates and Residual Certificateholders within
the 90-day period.
ADMINISTRATIVE MATTERS
The REMIC Pool will be required to maintain its books on a calendar year
basis and to file federal income tax returns for federal income tax purposes in
a manner similar to a partnership. The form for such income tax return is Form
1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return. The
Trustee will be required to sign the REMIC Pool's returns. Treasury regulations
provide that, except where there is a single Residual Certificateholder for an
entire taxable year, the REMIC Pool will be subject to the procedural and
administrative rules of the Code applicable to partnerships, including the
determination by the IRS of any adjustments to, among other things, items of
REMIC income, gain, loss, deduction or credit in a unified administrative
proceeding. The Residual Certificateholder owning the largest percentage
interest in the Residual Certificates will be obligated to act as "tax matters
person," as defined in applicable Treasury regulations, with respect to the
REMIC Pool. Each Residual Certificateholder will be deemed, by acceptance of
such Residual Certificates, to have agreed (i) to the appointment of the tax
matters person as provided in the preceding sentence and (ii) to the
irrevocable designation of the Master Servicer as agent for performing the
functions of the tax matters person.
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LIMITATIONS ON DEDUCTION OF CERTAIN EXPENSES
An investor who is an individual, estate or trust will be subject to
limitation with respect to certain itemized deductions described in Code
Section 67, to the extent that such itemized deductions, in the aggregate, do
not exceed 2% of the investor's adjusted gross income. In addition, Code
Section 68 provides that itemized deductions otherwise allowable for a taxable
year of an individual taxpayer will be reduced by the lesser of (i) 3% of the
excess, if any, of adjusted gross income over $100,000 ($50,000 in the case of
a married individual filing a separate return) (subject to adjustments for
post-1991 inflation) or (ii) 80% of the amount of itemized deductions otherwise
allowable for such year. In the case of a REMIC Pool, such deductions may
include deductions under Code Section 212 for the Servicer Fee and all
administrative and other expenses relating to the REMIC Pool, any similar fees
paid to the issuer or guarantor of the Agency Certificates or the private
mortgage-backed securities or Installment Contracts, or any similar expenses
allocated to the REMIC Pool with respect to a regular interest it holds in
another REMIC. Such investors who hold REMIC Certificates either directly or
indirectly through certain pass-through entities may have their pro rata share
of such expenses allocated to them as additional gross income, but may be
subject to such limitation on deductions. In addition, such expenses are not
deductible at all for purposes of computing the alternative minimum tax, and
may cause such investors to be subject to significant additional tax liability.
Temporary Treasury regulations provide that the additional gross income and
corresponding amount of expenses generally are to be allocated entirely to the
holders of Residual Certificates in the case of a REMIC Pool that would not
qualify as a fixed investment trust in the absence of a REMIC election.
However, such additional gross income and limitation on deductions will apply
to the allocable portion of such expenses to holders of REMIC Regular
Certificates, as well as holders of Residual Certificates, where such REMIC
Regular Certificates are issued in a manner that is similar to pass-through
certificates in a fixed investment trust. In general, such allocable portion
will be determined based on the ratio that a REMIC Certificateholder's income,
determined on a daily basis, bears to the income of all holders of REMIC
Regular Certificates and Residual Certificates with respect to a REMIC Pool. As
a result, individuals, estates or trusts holding REMIC Certificates (either
directly or indirectly through a grantor trust, partnership, S corporation,
REMIC, or certain other pass-through entities described in the foregoing
temporary Treasury regulations) may have taxable income in excess of the
interest income at the pass-through rate on REMIC Regular Certificates that are
issued in a single Class or otherwise consistently with fixed investment trust
status or in excess of cash distributions for the related period on Residual
Certificates. Unless otherwise indicated in the applicable Prospectus
Supplement, all such expenses will be allocable to the Residual Certificates.
TAXATION OF CERTAIN FOREIGN INVESTORS
REMIC Regular Certificates
Interest, including original issue discount, distributable to Regular
Certificateholders who are non-resident aliens, foreign corporations, or other
Non-U.S. Persons (as defined below), will be considered "portfolio interest"
and, therefore, generally will not be subject to 30% United States withholding
tax, provided that such Non-U.S. Person (i) is not a "10-percent shareholder"
within the meaning of Code Section 871(h)(3)(B) or a controlled foreign
corporation described in Code Section 881(c)(3)(C) and (ii) provides the
Trustee, or the person who would otherwise be required to withhold tax from
such distributions under Code Section 1441 or 1442, with an appropriate
statement, signed under penalties of perjury, identifying the beneficial owner
and stating, among other things, that the beneficial owner of the REMIC Regular
Certificate is a Non-U.S. Person. If such statement, or any other required
statement, is not provided, 30% withholding will apply unless reduced or
eliminated pursuant to an applicable tax treaty or unless the interest on the
REMIC Regular Certificate is effectively connected with the conduct of a trade
or business within the United States by such Non-U.S. Person. In the latter
case, such Non-U.S. Person will be subject to United States federal income tax
at regular rates. Prepayment premiums distributable to Regular
Certificateholders who are Non-U.S. Persons may be subject to 30% United States
withholding tax. Investors who are Non-U.S. Persons should consult their own
tax advisors regarding the specific tax consequences to them of owning a REMIC
Regular Certificate. The term "Non-U.S. Person" means any person who is not a
U.S. Person.
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The IRS recently issued final regulations (the "New Regulations") which
would provide alternative methods of satisfying the beneficial ownership
certification requirement described above. The New Regulations are effective
January 1, 2001. Current withholding certificates remain valid until the
earlier of December 31, 2000 or the due date of expiration of the certificate
under the rules as currently in effect. The New Regulations will require, in
the case of Offered Certificates held by a foreign partnership, that (x) the
certification described above be provided by the partners rather than by the
foreign partnership and (y) the partnership provide certain information,
including a United States taxpayer identification number. A look-through rule
will apply in the case of tiered partnerships. Non-U.S. Persons should consult
their own tax advisors concerning the application of the certification
requirements in the New Regulations.
Residual Certificates
The Conference Committee Report to the 1986 Act indicates that amounts
paid to Residual Certificateholders who are Non-U.S. Persons are treated as
interest for purposes of the 30% (or lower treaty rate) United States
withholding tax. Treasury regulations provide that amounts distributed to
Residual Certificateholders may qualify as "portfolio interest," subject to the
conditions described in "--REMIC Regular Certificates" above, but only to the
extent that (i) the Mortgage Loans (including mortgage loans underlying MBS)
were issued after July 18, 1984 and (ii) the Trust Fund or segregated pool of
assets therein (as to which a separate REMIC election will be made), to which
the Residual Certificate relates, consists of obligations issued in "registered
form" within the meaning of Code Section 163(f)(1). Generally, whole mortgage
loans will not be, but MBS and regular interests in another REMIC Pool will be,
considered obligations issued in registered form. Furthermore, a Residual
Certificateholder will not be entitled to any exemption from the 30%
withholding tax (or lower treaty rate) to the extent of that portion of REMIC
taxable income that constitutes an "excess inclusion." See "Taxation of
Residual Certificates--Limitations on Offset or Exemption of REMIC Income." If
the amounts paid to Residual Certificateholders who are Non-U.S. Persons are
effectively connected with the conduct of a trade or business within the United
States by such Non-U.S. Persons, 30% (or lower treaty rate) withholding will
not apply. Instead, the amounts paid to such Non-U.S. Persons will be subject
to United States federal income tax at regular rates. If 30% (or lower treaty
rate) withholding is applicable, such amounts generally will be taken into
account for purposes of withholding only when paid or otherwise distributed (or
when the Residual Certificate is disposed of) under rules similar to
withholding upon disposition of debt instruments that have original issue
discount. See "Tax-Related Restrictions on Transfer of Residual
Certificates--Foreign Investors" above concerning the disregard of certain
transfers having "tax avoidance potential." Investors who are Non-U.S. Persons
should consult their own tax advisors regarding the specific tax consequences
to them of owning Residual Certificates.
BACKUP WITHHOLDING
Distributions made on the REMIC Regular Certificates, and proceeds from
the sale of the REMIC Regular Certificates to or through certain brokers, may
be subject to a "backup" withholding tax under Code Section 3406 of 31% on
"reportable payments" (including interest distributions, original issue
discount, and, under certain circumstances, principal distributions) unless the
Regular Certificateholder complies with certain reporting and/or certification
procedures, including the provision of its taxpayer identification number to
the Trustee, its agent or the broker who effected the sale of the REMIC Regular
Certificate, or such Certificateholder is otherwise an exempt recipient under
applicable provisions of the Code. Any amounts to be withheld from distribution
on the REMIC Regular Certificates would be refunded by the IRS or allowed as a
credit against the Regular Certificateholder's federal income tax liability.
The New Regulations change certain of the rules relating to certain
presumptions currently available relating to information reporting and backup
withholding. Non-U.S. Persons are urged to contact their own tax advisors
regarding the application to them of backup withholding and information
reporting.
REPORTING REQUIREMENTS
Reports of accrued interest, original issue discount and information
necessary to compute the accrual of any market discount on the REMIC Regular
Certificates will be made annually to the IRS and to
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individuals, estates, non-exempt and non-charitable trusts, and partnerships
who are either holders of record of REMIC Regular Certificates or beneficial
owners who own REMIC Regular Certificates through a broker or middleman as
nominee. All brokers, nominees and all other non-exempt holders of record of
REMIC Regular Certificates (including corporations, non-calendar year
taxpayers, securities or commodities dealers, real estate investment trusts,
investment companies, common trust funds, thrift institutions and charitable
trusts) may request such information for any calendar quarter by telephone or
in writing by contacting the person designated in IRS Publication 938 with
respect to a particular Series of REMIC Regular Certificates. Holders through
nominees must request such information from the nominee.
The IRS's Form 1066 has an accompanying Schedule Q, Quarterly Notice to
Residual Interest Holders of REMIC Taxable Income or Net Loss Allocation.
Treasury regulations require that Schedule Q be furnished by the REMIC Pool to
each Residual Certificateholder by the end of the month following the close of
each calendar quarter (41 days after the end of a quarter under proposed
Treasury regulations) in which the REMIC Pool is in existence.
Treasury regulations require that, in addition to the foregoing
requirements, information must be furnished quarterly to Residual
Certificateholders, furnished annually, if applicable, to holders of REMIC
Regular Certificates, and filed annually with the IRS concerning Code Section
67 expenses (see "--Limitations on Deduction of Certain Expenses" above)
allocable to such holders. Furthermore, under such regulations, information
must be furnished quarterly to Residual Certificateholders, furnished annually
to holders of REMIC Regular Certificates, and filed annually with the IRS
concerning the percentage of the REMIC Pool's assets meeting the qualified
asset tests described above under "--Status of REMIC Certificates."
GRANTOR TRUST CERTIFICATES
STANDARD CERTIFICATES
General
In the event that no election is made to treat a Trust Fund (or a
segregated pool of assets therein) with respect to a Series of Certificates
that are not designated as "Stripped Certificates," as described below, as a
REMIC (Certificates of such a Series hereinafter referred to as "Standard
Certificates"), in the opinion of Brown & Wood LLP, Cadwalader, Wickersham &
Taft or Orrick, Herrington & Sutcliffe (as specified in the related Prospectus
Supplement), tax counsel to the Depositor, the Trust Fund will be classified as
a grantor trust under subpart E, part 1 of subchapter J of the Code and not as
an association taxable as a corporation or a "taxable mortgage pool" within the
meaning of Code Section 7701(i). Where there is no fixed retained yield with
respect to the Mortgage Loans underlying the Standard Certificates, the holder
of each such Standard Certificate (a "Standard Certificateholder") in such
Series will be treated as the owner of a pro rata undivided interest in the
ordinary income and corpus portions of the Trust Fund represented by its
Standard Certificate and will be considered the beneficial owner of a pro rata
undivided interest in each of the Mortgage Loans, subject to the discussion
below under "--Recharacterization of Servicing Fees." Accordingly, the holder
of a Standard Certificate of a particular Series will be required to report on
its federal income tax return its pro rata share of the entire income from the
Mortgage Loans represented by its Standard Certificate, including interest at
the coupon rate on such Mortgage Loans, original issue discount (if any),
prepayment fees, assumption fees, and late payment charges received by the
Master Servicer, in accordance with such Standard Certificateholder's method of
accounting. A Standard Certificateholder generally will be able to deduct its
share of the Servicing Fee and all administrative and other expenses of the
Trust Fund in accordance with its method of accounting, provided that such
amounts are reasonable compensation for services rendered to that Trust Fund.
However, investors who are individuals, estates or trusts who own Standard
Certificates, either directly or indirectly through certain pass-through
entities, will be subject to limitation with respect to certain itemized
deductions described in Code Section 67, including deductions under Code
Section 212 for the Servicing Fee and all such administrative and other
expenses of the Trust Fund, to the extent that such deductions, in the
aggregate, do not exceed two percent of an investor's adjusted gross income. In
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addition, Code Section 68 provides that itemized deductions otherwise allowable
for a taxable year of an individual taxpayer will be reduced by the lesser of
(i) 3% of the excess, if any, of adjusted gross income over $100,000 ($50,000
in the case of a married individual filing a separate return) (subject to
adjustments for post-1991 inflation), or (ii) 80% of the amount of itemized
deductions otherwise allowable for such year. As a result, such investors
holding Standard Certificates, directly or indirectly through a pass-through
entity, may have aggregate taxable income in excess of the aggregate amount of
cash received on such Standard Certificates with respect to interest at the
pass-through rate on such Standard Certificates. In addition, such expenses are
not deductible at all for purposes of computing the alternative minimum tax,
and may cause such investors to be subject to significant additional tax
liability. Moreover, where there is fixed retained yield with respect to the
Mortgage Loans underlying a Series of Standard Certificates or where the
Servicing Fee is in excess of reasonable servicing compensation, the
transaction will be subject to the application of the "stripped bond" and
"stripped coupon" rules of the Code, as described below under "--Stripped
Certificates" and "--Recharacterization of Servicing Fees," respectively.
Tax Status
In the opinion of Brown & Wood LLP, Cadwalader, Wickersham & Taft or
Orrick, Herrington & Sutcliffe (as specified in the related Prospectus
Supplement), tax counsel to the Depositor, Standard Certificates will have the
following status for federal income tax purposes:
1. A Standard Certificate owned by a "domestic building and loan
association" within the meaning of Code Section 7701(a)(19) will be considered
to represent "loans secured by an interest in real property" within the meaning
of Code Section 7701(a)(19)(C)(v), provided that the real property securing the
Mortgage Loans represented by that Standard Certificate is of the type
described in such section of the Code.
2. A Standard Certificate owned by a real estate investment trust will be
considered to represent "real estate assets" within the meaning of Code Section
856(c)(4)(A) to the extent that the assets of the related Trust Fund consist of
qualified assets, and interest income on such assets will be considered
"interest on obligations secured by mortgages on real property" to such extent
within the meaning of Code Section 856(c)(3)(B).
3. A Standard Certificate owned by a REMIC will be considered to represent
an "obligation. . . which is principally secured by an interest in real
property" within the meaning of Code Section 860G(a)(3)(A) to the extent that
the assets of the related Trust Fund consist of "qualified mortgages" within
the meaning of Code Section 860G(a)(3).
4. A Certificate owned by a "financial asset securitization investment
trust" within the meaning of Code Section 860L(c) will be considered to
represent "permitted assets" within the meaning of Code Section 860L(c) to the
extent that the assets of the Trust Fund consist of "debt instruments" or other
permitted assets within the meaning of Code Section 860L(c).
Premium and Discount
Standard Certificateholders are advised to consult with their tax advisors
as to the federal income tax treatment of premium and discount arising either
upon initial acquisition of Standard Certificates or thereafter.
Premium. The treatment of premium incurred upon the purchase of a Standard
Certificate will be determined generally as described above under "REMIC
Certificates--Taxation of Residual Certificates--Premium."
Original Issue Discount. The original issue discount rules will be
applicable to a Standard Certificateholder's interest in those Mortgage Loans
as to which the conditions for the application of those sections are met. Rules
regarding periodic inclusion of original issue discount income are applicable
to mortgages of corporations originated after May 27, 1969, mortgages of
noncorporate mortgagors (other than individuals) originated after July 1, 1982,
and mortgages of individuals originated after March 2, 1984. Under the OID
Regulations, such original issue discount could arise by the charging of points
by
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the originator of the mortgages in an amount greater than a statutory de
minimis exception, including a payment of points currently deductible by the
borrower under applicable Code provisions or, under certain circumstances, by
the presence of "teaser rates" on the Mortgage Loans.
Original issue discount must generally be reported as ordinary gross
income as it accrues under a constant interest method that takes into account
the compounding of interest, in advance of the cash attributable to such
income. Unless indicated otherwise in the applicable Prospectus Supplement, no
prepayment assumption will be assumed for purposes of such accrual. However,
Code Section 1272 provides for a reduction in the amount of original issue
discount includible in the income of a holder of an obligation that acquires
the obligation after its initial issuance at a price greater than the sum of
the original issue price and the previously accrued original issue discount,
less prior payments of principal. Accordingly, if such Mortgage Loans acquired
by a Standard Certificateholder are purchased at a price equal to the then
unpaid principal amount of such Mortgage Loans, no original issue discount
attributable to the difference between the issue price and the original
principal amount of such Mortgage Loans (i.e., points) will be includible by
such holder.
Market Discount. Standard Certificateholders also will be subject to the
market discount rules to the extent that the conditions for application of
those sections are met. Market discount on the Mortgage Loans will be
determined and will be reported as ordinary income generally in the manner
described above under "REMIC Certificates--Taxation of REMIC Regular
Certificates--Market Discount," except that the ratable accrual methods
described therein will not apply. Rather, the holder will accrue market
discount pro rata over the life of the Mortgage Loans, unless the constant
yield method is elected. Unless indicated otherwise in the applicable
Prospectus Supplement, no prepayment assumption will be assumed for purposes of
such accrual.
Recharacterization of Servicing Fees
If the Servicing Fee paid to the Master Servicer were deemed to exceed
reasonable servicing compensation, the amount of such excess would represent
neither income nor a deduction to Certificateholders. In this regard, there are
no authoritative guidelines for federal income tax purposes as to either the
maximum amount of servicing compensation that may be considered reasonable in
the context of this or similar transactions or whether, in the case of the
Standard Certificate, the reasonableness of servicing compensation should be
determined on a weighted average or loan-by-loan basis. If a loan-by-loan basis
is appropriate, the likelihood that such amount would exceed reasonable
servicing compensation as to some of the Mortgage Loans would be increased. IRS
guidance indicates that a servicing fee in excess of reasonable compensation
("excess servicing") will cause the Mortgage Loans to be treated under the
"stripped bond" rules. Such guidance provides safe harbors for servicing deemed
to be reasonable and requires taxpayers to demonstrate that the value of
servicing fees in excess of such amounts is not greater than the value of the
services provided.
Accordingly, if the IRS's approach is upheld, a servicer who receives a
servicing fee in excess of such amounts would be viewed as retaining an
ownership interest in a portion of the interest payments on the Mortgage Loans.
Under the rules of Code Section 1286, the separation of ownership of the right
to receive some or all of the interest payments on an obligation from the right
to receive some or all of the principal payments on the obligation would result
in treatment of such Mortgage Loans as "stripped coupons" and "stripped bonds."
Subject to the de minimis rule discussed below under "--Stripped Certificates,"
each stripped bond or stripped coupon could be considered for this purpose as a
non-interest bearing obligation issued on the date of issue of the Standard
Certificates, and the original issue discount rules of the Code would apply to
the holder thereof. While Standard Certificateholders would still be treated as
owners of beneficial interests in a grantor trust for federal income tax
purposes, the corpus of such trust could be viewed as excluding the portion of
the Mortgage Loans the ownership of which is attributed to the Master Servicer,
or as including such portion as a second class of equitable interest.
Applicable Treasury regulations treat such an arrangement as a fixed investment
trust, since the multiple classes of trust interests should be treated as
merely facilitating direct investments in the trust assets and the existence of
multiple classes of ownership interests is incidental to that purpose. In
general, such a
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recharacterization should not have any significant effect upon the timing or
amount of income reported by a Standard Certificateholder, except that the
income reported by a cash method holder may be slightly accelerated. See
"Stripped Certificates" below for a further description of the federal income
tax treatment of stripped bonds and stripped coupons.
Sale or Exchange of Standard Certificates
Upon sale or exchange of a Standard Certificate, a Standard
Certificateholder will recognize gain or loss equal to the difference between
the amount realized on the sale and its aggregate adjusted basis in the
Mortgage Loans and the other assets represented by the Standard Certificate. In
general, the aggregate adjusted basis will equal the Standard
Certificateholder's cost for the Standard Certificate, increased by the amount
of any income previously reported with respect to the Standard Certificate and
decreased by the amount of any losses previously reported with respect to the
Standard Certificate and the amount of any distributions received thereon.
Except as provided above with respect to market discount on any Mortgage Loans,
and except for certain financial institutions subject to the provisions of Code
Section 582(c), any such gain or loss would be capital gain or loss if the
Standard Certificate was held as a capital asset. However, gain on the sale of
a Standard Certificate will be treated as ordinary income (i) if a Standard
Certificate is held as part of a "conversion transaction" as defined in Code
Section 1258(c), up to the amount of interest that would have accrued on the
Standard Certificateholder's net investment in the conversion transaction at
120% of the appropriate applicable Federal rate in effect at the time the
taxpayer entered into the transaction minus any amount previously treated as
ordinary income with respect to any prior disposition of property that was held
as a part of such transaction or (ii) in the case of a non-corporate taxpayer,
to the extent such taxpayer has made an election under Code Section 163(d)(4)
to have net capital gains taxed as investment income at ordinary income rates.
Long-term capital gains of certain non-corporate taxpayers are subject to a
lower maximum tax rate (20%) than ordinary income or short-term capital gains
of such taxpayers (39.6%). The maximum tax rate for corporations is the same
with respect to both ordinary income and capital gains.
STRIPPED CERTIFICATES
General
Pursuant to Code Section 1286, the separation of ownership of the right to
receive some or all of the principal payments on an obligation from ownership
of the right to receive some or all of the interest payments results in the
creation of "stripped bonds" with respect to principal payments and "stripped
coupons" with respect to interest payments. For purposes of this discussion,
Certificates that are subject to those rules will be referred to as "Stripped
Certificates".
The Certificates will be subject to those rules if (i) the Depositor or
any of its affiliates retains (for its own account or for purposes of resale),
in the form of fixed retained yield or otherwise, an ownership interest in a
portion of the payments on the Mortgage Loans, (ii) the Master Servicer is
treated as having an ownership interest in the Mortgage Loans to the extent it
is paid (or retains) servicing compensation in an amount greater than
reasonable consideration for servicing the Mortgage Loans (see "Standard
Certificates--Recharacterization of Servicing Fees" above) and (iii)
Certificates are issued in two or more classes or subclasses representing the
right to non-pro-rata percentages of the interest and principal payments on the
Mortgage Loans. Certificates that represent the same percentage of interest and
principal on the Mortgage loans will be treated as Standard Certificates,
notwithstanding that other Certificates of the same Series are treated as
Stripped Certificates.
In general, a holder of a Stripped Certificate will be considered to own
"stripped bonds" with respect to its pro rata share of all or a portion of the
principal payments on each Mortgage Loan and/or "stripped coupons" with respect
to its pro rata share of all or a portion of the interest payments on each
Mortgage Loan, including the Stripped Certificate's allocable share of the
servicing fees paid to the Master Servicer, to the extent that such fees
represent reasonable compensation for services rendered. See discussion above
under "Standard Certificates--Recharacterization of Servicing Fees." Although
not free from doubt, for purposes of reporting to Stripped Certificateholders,
the servicing fees will be allocated to the Stripped Certificates in proportion
to the respective entitlements to distributions of each class (or
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subclass) of Stripped Certificates for the related period or periods. The
holder of a Stripped Certificate generally will be entitled to a deduction each
year in respect of the servicing fees, as described above under "Standard
Certificates--General," subject to the limitation described therein.
Code Section 1286 treats a stripped bond or a stripped coupon as an
obligation issued on the date that such stripped interest is purchased.
Although the treatment of Stripped Certificates for federal income tax purposes
is not clear in certain respects at this time, particularly where such Stripped
Certificates are issued with respect to a Mortgage Pool containing
variable-rate Mortgage Loans, in the opinion of Brown & Wood LLP, Cadwalader,
Wickersham & Taft or Orrick, Herrington & Sutcliffe (as specified in the
related Prospectus Supplement), tax counsel to the Depositor, (i) the Trust
Fund will be treated as a grantor trust under subpart E, Part 1 of subchapter J
of the Code and not as an association taxable as a corporation or a "taxable
mortgage pool" within the meaning of Code Section 7701(i), and (ii) each
Stripped Certificate should be treated as a single installment obligation for
purposes of calculating original issue discount and gain or loss on
disposition. This treatment is based on the interrelationship of Code Section
1286, Code Sections 1272 through 1275, and the OID Regulations. While under
Code Section 1286 computations with respect to Stripped Certificates arguably
should be made in one of the ways described below under "Taxation of Stripped
Certificates--Possible Alternative Characterizations," the OID Regulations
state, in general, that two or more debt instruments issued by a single issuer
to a single investor in a single transaction should be treated as a single debt
instrument for original issue discount purposes. The Agreement for an
applicable Series will require that the Trustee make and report all
computations described below using this aggregate approach, unless substantial
legal authority requires otherwise.
Furthermore, Treasury regulations issued December 28, 1992 provide for the
treatment of a Stripped Certificate as a single debt instrument issued on the
date it is purchased for purposes of calculating any original issue discount.
In addition, under these regulations, a Stripped Certificate that represents a
right to payments of both interest and principal may be viewed either as issued
with original issue discount or market discount (as described below), at a de
minimis original issue discount, or, presumably, at a premium. This treatment
suggests that the interest component of such a Stripped Certificate would be
treated as qualified stated interest under the OID Regulations. Further, these
final regulations provide that the purchaser of such a Stripped Certificate
will be required to account for any discount as market discount rather than
original issue discount if either (i) the initial discount with respect to the
Stripped Certificate was treated as zero under the de minimis rule, or (ii) no
more than 100 basis points in excess of reasonable servicing is stripped off
the related Mortgage Loans. Any such market discount would be reportable as
described under "REMIC Certificates--Taxation of REMIC Regular
Certificates--Market Discount," without regard to the de minimis rule therein,
assuming that a prepayment assumption is employed in such computation.
Status of Stripped Certificates
No specific legal authority exists as to whether the character of the
Stripped Certificates, for federal income tax purposes, will be the same as
that of the Mortgage Loans. Although the issue is not free from doubt, in the
opinion of Brown & Wood LLP, Cadwalader, Wickersham & Taft or Orrick,
Herrington & Sutcliffe (as specified in the related Prospectus Supplement), tax
counsel to the Depositor, Stripped Certificates owned by applicable holders
should be considered to represent "real estate assets" within the meaning of
Code Section 856(c)(4)(A), "obligation[s] principally secured by an interest in
real property" within the meaning of Code Section 860G(a)(3)(A), and "loans
secured by an interest in real property" within the meaning of Code Section
7701(a)(19)(C)(v), and interest (including original issue discount) income
attributable to Stripped Certificates should be considered to represent
"interest on obligations secured by mortgages on real property" within the
meaning of Code Section 856(c)(3)(B), provided that in each case the Mortgage
Loans and interest on such Mortgage Loans qualify for such treatment. Investors
should consult their own tax advisors as to such characterization.
Taxation of Stripped Certificates
Original Issue Discount. Except as described above under "General," each
Stripped Certificate will be considered to have been issued at an original
issue discount for federal income tax purposes. Original
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issue discount with respect to a Stripped Certificate must be included in
ordinary income as it accrues, in accordance with a constant interest method
that takes into account the compounding of interest, which may be prior to the
receipt of the cash attributable to such income. Based in part on the OID
Regulations and the amendments to the original issue discount sections of the
Code made by the 1986 Act, the amount of original issue discount required to be
included in the income of a holder of a Stripped Certificate (referred to in
this discussion as a "Stripped Certificateholder") in any taxable year likely
will be computed generally as described above under "REMIC
Certificates--Taxation of REMIC Regular Certificates--Original Issue Discount"
and "--Variable Rate REMIC Regular Certificates." However, with the apparent
exception of a Stripped Certificate issued with de minimis original issue
discount as described above under "General," the issue price of a Stripped
Certificate will be the purchase price paid by each holder thereof, and the
stated redemption price at maturity will include the aggregate amount of the
payments to be made on the Stripped Certificate to such Stripped
Certificateholder, other than payments of qualified stated interest. It is not
clear under current law whether such aggregate payments and the yield to
maturity should be computed using a prepayment assumption. Unless and until
required otherwise by applicable authority, its anticipated will use the
applicable initial Prepayment assumption for purposes of reporting to
investors.
If the Mortgage Loans prepay at a rate either faster or slower than that
under the Prepayment Assumption, a Stripped Certificateholder's recognition of
original issue discount will be either accelerated or decelerated and the
amount of such original issue discount will be either increased or decreased
depending on the relative interests in principal and interest on each Mortgage
Loan represented by such Stripped Certificateholder's Stripped Certificate.
While the matter is not free from doubt, the holder of a Stripped Certificate
should be entitled in the year that it becomes certain (assuming no further
prepayments) that the holder will not recover a portion of its adjusted basis
in such Stripped Certificate to recognize an ordinary loss equal to such
portion of unrecoverable basis.
As an alternative to the method described above, the fact that some or all
of the interest payments with respect to the Stripped Certificates will not be
made if the Mortgage Loans are prepaid could lead to the interpretation that
such interest payments are "contingent" within the meaning of the OID
Regulations. The OID Regulations, as they relate to the treatment of contingent
interest, are by their terms not applicable to prepayable securities such as
the Stripped Certificates. However, if final regulations dealing with
contingent interest with respect to the Stripped Certificates apply the same
principles as the OID Regulations, such regulations may lead to different
timing of income inclusion that would be the case under the OID Regulations.
Furthermore, application of such principles could lead to the characterization
of gain on the sale of contingent interest Stripped Certificates as ordinary
income. Investors should consult their tax advisors regarding the appropriate
tax treatment of Stripped Certificates.
Sale or Exchange of Stripped Certificates. Sale or exchange of a Stripped
Certificate prior to its maturity will result in gain or loss equal to the
difference, if any, between the amount received and the Stripped
Certificateholder's adjusted basis in such Stripped Certificate, as described
above under "REMIC Certificates--Taxation of REMIC Regular Certificates--Sale
or Exchange of REMIC Regular Certificates." To the extent that a subsequent
purchaser's purchase price is exceeded by the remaining payments on the
Stripped Certificates (other than qualified stated interest), such subsequent
purchaser will be required for federal income tax purposes to accrue and report
such excess as if it were original issue discount, if it exceeds the statutory
de minimis amount, in the manner described above. It is not clear for this
purpose whether, if use of prepayment assumption to accrue original issue
discount on a Stripped Certificate is appropriate, the assumed prepayment rate
that is to be used in the case of a Stripped Certificateholder other than an
original Stripped Certificateholder should be the Prepayment Assumption or a
new rate based on the circumstances at the date of subsequent purchase.
Purchase of More Than One Class of Stripped Certificates. Where an
investor purchases more than one class of Stripped Certificates, it is
currently unclear whether for federal income tax purposes such classes of
Stripped Certificates should be treated separately or aggregated for purposes
of the rules described above.
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Possible Alternative Characterizations. The characterizations of the
Stripped Certificates discussed above are not the only possible interpretations
of the applicable Code provisions. For example, the Stripped Certificateholder
may be treated as the owner of (i) one installment obligation consisting of
such Stripped Certificate's pro rata share of the payments attributable to
principal on each Mortgage Loan and a second installment obligation consisting
of such Stripped Certificate's pro rata share of the payments attributable to
interest on each Mortgage Loan, (ii) as many stripped bonds or stripped coupons
as there are scheduled payments of principal and/or interest on each Mortgage
Loan or (iii) a separate installment obligation for each Mortgage Loan,
representing the Stripped Certificate's pro rata share of payments of principal
and/or interest to be made with respect thereto. Alternatively, the holder of
one or more classes of Stripped Certificates may be treated as the owner of a
pro rata fractional undivided interest in each Mortgage Loan to the extent that
such Stripped Certificate, or classes of Stripped Certificates in the
aggregate, represent the same pro rata portion of principal and interest on
each such Mortgage Loan, and a stripped bond or stripped coupon (as the case
may be), treated as an installment obligation or contingent payment obligation,
as to the remainder. Final regulations issued on December 28, 1992 regarding
original issue discount on stripped obligations make the foregoing
interpretations less likely to be applicable. The preamble to those regulations
states that they are premised on the assumption that an aggregation approach is
appropriate for determining whether original issue discount on a stripped bond
or stripped coupon is de minimis, and solicits comments on appropriate rules
for aggregating stripped bonds and stripped coupons under Code Section 1286.
Because of these possible varying characterizations of Stripped
Certificates and the resultant differing treatment of income recognition,
Stripped Certificateholders are urged to consult their own tax advisors
regarding the proper treatment of Stripped Certificates for federal income tax
purposes.
REPORTING REQUIREMENTS AND BACKUP WITHHOLDING
The Trustee will furnish, within a reasonable time after the end of each
calendar year, to each Standard Certificateholder or Stripped Certificateholder
at any time during such year, such information (prepared on the basis described
above) as the Trustee deems to be necessary or desirable to enable such
Certificateholders to prepare their federal income tax returns. Such
information will include the amount of original issue discount accrued on
Certificates held by persons other than Certificateholders exempted from the
reporting requirements. The amounts required to be reported by the Trustee may
not be equal to the proper amount of original issue discount required to be
reported as taxable income by a Certificateholder, other than an original
Certificateholder that purchased at the issue price. In particular, in the case
of Stripped Certificates, unless provided otherwise in the applicable
Prospectus Supplement, such reporting will be based upon a representative
initial offering price of each class of Stripped Certificates. The Trustee will
also file such original issue discount information with the IRS. If a
Certificateholder fails to supply an accurate taxpayer identification number or
if the Secretary of the Treasury determines that a Certificateholder has not
reported all interest and dividend income required to be shown on his federal
income tax return, 31% backup withholding may be required in respect of any
reportable payments, as described above under "REMIC Certificates--Backup
Withholding."
TAXATION OF CERTAIN FOREIGN INVESTORS
To the extent that a Certificate evidences ownership in Mortgage Loans
that are issued on or before July 18, 1984, interest or original issue discount
paid by the person required to withhold tax under Code Section 1441 or 1442 to
nonresident aliens, foreign corporations, or other Non-U.S. Persons generally
will be subject to 30% United States withholding tax, or such lower rate as may
be provided for interest by an applicable tax treaty. Accrued original issue
discount recognized by the Standard Certificateholder or Stripped
Certificateholder on original issue discount recognized by the Standard
Certificateholder or Stripped Certificateholders on the sale or exchange of
such a Certificate also will be subject to federal income tax at the same rate.
Treasury regulations provide that interest or original issue discount paid
by the Trustee or other withholding agent to a Non-U.S. Person evidencing
ownership interest in Mortgage Loans issued after July 18, 1984 will be
"portfolio interest" and will be treated in the manner, and such persons will
be subject to the same certification requirements, described above under "REMIC
Certificates--Taxation of Certain Foreign Investors--REMIC Regular
Certificates."
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STATE TAX CONSIDERATIONS
In addition to the Federal income tax consequences described in "Certain
Federal Income Tax Consequences," potential investors should consider the state
income tax consequences of the acquisition, ownership, and disposition of the
Certificates. State income tax law may differ substantially from the
corresponding federal law, and this discussion does not purport to describe any
aspect of the income tax laws of any state. Therefore, potential investors
should consult their own tax advisers with respect to the various state tax
consequences of an investment in the Certificates.
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
imposes certain requirements on employee benefit plans subject to ERISA ("ERISA
Plans") and prohibits certain transactions between ERISA Plans and persons who
are parties in interest (as defined in ERISA) ("parties in interest") with
respect to assets of such Plans. Section 4975 of the Code prohibits a similar
set of transactions between certain plans ("Code Plans," and together with
ERISA Plans, "Plans") and persons who are disqualified persons (as defined in
the Code) (hereafter, also "parties in interest") with respect to Code Plans.
Certain employee benefit plans, such as governmental plans and church plans (if
no election has been made under Section 410(d) of the Code), are not subject to
the requirements of ERISA or Section 4975 of the Code, and assets of such plans
may be invested in Certificates, subject to the provisions of other applicable
federal and state law. Any such plan which is qualified under Section 401(a) of
the Code and exempt from taxation under Section 501(a) of the Code is, however,
subject to the prohibited transaction rules set forth in Section 503 of the
Code.
Investments by ERISA Plans are subject to ERISA's general fiduciary
requirements, including the requirement of investment prudence and
diversification and the requirement that investments be made in accordance with
the documents governing the ERISA Plan. Before investing in a Certificate, an
ERISA Plan fiduciary should consider, among other factors, whether to do so is
appropriate in view of the overall investment policy and liquidity needs of the
ERISA Plan. Such fiduciary should especially consider the sensitivity of the
investments to the rate of principal payments (including prepayments) on the
Mortgage Loans, as discussed in the Prospectus Supplement related to a Series.
Based on the holding of the United States Supreme Court in John Hancock
Mutual Life Ins. Co. v. Harris Trust and Savings Bank, 510 U.S. 86 (1993), the
assets of Plan may include assets held in the general account of an insurance
company. Before investing in a Certificate, an insurance company should
consider the effects of such holding on an investment of its general accounts
and the potential applicability of ERISA and Section 4975 of the Code.
PROHIBITED TRANSACTIONS
Section 406 of ERISA and Section 4975 of the Code prohibit parties in
interest with respect to ERISA Plans and Code Plans from engaging in certain
transactions involving such Plans or "plan assets" of such Plans unless a
statutory or administrative exemption applies to the transaction. Section 4975
of the Code and Sections 502(i) and 502(l) of ERISA provide for the imposition
of certain excise taxes and civil penalties on certain persons that engage or
participate in such prohibited transactions. The Depositor, the Master
Servicer, any Special Servicer or the Trustee or certain affiliates thereof may
be considered or may become parties in interest with respect to an investing
Plan. If so, the acquisition or holding of Certificates by, on behalf of or
with "plan assets" of such Plan may be considered to give rise to a "prohibited
transaction" within the meaning of ERISA and/or the Section 4975 of Code unless
an administrative exemption described below or some other exemption is
available.
Special caution should be exercised before "plan assets" of a Plan are
used to purchase a Certificate if, with respect to such assets, the Depositor,
the Master Servicer, any Special Servicer or the Trustee or 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.
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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"; PTCE 95-60, which
exempts certain transactions with insurance company general accounts; PTCE
91-38 (formerly PTCE 80-51), which exempts certain transactions between bank
collective investment funds and parties in interest; PTCE 90-1 (formerly PTCE
78-19), which exempts certain transactions between insurance company pooled
separate accounts and parties in interest; or PTCE 84-14, which exempts certain
transactions effected on behalf of a plan by a "qualified professional asset
manager." Also, the Department has issued administrative exemptions from
application of certain prohibited transaction restrictions of ERISA and Section
4975 of the Code to most underwriters of mortgage-backed securities (each, an
"Underwriter's Exemption"). Such an Underwriter's Exemption can only apply to
mortgage-backed securities which, among other conditions, are sold in an
offering with respect to which such underwriter serves as the sole or a
managing underwriter, or as a selling or placement agent. If such an
Underwriter's Exemption might be applicable to a Series of Certificates, the
related Prospectus Supplement will refer to such possibility.
Any fiduciary or other Plan investor (which could include an insurance
company investing general accounts assets) who proposes to invest "plan assets"
of a Plan in Certificates of any Series or Class should consult with its
counsel with respect to the potential consequences under ERISA and Section 4975
of the Code of any such acquisition and ownership of such Certificates.
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
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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 Residual Certificates--Limitations on Offset or
Exemption of REMIC Income" and "--Tax-Related Restrictions on Transfer of
Residual Certificates."
Due to the complexity of these rules and the penalties imposed upon
Persons involved in prohibited transactions, it is particularly important that
individuals responsible for investment decisions with respect to Plans consult
with their counsel regarding the consequences under ERISA and/or Section 4975
of the Code of their acquisitions and ownership of Certificates.
The sale of Certificates to a Plan is in no respect a representation by
the Depositor or the applicable underwriter that such investment meets all
relevant legal requirements with respect to investments by Plans generally or
any particular Plan, or that such investment is appropriate for Plans generally
or any particular Plan.
LEGAL INVESTMENT
The Prospectus Supplement for each Series will identify those Classes of
Certificates, if any, which constitute "mortgage related securities" for
purposes of the Secondary Mortgage Market Enhancement Act of 1984 (the
"Enhancement Act").
Such Classes will constitute "mortgage related securities" for so long as
they (i) are rated in one of the two highest rating categories by at least one
nationally recognized statistical rating organization and (ii) are part of a
Series evidencing interests in a trust fund consisting of loans originated by
certain types of originators as specified in the Enhancement Act (the "SMMEA
Certificates"). As "mortgage related securities," the SMMEA Certificates will
constitute legal investments for persons, trusts, corporations, partnerships,
associations, business trusts and business entities (including, but not limited
to, state-chartered savings banks, commercial banks, savings and loan
associations and insurance companies, as well as trustees and state government
employee retirement systems) created pursuant to or existing under the laws of
the United States or of any state (including the District of Columbia and
Puerto Rico) whose authorized investments are subject to state regulation to
the same extent that, under applicable law, obligations issued by or guaranteed
as to principal and interest by the United States or any agency or
instrumentality thereof constitute legal investments for such entities.
Pursuant to the Enhancement Act, a number of states enacted legislation, on or
before the October 3, 1991 cutoff for such enactments, limiting to varying
extents the ability of certain entities (in particular, insurance companies) to
invest in mortgage related securities, in most cases by requiring the affected
investors to rely solely upon existing state law, and not the Enhancement Act.
Pursuant to Section 347 of the Riegle Community Development and Regulatory
Improvement Act of 1994, which amended the definition of "mortgage related
security" to include, in relevant part, certificates satisfying the rating and
qualified originator requirements for "mortgage related securities," but
evidencing interests in a trust fund consisting, in whole or in part, of first
liens on one or more parcels of real estate upon which are located one or more
commercial structures, states were authorized to enact legislation, on or
before September 23, 2001, specifically referring to Section 347 and
prohibiting or restricting the purchase, holding or investment by
state-regulated entities in such types of certificates. Accordingly, the
investors affected by such legislation when and if enacted, will be authorized
to invest in SMMEA Certificates only to the extent provided in such
legislation.
The Enhancement Act also amended the legal investment authority of
federally chartered depository institutions as follows: federal savings and
loan associations and federal savings banks may invest in, sell or otherwise
deal with, mortgage related securities without limitation as to the percentage
of their assets 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,
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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
703.5(f) through (k), which prohibit federal credit unions from investing in
certain mortgage related securities (including securities such as certain
Series, Classes or subclasses of Certificates), except under limited
circumstances.
All depository institutions considering an investment in the Certificates
should review the Supervisory Policy Statement on Securities Activities dated
January 28, 1992, as revised April 15, 1994 (the "Policy Statement") of the
Federal Financial Institutions Examination Council. The Policy Statement, which
has been adopted by the Board of Governors of the Federal Reserve System, the
FDIC, the Comptroller of the Currency and the Office of Thrift Supervision and
by the NCUA (with certain modifications) prohibits depository institutions from
investing in certain "high-risk" mortgage securities (including securities such
as certain Series, Classes or subclasses of Certificates), except under limited
circumstances, and sets forth certain investment practices deemed to be
unsuitable for regulated institutions.
Institutions whose investment activities are subject to regulation by
federal or state authorities should review rules, policies and guidelines
adopted from time to time by such authorities before purchasing any SMMEA
Certificates, as SMMEA Certificates may be deemed unsuitable investments, or
may otherwise be restricted, under such rules, policies or guidelines (in
certain instances irrespective of the Enhancement Act).
The foregoing does not take into consideration the applicability of
statutes, rules, regulations, orders, guidelines or agreements generally
governing investments made by a particular investor, including, but not limited
to, "prudent investor" provisions, percentage-of-assets limits, provisions
which may restrict or prohibit investment in securities which are not "interest
bearing" or "income-paying," and provisions which may restrict or prohibit
investments in securities which are issued in book-entry form.
Investors should consult with their own legal advisers in determining
whether, and to what extent, SMMEA Certificates constitute legal investments
for such investors.
Other Classes of Certificates will not constitute "mortgage related
securities" under the Enhancement Act (the "Non-SMMEA Certificates"). The
appropriate characterization of the Non-SMMEA Certificates under various legal
investment restrictions, and thus the ability of investors subject to these
restrictions to purchase Non-SMMEA Certificates, may be subject to significant
interpretive uncertainties. All investors whose investment authority is subject
to legal restrictions should consult their own legal advisers to determine
whether, and to what extent, the Non-SMMEA Certificates will constitute legal
investments for them.
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
73
<PAGE>
purposes, or as to the ability of particular investors to purchase Certificates
under applicable legal investment restrictions. The uncertainties described
above (and any unfavorable future determinations concerning legal investment or
financial institution regulatory characteristics of the Certificates) may
adversely affect the liquidity of the Certificates.
PLAN OF DISTRIBUTION
Each Series of Certificates offered hereby and by means of the related
Prospectus Supplements may be sold directly by the Depositor or may be offered
through Credit Suisse First Boston Corporation, an affiliate of the Depositor,
or underwriting syndicates represented by Credit Suisse First Boston
Corporation (the "Underwriters"). The Prospectus Supplement with respect to
each such Series of Certificates will set forth the terms of the offering of
such Series of Certificates, including the name or names of the Underwriters,
the proceeds to the Depositor, and either the initial public offering price,
the discounts and commissions to the Underwriters and any discounts or
concessions allowed or reallowed to certain dealers, or the method by which the
price at which the Underwriters will sell such Certificates will be determined.
Unless otherwise specified in the related Prospectus Supplement, the
Underwriters will be obligated to purchase all of the Certificates of a Series
described in the related Prospectus Supplement with respect to such Series if
any such Certificates are purchased. The Certificates may be acquired by the
Underwriters for their own account and may be resold from time to time in one
or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale.
If specified in the applicable Prospectus Supplement, the Depositor will
authorize Underwriters or other persons acting as the Depositor's agents to
solicit offers by certain institutions to purchase the Certificates from the
Depositor pursuant to contracts providing for payment and delivery on a future
date. Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Depositor. The obligation of any purchaser
under any such contract will be subject to the condition that the purchase of
the offered Certificates shall not at the time of delivery be prohibited under
the laws of the jurisdiction to which such purchaser is subject. The
Underwriters and such other agents will not have any responsibility in respect
of the validity or performance of such contracts.
The Depositor may also sell the Certificates offered hereby by means of
the related Prospectus Supplements from time to time in negotiated transactions
or otherwise, at prices determined at the time of sale. The Depositor may
effect such transactions by selling Certificates to or through dealers, and
such dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Depositor and any purchasers of
Certificates for whom they may act as agents.
The place and time of delivery for each Series of Certificates offered
hereby and by means of the related Prospectus Supplement will be set forth in
the Prospectus Supplement with respect to such Series.
LEGAL MATTERS
Certain legal matters relating to the Certificates offered hereby will be
passed upon for the Depositor and for the Underwriters by Brown & Wood LLP, One
World Trade Center, New York, New York 10048; Cadwalader, Wickersham & Taft,
100 Maiden Lane, New York, New York 10038; or Orrick, Herrington & Sutcliffe
LLP, 666 Fifth Avenue, New York, New York 10103-0001, as specified in the
related Prospectus Supplement.
74
<PAGE>
INDEX OF DEFINED TERMS
<TABLE>
<S> <C>
1
1986 Act ..................................... 46
A
Accrual Certificates ......................... 4
Act .......................................... 1
ADA .......................................... 41
Agreement .................................... 10
B
Balloon Mortgage Loans ....................... 6
Bankruptcy Code .............................. 32, 35
Borrower ..................................... 16
borrower ..................................... 29
C
CERCLA ....................................... 8, 33
Certificateholder ............................ 43
Certificateholders ........................... 11
Certificates ................................. Cover
Closing Date ................................. 17
Code ......................................... 14, 43
Code Plans ................................... 70
Collection Account ........................... 11
commercial mortgage-related security ......... 73
Commission ................................... 1
Covered Trust ................................ 7
Crime Control Act ............................ 41
CSFBMC ....................................... 9
Cut-Off Date ................................. 11
D
defective obligation ......................... 45
Deleted Mortgage Loans ....................... 20
Department ................................... 71
Depositor .................................... Cover
Distribution Account ......................... 11
Distribution Date ............................ 11
DTC .......................................... 9
E
electing large partnership ................... 57
Enhancement .................................. 26
Enhancement Act .............................. 72
ERISA ........................................ 70
ERISA Plans .................................. 70
Escrow Account ............................... 21
Event of Default ............................. 25
excess inclusion ............................. 55
excess servicing ............................. 65
F
FHA .......................................... 18
FHLMC ........................................ 10
FNMA ......................................... 10
</TABLE>
75
<PAGE>
<TABLE>
<S> <C>
Form 8-K ................................ 17
future advance .......................... 30
G
GNMA .................................... 10
H
holder .................................. 43
Holders ................................. 11
HUD ..................................... 18
I
Installment Contracts ................... 16
Insurance Proceeds ...................... 12
interest ................................ 51
IRS ..................................... 45
L
L/C Bank ................................ 27
L/C Percentage .......................... 27
lender .................................. 29
Liquidation Proceeds .................... 12
M
Mark to Market Regulations .............. 59
market discount ......................... 50
Master Servicer ......................... 21
Master Servicer Remittance Date ......... 12
MBS ..................................... Cover, 16
Mortgage Interest Rate .................. 20
Mortgage Loan File ...................... 17
Mortgage Loan Schedule .................. 17
Mortgage Pool ........................... Cover
Mortgaged Property ...................... 16
Mortgages ............................... 16
N
NCUA .................................... 39
New Regulations ......................... 62
noneconomic residual interest ........... 58
Non-SMMEA Certificates .................. 73
Non-U.S. Person ......................... 61
Note .................................... 16
O
OCC ..................................... 73
OID Regulations ......................... 46
P
parties in interest ..................... 70
Pass-Through Entity ..................... 57
Pass-Through Rate ....................... 1
Permitted Investments ................... 13
plan assets ............................. 70
Plans ................................... 70
Policy Statement ........................ 73
portfolio interest ...................... 61, 62
Prepayment Assumption ................... 47
Prepayment Premium ...................... 12
</TABLE>
76
<PAGE>
<TABLE>
<S> <C>
Property Protection Expenses .............. 12
PTCE ...................................... 71
R
Rating Agency ............................. 10
readily achievable ........................ 41
Registration Statement .................... 1
Regular Certificateholder ................. 46
Regulations ............................... 71
Relief Act ................................ 38
REMIC ..................................... Cover
REMIC Regulations ......................... 43
REO Account ............................... 12
REO Property .............................. 12
Reserve Fund .............................. 27
Residual Certificateholders ............... 53
RICO ...................................... 41
S
SBJPA of 1996 ............................. 44
Senior Certificates ....................... 26
Simple Interest Loans ..................... 16
single family residences .................. 45
SMMEA Certificates ........................ 72
Special Servicer .......................... 21
Specially Serviced Mortgage Loans ......... 21
Standard Certificateholder ................ 63
Standard Certificates ..................... 63
Startup Day ............................... 44
Stripped Certificateholder ................ 68
Stripped Certificates ..................... 63
Subordinate Certificates .................. 26
Substitute Mortgage Loans ................. 20
T
thrift institutions ....................... 56
Title VIII ................................ 39
Treasury .................................. 43
Trust Fund ................................ Cover, 10
Trustee ................................... 15
U
UCC ....................................... 40
Unaffiliated Seller ....................... 19
Underwriters .............................. 74
Underwriter's Exemption ................... 71
U.S. Person ............................... 58
V
Voting Rights ............................. 9
</TABLE>
77
<PAGE>
[A graphic was omitted that consisted of photographs of the following
properties:]
11. SCHOLASTIC BUILDING
New York NY
52. KANAWHA MALL
Charleston WV
93. SCANDIA-HEMMAN APARTMENTS
Lindenwood NJ
44. HOLIDAY INN & SUITES-BRISTOL
Bristol VA
178. SUNSET PEAK APARTMENTS
Thornton CO
35. WEST VALLEY MEDICAL CENTER
Encino CA
72. TWIN PEAKS SQUARE SHOPPING CENTER
Longmont CO
31A. SUBURBAN LODGE-DALLAS
Dallas TX
<PAGE>
[A graphic was omitted that consisted of photographs of the following
properties:]
8. HATO REY TOWER
San Juan PR
32. EAST NORRITON CROSSING
East Norriton PA
30. INVESTOR'S BUSINESS DAILY BUILDING
Los Angeles CA
15A. RESIDENCE INN-INDIANAPOLIS
Indianapolis, IN
38. TOWN AND COUNTRY OFFICE PARK
Orange CA
43. THE VINEGAR FACTORY (ELI'S MARKET)
New York NY
<PAGE>
This diskette contains one spreadsheet file that can be put on a
user-specified hard drive or network drive. The file "CSFB99C1.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 of the Prospectus Supplement, and a worksheet consisting of the table
"Mortgage Notes" in the Prospectus Supplement.
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 data in the Microsoft Excel
file, open the worksheet labeled "Annex A." To view the "Mortgage Notes" data,
open the worksheet labeled "Mortgage Notes."
- ----------
(1) Microsoft Excel is a registered trademark of Microsoft Corporation.
